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HomeMy WebLinkAboutbocc.con.117.2013 RECEPTION#; 596523, 09/29/2013 at ��NTRaCT# , ,l, "�/3 10:09:17 AM, _��� 1 OF 56, R $0.00 Doc Code AGREEMENT Janice K.Vos Caudill, Pitkin County, CO ESCROW AGREEMENT AGREEMENT made this "'"` � day of January 2013,between and among Land Title Guarantee Company with offices in Aspen, Colorado, (the "Escrow Agent"), 2343 County Road, LLC,Ranch Lake III,Inc , Ranch Lake IV, LLC, Ranch III, LLC and Ranch IV, LLC ("Two Shoes"), and The Pitkin County Board of County Commissioners, (the`BOCC"). WITNESSETH: WHEREAS,Two Shoes and the BOCC have entered into an Agreement dated January LZ , 2013 (The"Agreement")concerning the BLM Land Exchange("Exchange")as more fully described in the Agreement; and WHEREAS, The Agreement contemplates,among other things,that after execution, a "Conservation Easement", "Deed Restriction" and funds in the amount of$700,QOO.QO("Funds") . shall be deposited in escrow(the"Escrow")with Escrow Agent; and WHEREAS,the Escrow shall be held by Escrow Agent subject to certain,terms conditions and provision as more fully set forth herein; and WHEREAS, Two Shoes,BOCC, and Escrow Agent desire to set forth their agreement as to responsibilities of the parties in connection with the Escrow; NOW THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein and other good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,the parties agree: 1. The Funds shall be held in escrow by the Escrow Agent in an interest bearing account. The Escrow Agent sha11 dispose of the Escrow only in accordance with the provisions of this Escrow Agreement. 2. The parties agree that after full execution of the Conservation Easement substantially in the form attached hereto as Exhibit A and Deed Restriction substantially in the form attached hereto as Exhibit B,both the Conservation Easement and Deed Restriction sha11 be held in Escrow by Escrow Agent, subject to terms, provisions and conditions set forth in this Escrow Agreement. 3. In the event that Two Shoes notifies Escrow Agent that the Exchange has been completed and that BLM parcels have been deeded to Two Shoes and a11 time periods for protest,challenges or stay periods of the Exchange have expired and no protest or appeal having been raised and Two shoes requests recording of the Conservation Easement and Deed Restriction,Escrow Agent shall promptly record the Conservation Easement and Deed Restriction. If the Exchange is not completed then upon request by Two Shoes,the Escrow Agent shall return the Conservation Easement and Deed Restriction to Two Shoes. 1 4. Within one(1} business day of execution of this Escrow Agreement, Two Shoes shall deposit with the Escrow Agent the sum of$700,000.00 to be held in Escrow. a.) After the Exchange has been completed,the BLM Parcels have been deeded to Two Shoes and all protest, challenges or sta.y periods for the Exchange have expired without any protest or appeal having been raised and Pitkin County("County")has purchased the Ty Bar Parcel and constructed approximately one mile of trail as shown on Exhibit C attached hereto ("Property") Two Shoes sha11 notify the Title Company and the $70Q,000.00 shall be delivered to the County to reimburse the County for the purchase price of the Property and trail construction. b.) In the event the County has not acquired the Property by the time of the Exchange has been completed and the BLM Parcels have been deeded to Two Shoes and all time periods for protest, challenges or stay periods of the Exchange have expired without any protest or appeal having been raised,Two Shoes shall notify the Title Company and the $7QO,OOQ.00 shall be delivered to County to be used for Rio Grande Trail improvements. Two Shoes and the County may also mutually agree upon the use of the $700,000.00 for the acquisition of trails or Open Space in the Crystal River area. c.) In the event the County has purchased the Property, and the Exchange does not occur Two Shoes shall notify the Title Company and the Escrow Agent shall deliver to the County$350,000.00 or one-half of the purchase price paid by the County for the actual Property, whichever is less. The remaining fu.nds shail thereupon be delivered to Two Shoes. d.) In the event the County has not purchased the Property, and the Exchange does not occur,the Escrow Agent sha11, upon written request from Two Shoes, deliver to Two Shoes the entire$700,000.00 held in Escrow. In all events,interest accrued on the$700,000 shall be paid to Two Shoes. - 5. No documents shall be recorded nor delivered and no funds shall be disbursed without prior written notice to the party not requesting delivery,recording or disbursement and expiration of three(3)business days from date of delivery of such notice. Should the forgoing deadline pass without objection,then Escrow Agent shall deliver or record the escrowed documents or deliver the Escrowed Funds as requested to the requesting party. 6. Escrow Agent may deliver the Escrow Fund in accordance with the order of any court of competent jurisdiction or in accordance with any written instrument executed by both the Seller and the Purchaser. The Escrow Agent may, at any time,deliver the Escrow Fund to a court of competent jurisdiction,whether or not pursuant to an interpleader action, or take such �rmative steps as it may elect in order to substitute an impartial party to hold the Escrow Fund and to terminate its dnties as Escrow Agent. The cost of any such action sha11 be borne equally by the parties. 7. Any notice to the Escrow Agent shall be sufficient only if received by the Escrow Agent within the applicable time periods set forth herein. (3 business days from date of delivery) All notices hereunder shall be sent by any one or more of the following methods: (a)registered 2 or certified mail,return receipt requested; (b)overnight delivery service; (c) facsimile transmission; (d)personal service or hand delivery at the following addresses: BOCC Pitkin County Manager Attn: John Peacock 530 East Main Street Aspen, CO 81611 Two Shoes Gideon Kaufinan 315 E. Hyman, Ste. 305 Aspen, CO 81611 Escrow A�ent Land Title Guarantee Company 533 East Hopkins Avenue Aspen, Colorado 81611 8. It is expressly understood that the Escrow Agent acts hereunder as an accommodation to Two Shoes and BOCC as a depository only and is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness or validity of any instrument deposited with it, or for the form of execution of such instruments or for the identity,authority or right of any person executing or depositing the same or for the terms and conditions of any instrument pursuant to which the Escrow Agent or the parties may act. 9. The Escrow Agent shall have no duties or responsibilities except those set forth in this Escrow Agreement and shall incur no liability in acting upon any signature,notice,request, waiver,consent,receipt ar other paper or document believed by the Escrow Agent to be genuine, and the Escrow Agent may assume that any authorized person giving it notice on behalf of any party in accordance with the provisions hereof has been duly authorized to do so. Two Shoes and BOCC,jointly and severally, agree to indemnify and save the Escrow Agent harmless from and against any and all loss, damage, claims, liabilities,judgments and other costs and expenses of every kind and nature which may be incurred by the Escrow Agent(including attorneys' fees)by reason of its acceptance of, and its performance under,this Escrow Agreement unless caused by the gross negligence or the willful misconduct of the Escrow Agent. 10. The terms and provisions of this Escrow Agreement shall not create any right in any person, firm, corporation or entity other than the parties hereto and their respective successors and permitted assigns, and no third party shall have the right to enforce or benefit from the terms hereof. 11. The Escrow Agent may act or refrain from acting with respect to any matter referred to herein in full reliance upon and with the advice of counsel which may be selected by it(including a.ny member of its firtn)and shall be fully protected in so acting or refraining from 3 acting upon the advice of such counsel. 12. Counterparts/Facsimile. This Escrow Agreement may be executed in one or more counterparts which together shall be one and the same instrument,binding on all parties, although not signatory to the same original document. This Escrow Agreement can be accepted andlor executed by either party by facsimile or e mail transmission,which shall be binding upon the party so executing. 13. Further Assurances. Each of the parties agrees to execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments and documents and to do all things and acts as the other party may reasonably require in order to carry out the intentions of this Escrow Agreement and the transactions contemplated hereby. 14. Interpretation. No provision of this Escrow Agreement shall be construed against or interpreted to the disadvantage of any party by reason of such party having, or being deemed to have requested, drafted,required or structured such provision. 15. Controlling Laws. This Escrow Agreement shall be construed in accordance with and governed by the laws of the State of Colorado. � 16. Attorneys' Fees. In the event of any litigation between the parties involving the interpretation and/or enforcement of this Escrow Agreement or any provision hereof,the substantially prevailing pariy sha11 be entitled to an award of its costs and expenses (including reasonable costs and attorneys' fees)incurred therein as a part of the judgment or stipulated settlement entered in such litigation. 17. Escrow Agent shall be paid a fee of$200.00 for its services hereunder. 18. This Escrow Agreement shall be for a I year term and thereafter the parties shall have the right to extend for l additional year. IN WITNESS WHEREOF,the parties hereto have set their names and seals the day and year first above written. ESCROW AGENT: Land Title Guarantee Company BY� ^-� ��>tC..�.'t�j�j Name: i�CPr r�,C.,r���S Title: � L..c�S �r•,i�� -PiC�£„�('"�_ Pitkin County Board of County Commissioners: By: � Name: Title:��-�c.� i-n4��,,0�" 4 Two Shoes By: Name: ' i,��0 ►�v��� Title: �/�y��� � 5 ' Exhibit A —Lower Potato Bill Conservation Easement NOTICE TO TITLE COMPANY: This Deed of Conservation Easement in gross requires one- hundred dollars ($100.00) be paid to Aspen Valley Land Trust or its successor organization by the recipient at the time of every transfer of this Property, as described in Section 16. This payment is exempt from the transfer fee restrictions contained within C.R.S. 38-35-127. DEED OF CONSERVATION EASEMENT IN GROSS Two Shoes Ranch IV—Lower Potato Bill Parcel Pitkin County THIS DEED OF CONSERVATION EASEMENT IN GROSS ("Easement") is granted this day of , , by RANCH IV LLC, a Colorado limited liability company ("Grantor"), to and for the benefit of ASPEN VALLEY LAND TRUST, a Colorado nonprofit corporation having offices at 320 Main Street, Suite 204, Carbondale, Colorado 81623 (the"Trust")(collectively, the"Parties"). The following exhibits are attached hereto and incorporated in this Easement by reference: Exhibit A: Property Legal Description; and Exhibit B: Map of Property. RECITALS WHEREAS, Grantor is the sole owner in fee simple of approximately 242 acres of real property, more or less, located on Potato Bill Creek in Pitkin County, State of Colorado, more particularly described in Exhibit A herein(the"Property"); WHEREAS, the Property possesses natural, scenic, open space, agricultural, and wildlife values (collectively, "Conservation Values") of importance to Grantor, the Trust, and the people of the State of Colorado that are worthy of preservation; WHEREAS, the Conservation Values of the Property are documented more specifically in the Baseline Documentation, described in Section 4 herein, and generally include the following, the protection of which are recognized under §170(h)(4)(A) of the Internal Revenue Code of 1986, as amended ("IRC"), and §1.170A-14(d) of the Treasury Regulations as valid conservation purposes: • Relatively Natural Habitat [§ 1.170A-14(d)(3)]. The Property provides natural habitat for many wildlife and plant species, and is traversed by Potato Bill Creek, an intermittent stream, and its steep inclines. It is part of Two Shoes Ranch and abuts an undeveloped area of the White River National Forest, and is comprised mostly of pinyon and juniper 1 � Exhibit A —Lower Potato Bill Conservation Easement forests. In particular, the Property provides significant cliff habitat for bighorn sheep, potential nesting habitat for peregrine falcons, and important winter range for deer and elk. • O�en Space [§ 1.170A-14(d)(4)]. The Property qualifies as open space because it will be preserved for the scenic enjoyment of the general public and is pursuant to a clearly delineated federal, state or local governmental conservation policy and will yield a significant public benefit. o Scenic Enjovrnent. The Property lies adjacent to National Forest land on the northwestern flanks of Mount Sopris, and as such is part of the scenic rural landscape surrounding Mount Sopris. The Property is also visible from State Highway 133, a heavily used public road close to the Town of Carbondale and part of the West Elk Loop Scenic Byway. o A�riculture. The Property is part of a large active ranch, and as such provides rangeland for livestock grazing. o Governmental Policies. Conservation of the Property is promoted by certain state, federal and local governrnental policies, laws and regulations, which support conservation of the Property relative to its scenic, wildlife habitat and natural area values, including the following: • The State of Colorado has recognized the importance of private efforts toward the preservation of natural systems in the State by the enactment of Colorado Revised Statutes ("C.R.S."} §§38-30.5-101 et seq. In addition, C.R.S. §33-1-101 provides in relevant part that "it is the policy of the state of Colorado that the wildlife and their environment are to be protected, preserved, enhanced, and managed for the use, benefit, and enjoyment of the people of this state and its visitors." C.R.S. §38-30.5-102 provides for the creation of conservation easements to maintain land "in a natural, scenic, or open condition, or for wildlife habitat, or for agricultural, horticultural, wetlands, recreational, forest or other use or condition consistent with the protection of open land . . ." • Colorado Parks and Wildlife ("CPW") promotes the conservation of the Property as it provides potential nesting habitat for peregrine falcons as mapped by the CPW, a Tier 1 Species of Greatest Conservation Need, and significant cliff habitat for bighorn sheep, a Tier 2 Species of Greatest Conservation Need, as identified in CPW's 2006 Comprehensive Wildlife Conservation Strategy and Wildlife Action Plans, and which species are also listed as having special conservation status in Colorado. o Si�nificant Public Benefit. The Property is located in a rural, agricultural, mountainous area of Pitkin County less than four miles from the Town of Carbondale, where there is a current and foreseeable trend of development in the general vicinity of the Property. There is a strong likelihood that development of the Property would compromise its scenic and natural character and the ecological integrity of the area. 2 ' Exhibit A —Lower Potato Bill Conservation Easement WHEREAS, the Parties acknowledge that this Easement will be recorded and placed on the Property immediately upon completion of the Sutey/Two Shoes administrative land exchange, and after the expiration of all protests, challenges or stay periods; WHEREAS, Grantor intends, as owner of the Property, to convey to the Trust the right to preserve and protect the Conservation Values in perpetuity and the Trust agrees by accepting this grant to honor the intentions of Grantor stated herein and to preserve and protect in perpetuity the Conservation Values for the benefit of this generation and the generations to come; WHEREAS, the Trust is a charitable organization as described in IRC §501(c)(3), and is a publicly-supported organization as described in IRC §170(b)(1)(A) whose primary purpose is to permanently preserve and protect the natural, scenic, agricultural, historical, and open space resources of the greater Roaring Fork and Colorado River Valleys, including the area in which the Property is located, and who is a "qualified organization"to do so within the meaning of IRC §170(h)(3), possessing the resources and commihnent to protect and defend the conservation purposes of this grant and Conservation Values identified herein; WHEREAS, the Trust also meets requirements of Colorado law as a qualified recipient for a conservation easement under C.R.S. §38-30.5-104, and is accredited by the Land Trust Accreditation Commission for the term ending August 31, 2013; and WHEREAS, the Board of Directors of the Trust has duly authorized the Trust's Executive Director or her designee to execute and accept this conservation easement on behalf of the Trust. AGREEMENT NOW, THEREFORE, in consideration of the matters above, the mutual covenants, terms, conditions and restrictions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. GxaivT Grantor hereby voiuntarily and irrevocably grants and conveys to the Trust a perpetual Conservation Easement in gross ("Easement"), pursuant to C.R.S. §§38-30.5-101 et seq., through the terms mutually agreed to in this Easement, consisting of the rights and restrictions enumerated herein, over and across the Property, to hold said Easement unto the Trust and its successors and assigns forever. Grantor agrees that the donation of the Easement gives rise to a property right, irnmediately vested in the Trust, which shall constitute a binding servitude upon the Property and shall be subject to prior reservations, easements, encumbrances and exceptions of record, except as otherwise set forth herein. Z. PURrosEs 3 � Exhibit A —Lower Potato Bill Conservation Easement Pursuant to the terms of C.R.S. §§38-30.5-101 et seq., the purposes of the Easement are to assure that the Property will remain forever predominantly in its scenic, natural and open space condition, subject to the uses of the Property permitted hereunder, including ongoing grazing and agricultural use, to protect and preserve the Conservation Values in perpetuity, to prevent any use of the Property that is inconsistent with the preservation and protection of the Conservation Values and, in the event of their degradation or destruction, to restore such Conservation Values as required herein. The primary purposes of this Easement are: 1) to preserve and protect important natural habitat; 2) to protect agricultural range land; 3) to protect scenic resources visible to the public; 4) to prevent residential development on the Property; and 5) to prevent mineral development of the Property to the degree that Grantor is able. (This paragraph collectively describes the"Purposes"of this Easement.) 3. INTENT Subject to the express reservations and prohibitions described in Section 7 below, the intent of the Parties is to permit all specified uses of the Property and any other uses that are not inconsistent with the preservation and protection of the Conservation Values as determined by the Trust in its sole discretion. Nothing in this Easement is intended to prevent Grantor's quiet and reasonable enjoyment of the Property, or to compel a specific use of the Property other than the preservation and protection of the Conservation Values. 4. BASELINE DOCUMENTATION The Parties acknowledge that a Baseline DQCUmentation of the Conservation Values and relevant features of the Property was prepared on by Colorado Wildlife Science, LLC of Basalt, Colorado, a company familiar with conservation easements, the Property, and the environs, which will be kept on file with the Parties. The Trust and Grantor acknowledge and agree that by the execution of this Easement, they hereby approve, acknowledge, and accept the Baseline Documentation as an accurate representation of the condition of the Property at the time of this grant. The Parties agree that the Baseline Documentation is not intended to preclude the use of other evidence to establish the present condition of the Property should a controversy arise over its use. 5. RIGHTS OF THE TRUST To fulfill the Purposes of this Easement, Grantor hereby conveys to the Trust a property right and interest in the form of this Easement, which immediately vests with the Trust (as agreed in Section 1 and stipulated in Section 14.3, herein), and includes the following affirmative rights: 5.1. All development rights deriving from, based upon, or attributable to the Property in any way ("Trust's Development Rights"), except those expressly reserved by Grantor in Section 7 herein, and the Parties agree that Trust's Development Rights shall be held by the Trust in perpetuity in order to fulfill the Purpose of this Easement, and to ensure that such rights are forever released, terminated and extinguished as to Grantor. The grant of this Easement shall not entitle Grantor to increase development density on adjacent properties owned by Grantor, or 4 � Exhibit A —Lower Potato Bill Conservation Easement to create any transferrable development rights from the Property onto such adjacent properties. The granting of this Easement across only part of a developable lot as approved by Pitkin County and depicted on Exhibit A, does not in any way prevent development of the remainder of the lot, which lot shall retain all previously granted development approvals from Pitkin County, with the exception that the portion of the lot included in this Property shall be subject to the terms of this Easement in perpetuity; 5.2. The right to preserve and protect the Conservation Values in perpetuity; 5.3. The right to enter upon the Property at least annually at reasonable times agreed to mutually by Grantor and the Trust to inspect the Property thoroughly, to monitor Grantor's compliance with, and otherwise enforce the terms of this Easement; provided that such entry shall not unreasonably interfere with Grantor's use and quiet enjoyment of the Property, with the exception that, upon an advanced good faith attempt to contact Grantor verbally or electronically, the Trust may immediately enter upon the Property in the event the Trust reasonably believes that such entry is essential to prevent or mitigate a violation of the Easement; 5.4. The right, as an interest owner in the Property, to prevent or enjoin Grantor or third parties (whether or not invitees of Grantor) from conducting any activity on, or use of, the Property that is inconsistent with the purposes of the Easement; and the right to require Grantor or third parties, as may be responsible, to restore such areas or features of the Property that are damaged by any inconsistent activity or use, subject to the qualifications of Section 13.5 herein; 5.5. Any other rights that the Parties may approve consistent with the purposes of the Easement, including adding additional purposes or defining additional Conservation Values; and 5.6. The right, as an interest owner in the Property, to receive notification from and join Grantor as a necessary party to any condemnation or eminent domain proceedings affecting the Property (as described in Section 14}, or to any leases, surface use agreements, damage agreements or rights-of-way that may be proposed, granted or required hereafter as a result of mineral development (as described in Section 7.3.G) or other activities with the potential to impact the surface of the Property or its Conservation Values. 6. RIGHTS OF GRANTOR Grantor reserves to itself and to its personal representatives, heirs, successors, and assigns, all rights and obligations accruing from its ownership of the Property, including the right to engage in all uses of the Property not prohibited herein that are not inconsistent with the preservation and protection of the Conservation Values, pursuant to IRC §170(h)(3) and C.R.S. §38-30.5-102. 7. PROHIBITED AND PERMITTED USES The following uses and practices by Grantor, though not an exhaustive recital, are either prohibited or permitted by this Easement. Certain of these uses, where specifically indicated, require notice to or approval from the Trust, or both, according to the procedures described in 5 � Exhibit A —Lower Potato Bill Conservation Easement Sections 10 and 11 herein. Any other activities that are inconsistent with the Purpose of this Easement or with preservation and protection of the Conservatian Values are prohibited. Trust's prior notice and approval is required for uses not expressly described herein when there is a question as to consister�cy with the preservation and protection of the Conservation Values. 7.1. Division of Property. Grantor may not divide or subdivide (including de facto subdivision) the Property into more than one parcel of land. At all times the Property shall be owned as a single parcel subject to this Easement. Ownership of the single parcel by joint tenancy or tenancy in common is permitted; however, actions to partition or condominiumize the Property are prohibited. 7.2. Develapment Rights and Improvements. The construction, improvement, placement, or replacement of any improvements (defined as buildings, structures, mobile homes or other physical, human-introduced development of or on the Property, including landscaping, fences, wells, roads, septic systems, utilities, etc.) are prohibited on the Property, except as follows: A. Fencin�. Grantor may repair and replace existing fences, provided any replacement fencing in wildlife migration corridors is consistent with then-current CPW guidelines for fencing in wildlife migration areas so as to permit the movement of wildlife across the Property. Grantor may construct new fences needed for agricultural purposes (e.g. cattle and range management), provided such new fencing is consistent with CPW fencing guidelines; B. Roads. There are no improved roads on the Property, and construction of improved roads is prohibited. Unimproved, primitive roads and tracks (meaning not graded, surfaced, cut or filled) may be maintained and developed on the Property as necessary for agriculture and property maintenance in a manner that minimizes erosion, soil compaction, and disturbance to sensitive ecosystems and habitat. Paving of roads is prohibited. Limited grading or surfacing of unimproved roads or tracks is permitted only as necessary for agriculture or property maintenance upon approval of the Trust; C. Footpaths and ATV Trails. The development and use of footpaths and other unimproved, low-impact (as defined in Section 21.1) natural-surfaced trails not to exceed three feet in width is permitted for agriculture, property maintenance and private, non-motorized recreation in a manner that minimizes erosion and disturbance to sensitive ecosystems and habitat; D. Ponds and Agricultural VVater Sources. There is no irrigation infrastructure now located on the Property, however, construction or development of irrigation ponds or stock ponds, water wells (for which there is an existing permit) and pumps, together with other agricuttural water sources such as stock watering tanks, wildlife guzzlers (which collect rain, snow and runoff to provide a water source for wildlife), and low- impact or portable water storage tanks are permitted on the Property to support 6 � Exhibit A —Lower Potato Bill Conservation Easement agricultural and wildlife use of the Property in a manner not damaging to the Conservation Values; E. Utilities and Other Technolo�y. Grants of easements and rights-of-way for, and the installation of utilities, utility lines, pipelines, communications technologies and all related infrastructure (collectively "utilities") is prohibited without prior approval from the Trust, except that: a. Agricultural water wells and pumps are permitted in accordance with Section 7.2.D, above; b. Low-impact (as defined in Section 21.1) utilities, such as fence-mounted solar panels, or solar or wind-powered pumps may be located on the Property without further notice to or approval from the Trust. Grantor shalt promptly reseed and restore any surface impacts that result from the installation or maintenance of any permitted utilities or related improvernents to the Property to as close to the Property's original condition as possible within three months, weather permitting, or an alternate time period approved by the Trust. 7.3. Resource Management and Use. Grantor recognizes the importance of good resource management and stewardship to preserve and protect the Conservation Values. Accordingly, Grantor agrees not to alter the topography of the Property through placement or removal of soil, gravel, iand fill, or other materials nor to impair the relatively natural habitat for native plants, wildlife, or similar ecosystems within and upon the Property, except: (a) as necessary in emergencies, including for fire control and prevention; (b) for weed control as described in subsection F, below; (c) as approved by the Trust and any required permitting agencies for habitat enhancement or restoration purposes; (d) as specifically permitted for improvements described in Section 7.2 above; and (e) as necessary for the uses described below, which shall be conducted in a manner not inconsistent with the preservation and protection of the Conservation Values: A. A�riculture and Livestock Grazin�. Grazing of horses and livestock and Ieasing of grazing rights is permitted on the Property in a manner that does not result in degradation of wiidlife habitat, or significant soil erosion or low soil quality as determined by the Natural Resource Conservation Service or its successor organization("NRCS"}. The following agricultural and livestock husbandry practices are specifically prohibited: a. Intensive growth livestock farms or commercial feed lots, defined as confined areas or facilities on the Property, within which the land is not grazed or cropped annually, for purposes of extended feeding and finishing of large numbers of livestock for commercial purposes; b. Grazing or keeping of domestic sheep on the Property without CPW consent; c. Clearing or conversion of native rangeland or habitat to create new pastures without approval of the Trust in consultation with CPW; 7 � Exhibit A —Lower Potato Bill Conservation Easement d. Tilled cultivation of crops, including tree farms or sod farms; e. Fish hatcheries or other aquaculture; and f. Commercial horse boarding. B. Use of Vehicles Off-Road. Grantor's private use of vehicles off road or off-trail is permitted only in a low-impact manner that does not result in erosion of, or significant compaction to, the Property's soils, harassment of wildlife, or damage to the natural vegetation, ecosystems or scenic values of the Property. Commercial, recreational, or public use of vehicles off roads is prohibited on the Property, except for private or guided hunting purposes permitted by Grantor, as deseribed below; C. HuntinQ. Hunting and the leasing of hunting rights on the Property is permitted in accordance with all applicable laws, and may include guided hunting for youth, veterans and handicapped individuals per agreement with CPW; D. Trash. Grantor shall not dump, permanently accumulate, or dispose of trash, garbage, or other hazardous or unsightly refuse on the Property, except for agricultural by-products and compostable matter (including chipped, diseased or dead wood resulting frorn habitat improvement or fire control) produced or used on the Property; E. Habitat and Vegetation Mana eg ment. Grantor may cut, thin or burn trees and native vegetation on the Property on a limited and localized basis to control weeds, insects, wildfire danger and disease; to prevent personal injury and property damage; for domestic and agricultural uses on the Property such as firewood collection and construction of permitted fences; or as approved by the Trust to otherwise maintain or enhance the character and health of the wildlife habitat or ecosystem, which may be subject to a management plan prepared in cooperation with the Trust as deemed necessary in the sole discretion of the Trust; F. Weed Control. Grantor agrees to control noxious weeds and invasive plant species on the Property in accordance with the Colorado Noxious Weed Act (January 23, 2006), or as such Act may be amended, and other applicable laws (as defined in Section 21.1}, and shall not intentionally introduce noxious weeds or other invasive species to the Property; G. Minerals. In accordance with IRC §170(h) and §1.170A-14(g) of the Treasury Regulations, exploration for, extraction or removal of any mineral resource (which may include, but is not limited to, sand, gravel, rock, soil, peat, coal, uranium, oil, oil shale, natural gas or other hydrocarbons) by any surface mining method or any other method in a manner inconsistent with the Purposes of this Easement is prohibited on the Property. Because Grantor does not own all of the mineral rights associated with the Property, a mineral remoteness letter, on file with the Trust, was prepared by Rare Earth Science LLC on , 2013, finding that the likelihood of surface mining on the Property is so remote as to be negligible, in compliance with IRC §170(h) and Treas. Reg. §1.170A-14(g). 8 � Exhibit A —Lower Potato Bill Conservation Easement In order to satisfy the intent of the above paragraph, Grantor may not separate or transfer Grantor's portion of the mineral rights from the Property, nor engage in, lease or otherwise permit the development of mineral rights on or under the Property (via leases, surface use agreements, non-surface use agreements, damage agreements, rights-of-way, or other easements or agreements related to mineral development (collectively, "mineral agreements")) except as may be required by third party mineral interest holders and in compliance with the following: a. Trust's Participation in Future Mineral Agreements. Grantor shall notify the Trust prior to entering into any mineral agreement with a third party mineral interest holder, and the Trust shall ha�e the same legal rights as Grantor to review all proposed mineral agreements prior to execution, and to participate in negotiations therefore in order to direct the future development of mineral resources to occur only by those methods having no more than limited, localized, temporary and reclaimable impacts on the Property, which impacts must not be irremediably destructive of the Conservation Values in accordance with IRC §170(h)(5), (6) and Treas. Reg. §1.170A-14(g)(4). The Trust's participation may not deny any third party's ultimate right to develop minerals underlying the Property, and the Trust shall claim no rights to proceeds or royalties from such development. Grantor retains sole execution authority for any mineral agreements or transfer deeds; however, failure to notice the Trust prior to entering into any mineral agreement or transfer may result in a $5000 fine payable to the Trust, in addition to other remedies available under law. All mineral agreements entered into after this date shall, at a minimum, include the following: 1) Reference to this Easement and summary of the Conservation Values; 2) Acknowledgement that the agreement is subordinate and subject to the terms of this Easement; 3) Non-surface occupancy methods of mineral development are strongly preferred, and only the minimum structures, infrastructure, and other disturbance or impacts to the Property shall be permitted as reasonably necessary to mineral development; 4) All impacted sites associated with mineral development shall be recontoured and revegetated, and any damage to the Property or its Conservation Values restored, to as close to the Property's original state as possible upon completion of active drilling or mineral development operations; any structures required to remain upon the Property for more than one year shall be concealed from public view and constructed and maintained in a manner not damaging to the Conservation Values. b. Current Mineral Leases. There are no active oil and gas or other mineral leases on or affecting the Property at this time. 9 � Exhibit A —Lower Potato Bill Conservation Easement H. Water Resources. Grantor shall not divert, dam, pollute, dredge, intentionally destabilize or degrade Potato Bill Creek, or other naturally-occurring streams, springs, designated wetlands or other surface or subsurface water features that may occur on the Property, except as approved by the Trust, and except for any work or structures deemed necessary by Grantor, in consultation with CPW or other agency qualified at the time to oversee such work, to enhance, restore or control erosion or siltation of water resources on the Property in compliance with all applicable laws (as defined in Section 21.1). The construction, installation, maintenance, improvement and replacement of ponds, wetlands, and irrigation structures (including ditches, pipelines, headgates and related equipment) are permitted for agricultural purposes or the enhancement of wildlife habitat, provided such activities are in compliance with applicable laws. Soil, sand, rock and gravel produced during the excavation or construction of permitted ditches or ponds may be used or relocated on the Property in a manner not inconsistent with the preservation and protection of the Conservation Values; I. Water Ri ts. There are no water rights included in or encumbered by this Easement; J. Commercial and Industrial Activities. Grantor shall not conduct industrial activity or commercial recreational activity on the Property, except for guided hunting activities that may be approved by CPW and leasing of hunting rights; K. Recreation. Private, low-impact recreational uses such as hiking, horseback riding, cross-country skiing,hunting, fishing and short-term camping are permitted on the Property, provided that recreational trails are limited pursuant to Section 7.2.B herein, and that any private recreational easements or agreements with neighboring landowners that predate the grant of this Easement shall be permitted. 8. NO PUBLIC ACCE5S Except by the terms of this Easement, including Section 7.3.C,Hunting, Grantor shall not afford the public any more than visual access to any portion of the Property, although Grantor may permit guests or invitees to access the Property on such terms and conditions as it deems appropriate, provided that such access is consistent with the terms of this Easement and preservation and protection of the Conservation Values. 9. REPRESENTATIONS AND WARRANTIES Grantor represents and warrants that, a$er reasonable investigation and to the best of its actual knowledge: 9.1. Except for fuels customarily used or transported in connection with agricultural activities; no substance defined, listed, or otherwise classified pursuant to any federal, state, or local law, regulation, or requirement as hazardous, toxic, polluting, or otherwise or threatening to human health or the environment exists or has been used or released on the Property; 10 � Exhibit A —Lower Potato Bill Conservation Easement 9.2. There are not now any underground storage tanks located on the Property, and no underground storage tanks have been removed from the Property in a manner not in compliance with applicable laws,regulations, and requirements; 9.3. Grantor and the Property are in compliance with all federal, state, and local laws, regulations, and requirements applicable to the Property and its use; and there is no existing, or pending litigation in any way affecting, involving, or relating to the Property; 9.4. Grantor has good and sufficient title to the Property and has lawful authority to grant and convey the Easement, that any mortgages or liens on the Property are subordinate to the terms of this Easement, and that Grantor shall warrant and forever defend the title to the Easement against all and every person or persons lawfully claiming by, through or under Grantor, the whole or any part thereof, except for rights-of-way, easements, restrictions, covenants and mineral reservations of record. 10. NOTICE OF INTENTION TO UNDERTAKE CERTAIN PERMITTED ACTION5 The purpose of requiring Grantor to notify the Trust before undertaking certain activities or uses, as specifically identified in Section 7 or elsewhere herein, is to afford the Trust an opportunity to update its records and, if approval is required pursuant to Section 11 below, to ensure that the activities or uses in question are not inconsistent with the terms of this Easement. Grantor shall also notice Trust and seek its approval, pursuant to Section 11 below, for proposed activities or uses when there is a question as to consistency with the preservation and protection of the Conservation Values. Whenever notice and the Trust's approval are required, Grantor shall notify the Trust in writing not less than 45 days prior to the date Grantor intends to undertake the activity or use in question, unless this Easement provides otherwise, and describe the nature, scope, design, location, timetable, and any other material aspect of the proposed activity or use in sufficient detail to permit the Trust to make an informed judgment as to the activity or use's consistency with the terms of this Easement and the preservation and protection of the Conservation Values. Whenever notice is required without the Trust's approval, Grantor shall notify the Trust in writing not less than 14 days in advance of the proposed activity or use, unless the activity involves emergency activities, such as fire fighting, in which case no notice is required. 11. THE TRUST'S APPROVAL Whenever this Easement requires that Grantor obtain the Trust's approval for any activity or use of the Property, or if Grantor desires approval for any activity or use of the Property not specifically addressed herein, such approval shall be given in the Trust's sole discretion, according to whether the Trust determines that such activity or use of the Property is not inconsistent with the preservation and protection of the Conservation Values. Grantor has the burden to prove that Grantor's proposed uses are not inconsistent with the preservation and protection of the Conservation Values. Where the Trust's approval is required, the Trust shall grant or withhold its approval in writing within 14 days of receipt of Grantor's written notice (as described in Section 10, above) of and request therefor. The Trust's approval may be withheld at 11 � Exhibit A —Lower Potato Bill Conservation Easement the Trust's sole discretion if the Trust determines that the action as proposed would be inconsistent with the Conservation Values or the purposes or terms of this Easement. The reason(s) for such a determination shall be set forth with specificity by the Trust in a written notice to Grantor. Where a modification of the proposed use or activity by Grantor would render the same not inconsistent with the purposes of the Easement and the Conservation Values, the Trust may specify, in such written notice to Grantor, such modifications to render approval appropriate. 12. TRUST'S REMEDIES:ENFORCEMENT The Trust shall have the right to prevent and correct or require correction of violations of the terms and purposes of this Easement. The Trust is not responsible for monitoring for or enforcing violations of any applicable laws (as defined in Section 21.1), permits or third party contracts affecting the Property now or in the future, except to the degree that any such violations may damage the Conservation Values, violate this Easement, or be otherwise inconsistent with the Purposes or terms of this Easement. If the Trust finds what it believes is a violation, or a threat of a violation, the Trust shall notify Grantor of the nature of the alleged violation. Upon receipt of this notice, Grantor shall immediately discontinue any activity that could increase or expand the alleged violation and shall either: (a) restore the Property within 60 days as is best possible, subject to weather conditions and season, to its condition prior to the violation in accordance with a plan approved by the Trust, or if immediate restoration is not possible, Grantor shall submit such plan to the Trust within 60 days; or (b) provide a written explanation to the Trust of the reason why the alleged violation should be permitted. If the Trust is not satisfied with Grantor's written explanation, the Parties agree to meet as soon as possible to resolve this difference. If a resolution of this difference cannot be achieved at the meeting, the Parties agree to attempt to resolve the dispute pursuant to Section 12.1,below. At any time, including if Grantor does not immediately discontinue any activity that could increase or expand the alleged violation while the Parties are attempting to resolve the alleged violation, or if the Trust believes an ongoing, imminent, or proposed activity violates the Easement, the Trust may, upon an advanced good faith attempt to contact Grantor verbally or electronically, take immediate, appropriate legal action to stop the activity, without prior notice to Grantor; without waiting for the period provided for cure to expire; and without waiting for the 60-day mediation period to expire. The Trust may bring an action at law or in equity, ex parte as necessary, in a court of jurisdiction, to enforce the terms of this Easement and to enjoin by temporary or permanent injunction a violation, which may require restoration of the Property to the condition that existed prior to the violation. The Trust's remedies described herein shall be in addition to all remedies now or hereafter existing at law or in equity, and shall include, without limitation, the right to recover damages for violation of the terms of this Easement or injury to the Conservation Values including damages for the loss of scenic, aesthetic, or environmental values. Without limiting Grantor's liability therefore, the Trust, in its sole discretion, may apply any damages recovered to the cost of undertaking any restorative, remedial, corrective action on the Property. 12 � Exhibit A —Lower Potato Bill Conservation Easement Enforcement of the terms of this Easement shall be at the sole discretion of the Trust, and any forbearance by the Trust to exercise its rights under this Easement in the event of any breach of any term of this Easement by Grantor shall not be deemed or construed to be a waiver by the Trust of such term or any subsequent breach of the same or any other term of this Easement or of any of the Trust's rights under this Easement. No delay or omission by the Trust in the exercise of any right or remedy upon any breach by Grantor shall impair such right or remedy or be construed as a waiver. The failure of the Trust to discover a violation or to take immediate legal action shall not bar the Trust from doing so within four years from the date upon which the violation is discovered. All reasonable costs incurred by the Trust in enforcing the terms of this Easement, including, without limitation, costs and expenses of pursuing legal action and reasonable attorney's fees, shall be paid to the Trust by Grantor, and any costs of restoration necessitated by Grantor's violation of the terms of this Easement, shall be borne by Grantor, unless: (1) a court finds that the Trust acted in bad faith in seeking enforcement thereof, in which case the Trust shall pay Grantor's court-awarded costs and fees, or (2) if Grantor ultimately prevails in a judicial enforcement action, the Trust shall pay its own costs and fees. 12.1. Mediation. If a dispute arises between the Parties concerning the consistency of any proposed use or activity with the terms of this Easement, and Grantor agrees not to proceed with the use or activity pending resolution of the dispute, either Party may refer the dispute to mediation by written request upon the other. Within 10 days of the receipt of such request, the Parties shall select a trained and impartial mediator with experience in easements and other land preservation tools. If the Parties are unable to agree on a mediator, then the Parties shall each select a mediator with experience in conservation easements and other land preservation tools, and those two mediators shall select a mediator who shall alone mediate the dispute. Mediation shall then proceed in accordance with the following guidelines: A. Pu ose. The purpose of the mediation is to: (a) promote discussion between the Parties; (b) assist the Parties to develop and exchange pertinent information concerning the issues in dispute; and (c) assist the Parties to develop proposals which will enable them to arrive at a mutually acceptable resolution of the controversy. The mediation is not intended to result in any express or de facto modification or amendment of the terms, conditions, or restrictions of this Easement; B. Participation. The mediator may meet with the Parties and their counsel jointly or ex parte. The Parties agree that they will participate in the mediation process in good faith and expeditiously, except in cases when the Trust believes that Conservation Values are continuing to be harmed during the mediation process, in which case the Trust can suspend its involvement in the mediation to remedy this threat of ongoing violation. Representatives of the Parties with settlement authority will attend mediation sessions as required by the mediator; C. Confidentialitv. All information presented to the mediafor shall be deemed confidential and shall be disclosed by the mediator only with the consent of the 13 � Exhibit A —Lower Potato Bill Conservation Easement Parties or their respective counsel. The mediator shall not be subject to subpoena by any Party in any subsequent litigation; D. Time Period and Fees. Neither Party shall be obligated to continue the mediation process beyond a period of 60 days from the date of receipt of the initial request or if the mediator concludes that there is no reasonable likelihood that continuing mediation will result in a mutually agreeable resolution of the dispute. The Parties shall equally share and each bear 50%of the mediator's fees. 13. COSTS,LIABILITIES,�TAXES,AND ENVIRONMENTAL COMPLIANCE 13.1. Costs, Legal Requirements and Liabilities. Grantor retains all responsibilities and obligations and shall bear all costs and liabilities of any kind related to the ownership, operation, upkeep, and maintenance of the Property, including the payment of property and other taxes related to the Property, and maintenance of liability insurance coverage. Grantor shall make best efforts to keep the Property free of any liens arising out of any work performed for, materials furnished to, or obligations incurred by Grantor. Nothing in this Easement shall be construed or interpreted as prohibiting Grantor from obtaining loans secured by deeds of trust encumbering the Property, provided any such deeds of trust are subordinate to this Easement, and shall encumber the entire Property; 13.2. Control. Nothing in this Easement shall be construed as giving rise, in the absence of a judicial decree, to any right or ability of the Trust to exercise physical or managerial control over the day-to-day operations of the Property, or over any of Grantor's activities on the Property, or otherwise to become an operator with respect to the Property within the meaning of The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended("CERCLA"), and any Colarado state law counterpart; 13.3. Hold Harmless. Grantor shall hold hannless, indemnify and defend the Trust and its members, directors, officers, employees, agents, and contractors and the heirs, personal representatives, successors, and assigns of each of them (collectively, the "Trust Parties") from and against all liabilities including, without limitation, court awarded third-party attorneys' fees, arising from or in any way connected with: (a) injury to or the death of any person, or physical damage to any property, resulting from any act, omission, condition, or other matter related to or occurring on or about the Property, regardless of cause, unless due solely to the gross negligence or intentional act of any of the Trust Parties; (b) the violation or alleged violation of, or other failure to comply with, any state, federal, or local law, regulation, or requirement, including, without limitation, CERCLA, by any person other than any of the Trust Parties, in any way affecting, involving, or relating to the Property; (c) the presence or release of hazardous or toxic substances in, on, from, or under the Property at any time, of any substance now or hereafter defined, listed, or otherwise classified pursuant to any federal, state, or local law, regulation, or requirement as hazardous, toxic, polluting, or otherwise contaminating to the air, water, or soil, or in any way hartnful or threatening to human health or the environment, unless caused solely by any of the Trust Parties; (d) payment of taxes imposed upon or incurred by the Property as a result of this Easement, including property taxes and the sale of income tax credits acquired as a result of this Easement; (e) tax benefits or consequences of any kind which result or do not result 14 � Exhibit A —Lower Potato Bill Conservation Easement from entering into this Easement; and (fl the obligations, covenants, representations, and warranties described herein; 13.4. Waiver of Certain Defenses. No action shall be commenced or maintained to enforce the terms of any building restriction described in this Easement, or to compel the removal of any building or improvement, unless said action is commenced within four years from the date of discovery of the violation for which the action is sought to be brought or maintained. To the extent that any defense available to Grantor pursuant to C.R.S. §38-41-119 is inconsistent with the foregoing, Grantor waives that defense. Grantor waives the defenses of laches, estoppel and prescription with regard to the enforcement of all other terms of this Easement; and 13.5. Acts Beyond Grantor's Control. Nothing contained in this Easement shall be construed to entitle the Trust to bring any action against Grantor for any injury to or change in the Property resulting from causes beyond Grantor's control (including wild fire, landslides and avalanches) or from any prudent action taken by Grantor under emergency conditions to prevent, abate, or mitigate significant injury to the Property resulting from such causes. Grantor is not responsible for acts of third parties not authorized to access the Property, but sha11 be responsible for those third parties, including guests or invitees, authorized by Grantor to access the Property. The Trust retains the right to enforce against third parties for violations of the Easement or damage to the Property pursuant to Section 5.6 herein. 14. EXTINGUISHMENT AND CONDENINATION 14.1. Extinguishment. The Parties agree that any changes in the economic viability of the uses permitted or prohibited by this Easement, or changes to neighboring land and its use shall not be deemed circumstances justifying the termination or extinguishment of the Easement. In addition, the inability of Grantor, or Grantor's heirs, successors or assigns, to implement any or all of the uses permitted under this Easement shall not impair the validity of the Easement, or be considered grounds for termination or extinguishment of this Easement. If circumstances arise in the future that render the purposes of this Easement impossible to accomplish, the Easement can only be terminated or extinguished, in whole or in part, by judicial proceedings in a court of competent jurisdiction after the court has explored all options for importing other purposes for the Easement pursuant to the cy pres doctrine. Each Party shall promptly notify the other when it first learns of such circumstances. The amount of the proceeds to which the Trust shall be entitled, after the satisfaction of prior claims, from any sale, exchange, or involuntary conversion of a11 or any portion of the Property subsequent to such termination, shall be determined, unless otherwise provided by Colorado law at the time, in accordance with the Proceeds paragraph below, and such proceeds shall be used by the Trust in a manner consistent with the conservation purposes of the original Easement contribution, as required by §1.170A-14(g)(6)(i) of Treasury Regulations. 14.2. Condemnation. If all or any part of the Property is taken by exercise of the power of eminent domain or acquired by purchase in lieu of condemnation, whether by public, corporate, or other authority, so as to terminate the Easement in whole or in part, Grantor and the 15 .��w,,.� _._..._.W � __n_. _. Exhibit A —Lower Potato Bill Conservation Easement Trust shall act jointly to recover the full value of the interests in the Property subject to the taking or in-lieu purchase and all damages resulting therefrom. All expenses reasonably incurred by Grantor and the Trust in connection with the taking or in-lieu purchase shall be paid out of the amount recovered. The Trust's share of the balance of the amount recovered shall be determined by multiplying that balance by the percentage set forth in Proceeds paragraph below. 14.3. Proceeds. Grantor and the Trust stipulate that as of the date of this Easement, they are each vested with a real property interest in the Property. The Parties further stipulate that the Trust's interest in the Easement has a value of 15 percent (%) of the fair market value of the Property from this date forward, and such percentage interest shall remain constant in relation to any future fair market value of the Property. Such percentage interest shall be used only for determining the Trust's proportion of proceeds from any payment of damages or action resulting from circumstances described in the Extinguishment and Condemnation paragraphs above. The Parties agree that the value of any improvements to the Property made by Grantor after the date of this Easement is reserved to Grantor. 15. ASSIGNMENT OF EASEMENT In the event the Trust is no longer able to carry out its duties and obligations under this Easement, or if circumstances change so that another similar organization is better able to carry out such duties and obligations, the Trust may, upon no less than 60 days prior notification to Grantor, elect to transfer the Easement and assign its rights and obligations under this Easement to either: (1) Colorado Open Lands, (2) the Colorado Cattlemen's Agricultural Land Trust, (3) Colorado Parks and Wildlife, or(4) a qualified non-governmental land conservation organization charged with a mission similar to that of the Trust; provided however, that any organization or entity selected to accept this Easement is, at the time of transfer: (a) willing and able to accept the transfer; (b) a qualified organization under §170(h) of the Internal Revenue Code of 1986, as amended (or any successor provision then applicable), and its applicable regulations; and (c) authorized to acquire and hold conservation easements under Colorado law. The Trust shall consult with Grantor regarding any selection of a qualified assignee of the Easement, but shall ultimately have the right to select an organization as defined herein that is willing, able and qualified to the hold the Easement (the "Assignee"), and to notify Grantor of its selection. As a condition of such transfer, the Trust shall require the Assignee to expressly agree, in writing, to carry out and uphold the purposes of the Easement and the Conservation Values and otherwise assume all of the obligations and liabilities of the Trust set forth herein or created hereby. After such transfer, the Trust shall have no further obligation or liability under this Easement. Should the Trust be unable to assign the Easement according to this procedure, a court with competent jurisdiction shall assign the Easement. 16. SUBSEQUENT TRANSFERS OF PROPERTY Grantor agrees to notify any party who may purchase, lease, or otherwise hold interest in this Property of the existence and terms of this Easement, and to provide a copy of the Easement and the Baseline Documentation to such party if requested. Grantor further agrees to give notice to the Trust of the transfer of any such interest prior to transfer. The Trust shall be available for and welcome the opportunity to meet with any prospective buyers or transferees of the Property 16 Exhibit A —Lower Potato Bill Conservation Easement to explain the terms of this Easement to potential new owners prior to or a$er sale closing, or to answer any questions or concerns related to this Easement, or any of its supporting documentation, including the Baseline Documentation. In addition, at any time Grantor transfers the Property to a third party, including all subsequent transfers, that party shall pay $100.00 to the Trust to cover administrative costs associated with the transfer, as well as to put the third party recipient on notice of the terms of this Easement. This payrnent is exempt from transfer fee restrictions of C.R.S. §38-35-127 because it does not affect residential real property, and only affects agricultural land. The failure of Grantor to perform any act required by this paragraph shall not impair the validity of this Easement or limit its enforceability in any way. 17. NOTICE5 Any communication that either Party desires or is required to give to the other shall be in writing and served personally or sent by first class mail, postage prepaid, addressed as follows or to such other address as either party from time to time shall designate by written notice to the other: To Grantor: Ranch IV, LLC c/o Gideon Kaufinan 315 Hyrnan Avenue, Suite 305 Aspen, CO 81611 To the Trust: Aspen Valley Land Trust 320 Main Street, Suite 204 Carbondale, CO 81623 18. RECORDATION This instrument shall be held in escrow to be recorded immediately after completion of the Sutey/Two Shoes administrative land exchange, and after the expiration of all protests, challenges or stay periods, in the official records of Pitkin County, Colorado and may be re- recorded at any time as may be required to preserve its rights in this Easement. 19. AMENDMENT If circumstances arise under which an amendment to this Easement would be appropriate to promote the purposes of the Easement, Grantor and the Trust may jointly amend this Easement. However, neither Grantor nor the Trust is under obligation to amend this Easement, and the Trust may decline any amendment in its sole discretion according to then-current Trust policies, which shall be made available to Grantor upon request. Any amendment must be consistent with, and protect and preserve, the purposes of the Easement and the Conservation Values and may not affect the Easement's perpetual duration. Any amendment must be in writing, signed by all the Parties, and recorded in the records of the Clerk and Recorder of the appropriate Colorado County. Corrections to correct factual mistakes or typographical or clerical 17 � Exhibit A —Lower Potato Bill Conservation Easement errors may be made at the discretion of the Trust. No amendment shall be allowed that affects the qualification of this Easement or the status of the Trust under any applicable laws, including C.R.S. §§38-30.5-101 et seq., or IRC §170(h) or any regulations promulgated thereunder. No amendment shall be pertnitted that will confer a private benefit to Grantor or any other individual or entity(see IRS Reg. 1.170A-14(h)(3)(i)) greater than the benefit to the general public, or that will result in private inurement to a Board member, staff or contract employee of the Trust (see IRS Reg. 1.501(c)(3)-1(c)(2)). 20. SUBORDINATION The Property is not subject to any mortgages or liens. 21. GENERAL PROVISIONS 21.1. Defmitions. A. The terms "Grantor" and "the Trust," wherever used herein, and any pronouns used in place of those terms, shall refer to, respectively, Grantor and its heirs, personal representatives, executors, administrators, successors and assigns, and the Trust and its successors and assigns; B. The terms "Easement", "conservation easement", "Deed of Conservation EasemenY', and "Deed of Conservation Easement in gross" refer to the immediately vested interest in real property defined by Colorado Revised Statutes §§38-30.5-101 et seq., and this legal document, consisting of the rights and restrictions enumerated herein,by which said Easement is granted; C. Applicable Laws. The term "applicable laws" refers to all relevant federal, state, and local statutes, ordinances, judicial decisions, executive orders1 codes, permits or regulations having the force and effect of law that have bearing on or may control certain uses allowed by the Easement; D. Low-Impact. The term "low-impact" refers to activities or improvements whose location, use and construction have little or no impact on the Property and do not negatively impact the Conservation Values. 21.2. Controlling Law. The interpretation and performance of this Easement shall be governed by the laws of the State of Colorado; 21.3. Liberal Construction. This Easement shall be liberally construed in favor of the grant to effect the purposes of the Easement and the policy and purpose of C.R.S. §38-30.5-101 et seq. If any provision in this instrument is found to be ambiguous, an interpretation consistent with ensuring continuation of the purposes of the Easement and the preservation and protection of the Conservation Values that would render the provision valid shall be favored over any interpretation that would render it invalid. The common law rules of disfavoring restrictions on the use of real property and construing restrictions in favor of the free and unrestricted use of real 18 Exhibit A —Lower Potato Bill Conservation Easement property shall not apply to interpretations of this Easement or to disputes between the Parties concerning the meaning of particular provisions of this Easement; 21.4. Severability. If any provision of this Easement, or the application thereof to any person or circumstance, is found to be invalid, the remainder of the provisions of this Easement shall be deemed severable and remain in full force and effect; 21.5. Entire Agreement. This instrument sets forth the entire agreement between the Parties with respect to the Easement and supersedes all prior discussions, negotiations, understandings, or agreements relating to the Easement, all of which are merged herein; 21.6. No Forfeiture. Nothing contained herein will result in a forfeiture or reversion of Grantor's title in any respect; 21.7. Joint and Several Obligation. The obligations imposed by this Easement upon Grantor shall be joint and several. If the Property's ownership, now or in the future, is by a single entity consisting of multiple parties including shareholders, partners, or members, that entity is required to notify its shareholders, partners, or members of the entity's and their individual rights and responsibilities, including any monetary or other obligations set forth in this Easement. Grantor shall provide a copy of such notice at any time upon the Trust's request; 21.8. Successors. The covenants, terms, conditions, and restrictions of this Easement shall be binding upon, and inure to the benefit of, the Parties hereto and Grantor's respective personal representatives, heirs, successors, transferees, and assigns, and the Trust's successors, transferees, and assigns, and shall continue as a servitude running in perpetuity with the Property; 21.9. Termination of Rights and Obligations. A Party's rights and obligations under this Easement terminate upon transfer of the Party's interest in the Easement or the Property, unless the transferee assumes such obligations, except that liability for acts or omissions occurring prior to transfer shall survive transfer; 21.10. Captions. The captions in this instrument have been inserted solely for convenience of reference and are not a part of this instrument and shall have no effect upon construction or interpretation; 21.11. Counterparts. The Parties may execute this instrument in two or more counterparts, which shall, in the aggregate, be signed by all the Parties; each counterpart shall be deemed an original instrument as against any Party who has signed it. In the event of any disparity between the counterparts produced, the recorded counterpart shall be controlling; 21.12. Merger. Unless the Parties expressly state that they intend a merger of estates or interests to occur, no merger shall be deemed to have occurred hereunder or under any document executed in the future affecting this Easement; 19 �. _,. _ ��,,�.=_,�n�,.�__�,� � Exhibit A —Lower Potato Bill Conservation Easement 21.13. Authority to Execute. Each party represents to the other that such party has full power and authority to execute and deliver this Deed of Conservation Easement, and perfortn its obligations under this Easement, that the individual executing this Easement on behalf of said � party is fully empowered and authorized to do so, and that this Easement constitutes a valid and legally binding obligation of said party enforceable against said party in accordance with its terms; and 21.14. No Third Party Beneficiaries. This Easement is entered into by and between Grantor and the Trust with the intent that there are no intended third party beneficiaries that have the right or obligation to enforce the terms and provisions of this Easement. No person or entity, other than the Grantor or the Trust, shall have standing to enforce, nor the right or obligation to enforce, the terms and provisions of this Easement or to otherwise commence or intervene in any lawsuit pertaining to this Easement. IN WITNESS WHEREOF, Grantor and the Trust have executed this Deed of Conservation Easement as of the date first written above. (signatures on following pages) 20 � Exhibit A —Lower Potato Bill Conservation Easement GRANTOR: 2343 COUNTY ROAD, LLC, a Colorado limited liability company By: Name: Title: STATE OF ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2011,by as of 2343 COUNTY ROAD, LLC, a Colorado limited liability company, as Grantor. WITNESS my hand and official sea1. [SEAL] Notary Public My commission expires: 21 � Exhibit A —Lower Potato Bill Conservation Easement ACCEPTED by the TRUST: ASPEN VALLEY LAND TRUST, a Colorado nonprofit corporation By: Martha Cochran, Executive Director STATE OF COLOR.ADO ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2011, by Martha Cochran as Executive Director of ASPEN VALLEY LAND TRUST, a Colorado nonprofit corporation. WITNESS my hand and official seal. [SEAL] Notary Public My commission expires: 22 Exhibit A —Lower Potato Bill Conservation Easement EXHIBIT A Legal Description of Property 23 Exhibit A —Lower Potato Bill Conservation Easement EXHIBIT B Map of Property 24 ' Exhibit A —Upper Potato Bi11 Conservation Easement NOTICE TO TITLE COMPANY: This Deed of Conservation Easement in gross requires one- hundred dollars ($100.00) be paid to Aspen Valley Land Trust or its successor organization by the recipient at the time of every transfer of this Property, as described in Section 16. This payment is exempt from the transfer fee restrictions contained within C.R.S. 38-35-127. DEED OF CONSERVATION EASEMENT IN GROSS Two Shoes Ranch III— Upper Potato Bill Parcel Pitkin County THIS DEED OF CONSERVATION EASEMENT IN GROSS ("Easement") is granted this _ day of , , by RANCH III LLC, a Colorado limited liability company ("Grantor"), to and for the benefit of ASPEN VALLEY LAND TRUST, a Colorado nonprofit corporation having offices at 320 Main Street, Suite 204, Carbondale, Colorado 81623 (the"Trust")(collectively, the"Parties"). The following exhibits are attached hereto and incorporated in this Easement by reference: Exhibit A: Property Legal Description; and Exhibit B: Map of Property. RECITALS WHEREAS, Grantor is the sole owner in fee simple of approximately 135 acres of real property, more or less, Iocated near the Town of Carbondale north of Potato Bill Creek in Pitkin County, State of Colorado, more particularly described in Exhibit A herein(the"Property"); WHEREAS, the Property possesses natural, scenic, open space, agricultural, and wildlife values (collectively, "Conservation Values") of importance to Grantor, the Trust, and the people of the State of Colorado that are worthy of preservation; WHEREAS, the Conservation Values of the Property are documented more specifically in the Baseline Documentation, described in Section 4 herein, and generally include the following, the protection of which are recognized under §170(h)(4}(A) of the Internal Revenue Code of 1986, as amended ("IRC"), and §1.170A-14(d) of the Treasury Regulations as valid conservation purposes: • Relatively Natural Habitat [§ 1.170A-14(d)(3)]. The Property is part of Two Shoes Ranch and provides natural habitat for many wildlife and plant species. It is comprised mostly of pinyon and juniper forests and provides important winter concentration areas for mule deer. 1 � Exhibit A —Upper Potato Bill Conservation Easement • Open Space [§ 1.170A-14(d)(4)]. The Property qualifies as open space because it will be preserved for the scenic enjoyment of the general public and is pursuant to a clearly delineated federal, state or local governmental conservation policy and will yield a significant public benefit. o Scenic Enjovment. The Property lies near National Forest land on the northwestern flanks of Mount Sopris, and as such is part of the scenic rural landscape surrounding Mount Sopris. The Property is also visible from State Highway 133, a heavily used public road close to the Town of Carbondale and part of the West Elk Loop Scenic Byway. o A�riculture. The Property is part of a large active ranch, and as such provides rangeland for livestock grazing. o Governmental Policies. Conservation of the Property is promoted by certain state, federal and local governmental policies, laws and regulations, which support conservation of the Property relative to its scenic, wildlife habitat and natural area values, including the following: • The State of Colorado has recognized the importance of private efforts toward the preservation of natural systems in the State by the enactment of Colorado Revised Statutes ("C.R.S.") §§38-30.5-101 et seq. In addition, C.R.S. §33-1-101 provides in relevant part that "it is the policy of the state of Colorado that the wildlife and their environment are to be protected, preserved, enhanced, and managed for the use, benefit, and enjoyment of the people of this state and its visitors." C.R.S. §38-30.5-102 provides for the creation of conservation easements to maintain land "in a natural, scenic, or open condition, or for wildlife habitat, or for agricultural, horticultural, wetlands, recreational, forest or other use or condition consistent with the protection of open land . . ." o Si�nificant Public Benefit. The Property is located in a rural, agricultural, mountainous area of Pitkin County less than four miles from the Town of Carbondale, where there is a current and foreseeable trend of development in the general vicinity of the Property. There is a strong likelihood that development of the Property would compromise its scenic and natural character and the ecological integrity of the area. WHEREAS, the Parties acknowledge that this Easement wi11 be recorded and placed on the Property immediately upon completion of the Sutey/Two Shoes administrative land exchange, and after the expiration of all protests, challenges or stay periods; WHEREAS, Grantor intends, as owner of the Property, to convey to the Trust the right to preserve and protect the Conservation Values in perpetuity and the Trust agrees by accepting this grant to honor the intentions of Grantor stated herein and to preserve and protect in perpetuity the Conservation Values for the benefit of this generation and the generations to come; 2 Exhibit A —Upper Potato Bill Conservation Easement WHEREAS, the Trust is a charitable organization as described in IRC §501(c)(3), and is a publicly-supported organization as described in IRC §170(b)(1)(A) whose primary purpose is to permanently preserve and protect the natural, scenic, agricultural, historical, and open space resources of the greater Roaring Fork and Colorado River Valleys, including the area in which the Property is located, and who is a"qualified organization"to do so within the meaning of IRC §170(h)(3), possessing the resources and commitment to protect and defend the conservation purposes of this grant and Conservation Values identified herein; WHEREAS, the Trust also meets requirements of Colorado law as a qualified recipient for a conservation easement under C.R.S. §38-30.5-104, and is accredited by the Land Trust Accreditation Commission for the term ending August 31, 2013; and WHEREAS, the Board of Directors of the Trust has duly authorized the Trust's Executive Director or her designee to execute and accept this conservation easement on behalf of the Trust. AGREEMENT NOW, THEREFORE, in consideration of the matters above, the mutual covenants, terms, conditions and restrictions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. G�vT Grantor hereby voluntarily and irrevocably grants and conveys to the Trust a perpetual Conservation Easement in gross ("Easement"), pursuant to C.R.S. §§38-30.5-101 et seq., through the terms mutually agreed to in this Easement, consisting of the rights and restrictions enumerated herein, over and across the Property, to hold said Easement unto the Trust and its successors and assigns forever. Grantor agrees that the donation of the Easement gives rise to a property right, immediately vested in the Trust, which shall constitute a binding servitude upon the Property and shall be subject to prior reservations, easements, encumbrances and exceptions of record, except as otherwise set forth herein. 2. Pu�osEs Pursuant to the terms of C.R.S. §§38-30.5-101 et seq., the purposes of the Easement are to assure that the Property will remain forever predominantly in its scenic, natural and open space condition, subject to the uses of the Property permitted hereunder, including ongoing grazing and agricultural use, to protect and preserve the Conservation Values in perpetuity, to prevent any use of the Property that is inconsistent with the preservation and protection of the Conservation Values and, in the event of their degradation or destruction, to restore such Conservation Values as required herein. The primary purposes of this Easement are: 1) to preserve and protect important natural habitat; 2) to protect agricultural range Iand; 3) to protect scenic resources visible to the public; 4) to prevent residential development on the Property; and 3 � Exhibit A —Upper Potato Bill Conservation Easement 5) to prevent mineral development of the Property to the degree that Grantor is able. (This paragraph collectively describes the"Purposes"of this Easement.) 3. INTENT Subject to the express reservations and prohibitions described in Section 7 below, the intent of the Parties is to permit all specified uses of the Property and any other uses that are not inconsistent with the preservation and protection of the Conservation Values as determined by the Trust in its sole discretion. Nothing in this Easement is intended to prevent Grantor's quiet and reasonable enjoyrnent of the Property, or to compel a specific use of the Property other than the preservation and protection of the Conservation Values. � 4. BASELINE DOCUMENTATION The Parties acknowledge that a Baseline Documentation of the Conservation Values and relevant features of the Property was prepared on by Colorado Wildlife Science, LLC of Basalt, Colorado, a company familiar with conservation easements, the Property, and the environs, which will be kept on file with the Parties. The Trust and Grantor acknowledge and agree that by the execution of this Easement, they hereby approve, acknowledge, and accept the Baseline Documentation as an accurate representation of the condition of the Property at the time of this grant. The Parties agree that the Baseline Documentation is not intended to preclude the use of other evidence to establish the present condition of the Property should a controversy arise over its use. 5. RIGHTS OF THE TRUST To fulfill the Purposes of this Easement, Grantor hereby conveys to the Trust a property right and interest in the form of this Easement, which immediately vests with the Trust (as agreed in Section 1 and stipulated in Section 14.3, herein), and includes the following affirmative rights: 5.1. All development rights deriving from, based upon, or attributable to the Property in any way ("Trust's Development Rights"), except those expressly reserved by Grantor in Section 7 herein, and the Parties agree that Trust's Development Rights shall be held by the Trust in perpetuity in order to fulfill the Purpose of this Easement, and to ensure that such rights are forever released, terminated and extinguished as to Grantor. The grant of this Easement shall not entitle Grantor to increase development density on adjacent properties owned by Grantor, or to create any transferrable development rights from the Property onto such adjacent properties. The granting of this Easement across only part of a developable lot as approved by Pitkin County and depicted on Exhibit A, does not in any way prevent development of the remainder of the lot, which lot shall retain all previously granted development approvals from Pitkin County, with the exception that the portion of the lot included in this Property shall be subject to the terms of this Easement in perpetuity; 5.2. The right to preserve and protect the Conservation Values in perpetuity; 4 _ __..._ �..�,,,�,,,�� _ _ ' Exhibit A —Upper Potato Bill Conservation Easement 5.3. The right to enter upon the Property at least annually at reasonable times agreed to mutually by Grantor and the Trust to inspect the Property thoroughly, to monitor Grantor's compliance with, and otherwise enforce the terms of this Easement; provided that such entry shall not unreasonably interfere with Grantor's use and quiet enjoyment of the Property, with the exception that, upon an advanced good faith attempt to contact Grantor verbally or electronically, the Trust may immediately enter upon the Property in the event the Trust reasonably believes that such entry is essential to prevent or mitigate a violation of the Easement; 5.4. The right, as an interest owner in the Property, to prevent or enjoin Grantor or third parties (whether or not invitees of Grantor) from conducting any activity on, or use of, the Property that is inconsistent with the purposes of the Easement; and the right to require Grantor or third parties, as may be responsible, to restore such areas or features of the Property that are damaged by any inconsistent activity or use, subject to the qualifications of Section 13.5 herein; 5.5. Any other rights that the Parties may approve consistent with the purposes of the Easement, including adding additional purposes or defining additional Conservation Values; and 5.6. The right, as an interest owner in the Property, to receive notification from and join Grantor as a necessary party to any condemnation or eminent domain proceedings affecting the Property (as described in Section 14), or to any leases, surface use agreements, damage agreements or rights-of-way that may be proposed, granted or required hereafter as a result of mineral development (as described in Section 73.G) or other activities with the potential to impact the surface of the Property or its Conservation Values. 6. RIGHTS OF GRANTOR Grantor reserves to itself and to its personal representatives, heirs, successors, and assigns, all rights and obligations accruing from its ownership of the Property, including the right to engage in all uses of the Property not prohibited herein that are not inconsistent with the preservation and protection of the Conservation Values, pursuant to IRC §170(h)(3) and C.R.S. §38-30.5-102. �. PROHIBITED AND PERMITTED USES The following uses and practices by Grantor, though not an exhaustive recital, are either prohibited or permitted by this Easement. Certain of these uses, where specifically indicated, require notice to or approval from the Trust, or both, according to the procedures described in Sections 10 and 11 herein. Any other activities that are inconsistent with the Purpose of this Easement or with preservation and protection of the Conservation Values are prohibited. Trust's prior notice and approval is required for uses not expressly described herein when there is a question as to consistency with the preservation and protection of the Conservation Values. 7.1. Division of Property. Grantor may not divide or subdivide (including de facto subdivision) the Property into more than one parcel of land. At all times the Property shall be owned as a single parcel subject to this Easement. Ownership of the single parcel by joint 5 � Exhibit A —Upper Potato Bill Conse�vation Easement tenancy or tenancy in common is permitted; however, actions to partition or condominiumize the Property are prohibited. 7.2. Development Rights and Improvements. The construction, improvement, placement, or replacement of any improvements (defined as buildings, structures, mobile homes or other physical, human-introduced development of or on the Property, including landscaping, fences, wells, roads, septic systems, utilities, etc.) are prohibited on the Property, except as follows: A. Fencin . Grantor may repair and replace existing fences, provided any replacement fencing in wildlife migration corridors is consistent with then-current CPW guidelines for fencing in wildlife migration areas so as to permit the movement of wildlife across the Property. Grantor may construct new fences needed for agricultural purposes (e.g. cattle and range management), provided such new fencing is consistent with CPW fencing guidelines; B. Roads. There are no improved roads on the Property, and construction of improved roads is prohibited. Unimproved, primitive roads and tracks (meaning not graded, surfaced, cut or filled) may be maintained and developed on the Property as necessary for agriculture and property maintenance in a manner that minimizes erosion, soil compaction, and disturbance to sensitive ecosystems and habitat. Paving of roads is prohibited. Limited grading or surfacing of unimproved roads or tracks is permitted only as necessary for agriculture or property maintenance upon approval of the Trust. C. Foo�aths and ATV Trails. The development and use of footpaths and other unimproved, low-impact (as defined in Section 21.1) natural-surfaced trails not to exceed three feet in width is permitted for agriculture, property maintenance and private, non-motorized recreation in a manner that minimizes erosion and disturbance � to sensitive ecosystems and habitat. D. Ponds and A�ricultural Water Sources. There is no irrigation infrastructure now located on the Property, however, construction or development of irrigation ponds or stock ponds, water wells and pumps, together with other agricultural water sources such as stock watering tanks,wildlife guzzlers(which collect rain, snow and runoff to provide a water source for wildlife), and low-impact or portable water storage tanks are permitted on the Property to support agricultural and wildlife use of the Property in a manner not damaging to the Conservation Values; E. Utilities and Other Technolo�v. Grants of easements and rights-of-way for, and the installation of utilities, utility lines, pipelines, communications technologies and all related infrastructure (collectively "utilities") is prohibited without prior approval from the Trust, except that: 6 Exhibit A —Upper Potato Bill Conservation Easement a. Agricultural water wells and pumps are permitted in accordance with Section 7.2.D, above; b. Low-impact (as defined in Section 21.1) utilities, such as fence-mounted solar panels, or solar or wind-powered pumps may be located on the Property without further notice to or approval from the Trust. Grantor shall promptly reseed and restore any surface impacts that result from the installation or maintenance of any permitted utilities or related improvements to the Property to as close to the Property's original condition as possible within three months, weather permitting, or an alternate time period approved by the Trust. 7.3. Resource Management and Use. Grantor recognizes the importance of good resource management and stewardship to preserve and protect the Conservation Values. Accordingly, Grantor agrees not to alter the topography of the Property through placement or removal of soil, gravel, land fill, or other materials nor to impair the relatively natural habitat for native plants, wildlife, or similar ecosystems within and upon the Property, except: (a) as necessary in emergencies, including for fire control and prevention; (b) for weed control as described in subsection F, below; (c) as approved by the Trust and any required permitting agencies for habitat enhancement or restoration purposes; (d) as specifically permitted for improvements described in Section 7.2 above; and (e) as necessary for the uses described below, which shall be conducted in a manner not inconsistent with the preservation and protection of the Conservation Values: A. A�riculture and Livestock Grazing. Grazing of horses and livestock and leasing of grazing rights is permitted on the Property in a manner that does not result in degradation of wildlife habitat, or significant soil erosion or low soil quality as determined by the Natural Resource Conservation Service or its successor organization("NRCS"). The following agricultural and livestock husbandry practices are specifically prohibited: a. Intensive growth livestock farms or commercial feed lots, defined as confined areas or facilities on the Property, within which the land is not grazed or cropped annually, for purposes of extended feeding and finishing of large numbers of livestock for commercial purposes; b. Grazing or keeping of domestic sheep on the Property without CPW consent; c. Clearing or conversion of native rangeland or habitat to create new pastures without approval of the Trust in consultation with CPW; d. Tilled cultivation of crops, including tree farms or sod farms; e. Fish hatcheries or other aquaculture; and f. Commercial horse boarding. B. Use of Vehicles Off-Road. Grantor's private use of vehicles off road or off-trail is permitted only in a low-impact manner that does not result in erosion of, or significant compaction to, the Property's soils, harassment of wildlife, or damage to the natural vegetation, ecosystems or scenic values of the Property. Commercial, 7 � Exhibit A —Upper Potato Bill Conservation Easement recreational, or public use of vehicles off roads is prohibited on the Property, except for private or guided hunting purposes permitted by Grantor, as described below; C. Huntin�. Hunting and the leasing of hunting rights on the Property is permitted in accordance with all applicable laws, and may include guided hunting for youth, veterans and handicapped individuals per agreement with CPW; D. Trash. Grantor shall not dump, permanently accumulate, or dispose of trash, garbage, or other hazardous or unsightly refuse on the Property, except for agricultural by-products and compostable matter (including chipped, diseased or dead wood resulting from habitat improvement or fire control) produced or used on the Property; E. Habitat and Vegetation Mana eg ment. Grantor may cut, thin or burn trees and native vegetation on the Property on a limited and localized basis to control weeds, insects, wildfire danger and disease; to prevent personal injury and property damage; for domestic and agricultural uses on the Property such as firewood collection and construction of permitted fences; or as approved by the Trust to otherwise maintain or enhance the character and health of the wildlife habitat or ecosystem, which may be subject to a management plan prepared in cooperation with the Trust as deemed necessary in the sole discretion of the Trust; F. Weed Control. Grantor agrees to control noxious weeds and invasive plant species on the Property in accordance with the Colorado Noxious Weed Act (January 23, 2006), or as such Act may be amended, and other applicable laws (as defined in Section 21.1), and shall not intentionally introduce noxious weeds or other invasive species to the Property; G. Minerals. In accordance with IRC §170(h) and §1.170A-14(g) of the Treasury Regulations, exploration for, extraction or removal of any mineral resource (which may include, but is not limited to, sand, gravel, rock, soil, peat, coal, uranium, oil, oil shale, natural gas or other hydrocarbons) by any surface mining method or any other method in a manner inconsistent with the Purposes of this Easement is prohibited on the Property. Because Grantor does not own all of the mineral rights associated with the Property, a mineral remoteness letter, on file with the Trust, was prepared by Rare Earth Science LLC on , 2013, finding that the likelihood of surface mining on the Property is so remote as to be negligible, in compliance with IRC §170(h) and Treas. Reg. §1.170A-14(g). In order to satisfy the intent of the above paragraph, Grantor may not separate or transfer Grantor's portion of the mineral rights from the Property, nor engage in, lease or otherwise permit the development of mineral rights on or under the Property (via leases, surface use agreements, non-surface use agreements, damage agreements, rights-of-way, or other easements or agreements related to mineral development (collectively, "mineral agreements")) except as may be required by third party mineral interest holders and in compliance with the following: 8 � Exhibit A —Upper Potato Bill Conservation Easement a. Trust's Participation in Future Mineral Agreements. Grantor shall notify the Trust prior to entering into any mineral agreement with a third party mineral interest holder, and the Trust shall have the same legal rights as Grantor to review all proposed mineral agreements prior to execution, and to participate in negotiations therefore in order to direct the future development of mineral resources to occur only by those methods having no more than limited, localized, temporary and reclaimable impacts on the Property, which impacts must not be irremediably destructive of the Conservation Values in accordance with IRC §170(h)(5), (6) and Treas. Reg. §1.170A-14(g)(4). The Trust's participation may not deny any third party's ultimate right to develop minerals underlying the Property, and the Trust shall claim no rights to proceeds or royalties from such development. Grantor retains sole execution authority for any mineral agreements or transfer deeds; however, failure to notice the Trust prior to entering into any mineral agreement or transfer may result in a $5000 fine payable to the Trust, in addition to other remedies available under law. All mineral agreements entered into after this date shall, at a minimum, include the following: 1) Reference to this Easement and summary of the Conservation Values; 2) Acknowledgement that the agreement is subordinate and subject to the terms of this Easement; 3) Non-surFace occupancy methods of mineral development are strongly preferred, and only the minimum structures, infrastructure, and other disturbance or impacts to the Property shall be permitted as reasonably necessary to mineral development; 4) All impacted sites associated with mineral development shall be recontoured and revegetated, and any damage to the Property or its Conservation Values restored, to as close to the Property's original state as possible upon completion of active drilling or mineral development operations; any structures required to remain upon the Property for more than one year shall be concealed from public view and constructed and maintained in a manner not damaging to the Conservation Values. b. Current Mineral Leases. There are no active oil and gas or other mineral leases on or affecting the Property at this time. H. Water Resources. Grantor shall not divert, dam, pollute, dredge, intentionally destabilize or degrade Potato Bill Creek, or other naturally-occurring streams, springs, designated wetlands or other surface or subsurface water features that may occur on the Property, except as approved by the Trust, and except for any work or structures deemed necessary by Grantor, in consultation with CPW or other agency qualified at the time to oversee such work, to enhance, restore or control erosion or siltation of water resources on the Property in compliance with all applicable laws (as defined in Section 21.1). The construction, installation, maintenance, improvement and replacement of ponds, wetlands, and irrigation structures (including ditches, 9 � Exhibit A —Upper Potato Bill Conservation Easement pipelines, headgates and related equipment) are permitted for agricultural purposes or the enhancement of wildlife habitat, provided such activities are in compliance with applicable laws. Soil, sand, rock and gravel produced during the excavation or construction of permitted ditches or ponds may be used or relocated on the Property in a manner not inconsistent with the preservation and protection of the Conservation Values; I. Water Ri ts. There are no water rights included in or encumbered by this Easement; J. Commercial and Industrial Activities. Grantor shall not conduct industrial activity or commercial recreational activity on the Property, except for guided hunting activities that may be approved by CPW and leasing of hunting rights; K. Recreation. Private, low-impact recreational uses such as hiking, horseback riding, cross-country skiing, hunting, fishing and short-term camping are permitted on the Property, provided that recreational trails are limited pursuant to Section 7.2.B herein, and that any private recreational easements or agreements with neighboring landowners that predate the grant of this Easement shall be permitted. 8. No PusLic AccESs Except by the terms of this Easement, including Section 7.3.C,Hunting, Grantor shall not afford the public any more than visual access to any portion of the Property, although Grantor may permit guests or invitees to access the Property on such terms and conditions as it deems appropriate, provided that such access is consistent with the terms of this Easement and preservation and protection of the Conservation Values. 9. REPRESENTATIONS AND WARRANTIES Grantor represents and warrants that, after reasonable investigation and to the best of its actual knowledge: 9.1. Except for fuels customarily used or transported in connection with agricultural activities; no substance defined, listed, or otherwise classified pursuant to any federal, state, or local law, regulation, or requirement as hazardous, toxic, polluting, or otherwise or threatening to human health or the environment exists or has been used or released on the Property; 9.2. There are not now any underground storage tanks located on the Property, and no underground storage tanks have been removed from the Property in a manner not in compliance with applicable laws,regulations, and requirements; 9.3. Grantor and the Property are in compliance with all federal, state, and local laws, regulations, and requirements applicable to the Property and its use; and there is no existing, or pending litigation in any way affecting, involving, or relating to the Property; 10 � Exhibit A —Upper Potato Bill Conservation Easement 9.4. Grantor has good and sufficient title to the Property and has lawful authority to grant and convey the Easement, that any mortgages or liens on the Property are subordinate to the terms of this Easement, and that Grantor shall warrant ar�d forever defend the title to the Easement against all and every person or persons lawfully claiming by, through or under Grantor, the whole or any part thereof, except for rights-of-way, easements, restrictions, covenants and mineral reservations of record. lO. NOTICE OF INTENTION TO UNDERTAKE CERTAIN PERMITTED ACTIONS The purpose of requiring Grantor to notify the Trust before undertaking certain activities or uses, as specifically identified in Section 7 or elsewhere herein, is to afford the Trust an opportunity to update its records and, if approval is required pursuant to Section 11 below, to ensure that the activities or uses in question are not inconsistent with the terms of this Easement. Grantor shall also notice Trust and seek its approval, pursuant to Section 11 below, for proposed activities or uses when there is a question as to consistency with the preservation and protection of the Conservation Values. Whenever notice and the Trust's approval are required, Grantor shall notify the Trust in writing not less than 45 days prior to the date Grantor intends to undertake the activity or use in question, unless this Easement provides otherwise, and describe the nature, scope, design, location, timetable, and any other material aspect of the proposed activity or use in sufficient detail to permit the Trust to make an informed judgment as to the activity or use's consistency with the terms of this Easement and the preservation and protection of the Conservation Values. Whenever notice is required without the Trust's approval, Grantor shall notify the Trust in writing not less than 14 days in advance of the proposed activity or use, unless the activity involves emergency activities, such as fire fighting, in which case no notice is required. 11. THE TRUST'S APPROVAL Whenever this Easement requires that Grantor obtain the Trust's approval for any activity or use of the Property, or if Grantor desires approval for any activity or use of the Property not specifically addressed herein, such approval shall be given in the Trust's sole discretion, according to whether the Trust determines that such activity or use of the Property is not inconsistent with the preservation and protection of the Conservation Values. Grantor has the burden to prove that Grantor's proposed uses are not inconsistent with the preservation and protection of the Conservation Values. Where the Trust's approval is required, the Trust shall grant or withhold its approval in writing within 14 days of receipt of Grantor's written notice (as described in Section 10, above) of and request therefor. The Trust's approval may be withheld at the Trust's sole discretion if the Trust determines that the action as proposed would be inconsistent with the Conservation Values or the purposes or terms of this Easement. The reason(s) for such a determination shall be set forth with specificity by the Trust in a written notice to Grantor. Where a modification of the proposed use or activity by Grantor would render the same not inconsistent with the purposes of the Easement and the Conservation Values, the Trust may specify, in such written notice to Grantor, such modifications to render approval appropriate. 12. TRUST'S REMEDIES:ENFORCEMENT 11 � Exhibit A —Upper Potato Bill Conservation Easement The Trust shall have the right to prevent and correct or require correction of violations of the terms and purposes of this Easement. The Trust is not responsible for monitoring for or enforcing violations of any applicable laws (as defined in Section 21.1), permits or third party contracts affecting the Property now or in the future, except to the degree that any such violations may damage the Conservation Values, violate this Easement, or be otherwise inconsistent with the Purposes or terms of this Easement. If the Trust finds what it believes is a violation, or a threat of a violation, the Trust shall notify Grantor of the nature of the alleged violation. Upon receipt of this notice, Grantor shall immedi�tely discontinue any activity that could increase or expand the alleged violation and shall either: (a) restore the Property within 60 days as is best possible, subject to weather conditions and season, to its condition prior to the violation in accordance with a plan approved by the Trust, or if immediate restoration is not possible, Grantor shall submit such plan to the Trust within 60 days; or (b) provide a written explanation to the Trust of the reason why the alleged violation should be permitted. If the Trust is not satisfied with Grantor's written explanation, the Parties agree to meet as soon as possible to resolve this difference. If a resolution of this difference cannot be achieved at the meeting, the Parties agree to attempt to resolve the dispute pursuant to Section 12.1,below. At any time, including if Grantor does not immediately discontinue any activity that could increase or expand the alleged violation while the Parties are attempting to resolve the alleged violation, or if the Trust believes an ongoing, imminent, or proposed activity violates the Easement, the Trust may, upon an advanced good faith attempt to contact Grantor verbally or electronically, take immediate, appropriate legal action to stop the activity, without prior notice to Grantor; without waiting for the period provided for cure to expire; and without waiting for the 60-day mediation period to expire. The Trust may bring an action at law or in equity, ex parte as necessary, in a court of jurisdiction, to enforce the terms of this Easement and to enjoin by temporary or permanent injunction a violation, which may require restoration of the Property to the condition that existed prior to the violation. The Trust's remedies described herein shall be in addition to all remedies now or hereafter existing at law or in equity, and shall include, without limitation, the right to recover damages far violation of the terms of this Easement or injury to the Conservation Values including damages for the loss of scenic, aesthetic, or environmental values. Without limiting Grantor's liability therefore, the Trust, in its sole discretion, may apply any damages recovered to the cost of undertaking any restorative, remedial, corrective action on the Property. Enforcement of the terms of this Easement shall be at the sole discretion of the Trust, and any forbearance by the Trust to exercise its rights under this Easement in the event of any breach of any term of this Easement by Grantor shall not be deemed or construed to be a waiver by the Trust of such term or any subsequent breach of the same or any other term of this Easement or of any of the Trust's rights under this Easement. No delay or omission by the Trust in the exercise of any right or remedy upon any breach by Grantor shall impair such right or remedy or be construed as a waiver. The failure of the Trust to discover a violation or to take immediate legal action shall not bar the Trust from doing so within four years from the date upon which the violation is discovered. 12 � Exhibit A —Upper Potato Bill Conservation Easement All reasonable costs incurred by the Trust in enforcing the terms of this Easement, including, without limitation, costs and expenses of pursuing legal action and reasonable attorney's fees, shall be paid to the Trust by Grantor, and any costs of restoration necessitated by Grantor's violation of the terms of this Easement, shall be borne by Grantor, unless: (1) a court finds that the Trust acted in bad faith in seeking enforcement thereof, in which case the Trust shall pay Grantor's court-awarded costs and fees, or (2) if Grantor ultimately prevails in a judicial enforcement action, the Trust shall pay its own costs and fees. 12.1. Mediation. If a dispute arises between the Parties concerning the consistency of any proposed use or activity with the terms of this Easement, and Grantor agrees not to proceed with the use or activity pending resolution of the dispute, either Party may refer the dispute to mediation by written request upon the other. Within 10 days of the receipt of such request, the Parties shall select a trained and impartial mediator with experience in easements and other land preservation tools. If the Parties are unable to agree on a mediator, then the Parties shall each select a mediator with experience in conservation easements and other land preservation tools, and those two mediators shall select a mediator who shall alone mediate the dispute. Mediation shall then proceed in accordance with the following guidelines: A. Pu ose. The purpose of the mediation is to: (a) promote discussion between the Parties; (b) assist the Parties to develop and exchange pertinent information concerning the issues in dispute; and (c) assist the Parties to develop proposals which will enable them to arrive at a mutually acceptable resolution of the controversy. The mediation is not intended to result in any express or de facto modification or amendment of the terms, conditions, or restrictions of this Easement; B. Participation. The mediator may meet with the Parties and their counsel jointly or ex parte. The Parties agree that they will participate in the mediation process in good faith and expeditiously, except in cases when the Trust believes that Conservation Values are continuing to be harmed during the mediation process, in which case the Trust can suspend its involvement in the mediation to remedy this threat of ongoing violation. Representatives of the Parties with settlement authority will attend mediation sessions as required by the mediator; C. Confidentialitv. All information presented to the mediator shall be deemed confidential and shall be disclosed by the mediator only with the consent of the Parties or their respective counsel. The mediator shall not be subject to subpoena by any Party in any subsequent litigation; D. Time Period and Fees. Neither Party shall be obligated to continue the mediation process beyond a period of 60 days from the date of receipt of the initial reqlrest or if the mediator concludes that there is no reasonable likelihood that continuing mediation will result in a mutually agreeable resolution of the dispute. The Parties shall equally share and each bear 50%of the mediator's fees. 13. COSTS,LIABILITIES,TAXES,AND ENVIRONMENTAL COMPLIANCE 13 � Exhibit A —Upper Potato Bill Conservation Easement 13.1. Costs, Legal Requirements and Liabilities. Grantor retains all responsibilities and obligations and shall bear all costs and liabilities of any kind related to the ownership, operation, upkeep, and maintenance of the Property, including the payment of property and other taxes related to the Property, and maintenance of liability insurance coverage. Grantor shall make best efforts to keep the Property free of any liens arising out of any work performed for, materials furnished to, or obligations incurred by Grantor. Nothing in this Easement shall be construed or interpreted as prohibiting Grantor from obtaining loans secured by deeds of trust encumbering the Property, provided any such deeds of trust are subordinate to this Easement, and shall encumber the entire Property; 13.2. Control. Nothing in this Easement shall be construed as giving rise, in the absence of a judicial decree, to any right or ability of the Trust to exercise physical or managerial control over the day-to-day operations of the Property, or over any of Grantor's activities on the Property, or otherwise to become an operator with respect to the Property within the meaning of The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended("CERCLA"}, and any Colorado state law counterpart; 13.3. Hold Harmless. Grantor shall hold harmless, indemnify and defend the Trust and its members, directors, officers, employees, agents, and contractors and the heirs, personal representatives, successors, and assigns of each of them (collectively, the "Trust Parties") from and against all liabilities including, without limitation, court awarded third-party attorneys' fees, arising from or in any way connected with: (a) injury to or the death of any person, or physical damage to any property, resulting from any act, omission, condition, or other matter related to or occurring on or about the Property, regardless of cause, unless due solely to the gross negligence or intentional act of any of the Trust Parties; (b) the violation ar alleged violation of, or other failure to comply with, any state, federal, or local law, regulation, or requirement, including, without limitation, CERCLA, by any person other than any of the Trust Parties, in any way affecting, involving, or relating to the Property; (c) the presence or release of hazardous or toxic substances in, on, from, or under the Property at any time, of any substance now or hereafter defined, listed, or otherwise classified pursuant to any federal, state, or local law, regulation, or requirement as hazardous, toxic, polluting, or otherwise contaminating to the air, water, or soil, or in any way harmful or threatening to human health or the environment, unless caused solely by any of the Trust Parties; (d) payment of taxes imposed upon or incurred by the Property as a result of this Easement, including property taxes and the sale of income tax credits acquired as a result of this Easement; (e) tax benefits or consequences of any kind which result or do not result from entering into this Easement; and (f� the obligations, covenants, representations, and warranties described herein; 13.4. Waiver of Certain Defenses. No action shall be commenced or maintained to enforce the terms of any building restriction described in this Easement, or to compel the removal of any building or improvement, unless said action is commenced within four years from the date of discovery of the violation for which the action is sought to be brought or maintained. To the extent that any defense available to Grantor pursuant to C.R.S. §38-41-119 is inconsistent with the foregoing, Grantor waives that defense. Grantor waives the defenses of 14 � Exhibit A —Upper Potato Bill Conservation Easement laches, estoppel and prescription with regard to the enforcement of all other terms of this Easement; and 13.5. Acts Beyond Grantor's Control. Nothing contained in this Easement shall be construed to entitle the Trust to bring any action against Grantor for any injury to or change in the Property resulting from causes beyond Grantor's control (including wild fire, landslides and avalanches) or from any prudent action taken by Grantor under emergency conditions to prevent, abate, or mitigate significant injury to the Property resulting from such causes. Grantor is not responsible for acts of third parties not authorized to access the Property,but shall be responsible for those third parties, including guests or invitees, authorized by Grantor to access the Property. The Trust retains the right to enforce against third parties for violations of the Easement or damage to the Property pursuant to Section 5.6 herein. 14. EXTINGUISHMENT AND CONDEMNATION 14.1. Extinguishment. The Parties agree that any changes in the economic viability of the uses permitted or prohibited by this Easement, or changes to neighboring land and its use shall not be deemed circumstances justifying the termination or extinguishment of the Easement. In addition, the inability of Grantor, or Grantor's heirs, successors or assigns, to implement any or all of the uses permitted under this Easement shall not impair the validity of the Easement, or be considered grounds for termination or extinguishment of this Easement. If circumstances arise in the future that render the purposes of this Easement impossible to accomplish, the Easement can only be terminated or extinguished, in whole or in part, by judicial proceedings in a court of competent jurisdiction after the court has explored all options for importing other purposes for the Easement pursuant to the cy pres doctrine. Each Party shall promptly notify the other when it first learns of such circumstances. The amount of the proceeds to which the Trust shall be entitled, after the satisfaction of prior claims, from any sale, exchange, or involuntary conversion of all or any portion of the Property subsequent to such termination, shall be determined, unless otherwise provided by Colorado law at the time, in accordance with the Proceeds paragraph below, and such proceeds shall be used by the Trust in a manner consistent with the conservation purposes of the original Easement contribution, as required by §1.170A-14(g)(6)(i) of Treasury Regulations. 14.2. Condemnation. If all or any part of the Property is taken by exercise of the power of eminent domain or acquired by purchase in lieu of condemnation, whether by public, corporate, or other authority, so as to terminate the Easement in whole or in part, Grantor and the Trust shall act jointly to recover the full value of the interests in the Property subject to the taking or in-lieu purchase and all damages resulting therefrom. All expenses reasonably incurred by Grantor and the Trust in connection with the taking or in-lieu purchase shall be paid out of the amount recovered. The Trust's share of the balance of the amount recovered shall be determined by multiplying that balance by the percentage set forth in Proceeds paragraph below. 14.3. Proceeds. Grantor and the Trust stipulate that as of the date of this Easement, they are each vested with a real property interest in the Property. The Parties further stipulate that the Trust's interest in the Easement has a value of 15 percent (%) of the fair market value of 15 Exhibit A —Upper Potato Bill Conservation Easement the Property from this date forward, and such percentage interest shall remain constant in relation to any future fair market value of the Property. Such percentage interest shall be used only for determining the Trust's proportion of proceeds from any payment of damages or action resulting from circumstances described in the Extinguishment and Condemnation paragraphs above. The Parties agree that the value of any improvements to the Property made by Grantor after the date of this Easement is reserved to Grantor. 15. ASSIGNMENT OF EASEMENT In the event the Trust is no longer able to carry out its duties and obligations under this Easement, or if circumstances change so that another similar organization is better able to carry out such duties and obligations, the Trust may, upon no less than 60 days prior notification to Grantor, elect to transfer the Easement and assign its rights and obligations under this Easement to either: (1} Colorado Open Lands, (2) the Colorado Cattlemen's Agricultural Land Trust, (3) Colorado Parks and Wildlife, or(4) a qualified non-governmental land conservation organization charged with a mission similar to that of the Trust; provided however, that any organization or entity selected to accept this Easement is, at the time of transfer: (a) willing and able to accept the transfer; (b) a qualified organization under §170(h) of the Internal Revenue Code of 1986, as amended (or any successor provision then applicable), and its applicable regulations; and (c) authorized to acquire and hold conservation easements under Colorado law. The Trust shall consult with Grantor regarding any selection of a qualified assignee of the Easement, but shall ultimately have the right to select an organization as defined herein that is willing, able and qualified to the hold the Easement (the "Assignee"), and to notify Grantor of its selection. As a condition of such transfer, the Trust shall require the Assignee to expressly agree, in writing, to carry out and uphold the purposes of the Easement and the Conservation Values and otherwise assume all of the obligations and liabilities of the Trust set forth herein or created hereby. After such transfer, the Trust shall have no further obligation or liability under this Easement. Should the Trust be unable to assign the Easement according to this procedure, a court with competent jurisdiction shall assign the Easement. 16. SUBSEQUENT TRANSFERS OF PROPERTY Grantor agrees to notify any party who may purchase, lease, or otherwise hold interest in this Property of the existence and terms of this Easement, and to provide a copy of the Easement and the Baseline Documentation to such party if requested. Grantor further agrees to give notice to the Trust of the transfer of any such interest prior to transfer. The Trust shall be available for and welcome the opportunity to meet with any prospective buyers or transferees of the Property to explain the terms of this Easement to potential new owners prior to or after sale closing, or to answer any questions or concerns related to this Easement, or any of its supporting documentation, including the Baseline Documentation. In addition, at any time Grantor transfers the Property to a third party, including all subsequent transfers, that party shall pay $100.00 to the Trust to cover administrative costs associated with the transfer, as well as to put the third party recipient on notice of the terms of this Easement. This payment is exempt from transfer fee restrictions of C.R.S. §38-35-127 because it does not affect residential real property, and only affects agricultural land. The failure 16 � Exhibit A —Upper Potato Bill Conservation Easement of Crrantor to perform any act required by this paragraph shall not impair the validity of this Easement or limit its enforceability in any way. 17. NOTICES Any communication that either Party desires or is required to give to the other shall be in writing and served personally or sent by first class mail,postage prepaid, addressed as follows or to such other address as either party from time to time shall designate by written notice to the other: To Grantor: Ranch III, LLC c/o Gideon Kaufman 315 Hyman Avenue, Suite 305 Aspen, CO 81611 To the Trust: Aspen Valley Land Trust 320 Main Street, Suite 204 Carbondale, CO 81623 18. RECORDATION This instrument shall be held in escrow to be recorded immediately after completion of the Sutey/Two Shoes administrative land exchange, and after the expiration of all protests, challenges or stay periods, in the official records of Pitkin County, Colorado and may be re- recorded at any time as may be required to preserve its rights in this Easement. l9. AMENDMENT If circumstances arise under which an amendment to this Easement would be appropriate to promote the purposes of the Easement, Grantor and the Trust may jointly amend this Easement. However, neither Grantor nor the Trust is under obligation to amend this Easement, and the Trust may decline any amendment in its sole discretion according to then-current Trust policies, which shall be made available to Grantor upon request. Any amendment must be consistent with, and protect and preserve, the purposes of the Easement and the Conservation Values and may not affect the Easement's perpetual duration. Any amendment must be in writing, signed by all the Parties, and recorded in the records of the Clerk and Recorder of the appropriate Colorado County. Corrections to correct factual mistakes or typographical or clerical errors may be made at the discretion of the Trust. No amendment shall be allowed that affects the qualification of this Easement or the status of the Trust under any applicable laws, including C.R.S. §§38-30.5-101 et seq., or IRC §170(h) or any regulations promulgated thereunder. No amendment shall be permitted that will confer a private benefit to Grantor or any other individual or entity (see IRS Reg. 1.170A-14(h)(3)(i)) greater than the benefit to the general public, or that will result in private inurement to a Board member, staff or contract employee of the Trust (see IRS Reg. 1.501(c)(3)-1(c)(2)). 20. SUBORDINATION 17 Exhibit A —Upper Potato Bill Conservation Easement The Property is not subject to any mortgages or liens. 21. GENERAL PROVISIONS 21.1. Defmitions. A. The terms "Grantor" and "the Trust," wherever used herein, and any pronouns used in place of those terms, shall refer to, respectively, Grantor and its heirs, personal representatives, executors, administrators, successors and assigns, and the Trust and its successors and assigns; B. The terms "Easement", "conservation easement", "Deed of Conservation Easement", and "Deed of Conservation Easement in gross" refer to the immediately vested interest in real property defined by Colorado Revised Statutes §§38-30.5-101 et seq., and this legal document, consisting of the rights and restrictions enumerated herein,by which said Easement is granted; C. Applicable Laws. The term "applicable laws" refers to all relevant federal, state, and local statutes, ordinances, judicial decisions, executive ordersl codes, permits or regulations having the force and effect of law that have bearing on or may control certain uses allowed by the Easement; D. Low-Impact. The term "low-impacY' refers to activities or improvements whose location, use and construction have little or no impact on the Property and do not negatively impact the Conservation Values. 21.2. Controlling Law. The interpretation and performance of this Easement shall be governed by the laws of the State of Colorado; 21.3. Liberal Construction. This Easement shall be liberally construed in favor of the grant to effect the purposes of the Easement and the policy and purpose of C.R.S. §38-30.5-101 et seq. If any provision in this instrument is found to be ambiguous, an interpretation consistent with ensuring continuation of the purposes of the Easement and the preservation and protection of the Conservation Values that would render the provision valid shall be favored over any interpretation that would render it invalid. The common law rules of disfavoring restrictions on the use of real property and construing restrictions in favor of the free and unrestricted use of real property shall not apply to interpretations of this Easement or to disputes between the Parties concerning the meaning of particular provisions of this Easement; 21.4. Severability. If any provision of this Easement, or the application thereof to any person or circumstance, is found to be invalid, the remainder of the provisions of this Easement shall be deemed severable and remain in full force and effect; 18 � Exhibit A —Upper Potato Bill Conservation Easement 21.5. Entire Agreement. This instrument sets forth the entire agreement between the Parties with respect to the Easement and supersedes all prior discussions, negotiations, understandings, or agreements relating to the Easement, all of which are merged herein; 21.6. No Forfeiture. Nothing contained herein will result in a forfeiture or reversion of Grantor's title in any respect; 21.7. Joint and Several Obligation. The obligations imposed by this Easement upon Grantor shall be joint and several. If the Property's ownership, now or in the future, is by a single entity consisting of multiple parties including shareholders, partners, or members, that entity is required to notify its shareholders, partners, or members of the entity's and their individual rights and responsibilities, including any monetary or other obligations set forth in this Easement. Grantor shall provide a copy of such notice at any time upon the Trust's request; 21.8. Successors. The covenants, terms, conditions, and restrictions of this Easement shall be binding upon, and inure to the benefit of, the Parties hereto and Grantor's respective personal representatives, heirs, successors, transferees, and assigns, and the Trust's successors, transferees, and assigns, and shall continue as a servitude running in perpetuity with the Property; 21.9. Termination of Rights and Obligations. A Party's rights and obligations under this Easement terminate upon transfer of the Party's interest in the Easement or the Property, unless the transferee assumes such obligations, except that liability for acts or omissions occurring prior to transfer shall survive transfer; 21.10. Captions. The captions in this instrument have been inserted solely for convenience of reference and are not a part of this instrument and shall have no effect upon construction or interpretation; 21.11. Counterparts. The Parties may execute this instrument in two or more counterparts, which shall, in the aggregate, be signed by all the Parties; each counterpart shall be deemed an original instrument as against any Party who has signed it. In the event of any disparity between the counterparts produced, the recorded counterpart shall be controlling; 21.12. Merger. Unless the Parties expressly state that they intend a merger of estates or interests to occur, no merger shall be deemed to have occurred hereunder or under any document executed in the future affecting this Easement; 21.13. Authority to Execute. Each party represents to the other that such party has full power and authority to execute and deliver this Deed of Conservation Easement, and perform its obligations under this Easement, that the individual executing this Easement on behalf of said party is fully empowered and authorized to do so, and that this Easement constitutes a valid and legally binding obligation of said party enforceable against said party in accordance with its terms; and 19 � Exhibit A —Upper Potato Bill Conservation Easement 21.14. No Third Party Beneficiaries. This Easement is entered into by and between Grantor and the Trust with the intent that there are no intended third party beneficiaries that have the right or obligation to enforce the terms and provisions of this Easement. No person or entity, other than the Grantor or the Trust, shall have standing to enforce, nor the right or obligation to enforce, the terms and provisions of this Easement or to otherwise commence or intervene in any lawsuit pertaining to this Easement. IN WITNESS WHEREOF, Grantor and the Trust have executed this Deed of Conservation Easement as of the date first written above. (signatures on following pages) 20 Exhibit A —Upper Potato Bill Conservation Easement GRANTOR: 2343 COUNTY ROAD, LLC, a Colorado limited liability company By: Name: Title: STATE OF ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2011, by as of 2343 COLTNTY ROAD, LLC, a Colorado limited liability company, as Grantor. WITNESS my hand and official seal. [SEAL] Notary Public My commission expires: 21 � Exhibit A —Upper Potato Bill Conservation Easement ACCEPTED by the TRUST: ASPEN VALLEY LAND TRUST, a Colorado nonprofit corporation By: Martha Cochran, Executive Director STATE OF COLORADO ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2011,by Martha Cochran as Executive Director of ASPEN VALLEY LAND TRUST, a Colorado nonprofit corporation. WITNESS my hand and official seal. [SEAL] Notary Public My commission expires: 22 � Exhibit A —Upper Potato Bill Conservation Easement EXHIBIT A Legal Description of Property 23 � Exhibit A —Upper Potato Bill Conservation Easement EXHIBIT B Map of Property 24 ° Exhibit B — Crystal Island Deed Restriction DEED RESTRICTION THIS DEED RESTRICTIION is made and entered into this day of 20_by Ranch Lake III, Inc and Ranch Lake IV, LLC (hereinafter the"Owners of the Burdened Property") as the owners of certain real property described as Lots lE, 4E, SE, 8W, 9W, IOW, 11W, 12W, 13 W, and 15W, Crystal Island Ranch Planned Unit Development recorded in Book 74 at Page 46 of the Real Property Records of the Clerk and Recorder of Pitkin County, Colorado (hereinafter the"Burdened Property"). RECITALS WHEREAS, the Owners of the Burdened Property along with 2343 County Road, LLC, Ranch II, LLC and Ranch IV, LLC entered into that certain agreement with the Pitkin County Board of County Commissioners (hereinafter the"Benefited Party") dated 20_(the"AgreemenY'); and WHEREAS, under the Ageement, the Owners of the Burdened Property along with 2343 County Road, LLC, Ranch II, LLC and Ranch IV, LLC agreed to relinquish ten(10) development rights that run with the Burdened Property; and WHEREAS, it is the desire and intention of the Owners of the Burdened Property to impose on the Burdened Property the restriction set forth in Paragraph 1 below for the benefit of the Benefited Party. DECLAR ATION 1. Restriction. Now, therefore, the Owners of the Burdened Property hereby declare that all of the Burdened Property shall be held and conveyed subject to the following restriction("Restriction"), which is declared and agreed to be for the benefit of the Benefited Party Residential Development is precluded on the Burdened Property. 2. Permitted Improvements. The Restriction notwithstanding: (a)the Owners of the Burdened Property shall have the right to locate no more than 1 single family residence along with permitted accessory structures and agricultural buildings on the combined lot area comprising Lots 14W and 15W; and(b) the owners of the Burdened Property shall have the right to locate no more than 2 single family residences along with perrnitted accessory structures and agricultural buildings on the combined lot area comprising Lots 1 E, 2E, 3 E, and 4E. 3. Effect; Successors. This Deed Restriction shall be a covenant running with the land and shall inure to the benefit of the Benefited Party and shall burden and bind the Burdened Property. 1 Exhibit B — Crystal Island Deed Restriction 4. Severabilitv. In the event any provisions herein or any portion of any provision herein shall be deemed to be invalid, illegal or unenforceable, such invalid, illegal or unenforceable provision shall be deemed severable, and such invalidity, illegality or unenforceability shall not alter any other provision or the remaining portion of such provision. 5. No Third Party Beneficiaries. The beneficiaries of this Deed Restriction are the Benefited Party and Owners of the Burdened Property and each of their successors in interest. Nothing herein shall be deemed to create any rights in, or be for the benefit of, any third party. 6. Governing Law. The terms and provisions of this Deed Restriction shall be constructed and enforced in accordance with the laws of the State of Colorado. IN WITNESS WHEREOF, the undersigned Owners of the Burdened Property have executed this Deed Restriction effective as of the date first set forth above. Ranch Lake III, Inc Owner of Lots lE, 4E, and SE By: ,President Ranch Lake IV, LLC Owner of Lots 8W, 9W, lOW, 11W, 12W, 13 W, and 15W By: , President STATE OF ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 20_,by as President of Ranch Lake III, Inc. Witness my hand and official seal. My Commission expires: Notary Public 2 ' Exhibit B — Crystal Island Deed Restriction STATE OF ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 20 ,by as President of Ranch Lake IV, LLC. ' Witness my hand and official seal. My Commission expires: Notary Public 3