erated, and payments shall be due on the first day of the month immediately succeeding. If such charges are not paid when due, a penalty of one per centum (1%) of the amount unpaid shall be added thereto, and thereafter an additional penalty of one per centum (1%) of the amount unpaid shall be added on the first day of each calendar month thereafter during such delinquency.

The monthly charge for generation of such energy to be credited to the generating agency shall be in such amount as may be determined in accordance with article eleven (11) hereof.

MINIMUM ANNUAL PAYMENTS

(13) The minimum quantity of firm energy which the allottee shall take and/or pay for each year (June 1 to May 31, inclusive), under the terms of this contract, and after the same is ready for delivery to the company, as provided in subdivision (c) of article ten (10) hereof, shall be two and seven-tenths per centum (2.7%) of all firm energy as defined in article eight (8) hereof, available in said year, except as reduced by ten per centum (10%) of one-half of amounts of firm energy allocated to the States of Arizona and Nevada, and contracted for by those States, or others, as provided in article fourteen (14) of said contract marked Exhibit A. The total payments made by the allottee for firm energy available in any year (June 1 to May 31, inclusive), whether any energy is taken by it or not, exclusive of its payments for credit to the generating agency, shall be not less than the number of kilowatt-hours of firm energy which the allottee is obligated to take and/or pay for during said year, multiplied by one and sixty-three hundredths mills ($0.00163), or multiplied by the adjusted rate of payment for firm energy in case the said rate is adjusted as provided in article eleven (11) hereof. For a fractional year at the beginning or end of the contract period, the minimum annual payment for firm energy shall be proportionately adjusted in the ratio that the number of days water is available for generation of energy in such fractional year bears to three hundred sixty-five (365); provided, that the minimum annual payment shall be reduced in case of interruptions or curtailment of delivery of water as provided in article sixteen (16) hereof.

The minimum annual payments made by the allottee for generation of such energy, to be credited to the generating agency, shall be determined in accordance with article eleven (11) hereof.

NO ENERGY TO BE DELIVERED WITHOUT PAYMENT

(14) Unless the written consent of the Secretary be first obtained, no electrical energy shall be generated for, or delivered to, the allottee if it shall be in arrears for more than twelve (12) months in the payment of any charge and/or penalty due or to become due the United States hereunder, whether for its own use or for credit to the generating agency.

CONTRACT MAY BE TERMINATED IN CASE OF BREACH

(15) If the allottee shall be in arrears for more than twelve (12) months in the payment of any charge and/or penalty due or to become due to the United States hereunder, and shall not have obtained an extension of time for payment thereof, or, if such extension be

obtained, has not made such payment within the time as extended, then the Secretary reserves the right forthwith upon written notice. to the allottee to terminate this contract and dispose of the energy herein allocated as he may see fit; provided, he shall first give opportunity to the company to contract on terms and conditions to be prescribed by the Secretary, for such energy; and provided further, that such disposition shall be subject to the condition that the allottee shall have the right at any time within ten (10) years from the date of the first of the defaults or breaches for which the contract is terminated to become reinstated hereunder by payment to the United States of all arrearages and penalties, if any, together with any and all loss incurred by the United States by reason of such termination, and compensation to the contractor or contractors for equipment rendered idle by such reinstatement. In case of disagreement or dispute as to any of the items so to be paid the same shall be determined as provided in article twenty-one (21) hereof. Nothing contained in this contract shall relieve the allottee from the obligation to make the United States whole, for the period of this contract, for all loss and/or damage occasioned by the failure of the allottee to take and/or pay for energy as provided in this contract. The waiver of a breach of any of the provisions of this contract shall not be deemed to be a waiver of any other provisions thereof, or of a subsequent breach of such provision.

INTERRUPTIONS IN DELIVERY OF WATER

(16) The United States will deliver water continuously to each lessee in the quantity, in the manner, and at the times necessary for the generation of the energy which each of said lessees has the right and/or obligation to generate under this contract in accordance with the load requirements of each of said lessees, and of allottees for which the respective lessees are generating agencies, excepting only that such delivery shall be regulated so as not to interfere with the necessary use of said Hoover Dam and Boulder Canyon Reservoir for river regulation, improvement of navigation, flood control, irrigation, or domestic uses, and the satisfaction of present perfected rights in or to the waters of the Colorado River or its tributaries, in pursuance of Article VIII of the Colorado River compact, and this contract is made upon the express condition, and with the express covenant, that the rights of the allottee to the waters of the Colorado River or its tributaries are subject to, and controlled by, the Colorado River compact. The United States reserves the right temporarily to discontinue or reduce the delivery of water for the generation of energy at any time for the purpose of maintenance, repairs and/or replacements, or installation of equipment, and for investigations and inspections necessary thereto; provided, however, that the United States shall, except in case of emergency, give to the lessees reasonable notice in advance of such temporary discontinuance or reduction, and that the United States shall make such inspections and perform such maintenance and repair work after consultation with the lessees at such times and in such manner as will cause the least inconvenience to the lessees, and shall prosecute such work with diligence, and, without unnecessary delay, will resume delivery of water so discontinued or reduced. Should the delivery of water be discontinued or reduced below the amount required for the normal generation of firm

energy for the payment of which said allottee has hereby obligated itself, the total number of hours of such discontinuance or reduction in any year shall be determined by taking the sum of the number of hours during which the delivery of water is totally discontinued and the product of the number of hours during which the delivery of water is partially reduced and the percentage of said partial reduction below the actual quantity of water required by the lessees, severally, for the normal generation of firm energy. Total or partial reductions in the delivery of water which do not reduce the power output below the amount required at the time by such lessee for the normal generation of firm energy will not be considered in determining the total hours of discontinuance in any year. The minimum annual payment specified in article thirteen (13) hereof shall be reduced by the ratio that the total number of hours of such discontinuance bears to eight thousand seven hundred sixty (8,760). In no event shall any liability accrue against the United States, its officers, agents, and/or employees for any damage, direct or indirect, arising on account of drought, hostile diversion, act of God or of the public enemy, or other similar cause; nevertheless, interruptions in delivery of water occasioned by such causes shall be governed as hereinabove provided in this article.

MEASUREMENT OF ENERGY

(17) All energy shall be measured at generator voltage and suitable metering equipment shall be provided and installed by the United States for this purpose. Suitable correction shall be made in the amounts of energy as measured at generator voltage to cover step-up transformer losses and energy required for operation of station auxiliaries, in determining the amounts of energy delivered at transmission voltage as provided in this contract. The said meter equipment shall be maintained by and at the expense of the respective lessees. Meters shall be tested at any reasonable time upon the request of either the United States or a lessee, and in any event they shall be tested at least once each year. If the test discloses that the error of any meter exceeds one per centum (1%), such meter shall be adjusted so that the error does not exceed one-half of one per centum (2%). Meter equipment shall be tested by means of suitable testing equipment which will be provided by the United States, and which shall be calibrated by the United States Bureau of Standards as often as requested by any party hereto. Meters shall be kept sealed, and the seals shall be broken only in the presence of representatives of both the United States and the lessees, respectively, and likewise all tests of meter equipment shall be conducted only when representatives of both the United States and the respective lessees are present. In the event that energy furnished to the allottee at Hoover Dam is transmitted over lines of another contractor, the meters at Hoover Dam will record only the total amounts of energy delivered to the operators of main transmission lines and it will not be possible to determine from these meters the division of the energy between the various allottees and the operator. The allottee or the operator of said lines shall provide suitable meter equipment, satisfactory to the Secretary, at the point where the energy is delivered by the operator of said lines to the allottee, for determining the amounts of energy

delivered to the allottee at said point, and to these amounts there shall be added proper corrections to cover transformer and line losses in determining the amounts of energy furnished to the allottee at Hoover Dam. The Secretary's determination of said amounts shall be conclusive.

INSPECTION BY THE UNITED STATES

(18) The Secretary or his representatives shall have free access at all reasonable times to the books and records of the allottee relating to the disposal of electrical energy, with the right at any time during office hours to make copies of and from the same.

TRANSMISSION

(19) The company having, in article twenty-five (25) of Exhibit A hereof, undertaken that it shall transmit over its main transmission lines, constructed for carrying Boulder Canyon power, such power allocated to the allottee as it may desire to have transmitted over such lines, the allottee agrees to compensate the company therefor as may be mutually agreed upon between the company and the allottee. In the event that an operator of main transmission lines other than the company transmits the energy allocated to the allottee pursuant to Exhibit A, article twenty-five (25) (c), the obligation of the allottee under this paragraph shall apply for the benefit of such other operator as though it had been named herein instead of the company. In any event, disputes and disagreements between the allottee and the operator of main transmission lines shall be determined in accordance with article twenty-one (21) (a) hereof. Nothing herein contained, however, shall relieve the allottee of the obligation to pay the United States for energy allocated to the allottee whether transmitted or not.

DURATION OF CONTRACT

(20) This contract shall remain in effect until the expiration of a period of fifty (50) years from the date at which energy is ready for delivery to the city, as announced by the Secretary. The holder of any contract for electrical energy, including the allottee, not in default thereunder, shall be entitled to a renewal thereof upon such terms and conditions as may be authorized or required under the then existing laws and regulations, unless the property of such holder dependent for its usefulness on a continuation of the contract be purchased or acquired and such contractor be compensated for damages to its property, used and useful in the transmission and distribution of such electrical energy and not taken, resulting from the termination of the supply.

DISPUTES AND DISAGREEMENTS

(21) (a) Disputes or disagreements arising under this contract between the allottee and any lessee or other allottee shall be arbitrated by three arbitrators, except where otherwise provided in this contract. The allottee shall name one arbitrator, and the other disputant shall name one. These two shall name the third. If either disputant has notified the other that arbitration is demanded and that it has named an arbitrator, and if thereafter the other disputant fails to name an arbitrator for fifteen days, the Secretary, if requested

by either disputant, shall name such arbitrator, who shall proceed as though named by the disputant. The two arbitrators so named shall meet within five days after appointment of the second, and name the third. If they fail to do so, the Secretary will, on request by either disputant or arbitrator, name the third. A decision by any two of the three arbitrators shall be binding on the disputants and enforceable by court proceedings or by the Secretary in his discretion. Arbitration as herein provided, or the failure of the arbitrators to render a decision within six months of appointment of the third arbitrator, shall be a condition precedent to suit by either disputant against the other upon the matter in dispute.

(b) Disputes or disagreements between the United States and the allottee as to the interpretation or performance of the provisions of this contract shall be determined either by arbitration or court proceedings, the Secretary of the Interior being authorized to act for the United States in such proceedings. Whenever a controversy arises out of this contract, and the disputants agree to submit the matter to arbitration, the allottee shall name one arbitrator and the Secretary shall name one arbitrator, and the two arbitrators thus chosen shall elect three other arbitrators, but in the event of their failure to name all or any of the three arbitrators within five (5) days after their first meeting, such arbitrators, not so elected, shall be named by the senior judge of the United States Circuit Court of Appeals for the ninth circuit. The decision of any three of such arbitrators shall be a valid and binding award of the arbitrators.

USE OF PUBLIC AND RESERVED LANDS OF THE UNITED STATES

(22) The use is authorized of such public and reserved lands of the United States as may be necessary or convenient for the construction, operation, and maintenance of main transmission lines, to transmit electrical energy generated at Hoover Dam, together with the use of such public and reserved lands of the United States as may be designated by the Secretary, from time to time, for camp sites, residences for employees, warehouses, and other uses incident to the operation and maintenance of the power plant and incidental works.

PRIORITY OF CLAIMS OF THE UNITED STATES

(23) Claims of the United States arising out of this contract shall have priority over all others, secured or unsecured.

TRANSFER OF INTEREST IN CONTRACT

(24) No voluntary transfer of this contract, or of the rights hereunder, shall be made without the written approval of the Secretary; and any successor or assign of the rights of the allottee, whether by voluntary transfer, judicial sale, foreclosure sale, or otherwise, shall be subject to all the provisions of the Boulder Canyon project act and also subject to all the provisions and conditions of this contract to the same extent as though such successor or assign were the original contractor hereunder; provided, that a mortgage or trust deed or judicial sales made thereunder shall not be deemed voluntary transfers within the meaning of this article.