20100099 Ver 2_Final MBI_20120320

��� N r o f ors
LC �' N
�z IN REPLY REFER TO
Regulatory Division
DEPARTMENT OF THE ARMY
WILMINGTON DISTRICT CORPS OF ENGINEERS
Washington Regulatory Field Office
Post Office Box 1000
Washington North Carolina 27889 -1000
March 19 2012
io -ooqg
Re Notification of Intent to Approve the Pancho Stream and Wetland Mitigation Plan
SAW- 2010 -00142
Mr Ian McMillan
Division of Water Quality
North Carolina Department of Environment
and Natural Resources
Mail Service Center 1650
Raleigh, North Carolina 27699 -1650
Dear NCIRT Member
D
MAR 2 0 2012
DENR WAi, R QUALITY
kltANDa AND STORMWATER BRANCH
The purpose of this letter is to provide you with a copy of the Final Mitigation Banking
Instrument for the Pancho Stream and Wetland Mitigation Bank in Wayne County North Carolina
Tlis letter also notifies you of our intent to approve the attached version of the Mitigation Banking
Instrument
Following the review of the Draft Instrument we received comments from the Interagency
Review Team (IRT) members We have worked with Restoration Systems LLC to address the
comments which have been incorporated into the attached version, and it is our intent to approve this
instrument In accordance with Section 332 8(d)(8) of the Mitigation Rule if any IRT member
objects to the approval of this instrument they may initiate the dispute resolution process by
notifying the district engineer within 15 days of the receipt of this letter Please note that this
process which is explained in Section 332 8(e) of the Mitigation Rule may only be initiated in
writing by a senior official of the agencies representing the IRT The deadline for mntnating this
process is April 3, 2012
Provided that no member objects to the approval of this instrument, we will begin the process
of obtaining agency signatures on the final instrument shortly after this deadline

Thank you for your prompt attention to this matter, and if you have any questions regarding
this letter the mitigation plan review process or the requirements of the Mitigation Rule please call
me at 910- 251 -4627
Sincerely
Tracey L Wheeler
Regulatory Project Manager
Copies Furnished
With Enclosures
Mr Jeffery Garnett
Wetlands and Marine Regulatory Section
Water Protection Division — Region IV
United States Environmental Protection Agency
61 Forsyth Street SW
Atlanta, Georgia 30303
Mr John Ellis
United States Fish and Wildlife Service
Ecological Services - Raleigh Field Office
Post Office Box 33726
Raleigh North Carolina 27636 -3726
Mr David Cox
North Carolina Wildlife Resources Commission
1142 I -85 Service Road
Creedmoor North Carolina 27522
Mr Ian McMillan
Division of Water Quality
North Carolina Department of Environment
and Natural Resources
Mail Service Center 1650
Raleigh, North Carolina 27699 -1650
2

Without Enclosures
Ms Tara Disy Allden
Restoration Systems LLC
1101 Haynes Street Suite 211
Raleigh NC 27604
Electronic Copies Furnished
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(Version June 2009)
AGREEMENT TO ESTABLISH THE PANCHO STREAM & WETLAND MITIGATION
BANK
IN WAYNE COUNTY, NORTH CAROLINA
This Mitigation Banking Instrument (MBI) is made and entered into on the _ day of
2012, by the Restoration Systems LLC, hereinafter Sponsor, and the U S Army
Corps of Engineers (Corps) and each of the following agencies upon its execution of this MBI
the Environmental Protection Agency (EPA) the U S Fish and Wildlife Service (FWS) the
National Marine Fisheries Service (NMFS), the North Carolina Wildlife Resources Commission
(NCWRC), and the North Carolina Division of Water Quality (NCDWQ) The Corps, together
with the State and Federal agencies that execute this MBI are hereinafter collectively referred to
as the Interagency Review Team (IRT)
WHEREAS the purpose of this agreement is to establish a mitigation bank (Bank) providing
compensatory mitigation for unavoidable wetland impacts separately authorized by Section 404
Clean Water Act permits and /or Section 10 of the Rivers and Harbors Act permits in appropriate
circumstances
WHEREAS the Sponsor is the record owner of two certain parcels of land, totaling
approximately 65 acres and comprising the Pancho Stream & Wetland Mitigation Bank located
in Wayne County, North Carolina, described in the Pancho Stream & Wetland Mitigation
Bank Mitigation Plan (Mitigation Plan — Appendix A), and as shown on the attached survey
(Property — Appendix B)
WHEREAS the agencies comprising the IRT agree that the Bank site is a suitable mitigation
bank site, and that implementation of the Mitigation Plan is likely to result in net gains in
wetland and stream functions at the Bank site, and have therefore approved the Mitigation Plan
THEREFORE it is mutually agreed among the parties to this agreement that the following
provisions are adopted and will be implemented upon signature of this MBI
Section I General Provisions
A The Sponsor is responsible for assuring the success of the restoration enhancement and
preservation activities at the Bank site and for the overall operation and management of the
Bank The Sponsor assumes the legal responsibility for providing the compensatory mitigation
once a permittee secures credits from the Sponsor and the DE receives documentation that
confirms the Sponsor has accepted responsibility for providing the required compensatory
mitigation
B The goal of the Bank is to restore, enhance, and preserve riparian wetland and associated
stream systems and their functions to compensate in appropriate circumstances for unavoidable
wetland and stream impacts authorized by Section 404 of the Clean Water Act permits and or

(Version June 2009)
Section 10 of the Rivers and Harbors Act permits in circumstances deemed appropriate by the
Corps after consultation through the permit review process, with members of the IRT
C Use of credits from the Bank to offset wetland impacts authorized by Clean Water Act
permits must be in compliance with the Clean Water Act and implementing regulations
including but not limited to the 404(b)(1) Guidelines the National Environmental Policy Act
and all other applicable Federal and State legislation rules and regulations This agreement has
been drafted in accordance with the regulations for Compensatory Mitigation for Losses of
Aquatic Resources effective June 9 2008 (33 CFR Parts 325 and 332) ( Mitigation Rule )
D The IRT shall be chaired by the District Engineer (DE) of the U S Army Corps of Engineers,
Wilmington District The IRT shall review documentation for the establishment of mitigation
banks The IRT will also advise the DE in assessing monitoring reports recommending remedial
measures approving credit releases and approving modifications to this instrument The IRT s
role and responsibilities are more fully set forth in Sections 332 8 of the Mitigation Rule The
IRT will work to reach consensus on its actions
E The DE after consultation with the appropriate Federal and State review agencies through the
permit review process, shall make final decisions concerning the amount and type of
compensatory mitigation to be required for unavoidable permitted wetland impacts, and whether
or not the use of credits from the Bank is appropriate to offset those impacts In the case of
permit applications and compensatory mitigation required solely under the Section 401 Water
Quality Certification rules of North Carolina the N C Division of Water Quality (NCDWQ) will
determine the amount of credits that can be withdrawn from the Bank
F The parties to this agreement understand that a watershed approach to establish compensatory
mitigation must be used to the extent appropriate and practicable Where practicable in kind
compensatory mitigation is preferred
Section II Geographic Service Area
The Geographic Service Area (GSA) is the designated area within which the bank is authorized
to provide compensatory mitigation required by Department of Army permits The GSA for this
Bank is the Neuse River Basin 8 digit Cataloging Unit 03020201 of North Carolina (as shown in
Appendix C) This 8 digit unit is comprised of approximately 3125 square miles that is
characterized by two Level II ecoregions — the Southeastern Plains and the Piedmont
The Piedmont ecoregion comprises a transitional area between the mountainous regions of the
Appalachians and the relatively flat Coastal Plain The Piedmont is an erosional terrain of
moderately dissected irregular plains with some hills Soils are generally finer textured than
those found in the Coastal Plain regions with less sand and more clay The Level IV ecoregions
of the Piedmont contained within the 8 digit Cataloging Unit tend to have less relief lower
elevations and wider floodplains than other Level IV ecoregions in the Piedmont The
Southeastern Plains are characterized by irregular plains with broad interstream areas
2

(Version June 2009)
Elevations and relief are greater than in the Southern Coastal Plain ecoregion, but generally less
than in the Piedmont and Blue Ridge ecoregions (Griffith et al 2002a 2002b)
Ecoregion boundaries are often portrayed by a single line but in reality are transition zones that
can be represented by a distinct and abrupt change, or a blurred boundary that can be more
difficult to determine as the result of a heterogeneous mosaic of characteristics from each of the
adjacent areas The Bank is located within the Southeastern Floodplains and Low Terraces on
the border of the Rolling Coastal Plain in the Southeastern Plains ecoregion however, the Bank
also exhibits characteristics of the Piedmont ecoregion (Griffith et al 2002a, 2002b) The
change in topographic relief, moderately sloping valleys varying floodplam widths (narrow
upstream to wider downstream), moderate side slope to the east of Kennedy Mill Branch
proposed for Enhancement (Level II) and irregularly dissected plains with moderately gradient
streams which characterize the Bank and adjacent land are more representative of the Piedmont
ecoregion while soil series are more typical of the Southeastern Plains Therefore, this Bank is
proposed to offset impacts with unavoidable impacts associated with projects located within the
entire 8 digit Cataloging Unit 03020201 Use of the Bank to compensate for impacts beyond the
GSA may be considered by the Corps or the permitting agency on a case by case basis
The Bank is located within the Neuse River Basin in 14 digit United States Geological Survey
(USGS) Cataloging Unit and Targeted Local Watershed 03020201150050 of the South
Atlantic /Gulf Region (North Carolina Division of Water Quality [NCDWQ] Subbasm Number
03 04 04) (Figure 2 Appendix A) Primary considerations for Bank selection include in kind
mitigation and the potential for protection/improvement of water quality within a region of North
Carolina under heavy livestock and agriculture pressure More specifically, considerations
include desired aquatic resource functions hydrologic conditions, soil characteristics, aquatic
habitat diversity, habitat connectivity compatibility with adjacent land uses, reasonably
foreseeable effects the mitigation project will have on ecologically important aquatic and
terrestrial resources and potential development trends and land use changes
Currently the proposed Bank is characterized by hardwood forest pasture and agricultural land
The Bank is located in an area protected by state water supply classification and riparian buffer
rules however clearing of vegetation for row crop production and livestock grazing adjacent to
streams has resulted in stream bank erosion a decrease in flood attenuation and stream
entrenchment If the proposed stream and wetland mitigation does not occur, erosion and
nutrient inputs into the nutrient sensitive Neuse River basin are expected to continue In
addition continued wetland loss through livestock disturbance ditch maintenance stream
channel degradation and repetitive maintenance will occur
The Bank is located along Kennedy Mill Branch at the confluence with Mill Creek According
to the Final Neuse Raver Basanwade Water Quality Plan (NCDWQ 2009), due to the lack of
buffer along Kennedy Mill Branch this watershed should be targeted for land acquisition to
protect the nutrient sensitive Neuse River watershed The proposed restoration and enhancement
will result in improved water quality within the Bank and downstream of the Kennedy Mill
Branch watershed The Bank is located in a region of the state dominated by agriculture and

(Version June 2009)
livestock therefore restoration and enhancement of streams and wetlands is expected to result in
immediate water quality benefits in the vicinity of the Bank
Section III Mitigation Plan
The Mitigation Plan for the Pancho Mitigation Bank is submitted herewith and included
as Appendix A The Mitigation Plan contains the information listed in 332 4(c)(2) through (14)
of the Compensatory Mitigation Rule
A The proposed Bank encompasses agricultural land utilized for livestock grazing row crop
production, and forest Approximately 9 830 linear feet of Kennedy Mill Branch and unnamed
tributaries to Kennedy Mill Branch as well as 35 9 acres of hydric soil and drained wetlands
exhibit mitigation potential within the Bank parcels Currently pasture areas are accessible to
livestock and are routinely cleared and mowed for hay production, resulting in local disturbances
to stream banks and wetland soil surfaces Additional on site land use practices including the
maintenance and removal of riparian vegetation ditching of adjacent riparian wetlands, and
relocation, dredging, and channelization of onsite streams have resulted in degraded water
quality and excessive sedimentation resulting from unstable banks (stream entrenchment,
erosion, and bank collapse)
A more detailed description of the baseline conditions on the site is contained in the Mitigation
Plan
B The Sponsor will perform work described on pages 24 through 31 of the Mitigation Plan
including (1) restoration (priority I) of 5,322 linear feet of streams (2) restoration of 1,137
linear feet of braided Coastal Plain stream (3) enhancement (level I1) of 1 837 linear feet of
stream (4) preservation of 1 176 linear feet of stream (5) restoration of 29 0 acres of
jurisdictional wetland (6) enhancement of 1 5 acres of cleared jurisdictional wetlands (7)
preservation of 0 5 acres of forested jurisdictional wetland and (8) establishment of a permanent
conservation easement to encompass all mitigation activities as well as a minimum 50 foot
wooded riparian buffer adjacent to wetlands and streams
The purpose of this work and the objective of the Bank is to compensate for the loss of aquatic
functions in the GSA associated with permitted impacts Goals of this stream and wetland
mitigation project focus on improving water quality, enhancing flood attenuation and restoring
aquatic and riparian habitat within the Kennedy Mill Branch watershed Protection of restored
aquatic resources (riparian wetlands and streams) with a conservation easement is likely to result
in net gains in water quality and habitat functions of streams and wetlands located within the
Bank Primary goals will be accomplished through the following measures
• Removing nonpoint sources of pollution associated with agricultural activities including
a) removal of livestock from streams stream banks wetlands and floodplains, b)
eliminating the application of fertilizer pesticides, and other agricultural materials into
and adjacent to streams and wetlands and c) establishing a vegetative buffer adjacent to

(Version June 2009)
streams and wetlands to treat surface runoff which may contain pollutants such as
sediment and/or agricultural pollutants from the adjacent landscape
• Reducing sedimentation onsite and downstream by a) reducing bank erosion associated
with hoof shear and vegetation maintenance and b) planting a diverse woody vegetative
buffer adjacent to Kennedy Mill Branch and associated unnamed tributaries to Kennedy
Mill Branch
• Reestablishing stream stability and the capacity to transport watershed flows and
sediment loads by restoring stable dimension, pattern, and profile supported by natural in
stream habitat and grade/bank stabilization structures
• Promoting floodwater attenuation by a) reconnecting bankfull stream flows to the
abandoned floodplam terrace b) restoring secondary entrenched tributaries thereby
reducing floodwater velocities within smaller catchment basins c) restoring depressional
floodplain wetlands, resulting in increased storage capacity for floodwaters within the
Bank, and d) revegetathng the Bank s floodplains to increase frictional resistance on
floodwaters crossing the Bank
• Providing shallow wetland marsh treatment areas to intercept surface waters draining
through agricultural areas prior to discharging into Bank streams and wetlands
• Improving aquatic habitat by promoting stable stream banks shading open waters and
providing in stream structures within the Bank
• Providing wildlife habitat corridors within fragmented parcels in the Neuse River
watershed
C The Sponsors shall monitor the Bank Site as described on pages 34 through 35 of the
Mitigation Plan until such time as the IRT determines that the success criteria described on
pages 32 through 34 of the Mitigation Plan have been met
D The members of the IRT will be allowed reasonable access to the Property for the purposes
of inspection of the Property and compliance monitoring of the Mitigation Plan
Section IV Reportm�
A The Sponsor shall submit to the DE for distribution to each member of the IRT an annual
report describing the current condition of the Bank and the condition of the Bank in relation to
the success criteria in the Mitigation Plan The Sponsor shall provide to the DE any monitoring
reports described on page 32 of the Mitigation Plan
B The Sponsor shall provide ledger reports documenting credit transactions as described in
Section VIII of this MBI
C The Sponsor shall provide notification the DE each time a credit transaction occurs
5

(Version June 2009)
Section V Remedial Action
A The DE shall review the monitoring reports and may at any time, after consultation with the
Sponsor and the IRT direct the Sponsor to take remedial action at the Bank site Remedial
action required by the DE shall be designed to achieve the success criteria specified in the
Mitigation Plan All remedial actions required under this section shall include a work schedule
and monitoring criteria that will take into account physical and climactic conditions
B The Sponsor shall implement any remedial measures required pursuant to the above
C In the event the Sponsor determines that remedial action may be necessary to achieve the
required success criteria it shall provide notice of such proposed remedial action to all members
of the IRT No remedial actions shall be taken without the concurrence of the DE in
consultation with the IRT
Section VI Use of Mitigation Credits
Description of Wetland Community Types
A Wetland community types found in a mitigation bank will be described in accordance with the
procedures found in the NC Wetland Assessment Method (NC WAM USACE 2007) It is
expected that impacts to the NC WAM types listed below will be compensated by the Mitigation
Types as listed in order to qualify as In Kind mitigation Exceptions to the use of In Kind
mitigation may be allowed at the discretion of the permitting agencies on a case by case basis
Mitigation Wetland Group
NCWAM Type
CAMA CoastalWetland
Salt/Brackish Marsh*
Riverme
Riverme Swamp Forest/Non Tidal Freshwater Marsh Tidal
Freshwater Marsh
Ripanan/Nonnvenne
Bottomland Hardwood Forest Headwater Forest Flood
Plain Pool Mountain Bog* Estuarine Woody Wetland
Non Riparian
Non Riverme Swamp Forest Seep Basin Wetland
Pocosms, Estuarine Woody, Pine Flat, Pine Savannah
Hardwood Flat

(Version June 2009)
Proposed Mitigation
Activity
Proposed Mitigation
Mitigation
Ratio
Proposed Credits
Streams
(linear feet)
Riparian Wetlands
(acres)
Stream
Credits
Riparian
Wetland Credits
Stream Restoration
6459
1 1
6459
Stream Enhancement I
803
15 1
535
Stream Enhancement II
1837
25 1
735
Stream Preservation
1176
5 1
235
Wetland Restoration
290
1 1
290
Wetland Enhancement
15
2 1
08
Wetland Preservation
05
5 1
0 1
Totals
10,683
310
7 964
299
B It is anticipated by the parties that in most cases in which the DE, after consultation with the
IRT has determined that mitigation credits from the Bank may be used to offset wetland impacts
authorized by Section 404 permits and/or Section 10 permits that the Restoration Equivalents as
enumerated above constitute credits that are considered to be equal to restoration credits for the
purposes of compensatory mitigation Therefore the use of Restoration credits or Restoration
Equivalents credits, or any combination thereof is acceptable to the DE for any permit
requirement so long as the required amount of credits are debited for a given mitigation
requirements It is also understood that in order to satisfy mitigation requirements imposed by
the NC Division of Water Quality, that restoration impact amounts must be at a minimum of 1 1
such that for every one acre of impact at least one acre of mitigation must be in the form of
restoration Additionally, decisions regarding stream mitigation will be made consistent with
current policy and guidance and will be made on a case by case basis Wetland and stream
compensation ratios are determined by the DE on a case by case basis based on considerations of
functions of the wetlands and/or streams impacted the severity of the wetland and/or stream
impacts, the relative age of the mitigation site whether the compensatory mitigation is in kind,
and the physical proximity of the wetland and/or stream impacts to the Bank site
C Notwithstanding the above all decisions concerning the appropriateness of using credits from
the Bank to offset impacts to waters and wetlands as well as all decisions concerning the amount
and type of such credits to be used to offset wetland and water impacts authorized by Department
of the Army permits shall be made by the DE pursuant to Section 404 of the Clean Water Act
and implementing regulations and guidance after notice of any proposed use of the Bank to the
members of the IRT, and consultation with the members of the IRT concerning such use Notice
to and consultation with the members of the IRT shall be through the permit review process
Section VII Credit Release Schedule
All credit releases must be approved by the DE in consultation with the IRT based on a
determination that required success criteria have been achieved

(Version June 2009)
A Credit Release Schedule for Forested Wetlands If deemed appropriate by the IRT fifteen
percent (15 %) of the Bank s total restoration and enhancement credits and one hundred percent
(100 %) of the Bank s preservation credits shall be available for sale immediately upon
completion of all of the following
1 Execution of this MBI by the Sponsor the DE and other agencies eligible for membership
in the IRT who choose to execute this agreement,
2 Approval of the final Mitigation Plan
3 Mitigation bank site has been secured,
4 Delivery of the financial assurance described in Section IX of this MBI and
5 Recordation of the long term protection mechanism described in Section X of this MBI as
well as a title opinion covering the property acceptable to the DE
The Sponsor must complete the initial physical and biological improvements to the Bank site
pursuant to the Mitigation Plan no later than the first full growing season following initial
debiting of the Bank Subject to the Sponsor s continued satisfactory completion of all required
success criteria and monitoring additional restoration mitigation credits will be available for sale
by the Sponsor on the following schedule
1 15 % upon completion of all initial physical and biological improvements made pursuant
to the Mitigation Plan (total 30 %),
2 10% after first year, if interim success measures are met (total 40 %)
3 10% after second year if interim success measures are met (total 50 %)
4 10% after third year, if interim success measures are met (total 60 %)
5 10% after fourth year, if interim success measures are met (total 70 %)
6 10% after fifth year, if Success Cntena are met (total 80 %)
7 10% after sixth year if vegetative Success Cntena are met (90 %), and
8 10% after seventh year if vegetative Success Cntena are met (100 %)
Interim success criteria will be measured and documented in an annual Monitoring Report to be
submitted to the IRT no later than December 31 of each calendar year after construction is
complete Performance standards for the wetlands are described in Section 9 of the Mitigation
Plan Provided that all Success Cntena are met the IRT may allow the Sponsor to discontinue
hydrologic monitoring after the fifth year The Sponsor will be required to monitor vegetation
for an additional two years after the fifth year for a total of seven years
B Credit Release Schedule for Streams
If deemed appropriate by the IRT, fifteen percent (15 %) of the Bank s total restoration and
enhancement credits and one hundred percent (100 %) of the Bank s preservation credits shall be
available for sale immediately upon completion of all of the following
1 Execution of this MBI by the Sponsor the DE and other agencies eligible for membership
in the IRT who choose to execute this agreement
2 Approval of the final Mitigation Plan

(Version June 2009)
3 Mitigation bank site has been secured
4 Delivery of the financial assurance described in Section IX of this MBI and
5 Recordation of the long term protection mechanism described in Section X of this MBI as
well as a title opinion covering the property acceptable to the DE
The Sponsor must complete the initial physical and biological improvements to the Bank site
pursuant to the Mitigation Plan no later than the first full growing season following initial
debiting of the Bank Subject to the Sponsor s continued satisfactory completion of all required
success criteria and monitoring additional restoration mitigation credits will be available for sale
by the Sponsor on the following schedule
1 15 % upon completion of all initial physical and biological improvements made pursuant
to the Mitigation Plan (total 30 %),
2 10% after first year if interim success measures are met (total 40 %),
3 10% after second year if interim success measures are met (total 50 %),
4 5% after third year if interim success measures are met (total 60 %),
5 10% after fourth year if interim success measures are met (total 70 %),
6 10% after fifth year if Success Criteria are met (total 80 %),
7 5% after sixth year if vegetative Success Criteria are met (90 %) and
8 10% after seventh year, if vegetative Success Criteria are met (100 %)
10% after bankfull event performance standard has been met
Interim success criteria will be measured and documented in an annual Monitoring Report to be
submitted to the IRT no later than December 31 of each calendar year after construction is
complete Performance standards for the wetlands are described in Section 9 of the Mitigation
Plan
If the monitoring of the site demonstrates that the site is successful by year 5 and no concerns
have been identified (vegetation stream stability etc ) the Sponsor may propose to terminate
monitoring of the site and forego the monitoring requirements of years 6 and 7 This provision is
only applicable if the site has consistently met all performance standards and at year 5 meet the
year 5 vegetation density standards (260 plants /acre) and the year 7 average height requirement
of 10 feet Early closure will only be provided through written approval from the USACE in
consultation with the NCIRT
Section VIII Accounting Procedures
A The Sponsor shall provide accounting procedures acceptable to the IRT for maintaining
accurate records of debits made from the Bank Such procedures include the generation of a
ledger by the Sponsor showing credits used at the time they are debited from the Bank (see
Appendix D) All ledger reports shall identify credits debited and remaining by type of credit
and shall include for each reported debit the Corps ORM ID number for the permit for which the
9

(Version June 2009)
credits were utilized and the permitted impacts for each resource type Each time an approved
credit transaction occurs the Sponsor must notify the DE within 30 days of the transaction
B The Sponsor shall prepare an annual ledger report on each anniversary of the date of
execution of this agreement showing all credits used, any changes in credit availability (e g
additional credits released credit sales suspended) and the beginning and ending balance of
credits remaining The Sponsor shall submit the annual report to the DE for distribution to each
member of the IRT until such time as all of the credits have been utilized or this agreement is
otherwise terminated
Section IX Financial Assurances
A The Sponsor shall provide either a Performance Bond underwritten by a surety company
licensed to do business in North Carolina with a Best s current rating of not less than A or a
casualty insurance policy in an appropriate form to be approved by the DE and in compliance
with current U S Army Corps of Engineers policy and guidance documents A Model
Performance Bond and Casualty Insurance Policy are included herein as Appendix E The
financial assurances instrument shall be presented to the Corps for timely review prior to
execution
a Additionally the Conservation Easement will designate the U S Army Corps of
Engineers as a party enabled to access the site and this document requires all
project specific reports and records to be provided to the Corps As such, the
Corps is enabled to determine the status of the site and to determine the
occurrence of default of the mitigation
b Prior to determination of default the bank sponsor shall be given a full
opportunity to remedy the Site to the satisfaction of the Corps
c The total value of the financial assurances shall be $1 091 060 00 which will be
split between construction in the amount of $774,653 and subsequently
monitoring in the amount of $316 407 These values include the amount
necessary to complete all tasks associated with the project from its current point
through to completion These include but are not limited to permitting
construction planting monitoring and a 30% contingency for regrading and /or
replanting
d Upon successful completion of the construction phase the value of the financial
assurances shall decrement in amounts proportional to the cost of carrying the
bank through to completion The project costs and bonding calculations are shown
in the Table below The Bank Sponsor will keep the Corps apprised of any issues
that may affect the project s financial assurances
10

(Version June 2009)
Pancho Cost Estimates & Bonding Worksheet
Item
Total Project
Cost
Cost of
Completed
Work
Future
(Bonded) Cost
Contingency
Fees (30 %)
Land
$1101590
$1101590
$0
Surveying
$50000
$19500
$30500
Easement
$70000
$0
$70000
Restoration Plan
$108638
$108638
$0
Project Construction
$523800
$0
$523800
$157140
Vegetation Planting
$51 000
$0
$51 000
$15 300
As Built Survey & Report
$11940
$0
$11 940
Project Monitoring
$0
$210000
Company Labor
.$210000
$23400
$7020
$16380
Legal Fees
$20000
$15000
$5000
Total
$2170368
$1 251 748
$918620
$172440
Financial assurances to complete all remaining tasks for the project will be divided into two
instruments one for Construction (including the As -Built Survey and Report) and one for
Monitoring Contingency fees (30% of the cost) for grading and planting are included an the
Construction Bond Remaining costs for the Sponsor s labor and legal fees were prorated Based
on these calculations the Construction Bond presented will be for $774 653 and the Monitoring
Bond will be for $316 407
B Financial assurances structured to provide funds to the Corps of Engineers in the event of
default by the Bank Sponsor are not acceptable
C A financial assurance must be in the form that ensures that the DE receives notification at
least 120 days in advance of any termination or revocation
Section X Long -Term Protection
A The Bank is comprised of two parcels, both of which are owned by Pancho Mitigation
Company LLC in fee simple Pancho Mitigation Company acquired three parcels to form the
Bank property Two were combined at closing so that now there are two parcels Documentation
of these transactions is included in Appendix B Prior to the first credit release a Permanent
Conservation Easement, substantially in the form included as Appendix F will be submitted to
the Wilmington District s Office of Counsel for review Upon written approval by the Corps
Office of Counsel the CE will be recorded in the land records at the Office of the Clerk of the
Superior Court in the county in which the land lies A copy of the recorded CE, showing book
and page numbers of the recorded location shall be provided to Office of Counsel Pancho
Mitigation Company, LLC shall grant a CE to be held by the Sponsor in form acceptable to the
IRT, sufficient to protect the Bank site in perpetuity The CE shall be perpetual, preserve all
natural areas, and prohibit all use of the property inconsistent with its use as mitigation property,
including any activity that would materially alter the biological integrity or functional and
11

(Version June 2009)
educational value of wetlands or streams within the Bank site, consistent with the Mitigation
Plan The purpose of the CE will be to assure that future use of the Bank site will result in the
restoration protection, maintenance and enhancement of aquatic functions described in the
Mitigation Plan
B The Sponsor shall deliver a title opinion acceptable to the DE covering the mitigation
property The property shall be free and clear of any encumbrances that would conflict with its
use as mitigation including but not limited to, any liens that have priority over the recorded
preservation mechanism
C The Sponsor shall hold the Conservation Easement during the operational life of the bank
which is anticipated to be a period of seven to nine years (as shown in the Credit Release
Schedule) ending with project close out At project close out the Sponsor shall transfer the CE
to the North Carolina Wildlife Habitat Foundation ( NCWHF) A letter indicating the NCWHF s
willingness to accept the CE is attached as Appendix G As the owner of the property the
Sponsor will remain in the chain of title The Sponsor is responsible for ensuring that that the CE
is re recorded to ensure that it remains within the chain of title The terms and conditions of this
conveyance shall not conflict with the intent and provisions of the CE nor shall such conveyance
enlarge or modify the uses specified in the CE The CE will contain a provision requiring 60 day
advance notification to the DE before any action is taken to void or modify the CE, including
transfer of title to or establishment of any other legal claims over the project site
Section XI Long -term Management
A The Sponsor will retain primary oversight of the property throughout Bank implementation
and monitoring At project closeout the Sponsor shall implement the long term management
plan described in Section 11 of the Mitigation Plan
B The long term management plan includes a one time payment to the NCWHF sufficient to
provide for any long term maintenance identified in the long term management plan
Section XII Default and Closure
A It is agreed to establish and/or maintain the Bank site until (1) credits have been exhausted or
banking activity is voluntarily terminated with written notice by the Sponsor provided to the DE
and other members of the IRT and (ii) it has been determined and agreed upon by the DE and
IRT that the debited Bank site has satisfied all the conditions herein and in the Mitigation Plan
If the DE determines that the Bank site is not meeting performance standards or complying with
the terms of the instrument, appropriate action will be taken Such actions may include, but are
not limited to suspending credit sales adaptive management decreasing available credits
utilizing financial assurances, and terminating the instrument
12

(Version June 2009)
B Any delay or failure of Bank Sponsor shall not constitute a default hereunder if and to the
extent that such delay or failure is primarily caused by any act event or conditions beyond the
Sponsor s reasonable control and significantly adversely affects its ability to perform its
obligations hereunder including (i) acts of God, lightning, earthquake, fire landslide or
interference by third parties (ii) condemnation or other taking by any governmental body (iii)
change in applicable law regulation rule ordinance or permit condition, or the interpretation or
enforcement thereof (iv) any order ,judgment action or determination of any federal, state or
local court, administrative agency or government body or (v) the suspension or interruption of
any permit, license consent authorization or approval If the performance of the Bank Sponsor
is affected by any such event, Bank Sponsor shall give written notice thereof to the IRT as soon
as is reasonably practicable If such event occurs before the final availability of all credits for
sale, the Sponsor shall take remedial action to restore the property to its condition prior to such
event in a manner sufficient to provide adequate mitigation to cover credits that were sold prior
to such delay or failure to compensate for impacts to waters including wetlands authorized by
Department of the Army permits Such remedial action shall be taken by the Sponsor only to the
extent necessary and appropriate, as determined by the IRT
C At the end of the monitoring period, upon satisfaction of the performance standards, the
Sponsor may submit a request to close out the bank site to the DE The DE, in consultation with
the IRT shall use best efforts to review and comment on the request within 60 days of such
submittal If the DE determines the Sponsor has achieved the performance standards in
accordance with the mitigation plan and all obligations under this MBI, the DE shall issue a
close out letter to the Sponsor
Sect-ion XIII Miscellaneous
A Any agency participant may terminate its participation in the IRT with notice in writing to all
other parties to this agreement Termination shall be effective seven (7) days from placing
written notices in the United States mail Member withdrawal shall not affect any prior sale of
credits and all remaining parties shall continue to implement and enforce the terms of this MBI
B Modification of this MBI shall be in accordance with the procedures set forth in 332 8 of the
mitigation rule
C No third party shall be deemed a beneficiary hereof and no one except the signatories hereof
their successors and assigns shall be entitled to seek enforcement hereof
D This MBI constitutes the entire agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements or undertakings
E In the event any one or more of the provisions contained in this MBI are held to be invalid
illegal or unenforceable in any respect such invalidity illegality or unenforceablility will not
affect any other provisions hereof, and this MBI shall be construed as if such invalid illegal or
unenforceable provision had not been contained herein
13

(Version June 2009)
F This MBI shall be governed by and construed in accordance with the laws of North Carolina
and the United States as appropriate
G This MBI may be executed by the parties in any combination in one or more counterparts
all of which together shall constitute but one and the same instrument
H The terms and conditions of this MBI shall be binding upon and inure to the benefit of the
parties hereto and their respective successors
I All notices and required reports shall be sent by regular mail to each of the parties at their
respective addresses provided below
Sponsor
Mr John Preyer
Restoration Systems LLC
1101 Haynes Street Suite 211
Raleigh NC 27604
Corps
Ms Tracey L Wheeler
Regulatory Project Manager
Department of the Army
Wilmington District Corps of Engineers
Washington Regulatory Field Office
Post Office Box 1000
Washington NC 27889 1000
EPA
/Ms Becky Fox
Wetlands Regulatory Section Region IV
U S Environmental Protection Agency
1307 Firefly Road
Whittier, NC 28789
FWS
Mr John Ellis
U S Fish and Wildlife Service
Ecological Services — Raleigh Field Offic
Post Office Box 33726
Raleigh NC 27636 3726
14

(Version June 2009)
NMFS
Mr Ron Sechler
National Marine Fisheries NOAA
Habitat Conservation Division
101 Pivers Island Road
Beaufort NC 28516
NCWRC
Mr David Cox
North Carolina Wildlife Resources Commission
1142 185 Service Road
Creedmoor NC 27522
NCDWQ
Mr Ian McMillan
Division of Water Quality
North Carolina Department of Environment and
Natural Resources
Mail Service Center 1650
Raleigh NC 27699 1650
15

(Version June 2009)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement entitled
"Agreement To Establish The Pancho Mitigation Bank In Wayne County, North
Carolina"
Sponsor
U S Army Corps of Engineers
Date
By Date
16

(Version June 2009)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement entitled
"Agreement To Establish The * Mitigation Bank In * County, North Carolina"
U S Environmental Protection Agency
By
Date
U S Fish and Wildlife Service
By
Date
National Marine Fisheries Service
By
Date
N C Division of Water Quality
By
Date
N C Wildlife Resources Commission
By
Date
N C Division of Coastal Management
By Date
4
17

(Version June 2009)
List of Appendices
Appendix A Final Mitigation Plan
Appendix B Property Surveys and Legal Description
Appendix C Geographic Service Area
Appendix D Bank Ledger
Appendix E Model Performance Bond
Appendix F Model Conservation Easement
Appendix G North Carolina Wildlife Habitat Foundation Letter
0
18

(Version June 2009)
AGREEMENT TO ESTABLISH THE PANCHO STREAM & WETLAND MITIGATION
BANK
IN WAYNE COUNTY, NORTH CAROLINA
This Mitigation Banking Instrument (MBI) is made and entered into on the _ day of
2012 by the Restoration Systems LLC hereinafter Sponsor and the U S Army
Corps of Engineers (Corps) and each of the following agencies upon its execution of this MBI
the Environmental Protection Agency (EPA) the U S Fish and Wildlife Service (FWS) the
National Marine Fisheries Service (NMFS) the North Carolina Wildlife Resources Commission
(NCWRC) and the North Carolina Division of Water Quality (NCDWQ) The Corps together
with the State and Federal agencies that execute this MBI, are hereinafter collectively referred to
as the Interagency Review Team (IRT)
WHEREAS the purpose of this agreement is to establish a mitigation bank (Bank) providing
compensatory mitigation for unavoidable wetland impacts separately authorized by Section 404
Clean Water Act permits and /or Section 10 of the Rivers and Harbors Act permits in appropriate
circumstances,
WHEREAS the Sponsor is the record owner of two certain parcels of land totaling
approximately 65 acres and comprising the Pancho Stream & Wetland Mitigation Bank located
in Wayne County, North Carolina described in the Pancho Stream & Wetland Mitigation
Bank Mitigation Plan (Mitigation Plan — Appendix A) and as shown on the attached survey
(Property — Appendix B)
WHEREAS the agencies comprising the IRT agree that the Bank site is a suitable mitigation
bank site and that implementation of the Mitigation Plan is likely to result in net gains in
wetland and stream functions at the Bank site and have therefore approved the Mitigation Plan
THEREFORE it is mutually agreed among the parties to this agreement that the following
provisions are adopted and will be implemented upon signature of this MBI
Section I General Provisions
A The Sponsor is responsible for assuring the success of the restoration enhancement and
preservation activities at the Bank site, and for the overall operation and management of the
Bank The Sponsor assumes the legal responsibility for providing the compensatory mitigation
once a permittee secures credits from the Sponsor and the DE receives documentation that
confirms the Sponsor has accepted responsibility for providing the required compensatory
mitigation
B The goal of the Bank is to restore, enhance, and preserve riparian wetland and associated
stream systems and their functions to compensate in appropriate circumstances for unavoidable
wetland and stream impacts authorized by Section 404 of the Clean Water Act permits and or

(Version June 2009)
Section 10 of the Rivers and Harbors Act permits in circumstances deemed appropriate by the
Corps after consultation through the permit review process with members of the IRT
C Use of credits from the Bank to offset wetland impacts authorized by Clean Water Act
permits must be in compliance with the Clean Water Act and implementing regulations
including but not limited to the 404(b)(1) Guidelines the National Environmental Policy Act
and all other applicable Federal and State legislation, rules and regulations This agreement has
been drafted in accordance with the regulations for Compensatory Mitigation for Losses of
Aquatic Resources effective June 9 2008 (33 CFR Parts 325 and 332) ( Mitigation Rule )
D The IRT shall be chaired by the District Engineer (DE) of the U S Army Corps of Engineers
Wilmington District The IRT shall review documentation for the establishment of mitigation
banks The IRT will also advise the DE in assessing monitoring reports, recommending remedial
measures approving credit releases, and approving modifications to this instrument The IRT s
role and responsibilities are more fully set forth in Sections 332 8 of the Mitigation Rule The
IRT will work to reach consensus on its actions
E The DE after consultation with the appropriate Federal and State review agencies through the
permit review process shall make final decisions concerning the amount and type of
compensatory mitigation to be required for unavoidable permitted wetland impacts and whether
or not the use of credits from the Bank is appropriate to offset those impacts In the case of
permit applications and compensatory mitigation required solely under the Section 401 Water
Quality Certification rules of North Carolina the N C Division of Water Quality (NCDWQ) will
determine the amount of credits that can be withdrawn from the Bank
F The parties to this agreement understand that a watershed approach to establish compensatory
mitigation must be used to the extent appropriate and practicable Where practicable in kind
compensatory mitigation is preferred
Section II Geographic Service Area
The Geographic Service Area (GSA) is the designated area within which the bank is authorized
to provide compensatory mitigation required by Department of Army permits The GSA for this
Bank is the Neuse River Basin 8 digit Cataloging Unit 03020201 of North Carolina (as shown in
Appendix C) This 8 digit unit is comprised of approximately 3125 square miles that is
characterized by two Level II ecoregions — the Southeastern Plains and the Piedmont
The Piedmont ecoregion comprises a transitional area between the mountainous regions of the
Appalachians and the relatively flat Coastal Plain The Piedmont is an erosional terrain of
moderately dissected irregular plains with some hills Soils are generally finer textured than
those found in the Coastal Plain regions with less sand and more clay The Level IV ecoregions
of the Piedmont contained within the 8 digit Cataloging Unit tend to have less relief lower
elevations and wider floodplams than other Level IV ecoregions in the Piedmont The
Southeastern Plains are characterized by irregular plains with broad mterstream areas
2

(Version June 2009)
Elevations and relief are greater than in the Southern Coastal Plain ecoregion but generally less
than in the Piedmont and Blue Ridge ecoregions (Griffith et al 2002a 2002b)
Ecoregion boundaries are often portrayed by a single line, but in reality are transition zones that
can be represented by a distinct and abrupt change or a blurred boundary that can be more
difficult to determine as the result of a heterogeneous mosaic of characteristics from each of the
adjacent areas The Bank is located within the Southeastern Floodplams and Low Terraces on
the border of the Rolling Coastal Plain in the Southeastern Plains ecoregion however, the Bank
also exhibits characteristics of the Piedmont ecoregion (Griffith et al 2002a 2002b) The
change in topographic relief, moderately sloping valleys varying floodplam widths (narrow
upstream to wider downstream) moderate side slope to the east of Kennedy Mill Branch
proposed for Enhancement (Level II) and irregularly dissected plains with moderately gradient
streams, which characterize the Bank and adjacent land are more representative of the Piedmont
ecoregion while soil series are more typical of the Southeastern Plains Therefore, this Bank is
proposed to offset impacts with unavoidable impacts associated with projects located within the
entire 8 digit Cataloging Unit 03020201 Use of the Bank to compensate for impacts beyond the
GSA may be considered by the Corps or the permitting agency on a case by case basis
The Bank is located within the Neuse River Basin in 14 digit United States Geological Survey
(USGS) Cataloging Unit and Targeted Local Watershed 03020201150050 of the South
Atlantic /Gulf Region (North Carolina Division of Water Quality [NCDWQ] Subbasin Number
03 04 04) (Figure 2 Appendix A) Primary considerations for Bank selection include in kind
mitigation and the potential for protection/improvement of water quality within a region of North
Carolina under heavy livestock and agriculture pressure More specifically, considerations
include desired aquatic resource functions hydrologic conditions soil characteristics, aquatic
habitat diversity habitat connectivity, compatibility with adjacent land uses reasonably
foreseeable effects the mitigation project will have on ecologically important aquatic and
terrestrial resources and potential development trends and land use changes
Currently the proposed Bank is characterized by hardwood forest pasture and agricultural land
The Bank is located in an area protected by state water supply classification and riparian buffer
rules however clearing of vegetation for row crop production and livestock grazing adjacent to
streams has resulted in stream bank erosion a decrease in flood attenuation, and stream
entrenchment If the proposed stream and wetland mitigation does not occur erosion and
nutrient inputs into the nutrient sensitive Neuse River basin are expected to continue In
addition continued wetland loss through livestock disturbance, ditch maintenance stream
channel degradation and repetitive maintenance will occur
The Bank is located along Kennedy Mill Branch at the confluence with Mill Creek According
to the Final Neuse Raver Basinwide Water Quality Plan (NCDWQ 2009) due to the lack of
buffer along Kennedy Mill Branch, this watershed should be targeted for land acquisition to
protect the nutrient sensitive Neuse River watershed The proposed restoration and enhancement
will result in improved water quality within the Bank and downstream of the Kennedy Mill
Branch watershed The Bank is located in a region of the state dominated by agriculture and

(Version June 2009)
livestock therefore restoration and enhancement of streams and wetlands is expected to result in
immediate water quality benefits in the vicinity of the Bank
Section III Mitigation Plan
The Mitigation Plan for the Pancho Mitigation Bank is submitted herewith and included
as Appendix A The Mitigation Plan contains the information listed in 332 4(c)(2) through (14)
of the Compensatory Mitigation Rule
A The proposed Bank encompasses agricultural land utilized for livestock grazing, row crop
production and forest Approximately 9,830 linear feet of Kennedy Mill Branch and unnamed
tributaries to Kennedy Mill Branch as well as 35 9 acres of hydric soil and drained wetlands
exhibit mitigation potential within the Bank parcels Currently pasture areas are accessible to
livestock and are routinely cleared and mowed for hay production resulting in local disturbances
to stream banks and wetland soil surfaces Additional on site land use practices including the
maintenance and removal of riparian vegetation ditching of adjacent riparian wetlands, and
relocation dredging and channelization of onsite streams have resulted in degraded water
quality and excessive sedimentation resulting from unstable banks (stream entrenchment
erosion and bank collapse)
A more detailed description of the baseline conditions on the site is contained in the Mitigation
Plan
B The Sponsor will perform work described on pages 24 through 31 of the Mitigation Plan
including (1) restoration (priority I) of 5 322 linear feet of streams (2) restoration of 1,137
linear feet of braided Coastal Plain stream (3) enhancement (level II) of 1 837 linear feet of
stream (4) preservation of 1 176 linear feet of stream (5) restoration of 34-929 0 acres of
jurisdictional wetland (6) enhancement of 1 -75 acres of cleared jurisdictional wetlands (7)
preservation of 4-70 5 acres of forested jurisdictional wetland and (8) establishment of a
permanent conservation easement to encompass all mitigation activities, as well as a minimum
50 foot wooded riparian buffer adjacent to wetlands and streams
The purpose of this work and the objective of the Bank is to compensate for the loss of aquatic
functions in the GSA associated with permitted impacts Goals of this stream and wetland
mitigation project focus on improving water quality enhancing flood attenuation and restoring
aquatic and riparian habitat within the Kennedy Mill Branch watershed Protection of restored
aquatic resources (riparian wetlands and streams) with a conservation easement is likely to result
in net gains in water quality and habitat functions of streams and wetlands located within the
Bank Primary goals will be accomplished through the following measures
• Removing nonpomt sources of pollution associated with agricultural activities including
a) removal of livestock from streams, stream banks wetlands, and floodplams b)
eliminating the application of fertilizer pesticides and other agricultural materials into
and adjacent to streams and wetlands and c) establishing a vegetative buffer adjacent to
4

(Version June 2009)
streams and wetlands to treat surface runoff which may contain pollutants such as
sediment and/or agricultural pollutants from the adjacent landscape
• Reducing sedimentation onsite and downstream by a) reducing bank erosion associated
with hoof shear and vegetation maintenance and b) planting a diverse woody vegetative
buffer adjacent to Kennedy Mill Branch and associated unnamed tributaries to Kennedy
Mill Branch
• Reestablishing stream stability and the capacity to transport watershed flows and
sediment loads by restoring stable dimension, pattern, and profile supported by natural in
stream habitat and grade/bank stabilization structures
• Promoting floodwater attenuation by a) reconnecting bankfull stream flows to the
abandoned floodplam terrace, b) restoring secondary entrenched tributaries thereby
reducing floodwater velocities within smaller catchment basins c) restoring depressional
floodplam wetlands, resulting in increased storage capacity for floodwaters within the
Bank and d) revegetating the Bank s floodplains to increase factional resistance on
floodwaters crossing the Bank
• Providing shallow wetland marsh treatment areas to intercept surface waters draining
through agricultural areas prior to discharging into Bank streams and wetlands
• Improving aquatic habitat by promoting stable stream banks shading open waters, and
providing in stream structures within the Bank
• Providing wildlife habitat corridors within fragmented parcels in the Neuse River
watershed
C The Sponsors shall monitor the Bank Site as described on pages 34 through 35 of the
Mitigation Plan until such time as the IRT determines that the success criteria described on
pages 32 through 34 of the Mitigation Plan have been met
D The members of the IRT will be allowed reasonable access to the Property for the purposes
of inspection of the Property and compliance monitoring of the Mitigation Plan
Section IV Reportm�
A The Sponsor shall submit to the DE for distribution to each member of the IRT, an annual
report describing the current condition of the Bank and the condition of the Bank in relation to
the success criteria in the Mitigation Plan The Sponsor shall provide to the DE any monitoring
reports described on page 32 of the Mitigation Plan
B The Sponsor shall provide ledger reports documenting credit transactions as described in
Section VIII of this MBI
C The Sponsor shall provide notification the DE each time a credit transaction occurs
5

(Version June 2009)
Section V Remedial Action
A The DE shall review the monitoring reports and may at any time after consultation with the
Sponsor and the IRT direct the Sponsor to take remedial action at the Bank site Remedial
action required by the DE shall be designed to achieve the success criteria specified in the
Mitigation Plan All remedial actions required under this section shall include a work schedule
and monitoring criteria that will take into account physical and climactic conditions
B The Sponsor shall implement any remedial measures required pursuant to the above
C In the event the Sponsor determines that remedial action may be necessary to achieve the
required success criteria, it shall provide notice of such proposed remedial action to all members
of the IRT No remedial actions shall be taken without the concurrence of the DE in
consultation with the IRT
Section VI Use of Mitigation Credits
Description of Wetland Community Types
A Wetland community types found in a mitigation bank will be described in accordance with the
procedures found in the NC Wetland Assessment Method (NC WAM, USACE 2007) It is
expected that impacts to the NC WAM types listed below will be compensated by the Mitigation
Types as listed in order to qualify as In Kind mitigation Exceptions to the use of In Kind
mitigation may be allowed at the discretion of the permitting agencies on a case by case basis
Mitigation Wetland Group
NCWAM Type
CAMA CoastalWetland
Salt/Brackish Marsh*
Riverme
Rivenne Swamp Forest/Non Tidal Freshwater Marsh Tidal
Freshwater Marsh
Ripanan/Nonnvenne
Bottomland Hardwood Forest Headwater Forest Flood
Plain Pool Mountain Bog* Estuarine Woody Wetland
Non Riparian
Non Riverme Swamp Forest Seep, Basin Wetland,
Pocosms Estuarine Woody Pine Flat, Pine Savannah
Hardwood Flat
0

(Version June 2009)
Proposed Mitigation
Activity
Proposed Mitigation
Mitigation
Ratio
Proposed Credits
Streams
(linear feet)
Riparian Wetlands
(acres)
Stream
Credits
Riparian
Wetland
Credits
Stream Restoration
6459
1 1
6459
Stream Enhancement I
803
15 1
535
Stream Enhancement I1
1837
25 1
735
Stream Preservation
1176
5 1
235
Wetland Restoration
3 -1-829 0
1 1
34-9290
Wetland Enhancement
4-715
2 1
089
Wetland Preservation
05
5 1
01
Totals
10 683
-34-0310,
7 964
-3-2-8299
B It is anticipated by the parties that in most cases in which the DE after consultation with the
IRT, has determined that mitigation credits from the Bank may be used to offset wetland impacts
authorized by Section 404 permits and/or Section 10 permits that the Restoration Equivalents as
enumerated above constitute credits that are considered to be equal to restoration credits for the
purposes of compensatory mitigation Therefore the use of Restoration credits or Restoration
Equivalents credits, or any combination thereof, is acceptable to the DE for any permit
requirement so long as the required amount of credits are debited for a given mitigation
requirements It is also understood that in order to satisfy mitigation requirements imposed by
the NC Division of Water Quality that restoration impact amounts must be at a minimum of 1 1
such that for every one acre of impact, at least one acre of mitigation must be in the form of
restoration Additionally decisions regarding stream mitigation will be made consistent with
current policy and guidance and will be made on a case by case basis Wetland and stream
compensation ratios are determined by the DE on a case by case basis based on considerations of
functions of the wetlands and /or streams impacted, the severity of the wetland and /or stream
impacts, the relative age of the mitigation site whether the compensatory mitigation is in kind
and the physical proximity of the wetland and/or stream impacts to the Bank site
C Notwithstanding the above all decisions concerning the appropriateness of using credits from
the Bank to offset impacts to waters and wetlands as well as all decisions concerning the amount
and type of such credits to be used to offset wetland and water impacts authorized by Department
of the Army permits shall be made by the DE pursuant to Section 404 of the Clean Water Act
and implementing regulations and guidance after notice of any proposed use of the Bank to the
members of the IRT, and consultation with the members of the IRT concerning such use Notice
to and consultation with the members of the IRT shall be through the permit review process
Section VII Credit Release Schedule
All credit releases must be approved by the DE, in consultation with the IRT, based on a
determination that required success criteria have been achieved

(Version June 2009)
A Credit Release Schedule for Forested Wetlands If deemed appropriate by the IRT fifteen
percent (15 %) of the Bank s total restoration and enhancement credits and one hundred percent
(100 %) of the Bank s preservation credits shall be available for sale immediately upon
completion of all of the following
1 Execution of this MBI by the Sponsor the DE and other agencies eligible for membership
in the IRT who choose to execute this agreement,
2 Approval of the final Mitigation Plan,
3 Mitigation bank site has been secured
4 Delivery of the financial assurance described in Section IX of this MBI, and
5 Recordation of the long term protection mechanism described in Section X of this MBI as
well as a title opinion covering the property acceptable to the DE
The Sponsor must complete the initial physical and biological improvements to the Bank site
pursuant to the Mitigation Plan no later than the first full growing season following initial
debiting of the Bank Subject to the Sponsor s continued satisfactory completion of all required
success criteria and monitoring additional restoration mitigation credits will be available for sale
by the Sponsor on the following schedule
1 15 % upon completion of all initial physical and biological improvements made pursuant
to the Mitigation Plan (total 30 %)
2 10% after first year if interim success measures are met (total 40 %),
3 10% after second year if interim success measures are met (total 50 %)
4 10% after third year if interim success measures are met (total 60 %)
5 10% after fourth year if interim success measures are met (total 70 %)
6 10% after fifth year if Success Criteria are met (total 80 %),
7 10% after sixth year, if vegetative Success Criteria are met (90 %) and
8 10% after seventh year if vegetative Success Criteria are met (100 %)
Interim success criteria will be measured and documented in an annual Monitoring Report to be
submitted to the IRT no later than December 31 of each calendar year after construction is
complete Performance standards for the wetlands are described in Section 9 of the Mitigation
Plan Provided that all Success Criteria are met the IRT may allow the Sponsor to discontinue
hydrologic monitoring after the fifth year The Sponsor will be required to monitor vegetation
for an additional two years after the fifth year for a total of seven years
B Credit Release Schedule for Streams
If deemed appropriate by the IRT fifteen percent (15 %) of the Bank s total restoration and
enhancement credits and one hundred percent (100°/x) of the Bank s preservation credits shall be
available for sale immediately upon completion of all of the following
1 Execution of this MBI by the Sponsor the DE and other agencies eligible for membership
in the IRT who choose to execute this agreement
2 Approval of the final Mitigation Plan

(Version June 2009)
3 Mitigation bank site has been secured,
4 Delivery of the financial assurance described in Section IX of this MBI, and
5 Recordation of the long term protection mechanism described in Section X of this MBI as
well as a title opinion covering the property acceptable to the DE
The Sponsor must complete the initial physical and biological improvements to the Bank site
pursuant to the Mitigation Plan no later than the first full growing season following initial
debiting of the Bank Subject to the Sponsor s continued satisfactory completion of all required
success criteria and monitoring, additional restoration mitigation credits will be available for sale
by the Sponsor on the following schedule
1 15 % upon completion of all initial physical and biological improvements made pursuant
to the Mitigation Plan (total 30 %)
2 10% after first year, if interim success measures are met (total 40 %)
3 10% after second year if interim success measures are met (total 50 %),
4 4-05% after third year, if interim success measures are met (total 60 %)
5 10% after fourth year, if interim success measures are met (total 70 %)
6 10% after fifth year if Success Criteria are met (total 80 %),
7 4-05% after sixth year if vegetative Success Criteria are met (90 %), and
8 10% after seventh year if vegetative Success Criteria are met (100 %)
—10% after bankfull event performance standard has been met
Interim success criteria will be measured and documented in an annual Monitoring Report to be
submitted to the IRT no later than December 31 of each calendar year after construction is
complete Performance standards for the wetlands are described in Section 9 of the Mitigation
Plan
If the monitoring of the site demonstrates that the site is successful by year 5 and no concerns
have been identified (vegetation stream stability, etc ) the Sponsor may propose to terminate
monitoring of the site and forego the monitoring requirements of years 6 and 7 This provision is
only applicable if the site has consistently met all performance standards and at year 5 meet the
year 5 vegetation density standards (260 plants /acre) and the year 7 average height requirement
of 10 feet Early closure will only be provided through written approval from the USACE in
consultation with the NCIRT
Section VIII Accounting Procedures
A The Sponsor shall provide accounting procedures acceptable to the IRT for maintaining
accurate records of debits made from the Bank Such procedures include the generation of a
ledger by the Sponsor showing credits used at the time they are debited from the Bank (see
Appendix D) All ledger reports shall identify credits debited and remaining by type of credit
and shall include for each reported debit the Corps ORM ID number for the permit for which the

(Version June 2009)
credits were utilized and the permitted impacts for each resource type Each time an approved
credit transaction occurs the Sponsor must notify the DE within 30 days of the transaction
B The Sponsor shall prepare an annual ledger report, on each anniversary of the date of
execution of this agreement showing all credits used any changes in credit availability (e g
additional credits released, credit sales suspended) and the beginning and ending balance of
credits remaining The Sponsor shall submit the annual report to the DE for distribution to each
member of the IRT until such time as all of the credits have been utilized or this agreement is
otherwise terminated
Section IX Financial Assurances
A The Sponsor shall provide either a Performance Bond underwritten by a surety company
licensed to do business in North Carolina with a Best s current rating of not less than A or a
casualty insurance policy in an appropriate form to be approved by the DE and in compliance
with current U S Army Corps of Engineers policy and guidance documents A Model
Performance Bond and Casualty Insurance Policy are included herein as Appendix E The
financial assurances instrument shall be presented to the Corps for timely review prior to
execution
a Additionally, the Conservation Easement will designate the U S Army Corps of
Engineers as a party enabled to access the site and this document requires all
project specific reports and records to be provided to the Corps As such the
Corps is enabled to determine the status of the site and to determine the
occurrence of default of the mitigation
b Prior to determination of default the bank sponsor shall be given a full
opportunity to remedy the Site to the satisfaction of the Corps
c The total value of the financial assurances shall be $1 091 060 00 which will be
split between construction in the amount of $774 653 and subsequently
monitoring in the amount of $316 407 These values include the amount
necessary to complete all tasks associated with the project from its current point
through to completion These include but are not limited to permitting
construction planting monitoring and a 30% contingency for regrading and /or
replanting
d Upon successful completion of the construction phase the value of the financial
assurances shall decrement in amounts proportional to the cost of carrying the
bank through to completion The project costs and bonding calculations are shown
in the Table below The Bank Sponsor will keep the Corps apprised of any issues
that may affect the project s financial assurances
10

(Version June 2009)
Pancho Cost Estimates & Bonding Worksheet
Item
Total Project
Cost
Cost of
Completed
Work
Future
(Bonded) Cost
Contingency
Fees (30 %)
Land
$1101590
$1101590
$0
Surveying
$50000
$19500
$30500
Easement
$70000
$0
$70000
Restoration Plan
$108638
$108638
$0
Project Construction
$523800
$0
$523800
$157140
Vegetation Planting
$51 000
$0
$51 000
$15300
As Built Survey & Report
$11940
$0
$11940
Project Monitoring
$210000
$0
$210000
Company Labor
$23400
$7020
$16380
Legal Fees
$20000
$15000
$5000
Total
$2 170 368
$1 251 748
$918620
$172440
Financial assurances to complete all remaining tasks for the project will be divided into two
instruments one for Construction (including the As Built Survey and Report) and one for
Monitoring Contingency fees (30% of the cost) for grading and planting are included in the
Construction Bond Remaining costs for the Sponsor s labor and legal fees were prorated Based
on these calculations the Construction Bond presented will be for $774 653 and the Monitoring
Bond will be for $316 407
B Financial assurances structured to provide funds to the Corps of Engineers in the event of
default by the Bank Sponsor are not acceptable
C A financial assurance must be in the form that ensures that the DE receives notification at
least 120 days in advance of any termination or revocation
Section X Lone -Term Protection
A The Bank is comprised of two parcels both of which are owned by Pancho Mitigation
Company LLC in fee simple Pancho Mitigation Company acquired three parcels to form the
Bank property Two were combined at closing so that now there are two parcels Documentation
of these transactions is included in Appendix B Prior to the first credit release a Permanent
Conservation Easement substantially in the form included as Appendix F will be submitted to
the Wilmington District s Office of Counsel for review Upon written approval by the Corps
Office of Counsel the CE will be recorded in the land records at the Office of the Clerk of the
Superior Court in the county in which the land lies A copy of the recorded CE, showing book
and page numbers of the recorded location, shall be provided to Office of Counsel Pancho
Mitigation Company LLC shall grant a CE to be held by the Sponsor in form acceptable to the
IRT sufficient to protect the Bank site in perpetuity The CE shall be perpetual preserve all
natural areas, and prohibit all use of the property inconsistent with its use as mitigation property,
including any activity that would materially alter the biological integrity or functional and
11

(Version June 2009)
educational value of wetlands or streams within the Bank site consistent with the Mitigation
Plan The purpose of the CE will be to assure that future use of the Bank site will result in the
restoration protection maintenance and enhancement of aquatic functions described in the
Mitigation Plan
B The Sponsor shall deliver a title opinion acceptable to the DE covering the mitigation
property The property shall be free and clear of any encumbrances that would conflict with its
use as mitigation including, but not limited to, any liens that have priority over the recorded
preservation mechanism
C The Sponsor shall hold the Conservation Easement during the operational life of the bank
which is anticipated to be a period of seven to nine years (as shown in the Credit Release
Schedule) ending with project close out At project close out, the Sponsor shall transfer the CE
to the North Carolina Wildlife Habitat Foundation ( NCWHF) A letter indicating the NCWHF s
willingness to accept the CE is attached as Appendix G As the owner of the property the
Sponsor will remain in the chain of title The Sponsor is responsible for ensuring that that the CE
is re recorded to ensure that it remains within the chain of title The terms and conditions of this
conveyance shall not conflict with the intent and provisions of the CE nor shall such conveyance
enlarge or modify the uses specified in the CE The CE will contain a provision requiring 60 day
advance notification to the DE before any action is taken to void or modify the CE including
transfer of title to or establishment of any other legal claims over the project site
Section XI Lonp -term Management
A The Sponsor will retain primary oversight of the property throughout Bank implementation
and monitoring At project closeout the Sponsor shall implement the long term management
plan described in Section 11 of the Mitigation Plan
B The long term management plan includes a one time payment to the NCWHF sufficient to
provide for any long term maintenance identified in the long term management plan
Section XII Default and Closure
A It is agreed to establish and/or maintain the Bank site until (i) credits have been exhausted or
banking activity is voluntarily terminated with written notice by the Sponsor provided to the DE
and other members of the IRT and (n) it has been determined and agreed upon by the DE and
IRT that the debited Bank site has satisfied all the conditions herein and in the Mitigation Plan
If the DE determines that the Bank site is not meeting performance standards or complying with
the terms of the instrument appropriate action will be taken Such actions may include but are
not limited to suspending credit sales adaptive management decreasing available credits
utilizing financial assurances and terminating the instrument
12

(Version June 2009)
B Any delay or failure of Bank Sponsor shall not constitute a default hereunder if and to the
extent that such delay or failure is primarily caused by any act, event or conditions beyond the
Sponsor s reasonable control and significantly adversely affects its ability to perform its
obligations hereunder including (i) acts of God, lightning, earthquake fire landslide, or
interference by third parties (ii) condemnation or other taking by any governmental body, (iii)
change in applicable law regulation rule ordinance or permit condition or the interpretation or
enforcement thereof, (iv) any order ,judgment, action or determination of any federal state or
local court administrative agency or government body or (v) the suspension or interruption of
any permit license consent authorization or approval If the performance of the Bank Sponsor
is affected by any such event Bank Sponsor shall give written notice thereof to the IRT as soon
as is reasonably practicable If such event occurs before the final availability of all credits for
sale the Sponsor shall take remedial action to restore the property to its condition prior to such
event in a manner sufficient to provide adequate mitigation to cover credits that were sold prior
to such delay or failure to compensate for impacts to waters, including wetlands, authorized by
Department of the Army permits Such remedial action shall be taken by the Sponsor only to the
extent necessary and appropriate, as determined by the IRT
C At the end of the monitoring period, upon satisfaction of the performance standards the
Sponsor may submit a request to close out the bank site to the DE The DE in consultation with
the IRT shall use best efforts to review and comment on the request within 60 days of such
submittal If the DE determines the Sponsor has achieved the performance standards in
accordance with the mitigation plan and all obligations under this MBI the DE shall issue a
close out letter to the Sponsor
Section XIII Miscellaneous
A Any agency participant may terminate its participation in the IRT with notice in writing to all
other parties to this agreement Termination shall be effective seven (7) days from placing
written notices in the United States mail Member withdrawal shall not affect any prior sale of
credits and all remaining parties shall continue to implement and enforce the terms of this MBI
B Modification of this MBI shall be in accordance with the procedures set forth in 332 8 of the
mitigation rule
C No third party shall be deemed a beneficiary hereof and no one except the signatories hereof,
their successors and assigns shall be entitled to seek enforcement hereof
D This MBI constitutes the entire agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements or undertakings
E In the event any one or more of the provisions contained in this MBI are held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceablility will not
affect any other provisions hereof, and this MBI shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein
13

(Version June 2009)
F This MBI shall be governed by and construed in accordance with the laws of North Carolina
and the United States as appropriate
G This MBI may be executed by the parties in any combination in one or more counterparts
all of which together shall constitute but one and the same instrument
H The terms and conditions of this MBI shall be binding upon and inure to the benefit of the
parties hereto and their respective successors
I All notices and required reports shall be sent by regular mail to each of the parties at their
respective addresses provided below
Sponsor
Mr John Preyer
Restoration Systems LLC
1101 Haynes Street Suite 211
Raleigh NC 27604
Corps
Ms Tracey L Wheeler
Regulatory Project Manager
Department of the Army
Wilmington District Corps of Engineers
Washington Regulatory Field Office
Post Office Box 1000
Washington NC 27889 1000
EPA
/Ms Becky Fox
Wetlands Regulatory Section Region IV
U S Environmental Protection Agency
1307 Firefly Road
Whittier NC 28789
FWS
Mr John Ellis
U S Fish and Wildlife Service
Ecological Services — Raleigh Field Offic
Post Office Box 33726
Raleigh NC 27636 3726
14

(Version June 2009)
NMFS
Mr Ron Sechler
National Marine Fisheries NOAA
Habitat Conservation Division
101 Pivers Island Road
Beaufort, NC 28516
NCWRC
Mr David Cox
North Carolina Wildlife Resources Commission
1142 185 Service Road
Creedmoor NC 27522
NCDWQ
Mr Ian McMillan
Division of Water Quality
North Carolina Department of Environment and
Natural Resources
Mail Service Center 1650
Raleigh, NC 27699 1650
15

(Version June 2009)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement entitled
"Agreement To Establish The Pancho Mingahon Bank In Wayne County, North
Carolina"
Sponsor
U S Army Corps of Engineers
Date
By Date
16

(Version June 2009)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement entitled
"Agreement To Establish The * Mitigation Bank In * County, North Carolina"
U S Environmental Protection Agency
LIM
U S Fish and Wildlife Service
Date
By Date
National Marine Fisheries Service
By Date
N C Division of Water Quality
By Date
N C Wildlife Resources Commission
By Date
N C Division of Coastal Management
By Date
17

(Version June 2009)
List of Appendices
Appendix A Final Mitigation Plan
Appendix B Property Surveys and Legal Description
Appendix C Geographic Service Area
Appendix D Bank Ledger
Appendix E Model Performance Bond
Appendix F Model Conservation Easement
Appendix G North Carolina Wildlife Habitat Foundation Letter
18

MITIGATION PLAN
PANCHO MITIGATION BANK
Developed Through
RESTORATION, ENHANCEMENT, AND PRESERVATION
OF KENNEDY MILL BRANCH,
UNNAMED TRIBUTARIES, AND
RIVERINE WETLANDS
Wayne County, North Carohna
Axiom Environmental Inc
PREPARED BY
RESTORATION SYSTEMS LLC
1101 HAYNES STREET SUITE 211
RALEIGH NORTH CAROLINA 27604
AND
AXIOM ENVIRONMENTAL INC
218 SNOW AVENUE
RALEIGH NORTH CAROLINA 27603
MARCH 2012

EXECUTIVE SUMMARY
Restoration Systems LLC proposes the establishment of a stream and wetland mitigation bank at
the Pancho Mitigation Site (Bank) approximately 13 miles west of Goldsboro in western Wayne
County north of U S Highway 13 near the intersection of State Road 1008 (Stevens Mill Road)
and State Road 1105 (Dobbersville Road) The Bank is located within the Neuse River Basin in
14 digit United States Geological Survey Cataloging Unit and Targeted Local Watershed
03020201150050 of the South Atlantic /Gulf Region (North Carolina Division of Water Quality
Subbasm Number 03 04 04)
The proposed Bank encompasses agricultural land utilized for livestock grazing row crop
production and forest Kennedy Mill Branch and unnamed tributaries to Kennedy Mill Branch
as well as 31 0 acres of hydric soil and existing wetlands exhibit mitigation potential within the
Bank Pasture areas are accessible to livestock and are routinely cleared and mowed for hay
production resulting in local disturbances to stream banks and wetland soil surfaces Additional
land use practices including the maintenance and removal of riparian vegetation ditching of
adjacent riparian wetlands and relocation dredging and channelization of onsite streams have
resulted in degraded water quality and excessive sedimentation resulting from unstable banks
(stream entrenchment erosion and bank collapse) Protection of Bank resources through a
conservation easement will promote the sustainability and improvement of aquatic resources in
the Kennedy Mill Branch watershed as well as downstream of the Bank
Goals of this stream and wetland mitigation project focus on improving water quality enhancing
flood attenuation and restoring aquatic resources and riparian habitat within the Kennedy Mill
Branch watershed Protection of restored aquatic resources (riparian wetlands and streams) with
a conservation easement is likely to result in net gains in water quality and habitat functions of
streams and wetlands located within the Bank Primary goals will be accomplished through the
following measures
Improving Water Quality
• Removing nonpoint sources of pollution associated with agricultural activities including
a) removal of livestock from streams stream banks wetlands and floodplains b)
eliminating the application of fertilizer pesticides and other agricultural materials into
and adjacent to streams and wetlands and c) establishing a vegetative buffer adjacent to
streams and wetlands to treat surface runoff which may contain pollutants such as
sediment and /or agricultural pollutants from the adjacent landscape
• Reducing sedimentation onsite and downstream by a) reducing bank erosion associated
with hoof shear and vegetation maintenance and b) planting a diverse woody vegetative
buffer adjacent to Kennedy Mill Branch and associated unnamed tributaries to Kennedy
Mill Branch
• Providing shallow wetland marsh treatment areas to intercept surface waters draining
through agricultural areas prior to discharging into Bank streams and wetlands
Mitigation Plan Executive Summary page i
Pancho Stn eam and Wetland Mitigation Bank Reston ation Systems LLC

Enhancing Flood Attenuation
• Promoting floodwater attenuation by a) reconnecting bankfull stream flows to the
abandoned floodplain terrace b) restoring secondary entrenched tributaries thereby
reducing floodwater velocities within smaller catchment basins c) restoring depressional
floodplain wetlands resulting in increased storage capacity for floodwaters within the
Bank and d) revegetating the Bank s floodplains to increase frictional resistance on
floodwaters crossing the Bank
Restoring Aquatic Resources and Riparian Habitat
• Reestablishing stream stability and the capacity to transport watershed flows and
sediment loads by restoring stable dimension pattern and profile supported by natural in
stream habitat and grade/bank stabilization structures
• Improving aquatic habitat by promoting stable stream banks shading open waters and
providing in stream structures within the Bank
• Providing wildlife habitat corridors within fragmented parcels in the Neuse River
watershed
This mitigation plan includes 1) restoration (priority I) of 5322 linear feet of streams 2)
restoration of 1137 linear feet of braided Coastal Plain stream 3) enhancement (level I) of 803
linear feet of stream 4) enhancement (level II) of 1837 linear feet of stream 5) preservation of
1176 linear feet of stream 6) restoration of 29 0 acres of jurisdictional wetland 7) enhancement
of 15 acres of cleared jurisdictional wetlands 8) preservation of 0 5 acres of forested
jurisdictional wetland and 9) establishment of a permanent conservation easement to encompass
all mitigation activities as well as a minimum 50 foot wooded riparian buffer adjacent to
wetlands and streams
Mitigation options outlined in this report are as follows
After completion the Bank will offer 7964 stream mitigation credits and 29 9 riparian
wetland mitigation credits as determined using interagency guidelines outlined below
Mitigation Plan Erecutive Summary page !i
Pancho Sa eam and Wetland Mitigation Bank Restoi ation Systems LLC
Proposed Mitigation
Proposed Credits
Riparian
Proposed Mitigation
Mitigation
Activity
Riparian Wetlands
Ratio
Stream
Wetland
(linear
(linear feet)
(acres)
Credits
Credits
Stream Restoration
6459
1 1
6459
n
Stream Enhancement I
80-)
1 5 1
535
Stream Enhancement II
1837
4
25 1
735
,�.-
Stream Preservation
1176
5 1
235
Wetland Restoration
�M
290
1 1
1Q :-
290
Wetland Enhancement'
1 5
2 1
08
Wetland Preservation
05
5 1
0 1
Totals
10 683
310
11 4 ��
��� �� �,�.
7964
29 9
After completion the Bank will offer 7964 stream mitigation credits and 29 9 riparian
wetland mitigation credits as determined using interagency guidelines outlined below
Mitigation Plan Erecutive Summary page !i
Pancho Sa eam and Wetland Mitigation Bank Restoi ation Systems LLC

This project complies with interagency guidelines outlined in Information Regarding Stream
Restoration with Emphasis on the Coastal Plain — Draft (USACE et a12007) Stream Mitigation
Guidelines (USACE et al 2003) Mitigation Site Type (MIST) documentation (USEPA 1990)
and Compensatory Hardwood Mitigation Guidelines (DOA 1993) Specifically Bank selection
restoration goals and monitoring procedures /objectives comply with project design
considerations outlined by interagency guidance
In addition to providing mitigation for impacts to federally regulated aquatic resources as
described above upland areas of the Pancho Site will be used to offset nutrient inputs in the
Neuse River Basin as regulated by the North Carolina Division of Water Quality Those efforts
will be described and accounted for under separate documentation
Mitigation Plan Erecutive Summary page iii
Pancho Sti eam and Wetland Mitigation Bank Reston ation Systems LLC

TABLE OF CONTENTS
EXECUTIVE SUMMARY
I
10
INTRODUCTION
1
20
OBJECTIVES
2
30
WATERSHED APPROACH
3
3 1
BANK SELECTION
3
32
GEOGRAPHIC SERVICE AREA
5
40
BANK PROTECTION INSTRUMENT
6
50
BASELINE INFORMATION
6
5 1
PHYSIOGRAPHY TOPOGRAPHY AND LAND USE
6
52
WATER QUALITY
7
53
VEGETATION
7
54
SOILS AND LAND FORM
8
5 5
JURISDICTIONAL STREAMS AND WETLANDS
9
56
STREAM CHARACTERISTICS
12
57
STREAM POWER SHEAR STRESS AND STABILITY THRESHOLD
19
5 8
REFERENCE STUDIES
22
59
SURFACE WATER ANALYSIS AND HYDROLOGIC TRESPASS
24
5 10
FEDERALLY PROTECTED SPECIES
25
511
SITE DESIGN AND IMPLEMENTATION CONSTRAINTS
26
6 0
DETERMINATION OF CREDITS
26
61
CREDIT DETERMINATION
26
62
CREDIT RELEASE SCHEDULE
27
7 0
MITIGATION WORK PLAN
27
7 1
STREAM RESTORATION
28
72
STREAM ENHANCEMENT (LEVEL I)
31
7 3
STREAM ENHANCEMENT (LEVEL II)
31
74
STREAM PRESERVATION
31
75
WETLAND RESTORATION AND ENHANCEMENT
32
76
WETLAND PRESERVATION
33
77
PLANT COMMUNITY RESTORATION
33
78
PLANTING PLAN
34
8 0
MAINTENANCE PLAN
34
9 0
PERFORMANCE STANDARDS
36
91
STREAM SUCCESS CRITERIA
36
92
HYDROLOGY SUCCESS CRITERIA
38
9 3
VEGETATION SUCCESS CRITERIA
39
10 0
MONITORING REQUIREMENTS
39
10 1
STREAM MONITORING
40
10 2
HYDROLOGY MONITORING
41
10 3
VEGETATION MONITORING
41
10 4
BIOTIC COMMUNITY MONITORING
42
110
LONG TERM MANAGEMENT PLAN
42
12 0
ADAPTIVE MANAGEMENT PLAN
43
13 0
CORPORATE EXPERIENCE
43
14 0
REFERENCES
45
Mitigation Plan Table of Contents page i
Pancho Sti eam and Wetland Mitigation Bank Rester ation Systems LLC

APPENDICES
Appendix A Figures
Appendix B Existing Stream Data
Appendix C Flood Frequency Analysis Data
Appendix D Thornthwaite Analysis Data
LIST OF FIGURES
Figures IA 1B Project and Reference Locations
Figure 2 Hydrologic Unit Map
Figures 3A 3B Topography and Drainage Area
Figure 4 Existing Conditions and Soils
Figure 5A Reference Reach 1 Dimension Pattern and Profile
Figure 5B Reference Tar Kiln Branch Dimension Pattern and Profile
Figure 6 Mitigation Units
Figures 7A 7B Restoration Plan
Figure 8A Typical Structure Details
Figure 8B Typical Marsh Treatment Detail
Figure 9 NCWAM Wetland Types
Figure 10 Planting Plan
Figure B 1 Cross section Locations
LIST OF TABLES
Table I
Bank Soils
8
Table 2
Existing Stream Characteristics
9
Table 3
Results for Boussmesq Equation
11
Table 4
Thornthwaite Monthly Water Balance Model
12
Tables 5A 5C Stream Geometry and Classification
14 16
Table 6
Reference Reach Bankfull Discharge Analysis
17
Table 7
Stream Power (0) and Shear Stress (t) Values
22
Table 8
Reference Forest Ecosystem
24
Table 9
FSC Species Listed for Wayne County
25
Table 10
Proposed Mitigation Quantities vs Mitigation Credits
26
Table 11
Credit Release Schedule
27
Table 12
Planting Plan
35
Mitigation Plan Table of Contents page u
Paneho Sty eam and Wetland Mitigation Bank Restoi anon Systems LLC

MITIGATION PLAN
PANCHO MITIGATION BANK
RESTORATION, ENHANCEMENT, AND PRESERVATION
OF KENNEDY MILL BRANCH,
UNNAMED TRIBUTARIES, AND
RIVERINE WETLANDS
Wayne County, North Carolina
10 INTRODUCTION
Restoration Systems LLC proposes the establishment of a stream and wetland mitigation bank at
the Pancho Mitigation Site (hereafter the Bank) located approximately 13 miles west of
Goldsboro in western Wayne County north of U S Highway 13 near the intersection of State
Road 1008 (Stevens Mill Road) and State Road 1105 (Dobbersville Road) (Figure 1 A Appendix
A) The Bank is located within the Neuse River Basin in 14 digit United States Geological
Survey (USGS) Cataloging Unit and Targeted Local Watershed 03020201150050 of the South
Atlantic /Gulf Region (North Carolina Division of Water Quality [NCDWQ] Subbasm Number
03 04 04) (Figure 2 Appendix A) The Bank is expected to offset unavoidable impacts
associated with projects located within 8 digit Cataloging Unit 03020201 this is discussed in
further detail in Section 3 2 (Geographic Service Area)
This document serves as the Mitigation Plan for the Bank with supporting figures located in
Appendix A The Bank consists of agricultural land utilized for livestock grazing row crop
production and forest Approximately 9440 linear feet of existing Kennedy Mill Branch and
unnamed tributaries to Kennedy Mill Branch as well as 310 acres of hydric soil and existing
wetlands exhibit mitigation potential within the Bank Pasture areas are accessible to livestock
and are routinely cleared and mowed for hay production resulting in local disturbances to stream
banks and wetland soil surfaces Additional land use practices including the maintenance and
removal of riparian vegetation ditching of adjacent riparian wetlands and relocation dredging
and channelization of onsite streams have resulted in degraded water quality unstable banks
(stream entrenchment erosion and bank collapse)
Directions to the Bank
➢ From the City of Raleigh travel east on U S Highway 70
➢ Travel --37 miles on U S Highway 70 to the intersection with Martin Livestock Road
➢ Turn right at Martin Livestock Road (0 7 mile)
➢ Turn right at Progressive Church Road (4 miles)
➢ Turn left at Brogden Road (0 5 mile)
➢ Turn right at Richardson Bridge Road (5 3 miles)
➢ Turn left at T intersection onto Harper House Road which turns into Stevens Mill Road
(1 3 miles)
The Bank is located where Kennedy Mill Branch crosses Stevens Mill Road
o Latitude 35 333755° N Longitude 78 192699° W
Mitigation Plan page I
Pancho Sb eam and Wetland Mitigation Bank Restot ation Systems LLC

20 OBJECTIVES
The primary goals of this stream and wetland project focus on improving water quality
enhancing flood attenuation and restoring aquatic and riparian habitat to Kennedy Mill Branch
and its tributaries wetlands and floodplams Sediment from eroding banks is deleterious to
benthic macromvertebrate habitat and can be expected to reduce fisheries populations in the
existing and downstream reaches In addition proposed mitigation activities will create wildlife
and fish habitat shade /cool surface waters (thereby increasing dissolved oxygen levels) filter
nutrients reduce sedimentation reduce downstream flooding and increase bed morphology
(habitat) through maintenance of perpendicular flow vectors
The primary goals will be accomplished through the following measures
Improvmg Water Quality
• Removing nonpoint sources of pollution associated with agricultural activities including
a) removal of livestock from streams stream banks wetlands and floodplams b)
eliminating the application of fertilizer pesticides and other agricultural materials into
and adjacent to streams and wetlands and c) establishing a vegetative buffer adjacent to
streams and wetlands to treat surface runoff which may contain pollutants such as
sediment and/or agricultural pollutants from the adjacent landscape
• Reducing sedimentation onsite and downstream by a) reducing bank erosion associated
with hoof shear and vegetation maintenance and b) planting a diverse woody vegetative
buffer adjacent to Kennedy Mill Branch and associated unnamed tributaries to Kennedy
Mill Branch
• Providing shallow wetland marsh treatment areas to intercept surface waters draining
through agricultural areas prior to discharging into Bank streams and wetlands
Enhancing Flood Attenuation
• Promoting floodwater attenuation by a) reconnecting bankfull stream flows to the
abandoned floodplain terrace b) restoring secondary entrenched tributaries thereby
reducing floodwater velocities within smaller catchment basins c) restoring depressional
floodpaan wetlands resulting in increased storage capacity for floodwaters within the
Bank and d) revegetatmg the Bank s floodplams to increase frictional resistance on
floodwaters crossing the Bank
Restoring Aquatic Resources and Riparian Habitat
• Reestablishing stream stability and the capacity to transport watershed flows and
sediment loads by restoring stable dimension pattern and profile supported by natural in
stream habitat and grade/bank stabilization structures
• Improving aquatic habitat by promoting stable stream banks shading open waters and
providing in stream structures within the Bank
• Providing wildlife habitat corridors within fragmented parcels in the Neuse River
watershed
Mitigation Plan page 2
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Svstems LLC

These goals will be achieved by the following
• Providing 7964 stream mitigation units by the following
• Restoring approximately 5322 linear feet of stream channel through priority I
construction of stable channels thereby reestablishing stable dimension pattern and
profile
• Restoring approximately 1137 linear feet of braided stream channel by redirecting
stream flows into a braided backwater slough
• Enhancing (Level I) approximately 803 linear feet of stream channel by removing
invasive species protecting desirable hardwood trees greater than 4 inches in
diameter at breast height to the maximum extent possible restoring overbank
flooding/hydrodynamics by raising the bed elevation sloping channel banks and
supplementally planting where necessary
• Enhancing (Level II) approximately 1837 linear feet of stream channel by planting
riparian buffers with native woody vegetation and removing spoil material adjacent to
channels
• Preserving approximately 1176 linear feet of forested stream channel
• Providing 29 9 wetland mitigation units by the following
• Restoring approximately 29 0 acres of riparian wetlands by reconstructing stream
channels within the historic floodplain filling agricultural ditches removing livestock
and row crop production rehydrating floodplam soils and planting with native
woody vegetation
• Enhancing approximately 15 acres of riparian wetlands by 1) supplemental planting
areas high graded for lumber production or 2) removing livestock and planting with
native forest vegetation
• Preserving approximately 0 5 acres of existing forested riparian wetlands
• Planting a native woody riparian buffer adjacent to restored /enhanced streams and
wetlands within the Bank
• Protecting the Bank in perpetuity with a conservation easement
In addition to providing mitigation for impacts to federally regulated aquatic resources as
described above upland areas of the Pancho Site will be used to offset nutrient inputs in the
Neuse River Basin as regulated by the North Carolina Division of Water Quality Those efforts
will be described and accounted for under separate documentation
3 0 WATERSHED APPROACH
31 BANK SELECTION
Primary considerations for Bank selection include in kind mitigation and the potential for
protection/improvement of water quality within a region of North Carolina under heavy livestock
and agriculture pressure More specifically considerations include desired aquatic resource
functions hydrologic conditions soil characteristics aquatic habitat diversity habitat
connectivity compatibility with adjacent land uses reasonably foreseeable effects the mitigation
project will have on ecologically important aquatic and terrestrial resources and potential
development trends and land use changes
Mitigation Plan page 3
Pancho Sh eam and Wetland Mitigation Bank Restoi atron Systems LLC

Currently the proposed Bank is characterized by hardwood forest pasture and agricultural land
The Bank is located in an area protected by state water supply classification and riparian buffer
rules however clearing of vegetation for row crop production and livestock grazing adjacent to
streams has resulted in stream bank erosion a decrease in flood attenuation and stream
entrenchment If the proposed stream and wetland mitigation does not occur erosion and
nutrient inputs into the nutrient sensitive Neuse River basin are expected to continue In
addition continued wetland loss through livestock disturbance ditch maintenance stream
channel degradation and repetitive maintenance will occur
The Bank is located along Kennedy Mill Branch at the confluence with Mill Creek According
to the Final Neuse River Basimvtde Water Quality Plan (NCDWQ 2009) due to the lack of
buffer along Kennedy Mill Branch this watershed should be targeted for land acquisition to
protect the nutrient sensitive Neuse River watershed The proposed restoration and enhancement
will result in improved water quality within the Bank and downstream of the Kennedy Mill
Branch watershed The Bank is located in a region of the state dominated by agriculture and
livestock therefore restoration and enhancement of streams and wetlands is expected to result in
immediate water quality benefits in the vicinity of the Bank
During mitigation planning a variety of alternative mitigation activities were considered as
follows
• Enhancement was considered in upstream reaches of Kennedy Mill Branch south of
Steven Mill Road currently proposed for restoration However due to degradation of the
aquatic resources (both stream and wetland) resulting from land use activities it was
determined that restoration of streams at the historic floodplam elevation would provide
the greatest uplift to aquatic resources and increased flood attenuation
• Restoration was considered in the downstream reach of Kennedy Mill Branch to the north
of Stevens Mill Road currently proposed for Enhancement (Level II) The increase in
watershed size below the road and elevation constraints associated with the culvert at
Stevens Mill Road prohibit priority I restoration of the channel
• A single thread channel was considered on UT 7 however due to the nature of the
channel valley channel slope watershed hydrology source adjacent proposed wetlands
and topography it was determined this tributary will be better suited as a braided channel
with diffuse flow across restored forested riparian wetlands
• Enhhancement (Level Il) was considered at the upper extent of Kennedy Mill Branch and
the Main Tributary dust upstream of the restoration reaches Enhancement (Level II)
would have entailed leaving the existing channel depth and allowing the channels to fill
in overtime However it was determined that enhancement (level I) which will entail
shallowing the channel from a depth of 5 feet to a depth of 1 to 2 feet contouring stream
banks, removing invasive plant species and supplemental planting as necessary could be
completed with minimal disturbance to existing vegetation leaving as many desirable
hardwood trees greater than 4 inches in diameter at breast height as possible resulting in
the quickest uplift to aquatic resources
• UTs 3 and 4 were removed from the project due to their small size it is anticipated that
these channels once filled in will act as wetland complexes and will not have the flow to
maintain a defined braided channel system
Mitigation Plan page 4
Pancho Sn eam and Wetland Mitigation Bank Restot ation Svstems LLC

Completing Bank mitigation activities without the use of marsh treatment areas was
considered Marsh treatment areas were determined to be necessary to intercept surface
waters draining through agricultural areas prior to discharging into Bank streams and
wetlands
3 2 GEOGRAPHIC SERVICE AREA
The Geographic Service Area (GSA) is the designated area within which the bank is authorized
to provide compensatory mitigation required by Department of Army permits The GSA for this
Bank will include the Neuse River Basin 8 digit Cataloging Unit 03020201 of North Carolina
This 8 digit unit is comprised of approximately 3125 square miles that is characterized by two
Level II ecoregions (and a total of six Level IV ecoregions) as follows
Southeastern Plains
Southeastern Floodplams and Low Terraces
Rolling Coastal Plain
Piedmont
• Northern Outer Piedmont
• Southern Outer Piedmont
• Carolina Slate Belt
• Triassic Basins
The Piedmont ecoregion comprises a transitional area between the mountainous regions of the
Appalachians and the relatively flat Coastal Plain The Piedmont is an erosional terrain of
moderately dissected irregular plains with some hills Soils are generally finer textured than
those found in the Coastal Plain regions with less sand and more clay The Level IV ecoregions
of the Piedmont contained within the 8 digit Cataloging Unit tend to have less relief lower
elevations and wider floodplams than other Level IV ecoregions in the Piedmont The
Southeastern Plains are characterized by irregular plains with broad mterstream areas
Elevations and relief are greater than in the Southern Coastal Plain ecoregion but generally less
than in the Piedmont and Blue Ridge ecoregions (Griffith et at 2002a 2002b)
Ecoregion boundaries are often portrayed by a single line but in reality are transition zones that
can be represented by a distinct and abrupt change or a blurred boundary that can be more
difficult to determine as the result of a heterogeneous mosaic of characteristics from each of the
adjacent areas The Bank is located within the Southeastern Floodplains and Low Terraces on
the border of the Rolling Coastal Plain in the Southeastern Plains ecoregion however the Bank
also exhibits characteristics of the Piedmont ecoregion (Griffith et at 2002a 2002b) The
change, in topographic relief moderately sloping valleys varying floodplam widths (narrow
upstream to wider downstream) moderate side slope to the east of Kennedy Mill Branch
proposed for Enhancement (Level II) and irregularly dissected plains with moderately gradient
streams which characterize the Bank and adjacent land are more representative of the Piedmont
ecoregion while soil series are more typical of the Southeastern Plains Therefore this Bank is
proposed to offset impacts with unavoidable impacts associated with projects located within the
Mitigation Plan page.)
Pancho St, eam and Wetland Mitigation Bank Restoi ation Systems LLC

entire 8 -digit Cataloging Unit 03020201. Use of the Bank to compensate for impacts beyond the
GSA may be considered by the Corps or the permitting agency on a case -by -case basis.
4.0 BANK PROTECTION INSTRUMENT
The Site is comprised of two separate parcels both owned by Pancho Mitigation Company, LLC.
Prior to the first release of credits, a Conservation Easement will be placed on all project
property. The Sponsor shall hold the Conservation Easement during the operational life of the
bank, which is anticipated to be a period of seven to nine years (as shown in the Credit Release
Schedule), ending with project close out. At project close out, the Sponsor shall transfer the CE
to the North Carolina Wildlife Habitat Foundation (NCWHF). A letter indicating the NCWHF's
willingness to accept the CE is attached as Appendix G. As the owner of the property, the
Sponsor will remain in the chain of title. The Sponsor is responsible for ensuring that that the CE
is re- recorded to ensure that it remains within the chain of title. The terms and conditions of this
conveyance shall not conflict with the intent and provisions of the CE nor shall such conveyance
enlarge or modify the uses specified in the CE. The CE will contain a provision requiring 60 -day
advance notification to the DE before any action is taken to void or modify the CE, including
transfer of title to, or establishment of any other legal claims over, the project site.
5.0 BASELINE INFORMATION
The Bank is characterized by forest and agricultural land that is used for livestock grazing in the
southern portion of the Bank and row crop production in the northern portion of the Bank. The
northern and southern portions of the Bank are bisected by Stevens Mill Road. The main
hydrologic features of the Bank include Kennedy Mill Branch, six unnamed tributaries to
Kennedy Mill Branch (Main Tributary and UTs 1 -2, and 5 -7), and floodplains (Figure 4,
Appendix A).
5.1 PHYSIOGRAPHY, TOPOGRAPHY, AND LAND USE
The Bank is located in the Southeastern Floodplains and
Low Terraces ecoregion on the border of the Rolling
Coastal Plain ecoregion within the Southeastern Plains of
North Carolina in USGS HUC 03020201 (NCDWQ
Subbasin Number 03- 04 -06) of the Neuse River Basin.
Regional physiography
is characterized by
broad interstream
divides with gentle to
steep side slopes
dissected by numerous small, low to moderate gradient sandy
bottomed streams and major river floodplains, associated
terraces, and low gradient streams with sandy and silty
substrates (Griffith et al. 2002a). Onsite elevations range from
a high of 100 feet National Geodetic Vertical Datum (NGVD) on slopes to a low of
approximately 75 feet NGVD at the lowest point of the Bank (USGS Grantham, North Carolina
7.5- minute topographic quadrangle). Topography within the Bank is depicted on Figures 3A -3B
(Appendix A).
Mitigation Plan page 6
Pancho Stream and Wetland Mitigation Bank Restoration Systems, LLC

The Bank provides water quality functions to an approximately 3 3 square mile watershed at the
outfall of Kennedy Mill Branch from the Bank (Figure 3A Appendix A) The watershed is
dominated by pasture agricultural land forest and sparse residential property Impervious
surfaces account for less than 5 percent of the upstream watershed land surface
Surrounding area land use is primarily agricultural with some low- density residential housing
Onsite land use is characterized by hardwood forest agricultural land (row crop production) and
pasture (livestock) Riparian zones and wetland areas are primarily composed of herbaceous
vegetation with sparse hardwood canopy species along the streams Riparian vegetation adjacent
to restoration/enhancement reaches of the Bank is sparse and disturbed due to livestock grazing
bush hogging and regular maintenance activities
5 2 WATER QUALITY
The Bank is located within the Neuse River Basin in 14 digit USGS Cataloging Unit and
Targeted Local Watershed 03020201150050 of the South Atlantic /Gulf Region ( NCDWQ
Subbasm Number 03 04 04) (Figure 2 Appendix A) Kennedy Mill Branch drains to Mill Creek
which has been assigned Stream Index Number 27 52 -(1) and a Best Usage Classification of C,
NSW ( NCDWQ 2010c) These waters are suitable for all Class C uses including aquatic life
propagation and survival fishing wildlife secondary recreation and agriculture Secondary
recreation includes wading boating and other uses not involving human body contact with
waters on an organized or frequent basis The designation NSW (Nutrient Sensitive Waters)
includes areas with water quality problems associated with excessive plant growth resulting from
nutrient enrichment Local programs to control nonpomt sources and stormwater discharges of
pollution are required
NCDWQ has assembled a list of impaired waterbodies according to the Clean Water Act Section
303(d) and 40 CFR 130 7 which is a comprehensive public accounting of all impaired
waterbodies An impaired waterbody is one that does not meet water quality standards including
designated uses numeric and narrative criteria and anti degradation requirements defined in 40
CFR 131 Kennedy Mill Branch and Mill Creek within and adjacent to the Bank are not listed
on the NCDWQ draft 2010 or final 2008 303(d) lists however the Neuse River (Stream Index
Number 27 (49 5a) less than 1 5 miles downstream of the Bank is listed in the draft 2010 '30' )(d)
list for a standard violation reducing aquatic life integrity as the result of turbidity levels
( NCDWQ 2010a 2010b) Vegetation of Bank streams wetlands floodplams and slopes will
reduce sedimentation associated with bank erosion resulting from livestock and agricultural
practices
53 VEGETATION
The Bank is characterized primarily by mature to disturbed hardwood forest agricultural land
and pasture Agricultural land is dispersed along the margins of riparian zones in the northern
half of the Bank Disturbed hardwood forest occupies the southern portion of the Bank Pasture
dominates the majority of the Bank and consists primarily of fescue (Festuca sp ) crabgrass
(Digitaria sp) dog fennel (Eupatorium caplllifohum) rushes (Juncus sp) and sedges (Carex
sp ) Disturbed hardwood forest are characterized by mesic floodplain species adjacent to
stream channels such as river birch (Betula nigra), eastern red cedar (Jumperus vtrgtntana)
Mitigation Plan page 7
Pancho Sh earn and Wetland Mitigation Bank Restoi ation Systems LLC

willow oak (Ouercus phellos) red maple (Acer rubrum) sweetgum (Liquidambar styraciva)
black willow (Salix nigra) tulip tree (Liriodendron tulipifera) and American sycamore
(Platanus occtdentahs) Wetlands are dominated by emergent vegetation such as rushes sedges
polygonum ( Polygonum sp ) and meadow beauty (Rhexia sp )
5 4 SOILS AND LAND FORM
Based on county soil survey mapping (MRCS 2009) the Bank contains seven soil series Bibb
sandy loam (Typic Fluvaquent) Chewacla loam (Fluvaquentic Dystrudepts) Kalmia loamy sand
(Typic Hapludults) Kenansville loamy sand (Arentc Hapludults) Johnston loam (Cumulic
Humaquepts) Norfolk loamy sand (Typic Paleudults) and Wagram loamy sand (Arentc
Kandiudults) Bank soils are depicted on Figure 4 (Appendix A) and described in Table 1
Table 1 Bank Sods
MapUnit
Map Unit
Hydric
Description
Symbol
Name
Status
Bb
Bibb sandy
Hydric
The Bibb series consists of very deep poorly drained moderately permeable soils that
loam
formed in stratified loamy and sandy alluvium These soils are on floodplains of
streams in the coastal plain They are commonly flooded and water runs off the
surface very slowly Slopes range from 0 to 2 percent The water table is within 8
inches of the surface from 6 to 11 months each year
Ch
Chewacla
Hydric
The Chewacla series consists of very deep somewhat poorly drained moderately
loam
permeable soils that formed in stratified loamy and sandy alluvium These soils are on
floodplams of streams in the piedmont and coastal plain river valleys that dram out of
the Piedmont They frequently to rarely flood for brief to long periods Slopes range
from 0 to 2 percent Depth to seasonal high water table is generally 6 to 24 inches
from November to April Bedrock occurs at a depth of more than 80 inches
KaD
Kalmia
Non
The Kalmia series consists of well drained moderately permeable soils that formed in
loamy sand
hydric
stratified loamy and sandy alluvium These soils are on stream terraces that never or
rarely flood for very brief periods Slopes range from 0 and 6 percent Depth to the
seasonal high water table is 40 to 72 inches or more December to April Bedrock
occurs at a depth of more than 80 inches
Ke
Kenansville
Non
The Kenansville series consists of well drained nearly level to gently sloping soils on
loamy sand
hydric
Coastal Plain uplands and stream terraces They have formed in marine and fluvial
sediments Slopes are generally between 0 and 10 percent Depth to the seasonal high
water table is greater than 48 inches for the wet substratum phase Bedrock occurs at a
depth of more than 80 inches
Js
Johnston
Hydric
The Johnston series consists of very poorly drained moderately rapid permeable soils
loam
that formed in alluvium These soils are on floodplains and swamps of the lower and
upper coastal plain They frequently or occasionally flood for very brief to long
periods of time Slopes are generally between 0 and 2 percent Depth to the seasonal
high water table is 0 to 12 inches from November to May Bedrock occurs at a depth
of more than 80 inches
NoC
Norfolk
Non
The Norfolk series consists of well drained moderately permeable soils that formed in
loamy sand
hydric
marine and fluvial sediments These soils are on uplands or marine terraces in the
lower middle and upper coastal plain that never or rarely flood for very brief periods
of time Slopes are generally between 0 and 10 percent Depth to seasonal high water
table is 40 to 72 inches from January to March
WaB
Wagram
Hydric
The Wagram series consists of somewhat excessively drained moderately permeable
loamy sand
soils that formed in fluvial and marine sediments These soils are on uplands in the
middle and Lipper coastal plain that never or rarely flood for very brief periods of time
Slopes are generally between 0 and 15 percent Depth to seasonal high water table is
more than 60 inches Bedrock occurs at a depth of more than 80 inches
Mitigation Plan page 8
Pancho Sti eam and Wetland Mitigation Bank Rester ation Systems LLC

5 5 JURISDICTIONAL STREAMS AND WETLANDS
The main hydrologic features of the Bank include Kennedy Mill Branch unnamed tributaries to
Kennedy Mill Branch and associated riparian wetlands and floodplains Kennedy Mill Branch
drains an approximately 3 3 square mile watershed at the Bank s outfall Kennedy Mill Branch
is a third order bank to bank stream system and the Main Tributary to Kennedy Mill Branch is a
second order bank to -bank stream system which have been dredged and straightened and are
characterized by eroding banks bimodal sediment transport and disturbed riparian buffers The
five secondary tributaries (Unnamed Tributaries [UTs] 1 2 and 5 7) are disturbed first order
streams that have been ditched straightened and redirected (Figure 4 Appendix A)
Perennial streams within the Bank may be generally characterized as rivenne upper perennial
with unconsolidated bottoms consisting of sand (R3UB2) Intermittent streams within the Bank
may generally be characterized as riverine intermittent with streambeds consisting of sand and
mud (R4SB4) Streams located at the Bank are fully exposed to partially shaded by a mixture of
mature riparian vegetation and exhibit entrenchment and bank failure due to livestock and
agriculture practices located within the watershed The Bank encompasses approximately 9440
linear feet of existing stream channel proposed for mitigation (Table 2 and Figure 4 Appendix
A)
Table 2 Existin:i Stream Characteristics
Jurisdictional wetlands are defined by the presence of three criteria hydrophytic vegetation
hydric soils and evidence of wetland hydrology during the growing season (Environmental
Laboratory 1987) Portions of the Bank supporting jurisdictional wetlands may originally have
been characterized by palustrine forested wetlands which were seasonally flooded However
onsite wetland areas have been impacted by livestock trampling deforestation groundwater
draw down from stream channel incision floodplain ditching and excavation of the floodplain
Approximately 34 0 acres of the Bank s land area is currently underlain by hydric soils which
have been impacted by stream channel entrenchment ditching casting of spoil compaction due
to hoof shear and agricultural equipment and removal of native woody vegetation (Figure 4
Appendix A) Approximately 31 0 acres of the restored enhanced and preserved wetland will
Mitigation Plan page 9
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC
Approximate
USGS
USGS Stream
In Field Stream
Stream Reach
Stream Length
Stream Order
Classification
Classification
(linear feet)
Kennedy Mill
5271
third
perennial
perennial
Branch
Main Tributary
1770
second
intermittent
perennial
UT1
420
not shown
not shown
intermittent
UT2
360
not shown
not shown
intermittent
UT5
410
not shown
not shown
perennial
UT6
130
not shown
not shown
perennial
UT7
1080
first
intermittent
perennial
Total
9440
1r'11% &
I�zs�.�, �
VT
Jurisdictional wetlands are defined by the presence of three criteria hydrophytic vegetation
hydric soils and evidence of wetland hydrology during the growing season (Environmental
Laboratory 1987) Portions of the Bank supporting jurisdictional wetlands may originally have
been characterized by palustrine forested wetlands which were seasonally flooded However
onsite wetland areas have been impacted by livestock trampling deforestation groundwater
draw down from stream channel incision floodplain ditching and excavation of the floodplain
Approximately 34 0 acres of the Bank s land area is currently underlain by hydric soils which
have been impacted by stream channel entrenchment ditching casting of spoil compaction due
to hoof shear and agricultural equipment and removal of native woody vegetation (Figure 4
Appendix A) Approximately 31 0 acres of the restored enhanced and preserved wetland will
Mitigation Plan page 9
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

be used to generate mitigation credit. Extensive floodplain
manipulations associated with stream ditching and straightening,
deforestation, and floodplain ditching, have effectively removed
groundwater hydrology from these areas. In order to accurately
calculate wetland mitigation credits, a jurisdictional wetland
delineation was completed in July 2011 and subsequently revised as
requested and verbally approved by United States Army Corps of
Engineers (USACE) representative William Wescott during a field
meeting on November 3, 2011.
Portions of the Bank supporting jurisdictional wetlands are
characterized by semi - permanently flooded, palustrine wetlands
underlain by hydric soils that are dark (low chroma) in color and are
striated with lenses of coarse materials deposited in a fluvial environment. Vegetative
communities within wetlands proposed for preservation are composed of a well - developed forest
community while wetlands proposed for enhancement are composed of a single stratum of
herbaceous vegetation due to livestock grazing and routine maintenance. Groundwater springs
and surface runoff contribute hydrology to these areas, although historically the wetlands may
have additionally had a hydrological influence of overbank flooding.
Hydric soils have been mapped by the Natural Resource Conservation Service (MRCS) as
Johnston or Bibb; however, two wetland enhancement areas in the northern portion of the Bank,
located within a Chewacla map unit, appear to be characterized by Johnston/Bibb inclusions.
According to the Cowardin classification ( Cowardin et al. 1979), jurisdictional wetlands located
along Kennedy Mill Branch may be generally classified as palustrine, persistent emergent,
wetlands that are saturated, semipermanent, or seasonally flooded (PEM 1 Y).
Restoration efforts should focus on elevating groundwater tables through restoration of
entrenched stream channels, filling of secondary ditches, removal of livestock and row crop
production, and planting with native forest vegetation. These measures will restore
approximately 31.8 acres of jurisdictional wetland (29.0 acres of this area will generate
mitigation credit), enhance approximately 1.7 acres of jurisdictional wetland (1.5 acres of this
area will generate mitigation credit), and preserve approximately 0.5 acre of existing forested
wetland. Mitigation efforts should allow the floodplain to perform wetland functions such as
flood -flow suppression, nutrient cycling, and pollutant removal.
Groundwater Model
For this study, the Boussinesq equation was utilized to predict groundwater impacts associated
with floodplain and stream ditching. The Boussinesq equation represents a two - dimensional
general flow equation for unconfined aquifers. The equation has been applied in the past to
predict the decline in elevation of the water table near a pumping well as time progresses.
The Boussinesq equation was applied to Bank ditches to predict the linear distance of
groundwater drawdown that exceeds 1 foot for 12.5- percent of the growing season. The
percentage of the growing season (12.5 percent) was selected based upon guidance from the
Mitigation Plan page 10
Pancho Stream and Wetland Mitigation Bank Restoration Systems, LLC

Corps of Engineers Wetland Delineation Manual (Environmental Laboratory 1987) The
equation is solved for wetland impacts with data for the following variables 1) equivalent
hydraulic conductivity 2) drawable porosity 3) an estimated depth to the impermeable layer or
aquiclude 4) the time duration of the drawdown 5) target water table depth (1 foot below the
soil surface) and 6) minimum ditch depth
Results from the Boussmesq equation predicted lateral effects results of the Boussinesq equation
are summarized in Table 3 Restoration efforts should focus on elevating groundwater tables
through restoration of entrenched stream channels filling of secondary ditches removal of
livestock and planting with native forest vegetation These measures will restore approximately
31 8 acres of jurisdictional wetland and enhance approximately 1 7 acre of wetland Mitigation
efforts should allow the floodplam to perform wetland functions such as flood -flow suppression
nutrient cycling pollutant removal and provision of native species habitat
Table 3 Results for Boussinesa F.auntion
Sod
Ditch Depth
(ft)
Depth to
Aquaclude
(cm)
Ksat (cm /hr)
Growing
Season (his)
Dramable
Porosity (cm)
Ditch Impact
(ft)
Johnston
1
165
1054
672
002
13
2
165
1054
672
002
201
3
165
1054
672
002
273
4
165
1054
672
002
288
5
165
1054
672
002
317
1
165
3A
672
0019.)
7
2
165
334
672
0019.)
115
Bibb
3
165
3 34
672
0019.)
156
4
1 165
3 34
672
0019.)
165
5
165
3 34
672
0019,
182
Water Budget
A Thornthwaite monthly water balance with graphical user interface has been used to evaluate
the hydrologic cycle for a poorly drained small stream and floodplain in Wayne County North
Carolina The Thornthwaite model uses inputs of monthly measured temperature precipitation
and computed Potential Evapotranspiration (PET) to estimate monthly water surpluses which
may be in the form of runoff seepage or changes in water storage Predicted water surpluses for
this project are assumed to result in stream outflow and wetland hydrology success
Monthly precipitation and temperature data were obtained for a period of 1993 to 2003 from
Seymour Johnson Air Force Base located approximately 12 miles east of the Bank The field
capacity value used in this simulation was based on the drained volume upflux estimates for soil
moisture retention (0 20 millimeters) while depth of the root zone was estimated at 100
centimeters giving a soil moisture storage capacity (SOILma,) of 200 millimeters Due to the
poorly drained nature of Bank soils during the first month of the simulation (January 1993) the
initial soil moisture retention was assumed to be saturated (SOILo)
Mitigation Plan page 11
Pancho Sa eam and Wetland Mitigation Bank Restoi ateon Systems LLC

Thorrithwaite model results were subsequently compared to WETS data (available at
htty / /weww wcc nres usda 1?ov /ftpref /support/cllmate /wetlands /nc/37191 tact) for Wayne County
to determine if measured rainfall at the Bank was below within or above average rainfall
amounts WETS data predicts average annual rainfall to be between the ranges of 46 79 and
56 33 inches annually in Wayne County (WETS data may be found in Appendix D) Weather
data obtained for modeling purposes ranges between 39 0 inches and 710 inches annually
Specifically five years measured below average annual rainfall three years measured within
average annual rainfall amounts and two years measured above average rainfall Results of the
model are depicted in the following table and data for Thronthwaite output is located in
Appendix D
Table 4 Thornthwaite Monthly Water- Balance Model
Year
Annual Average
Precipitation (inches)*
WETS Data
Comparison **
Consecutive
Months with
Surplus Water
Storage
NRCS Wetland
Success Attained
Based on
Thornthwaite * **
1993
395
below average
4
Yes
1994
390
below average
3
No
1995
464
below average
2
No
1996
561
average
4
Yes
1997
429
average
4
Yes
1998
645
above average
4
Yes
1999
710
above average
3
No
2000
434
below average
4
Yes
2001
470
average
3
No
2002
417
below average
4
Yes
* Precipitation data from Seymour Johnson Air Force Base
** WETS data indicates average annual rainfall for Wayne County ranges between 46 79 and 56 33 inches
* ** NRCS wetland success based on traditional 12 5°/ of growing season between March 17 and November 14
Data presented in Table 4 indicate that in years with below average rainfall wetland hydrology
success may be attained 60 percent of the years monitored (3 years of success out of 5 years
modeled) Similarly for average rainfall years wetland hydrology would be successful 67
percent of years monitored (2 years of success out of 3 years modeled) High rainfall years have
been skewed by hurricanes in dry times of the year specifically Hurricane Floyd in 1999
During this year the model predicted that wetland criteria would not be met even though
precipitation was above average
5 6 STREAM CHARACTERISTICS
Bank streams have been characterized based on fluvial geomorphic principles (Rosgen 1996)
Tables 5A 5C provide a summary of measured stream geometry attributes under existing
conditions (considered to be unstable) and a preliminary estimate of potentially stable stream
attributes Preliminary estimates of stable stream attributes are based primarily upon
measurements of two reference reaches discussed further in Section 5 8 and Coastal Plain
regional curves (Geratz et al 2003)
Mitigation Plan Page 12
Pancho Stb eam and Wetland Mitigation Bank Restoi ation Svstems LLC

5 6 1 Drainage Area
Drainage basin sizes for restoration reaches range from 0 01 square mile for unnamed tributaries
to 2 9 square mile for Kennedy Mill Branch at Stevens Mill Road The Bank s discharge is
dominated by a combination of upstream basin catchment groundwater flow and precipitation
Based on reference measurements and regional curves the bankfull discharge for a 2 9 square
mile watershed is expected to average 17 8 cubic feet per second which is expected to overbank
every 0 1 to 0 3 years (Geratz et al 2003)
5 6 2 Discharge
Discharge estimates for the Site utilize an assumed definition of bankfull and the return
interval associated with that bankfull discharge For this study the bankfull channel is defined
as the channel dimensions designed to support the channel forming or dominant discharge
(Gordon et al 1992) Current research also estimates a bankfull discharge would be expected to
occur approximately every 0 1 to 0 3 years (Geratz et al 2003) This is much shorter than
previous state and nationwide estimates in other ecoregions of approximately every 13 to 15
years (Rosgen 1996 Leopold 1994) The shortened recurrence interval may be attributed to
precipitation inputs onto wide nearly level land with a large surface storage capacity an elevated
water table and slow flushing rates (Geratz et al 2003)
Based on available Coastal Plain regional curves the bankfull discharge for the reference reaches
averages approximately 5 8 and 12 0 cubic feet per second (cfs) for Reference Reach 1 and the
Reference at Tar Kiln Branch respectively (Geratz et al 2003) The USGS regional regression
equation for the Coastal Plain region indicates that bankfull discharge for the reference reaches at
a 0 1 to 0 3 year return interval average approximately 2 0 7 0 and 4 0 12 0 cfs respectively
(USGS 2001) In addition a stream roughness coefficient (n) was estimated using a version of
Arcement and Schneider s (1989) weighted method for Cowan s (1956) roughness component
values and applied to the following equation (Manning 1891) to obtain a bankfull discharge
estimate
Qbkf = [ 1 486/n] * [A* R2/3 * S 1/2]
where A equals bankfull area R equals bankfull hydraulic radius and S equals average water
surface slope The Manning s n method indicates that bankfull discharge for the reference
reaches average approximately 12 7 and 112 cfs respectively Field indicators of bankfull and
riffle cross sections were utilized to obtain an average bankfull cross sectional area for the
reference reaches The Coastal Plain regional curves were then utilized to plot the watershed
area and discharge for the reference reach cross sectional area Field indicators of bankfull
approximate an average discharge of 6 6 and 9 5 cfs respectively for the reference reaches
Based on the above analysis of methods to determine bankfull discharge proposed conditions at
the Site will be based on bankfull indicators found on the reference reaches and onsite indicators
of bankfull which results in an area 90 percent of the size indicated by Coastal Plain regional
curves Table 6 summarizes all methods analyzed for estimating bankfull discharge
Mitigation Plan page 13
Pancho Sti eam and Wetland Mitigation Bank Restoi, ation Systems LLC

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Table 513 Table of Morphological Stream Characteristics
Variables
Kenedy Mill Upstream of
Confluence
PROPOSED
Main Tributary EXISTING
Main Tributary PROPOSED
Stream Type
Ge5
Ce5
Ge5
Ce5
Drainage Area (mil)
17
17
11
11
Bankfull Discharge (cfs)
118
118
91
91
Dimension Variables
Dimension Variables
Bankfull Cross Sectional Area (Aba)
125
125
91
91
Existing Cross Sectional Area (A
61 95
125
63 885
91
Bankfull Width (Wbm)
Mean 113
Mean 132
Mean 85
Mean 11 3
Range 85 163
Range 122 141
Range 65 11 1
Range 104 121
Bankfull Mean Depth (Dbkf)
Mean 11
Mean 09
Mean 11
Mean 08
Range 08 15
Range 09 10
Range 08 14
Range 08 09
Bankfull Maximum Depth (Dm,,j
Mean 14
Mean 12
Mean 15
Mean 10
Range 10 19
Range 11 14
Range 13 19
Range 10 12
Pool Width W
Width ( WP. i)
No distinctive repetitive
Mean 171
No distinctive repetitive pattern of
Mean 147
pattern of riffles and pools
Range 132 21 1
riffles and pools due to
Range 113 181
Maximum Pool Depth (DP, 1)
due to channel disturbance
Mean 16
staightening activities
Mean 14
Range 14 25
Range 12 22
Mean 150
Mean 1500
Mean 120
Mean 150
Width of Floodprone Area (Wfpa)
Range 13 19 lRange
50 250
Range 405320
Range 50 250
Dimension Ratios
Dimension Ratios
Mean 12
Mean 114
Mean 18
Mean 133
Entrenchment Ratio (WiP�Wbu)
Range 12 18
Range 38 189
Range 14 18
Range 44 221
Mean 103
Mean 140
Mean 77
Mean 140
Width /Depth Ratio (Wb,d /Dbk,)
Range 57 204
Range 120 160
Range 46 139
Range 120 160
Mean 13
Mean 1 3
Mean 14
Mean 1 3
Max D/ D Ratio
bin bw
Range 13 13
Range 12 15
Range 14 16
Range 12 15
Mean 28
Mean 10
Mean 35
Mean 10
Low Bank Height / Max Dba Ratio
Range 24 47
Range 10 13
Range 33 36
Range 10 13
Maximum Pool Depth / Bankfull
Mean 18
Mean 18
Mean Depth (DP, i/DbM)
No distinctive repetitive
Range 1 5 2 8
No distinctive repetitive pattern of
Range 1 5 28
Pool Width /Bankfull
Mean 1 3
Mean 1 3
pattern of raffles and pools
raffles and pools due to
Width (W P, �•bld)
Y
due to channel disturbance
Range 1 0 1 6
staightening activities
Range 1 0 1 6
Pool Area / Bankfull
Mean 1 5
Mean 1 5
Cross Sectional Area
Range 1 0 19
Range 1 0 19
Pattern Variables
Pattern Variables
Med 462
Med 396
Pool to Pool Spacing (LP.P)
Range 330 792
Range 283 678
Med 80
Med 678
Meander Length (Lm)
No distinctive repetitive
Range 52 8 118 8
No distinctive repetitive pattern of
Range 45 2 101 7
pattern of riffles and pools
due to channel disturbance
g
riffles and pools due to
staightening activities
Belt Width (Wbei)
Med 264
Med 224
Range 198 462
Range 170 396
Med 330
Med 282
Radius of Curvature (R )
Range 264 660
lRange
226 565
Sinuosity (Sin)
117
120
114 1
120
Pattern Ratios
Pattern
Ratios
Pool to Pool Spacing/
Med 35
Med 35
Bankfull Width (LP_P/Wbid)
Range 25 60
Range 25 60
Meander Length/
Med 6 0
Med 60
Bankfull Width (L WWba)
No distinctive repetitive
pattern of raffles and pools
Range 40 90
No distinctive repetitive pattern of
riffles and pools due to
Range 4 0 9 0
Meander Width Ratio
due to channel disturbance
Med 20
staightening activities
Med 20
(Wbeii/Wbw)
Range 15 35
Range 15 35
Radius of Curvature/
Med 25
Med 25
Bankfull Width (RcN1/bM)
Range 20 50
Range 20 50
Profile Variables
Profile Variables
Average Water Surface Slope (S )
00027
00027
00047
00043
Valley Slope (S n Y)
00032
00032
00051
00051
Mean 00068
Mean 00108
Riffle Slope (S f(L)
Range 00054 00081
Range 00086 00129
Mean 00005
Mean 00009
Pool Slope (SPO i)
No distinctive repetitive
pattern of riffles and pools
Range 0 00011
No distinctive repetitive pattern of
riffles and pools due to
Range 0 00017
Mean 0 0011
Mean 0 0017
Run Slope (S,u)
due to channel disturbance
Range 0 00081
staightening activities
Range 0 00129
Mean 00008
Mean 00030
Glide Slope (SOd)
Range 0 00022
1
Range 0 00034
Profile Ratios
Profile Ratios
Riffle Slope/ Water Surface
Mean 250
Mean 250
Slope (S ffie/S )
No distinctive repetitive
Range 20 30
No distinctive repetitive pattern of
Range 20 30
Pool Slope/Water Surface
Mean 0 20
Mean 020
Range 0 0 4
Slope ( S � VS )
p
pattern of riffles and pools
Range 0 04
riffles and pools due to
g
040
Run SlopetWater Surface
due to channel disturbance
Mean 040
staightening activities
Mean
Slope (S, ,,/S )
Range 0 30
Range 0 30
Glide Slope/Water Surface
Mean 030
Mean 030
Slope (Sode/S )
Range 0 08
Range 0 08

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Table 6 Reference Reach Bankfull Discharee Analvsis
Method
Watershed Area
(square miles)
Return Interval
(years)
Discharge
(cfs)
Reference Reach 1
Coastal Plain Regional Curves
( Geratz et al 2003)
06
0 1-03
5 8
Coastal Plain Regional Regression Model
(USGS2001)
06
01 -03
2070
Manning s n using Cowan s Method (1956)
06
NA
127
Field Indicators of Bankf ill (Coastal Plain
Regional Curves Geratz et al 200.))
06
0 1-03
66
Reference Tar Kiln Branch
Coastal Plain Regional Curves
( Geratz et al 200.3)
1 5
0 1-03
120
Coastal Plain Regional Regression Model
(USGS 2001)
1 5
0 1-03
4 0-12 0
Manning s n using Cowan s Method (1956)
15
NA
112
Field Indicators of Bankfull (Coastal Plain
Regional Curves Geratz et al 2003)
1 5
0 1-0.)
95
5 6 3 Stream Classification
Stream geometry and substrate data have been evaluated to orient stream restoration based on a
classification utilizing fluvial geomorphic principles (Rosgen 1996) This classification stratifies
streams into comparable groups based on pattern dimension profile and substrate
characteristics Primary components of the classification include degree of entrenchment width
depth ratio sinuosity channel slope and stream substrate composition
Historically onsite stream reaches may have been characterized by E type channels E type
streams are characterized as slightly entrenched riffle pool channels exhibiting high sinuosity
( >1 5) however reference streams in the region typically are characterized by sinuosities
slightly lower than 13 In North Carolina E type streams often occur in narrow to wide valleys
with well developed alluvial floodplains (Valley Type VIII) E type streams typically exhibit a
sequence of riffles and pools associated with a sinuous flow pattern E type channels are
typically considered stable However these streams are sensitive to disturbance and may rapidly
convert to other stream types
Onsite streams appear to be progressing through a common evolutionary tendency found in
streams of North Carolina As streams are dredged and straightened the water surface profile
tends to become oversteepened resulting in 1) the loss of horizontal flow vectors that maintain
pools and 2) an increase in erosive forces to channel bed and banks The lack of deep rooted
riparian vegetation and the introduction of livestock into the channel appear to have exacerbated
problems with erosion to onsite channels
Mitigation Plan page 17
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

Bed and bank erosion typically leads to channel downcutting and evolution of a stable E -type
channel into a G -type (gully) channel. Continued erosion eventually results in lateral extension
of the G -type channel into an F -type (widened gully) channel. The F -type channel will continue
to widen laterally until the channel is wide enough to support a stable C -type or E -type channel
at a lower elevation and the original floodplain is no longer subject to regular flooding.
The majority of Bank streams have been impacted by land clearing, erosive flows, livestock
grazing, hoof shear, and manipulation of the channels including dredging and straightening.
Onsite streams are expected to continue to erode and deposit sediment into receiving streams
until a stable stream pattern has been carved from the adjacent floodplain.
5.6.3.1 Dimension
Regional curves (Geratz et al. 2003) were utilized to
determine bankfull channel cross - sectional areas of
the Bank's streams. The cross - sectional area was
then utilized to determine the bankfull width, average
bankfull depth, maximum depth, and floodprone area
of the existing channels. Using this method, a
departure from stability could be estimated based on
a comparison of existing and proposed/stable
dimension variables (Tables 5A -5C).
During field investigations, numerous cross - sections
were measured to characterize Bank streams.
Existing cross - section data is provided in Appendix B with cross - section locations depicted on
Figure BI (Appendix B). Kennedy Mill Branch and its tributaries are characterized as G -type
channels in the reaches proposed for restoration. Bank- height ratios are high ranging from 3.0-
7.7 indicating highly incised channels. In addition, existing cross - sectional areas measure
greater than four times the size predicted by reference reaches, bankfull indicators, and regional
curves. Restoration reaches within the Bank exhibit bank erosion and increased destabilization
due to land management practices and livestock impacts.
Based on regional curve estimations of cross - sectional area, onsite streams are characterized by
channel incision and excessively high bank- height ratios. Channel incision has resulted in bank
erosion below the effective rooting depth of existing riparian vegetation in combination with
erosive flow velocities. Measures to reduce channel size (cross - sectional area) and bank height
ratios will be targeted for this project.
5.6.3.2 Profile
Based on topographic mapping created by a Professional Land Surveyor, the valley slope for
restorable Bank streams measure 0.0028 - 0.0032 rise /run on Kennedy Mill Branch and the Main
Tributary, 0.0251 - 0.0337 rise /run for UTs 1 -2 and 5 -6, and 0.0049 for UT7 (Tables 5A -5C).
Estimated valley slopes appear typical for the physiographic region of North Carolina. Water
surface slopes were estimated by dividing the valley slope by channel sinuosity. Sinuosity was
measured from topographic surveys, Geographic Information Systems (GIS) analysis of aerial
Mitigation Plan page 18
Pancho Stream and Wetland Mitigation Bank Restoration Systems, LLC

photography and visual observations of the stream channel during field surveys and was
measured 1 1 or lower for Bank restoration reaches
Impacts to onsite streams such as straightening downcuttmg incision and bank erosion have
resulted in oversteepemng of the average water surface profile In addition impacts have
removed most of the riffle and pool morphology characteristic of stable streams in this region
Stream incision may have resulted in excessive sediment deposition within pools thereby
steepening pool slopes and flattening riffle slopes Measures designed to flatten the average
water surface profile and restore riffle /pool slopes to suitable ranges are to be targeted
5 6 3 3 Plan Form
Analysis of aerial photography utilizing GIS was conducted to determine existing onsite plan
form variables Existing plan form variables were compared to ratios of stable plan form based
on fluvial geomorphic methods (Rosgen 1996) Using this method a departure from stability
was estimated
The Bank s streams have been straightened in the past resulting in sinuosity measuring
approximately 1 1 or less (Tables 5A 5C) Due to channel alterations no distinct repetitive
pattern of riffles and pools occurs in the existing channel In addition values for belt width
pool -to pool spacing and meander wavelength were not measurable
Based on plan form variables Bank streams have been degraded by 1) bank collapse erosion
and incision 2) straightening resulting in no repetitive riffle and pool sequence and reduction in
sinuosity and 3) a subsequent reduction in the overall length of stream channels Mitigation
efforts along degraded channel sections will target restoration of riffle /pool pattern and bringing
pool to pool spacing and meander wavelength into suitable relationship for this region
5 7 STREAM POWER, SHEAR STRESS, AND STABILITY THRESHOLD
5 7 1 Stream Power
Stability of a stream refers to its ability to adjust itself to in flowing water and sediment load
One form of instability occurs when a stream is unable to transport its sediment load leading to
aggradation or deposition of sediment onto the stream bed Conversely when the ability of the
stream to transport sediment exceeds the availability of sediments entering a reach and /or
stability thresholds for materials forming the channel boundary are exceeded erosion or
degradation occurs
Stream power is the measure of a stream s capacity to move sediment over time Stream power
can be used to evaluate the longitudinal profile channel pattern bed form and sediment
transport of streams Stream power may be measured over a stream reach (total stream power)
or per unit of channel bed area The total stream power equation is defined as
Q = PgQs
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Pancho So eam and Wetland Mitigation Bank Restoi ation Systems LLC

where 0 = total stream power (ft lb /s ft) p = density of water (lb/ft) g = gravitational
acceleration (ft/s2) Q = discharge (ft' /sec) and s = energy slope (ft/ft) The specific weight of
water (I = 62 4 lb /ft') is equal to the product of water density and gravitational acceleration pg
A general evaluation of power for a particular reach can be calculated using bankfull discharge
and water surface slope for the reach As slopes become steeper and/or velocities increase
stream power increases and more energy is available for reworking channel materials
Straightening and clearing channels increases slope and velocity and thus stream power
Alterations to the stream channel may conversely decrease stream power In particular over
widening of a channel will dissipate energy of flow over a larger area This process will
decrease stream power allowing sediment to fall out of the water column possibly leading to
aggradation of the stream bed
The relationship between a channel and its floodplam is also important in determining stream
power Streams that remain within their banks at high flows tend to have higher stream power
and relatively coarser bed materials In comparison streams that flood over their banks onto
adjacent floodplams have lower stream power transport finer sediments and are more stable
Stream power assessments can be useful in evaluating sediment discharge within a stream and
the deposition or erosion of sediments from the stream bed
5 7 2 Shear Stress
Shear stress expressed as force per unit area is a measure of the frictional force that flowing
water exerts on a streambed Shear stress and sediment entrainment are affected by sediment
supply (size and amount) energy distribution within the channel and frictional resistance of the
stream bed and bank on water within the channel These variables ultimately determine the
ability of a stream to efficiently transport bed load and suspended sediment
For flow that is steady and uniform the average boundary shear stress exerted by water on the
bed is defined as follows
T =y Rs
where T = shear stress (lb /ft') y = specific weight of water R = hydraulic radius (ft) and s = the
energy slope ( ft/ft) Shear stress calculated in this way is a spatial average and does not
necessarily provide a good estimate of bed shear at any particular point Adjustments to account
for local variability and instantaneous values higher than the mean value can be applied based on
channel form and irregularity For a straight channel the maximum shear stress can be assumed
from the following equation
Tmax = 1 5T
for sinuous channels the maximum shear stress can be determined as a function of plan form
characteristics
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Pancho So eam and Wetland Mitigation Bank Restot ation Systems LLC

Tmax = 2 65T(Rc /Wbkf) 0 5
where Rc = radius of curvature (ft) and Wbkf = bankfull width (ft)
Shear stress represents a difficult variable to predict due to variability of channel slope
dimension and pattern Typically as valley slope decreases channel depth and sinuosity
increase to maintain adequate shear stress values for bedload transport Channels that have
higher shear stress values than required for bedload transport will scour bed and bank materials
resulting in channel degradation Channels with lower shear stress values than needed for
bedload transport will deposit sediment resulting in channel aggradation
The actual amount of work accomplished by a stream per unit of bed area depends on the
available power divided by the resistance offered by the channel sediments plan form and
vegetation The stream power equation can thus be written as follows
w =PgQs =Tv
where w = stream power per unit of bed area (N /ft sec Joules /sec /ftz) T = shear stress and v =
average velocity (ft/sec) Similarly
(0 = O /Wbkf
where Wbkf= width of stream at bankfull (ft)
5 7 3 Stream Power and Shear Stress Methods and Results
Channel degradation or aggradation occurs when hydraulic forces exceed or do not approach the
resisting forces in the channel The amount of degradation or aggradation is a function of
relative magnitude of these forces over time The interaction of flow within the boundary of
open channels is only imperfectly understood Adequate analytical expressions describing this
interaction have yet to be developed for conditions in natural channels Thus means of
characterizing these processes rely heavily upon empirical formulas
Traditional approaches for characterizing stability can be placed in one of two categories 1)
maximum permissible velocity and 2) tractive force or stream power and shear stress The
former is advantageous in that velocity can be measured directly Shear stress and stream power
cannot be measured directly and must be computed from various flow parameters However
stream power and shear stress are generally better measures of fluid force on the channel
boundary than velocity
Using these equations stream power and shear stress were estimated for 1) existing dredged and
straightened reaches 2) the reference reaches and 3) proposed onsite conditions Important
input values and output results (including stream power shear stress and per unit shear power
and shear stress) are presented in Table 7 Average stream velocity and discharge values were
calculated for the existing onsite stream reaches the reference reaches and proposed conditions
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Pancho Sh eam and Wetland Mitigation Bank Restoi anon Systems LLC

In order to maintain sediment transport functions of a stable stream system the proposed channel
should exhibit stream power and shear stress values so that the channel is neither aggrading nor
degrading Results of the analysis indicate the proposed channel reaches are expected to
maintain stream power as a function of width values of approximately 0 16 0 45 and maximum
shear stress values of approximately 0 22 0 70 (comparable to that of the reference reach and
much lower than existing degrading reaches)
Table 7 Stream Power (0) and Shear Stress (21 Values
Stream power and shear stress values are higher for the existing stream reaches than for
proposed channels Existing reaches are degrading as evidenced by bank erosion channel
incision low width depth ratios and high bank height ratios degradation has resulted from a
combination of water surface slopes that have been steepened channel straightening dredging
and channel incision Stream power and shear stress values for the proposed channels should be
lower than for existing channels to effectively transport sediment through the Site without
eroding and downcutting resulting in stable channel characteristics
Reference reach values for stream power and shear stress are comparable for the proposed
channels the valley and water surface slopes are slightly lower for the reference reach resulting
in lower stream power and shear stress values
58 REFERENCE STUDIES
Distinct bankfull indicators were present within the reference stream channels In addition
dimension pattern and profile variables have not been altered or degraded allowing for
assistance with designing the proposed restoration reaches The Table of Morphological Stream
Characteristics (Tables 5A 5C) and Figures 5A 513 (Appendix A) include a summary of
dimension profile and pattern data for each reference reach used to establish reconstruction
Mitigation Plan page 22
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC
Discharge
(ft /s)
Water
surface
Slope
(ft/ft)
Total
Stream
Power
M)
Q1W
Hydraulic
Radius
Shear
Stress
(T)
Velocity
(v)
T v
Tn,
Existing Conditions
Kennedy Mill
178
00028
3 11
0 18
674
1 18
0 1.)
0 16
1 77
Main Channel
91
00047
267
0A
708
208
012
025
3 12
Tributaries
10
0 0.»4
208
069
397
828
007
055
124
Reference Conditions
Reference Reach 1
66
0 005
206
027
079
025
092
02-)
037
Reference Tar Kiln
Branch
95
00016
095
Oil
094
009
095
009
0 14
Proposed Conditions
Kennedy Mill
178
0002.)
255
0 16
101
0 15
096
0 14
022
Main Channel
91
0 004-1
2 44
022
071
0 19
10
019
028
Tributaries
10
0 0291
183
045
026
047
08.)
1 0.39
070
Stream power and shear stress values are higher for the existing stream reaches than for
proposed channels Existing reaches are degrading as evidenced by bank erosion channel
incision low width depth ratios and high bank height ratios degradation has resulted from a
combination of water surface slopes that have been steepened channel straightening dredging
and channel incision Stream power and shear stress values for the proposed channels should be
lower than for existing channels to effectively transport sediment through the Site without
eroding and downcutting resulting in stable channel characteristics
Reference reach values for stream power and shear stress are comparable for the proposed
channels the valley and water surface slopes are slightly lower for the reference reach resulting
in lower stream power and shear stress values
58 REFERENCE STUDIES
Distinct bankfull indicators were present within the reference stream channels In addition
dimension pattern and profile variables have not been altered or degraded allowing for
assistance with designing the proposed restoration reaches The Table of Morphological Stream
Characteristics (Tables 5A 5C) and Figures 5A 513 (Appendix A) include a summary of
dimension profile and pattern data for each reference reach used to establish reconstruction
Mitigation Plan page 22
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

parameters Channel cross sections were measured at systematic locations and stream profiles
were developed via total station
5 8 1 Reference Channels
Two reference reaches were identified for the Site The first reference stream (Reference Reach
1) is located approximately 40 miles southwest of the Site approximately 1 mile northeast of the
Town of Roseboro on an unnamed tributary to the Little Coharie River (Figure 1 B Appendix A)
The second reference stream (Tar Kiln Branch) is located less than 5 miles east of the Site
immediately upstream of Overman Road on Tar Kiln Branch (Figure IA Appendix A) The
streams were measured and classified by stream type (Rosgen 1996) The reference reaches are
both characterized as E type moderately sinuous (1 2) channels with sand dominated substrate
E type streams are characterized as slightly entrenched riffle pool channels exhibiting high
sinuosity (1 3 to greater than 1 5) however reference streams in the region typically are
characterized by sinuosities slightly lower than 13 E type streams typically exhibit a sequence
of riffles and pools associated with a sinuous flow pattern In North Carolina E type streams
often occur in narrow to wide valleys with well developed alluvial floodplams (Valley Type
VIII) E type channels are typically considered stable however these streams are sensitive to
upstream drainage basin changes and /or channel disturbance and may rapidly convert to other
stream types
Dimension Data collected at Reference Reach 1 and Tar Kiln Branch indicate bankfull cross
sectional areas of 7 2 and 10 0 square feet (respectively) Reference Reach 1 was slightly larger
than predicted by regional curves (6 ) 3 square feet) and Tar Kiln Branch was slightly smaller than
predicted by regional curves (12 7 square feet) However both streams are within a reasonable
deviation from predictions by regional curve calculations and adequately verify the use of
regional curves at the Site Reference Reach 1 and Tar Kiln Branch exhibit a bankfull width of
7 5 and 8 4 a bankfull depth of 0 8 and 1 1 feet and width to depth ratios of 8 1 and 7 9
respectively (see Tables 5A 5C Table of Morphological Stream Characteristics) Figures 5A 5B
(Appendix A) provide plan view and cross sectional data for the reference reaches and depict the
bankfull channel area The reference reaches exhibit a bank height ratio of 10
Pattern and Profile In field measurements of the reference reaches have yielded an average
sinuosity of 1 17 and 121 (thalweg distance /straight line distance) Onsite valley slopes range
from 0 0028 to 0 0051 in the dominant hydrologic features of the Site Valley slopes exhibited
by reference channels range from slightly higher (0 0061) to slightly lower (0 0019) than the
Site providing a good range of slopes to compare existing and proposed Site conditions
Substrate Reference channels are characterized by substrate dominated by sand sized particles
5 8 2 Reference Forest Ecosystem
According to Mitigation Site Classification (MIST) guidelines (USEPA 1990) Reference Forest
Ecosystems (RFEs) must be established for restoration sites RFEs are forested areas on which
to model restoration efforts at the Bank in relation to soils hydrology and vegetation RFEs
should be ecologically stable climax communities and should represent believed historical (pre-
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Pancho Su eam and Wetland Mitigation Bank Restoi ation Systems LL

disturbance) conditions at the Bank Data describing plant community composition and structure
are collected at the RFEs and subsequently applied as reference data for design of the Bank
Reference vegetative communities for this project are located upstream of the Bank on
preservation reaches of Kennedy Mill Branch and the Main Tributary and within the wetland
preservation area Tree and shrub species identified in these areas are listed in Table 8 and will
be utilized in addition to other relevant species to supplement community descriptions for
Coastal Plain Bottomland Hardwoods (brownwater subtype) in floodplains and wetlands and
Mesic Mixed Hardwood Forest on slopes
Table 8 Reference Forest Ecosystem
Canopy Species
Understory Species
Red maple (Acer rubrum)
Red maple (Acer rubrum)
River birch (Betula nigra)
River birch (Betula nigra)
Pecan (Carya illmotnensts)
Ironwood (Carpinits carolmtana)
American beech (Fagus grandtfolta)
Coastal sweetpepperbush (Clethra alntfolta)
American holly (Ilex opaca)
Dogwood (Cot nus flortda)
Sweetgum (Liquidambar styracifltta)
Sourwood (Diospyros virgintana)
Tulip poplar (Ltrtodendrum tultptfera)
American holly (Ilex opaca)
Black gum (Nyssa Mora)
Virginia sweetspire (Itea vtrgtntca)
Water oak (Quercus nigra)
Sweetgum (Ltqutdambat styt aciva)
Swamp chestnut oak (Quercus michauxtt)
Tulip poplar (Ltrtodendrttm tult fet a)
Cherrybark oak (Quercus pagoda)
Common sweetleaf (Symplocos ttnctorta)
Willow oak (Quercus phellos)
Winged elm (Ulmus alata)
Winged elm (Ulmus alata)
Highbush blueberry (Vacctnutm corvmbosum)
American elm (Ulmus amet tcana)
5 9 SURFACE WATER ANALYSIS AND HYDROLOGIC TRESPASS
Surface drainage on the Bank and surrounding areas are in the process of being analyzed to
predict the feasibility of manipulating existing surface drainage patterns without adverse effects
to the Site or adjacent properties The following presents a summary of hydrologic and hydraulic
analyses along with provisions designed to maximize groundwater recharge and wetland
restoration while reducing potential for impacts to adjacent properties
The purpose of the analysis is to predict flood extents for the 1 2 5 10 50 and 100 year
storms under existing and proposed conditions after stream and wetland restoration activities
have been implemented The comparative flood elevations are evaluated by simulating peak
flood flows for Site features using the WMS (Watershed Modeling System BOSS International)
program and regional regression equations Once the flows are determined the river geometry
and cross sections are digitized from a DTM (Digital Terrain Model) surface (prepared by a
professional surveyor) using the HEC GeoRAS component of ArcView The cross - sections are
adjusted as needed based on field collected data Once corrections to the geometry are
performed the data is imported into HEC RAS
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Pancho Sh eam and Wetland Mitigation Bank Restot anon Systems LLC

Watersheds and land use estimations were measured from existing DEM (Digital Elevation
Model) data and an aerial photograph Field surveyed cross sections and water surfaces were
obtained along Site features Valley cross sections were obtained from both onsite cross
sections and detailed topographic mapping to 1 foot contour intervals using the available DTM
Observations of existing hydraulic characteristics will be incorporated into the model and the
computed water surface elevations will be calibrated using engineering judgment
The HEC PAS will be completed prior to completion of detailed construction plans for Site
restoration activities A primary objective of the stream and wetland restoration design is
maintenance of a no rise in the 100 year floodplain Although a portion of the Site is located
within a Federal Emergency Management Agency (FEMA) floodway the floodway is limited to
the mainstem New River channel No FEMA cross sections or detailed mapping occurs along
restoration reaches (the three unnamed tributaries) within the Bank Therefore a Conditional
Letter of Map Revision (CLOMR) or Letter of Map Revision (LOMR) are not expected to be
necessary at this time However coordination with FEMA will be conducted if necessary prior
to initiating Bank construction activities
5 10 FEDERALLY PROTECTED SPECIES
Species with the classification of Endangered (E) Threatened (T) or officially Proposed (P) for
such listing are protected under the Endangered Species Act of 1973 (ESA) as amended (16
U S C 1531 et seq ) One species is federally listed for Wayne County by the United States Fish
and Wildlife Service (USFWS) (USFWS 2008) red cockaded woodpecker (Picoides borealis)
Additionally the bald eagle (Haliaeetus leucocephalus) is protected by the Bald and Golden
Eagle Protection Act Habitat for red cockaded woodpecker and bald eagle is not present within
the Bank
In addition to the bald eagle and E T and P species the USFWS list includes a category of
species designated as Federal Species of Concern (FSC) A species with this designation is
one that may or may not be listed in the future (formerly C2 candidate species or species under
consideration for listing for which there is insufficient information to support listing) The FSC
designation provides no federal protection under the ESA for the species listed The nine FSC
species listed on the current USFWS list are presented in Table 9
Table 9 FSC Snecies Listed for Wavne Cnnnty
Common Name
Scientific Name
American eel
Anguilla rostrata
Carolina madtom
Noturus furiostis
Pinewoods shiner
Lythrurus matuhnus
Rafinesque s big eared bat
Corynorhinus i afrnesgiui
Southern hognose snake
Hetetodon simus
Atlantic pigtoe
Fusconaia masons
Yellow lance
Elliptio lanceolata
Cuthbert turtlehead
Chelone cuthbertit
Pondspice
Litsea aestivalis
Mitigation Plan page 2.)
Pancho Stream and Wetland Mitigation Bank Restoi ation Systems LLC

Proposed mitigation activities will result in positive benefits for these species through improved
habitat and water quality
5 11 SITE DESIGN AND IMPLEMENTATION CONSTRAINTS
The presence of conditions or characteristics that have the potential to hinder restoration
activities on the Bank was evaluated The evaluation focused primarily on the presence of
hazardous materials utilities and restrictive easements rare /threatened/endangered species or
critical habitats cultural resources and the potential for hydrologic trespass Existing
information regarding constraints was acquired and reviewed In addition any Bank conditions
that have the potential to restrict the restoration design and implementation were documented
during the field investigation
No evidence of natural and/or man made conditions was identified that has the potential to
impede proposed restoration activities
6 0 DETERMINATION OF CREDITS
61 CREDIT DETERMINATION
The Bank encompasses Kennedy Mill Branch unnamed tributaries to Kennedy Mill Branch and
associated wetlands/hydric soils and floodplains Bank mitigation options outlined in this report
are as follows
Table 10 Proposed Mitigation Quantities vs Mitigation Credits
After completion the Bank will offer 7964 stream mitigation credits and 29 9 riparian
wetland mitigation credits as determined using interagency guidelines outlined in Stream
Mitigation Guidelines (USAGE et al 200' )) and Information Regarding Stream Restoration with
Emphasis on the Coastal Plain — Draft ( USACE et al 2007) Proposed mitigation units are
depicted on Figure 6 (Appendix A)
Mitigation Plan page 26
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC
Proposed Mitigation
Proposed Credits
Riparian
Proposed Mitigation
Mitigation
Activity
Streams
Riparian Wetlands
Ratio
Stream
Wetland
(linear feet)
(acres)
Credits
Credits
Stream Restoration
6459
N
1 1
6459
Z11--f
Stream Enhancement I
80.3
Z-
1 5 1
535
Stream Enhancement II
18.)7�
25 1
735
_
Stream Preservation
1176
NO ' 14— %
5 1
235
'
Wetland Restoration
44
290
1 1
290
t
Wetland Enhancement
` In
1 5
2 1
��
08
Wetland Preservation
05
5 1
01
Totals
10 683
310
7964
299
After completion the Bank will offer 7964 stream mitigation credits and 29 9 riparian
wetland mitigation credits as determined using interagency guidelines outlined in Stream
Mitigation Guidelines (USAGE et al 200' )) and Information Regarding Stream Restoration with
Emphasis on the Coastal Plain — Draft ( USACE et al 2007) Proposed mitigation units are
depicted on Figure 6 (Appendix A)
Mitigation Plan page 26
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

62 CREDIT RELEASE SCHEDULE
The credit release scenario below complies with current interagency guidelines Under this
scenario the credit release schedule is based upon satisfactory completion of project milestones
Project milestones and percent of credit released include the following
Table 11 Credit Release Schedule
Credit
Wetlands
Streams
Release
Release Activity
Interim Credit
Interim Credit
Total Credit
Milestone
Release
Release
Release
1^
Bank Establishment including all required criteria
15
15
15
2
Site Inspection by USACE — upon completion of all initial
15
15
)0
physical and biological improvements made pursuant to
the Mitigation Plan
3
Year 1 Monitoring Report demonstrates channel is stable
10
10
40
and interim performance standards are met
4
Year 2 Monitoring Report — demonstrates channel is stable
10
10
50 (60 *)
and interim performance standards are met
5
Year 3 Monitoring Report — demonstrates channel is stable
10
10
60 (70 *)
and interim performance standards are met
6
Year 4 Monitoring Report — demonstrates channel is stable
10
5
65 (75 *)
and interim performance standards are met
7 **
Year 5 Monitoring Report — demonstrates channel is stable
10
10
75 (85 *)
and interim performance standards are met
8
Year 6 Monitoring Report — demonstrates channel is stable
10
5
80 (90 *)
and interim performance standards are met
9
Year 7 Monitoring Report — demonstrates channel is stable
10
10
90 (100 *)
and interim performance standards are met
Totals
100
100
100
i USK i mcivaes the eKecuuon of me !wrist iK i approval of the Mitigation Tian delivery of tinancial assurances recordation of
the conservation easement and delivery of the title option to the IRT
*Credit totals include additional 10 percent reserve of credits to be held back until the bankfull event performance standard has
been met
* *If the monitoring of the site demonstrates that the site is successful by vear 5 and no concerns have been identified (vegetation
stream stability etc ) the Sponsor may propose to terminate monitoring of the site and forego the monitoring requirements of
years 6 and 7 This provision is only applicable if the site has consistently met all performance standards and at year D meet
the year 5 vegetation densit) standards (260 plants/acre) and the year 7 average height requirement of 10 feet Early closure
will only be provided through written approval from the USAGE in consultation with the NCIRT
7 0 MITIGATION WORK PLAN
The primary goals of this mitigation plan include 1) protecting a watershed from nonpoint
sources of pollution associated with heavy livestock and agriculture pressures 2) promoting
water qualitv by protecting jurisdictional wetlands adjacent to Bank streams and tributaries 3)
perpetually providing a diverse woody vegetative buffer adjacent to Bank streams and wetlands
4) promoting floodwater attenuation by protecting vegetation on Bank floodplains to increase
frictional resistance on floodwaters crossing the Bank 5) improving aquatic habitat by
promoting stable stream banks shading open waters and providing structure within the Bank
Mitigation Plan page 27
Pancho Sti eam and Wetland Mitigation Bank Rester ation Systems LLC

and 6) establishing fee simple ownership or a permanent conservation easement which will
encompass all mitigation activities
Primary activities proposed at the Site include 1) stream restoration 2) stream enhancement
(level I) 3) stream enhancement (level II) 4) stream preservation 5) wetland restoration 6)
wetland enhancement 7) wetland preservation 8) construction of marsh treatment areas and 9)
plant community restoration (Figures 7A 7B Appendix A)
71 STREAM RESTORATION
Stream restoration efforts are designed to restore a stable meandering stream on new location on
Kennedy Mill Branch the Main Tributary UTs 1 2 and UTs 5 6 that approximates
hydrodynamics stream geometry and local microtopography relative to reference and onsite
conditions Geometric attributes for the existing degraded channels and the proposed stable
channels are listed in Table of Morphological Stream Characteristics (Tables 5A 5C)
Based on preliminary analysis and field investigations restoration activities will follow stream
guidance as presented in Information Regarding Stream Restoration with Emphasis on the
Coastal Plain — Draft (USACE and NCDWQ 2007) Primary activities designed to restore the
channels include 1) belt width preparation and grading 2) channel excavation 3) installation of
channel plugs 4) backfilling of the abandoned channel and 5) vegetative planting
Belt width Preparation and Grading
Care will be taken to avoid the removal of existing deeply rooted vegetation within the belt
width corridor which may provide design channel stability Material excavated during grading
will be stockpiled immediately adjacent to channel segments to be abandoned and backfilled
These segments will be backfilled after stream diversion is completed
Spoil material may be placed to stabilize temporary access roads and to minimize compaction of
the underlying floodplam However all spoil will be removed from floodplamn surfaces upon
completion of construction activities
After preparation of the corridor the design channel and updated profile survey will be
developed and the location of each meander wavelength plotted and staked along the profile
Pool locations and relative frequency configurations may be modified in the field based on local
variations in the floodplam profile
Channel Excavation
The channels will be constructed within the range of values depicted in the Table of
Morphological Stream Characteristics (Tables 5A 5C)
The stream banks and local belt width area of constructed channels will be immediately planted
with shrub and herbaceous vegetation Deposition of shrub and woody debris into and/or
overhanging the constructed channel is encouraged
Mitigation Plan page 28
Pancho So eam and Wetland Mitigation Bank Reston ation Systems LLC

Particular attention will be directed toward providing vegetative cover and root growth along the
outer bends of each stream meander Live willow stake revetments available root mats and/or
biodegradable erosion control matting may be embedded into the break in -slope to promote
more rapid development of an overhanging bank Willow stakes will be purchased and /or
collected onsite and inserted through the root/erosion mat into the underlying soil
UTs 1 and 2 will be constructed as single thread channels within a broader braided wetland
complex therefore credit footages were determined based on the constructed channel length
These channels will consist of shallow (0 2 foot in depth) depressions that will promote the
development of stream features in a Juncus dominated wetland area Over time shading of the
Juncus is expected to occur and root development will promote a braided wetland and stream
complex Shading of Juncus and root development will likely take longer than the 7 -year
monitoring period therefore some larger containerized trees will be planted in these areas to
facilitate canopy development
Channel Plugs
Impermeable plugs will be installed along abandoned channel segments The plugs will consist
of low - permeability materials or hardened structures designed to be of sufficient strength to
withstand the erosive energy of surface flow events across the Site Dense clays may be
imported from off site or existing material compacted within the channel may be suitable for
plug construction The plug will be of sufficient width and depth to form an imbedded overlap in
the existing banks and channel bed
Channel Backfilhng
After impermeable plugs are installed the abandoned channel will be backfilled Backfillmg
will be performed primarily by pushing stockpiled materials into the channel The channel will
be filled using material from off site and compacted in the vicinity of the backfilled channel
Vegetation debris (root mats top soils shrubs woody debris etc ) will be redistributed across
the backfill area upon completion
Braided Channel Development
Minimal channel excavation is proposed on UT7 which is proposed to be constructed as a
braided D type stream in a low gradient valley using the Coastal Plain guidelines (USACE et al
2007) It is anticipated that this stream type will develop without intervention Use of heavy
equipment and disruption of existing vegetation and soils within the Bank will therefore be
minimized Credit footage for the braided channel was determined based on a straight line
valley distance
Marsh Treatment Areas
Shallow wetland marsh treatment areas will be excavated in the floodplam to intercept surface
waters draining through agricultural areas prior to discharging into Bank Marsh treatment areas
are intended to improve the mitigation project and are not generating mitigation credit Proposed
marsh treatment area locations are depicted on Figure 7B (Appendix A) and will consist of
shallow depressions that will provide treatment and attenuation of initial stormwater pulses
(Figure 8B Appendix A) The outfall of each treatment area will be constructed of hydraulically
Mitigation Plan page 29
Pancho Sa eam and Wetland Mitigation Bank Restol ation Systems LLC

stable np rap or other suitable material that will protect against headcut migration into the
constructed depression and/or upstream stream reaches It is expected that the treatment areas
will fill with sediment and organic matter over time
In- Stream Structures
Stream restoration under natural stream design techniques normally involves the use of in- stream
structures for bank stabilization grade control and habitat improvement Primary activities
designed to achieve these objectives may include the installation of a limited number of cross -
vanes log vanes and an outfall drop structure
Cross vane Weirs
Cross vane weirs may be installed in the channel (Figure 8A Appendix A) The purpose of the
vane is to 1) sustain bank stability 2) direct high velocity flows during bankfull events toward
the center of the channel 3) maintain average pool depth throughout the reach 4) preserve water
surface elevations and reconnect the adjacent floodplam to flooding dynamics from the stream
and 5) modify energy distributions through increases in channel roughness and local energy
slopes during peak flows
Cross vane weirs will be constructed of boulders approximately 24 inches in minimum width
Cross vane weir construction will be initiated by imbedding footer rocks into the stream bed for
stability to prevent undercutting of the structure Header rocks will then be placed atop the
footer rocks at the design elevation Footer and header rocks create an arm that slopes from the
center of the channel upward at approximately 7 to 10 degrees tying in at the bankfull floodplam
elevation The cross vane arms at both banks will be tied into the bank with a sill to eliminate
the possibility of water diverting around the structure Once the header and footer stones are in
place filter fabric will be buried into a trench excavated around the upstream side of the vane
arms The filter fabric is then draped over the header rocks to force water over the vane The
upstream side of the structure can then be backfilled with suitable material to the elevation of the
header stones
Log Vanes
The primary purpose of the log vanes is to direct high velocity flows during bankf ill events
towards the center of the channel (Figure 8A Appendix A) Log vanes will be constructed
utilizing large tree trunks harvested from the Site or imported from offsite The tree stem
harvested for a log cross -vane arm must be long enough to be imbedded into the stream channel
and extend several feet into the floodplam Logs will create an arm that slopes from the center of
the channel upward at approximately 5 to 7 degrees tying in at the bankfull floodplam elevation
Logs will extend from each stream bank at an angle of 20 to 30 degrees A trench will be dug
into the stream channel that is deep enough for the head of the log to be at or below the channel
invert The trench is then extended into the floodplam and the log is set into the trench such that
the log arm is below the floodplam elevation If the log is not of sufficient size to completely
block stream flow (gaps occur between the log and channel bed) then a footer log will be
installed beneath the header log Support pilings will then be situated at the base of the log and
at the head of the log to hold the log in place Once these vanes are in place filter fabric is toed
Mitigation Plan page 30
Pancho Sty eam and Wetland Mitigation Bank Restoration Systems LLC

into a trench on the upstream side of the vane and draped over the structure to force water over
the vane The upstream side of the structure is then backfilled with suitable material
Drop Structure
A drop structure is proposed at the outfall of the southern Kennedy Mill Branch at Stevens Mill
Road to lower Site hydrology to its preconstruction elevation (Figure 8A Appendix A) To
avoid hydrologic trespass the drop structure may be installed approximately 150 feet from the
downstream Site outfall The structure should be constructed to resist erosive forces associated
with hydraulic drops proposed at the Bank A TerraCell drop structure or other similar structure
may be installed TerraCell is a light weight flexible mat made of high density polyethylene
strips The strips are bonded together to form a honeycomb configuration The honeycomb mat
is fixed in place and filled with gravel or sand Material in the TerraCell structure may be
planted with grasses and shrubs for additional erosion protection The TerraCell structure will
form a nickpoint that approximates geologic controls in stream beds
7 2 STREAM ENHANCEMENT (LEVEL I)
Stream enhancement (level I) is proposed for two reaches within the Site 1) the upstream reach
of Kennedy Mill Branch and 2) the upstream reach of the Main Tributary (Figure 6 Appendix
A) Enhancement (level I) will entail shallowing the channel from a depth of 5 feet to a depth of
1 to 2 feet contouring stream banks removing invasive plant species and supplemental planting
as necessary All channel work will be completed in a manner to cause as little disturbance to
the existing vegetation as feasible and desirable hardwood trees greater than 4 inches in diameter
at breast height will be avoided to the maximum extent possible Enhancement (level I) should
promote overbank flooding reduced shear stress /sedimentation improved water quality
functions and improved aquatic and wildlife habitat associated with a stable riparian
corridor /stream
7 3 STREAM ENHANCEMENT (LEVEL II)
Stream enhancement (level II) is proposed on the northern reaches of Kennedy Mill Branch
downstream of Stevens Mill Road (Figure 6 Appendix A) Stream enhancement (level II) will
entail the cessation of current land management practices removal of spoil material along the
stream banks and planting riparian buffers with native forest vegetation Riparian buffers will
extend a minimum of 50 feet from the top of stream banks to facilitate stream recovery and
prevent further degradation of the stream
7 4 STREAM PRESERVATION
Preservation is being proposed on the forested reaches of Kennedy Mill Branch and the Main
Tributary (Figure 6 Appendix A) Based on preliminary analysis and field investigations these
reaches are relatively stable due a lack of human induced impact and a well developed riparian
buffer These areas will be protected in perpetuity through the establishment of a conservation
easement including a minimum 50 foot forested buffer adjacent to each bank of the stream
Mitigation Plan page 31
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

7 5 WETLAND RESTORATION AND ENHANCEMENT
Alternatives for wetland restoration are designed to restore a fully functioning wetland system
which will provide surface water storage nutrient cycling removal of imported elements and
compounds and will create a variety and abundance of wildlife habitat (Figure 6 Appendix A)
Portions of the Site underlain by hydnc soils have been impacted by channel incision drainage
ditch excavation vegetative clearing hoof shear and earth movement associated with
agricultural practices Wetland restoration options should focus on the removal of fill materials
restoration of vegetative communities filling drainage ditches the reestablishment of soil
structure and microtopographic variations and redirecting normal surface hydrology from
ditches back to Site floodplams In addition the construction of (or provisions for) surface water
storage depressions (ephemeral pools) will also add an important component to groundwater
restoration activities These activities will result in the restoration of 31 8 acres of jurisdictional
riparian floodplain wetlands (29 0 acres of this area will generate mitigation credit) An
additional 17 acres of jurisdictional riparian wetland will be enhanced within the Bank by
planting cleared wetlands with native forest vegetation (1 5 acres of this area will generate
mitigation credit)
Reestablishment of Historic Groundwater Elevations
Hydric soils adjacent to the incised channels appear to have been drained due to lowering of the
groundwater tables and a lateral drainage effect from existing stream reaches Reestablishment
of channel inverts is expected to rehydrate soils adjacent to Site streams In addition drainage
ditches are effectively removing wetland hydrology within the restoration areas Filling of these
ditches and restoring Bank tributaries are expected to rehydrate hydric soils within the Site
resulting in the restoration of jurisdictional hydrology to riparian wetlands
Excavation and Grading of Elevated Spoil and Sediment Embankments
Some areas adjacent to the existing channels and area ditches have experienced both natural and
unnatural sediment deposition Spoil piles were likely cast adjacent to the channel during
dredging straightening and rerouting of Site streams and ditching of the adjacent floodplain
Mayor flood events may have also deposited additional sediment adjacent to stream banks from
onsite eroding banks and upstream agricultural fields The removal of these spoil materials
and/or filling of onsite ditches with spoil material represents a critical element of Bank wetland
restoration
Hydrophytic Vegetation
Bank wetland areas have endured significant disturbance from land use activities such as land
clearing agriculture livestock grazing and other anthropogemc maintenance Wetland areas
will be revegetated with native forest vegetation typical of wetland communities in the region
Emphasis will focus on developing a diverse plant assemblage
Reconstructing Stream Corridors
The stream restoration plan involves the reconstruction of Bank streams through the floodplain
Existing channels will be backfilled so that the water table may be restored to historic conditions
However some portions of the existing channels may remain open for the creation of wetland
Mitigation Plan page 32
Pancho Sth eam and Wetland Mitigation Bank Restoi ation Systems LLC

vernal pool features These features will be plugged on each side of the open channel and will
function as open water systems expected to provide habitat for a variety of wildlife as well as
create small pockets of open water /freshwater marsh within the Bank These features will
account for a small portion of the Site and will be required to occupy less than 10 percent of the
overall wetland area
7 6 WETLAND PRESERVATION
Preservation is being proposed on 0 5 acre of existing forested jurisdictional wetlands (Figure 6
Appendix A) These areas will be protected in perpetuity through the establishment of a
conservation easement
7 7 PLANT COMMUNITY RESTORATION
Restoration of floodplain forest and stream side habitat allows for development and expansion of
characteristic species across the landscape Ecotonal changes between community types
contribute to diversity and provide secondary benefits such as enhanced feeding and nesting
opportunities for mammals birds amphibians and other wildlife
Reference Forest Ecosystem (RFE) data onsite observations and community descriptions from
Classification of the Natural Communities of North Carolina (Schafale and Weakley 1990) will
be used to develop the primary plant community associations that will be promoted during
community restoration activities
Stream side trees and shrubs include species with high value for sediment stabilization rapid
growth rate and the ability to withstand hydraulic forces associated with bankfull flow and
overbank flood events Stream -side trees and shrubs will be planted within 15 feet of the
channel throughout the meander belt width Shrub elements will be planted along the
reconstructed stream banks concentrated along outer bends
Deep rooted riparian vegetation will be restored within approximately 48 9 acres of the Bank
Planting vegetation on cleared stream banks is proposed to reestablish native/histonc community
patterns within the stream corridor associated side slopes and transition areas Revegetating the
Bank s floodplains and stream banks will provide stream bank stability give shade reduce
surface water temperatures filter pollutants from adjacent runoff and provide habitat for area
wildlife
Variations in vegetative planting will occur based on topographic locations and hydraulic
conditions of the soil Vegetative species composition will mimic reference forest data onsite
observations and community descriptions from Classification of the Natural Communities of
North Carolina (Schafale and Weakley 1990) Community associations to be utilized include 1)
Mesic Mixed Hardwood Forest on slopes 2) Coastal Plain Bottomland Hardwoods (brownwater
subtype) in wetlands that are intermittently to seasonally inundated for long periods (NC WAM
Bottomland Hardwood Forest and Headwater Forest) and 3) stream side assemblage within 15
feet of stream banks (Figures 9 10 Appendix A)
Mitigation Plan page 33
Pancho Sit eam and Wetland Mitigation Bank Restoi ation Systems LLC

78 PLANTING PLAN
Species selected for planting will be dependent upon availability of local seedling sources
Seedlings from a local (within 200 miles) will be obtained from a licensed nursery to be planted
at the Bank Advance notification to nurseries (1 year) would facilitate availability of various
noncommercial elements
Bare root seedlings of tree species will be planted within the Mesic Mixed Hardwood Forest and
Coastal Plain Bottomland Hardwoods (brownwater subtype) at a density of approximately 680
stems per acre on 8 foot centers Larger containerized seedlings will be incorporated in the
planting adjacent to UTs 1 2 to facilitate faster canopy growth Species in the stream -side
assemblage community will be planted at a density of 2720 stems per acre on 4 -foot centers
Table 12 depicts the total number of stems and species distribution within each vegetation
association with the exception of the emergent seed mix outlined above Planting will be
performed between December 1 and March 15 to allow plants to stabilize during the dormant
period and set root during the spring season
8 0 MAINTENANCE PLAN
The restoration and enhancement portion of the Bank will be monitored annually for seven years
or until success criteria are met Monitoring is discussed in more detail in Section 10 0
(Monitoring Requirements) In the event that success criteria are not fulfilled a mechanism for
contingency will be implemented The maintenance plan as discussed below includes
contingency for stream hydrology and vegetation components of the Bank as well as other
components of the Bank including easement boundaries fencing and marsh treatment areas
However prior to implementation of any proposed maintenance actions approval will be
obtained from the USACE in consultation with the IRT
Stream Contingency
Stream contingency may include structure repair and/or installation repair of dimension pattern
and/or profile variables bank stabilization chinking of in stream structures to prevent piping
securing of loose coir fiber matting supplemental planting along the channel and/or
maintenance to areas of the stream bank where stormwater or floodplam flows are intercepted to
prevent bank failure and head cutting of the channel The method of contingency is expected to
be dependent upon stream variables that are not in compliance with success criteria
Hydrologic Contingency
Hydrologic contingency may include floodplam surface modifications such as construction of
ephemeral pools deep ripping of the soil profile installation of berms to retard surface water
flows supplemental planting and/or maintenance to areas of the wetland where stormwater or
floodplam flows are intercepted to prevent scour Recommendations for contingency to establish
wetland hydrology may be implemented and monitored until hydrology success criteria are
achieved In the event that beaver become a nuisance within the Bank beaver management will
be initiated and continued on an as needed basis in accordance with North Carolina Wildlife
Resource Commission (NCWRC) rules and regulations
Mitigation Plan page 3.1
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

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Vegetation Contingency
If vegetation success criteria are not achieved based on average density calculations from
combined plots over the entire restoration area or if significant existing mature tree mortality
occurs adjacent to the enhancement (level I) reach supplemental planting will be performed with
tree species approved by regulatory agencies Supplemental planting will be performed as
needed until achievement of vegetation success criteria Other vegetation maintenance and
repair activities may include pruning mulching and fertilizing In the event that exotic invasive
plant species require treatment or a volunteer species (such as red maple sweet gum or loblolly
pine) comprises greater than 20 percent of the total composition such species will be controlled
by mechanical and/or chemical methods in accordance with North Carolina Department of
Agriculture (NCDA) rules and regulations
Easement Boundaries and Fencing
Bank boundaries will be identified in the field to ensure clear distinction between the mitigation
Bank and adjacent properties Boundaries south of Stevens Mill Road will be delineated by
fencing and to the north of Stevens Mill Road may be identified by boundary markers Fencing
and boundary markers disturbed damaged or destroyed will be repaired and/or replaced on an
as needed basis
Marsh Treatment Areas
Marsh treatment areas used to intercept initial stormwater pulses will be visually inspected
throughout the mitigation monitoring period These areas are expected to naturalize and
maintenance is not anticipated
Terracell Drop Structure
The Terracell drop structure proposed immediately south of Stevens Mill Road will be monitored
annually at a minimum In the event of erosion or scour within the structure maintenance may
include structure repair chinking of the structure to prevent piping securing of loose coir fiber
matting and/or supplemental planting of livestakes and erosion control grasses In the event that
debris clogs or inhibits flow over the structure manual or mechanical removal of debris will
occur maintenance is only expected until the structure naturalizes
9 0 PERFORMANCE STANDARDS
Monitoring of Site restoration efforts will be performed for seven years or until agreed upon
success criteria are fulfilled Monitoring is proposed for wetland hydrology the stream channel
and vegetation in years 1 7 Success criteria are outlined for each below
91 STREAM SUCCESS CRITERIA
Priority I Restoration and Enhancement (Level I) Reaches
Kennedy Mill Branch, Main Tributary, UTs 5 -6
Performance standards for channels where work includes construction of pattern dimension
and/or profile (e g Priority I and 11 Restoration and Enhancement 1) shall be in accordance with
the Stream Mitigation Guidelines dated April 2003 listed below These stream systems which
include Kennedy Mill Branch the Main Tributary and UTs 5 6 on the Restoration Plan (Figures
7A 7B Appendix A) are subject to the performance standards listed below
Mitigation Plan page 36
Pancho Sa eam and Wetland Mitigation Bank Restoi ation Systems LLC

1 Photo reference sites should show no substantial aggradation degradation or
bank erosion
2 Channel stability (monitored using cross sections longitudinal profiles and
photographic documentation of substrate) should demonstrate no more than
minimal evidence of instability (down cutting deposition bank erosion or
increase in sands or finer substrate material)
Braided Stream Restoration (UT7) and
Single- threaded Stream Restoration within Wetland Complex (UTs 1 -2)
Stream channels associated with the project that do not involve construction of pattern
dimension and /or profile were generally designed in accordance with the USACE guidance
document Information Regarding Stream Restoration with Emphasis on the Coastal Plain
Version 2 dated April 4 2007 Development of streams in these systems will be achieved
through the reestablishment of braided stream morphology through passive measures including
ditch filling and natural progression of the stream through historic sloughs braids and channels
(UT7 on the Restoration Plan [Figure 7B Appendix A]) or the construction of single- threaded
channels consisting of shallow (0 2 foot in depth) depressions that will promote the development
of stream features in a Juncus dominated wetland area (UTs 1 2 on the Restoration Plan [Figure
7A Appendix A]) These stream systems are subject to the performance standards listed below
1 Under normal climatic conditions continuous surface water flow within the valley or
crenulation must be documented to occur every year for at least 30 consecutive days
within each monitoring year during the prescribed monitoring period (7 years)
Additional monitoring and/or analysis may be necessary in the event of abnormal
climactic conditions Documentation of flow shall be accomplished using flow meters
and photographic evidence of observed flow taken from fixed photo stations located
along the path of the flow
2 Evidence of channel formation within the valley or crenulation must be documented
through the identification of field indicators on an annual basis in accordance with the
following schedule
a During monitoring years 1 through 4 the preponderance of documented field
indicators must demonstrate the accumulation of flow within the topographic
low point of the valley or crenulation Documented indicators may include
any of the following indicators or any of the indicators listed in Part b
i Presence of litter and debris (wracking) indicating a surface water flow
ii Leaf litter disturbed or washed away
iii Matted bent or absence of vegetation (herbaceous or otherwise) indicative
of surface flow
iv Sediment deposition and/or scour indicating sediment transport by flowing
water
v Water staining due to continual presence of water
Mitigation Plan page 37
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

b During monitoring years 5 through 7 the preponderance of documented field
indicators must demonstrate the accumulation of flow within the topographic
low point of the valley or crenulation (documented by the field indicators
listed in Part a) and the development of a primary path of flow stream
channel or ordinary high water mark Documented indicators may include
any of the following
i Formation of channel bed and banks
ii Sediment sorting indicated by grain size distribution within the primary
path of flow
ui Sediment shelving or a natural line impressed on the banks
iv Change in plant community (absence or destruction of terrestrial
vegetation and /or transition to species adapted for flow or inundation for a
long duration including hydrophytes)
v Development of channel pattern (meander bends and /or channel braiding)
at natural topographic breaks woody debris piles or plant root systems
vi Exposure of woody plant roots within the primary path of flow
vii Changes in soil characteristics (when compared to the soils abutting the
primary path of flow)
Bankfull Events
Documentation of at least two bankfull events within the monitoring period must occur in
separate years in the event that only one bankfull event occurs or if bankfull events occur in the
same monitoring year release of remaining credit for bankfull events will be subject to IRT
approval
Stream Substrate
Stream substrate is not expected to coarsen over time therefore pebble counts are not proposed
as part of the stream success criteria
Visual Assessments of Structures
Visual assessment of in stream structures will be conducted to determine if failure has occurred
Failure of a structure may be indicated by collapse of the structure undermining of the structure
abandonment of the channel around the structure and/or stream flow beneath the structure
9 2 HYDROLOGY SUCCESS CRITERIA
According to the Soil Survey of Wayne County the growing season for Wayne County in
Goldsboro is from March 17 November 14 (USDA 1974) However for purposes of this project
gauge hydrologic success will be determined using data from February 1 November 14 to more
accurately represent the period of biological activity Success of hydrology criteria at the Bank
indicates successful restoration of aquatic riparian wetland resources and enhanced floodwater
attenuation as well as improvement of overall water quality resulting from the removal of
livestock
Mitigation Plan page 38
Pancho Sti earn and Wetland Mitigation Bank Restoi ation Systems LLC

Target hydrological characteristics include saturation or inundation for a minimum of 9 percent
of the monitoring period (February 1 November 14) during average climatic conditions During
years with atypical climatic conditions data from a groundwater gauge(s) in a reference wetland
will be available for use by the USACE and the IRT to evaluate hydrology success Based on
groundwater modeling consecutive groundwater hydrology within an early successional
restoration site is typically approximately 75 percent of that in a mature forested reference site
These areas are expected to support hydrophytic vegetation and hydric soils a jurisdictional
determination may be performed to provide this additional information to the USACE and the
IRT
In addition vernal pool features resulting from small pockets of open channel remaining after
plugging and filling existing channels should account for less than 10 percent of the overall
wetland area
9 3 VEGETATION SUCCESS CRITERIA
Success criteria have been established to verify that the vegetation component supports
community elements necessary for forest development Success of vegetation criteria at the
Bank indicates successful restoration of riparian habitat within and adjacent to aquatic stream
and wetland resources as well as improvement of overall water quality resulting from the
treatment of surface water and a reduction of sedimentation
Success criteria are dependent upon the density and growth of characteristic forest species
throughout the planted areas of the Site including the Mesic Mixed Hardwood Forest and
Coastal Plain Bottomland Hardwoods (brownwater subtype) communities An average density
of 320 living planted stems per acre must be surviving in the first three monitoring years
Subsequently 260 living planted stems per acre in year 5 and 210 living planted stems per acre
in year 7
No single volunteer species (most notably red maple loblolly pine and sweet gum) will
comprise more than 20 percent of the total composition If this occurs remedial
procedures /protocols outlined in the contingency plan will be implemented If within the first 3
years any species exhibits greater than 50 percent mortality the species will either be replanted
or an acceptable replacement species will be planted in its place as specified in the contingency
plan
10 0 MONITORING REQUIREMENTS
Monitoring of the Site will conform to guidelines established in Information Regarding Stream
Restoration with Emphasis on the Coastal Plain — Draft (USACE et al 2007) and Stream
Mitigation Guidelines (USACE et al 2003) Monitoring data collected at the Bank should
include reference photos plant survival analysis hydrology analysis channel stability analysis
documentation of bankfull events and biological data if specifically required by permit
conditions Prior to the installation of all monitoring gauges and sampling plots proposed
numbers and locations will be submitted to the USACE for approval Preservation areas will
only require preliminary reference photos to be taken to document the status of aquatic
Mitigation Plan page 39
Pancho Stream and Wetland Mitigation Bank Restoi ation Systems LLC

resources including streams wetlands and riparian zones Photos will adequately document the
Bank preservation areas and will include a detailed description of the locations at which the
photos were taken
Wetland hydrology the stream channel and vegetation are proposed to be monitored for a period
of seven years (years 1 7) If monitoring demonstrates that the Site is successful by year 5 and
no concerns have been identified Restoration Systems LLC may propose to terminate
monitoring at the Site and forego monitoring requirements for years 6 and 7 This provision is
only applicable if the Site has consistently met all performance standards and at year 5 meet the
year 5 vegetation density standards (260 plants /acre) and the year 7 average height requirement
of 10 feet Early closure will only be provided through written approval from the USACE in
consultation with the NCIRT
Monitoring will be conducted by Axiom Environmental Inc Annual monitoring reports of the
data collected will be submitted to the IRT no later than December 31 of each monitoring year
10 1 STREAM MONITORING
Priority I Restoration and Enhancement (Level I) Reaches
Kennedy Mill Branch, Main Tributary, UTs 5 -6
Annual fall monitoring will include development of channel cross sections on riffles and pools
and a water surface profile of the channel in priority I stream restoration and enhancement (level
I) reaches The data will be presented in graphic and tabular format Data to be presented will
include 1) cross sectional area 2) bankf ill width 3) average depth 4) maximum depth 5)
width to depth ratio and 6) water surface slope A photographic record of preconstruction and
post construction pictures will also be compiled
In addition linear transects will be monitored adjacent to the stream enhancement (level I) reach
to access any existing mature tree mortality due to changes in hydrology This information will
be reported in the annual monitoring report but will not be tied to performance standards
Braided Stream Restoration (UT7) and
Single- threaded Stream Restoration within Wetland Complex (UTs 1 -2)
Annual fall monitoring will include documentation of channel surface flow (a minimum of 30
consecutive days) and fixed photograph locations in the braided stream restoration reach (UT7)
and single threaded stream restoration within wetland complexes (UTs 1 2) Evidence of
channel formation within the valley will be documented annually in monitoring years 1 -4 Field
indicators such as wracking disturbance of leaf litter matted or absent vegetation sediment
deposition and/or scour and water staining due to the continual presence of water will be noted
and photographed In monitoring years 5 7 documented field indicators of channel formation
must demonstrate the accumulation of flow in the topographic low point of the valley with
development of a primary path of flow stream channel or ordinary high water marks
Mitigation Plan page 40
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

Enhancement (Level II) Reach
Kennedy Mill Branch
Annual fall monitoring will include fined photograph locations to adequately document the
enhancement (level II) reach throughout the monitoring period
Bankfull Events
Bankfull events will be documented throughout the monitoring period
10 2 HYDROLOGY MONITORING
Groundwater monitoring gauges will be installed to take measurements after hydrological
modifications are performed at the Site Hydrological sampling will continue throughout the
growing season at intervals necessary to satisfy the Jurisdictional hydrology success criteria
within each wetland restoration area (USEPA 1990) According to the Soil Survey of Wayne
County the growing season for Wayne County in Goldsboro is from March 17 November 14
(USDA 1974) However for purposes of this project gauge hydrologic success will be
determined using data from February 1 November 14 to more accurately represent the period of
biological activity Soil temperatures will be collected in late January /early February of each
monitoring year and will be reporting in the annual monitoring report
10 3 VEGETATION MONITORING
Restoration monitoring procedures for vegetation are designed in accordance with USEPA
guidelines enumerated in Mitigation Site Type (MIST) documentation (USEPA 1990)
Compensatory Hardwood Mitigation Guidelines (DOA 1993) Stream Mitigation Guidelines
(USACE 2003) and CVS EEP Protocol for Recording Vegetation Level 1 -2 Plot Sampling Only
(Version 4 0) (Lee et al 2006) A general discussion of the restoration monitoring program is
provided A photographic record of plant growth should be included in each annual monitoring
report
After planting has been completed in winter or early spring an initial evaluation will be
performed to verify planting methods and to determine initial species composition and density
Supplemental planting and additional Site modifications will be implemented if necessary
During the first year vegetation will receive a cursory visual evaluation on a periodic basis to
ascertain the degree of overtopping of planted elements by nuisance species with quantitative
sampling occurring between September 1 and September 30 Subsequently quantitative
sampling of vegetation will be performed between June 1 and September 30 for each growing
season until the vegetation success criteria are achieved
During quantitative vegetation sampling in early fall of the first year up to 10 sample plots (10
meters by 10 meters) will be randomly placed within the Site Best professional Judgment may
be necessary to establish vegetative monitoring plots upon completion of construction activities
In each sample plot vegetation parameters to be monitored include species composition and
species density
Mitigation Plan page 41
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

10 4 BIOTIC COMMUNITY MONITORING
Changes in the biotic community are anticipated from a shift in habitat opportunities as Kennedy
Mill Branch and tributaries are restored In- stream biological monitoring is proposed to track
the changes during the monitoring period The benthic macro invertebrate community will be
sampled using NCDWQ protocols found in the Standard Operating Procedures for Benthrc
Macrornvertebrates ( NCDWQ 2006) and Benthrc Macrornvertebrate Protocols for
Compensatory Stream Restoration Projects ( NCDWQ 2001) Biological sampling of benthic
macromvertebrates will be used to collect preconstruction baseline data for comparison with
postconstruction restored conditions
Two benthic macromvertebrate monitoring locations were established within proposed
restoration reaches and one monitoring location was established upstream within a reach of
Kennedy Mill Branch proposed for preservation It is anticipated that post restoration collections
may move slightly from the prerestoration conditions in order to take advantage of developing
habitat niches (i a riffles vegetative cover woody debris in channel overhanging banks) that
cannot be predicted prior to restoration Benthrc macroinvertebrate samples will be collected
from individual reaches using the Qual 4 collection method Sampling techniques of the Qual -4
collection method consist of kick nets sweep nets leaf packs and visual searches Preproject
biological sampling occurred on June 1 2010 post restoration monitoring will occur during the
same time frame of each monitoring year
Identification of collected organisms will be performed by personnel with the NCDWQ or by a
NCDWQ certified laboratory Other data collected will include D50 values/NCDWQ habitat
assessment forms Samples collected in June 2010 are currently being identified and analyzed
by a qualified laboratory results should be available in late September 2010
110 LONG -TERM MANAGEMENT PLAN
The Bank will be protected and managed under the terms outlined in perpetual conservation
easements Conservation easements will be written to prohibit incompatible uses that might
jeopardize the objectives of the Bank Easements may be maintained by the Sponsor or by a
land management entity approved by the IRT As discussed in Section X of the MBI the North
Carolina Wildlife Habitat Foundation will be the long term holder of the Conservation Easement
and responsible for long term stewardship of the Bank site The Sponsor will provide a financial
sum appropriate for the long term holder of the Conservation Easement to carry out its
responsibilities The North Carolina Wildlife Habitat Foundation maintains and endowment for
the purpose of funding longterm management of sites for which it holds conservation easements
and will require a one time payment from the Sponsor sufficient to maintain the endowment such
that responsibilities at the Bank may be carried out in perpetuity
The particulars of longterm management are primarily determined by the provisions of the
Conservation Easement The NCWHF will be responsible for protecting the easement area from
encroachment trespass clearing and other violations that interfere with the conservation
purpose It is not anticipated that livestock will be maintained on site Boundaries of the
easement area will be clearly marked prior to transfer to the NCWHF
Mitigation Plan page 42
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Svstems LLC

NCWHF and Sponsor will agree upon sufficient funding to maintain and defend the easement
boundary and all other activities described above
12 0 ADAPTIVE MANAGEMENT PLAN
Any changes that may occur in the mitigation plan due to unanticipated construction constraints
will be adapted accordingly to meet performance standards outlined above (Section 9 0
Performance Standards) The Bank will be visited at least annually to check the status of aquatic
resources Likely challenges are limited but may include a loss of vegetation structure due to
natural or man-made causes including mortality of existing mature trees adjacent to the
Enhancement (Level 1) reach as the result of changes in hydrology a growing presence of
invasive species or some type of contaminated spill upstream of the Bank In the event that
unforeseen changes occur that affect the management or performance standards of the Bank the
holder of the easements will utilize the maintenance plan outlined above (Section 8 0
Maintenance Plan) and work with the IRT to determine appropriate measures to rectify
deficiencies in the Bank in order to provide targeted aquatic functions The holder of the
easement will obtain additional permits as necessary and will provide the USACE a Record
Drawing of corrective actions that depict the extent and nature of the work performed
13 0 CORPORATE EXPERIENCE
Restoration Systems is an environmental restoration mitigation banking and full delivery mitigation firm
founded in 1998 The firm was formed to improve the quality of environmental restoration and
mitigation by locating and acquiring the best available sites planning their restoration using proven
science and constructing them with the most qualified contractors Restoration Systems staff has been
involved in environmental mitigation and mitigation banking since 1992 Project managers have more
than 80 years of experience in resource evaluation environmental restoration and mitigation
implementation The company employs 11 permanent staff based in Raleigh North Carolina
Corporate experience of the principals began with completion of the state s first full delivery mitigation
project in 1997 the Barra Farms Mitigation Bank (623 acres) the subsequent Bear Creek — Mill Branch
Mitigation Bank in 2001 (450 acres) and Sleepy Creek Mitigation Site (550 acres) The firm then
performed all of the off site mitigation (7500 linear feet of stream restoration and 10 acres of wetland
restoration) for the Piedmont Triad International Airport Authority
Restoration Systems has implemented projects for the EEP and the North Carolina Wetland Restoration
Program including the removal of the Carbonton and Lowell Dams in the Cape Fear and Neuse River
Basins (132 000 linear feet) the Haw River Wetland Restoration Site (34 acres Cape Fear) the Elk
Shoals Stream Restoration Site (6000 linear feet Catawba) the Lick Creek Stream Site (10 000 linear
feet Cape Fear) Gatlin Swamp Wetland Restoration Site (125 acres Roanoke) and a number of buffer
restoration projects including Casey Dairy Walnut Creek Big Bull Brogden Road and Little Buffalo
Restoration Systems Cripple Creek Stream & Wetland Mitigation Bank in the Cape Fear 02 River Basin
is the first compensatory wetland and stream bank in North Carolina under the 2008 Federal
Compensatory Mitigation Rule Additional mitigation banking projects are under way in North Carolina
including the Pancho Site and throughout the southern United States
Mitigation Plan page 43
Pancho Sti eam and Wetland Mitigation Bank Restoi ation Systems LLC

Financial Assurances
The Sponsor shall provide either a Performance Bond underwritten by a surety company licensed to do
business in North Carolina with a Best s current rating of not less than A or a casualty insurance policy
to an appropriate form to be approved by the DE and to compliance with current U S Army Corps of
Engineers policy and guidance documents A Model Performance Bond and Casualty Insurance Policy
are included herein as Appendix E The financial assurances instrument shall be presented to the Corps
for timely review prior to execution
a Additionally the Conservation Easement will designate the U S Army Corps of
Engineers as a party enabled to access the site and this document requires all project
specific reports and records to be provided to the Corps As such the Corps is enabled to
determine the status of the site and to determine the occurrence of default of the
mitigation
b Prior to determination of default the bank sponsor shall be given a full opportunity to
remedy the Site to the satisfaction of the Corps
c The total value of the financial assurances shall be $1 091 060 00 which will be split
between construction in the amount of $774 653 and subsequently monitoring in the
amount of $316 407 These values include the amount necessary to complete all tasks
associated with the project from its current point through to completion These include
but are not limited to permitting construction planting monitoring and a.30%
contingency for regrading and/or replanting
d Upon successful completion of the construction phase the value of the financial
assurances shall decrement to amounts proportional to the cost of carrying the bank
through to completion The project costs and bonding calculations are shown in the Table
below The Bank Sponsor will keep the Corps apprised of any issues that may affect the
project s financial assurances
Pancho Cost Estimates & Bonding Worksheet
Item
Total Project
Cost
Cost of
Completed
Work
Future
(Bonded)
Cost
Contingency
Fees (30 %)
Land
$1 101 590
$1101590
$0
Surveying
$50000
$19500
$30500
Easement
$70000
$0
$70000
Restoration Plan
$108638
$108638
$0
Project Construction
$523800
$0
$523800
$157140
Vegetation Planting
$51 000
$0
$51 000
$15300
As Built Survey & Report
$11 940
$0
$11940
Project Monitoring
$210000
$0
$210000
Company Labor
$23400
$7020
$16380
Legal Fees
$20000
$15000
$5000
Total
$2170 368
$1 251 748
$918,620
$172440
Financial assurances to complete all remaining tasks for the project will be divided into two instruments a one for Construction
(including the As Built Surrey and Report) and one for Monitonng Contingency fees (301 of the cost) for grading and planting are
included in the Construction Bond Remaining costs for the Sponsor's labor and legal fees were prorated Based on these
calculations the Construction Bond presented will be for $774 653 and the Monitoring Bond will be for $316 407
Mitigation Plan page 44
Pancho Std earn and Wetland Mitigation Bank Reston ation Systems LLC

14 0 REFERENCES
Cowardm Lewis M V Carter F C Golet and E T LaRoe 1979 Classifications of Wetlands
and Deepwater Habitats of the United States U S Fish and Wildlife Service U S
Government Printing Office Washington D C
Department of the Army (DOA) 1993 (unpublished) Corps of Engineers Wilmington District
Compensatory Hardwood Mitigation Guidelines (12/8/93)
Environmental Laboratory 1987 Corps of Engineers Wetlands Delineation Manual Technical
Report Y 87 1 United States Army Engineer Waterways Experiment Station
Vicksburg Mississippi
Geratz J W W V Sweet 2003 Bankf ill Hydraulic Geometry Relationships and Recurrence
Intervals for North Carolinas Coastal Plain Journal of American Water Resources
Association 39 861 871
Gordon N D T A McMahon and B L Finlayson 1992 Stream Hydrology an Introduction
for Ecologists John Wiley & Sons Ltd West Sussex England
Griffith G E J M Omermk J A Comstock M P Schafale W H McNab D R Lenat T F
MacPherson J B Glover and V B Shelbourne 2002a Ecoregions of North Carolina
and South Carolina U S Geological Survey Reston Virginia
Griffith G E J M Omernik and J A Comstock M P 2002b Ecoregions of North Carolina
Regional Descriptions U S Geological Survey U S Department of Agriculture and
Indus Corporation Corvallis Oregon
Leopold L B 1994 A View of the River Harvard University Press Cambridge MA 298 pp
Lee M T R K Peet S D Roberts and T R Wentworth 2006 CVS EEP Protocol for
Recording Vegetation Level 1 2 Plot Sampling Only Ecosystem Enhancement
Program North Carolina Department of Environment and Natural Resources 11 pp
Natural Resources Conservation Service (MRCS) 2009 Web Soil Survey (online) Available
http //websoilsurvey nres usda gov/ [September 15 2009] Soil Survey Staff Natural
Resources Conservation Service United States Department of Agriculture
North Carolina Division of Water Quality (NCDWQ) 2001 Benthic Macromvertebrate
Monitoring Protocols for Compensatory Mitigation 401 /Wetlands Unit Department of
Environment and Natural Resources Raleigh North Carolina
Mitigation Plan page q-)
Pancho Sh eam and Wetland Mitigation Bank Restoi ation Systems LLC

North Carolina Division of Water Quality (NCDWQ) 2006 Standard Operating Procedures for
Benthic Macroinvertebrates Biological Assessment Unit Department of Environment
and Natural Resources Raleigh North Carolina
North Carolina Division of Water Quality (NCDWQ) 2007 Redbook Surface Waters and
Wetlands Standards North Carolina Department of Environment and Natural Resources
Division of Water Quality Raleigh North Carolina
North Carolina Division of Water Quality (NCDWQ) 2009 Final Neuse River Basinwide
Water Quality Plan North Carolina Department of Environment and Natural Resources
Raleigh North Carolina
North Carolina Division of Water Quality (NCDWQ) 2010a Final North Carolina Water
Quality Assessment and Impaired Waters List (2008 Integrated 305(b) and 303(d)
Report) (online) Available http / /portal ncdenr org/c /document_ library /get_file�
uuid= 9f453bft9 2053 4329 b943- 6614bd4e709a &groupId =38364 [May 24 20101 North
Carolina Department of Environment and Natural Resources Raleigh North Carolina
North Carolina Division of Water Quality (NCDWQ) 2010b Draft North Carolina Water
Quality Assessment and Impaired Waters List (2010 Integrated 305(b) and 303(d)
Report) (online) Available http / /portal ncdenr org/c /document_ library /get_file�
uuid= 33a71505 6cdf 4497 b090 aadf79blf02c &groupId =38364 [May 24 2010] North
Carolina Department of Environment and Natural Resources Raleigh North Carolina
North Carolina Division of Water Quality (NCDWQ) 2010c North Carolina Waterbodies
Listed by Subbasm (online) Available
http //h2o enr state nc us/ bims /reports/basinsandwaterbodies /03 04 -04 pdf [May 25
2010] North Carolina Department of Environment and Natural Resources Raleigh
North Carolina
Rosgen D 1996 Applied River Morphology Wildland Hydrology (Publisher) Pagosa
Springs Colorado
Schafale M and Weakley A 1990 Classification of the Natural Communities of North
Carolina Third Approximation North Carolina Natural Heritage Program Division of
Parks and Recreation Raleigh North Carolina
United States Army Corps of Engineers United States Environmental Protection Agency North
Carolina Wildlife Resources Commission North Carolina Division of Water Quality
(USACE et al ) 2003 Stream Mitigation Guidelines
Mitigation Plan Page 46
Pancho Sti eam and Wetland Mitigation Bank Restoi atron Systems LLC

United States Army Corps of Engineers (USACE) and North Carolina Division of Water Quality
(NCDWQ) 2007 Information Regarding Stream Restoration with Emphasis on the
Coastal Plain Draft Available
http / /www nceep net / business /landowner/ Guidance_ Stream— Restoration_with_Emphasis
—on Coastal— Plains pdf [September 28 2009]
United States Department of Agriculture (USDA) 1974 Soil Survey of Wayne County North
Carolina Soils Conservation Service United States Department of Agriculture
United States Environmental Protection Agency ( USEPA) 1990 Mitigation Site Type
Classification (MIST) USEPA Workshop August 13 -15 1989 EPA Region IV and
Hardwood Research Cooperative NCSU Raleigh North Carolina
United States Fish and Wildlife Service (USFWS) 2008 Threatened and Endangered Species
in North Carolina (online) Available http / /www fws gov /nc es /es /countyfr html [May
24 20 10] United States Fish and Wildlife Service Raleigh North Carolina
United States Geological Survey (USGS) 1974 Hydrologic Unit Map 1974 State of North
Carolina
United States Geological Survey (USGS) 2001 Estimating the Magnitude and Frequency of
Floods in Rural Basins of North Carolina — Revised USGS Water Resources
Investigations Report 01 4207 Raleigh North Carolina
Mitigation Plan page 47
Pancho Sh eam and Wetland Mitigation Bank Restot ation Systems LLC

G19; a 04a11ki1
FIGURES
Mitigation Plan
Pancho So eam and Wetland Mitigation Bank
Appendices
Restoi atdon Systems LLC

MrAl
Jjp4a 'fir
Legend J
Surveyed Easement Boundary
Roads
County Boundaries
Wayne County
Municipal Boundaries
Goldsboro
C�
os
5,11
\1e b
J
Reference Site-
Tar Kiln Branch
13
..0
Pancho
Mitigation V, A4--
N
Bank
Directions to the Site from Raleigh, NC:
Travel east on U.S. Highway 70
Travel — 37 miles on U.S. Highway 70 to the intersection
with Martin Livestock Road
Turn right at Martin Livestock Road (0.7 mile)
Turn right at Progressive Church Road (4 miles)
Turn left at Brogden Road (0.5 mile)
Turn right at Richardson Bridge Road (5.3 miles)
Turn left at T-intersection onto Harper House Road,
0 0.5 1 2 3 4 which becomes Stevens Mill Road (1.3 miles)
Miles The Bank is located where Kennedy Mill Branch crosses
Stevens Mill Road
Scale 1:120,000 Latitude: 35.3337550 N, Longitude: 78.192699* W
Dwn. By- FIGURE
Axiom Environmental, Inc. PROJECT AND REFERENCE LOCATIONS CLF
218 Snow Avenue Date:
Raleigh, NC 27603 PANCHO RESTORATION SITE Feb 2012
919-215-1693 Wayne County, North Carolina Project: 1A
Axiom Emrccnmer.al, Inc. 10-010

Axiom Environmental, Inc.
216 Snow Avenue
Raleigh, NC 27603
919- 215 -1693
1mm Em'ucnmr+al. Ine.
PROJECT AND REFERENCE LOCATIONS
PANCHO MITIGATION BANK
Wayne County, North Carolina
Dwn. By: FIGURE
CLF
Date:
Feb 2012
Project: 1B
10 -010
L --------------

Dwn. By: FIGURE
Axiom Environmental, Inc. HYDROLOGIC UNIT MAP CLF
218 Snow Avenue PANCHO MITIGATION BANK Date:
Raleigh, NC 27603 Feb 2012
919- 215 -1693 Wayne County, North Carolina Project:
Adam E-- maftl, i— 1 0 -01 0

Dwn. By FIGURE
Axiom Environmental, Inc. TOPOGRAPHY AND DRAINAGE AREA CLF
218 Snow Avenue Date:
Raleigh, ��
Raleigh, NC 27603 PANCHO MITIGATION BANK Feb 2012
919- 215 -1693 Wayne County, North Carolina Project:
A- Envimnmwlal, Inc.
10 -010

Dwn. By: FIGURE
Axiom Environmental, Inc. TOPOGRAPHY AND DRAINAGE AREA CLF
218 Snow Avenue Date:
Raleigh, NC 27603 PANCHO MITIGATION BANK Feb 2012
919- 215 -1693 Wayne County, North Carolina Project: 3B
Axam emironmmlal. Inc. 1 0-01 0

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L I

APPENDIX B
EXISTING STREAM
CHARACTERISTIC DATA
Mitigation Plan Appendices
Pancho Stream and Wetland Mitigation Bank Restoration Svstems, LLC

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APPENDIX C
FLOOD FREQUENCY
ANALYSIS DATA
Mitigation Plan Appendices
Pancho Sty eam and Wettand Mitigation Bank Restoi ation Systems LLC

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APPENDIX D
THORNTHWAITE
ANALYSIS DATA
Mitigation Plan Appendices
Pancho Sh eam and Wetland Mitigation Bank Restoi ation Systems LLC

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WETS Station GOLDSBORO 4
SE NC3510
Creation
Date 10/23/2002
Latitude
3520
Longitude
1 24 F
07758
higher
Elevation
110
higher
---------------------I-----------------1-----------------I-----------------
1
State FIPS
/County(FIPS)
37191
County
Name Wayne
Growing Season Leng`h
Start yr
--------------------------------------------------------------------
- 1971
End yr
- 2000
days
1 3/ 7 to 11/20 I
3/23
to 11/ 4
- - -
- -I
days
I 258 days I
Temperature
days
I
I
I >
Precipitation
days
I I
l 3/ 2 to 11/25 1
3/18
I
1 >
I
(Degrees
F )
I 269 days I
I I
237
(Inches)
---------------------------------------------------------------------------
Percent chance of
the growing
season occurring between the
Beginning
-----------------------
I
I
---------------------------------
1 303 chance
lavg I
- - -
- - I
I
I
I
I will have
1# ofl
avg
I
i-------
I-------
I-------
I
I -----------------
Idaysl
totall
Month
I avg
I avg
I avg
I avg
I less I more
Iw/ 11
snow
I
I daily
i daily
I
I
I than I than
I orl
fall
I
I max
I min
I
I
I I
Imorel
I
--------------------------------------------------------------------
January
1 52
6 1 33 0
1 42
8 1 4
64
1 3 56 1 5
37
1 8 1
- - -
1
- -I
1 1
February
1 56
1 1 34 7
1 45
4 1 3
67
1 2 47 1 4
28
1 6 1
1
4 1
March
I 64
2 1 41 8
1 53
0 1 4
55
1 3 28 5
53
1 7
0
9 1
April
l 73
5 l 49 7
1 61
6 1 3
45
I 2 15 1 4
31
I 5 1
0
0 1
May
I 80
8 1 58 7
1 69
7 1 3
87
1 2 65 1 4
83
I 6 1
0
0 1
June
1 87
2 66 5
1 76
8 1 4
03
1 2 51 1 4
94
I 6 1
0
0 1
July
1 90
5 1 71 1
1 80
8 1 5
34
1 3 51 i 6
38
1 8 1
0
0
August
1 88
9 1 69 8
1 79
3 1 5
52
1 3 49 1 6
34
I 7 1
0
0 1
September
1 83
6 1 63 7
1 73
7 5
57
1 2 43 I 7
40
I 6 1
0
0 1
October
1 73
9 1 50 6
1 62
3 1 3
10
1 1 99 1 4
39
1 4 1
0
0 1
November
I 65
2 1 41 8
1 53
5 1 3
01
1 1 94 1 3
65
1 5 1
0
0 1
December
----------
I 56
I -------
0 1 35 3
I -------
1 45
I -------
7 1 3
I --------
44
1 2 28 1 4
I -------- I --------
25
1 6 1
I ---- I-
0
- - -
7 1
- - I
----------
Annual
I-------
I - - - --
I-------
I - - - --
I-------
I - - - --
I--------
I - - -
- --
1-------- I--------
I 46 79 I 56
33
I---- I-
I -- I
- - -
- - --
- -I
I
----------
Average
----------
I -------
I 72
I--------------
I -------
7 1 51 4
I -------
1 62
1-------
1 --------
0 1 - - -
I--------
- --
1-------- 1--------
I - - - - -- I - - - -
1----------------
--
I----------
I -- I
1---- I-
- - --
- - -
I
I
- -I
Total
----------
--------------------------------------------------------------------
I - - - --
I-------
I- - ---
1-------
I - - - --
I-------
I 50
1----------------
20
I - - - - -- I - - - -
I--------
--
1 74 1
I---- I-
4
- - -
- - -
1 1
- -I
- -I
GROWING SEASON DATES
---------------------------------------------------------------------------
I
Temperature
---------------------I-----------------------------------------------------
Probability
1 24 F
or
higher
1 28 F or higher 1 32
F or
higher
---------------------I-----------------1-----------------I-----------------
1
Beginning and Ending Dates
Growing Season Leng`h
50 percent
I
1 >
365
days
1 3/ 7 to 11/20 I
3/23
to 11/ 4
1 >
365
days
I 258 days I
225
days
70 percent
I
I >
365
days
I I
l 3/ 2 to 11/25 1
3/18
to 11 /10
1 >
I
365
days
I 269 days I
I I
237
days
---------------------------------------------------------------------------
Percent chance of
the growing
season occurring between the
Beginning
and Ending dates
total 1902 -2002 prcp
Station NC3510 GOLDSBORO 4 SE

- - - - - -- Unit = inches
yr fan feb mar apr may ]un Sul aug sep Oct nov dec annl
2
3 2 57 5 76 5 89 M4 25
4 2 60 4 61 3 96 1 09
5 1 99 5 91 2 22 5 34
6 3 53 4 83 6 00 0 52
7 1 46 3 55 1 85 3 98
8 3 72 5 43 6 98 2 68
9M1 39 M1 33 2 04 M2 87
10 3 19 M5 33 3 35 4 49
11 4 59 1 29 3 43 2 46
12 4 47 3 55 4 22 4 12
13 3 65 3 27 4 68 1 01
14 2 75 5 86 3 69 2 98
15M6 43 2 82 2 21 2 41
16M2 86 3 35 2 38 2 04
17 3 67 2 91 3 54 3 24
18 2 95 0 97 1 96 8 05
19M5 23 4 66 1 86 Ml 80
20 2 57 5 40 M4 70 6 61
21 3 92 4 85 3 95 5 74
22 4 71 M7 78 5 94 4 86
23 2 81 2 37 3 42 6 08
24 4 39 5 86 2 46 3 71
25 6 58 M3 65 2 38 M2 17
26 4 10 5 20 4 08 2 21
27M0 79 3 90 3 95 1 69
28 0 73 M3 53 2 38 6 28
29M4 79 6 48 4 73 2 80
30 5 38 1 63 2 59 2 13
31 2 09 1 36 3 49 4 63
32 2 75 2 65 2 79 1 21
33 3 88 4 06 2 55 6 13
34 1 17 M4 00 M5 08 3 00
35M3 32 2 28 3 19 3 31
36 4 50 3 90 5 82 4 08
37 6 29 M5 22 2 09 9 83
38 2 29 1 01 1 97 7 95
39 4 40 7 05 4 27 2 43
40 2 63 2 10 3 21 2 72
41 3 22 3 19 5 28 3 51
42 2 26 2 35 8 80 1 44
43 5 56 MO 98 6 58 3 51
44 4 94 6 12 4 52 4 61
45 2 03 4 14 1 41 1 67
46 2 92 3 06 3 46 3 58
47 3 94 1 60 4 34 5 46
48 6 41 5 27 3 26 3 68
49 1 32 4 55 2 52 4 98
50 2 22 0 96 3 86 0 31
51 1 48 1 45 3 14 M2 68
52 2 44 M3 93 4 50 2 65
53 2 13 3 74 2 66 3 10
54 5 79 1 52 3 76 4 02
55 2 48 2 01 2 34 1 83
56 2 39 4 95 M2 85 3 99
57 1 95 3 41 4 05 2 01
MO 00 MO 38 2 98 3 36
0 96 6 07 3 59 M4 27 2 01 4 27 0 52 Ml 17 41 33
3 47 5 00 6 23 7 32 4 59 2 09 M2 84 3 43 47 23
5 64 2 28 10 89 9 02 M2 54 2 45 MO 75 5 13 54 16
4 55 8 47 12 67 6 07 2 43 3 99 0 73 4 00 57 79
4 72 6 15 3 60 M2 73 2 85 0 78 M4 18 M2 56 38 41
2 69 4 46 33 39 9 47 1 09 3 12 Ml 15 M2 64 76 82
5 20 5 44 M9 79 M4 08 M2 26 1 13 0 45 1 90 37 88
6 56 6 37 5 67 8 20 5 60 2 36 MO 03 2 60 53 75
0 57 2 20 2 82 3 53 2 65 M3 53 4 44 M3 31 34 82
2 72 M7 25 4 17 5 99 4 31 0 46 1 79 2 48 45 53
6 63 8 53 M8 99 1 97 6 39 3 82 1 18 3 36 53 48
Ml 90 2 33 2 40 6 19 6 71 3 54 2 95 4 73 46 03
M6 33 3 78 5 71 4 21 4 04 4 44 M1 81 2 28 46 47
4 96 6 02 6 95 3 92 3 69 2 51 1 06 2 90 42 64
4 67 7 69 7 77 3 49 15 66 1 48 1 45 1 80 57 37
4 74 2 55 5 14 2 42 5 47 1 61 3 43 5 47 44 76
M5 13 M6 10 11 26 3 43 M3 49 M2 59 MO 29 1 32 47 16
MO 50 6 16 9 32 M5 16 4 15 1 37 4 57 M5 43 55 94
9 95 3 81 5 82 2 73 2 17 2 48 M3 50 M2 27 51 19
7 70 11 41 M7 58 5 19 0 92 4 91 0 40 4 57 65 97
2 68 1 73 5 58 4 27 1 07 1 86 3 75 M4 51 40 13
7 04 M5 41 5 72 4 58 14 16 0 81 1 43 5 54 61 11
4 20 M4 04 4 50 M2 30 M2 28 2 71 M1 13 35 94
1 50 5 32 2 69 5 56 0 68 0 32 M2 90 1 71 36 27
1 20 7 27 5 42 M3 18 4 20 4 32 3 47 2 71 42 10
4 56 3 98 6 78 M3 96 14 23 3 00 2 08 M3 64 55 15
M6 13 3 93 M5 31 5 78 5 41 8 37 M4 21 4 06 62 00
2 09 4 10 3 85 2 84 1 35 2 01 1 52 4 46 33 95
4 85 3 85 6 91 11 05 2 16 2 86 0 35 5 84 49 44
5 61 3 05 2 50 3 04 1 70 5 94 M5 30 5 38 41 92
7 10 1 81 7 22 7 38 1 67 0 01 0 89 0 88 43 58
2 89 5 27 14 51 2 97 6 44 MO 30 3 88 2 82 52 33
2 26 3 35 10 07 5 87 6 65 0 31 3 16 5 21 48 98
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�wsin�n��ouai�n
Doc ID 010418480003 Type CRP
Recorded 11 /18/2010 at 12 36 87 PM
Fee Amt $20 00 Page i of 3
WAYNE COUNTY NO
LOIS J MOORING REGISTER OF DEEDS
BK281 P(1419 -421
3. � �o
Prepared by William P Aycock H, Attomey
d- R�� uW ft�1 Schell Bray Aycock Abel & Livmgston PLLC
P O Box 21847
Greensboro North Carolma 27420
(No taxable consideration)
STATE OF NORTH CAROLINA
INSTRUMENT OF COMBINATION
COUNTY OF WAYNE
THIS INSTRUMENT OF COMBINATION is made this 12th day of November, 2010,
by PANCHO MITIGATION COMPANY, LLC, a North Carolina limited liability company,
whose address is 1101 Haynes Street, Suite 211, Raleigh, North Carolina 27604
WITNESSETH
WHEREAS, the makers of this Instrument of Combination own two parcels pf land
which were acquired by the following deeds ,
1 Deed dated November 15 , 2010, and recorded in Book $� j' , Page ► 1 , Office
of the Register of Deeds of Wayne County, North Carolina -
2 Deed dated November _15, 2010, and recorded in Book 2,1 11 Page *16,
Office of the Register of Deeds of Wayne County, North Carolina
WHEREAS, said owners wish to combine the above - mentioned properties into a single
tract of land which is described by one common boundary line for the purpose of complying with
all applicable provisions of the Wayne County Development Ordinances,
WHEREAS, this is a limited special purpose instrument for the purposes specified above
and is not a conveyance and does not change or modify in any manner the ownership interests in
the above - referenced property, and
ff2725420

WHEREAS, upon execution and recordation of this Instrument of Combination, the
above referenced properties are hereby combined and shall hereafter be described as shown on
Exhibit "A" attached hereto and incorporated herein by reference
IN WITNESS WHEREOF, the maker has hereunto set its hand and seal, the day and year
first above written
PANCHO MITIGATION COMPANY, LLC
By �^
Title COED
STATE OF NORTH CAROLINA
COUNTY OF GUILFORD
I certify that the following person(s) personally appeared before me this day, each acknowledging
to me that he or she signed the foregoing document
1' hen C SV,Var\q :.
WITNESS my hand and official
(Of c:aI Seal)
�pTAR),
x
A U
BL �G =V
k Adf U w-+Qthm' , 2010
-Z, Y�Q
Notary's Printed or Typed Name p
My commission expires 1-a 8

EX MIT "A"
Attached to and made a part of that certain Instrument of Combination dated November 12
2010, by Kevin J Pusch and spouse, Dianne M Pusch
Being all that certain parcel of land situated in Grantham Township, Wayne County, North
Carolina, more particularly described as follows
All of Tract 1(containing 215 acres±) and Tract 2 (containing 2 85 acres±) as shown on plat for
"Pancho Nhtigatton Company, LLC, entitled Vancho Restoration Site," dated October 28, 2010,
prepared by K2 Design Group, P A and recorded in Book N, Page 50B, Wayne County, North
Carolina, Registry
3

R'
SCHELL BRAY AYCOCK ABEL 6 LIVINGSTON PLCC
ATTORNEYS AND COUNSELORS AT LAW
DDRIS R BRAY
WILLIAM P AYCOCK II
MICHAEL R ABEL
PAUL H LIVINGSTON JR
THOMAS C WATKINS
MICHAEL H GODWIN
BARBARA R CHRISTY
MELANIE SAMSON TUTTLE
JENNIFER L J KOENIG
HOLLY H ALDERMAN
MARKT CAIN
GARLAND G GRAHAM
STACEY A BRADY
CRAIG KISER
MY H KINCAID
CHRISTINA FREEMAN PEARSALL
THOMAS P HOCKMAN
APRIL E KIGHT
PARRISH LENTZ PEDDRICK
BRAXTON SCHELL
(1924 2008)
GREENSBORO I CHAPEL HILL
January 24, 2011
Ms Tara Allden
Restoration Systems, LLC
1101 Haynes Street, Suite 211
Raleigh, North Carolina 27604
Re Pancho Mitigation Company, LLC
Dear Tara
We are enclosing the following title policies in connection with the
captioned project
WRITER S DIRECT DIAL NUMBER
338 370 8803
WRITER S EMAIL ADDRESS
wpaycockCsobsUbmy cam
1 Owner's Policy of Title Insurance No 201004085G issued by
Investors Title Insurance Company covering Tract 1 (containing 215 acres) as
shown on plat for Pancho Mitigation Company, LLC, and
2 Owner's Policy of Title Insurance No 201004092G issued by
Investors Title Insurance Company covering Tract 2 (containing 2 85 acres) as
shown on plat for Pancho Mitigation Company, LLC
If you need anything further, please let me know
WPAII/sh
Enclosures
Very truly yours,
SCHELL BRAY AYCOCK ABEL & LIVINGSTON PLLC
William P Aycock II
schellb ay com
1500 RENAISSANCE PLAZA 230 NORTH ELM STREET GREENSBORO NC 27401 MAILING ADDRESS P 0 BOX 21847 GREENSBORO NC 27420 p 336 370 8800 f 336 370 8830

imiMi�o�ww�wi'wi
Doe ID 010418440003 TVDe CRP - a
Recorded 11/18/2010 at 12 30 88 PM 3
Fee Amt 8748 00 Page i of 3 .1
Exolee Tax 8723 00 RE y— �P
WAYNE COUNTY NO
LOIS J MOORING REGISTER OF DEEDS
GK2817 PA 16 -418
Mail after recording to Witham P Aycock II Esquire
P O Box 21847 Greensboro NC 27420
Tius instrument was prepared by William P Aycock II, Esquire
Schell Bray Aycock Abel & Livingston PLLC
NORTH CAROLINA GENERAL WARRANTY DEED
4L
THIS DEED made this day of November, 2010, by and between
GRANTOR
RICHARD H. COX, JR. and spouse,
DIANA P COX
GRANTEE
PANCHO MITIGATION COMPANY, LLC,
a North Carolina limited habilitycompany
Address
1101 Haynes Street, Suite 211
Raleigh, North Carolina 27604
The designation Grantor and Grantee as used herem shall include said parties, their hens successors and
assigns, and shall include singular, plural, masculine, feminine or neuter as required by context
WITNESSETH, that the Grantor, for a valuable consideration paid by the Grantee, the receipt of
which is hereby acknowledged, has and by these presents does grant, bargain, sell and convey unto the
Grantee m fee simple, all that certain lot or parcel of land situated in Grantham Township, Wayne
County, North Carolina, and more particularly described as follows
All of Tract I (containing 215 acres±) as shown on plat for "Pancho Mntigation
Company, LLC, entitled "Pancho Restoration Site" dated October 28, 2010, prepared by
K2 Design Group, P A and recorded in Book N, Page SOB, Wayne County, North
Carolina, Registry
#272447vl

TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all privileges and
appurtenances thereto belonging to the Grantee in fee simple
And the Grantor covenants with the Grantee, that Grantor is seized of the premises in fee simple,
has the right to convey the same in fee simple, that title is marketable and free and clear of all
encumbrances, and that Grantor will warrant and defend the title against the lawful claims of all persons
whomsoever except for the exceptions hereinafter stated Title to the property hereinabove described is
subject to the following exceptions
Restrictions, rights of -way and easements of record and to ad valorem taxes for
the current year
Grantor shall have the right to retain hunting rights over the above - described property for the
benefit of Grantor(s), their immediate families, their hens and their heirs' immediate families, provided,
however, the exercise of such rights shall not interfere with any mitigation, restoration or preservation
projects conducted on the property by Grantee and/or its successors and assigns
The above - described property is not the pnmary residence of the Grantor
IN WITNESS WHEREOF, the Grantor has caused this instrument to be duly executed and
delivered, the day and year first above written
(SEAL)
Ri and H Cox, Jr
a�C.�t.rtJ (SEAL)
Diana P Cox
r
2

STATE OF NORTH CAROLINA
• IN • —.. .i M
I certify that the following person(s) personally appeared before me tins day, each acknowledging
to me that he or she signed the foregoing document
Richard H Cox, Jr and Diana P Cox
WITNESS my hand and official seal, this ISr day of November, 2010
Notary's Official Signs e
(Official '
to U �/7�1 �ry S GeGJti
Notary's Printed or T ed Name
•L'•;A,•`�, My commission expires
••` �/ L( I
pD Gov
�•�,,,������ +N•
r

CTjl�Investors Zitle Insurance Company
OWNER'S POLICY OF TITLE INSURANCE
Any notice of claim and any other notice or statement in writing required to be given to the Company under this Policy
must be given to the Company at the address shown In Section 18 of the Conditions
COVERED RISKS
SUBJECT TO THE EXCLUSIONS FROM COVERAGE THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND
THE CONDITIONS INVESTORS TITLE INSURANCE COMPANY a North Carolina corporation (the Company) insures as of Date
of Policy and to the extent stated in Covered Risks 9 and 10 after Date of Policy against loss or damage not exceeding the
Amount of Insurance sustained or incurred by the Insured by reason of
1 Title being vested other than as stated In Schedule A
2 Any defect in or lien or encumbrance on the Title This Covered Risk includes but is not limited to insurance against loss
from
(a) A defect in the Title caused by
(i) forgery fraud undue Influence duress incompetency incapacity or impersonation
(ii) failure of any person or Entity to have authorized a transfer or conveyance
(iii) a document affecting Title not properly created executed witnessed sealed acknowledged notarized or delivered
(iv) failure to perform those acts necessary to create a document by electronic means authorized by law
(v) a document executed under a falsified expired or otherwise invalid power of attorney
(vi) a document not properly filed recorded or indexed in the Public Records including failure to perform those acts by
electronic means authorized by law or
(vii) a defective judicial or administrative proceeding
(b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable but unpaid
(c) Any encroachment encumbrance violation variation or adverse circumstance affecting the Title that would be disclosed
by an accurate and complete land survey of the Land The term encroachment includes encroachments of existing
Improvements located on the Land onto adjoining land and encroachments onto the Land of existing improvements
located on adjoining land
3 Unmarketable Title
4 No right of access to and from the Land
5 The violation or enforcement of any law ordinance permit or governmental regulation (including those relating to building
and zoning) restricting regulating prohibiting or relating to
(a) the occupancy use or enjoyment of the Land
(b) the character dimensions or location of any improvement erected on the Land
(c) the subdivision of land or
(d) environmental protection
If a notice describing any part of the Land is recorded In the Public Records setting forth the violation or intention to enforce
but only to the extent of the violation or enforcement referred to in that notice
(continued on back panel)
IN WITNESS WHEREOF Investors Title Insurance Company has caused this Policy to be signed and sealed to be valid when
Schedule A is countersigned by an authorized officer or agent of the Company
® The use of this Farm is restricted to
tNSUq�c
AMERICAN ALTA licensees and ALTA members
LAND TITLE
AS OCIATION In good standing as of the date of
use All other uses are prohibited H S E A L 39 President
Reprinted under license from the � 1972 i
American Land Title Association s
Copyright 2006 2009 American Land Title Association
a
All rights reserved V Secretary
Form No 109 06 J (Rev 3120071 AITA rlwnar'c Pnllru [AR 17 nRl

CONDITIONS
1 DEFINITION OF TERMS
The following terms when used in this policy mean
(a) Amount of Insurance The amount stated In Schedule A as may be
increased or decreased by endorsement to this policy Increased by Section 8(b) or
decreased by Sections 10 and 11 of these Conditions
(b) Date of Policy The date designated as Date of Policy in Schedule A
(c) Entity A corporation partnership trust limited liability company or other
similar legal entity
(d) Insured The Insured named in Schedule A
(1) the term insured also includes
(A) successors to the Title of the Insured by operation of law as
distinguished from purchase including heirs devisees survivors personal
representatives or next of kin
(B) successors to an Insured by dissolution merger consolidation
distribution or reorganization
(C) successors to an Insured by its conversion to another kind of Entity
(D) a grantee of an Insured under a deed delivered without payment of
actual valuable consideration conveying the Title
(1) if the stock shares memberships or other equity Interests of
the grantee are wholly owned by the named Insured
(2) if the grantee wholly owns the named Insured
(3) it the grantee is wholly owned by an affiliated Entity of the
named Insured provided the affiliated Entity and the named Insured are both wholly
owned by the same person or Entity or
(4) if the grantee is a trustee or beneficiary of a trust created by a
written instrument established by the Insured named In Schedule A for estate
planning purposes
(11) with regard to (A) (B) (C) and (D) reserving however all rights and
defenses as to any successor that the Company would have had against any
predecessor Insured
(e) Insured Claimant An Insured claiming loss or damage
(f) Knowledge or Known Actual knowledge not constructive knowledge or
notice that may be imputed to an Insured by reason of the Public Records or any
other records that impart constructive notice of matters affecting the Title
(g) Land The land described in Schedule A and affixed improvements that by
law constitute real property The term Land does not include any property beyond
the Imes of the area described in Schedule A nor any right title interest estate or
easement in abutting streets roads avenues alleys lanes ways or waterways but
this does not modify or limit the extent that a right of access to and from the land
is insured by this policy
(h) Mortgage Mortgage deed of trust trust deed or other security
instrument Including one evidenced by electronic means authorized by law
(i) Public Records Records established under state statutes at Date of Policy
for the purpose of imparting constructive notice of matters relating to real property
to purchasers for value and without Knowledge With respect to Covered Risk 5(d)
Public Records shall also include environmental protection liens filed in the records
of the clerk of the United States District Court for the district where the Land
Is located
lf)
Title The estate or interest described in Schedule A
(k) Unmarketable Title Title affected by an alleged or apparent matter that
would permit a prospective purchaser or lessee of the Title or lender on the Title to
be released from the obligation to purchase lease or lend if there is a contractual
condition requiring the delivery of marketable title
2 CONTINUATION OF INSURANCE
The coverage of this policy shall continue in force as of Date of Policy in favor
of an insured but only so long as the Insured retains an estate or interest in the
Land or holds an obligation secured by a purchase money Mortgage given by a
purchaser from the insured or only so long as the Insured shall have liability by
reason of warranties in any transfer or conveyance of the Title This policy shall not
continue in force in favor of any purchaser from the Insured of either (I) an estate or
Interest In the Land or (d) an obligation secured by a purchase money Mortgage
given to the Insured
3 NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT
The insured shall notify the Company promptly In writing (1) in case of any
litigation as set forth in Section 5(a) of these Conditions (u) In case Knowledge shall
come to an Insured hereunder of any claim of title or interest that Is adverse to the
Title as insured and that might cause loss or damage for which the Company may
be liable by virtue of this policy or (iii) if the Title as insured is rejected as
Unmarketable Title If the Company is prejudiced by the failure of the Insured
Claimant to provide prompt notice the Company s liability to the Insured Claimant
under the policy shall be reduced to the extent of the prejudice
4 PROOF OF LOSS
In the event the Company Is unable to determine the amount of loss or damage
the Company may at its option require as a condition of payment that the Insured
Claimant furnish a signed proof of loss The proof of loss must describe th ct
lien encumbrance or other matter insured against by this policy that consti, he
basis of loss or damage and shall state to the extent possible the basis of
calculating the amount of the loss or damage
5 DEFENSE AND PROSECUTION OF ACTIONS
(a) Upon written request by the Insured and subject to the options contained in
Section 7 of these Conditions the Company at its own cost and without
unreasonable delay shall provide for the defense of an Insured in litigation in which
any third party asserts a claim covered by this policy adverse to the Insured This
obligation is limited to only those stated causes of action alleging matters Insured
against by this policy The Company shall have the right to select counsel of its
choice (subject to the right of the insured to object for reasonable cause) to
represent the Insured as to those stated causes of action It shall not be liable for
and will not pay the fees of any other counsel The Company will not pay any fees
costs or expenses incurred by the Insured In the defense of those causes of action
that allege matters not insured against by this policy
(b) The Company shall have the right In addition to the options contained in
Section 7 of these Conditions at its own cost to Institute and prosecute any action
or proceeding or to do any other act that In its opinion may be necessary or
desirable to establish the Title as Insured or to prevent or reduce loss or damage
to the Insured The Company may take any appropriate action under the terms of
this policy whether or not it shall be liable to the Insured The exercise of these
rights shall not be an admission of liability or waiver of any provision of this policy
If the Company exercises its rights under this subsection it must do so diligently
(c) Whenever the Company brings an action or asserts a defense as required or
permitted by this policy the Company may pursue the litigation to a final
determination by a court of competent jurisdiction and it expressly reserves the
right in Its sole discretion to appeal any adverse judgment or order
6 DUTY OF INSURED CLAIMANT TO COOPERATE
(a) In all cases where this policy permits or requires the Company to prr, ute
or provide for the defense of any action or proceeding and any appeals the ad
shall secure to the Company the right to so prosecute or provide defense the
action or proceeding including the tight to use at its option the name of the
Insured for this purpose Whenever requested by the Company the Insured at the
Company s expense shall give the Company all reasonable aid (1) in securing
evidence obtaining witnesses prosecuting or defending the action or proceeding or
effecting settlement and (o) in any other lawful act that in the opinion of the
Company may be necessary or desirable to establish the Title or any other matter as
Insured If the Company is prejudiced by the failure of the Insured to furnish the
required cooperation the Company s obligations to the Insured under the policy
shall terminate including any liability or obligation to defend prosecute or continue
any litigation with regard to the matter or matters requiring such cooperation
(b) The Company may reasonably require the Insured Claimant to submit to
examination under oath by any authorized representative of the Company and to
produce for examination inspection and copying at such reasonable times and
places as may be designated by the authorized representative of the Company all
records In whatever medium maintained including books ledgers checks
memoranda correspondence reports a mails disks tapes and videos whether
bearing a date before or after Date of Policy that reasonably pertain to the loss or
damage Further if requested by any authorized representative of the Company the
Insured Claimant shall grant its permission In writing for any authorized
representative of the Company to examine Inspect and copy all of these records In
the custody or control of a third party that reasonably pertain to the loss or damage
All Information designated as confidential by the Insured Claimant provided to the
Company pursuant to this Section shall not be disclosed to others unless In the
reasonable judgment of the Company It is necessary to the administration of the
claim Failure of the Insured Claimant to submit for examination under oath produce
any reasonably requested Information or grant permission to secure reasonably
necessary Information from third parties as required in this subsection unless
prohibited by law or governmental regulation shall terminate any liability the
Company under this policy as to that claim
7 OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS TERMINATION OF
LIABILITY
In case of a claim under this policy the Company shall have the following
additional options
(a) To Pay or Tender Payment of the Amount of Insurance
To pay or tender payment of the Amount of Insurance under this policy
tonether with anv costs attornevs fees and expenses incurred by the Insured

INVESTORS TITLE INSURANCE COMPANY
P O Drawer 2687
Chapel Hill North Carolina 27515 2687
OWNER'S POLICY OF TITLE INSURANCE
(06- 17 -06)
This Policy is not complete without appropriate Schedules and corresponding Jacket unless otherwise agreed in writing
SCHEDULE A
Policy Number 201004092G Policy Date 11/16/2010 Time 12 26 00 PM
Amount of Insurance $34,000 00 Premium $ 69 70
Address Reference TRACT 2, PANCHO RESTORATION SITE
WAYNE COUNTY, NC
1 Name of Insured Pancho Mitigation Company, LLC, a North Carolina lsmited
liability company
2 The estate or interest in the Land that is insured by this policy is
FEE SIMPLE
I Title is vested in PANCHO MITIGATION COMPANY, LLC, A NORTH CAROLINA LIMITED
ABILITY COMPANY
4 The Land referred to in this Policy is in the State of NC County of
Wayne and described as follows
LOCATED IN GRANTHAM TOWNSHIP, WAYNE COUNTY, NORTH CAROLINA AND MORE
PARTICULARLY DESCRIBED AS FOLLOWS
ALL OF TRACT 2 (CONTAINING 2 85 ACRES ±) AS SHOWN ON PLAT FOR "PANCHO
MITIGATION COMPANY, LLC, ENTITLED "PANCHO RESTORATION SITE," DATED OCTOBER
28, 2010, PREPARED BY K2 DESIGN GROUP, P A AND RECORDED IN BOOK N, PAGE
50B, WAYNE COUNTY, NORTH CAROLINA, REGISTRY
Issued through the Office of
Investors Title Insurance Company
127 North Greene Street
Suite 100
Greensboro NC 27401 2501
Tel [phone]
/ r- ,[phone]
Authorized Countersign re
Form No 109 06 A
Page 1

INVESTORS TITLE INSURANCE COMPANY
P O Drawer 2687
Chapel Hill North Carolina 27515 2687
Policy No 201004092G
SCHEDULE B
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage, and the Company will not pay
costs, attorneys' fees, or expenses that arise by reason of
I The dower, curtesy, homestead, community property, or other statutory
marital rights, if any, of the spouse of any individual insured
1 Taxes for the year 2011, and subsequent years, not yet due and payable
2 Subject to matters shown on recorded Plat Book N at Page 50B, Wayne County, North
Carolina, Registry
3 Easement(s) and/or Right(s) of way to Carolina Power 6 Light Company, recorded in
Book 1816 at Page 544 and 545 of the Wayne County Register of Deeds
4 Hunting rights reserved in Deed recorded in Book 2817, Page 413 of the Wayne County
Register of Deeds
5 Rights of others thereto entitled in and to the continued uninterrupted flow of
Kennedy Mill Branch, located on the Land
NOTE NO INSURED CLOSING PROTECTION COVERAGE PROVIDED - As to the transaction for which
this binder and /or policy is issued, the Company specifically excludes this transaction
from any closing protection services
The Land described in Schedule A number 4 is encumbered by the following
mortgage(s), if any
N/A
Form No 109 06 A Page 2

CONDITIONS (Continued)
Claimant that were authorized by the Company up to the time of payment or tender
of payment and that the Company is obligated to pay
Upon the�exercise by the Company of this option all liability and obligations
of 0, Company to the Insured under this policy other than to make the payment
re in this subsection shall terminate including any liability or obligation to
deco u prosecute or continue any litigation
(b) To Pay or Otherwise Settle With Parties Other Than the insured or With
the Insured Claimant
(►) to pay or otherwise settle with other parties for or in the name of an
Insured Claimant any claim insured against under this policy In addition the
Company will pay any costs attorneys fees and expenses incurred by the Insured
Claimant that were authorized by the Company up to the time of payment and that
the Company Is obligated to pay or
(n) to pay or otherwise settle with the Insured Claimant the loss or damage
provided for under this policy together with any costs attorneys fees and
expenses incurred by the insured Claimant that were authorized by the Company up
to the time of payment and that the Company is obligated to pay
Upon the exercise by the Company of either of the options provided for in
subsections (b)(i) or (11) the Company s obligations to the Insured under this policy
for the claimed loss or damage other than the payments required to be made
shall terminate Including any liability or obligation to defend prosecute or continue
any litigation
8 DETERMINATION AND EXTENT OF LIABILITY
This policy Is a contract of indemnity against actual monetary loss or damage
sustained or Incurred by the Insured Claimant who has suffered loss or damage by
reason of matters insured against by this policy
(a) The extent of liability of the Company for loss or damage under this policy
shall not exceed the lesser of
(►) the Amount of Insurance or
(11) the difference between the value of the Title as Insured and the value of
the Title subject to the risk insured against by this policy
(b) If the Company pursues its rights under Section 5 of these Conditions and
is unsuccessful in establishing the Title as insured
(€) the Amount of Insurance shall be Increased by 10% and
(u) the insured Claimant shall have the right to have the loss or damage
determined either as of the date the claim was made by the insured Claimant or as
of the date it Is settled and paid
(c) In addition to the extent of liability under (a) and (b) the Company will also
pay those costs attorneys fees and expenses incurred In accordance with Sections
5 and 7 of these Conditions
9 LIMITATION OF LIABILITY
(a) if the Company establishes the Title or removes the alleged defect Ilan or
encumbrance or cures the lack of a right of access to or from the Land or cures
the claim of Unmarketable Title all as insured In a reasonably diligent manner by
any method Including litigation and the completion of any appeals it shall have fully
performed its obligations with respect to that matter and shall not be liable for any
toss or damage caused to the insured
(b) In the event of any litigation Including litigation by the Company or with the
Company s consent the Company shall have no liability for loss or damage until
there has been a final determination by a court of competent jurisdiction and
disposition of all appeals adverse to the Title as insured
(c) The Company shall not be liable for loss or damage to the Insured for
liability voluntarily assumed by the Insured In settling any claim or suit without the
prior written consent of the Company
10 REDUCTION OF INSURANCE REDUCTION OR TERMINATION OF LIABILITY
All payments under this policy except payments made for costs attorneys fees
and expenses shall reduce the Amount of Insurance by the amount of the payment
11 LIABILITY NONCUMULATIVE
The Amount of Insurance shall be reduced by any amount the Company pays
under any policy Insuring a Mortgage to which exception is taken in Schedule B or
to which the Insured has agreed assumed or taken subject or which Is executed
by an Insured after Date of Policy and which Is a charge or lien on the Title and the
am so paid shall be deemed a payment to the Insured under this policy
12 MENT OF LOSS
When liability and the extent of loss or damage have been definitely fixed in
accordance with these Conditions the payment shall be made within 30 days
13 RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT
(a) Whenever the Company shall have settled and paid a claim under this policy
it shall be subrogated and entitled to the rights of the Insured Claimant in the Title
Form No 109 06 J (Rev 312007)
and all other rights and remedies in respect to the claim that the Insured Claimant
Etas against any person or property to the extent of the amount of any loss costs
attorneys fees and expenses paid by the Company if requested by the Company
the Insured Claimant shall execute documents to evidence the transfer to the
Company of these rights and remedies The Insured Claimant shall permit the
Company to sue compromise or settle in the name of the Insured Claimant and to
use the name of the Insured Claimant in any transaction or litigation involving these
rights and remedies
If a payment on account of a claim does not fully cover the loss of the
Insured Claimant the Company shall defer the exercise of Its right to recover until
after the insured Claimant shall have recovered its loss
(b) The Companys right of subrogation includes the rights of the Insured to
Indemnities guaranties other policies of insurance or bonds notwithstanding any
terms or conditions contained in those Instruments that address subrogation rights
14 ARBITRATION
Either the Company or the Insured may demand that the claim or controversy
shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of
the American land Title Association ( Rules ) Except as provided in the Rules there
shall be no joinder or consolidation with claims or controversies of other persons
Arbitrable matters may include but are not limited to any controversy or claim
between the Company and the Insured arising out of or relating to this policy any
service in connection with its issuance or the breach of a policy provision or to any
other controversy or claim arising out of the transaction giving rise to this policy All
arbitrable matters when the Amount of insurance Is $2 000 000 or less shall be
arbitrated at the option of either the Company or the Insured All arbitrable matters
when the Amount of Insurance Is In excess of $2 000 000 shall be arbitrated only
when agreed to by both the Company and the insured Arbitration pursuant to this
policy and under the Rules shall be binding upon the parties Judgment upon the
award rendered by the Arbitrator(s) may be entered in any court of competent
jurisdiction
15 LIABILITY LIMITED TO THIS POLICY POLICY ENTIRE CONTRACT
(a) This policy together with all endorsements if any attached to it by the
Company is the entire policy and contract between the Insured and the Company In
Interpreting any provision of this policy this policy shall be construed as a whole
(b) Any claim of loss or damage that arises out of the status of the Title or by
any action asserting such claim shall be restricted to this policy
(c) Any amendment of or endorsement to this policy must be in writing and
authenticated by an authorized person or expressly incorporated by Schedule A of
this policy
(d) Each endorsement to this policy Issued at any time is made a part of this
policy and Is subject to all of its terms and provisions Except as the endorsement
expressly states It does not (1) modify any of the terms and provisions of the policy
(h) modify any prior endorsement (ill) extend the Date of Policy or (Iv) increase the
Amount of Insurance
16 SEVERABILITY
In the event any provision of this policy in whole or in part is held Invalid or
unenforceable under applicable law the policy shall be deemed not to include that
provision or such part held to be invalid but all other provisions shall remain in full
force and effect
17 CHOICE OF LAW FORUM
(a) Choice of Law The insured acknowledges the Company has underwritten
the risks covered by this policy and determined the premium charged therefor in
reliance upon the law affecting interests in real property and applicable to the
Interpretation rights remedies or enforcement of policies of title Insurance of the
jurisdiction where the Land is located
Therefore the court or an arbitrator shall apply the law of the jurisdiction
where the Land is located to determine the validity of claims against the Title that
are adverse to the Insured and to interpret and enforce the terms of this policy In
neither case shall the court or arbitrator apply its conflicts of law principles to
determine the applicable law
(b) Choice of Forum Any litigation or other proceeding brought by the insured
against the Company must be tiled only in a state or federal court within the United
States of America or Its territories having appropriate jurisdiction
18 NOTICES WHERE SENT
Any notice of claim and any other notice or statement in writing required to be
given to the Company under this policy must be given to the Company at Investors
Title Insurance Company PO Drawer 2687 Chapel Hill NC 27515 2687
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C� iFTiInvestors7itle Msurance Company
OWNER'S POLICY OF TITLE INSURANCE
Any notice of claim and any other notice or statement in writing required to be given to the Company under this Policy
must be given to the Company at the address shown In Section 18 of the Conditions
COVERED RISKS
SUBJECT TO THE EXCLUSIONS FROM COVERAGE THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND
THE CONDITIONS INVESTORS TITLE INSURANCE COMPANY a North Carolina corporation (the Company ) insures as of Date
of Policy and to the extent stated in Covered Risks 9 and 10 after Date of Policy against loss or damage not exceeding the
Amount of Insurance sustained or incurred by the Insured by reason of
1 Title being vested other than as stated In Schedule A
2 Any defect in or lien or encumbrance on the Title This Covered Risk includes but is not limited to insurance against loss
from
(a) A defect in the Title caused by
(1) forgery fraud undue influence duress Incompetency incapacity or impersonation
(it) failure of any person or Entity to have authorized a transfer or conveyance
(III) a document affecting Title not properly created executed witnessed sealed acknowledged notarized or delivered
(iv) failure to perform those acts necessary to create a document by electronic means authorized by law
(v) a document executed under a falsified expired or otherwise invalid power of attorney
(vi) a document not properly filed recorded or indexed in the Public Records Including failure to perform those acts by
electronic means authorized by law or
(vii) a defective Judicial or administrative proceeding
(b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable but unpaid
(c) Any encroachment encumbrance violation variation or adverse circumstance affecting the Title that would be disclosed
by an accurate and complete land survey of the Land The term encroachment includes encroachments of existing
improvements located on the Land onto adjoining land and encroachments onto the Land of existing improvements
located on adjoining land
3 Unmarketable Title
4 No right of access to and from the Land
5 The violation or enforcement of any law ordinance permit or governmental regulation (including those relating to building
and zoning) restricting regulating prohibiting or relating to
(a) the occupancy use or enjoyment of the Land
(b) the character dimensions or location of any Improvement erected on the Land
(c) the subdivision of land or
(d) environmental protection
If a notice describing any part of the Land is recorded In the Public Records setting forth the violation or intention to enforce
but only to the extent of the violation or enforcement referred to In that notice
(continued on back panel)
IN WITNESS WHEREOF Investors Title Insurance Company has caused this Policy to be signed and sealed to be valid when
Schedule A is countersigned by an authorized officer or agent of the Company
® The use of this form Is restricted to
INSU
AMERICAN (� 7%
ALTA licensees and ALTA members �y� //� v /
LAND TITLE AS O
CIATION In good standing as of the date of F�
use All other uses are prohibited y SEAL 9 Pres(dent
Reprinted under license from the `" 1972
a American Land Title Association s
Copyright 2006 2009 American Land Title Association
All rights reserved Secretary
Form No 109 06 J (Rev =007) ALTA Owners Policv (06 17 06)

CONDITIONS
1 DEFINITION OF TERMS
The following terms when used in this policy mean
(a) Amount of Insurance The amount stated in Schedule A as may be
Increased or decreased by endorsement to this policy increased by Section 8(b) or
decreased by Sections 10 and 11 of these Conditions
(b) Date of Polley The date designated as Date of Policy In Schedule A
(c) Entity A corporation partnership trust limited liability company or other
similar legal entity
(d) Insured The Insured named in Schedule A
(i) the term Insured also Includes
(A) successors to the Title of the Insured by operation of law as
distinguished from purchase Including heirs devisees survivors personal
representatives or next of kin
(B) successors to an Insured by dissolution merger consolidation
distribution or reorganization
(C) successors to an insured by its conversion to another kind of Entity
(D) a grantee of an Insured under a deed delivered without payment of
actual valuable consideration conveying the Tale
(1) if the stock shares memberships or other equity interests of
the grantee are wholly owned by the named insured
(2) if the grantee wholly owns the named Insured
(3) if the grantee is wholly owned by an affiliated Entity of the
named Insured provided the affiliated Entity and the named Insured are both wholly
owned by the same person or Entity or
(4) if the grantee is a trustee or beneficiary of a trust created by a
written Instrument established by the Insured named In Schedule A for estate
planning purposes
(il) with regard to (A) (B) (C) and (D) reserving however all rights and
defenses as to any successor that the Company would have had against any
predecessor Insured
(e) Insured Claimant An Insured claiming loss or damage
(f) Knowledge or Known Actual knowledge not constructive knowledge or
notice that may be imputed to an Insured by reason of the Public Records or any
other records that impart constructive notice of matters affecting the Title
(g) Land The land described in Schedule A and affixed improvements that by
law constitute real property The term Land does not include any property beyond
the lines of the area described in Schedule A nor any right title interest estate or
easement in abutting streets roads avenues alloys lanes ways or waterways but
this does not modify or limit the extent that a right of access to and from the Land
Is insured by this policy
(h) Mortgage Mortgage deed of trust trust deed or other security
Instrument including one evidenced by electronic means authorized by law
(i) Public Records Records established under state statutes at Date of Policy
for the purpose of Imparting constructive notice of matters relating to real property
to purchasers for value and without Knowledge With respect to Covered Risk 5(d)
Public Records shall also include environmental protection liens filed in the records
of the clerk of the United States District Court for the district where the Land
Is located
(j) Title The estate or interest described in Schedule A
(k) Unmarketable Title Title affected by an alleged or apparent matter that
would permit a prospective purchaser or lessee of the Title or lender on the Title to
be released from the obligation to purchase lease or lend d there Is a contractual
condition requiring the delivery of marketable title
2 CONTINUATION OF INSURANCE
The coverage of this policy shall continue In force as of Date of Policy in favor
of an Insured but only so long as the Insured retains an estate or interest In the
Land or holds an obligation secured by a purchase money Mortgage given by a
purchaser from the insured or only so long as the Insured shall have liability by
reason of warranties in any transfer or conveyance of the Title This policy shall not
continue in force In favor of any purchaser from the Insured of either (I) an estate or
Interest In the Land or (n) an obligation secured by a purchase money Mortgage
given to the Insured
3 NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT
The Insured shall notify the Company promptly in writing (i) in case of any
litigation as set forth in Section 5(a) of these Conditions (Ii) in case Knowledge shall
come to an Insured hereunder of any claim of title or Interest that is adverse to the
Title as insured and that might cause loss or damage for which the Company may
be liable by virtue of this policy or (iil) if the Title as insured is rejected as
Unmarketable Titig If the Company Is prejudiced by the failure of the Insured
Claimant to provide prompt notice the Company s liability to the Insured Claimant
under the policy shall be reduced to the extent of the prejudice
4 PROOF OF LOSS
In the event the Company is unable to determine the amount of loss or damage
the Company may at its option require as a condition of payment that the Insured
Claimant furnish a signed proof of loss The proof of loss must describe thik, lot
lien encumbrance or other matter insured against by this policy that consfig,� - ne
basis of loss or damage and shall state to the extent possible the basis of
calculating the amount of the loss or damage
5 DEFENSE AND PROSECUTION OF ACTIONS
(a) Upon written request by the Insured and subject to the options contained in
Section 7 of these Conditions the Company at its own cost and without
unreasonable delay shall provide for the defense of an insured In litigation in which
any third party asserts a claim covered by this policy adverse to the Insured This
obligation is limited to only those stated causes of action alleging matters insured
against by this policy The Company shall have the right to select counsel of Its
choice (subject to the right of the Insured to object for reasonable cause) to
represent the Insured as to those stated causes of action it shall not be liable for
and will not pay the fees of any other counsel The Company will not pay any fees
costs or expenses incurred by the Insured in the defense of those causes of action
that allege matters not insured against by this policy
(b) The Company shall have the right In addition to the options contained in
Section 7 of these Conditions at its own cost to Institute and prosecute any action
or proceeding or to do any other act that In its opinion may be necessary or
desirable to establish the Title as insured or to prevent or reduce loss or damage
to the Insured The Company may take any appropriate action under the terms of
this policy whether or not it shall be liable to the Insured The exercise of these
rights shall not be an admission of liability or waiver of any provision of this policy
If the Company exercises its rights under this subsection it must do so diligently
(c) Whenever the Company brings an action or asserts a defense as required or
permitted by this policy the Company may pursue the litigation to a final
determination by a court of competent jurisdiction and it expressly reserves the
right in its sole discretion to appeal any adverse judgment or order
6 DUTY OF INSURED CLAIMANT TO COOPERATE
(a) in all cases where this policy permits or requires the Company to pro,,f,ute
or provide for the defense of any action or proceeding and any appeals theme d
shall secure to the Company the right to so prosecute or provide defense the
action or proceeding including the right to use at Its option the name of the
Insured for this purpose Whenever requested by the Company the Insured at the
Company s expense shall give the Company all reasonable aid (i) in securing
evidence obtaining witnesses prosecuting or defending the action or proceeding or
effecting settlement and (ii) In any other lawful act that In the opinion of the
Company may be necessary or desirable to establish the Title or any other matter as
insured if the Company is prejudiced by the failure of the Insured to furnish the
required cooperation the Company s obligations to the insured under the policy
shall terminate Including any liability or obligation to defend prosecute or continue
any litigation with regard to the matter or matters requiring such cooperation
(b) The Company may reasonably require the Insured Claimant to submit to
examination under oath by any authorized representative of the Company and to
produce for examination inspection and copying at such reasonable times and
places as may be designated by the authorized representative of the Company all
records in whatever medium maintained Including books ledgers checks
memoranda correspondence reports a mails disks tapes and videos whether
bearing a date before or after Date of Policy that reasonably pertain to the loss or
damage Further If requested by any authorized representative of the Company the
Insured Claimant shall grant Its permission in writing for any authorized
representative of the Company to examine Inspect and copy all of these records in
the custody or control of a third party that reasonably pertain to the loss or damage
All information designated as confidential by the Insured Claimant provided to the
Company pursuant to this Section shall not be disclosed to others unless In the
reasonable judgment of the Company It Is necessary in the administration of the
claim Failure of the Insured Claimant to submit for examination under oath produce
any reasonably requested Information or grant permission to secure reasonably
necessary Information from third parties as required in this subsection unless
prohibited by law or governmental regulation shall terminate any liability °` the
Company under this policy as to that claim
7 OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS TERMINATION OF
LIABILITY
In case of a claim under this policy the Company shall have the following
additional options
(a) To Pay or Tender Payment of the Amount of Insurance
To pay or tender payment of the Amount of Insurance under this policy
together with any costs attorneys fees and expenses incurred by the insured

INVESTORS TITLE INSURANCE COMPANY
P O Drawer 2687
Chapel Hill North Carolina 27515 2687
OWNER'S POLICY OF TITLE INSURANCE
(06- 17 -06)
This Policy Is not complete without appropriate Schedules and corresponding Jacket unless otherwise agreed in writing
SCHEDULE A
Policy Number 201004085G Policy Date 11/16/2010 Time 12 30 PM
Amopnt of Insurance $361,500 00 Premium $678 60
Address Reference TRACT 1, 21 5 ACRES, PANCHO RESTORATION SITE
WAYNE COUNTY, NC
1 Name of Insured Pancho Mitigation Company, LLC, a North Carolina limited
liability company
2 The estate or interest in the Land that is insured by this policy is
FEE SIMPLE
3 Title is vested in PANCHO MITIGATION COMPANY, LLC, A NORTH CAROLINA LIMITED
IABILITY COMPANY
4 The Land referred to in this Policy is in the State of NC County of
Wayne and described as follows
LOCATED IN GRANTHAM TOWNSHIP, WAYNE COUNTY, NORTH CAROLINA AND MORE
PARTICULARLY DESCRIBED AS FOLLOWS
ALL OF TRACT 1 (CONTAINING 21 5 ACRES ±) AS SHOWN ON PLAT FOR " PANCHO
MITIGATION COMPANY, LLC, ENTITLED " PANCHO RESTORATION SITE," DATED OCTOBER
28, 2010, PREPARED BY K2 DESIGN GROUP, P A AND RECORDED IN BOOK N, PAGE
50B, WAYNE COUNTY, NORTH CAROLINA, REGISTRY
Issued through the Office of
Investors Title Insurance Company
127 North Greene Street
Suite 100
Greensboro, NC 27401 2501
Tel [phone]
/ — r [phone]
$Aw�
Authorized Countersigna4ke
For m No 109 06 A
Page 1

INVESTORS TITLE INSURANCE COMPANY
P 0 Drawer 2687
Chapel Hill North Carolina 27515 2687
Policy No 201004085G
SCHEDULE B
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage, and the Company will not pay
costs, attorneys' fees, or expenses that arise by reason of
I The dower, curtesy, homestead, community property, or other statutory
marital rights, if any, of the spouse of any individual insured
1 Taxes for the year 2011, and subsequent years, not yet due and payable
2 Subject to matters shown on recorded Plat Book N at Page 50B, Wayne County, North
Carolina, Registry
3 hunting rights reserved in Deed recorded in Book 2817, Page 416 of the Wayne County
Register of Deeds
4 Rights of others entitled thereto in and to the ditch(es) crossing the Land
5 Rights of others thereto entitled in and to the continued uninterrupted flow of
Kennedy Mill Branch, located on the Land
6 Plat of survey by John A Rudolph, PLS, dated 1012812010, shows an existing 30'
Progress Energy easement and 12 CPP located on the Land
NOTE NO INSURED CLOSING PROTECTION COVERAGE PROVIDED - As to the transaction for which
this binder and /or policy is issued, the Company specifically excludes this transaction
from any closing protection services
The Land described in Schedule A number 4 is encumbered by the following
mortgage(s), if any
N/A
Form No 109 06 A Page 2

INVESTORS TITLE INSURANCE COMPANY
P O Drawer 2687
Chapel Hill North Carolina 27515 2687
Policy No 201004085G
Form No 109 06 A Page 3

CONDITIONS (Continued)
Claimant that were authorized by the Company up to the time of payment or tender
of payment and that the Company Is obligated to pay
Upon the exercise by the Company of this option all liability and obligations
of the Company to the Insured under this policy other than to make the payment
required in this subsection shall terminate including any liability or obligation to
defend prosecute or continue any litigation
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or With
the insured Claimant
(f) to pay or otherwise settle with other parties for or in the name of an
Insured Claimant any claim insured against under this policy In addition the
Company will pay any costs attorneys fees and expenses incurred by the Insured
Claimant that were authorized by the Company up to the time of payment and that
the Company is obligated to pay or
(ii) to pay or otherwise settle with the Insured Claimant the loss or damage
provided for under this policy together with any costs attorneys fees and
expenses Incurred by the insured Claimant that were authorized by the Company up
to the time of payment and that the Company Is obligated to pay
Upon the exercise by the Company of either of the options provided for in
subsections (b)(1) or (ii) the Company s obligations to the insured under this policy
for the claimed loss or damage other than the payments required to be made
shall terminate including any liability or obligation to defend prosecute or continue
any litigation
8 DETERMINATION AND EXTENT OF LIABILITY
This policy is a contract of indemnity against actual monetary loss or damage
sustained or incurred by the Insured Claimant who has suffered loss or damage by
reason of matters insured against by this policy
(a) The extent of liability of the Company for loss or damage under this policy
shall not exceed the lesser of
(i) the Amount of insurance or
(11) the difference between the value of the Title as Insured and the value of
the Title subject to the risk insured against by this policy
(b) If the Company pursues its rights under Section 5 of these Conditions and
Is unsuccessful In establishing the Title as insured
(1) the Amount of Insurance shall be increased by 10% and
(n) the Insured Claimant shall have the right to have the loss or damage
determined either as of the date the claim was made by the Insured Claimant or as
of the date it Is settled and paid
(c) In addition to the extent of liability under (a) and (b) the Company will also
pay those costs attorneys fees and expenses incurred in accordance with Sections
5 and 7 of these Conditions
9 LIMITATION OF LIABILITY
(a) If the Company establishes the Title or removes the alleged defect lien or
encumbrance or cures the lack of a right of access to or from the Land or cures
the claim of Unmarketable Title all as insured In a reasonably diligent manner by
any method Including litigation and the completion of any appeals it shall have fully
performed its obligations with respect to that matter and shall not be liable for any
loss or damage caused to the Insured
(b) In the event of any litigation Including litigation by the Company or with the
Company s consent the Company shall have no liability for loss or damage until
there has been a final determination by a court of competent jurisdiction and
disposition of all appeals adverse to the Title as insured
(c) The Company shall not be liable for loss or damage to the Insured for
liability voluntarily assumed by the Insured in settling any claim or suit without the
prior written consent of the Company
10 REDUCTION OF INSURANCE REDUCTION OR TERMINATION OF LIABILITY
All payments under this policy except payments made for costs attorneys fees
and expenses shall reduce the Amount of Insurance by the amount of the payment
11 LIABILITY NONCUMULATIVE
The Amount of Insurance shall be reduced by any amount the Company pays
under any policy insuring a Mortgage to which exception Is taken in Schedule 8 or
to which the Insured has agreed assumed or taken subject or which is executed
by an Insured after Date of Policy and which Is a charge or lien on the Title and the
amount so paid shall be deemed a payment to the Insured under this policy
12 PAYMENT OF LOSS
When liability and the extent of loss or damage have been definitely fixed In
accordance with these Conditions the payment shall be made within 30 days
13 RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT
(a) Whenever the Company shall have settled and paid a claim under this policy
it shall be subrogated and entitled to the rights of the Insured Claimant In the Title
Form Nn inq nR i IRav von w%
and all other rights and remedies in respect to the claim that the insured Claimant
hwgainst any person or property to the extent of the amount of any loss costs
attorneys fees and expenses paid by the Company If requested by the Company
the Insured Claimant shall execute documents to evidence the transfer tie
Company of these rights and remedies The Insured Claimant shall per e
Company to sue compromise or settle In the name of the Insured Claimant and to
use the name of the Insured Claimant in any transaction or litigation involving these
rights and remedies
If a payment on account of a claim does not fully cover the loss of the
Insured Claimant the Company shall defer the exercise of its right to recover until
after the Insured Claimant shall have recovered its loss
(b) The Company s right of subrogation includes the rights of the insured to
Indemnities guaranties other policies of insurance or bonds notwithstanding any
terms or conditions contained in those instruments that address subrogation rights
14 ARBITRATION
Either the Company or the Insured may demand that the claim or controversy
shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of
the American Land Title Association ( Rules ) Except as provided in the Rules there
shall be no joinder or consolidation with claims or controversies of other persons
Arbitrable matters may include but are not limited to any controversy or claim
between the Company and the Insured arising out of or relating to this policy any
service In connection with its Issuance or the breach of a policy provision or to any
other controversy or claim arising out of the transaction giving rise to this policy All
arbitrable matters when the Amount of Insurance Is $2 000 000 or less shall be
arbitrated at the option of either the Company or the insured All arbitrable matters
when the Amount of Insurance Is in excess of $2 000 000 shall be arbitrated only
when agreed to by both the Company and the Insured Arbitration pursuant to this
policy and under the Rules shall be binding upon the parties Judgment upon the
award rendered by the Arbitrator(s) may be entered in any court of competent
jurisdiction
15 LIABILITY LIMITED TO THIS POLICY POLICY ENTIRE CONTRACT
(a) This policy together with all endorsements If any attached to it by the
Company is the entire policy and contract between the Insured and the Compar, In
interpreting any provision of this policy this policy shall be construed as a x
(b) Any claim of loss or damage that arises out of the status of the Title " uy
any action asserting such claim shall be restricted to this policy
(c) Any amendment of or endorsement to this policy must be in writing and
authenticated by an authorized person or expressly incorporated by Schedule A of
this policy
(d) Each endorsement to this policy issued at any time is made a part of this
policy and Is subject to all of its terms and provisions Except as the endorsement
expressly states it does not (i) modify any of the terms and provisions of the policy
(ii) modify any prior endorsement (iii) extend the Date of Policy or (Iv) increase the
Amount of Insurance
16 SEVERABILiTY
In the event any provision of this policy In whole or in part Is held invalid or
unenforceable under applicable law the policy shall be deemed not to include that
provision or such part held to be invalid but all other provisions shall remain in full
force and effect
17 CHOICE OF LAW FORUM
(a) Choice of Law The Insured acknowledges the Company has underwritten
the risks covered by this policy and determined the premium charged therefor in
reliance upon the law affecting interests In real property and applicable to the
Interpretation rights remedies or enforcement of policies of title insurance of the
jurisdiction where the Land Is located
Therefore the court or an arbitrator shall apply the law of the furisdicbon
where the Land Is located to determine the validity of claims against the Title that
are adverse to the Insured and to interpret and enforce the terms of this policy In
neither case shall the court or arbitrator apply its conflicts of law principles to
determine the applicable law
(b) Choice of Forum Any litigation or other proceeding brought by the Insured
against the Company must be filed only In a state or federal court within the United
States of America or its territories having appropriate jurisdiction
18 NOTICES WHERE SENT
Any notice of claim and any other notice or statement in writing required to be
given to the Company under this policy must be given to the Company at Investors
Title Insurance Company PO Drawer 2687 Chapel Hill NC 27515 2687

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C/
iiiiimiilmiiliiiimiiiillillill
Reoorded it,t8/2010 CRP 0 PM e1 5
Fee Amt $103 00 Page 1 of 3
Excise Tex •78 oo
MAYNE COUNTY NC
LOIS J MOORING REGISTER OF DEEDS
BK2817 Po413 -415
Mad after recording to William P Aycock II, Esquire
P O Box 21847 Greensboro NC 27420
This instrument was prepared by William P Aycock II, Esquire
Schell Bray Aycock Abel & Livingston PLLC
NORTH CAROLINA GENERAL WARRANTY DEED
THIS DEED made this day of November, 2010, by and between
GRANTOR
RICHARD H COX, JR. and spouse,
DIANA P COX
and
LEMUEL H COX and spouse,
BARBARA HOLLER COX
GRANTEE
PANCHO MITIGATION COMPANY, LLC,
a North Carolina limited babiiitycompany
Address
1101 Haynes Street, Suite 211
Raleigh, North Carolina 27604
r
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors and
assigns, and shall include singular, plural, masculine, femmme or neuter as required by context
WITNESSETH, that the Grantor, for a valuable consideration paid by the Grantee, the receipt of
which is hereby acknowledged, has and by these presents does grant, bargain, sell and convey unto the
Grantee in fee simple, all that certain lot or parcel of land situated in Grantham Township, Wayne
County, North Carolina, and more particularly described as follows
All of Tract 2 (containing 2 85 acres±) as shown on plat for "Pancho Mitigation
Company, LLC, entitled "Pancho Restoration Site," dated October 28, 2010, prepared by
K2 Design Group, P A and recorded in Book N, Page 50B, Wayne County, North
Carolina, Registry
#272442v1

TO HAVE AND TO HOLD the aforesaid tot or parcel of land and all privileges and
appurtenances thereto belonging to the Grantee in fee simple
And the Grantor covenants with the Grantee, that Grantor is seized of the premises in fee simple,
has the right to convey the same in fee supple, that title is marketable and free and clear of all
encumbrances and that Grantor will warrant and defend the title against the lawful claims of all persons
whomsoever except for the exceptions hereinafter stated Title to the property heremabove described is
subject to the following exceptions
Restrictions, rights of way and easements of record and to ad valorem taxes for
the current year
Grantor shall have the right to retain hunting rights over the above - described property for the
benefit of Grantor(s), their immediate families, their hens and their hears' immediate families, provided,
however, the exercise of such rights shall not interfere with any mitigation, restoration or preservation
projects conducted on the property by Grantee and/or its successors and assigns
Grantors Lemuel H Cox, Barbra Holler Cox, Richard H Cox, Jr and Diane Pantel Cox are
parties to a Buy Sell Agreement recorded in Book 1247, Page 81, Wayne County Registry The property
described in this deed is a portion of the property covered by this Buy Sell Agreement All Grantors
agree and confirm that the terms, conditions and restrictions of the Buy Sell Agreement have been
complied with in regard to the property herein conveyed and that such property is conveyed free and clear
of the Buy Sell Agreement The Buy Sell Agreement remains in full force and effect as to the property
not included in this deed
The above- descnbed property is not the primary residence of the Grantor
IN WITNESS 'WHEREOF, the Grantor has caused this instrument to be duly executed and
delivered, the day and year first above written
1
r 1 .09/
{SEAL)
Richdrd H Cox, Jr
c.rtJ T • (SEAL)
Diana Cox
��lY " ,L� (SEAL)
Lemuel H Cox
� 24 . � (SEAL)
Barbara Holler Cox
2

STATE OF NORTH CAROLINA
COUNTY OF 61t, Mi .�2
I certify that the following person(s) personally appeared before me this day, each acknowledging
to me that he or she signed the foregoing document
Richard H Cox, Jr and Diana P Cox
WITNESS my hand and official seal, this day of November, 2010
.-( A-� k c,--e K:-
Notary's Official Signadire
,
NO , , R
RARY PAW
Notary's Printed or Typed Name
My commission expires _3 & � T !f
STATE OF NORTH CAROLINA
COUNTY OF PeJ
I certify that the following person(s) personally appeared before me this day, each acknowledgmg
to me that he or she signed the foregoing document
Lemuel H Cox and Barbara Holler Cox
WITNESS my hand and official seal, this S4( day of November 2010
Notary's Official Signatpfe
r. y
Se
*.AW PUBLIC
s
Notary's Printed or Typed ame
My commission expires Z u i
3

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BOOK 2 7 5 4 PAQ 15
RECORDED AND VERIRED
11111101111111111
LOIS J MOORING
REGISTER OF DrEDS
Doc ID 010255780005 Tvice CRP
PM
FeeoAmtd E12435,000Page
I off1598
Excise Tax $1 404 00
NAYNE COUNTY NC
LOIS J MORINO REGISTER OF DEEDS
?,
EiK2754Po215-219
Mail after recording to �= co 0—h t1
O X 1 ,�te -N O be (" h C °� 77 a!
This instrument was prepared by William P Aycock H Esquire
Schell Bray Aycock Abel & Livingston PLLC
NORTH CAROLINA GENERAL WARRANTY DEED
THIS DEED made this 10 _ day of December 2009 by and between
GRANTOR I GRANTEE
MAX G FUTRELL
and wife,
MARY J FUTRELL
4418 Stevens Mdl Road
Goldsboro, North Carolina 27530
RESTORATION SYSTEMS, LLC,
a North Carolina limited liability company,
1101 Haynes Street, Suite 211
Raleigh, North Carolina 27604
The designation Grantor and Grantee as used herein shall include said parties their heirs successors and
assigns and shall include singular plural masculine feminine or neuter as required by context.
WITNESSETH that the Grantor for a valuable consideration paid by the Grantee the receipt of
which is hereby acknowledged has and by these presents does grant, bargain sell and convey unto the
Grantee in fee simple all that certain lot or parcel of land situated in Grantham Township Wayne
County North Carolina, and more particularly described on EXHIBIT "A" attached hereto and
incorporated herein by reference
TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all privileges and
appurtenances thereto belonging to the Grantee in fee simple
And the Grantor covenants with the Grantee that Grantor is seized of the premises in fee simple
has the right to convey the same in fee simple that title is marketable and free and clear of all
encumbrances and that Grantor will warrant and defend the title against the lawful claims of all persons
#245»6v 1

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91 ZHU IS U? N008

BOOK 2 7 5 4 PAE 217
I W4 "I 111.31 1I:1
BEGINNING at an existing iron pin located at NC Grid Coordinate N= 575 946 5494 feet
E= 2,242,867 0492 feet, which iron pun is located North 51° 06 47" West 20,866 331 feet from
NCGS Marker "Hood" (Grid Factor 0 9998744999 N= 562,846 9320 feet, E= 2,259109 0870
feet) which Beginning Point is a common comer with Maxwell Foods, Inc (see Deed Book
2287, Page 797), thence from said Beginning Point with the line of Maxwell Foods, Inc the
following ten (10) calls North 53° 50 09" West 280 35 feet to an existing iron stake, North 66°
48 55 ' West 808 55 feet to an existing iron pin, South 240 59 25" West 132 00 feet to an iron
stake set South 12° 22 47" West 18150 feet to an existing iron pm, South 280 08 58" West
329 90 feet to an existing iron pin South 090 10 29' West 230 98 feet to an existing iron pin,
South 30° 10 21" West 280 41 feet to an existing iron pun, South 190 11 00' West 198 00 feet
to an existing iron pin, South 44° 10' 51" West 247 50 feet to an existing iron pin South 52° 07
13 'West 23102 feet to an existing axle located in the centerlme of Kennedy Mill Branch, a
comer with Max G Futrell (see Deed Book 997, Page 507), thence with Futrell s line the
following twelve (12) calls North 460 06' 05" West 154 65 feet to an iron stake set, North 40°
18 31 East 253 06 feet to an iron stake set, North 22° 41' 4T' East 436 67 feet to an iron stake
set North 22° 28' 38 East 429 68 feet to an iron stake set, North 23° 11 01" East 305 38 feet to
an iron stake set North 00° 36 58' West 273 53 feet to an iron stake set, North 240 04 40 West
67 79 feet to an iron stake set North 70° 56 10 West 110 88 feet to an iron stake set, North 671
58' 01" West 129 92 feet to an iron stake set North 64° 24 53' West 89 85 feet to an iron stake
set, North 88° 48 31' West 115 93 feet to an iron stake set, North 51° 21 36' West 68 88 feet to
an iron stake set in the eastern line of the tract conveyed to Max Graham Futrell Jr by deed
recorded in Book 1167 Page 289 thence with Max G Futrell Jr s line, North 05° 41' 57 West
5128 feet to an existing iron stake, thence with Futrell Jr s north line South 84° 18 03" West
208 81 feet to an existing iron stake thence South 84° 18 03" West 85 43 feet to an iron stake
set in the boundary line established by that certain Boundary Line Agreement between Max G
Futrell Sr et ux and Max Graham Futrell Jr et ux recorded in Book 2, j!�, Page Z I I ,
Wayne County Registry thence with said Boundary Line as established in the Boundary Line
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INVESTORS TITLE INSURANCE COMPANY
P O Drawer 2687
Chapel Hill North Carolina 27515 2687
OWNER'S POLICY OF TITLE INSURANCE
(06- 17 -06)
This Policy is not complete without appropriate Schedules and corresponding Jacket unless otherwise agreed in writing
SCHEDULE A
Policy Number 201000059G Policy Date 1213012009 Time 02 21(PM
Amount of Insurance $702 000 00 Premium $1,002 00
Address Reference 41 26 ACRES
WAYNE COUNTY, NC
1 Name of Insured Restoration Systems, LLC a North Carolina limited liability
company
2 The estate or interest in the Land that is insured by this policy is
FEE SIMPLE
3 Title is vested in RESTORATION SYSTEMS, LLC, A NORTH CAROLINA LIMITED
r'INBILITY COMPANY
4 The Land referred to in this Policy is in the State of NC County of
Wayne and described as follows
BEGINNING AT AN EXISTING IRON PIN LOCATED AT NC GRID COORDINATE
N =575 946 5494 FEET E= 2,242,867 0492 FEET, WHICH IRON PIN IS LOCATED NORTH
51 06' 47" WEST 20,866 331 FEET FROM NCGS MARKER "HOOD" (GRID FACTOR
0 9998744999 N= 562,846 9320 FEET E -= 2,259,109 0870 FEET) WHICH BEGINNING
POINT IS A COMMON CORNER WITH MAXWELL FOODS, INC (SEE DEED BOOK 2287, PAGE
797) THENCE FROM SAID BEGINNING WITH THE LINE OF MAXWELL FOODS, INC , THE
FOLLOWING TEN (10) CALLS NORTH 53 50' 09" WEST 280 35 FEET TO AN EXISTING
IRON STAKE NORTH 66 48' 55" WEST 808 55 FEET TO AN EXISTING IRON PIN
SOUTH 24 59' 25" WEST 132 00 FEET TO AN IRON STAKE SET SOUTH 12 22 47
WEST 181 50 FEET TO AN EXISTING IRON PIN SOUTH 28 08' 58" WEST 329 90 FEET
TO AN EXISTING IRON PIN SOUTH 09 10 29" WEST 230 98 FEET TO AN EXISTING
IRON PIN SOUTH 30 10' 21" WEST 280 41 FEET TO AN EXISTING IRON PIN SOUTH
19 11 00' WEST 198 00 FEET TO AN EXISTING IRON PIN SOUTH 44 10' 51' WEST
Issued through the Office of
Investors Title Insurance Company
127 North Greene Street
Suite 100
Greensboro NC 27401 2.)01
Tel [phone]
Fa,,, 136)275 7940
Form No 109 06 A Page 1
Authorized Count rs gnature

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INVESTORS TITLE INSURANCE COMPANY
P O Drawer 2687
Chapel Hill North Carolina 27515 -2687
Policy No 201000059G
MONUMENT SOUTH 22 46' 39' EAST 164 89 FEET TO AN EXISTING CONCRETE
MONUMENT SOUTH 60 09 09 EAST 391 64 FEET TO A NON MONUMENTED CORNIER IN
THE MIDDLE OF AN EXISTING STREAM A CORNER WITH LEE (SEE 89E -145 DEED BOOK
821 PAGE 687) SOUTH 56 48' 24' EAST 8 0 FEET TO AN EXISTING IRON PIN IN
MAXWELL FOODS INC THE FOLLOWING FOUR (4) CALLS SOUTH 56 48' 24 EAST
109 24 FEET TO AN EXISTING IRON PIN SOUTH 57 39 55' EAST 141 06 FEET TO
AN EXISTING IRON PIN SOUTH 68 55' 10" EAST 1 61 FEET TO AN EXISTING IRON
PIN A CORNER WITH MAXWELL FOODS, INC THENCE CONTINUING WITH MAXWELL
FOODS INC SOUTH 24 09' 59" WEST 215 46 FEET TO THE POINT AND PLACE OF
BEGINNING AND CONTAINING 41 27 ACRES, PLUS OR MINUS, AND AS SHOWN ON A
BOUNDARY SURVEY OF THE PANCHO SITE FOR RESTORATION SYSTEMS LLC PREPARED BY
K2 DESIGN! GROUP P A , DATED 11 -18 -09 (DRAWING NO RSS065MR09) A COPY OF
WHICH IS ATTACHED HERETO AS EXHIBIT A -1 AND INCORPORATED HEREIN BY
REFERENCE
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INVESTORS TITLE INSURANCE COMPANY
P 0 Drawer 2687
Chapel Hill North Carolina 27515 2687
N/A
Policy No 201000059G
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801K2 7 5 4 PAR 212
BEGINNING at an iron stake set, which existing iron stake (No 4 Rebar 5
inches below grade) is located South 840 18' 03 West from an existing iron stake
in the northwest comer of the tract conveyed to Max Graham Futrell Jr and wife
Theresa R. Futrell, by Max G Futrell and wife, Mary J Futrell, by Deed of
Correction dated May 28, 1987 and recorded in Book 1167 Page 289, Wayne
County Registry thence from said beginning point, North 14° 58 15" West
153 18 feet to an iron stake set, thence North 14° 23 40" West 88 42 feet to an
iron stake set, thence North 02° 07' 43 ' West 72 09 feet to an iron stake set
thence North 13° 17 51 East 217 58 feet to an iron stake set, thence North 02°
35 42" East 44 38 feet to an iron stake set in the southern right -of -way of
N C S R. 1008 (Stevens Mill Road) and as more particularly shown on a boundary
survey of the Pancho Restoration Site for Restoration Systems, LLC, prepared by
K2 Design Group, P A, dated 11/18/09 (Drawmg No RSS065MR09) (the
"Boundary Line')
2 To the extent that Futrell Sr , individually previously held title to any land located
immediately to the west of the Boundary Line he does hereby release and quitclaim unto Futrell
SrJFutrell Jr, as tenants in common, all rights, title, claim and interest in and to all such lands
3 To the extent that Futrell Sr and Futrell Jr as tenants in common, previously
held title to any land located unmediately to the east of the Boundary Line, they do hereby
release and quitclaim unto Futrell Sr all rights, title claim and interest in and to all such lands
4 Mary J Futrell, spouse of Futrell Sr , and Theresa R. Futrell spouse of Futrell Jr
join in the execution of this Agreement to waive and release any marital rights they might have,
respectively, in the property conveyed by this Agreement
TO HAVE AND TO HOLD the aforesaid properties unto the parties hereto in the
manner set forth and their respective heirs successors and assigns in fee simple
IN WITNESS WHEREOF the parties have hereunto set their hands and seals the day
and year first above written
*a, (SEAL)
Max G Futrell Sr
(SEAL)
M J 1r
(SEAL)
Max Graham Futrell Jr
y�
R az�gAEAL)
eresa R Futrell

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imiligillifillitilill
Doe ID 010298940008 TVOe CRP
Recorded 02/22/2010 at 03 14 40 PM
Fee Amt $31 00 Page i of 8
Excise Tax $0 00
WAYNE COUNTY NO
LOIS J MOORING REGISTER OF DEEDS
2763 Pa212 -216
BOOK 7 6 3 PA6E2 12
RECORDED AND VERIFIED
LOIS J MOORING
REGISTER OF DEEDS
IND-SMED
Ho N C Real
Estate wise Tax Affixed
(No Taxable Consideration) REWIM
Mail after recording to William P t ycock % Esquire Scbell Bray Aycock Abel & Livingston PLLC
P 0 Box 21$47 Greensboro, North Carolina 27420
This instrument was prepared by William P Aycock II, Esquire
Schell Bray Aycock Abel & Livingston PLLC
NORTH CAROLINA GENERAL WARRANTY DEED
TMS DEED made this O040-0day of February, 2010, by and between
GRANTOR I GRANTEE
RESTORATION SYSTEMS, LLC,
a North Carolina limited liability company,
1101 Haynes Street, Suite 211
Raleigh, North Carolina 27604
PANCHO MITIGATION COMPANY, LLC,
a North Carolina Iimited liability company
1101 Haynes Street, Suite 211
Raleigh, North Carolina 27604
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors and
assigns, and shall include singular plural masculine, femimae or neuter as required by context.
WITNESSETH that the Grantor, for a valuable consideration paid by the Grantee, the receipt of
which is hereby acknowledged, has and by these presents does grant, bargain, sell and convey unto the
Grantee in fee simple, all that certain lot or parcel of land situated in Grantham Township, Wayne
County, North Carolina, and more particularly described on EXMIT "A" attached hereto and
incorporated herem by reference
TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all privileges and
appurtenances thereto belonging to the Grantee in fee simple
And the Grantor covenants with the Grantee, that Grantor is seized of the premises in fee supple,
has the right to convey the same in fee simple that title is marketable and free and clear of all
#2494I0v1

BOOK - 7 6 3 PAN 213
encumbrances, and that Grantor will warrant and defend the title against the lawful claims of all persons
whomsoever except for the exceptions hereinafter stated Title to the property heremabove described is
subject to the following exceptions Restrictions, rights of way and easements of record, if any, and to ad
valorem taxes for the current year
The above:- described property is not the pnmary residence of the Grantor
IN WITNESS WHEREOF, the Grantor has caused this instrument to be duly executed and
delivered, the day and year first above written
RESTORATION SYSTEMS, LLC, (SEAL)
a North Carolina limited liability company
By
Name hn E Skvarla `
Title Member/Manager
STATE OF NORTH CAROLINA
COUNTY OF WAKE
I certify that the following person(s) personally appeared before me this day, each acknowledging
to me that he or she signed the foregoing document
John E Slivarla as Manager of Restoration Systems, LLC, a
North Carolina limited liability company
WITNESS my hand and official seal, this y of February 2010
BRENDA W LOONEY J
NOTARY PUBLIC —
WAKE COUNTY, N C Notary's Officia ignature
(offlcral Seal) ' e� O
Notary's Printed or Typed Name
My commission expo es Cap l wo
2

BOOK Z 16 3 PABE2 14
i`rAMS f "N'
BEGINNING at an existing won pin located at NC Grid Coordinate N= 575,946 5494 feet,
E-- 2,242,867 0492 feet, which iron pm is located North 51° 06' 47" West 20,866 331 feet from NCGS
Marker `Hood" (Grid Factor 0 9998744999, N =562 846 9320 feet, )x2,259,109 0870 feet), which
Begummg Point is a common corner with Maxwell Foods, Inc (see Deed Book 2287, Page 797), thence
from said Beginning Point with the line of Maxwell Foods Inc the following ten (10) calls North 53°
50' 09" West 280 35 feet to an existing iron stake, North 66° 48' 55" West 808 55 feet to an existing iron
pin, South 24° 59' 25" West 132 00 feet to an iron stake set, South 121 22' 47" West 18150 feet to an
existing iron pm, South 28° 08' 58" West 329 90 feet to an existing iron pin South 09° 10' 29" West
230 98 feet to an existing iron pin South 30° 10 21" West 280 41 feet to an existing iron pin South 19°
11' 00" West 198 00 feet to an existing iron pin, South 441 10' 51" West 247 50 feet to an existing iron
pin, South 52° 07 13" West 23102 feet to an existing axle located in the centerline of Kennedy Mill
Branch, a corner with Max G Futrell (see Deed Book 997, Page 507), thence with Futrell's line the
following twelve (12) calls North 460 06' 05" West 154 65 feet to an iron stake set-, North 401 18' 31"
East 253 06 feet to an iron stake set; North 22° 41 47" East 436 67 feet to an iron stake set, North 22° 28'
38" East 429 68 fleet to an iron stake set, North 23° 11' 01"East 305 38 feet to an iron stake set; North 001
36' 58" West 273 53 feet to an iron stake set; North 240 04' 40" West 67 79 feet to an won stake set;
North 70° 56 10" West 110 88 feet to an iron stake set, North 67158' 01" 'West 129 92 feet to an iron
stake set, North 64° 24' 53" West 89 85 feet to an won stake set; North 88° 48' 31" West 115 93 feet to an
iron stake set; North 51* 21 36" West 68 88 feet to an iron stake set m the eastern line of the tract
conveyed to Max Graham Futrell Jr by deed recorded in Book 1167, Page 289, thence with Max G
Futrell, Jr 's line, North 05° 41' 57" West 5128 feet to an existing iron stake, thence with Futrell Jr 's
north line, South 84'18 03" West 208 81 feet to an existing iron stake, thence South 841 18 03" West
85 43 feet to an iron stake set in the boundary line established by that certain Boundary Line Agreement
between Max G Futrell, Sr et ux and Max Graham Futrell, Jr et ux recorded in Book 2754, Page 211
Wayne County Registry; thence with said Boundary Line as established in the Boundary Line Agreement
the following five (5) calls North 149 58' 15" West 153 18 feetto an iron stake set, North 14"23'40'
West 88 42 feet to an iron stake ser North 02° 07' 43' West 72 09 feet to an iron stake set, North 13117'
51 ' East 217 58 feet to an iron stake set, North 02° 35' 42' East 44 38 feet to an iron stake set in the
southern margin ofN C S R 1008 (Stevens Mill Road) thence with the southern right of-way of
N C S R. 1008 the following three (3) calls North 770 45 21 'East 68619 feet to an won stake set; North
770 49 12" East 165 39 feet to an iron stake set, North 77° 06' 22' East 202 92 feet to an won stake set;
thence South 27° 26' 54" East 19 22 feet to an existing concrete monument in the line of Maxwell Foods,

BOOK 216 3 PABE215
Inc (see Deed Book 2287 Page 797), thence with Maxwell Foods Ines line the following eight (8)
calls South 271126' 54" East 425 88 feet to an existmg concrete monument, South 27° 39' 59' East
49148 feet to an iron stake set, South 52° 46 39" East 165 00 feet to an existing concrete monument,
South 22° 46' 39" East 164 89 feet to an existing concrete monument, South 601 09' 09" East 39164 feet
to a non monumented corner in the middle of an existing stream a corner with Lee (see 89E -145, Deed
Book 821, Page 687), South 56° 48' 24" East 8 0 feet to an existing iron pin in Maxwell Foods, Inc 's
southwestern line, thence with Maxwell Foods, Inc the following four (4) calls South 56a 48' 24" East
109 24 feet to an existing iron pm, South 570 39155" East 14106 feet to an existing iron pin, South 680
55 10" East 161 feet to an existing iron pm, a corner with Maxwell Foods, Inc , thence continuing with
Maxwell Foods, Inc., South 24° 09' 59" West 215 46 feet to the point and place of Beginning, and
containing 4127 acres, plus or minus and as shown on a boundary survey of the Pancho Restoration Site
for Restoration Systems, LLC, prepared by K2 Design Group, P.A. dated 11/18/09 (Drawing No
RSS065MR09), a copy of which is attached hereto as Exhibit A -1 and incorporated herein by reference
4

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Bank is located within
Targeted Local Watershed
03020201150050
HARN T
Legend
= Easement Boundary
MGeographic Service Area
Targeted Local Watershed
MCounty Boundaries
Roads
+� Railroads
AND
FR*A -N KLI N
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03020201
JOHNS"
0
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Scale 1:750,000
ENOI
28
■ Miles
Dwn. By FIGURE
Axiom Environmental, Inc. GEOGRAPHIC SERVICE AREA CLF
218 Snow Avenue Date:
AKRaleigh, NC 27603 PANCHO MITIGATION BANK July 2011
919- 215 -1693 Wayne County, North Carolina Project:
Amm E-- m-t.(— 10 -010

Pancho Wetland & Stream Mitigation Bank - Neuse 01 Service Area
Restoration Systems, LLC
,orps Action ID # SAW- 2010 -00142
DWQ #
MBI approved
SMUs 7 964
Preservation 235
Enhancement & Restoration 7 729
riparian WMUs 2990
Preservation 01
Enhancement & Restoration 2980
Credit Release Schedule
Credit totals include additional 10 percent reserve of credits to be held back until the bankfWl event performance standard has been met
*If the monitoring of the site demonstrates that the site is successful by year 5 and no concerns have been identified (vegetation, stream
stability etc) the Sponsor may propose to terminate monitoring of the site and forego the monitoring requuements of years 6 and 7 This
provision is only applicable if the site has consistently met all performance standards, and at year 5 meet the year 5 vegetation density
standards (260 plants/acre) and the year 7 average height requirement of 10 feet. Early closure will only be provided through written
approval from the USAGE in consultation with the NCIRT
A
Wetland / Stream # of
Credit Wetland Credit Stream riparian
Release
Task #
Description
Release Preservation Release Preservation WMUs
# of SMUs
Date
MBI execution land protection
financial assurances
15% 1 15% 235 00 457
1 394 4
II
Construction w /Corps site
inspection
15% 15% 447
1 1594
III
Year 1 Monitoring Report
10% 10% 2 98
10% 10% 298
772 9
IV
Year 2 Monitoring Report
7729
V
Year 3 Monitoring Report
10% 5% 298
3865
VI
Year 4 Monitoring Report
10% 10% 298
7729
VII
Year 5 Monitoring Report
10% 5% 298
3865
VIII
Year 6 Monitoring Report
10% 10% 298
10% 10% 298
7729
IX
Year 7 Monitoring Report
7729
*10%
10%
7729
Total
100% 100% 2990
7 964 0
Credit totals include additional 10 percent reserve of credits to be held back until the bankfWl event performance standard has been met
*If the monitoring of the site demonstrates that the site is successful by year 5 and no concerns have been identified (vegetation, stream
stability etc) the Sponsor may propose to terminate monitoring of the site and forego the monitoring requuements of years 6 and 7 This
provision is only applicable if the site has consistently met all performance standards, and at year 5 meet the year 5 vegetation density
standards (260 plants/acre) and the year 7 average height requirement of 10 feet. Early closure will only be provided through written
approval from the USAGE in consultation with the NCIRT

Pancho Wetland & Stream Mitigation Bank -- Neuse 01
Service Area
Restoration Systems, LLC
Corps Action ID # SAW- 2010 -00142
DWQ #
Riparian Wetland
Stream
Balance
Permitee
Information
Transaction
Date
IRT
notifcatoion
sent
Credit ( +)
Debit ()
Credit ( +)
Debit ()
rWMUs
SMU
s
Permitee Corps
Action ID#
Project
Name
Project
Contact
Available
Credits
0
00

REGULATORY GUIDANCE
US Army Corps LETTER
of Engineers©
No 05 -1 Date 14 February 2005
SUBJECT Guidance on the Use of Financial Assurances and Suggested Language for Special
Conditions for Department of the Army Permits Requiring Performance Bonds
1 Purpose and applicability
a Purpose The U S Army Corps of Engineers (Corps) has the authority to issue permits
under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act These
permits may require compensatory mitigation to ensure that issued permits and resolution of
unauthorized activities result in a no net loss of aquatic resource functions The purposes of this
guidance are 1) to provide general guidance on the use of letters of credit performance bonds and
other financial assurances and 2) to provide specific guidance for the use of performance bonds to
ensure the completion of compensatory mitigation projects
b Applicability This guidance applies to Department of the Army (DA) permits that are
conditioned to include any type of financial assurance to ensure that required compensatory
mitigation is completed It may also be used when financial assurances are required for mitigation
and/or restoration for unauthorized activities
2 General Considerations for Financial Assurances
a The Purpose of Requiring Financial Assurances The overall success of
compensatory mitigation including establishment (i a creation) restoration and enhancement of
natural ecosystems is subject to many variables Site specific factors such as local droughts fires or
floods pest infestations diseases or illegal entrance by off road vehicles may negatively affect a
compensatory mitigation protect before it has achieved the specified performance standards and
thus may require additional effort or remediahon to ensure functional success Detailed well
written special conditions and compliance requirements without the requirement of financial
assurances are usually sufficient for DA permits to ensure that relatively simple compensatory
mitigation activities are completed and provide for desired aquatic resource functions However
for some DA permits district engineers may require financial assurances on a permit by permit
basis to ensure the initiation and successful completion of required compensatory mitigation For
example district engineers may determine that financial assurances are necessary to ensure that
multiple year plantings occur invasive species are controlled and adequate water is supplied after
the initial physical phases of landscape construction (e g soil amendments, grading plantings
seeding) are completed

b Considerations for Requiring Financial Assurances Because the circumstances of
each permit case are unique the decision to require financial assurances should be made on a
permit by permit basis The analysis used to determine that an additional financial assurance is
required for a particular permit must be documented on a case specific basis and included as part of
the administrative record for that permit At their discretion district engineers may choose to
require financial assurances on a case by case basis for many reasons some of which may include
tthe length of monitoring required for the compensatory mitigation project whether the mitigation
is for an after the fact permit or constructed in advance of impacts the type of mitigation
(establishment restoration or enhancement) experience with the permittee and/or consultant and
whether it requires new technology or includes proven techniques whether the permit is for a
project that impacts aquatic resources that provide high or low quality functions and the likelihood
of mitigation site sustainability Funding for many long term management activities such as
prescribed burning invasive species control and maintenance of water control structures may also
require financial assurances These are among the many factors that should be taken into account
when deciding whether or not to require additional financial assurances
c Types of Financial Assurances Examples of financial assurances include performance
bonds irrevocable trusts escrow accounts casualty insurance letters of credit legislatively enacted
dedicated funds for government operated banks or other approved instruments
d Amount of Financial Assurance The dollar amount of any financial assurance
including the penal sum of a performance bond is determined by the district engineer Any
required financial assurances should be sufficient to cover contingency actions such as default by
the permittee or failure to meet performance standards In addition the amount of the financial
assurances should be based on the size and complexity of the proposed compensatory mitigation
protect the estimated amount required to construct and remediate the proposed compensatory
mitigation project and monitoring of the compensatory mitigation site The financial assurances
may also include a reasonable amount to cover contingency costs or other amount determined to be
appropriate to the level of the uncertainty for completion of a successful compensatory mitigation
project In some cases the financial assurance may be increased to provide funds for the real estate
costs associated with the purchase of another compensatory mitigation site if the current site cannot
support the desired aquatic resource because of insufficient hydrology (e g possible reduction of
groundwater in a highly urbanizing setting or change in surface water rights) or other factors that
could affect compensatory mitigation project success District engineers must document the
analysis used to determine the amount of the financial assurance and must include this analysis in
the administrative records for their permits
e Use and Release of Financial Assurances Financial assurances may be phased out or
reduced once the project has been demonstrated to be functionally assured and self sustaining in
accordance with performance standards /success criteria District engineers should clearly specify
the conditions under which financial assurances are used to ensure mitigation and the conditions
under which the financial assurances are to be released to the permit applicant and/or provider of
2

the financial assurance Special conditions should provide the permit applicant and/or financial
assurance provider with an adequate chance to correct deficiencies with the compensatory
mitigation project In some cases release of the financial assurance can be keyed to stages
demonstrated with achievement of mitigation project performance standards or other special
conditions As discussed in section 3(a) of this Guidance district engineers should not position
themselves to accept directly retain or draw on financial assurance funds in the event of default of
the permittee unless specifically authorized by Federal statute
3 Specific Considerations for Performance Bonds This section provides guidance specific to
the use of performance bonds
a Legal Considerations Applicable to Performance Bonds Unlike some other Federal
agencies the Corps lacks statutory authority to accept directly retain and draw upon performance
bonds to ensure compliance with permit conditions If the Corps were to receive the sum of a
performance bond directly the sum would be categorized as a miscellaneous receipt under the
Miscellaneous Receipts Statute 31 U S C §3302(b) and would be deposited in the U S Treasury
without being used to ensure permit compliance This situation applies to the use of other financial
assurances as well However along with its authority to deny permit authorizations the Corps has
the authority to issue its permits with conditions District engineers have the discretion to condition
the approval of a permit to require the posting and execution of a performance bond by a permittee
as long as the Corps is not positioned to accept directly retain or draw upon bond monies in the
event of a default If and when they are used such bonds should be executed with the signatures of
an additional governmental or non governmental environmental management entity or entities as a
bond surety or sureties who agree to ensure performance if the Corps should determine that the
permittee as the bond principal has defaulted on any of its responsibilities The permit should
also specify that the Corps stands as a third party `obligee 'to the principal and surety(ies) of the
bond possessing the full and final authority to determine the penal sum amount and to determine
whether the principal and the surety(ies) have specifically performed some or all of the obligations
covenants, terms conditions and agreements of the bond Finally the bond should specify that if
both the principal and the surety(ies) default in their responsibilities the Corps retains the full and
final discretionary authority to identify new parties as additional surety(ies) to the bond
b Suggested Permit Language if Performance Bond is Used If a district engineer
determines that a performance bond is necessary to ensure the completion of a compensatory
mitigation project the permit should list the posting and execution of the bond as a special
condition The following is suggested language for a special permit condition involving a
performance bond
The Permittee has executed a Performance Bond dated [insert date bond
executed] in the amount of [insert amount determined by district engineer]
attached to this permit as [insert Attachment Number or Letter] and made a part
3

hereof to provide financial assurance for the performance of all of the obligations
covenants, terms, conditions and agreements required of the Permittee under this
permit The bond shall be posted before construction authorized by this permit
commences '
c Model Performance Bond The appendix to this guidance is a Model Performance Bond
which is provided as a suggested template for district engineers that choose on a permit by permit
basis to use performance bonds as special conditions to DA permits This Model Performance
Bond may be modified at the discretion of district engineers on a permit -by permit basis
4 Duration This guidance remains effective unless revised or rescinded
FOR THE COMMANDER
Encl D T EY
4a�or General, US Army
Director of Civil Works
4

Appendix

MODEL PERFORMANCE BOND DATE BOND EXECUTED (Must be same or earlier than date of
permit )
OBLIGEE
[Insert District Name] United States Army Corps of Engineers
Insert Address
PRINCIPAL (Legal name and business address)
TYPE OF ORGANIZATION
X ONE
_Individual
_Joint Venture
_Partnership
_Corporation
STATE OF INCORPORATION
PERMIT DATE
OBLIGATION
Surety(ies) (Legal name(s) and business address(es))
PENAL SUM OF BOND amount determined solely by Obli ee
Million(s)
Thousand(s)
Hundred(s)
Cent(s)
PERMIT DATE
PERMIT NO
We the Principal and Surety(ies) hereto are firmly bound as Obligors to the U S Army Corps of Engineers (hereinafter called the Obligee) in the
above penal sum an amount determined solely by the Obligee For the payment of the penal sum we bind ourselves our heirs executors
administrators assigns and successors jointly and severally However where the Sureties are corporations acting as co sureties we the
Sureties bind ourselves in such sum jointly and severally as well as severally" only for the purpose of allowing a joint action or actions against
any or all of us For all other purposes each Surety binds itself jointly and severally with the Principal for the payment of the sum shown below
the name of the Surety The limit of liability shall be the full amount of the penal sum
CONDITIONS
The Principal received the permit identified above
THEREFORE
The above obligation is void if the Principal —
(a) Specifically performs and fulfills all of the obligations covenants terms conditions and agreements of the permit during the original term of
the permit and any extensions thereof that may be granted by the Obligee with or without notice to the Surety(ies) and during the life of any
guaranty required under the permit and
(b) Also specifically performs and fulfills all of the obligations covenants terms conditions and agreements of any and all duly authorized
modifications of the permit that may hereafter be made Notice of those modifications to the Surety(ies) are waived
IT IS FURTHER EXPRESSLY PROVIDED THAT
The Obligee shall have the full and final authority to determine whether the Principal and Surety(ies) have specifically performed and fulfilled
some or all of the obligations covenants terms conditions and agreements of the permit
Within thirty (30) business days of receiving notice from the Obligee that the Principal has defaulted on some or all of the obligations covenants
terms conditions and agreements of the permit the Surety(ies) shall either
(a) Remedy the default of the Principal to the full satisfaction of the Obligee by a certain date determined by the Obligee or
(b) Immediately tender to a party or parties identified by the Obligee the portion of the penal sum that the Obligee determines is due and owing
and necessary to remedy the default In no circumstance shall such a sum be tendered to the Obligee Any new party or parties identified by
the Obligee under this section shall immediately become a Surety or Sureties to this bond If the Obligee determines that it is unable to identify
such a party or parties the Suerty(ies) shall remedy the default of the Principal under (a) of this section
In the event that the Surety(ies) fail(s) to respond within thirty (30) business days to the Obligee s notice of default or to honor comitments to the
full satisfaction of the Obligee under (a) or (b) above of this section the full penal sum may at the election of the Obligee immediately become
due and owing and paid to a party or parties identified by the Obligee In no circumstance shall the full penal sum be tendered to the Obligee
Any new party or parties identified by the Obligee under this paragraph shall immediately become a Surety or Sureties to this bond
WITNESS
The Obligee Principal and Surety(ies) have executed this performance bond and have affixed their seals on the date set forth above

PRINCIPAL
Signature 1
Seal
Signature 2
Seal
Corporate Seal
Name title 1 (typed)
Name title 2 (typed)
INDIVIDUAL SURETY(IES)
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
COPORATE SURETY(IES)
Surety A
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
Surety B
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
Surety C
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)

Surety
D
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
Surety
E
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
Surety
F
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
Surety
G
Name & address
State of Incorporation
Liability limit
Signature 1
Seal
Signature 2
Seal
Name title 1 (typed)
Name title 2 (typed)
Obligee
[Insert District Name]
U S Army Corps of Engineers
Insert District Address
Signature 1
(Seal)
Signature 2 (optional)
(Seal)

Name title 1 (typed) Name title 2 (typed)
INSTRUCTIONS
1 Insert the full legal name and business address of the Principal
in the space designated Principal on the face of the form An
authorized person shall sign the bond Any person signing in a
representative capacity (e g an attorney in fact) must furnish
evidence of authority if that representative is not a member of the
firm partnership or point venture or an officer of the corporation
involved
2 (a) Corporations executing the bond as sureties must appear on
the Department of the Treasurys list of approved sureties and
must act within the limitation listed therein Where more than one
corporate surety is involved their names and addresses shall
appear in the spaces (Surety A Surety B etc ) headed
CORPORATE SURETIES) In the space designated
E
SURETY(IES) on the face of the form insert only the letter
identification of the sureties
(b) Where individual sureties are involved a completed Affidavit
of Individual Surety for each individual surety shall accompany the
bond The Government may require the surety to furnish additional
substantiating information concerning their financial capability
3 Corporations executing the bond shall affix their corporate
seals Individuals shall execute the bond opposite the word
Corporate Seal and shall affix an adhesive seal if executed in
Maine New Hampshire or any other jurisdiction requiring adhesive
seals

MODEL CONSERVATION EASEMENT
January 18 2001
Rev d October 16 2002
Rev d August 2003
Model Conservation Easement for use in preserving mitigation property Language in
italics is instructional and should be deleted when site specific Conservation Easement
is prepared
PERMANENT CONSERVATION EASEMENT
THIS CONSERVATION EASEMENT ( Conservation Easement ) made this
day of 200_ by and between
( Grantor ) and (Grantee)
The designation Grantor and Grantee as used herein shall include said parties
their heirs successors and assigns and shall include singular plural masculine feminine
or neuter as required by context
RECITALS
WHEREAS Grantor owns in fee simple certain real property situated lying and
being in County North Carolina more particularly
described in Exhibit A attached hereto and incorporated herein ( Property )
WHEREAS Grantee is [either a public body of this state an agency of the United
States or a nonprofit corporation or trust whose purpose is the conservation of property]
and is qualified to be the Grantee of a conservation easement pursuant to N C Gen Stat
§ 121 35
WHEREAS Grantor and Grantee recognize the conservation scenic natural or
aesthetic value of the property in its natural state which includes the following natural
communities [describe by wetland and/or stream type as well as any associated buffers
or upland communities] The purpose of this Conservation Easement is to maintain
wetland and /or riparian resources and other natural values of the Property and prevent
the use or development of the Property for any purpose or in any manner that would
conflict with the maintenance of the Property in its natural condition
[ For use when the mitigation is offered for impacts of a single individual or
general permit use] WHEREAS the preservation of the Property is a condition of
Department of the Army permit Action ID issued by the Wilmington
District Corps of Engineers required to mitigate for unavoidable stream and /or wetland
impacts authorized by that permit Grantor and Grantee agree that third party rights of
enforcement shall be held by the U S Army Corps of Engineers Wilmington District

(Corps to include any successor agencies) and that these rights are in addition to and do
not limit the rights of enforcement under said permit
[Alternate paragraph for use when the conservation easement supports a
mitigation bank] WHEREAS the preservation of the Property is required by a Mitigation
Banking Instrument for the [Name of Bank] Department of the Army Action ID [Action
ID number for the mitigation bank] The Mitigation Bank is intended to be used to
compensate for unavoidable stream and/or wetland impacts authorized by permits issued
by the Department of the Army Grantor and Grantee agree that third party rights of
enforcement shall be held by the U S Army Corps of Engineers Wilmington District
(Corps to include any successor agencies) and that these rights are in addition to and do
not limit the rights of the parties to the Mitigation Banking Instrument
NOW THEREFORE for and in consideration of the covenants and
representations contained herein and for other good and valuable consideration the
receipt and legal sufficiency of which is hereby acknowledged Grantor hereby
unconditionally and irrevocably grants and conveys unto Grantee its heirs successors
and assigns forever and in perpetuity a Conservation Easement of the nature and
character and to the extent hereinafter set forth over the Property described on Exhibit A
together with the right to preserve and protect the conservation values thereof as follows
ARTICLE I
DURATION OF EASEMENT
This Conservation Easement shall be perpetual This conservation Easement is an
easement in gross runs with the land and is enforceable by Grantee against Grantor
Grantor s personal representatives heirs successors and assigns lessees agents and
licensees
ARTICLE II
PROHIBITED AND RESTRICTED ACTIVITIES
Any activity on or use of the Property inconsistent with the purpose of this
Conservation Easement is prohibited The Property shall be preserved in its natural
condition and restricted from any development that would impair or interfere with the
conservation values of the Property
Without limiting the generality of the foregoing the following activities and uses
are expressly prohibited restricted or reserved as indicated hereunder
A Disturbance of Natural Features Any change disturbance alteration or
impairment of the natural features of the Property or any introduction of non native
plants and /or animal species is prohibited
B Construction There shall be no constructing or placing of any building
mobile home asphalt or concrete pavement billboard or other advertising display

antenna utility pole tower conduit line, pier, landing dock or any other temporary or
permanent structure or facility on or above the Property
C Industrial, Commercial and Residential Use Industrial residential and/or
commercial activities including any right of passage for such purposes are prohibited
D Agricultural, Grazing and Horticultural Use Agricultural grazing animal
husbandry and horticultural use of the Property are prohibited
E Vegetation There shall be no removal burning destruction harming cutting
or mowing of trees shrubs or other vegetation on the Property
F Roads and Trails There shall be no construction of roads trails or walkways
on the property nor enlargement or modification to existing roads trails or walkways
G Si_gnag_e No signs shall be permitted on or over the Property except the
posting of no trespassing signs signs identifying the conservation values of the Property
signs giving directions or proscribing rules and regulations for the use of the Property
and/or signs identifying the Grantor as owner of the property
H Dumping or Storage Dumping or storage of soil trash ashes garbage waste
abandoned vehicles appliances machinery or hazardous substances, or toxic or
hazardous waste or any placement of underground or aboveground storage tanks or other
materials on the Property is prohibited
I Excavation, Dredging or Mineral Use There shall be no grading filling
excavation dredging mining or drilling no removal of topsoil sand gravel rock peat
minerals or other materials and no change in the topography of the land in any manner
on the Property except to restore natural topography or drainage patterns
J Water Quality and Drainage Pattern There shall be no diking draining
dredging channeling filling leveling pumping impounding or related activities or
altering or tampering with water control structures or devices or disruption or alteration
of the restored enhanced or created drainage patterns In addition diverting or causing
or permitting the diversion of surface or underground water into within or out of the
easement area by any means removal of wetlands polluting or discharging into waters
springs seeps or wetlands or use of pesticide or biocides is prohibited
K Development Rights No development rights that have been encumbered or
extinguished by this Conservation Easement shall be transferred pursuant to a
transferable development rights scheme or cluster development arrangement or
otherwise
L Vehicles The operation of mechanized vehicles including but not limited to,
motorcycles dirt bikes all terrain vehicles cars and trucks is prohibited [The Corps
will generally allow the use of vehicles on existing roads provided those roads are

identified by reference to a recorded map showing their location configuration and
size J
M Other Prohibitions Any other use of or activity on the Property which is or
may become inconsistent with the purposes of this grant the preservation of the Property
substantially in its natural condition or the protection of its environmental systems is
prohibited
ARTICLE III
GRANTOR S RESEVERED RIGHTS
The Grantor expressly reserves for himself his personal representatives heirs
successors or assigns the right to continue the use of the property for all purposes not
inconsistent with this Conservation Easement including but not limited to the right to
quiet enjoyment of the Property the rights of ingress and egress the right to hunt fish
and hike on the Property the right to sell transfer gift or otherwise convey the Property
in whole or in part provided such sale transfer or gift conveyance is subject to the terms
of and shall specifically reference this Conservation Easement
[For use when mitigation work (approved or required restoration creation or
enhancement) is to be done on the propero4Notwithstanding the foregoing Restrictions,
Grantor reserves for Grantor its successors and assigns the right to construct wetland
and stream mitigation on the Property in accordance with the [describe mitigation plan
by title date and permit action id if a single mitigation site if a mitigation bank include
the language detailed mitigation plan approved an accordance with the Mitigation
Banking Instrument for the Mitigation Bank]
ARTICLE IV
GRANTEE S RIGHTS
The Grantee or its authorized representatives successors and assigns and the
Corps shall have the right to enter the Property at all reasonable times for the purpose of
inspecting said property to determine if the Grantor or his personal representatives heirs
successors or assigns is complying with the terms conditions restrictions and purposes
of this Conservation Easement The Grantee shall also have the right to enter and go
upon the Property for purposes of making scientific or educational observations and
studies and taking samples The easement rights granted herein do not include public
access rights
ARTICLE V
ENFORCEMENT AND REMEDIES
A To accomplish the purposes of this Easement Grantee is allowed to prevent
any activity on or use of the Property that is inconsistent with the purposes of this
Easement and to require the restoration of such areas or features of the Property that may
be damaged by such activity or use Upon any breach of the terms of this Conservation

Easement by Grantor that comes to the attention of the Grantee, the Grantee shall notify
the Grantor in writing of such breach The Grantor shall have 30 days after receipt of
such notice to correct the conditions constituting such breach If the breach remains
uncured after 30 days the Grantee may enforce this Conservation Easement by
appropriate legal proceedings including damages injunctive and other relief
Notwithstanding the foregoing the Grantee reserves the immediate right without notice
to obtain a temporary restraining order injunctive or other appropriate relief if the breach
of the term of this Conservation Easement is or would irreversibly or otherwise
materially impair the benefits to be derived from this Conservation Easement The
Grantor and Grantee acknowledge that under such circumstances damage to the Grantee
would be irreparable and remedies at law will be inadequate The rights and remedies of
the Grantee provided hereunder shall be in addition to and not in lieu of all other rights
and remedies available to Grantee in connection with this Conservation Easement The
costs of a breach correction or restoration including the Grantee s expenses court costs
and attorneys fees shall be paid by Grantor provided Grantor is determined to be
responsible for the breach The Corps shall have the same right to enforce the terms and
conditions of this easement as the Grantee
B No failure on the part of the Grantee to enforce any covenant or provision
hereof shall discharge or invalidate such covenant or any other covenant condition or
provision hereof or affect the right to Grantee to enforce the same in the event of a
subsequent breach or default
C Nothing contained in this Conservation Easement shall be construed to entitle
Grantee to bring any action against Grantor for any injury or change in the Property
resulting from causes beyond the Grantor s control including without limitation fire
flood storm, war acts of God or third parties except Grantor s lessees or invitees or
from any prudent action taken in good faith by Grantor under emergency conditions to
prevent, abate or mitigate significant injury to life damage to property or harm to the
Property resulting from such causes
ARTICLE VI
MISCELLANEOUS
A Warranly Grantor warrants covenants and represents that it owns the
Property in fee simple and that Grantor either owns all interests in the Property which
may be impaired by the granting of this Conservation Easement or that there are no
outstanding mortgages tax liens encumbrances or other interests in the Property which
have not been expressly subordinated to this Conservation Easement Grantor further
warrants that Grantee shall have the use of and enjoy all the benefits derived from and
arising out of this Conservation Easement and that Grantor will warrant and defend title
to the Property against the claims of all persons

B Subsequent Transfers The Grantor agrees to incorporate the terms of this
Conservation Easement in any deed or other legal instrument that transfers any interest in
all or a portion of the Property The Grantor agrees to provide written notice of such
transfer at least thirty (30) days prior to the date of the transfer The Grantor and Grantee
agree that the terms of this Conservation Easement shall survive any merger of the fee
and easement interests in the Property or any portion thereof and shall not be amended
modified or terminated without the prior written consent and approval of the Corps
C Assignment The parties recognize and agree that the benefits of this
Conservation Easement are in gross and assignable provided however that the Grantee
hereby covenants and agrees that in the event it transfers or assigns this Conservation
Easement the orgamzation receiving the interest will be a qualified holder under N C
Gen Stat § 121 34 et seq and § 170(h) of the Internal Revenue Code, and the Grantee
further covenants and agrees that the terms of the transfer or assignment will be such that
the transferee or assignee will be required to continue in perpetuity the conservation
purposes described in this document
D Entire Agreement and Severability This instrument sets forth the entire
agreement of the parties with respect to the Conservation Easement and supersedes all
prior discussions negotiations understandings or agreements relating to the Conservation
Easement If any provision is found to be void or unenforceable by a court of competent
jurisdiction the remainder shall continue in full force and effect
E Obligations of Ownership Grantor is responsible for any real estate taxes
assessments fees or charges levied upon the Property Grantor shall keep the Property
free of any liens or other encumbrances for obligations incurred by Grantor Grantee shall
not be responsible for any costs or liability of any kind related to the ownership
operation insurance upkeep or maintenance of the Property except as expressly
provided herein Nothing herein shall relieve the Grantor of the obligation to comply with
federal state or local laws regulations and permits that may apply to the exercise of the
Reserved Rights
F Extinguishment In the event that changed conditions render impossible the
continued use of the Property for the conservation purposes this Conservation Easement
may only be extinguished in whole or in part by judicial proceeding
G Eminent Domain Whenever all or part of the Property is taken in the exercise
of eminent domain so as to substantially abrogate the Restrictions imposed by this
Conservation Easement Grantor and Grantee shall loin in appropriate actions at the time
of such taking to recover the full value of the taking and all incidental and direct
damages due to the taking
H Proceeds This Conservation Easement constitutes a real property interest
immediately vested in Grantee In the event that all or a portion of this Property is sold
exchanged or involuntarily converted following an extinguishment or the exercise of
eminent domain Grantee shall be entitled to the fair market value of this Conservation

Easement The parties stipulate that the fair market value of this Conservation Easement
shall be determined by multiplying the fair market value of the Property unencumbered
by this Conservation Easement (minus any increase in value after the date of this grant
attributable to improvements) by the ratio of the value of this easement at the time of this
grant to the value of the Property (without deduction for the value of this Conservation
Easement) at the time of this grant The values at the time of this grant shall be the values
used or which would have been used to calculate a deduction for federal income tax
purposes pursuant to Section 170(h) of the Internal Revenue Code (whether eligible or
ineligible for such a deduction) Grantee shall use its share of the proceeds in a manner
consistent with the purposes of this Conservation Easement
I Notification Any notice request for approval or other communication
required under this Conservation Easement shall be sent by registered or certified mail
postage prepaid to the following addresses (or such address as may be hereafter specified
by notice pursuant to this paragraph)
To Grantor
[Name address and fax number]
To Grantee
[Name address and fax number]
To the Corns
[Name address and fax number]
J Failure of Grantee If at any time Grantee is unable or fails to enforce this
Conservation Easement or if Grantee ceases to be a qualified grantee and if within a
reasonable period of time after the occurrence of one of these events Grantee fails to
make an assignment pursuant to this Conservation Easement then the Grantee's interest
shall become vested in another qualified grantee in accordance with an appropriate
proceeding in a court of competent j un sdiction
K Amendment This Conservation Easement may be amended but only in a
writing signed by all parties hereto and provided such amendment does not affect the
qualification of this Conservation Easement or the status of the Grantee under any
applicable laws and is consistent with the conservation purposes of this grant
L [For use if there is a document describing the current condition of the
property The language provided is applicable if there is a mitigation plan that
accurately describes the current condition and uses of the property If there is not such a
plan another document we agree is accurate and can be identified and is in our files can
be referenced ]Present Condition of the Property The wetlands scenic resource
environmental and other natural characteristics of the Property and its current use and
state of improvement are described in Section _ Appendix B of the Mitigation Plan

dated prepared by Grantor and acknowledged by the Grantor and
Grantee to be complete and accurate as of the date hereof Both Grantor and Grantee
have copies of this report It will be used by the parties to assure that any future changes
in the use of the Property will be consistent with the terms of this Conservation
Easement However this report is not intended to preclude the use of other evidence to
establish the present condition of the Property if there is a controversy over its use
TO HAVE AND TO HOLD the said rights and easements perpetually unto Grantee for
the aforesaid purposes
IN TESTIMONY WHEREOF the Grantor has hereunto set his hand and seal the day
and year first above written
[Signatures of the Grantor and Grantee in appropriate form]

Kelly Harrill
Chairman
Greensboro NC
Tenna Koury
'ice Chan-man
aurlington NC
John C Hagan
Secretary
Greensboro NC
W Harrison Stewart
Treasurer
Greensboro NC
Eddie C Bridges January 20, 2011
Executive Director
Greensboro NC
Dan Barker
Greensboro NC Ms Tara Allden
Thomas r G �; o NC Restoration Systems, LLC
Samuel Bridges 1101 Haynes Street, Suite 211
Greensboro NC Raleigh, NC 27604
Tracy Brooks
Greensboro NC
TonrueE Davis Dear Tara,
Roxboro NC
Johnny Dinkins The North Carolina Wildlife Habitat Foundation (NC WHF) has reviewed the
Greensboro NC
Mitigation Plan for Restoration System's Pancho Stream and Wetland
William DuBose
reensboro NC Mitigation in Wayne County and is willing to become the longterm holder
Gregory Erwin and provide oversight of the Conservation Easement that will protect the
Raleigh NC property in perpetuity The role of easement holder for the Pancho project
John Coins s in keeping with the the NC WHF to protect
Hendersonville NCl p in g wi e mission o o manage an p
Stewart Gordon wildlife within the State of North Carolina
Winston Salem NC t `
Scott Heffernan
Greensboro NC l W
Maurice S Hull
High Point, NC
John Preyer
Chapel Hill NC
Dr Wes Perry
Kinston, NC
Mark Ruffin
Greensboro NC
John Saslow
Greensboro NC
Michelle Sharpe
Greensboro NC
Mark Toland
Asheville NC
P O Box 29187 • Greensboro NC 27429 9187
(336) 375 -4994 • www ncwhf orQ
*Oi