PRESERVATION EASEMENT

This grant of a perpetual preservation easement is made by the Loup Basin Reclamation District, a political subdivision of the State of Nebraska, hereinafter referred to as "Grantor", and the University of Nebraska State Museum, a division of the University of Nebraska, hereinafter referred to as "Grantee", collectively referred to hereinafter as the "parties".

INTRODUCTORY STATEMENTS: This perpetual preservation easement is granted to and in accordance with Neb.Rev.Stat. Section 76-2,111 et. seq. (Reissue, 1999), the Conservation and Preservation Easements Act. Grantor is a political subdivision of the State of Nebraska, organized and existing by virtue of Chapter 46, Neb.Rev.Stat., 1999, and as such has acquired title to the lands hereinafter described as the "easement lands" for the purpose of continuing operations of the Middle Loup Division for the purposes for which the project was constructed. Grantee is a division of the University of Nebraska organized and existing by virtue of Chapter 85, Neb.Rev.Stat., 1999, and as such is qualified and has the authority to hold a grant of perpetual preservation easement pursuant to the Conservation and Preservation Easements Act over the described "easement lands". The restrictions and covenants contained in this easement constitute a perpetual servitude upon, and run with the land subject hereto. The parties, each to the other, covenant to do, or refrain from doing, such acts as are hereinafter specified. The easement shall be binding upon the parties and upon their respective representatives, administrators, agents, successors and assigns forever. The parties reserve the rights enumerated in this easement for themselves, their representatives, administrators, agents, successors and assigns.

The Middle Loup Division was constructed by the United States of America, including the Sherman Dam and Reservoir and associated water storage facilities, the Acadia Diversion Dam and other diversion and delivery facilities primarily for the purposes of water storage and delivery of water for irrigation purposes. The United States, as the original owner of the project held certain responsibilities regarding the preservation and protection of its holdings for historical, archeological and cultural purposes and for that reason Grantor has agreed with the United States to enter into this grant of perpetual preservation easement for the purpose of transferring to the Grantee the responsibility of administering the lands described as the "easement lands" for promoting the preservation and protection of the significant archeological and historical sites and other related purposes consistent with this easement and consistent with the intended purposes of the project and not prohibited by law or regulation governing such purposes.

The parties recognize and acknowledge that the principle purposes of the project continue to be for irrigation diversion, storage of water for irrigation and delivery of water for irrigation to the water users upon whose lands the irrigation water rights are attached, and the Grantee shall conduct its responsibilities in accordance with that acknowledgment.

The parties further recognize and acknowledge that this grant of perpetual preservation easement is intended to provide, in perpetuity, for the protection and preservation of the public trust for historical, archeological and cultural purposes on the easement lands and for the exploration and recovery of artifacts therefrom.

PERPETUAL PRESERVATION EASEMENT LANDS DESCRIPTION: Grantor is the owner in fee simple of certain real property, hereinafter referred to as the "easement lands" which includes a water reservoir, Sherman Dam and Reservoir, developed and constructed for the principle purpose of storing water from the Middle Loup River for irrigation of lands in the project areas, known as the Sargent Irrigation District and the Farwell Irrigation District, and the Arcadia Diversion Dam, developed and constructed for the principle purpose of diverting water from the Middle Loup River for the projects. The easement lands include land areas surrounding those project facilities and are generally described as follows, to-wit:

Tract 1: Site 25SM20, as defined by the Nebraska State Historical Society, containing approximately 2.2 acres and located in the northwest ¼ of Section 21, Township 16N, Range 14W in Sherman County, Nebraska.

Tract II: Consists of the proposed National Register District as located within the lands conveyed from the United States to the Loup Basin Reclamation District, as further identified on Exhibit A attached hereto, said lands include portions of the south ½ of Section 26; and the west ½ of the northeast ¼, and the east ½ of the northwest ¼ of Section 35, all in Township 18N, Range 17W in Custer County, Nebraska.

In the future, should Grantee require further specific description of the "easement lands", Grantee, at its cost and expense, may have all or parts of the "easement lands" surveyed and when the survey is completed the legal description contained in the survey may, with consent of the Grantor, be substituted for the description contained herein by attaching the description hereto, without further amending this, perpetual preservation easement.

PURCHASE PRICE: Grantee agrees to pay Grantor for the perpetual preservation easement the sum of one dollar ($1.00) and other valuable consideration.

GRANTING CLAUSE: Grantor hereby gives, grants, bargains, sells and conveys unto Grantee forever, a perpetual preservation easement, and to Grantee's successors and assigns provided that this perpetual preservation easement may be assigned or transferred by Grantee to any governmental body or charitable corporation or trust authorized to hold such a perpetual preservation easement pursuant to the Conservation and Preservation Easement Act and which is capable of carrying out the specific purposes for which the perpetual preservation easement is granted. Grantor, for itself and its successors and assigns, hereby grants to the Grantee an estate and interest in the "easement lands" of the nature and extent hereinafter described and covenants on behalf of itself, its successors and assigns, said covenants, estates and interests to run with the lands, with Grantee and its successors and assigns, to do and refrain from doing, severally and collectively upon the "easement lands", the various acts hereinafter specified; it being agreed that such covenants, estates and interests are and will be for the benefit of Grantee and its successors and assigns, to preserve the "easement lands" for historical, archeological and cultural purposes and for the purposes of protecting, preserving, exploring and recovering artifacts therefrom.

It is understood by the parties that a perpetual conservation easement has or will be conveyed by the Grantor to the Nebraska Game and Parks Commission, which will also cover the "easement lands"'and it is further understood that this perpetual preservation easement shall be the dominant easement for historical, archeological or cultural preservation on the easement lands subject to this easement; but that this easement shall not require the Nebraska Game and Parks Commission to enforce any extraordinary restrictions or to conduct itself in any extraordinary manner regarding such lands as may here be protected, other than to not disturb the areas for its purposes without consent and assent from the Grantee.

ACCEPTANCE: Grantee signifies by execution hereof, the acceptance of the perpetual preservation easement on the "easement lands", as provided for in the Conservation and Preservation Easements Act. The acceptance by Grantee is conditioned upon the approval of the perpetual preservation easement by any local zoning and planning authorities which are the appropriate governing bodies with jurisdiction over the "easement lands" as provided for the Conservation and Preservation Easements Act. A copy of such approval will be attached hereto and incorporated herein by this reference, when it is received.

CONDITIONS OF GRANT: This perpetual preservation easement shall specifically be conditioned upon the following provisions, to-wit:

A. The Grantee is vested with the responsibility for the conduct of historical, archeological and cultural resources protection, preservation, exploration and recovery of artifacts therefrom. The Grantee may carry out such activities upon the "easement lands" as it deems appropriate and in order from time to time and to preserve and protect the sites for those purposes. In doing so, it is expected that the Grantee develop appropriate specific management plans for the conduct of investigations and reports as it deems appropriate; and that any such plans be provided whenever developed to the Grantor for its information, to the Nebraska Game and Parks Commission for its information, and Nebraska State Historic Preservation Officer. Such an initial management plan has been developed and adopted by Grantee, dated on the __________ day of ____________________, 2001 and the parties acknowledge receipt of a copy thereof.

B. The Grantee shall conduct any and all work undertaken in accordance with any management plans developed in such a manner as shall incur a minimum of impact upon the activities of the Grantor or the Nebraska Game and Parks Commission in the conduct of their responsibilities.

C. The Grantee may construct, locate and operate and maintain such improvements upon the "easement lands" as may be necessary, either temporary or permanent, to conduct its activities. All such improvements shall be operated and maintained by Grantee or others in a manner which shall assure that such improvements are kept in satisfactory repair and physical appearance for the uses for which such improvements were constructed.

D. The Grantee shall have full and absolute control over the selection and direction and control of any and all permitees or contractors working with Grantee in any manner whatsoever on the "easement lands" and for the uses made of such "easement lands" by Grantee.

E. The Grantee shall not grant easements or enter into other agreements of any kind that convey an interest in any "easement lands" without prior approval of the Grantor.

F. Grantor, its agents and assigns, assume no liability for damages to property or injuries or death to persons which may arise from or be incident to the use and occupation of the "easement lands" nor for damages to property or injuries or death to the person of the Grantee's officers, agents, servants, employees, contractors, or others who may be on said "easement lands" at the invitation of any one of them, arising from or incident to the regulation, storage, routing, and discharge of water through the reservoir, including flooding where applicable, or arising from or incident to any other activities of Grantor, its officers, directors, agents or employees. Grantor shall use reasonable diligence to provide timely notice to Grantee of any scheduled activities by Grantor which may affect Grantees continued immediate use during times when Grantee's officers, agents, servants, employees, contractors or others are physically present on the easement lands and Grantor has notice thereof.

G. Grantee shall not engage in or permit any activity within the "easement lands" or allow any omission therein which will interfere with the safety, protection, and operation of the reservoir or diversion facilities or other works for irrigation, recreation, fish and wildlife purposes. The Grantee may impose the same or similar rules and regulations on the "easement lands" as it imposes on other lands owned or controlled by it for purposes similar to those for which this easement is held.

H. Nothing in this perpetual preservation easement shall be construed or interpreted as authorizing the Grantee, its agents, or employee, to act as agents or representatives for, or on behalf of, the Grantor, its agents, employees, or assigns or to incur any obligation of any kind on behalf of Grantor, or its agents, employees, or assigns. Nothing in this perpetual preservation easement shall be construed or interpreted as authorizing Grantor, its agents, or employees to act as agents or representatives for, or on behalf of, the Grantee, or to incur any obligations of any kind on behalf of Grantee.

I. Grantor, its agents, or assigns, shall not be liable for any loss, injury, or damage of any kind or nature whatsoever to any building or other structure constructed by the Grantee, its permitees, contractors or employees which may be on the "easement lands", nor for any loss, injury, or damage of any kind or nature whatsoever to the contents of any building or structure upon the "easement lands" and whether such loss, injury, or damage results from fire, flood, or any other cause, except for damage or loss caused by the actions of Grantor, its agents, and assigns as allowed under the Political Subdivision Tort Claims Act.

J. Property taxes upon the "easement lands" shall be subject only to "in lieu of tax contributions" made by the Grantor to the counties in which is located any of such lands and shall be subject only to those separate agreements. Any taxes due upon improvements made by Grantee shall be subject to the laws of the State of Nebraska governing any such obligations. Any taxes due upon improvements made by Grantee shall be paid by Grantee in accordance with the laws of the State.

K. Grantee shall provide, without restriction, any reasonably required rights of ingress and egress to Grantor, its officers, directors, agents, employees and permittees, including the Nebraska Game and Parks Commission, its officers, directors, agents, employees and permittees, for carrying out project operations as needed upon or near the "easement lands". Such rights of ingress and egress by Grantor, the exercise of which may involve modification of project facilities which are essential to primary project purposes or project integrity on such "easement lands", shall not be exercised by Grantor without prior written notice and consultation with Grantee, unless such actions are required in response to emergency conditions. Any other modifications of project facilities which may involve "easement lands" will be done only after assent thereto by Grantee. The parties agree that periodic inspections by Grantor of "easement lands" shall also be allowed by Grantee upon prior notice of at least ten [10] days, at which time Grantor may be provided access to any and all locations and facilities upon the "easement lands".

MODIFICATION OR TERMINATION OF EASEMENT: The parties hereto may mutually agree to modify or terminate this perpetual preservation easement to the extent that modification and termination is consistent with the provisions of the Conservation and Preservation Easements Act or any provision of law in effect at the time that such modification or termination is sought. Grantor and Grantee and their respective successors or assigns may petition the District Court of the county where the property is located, in accordance with the Conservation and Preservation Easements Act if the petitioning party establishes that it is no longer in the public interest to hold the perpetual preservation easement or that the perpetual preservation easement no longer achieves the preservation purpose for which it was created.

RELEASE OF EASEMENT: This perpetual preservation easement may be released by the Grantee, upon the approval of the Board of Regents of the University of Nebraska which approved the easement, and a finding by such body that the perpetual preservation easement no longer substantially achieves the preservation purpose for which it was created, in accordance with the Conservation and Preservation Easement Act, or as authorized by any other provision of the law in effect at the time such release is sought.

BINDING EFFECT: The covenants agreed to and the terms, conditions, restrictions, and purposes imposed with the grant of perpetual preservation easement shall be binding upon Grantor and Grantee, their successors and assigns and all other successors to them in interest and shall continue as a servitude running in perpetuity with the "easement lands".

This grant of perpetual preservation easement shall not be binding upon Grantee until accepted by Grantee, as aforesaid. Execution and acknowledgement hereof by Grantor prior to Grantee's acceptance shall be binding upon Grantor until expiration of the period of time allowed for acceptance by Grantee, in consideration of the payment to the Grantor of one dollar ($1.00) and other valuable consideration, the receipt of which is hereby expressly acknowledged by the Grantor.

Notice of acceptance, of this grant of perpetual preservation easement shall be given to Grantor by certified mail addressed to Grantor at its regular place of business and shall be effective upon the date of mailing, and such notice shall be binding upon Grantor.

Payment of the consideration will be made following acceptance hereof by Grantor.

SEVERABILITY: If any provisions of this perpetual preservation easement or the application thereof to any person or circumstances is found to be invalid, the remainder of the provisions of the perpetual preservation easement and the application of such provisions to the persons or circumstances other than those to which it is found to be invalid shall not be affected thereby.

IN WITNESS WHEREOF, Loup Basin Reclamation District, Grantor, has caused its Chairman and Secretary to set their hands in official capacity on behalf of Grantor on the _______________ day of ___________________, 2002.

IN ACCEPTANCE OF CONDITIONS SET FORTH HEREIN, the University of Nebraska State Museum, a division of the University of Nebraska, Grantee, has caused its Corporate Secretary to set her hand in official capacity on behalf of Grantee on the ___________ day of ______________________, 2002

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Corporate Secretary