SETTLEMENT AGREEMENT

This Settlement Agreement is entered into this 15th day of April , 1997, by Plaintiff, the State of Nevada ("Nevada") and Federal Defendants, Federico Pena , Secretary of the United States Department of Energy and the United States Department of Energy (collectively referred to herein as "DOE") to settle the controversies underlying the above-captioned matter of State of Nevada v. Pena, et al., , CV-S-94-00576-PMP (RLH). (Nevada and DOE are herein referred to collectively as "the Parties.')

I. BACKGROUND
A. On June 28, 1994, Nevada filed its Complaint initiating the instant action against DOE;

B. On July 20, 1994, Nevada filed its First Amended Complaint for Declaratory Judgment and Injunction against DOE;

C. On October 14, 1994, DOE filed its Motion to Dismiss or, in the Alternative. Motion for Summary Judgment;

D. On January 10, 1995, the Court granted DOE's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment to the extent it requested dismissal of Nevada's claims regarding shipment of low-level waste coming from the Fernald Environmental Management Project in Fernald, Ohio ("Fernald") to the Nevada Test Site;

E. On February 24, 1995, Nevada filed its Second Amended Complaint, which was answered by DOE on March 20. 1995;

F. It is in the interests of the public, the Parties, and judicial economy to resolve this action without protracted litigation; and

G. The Parties have agreed to a settlement of the above captioned case without any admission or adjudication of fact or law, which they consider to be a fair, just, adequate and equitable resolution of the claims raised in the case.

II. AGREEMENT
A. Agreement of DOE:

In consideration of the dismissal without prejudice agreed to by Nevada in this Settlement Agreement, DOE agrees as follows:

1. To store and/or dispose of all low-level waste (other than waste originating from the Fernald facility currently Designated for disposal at Area 3, and Environmental Restoration waste generated in the State of Nevada) at Area 5 of the Nevada Test Site ("NTS") until the following conditions are met:

a. DOE commits, as part of its completion of a Final Area 3 Performance Assessment, to produce a Draft Final Area 3 Performance Assessment and transmit said document to the United States Department of Energy's Nevada Office for internal review on or before November 30, 1997; and

b. DOE initiates consultation with the United States Department of the Interior ("DOI") concerning the status of the existing land withdrawals for the NTS with regard to low-level waste storage/disposal activities.

2. Further, DOE agrees to convey a copy of the Draft Final Area 3 Performance Assessment referred to in paragraph II .A. 1. a, above, to the State of Nevada Attorney General's Office. The conveyance of said draft document shall not, however, be construed to waive any non-disclosure privileges DOE may assert under the Freedom of Information Act, 5 U.S.C. º 552.

3. DOE also agrees to convey the results of its consultation with DOI as referred to in paragraph II .A. 1.b., above, to the State of Nevada Attorney General's Office.

4. DOE further agrees to continue to pursue the Underground Test Area Subproject as outlined in Appendix VI of the Federal Facility Agreement and Consent Order entered into between the State of Nevada Department of Conservation and Natural Resources, Division of Environmental Protection, the United States Department of Energy and the United States Department of Defense|dated March 15 1996.

B. Agreement of Nevada:

1. In consideration of the actions taken by DOE |pursuant to paragraphs II. A. 1.-4., above, Nevada agrees to dismiss the action of State of Nevada v. Pena et al., CV-S-94-00576-PMP (RLH) without prejudice.

2. Nevada further agrees to refrain from taking any legal action against DOE concerning the issues raised in the action of State of Nevada v. Pena et al., CV-S-94-00576-PMP (RLH) until the conditions set forth in paragraphs II .A. 1.a. -b., above, have been met, other than an action to enforce the terms of this Settlement Agreement.

C. Modification of Agreement
1. This Settlement Agreement may be modified only by the express written consent of the Parties.

D. Miscellaneous Provisions
1. Nothing in this Settlement Agreement relieves DOE of the obligation to act in a manner consistent with other applicable law, including the Anti-Deficiency Act. The obligations and commitments undertaken by virtue of this Settlement Agreement are subject to applicable appropriations law;

2. The parties agree to bear their respective attorney's fees and costs incurred in connection with the above captioned case, including any costs or fees incurred in the negotiation and drafting of this Settlement Agreement;

3. Nothing in this Settlement Agreement shall be construed as an admission by any party concerning any fact, claim or defense asserted in this matter;

4. This Settlement Agreement embodies the entire agreement of the Parties concerning settlement of the matters described above; and

5. The Parties acknowledge representation by counsel throughout all negotiations which preceded and culminated in the execution of this Settlement Agreement. Each of the Parties hereto further warrants for itself that it has read all of this Settlement Agreement, has discussed it with its respective attorneys and fully understands it.

IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be executed by their duly authorized representative as indicated below:

FRANKIE SUE DEL PAPA
Attorney General for the State of Nevada

By: HARRY W SWAINSTON
Senior deputy Attorney General
JAMES H. DAVENPORT
Special Deputy Attorney General
Capitol Complex
1802 N. Carson, Suite 252
Carson City, NV 89710
(702) 687-5866

Attorneys for Nevada

CAROLINE M. ZANDER
ANN D. NAVARO
United States Department of Justice
Environment and Natural
Resources Division
P.O. Box 663
Washington, D.C. 20044-0663
(202) 305-0248/305-0462