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20181397 Ver 1_Signed DWR MBI_20201026DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA ROY COOPER Governor MICHAEL S. REGAN Secretary S. DANIEL SMITH Director TO: Danny Smith Director FROM: Katie Merritt NORTH CAROLINA Environmental Quality October 22, 2020 Nutrient Offse oBuffer Banking Coordinator THROUGH: Paul Wojoski Supervisor - 401 & Buffer Permitting Branch SUBJECT: Division Approval of the Feed & Seed Mitigation Banking Instrument for Riparian Buffer Mitigation Credits pursuant to the Randleman Lake Water Supply Nutrient Management Strategy for Environmental Banc & Exchange, LLC. The attached final Mitigation Banking Instrument (MBI) between Environmental Banc & Exchange, LLC and the Division of Water Resources was placed on public notice and made available for public comments on October 1, 2020. The public comment period ended on October 16, 2020 and no comments were received on the draft MBI. DEQ Legal counsel assisted with and agrees with the final template for which all our MBI documents are drafted from. I have reviewed the attached MBI and it is ready for your approval. Please sign on page 15 and return the document to me for final execution. D E Qbi�� North Carolina Department of Environmental Quality I Division of Water Resources 512 North Salisbury Street 1 1611 Mail Service Center I Raleigh, North Carolina 27699-1611 vOry rN Cx:40:.itiA � o .—Io E�.w�����a�:r� /� 919.707.9000 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA AGREEMENT TO ESTABLISH THE RES FEED AND SEED MITIGATION BANKING INSTRUMENT IN THE RANDLEMAN LAKE WATERSHED FOR RIPARIAN BUFFER MITIGATION CREDITS PURSUANT TO THE RANDLEMAN LAKE WATER SUPPLY WATERSHED NUTRIENT STRATEGY TABLE OF CONTENTS I. PREAMBLE....................................................................................................................... 2 II. LOCATION AND GEOGRAPHIC SERVICE AREA ...................................................... 2 III. AUTHORITIES.................................................................................................................. 3 IV. ESTABLISHMENT OF BANK PARCEL......................................................................... 3 V. BUFFER MITIGATION PLAN......................................................................................... 4 VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL ................ 6 VII. CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL ................. 9 VIII. CREDIT RELEASE SCHEDULE.................................................................................... 10 IX. PROCEDURE FOR DEBITING AND CREDITING...................................................... 11 X. BANK PARCEL CLOSURE............................................................................................ 12 XI. GENERAL PROVISIONS FOR THE BANK PARCEL ................................................. 12 ATTACHMENTS AND REFERENCES Attachments A — Division of Water Resources Authority Document B — Randleman Lake Watershed Buffer Ledger Template References 1. Riparian Buffer Mitigation Rule: ft-.//fflj�W8JQa1 1rgtaAeAV&Uk httpPbive ,e fatedeon-Q-*w3Wdw 1 pter% DocuSign Envelope ID: 0770521E-E6B8-4EE2-A210-132E63375ECA I. PREAMBLE This RES Feed and Seed Mitigation Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Feed and Seed Buffer Mitigation Bank Parcel (`Bank Parcel"), to provide Randleman Lake Watershed Riparian Buffer mitigation credits ("Riparian Buffer Credits") is made and entered into by and among Environmental Banc and Exchange, LLC ("EBX, LLC") acting as the Bank Sponsor ("Sponsor"), and the North Carolina Department of Environmental Quality — Division of Water Resources ("DWR"). This Instrument is in accordance with the Consolidated Mitigation Rule 15A NCAC 02B .0295, which became effective on November 1, 2015 see Attachments and References. The purpose of this Bank is: A. To restore and preserve riparian vegetation adjacent to streams and/or agricultural ditches with the intent to improve water quality within the Randleman Lake Watershed. B. To convert agricultural land uses within riparian areas adjacent to streams, ponds, and/or agricultural ditches into a dense, hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices into streams and ditches. C. To provide mitigation and sell any resulting Riparian Buffer Credits to third parties in the Randleman Lake Watershed, for development (both existing and proposed) requiring such mitigation. II. LOCATION AND GEOGRAPHIC SERVICE AREA A. The Geographic Service Area ("GSA") is the designated area wherein a Bank can reasonably be expected to sell Riparian Buffer Credits for impacts due to development activities. B. The GSA for this instrument is limited to the Randleman Lake Water Supply Watershed in the Cape Fear River Basin. C. Selling Riparian Buffer Credits shall be limited to the Randleman Lake Water Supply Watershed, as defined in rule 15A NCAC 02B .0724, unless otherwise authorized by the DWR or delegated local government in accordance with 15A NCAC 02B .0295. D. The following table provides site -specific details of the Bank Parcel proposed under this Instrument, which is within the Randleman Lake Watershed (8-digit HUC 03030003); Table 1.0 — Site -specific Details Bank Parcel County 14-Digit USGS DWR Project # Project Named Receiving Primary Land Name HUC Location Stream Use/s Feed and Seed Randolph 03030003010070 2018-1397 V ] 35.883069, Randleman Lake Agricultural and -79.856111 cattle pasture 2 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA III.AUTHORITIES A. The Bank Parcel will be used to provide Riparian Buffer Credit in accordance with the requirements in the DWR Authority document referenced herein as "Attachment A" and attached to this Instrument. B. Projects eligible for utilization of the credits are those requiring authorization under the requirements of Attachment A and any new approved North Carolina ("State") statutes and rules for the Randleman Lake Water Supply Watershed. C. The selling of mitigation credits generated from the Bank Parcel approved under this Instrument, shall be consistent with approved State statutes and rules for the Randleman Lake Water Supply Watershed. D. All mitigation activities proposed under this Instrument and corresponding Buffer Mitigation Plan (Plan) to generate Riparian Buffer Credits shall be consistent with State statutes and rules for the Randleman Lake Water Supply Watershed that are in place at the time a complete Plan is submitted to DWR. IV. ESTABLISHMENT OF BANK PARCEL A. In accordance with 15A NCAC 02B .0295, DWR has provided a "Site Viability Letter" for the Bank Parcel proposed under this Instrument. The site viability letter is not an approval of the site to generate Riparian Buffer Credits, but is a preliminary review of the Bank Parcel that details and confirms existing land -use conditions, defines the riparian sites (Enhancement, Preservation or Restoration), and identifies features (streams, ditches, ponds, etc.) that meet general criteria to be suitable to generate Riparian Buffer Credits. Table 2.0 below outlines when a Site Viability Letter was issued by DWR for the mitigation site proposed under this Instrument: Table 2.0 — Site Viability Letter Details Viability Letter Viability Letter Bank Parcel NC DWR Site Visit Received Expiration Date Feed and Seed June 13, 2018 August 2, 2018 August 2, 2020 B. A valid Site Viability Letter is required prior to submittal of the Plan. Site Viability Letters will either expire on the dates listed in the table above or upon the submittal of an individual As -Built Report to the DWR, whichever comes first. If the Site Viability Letter expires prior to submittal of a complete Plan as described in Section V to DWR, then the Sponsor must submit a formal request to DWR for a new Site Viability Letter for that Bank Parcel. C. The Bank Parcel proposed for inclusion under this Instrument shall require a Plan be submitted to, and approved by, the DWR prior to use of the individual Bank Parcel for mitigation purposes or for any sale or transfer of any associated credits. The contents of the Plan are provided in Section V. 3 DocuSign Envelope ID: 0770521E-E6B8-4EE2-A210-132E63375ECA D. This Bank Parcel is slated to be developed in conjunction with the RES Cape Fear Umbrella Mitigation Bank, and the Feed and Seed Mitigation Site, United States Army Corps of Engineers (USACE) Action ID # SAW-2018-01637, for stream mitigation. The mitigation plan associated with this Bank Parcel has been submitted to the Interagency Review Team (IRT) for review and approval. E. The Plan submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. F. The Riparian Buffer Credits on this Bank Parcel will be generated along mitigated stream channels and within the footprint of in -line ponds that are proposed for stream mitigation. The Stream Mitigation Plan will be submitted under the RES Cape Fear Umbrella Mitigation Bank referenced in "D" in this section. Additionally, all activities conducted within riparian buffers and adjacent riparian areas for purposes of generating Riparian Buffer Credits will be conducted in concurrence with stream mitigation activities. Riparian Buffer Credit may be achieved through restoration, enhancement and preservation of DWR riparian buffers as they are defined in 15A NCAC 02B .0724, and other riparian areas allowed per 15A NCAC 02B .0295 (n) and (o) on the Bank Parcel. Riparian Buffer Credits are only attainable if the width of the mitigated area is at least 20 feet as measured perpendicularly from top of bank. G. The Bank Parcel is intended to provide Randleman Riparian Buffer Credit as follows: 1. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to mitigated streams. 2. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295(b) by placing a conservation easement around riparian areas along streams as allowed by 15A NCAC 02B .0295 (o). 3. Enhancing riparian areas that are being grazed by cattle by installing fencing to permanently excluding cattle from the streams and their associated riparian areas as allowed in 15A NCAC 02B .0295 (o)(6). 4. Diffused flow will be maintained onsite to the maximum extent practicable. H. The Bank Parcel submitted for review under this Instrument is anticipated to begin stream mitigation construction in Spring 2021. V. BUFFER MITIGATION PLAN A. The Buffer Mitigation Plan (Plan) submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the Bank Parcel. The Plan must describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the Plan is submitted to DWR. The Plan shall include detailed information consistent with the sections below concerning; 1) site location (14-digit HUC is required); 2) existing conditions with current photos; 3) proposed buffer mitigation activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) m DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA associated buffer mitigation calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream buffer determination letter from DWR, and 8) Site Viability Letter from DWR; 9) a figure depicting the proposed stream mitigation areas; and 10) service area figure for each mitigation type. B. The Sponsor will obtain all applicable federal, state, and local documentation, permits, or authorizations needed to construct and maintain the Bank Parcel. This Instrument does not qualify as, or substitute for, such documentation, permit, or authorization. C. Any restoration activities or proposed construction within riparian buffers and other riparian areas on the Bank Parcel to produce Riparian Buffer Credit must be approved by DWR in writing prior to implementation. The failure of the Sponsor to comply with this requirement may result in a revised or reduced credit release schedule for the Bank Parcel. All restoration activities must be performed in concurrence with any stream mitigation activities and not before. D. Requests for deviation from the approved Plan must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved Plan. Property Disposition & Long -Term Management for the Bank Parcel E. Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the Randolph County Register of Deeds' office that is sufficient to ensure protection, operation and maintenance of restored riparian buffers and other riparian areas for the duration specified in the approved Plan. F. The form of the conservation easement shall be consistent with the standards employed by the State of North Carolina in the protection of restored riparian buffers and riparian areas and shall be approved by the DWR and USACE prior to the release of any credits. G. The Sponsor shall not grant additional easements, right of ways, or any other property interest in or to the project areas, without prior approval from the DWR and the USACE. H. The Sponsor agrees to transfer or assign the conservation easement and its interests in perpetuity to a qualified holder under NC General Statute ("GS") 121-34 et seq. and 170(h) of the Internal Revenue Code prior to the submittal of the Year 4 Monitoring Report. The holder shall be a land trust or stewardship program that will hold and enforce the conservation easement and the interests in perpetuity. The Sponsor shall choose a land trust or stewardship program that is accredited by the Land Trust Accreditation Commission and/or has been approved by DWR prior to the end of the fourth -year monitoring period. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. I. In the event the Sponsor is also the owner of the underlying fee interest in the property, the conveyance of the conservation easement to a land trust or stewardship fund must be arranged at the outset of the approved Plan. Financial Assurances for the Bank Parcel 5 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA J. Following approval of the Plan for the Bank Parcel, the Sponsor shall provide Performance/Maintenance Bonds from a surety company that is rated no less than an "A-" as rated by A.M. Best, to construct the sites according to the approved Plans. It is the Sponsor's responsibility to confirm that the surety company is rated no less than an "A-" with each annual bond renewal. K. The amount of the Performance Bond shall be 100% of the estimated cost for implementation of the mitigation activities of the Bank Parcel as described in the approved Plan. No bond shall be less than $150,000.00 to cover construction costs. L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct the projects prior to the first credit releases. M. For the Bank Parcel, once DWR has released all credits for completion of all the items listed below, then the Bank Sponsor will be released from its performance obligations under the performance bond required in Item J and K of this section: 1. Instrument and Plan approved by DWR, Stream Mitigation Plan approved by IRT, Conservation Easement recorded and assigned, Financial Assurance posted; 2. Mitigation site earthwork and planting and installation of monitoring devices completed; 3. As -Built Report as described in Section VI has been received by DWR; and 4. DWR has submitted a written approval of the As -Built Report. N. To comply with this section, DWR must be the Obligee on all performance bonds. VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL As -Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding Plan, to establish, maintain, and monitor Randleman Lake Watershed Riparian Buffers or other riparian areas until Item B (1) and (2) of Section X have been satisfied. B. When all stream mitigation activities have commenced, the Sponsor will submit an as -built plan and report for the Bank Parcel within 30 calendar days after completing the establishment of the riparian buffer mitigation areas. The as -built report will describe any deviation from the approved Plan and will document the following: 1. Buffer restoration and planting details, invasive species control, confirmation of fence installation (if applicable), monitoring device locations, vegetation plot locations, photo point locations, surface and groundwater elevations, as appropriate, a summary of any deviations to the Plan. Con DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA 2. Provide confirmation that the construction of all stream mitigation activities has been completed. 3. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory of the final mitigation areas for riparian buffer mitigation credits in both square feet and acres. 4. As -built map of the mitigation area showing where riparian restoration and preservation was performed and any deviations to the Bank Parcel from what was approved in the Plan. 5. As -Built map of the stream mitigation areas. 6. Aerial map of the mitigation area that was included in the approved Plan. Financial Assurance for the Bank Parcel C. After completion of the restoration/construction on the Bank Parcel, a Performance/Maintenance Bond will be secured for 100% of the estimated cost to implement the monitoring and maintenance plan as described in the approved Plan and As -Built Report applicable for the site. The Bond must be from a surety company that is rated no less than an "A-" as rated by A.M. Best, and it is the Sponsor's responsibility to confirm that the surety company is rated no less than an "A-" with annual bond renewals. D. A Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all mitigation credits to the Bank Sponsor. Upon receiving written notification from DWR approving a monitoring report with no contingencies, the bond may be lowered by a maximum of 20% for that next year's monitoring based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000 initially, to cover monitoring and maintenance costs. E. Once DWR has released 100% of all credits for completion of all Bank Parcel milestones described in Table 3.0 of Section VIII and in the corresponding Plan, the Bank Sponsor will be released from its performance obligations under the performance bond required in C and D of this Section. F. To comply with this section, DWR must be the Obligee on all performance bonds. Monitoring and Maintenance Reports G. The Sponsor shall monitor the Bank Parcel as described in the Plan until such time as DWR determines that the performance standards described below have been met. The monitoring period shall be a minimum of five consecutive years. H. Performance Standards for Vegetation: Native hardwood trees or native hardwood tree and shrub species should be planted at a density sufficient to provide 260 stems per acre after five years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species 7 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA must be planted. No one species shall be greater than 50% of the planted stems. A list of species for planting will be detailed in the Plan for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height. J. If the performance standards of the vegetation are not met, supplemental plantings may be required. Supplemental plantings will be utilized until the required densities have been achieved and maintained for five years. Bank Parcel maintenance, such as ensuring diffuse flow, managing invasive species, and pest control will be included in the Plan. K. Monitoring Reports for Riparian Buffer Credit: Reporting criteria of the vegetation shall be based on the Carolina Vegetation Survey (CVS) — EEP Protocol for Recording Vegetation Level 2 Plot Sampling only version 4.0 or any updated versions of this protocol in place on the date of acceptance of the Plan. The Sponsor shall submit to the DWR an annual monitoring report no later than December 31 of each year for a minimum of five consecutive years after the first full growing season. This report will describe the conditions of the Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved Plan. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative with supporting photos summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; and 3. A map, survey, or other figure showing locations of sampling plots, permanent photo points, location of transects, etc.; and 4. Monitoring data, including specific vegetative counts and heights showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; and 5. A copy of the most recent Bank credit/debit ledgers; and 6. Corresponding verification letters from designated local governments upon request; and 7. Corresponding Mitigation Transfer Certificates upon request; and 8. Proof of performance bond renewal to cover the next monitoring year (if applicable) Contingency Plans/Remedial Actions L. In the event the Bank Parcel fails to achieve the performance criteria described in this Instrument and the approved Plan, the Bank Sponsor shall develop necessary contingency plans in coordination with the DWR and implement appropriate remedial actions for the Bank Parcel and N. DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA the Bank. Depending on the degree of remedial actions required, the DWR may modify the monitoring period. VII. CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL Riparian Buffer Credits A. All Riparian Buffer Credits shall be determined based on the ratios and percentages provided in 15A NCAC 02B .0295 (in) and (n). B. Riparian buffer restoration on the Bank Parcel, as described in 15A NCAC 02B .0295(n) and (o) and defined in 15A NCAC 02B .0295(b) may be used for Riparian Buffer Credit. C. Riparian buffer preservation on the Bank Parcel, as described in 15A NCAC 02B .0295 (o) and defined in 15A NCAC 02B .0295 (b), may be used for Riparian Buffer Credit. D. Riparian buffer enhancement on the Bank Parcel, as described and defined in 15A NCAC 02B .0295 (0)(6) may be used for Riparian Buffer Credit. E. Riparian Buffer Credit is defined as one (1) buffer credit per one square foot or 43,560 buffer credits per one acre. I DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA VIII. CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that the mitigation credits associated with the Bank Parcel will become available for sale to a third party in accordance with the Credit Release Schedule below in Table 3.0. Table 3.0 - Credit Release Schedule for Riparian Buffer Credits % Credit % Credit Task Project Milestone Release Release within the Pond Footprint Buffer Mitigation Plan Approved by DWR, Stream Mitigation Plan Approved -by IRT, Conservation Easement 25 No credits released for areas within 1 Recorded and Item13 (1) of Section IX in this Instrument pond footprint has been completed and approved by DWR.* and Financial Assurance Posted 2 Mitigation Site Earthwork, Planting and Installation Monitoring Devices Completed 20 No credits released for areas within of and oo rint 3 Monitoring Financial Assurance Posted and Approval of 10 55 As -Built lre ort 4 Monitoring Report #1: Approved by the DWR** 10 10 5 Monitoring Report #2: Approved by the DWR** 10 10 6 Monitoring Report #3: Approved by the DWR** 10 10 7 Monitoring Report #4: Approved by the DWR** 5 5 Monitoring Report #5: Approved by the DWR** and final by DWR has been 10 g site visit conducted 10 Total 100% 100% * For specification, please see Section V in this Instrument ** DWR Approval provided upon a determination that the site is meeting performance standards contained within the approved Plan B. DWR may modify the credit release schedules based on the information submitted or the order in which required information is received. DWR will notify the Sponsor of any modification to the credit release schedule. C. DWR may consider a Credit Release Schedule for a Bank Parcel based on the extent of change between current onsite conditions and proposed post construction conditions. D. The Sponsor must initiate implementation of the approved Plan for the site under this Instrument in concurrence with all stream mitigation activities proposed in the approved Mitigation Plan referenced in Item D of Section IV of this Instrument. Iff DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA IX. PROCEDURE FOR DEBITING AND CREDITING Credit Ledgers A. The Bank Sponsor shall maintain a credit ledger for the bank parcel under this Instrument: The credit ledger shall provide the accounting for Riparian Buffer Credit in square feet and acres. B. The credit ledger shall be submitted on a separate 8 '/2 inch by 11-inch spreadsheet with legible font style and font size. The ledger shall be submitted using the templates provided in Attachment B of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Riparian Buffer Credits generated on this Bank Parcel will be used to provide mitigation for authorized buffer impacts within the Randleman Lake Water Supply Watershed according to 15A NCAC 02B .0295(g). D. Riparian buffer restoration, enhancement, and preservation credits generated on this Bank Parcel are not transferrable into Nutrient Offset Credits. E. The Bank Sponsor shall obtain written verification of buffer mitigation required from the delegated local government in the Randleman Lake Water Supply Watershed or DWR prior to debiting Riparian Buffer Credits from the individual Bank Parcel. F. All credit and debit transactions for the bank parcel under this Instrument shall be accurately depicted in the credit ledgers. The Bank Sponsor shall provide DWR up-to-date credit ledgers for the Bank by the tenth (1 Oth) of each month. At a minimum and upon request, DWR shall receive a hard copy of updated credit ledgers along with the corresponding Mitigation Credit Transfer Certificates and all corresponding letters from the designated or delegated local governments or DWR where applicable once a year. Notification of all credit sales shall be provided to DWR until all credits that have been released have been sold. Mitigation Credit Transfer Certificates G. All credit sales will include a Mitigation Credit Transfer Certificate ("Certificate") that is required to be provided to the buyer of Riparian Buffer credits, that will include, at a minimum, the following information: 1. Bank Details: (1) Bank Sponsor Name, (2) Bank Parcel name as it appears in this Instrument, and (3) DWR project number for the Plan as it appears in Table 1.0 of this Instrument. 2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3) amount of Riparian Buffer Credits purchased in square feet and the confirmation from DWR or the local government of the amount required. 11 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA 3. Permitted Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 14-digit HUC, (3) confirmation of location within the Randleman Lake Water Supply Watershed, (4) DWR authorization number or delegated local government requiring Riparian Buffer Credits for the project. H. If the DWR determines that the Bank is operating at a deficit (e.g. the Sponsor is closing on sales and/or transferring credit that is not available), or the Bank is selling credits out of compliance with statutes, rules or this Agreement, the sale/transfer of credits will immediately cease, and the DWR, in consultation with the Sponsor, will determine what remedial actions are necessary. X. BANK PARCEL CLOSURE A. Bank Parcel Closure shall be identified as the event when the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there are no Riparian Buffer Credits left to sell. B. Bank Parcel Closure shall commence only after all of the following events have occurred: 1. Transfer or assign the conservation easement and all of its interests, in perpetuity, to a land trust or stewardship program as described in Section V of this Instrument. 2. All five years of monitoring completed, and all monitoring reports submitted and approved by DWR. 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. XI. GENERAL PROVISIONS FOR THE BANK PARCEL A. Upon the presentation of proper credentials, and during normal business hours, the Sponsor and the landowner shall grant permission to the Director of DWR, or authorized representative of the Director of DWR, to enter the property containing the Bank Parcel. B. Amendments: This Banking Instrument may be amended or modified only with written approval of all signatory parties, including the USACE if it is applicable to the amendment. C. Any transfer of the Sponsor's rights or obligations outlined in this Instrument or any other agreement referenced in this Instrument to a third party must be approved by DWR prior to the transfer. D. Force Majeure: After 100% of all of the credits have been released according to the credit release schedule in Section VIII and confirmation has been received by the DWR that the Conservation Easement has been successfully assigned in compliance with Item H of Section V, the Sponsor will not be responsible for Bank failure that is attributed to natural catastrophes including but not limited to flood, drought, disease, regional pest infestation, etc. that are beyond the control of the Sponsor. 12 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA E. However, if an event occurs before 100% of all of the credits have been released according to the credit release schedule in Section VIII, then the Sponsor shall take remedial action to restore the property to its condition prior to the event, in a manner sufficient to provide adequate mitigation to cover credits that were sold prior to the occurrence of the event. Such remedial action shall be taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and the Sponsor. DWR must concur in writing that a force majeure event has occurred for this provision to apply. F. Oversight: Actions taken by DWR may include, but are not limited to, the following: 1. Site visits, 2. Issuance of Site Viability Letters, 3. Plan review and approval of items listed in Section V of this Instrument, 4. As -Built Report review, and approval of items listed in Section VI of this Instrument, 5. Monitoring Report review, and approval of items listed in Section VI of this Instrument, 6. Credit Ledger review and approval of items listed in Section IX of this Instrument, 7. Certificate review of items listed in Section IX of this Instrument and cross analysis to credit ledgers and, 8. Information requests, file reviews and audits G. Reports, ledgers, files and other information shall be made available to DWR upon request, unless otherwise specified in this or any other document. H. Validity of the Banking Instrument: This Instrument will become valid on the date of the last party's signature. I. Specific Language of Banking Instrument Shall Be Controlling: To the extent that specific language in this document changes, modifies, or deletes terms and conditions contained in those documents that are incorporated into the Instrument by reference, and that are not legally binding, the specific language within the Instrument shall be controlling. J. Any disputes over decisions regarding this Instrument, shall be referred to the Director of DWR for a decision. The Director's decision is subject to review as provided in Articles 3 and 4 of G.S. 150B. K. This Agreement shall be binding upon the parties and is entered into knowingly, intelligently, and voluntarily. 13 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA L. Notices: All notices and other communications which may be or are required to be given or made by any party to the other shall be in writing and shall be deemed to have been properly given and received on the date delivered in person or deposited in the United States mail, registered or certified, electronic mail, return receipt requested, to the addresses set out below, or at such other addresses as specified by written notice delivered in accordance herewith. If to Bank Sponsor: Environmental Banc & Exchange, LLC Attention: Mr. Matt Butler 3600 Glenwood Ave. Suite 100 Raleigh, North Carolina 27612 Matt Butler mbutler@res.us If to DWR: NC Division of Water Resources — 401 & Buffer Permitting Branch Attn: Nutrient Offset and Buffer Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 14 DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA M. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. ENVIRONMENTAL BANC & EXCHANGE, LLC By: Brad Breslow (Print) (Signature) Title: Regulatory Manager Date: 9/29/2020 NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES By: S. Daniel Smith (Print) (Signature) Title: Director, Division of Water Resources 10/25/2020 Date: 15 DocuSign Envelope ID: 0770521E-E6B8-4EE2-A210-132E63375ECA Updated Riparian Buffer Mitigation Program September 29, 2020 Authorities for Randleman Lake Watershed ATTACHMENT A Authorities pertaining to the Feed & Seed Mitigation Banking Instrument All Basins General Statutes: G.S. §143-214.11 Ecosystem Enhancement Program G.S. § 143-214.20-24 Riparian Buffer Protection Program G.S. § 143-214.7 Stormwater runoff rules and programs G.S. §143-215.8B Basinwide Water Quality Management Plans Session Laws S.L. 2016-94 S.L.2015-246 S.L.2015-149 S.L. 2014-90 S.L.2014-120 S.L.2013-413 S.L. 2013-121 S.L.2013-265 S.L. 2012-200 (Amendment to G.S. § 143-214.23 and G.S. § 143-215.1) S.L. 2011-343 (Amendment to G.S. §143-214.11) S.L. 2009- 337 (Amendment to G.S. §143-214.11) Administrative Rules. 15A NCAC 02B .0202 Definitions 15A NCAC 02B .0223 Nutrient Sensitive Waters 15A NCAC 02B .0240 Nutrient Offset Payments 15A NCAC 02B .0295 Mitigation Program Requirements for Protection and Maintenance of Riparian Buffers Randleman Lake Water Supply Watershed Buffer Nutrient Strategy Session Laws S.L.2011-394 S.L. 1999-329 (part of G.S. 143B-282) Administrative Rules: 15A NCAC 02B .0610 Managing Activities within Riparian Buffers: Definitions 15A NCAC 02B .0611 Managing Activities within Riparian Buffers: Authorization Certificates 15A NCAC 02B .0612 Managing Activities within Riparian Buffers: Forest Harvesting Requirements 15A NCAC 02B .0724 Protection & Maintenance of Existing Riparian Buffers DocuSign Envelope ID: 0770521 E-E6B8-4EE2-A210-132E63375ECA *Credits shown below are only for mitigation credits approved by the UMBI, BPDP, and As -Built. (Sponsor Name & Instrument Name) (Parcel Name w/ HUC #) Buffer Credit Ledger Date Last Updated: DWR Bank Parcel Project #: Total Credits Released To Date: Sale/ Release Date Purchaser or % Credit Release Project w/ HUC # Credits Released/Available to Bank Credits Debited/Sold From Bank Buffer Credit Balance Gov't Requiring Square Feet Acres Square Feet Acres SquareAcres Feet