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month immediately following the month during which the energy was gen-
erated, and payments shall be due on the first day of the month immediately
succeeding. If such charges (less proper and applicable credits) are not paid
when due an interest charge of one per centum (1%) of the amount unpaid
shall be added thereto, and thereafter an additional interest charge of one per
centum (1%) of the principal sum unpaid shall be added on the first day of
each succeeding calendar month until the amount due, including such interest,
is paid in full, but nothing contained in this article shall be construed as in
any manner abridging, limiting, or depriving the United States of any means of
enforcing any remedy either at law or in equity for the breach of any of the
provisions hereof which it would otherwise have.

(b) In accordance with the provisions of Section 4 (b) of the Adjustment
Act, in the event payments to the States of Arizona and Nevada, or either of
them, under Section 2 (c) of the Adjustment Act, shall be reduced by reason
of the collection of taxes mentioned in said section, adjustments shall be made,
from time to time, with each allottee which shall have paid any such taxes, by
credits or otherwise, for that proportion of the amount of such reductions which
the amount of the payments of such taxes by such allottee bears to the total
amount of such taxes collected.

MINIMUM ANNUAL PAYMENTS

16. The minimum quantity of firm energy which the State shall take and/or
pay for at firm energy rates in each year of operation under the terms of this
contract shall be the total kilowatt hours stated in notices of withdrawal which
are in effect as of June 1 of such year of operation as properly adjusted to ac-
count for the number of kilowatt hours for the remainder of such year of oper-
ation added or subtracted by notices of withdrawal or relinquishment becoming
effective during such year of operation. No period of less than one day will
be considered in making such adjustments. The minimum annual energy pay.
ment shall be reduced in case of interruptions or curtailment of delivery of wa-
ter as provided in Article 12 hereof.

DURATION OF CONTRACT

17. This contract shall remain in effect to and including May 31, 1987, un-
less sooner terminated as elsewhere herein provided. The State, if this contract
has not been terminated prior to said date, shall be entitled to a renewal hereof
upon such terms and conditions as may be authorized or required under the
then existing laws and regulations, unless the property of the State dependent for
its usefulness on a continuation of this contract be purchased or acquired, and
the State 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.

NO ENERGY TO BE DELIVERED WITHOUT PAYMENT

18. Unless an extension of time for payment has been first obtained from
the Secretary, in writing, no energy shall be generated for, or delivered to, the
State if it shall be in arrears for more than twelve (12) months in the payment
of any charge due to the United States hereunder.

CONTRACT MAY BE TERMINATED IN CASE OF DEFAULT IN PAYMENT

19. If the State shall be in arrears for more than twelve (12) months in the
payment of any charge, including interest, due to the United States hereunder,
and shall not have obtained an extension of time from the Secretary for the
payment thereof, or, if such extension be obtained, has not made such payment
within the time as extended, then the Secretary shall have the right forthwith
upon written notice to the State to terminate this contract; provided, that the
State shall have the right at any time within four (4) years from date of the
first of the defaults for which the contract is terminated, to become reinstated
hereunder by payment to the United States of all arrearages including interest,
if any, together with any and all loss incurred by the United States by reason of
such termination and compensation to the allottees affected for property rendered
idle by such reinstatement. If the State and the allottees affected fail to agree
on such compensation, the disagreement shall be determined by arbitration as
provided in Article 25 of Exhibit 2. Nothing contained in this contract shall
relieve the State 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 State to take and/or pay for energy as provided in this contract.

ACCESS TO BOOKS AND RECORDS

20. The Secretary or his duly authorized representatives shall have free access
at all reasonable times to the books and records of the State relating to the
transmission and disposal of electrical energy hereunder, with the right at any
time during office hours to make copies of or from the same.

USE OF PUBLIC AND RESERVED LANDS OF THE UNITED STATES

21. 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 Boulder 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 such main transmission lines.

MODIFICATIONS

22. Any modifications, extension or waiver by the Secretary, subsequent to May 31, 1941, of any of the terms, provisions or requirements of any regulation or contract, promulgated or executed subsequent to May 19, 1941, for the benefit of any one or more of the allottees shall not be denied to the State.

DISPUTES AND DISAGREEMENTS

23. Disputes or disagreements between the United States and the State as to the interpretation or performance of the provisions of this contract shall be determined either by arbitration or court proceedings. If in any such arbitration or court proceedings or otherwise any sum or amount paid by the State on the demand or bill of the United States under this contract shall be held not to have been due or owing, payment shall not be deemed to have been voluntary, and such sum or amount shall be refunded. Whenever a controversy arises out of this contract, and the disputants agree to submit the matter to arbitration the Secretary shall name one arbitrator and the State shall name one arbitrator, and the two arbitrators thus chosen shall select a third arbitrator, but in the event of their failure to name such third arbitrator within five days after their first meeting, such third arbitrator shall be named by the Chief Justice of the Supreme Court of the United States. The decision of any two of such arbitrators shall be a valid award of the arbitrators, and shall be final and binding as to the parties hereto.

PRIORITY OF CLAIMS OF THE UNITED STATES

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

TITLE TO REMAIN IN UNITED STATES

25. The title to Boulder Dam and reservoir, Boulder Power Plant, and incidental works, including generating machinery and equipment, shall forever remain in the United States.

EFFECT OF WAIVER OF BREACH OF CONTRACT

26. The waiver of a breach of any of the provisions of this contract shall not be deemed to be a waiver of any provision hereof, or of any other subsequent breach of any provision hereof.

833942—50–71

TRANSFER OF INTEREST IN CONTRACT

27. No voluntary transfer of this contract, or of the rights of the State hereunder, shall be made without the written approval of the Secretary; and any successor or assign of the rights of the State, whether by voluntary transfer, judicial sale, trustee's sale, or otherwise, shall be subject to all the conditions of the Project Act as modified by the Adjustment Act, and of the Adjustment 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 the execution of a mortgage or trust deed, or judicial or trustee's sale made thereunder, shall not be deemed a voluntary transfer within the meaning of this Article.

NOTICES

28. (a) Any notice, demand or request required or authorized by this contract to be given or made to or upon the United States shall be delivered, or mailed postage prepaid, to the Director of Power, United States Bureau of Reclamation, Boulder City, Nevada, except where, by the terms hereof, the same is to be given or made to or upon the Secretary, in which event it shall be delivered, or mailed postage prepaid, to the Secretary, at Washington, D. C.

(b) Any notice, demand or request required or authorized by this contract to be given or made to or upon the State shall be delivered, or mailed postage prepaid, to the Secretary of the Arizona Power Authority, Phoenix, Arizona.

(c) The designation of any person specified in this article or in any such request or notice, or the address of any such person, may be changed at any time by notice given in the same manner as provided in this article for other notices.

CONTRACT CONTINGENT UPON APPROPRIATIONS

29. This contract is subject to appropriations being made by Congress from time to time of money sufficient to make all payments and to provide for the doing and performance of all things on the part of the United States to be done and performed under the terms hereof, and to there being sufficient money available in the Colorado River Dam fund for such purposes. No liability shall accrue against the United States, its officers, agents or employees, by reason of sufficient money not being so appropriated, or on account of there not being sufficient money in the Colorado River Dam fund for such purposes.

OFFICIALS NOT TO BENEFIT

30. No Member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or part of this contract or to any benefit that may arise herefrom, but this restriction shall not be construed to extend to this contract if made with a corporation or company for its general benefit.

IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed the day and year first above written.

THE UNITED STATES OF AMERICA, By Harold L. ICKES,

Secretary of the Interior.

Arizona POWER AUTHORITY,

By M. J. DOUGHERTY, Chairman. Attest:

MILDRED MCCLAIN, Secretary.

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