Natural Gas Appliance - Residential Water Heater - LEASE AGREEMENT

PUGET SOUND ENERGY COMPANY (“Company”) and the customer named below(“Customer”) enter into this Agreement, under which Company rents to Customer the appliance identified below (“Appliance”) for use at the indicated location (“Premises”). The Agreement shall commence on (“Commencement Date”).

1. Customer rents from Company, and Company rents to Customer, said Appliance, for the term of twelve (12) months from the Commencement Date and thereafter until terminated by either party upon (30) thirty days written notice to the other party, subject to the terms and conditions hereinafter contained. Customer agrees to pay the rental provided for in Company's tariffs filed with the Washington Utilities and Transportation Commission, as may be amended from time to time (currently $ a month) any tax where applicable, on or before the due date of the current bill for utility service at the Premises. Such rentals may be charges on utility statements.

2. Customer represents that he or she is the owner or contract purchaser of the Premises. Customer agrees that the Appliance is and will remain the property of the Company free from any lien or claim from Customer or any third party. Customer shall not remove or obscure the label on the Appliance identifying the same as Company's property.

3. This Agreement is subject to acceptance by Company, which acceptance shall be assumed unless notice of rejection is given in writing to Customer within twenty (20) days of the Commencement Date hereof.

4. Customer agrees that because Company has no control over the use of the Appliance, Company shall not be liable to Customer for any claim of any nature resulting from use or condition of the Appliance, except that Company agrees to be responsible for maintaining the Appliance, at Company's expense, in an efficient operating condition when notified by the Customer. Such maintenance, however, shall not include any work necessitated by the Customer's act or negligence or by causes or conditions that are external to the Appliance and not under Company's control. Company's maintenance shall not extend to Customer's fixtures or appurtenances.

5. Customer agrees to use the Appliance only for its ordinary intended purposes utilizing ordinary tap water and a non-corrosive air supply under standard atmospheric conditions. Customer also agrees not to tamper with, adjust, repair or relocate the Appliance without obtaining prior written permission from Company provided that the Customer may readjust the temperature setting of the Appliance to the extent permitted by law, presently RCW 19.27.130. Relocating the Appliance, when approved by Company, shall be at Customer's expense and shall done only by person or persons approved by the Company. Upon the termination of this lease, Customer shall surrender the Appliance to the Company in the same condition the Appliance was in at the time of installation, ordinary wear and tear excepted. Upon such termination, representatives of the Company shall be permitted to enter the Premises for the purpose of removing the Appliance.

6. Notwithstanding paragraph 1, Company, without prejudice to any other claim it may have hereunder, may terminate this Agreement and enter the Premises and disconnect and remove the Appliance, if one or more of the following conditions exist: (a) Customer breaches any term of this Agreement; (b) Customer fails to pay rental charges as provided herein within 30 days after any such charges shall become due and payable; (c) Customer ceases to be a utility customer of the Company; (d) Appliance is used with a contaminated water or air supply; or is used at an air pressure less than normal atmospheric pressure: (e) Satisfactory operation is not reasonably possible; (f) Customer fails to pay for gas furnished by Company; or (g) Appliance must be replaced and Customer does not wish to pay applicable, if any, installation, relocation, and/or code upgrade costs.

7. If the Premises are to be sold or transferred, Customer shall at least thirty (30) days prior to such sale or transfer, (a) notify Company of such sale or transfer and (b) notify the prospective purchaser that the Company owns the Appliance, rents it to Customer, and can remove it upon sale or transfer unless other arrangements are made. Notwithstanding paragraph 1, the Company may, upon sale or transfer, immediately terminate this Agreement and enter the Premises to remove the Appliance.

8. Customer agrees to indemnify and save harmless Company from any and all loss or damage or claims for loss or damage to persons or property arising from the use or condition of the Appliance. Customer shall also indemnify Company against loss and damage to the Appliance, ordinary wear and tear expected.

9. In the event that a Leased Commercial Appliance is installed at a location other than street level or if any other extraordinary condition exists, Customer agrees to pay all costs and associated charges necessary for the removal and/or change-out of the leased appliance.

10. THE OBLIGATIONS ASSUMED BY COMPANY PURSANT TO PARAGRAPH 4 OF THIS AGREEMENT ARE IN LIEU OF ALL OTHER OBLIGATIONS OR WARRANTIES ARISING BY LAW OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTY OF MERCHANTIBILITY AND THE IMPLIED WARRANTY OF FITNESS. CUSTOMER HEREBY ACCEPTS THE APPLIANCE IN AN “AS IS” CONDITION AND AGREES THAT COMPANY SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGE TO PERSONS OR PROPERTY WHICH MAY ARISE IN CONNECTION WITH APPLIANCE OR IN ANY CONNECTION WITH ANY DELAY BY COMPANY IN PERFORMING ITS DUTIES PURSUANT TO PARAGRAPH 4 HEREOF.