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JOINT UTILITY TRENCH AGREEMENT

City of KenmoreSR 522 Phase 1 Stage 1 Improvements

THIS AGREEMENT is entered into between the CITY OF KENMORE, aMunicipal Corporation of Washington State (“City”) and PUGET SOUND Ej4ERGY,NC., a Washington Corporation (“PSE”). This Agreement may refer to thCity or PSEindividually as a Party or collectively as Parties (“Party or Parties”).

RECITALS

WHEREAS, the City is making certain improvements to State Route 522 (“SR 522Improvements”); and

WHEREAS, as a part of the SR 522 Improvements the City will provide a sharedtrench for the installation of certain utility facilities (the “Shared Trench”); and

WHEREAS, PSE desires to replace an existing natural gas line with a new six (6)inch natural gas line (the “Gas Line”) as paft.öfthe SR 522 Improvements and hasrequested that the City accommodate instä1ation.ofheGas Line by PSE within the SharedTrench (the “Project”); and

WHEREAS, the Parties recognize that certain efficiencies can be realized byperformance of the Project; and

NOW THEREFORE, in consideration of the terms, conditions, covenants andperformances contained’4iërein, and athay be attached and incorporated and made a parthereof, the Parties mutuallS’ agree as follows:

AGREEMENT

6) TERM AND TERMINATION.

-fliis Agreement shall become effective immediately upon execution by theparties. It is ahticipated that the Project will be completed by December 31, 2009 and thisAgreement shall be effective to this date, or until Project completion, whichever occursfirst. This Agreement may otherwise be tenninated only by and as mutually agreed by theParties.

7) SCOPE OF WORK.

The work contemplated under this Agreement shall be performed in accordancewith the following: Plans, Bid and Contract Documents and Specifications for 5R522

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Corridor Improvements Phase 1, Stage 1 65th Ave NE to 73 Ave NE, prepared by BWR(the “Plans & Specifications”) including the WSDOT Standard Specifications (the“Standard Specifications.”) The Plans & Specifications show in detail the location of theShared Trench, including the depiction of the Gas Line, which PSE has approved.

The City shall be the lead agency for the SR 522 Improvements and the Project andCity Engineer shall act as the administrator and the City’s representative for thiscooperative undertaking. The City will be responsible for compliance with the LocalAgency Guidelines and WSDOT will provide certification acceptance authority during theDesign, Right of Way and Construction phases of the Project.

The City shall be responsible for the competitive bidding, awarding,adrninistrationand construction of the SR 522 Improvements, and may enter into a contra’ct with thesuccessful bidder. As required by State law, award of the bid shall be to the lowestresponsible bidder (the “Construction Contractor”) submitting a responsive bid for the SR522 Improvements.

As a part of the City’s request for bids for construction of the SR 522Improvements, the City shall include PSE’s scope of work, plans and specifications for theinstallation of the Gas Line and other associated facilities in the hared Trench in the City’sContract Documents. The City shall also include in its bid package an additional alternateline item (“Add Alternate”) requesting a separatecost estimate for accommodation of theinstallation by PSE of the Gas Line within the SharedUrench.

If there is any discrepancy between the City’s Plans & Specifications and PSE’sGas Line plans, the parties mutually agree to work together to resolve such discrepancybetween the plans expeditiously.

The City reserves the iht to review and reject plans and specifications forinstallation of any utility’facilitis not in compliance with City standards or not inconformance with the Cit!sPlans & Specifications for the SR 522 Improvements. It shallbe PSE’s responsibility to ehre the Gas Line installation is accomplished in accordancewith the City’s Plans & Specifications.

The Add1Alternate will specify the work to be performed by the City and by PSEwith respect to the installation of PSE’s Gas Line in the Shared Trench, which is depictedon the attached Exhibit “A”.

In tjIe eèiit the specified Add Alternate is provided and mutually accepted by theParties, the Construction Contractor will provide the specified additional trenchdimensions required for the accommodation of the Gas Line in the Shared Trench. PSEshall be responsible for installing the Gas Line within the Shared Trench and will provideall labor, equipment and materials necessary to install and bed the Gas Line as furtherprovided herein. Following installation of the Gas Line by PSE’s contractor, theConstruction Contractor will then complete backfill of the trench and restoration of theroad surface as further provided herein.

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8) RESPONSIBILITIES OF THE PARTIES.

A) PSE and/or its contractor wifi perform the following duties and items of work:

1. Provide to the City suitable design drawings, specifications, constructionstandards and other information required to portray PSE’s proposed installationof the Gas Line within the Shared Trench to facilitate the City’s reasonabledescription and inclusion of the Add Alternate in the City’s bid documents forthe Improvements. -

2. Provide written acceptance or rejection of the Add A1ternatwihin five (5)working days of receipt of the Add Alternate cost from the City’ sselectedcontractor.

3. Provide all necessary materials (including beddilig material, but otherwiseexcluding backfill materials) and equipmenttb insta1l,the Gas Line within theShared Trench and connect gas service lineg totheGas Line as may berequired.

4. Provide for the delivery and storage of materials and equipment required for theProject. The City has not provided an area for PSE to stage their work or storematerials and equipment. Any stagmg of work or storing of materials for theProject will need to be coordinated with?the.Gity and its ConstructionContractor.

5. Maintain regular and continuous cordination with the City and theConstruction çontctor regarding the installation of the Gas Line and relatedwork by PSE and/crits contractor. This coordination will include, but will notbe limited t. the f1ig

a. Attendance and participation in the City’s pre-construction meetingwith the Construction Contractor. The City will notify PSE of thetime and location of this meeting.

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b. Mutual agreement by the Parties and/or their respective contractorson a schedule for all work associated with the Project and relatedwork and, as mutually agreed, adjustment thereof as may berequired or desired by the Parties and/or their contractors. TheConstruction Contractor will be limited to a maximum of 200 feet ofopen trench during construction. PSE’s contractor shall schedulethe Project in coordination with the work on the shared trench byConstruction Contractor to ensure that 200 feet of open trench is notexceeded. The City shall have the right to increase the open trenchlimit if it is determined to be in the best interest ofboth parties.

c. Attendance and participation in the weekly constructioncoordination meetings as reasonably established by the City’s

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Construction Contractor and other meetings as may be mutuallyagreed by the Parties andJor their contractors.

d. In response to notice from the Construction Contractor of plannedavailability of Shared Trench as provided below, provideconfirmation of scheduled commencement of intended Gas Lineinstallation within one (1) working day of the ConstructionContractor’s notice.

6. Provide traffic control and flagging during Gas Line installationPSE shallsubmit a traffic control plan to City and WSDOT for review and approval priorto starting work. Should lane closures become necessary,.PSE sall be limitedto working between the hours of 9am and 3pm and must maintain five lanes(two lanes in either direction plus the center turn lane) of traffic on’S’R 522.PSE should plan for the initial traffic control plan review to take aboui’thirty(30) working days and subsequent reviews will be completed in ten (10)working days. Driveways and accesses to businesseand residents shall remainopen during PSE’s work. If alternate routes ‘arené&led to access businessesand residents, PSE shall clearly identify the roiitechanges and notifybusinesses, residents and the City of the changes t least 48 hours in advance ofthe change.

7. Provide regular coordination ofPSE s-trench plating requirements. PSEconstruction contractor shall provide sufficient time at the end of each workshift (prior to 3pm if lane closures aierequired) to allow ConstructionContractor to plate open trench. When required during overlapping work shifts,PSE’s contractor will provide traffic control for Construction Contractor toplace and set.plates over the open shared trench.

8. Provide regular communication of Gas Line installation work progress relativeto establish work schedülè and prompt notice of any unanticipated workslow-downs, delays or stoppages to the Construction Contractor as soon asreasonably practicable.

9:. ;eform compaction tests on sand bedding placed by PSE’s contractor atintervals of 200 feet or less. Compaction tests shall be provided to City withinone (1)week of testing.

i:oProvide’the City with as-built information on a monthly basis and aftercompletion of its work.

11. Provide notification of the Project completion to the City andlor theConstruction Contractor.

12. Coordinate with the planned facilities of the City and other parties regardingGas Line placement and installation work within the Shared Trench asapproved by the City.

13. Coordinate with the City and/or the Construction Contractor and other affectedparties during the final pressure testing of the Gas Line. In the event final

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testing necessitates additional excavation by PSE of the Gas Line it shall be theresponsibility of PSE and/or its contractor to perform all excavation for andnecessary work on the Gas Line.

14. Be responsible for inspection as follows:

a.) Inspect the Construction Contractor’s work to ensure the area isready for PSE to begin its work. PSE shall notify the City within 24hours if PSE has any concerns about the work completed by theConstruction Contractor.

b.) Inspect the work performed by PSE contractor. The City will notinspect PSE’s Gas Main work.

15. Conduct its operations in accordance with the site safety plans provided by theCity and attend safety meetings scheduled by the City.

B) The CITY andlor its Construction Contractor wifi perform the followingduties and items of work:

1. Administer the contract and make payments to the Construction Contractor.

2. Perform inspections and acceptance-ofth construction work, and is responsiblefor conformance of the SR 522 Improvements with the Plans and Specificationsexcept as otherwise specified in this, agreement. Inspection of constructionactivities shall not constitute a guaiañtee or warranty of the adequacy ofperformance. .Daily Inspection reports completed by the City will be availablein the consh etion management office for inspection and copying.

3. Notify PSE imrnediately if the work performed by PSE’s contractor impacts thework by the Constii4çtion Contractor, and PSE’s contractor will remedy theirwork with 24 hours.

4. Excaatè the trenches, accommodate and coordinate the installation of the GasLine with other underground utilities, furnish and install backfill (except thatbedding required for the Gas Main) and perform any final compaction andrecpiired restoration after the Gas Line installation and testing is complete. TheConstruction Contractor will exercise reasonable care in the performance of thework herein provided for.

5. Provide all traffic control required for the SR 522 Improvements, except asotherwise specified herein for PSE’s contractor’s work on the Gas Line.

6. Keep reasonably itemized and detailed progress payments covering the cost ofconstruction and consulting services; identifying those costs attributablespecifically to the accommodation of the Gas Line in the Shared Trench. Upon

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installation and completion of the Project, the City will determine the actualdirect and indirect costs of construction and other costs directly attributable tothe installation of the Gas Line.

6. Provide to PSE a reproducible copy of the Project “as built” plan sheetsshowing its completed utilities, provided that construction of said utilities hasbeen completed under the terms of this Agreement.

7. Prepare a schedule for the Project (“Project Schedule”) in accordance with thePlans and Specifications for the parties to review and coordinate the ProjectSchedule as further described herein in Section 5 — Project Schedule.

8. Prior to awarding a contract for construction of the SR 522 lmprovéments,provide PSE notice of the Add Alternative bid cost and a five (5) working dayperiod for PSE to provide to the City its writtenacceptance or rejection of theAdd Alternate cost. In the event PSE rejects the AcidAlternate, the City mayaward a contract which does not include the Add A’ltemate.

9. Monitor and document amounts attributable to Add Alternate portion of SharedTrench provided for Gas Line installation including trench lengths, widths anddepths and quantities of materials usçl to backfill the Add Alternate portion ofthe Shared Trench. Upon completion of the work, provide such documentationto PSE for its reasonable review::

10. Coordinate with the PSE and/or its’contractor and other affected parties duringthe final pressure testing of the Gaà’Line.

4) COST ALLOCATION.

PSE shall be respoIisible for the actual cost to the City (including applicable taxes)to provide the Add Alternate. A, reasonably itemized statement of actual costs (includingany resulting from any change o’Mers mutually approved by the Parties) incurred by theCity assöcidtedith the performance of the Add Alternate work will be provided by theCityto PSE withiri a reasonable period following the completion of the Add Alternatewok, or otherwis.thereafter as may mutually be agreed by the Parties.

The itemized statement provided by the City will substantially contain and addressthe following:

A) Trench Costs.

The actual cost to the City (including applicable taxes) to provide the AddAlternate portion of the Shared Trench, including backfill, used by PSE for theinstallation of the Gas Line, and including any associated additional trenchingwhich may be requested by PSE’s contractor and performed by the ConstructionContractor for the installation of the Gas Line.

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B) Additional Expenses.

The actual direct and indirect construction costs to the City (including applicabletaxes) to provide any work, materials or services which may be provided by theCity, its Construction Contractor and consultants at the request of PSE’s contractoror as may otherwise be required to facilitate, support or respond to the installationof the Gas Line by PSE’s contractor to the extent such additional work is notrequired by the Plans and Specifications. Such additional work, materials orservice not previously included in the Plans and Specifications will,.Svhenreasonably anticipated or recognized, be documented in a change order at the timeof provision or as soon thereafter as reasonably practical. TheCity will notify PSEof the added costs and PSE will approve or disapprove the costs within fye (5)days. If PSE does not provide the City with its approval andlor commeiIt withinfive (5) days, it will be assumed the costs are acceptable to PSE.

C) Claims. -•‘

The cost to the City (including applicable taxes) of n.y claim by ConstructionContractor or other party, resulting from or caused by the performance (or lackthereof) of PSE or its contractor of the work required by this Agreement or delaysin performance of other obligationsunder this Agreement. Any and all such claimsmust be reasonably substantiated and documented and shall be subject to resolutionin accordance with the Governing Lw prOvision of this Agreement.

5) Project Schedule.

A) PSE shall reviewand nake written coiñrnents concerning the Project Schedule forcoordination and completion of the Project (as defined herein) within five (5)working days of. rece1 ‘If .PSE does not provide the City with its writtencomments regarding the Project Schedule within five (5) working days, the ProjectSchedule shall be considered accepted by PSE. The City and ConstructionContractor will review PSE’s comments and will work with PSE to arrive at amuthal!1, cceptable Project Schedule. Once the Project Schedule has been agreedupon, PSE agrees to timely perform its portion of the work on the Gas Line and its

- other duties under this Agreement in conformance with the Project Schedule.

B) If’the Profect Schedule or Plans are revised and such revision causes any increase inrecoverable construction costs or otherwise impacts PSE, a claim shall be made byPSE in conformance with the Plans and Specifications including the portions of theStandard Specifications applicable to any increase in costs or extensions of time.

C) If P SE’s contractor causes delays or impacts to the Construction Contractor andsuch delays and impacts cause an increase in construction costs, the City shallsubmit a claim to PSE for an increase in costs. PSE shall work in good faith toresolve such claim at no further impact to the project

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6) INVOICE AND PAYMENT.

In addition to the itemized statement provided by the City to PSE per Section 4above, the City will provide to PSE an appropriate invoice presenting the totalamount to be paid by PSE to the City. Within twenty (20) days following receipt ofthe City’s itemized statement and invoice, PSE will promptly review thesedocuments. In the event PSE reasonably believes additional documentation ordiscussion with the City is needed to reasonably verify the costs presnted to PSEfor payment, PSE may so notify the City thereof in writing within twéhty (20) daysfollowing receipt of the City’s invoice. In such event, the Parties will meet as soonthereafter as reasonably practical to discuss and resolve any qiItstanIing questionsconcerning the City’s statement and invoice. In the event aiy such plution is notachieved to the Parties’ mutual satisfaction within thirty (30) days of receiving theCity’s invoice, PSE will nevertheless promptly pay th City the full amounl shownon the City’s invoice, with such payment made byPSE to the City in no case morethan sixty (60) days following the date of the çit’s invoice, and the Parties maythereafter further pursue resolution of any dispütedamounts as provided by law.

7) CHANGES.

Following execution of a contract between the City and the ConstructionContractor, PSE or its contractor will submit any Iequests for changes to the work to beperformed by the Construction Contractor in writingto the City. The City will submitsuch request(s) to its Construction Contractor in accord with the Standard Specifications asmodified for this Project and as required by the contract between the City and theConstruction Contractor. ESE agrees to requir9 its contractor to abide by all requirementsof the Plans and Specifications including the Standard Specifications as modified for thisProject and to assume4oward the City all requirements and duties required by the StandardSpecifications and the Plans andSpecffications of a Contractor under those documentsunless otherwise required uiider this Agreement.

8) INDEMNIFICATION AND LIABILITY.

Each Party shall defend, indemnify and hold the the other Party, its officers,officials, employees, consultants, and agents harmless from any and all claims, injuries,damag9,Josses orsuits, including all legal costs and attorney fees, to the extent the samearise froth’ or in connection with: (a) fault, willful misconduct, or negligence of theindemnifying party, its officers, officials, employees, agents, contractors, sub-contractorsand/or representatives in their respective performance under this Agreement; (b) anyproduct liability claims related to any materials supplied by the indemnifying party underthis Agreement; (c) failure of the indemnifying Party, its officers, officials, employees,agents, contractors, sub-contractors and/or representatives to comply with any term of thisAgreement or any applicable law, regulation or regulation; and (d) claims under workers’compensation or similar employee benefits acts by the indemnifying Party, its employees,agents, contractors and sub-contractors and respective employees or agents thereof.

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The indemnification of the City by PSE shall include claims from third partiesarising from a failure by PSE or its contractor to promptly perform its Gas Line installationwithin a reasonable period following receipt from the City or its contractor that the SharedTrench (or reasonable portion thereof) is available and accessible for performance of GasLine installation, except for claims caused by or resulting from performance failure,negligence or willful misconduct by the City or the Construction Contractor.

9) INSURANCE.

The Parties and their respective contractors shall be required to procure nd maintain forthe duration of performance under this Agreement insurance of the types and in theamounts described below against claims for injuries to persons and danage to propertywhich may arise from or in connection with performance of work the Parties and theirrespective contractors, their employees, agents, sub-contractors and representatives underthe Agreement. The Parties may elect to self-insure in amounts not less than those listedbelow: -

A) General Requirements1) PSE shall obtain the insurance described in this section from insurers approved

by the State Insurance Commissioner pursuant to RCW Title 48. The insurancemust be provided by an insurefvith a rating of A-Vu or higher in the A.M.Best’s Key Rating Guide, which is licensed to do business in the State ofWashington (or issued as a surplus linebyaWashington Surplus lines broker).The City reserves the right to approve or reject the insurance provided, basedon the insurer (including financial condition), terms and coverage, theCertificate of Insurance, andlorend9rsements.

2) PSE shall keep thisinsurance in force during the term of the Agreement and forthirty (30) days after theobmpletion of the Project, unless otherwise indicated(see C. below)::.

3 .I-fany insurance policy is written on a claims made form, its retroactive date,and that of all subsequent renewals, shall be no later than the effective date of

• this Agreement. The policy shall state that coverage is claims made, and statethe retroactive date. Claims-made form coverage shall be maintained by PSE

- for a minimum of 36 months following the completion of the Project or earlier.termination of the Agreement, and PSE shall annually provide the City withprdof of renewal. If renewal of the claims made form of coverage becomesunavailable, or economically prohibitive, PSE shall purchase an extendedreporting period (“tail”) or execute another form of guarantee acceptable to theCity to assure financial responsibility for liability for services performed.

4) The insurance policies shall contain a “cross liability” provision.

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5) PSE’s and all PSE contractor’s insurance coverage shall be primary and non-contributory insurance as respects the City’s insurance, self-insurance orinsurance pool coverage.

6) All insurance policies and Certificates of Insurance shall include a requirementproviding for a minimum of thirty (30) days prior written notice to the City ofany cancellation in any insurance policy.

7) Upon request, PSE shall forward to the City a full and certified copy of theinsurance policy(s).

8) PSE shall not begin work under the Agreement until the required insurance hasbeen obtained and approved by the City.

9) Failure on the part of PSE to maintain the insurance as required shall constitutea material breach of contract, upon which the City may, after giving five (5)business days notice to PSE to correct the breach,:immediately terminate theAgreement or, at its discretion, procure or renew such insurance and pay anyand all premiums in connection therewith, with an’y sums so expended to berepaid to the City on demand.

B) Additional Insured -.

All insurance policies, with the exception of Professional Liability and WorkersCompensation, shall name the City and its officers, elected officials, employees,agents and volunteers as additional inured(s).

C) Evidence of InsurancePSE shall deliver to the Citya certificate(s) of Insurance and endorsements foreach policy of insurai c’eñieeting the requirements set forth herein when PSEdelivers the signed Agreement for the Project. The certificate and endorsementsmust confirm to the folldwing requirements:

I) An ACORD certificate or a form determined by the City to be equivalent.

2) Copies çf all endorsements naming the City as Additional Insured(s), showingthe pçilicy number. PSE may submit a copy of any blanket additional insuredcrai.se from its policies instead of a separate endorsement. A statement ofadditional insured status on an ACORD Certificate of Insurance shall notsatisfy this requirement.

3) Any other amendatory endorsements to show the coverage required herein.

4) Certification of PSE’s self-insurance program.

D) Coverages and Limits

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The insurance shall provide the minimum coverages and limits set forth below.Providing coverage in these stated minimum limits shall not be construed to relievethe Contractor from liability in excess of such limits. All deductibles and self-insured retentions must be disclosed and are subject to approval by the City. Thecost of any claim payments falling within the deductible shall be the responsibilityof PSE.

1) Commercial General LiabilityA policy of Commercial General Liability Insurance, including:

Per project aggregatePremises/Operations LiabilityProducts/Completed Operations — for a period of one year following

final acceptance of the workPersonal/Advertising InjuryContractual LiabilityIndependent Contractors Liability :‘

Stop Gap/Employers’ LiabilityExplosion, Collapse or Underground Piopety Damage (XCU)Blasting (only required when the PSE’s work under thisAgreement includ exposures to which this specified coverage

responds)

Such policy must have the falrowing minimum limits:$1,000,000 Each Occurrenc$2,000,00’ General Aggregá?e$1 ,00O,O0( Products & Completed Operations Aggregate$1,000,000 Personal & Advertising Injury, each offence

Stop Gap / Eiipioyers’ Liability$1,000,000 ‘]4ch Accident

$1 ,000,000 Disease — Policy Limit$F,000,000 Disease — Each Employee

2) Automobile LiabifityAutomobile Liability for owned, non-owned, hired, and leased vehicles, with anMCS 90 endorsement and a CA 9948 endorsement attached if “pollutants” are to betransported. Such policy(ies) must provide the following minimum limit:

$1,000,000 combined single limit

3) Workers’ Compensation

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PSE shall comply with Workers’ Compensation coverage as required by theIndustrial Insurance laws of the State of Washington.

10) FRANCHISE AGREEMENT.

The City and PSE agree that by entering into this Agreement, neither Party haswaived any rights it may have under the applicable Franchise Agreement between the Cityand PSE in effect during the term of this Agreement or any other agreemert between theCity and PSE, nor under any existing tariff filed with the Washington Utilities andTransportation Commission, nor under applicable law. -

11) HAZARDOUS MATERIALS.

“Hazardous Materials” means any hazardous, radioactive, or toxic substance,material, or waste defined or regulated as such in or und& any environmental, health orsafety law including without limitation asbestos, and thoe hazaiilous materials,substances, and wastes defined by the United States Depaftnent of Transportation(“DOT”), Occupational Safety and Health Administration (“QSHA”), EnvironmentalProtection Agency (“EPA”), or the Nuclear Regulatory Commission (“NRC”).

In connection with its activities under-this Agreement and all work under thisAgreement, the City and PSE shall complywith all pJicable provisions of the HazardousMaterials Transportation Act (49 U.S.C. §18O1;e1 seq.), the Resource Conservation andRecovery Act (42 U.S.C. §690 1, et seq.), the.Tàxic Substances Control Act of 1976 (15U.S.C. §2601, et seq.), the Comprehensive En’ironmental Response, Compensation, andLiability Act of 1980 (42tJS€. §9601, et seq.) the OSHA Act, and any other applicablefederal, state, and local laws and regulations governing Hazardous Materials or safety.

Wherever appliable,the City and PSE shall utilize reasonable efforts to provideproducts and services that eliminate or reduce the generation of hazardous waste/materials.

i?ie Ci.y -will promptly notify the PSE representative of the discovery of anyHazardous Material previously undisclosed to the City affecting the work hereunder. Tothe etent applical3l’e and required, the Parties shall furnish each other with Material SafetyData Sheets that comply with the requirements of the OSHA Hazard CommunicationStandard.(29 CER 1910.1200), as amended, for any materials furnished under thisAgreemenf

PSE will promptly notify the City of the discovery of any Hazardous Materialpreviously undisclosed to PSE affecting the work hereunder. To the extent applicable andrequired, the Parties shall furnish each other with Material Safety Data Sheets that complywith the requirements of the OSHA Hazard Communication Standard (29 CFR19 10.1200), as amended, for any materials furnished under this Agreement.

The City shall defend, indemnify and hold harmless PSE for any loss,damage, liability, claim, demand or any penalty, including costs, expenses and reasonable

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attorney’s fees, assessed against PSE that may be sustained by reason of the City’s failureto comply with any rules, regulations or laws governing Hazardous Materials and/orsubstances, including, but not limited to, those enumerated herein. The City shall own andproperly dispose of any Hazardous Materials that it introduces to PSE property. Under nocircumstances shall any Hazardous Materials be disposed of on PSE premises or property,including but not limited to PSE dumpsters.

PSE shall defend, indemnify and hold harmless the City for any loss, damage,liability, claim demand or any penalty, including costs, expenses and reasonable attorney’sand expert witness fees, assessed against the City that may be sustainedby reason of PSE’sfailure to comply with any rules, regulations, or laws governing Hazaidous Materialsand/or substances, including, but not limited to, those enumerated herein. PSE.shall ownand properly dispose of any Hazardous Materials that it introduces to City proeit.y. Underno circumstances shall any Hazardous Materials be disposel of by PSE on City premisesor property, including but not limited to City dumpsters.

12) MISCELLANEOUS.

A) Compliance with Laws.

The Parties and their respective coh,tractors will comply with all applicable federal,state and local laws, rules and regulations throughout every aspect of performance underthis Agreement.

B) No Waiver of Breach.

The failure of a,Ptyto insist upon strict performance of any of the terms,conditions and rights containedin this Agreement, or to exercise any right or option hereincontained in one or more instances, shall not be construed to be a waiver or relinquishmentof any such terms, conditions and rights and the same shall remain in full force and effect.

C) Governing Law.

This Agreement shall be governed and construed in accordance with the laws ofWaslington State. As to any dispute which may arise between the Parties and/or theirrespective contractqrs or any combination thereof under any of the provisions of thisAgreement’ andnot resolved amongst themselves, resolution thereof shall be available onlythrough thjurisdiction, venue and rules of the King County Superior Court, King County,Washington.

D) Disputes and Attorney’s Fees.

If the parties have a dispute related to the Project that cannot be resolved bynegotiation, the parties agree to submit the dispute to mediation prior to commencing anylegal action. If the dispute cannot be resolved by mediation, the parties agree that allunresolved disputes related to the Project shall be filed in King County Superior Courtwith venue in Seattle, Washington. In the event of any suit, arbitration or other proceeding

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instituted to enforce any term or condition of this Agreement, the Parties specificallyunderstand and agree that the prevailing Party in any such action shall be entitled torecovery of its attorney’s fees and costs in pursuance thereof.

E) Written Notice.

All communications regarding this Agreement shall be sent to the respectiveParties at the addresses listed on the signature page of this Agreement, unless otherwisemutually agreed or required outside of this Agreement. Any written noticehall becomeeffective upon delivery, and in any event three (3) calendar days after tedate of ailing byregistered or certified first class mail (or alternative over-night delivery sefiice), and shallbe deemed sufficiently given if sent to the addressee at the address tated iii’ thisAgreement.

F) Modification.

No waiver, alteration or modification of any ofthe proisions of this Agreementshall be valid or binding unless in writing and signed by diil.yauthorized representative ofall Parties.

G) Severability.

If any one or m ore sections, subsections, sentenç.es or parts of this Agreement areheld by competent authority to be invalid, suchdnvalidity shall not affect the validity of theremaining portions of this Agreement, whichshall remain in full force and effect, unlessotherwise mutually agreed by the Parties in wiiting.

H) Relationship.

The Parties specificallyimderstand and agree that no agency, employment, jointventure, co-employer or pa çrship is created by this Agreement. No Party hereto shall (i)have the power or authority to act for another in any manner to create obligations or debtswhich would be,.binding upon another, or; (ii) be responsible for any obligation or expensewhatsoever of another.

I) Eorce Majeure.

Parhesshall not be deemed to be in breach of this Agreement if unable to performtheir respectiVe obligations hereunder as a result of the occurrence of “force majeure”event, which shall include, but not be limited to, acts of God, acts of government of theUnited States or any state or political subdivision thereof, war, strikes, civil riots ordisturbances, fires, floods, explosions, earthquake, wind, storms, lightning or other similarcatastrophes or other causes beyond the Parties’ reasonable control. The scope of event offorce majeure shall not extend to payment of money owed hereunder. Parties shallreasonable endeavor to resume performance of their obligations under this Agreement asmay be practicable following the conclusion of the force majeure event.

14

PSE-Kenmore JT Agreement 3-4-08 PSE RI .doc March 4. 2008SR 522 Phase I Stage 1

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J) Disclosure.

The Parties agree that, to the extend allowable under RCW Chapter 42.17 (PublicDisclosure Ace), neither Party shall, without the prior written consent of the other Party:(a) issue any press release or make any other public announcement or statement regardingthis Agreement or any relation between the Parties; or (b) use the name, trademarks orother proprietary identifying symbols of the other Party (and/or its affiliates).

K) Assignment.

Neither Party may nor shall either Party assign this Agreement any of the rightsor obligations hereunder to any other person or entity without the prior writ?ei consent ofthe other, which consent will not be unreasonably withheld or delayed. Notwithstandingthe foregoing, either Party may assign all or part of this Agreement immediately, withoutprior written consent of the other: (a) to any entity that controls, is controlled by, or is incommon control with a Party; or (b) to any successor in inlerestto a Party; or (c) ifnecessary to satisfy the rules, regulations and/or orders fany federal, state or localgovernment agency or body.

L) Entire Agreement.

The written provisions, terms and coiditions of this Agreement, together with anyattached Exhibits, supersede any and all p’rior representations concerning the subject of thisAgreement made by any representatives of the Parties, and any such prior representationsshall not be construed as forming a part of or altering in any manner this Agreement. ThisAgreement and any attached Exhibits contain the entire agreement concerning this subjectbetween the Parties. In the évnt any language in any Exhibit to this Agreement conflictwith any language contained ii this Agreement, the provisions, terms and conditions ofthis Agreement shall prevail., Provided, notwithstanding the foregoing, the Parties and/ortheir respective contractofs may mutually agree to provisions concerning the performanceof the work addressed in thisAgreement so long as such mutual agreement is not in anyway in conflict with or contrar3to the provisions, terms and condition of this Agreement.

IN WITNESS WhEREOF, the duly authorized representatives of the Parties have belowexecuea’ this Agreement:

PSE-Kenmore JT Agreement 3-4-OS PSE Ri .doc March 4. 2008SR 522 Phase I Stage 1

DRAFT

PUGET SOUND ENERGY

Name:

____________________

Title:

____________________

Date:

CITY OF KENMORE

Name:

_______________

Title:

_______________

Date:

Notices to be sent to:

Puget Sound Energy

Community Services

Attn: Elaine Babby

P0 Box 97034 EST11W

Bellevue, WA 98009-9734

Telephone:

____________

Notices to be sent to:

City of Kenmore

Public Works Department

Attn: Rob English

P0 Box4’2607

Kenm&e, WA .98028

Telephoxé:c____________

PSE-Kenmore JT Agreemeut 3-4-08 PSE RI .docSR 522 Phase I Stage I

March 4. 2008