20071843 Ver 1_Mitigation Info_20071115

A 4
LMG
LAND MANAGEMENT GROUP ixc.
Environmental Consultants
Mr. Mickey Sugg
US Army Corps of Engineers
Regulatory Specialist
Wilmington Field Office
PO Box 1890
Wilmington, NC 28402
November 13, 2007
RE: Stone Farm Regional Mitigation Bank
Mitigation Banking Instrument and Supporting Exhibits
Dear Mickey:
Land Management Group, Inc. (LMG) is pleased to submit a draft copy of the Mitigation Banking
Instrument (MBI) for the Stone Farm Regional Mitigation Bank located in Brunswick County (NC).
Please note that this document includes supporting exhibits including amended language for the
Mitigation Plan addressing recent MBRT comments. A draft conservation easement deed has also
been attached. Cape Fear River Watch, Inc. (a non-profit 501 (c)(3) corporation) will be the Grantee of
the conservation easement deed.
LMG is also providing specific responses to EPA's and NC DWQ's joint comments provided on October
5, 2007 (please refer to Attachment A).
Copies of this submittal are being provided to the other members of the MBRT. Please contact us with
any questions or comments once you have had the opportunity to review these documents. Thank you
for your continued attention to this project.
Sincerely,
Land Management Group, Inc.
l
t ba/ y?? I
Christian Preziosi
Wetland Section Manager
Iv'
?7 1 i, 0 r
2007
f)r.fv? vVAi R iQUALI1Y
www.lmgroup.net • [e-mail] • Phone: [phone] • Fax: [phone]
3805 Wrightsville Ave., Suite 15, Wilmington, NC 28403 • P.O. Box 2522, Wilmington,
NC 28402
Attachment A.
MBRT comments on Stone Farm's August 2007 Restoration Plan
DWQ comments added in italics on October S, 2007
LMG comments added in italics on November 14, 2007
In general, the document is much improved and easier to understand than the April
version. Further, most of the recommendations of the agencies have been followed.
However, there are a few issues which still need to be resolved prior to approval of the
restoration plan.
Also, I note that the cover letter expresses an interest in moving ahead with the project,
but the sponsor has not provided a draft MBI for our review. Although the sponsor
doesn't need the approved MBI to proceed with work on the site, it would be in its best
interest to at least begin MBI discussions as soon as possible.
1. In general, I agree with the proposed geographic service area and credit release
schedule. However, the site should be used only for in-kind mitigation for similar
wetland types, and impacts to streams within one stream order. Impacts on an island,
such as Sunset Beach, Ocean Isle, Holden Beach, and Oak Island, should be mitigated on
the same island. Coastal marsh impacts should not be mitigated at the site.
DWO - concurs with Ms. Matthews comments regarding the proposed service area and
credit release schedule in the August 2007 draft restoration plan.
LMG - Current permit procedures typically require that in-kind mitigation be provided in
the event of an unavoidable impact to palustrine or coastal wetlands. In addition, the
Mitigation Banking Instrument (MBI) identifies that the Bank is suited for appropriate
forms of in-kind mitigation. Only under circumstances in which permitting agencies
(USACOE, NC DWQ) consider the Bank preferable under Section 4041401 review, may
credits be debited for out-of-kind impacts.
2. Page 30: The mitigation restoration plan states that live staking will be rare along the
stream banks, and doesn't mention a plant species. At the May 31, 2007 meeting,
Tammy Hill of DWQ recommended that no live stakes be used, and that a wetland annual
mix be used instead. We recommend that the restoration plan be revised to incorporate
Ms. Hill's recommendation.
DWO - concurs.
LMG - No live stakes will be used during the stream construction process. All woody
stems will be planted within the riparian area and will not be used for the purposes of
streambank stabilization. Planted species will be chosen to restore the small stream
swamp community discussed in the restoration plan (pg. 34).
2
3. Page 33: I am pleased to see that the mature trees on the site will not be removed from
the site, unless required for specific work.
DWQ - concurs.
LMG - All trees of DBH greater than 24 " have been located and identified to aid the
design of the restored stream channel. Any removal of large specimen trees will only be
conducted to facilitate specific site work.
4. Pages 33 and 43: I remain concerned that many of the preservation areas are not of
high enough quality to warrant a 5:1 ratio. At the May 31, 2007 meeting, the MBRT
discussed that the ratios would not be 5:1, but we didn't agree on a ratio. I recommend
that the ratios for preservation be changed to 10:1. The ratios for the other forms of
mitigation are appropriate.
DWO - concurs.
LMG - No change to the 5:1 preservation ratio is proposed at this time, as these areas
provide significant additional acreage for wildlife habitat, watershed stabilization, and
pollutant removal. Furthermore, given the acute development pressures within this area,
these areas help to define one of the largest contiguous natural communities in western
Brunswick County.
5. Page 37: As discussed at the May 31, 2007 meeting, overbank flooding is the key
function to restore for the stream and small stream swamp habitat. It appears that
overbank flooding will be monitored by photograph, rather than by gauge. However, I
recommend that a crest gauge be used to record overbank flooding in both the reference
site and restoration site.
DWQ - concurs.
LMG - Specific monitoring procedures regarding the documentation of stream flow and
overbank flooding are discussed in the Exhibit B (edits to the Mitigation Plan) included
within this submittal.
6. Page 40: The restoration plan sets no success criteria for macrobenthos. This is in part
because improvements in macrobenthic community are often not seen for more than 5
years in stream restoration projects. I think the MBRT needs to discuss whether the
mitigation site should be required to exhibit a trend toward more flowing water species.
DWQ - will require that macrobenthos sampling occur during December - February of
each year. Since this is typically the wettest and coolest time of the year, it will be most
3
likely to indicate flow in the stream. While a community associated with a mature stream
ecosystem may not occur within S years, it is expected that some flow-dependent species
will be observed during that timeframe if the stream is experiencing flowing water.
LMG - Annual monitoring of the macrobenthic community is being proposed as part of
this project (see Exhibit B for specific details). While data will be compared to similar
lotic systems within the Coastal Plain, no specific success criteria is proposed for this
portion of the monitoring.
7. Page 41: the plan states "if the stream flows are insufficient to meet appropriate levels
during normal rainfall periods, available credits for steam restoration may be reduced to
depict the valley length rather than designed specifications." However, there are no
success criteria for flow, or for lotic species within the stream, and no plans to monitor
flow. This is a significant issue, and I recommend that the restoration plan include
monitoring of flow in the main stem and at least one of the smaller tributaries. The
streams may be too small for flow gauges, so the MBRT will need to determine another
method for documenting flow.
DWQ - In addition to the macrobenthos monitoring described above, DWQ suggests a
simple physical means of documenting flow: place a couple narrow lines of white silica
sand across the stream bed and mark the locations with flagged stakes. Using
photographs (taken monthly and/or after rain events), document how much/how quickly
the sand travels downstream over time. The MBRT will need to decide how far the
sand will have to move in order to document sufficient flow.
The Coastal Plain stream mitigation guidance discusses awarding credit based on valley
length for headwater or 0 to I S` order streams that due to slopes and watershed size, are
not believed to have developed a discrete channel with pattern, dimension and profile.
As described in the guidance, these systems will usually possess a braided, diffuse flow
surface flow pattern. It is the restoration of these types of systems that merit
consideration of awarding stream credit based on valley length.
Stream restoration involving the construction of discrete channels exhibiting pattern,
dimension and profile assumes that sufficient flow will be present in the channel. Given
the slopes at the site, DWQ continues to have some concerns regarding whether the
constructed streams will flow. Although we had previously suggested that valley length
credit would be appropriate in the absence of adequate flow, further review of the
mitigation plan, the Coastal Plain mitigation stream guidance, and precedent (in which
stream mitigation projects did not achieve flow) has revealed that the designed system
may not fall under the guidance. Therefore, valley length credit may not be achieved if
the stream restoration simply fails to meet its design criteria.
If the macrobenthos monitoring at the site reveals the presence of a macrobenthos
community at the site more characteristic of lentic systems, and shows a lack of
rheophilic organisms, this system will not fit into the category of 0 to IS` order stream
4
restoration as described above. Rather, if the constructed stream is not exhibiting flow,
stream credit may not be awarded.
LMG' - Specific monitoring procedures regarding the documentation of stream flow and
overbank flooding are discussed in Exhibit B included within this submittal.
8. At the meeting, Mickey Sugg asked for topographic elevations and information on
flow at the northeast outlet from the bay. After reviewing the restoration plan, I am
unable to find any discussion on the northeast outlet. Please address Mr. Sugg's request
and provide this information.
LMG - A 2' contour topographic showing the recently released LIDAR data is attached
per request from Mickey Sugg.
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MITIGATION BANKING INSTRUMENT
STONE FARFM REGIONAL MITIGATION BANK
IN BRUNSWICK COUNTY, NC
1.0 PREAMBLE
This Mitigation Banking Instrument (MBI) is made and entered into on the day of
20 , by Ocean Isle Investment Company, hereinafter Sponsor, and the U.S.
Army Corps of Engineers (USACE), and each of the following agencies, upon its
execution of this MBI, the U.S. Environmental Protection Agency (EPA), the U.S. Fish
and Wildlife Service (USFWS), the North Carolina Wildlife Resources Commission
(NCWRC), and the North Carolina Division of Water Quality (NCDWQ). The USACE,
together with the State and Federal agencies that execute this MBI, are hereinafter
collectively referred to as the Mitigation Bank Review Team (MBRT).
WHEREAS the purpose of this Agreement is to establish the Stone Farm Regional
Mitigation Bank as a general-use bank site providing compensatory mitigation of
unavoidable wetland and stream impacts separately authorized by Section 404 Clean
Water Act (CWA) permits and/or Section 401 Water Quality Certifications in appropriate
circumstances; and
0 WHEREAS the Sponsor is the record owner of fee simple title to that certain tract of land
encompassing 886 total acres (comprising 879 acres of compensatory mitigation and 7
acres of upland buffer) located in Brunswick County, North Carolina, described in the
Stone Farm Regional Mitigation Bank Wetlands and Stream Mitigation Plan (Mitigation
Plan), and as shown on the attached survey (Exhibit A).
WHEREAS the agencies comprising the MBRT agree that the Stone Farm Regional
Mitigation Bank site is a suitable mitigation bank site, and that the implementation of the
0

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.
2.0 GENERAL PROVISIONS
• 2.1 Goals: The goal of the Stone Farm Regional Mitigation Bank is to restore, enhance, l
and preserve pocosin/Carolina bay wetland, headwater swamp wetland, small steam- 4
swamp wetland, and Coastal Plain stream systems and their functions and values to
compensate for unavoidable wetland and stream impacts authorized by Section 404 of the
CWA permits or Water Quality Certifications deemed appropriate by the USACE or
NCDWQ after consultation, through the permit review process, with members of the
MBRT.
2.2 Use of Credits: Use of credits from the Bank to offset wetland and stream impacts
lianc 4
authorized by CWA permits of 401 Water Quality Certifications must be in L40?b)(I)
with the CWA and implementing regulations, including but not limited to th Guidelines, the National Environmental Policy Act, and all other applicable Federal and
State legislation, rules and regulations. This agreement has been drafted following the
guidelines set forth in the "Federal Guidance for the Establishment, Use and the
Operation of Mitigation Banks", 60 Fed. Reg. 58605, November 28, 1995 (Guidance).
2.3 Role of the MBRT: The MBRT shall be chaired by the representative from the
USACE, Wilmington District. The MBRT shall review monitoring and accounting
reports more fully described in Sections 3.3 and 4.4 below. In addition, the MBRT will
review proposals for remedial actions proposed by the Sponsor, or any of the agencies
represented on the MBRT. The MBRT's role and responsibilities are more fully set forth
in Sections ILC, 3 & 6 of the Guidance. The MBRT will work to reach consensus on its
actions.
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0
The USACE, 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 and
stream impacts, and whether or not the use of credits from the Banks site 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, NCDWQ will determine the amount of credits that can be withdrawn from the
Bank.
The parties to this agreement understand that, where practicable, on-site, in-kind
compensatory mitigation may be preferred. However, it is recognized that in many
instances use of a mitigation bank may be considered to be environmentally preferable.
3.0 MITIGATION PLAN
3.1 General Description: The Stone Farm bank site is composed of approximately 879
acres (ac) of former Carolina bay, headwater swamp forest, small stream swamp wetland
communities and 20,355 linear feet (10 of degraded Coastal Plain streams. An additional
0 50-ft buffer (totaling 7 acres) around the perimeter of the restored, enhanced, and
preserved wetlands will be conveyed as part of the conservation easement. This site
offers opportunities for riverine and nonriverine wetland restoration, enhancement and
preservation and stream restoration. A more detailed description of existing site
conditions is contained in the Mitigation Plan.
3.2 Site Modifications: The Sponsor will complete all work as described in the
Mitigation Plan. The bank site will include 369 acres of wetland restoration (104 ac of
riverine wetlands and 265 acres of nonriverine wetlands), 158 acres of wetland
3
0
11
enhancement, and 352 acres of wetland preservation (refer to Figure 6 of the Mitigation
Plan). Site modifications will be done in accordance with the approved Mitigation Plan.
The following table summarizes mitigation type, acreage, and credits for the proposed
mitigation effort:
Table 1. Mitigation Credit - Stone Farm Regional Mitigation Bank
Area/Distance Mitigation Replacement Credit
Mitigation Type (acres/If) Credit Ratio (acre credits)
Nonriverine
Pocosin/Carolina Bay 145 1:1 145
Restoration
Nonriverine Swamp 120 1:1 120
Forest Restoration
Riverine Small Stream

Swamp Restoration 104 1:1 104
Nonriverine Wetland

Enhancement 158 2:1
in A 79
Nonriverine Wetland '
Preservation 352 5:1 I 0.4
TOTAL WETLAND 879 518.4
AREA AND CREDITS
TOTAL STREAM
DISTANCE AND 20,355 1:1 20,335
CREDITS
3.3 Site Monitoring: The Sponsor shall monitor the Bank Site as described in the
monitoring section of the Mitigation Plan and as amended in Exhibit B (Revisions to the
Mitigation Plan). The Bank Site will be monitored for a five (5) year period after
implementation is completed or until such time as the MBRT determines that the Success
Criteria have been met, whichever occurs later.
The Sponsor is responsible for assuring the success of the restoration, enhancement and
preservation activities at the Stone Farm site, and for the overall operation and
management of the Bank.
4
0
The Sponsor shall provide the reports described in the monitoring section of the
Mitigation Plan to each member of the MBRT.
3.4 Contingency: USACE shall review said reports and may, at any time, after
consultation with the Sponsor and the MBRT, direct the Sponsor to take remedial action
at the Bank Site. Remedial action required by USACE shall be designed to achieve the
success criteria specified in the monitoring section of the Mitigation Plan and Exhibit B.
All remedial actions required under this paragraph shall include monitoring criteria and a
0 work schedule that will take into account physical and climatic conditions.
The Sponsor shall implement any remedial measures required pursuant to the above
paragraph.
In the event the Sponsor determines that remedial action may be necessary to achieve the
required monitoring and maintenance criteria, it shall provide notice of such proposed
remedial action to all members of the MBRT. No remedial actions shall be taken without
the concurrence of USACE, in consultation with the MBRT.
The members of the MBRT will be allowed reasonable access to the Property for the
purposes of inspection of the Property and compliance monitoring of the Mitigation Plan.
4.0 USE OF MITIGATION CREDITS
•
4.1 Geographic Service Area: The Geographic Service Area (GSA) is the designated
area wherein a bank can reasonably be expected to provide appropriate compensation for
impacts to similar wetland and/or other stream or aquatic functions. The Stone Farm
Regional Mitigation Bank is situated on the boundary of the Coastal Carolina unit of the
Lumber River Basin (USGS Hydrologic Unit 03040207) and the Waccamaw Unit (USGS
Hydrologic Unit 03040206). Since the Stone Farm site is situated on the boundary of two
8-digit cataloging units, the GSA of this Bank shall include a subset of 14-digit HUCs
5
•
occurring within the vicinity of the Stone Farm site as listed in Table 2 of this document.
Refer to Figure 7 of the Mitigation Plan for the location and extent of the GSA.
Based upon standard state mitigation guidelines (including those set forth by NCDENR
and the NC Ecosystem Enhancement Program (EEP)), the Stone Farm Bank Site may be
suitable for providing compensatory mitigation for wetland impacts occurring anywhere
within the same 8-digit hydrologic unit (i.e. Coastal Carolina unit of the Lumber River
Basin, USGS Hydrologic Unit 03040207). Therefore, use of the Bank for compensatory
• mitigation will also be considered outside of the designated GSA if this option is
preferable to other mitigation alternatives during the course of the permit review process.
4.2 Amount and Type of Credit: The Mitigation Plan is intended to result in the forms
and amounts (in acres or linear feet) of wetland and stream compensatory mitigation as
depicted in Table 1. Successful implementation of the Mitigation Plan will result in the
establishment of 20,335 if of stream restoration, 104 ac of riverine wetland restoration,
and approximately 265 acres of nonriverine wetland restoration.
It is anticipated by the parties to this Agreement that use of mitigation credits sball be
"in-kind" (i.e. the type of wetland credit used will offset the same type of wetland to be
impacted under appropriate 404/401 authorization).
It is anticipated by the parties to this Agreement that in most cases in which USACE,
after consultation with members of the MBRT, has determined that mitigation credits
•
from the bank may be used to offset wetland impacts authorized by Department of the
Anny pennits, for every acre of impact, two credits will be debited from the Bank. One
of those credits must be a restoration credit; the remaining credit will be made up of any
combination of restoration, enhancement, or preservation credits as selected by the
Sponsor and approved by the USACE during its pen-nit process. Deviations from this
compensation ratio may be authorized by the USACE on a case-by-case basis where
justified by considerations of functions of wetlands impacted, the severity of the impacts
to wetlands, whether the compensatory mitigation is in-kind, and physical proximity of
6

•
the wetland impacts to the Bank site. Additionally, for use of stream credits, the MBRT
agrees that for every linear foot of proposed stream impact, two stream credits will be
debited from the Bank. Deviations from this compensation ratio may be authorized by
the USACE on a case-by-case basis where justified by considerations of function and/or
quality of stream impacted, the severity of the impacts to stream, and the physical
proximity of the stream impacts to the Bank site.
Table 2. List of 14-digit watersheds within Geographic Service Areal
14 -Digit Hydrologic Unit Code (HUC)
3040206060020
•
3040206060030
3040206060040
3040206060010
3040206060060
3040206060050
3040206040010
3040206102010
3040206050010
3040206090010
3040207020060
3040206090020
3040207020090
3040207020070
3040207020110
3040207020080
3040207020100
3040207020120

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Based upon standard mitigation guidelines (inclu ng those set forth by NCDENR and the NC EEP, the
Bank may be suitable for providing compet mi ' n for wetland impacts occurring anywhere
within the same 8-digit hydrologic uni 03 - wer Cape Fear Therefore, use of the Bank for
compensatory mitigation will also be consiside of the 11- igit units listed above upon review and
analysis of other mitigation alternatives at tof permit issuance.

p 30 `fb Zo'7 7

Notwithstanding the above, all decisions concerning the appropriateness of using credits
from the Bank to offset impacts to streams and wetlands, as well as all decisions
concerning the amount and type of such credits to be used to offset stream and wetland
impacts authorized by Department of the Army permits, shall be made by USACE,
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 MBRT, and
consultation with the members of the MBRT concerning such use.
0 4.3 Credit Release Schedule: The credit release schedule for the Bank is based on
current guidelines but may be amended with the release of new EPA guidance anticipated
by theVend of 2007. The credit release schedule for the Bank, as depicted in Table 3,
will be based upon successful completion of the following tasks:
Task 1: Fifteen percent (15%) of the Bank's total restoration credits shall be available
for sale immediately upon completion of all of the following:
(a) Execution of this MBI by the Sponsor, the USACE, and other agencies on the
MBRT who choose to execute this agreement;
(b) Approval of the final Mitigation Plan with amendments;
(c) Delivery of the financial assurances as described in Section 6 of this MBI;
(d) Recordation of the preservation mechanism described in Section 5 of this
MBI, as well as a title opinion covering the property acceptable to the
USACE;
11
Additionally, 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.
Completion of Task 1 is a prerequisite for release of any credits from the bank site, not
withstanding completion of other tasks described below.
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0
•
0
0
Task 2: Task 2 includes completion of all mitigation implementation activities at the
Bank site as specifically identified in the Mitigation Plan. Such activities will include
required grading and planting of the site and establishment of monitoring stations.
Documentation (including `as-built' drawings) will be submitted to the MBRT certifying
completion of Task 2. Upon completion of Task 2, 15% of the wetland and stream Bank
credits will be released (30% cumulative).
Task 3: Task 3 involves implementation of the monitoring plan and submittal of annual
reports to the MBRT for a five-year monitoring period, or until success criteria have been
fulfilled, whichever period is longer. Hydrology and vegetation sampling will be
completed near the end of each growing season (between September 1 and October 31).
The data will be compiled and success/failure documented within the Bank. The data
will be submitted to the MBRT as an Annual Wetland Monitoring Report (AWMR).
Upon submittal of the AWMR demonstrating that success criteria are being fulfilled,
wetland and stream credits will be released as follows:
First AWMR (January 2010):
Second AWMR (January 2011)
Third AWMR (January 2012):
Fourth AWMR (January 2013):
Fifth AWMR (January 2014):
10% (40% cumulative)
15% (55% cumulative)
15% (70% cumulative)
10% (80% cumulative)
20% (100% cumulative)
Credit releases for Task 3 will occur only if success criteria are fulfilled as stipulated in
Section V of the Mitigation Plan.
4.4 Accounting Procedures: The Sponsor shall develop accounting procedures for
maintaining accurate records of debits made from the Bank. Such procedures shall
include the generation of a report by the Sponsor showing credits used at the time they
are debited from the Bank, which the Sponsor shall provide within 30 days of the debit to
each member of the MBRT. In addition, the Sponsor shall prepare an annual report, on
each anniversary of the date of execution of this Agreement, showing all credits used, and
9
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e
t
the balance of credits remaining, to each member of the MBRT, until such time as all of
the credits have been utilized, or this Agreement is otherwise terminated. All reports
shall identify credits debited and remaining by type of credit (e.g. headwater swamp
wetland), and shall include for each reported debit the USACE Action ID Number for the
permit for which the credits were utilized.
Table 3. Mitigation Credit Release Schedule - Stone Farm Regional Mitigation
Bank
???X?c? ? ?t1C?rnr3rG•? Y?.Qu? v(?..1?-?? ?F? 1 ?"? ???r1 ?:c?c?4stc?1
Task Projected Percentage Credits Cumulative
Completion of Credits Released Credits Released
Date Released (%
cumulative)
1.0 Signing of the MBI; 12/2007 15 (15) 77.8 77.8
Recordation of Conservation
Easement Deed; Delivery of
financial assurances
2.0 Completion of all 3/2009 15(30) 77.8 155.6
Restoration Activities
3.0 Monitoring Plan --- --- --- _--
3.1 Year 1: Fulfill Success 1/2010 10(40) 51.8 207.4
Criteria
3.2 Year 2: Fulfill Success 1/2011 15 (55) 77.8 285.2
Criteria
3.3 Year 3: Fulfill Success 1/2012 15(70) 77.8 363.0
Criteria
3.4 Year 4: Fulfill Success 1/2013 10(80) 51.8 414.8
Criteria
3.5 Year 5: Fulfill Success 1/2014 20(100) 103.6 518.4
Criteria
TOTAL 100 518.4
5.0 PROPERTY DISPOSITION
A Conservation Easement Deed will be recorded and conveyed to Cape Fear River
Watch, Inc. (a non-profit 501 (c) (3) corporation) upon execution of this Agreement. As
the grantee of this easement, Cape Fear River Watch will be responsible for maintaining
the Bank in strict accordance with the provisions expressed therein and will be
responsible for protection of the Bank Site in perpetuity. The Conservation Easement
0 10
0
Deed shall be perpetual, preserve all natural areas, and prohibit all use of the property
inconsistent with its use as a mitigation property, including any activity that would
materially alter the biological integrity or functional and educational value of wetlands
within the Bank site, consistent with the Mitigation Plan. The purpose of the
Conservation Easement Deed will be to assure that future use of the Bank site will result
in the restoration, protection, maintenance, and enhancement of wetland and stream
functions as described in the Mitigation Plan. The Sponsor is providing a title opinion
(Exhibit C) for the mitigation property. The property is 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. A copy of the
Conservation Easement Deed to be used for the protection of the site in perpetuity is
attached as Exhibit C.
6.0 FINANCIAL ASSURANCES
6.1 Performance/Construction Letter of Credit: The Sponsor has secured a $500,000
irrevocable letter of credit with Smith Barney as a financial assurance of completing
construction of the Bank site. Documentation of this letter of credit will be provided
prior to the 15% credit release associated with Task 1.
6.2 Monitoring and Maintenance Letter of Credit: The Sponsor is responsible for
securing a irrevocable letter of credit in the amount of $100,000 for monitoring and
0 maintenance to cover contingency actions in the event of Bank default or failure. The
letter of credit will be left in place for the duration of the monitoring period.
Documentation of this letter of credit will be secured prior to completion of Task 2.
6.3 Management Endowment: The Sponsor will be providing a separate endowment to
Cape Fear River Watch, Inc. (Grantee) for the long-term management and maintenance
of the site. The Grantee will be responsible for ensuring protection of the site in a natural
state consistent with the provisions of the conservation easement deed.
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7.0 MISCELLANEOUS
This agreement may be amended with written consent of all the parties.
Notices, requests, and required reports shall be sent by regular mail to each of the parties
at their respective addresses provided below:
Sponsor:
Mr. DeCarol Williamson
Ocean Isle Investment Company
2618 New Village Way
Wilmington, NC 28405
USACE:
Mr. Ken Jolly
U.S. Army Corps of Engineers
P.O. Box Office 1890
Wilmington, NC 28402
USEPA:
Ms. Kathy Matthews
0 Environmental Protection Agency
Atlanta Federal Center
61 Forsythe St.
Atlanta, GA 30303
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0
USFWS:
Mr. Mike Wicker
U.S. Fish and Wildlife Service
P.O. Box 3326
Raleigh, NC 27636
NCWRC:
Ms. Shannon Deaton
• North Carolina Wildlife Resources Commission
512 N. Salisbury St.
Raleigh, NC 27604
NCDWQ:
Mr. John Dorney
North Carolina Division of Water Quality
Department of Environment and Natural Resources
2321 Crabtree Blvd.
Raleigh, NC 27604
•
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0
f

IN WITNESS WHEREOF, the parties hereto have executed this Agreement for the Stone Farm
Regional Mitigation Bank.
Wilmington District Engineer
U.S. Army Corps of Engineers
Ecological Service Supervisor
U.S. Fish and Wildlife Service
Ecological Service Supervisor
U.S. Fish and Wildlife Service
Commission
Chief, Wetland Section, Wetlands
Coastal, and Water Quality Grants
Branch, Water Management Division
U.S. Environmental Protection
Agency
Director
North Carolina Division of Water Quality
DeCarol Williamson
President
Ocean Isle Investment Company
14

EXHIBIT A.
BOUNDARY SURVEY OF MITIGATION BANK SITE
(forthcoming December 2007)

EXHIBIT B.
ADDENDUM TO THE MITIGATION PLAN' (August 2007 Version)
EXECUTIVE SUMMARY
The proposed mitigation bank site (879 acres of compensatory mitigation plus an additional 7 ac of
40 upland buffer) consists of diverse wetland and upland habitats situated at the headwaters of the
Waccamaw River and the Calabash River in the Lumber River Basin. Riparian and nonriparian
headwater wetlands have been historically ditched on the tract for silvicultural site index
improvement by timber management companies. Past clearing and ditching was also conducted
for agricultural production in select areas of the tract. Surface water flow is directed from a 145-
acre Carolina bay on the southern portion of the tract north to the Little Caw Caw Canal (a first-
order tributary of the Waccamaw River) via channelized ditches. There are approximately 14,736
linear feet of degraded `blue-line' streams on the tract potentially suitable for restoration (not
including the Little Caw Caw Canal on the northern property boundary). Based upon on-site
investigations and planning, 369 acres of wetland restoration (including small stream swamp,
headwater swamp, and pocosin/Carolina bay habitats) are viable on the tract. The mitigation bank
site is owned by Ocean Isle Investment Company (Sponsor). Land Management Group (LMG) has
conducted many of the on-site evaluations contributing to the proposed restoration plan and is
operating as the agent for the Ocean Isle Investment Company in the submittal of this plan to the
Mitigation Bank Review Team (MBRT). Kerr Environmental conducted additional site evaluations
and prepared the stream restoration component of this plan.
The proposed project will serve as a general use wetland and stream mitigation bank serving an
agreed upon group of 14-digit hydrologic units located in Brunswick County (NC) which will
1 Note that this addendum reflects changes to the Mitigation Plan based upon MBRT review and comment
on the August 2007 draft of the Stone Farm Region Mitigation Bank Site-Specific Restoration Plan. The
plan will be referred to hereafter as the `Mitigation Plan' as referenced in the Mitigation Banking
Instrument (MBI). The text provided in this addendum should replace that of corresponding sections of the
August 2007 draft.
0 Exhibit B I
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comprise its service area. The purpose of the bank is to compensate for those wetland losses
authorized by applicable federal and state regulatory program permits via the restoration,
enhancement, and preservation of 879 acres of wetlands and approximately 20,335 If of streams.
Based upon these acreage amounts and established credit ratios, 518 wetland mitigation credits
and 20,335 If of stream credits available through this proposed bank site. The following mitigation
plan provides site-specific information related to existing site conditions, mitigation goals and
objectives, proposed mitigation activities, site-success criteria, financial assurances, property
dispensation, and annual monitoring for both the wetland and stream components.
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SECTION V. MONITORING PLAN
Stream Monitoring Protocol
The Mitigation Plan for the project provides an outline for the annual monitoring procedures related
to photo documentation, ecological function, and channel stability. While the report discusses the
main categories of the monitoring plan, further clarification of methodology is necessary for final
agency approval. This addendum includes additional specific information based on the current
stream monitoring guidelines published by the USA COE, NC DWQ, and NC EEP.
Level I Monitoring Guidelines
(1) Photo-Documentation
0 Extensive photo documentation is proposed for the stream monitoring phase of this project.
Photos will be taken at all permanent cross-sections on a bi-annual basis (winter and summer) in
addition to any problem areas that may develop after construction in completed. Photos will be
georeferenced to the corresponding cross-section and/or problem area as part of the submitted
report.
Photo documentation will also be used to document the health of the riparian area plantings and
the effectiveness of any erosion control measures.
0 Exhibit B 2

(2) Ecological Function
The health of the riparian vegetation will be documented as part of the wetland restoration
monitoring efforts. Multiple 0.10 ac. permanent monitoring plots will be established throughout the
riverine wetland restoration including areas directly adjacent to the restored channel. In order for
these areas to be deemed successful, density of planted species and acceptable volunteer species
must meet or exceed 320 woody stems per acre at the end of Year 3 monitoring and 260 stems
per acre by the Year 5 monitoring event.
Macroin vertebrate sampling is also proposed for the duration of the monitoring period with the
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exception of Year 1 (which will allow for populations to acclimate to the restored channel).
Sampling events will take place during the winter months, which typically support greater species
richness. Sampling will be conducted based on the NCDENR Standard Operating Procedure for
Macroinvertebrates. All data will be compared to pre-construction results which will be collected
during the winter of 2008. However, should drought conditions continue pre-construction
monitoring may be suspended. If this occurs, any post construction results will be compared to
results from peer-reviewed publications for similar lotic systems.
(3) Channel Stability/Survey Procedures
A. Cross-Sections
The Stone Farm Regional Mitigation Bank will restore 20,335 If of Coastal Plain stream. The
restoration will mimic low gradient, low velocity stream reaches characteristic of the outer Coastal
Plain. No hardened materials (i.e. rock structures) will be used. Rather, natural material (such as
op root wads and log vanes) will assist with channel stabilization and grade control. Given the size,
uniform design, and gentle slope (0.005) of the proposed project, cross-sections will be established
every 1,000 feet of stream length (totaling 21 permanent stations). Placement of these stations will
be designed to assess the performance of potential problem areas (i.e. severe erosion, structural
failure). These stations will also be evenly distributed between riffles and pools throughout the
project. Refer to Table 1 for proposed placement of cross-section monitoring stations.
0 Exhibit B 3

Table 1. Proposed Stream Cross-Sections.

Reach Name
Existing (If) Proposed
(If)
Bkf Width(Proposed)
Cross-sections
Mainstem 5,850 8,073 14.60 8
Northern Tributary 1,934 2,668 8.30 3
Southern Tributary 1,914 2,641 11.60 3
Hunters Creek 5,039 6,953 11.60 7
Total Length 14,736 20,335 21
B. Longitudinal Profiles
Guidelines regarding longitudinal profiles for projects totaling over 3,000 If suggest that 30% of the
area be surveyed on an annual basis. Based on this guideline, a total of 6,100 If of project would
be required for the Stone Farm project. The 6,100 If of survey will be divided throughout the
individual reaches and will include the permanent cross-sections (Table 2). Data presented in the
annual monitoring reports will be shown in comparison to as-built conditions.
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Table 2. Proposed Longitudinal Profiles by Stream Reach

Reach Name
Existing (If) Proposed
(If)
% of Project
Profile (If)
Mainstem 5,850 8,073 39.7 2,400
Northern Tributary 1,934 2,668 13.1 800
Southern Tributary 1,914 2,641 13.0 800
Hunters Creek 5,039 6,953 34.2 2,100
Total Length 14,736 20,335 6,100
C. Pebble Counts
In order to properly assess the substrate in the restored channel pebble counts will be conducted.
The NCSU Stream Restoration Handbook suggests a variety of different methodologies designed
to use either the longitudinal profile or permanent cross-section as an appropriate location for
sampling. The longitudinal profile methodology is proposed, as it will provide a more complete
representation of the system.
0 Exhibit B 4

The longitudinal profile for each reach (Table 2) will be evaluated to determine the percentages of
existing riffles and pools. These percentages will determine the amount of sediment sampling that
occurs in each area. A total of 100 counts will be conducted in each of the profiles. Final count
data will be plotted to show size-class and frequency.
D. Stream Flow Monitoring
Documentation of stream flow within the project will also be conducted. Following stream
construction activities, 4 stream gauges (one in each major reach) will be installed. These gauges
will measure the elevation of water in the channel on a daily basis and will be used to determine
the cross-sectional area of the channel under a variety of flow conditions.
In addition to these data, velocity measurements will be collected within 24 hours of a 0. 5, 1. 0, and
2.0 inch rain event at each gauge location during Year 1 monitoring. Measurements will be taken
at 1-foot intervals across the restored channel at depths of 0.6 ft. above the bottom. This
information will be used to compute a total discharge measured in cubic feet per second for each
reach for the duration of the monitoring activities. All data will then be used to develop a
regression analysis which will define the relationship between rainfall events and total stream
discharge. These data will be presented in graphical format with individual bankfull and high flow
events highlighted.
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Published research supports the restoration of streams with similar sized watersheds in east
North Carolina. If insufficient flow is observed during the course of post-constructio onitoring
the total number of stream credits may be reduced to the existing valley length er US EPA and
NC DWQ comments. However, prior to any changes in the amount of available credit a formal
review of the available data would be requested by the Bank Sponsor.
VI. IMPLEMENTATION SCHEDULE AND FINANCIAL ASSURANCES
A Mitigation Banking Instrument (MBI) has been developed and will be executed prior to project
construction. Upon acceptance of the final mitigation plan by the Mitigation Bank Review Team
0 Exhibit B 5
C,
(MBRT), the bank sponsor (Ocean Isle Investment Company) will initiate proposed grading and
planting activities for the development of the Stone Farm Regional Mitigation Bank.
Use of credits from the Bank to offset wetland and stream impacts authorized by federal permits or
state water quality certifications must be in compliance with the Clean Water Act, Section 404
(b)(1) guidelines and other applicable federal and state legislation, regulations, and policies. Prior
to release of bank credits, the following requirements will be met: (1) approval of the final mitigation
plan and execution of the MBI; (2) securing the bank site; and (3) establishment of appropriate
• financial assurances.
The ownership of the Bank will reside with the Sponsor. Upon approval of the Mitigation Plan and
execution of the MBI, a conservation easement will be recorded and conveyed to the Cape Fear
River Watch, a licensed non-profit land trust organization. The conservation easement will define
the actions related to the long-term protection and management of the site. The easement
prohibits any activities (e.g. timbering, farming, building, etc.) that would alter the environmental
state of the Bank site. Conditions of the easement will not restrict passive recreational and
research activities.
The Bank Sponsor will be responsible for securing appropriate financial assurances in the form of
construction, monitoring, and maintenance bonds and/or irrevocable letter of credit to cover
contingency measures in the event of Bank default or failure. Performance monitoring will be
conducted for a 5-year period subsequent to project construction. Annual monitoring will evaluate
r the development of wetland/stream function and document site performance relative to established
success criteria. In addition, monitoring activities will identify any site deficiencies that may warrant
remedial action. Monitoring reports documenting site success and/or failure will be submitted to
the MBRT each year. Upon submittal of annual monitoring reports demonstrating the fulfillment of
site success criteria, wetland/stream credits will be released. See below for specifics relating to
these financial assurances.
Upon acceptance of this mitigation plan, proposed mitigation activities will be initiated. It is
anticipated that grading activities will begin in January 2008. Subsequent site planting will be
0 Exhibit B 6
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conducted during February 2008. Based upon anticipated start dates, an `as-built' survey will be
completed by January 2009.
Performance/Construction Letter of Credit: The Sponsor has secured a $500, 000 irrevocable
letter of credit with Smith Barney as a financial assurance of completing construction of the Bank
site. Documentation of this letter of credit will be provided prior to the 15% credit release
associated with Task 1
Monitorinq and Maintenance Letter of Credit: The Sponsor is responsible for securing a
irrevocable letter of credit in the amount of $100, 000 for monitoring and maintenance to cover
contingency actions in the event of Bank default or failure. The letter of credit will be left in place
for the duration of the monitoring period. Documentation of this letter of credit will be secured prior
to completion of Task 2.
Management Endowment: The Sponsor will be providing a separate endowment to Cape Fear
River Watch, Inc. (Grantee) for the long-term management and maintenance of the site. The
Grantee will be responsible for ensuring protection of the site in a natural state consistent with the
provisions of the conservation easement deed.
VIII. FINAL PROPERTY DISPENSATION
0 Ownership of the Stone Farm site will reside with the Bank Sponsor who will convey a perpetual
conservation easement deed to Cape Fear River Watch (CFRM, a registered land trust
organization in North Carolina, for long-term protection of the site. This transfer received approval
from the CFRW executive board and the bank sponsor in October 2007. The conservation
easement deed will be conveyed as part of Task 1 prior to the release of any bank credits. CFRW
will be responsible for maintaining the Bank in accordance with a Conservation Easement placed
on the Bank Site for perpetual protection as described in the Mitigation Plan.
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In addition to monitoring activities throughout the site, CFRW will maintain trails throughout the 50'
upland buffer that surrounds the project (outside of the limits of compensatory mitigation). Trails
will be maintained via small bush-hog equipment and will not exceed 8' in width. The trails will be
used to facilitate environmental programs designed to educate a variety age groups from the
surrounding community. Educational signs and kiosks will also be placed at strategic locations
throughout the buffer.
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0 Exhibit B
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EXHIBIT C.
PERMANENT CONSERVATION EASEMENT
THIS CONSERVATION EASEMENT ("Conservation Easement") made this
day of , 200 by and between
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("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 Brunswick County, North Carolina, more particularly described in Exhibit A
attached hereto and incorporated herein ("Property");
WHEREAS, Grantee is Cape Fear River Watch Inc. (a 501(c)(3) non-profit
organization), 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: pocosin/Carolina bay wetlands, headwater swamp forest wetlands, small
stream swamp forest, and coastal plain streams. 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.
WHEREAS, the preservation of the Property is required by a Mitigation Banking
Instrument for the Stone Farm Regional Mitigation 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
do
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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
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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 ACTIVITES
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 rights 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 with the
exception of narrow, pedestrian access trails to be used for monitoring and/or
educational purposes. In no circumstance should these trails be wider than 8-
ft wide.
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
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walkways, with the exception of narrow, pedestrian access trails to be used for
monitoring and/or educational purposes. In no circumstance should these
trails be wider than 8-ft wide.
G. Siege. 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 sign identifying the Grantor as owner of the
Property.
H. Dumper 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.
1. Excavation, Dredging or Material 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.
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 pesticides or biocides is prohibited.
K. Development Rights. No development rights that have been encumbered or
extinguished by the 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.
M. Other Prohibitions. Any other use of , or activity on, the Property which is or
may become inconsistent with the purpose of this grant, the preservation of
the Property substantially in its natural condition, or the protection of its
environmental systems, is prohibited.
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ARTICLE III
GRANTOR'S RESERVED 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 so 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, the Conservation Easement.
Notwithstanding the foregoing Restriction, Grantor reserves for Grantor, its
successors and assigns, the right to construct wetland and stream mitigation of the
Property, in accordance with the detailed mitigation plan approved in accordance with the
Mitigation Banking Instrument for Stone Farm Regional 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 of 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 observation and
studies, and taking samples. The Easement rights granted herein do not include public
access rights.
ARTICLE V.
ENFORCEMENT AND REMEDIES
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A. To accomplish the purpose of this Easement, Grantee is allowed to prevent
any activity on or use 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 activities 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
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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 attorney's 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.
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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. Warranty. 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 the 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
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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 the Conservation
Easement shall survive any merger of the fee and easement interests in the
Property or any portion therefore 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 transfer or assigns
this Conservation Easement, the organization 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 purpose 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 join in appropriate
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actions at the time of such taking to recover the full value of the taking, and
all incidental and direct damage 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.
1. Notification. Any notice, request for approval, or other communication
required under this Conservation Easement shall be sent by registered mail,
postage prepaid, to the following addresses (or such address as may be
hereafter specified by notice pursuant to the paragraph):
To Grantor
DeCarol Williamson
2618 New Village Way
Wilmington, NC 28405
To Grantee:
Cape Fear River Watch, Inc.
617 Surry St.
Wilmington, NC 28401
To the Corps:
US Army Corps of Engineers
Attn. Mr. Mickey Sugg
Wilmington District - Regulatory Branch
P.O. Box 1890
Wilmington, NC 28402
Fax: [phone]
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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
withing a reasonable period of time after the occurrence of one of these events
Grantee fails to mae 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
jurisdiction.
K. Amendment. This Conservation Easement may be amended, but only in
e 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. 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 the Mitigation Plan, dated
August 2007, prepared by Grantor and acknowledged by the Grantor and
Grantee to be completed 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.
U,
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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.
(SEAL)
NORTH CAROLINA
COUNTY OF BRUNSWICK
I,
a Notary Public in and for the
County and State aforesaid, do hereby certify that
Grantor, personally appeared before me this day and acknowledged the execution
of the foregoing instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal this
the day of , 200
Notary Public
My commission expires:

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EXHIBIT D.
FINANCIAL ASSURANCES - LETTER OF CREDIT (DRAFT)
MITIGATION BANK IRREVOCABLE LETTER OF CREDIT
TO DEMONSTRATE CONSTRUCTION/IMPLEMENTATION FINANCIAL
ASSURANCE
0 Address of Issuing Institution
Dear Sir or Madam:
No.
We hereby establish our Irrevocable Standby Letter of Credit
Ocean Isle Investment Company (2618 New Village Way, Wilmington, NC 28405)
up to the aggregate amount of Five Hundred Thousand Dollars
U.S. dollars $ 500,000.00 available upon presentation of your sight draft, bearing
reference to this letter of credit No.
This letter of credit may be drawn on to cover construction and implementation activities of
the Stone Farm Regional Mitigation Bank as authorized and required by Department permit
number as such permit may be amended and including all plans approved by
such permit.
This letter of credit may not be drawn on to cover any of the following:
a) Any obligation of Ocean Isle Investment Company under a workers'
compensation, disability benefits, or unemployment compensation law or other similar law;
b) Bodily injury to an employee of Ocean Isle Investment Company arising
from, and in the course of employment by Ocean Isle Investment Company;
C) Bodily injury or non-realty property damage arising from the ownership,
maintenance, use, or entrustment to others of any aircraft, motor vehicle, or watercraft;
d) Property damage to any property owned, rented, loaned to, in the care,
custody, or control of, or occupied by Ocean Isle Investment Company that is not the direct
result of the construction or implementation of the Stone Farm Regional Mitigation Bank
pursuant to the Mitigation Banking Instrument;
e) Bodily injury or property damage for which Ocean Isle Investment Company
is obligated to pay damages by reason of the assumption of liability in a contract or
agreement.
in your favor, at the request and for the account of
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This letter of credit is effective as of and shall expire on
but such expiration date shall be automatically extended without
amendment for additional periods of one year from the present or future expiration date
unless, at least 120 days before an expiration date, we notify both you and Ocean Isle
Investment Company by certified mail that we have decided not to extend this letter of
credit for any such additional period. In the event you are so notified, any unused portion of
the credit shall be available upon presentation of your sight draft for 120 days after the date
of receipt by both you and Ocean Isle Investment Company as shown on the signed return
receipts.
Whenever this letter of credit is drawn on under and in compliance with the terms of this
credit, we shall duly honor such draft upon presentation to us, and we shall deposit the
amount of the draft directly into the
40 Name of Trust Fund
Signature(s), Title(s) of Official(s) of Issuing Institution
Date
This credit is subject to
Insert "the most recent edition of the Uniform Customs and Practice for Documentary Credits, published by the International
Chamber of Commerce, " or " the Uniform Commercial Code".
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