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HomeMy WebLinkAbout12-21 Solar Facility Siting Agreement2 contained herein, the receipt and sufficiency of which are hereby acknowledged, the County and Applicant do hereby agree as follows: 1. CUP Conditions. The Applicant acknowledges and agrees that it is subject to all the terms and conditions contained in the conditional use permit (“CUP”) approved by the Board for the Project on January 12, 2022, attached hereto as Exhibit A and incorporated herein. Violation by the Applicant or by any of Applicant’s agents, assigns or successors in interest of any terms and conditions of the CUP or of any other applicable zoning requirements shall constitute a violation of this Agreement. 2. Grant of Conservation Easement. Applicant has offered, and County has accepted Applicant’s offer, to grant the Frederick County Conservation Easement Authority a conservation easement (“Conservation Easement”) on the Property in accordance with the terms of the Conservation Easement Deed attached hereto as Exhibit B. Applicant also has offered, and County has accepted Applicant’s offer, to extinguish any right to transfer development rights pursuant to Article III of the of the Frederick County Zoning Ordinance (“Zoning Ordinance”). The Conservation Easement and the extinguishment of any transfer of development rights are subject to (a) the County’s issuance of a CUP acceptable to Applicant, (b) the Project achieving Commercial Operation and (c) such other terms set forth herein, including without limitation, Exhibit B. 3. Separation of Property and Equipment. For purposes of any taxation by the County, the Project shall be treated as separate class of property from the associated real property or any other personal property, as set forth in Virginia Code § 58.1-3660(A). 4. Annual Valuation and Taxation of Real Property. In recognition of Applicant granting the Conservation Easement to the County and extinguishing any right to transfer development rights, County acknowledges that, for purposes of determining assessed value, the portion of the Property where the land is not improved with solar infrastructure, and which is placed in Conservation Easement as contemplated herein, will be eligible for agricultural land use taxation treatment in accordance with County policy, notwithstanding the existence of the Project on other portions of the Property. The County further acknowledges that the extinguishment of rights to transfer development rights on the entire Property, as a matter of County policy, is taken into consideration when calculating the assessed value of the Property. The applicable tax rate for the Property shall be the County real estate tax rate. 5. Annual Valuation and Taxation of Equipment. (a) Prior to the Commercial Operation Date, Applicant agrees to provide County with a detailed list of capital equipment, including but not limited to solar photovoltaic equipment proposed to be installed, regardless of whether it has yet been certified as pollution control equipment by the State Corporation Commission or Virginia Department of Environmental Quality, and lists of all other taxable tangible property. Thereafter, on an annual basis, Applicant shall provide County with any updates to this information, including but not limited to all new or replacement solar panels and all other equipment. Applicant agrees to provide the County all information it may in the future provide to the Virginia State Corporation Commission for the Commission’s use in valuing such property for taxation purposes. In addition, prior to the Commercial Operation Date, Applicant shall provide proof of payment for all components of the Project installed prior to the Commercial Operation Date. Applicant shall further submit proof of payment for any additional or replacement component installed during the life of the Project, proof of which shall be updated annually on or before the anniversary of 3 the Commercial Operation Date, and if no such component is installed in any given year, notice of such shall also be filed with the County on or before the anniversary of the Commercial Operation Date. The sum value of the capital equipment of the Project determined in accordance with this Section 5(a) shall be referred to as the “Assessed Value”. As used herein, “Commercial Operation” shall mean the date the Applicant commences the regular sale of electricity (excluding any test energy) generated from the Project. (b) In calculating the M&T Tax payable by the Applicant, the County shall reduce the Assessed Value of the Project by the percentage set forth in Virginia Code § 58.1-3660(G)(ii) (“Pollution Control Tax Abatement”). (c) The annual tax payable by the Project shall be calculated by multiplying (i) the Assessed Value by (ii) Pollution Control Tax Abatement and then multiplying the product thereof by (iii) the Depreciation Percentage and then multiplying the product thereof by (iv) the M&T Tax rate. (d) As of the date of this Agreement, the County has not adopted a Revenue Share Ordinance as provided under Virginia Code § 58.1-3660 (D), and the payments under this agreement are not conditioned upon the County adopting such ordinance. Should the County later adopt a Revenue Share Ordinance, the County acknowledges that Applicant shall have the option, in its sole discretion, to elect to be taxed in accordance with any such Revenue Share Ordinance. County shall notify Applicant in writing within 30 days of adopting any Revenue Share Ordinance, after which Applicant shall have 30 days to elect to pay taxes in accordance with such Revenue Share Ordinance. 6. Statutory Structure of Payments; Statement of Benefit. The Parties agree that by entering into this Agreement, pursuant to Virginia Code § 15.2-2316.6 et seq., the payments set forth in Sections 4 and 5 above are authorized by statute. County acknowledges that it is bound by law to assess taxes only as set forth in Sections 4 and 5 above. Applicant acknowledges that it is bound to pay taxes assessed by the County in accordance with Sections 4 and 5 above. County shall assess no other taxes on the Project, or Applicant in relation to the Project, other than as expressly set forth herein. The Parties acknowledge that this Agreement is fair and mutually beneficial to them both. The County further acknowledges that the use of the Property for the Project, the Applicant’s grant of the Conservation Easement over the Property and the extinguishment of the right to transfer development rights provide substantial benefit to the County in preserving the rural nature of the County and furthering the efforts of the Frederick County Conservation Easement Authority. Applicant acknowledges that this Agreement is beneficial to Applicant in allowing it to proceed with the development of the Project. 7. Conformance with Comprehensive Plan. Upon approval of this Agreement by the Board, the Project shall be deemed to be “substantially in accord” with the Frederick County Comprehensive Plan in all respects. No further finding shall be required by the County Planning Commission pursuant to Virginia Code § 15.2-2232(A). 8. Effect of Agreement a. In accordance with Virginia Code § 15.2-2316.9(B), and as acknowledged and agreed to by the Parties, the terms of this Agreement shall control over any County ordinance(s) and/or regulation(s) that may be inconsistent with the terms of this Agreement. However, nothing shall be construed to exempt the Applicant from any applicable requirement to obtain approvals and 4 permits under federal, state, or local ordinances and regulations. b. In accordance with Virginia Code § 15.2-2316.8(A)(3), and acknowledged and agreed to by the Parties, this Agreement shall be binding upon the County, the Board, and enforceable against the Board and future governing bodies of the County in any court of competent jurisdiction. c. This Agreement is expressly conditioned upon the Board’s approval of a CUP authorizing the use of the Property as a utility-scale solar facility on terms acceptable to the Applicant. 9. Term; Termination. This Agreement shall commence on the Effective Date and shall continue until the Termination Date. The “Termination Date” shall be the earlier of (a) the date the Project is “Decommissioned” in accordance with Va. Code Ann. § 15.2-2241.2 and (b) the date Applicant provides written notice to County that it is abandoning the development of the Project. The termination of this Agreement shall not limit the Applicant’s legal obligation to pay local taxes in accordance with applicable law at such time and for such period as the Project remains in operation. 10. Mutual Covenants. The Applicant covenants to the County that it will not seek to invalidate this Agreement, or otherwise take a position adverse to the purpose or validity of this Agreement. So long as Applicant is not in breach of this Agreement during its term, the County covenants to the Applicant that it will not seek to invalidate this Agreement or otherwise take a position adverse to the purpose or validity of this Agreement. 11. No Obligation to Develop. The Applicant has no obligation to develop the Project and this Agreement does not require any payments until after the Commercial Operation Date. Any test energy or other energy produced prior to the Commercial Operation Date shall not trigger payment under this Agreement. It is understood that development of the Project by Applicant is contingent upon a number of factors including, but not limited to, regulatory approvals, availability and cost of equipment and financing, and demand for renewable energy and renewable energy credits. No election by the Applicant to terminate, defer, suspend or modify plans to develop the Project shall be deemed a default of Applicant under this Agreement. 12. Successors and Assigns. This Agreement will be binding upon the successors and assigns of the Applicant, and the obligations created hereunder shall be covenants running with the Property upon which the Project is developed. If Applicant sells, transfers, leases or assigns all or substantially all of its interest in the Project, this Agreement will automatically be assumed by and be binding on the purchaser, transferee or assignee. Any such assumption, sale, transfer, lease or assignment shall relieve the Applicant of all obligations and liabilities under this Agreement accruing from and after the date of sale or transfer, and the purchaser or transferee shall automatically become responsible under this Agreement. The Applicant shall execute such documentation as reasonably requested by the County to memorialize the assignment and assumption by the purchaser or transferee. 13. Memorandum of Agreement. This Agreement or memorandum of this Agreement, in a form acceptable to the County Attorney, shall be recorded in the land records of the Clerk’s Office of the Circuit Court of Frederick County, Virginia. Such recordation shall be at the Applicant’s sole cost and expense and shall occur as soon as reasonably practicable after the full execution of this Agreement. If the Applicant chooses to not develop the Project, in its sole discretion, the County shall execute a release of the memorandum filed in the aforementioned Clerk’s Office. 14. Notices. Except as otherwise provided herein, all notices required to be given 5 or authorized to be given pursuant to this Agreement shall be in writing and shall be delivered or sent by registered or certified mail, postage prepaid, by recognized overnight courier, or by commercial messenger to: If to County: Planning Department County of Frederick 107 North Kent Street Winchester, Virginia 22601 Email: wpearson@fcva.us If to Applicant: Hollow Road Solar, LLC 112 South Street SE, Suite A Leesburg, VA 20175 Email: notices@breh.com With a copy to: Roderick B. Williams County Attorney County of Frederick 107 North Kent Street Winchester, Virginia 22601 Email: rwillia@fcva.us With a copy to: Michelle Rosati Holland & Knight LLP 1650 Tysons Boulevard, Suite 1700 Tysons, Virginia 22102 Email: michelle.rosati@hklaw.com The County and Applicant, by notice given hereunder, may designate any further or different persons or addresses to which subsequent notices shall be sent. 15. Governing Law; Jurisdiction; Venue. This agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to any of its principles or conflicts of laws or other laws which would result in the application of the laws of another jurisdiction. The parties hereto (A) agree that any suit, action or other legal proceeding, as between the parties hereto, arising out of or relating to this agreement shall be brought and tried only in the Circuit Court of Frederick County, Virginia, (B) consent to the jurisdiction of such court in any such suit, action or proceeding and (C) waive any objection which any of them may have to the laying of venue on any such suit, action or proceeding in such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. The parties hereto agree that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 16. Severability; Invalidity Clause. Any provision of this Agreement that conflicts with applicable law or is held to be void or unenforceable shall be ineffective to the extent of such conflict, voidness or unenforceability without invalidating the remaining provisions hereof, which remaining provisions shall be enforceable to the fullest extent permitted under applicable law. If, for any reason, including a change in applicable law, it is ever determined by any court or governmental authority of competent jurisdiction that this Agreement is invalid then the Parties shall, subject to any necessary County meeting vote or procedures, undertake reasonable efforts to amend and or reauthorize this Agreement to render the invalid provisions herein lawful, valid and enforceable. If the Parties are unable to do so, this Agreement shall terminate as of the date of such determination of invalidity, and the Property and the Project will thereafter be assessed and taxed as though this Agreement did not exist. The Parties will cooperate with each other and use reasonable efforts to defend against and contest any challenge to this Agreement by any third party. 6 17. Entire Agreement. This Agreement and any schedules or exhibits constitute the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the Parties hereto with respect to the subject matter hereof. No provision of this Agreement can be modified, altered or amended except in a writing executed by all Parties hereto. 18. Construction. This Agreement was drafted with input by the County and the Applicant, and no presumption shall exist against any Party. 19. Force Majeure. Neither Party will be liable for any failure or delay in performing an obligation under this Agreement that is due to any of the following causes, to the extent beyond its reasonable control: acts of God, accident, riots, war, terrorist act, epidemic, pandemic, quarantine, civil commotion, breakdown of communication facilities, breakdown of web host, breakdown of internet service provider, natural catastrophes, governmental acts or omissions, changes in laws or regulations, national strikes, fire, explosion, generalized lack of availability of raw materials or energy. For the avoidance of doubt, Force Majeure shall not include (a) financial distress nor the inability of either party to make a profit or avoid a financial loss, (b) changes in market prices or conditions, or (c) a Party's financial inability to perform its obligations hereunder. 20. Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties hereto and their respective successors and permitted assigns, and no other person shall have any right, benefit, priority or interest in, under or because of the existence of, this Agreement. 21. Counterparts; Electronic Signatures. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed to be an original, and all of which shall constitute but one and the same instrument. A signed copy of this Agreement delivered by facsimile, e-mail/PDF or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. [signature page follows] EXHIBIT A 1 EXHIBIT B CONSERVATION EASEMENT DEED NOTE TO TITLE EXAMINERS: This conservation easement contains restrictions on permitted uses and activities on the property described below, which run with the land and are applicable to the property in perpetuity. Prepared by: Return to: Frederick County Conservation Easement Authority TAX MAP NO. or PIN: 27-A-11 and 27-A-12 Exempt from recordation tax under the Code of Virginia (1950), as amended, Sections 58.1-811 (A) (3), 58.1-811 (D) and 10.1-1803 and from Circuit Court Clerk’s fees under Sections 17.1-266 and 17.1-279 THIS DEED OF GIFT OF EASEMENT (this “Easement”), made this ___ day of _________, 20___, between HOLLOW ROAD LAND HOLDINGS LLC (“Grantor”}; the FREDERICK COUNTY CONSERVATION EASEMENT AUTHORITY, a body politic and corporate organized under the laws of the Commonwealth of Virginia for the purpose of acquiring conservation easements and the FREDERICK COUNTY BOARD OF SUPERVISORS, a body politic and corporate vested with the powers and duties of the County of Frederick, Virginia, (together, the “Grantees”) (the designations “Grantor” and “Grantees” refer to Grantor and Grantees and their respective successors and assigns), witnesseth: 1 RECITALS: R-1 Grantor is the owner in fee simple of certain real property situated in Frederick County, Virginia, containing acres2 as further described below (the “Property”), and desires to give, grant, and convey to Grantees a perpetual open-space easement over the Property as set forth herein. R-2 Frederick County Board of Supervisors is the body vested with all the rights and powers conferred on boards of supervisors by general law for the County of Frederick, Virginia. Frederick County Conservation Easement Authority (the “Authority”) is a governmental agency of the Commonwealth of Virginia and a “qualified organization” and “eligible donee” under Section 1 In the event that the ownership entity changes before the easements are granted, or if there are lenders/trustees, this portion of the form would be modified accordingly 2 To be filled in when easement area is delineated at time of grant. 2 170(h)(3) of the Internal Revenue Code (references to the Internal Revenue Code in this Easement are to the United States Internal Revenue Code of 1986, as amended, and the applicable regulations and rulings issued thereunder, or the corresponding provisions of any subsequent federal tax laws and regulations) (the “IRC”) and Treasury Regulations Section 1.170A-14(c)(1) and is willing to accept a perpetual open-space easement over the Property as set forth herein. R-3 Chapter 461 of the Virginia Acts of 1966 provides in part “that the provision and preservation of permanent open-space land are necessary to help curb urban sprawl, to prevent the spread of urban blight and deterioration, to encourage and assist more economic and desirable urban development, to help provide or preserve necessary park, recreational, historic, and scenic areas, and to conserve land and other natural resources” and authorizes the acquisition of interests in real property, including easements in gross, as a means of preserving open-space land. The balance of the Chapter is codified in Chapter 17, Title 10.1, Sections 10.1-1700 through 10.1-1705 of the Code of Virginia (1950), as amended, (the “Open-Space Land Act”). R-4 Pursuant to the Open-Space Land Act, the purposes of this Easement (as defined below in Section I) include retaining and protecting open-space and natural resource values of the Property, and the limitation on division, construction of buildings and other structures, and commercial and industrial uses contained in Section II ensures that the Property will remain perpetually available for agricultural, forestal, or open-space use, all as more particularly set forth below. R-5 Section 10.1-1701 of the Open-Space Land Act authorizes any public body to acquire title to or any interests or rights of not less than five years’ duration in real property for the purpose of preserving open space. Pursuant to this authority, the Frederick County Board of Supervisors established the Frederick County Conservation Easement Program, as codified in Chapter 68, Sections 68-1 through 68-12 of the Code of the County of Frederick, Virginia, establishing and authorizing the Frederick County Conservation Easement Authority to acquire and co-hold easements with the Board of Supervisors for the purposes of retaining or protecting natural or open space values of real property, assuring its availability for agricultural, forestal, recreational or open space use, protecting natural resources, maintaining or enhancing air or water quality or preserving the historical, architectural or archaeological aspects of real property. R-6 As required under Section 10.1-1701 of the Open-Space Land Act, the use of the Property for open-space land conforms to the County of Frederick 2035 Comprehensive Plan and the Property is located within an area that is designated as Rural/Agricultural on the county’s future land use map. R-7 This Easement is intended to constitute (i) a “qualified conservation contribution” as defined in IRC Section 170(h)(1) and as more particularly explained below, and (ii) a qualifying “interest in land” under the Virginia Land Conservation Incentives Act of 1999 (Section 58.1-510 et seq. of the Code of Virginia (1950), as amended). R-8 This Easement is intended to be a grant “exclusively for conservation purposes” under IRC Section 170(h)(1)(C), because it effects “the preservation of open space (including farmland and forest land)” under IRC Section 170(h)(4)(A)(iii); specifically, the preservation of open space on 3 the Property is pursuant to clearly delineated state and local governmental conservation policies and will yield a significant public benefit. R-9 This open-space easement in gross constitutes a restriction granted in perpetuity on the use that may be made of the Property and is in furtherance of and pursuant to the clearly delineated governmental conservation policies set forth below: (i) Land conservation policies of the Commonwealth of Virginia as set forth in: a. Section 1 of Article XI of the Constitution of Virginia, which states that it is the Commonwealth’s policy to protect its atmosphere, lands, and waters from pollution, impairment, or destruction, for the benefit, enjoyment, and general welfare of the people of the Commonwealth; b. The Open-Space Land Act cited above; c. Chapter 68, Sections 68-1 through 68-12 of the Code of the County of Frederick, Virginia; d. The Virginia Land Conservation Incentives Act, Chapter 3 of Title 58.1, Sections 58.1-510 through 58.1-513 of the Code of Virginia (1950), as amended, cited above, which supplements existing land conservation programs to further encourage the preservation and sustainability of the Commonwealth’s unique natural resources, wildlife habitats, open spaces, and forested resources; e. Grantees’ formal practices in reviewing and accepting this Easement. Grantees have engaged in a rigorous review , and pursuant to the eligibility criteria and ranking criteria set forth in Sections 68-6 and 68-7 of the Code of the County of Frederick, Virginia considered and evaluated the benefits provided by this Easement to the general public as set forth in these recitals, and have concluded that the protection afforded the open-space character of the Property by this Easement will yield a significant public benefit and further the open-space conservation objectives of Grantees and the Commonwealth of Virginia. Treasury Regulations Section 1.170A-14(d)(4)(iii)(B) states that such review and acceptance of a conservation easement by a governmental entity tends to establish a clearly delineated governmental conservation policy as required under IRC Section 170(h)(4)(A)(iii); (ii) Land use policies of the County of Frederick as delineated in: a. its 2035 Comprehensive Plan, which emphasizes that the County’s “[R]ural Areas best exhibit the nature, beauty, view sheds, and tranquility for which Frederick County is known. The primary land uses in the Rural Areas are agricultural and forestal operations”, and contains the following goal: “SUPPORT VOLUNTARY LAND PRESERVATION TOOLS AND THE LAND USE TAX DEFERRAL PROGRAM STRATEGIES:” 4 In support of this goal, the 2035 Comprehensive Plan contains the following strategy: “ Support Conservation Easement Authority (CEA), Transfer of Development Rights (TDR), Agricultural and Forestal Districts, and Purchase of Development Rights (PDR) programs, among others.” b. Frederick County policy including an adopted ordinance to allow taxpayers to apply for specially reduced assessments on certain real estate, depending on its use. Following very closely on the calculations of the State Land Evaluation Advisory Council (SLEAC), reductions of assessment are given on each qualifying parcel. Such reduction is specifically designed to encourage the continuation of farms, orchards, and forests in such cases where development is driving the value of land up in a greater ratio than the return on products generated from such land. R-10 This Easement will yield significant public benefit to the citizens of the Commonwealth as set forth in these recitals and in Section I below. R-11 Grantor and Grantees desire to protect in perpetuity the conservation values of the Property as specified in Section I (the “Conservation Values”) by restricting the use of the Property as set forth in Section II. R-12 Grantees have determined that the restrictions set forth in Section II will preserve and protect in perpetuity the Conservation Values of the Property and will limit use of the Property to those uses consistent with, and not adversely affecting, the Conservation Values of the Property and the governmental conservation policies furthered by this Easement. R-13 Grantees, by acceptance of this Easement, designates the Property as property to be retained and used in perpetuity for the preservation and provision of open-space land pursuant to the Open- Space Land Act. NOW, THEREFORE, in consideration of the foregoing recitals, incorporated herein and made a part hereof, and in consideration of the mutual covenants herein and their acceptance by Grantees, Grantor does hereby give, grant, and convey to Grantees for the public purposes set forth in Section I below an open-space easement in gross (this “Easement”) over, and the right in perpetuity to restrict the use of, the Property, which is described below and consists of _____________ acres located in Frederick County, Virginia, generally south of Parishville Road in Gore, Virginia, to-wit: ________ [attorney to insert legal description keyed to each tax parcel ] 3___________ ______________________________________________________________________________________ ______________________________________________________________________________________ 3 Information to be filled in at the time of grant. 5 ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ The Property is shown as Tax Map No. [or PIN] ________________ among the land records of the County of Frederick, Virginia. SECTION I -PURPOSES The conservation purpose of this Easement is to preserve and protect the Conservation Values of the Property in perpetuity by imposing the restrictions on the use of the Property set forth in Section II and providing for their enforcement in Section III. The Conservation Values of the Property are described in the above recitals, are documented in the Baseline Documentation Report described in Section IV below, and include the Property’s open-space, scenic and natural, values, and its value as land preserved for rural uses such as forestry and agriculture (including livestock production). Pursuant to the Virginia Land Conservation Foundation’s Conservation Value Review Criteria, the further conservation purpose of this Easement is: preservation of land for agricultural use, forestal use, natural habitat and biological diversity, and/or natural resource-based outdoor recreation or education, and/or preservation of scenic open space, and/or preservation of open space designated by local government. Grantor covenants that no acts or uses are currently being conducted or will be conducted on the Property which are: (i) inconsistent with the conservation purposes of the donation or (ii) consistent with the conservation purposes of the donation, but destructive of other significant conservation interests unless such acts or uses are necessary for the protection of the Conservation Values. SECTION II – RESTRICTIONS Restrictions are hereby imposed on the uses of the Property pursuant to the public policies set forth above. The acts that Grantor covenants to do and not to do upon the Property and the restrictions that Grantees are hereby entitled to enforce are as follows: 1. DIVISION. (i) The Property shall not be divided into or separately conveyed as more than 2 parcels, regardless of the number of tax parcels or tracts it currently encompasses, and regardless of the subdivision regulations of Frederick County as they now exist or may change from time to time. For purposes of this Easement, division of the Property also includes, but is not limited to, (a) recordation of a subdivision plat, (b) judicial partitioning of the Property, (c) testamentary partitioning of the Property, or (d) pledging for debt of a portion of the Property. Notwithstanding the foregoing, boundary line adjustments affecting only Parcels 27-A-11 and 27-A-12 shall not be considered divisions for purposes of this 6 Easement, and shall be permitted, provided that Grantees are made parties to the deed creating the boundary line adjustment. Each of these two parcels may be sold individually, or together, either as currently situated, or subsequent to a boundary line adjustment as described herein, so long as the combination of Parcels 27-A-11 and 27-A-12 does not result in more than two separate parcels. Boundary line adjustments with adjoining parcels of land are permitted and shall not be considered divisions of the Property, provided that Grantees are made party to the deed creating the boundary line adjustment and provided that the combined acreage of Parcels 27-A-11 and 27-A-12 is not reduced. (ii) The taking, conveyance, or dedication of a de minimis portion of the Property for minor road improvements will not be considered a division of the Property, and neither the taking, conveyance or dedication of such a de minimis portion of the Property nor the use of the portion of the Property so acquired will be prohibited by this Easement. 2. IMPERVIOUS COVERAGE LIMITATIONS. The collective footprint of all buildings and structures on the Property, excluding roads, shall not exceed one percent (1%) of the total area of the Property. However, if Grantor can demonstrate that an increase in the collective footprint would result in increased protection of the Conservation Values protected herein, Grantees shall reasonably approve such increase. For the purpose of this paragraph the collective footprint is the ground area measured in square feet of the structures set forth in 3(i) below 3. BUILDINGS, STRUCTURES, ROADS, AND UTILITIES Buildings, structures, roads, and utilities. No buildings, structures, roads, or utilities, other than the following, are permitted for each of the two (2) permitted parcels on the Property: (i) Buildings and structures. (a) One (1) single family residential dwelling and associated accessory structures, which does not exist as of the date of this Easement. Such single family residential dwelling and associated accessory structures shall be wholly contained within the designated Building Area, the location of which may be designated by Grantor, subject to the following restrictions: (a) the Building Area shall be no larger than two (2) acres in size, (b) said single family residential structure shall be no larger than 5000 square feet of above-ground enclosed living area, (c) structures within the Building Area shall not harm the Conservation Values of the Property; (d) prior to constructing or placing such single family residential dwelling and associated accessory structures on the Property, Grantor shall submit in writing to Grantees a request for designation of the Building Area that provides the specific requested 7 location, and shall obtain in writing the Grantee’s approval of such Building Area, which approval shall not be unreasonably withheld or denied; and (b) Farm buildings or structures, except that a farm building or farm structure exceeding 4,000 square feet in ground area may not be constructed or placed on the Property unless prior written approval for the building or structure is obtained from Grantees, which approval shall not be unreasonably withheld, conditioned or delayed, and which approval shall additionally be limited to consideration of the impact of the size, height and siting of the proposed structure on the Conservation Values of the Property. For purposes of this subparagraph, a farm building or structure shall mean a building or structure originally constructed and used for the activities contemplated herein. Grantor shall give Grantees thirty (30) days’ written notice before beginning construction or enlargement of any agricultural building or residential dwelling on the Property. (ii) Roads, driveways, and trails. (a) Private roads and driveways to serve permitted buildings and structures and roads for permitted uses and activities; (b) Private roads or driveways and access easements over same to serve adjacent properties, provided such roads or driveways have the prior written approval of Grantees, which approval will take into consideration the impact of the roads or driveways on the Conservation Values of the Property; and (c) Trails including, but not limited to, hiking, biking, and equestrian trails. (iii) Utilities and renewable energy facilities. (a) Public or private utilities within existing rights-of-way therefor, consistent with any recorded instrument granting such rights-of-way; (b) Public or private utilities and renewable energy facilities used to harness natural renewable energy sources such as sunlight, wind, water, or biomass to serve permitted buildings, structures, or activities on the Property. Such limitation will not prohibit the sale of excess power generated incidentally in the operation of renewable energy facilities; and (iv) Signs. Signs not exceeding 32 square feet in area, or as otherwise permitted by Grantees, which permission shall not be unreasonably withheld. 8 4. ACTIVITIES PERMITTED ON THE PROPERTY. No activities other than the following are permitted on the Property: (i) Agricultural, forestal and equine activities, including processing of agricultural and forestal products; (ii) Residential activities compatible with the limitations on buildings, structures, impervious surfaces, and ground disturbance contained herein and local, state, and federal regulations; (iii) Commercial activities compatible with the limitations on buildings, structures, impervious surfaces, and ground disturbance contained herein and local, state, and federal regulations, provided, however, that such commercial activities may not be inconsistent with the conservation purposes of this Easement; (iv) Management of wildlife; (v) Natural resource-based educational and scientific activities; (vi) Development of ecosystem functions on the land, including necessary equipment and structures with the prior written approval of Grantees, taking into consideration the effect of such development on the Conservation Values of the Property; and (vii) Outdoor recreational activities requiring little or no surface alteration of the land. 5. MANAGEMENT OF FOREST. (i) A pre-harvest plan must be submitted to Grantees for approval no later than fourteen (14) days before the proposed date of a material timber harvest, which approval will take into consideration whether the pre-harvest plan is consistent with the terms of this Easement. Best Management Practices for Water Quality Field Guide as promulgated by the Virginia Department of Forestry must be used when such a harvest is undertaken. (ii) The cutting, clearing, or removal of trees on less than ten (10) acres of the Property at any one time does not constitute a material timber harvest and does not require the submission of a pre-harvest plan to Grantees. 6. LANDSCAPE ALTERATION, EXCAVATION, AND MINING. 9 (i) Grading, blasting, filling, excavation, or earth removal may not materially alter the topography of the Property except (a) for clearing, grading, and dam construction to create and maintain ponds (but not storm water retention or detention ponds to serve other properties), (b) for restoration, enhancement, or development of ecosystem functions on the Property as permitted and limited under Section II, Paragraph 4 (vi) above, (c) as required in the construction of permitted buildings, structures, driveways, roads, trails, and utilities, or (d) for erosion and sediment control pursuant to an erosion and sediment control plan. (ii) Grading, blasting, filling, or earth removal in excess of one acre for the purposes set forth in subparagraph (i) above require 30 days’ prior notice to Grantees. (iii) Generally accepted agricultural activities will not constitute a material alteration of the topography. (iv) Surface mining on the Property, subsurface mining from the surface of the Property, and drilling for oil or gas or other minerals on the Property are prohibited. Dredging on or from the Property is prohibited, except for creation and maintenance of any ponds on the Property. (v) Notwithstanding the foregoing, any land disturbance activity required by a decommissioning plan shall be permitted. SECTION III – ENFORCEMENT 1. RIGHT OF INSPECTION. Employees, agents, and other representatives of Grantee may enter the Property from time to time, after notice to the Grantor and with a representative of Grantor present, for purposes of (i) inspection (including photographic documentation of the condition of the Property), (ii) flagging or otherwise marking the boundaries of specific areas or zones on the Property that are restricted as to the structures or activities allowed thereon in Section II above, and (iii) enforcement of the terms of this Easement after reasonable notice to Grantor or Grantor's representative, provided, however, that in the event of an emergency, entrance may be made to observe, document, prevent, terminate, or mitigate a potential violation of these restrictions with notice to Grantor or Grantor’s representative being given at the earliest practicable time. 2. ENFORCEMENT. (i) Grantees, in accepting this Easement, commits to protecting the Conservation Values and advancing the conservation purposes of this Easement and have the resources necessary to enforce the restrictions set forth herein. Grantees have the right to bring a judicial proceeding to enforce the restrictions, which right specifically includes the right (a) to require restoration of the Property to its condition on the Effective Date or to require restoration of the Property to its condition prior to a violation hereof, provided that such prior condition was in 10 compliance with the provisions of this Easement; (b) to recover any damages arising from non-compliance; (c) to compel Grantor to disgorge to Grantees any proceeds received in activities undertaken in violation of the restrictions set forth in Section II of this Easement; (d) to require Grantor to replant or pay for the replanting of trees on the Property harvested in violation of the restrictions involving timber or trees set forth in Section II of this Easement, (e) to require Grantor to pay the costs of ascertaining the value of the timber harvested in violation of restrictions involving timber or trees set forth in Section II of this Easement; (f) to pay to Grantees three times the value of the timber on the stump for the value (at the time of harvesting) of such timber harvested in violation of restrictions involving timber or trees set forth in Section II of this Easement, constituting the agreed-upon harm to the Conservation Values protected herein caused by such wrongful harvest; (g) to enjoin non-compliance by temporary or permanent injunction; and (h) to pursue any other appropriate remedy in equity or at law. If the court determines that Grantor failed to comply with this Easement, Grantor must reimburse Grantees for any reasonable costs of enforcement, including costs of restoration, court costs, expert-witness costs, and attorney’s fees, in addition to any other payments ordered by the court. A Grantee’s delay will not waive or forfeit its right to take such action as may be necessary to ensure compliance with this Easement, and Grantor hereby waives any defense of waiver, estoppel, or laches with respect to any failure to act by Grantees. (ii) Notwithstanding any other provision of this Easement, Grantor will not be responsible or liable for any damage to the Property or change in the condition of the Property (a) caused by fire, flood, storm, Act of God, governmental act, or other cause outside of Grantor’s control or (b) resulting from prudent action taken by Grantor to avoid, abate, prevent, or mitigate such damage to or changes in the condition of the Property from such causes. (iii) Nothing in this Easement creates any right in the public or any third party to maintain a judicial proceeding against Grantor or Grantees. The conveyance of this Easement to Grantees does not affect the property rights of contiguous landowners or vest in any contiguous or nearby landowner rights in the Property or the administration of this Easement by Grantees. SECTION IV – DOCUMENTATION Grantor has made available to Grantees, prior to conveyance of this Easement, documentation sufficient to describe the condition and character of the Property, and the Baseline Documentation Report (BDR), describes the condition and character of the Property on the Effective Date. The BDR may be used to determine compliance with and enforcement of the terms of this Easement. However, the parties are not precluded from using other relevant evidence or information to assist in that determination. The parties hereby acknowledge that the BDR contained in the files of Grantees is an accurate representation of the Property and contains a statement signed by Grantor and a 11 representative of each Grantee as required by Treasury Regulation Section 1.170A- 14(g)(5)(i). Grantees may compile written reports and photographic documentation of the condition of the Property from time to time as a result of inspection of the Property pursuant to Section III 1. above. SECTION V – GENERAL PROVISIONS 1. DURATION AND CONVEYANCE. This Easement will be perpetual. It is an easement in gross that runs with the land as an incorporeal interest in the Property. Grantor shall, expressly, have the right to convey the Property, or to subject the Property to a mortgage or deed of trust for purposes of securing financing, without limitation. The covenants, terms, conditions, and restrictions contained in this Easement are binding upon, and inure to the benefit of, Grantor and its successors in title to the Property, or any portion thereof or interest therein, and will continue as a servitude running in perpetuity with the Property. The rights and obligations of an owner of the Property under this Easement terminate upon proper transfer of such owner’s interest in the Property, except that liability for acts or omissions occurring prior to transfer will survive transfer. 2. NO PUBLIC ACCESS AND GRANTOR’S RETENTION OF USE. Although this Easement will benefit the public as described above, nothing herein may be construed to convey to the public a right of access to or use of the Property. Subject to the terms hereof, Grantor retains the exclusive right to such access on and use of the Property. 3. GRANTOR’S REPRESENTATIONS AND WARRANTIES . Grantor represents, covenants, and warrants that (i) Grantor has good fee simple title to the Property (including the mineral rights located under the surface of the Property), (ii) Grantor has all right and authority to give, grant and convey this Easement, (iii) the Property is free and clear of all encumbrances (other than restrictions, covenants, conditions, and utility and access easements of record), except as noted herein,( including, but not limited to, any leases, option contracts, mortgage liens, deed of trust liens, or other liens not subordinated to this Easement, and (iv) no consent of any third party is required for Grantor to enter into this Easement. (v) each person and/or entity signing on behalf of Grantor is authorized to do so, (vi) and Grantor is duly organized and legally existing under the laws of the Commonwealth of Virginia. No provision of this Representation and Warranty shall be interpreted to limit the Grantee’s ability to finance the Property.4 5. INTERACTION WITH OTHER LAWS. This Easement does not permit any use of the Property that is otherwise prohibited by federal, state, or local law or regulation. Neither the Property, nor any portion of it, has been or may be proffered or dedicated as open space within, or as part of, a residential subdivision or any other type of residential or commercial development; proffered or dedicated as open space in, or as part of, any real estate development plan; or proffered or dedicated for the purpose of fulfilling density 4 There is not, as of the date of the CUP approval, financing on the Property, but the Grantor reserves the right to finance and encumber the Property. 12 requirements to obtain approvals for zoning, subdivision, site plan, or building permits. No development rights that have been encumbered or extinguished by this Easement may be transferred to any other property pursuant to a transferable development rights scheme, cluster development arrangement, or otherwise. 6. CONSTRUCTION. Pursuant to the public policy of the Commonwealth of Virginia favoring land conservation, any general rule of construction to the contrary notwithstanding (including the common-law rule that covenants restricting the free use of land are disfavored and must be strictly construed), it is the intent of the parties hereto that this Easement and all language contained herein be liberally construed in favor of the grant to effect the purposes of this Easement and the policies and purposes of Grantees. If any provision of this Easement is found to be ambiguous, an interpretation that is consistent with the purposes of this Easement (to protect the Conservation Values of the Property and prevent the exercise of reserved rights in a way that would impair such values) and that would render the provision valid will be favored over any interpretation that would render it invalid. Notwithstanding the foregoing, lawful acts or uses consistent with the purposes of and not expressly prohibited by this Easement are permitted on the Property. Grantor and Grantees intend that the grant of this Easement qualify as a “qualified conservation contribution” as that term is defined in IRC Section 170(h)(1) and Treasury Regulation Section 1.170A-14, and the restrictions and other provisions of this Easement will be construed and applied in a manner that will not prevent it from being a qualified conservation contribution. 7. REFERENCE TO EASEMENT IN SUBSEQUENT DEEDS . This Easement must be referenced by deed book and page number, instrument number, or other appropriate reference in any deed or other instrument conveying any interest in the Property. Failure of Grantor to comply with this requirement will not impair the validity of this Easement or the conveyance or limit this Easement’s enforceability in any way. 8. NOTICE TO GRANTEES AND GRANTOR. For the purpose of giving notices hereunder the current address of Grantees are:_______________________________________________________________, and any notice to Grantor should be given to the recipient at the address at which the real estate tax bill is mailed for the Property or portion thereof that is the subject of the notice and which is currently _____________________________.5 (a) Grantor must notify Grantees in writing at or prior to closing on any inter vivos transfer, other than a deed of trust or mortgage, of all or any part of the Property. (ii) In addition, Grantor agrees to notify Grantees in writing before exercising any reserved or permitted right that may have an adverse effect on the Conservation Values of the Property as encumbered by this Easement or that, because of unforeseen or changed circumstances, involves activities or structures regarding which this Easement is silent or ambiguous. (The purpose of requiring such notice 5 Information to be filled in at the time of grant of the easement. 13 is to afford Grantees an adequate opportunity to either (a) prohibit or approve and monitor such activities to ensure that they are carried out in a manner not having an adverse impact on the Conservation Values of the Property or (b) to prohibit or permit the construction of such structures, depending upon whether the construction of such structures will have an adverse impact on the Conservation Values of the Property.) Such notice must describe the proposed activity or structure in sufficient detail to allow Grantees to judge the consistency of the proposed activity or construction of the proposed structures with the purposes of this Easement. Grantees may grant its consent if it determines, in its sole discretion, that the performance of such activities or the construction of such structures does not confer upon Grantor an impermissible private benefit, does not violate any of the terms of this Easement, and does not have an adverse impact on the Conservation Values of the Property. Grantor may not engage in the proposed activities or construction of such structures unless and until Grantor receives Grantees’ approval in writing. (iii) Failure of Grantor to comply with these requirements will not impair the validity of this Easement or limit its enforceability in any way. 9. TAX MATTERS. The parties hereto agree and understand that any value of this Easement claimed for tax purposes as a charitable gift must be fully and accurately substantiated by an appraisal from a qualified appraiser as defined in Treasury Regulation Section 1.170A- 13(c)(5), and that the appraisal is subject to review and audit by all appropriate tax authorities. Grantees make no express or implied warranties that any tax benefits will be available to Grantor from conveyance of this Easement, that any such tax benefits might be transferable, or that there will be any market for any tax benefits that might be transferable. 10. GOODS AND SERVICES. By its execution hereof, Grantees acknowledge and confirm receipt of this Easement and further acknowledges that Grantees have not provided any goods or services to Grantor in consideration of the grant of this Easement. 11. NO MERGER. Grantor and Grantees agree that in the event that either Grantee acquires a fee interest in the Property, this Easement will not merge into the fee interest, but will survive the deed and continue to encumber the Property. 12. ASSIGNMENT BY GRANTEES. Assignment of this Easement is permitted by Virginia Code Section 10.1-1801, but Grantees may not transfer or convey this Easement unless Grantees condition such transfer or conveyance on the requirement that (i) all restrictions set forth in this Easement are to be continued in perpetuity, (ii) the transferee then qualifies as an eligible donee as defined in IRC Section 170(h)(3) and the applicable Treasury Regulations, and (iii) the transferee is a public body as defined in Section 10.1-1700 of the Open-Space Land Act. 13. GRANTEES’ PROPERTY RIGHT. Grantor agrees that the conveyance of this Easement gives rise to a property right, immediately vested in Grantees, with a fair market value that is equal to the proportionate value that this Easement on the Effective Date bears to the value of the Property as a whole at that time. 14 14. CONVERSION OR DIVERSION. Grantor and Grantees intend that this Easement be perpetual and acknowledge that no part of the Property may be converted or diverted from its open-space use except in compliance with the provisions of Section 10.1-1704 of the Open-Space Land Act, which does not permit loss of open space. 15. EXTINGUISHMENT. This Easement may be extinguished, in whole or in part, only (i) in a judicial proceeding in a court of competent jurisdiction, (ii) upon a finding by the court that a subsequent unexpected change in the conditions surrounding the Property has made impossible or impractical the continued use of the Property (or the portion thereof to be removed from this Easement) for conservation purposes, and (iii) with a payment to Grantees of a share of the proceeds from a subsequent sale, exchange, or involuntary conversion of the Property at least equal to the proportionate value of this Easement computed as set forth in Section V, Paragraph 13 above. Grantees must use all of their share of the proceeds from the sale of the Property in a manner consistent with the conservation purposes of this Easement. For purposes of this Easement, an extinguishment involves the removal of all or any part of the Property from this Easement. 16. AMENDMENT. Grantees and Grantor may amend this Easement to enhance the Property’s Conservation Values or add acreage to the restricted property by an amended deed of easement, provided that no amendment may (i) affect this Easement’s perpetual duration or remove this Easement from any portion of the Property, (ii) conflict with or be contrary to or inconsistent with the conservation purposes of this Easement, (iii) reduce the protection of the Conservation Values, (iv) affect the qualification of this Easement as a “qualified conservation contribution” or “interest in land”, (v) affect the status of any Grantee as a “qualified organization” or “eligible donee”, or (vi) create an impermissible private benefit or private inurement in violation of federal tax law. No amendment will be effective unless documented in a notarized document executed by Grantees and Grantor and recorded in the Clerk’s Office of the Circuit Court of Frederick County, Virginia. 17. COST RECOVERY CHARGES. Grantees reserve the right to recover their costs incurred in responding to requests initiated by Grantor involving matters such as easement amendments, project reviews for ecosystem services, preparation of reports to facilitate sales, and access or utility easements over the Property. Such cost recovery charges will be determined and periodically adjusted by Grantees, as set forth in a published fee schedule. 18. JOINT OWNERSHIP. If Grantor at any time owns the Property or any portion of or interest therein in joint tenancy, tenancy by the entirety, or tenancy in common, all such tenants will be jointly and severally liable for all obligations of Grantor set forth herein. 19. SEVERABILITY. It is the express intent of the parties hereto that all provisions of this Easement be considered and construed as part of the whole and that no provision will be applied in isolation without consideration of the overall purposes of this Easement. Nevertheless, if any provision of this Easement or its application to any person or 15 circumstance is determined by a court of competent jurisdiction to be invalid, the remaining provisions of this Easement will not be affected thereby. 20. ENTIRE AGREEMENT. This instrument sets forth the entire agreement of the parties with respect to this Easement and supersedes all prior discussions, negotiations, understandings, or agreements relating to this Easement. 21. CONTROLLING LAW. The interpretation and performance of this Easement will be governed by the laws of the Commonwealth of Virginia and the United States, resolving any ambiguities or questions of the validity of specific provisions in a manner consistent with the provisions of Section V, Paragraph 6 above in order to give maximum effect to its conservation purposes. 22. RECODIFICATION AND AMENDMENT OF STATUTES AND REGULATIONS This Easement cites various federal and state statutes and regulations applicable to open- space easements. In the event that such statutes or regulations are re-codified or amended, this Easement will be interpreted and enforced according to the re-codified or amended statutes and regulations most closely corresponding to those cited herein and carrying out the purposes recited herein. 23. RECORDING. This Easement will be recorded in the land records in the Clerk’s Office of the Circuit Court of Frederick County, Virginia, and Grantees may take any steps necessary in said clerk’s office to preserve their rights under this Easement in the future. 24. COUNTERPARTS. This Easement may be executed in one or more counterpart copies, each of which, when executed and delivered, will be an original, but all of which will constitute one and the same Easement. Execution of this Easement at different times and in different places by the parties hereto will not affect the validity of this Easement. 25. DEFINITIONS. For purposes of this Easement, the phrase “Effective Date” means the date upon which this Easement was first put to record in the Clerk’s Office of the Circuit Court of Frederick County, Virginia. The words “currently” or “existing” mean currently or existing on the Effective Date. Time will be calculated in calendar days, not business days. [Subordination, if applicable6 ____________________, herein the Lender, is the note holder under a certain deed of trust dated _______ and recorded in the Clerk's Office of the Circuit Court of __________________ County, Virginia in Deed Book ________ at Page ______, which subjects the Property [or a portion of the Property] to the Lender's lien. The Lender hereby consents to the terms, conditions, and restrictions of this Easement, agrees that the lien represented by said deed of trust will be held subject to this Easement and all of Grantees’ rights hereunder, and joins in this Easement to reflect its direction to the Trustee(s) to execute this Easement to give effect to the subordination of such deed of trust to this Easement and to Grantees’ said rights. The Trustee(s) join(s) in the execution 6 This information will be included if applicable at the time of the grant. 16 of this Easement to confirm that in the event of foreclosure under the deed of trust or other sale of the property described in the deed of trust under judicial or non-judicial proceedings, the property will be sold subject to this Easement and to all of Grantees’ rights hereunder. [If applicable: It is understood by the parties hereto that the granting of the deed of trust/deed on a portion/portions of the Property constitutes a division of the Property unless and until such deed of trust has been released of record.] WITNESS the following signatures and seals: [Counterpart signature pages follow.] 17 [Counterpart signature page 1 of 4 of deed of open-space easement] ____________________________________ Grantor ________________________________________ Grantor COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF ______________________, TO WIT: The foregoing instrument was acknowledged before me this ___ day of __________, 20___ by _________________________________. ____________________________________ Notary Public My commission expires: ______________________ (SEAL) Registration No. ____________________________ COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF ______________________, TO WIT: The foregoing instrument was acknowledged before me this ___ day of __________, 20___ by _________________________________. ____________________________________ Notary Public My commission expires: _______________________ (SEAL) Registration No. ____________________________ 18 [Counterpart signature page 2 of 4 of deed of open-space easement] Accepted: FREDERICK COUNTY CONSERVATION EASEMENT AUTHORITY, By: __________________________________ COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF _____________________________, TO WIT: The foregoing instrument was acknowledged before me this ________ day of ______________, 20___ by________________________, a Deputy Director/Staff Attorney of the FREDERICK COUNTY CONSERVATION EASEMENT AUTHORITY. ____________________________________ Notary Public My commission expires: ________________________ (SEAL) Registration No. ______________________________ 19 [Counterpart signature page 3 of 4 of deed of open-space easement] Lender: By: ________________________________ Its: ________________________________ COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF _________________________, TO WIT: The foregoing instrument was acknowledged before me this _________ day of _____________, 20___ by_________________ [name of officer], __________________ [title of officer] of ____________________________ [name of corporation], a ________________ [state of incorporation] corporation, on behalf of the corporation. ____________________________________ Notary Public My commission expires: ________________________ (SEAL) Registration No. ______________________________ 20 [Counterpart signature page 4 of 4 of deed of open-space easement] ____________________________________, Trustee ____________________________________, Trustee COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF ___________________________, TO WIT: The foregoing instrument was acknowledged before me this ________ day of ______________, 20___ by _____________________, Trustee. ____________________________________ Notary Public My commission expires: _______________________ (SEAL) Registration No. _____________________________ COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF ___________________________, TO WIT: The foregoing instrument was acknowledged before me this ________ day of ______________, 20___ by _____________________, Trustee. ___________________________________ Notary Public My commission expires: ______________________ (SEAL) Registration No. ____________________________