The following definitions are applicable to the Farmland Stewardship Program Contract:

Farmland Stewardship Program allows one or more conservation programs to be blended into a single agreement with a single application. Conservation programs include the Conservation Reserve Program, Wetlands Reserve Program, Environmental Quality Incentives Program, Wildlife Habitat Incentives Program, Forest Land Enhancement Program, Farmland Protection Program, Grasslands Reserve Program and other Federal, State and local conservation programs.

FSP contract or FSP-1 means the program documents, including the applicable contract appendix, and the terms of any required easement, if applicable, entered into between Agency and the Participant. This service contract does not grant to Agency any continuing interests in land, either real or implied. This contract specifies services that the Participant shall perform on the identified property during the contract term. The services that the Participant is to perform as part of this contract are more specifically defined in the Property Operation Document.

FSP Land is the property subject to the contract. It includes "Conservation Premises" and "Adjoining Lands". Conservation premises are the areas where specific services are to be provided by the Participant, such as management of wildlife areas, wetlands or other natural ecosystems. Adjoining lands are those which contain structures, or are devoted to other than natural uses, or are not included in the services to be provided by the Participant.

Property Operation Document is the plan document that will govern current and proposed agricultural, forestry and/or resource extraction activities on the FSP land. (An example of a Property Operation Document can be found in the Outline of Exhibits and Attachments, under Attachment 3).

By signing the FSP contract, the Participant, except in the case of persons qualifying solely as a tenant,certifies that such Participant will control the land subject to the contract for the contract period and, if applicable, the easement period and shall, upon demand, provide evidence to Agency demonstrating that such Participant will control the land for that period.

Land otherwise eligible for the FSP shall not be eligible, except as agreed otherwise, in writing, by Agency, if the land is subject to a deed or other restriction prohibiting the production of agricultural commodities. Land will also be ineligible where a benefit has or will be obtained from a Federal Agency in return for the Participant's agreement not to produce such commodities on the land during the same time as the land would be enrolled in the FSP. By offering land for enrollment, the Participant certifies as a condition for payment that no such restrictions apply to such land, except as agreed otherwise, in writing, by Agency.

Any person who enters into this FSP contract or participates in such contract at any time who is not a citizen of the United States or an alien lawfully admitted into the United States for permanent residence under the Immigration and Nationality Act (8 U.S.C. 1101 et. seq.) shall be ineligible to receive annual contract payments under this contract unless such person meets the requirements of 7 CFR Part 1400 which shall be applicable to this contract.

(1) That the applicable FSP-1 and its addenda shall be considered an offer to enter into the Farmland Stewardship Program on the terms specified on Form FSP-1 and their addenda. The offer, until revoked, may be accepted by Agency provided further, that, liquidated damages may apply in the case of a revocation as specified elsewhere in this Appendix;

(3) To comply with the terms and conditions of the Property Operation Document;

(4) To establish, maintain, and carry out the practices agreed to in the Property Operation Document;

(5) Not to undertake any action on land under the Participant's control which tends to defeat the purposes of this contract;

(6) To annually certify crop and land use for the property with the Agency on the appropriate form, accurately listing all land enrolled in FSP on the farm, not later than the final reporting date determined and announced by the Agency;

(7) To annually file required forms requested by Agency for payment determinations; and

(1) Pay the cost with owners and operators of establishing an eligible practice, or an identified unit thereof, agreed to in the Property Operation Document, except that, in no case may the share of Agency exceed an amount equal to ______ percent of the price at which the land placed in the FSP could be sold on the open market at the time at which this contract is signed by the Participant, unless the Agency otherwise approves such amount, provided further, that such approval must specifically reference the particular land placed in the FSP under this contract;

(3) Pay to the Participant, to the extent required by Agency regulations, an interest penalty on cost-share payments, incentive payments, and all annual bonus payments not made by the date, the payment is due;

(4) Any payment or portion thereof due any Participant will be made by Agency without regard to any question of title under State law, and without regard to any claim or lien which may be asserted by a creditor, except agencies of the U. S. Government. Offsets for debts owed to agencies of the U. S. Government shall be made prior to making any payments to Participants or their assigns.

(5) Modify this contract to add, or substitute certain practices when:

(a) The installed practice fails to adequately produce the desired results or provide the desired benefit at no fault of the Participant;

(b) The installed practice deteriorates because of conditions beyond the control of the Participant;

(c) Another practice will achieve at least the same level of benefits; or

(d) Agricultural market conditions or use of the land change or are contemplated to change to such a degree that the practices also must be changed to accommodate these changes and maintain the terms of this contract.

Make good-faith efforts to resolve conflicts concerning the implementation of practices or a changes to an installed practices contained in the Property Operation Document. The parties agree to find practical, cost-effective ways in which the proposed practices can be modified and accommodated, or if that is not possible or practical, to mitigate, offset or make reparations for any damages or impacts that the proposed practice might cause on the property. Finally, if it is not possible to modify, accommodate, mitigate or make reparations for the proposed practices without causing irreparable damage to the property, the proposed action or use shall be denied without further compensation to the Participant. The parties may also mutually agree to terminate this contract if no proposed practice will accomplish the desired results or provide the desired benefit as contained in the Property Operation Document.

The Farmland Operation Document will include some or all of the following information and requirements:

(1) A map, prepared by the administering Agency at no charge to the Participant, showing the FSP Land.

(2) A legal description and aerial photograph of the FSP land.

(3) A description of the land, water and subsurface areas that shall be the focus of the contract. If the contract is for environmental services, the description should describe habitats, wetlands and other natural resources and ecosystems of significant value covered by the agreement; such description may contain a description of the species contained on the property, but shall not include an inventory or population count.

(4) A description of current property use.

(5) A description of management activities and practices that are to be applied to the conservation premises and if applicable, the adjoining lands.

(6) A schedule of completion dates for services to be provided on the FSP land;

(7) The criteria that shall be used to determine the level of benefits or services which must be attained on the FSP land;

(8) Any other practices required on the FSP land. For environmental service contracts, this may include weed, insect, pest, and other controls of undesirable species, and such maintenance as necessary to avoid an adverse impact on adjoining land as determined appropriate by Agency, taking into consideration the needs of water quality, wildlife concerns, and other factors.

(9) A detailed itemization of the fees for each service provided for by the Participant on the FSP land.

By signing the Property Operation Document, the Participant agrees to implement the practices specified in the Property Operation Document on the FSP land even if such practices differ from those listed on Form FSP-1.

D. Determination of Fees for Services:

Subject to the availability of funds, payments shall be made available upon a determination by Agency that an eligible practice, or an identifiable unit thereof, has been established in compliance with the Property Operation Document and with appropriate standards and specifications.

Examples of eligible practices include:

(1) preventing all residential, commercial, industrial and non-agricultural development on the Conservation Premises and the Adjoining Lands as identified in the Farmland Operation Document for the term of the Agreement;

(2) for managing the Conservation Premises to maintain the value of the property to ecosystem function (including location, quality, amount, and connection to other parcels and/or other natural systems), for the term of the Agreement;

(3) for managing the Conservation Premises to maintain the natural habitats on the Conservation Premises, so that these habitats may continue to provide food and cover and otherwise support the animal species that were observed on the premises on the date of the commencement of this Agreement; and

(4) for managing the Adjoining Lands so that the activities that take place on these lands do not interfere or conflict with (2) and (3) above.

Except as otherwise provided for in program regulations, financial assistance may be made available under the FSP only for the establishment or installation of an eligible practice. In order to receive financial assistance, the Participant, upon completion of the practice, must file documentation as approved by Agency, for approval by Agency.

E. Fees for Services and Agency’s Expenses

(1) Agency agrees to pay to Participant the total sum of $_______ , as set forth in the FSP-1, over the term of this Agreement as a fixed Fee for Services in consideration for the services described herein and in the Property Operation Document, $______ of which is payable upon the execution of this agreement. The calculation to determine the fee for services shall be described in detail in the Property Operation Document.

(2) Additional Fees for Services for the Participant may also includes the following compensation:

          (a) Tax credits, annual payments and other compensation paid to the Participant, calculated on a per acre basis on a sliding scale which shall be determined by the intensity of use on the lands subject to this contract., with less intense uses receiving higher payments.

         (b) Bonus payments paid to the Participant to convert a service into a permanent conservation easement and/or to grant the Agency a right of first refusal if the FSP land is offered for sale.

         (c) Bonus payments paid to the Participant to provide additional or higher quality services beyond those specified in the Property Operation Document.

Agency’s obligation to pay Fees for Services to ensure proper management of the FSP land will be for the term provided for in the FSP-1 document, unless terminated at an earlier date for any reason set forth in this contract.

(1) The Agency shall work in cooperation with the Participant to prepare a status report on this Agreement at least once every five(5) years. The first status report shall be completed and submitted to the ___________________________________ (fill in name of appropriate Agency) no later than __________ [date]; the second status report shall be completed and submitted to the ___________________________________ (fill in name of appropriate Agency) no later than __________ [date]; and the third status report shall be completed and submitted to the ___________________________________ (fill in name of appropriate Agency) no later than __________ [date]. A final report shall be completed and submitted to the ___________________________________ (fill in name of appropriate Agency) no later than six (6) months following termination of this Agreement. Should this Agreement be renewed according to the provisions in status reports shall continue to be completed and submitted at ensuing five (5) year intervals. All requirements and costs of preparing said reports shall be borne by the Agency.

If the contract is for environmental services, the report shall describe the status of the habitats, wetlands and other conservation features covered by this Agreement and indicate whether the condition of these features has improved, remained the same or declined and, if they have declined, if the decline is the result of natural ecological fluctuations, and/or are due to causes beyond the Participant’s control, and if said decline can be reversed. For other management contracts, the report shall describe whether the installed practice or practices are producing the desired effect on the property. The reports shall include statements from the Agency and from the Participant concerning whether each party is satisfied with the Agreement and its administration, whether either party has concerns about the Agreement and its administration, or whether either party feels that any changes are necessary or desirable in the Agreement, its administration, the services which the Participants is to provide under the Agreement, the fees paid to the Participant, and the documents that make up the Agreement, including the Property Operation Document. These reports shall form the basis for determining if any changes should be made in the Agreement and whether any "bonus payments" are due to the Participant.

II. PROVISIONS RELATING TO TENANTS AND LANDLORDS

Payments shall not be paid under this FSP contract if Agency determines that:

(1) FOR ACREAGE NOT ENROLLED IN THE FSP AT THE TIME OF SIGNUP:

The landlord or operator has:

(2) FOR ACREAGE ENROLLED IN THE FSP AT THE TIME OF SIGNUP:

The landlord or operator has not provided tenants with an interest in the FSP contract acreage an opportunity to participate in the benefits of the program if:

(3) The landlord or operator has deprived any tenant of any benefits to which such tenant would otherwise be entitled.

(4) If any such conditions as identified in (a) through (c) occur or are discovered after payments have been made, all or any part of the payments, as determined by Agency, must be refunded with interest and no further payments shall be made.

After this FSP contract is approved, the operator or tenant may, with the approval of Agency, be replaced for purposes of the FSP contract and for payments to be made under the contract if such tenant or operator, as determined by Agency:

The removal of an operator or tenant from the agreement shall not release the operator or tenant from liabilities for actions arising before such removal.

A Participant who is determined to have erroneously represented any fact affecting a determination with respect to this FSP contract and the regulations applicable to this FSP contract, adopted any scheme or device which tends to defeat the purposes of this FSP contract, or made any fraudulent representation with respect to this contract will not be entitled to payments or any other benefits made in accordance with this FSP contract and the Participant must refund to Agency all payments received by such Participant, plus interest and liquidated damages thereon, with respect to the FSP contract. Such liquidated damages will be determined in accordance with paragraph 9 of this Appendix.

Unless Agency regulations provide otherwise, refunds determined to be due and owing to Agency in accordance with this FSP contract will bear interest at the rate which Agency was required to pay for its borrows from the United States Treasury on the date of the disbursement by Agency of the monies to be refunded. Interest will accrue from the date of such disbursement by Agency.

It is mutually agreed that in the event the FSP contract is breached by the Participant, or the participant withdraws the filing of the FSP-1 before it is accepted or rejected by the Agency, the Agency will suffer substantial damages which may not be possible to quantify with certainty.

Therefore, if the participant withdraws the filing of the FSP-1 before it is accepted or rejected by the Agency, the participant agrees to pay $________.

In addition to the refund of payments received plus interest due, for breach of contract prescribed in this contract, the Participant agrees to pay an amount equal to the product obtained by multiplying: (1) 25 percent of the contract payment rate per acre on Form FSP-1 by, (2) the number of acres that are the subject of the FSP contract. Such amount shall be due as liquidated damages in addition to such other damages or amounts as may be due, and not as a penalty.

In the event that the contract is breached by the Agency, the Agency agrees that the expiration or termination of this contract pursuant shall not relieve Agency of its liability and obligation to pay the Fees for Services and any other charges accrued prior to these events. These liabilities and obligations of Agency shall survive any expiration or termination of the contract. In addition to the refund of payments received plus interest due, for breach of contract prescribed in this contract, the Agency agrees to pay an amount equal to the product obtained by multiplying: (1) 25 percent of the contract payment rate per acre on Form FSP-1 by, (2) the number of acres that are the subject of the FSP contract. Such amount shall be due as liquidated damages in addition to such other damages or amounts as may be due, and not as a penalty.

Agency agrees that, if any changes of any terms and conditions of this FSP contract, including changes necessary to reconcile the practices listed on the FSP-1 to those specified in the Property Operation Document, become necessary prior to the date that this contract is approved on behalf of Agency, Agency will notify the persons signing the FSP-1 of such change and such person will be given 10 days from the date of notification in which to agree to the revised terms and conditions or to withdraw from the offer. The Participant agrees to notify the Agency of an intention to withdraw from the offer within 10 days from the date of the issuance of such notice and further agrees that failure to notify the Agency will constitute agreement to the revised terms and conditions.

VI. CORRECTIONS

Agency reserves the right to correct all errors in entering data or the results of computations in the contract.

If a Participant fails to carry out the terms and conditions of this FSP contract but Agency determines that such failure does not warrant termination of this FSP contract, Agency may require such Participant to refund, with interest, payments received under this FSP contract, or require the Participant to accept such adjustments in the subsequent payment as are determined to be appropriate by Agency.

The FSP contract is effective when, as determined by Agency, it has been signed by the Participants, and an authorized representative of Agency. Except as otherwise determined by Agency, as permitted by regulations or other law, the FSP contract may not be revoked or revised unless by mutual agreement between the parties. If, after the effective date of this contract, Agency determines that the offered acreage was erroneously enrolled or otherwise ineligible for enrollment, Agency may terminate the contract. Such termination shall not effect payments already made to the Participant as of the time of termination. Within the dates established by Agency, the FSP contract must be signed by all required Participants.

In the event that a statute is enacted during the period of this FSP contract which would materially change the terms and conditions of this FSP contract, the Agency may require the Participants to elect between acceptance of modifications in this FSP contract consistent with the provisions of such statute or termination of this FSP contract.

The regulations in (state or federal statute) for the FSP are incorporated herein. In the event of a conflict between these regulations and the terms of this Appendix, the provisions of the regulations will prevail.