ified in the Power Sales Contract between the Participant and the Administrator. Such energy and capacity shall be made available to the Participant solely for use in its own distribution system. If the Participant has an effective Power Sales Contract, the Administrator shall, notwithstanding any other provision of this agreement, not be obligated to make available to the Participant during any month electric energy and capacity hereunder in excess of the amounts of firm power which he is obligated to make available to the Participant during such month under such Power Sales Contract. The exchange electric energy and capacity shall be made available hereunder to the Participant at each point of delivery specified in the Power Sales Contract and shall be determined by multiplying the total amounts of firm power in terms of electric energy and capacity which would otherwise have been made available to the Participant at each such point under said Power Sales Contract in the absence of this agreement by the ratio which the cost to be paid by the Participant as his monthly share of the Project Annual Costs bears to the Aggregate Billing for the corresponding month; provided, however, that such ratio shall not exceed unity.

(e) The Supply System, within ninety (90) days after the end of each Contract Year, commencing at the time specified in subsection (a) of this section, shall submit to the Participant and the Administrator a statement, prepared by a certified public accountant, setting forth the intemized actual Project Annual Costs for the preceding Contract Year and the amount thereof allocated to each Participant. To the extent that such actual Project Annual Costs differ from the estimated Project Annual Costs determined as provided in subsection (b) of this section, such difference shall be credited to the Government or to the Participant, whichever is applicable, on the amounts due the Government under the Power Sales Contract of the Participant during the remaining months of the Contract Year in which such itemized statement has been received by the Administrator.

(f) If the Participant does not have, at any time during the term hereof, an effective Power Sales Contract with the Administrator, the Government shall make available each month to the Participant an amount of exchange electric energy which is equal to the quotient obtained by dividing the monthly share of Project Annual Costs allocated to the Participant, as provided in subsection (b) of this section, by the average cost per kilowatt-hour for firm power under the Administrator's prevailing rates to the other Participants of the same class who are customers of the Government. Such electric energy shall be made available to the Participant at a rate not to exceed an amount determined by dividing such electric energy in average kilowatts for such month by sixty percent (60%).

6. Scheduling Arrangements.-The Supply System's dispatchers shall schedule the amounts of electric energy to be generated at the Project during each hour in each day in the term hereof, commencing at the time specified in section 5(a), in accordance with schedules prepared by the Government's dispatchers and submitted to the Supply System at least twelve (12) hours prior to each day. If conditions change substantially from those used in preparing such schedule, and a revision in such schedule of the planned operation of the Project becomes necessary, the Government's dispatcher will immediately notify the Supply System of such revision in schedule.

7. Operation and Maintenance of the Project.

(a) The Supply System shall economically and efficiently operate and maintain the Project at reasonable cost and in a manner satisfactory to, and in accordance with operating guides furnished by, the Administrator. The Supply System shall operate and maintain the new production reactor at any time during the term of this agreement when said reactor is not being utilized by the Commission for its primary purpose.

Once each year representatives of the Supply System, in consultation with representatives of the Administrator and the Commission, will prepare a maintenance program showing the approximate duration and date of interruption of a Project generator, transformer bank, and other apparatus and equipment, including any other work which can reasonably be expected to affect the Project Output. Such work shall be performed, to the extent practicable, when the Government's system load commitments and operating conditions are least affected. Minor maintenance work will be arranged between the Government's operations section and the representative of the Supply System operating the Project.

(b) As soon as reasonably practicable, the Project representatives shall notify the Government's dispatchers of any emergency outage of facilities affecting delivery of power from the Project and the probable duration of such outages.

8. Permits.

(a) If any equipment or facilities of the Supply System or the Government is, or is to be by the term of this agreement, located on the property of the other, a permit to install, test, maintain, inspect, replace, and repair during the term of this agreement, and to remove at the expiration of said term, such equipment and facilities, together with the right of ingress to and egress from the location thereof at all reasonable times in such term, is hereby granted by the other party. (b) The Administrator shall have the right to read, at all reasonable times, any and all meters which are installed on the property of the Supply System.

9. Ownership of Facilities and Option to Acquire.-Ownership of the Project shall be and remain in the Supply System at all times during the term of this agreement; provided, however, that the Government may, at its option:

(a) acquire such Project, other assets and liabilities associated therewith prior to the time when all Revenue Bonds or other obligations sold or incurred by the Supply System to finance the Project have matured and been completely paid, upon payment of all obligations of the Supply System incurred in connection with the Project including all outstanding Revenue Bonds, plus accrued interest and the premium, if any, on redemption thereof, and other current obligations properly paid or incurred by the Supply System for such purpose;

or

(b) acquire the ownership of such Project and all assets associated therewith at no cost to the Government, at the time of termination of this agreement, provided that all liabilities and obligations of the Supply System connected with the Project have been satisfactorily discharged or assumed in writing by the Government.

10. Agreement between the Supply System and the Commission. The Supply System has entered into an agreement with the Commission

(hereinafter referred to as the Commission-Supply System Agreement) relating to the construction and operation of the Project by the Supply System. A copy of the Commission-Supply System Agreement, as approved by the Administrator, is hereby attached to this agreement as Exhibit C, and the Supply System hereby agrees to carry out the terms thereof. Any amendments thereto or renewals thereof shall be subject to the review and prior approval of the Administrator and, upon such approval, shall be made a part of said Exhibit C.

11. Accounts.-The Supply System agrees to keep accurate records and accounts for the Project as required by appropriate public authority and to carry out the terms of this agreement. Said accounts shall be the subject of an annual audit by a firm of certified public accountants experienced in electric utility accounting. A copy of each such certified annual report shall be furnished by the Supply System to the Participants and the Administrator.

12. Project Revenues-Special Funds.-The Supply System agrees that it will establish and maintain each of the special funds and accounts created by the Bond Resolution in the manner therein provided, and the parties hereto hereby agree that the Supply System is required to comply with all of the provisions and requirements of the Bond Resolution.

13. Insurance.-The Supply System agrees that, in cooperation with the Administrator, it will obtain and maintain in full force and effect during the term hereof, to the extent available at reasonable cost, adequate insurance by responsible insurers, with policies payable to the Supply System for the benefit of the Supply System, the Government and the Participants as their respective interests may appear, against claims and loss or damages which may result from any of the following events:

1. Claims against the Supply System under the Workmen's Compensation Law of the State of Washington and Employers' Liability;

2. Public liability for bodily injury and property damage;

3. Physical loss or damage to the Project on a replacement cost basis;

4. Business interruption loss to the Supply System or to the Participants, or to all or any of them, resulting from a delay in completion of the Project, or by interruption or reduction of generation or transmission of power and energy from the System caused by physical loss, damage or destruction; and

5. Such other risks as may be agreed upon by the Supply System and the Administrator.

14. Eight-Hour Law and Overtime Compensation.-No laborer or mechanic doing any part of the work contemplated by this agreement in the employ of the Supply System and/or the Participant, or any subcontractor contracting for any part of said work contemplated, shall be required or permitted to work more than eight hours in any one calendar day upon such work except upon the condition that compensation is paid to such laborer or mechanic in accordance with the provisions of this section. The wages of every laborer and mechanic employed by the Supply System and the Participant, or any subcontractor engaged in the performance of this agreement, shall be computed on a basic day rate of eight (8) hours per day and work in excess of eight (8) hours per day is permitted only upon the condition that

every such laborer and mechanic shall be compensated for all hours in excess of eight (8) hours per day at not less than one and one-half times the basic rate of pay. For each violation of the requirement of this section a penalty of five dollars ($5) shall be imposed upon the Supply System and/or the Participants for each laborer or mechanic for every calendar day in which such employee is required or permitted to labor more than eight (8) hours upon said work without receiving compensation computed in accordance with this section, and all penalties thus imposed shall be paid upon demand to the Government for its use and benefit; provided, however, that this stipulation shall be subject in all respects to the exceptions and provisions of U.S. Code, title 40, sections 321, 324, 325, 325a, and 326, relating to hours of labor and compensation for overtime.

15. Convict Labor.-The Supply System and the Participant shall not employ any person undergoing sentence of imprisonment at hard labor for the performance of any of their obligations hereunder.

16. Nondiscrimination.-In connection with the performance of work under this contract, the Supply System and the Participant agree as follows:

(1) The Supply System and the Participant will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Supply System and the Participant agree to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Administrator setting forth the provisions of this nondiscrimination clause.

(2) The Supply System and the Participant will, in all solicitations or advertisements for employees placed by or on behalf of the Supply System and the Participant, respectively, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin.

(3) The Supply System and the Participant will send to each labor union or representative of workers with which they have collective bargaining agreements or other contracts or understandings, a notice, to be provided by the Administrator, advising said labor union or workers representative of their commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

(4) The Supply System and the Participant will comply with all provisions of Executive Order No. 10925 of March 6, 1961, and of the rules, regulations, and relevant orders of the President's Committee on Equal Employment Opportunity created thereby.

(5) The Supply System and the Participant will furnish all information and reports required by Executive Order No. 10925 of March 6, 1961, and by the rules, regulations, and orders of the said Committee. or pursuant thereto, and will permit access to their books, records, and accounts by the Administrator and the Committee for purposes of investigation to ascertain compliance with such rules, regulations and orders.

(6) In the event of the Supply System's and/or the Participant's noncompliance with the nondiscrimination clauses of this contract or

with any of the said rules, regulations, or orders, this contract may be cancelled in whole or in part and the Supply System and/or the Participant may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 10925 of March 6, 1961, and such other sanctions may be imposed and remedies invoked as provided in the said Executive Order or by rule, regulation, or order of the President's Committee on Equal Employment Opportunity, or as otherwise provided by law.

(7) The Supply System and the Participant will include the provisions of the foregoing paragraphs (1) through (6) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the President's Committee on Equal Employment Opportunity issued pursuant to section 303 of Executive Order No. 10925 of March 6, 1961, so that such provisions will be binding upon each subcontractor or vendor. The Supply System and the Participant will take such action with respect to any subcontract or purchase order as the Administrator may direct as a means of enforcing such provisions, including sanctions for noncompliance; provided, however, that in the event the Supply System and/or the Participant becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the Administrator, they may request the United States to enter into such litigation to protect the interests of the United States.

17. Waiver of Default.-Any waiver at any time by any party to this agreement of its rights with respect to any default of any other party thereto, or with respect to any other matter arising in connection with such agreement, shall not be considered a waiver with respect to any subsequent default or matter.

18. Notices and Computation of Time.-Any notice required by this agreement to be given to any party shall be effective when it is received by such party, and in computing any period of time from such notice, such period shall commence at 12:00 p.m. on the date of receipt of such notice.

19. Interest of Member of Congress.-No Member of, or Delegate to Congress, or Resident Commissioner shall be admitted to any share or part of this agreement or to any benefit that may arise therefrom. Nothing, however, herein contained shall be construed to extend to such agreement if made with a corporation for its general benefit.

20. Assignment of Agreement.-This agreement shall inure to the benefit of, and shall be binding upon the respective successors and assigns of the parties to this agreement; provided, however, that neither this agreement nor any interest therein shall be transferred or assigned by either party to any party other than to the State of Washington, the United States, or an agency of either thereof, without the written consent of the other. The Participant agrees that Exhibit A shall be modified to reflect the assignment of any Exchange Agreement by a Participant. No assignment or transfer of this agreement shall relieve the parties of any obligation incurred hereunder.

21. Arbitration.-If the parties hereto do not agree regarding any question of fact arising under the provisions of this agreement a determination shall be made by a committee composed of a member appointed by the Administrator and a member appointed by the Supply System. If such members are unable to reach an agreement, on the item of controversy, they shall appoint a third member who