Exhibit 10.17
PYRAMID LAKE PAIUTE TRIBE FISH SPRINGS RANCH SETTLEMENT AGREEMENT
     THIS SETTLEMENT AGREEMENT, dated as of May 30, 2007 is entered into among
the Pyramid Lake Paiute Tribe of Indians, the United States of America, the
Bureau of Land Management and the Department of the Interior, and Fish Springs
Ranch, LLC.
1.0 RECITALS
1.1. Fish Springs owns Water Rights in the amount of 14,108 acre-feet per year.
The State Engineer, by a Ruling and a Supplemental Ruling, has authorized Fish
Springs to Transfer up to 13,000 acre-feet per year of Water Rights for use
outside of the Honey Lake Valley Basin.
1.2. Pursuant to the State Engineer’s authorization, Fish Springs has proposed
to Pump and Transfer up to 8,000 acre-feet per year of the Water Rights to the
North Valleys Planning Area by means of the Project described in the FEIS and
the ROD issued by the BLM. The Tribe has objected to the FEIS, the ROD, and the
Project, and asserts that the Project will harm the resources of the
Reservation, will cause Injuries to Tribal Water Rights, and will impair the
Tribe’s existing and claimed Tribal Water Rights in the Honey Lake Valley Basin,
the Smoke Creek Desert Basin, Pyramid Lake, and the Pyramid Lake Valley Basin.
1.3. On July 20, 2006, the Tribe filed before the Interior Board of Land
Appeals, Office of the Secretary of the Interior (IBLA) an appeal and request
for stay of the ROD. On September 7, 2006, the IBLA denied the requested stay of
the Tribe. The Tribe’s appeal before the IBLA is Number IBLA 2006-223,
NVN-76800.

 

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1.4. On October 13, 2006, the Tribe filed a complaint in the United States
District Court of Nevada Case Number 2:06-CV-01293-LDG-LRL, alleging, among
other matters, that the FEIS and ROD did not comply with NEPA and that the BLM
violated the federal trust obligation owed to the Tribe. The District Court has
enjoined any further construction activity, except as expressly set forth in its
May 8, 2007, order, pending a final determination in that case. An evidentiary
hearing date has been set before the Court for June 4, 2007.
1.5. On April 11, 2007, the Tribe filed Notice of Appeal of the District Court’s
Preliminary Injunction. On April 13, 2007, Fish Springs Ranch filed a notice of
cross-appeal. That appeal and cross-appeal are pending before the Ninth Circuit
Court of Appeals, Case Numbers 07-15633 and 07-15671.
1.6. The Parties have agreed to settle and resolve permanently (a) the Tribe’s
objections to the Project, the FEIS, the ROD, the Ground Water Rights, and the
Additional Fish Springs Water Rights, and (b) the Tribe’s claims that the
Project, the Water Rights, the Ground Water Rights, and the Additional Fish
Springs Water Rights will harm the resources of the Reservation, will cause
Injuries to Tribal Water Rights, and will impair the Tribe’s existing and
claimed Tribal Water Rights in the Honey Lake Valley Basin, Smoke Creek Desert
Basin, Pyramid Lake, and the Pyramid Lake Valley Basin.
1.7. By means of this Agreement, the Tribe and Fish Springs intend to completely
and fully settle and conclude the current disputes between them with this
settlement that has two independent components: First, in consideration of the
payments and property called for in Paragraph 4.1 of this Agreement, the Tribe
and Fish Springs intend to settle and

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forever compromise all administrative appeals and end all litigation, whether
currently pending or arising in the future, involving the Tribe’s objections to
the Project, the Ground Water Rights, the Additional Fish Springs Water Rights,
the FEIS and the ROD, or relating to any potential impacts to the Tribe or its
resources arising out of the Project, the FEIS, the ROD, the Groundwater Rights,
and the Additional Fish Springs Water Rights; and Second, in consideration of
the payments called for in Paragraph 4.2 of this Agreement, to completely and
fully settle any and all claims of the Tribe and of the United States on behalf
of the Tribe and its members, for impacts or injuries to existing and claimed
Tribal Water Rights and Injuries to Tribal Water Rights in the Honey Lake Valley
Basin, the Smoke Creek Desert Basin, Pyramid Lake, and the Pyramid Lake Valley
Basin or relating to any potential impacts to the Reservation and to existing
and claimed Tribal Water Rights and Injuries to Tribal Water Rights resulting
from the Project, the Water Rights, the Ground Water Rights, and the Additional
Fish Springs Water Rights.
1.8. In addition, the Parties intend this Agreement to fulfill the United
States’ trust obligation to the Tribe to protect existing and claimed Tribal
Water Rights, to prevent Injuries to Tribal Water Rights, and to protect the
Reservation and its resources, including the United States’ trust obligations
regarding implementation of the Project and the Pumping and Transfer of the
Ground Water Rights and the Additional Fish Springs Water Rights.
1.9. It is the policy of the United States, in fulfillment of its trust
responsibility to Indian tribes, to promote Indian self-determination and
economic self-sufficiency, and to

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settle, wherever possible, the water rights claims of Indian tribes without
lengthy and costly litigation.
1.10. In order to fully implement this Agreement, the Parties recognize that
additional legislative, judicial, administrative, or other actions are required.
Accordingly, the Tribe and Fish Springs recognize that the BLM and the United
States will execute this agreement after the Tribe and Fish Springs will execute
the Agreement. The Tribe and Fish Springs intend to act in conformance with the
obligations under this Agreement until such time as the BLM and The United
States execute the Agreement.
     NOW, THEREFORE, the Parties agree as follows:
2.0 DEFINITIONS
     For purposes of this Agreement, the following terms shall have the meanings
set forth below:
2.1. “Act of Congress” shall mean the legislation enacted by Congress and
approved by the President of the United States ratifying and approving this
Agreement in substantially the form attached as Exhibit “A.”
2.2. “Additional Fish Springs Water Rights” shall mean the Pumping and Transfer
of Ground Water Rights in excess of 8,000 acre feet per year, up to 13,000 acre
feet per year, pursuant to the Ruling, the Supplemental Ruling, and
Paragraph 4.11 of this Agreement.
2.3. “Agreement” shall mean this Pyramid Lake Paiute Tribe Fish Springs Ranch
Settlement Agreement and all Exhibits hereto.
2.4. “Approval of the Secretary” or “Secretarial Approval” shall mean the
approval of the Secretary of the Interior acting in the capacity of the Trustee
for the Tribe and its members as such approval is required and directed under
the Act of Congress.

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2.5. “Aquatrac Land” shall mean the 6,214.32 acres of land, more or less,
including all water rights and other appurtenances described in Exhibit “B.”
2.6. “BLM” shall mean the Bureau of Land Management and the United States
Department of the Interior, who granted the ROD, and are named as defendants in
the Federal District Court Action Ninth Circuit Appeals and in the IBLA Appeal,
and are acting solely in the capacity as defendants in the IBLA Appeal, the
Federal District Court Action, the Ninth Circuit Appeals, and not in any
capacity as trustee for the Tribe and its members.
2.7. Effective dates related to this Agreement shall be as follows:

  2.7.1.   “Effective Date” shall mean the date as of which both Fish Springs
and the Tribe have executed this Settlement Agreement; the parties to the
Federal Court Action have filed the stipulation to dissolve the preliminary
injunction and the injunction pending appeal, and to stay proceedings in the
Federal District Action; filed the dismissal of the IBLA appeal; and filed the
dismissal of the Ninth Circuit Appeals.     2.7.2.   “First Payment Date” shall
mean January 8, 2008.     2.7.3.   “Final Payment Date” shall mean January 8,
2009 or passage of an Act of Congress and Approval of the Secretary, whichever
occurs later.

2.8. “Effluent” shall mean the product discharged from the point of final
treatment from within a sewage collection and treatment system as referred to in
Title 48, Chapter 533, of the Nevada Revised Statutes.
2.9. “End Users” shall mean Washoe County, the City of Reno and the North
Valleys Planning Area in the State of Nevada, all persons in or residing in, and
all entities doing

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business in, Washoe County, the City of Reno and the North Valleys Planning Area
now and in the future, using water Pumped and Transferred through the Project
pursuant to this Agreement for whatever purpose, as well as their successors and
assigns.
2.10. “Federal District Court Action” shall mean the action described in Recital
1.4.
2.11. “FEIS” shall mean the Final Environmental Impact Statement, North Valleys
Rights-of-Way Projects, prepared by the United States Department of the
Interior, Bureau of Land Management, notice of which was published in the
November 10, 2005, Federal Register.
2.12. “Fish Springs” shall mean Fish Springs Ranch, LLC, a Nevada limited
liability company, its parent, Pico Holdings, Inc., a Delaware corporation, Pico
Holdings, Inc.’s wholly or partially-owned subsidiaries, including but not
limited to Nevada Land and Resource Company, LLC, a Nevada limited liability
company, and Vidler Water Company, Inc., a Nevada corporation, and all of their
successors and assigns.
2.13. “Fish Springs Ranch” shall mean the land described in Exhibit “C.”
2.14. “Grant, Bargain and Sale Deed” shall mean the deed conveying the Aquatrac
Land attached as Exhibit “D.”
2.15. “Ground Water Rights” shall mean the Pumping and Transfer of up to 8,000
acre-feet of the Ground Water Rights per year pursuant to the Ruling and the
Supplemental Ruling, through the Project and pursuant to the Right-of-Way
granted in the ROD.
2.16. “Honey Lake Valley Basin” shall mean the Honey Lake Valley Hydrographic
Basin as described as Nevada Hydrographic Water Basin 97.
2.17. “IBLA Appeal” shall mean the IBLA action described in Recital 1.3.

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2.18. “Injuries to Tribal Water Rights” shall mean any interference with,
diminution of, or deprivation of Tribal Water Rights including, but not limited
to, a lowering of the underground water table of the Reservation, a diminution
of the levels of Pyramid Lake or the flows in or into the Truckee River, impacts
to water quality on or off the Reservation caused by Pumping at Fish Springs
Ranch, Pumping and Transfer of the Ground Water Rights and the Additional Fish
Springs Water Rights, a diminution of groundwater flows onto the Reservation,
subsidence of land on the Reservation, all impacts to water or land on the
Reservation or on the land aboriginally occupied by the Tribe and its members
and their predecessors, including all such interferences with, diminutions of,
or deprivations of Tribal Water Rights from the Project, the Water Rights, the
Ground Water Rights, and the Additional Fish Springs Water Rights which are
identified in the FEIS or which are not identified in the FEIS but which occur
as a result of the Project, the Water Rights, the Ground Water Rights, and the
Additional Fish Springs Water Rights.
2.19. “North Valleys Planning Area” shall mean an area of approximately 245
square miles of land located in Washoe County as described in the Washoe County
Master Plan.
2.20. “Party” shall mean any signatory to this Agreement; “Parties” shall mean
all of the signatories to this Agreement.
2.21. “Project” shall mean the Pumping and Transfer of 8,000 acre-feet of the
Ground Water Rights per year as described in the FEIS and ROD and the Additional
Fish Springs Water Rights as ultimately carried out hereafter. The term does not
include the project proposed by Intermountain Water Supply, Ltd. and described
in the FEIS.

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2.22. “Pump, Pumped, or Pumping” shall mean the withdrawal of water from beneath
the surface of the earth through a well.
2.23. “Pyramid Lake” shall mean the body of water that serves as the terminus
for the Truckee River in Nevada and that reach of the Truckee River within the
boundaries of the Reservation.
2.24. “Pyramid Lake Valley Basin” shall mean the Pyramid Lake Valley
Hydrographic Basin as described as Nevada Hydrographic Water Basin 81.
2.25. “Pyramid Lake Paiute Tribe” or “the Tribe” shall mean the members of, and
the government composed of the members of, the Pyramid Lake Paiute Tribe,
organized under section 16 of the act of June 18, 1934, as codified at 25 U.S.C.
476.
2.26. “Reservation” shall mean the reservation of the Pyramid Lake Paiute Tribe,
created by Executive Order ___ dated March 23, 1874.
2.27. “Reserved Rights Doctrine” shall mean the doctrine as announced by the
United States Supreme Court in Winters v. United States, 207 U.S. 564 (1908) and
subsequent decisions of the courts of the United States.
2.28. “ROD” shall mean the Record of Decision that is the separate, concise
public record of the BLM District Manager’s decision regarding the FEIS and the
Project issued May 31, 2006 pursuant to the requirements of 40 C.F.R. § 1505.2.
ROD shall include the Right of Way granted to Fish Springs pursuant to the terms
of the ROD.
2.29. “Ruling” shall mean Ruling No. 3787 signed by the State Engineer on
March 1, 1991, and attached hereto as Exhibit “E.”
2.30. “Secretary” shall mean the Secretary of the United States Department of
the Interior.

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2.31. “Smoke Creek Desert Basin” shall mean the Smoke Creek Desert Hydrographic
Basin described as Nevada Hydrographic Water Basin 21.
2.32. “State Engineer” shall mean the office within the State of Nevada created
pursuant to N.R.S. § 532.010 et seq.
2.33. “Supplemental Ruling” shall mean the Supplemental Ruling on Remand
No. 3787A signed by the State Engineer on October 9, 1992, and attached hereto
as Exhibit “F.”
2.34. “Transfer” or “Transferred” shall mean the conveyance, transport, or
importation of water Pumped at Fish Springs Ranch to any location outside of the
Honey Lake Valley Basin.
2.35. “Tribal Water Rights” shall mean all rights of the Reservation and of the
Tribe and its members to the use for any purpose of surface water, groundwater,
or Effluent on or off the Reservation, whether based on state law, federal law,
or other law, whether claimed, unclaimed, asserted, or unasserted, whether
existing in the past, present, or future within the Honey Lake Valley Basin, the
Smoke Creek Desert Basin, Pyramid Lake, and the Pyramid Lake Valley Basin, and
all past, present, and future rights of the Tribe and its members to the use for
any purpose of surface water, groundwater, or Effluent based upon the aboriginal
occupation of the Tribe and its members and their predecessors of any area of
land.
2.36. “Truckee River Operating Agreement” or “TROA” shall mean the October 2003
draft of the Truckee River Operating Agreement negotiated for the purpose of
carrying out the terms of the Truckee-Carson-Pyramid Lake Water Rights
Settlement Act, Public Law No. 101-618, and any final, signed version of the
Truckee River Operating

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Agreement which becomes effective under the terms of the Truckee-Carson-Pyramid
Lake Water Rights Settlement Act.
2.37. “Truckee River Water Quality Settlement Agreement” shall mean the
agreement dated October 10, 1996, between the Tribe, the City of Reno, the City
of Sparks, the County of Washoe, the United States Department of the Interior,
the United States Department of Justice, the United States Environmental
Protection Agency, and the Nevada Division of Environmental Protection.
2.38. “United States” shall mean the United States of America, acting through
the Secretary, as trustee for the Tribe and its members.
2.39. “Water Rights” shall mean the 14,108 acre-feet of water available to Fish
Springs pursuant to certificates of water rights issued to Fish Springs or its
predecessors in interest by the State Engineer, copies of which are attached as
Exhibit “G.”
2.40. “Wiring Instructions” shall mean the wiring instruction provided for
deposit to the Trust Account of Robert C. Maddox & Associates.
3.0 EXHIBITS
     The following exhibits are attached hereto, incorporated herein and made a
part of this Agreement.

              Exhibit A   Exhibit C   Exhibit E   Exhibit G Exhibit B  
Exhibit D   Exhibit F   Exhibit H

4.0 AGREEMENTS OF FISH SPRINGS
4.1. Fish Springs agrees to make the payments set forth in this Paragraph 4.1 in
order to fully and forever discharge and settle the Tribe’s objections and
claims arising out of or related to the ROD, the FEIS, the Project, the Ground
Water Rights, the Additional

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Fish Springs Water Rights, the IBLA Appeal, and the Federal District Court
Action. The Parties intend that the obligations of the Tribe, Fish Springs, and
the BLM to settle these claims are not contingent on the Act of Congress or the
Approval of the Secretary and intend that the Parties are bound by these
obligations immediately upon the execution of this Agreement by the Tribe, Fish
Springs, and the BLM.
4.1.1. On the date that Fish Springs and the Tribe execute this Settlement
Agreement, Fish Springs shall deliver to Don Springmeyer, Esq., counsel for the
Tribe, for disbursal to the Tribe the sum of Five Hundred Thousand Dollars
($500,000.00) and the Grant, Bargain and Sale Deed for the Aquatrac Land which
shall be not be disbursed to the Tribe or recorded until satisfaction of the
conditions relating to the Effective Date as defined above in Paragraph 2.7.1.
Such funds and property are compensation for the Tribe’s agreement to request in
the Federal District Action to dissolve the preliminary injunction and the
injunction pending appeal, to stay the proceedings in the Federal District Court
Action, to dismiss the IBLA Appeal, to dismiss the appeal filed in the Ninth
Circuit Court of Appeals, and to cooperate in accordance with Paragraph 8.14.
4.1.2. On the First Payment Date, January 8, 2008, Fish Springs shall pay the
Tribe Three Million One Hundred Thousand Dollars ($3,100,000.00). The payment
required by this Paragraph 4.1.2 and the payments required by Paragraph 4.10 is
compensation for fully settling and resolving all objections, litigation,
claims, demands, injuries, and harms alleged by the Tribe over the Project, the
Ground Water Rights, the Additional Fish Springs Water Rights, the FEIS, and the
ROD.

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4.2. Fish Springs agrees to make the payment required by this Paragraph 4.2 in
order to fully and forever settle the Tribe’s claims and the United States’
claims on behalf of the Tribe and its members for impacts or injuries to past,
existing, claimed, or future Tribal Water Rights, or Injuries to Tribal Water
Rights. The Parties intend that the obligations to settle these claims are
contingent upon an Act of Congress and Approval of the Secretary.
4.2.1. On the Final Payment Date, January 8, 2009 or an Act of Congress and
Approval of the Secretary, whichever occurs later, Fish Springs shall pay the
Tribe Three Million Six Hundred Thousand Dollars ($3,600,000.00) for the Tribe’s
claims of impairment to the Tribe’s existing and claimed Tribal Water Rights and
Injuries to Tribal Water Rights in the Honey Lake Valley Basin, Smoke Creek
Desert Basin, Pyramid Lake, and the Pyramid Lake Valley Basin. The Parties
intend that the payment required under this Paragraph 4.2.1 requires an Act of
Congress and Approval of the Secretary and that the Final Payment Date shall be
delayed until the passage of an Act of Congress and Approval of the Secretary is
obtained. Fish Springs agrees to pay interest on the amount due under this
Paragraph 4.2.1 at the LIBOR rate per annum from January 8, 2009 until the Act
of Congress and Approval of the Secretary have occurred if these prerequisites
have not occurred by January 8, 2009.
4.3. Fish Springs shall wire the funds to be paid to the Tribe pursuant to this
Agreement in accordance with the Wiring Instructions provided to Fish Springs in
present collected funds on or before the dates the money is due and payable
pursuant to this Agreement.

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4.4. In the event Fish Springs fails to make the payments required on the
Effective Date or the First Payment Date, the Tribe may, at its option, (a) seek
specific performance of this Agreement or (b) after thirty days’ written notice
to Fish Springs, cancel this Agreement and retain all consideration paid by Fish
Springs. In the event Fish Springs fails to make the payment required on the
Final Payment Date, other than for failure to obtain an Act of Congress or
Approval of the Secretery, the Tribe may, at its option, (a) seek specific
performance of this Agreement or (b) after thirty days’ written notice to Fish
Springs from the Tribe may retain all consideration paid by Fish Springs. Fish
Springs may cure any failure to make the payment required on the Effective Date,
the First Payment Date, or the Final Payment Date by making the required payment
within the thirty-day notice period specified in this paragraph, and for reasons
other than failure to obtain an Act of Congress or Approval of the Secretary,
with interest at the LIBOR rate plus 2% from the required dates to the date
payment is made. Fish Springs may cure any failure to make the conveyance
required on the Effective Date by making the required conveyance at any time
within the thirty-day notice period specified in this Paragraph 4.4.
4.5. After the Effective Date of this Agreement, Fish Springs shall deliver to
the Tribe and the United States the reports prepared by Fish Springs or its
designee for the Nevada State Engineer’s office showing the total amount of
water Pumped and Transferred from Fish Springs Ranch to the North Valleys
Planning Area through the Project during the preceding year.
4.6. Fish Springs shall implement the Water Resources Monitoring and Management
Plan as approved by the State Engineer.

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4.7. In consideration for the payment of funds and the conveyance of property as
provided in Paragraphs 4.1 of this Agreement, Fish Springs shall have the right:

  4.7.1.   To Pump and Transfer through the Project to the End Users for the use
of the End Users for any purpose and at any location allowed by the State
Engineer the Ground Water Rights and the Additional Fish Springs Water Rights,
subject to the requirements of Paragraph 4.10, without objection by the Tribe;  
  4.7.2.   To manage Fish Springs Ranch and the Ground Water Rights and the
Additional Fish Springs Water Rights by replacing or deepening existing wells,
constructing new wells, constructing monitoring wells, and any and all other
actions Fish Springs determines, in the exercise of its sole judgment, are
necessary and appropriate to the management of Fish Springs Ranch and the Ground
Water Rights, and the Additional Fish Springs Water Rights consistent with the
provisions of this Agreement.

4.8. In consideration for the payment of funds as provided in Paragraphs 4.2 of
this Agreement, Fish Springs shall have the right:

  4.8.1.   To manage Fish Springs Ranch and the Water Rights by replacing or
deepening existing wells, constructing new wells, constructing monitoring wells,
and any and all other actions Fish Springs determines, in the exercise of its
sole judgment, are necessary and appropriate to the management of Fish Springs
Ranch and the Water Rights, consistent with the provisions of this Agreement;

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  4.8.2.   To assert the benefits and rights obtained under the waivers of the
Tribe as set forth in this Agreement and Exhibit “H.”

4.9. Upon the execution of this Agreement, the Parties shall file stipulations
to: (a) dismiss with prejudice the Tribe’s Appeal and Fish Springs’ Cross-Appeal
filed in the Ninth Circuit Court of Appeals; (b) dissolve the preliminary
injunction and injunction pending appeal entered in the Federal District Court
Action; (c) stay the Federal District Court Action pursuant to the terms of this
Agreement pending approval of an Act of Congress and Approval of the Secretary;
and (d) dismiss with prejudice the Tribe’s IBLA Appeal.
4.10. Fish Springs agrees that at such time as Fish Springs is permitted and
authorized to Pump and Transport Additional Fish Springs Water Rights that Fish
Springs shall pay to the Tribe a sum equal to Twelve (12%) Percent of the gross
sales price for each acre- foot of Additional Fish Springs Water Rights. The
Twelve (12%) Percent fee paid to the Tribe shall not be applicable to any
infrastructure component fee levied by Washoe County or Fish Springs
attributable to the Additional Fish Springs Water Rights. The Twelve (12%)
Percent fee shall be due and payable from the proceeds of any escrow relating to
Additional Fish Springs Water Rights at the time of the close of the escrow
relating to such sales transaction. The Tribe shall not oppose all permitting
activities related to the Additional Fish Springs Water Rights.
5.0 AGREEMENTS OF THE UNITED STATES AND THE TRIBE
5.1. On the Effective Date and in consideration of the payment and conveyance
described in Paragraph 4.1.1 the Tribe shall have filed the stipulation to
dismiss with prejudice the IBLA Appeal, the stipulation to dismiss the Appeal
and Cross-Appeal filed in the Ninth Circuit Court of Appeals, the stipulation to
dissolve the preliminary

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injunction and injunction pending appeal, and the stipulation and joint motion
to stay proceedings in the Federal District Court Action as set forth above. In
consideration of the payment and conveyance described in Paragraph 4.1.1 and
4.1.2 the Tribe shall execute a stipulation to dismiss the Federal District
Court Action. The Parties agree that the stipulation to dismiss the Federal
District Court Action shall not be filed until the Act of Congress and the
Approval of the Secretary have occurred or until it is reasonably certain that
Act of Congress and the Approval of the Secretary shall not be forthcoming.
5.2. In consideration of the payments and conveyance described in
Paragraph 4.1.1 and 4.1.2, the Tribe agrees that the Project, the FEIS, and the
ROD fulfill all obligations of the BLM under the National Environmental Policy
Act, the Endangered Species Act, the National Historic Preservation Act, and all
other applicable state and federal environmental laws. The Tribe further agrees
that the BLM has discharged its trust responsibilities in the preparation of
both the FEIS and the ROD.
5.3. Provided that Fish Springs has complied with and continues to comply with
the provisions of this Agreement, including its obligations under
Paragraph 4.10, the Tribe, shall not object to the Project, Pumping and Transfer
of the Ground Water Rights and the Additional Fish Springs Ranch Water Rights
consistent with Paragraph 4.7 hereof.
5.4. In consideration for the payments under paragraph 4.2, The Tribe and its
members, and the United States acting through the Secretary on behalf of the
Tribe and its members, accept the benefits of this Agreement to the Tribe as
full and complete satisfaction of the Tribe’s claims for Tribal Water Rights or
Injuries to Tribal Water Rights under federal, state, and other laws, including
claims for Tribal Water Rights or Injuries to Tribal Water Rights from or in
connection with the Project, the Water Rights,

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the Ground Water Rights, and the Additional Fish Springs Water Rights,
consistent with Paragraph 4.8, from time immemorial to the Final Payment Date
and thereafter forever, as set forth in Exhibit “H.” Nothing in this Agreement
shall be deemed to recognize or establish any right of a member of the Tribe to
water, or to land, or to compensation under this Agreement.
6.0 WAIVER AND RELEASE OF CLAIMS BY THE UNITED STATES AND THE TRIBE
6.1. The Tribe waives all rights it may have under federal, state, or other laws
to challenge the validity of the FEIS, the ROD, the Project, the Groundwater
Rights, and the Additional Fish Springs Water Rights in any manner whatsoever
subject only to the terms of this Agreement.
6.2. Upon the Act of Congress and the Approval of the Secretary, the Tribe and
its members and the United States acting through the Secretary on behalf of the
Tribe, and its members waive all rights they may have under state, federal, or
other law, to challenge the validity or characteristics of the Project, the
Water Rights, the Ground Water Rights, the Additional Fish Springs Water Rights,
or the exercise of the Water Rights, the Ground Water Rights, and the Additional
Fish Springs Water Rights, including the right to assert a senior priority
against or to place a call on the Project, the Water Rights, the Ground Water
Rights, or Additional Fish Springs Water Rights, and Tribal Water Rights shall
be subordinate to the Project, the Water Rights, the Ground Water Rights, and
the Additional Fish Springs Water Rights from time immemorial to the Final
Payment Date, and thereafter forever, as set forth in Exhibit “H” hereto.
6.3. Upon the Act of Congress and the Approval of the Secretary, the Tribe, and
the United States acting through the Secretary on behalf of the Tribe, waive,
release, and

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discharge all claims of the Tribe for Tribal Water Rights or Injuries to Tribal
Water Rights under federal, state, or other laws, including Tribal Water Rights
or Injuries to Tribal Water Rights from or in connection with the Project, the
Water Rights, the Ground Water Rights, and Additional Fish Springs Water Rights,
from time immemorial to the Final Payment Date, and thereafter forever, and any
and all future claims of Tribal Water Rights or Injuries to Tribal Water Rights
under federal, state, or other laws, including Tribal Water Rights or Injuries
to Tribal Water Rights from or in connection with the Project, the Water Rights,
the Ground Water Rights, and the Additional Fish Springs Water Rights, from and
after the Final Payment Date, and thereafter forever, as set forth in Exhibit
“H” hereto.
6.4. Upon the Act of Congress and the Approval of the Secretary, the Tribe, and
the United States acting through the Secretary on behalf of the Tribe, waive,
release, and discharge all claims against Fish Springs, its officers, directors,
employees, and agents relating to the negotiation and implementation of this
Agreement, as set forth in Exhibit “H” hereto.
6.5. Upon the Act of Congress and the Approval of the Secretary, the Tribe and
its members, and the United States acting through the Secretary on behalf of the
Tribe and its members, acknowledge that the Tribe has been competently, fully,
and fairly represented by attorneys and technical experts in negotiating and
entering into this Agreement, and the Tribe waives and releases all claims
against the United States, the Secretary, and their employees and agents
relating to the negotiation and implementation of this Agreement, including the
Tribe’s use and expenditure of the moneys paid by Fish

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Springs under this Agreement, and the Tribe’s acquisition and use of the
Aquatrac Land, as set forth in Exhibit “H” hereto.
7.0 RETENTION OF CLAIMS BY THE PARTIES
7.1. The Parties retain the right to seek the interpretation of and to enforce
this Agreement in the United States District Court for the District of Nevada,
but not in the courts of the Tribe. Except for the right to cancel this
Agreement for the non-payment of money or the failure to convey the Aquatrac
Land, the Parties’ remedies under this Agreement shall be limited to specific
enforcement of this Agreement or injunctive relief under this Agreement. No
Party shall bring any action to enforce this Agreement in the courts of the
Tribe.
7.2. Fish Springs retains the right to:

  7.2.1.   Subject to performance pursuant to Paragraph 4.10 hereof, seek to
Pump and Transfer all or any part of the Additional Fish Springs Water Rights in
excess of 8,000 acre-feet per year to the End Users subsequent to the Final
Payment Date; and     7.2.2.   Object to any effort or attempt by the Tribe and
its members, or by the United States acting on behalf of the Tribe and its
members, to oppose the terms of this Agreement or to obtain a reserved right to
groundwater or any additional Tribal Water Rights not already confirmed to the
Tribe in Nevada v. United States, 463 U.S. 110 (1983) and related proceedings,
including the decree of the United States District Court for the District of
Nevada in United States v. Orr Water Ditch Company, et al., in Equity, Docket
No. A3, dated September 8, 1944, and all amendments thereto.

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7.3. The Tribe and the United States, acting through the Secretary, on behalf of
the Tribe,and its members retain the right to:
7.3.1 Seek to obtain on behalf of the Tribe a reserved right to groundwater in
the Honey Lake Valley Basin, the Smoke Creek Desert Basin, and the Pyramid Lake
Valley Basin;
7.3.2. Enforce the Tribe’s rights against any party to the Truckee River
Operating Agreement;
7.3.3. Enforce the Tribe’s rights against any party to the Truckee River Water
Quality Settlement Agreement;
7.3.4. Enforce whatever rights exist to seek compliance with any permit issued
to any wastewater treatment or reclamation facility treating wastewater
generated by the End Users.
7.4. Notwithstanding the retention of these rights by the Parties:

  7.4.1.   Subject to the payment provision of Paragraph 4.2, and the Act of
Congress and Approval of the Secretary, the Parties agree that any Tribal Water
Rights that may be established by the Tribe or the United States on behalf of
the Tribe in (a) seeking a general adjudication of all rights to use water in
the Pyramid Lake Valley Basin, the Smoke Creek Desert Basin, or the Honey Lake
Valley Basin, or (b) attempting to obtain a reserved right to groundwater in the
Pyramid Lake Valley Basin, the Smoke Creek Desert or Honey Lake Valley Basin
shall be subject to the waivers, releases, and discharges of the Tribe and the
United States acting on behalf of the Tribe and its members regarding the
Project, the Water

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      Rights, the Ground Water Rights, and the Additional Fish Springs Water
Rights, and shall be subordinate to the Project, the Water Rights, the Ground
Water Rights, and the Additional Fish Springs Water Rights.

7.4.2. Subject to the payment and conveyance provisions of Paragraph 4.1, the
Parties hereby ratify, confirm, declare to be valid, and agree not to object to,
dispute, or challenge the Project, the FEIS, the ROD, the Ground Water Rights,
or the Additional Fish Springs Water Rights in any action or claim brought by or
on behalf of the Tribe after the Effective Date of this Agreement.
8.0 OTHER AGREEMENTS OF THE PARTIES
8.1. Third Party Beneficiaries. The Parties intend the End Users to be third
party beneficiaries of this Agreement. It is understood that the discharge of
Effluent generated from the water Pumped and Transferred to the North Valleys
Planning Areas from the Project and use of the Ground Water Rights shall comply
will all applicable discharge permits required by federal, state, and local
authorities. Fish Springs will use its best efforts to advocate the treatment
and reuse of wastewater within the North Valleys Planning Area for Project water
imported to that area.
8.2. Precedent and Rights Affected. This Agreement is not intended to establish
any precedent with respect to the application of the Reserved Rights Doctrine to
groundwater or the quantification of Tribal Water Rights; and is not intended to
affect the rights of any other tribe, band, or community of Native Americans.
8.3. Construction. The Parties agree that they have each been represented by
counsel in connection with the drafting and execution of this Agreement, and
that counsel have approved this Agreement as to content and form. Accordingly,
this Agreement is to be

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construed according to its fair content and meaning, and no Party shall be
entitled to construction of this Agreement in its favor by virtue of its status
as a Tribe, as a beneficiary of a trust relationship with the United States, or
otherwise.
8.4. Governing Law. The laws of the State of Nevada shall govern the
construction and interpretation of this Agreement.
8.5. Sovereign Immunity. In the event any Party to this Agreement files a
lawsuit in the United States District Court for the District of Nevada, but not
in the courts of the Tribe, for the interpretation or enforcement of this
Agreement, naming the United States of America or the Tribe as a party, the
United States and the Tribe agree to be joined in any such litigation and waive
any claim by the United States or the Tribe to sovereign immunity from such
suit. No suit to interpret or enforce this Agreement may be brought in the
courts of the Tribe.
8.6. Allotments and Allottees. No Reservation lands have ever been allotted to
any member of the Tribe; however, to the extent any such allotments exist or are
claimed to exist, the benefits accruing to the Tribe and its members under this
Agreement shall be in full satisfaction of the claims of such allottees.
8.7. Entire Agreement. This Agreement constitutes the entire understanding among
the Parties. Evidence of conduct or statements made in the course of negotiating
this Agreement, including but not limited to previous drafts of this Agreement,
is inadmissible in any legal proceedings for the interpretation or enforcement
of this Agreement.
8.8. Modification. No modification of this Agreement shall be effective unless
it is in writing and signed by all Parties; provided, however, the Parties agree
to execute a

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modification or restatement of this Agreement to the extent necessary to make it
conform to the Act of Congress as required under the Act of Congress.
8.9. Obligation of Good Faith. As of the Effective Date, each Party shall have
the obligation to work in good faith to satisfy the conditions set forth herein.
The parties will support, advocate, and defend this Agreement and the acts and
actions necessary to fulfill the terms of this Agreement.
8.10. Authority to Sign. By signing this Agreement, each person represents that
he or she has the authority to execute this Agreement.
8.11. Binding Agreement. This Agreement shall inure to the benefit of, and be
binding upon, the successors and assigns of the Parties.
8.12. Counterparts. This Agreement may be executed in duplicate originals, each
of which shall constitute an original Agreement.
8.13. Tribal Jurisdiction. No part of this Agreement shall be construed, in
whole or in part, as providing consent by Fish Springs or the End Users to the
legislative, executive, or judicial jurisdiction or authority of the Tribe in
connection with activities, rights, or duties contemplated by this Agreement and
conducted by Fish Springs or the End Users outside the exterior boundaries of
the Reservation. This Agreement shall not be construed as a commercial dealing,
contract, lease or other arrangement that creates a consensual relationship
between Fish Springs or the End Users and the Tribe so as to provide a basis for
the Tribe’s legislative, executive, or judicial jurisdiction or authority over
Fish Springs or the End Users under Montana v. United States, 450 U.S. 544
(1981), for activities conducted outside the exterior boundaries of the
Reservation. The activities, rights, or duties conducted or undertaken by Fish
Springs or the End Users pursuant to

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this Agreement outside the exterior boundaries of the Reservation shall not be
construed as conduct that threatens or affects the political integrity, economic
security, or health and welfare of the Tribe so as to provide a basis for the
exercise of the Tribe’s legislative, executive, or judicial jurisdiction or
authority over Fish Springs or the End Users under Montana v. United States, 450
U.S. 544 (1981). Benefits and rights accruing to Fish Springs or the End Users
are provided as consideration for benefits and rights accruing to the Tribe
hereunder, and shall not be construed as privileges, benefits, tribal services,
or other advantages of civilized society provided by the Tribe that would
justify the imposition of the Tribe’s legislative, executive, or judicial
authority over Fish Springs or the End Users in regard to the activities,
rights, and duties conducted outside the exterior boundaries of the Reservation.
8.14 Future Permitting. The Tribe agree to not oppose the necessary local,
state, and federal permitting required to authorize the Pumping and Transfer of
the Additional Fish Springs Water Rights of up to 5,000 acre-feet.
8.15 Fully Informed. In executing this Agreement and the waivers and releases
herein, each Party acknowledges that it has consulted with or had the
opportunity to consult with counsel or an attorney or hydrological or technical
experts of their own choosing, had the advice of counsel or an attorney duly
admitted to practice law in the state of Nevada, and that they execute the
Agreement after independent investigation and without fraud, duress, or undue
influence.
8.16 Further Assurances. The Parties hereto acknowledge and understand that
there may be additional acts, actions, and agreements necessary to fully
implement the intent and agreement of the Parties hereto. The Parties shall act
in accordance with this

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Agreement pending any further actions contemplated by this Agreement. The
Parties agree to execute such further agreements and undertake such further acts
and actions as may be required to fully implement this Agreement. Such further
actions may involve but are not limited to the advocacy by Fish Springs for the
treatment of wastewater in the North Valleys and the preparation, support, and
cooperation in the approvals by any federal agencies, the Secretary of the
Interior, or the United States Congress for the future enforceability of all or
any portion of this Agreement. The Parties agree to use their best efforts and
to act in good faith and to deal fairly with each other in all such future
actions and agreements.
8.17 Court Action. This Agreement shall be attached to a Stipulation and Order
to Dissolve the Preliminary Injunction, the Injunction Pending Appeal and Stay
Proceedings, to be filed in the Federal District Court Action, seeking the
Court’s approval of the dismissal of said action with prejudice, with each party
to bear its own attorneys’ fees and costs, in accordance with the terms of this
Agreement.
8.18 Severability. As stated in Recital 1.6, this Agreement has two independent
components. Although the Parties desire and shall work toward obtaining the Act
of Congress and Approval of the Secretary, the Parties recognize that these
actions are beyond the control of the Parties. Therefore, the Parties intend
that in the event the Act of Congress and Approval of Secretary are not
obtained, then the Tribe, Fish Springs, and the BLM (a) intend to be bound by
the terms of this Agreement that are not contingent upon the Act of Congress and
the Approval of the Secretary and (b) further intend that those terms that are
contingent upon the Act of Congress and Approval of the Secretary shall be
severed from this Agreement and shall have no force and effect.

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8.19 Notices. Any notice to be given under this Agreement shall have been
properly given when received by the officer or manager designated herein, or
when deposited in the United States mail in a Nevada or Washington, D.C. post
office, certified or registered, postage prepaid, addressed as follows:
As to the Tribe:
As to Fish Springs:
or addressed to such other address as the party to receive such notice shall
have designated by written notice given as required by this paragraph.
8.20 Recitals. The Parties agree that the Recitals set forth in Section 1.0 are
to be incorporated as additional terms under this Agreement.

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     IN WITNESS WHEREOF, the Parties have executed this Agreement dated as of
the day and year first above written.
9.0 SIGNATURE BLOCK

                  THE UNITED STATES OF AMERICA    
 
           
 
  By:        
 
     
 
   
 
                Secretary of the Interior    
 
                THE BUREAU OF LAND    
 
                MANAGEMENT    
 
                AND DEPARTMENT OF THE INTERIOR    
 
           
 
  By:        
 
     
 
   
 
           
 
  Its:        
 
     
 
   
 
                FISH SPRINGS RANCH, LLC    
 
                By Vidler Water Company, Inc.         Its Managing Member    
 
           
 
  By:        
 
     
 
President    
 
                PYRAMID LAKE PAIUTE TRIBE OF INDIANS    
 
           
 
  By:        
 
     
 
Chairman    

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