8.0. ACQUISITION OF CAP CONTRACTS AND ESTABLISHMENT OF TRUST ACCOUNTS

8.1. In accordance with Section 6(d) of the Act, the Tribe hereby agrees to establish a trust account into which revenues from the Verde River Basin Water Fund will be deposited. Revenues deposited into the Fund to the credit of the Tribe will be derived from the sale of the Tribe's CAP contract entitlement in accordance with Section 5 of the Act.

A. The Tribe hereby agrees that revenues from the trust account may only be used to defray the Tribe's water service costs under the Water Service Agreement or to develop and maintain facilities for water or Effluent use on the Reservation. Any funds withdrawn from the trust account but not used for the purposes stated herein shall be returned to the trust account, with interest at the Federal Reserve Discount Rate (the interest rate charged on loans to depository institutions by the Federal Reserve Banks) in effect from time to time.

B. The Tribe agrees to permit complete and thorough audits of the trust account and all expenditures therefrom and deposits thereto on an annual basis. Such audits may be conducted by the Area Director, Phoenix Area Office, Bureau of Indian Affairs or its designees.

8.2. In accordance with Section 6(d) of the Act, Prescott hereby agrees to establish a trust account into which revenues from the Verde River Basin Water Fund will be deposited. Revenues deposited to the Fund to the credit of Prescott will be derived from the sale of Prescott's CAP contract entitlement in accordance with Section 5 of the Act.

A. Prescott hereby agrees that revenues from the trust account may only be used to defray expenses associated with the investigation, acquisition or development of alternative sources of water to replace the CAP water relinquished under this Act. Alternative sources shall be understood to include, but not be limited to, retirement of agricultural land and acquisition of associated water rights, development of ground water resources outside the Prescott Active Management Area established pursuant to the laws of the State of Arizona and artificial recharge. Any funds withdrawn from the trust account but not used for the purposes stated herein shall be returned to the trust account, with interest at a rate equal to the average rate of interest paid on governmental deposits by the Arizona State Treasurer's Pool during the period of time that the monies were erroneously expended from the trust account.

B. Prescott also agrees that it will comply with all applicable federal environmental and state environmental and water laws in developing alternative water sources. Development of such alternative water sources shall not be inconsistent with the goals of the Prescott Active Manage

ment Area, preservation of the riparian habitat, flows and biota of the Verde River and its tributaries.

C. Prescott agrees to permit complete and thorough audits of the trust account and all expenditures therefrom and deposits thereto on an annual basis. Such audits may be conducted by the Regional Director, Lower Colorado River Region, Bureau of Reclamation, or it designees.

9.0 WAIVER OF CLAIMS

9.1. Except as provided in subparagraph 9.2 hereof, the Tribe, on behalf of itself and its members, and the United States shall execute a waiver and release of:

A. Any and all past and present claims of water rights or injuries to water rights (including water rights in groundwater, surface water and effluent) for lands within the Reservation, from time immemorial to the date of execution of such waiver and release, which the Tribe and/or its members may have, against the United States, the State of Arizona or any agency or political subdivision thereof, or any other person, corporation or municipal corporation, arising under the laws of the United States or the State of Arizona.

B. Any and all future claims of rights to water (including water rights in groundwater, surface water and effluent) for lands within the Reservation, from and after the date of execution of such waiver and release, which the Tribe and/or its members may have, against the United States, the State of Arizona or any agency or political subdivision thereof, or any other person, corporation or municipal corporation, arising under the laws of the United States or the State of Arizona.

C. Any and all past, present and future claims of water rights or injuries to water rights (including water rights in groundwater, surface water and effluent) for lands outside of the exterior boundaries of the Reservation for claims based upon aboriginal occupancy, which the Tribe and/or its members may have, against the United States, the State of Arizona or any agency or political subdivision thereof, or any other person, corporation or municipal corporation, arising under the laws of the United States or the State of Arizona. The waiver and release will be in the form set out in Exhibit 9.1 to this Agreement.

9.2. Notwithstanding the execution by the Tribe of the waiver and release described in Subparagraph 9.1 hereof, the Tribe, its members, and the United States for their benefit, shall retain the right to assert the following claims:

A. Claims for protection and/or enforcement of the Tribe's surface water, groundwater and effluent rights and entitlements as provided for in this Agreement under the continuing jurisdiction of the Court in the Gila River Adjudication or otherwise.

B. Claims for the breach or enforcement of the terms of this Agreement or rights or entitlements recognized here

in, or for the breach or enforcement of the Water Service Agreement or rights or entitlements recognized therein, including claims for future injuries to such rights and entitlements.

C. Claims for past, present and/or future injuries to Tribal natural resources and property, including but not limited to surface water and groundwater and rights thereto, resulting from, caused by or related to pollution or contamination of any kind.

D. Claims for water rights and/or injuries to water rights asserted in the circumstances described in Subparagraphs 10.3, 10.4 and 10.5 hereof.

9.3. Any entitlement to water of any individual member of the Tribe for lands within the Reservation shall be satisfied out of the water resources provided to the Tribe in this Agreement.

9.4. Except as provided in Paragraph 9.2 hereof, the United States shall not assert any claim against the State of Arizona and any agency or political subdivision thereof or any other person, corporation, or municipal corporation, in its own right or for the benefit of the Tribe and its members based upon (1) water rights or injuries to water rights of the Tribe and its members; or (2) water rights or injuries to water rights held by the United States for the benefit of the Tribe and its members.

9.5. The parties shall file a stipulation and form of judgment in the Gila River Adjudication in the form of Exhibit 9.5 hereto. The United States or the Tribe shall be permitted to support any claim of any party to this Agreement filed in the Gila River Adjudication from which the Tribe's water rights under this Agreement are derived.

9.6. In the event any party to this Agreement files a lawsuit in a United States district court relating only and directly to the interpretation or enforcement of this Agreement or the Act, naming the United States of America or the Tribe as parties, the sovereign immunity of the United States and the Tribe from such suit is waived by Section 11(a) of the Act. In the event Prescott submits a dispute under the Water Service Agreement to arbitration or seeks review by the United States District Court for the District of Arizona of an arbitration award under the Water Service Agreement, any claim by the Tribe to sovereign immunity from such arbitration or review is waived by Section 11(a) of the Act.

9.7. Nothing herein shall affect the water rights or claims related to any trust allotment located outside the exterior boundaries of the Reservation of any member of the Tribe; provided, however, that any water rights determined to exist for such allotments shall not be exercised for use on the Reservation.

9.8. Nothing herein shall be deemed to recognize or establish any right of a member of the Tribe to water on the Tribe's Reservation.

9.9. Nothing herein shall prevent the Tribe from participating with other entities in further activities to augment the water supply available to the Prescott Active Management Area and the Granite Creek watershed. In addition to the water provided to the Tribe under this Agreement and the Water Service Agreement, the Tribe may, consistent with state and federal law, acquire rights to water pursuant to state law or by contract with the United States; provided, however, that no rights so acquired shall be based upon claims waived pursuant to this Paragraph 9.0 and Section 10 of the Act, nor shall the acquisition of any such rights vitiate the Waiver and Release of Claims executed by the Tribe and the United States pursuant to this Paragraph 9.0 and Section 10 of the Act.

10.0 ENFORCEABILITY DATE AND RELATED MATTERS

10.1. This Agreement shall be effective and binding when it has been executed by all parties hereto and when the parties to this Agreement have executed all exhibits to the Agreement which call for their signatures. Other than to take all steps described in this Subparagraph 10.1 to occur, no party to this Agreement shall be required to perform any of the obligations, or be entitled to receive any of the benefits, under the Agreement or under any of the Exhibits hereto until such time as the waivers authorized in Section 10(b) of the Act have become effective pursuant to Section 12(a) of the Act, which date is referred to herein as the "Enforceability Date". In the event the waivers authorized in Section 10(b) of the Act have not become effective by December 31, 1995, this Agreement shall be of no further force or effect.

10.2. Exhibit 2.1 hereto is the Act, which authorizes the federal action required to carry out this Agreement. Any act of Congress which materially amends the Act set forth in Exhibit 2.1 hereto, as it affects this Agreement, prior to the Enforceability Date of this Agreement, without the written consent of the parties adversely affected by such amendment, shall relieve all parties to this Agreement of their obligations hereunder.

10.3. In the event the waivers authorized in Section 10(b) of the Act have become effective and a party to the Gila River Adjudication has obtained the reversal of the judgment of the Maricopa County Superior Court approving Exhibit 9.5 hereto and no further appeals may be taken, the parties to this Agreement shall:

A. Perform all of their respective obligations under this Agreement, unless otherwise ordered by a court of competent jurisdiction; and

B. Permit the Tribe and its members, and the United States for their benefit, to assert in the Gila River Adjudication claims for water rights and entitlements in excess of the Tribe's rights and entitlements under this Agreement and the Water Service Agreement, and the other parties to this Agreement agree not to assert any defense

against the Tribe and the United States; however, the Tribe and the United States agree that a reserved right awarded to the Tribe will be satisfied as provided in this Agreement and the Water Service Agreement, and that if a right in excess of the Tribe's rights and entitlements under this Agreement and the Water Service Agreement is awarded, the excess of such right will not be exercised, in any phase of the Gila River Adjudication of any subsequent proceedings, against junior rights held by other parties to this Agreement.

10.4. In the event the waivers authorized in Section 10(b) of the Act have become effective and a court of competent jurisdiction has permanently ordered any single party to this Agreement not to perform an obligation to deliver water to the Tribe as provided in this Agreement and no further appeal may be taken.

A. All other parties to this Agreement shall perform all of their respective obligations under this Agreement, unless otherwise ordered by a court of competent jurisdiction;

B. The party ordered not to perform an obligation to delivery water to the Tribe as provided in this Agreement shall perform all of its remaining obligations, if any, under this Agreement; that party shall be relieved of its obligations under this Agreement only to the extent necessary to comply with the court's order; and

C. The Tribe and its members, and the United States for their benefit, may assert in the Gila River Adjudication claims for water rights and entitlements in excess of the Tribe's rights and entitlements under this Agreement and the Water Service Agreement, and the other parties to this Agreement agree not to assert any defense against the Tribe and the United States; however, the Tribe and the United States agree that a reserved right awarded to the Tribe will be satisfied as provided in this Agreement and the Water Service Agreement, to the extent not precluded by an order of a court of competent jurisdiction as provided in the Subparagraph 10.4, and that if a right in excess of the Tribe's rights and entitlements under this Agreement and the Water Service Agreement is awarded, the excess of such right will not be exercised, in any phase of the Gila River Adjudication or any subsequent proceedings, against junior rights held by other parties to this Agreement.

10.5. In the event the waivers authorized in Section 10(b) of the Act have become effective and a court of competent jurisdiction has permanently ordered more than one of the parties to this Agreement not to perform an obligation to deliver water to the Tribe as provided in this Agreement and no further appeal may be taken, then, unless otherwise agreed by the Tribe, this Agreement shall be null and void and, except as provided in Subparagraph 9.6 hereof and in this Subparagraph 10.5, all parties shall be relieved of their obligations under this Agreement.