Conservation Easement. . .

III. AGREEMENT
1. Breitenbush Eco Fund agrees to convey and transfer ownership of the property to Breitenbush Hot Springs, and Breitenbush Hot Springs agrees to accept that conveyance.

2. Rather than requiring Breitenbush Hot Springs to pay the Eco Fund for its equity in the property, the parties agree that Breitenbush Hot Springs shall instead place a fully enforceable conservation easement on the property that requires the preservation and protection of certain areas of the property. This conservation easement shall be recorded as a restriction on the title of the property and shall run with the title to limit future development no matter who or what entity later owns the property. The parties agree that the monetary value of this conservation easement must be equal to or greater than the value of the equity in the property held by the Eco Fund.

3. The parties agree that Breitenbush Hot Springs may choose to delay the process of actually placing and recording the conservation easement on the title of the property, if necessary to successfully refinance the loan for the purchase of the property.

1. In this event, the parties agree that the terms of the conservation easement shall be fully binding and enforceable immediately upon the conveyance of the property to Breitenbush Hot Springs, as a result of this contract, and Breitenbush Hot Springs agrees to comply with the terms and spirit of the conservation easement regardless of the delay in recording it.

2. In this event, the parties agree that the conservation easement will be officially recorded as a restriction on the title of the property by a date which is not more than 5 years from the date of this agreement, or alternatively must do so prior to the conveyance or transfer of the property or of any interest in the property to any other party. Provided, however, that refinancing the loan for the purchase of the property shall not be defined as a transfer of an interest in the property that will trigger the requirement that the conservation easement be officially recorded.

4. If any aspect of this contract is declared unenforceable, then that portion shall be severed from the agreement and the remaining provisions of this agreement shall be enforceable. If any form of litigation or legal process becomes necessary to enforce any of the provisions of this contract, then the reasonable attorney fees and legal costs of the party which substantially prevails shall be paid by the other party, including the costs of any appeals. The parties agree that any person who serves on the Board of either party, either at the time this agreement is made or at any later time, shall have standing to bring a lawsuit or other legal process in order to compel the enforcement of this agreement.

5. The parties both agree to promptly and without unnecessary delay consider, authorize and execute all of the documents and agreements necessary to carry out the provisions of this contract.

IV. THE CONSERVATION EASEMENT.
The terms of the easement are as follows:
1. DEVELOPMENT OF A COMMUNITY. The goal of this conservation easement is to protect the natural resources and public values of this property while at the same time allowing the development of an ecologically sensitive community on the land, with residences, buildings, access, and sensitive use of the geothermal resources. Current structures which are in existence at the time of this agreement are grandfathered in and do not have to be removed as a result of this conservation easement.

2. RESTRICTION ON TIMBER CUTTING. The property shall be managed, used and developed in a manner which will return its forest cover to its original old growth forest conditions as soon as reasonably possible. There shall be no commercial cutting of the trees on the property, and no clearing or cutting of the trees other than as necessary for and incidental to the development of residences, buildings and roads which have been approved by the appropriate state and local planning, zoning and other authorities and agencies. Clearing or cutting trees incidental to such construction of residences and development shall be restricted to areas no greater than ? acre. No more than 10% of the area of the property or of the timber volume of the property may be cleared or cut. Because of the amount of previous canopy removal, no standing timber, dead or alive, trees which are eight inches DBH or greater should be protected and not cut unless clearly necessary for the development of the property.

3. WETLAND AREAS. The property shall be managed, used and developed in a manner which protects the wetland areas of the property. These areas are shown on the map of the property labeled Exhibit B. There shall be no residences, structures or roads developed in these areas, and no activities such as trenching, digging or filling, that could drain or damage these areas or that could interfere with the healthy ecological wetland functions of these areas. Small scale, unobtrusive, environmentally compatible alterations or developments may be allowed so long as they do not violate these limitations. Provided, however, that no developments or alterations in wetland areas shall be allowed if they can reasonably be placed or done elsewhere.

4. RIPARIAN AREAS. The property shall be managed, used and developed in a manner which preserves the riparian areas of the property. No significant alterations or developments may take place within 30' of the mean high water mark of any perennial or seasonal stream.

5. OTHER RESTRICTIONS.

1. The property shall be managed, used and developed in a manner which protects and enhances the health, diversity and stability of the ecosystem naturally found there.

2. The land serves as habitat and as a natural migration corridor for numerous species, and must be protected to preserve those ecological functions. To accomplish this, a corridor, with vegetative cover, must be protected from alteration or development. That corridor shall completely transect the property in two directions - both east-to-west and north-to-south. As part of this, the deciduous stands of alder, poplar and big-leaf maple, which are superb passerine (songbird) habitat, must be preserved. Further, all riparian corridors, whether perennial or seasonal, shall be off limits to development, including a thirty foot no-development buffer on either side. The no-development buffer for Mansfield Creek shall be 100 feet, as described below. All three ponds shall be off limits to development. There shall be a fifty foot buffer around the ponds; however the existing sweat lodge east of the large pond should be grandfathered in. The "lower wetland" as shown on the accompanying map shall be off limits to all development with the exception of development necessary to utilize the already existing geothermal well (for example, a heat exchanger and necessary pipes and plumbing may be installed).

3. No domestic animals, whether pets or livestock, may be kept or allowed to remain on the property, because pets such as cats and dogs disrupt the native biotic community and livestock degrade wildlife habitat.

4. There shall be no alteration of the creek channel of Mansfield Creek, however a pipe and pelton wheel for low-impact hydropower may be installed. Other than for that hydropower development, no rocks may be removed from the creek and there shall be no alteration of the creek banks other than for restoration work or for the necessary repair or replacement of existing roads. There shall be a one hundred foot no-development buffer zone on both sides of Mansfield creek, but geothermal resources from the existing well located west of creek may be developed and utilized through installation of a heat exchanger, pipes and plumbing.

6. RESOURCE DEVELOPMENT. In perpetuity, the Breitenbush Hot Springs Community and any future owners of the land:

1. May not sell, convey, assign or otherwise transfer any geothermal rights;

2. May not enter into any geothermal conveyances, leases, exploration agreements, or production agreements that exploit geothermal resources for other than uses by the Community located on the property or at Breitenbush Hot Springs;

3. May not sell, convey, assign or otherwise transfer any mineral rights;

4. May not enter into any mineral conveyances, leases, exploration agreements or mineral production agreements;

5. May not sell, convey, assign, or otherwise transfer any grazing rights.