ATTACHMENT 3

PROTECTIVE EASEMENT

TO CHAPEL HILL MUSEUM PROPERTY

WHEREAS, the Chapel Hill Museum located at 523 E. Franklin Street, Orange Co., North Carolina, hereinafter referred to as the Subject Property, is a building and site of recognized historical, cultural and architectural significance; and

WHEREAS, the Historic Preservation Foundation of North Carolina, Inc. (hereafter the Foundation) and the owner both desire that the historic Chapel Hill Museum structure and site be rehabilitated and preserved for the enjoyment and edification of future generations, while at the same time it may need to be adapted and altered to provide for contemporary uses; and

WHEREAS, the Foundation is a charitable organization which acquires certain rights pursuant to historic preservation agreements that will insure that structures located within the state of North Carolina of recognized historical and architectural significance are preserved and maintained for the benefit of future generations; and

WHEREAS, the North Carolina General Assembly has enacted the Historic Preservation and Conservation Agreements Act validating restrictions, easements, covenants, conditions or otherwise, appropriate to the preservation of a structure or site historically significant for its architectural, archeological or historical associations.

NOW THEREFORE, that the owner hereby agrees that the Subject Property shall be and shall permanently remain subject to the following agreement, easements, covenants and restrictions:

(1) These covenants shall be administered solely by the Historic Preservation Foundation of North Carolina, Inc., its successors in interest or assigns; and in all subsequent conveyances of Subject Property, the Foundation, its successors in interest or assigns shall be the sole party entitled to administer these covenants.  In the event that the Foundation, or its successors in interest by corporate merger cease to exist, then in such event the Foundation shall assign all of its rights and interests in these easements, covenants, and conditions subject to such duties and obligations which it assumes hereby to a non-profit corporation of responsibility which exists for substantially the same reasons as the Foundation itself (as circumstances such assignment shall be made to the State of North Carolina which shall be the sole party entitled to administer those covenants.

(2) The owner covenants and agrees to rehabilitate the Chapel Hill Museum and grounds according to the terms, conditions, and deadlines of a Rehabilitation Agreement entered into by the parties and signed by authorized officials of the Foundation and, after rehabilitation, to continuously maintain, repair, and administer the Subject Property herein described in accordance with the Secretary of the Interior’s Standards for the Treatment of Historic Properties (1992) so as to preserve the historical integrity of features, materials, appearances, workmanship and environment of the Subject Property.  Maintenance shall be continuously provided.  Said standards are attached hereto and incorporated in these covenants by reference.

(3)No alteration and no physical or structural change and no changes in the color, material or surfacing shall be made to the exterior of the Museum without the prior written approval of the President or Chairman of the Board of Directors of the Foundation.

The Foundation, in reviewing the plans and designs for any change to the structure or site shall consider the following criteria:  Exterior building materials; height; fenestration; roof shapes, forms, and materials; surface textures; expression of architectural detailing; scale; relationship of any additions to the main structure; general form and proportion of structures; orientation to street; setback; spacing of buildings, defined as the distance between  adjacent buildings; lot coverage; use of local or regional architectural traditions; and effect on archeological resources. 

(4) The owner and the Foundation hereby agree to preserve/maintain the following elements/features of the Subject Property:

a) The general massing and form of the structure shall be preserved.  Any additions or new construction on the site shall not overpower the original building, compromise its architectural integrity, misrepresent its chronology, or destroy significant features of the building or site.

b) The entire exterior wall assembly shall be preserved.  This includes the exterior siding materials; placement, shape, and size of windows, and interior window casings/trim.  This restriction shall not be interpreted as precluding the reconfiguration of the interior spaces.

c) The fireplace and mantle shall be preserved.  Its historic materials, form, and detailing shall be retained.

d) The carved wood doors on the south side shall be preserved.  This includes the doors on the interior side of the air lock/entry as well as the doors on the exterior of the south side.

e) The hardscape elements on the south and east sides of the building shall be maintained in their present form, especially the stone walls.

After the Subject Property has been rehabilitated, no removal, relocation, or alteration of the above mentioned features/elements shall be made without the prior written approval of the President or Chairman of the Board of Directors of the Foundation.

(5) Neither the Museum nor any part thereof may be removed or demolished without the prior written approval of the President or Chairman of the Board of Directors of the Foundation.

(6) No portion of the Subject Property may be subdivided.

(7) No living trees greater than 12 inches in diameter at a point 4 feet above the ground shall be removed from the Subject Property without the express written approval of the Foundation unless immediate removal is necessary for the protection of any persons coming onto the Subject Property or of the general public; for the prevention or treatment of disease; or for the protection and safety of the owner or to enable other approved, permanent improvements on the Subject Property.  Any tree of the aforementioned size which must be removed shall be replaced within a reasonable time by a new tree of a substantially similar species.  If so requested, the Foundation may approve the use of an alternate species.

(8) The owner shall abide by all federal, state, and local laws and ordinances regulating the rehabilitation, maintenance and use of the Subject Property.

(9) When seeking approvals for changes to the Subject Property, the owner shall give written notice to the Foundation.  If the Foundation fails to respond within forty-five (45) days, then the landowner shall have the right to proceed according to the written notice plans.  The Foundation’s decisions shall be based on the Secretary of the Interior’s Standards for the Treatment of Historic Properties (1992) and shall not be unreasonably withheld.

(10) In case of any contemplated sale of the Subject Property or any portion thereof by the owner or any successor in title thereto, first refusal as to any bona fide offer of purchase must be given to the Foundation, its successors or assigns.  If the Foundation so decides to purchase, it shall notify the then owner of its willingness to buy upon the same terms within thirty (30) days of receipt of written notice of such bona fide offer.  Failure of the Foundation to notify the then owner of its intention to exercise this right of first refusal within such thirty (30) day period shall free the owner to sell pursuant to the bona fide offer. Provided, however, that if there are any outstanding deeds of trust or other encumbrances against the property, any right to repurchase shall be subject to said deeds of trust or encumbrances, and they shall either be satisfied or assumed as part of the purchase price.

(11) In the event of a violation of covenants contained in Paragraphs 2, 3, 4 and 5 hereof, the Foundation then shall have an option to purchase the Subject Property, provided that it shall give the owner written notice of the nature of the violation and the owner shall not have corrected same within the ninety (90) days next following the giving of said notice.  The purchase of the Subject Property, pursuant to the exercise of the option retained hereby, shall be at a price equal to the then market value of the Subject Property, subject

to restrictive covenants, as determined by agreement of the then owner and the Foundation, or, in the absence of such agreement, by a committee of three appraisers, one to be selected by the Foundation, one to be selected by the then owner, and the other to be designated by the two appraisers selected by the Foundation and the owner respectively.

Provided, however, that if there are outstanding deeds of trust or other encumbrances against the property, any right to purchase shall be subject to said deeds of trust or encumbrances, and they shall either be satisfied or assumed as part of the purchase price.

(12) Representatives of the Foundation shall have the right to enter the Subject Property at reasonable times, after giving reasonable notice, for the purpose of inspecting the building and grounds to determine if there is compliance by the owner with the terms of these covenants.

(13) Researchers, scholars, and groups especially interested in historic preservation shall have access to view the interior of the rehabilitated property by special appointment at various times and intervals during each year.  The general public shall have access to the Subject Property to view the exterior and interior features herein protected at the owner’s discretion at various times and intervals during each year at times both desirable to the public and convenient with the owner.

(14) The owner does hereby covenant to carry out the duties specified herein, and these restrictions shall be covenants and restrictions running with the land, which the owner, heirs, successors, and assigns, covenant and agree, in the event the Subject Property is sold or otherwise disposed of, will be inserted in the deed or other instrument conveying or disposing of the Subject Property.

(15) The properties the Foundation seeks to protect may contain certain hazards as a result of outdated building practices or use of certain materials that may contain lead paint, asbestos, or some other hazards that may need to be removed or encapsulated before the building is habitable.  Addressing these problems is one of the challenges of owning and restoring a historic property.  The Foundation does not have the resources to correct these problems and cannot take responsibility for the condition of the properties being sold.  The Foundation is not liable in any way for any hazards, defects, or other problems with the properties under covenants.

(16) The owner and the Foundation recognize that an unexpected change in the conditions surrounding the Subject Property may make impossible or impractical the continued use of the Subject Property for conservation purposes and necessitate the extinguishment of this Historic Preservation Agreement.  Such an extinguishment must comply with the following requirements:

a) The extinguishment must be the result of a final judicial proceeding.

b) The Foundation shall be entitled to share in the net proceeds resulting from the extinguishment in an amount in accordance with the then applicable regulations of the Internal Revenue Service of the U.S. Department of the Treasury.

c) The Foundation agrees to apply all of the portion of the net proceeds it receives to the preservation and conservation of other property or buildings having historical or architectural significance to the people of the State of North Carolina.