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FY2010-36, A&B; Lease And Material Sales Agreement Between The Kodiak Island Borough And Brechan Enterprises, Inc. For Operation Of The Bells Flats Gravel PitsCONTRACTS TRANSMITTAL FORM RETENTION SCHEDULE: CL -09 CONTRACTS Records related to obligations under contracts, leases, and other agreements between the Borough and outside parties, successful bids, and proposals. Active records are kept by the corresponding department. Apply retention (plus 4 years) once contract or agreement expires, or once product is procured. Apply retention (plus 25 years) for agreements that involve real property. DATE: 01/02/25 TRANSMITTED BY: Meagan Christiansen DEPT: Manager CONTRACT NO.: FY 2010-36B VENDOR OR PROVIDER: Brechan Construction LLC CONTRACT TITLE: Amendment No. 2 to the Lease and Material Sales Agreement for Operation of the Bells Flats Gravel Pits Administrative contracts are contracts approved by the manager that are within the spending authority allowed by code. Assembly approved contracts are beyond the manager's spending authority and require approval by the Assembly during a meeting. APPROVED BY: Assembly TYPE OF CONTRACT: Lease DATE OF APPROVAL: 12/19/24 PROVIDE DETAILS FOR ANY AUTOMATIC RENEWALS OR EXTENSIONS BELOW: EXPIRATION DATE: 12/31/29 PURGE DATE: If there is no expiration/purge date, enter 9999 as the year for open-ended contracts AND explain the process below on how or when it should be flagged for review. Are all relevant attachments, exhibits, referenced documents attached to the contract?0 Are the successful bids and proposals incorporated in the contract? 0 FILL OUT BELOW IF THE RECORD AMENDS, EXTENDS, IS A CHANGE ORDER TO A CONTRACT, OR IS AN ADDENDUM TO A CONTRACT DATE: REQUESTED BY: CONTRACT NO.: FY CATEGORY: Select One APPROVED BY: Select One TYPE OF CONTRACT: Select One PROVIDE DETAILS FOR ANY AUTOMATIC RENEWALS OR EXTENSIONS BELOW: EXPIRATION DATE: PURGE DATE: If there is no expiration/purge date, enter 9999 as the year for open-ended contracts AND explain the process below on how or when it should be flagged for review. Rev. 11/08/2024 LEASE AND MATERIAL SALES AGREEMENT THIS AMENDMENT NO. 2 TO THE LEASE and MATERIAL SALES AGREEMENT dated July 1, 2010 is made this 1 st day of January, 2025 by and between the Kodiak Island Borough ("Landlord" or "KIB"), a borough organized under the laws of the state of Alaska, whose address is 710 Mill Bay Road, Kodiak, Alaska 99615, and Brechan Construction, LLC ("Tenant" or `BRECHAN"), a limited liability company organized under the laws of the state of Alaska, whose address is 2705 Mill Bay Road, Kodiak, AK 99615. RECITALS WHEREAS, the KIB and BRECHAN's predecessor in interest, Brechan Enterprises, Inc., entered into a ten (10) year Lease and Material Sales Agreement July 1, 2010, under which BRECHAN is authorized to conduct gravel mining operations on the KIB's land, paying appropriate rental, taxes, and royalty to the KIB for the gravel removed; and, WHEREAS, the Parties agreed to assignment of the Lease and Material Sales Agreement to BRECHAN in 2012; and, WHEREAS, the Lease and Material Sales Agreement included the option for extending the lease term twice, for a period of five (5) years each, or a total of ten (10) years; and, WHEREAS, the Parties amended the Lease and Material Sales Agreement on June 19, 2019, to extend the term of the Lease for the initial five-year extension until December 31, 2024; and, WHEREAS, BRECHAN has indicated its desire to renew the lease for the second of the two, five (5) year extensions; and, WHEREAS, the Lease and Material Sales Agreement included stipulations regarding gravel mining operations, a State of Alaska Department of Natural Resources approved Reclamation Plan, and a Stormwater Pollution Prevention Plan which were incorporated by reference; and, WHEREAS, the State of Alaska Department of Natural Resources approved Reclamation Plan covered the operating period 2010 thorough 2020; and, WHEREAS, the covered period of the approved Reclamation Plan expired in 2020 however it has remained active with the State of Alaska Department of Natural Resources; and, WHEREAS, the Parties now desire to further amend and restate the Lease and Material Sales Agreement to extend the term for the second five (5) year extension until December 31, 2029, and to provide for update of the State of Alaska Department of Natural Resources approved Reclamation Plan. Lease and Material Sales Agreement Page I of 9 For and in consideration of the covenants, rents and demises, and upon the terms and conditions set forth in this agreement, the Parties agree to amend the Lease and Material Sales Agreement to be restated as follows: 1. Premises. Landlord hereby lets, leases and demises to Tenant the real estate particularly described as follows: Tracts B 1, B2, B3 and 134A, Bells Flats Alaska Subdivision, generally according to Plat 69-4 (as to Tract B), located in the Kodiak Recording District, Third Judicial District, State of Alaska. Also known as 12247, 125361 and 12583 Middle Bay Drive and 12027 Bells Flats Road ("the premises"). Tenant, upon paying the rents, and performing all of the terms and covenants required by this agreement, shall peaceably and quietly enjoy the premises subject nevertheless, to the terms of this agreement. 2. Term of Lease. The term of this agreement shall be for the period of five (5) years following the commencement of the term, unless sooner terminated as provided in this agreement. The lease term shall commence on January 1, 2025 ("the anniversary date"), and shall expire at 5:00 P.M., prevailing Alaska Time on December 31, 2029. Brechan must give written notice of its desire to renew this agreement no less than one year prior to the end of the then current term. 3. Rental. In consideration of the demise and leasing of the premises Tenant agrees to pay to Landlord as rental for the premises an annual sum adjusted each June 1St for the following year determined as follows: the prime rate plus 2.0% (as an indication of conventional commercial mortgage rate), but not less than six percent (6%), of the appraised value. Rental will be paid in advance, on or before the first day each month of the lease term. All rent shall be paid to the Landlord at 710 Mill Bay Road, Kodiak, Alaska 99615, or at such other place as Landlord may designate from time to time in writing. 4. Unit Price for Materials. Consistent with KIBC Chapter 18.60, BRECHAN is also granted the right to purchase gravel by this agreement. BRECHAN shall bear the cost of and shall provide the volume determination according to KIBC 18.60.040. The volume determination shall be in units of tons which shall be calculated at the rate of one and seven tenths (1.7) tons per cubic yards. BRECHAN shall pay for this gravel the unit price as determined by the Assembly under KIBC 18.60.060 (the "royalty"). BRECHAN shall submit to KIB on an annual basis and not less than thirty days prior to the anniversary date of this agreement, the volume determination of the gravel removed from the premises and the royalty payment. KIB reserves the right but is not obligated to make its own volume determination of the gravel removed from the premises. In the event BRECHAN fails to pay for the gravel forty-five (45) days after the anniversary date of this agreement, a penalty of 10% of the amount due shall be assessed. Interest shall accrue on the amount due including the penalty at the rate of twelve percent (12%) per year from the due date. Lease and Material Sales Agreement Page 2 of 9 5. Alteration of Premises. Except for Tenant's gravel mining operations which are to be conducted consistent with this Lease, Tenant shall not make any alterations, additions, or improvements to the premises without first obtaining the written consent of the Borough Manager or designee. Any such alterations, additions and improvements consented to by the Borough Manager or designee shall be made at Tenant's expense and only after Tenant has secured all required governmental permits. Tenant shall hold Landlord harmless from all liability and liens resulting from the approved work. All alterations, additions and improvements are subject to the terms of KIBC 18.40.140 and Section 3.1.3 (Equipment/Debris Removal) of the Reclamation Plan. The Parties agree that the approved Reclamation Plan shall be treated as extended and shall remain in effect until replaced with an updated approved Reclamation Plan. Tenant shall, within six (6) months of execution of this Amendment No. 2, provide KIB with an updated Department of Natural Resources approved Reclamation Plan substantially similar to the original Reclamation Plan which covers the extended term of the Lease and Material Sales Agreement. BRECHAN's obligations to perform the Reclamation Plan shall survive expiration of the term of this Lease, and the security for performance, as provided for in Section 28, shall be maintained until the Reclamation Plan is fully performed. 6. Use of Premises. The premises shall be used as support for Tenant's extraction, remanufacturing and removal of gravel from the premises (generally referred to as "gravel mining") and for no other purpose, without the prior written consent of the Borough Manager or designee. Tenant shall not use or permit the premises or any part thereof to be used for any purpose in violation of any borough, state, federal or other governmental law, ordinance, rule or regulation. Tenant shall comply with all laws affecting the property and its gravel mining operation. Tenant agrees that it, together with all other persons entering and/or occupying the premises at its request or with its permission, will abide by, keep and observe all reasonable rules and regulations which Landlord may make from time to time for the protection of the surrounding habitat and residential areas. The violation of any such rules and regulations shall be deemed a material breach of this agreement by Tenant. Tenant shall use, operate and/or install any electrical or mechanical equipment, machinery, or mechanical devices on the premises in compliance with the highest standards applicable to the premises, or to the use, operation, or installation of such equipment, machinery or devices, generally recognized by the profession or industry in which Tenant is engaged. Tenant expressly agrees to comply with the list of stipulations on attached Exhibit A, which are incorporated into and made part of this agreement. 7. Taxes. Tenant shall pay any and all real property taxes based on its possessory interest in the premises, taxes levied on personal property and trade or other fixtures on the premises, severance taxes associated with its resources extracted or produced from the premises, and license and excise fees and occupation taxes covering business conducted on the premises. 8. Utilities. Tenant shall provide at its expense all utilities and services used on the premises. Landlord shall not be liable for any loss or damage caused by or resulting from any variation, interruption or failure of any utilities or services. Lease and Material Sales Agreement Page 3 of 9 9. Maintenance and Repairs. As this is a lease of land, Landlord has no duty to maintain or repair the premises. Tenant shall, at its expense, maintain and repair the premises. Tenant shall commit no waste of any kind in or about the premises, and Tenant shall pay for all damage to the premises caused by Tenant's misuse or neglect of the premises. Landlord shall not be responsible or liable at any time for any loss or damages to Tenant's equipment or other personal property or to Tenant's business except to the extent attributable to Landlord's negligence. Landlord shall not be responsible or Gable for any defect, latent or otherwise, in the premises. Nor shall Landlord be responsible or liable for any injury, loss or damage to any person or to any property of Tenant or other person caused by or resulting from bursting, breakage or by or from leakage, stream or snow or ice, running or the overflow of water or sewerage in any part of said premises, or the surrounding area, or for any injury or damage caused by or resulting from acts of nature or the elements, or for any injury or damage caused by or resulting from any defect in the operation or use of any of the premises by any person or by or from the acts or negligence of any occupant of the premises, unless Landlord itself is negligent. 10. Fire and Other Casualty. As this is a lease of land, Landlord has no duty to protect the premises from damage by fire or other casualty. Tenant acknowledges that it must protect its machinery and equipment from damage by fire or other casualty. There will be no reduction in rent in the event that Tenant's machinery and/or equipment is damaged by fire or other casualty. 11. Subletting and Assignment. Tenant shall not sublet the premises, or any part thereof, or assign this agreement or any part thereof, nor shall this agreement be assigned in whole or in part by operation of law or through any court proceedings, without the prior written consent of Borough Manager or designee to such subletting or assigning; any such assignment or sublease without Borough Manager or designee's written consent shall be void. Any merger, consolidation, or dissolution to which Tenant is a party, or any change in ownership of a majority of its voting stock outstanding, shall constitute an assignment of this agreement for purposes of this paragraph. 12. Indemnification. Tenant shall defend and indemnify Landlord from and against any and all claims, liabilities, or losses of any type arising out of Tenant's occupancy and use of the premises together with reasonable attorney's fees and all costs and expenses incurred by Landlord in negotiating, settling, defending and otherwise acting as a result of such claims. Landlord shall promptly notify Tenant of any loss or claim and shall tender defense of such claim to Tenant prior to negotiating, settling, or defending such claim. 13. Insurance. Tenant, at its sole expense, shall keep or cause to be kept in force for the mutual benefit of Landlord and Tenant comprehensive broad form general public liability insurance coverage against claims and liability for personal injury, death or property damage arising from the use, occupancy, disuse, or condition of the premises, improvements, or adjoining areas or ways. This insurance shall provide coverage of at least $2,000,000 aggregate, $1,000,000 per occurrence, $2,000,000 for products/operations and $1,000,000 for personal and advertising. Landlord shall be an additional named insured in such policy or policies. Such policy or policies Lease and Material Sales Agreement Page 4 of 9 shall be written by a responsible insurance company or companies satisfactory to Landlord and licensed to do business in Alaska. All such policies shall be nonassessable and shall contain language to the effect that (1) any loss shall be payable notwithstanding any act or negligence of Landlord that might otherwise result in a forfeiture of the insurance; (2) the insurer waives the right of subrogation against Landlord; (3) the policies are primary and noncontributing with any insurance that may be carried by Landlord; and (4) they cannot be cancelled or materially changed except after thirty (30) days' notice by the insurer to Landlord. Maintenance of insurance and the performance by Tenant of the obligation under this paragraph shall not relieve Tenant of liability under paragraph 13, above. If Tenant fails or refuses to procure or maintain the required insurance or fails to provide Landlord with the required proof of insurance and that it is in force and paid for, Landlord may, at Landlord's election and without notice, procure and maintain such insurance, or may terminate this agreement without liability upon written notice to Tenant. Any premiums paid by Landlord shall be treated as an added fee due from Tenant with interest at twelve per cent (12%) per year, to be paid on demand. 14. Liens. Tenant will not permit any mechanics', laborers' or material men's liens to stand against the premises for any labor or materials furnished to Tenant or claimed to have been furnished to Tenant, or to Tenant's agents in connection with work of any character performed or claimed to have been performed on the premises or improvements by or at the direction of sufferance of Tenant; provided, however, Tenant shall have the right to contest the validity or amount of any such lien or claimed lien. In the event of such contest, Tenant shall give to Landlord such reasonable security as may be demanded by Landlord to insure payment of such lien or such claim of lien. Tenant will immediately pay any judgment rendered with all proper costs and charges and shall have such lien released or judgment satisfied at Tenant's own expense. The foregoing provisions respecting liens shall apply to all liens, of any kind or nature, asserted against the premises, including liens arising out of, incident to, or connected with the use and occupation of the premises by Tenant. 15. Default. If Tenant at any time during the term of this lease (and regardless of the pendency of any bankruptcy, reorganization, receivership, insolvency or other proceedings, in Iaw, in equity or before any administrative tribunal, which have or might have the effect of preventing Tenant from complying with the terms of this lease) shall: (a) Fail to make payment of any installment of rent, royalty or of any other sum herein specified to be paid by Tenant, and Tenant fails to cure such default within ten (10) days after failure to make payment; or (b) Fail to observe or perform any of Tenant's other covenants, agreements or obligations required by this agreement or the attached exhibits (the list of stipulations (Exhibit A), the Reclamation Pian dated May 12, 20I0 (Exhibit B) as updated incompliance with section 5 of this Lease, all of which are incorporated herein by reference), and if within thirty days after Landlord shall have given to Tenant written notice specifying such default or defaults, Tenant shall not have commenced to cure such default and proceed diligently to cure the same; or Lease and Material Sales Agreement Page 5 of 9 (c) Fail to mine gravel from the premises for any twelve (12) month period; (d) If Tenant has filed a Petition under Chapter 11 or the Bankruptcy Act, or a voluntary petition under any other provision of the Bankruptcy Act, or if Tenant finally and without further possibility to appeal or review: (1) is adjudicated as bankrupt of insolvent; or (2) has a receiver appointed for all or substantially all of its business or assets on the ground of Tenant's insolvency; or (3) has itself appointed as a debtor-in-possession; or (4) has a trustee appointed for it after a petition has been filed for tenant's reorganization under the Bankruptcy Act of the United States or any future law of the United States having the same general purpose; or (5) if Tenant shall make an assignment for the benefit of creditors, then in any such event Landlord shall have the right at its election, then or at any time thereafter, and while such default, defaults or events shall continue, to give Tenant notice of Landlord's intention to terminate this agreement and all Tenant's rights hereunder, on a date specified in such notice, which date shall not be less than ten (10) days after the date of giving of such notice, and on the date specified in such notice, the term of this agreement and all rights granted Tenant hereunder shall come to an end as fully as if this agreement then expired by its own terms, and Tenant hereby covenants peaceably and quietly to yield up and surrender to Landlord the premises, and to execute and deliver to Landlord such instrument or instruments as shall be required by Landlord as will properly evidence termination of Tenant's rights hereunder or its interest therein. In the event of termination of this agreement as in this paragraph provided, Landlord shall have the right to repossess the premises and such structures, buildings, improvements and equipment, either with process of law or through any form of suit or proceeding, as well as the right to sue for and recover all rents and other sums accrued up to the time of such termination, and damages for rent not then accrued. Landlord shall also have the right, without resuming possession of the premises or terminating this agreement, to sue for and recover all rents and other sums, including damages, at any time and from time to time accruing hereunder. 16. Notices. Any and all notices required or permitted under this agreement, unless otherwise specified in writing by the party whose address is changed, shall be mailed, certified or registered mail, or delivered, to the following addresses: Lease and Material Sales Agreement Page 6 of 9 LANDLORD: Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 TENANT: Brechan Construction, LLC 2705 Mill Bay Road Kodiak, Alaska 99615 Any such notices shall be deemed effective on the date of mailing or delivery. 17. Costs Upon Default. In the event either party shall be in default in the performance of any of its obligations under this agreement or an action shall be brought for the enforcement thereof, the defaulting party shall pay to the other all the expenses incurred therefor, including a reasonable attorney's fee. In the event either party shall without fault on its part be made a party to any litigation commenced by or against the other, then such other party shall pay all costs and reasonable attorney's fees incurred or paid by such party in connection with such litigation. 18. Ri-ahts or Remedies. Except insofar as this is inconsistent with or contrary to any provision of this agreement, no right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder, or now or hereafter existing at law or in equity or by statute. 19. Waiver and Forbearance. Except to the extent that Landlord may have otherwise agreed in writing, no waiver by Landlord of any breach by Tenant of any of its obligations, agreements or covenants hereunder shall be deemed to be a waiver of any subsequent breach of the same or any other covenant, agreement or obligation. Nor shall any forbearance by Landlord to seek a remedy for any breach of Tenant be deemed a waiver by Landlord of its rights or remedies with respect to such breach. 20. Inspection. Landlord shall at all reasonable times during Tenant's business hours have access to the premises for the purpose of inspection. Landlord shall also be entitled to put "to lease" or "for lease" signs in and about the premises, and to show the premises to prospective tenants, during the last sixty (60) days of this agreement term and any extended term, and during any period of time after Landlord has given Tenant a notice of intention to terminate under paragraphs 3 or 16 of this agreement. 21. Notices of Nonresponsibility. Landlord may enter the premises at any time for the purpose of posting notices of nonresponsibility. 22. Successors in Interest. This agreement shall be binding upon and inure to the benefit of the respective heirs, successors and assigns of the parties hereto. 23. Holding Over. In the event that Tenant holds over at or after the end of the term, the tenancy shall be deemed a month-to-month tenancy commencing on the first day of the holdover period. Lease and Material Sales Agreement Page 7 of 9 24. I=. Other than "no trespassing" signs and signs necessary for the compliance with regulatory requirements, Tenant agrees that no other sign or signs shall be installed on the premises without the written consent of Landlord. 25. Memorandum of Lease. Tenant agrees that it will not record this agreement. At the request of either Landlord or Tenant, the parties shall execute a memorandum lease for recording purposes in lieu of recording this agreement, in such form as may be satisfactory to their respective attorneys. 26. Excuse for Nonperformance. Either party hereto shall be excused from performing any or all of its obligations hereunder with respect to any repair and construction work required under the terms of this agreement for such times the performance of any such obligation is prevented or delayed by an act of God, floods, explosion, the elements, war, invasion, insurrection, riot, mob violence, sabotage, terrorist activity, inability to procure Iabor, equipment, facilities, materials or supplies in the open market, failure of transportation, strikes, lockouts, action by labor unions, or laws or order of governmental agencies, or any other cause whether similar or dissimilar to the foregoing which is not within the reasonable control of such party. 27. Construction of Lease. This agreement shall be governed by and construed in accordance with the laws of the State of Alaska. Words of gender used in this agreement shall mean and include any other gender, and singular shall mean and include the plural and the plural the singular, where applicable, and when the sense requires. 28. Performance Bond. As required by K.IBC 18.60.070 a performance bond in an amount determined by the Manager to be necessary is required to protect Landlord's interest and ensure satisfactory compliance with this agreement and the Reclamation Plan (Exhibit B). Once the KIB has accepted the Reclamation Plan as having been completed and all equipment of BRECHAN removed the required performance bond security may be released to BRECHAN. 29. Condemnation. If the premises shall be taken or condemned for any public purpose to such an extent as to render the premises untenantable, this agreement shall, at the option of either party, cease and terminate as of the date when possession is taken. All proceeds from any taking or condemnation of the premises shall belong to and be paid to Landlord, and Tenant shall have no right to any portion of the amount that may be awarded or paid to Landlord as a result of such taking. Tenant shall be entitled to pursue any and all damages from the condemner personal to Tenant resulting from condemnation. 30. Subordination and Nondisturbance. This agreement and all of the rights of Tenant hereunder are and shall be subject and subordinate to the lien of every deed of trust and every mortgage now or hereafter placed on the premises or any part thereof (except the property of Tenant), and to any and all renewals, modifications, consolidations, replacements, extensions or substitutions of any such mortgage or deed of trust ("encumbrances"). Lease and Material Sales Agreement Page 8 of 9 IN WITNESS WHEREOF, the parties have hereunto set their hands and seals this 3/ day of %�� L„K� , 2024. TENANT: BRECHAN CONSTRUCTION, LLC Don Kashevaroff, CEO of Seldovia Native Association Its Managing Member SUBSCRIBED AND SWORN to before me by P6 -i kcorAeyo res —r this 3 day of-C)ee �e�, 2024, at Kodiak, Alaska. STATE OF ALASKA Notary Public in and for Alaska NOTARY PUBLIC My Commission expires: r,. /(0 202% Aaron T. Hocum ` LANDLORD: My Commission Expires Aug 16, 2028 THE KODIAK ISLAND BOROUGH �PNp BpRo c4w� Williams, Borough Manager Q _ ATTEST: figorough Clerk, Nova vie�ASKP4L SUBSCRIBED AND SWORN to before me by AFAM 01; 11 j4*, - this Zi day of 202/ at Kodiak, Alaska. 5 Lease and Material Sales Agreement Page 9 of 9 QAAL Q� Notary Public m and for Alaska , My Commission expires: WiAA 6 KODIAK ISLAND BOROUGH OFFICE of the MANAGER LEASE AMENDMENT 1 CONTRACT FY 2010-36k THIS AMENDMENT NO. 1 TO LEASE AGREEMENT FY2010-36 ("Amendment") is entered into as of JUNE 21, 2019 , by and between Brechan Construction LLC. (`Brechan"), and Kodiak Island Borough ("Landlord"). AMENDED TERMS: Section 2. Term of Lease shall read as follows: The term of this agreement shall be for the period of 5 years, unless sooner terminated as provided in this agreement. The lease term shall commence JANUARY 1, 2020, ("the anniversary date"), and shall expire at 5:00 PM, prevailing Alaska Time on December 31, 2024. Subject to being approved by the KIB Assembly ("the Assembly"), this agreement may be renewed for one additional five year term. Tenant must give written notice of its desire to renew this agreement not less than one year prior to the end of the current term. End of AMENDED section. All other terms of this agreement remain in effect. The Parties have executed this Amendment on the date first above written. Accepted and Agreed to by: Tenant: Brechan Const actioonn LLC. By' Mark Anderson Its Vice President and CFO L LORD: I��ak Island Boro gh �'AND ep� /// Q� ' G By Michael Owers 0 G1 Its Manager Q = i \gSKA�1� SURETY RIDER To be attached to and form a part. of Bond No. 929614013 Type of Performance Bond for Lease and Material Sales Agreement B -Tracts Gravel Pit (Bells Flats Subdivision), Bond: Kodiak, Alaska dated effective July 1, 2015 (MONTH -DAY, YEAR) executed by Brechan Construction, LLC , as Principal, (PRINCIPAL) and by Western Surety Company , as Surety, in favor of Kodiak Island Borough (OBLIGEE) in consideration of the mutual agreements herein contained the Principal and the Surety hereby consent to >tlwwg04 decreasing the bond liability from $250,000.00 to $150,000.00. Nothing herein contained shall vary, alter or extend any provision or condition of this bond except as herein expressly stated. This rider is effective June 2, 2021 (MONTH -DAY -YEAR) Signed and Sealed June 2, 2021 (MONTH -DAY -YEAR) Brechan Construction, LLC (PRINCIPAL) By: (PRINCIPAL) By: S-0443/GE 8/08 XDP Western Surety Company POWER OF ATTORNEY APPOINTING INDIVIDUAL ATTORNEY-IN-FACT Know AO Men By These Presents, That WESTERN SURETY COMPANY, a South Dakota corporation, is a duly organized and existing corporation having its principal office in the City of Sioux Falls, and State of South Dakota, and that it does by virtue of the signature and seal herein affixed hereby make, constitute and appoint Susan B Larson, Deanna M French, Ronald J Lange, Scott Fisher, Elizabeth R Hahn, Jana M Roy, Scott McGilvray, Mindee L Rankin, Roger Kaltenbach, John R Claeys, Guy P Armfield, Andrew P Larsen, Nicholas Fredrickson, Scott Garcia, Carly C Febringer, John M Miller, Derek Sabo, Charla M Boadle, Individually, of Bellevue, WA Drew D Neessen, Charles Floberg, William M Smith, Mason M Marks, Individually, of Portland, OR its true and lawful A tonney(s)-in-Fact with full power and authority hereby conferred to sign, seal and execute for and on its behalf bonds, undertakings and other obligatory instruments of similar nature - In Unlimited Amounts - and to bind it thereby as fully and to the same extent as if such instruments were signed by a duly authorized officer of the corporation and all the acts of said Attorney, pursuant to the authority hereby given, are hereby ratified and confirmed. This Power of Attorney is made and executed pursuant to and by authority of the By -Law printed on the reverse hereof, duly adopted, as indicated, by the shareholders of the corporation. In Witness Whereof, WESTERN SURETY COMPANY has caused these presents to be signed by its Vice President and its corporate seal to be hereto affixed on this 7th day of October, 2020. WESTERN SURETY COMPANY �eV�p�rnj z CA �J-*Paul T. Bnrflat, Vice President State of South Dakota ss County of Mianehaha On this 7th day of October, 2020, before me personally came Paul T. Bruflat, to me known, who, being by we duly swom, did depose and say: that he resides in the City of Sioux Falls, State of South Dakota; that he is the Vice President of WESTERN SURETY COMPANY described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to the said instrument is such corporate seal; that it was so affixed pursuant to authority given by the Board of Directors of said corporation and that he signed his name thereto pursuant to like authority, and acknowledges same to be the act and deed of said corporation. My commission expires J. MOHR SOME) June 23, 2021 °0U11°"%or" J. Mohr, Notary Public CERTIFICATE I, L. Nelson, Assistant Secretary of WESTERN SURETY COMPANY do hereby certify that the Power of Attorney hereinabove set forth is still in force, and further certify that the By -Law of the corporation printed on the reverse hereof is still in force. In testimony whereof I have hereunto subscribed my name and affixed the seal of the said corporation this 2nd day of June, 2021. WESTERN SURETY COMPANY r,.tr P i `4 f A 0 • L. Nelson, Assistant Secretary Form F4280-7-2012 Go to www.cnasurety.com > Owner/ Obligee Services > Validate Bond Coverage, if you want to verify bond authenticity. STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING, LAND AND WATER ❑ Northern Region ® Southcentral Region ❑ Southeast Region 3700 Airport Way 550 W 7th Ave., Suite 900C 400 Willoughby, #400 Fairbanks, AK 99709 Anchorage, AK 99501-3577 P.O. Box 111020 (907) 451-2740 (907) 269-8552 Juneau, AK 99801 (907) 463-3400 MATERIAL SITE RECLAMATION PLAN OR LETTER OF INTENTIANNUAL RECLAMATION STATEMENT AS 27.19.030 — 27.19.050 Nairraf ffWabb"fsa for mcknubw plan: $100 In accordance with Alaska Statute 27.19, reclamation is required of all mining operations, including sand and gravel extraction. Completion of this farm will meet the laws requirements for a rectamatton plan (see below for filing requirements; due date: at least 45 days before mining is proposed to begin; requires approval by the Division of Mining, Land and Water). Completion of this form will also serve as a letter of Intent for operations exempt from the plan requirement (due date: before mining begins). No approval is required for a letter of intent, but a miner who files a letter of intent must, before December 31, file an annual reclamation statement (Section 8 of this form). Check applicable box: 0 A. RECLAMATION PLAN (REQUIRED if the operation will disturb five or more acnes this year, OR 50,000 cubic yards, OR N the operation has a cumulative disturbed area of five or more acres) ❑ B. RECLAMATION PLAN—VOLUNTARY (for an operation below limits shown in Box A but wanting to qualify for the statewide bonding pooh ❑ C. LETTER OF INTENT (less than five acres to be disturbed AND less than 50,000 cubic yards AND less than five acres unmelaimed area) NOTE: A miner who files a letter of intent is also required to fila an annual reclamation statement at the end of the year. THIS RECLAMATION PLANfLETTER OF INTENT IS FOR CALENDAR YEAR 7 70V- 1 (IF YOU CHECKED EITHER BOX A OR B ABOVE AND PROPOSE A MULTI-YEAR PIAN, STATE ALL YEARS COVERED.) 1. MINER INFORMATION (IF THERE IS MORE THAN ONE MINER, ATTACH A LIST OF THE NAMES, ADDRESSES. AND TELEPHONE NUMBERS OF ALL OTHER OWNERS, OPERATORS, OR LEASEHOLDERS OF THE MINING OPERATION) Afi,i. r rc r i r C` a r1Ac r ' �N NAME OF MINER WHO WILL SERVE AS AGENT FOR NOTICE PURPOSES 2- ,11 6 ADDRESS (NOTIFY THE DEPARTMENT OF ANY LATER CHANGE OF ADDRESS) A k 7961 q01) 8 - 3Z I S CITY STATE ZIP CODE 601i 4 � prounk NAME OF LANDOWNER (IF OTHER THAN MINE ) OR PUBLIC LAND MAN FEDERAL OR STATE CASEFILE NUMBER (IF ANY) ASSIGNED TO THE SITE 102-4018 (Rw. 04M) AGENCY 2. LEGAL. DESCRIPTION OF PROPOSED MINING SITE 5E % 5F Ys, Sec 36 29S ZI W _ 5ew'41,C1 LEGAL SUBDIVISION/ SECTIONI QUARTER -SECTION TOWNSHIP RANGE MERIDIAN 3. DESCRIPTION OF THE MINING OPERATION (IF YOU CHECKED BOX A OR B ON P. 1 OF THIS FORM AND ARE PROPOSING A MULTI-YEAR RECLAMATION PLAN, ATTACH SEPARATE SHEETS AS NEEDED SHOWING ACREAGE TO BE MINED, VOLUME TO BE MINED, AND EXISTING ACREAGE OF MINED AREA FOR EACH YEAR COVERED BY THE PLAN) a. 5. Li acres Total acreage to be mined or disturbed during the year. b.35%�a . y. Estimated total volume to be mined or disturbed, including overburden. c. _ Type of material (sand, gravel, peat, etc.). d. 80 acres Existing acreage of mined area (disturbed area that has not yet been reclaimed, but counting only acreage disturbed after October 15. 1991) 4. DESCRIPTION OF THE RECLAMATION OPERATION a. The total acreage that will be reclaimed during the year (or each year, if for a multi-year reclamation plan) is: b. Provide a list of equipment (type and quantity) to be used during the reclamation operation. C. A time schedule of reclamation measures shall be included as part of the plan. The following measures must be considered in preparing and implementing the reclamation plan. Please mark those measures appropriate to your reclamation activity: is Topsoil that is not promptly redistributed to an area being reclaimed will be separated and stockpiled for future use. This material will be protected from erosion and contamination by acidic or toxic materials and preserved in a condition suitable for later use. I® The area will be bacifted, graded and recontoured using strippings, overburden, and topsoil to a condition that allows for the reestablishment of renewable resources on the site within a reasonable period of time. It will be stabilized to a condition that will allow sufficient moisture to be retained for natural revegetabon. * Stockpiled topsoil will be spread over the reclaimed area to promote natural plant growth that can reasonably be expected to revegetate the area within five years. * Stream channel diversions will be relocated to a stable location in the flood plain. ® Exploration trenches or pits will be backfilled. Brush piles, vegetation, topsoil, and other organics mmll be spread on the backfilled surface to inhibit erosion and promote natural revegetation ® All buildings and structures constructed, used, or improved on land owned by the State of Alaska will be removed, dismantled, or otherwise properly disposed of at the completion of the mining operation. is Any roads, airstrips or other facilities constructed to provide access to the mining operation shall be reclaimed (unless otherwise authorized) and included in the reclamation plan. ❑ Peat and topsoil mine operations shall ensure a minimum of two inches of suitable growing medium is left or replaced on the site upon completion of the reclamation activity. 1024018 ftv.04=) IN If extraction occurs within a Hood plain, the reclamation activity shall reestablish a stable bed and bank profile such that river currents will not be altered and erosion and deposition patterns will not change. NOTE: If you propose to use reclamation measures other than those shown above, or if the private landowner or public land manager of the site requires you to use stricter radamation measures than those shown above, attach a list of those measures to this plan. 5. ALTERNATE POST -MINING LAND USE ❑ The mining site is public land. The land management agency's land use plan (if any) for post -mining land use is: 0 The mining site is public land. As allowed by AS 27.19.030(b), I propose to reclaim it to the following post -mining land use: ❑ The mining site is private property. The private landowner plans to use it for the following post -mining land use: 6. ATTACHMENTS ❑ If the mining operation has additional owners, operators, or leaseholders not shown on p. 1 of this form, attach a list of their names, addresses, and telephone numbers. ® Attach a USGS map at a scale no smaller than 1.63,360 (inch to the mile) showing the general vicinity of the mining operation and the specific property to be mined. Option. If you checked Box C on the first page of this form and the mining site is adjacent to an airport or public highway, slate the name of the airport or the name and milepost of the public highway. 18 Attach a diagram of the mined area (this tern includes the extraction site, stockpile sites, overburden disposal sites, stream diversions, settling ponds, etc.) and the mining operation as a whole (this term incudes the roads you plan to build, your power lines, support facilities, etc.). Show and state the number of acres to be mined during the year. (If you checked Box A or B on the first page of this form and your plan covers more than one year, show each years work.) Show the location comers or property boundaries of the site in relation to the reclamation work and any other areas affected by the operation. le Attach a list of the equipment (type and quantity) to be used during the reclamation activity. Ot A time schedule of events must be attached that incudes dates and activities related to this reclamation plan. ® If the site is private land not owned by the miner, attach a signed, notarized statement from the landowner indicating the landowners consent to the operation. The landowner may also use the consent statement to notify the department that the landowner plans a post -mining land use incompatible with natural revegetation and therefore belleves that reclamation to the standard of AS 27.19.020 is not feasible. ❑ For those miners that are requited to file an annual reclamation statement, attach photographs and/or videotapes dated and described as to location of the reclamation activity that was completed. IN If you propose to use reclamation measures other than those listed on this form, or if the private landowner or public land manager of the site requires you to use strider reclamation measures, attach a list of those measures. 1024010IR&v. 04W) 7. DECLAMATION BONDING (REQUIRED ONLY IF YOU CHECKED BOX A or B ON THE FIRST PAGE OF THIS FORM) The total acreage of my mining operation that is subject to the bonding requirement for the current year is _ A H acres (add acreages stated in Section 3(a) and 3(d) of this form). The per acre bond amount is $750/acre or a total bond amount of $ Please check the appropriate bonding method that you will appy toward this reclamation plan, El Participation in the statewide bonding pool. 13 Posting a corporate surety bond. ® Posting a personal bond accompanied by a letter of credit, certificate of deposit, or a deposit of cash or gold. ❑ Posting a bond or financial guarantee with another government agency that has jurisdiction over the mining operation, as allowed by a cooperative management agreement between that agency and the Division of Mining, Land and Water. ❑ Posting a general performance bond with a state agency that meets the requirements of 11 AAC 97.400(4). The above reclamation planAetter of intent and all attachments are correct and complete to the best of my knowledge. /_G�r Zo Z7 Signature of MinerT/. Date AS 27. 10,030 and AS 2719.050 require a miner aWw to flee a mdanmtion plan for appnxat or to Iib a letler of Intent fok wed by an arvnuel medamation ataWnent. AS 3t1.0UWa) auprorisee Ve dh9dw to I citta what irdhrrrmlion is model to peaces an application fix the sab or used stale land and resources. This Infoinatlon Is made a part d ere sbtr public land records and becernes public V* m wn under AS 4L2&110 and 40.25.120 (urdm the brkmallm qualifies for conliderdialily raider AS X05.0314a)(9) aid consderdbkly b eequest@4 public hdwmalion Is open to heapaetiam by you or+ny rrw idm d tha pub5r: A patum who k the sub)eat d the inlornullon may challenge ks accuracy orcomplehm s under AS 44.99.310, by OWft a wrHian deaeripfion of the duNwWd brfo .."m , the duay.a nse . to correct 9, and ■ name and addnge where the pse9an can be resdrsd False stalemenle made In an applicigm for a bensfit are punishable under AS 11.1141.210. 1024018 tRev. OM) EXHIBrf B RECON, LLC 2010 Reclamation Plan B -Tracts Gravel Pit Kodiak, Alaska Isaac Rowland 05/12/2010 REcON Lr -J r UC Rot•%land EngineeringCon--ultant., Satin It RoWwd, PE 431 MMArcacAw- Phhw AK95164f 907-746.40300E aY07.W.?MCc& 5wn-9 rc w&iPa Reclamation plan developed by RECON, LLC on behalf of Kodiak Island Borough for the B -Tracts Gravel pits located at Bell Flats, Kodiak Alaska It CONTENTS s RECON ► 1.0 INTRODUCTION..............................................................................................................1 1.1 Location...........................................................................................................1 1.2 Description of Site...........................................................................................1 2.0 OPERATIONS.................................................................................................................. 2 2.1 Historic Operations.......................................................................................... 2 2.2 Planned Operations.........................................................................................2 2.3 Area to be Mined.............................................................................................2 2.4 Quantity to be Mined.......................................................................................3 3.0 RECLAMATION................................................................................................................3 3.1 Landowner Requirements...............................................................................3 3.1.1 Separation from Russian Creek...........................................................3 3.1.2 Diversion Channel...............................................................................3 3.1.3 Equipment/Debris Removal.................................................................4 3.1.4 Pond Reclamation...............................................................................5 3.1.5 Re-contouring.....................................................................................5 3.2 Reclamation Schedule.....................................................................................6 3.3 Reclamation Equipment..................................................................................6 4.0 BONDING.........................................................................................................................7 5.0 SUMMARY....................................................................................................................... 7 ATTACHMENTS Fig 1— General Location of B -Tracts Pit. Fig 2 — 2006 Property Survey Fig 3 — Site Map Fig 4 — Reclaimed Site Configuration Fig 5 — Diversion Channel Cross Section Fig 6 -- Pond Overflow Drawing Project No.: TOO i 12 May 2010 •ftON F 1.0 INTRODUCTION This reclamation plan was prepared by RECON, LLC on behalf of Kodiak Island Borough (KIB) and covers the reclamation of the B -Tracts material site located in Bell Flats Subdivision, Kodiak Alaska. The land on which the site is located is currently owned by KIB and leased to Brechan Enterprises (the operator). This reclamation plan will be filed by Brechan Enterprises as required by Alaska Statute 27.19. This reclamation plan is intended to cover the operations of the pit between 2010 and 2020, corresponding to the term of the lease agreement. This document covers the DNR reclamation requirements as well as additional requirements by the landowner. 1.1 Location The B -Tracts material site is located in the Bell Flats Subdivision in the Russian Creek drainage, two miles from the head of Womens Bay. Please see Fig. 1 for a map of the general location of the site. 1.2 Description of Site The site is immediately adjacent to the north limit of the current Russian Creek floodplain. Material extracted from the site is of alluvial origin and consists of gravel with some sand. The majority of the mined area now consists of two freshwater ponds with a combined extent of approximately 34 acres. The ponds are located on four properties owned by KIB and known as Tracts B-1, B-2, B-3, and B -4A of the Bell Flats Subdivision. Total area of the four tracts is approximately 84 acres. See Fig. 2 for the location of the property lines relative to the mining operations. KIB currently mandates a 200 ft setback for mining operations adjacent to the road. Historical mining methods are reported to have included surface stripping and loading, underwater mining using excavators, tracked dragline and fixed boom dragline. Given setback requirements and terrain constraints, roughly 54 acres of the total 84 acres contained in the B -Tracts site are available for material extraction. Page 1 12 May 2010 EO 2.0 OPERATIONS 2.1 Historic Operations RECON Tracts B-3 and B-4 have historically been mined by Brechan Enterprises since the 1960's. Excavation at the pit has consisted of surface loading, a tracked crane with clamshell bucket, and a mobile dragline. Current excavation is with a hydraulic excavator mining above and below the water table. A bathymetry survey completed by Kodiak Land Surveyors (KLS) in 2006 showed the bottom elevation of the pond is highly variable with the pond depth ranging from 15-46 ft. The south pond located on the B-1 and 3-2 Tracts has currently been mined using only a hydraulic excavator and is overall of a shallower depth than the B-3 and B -4A Tracts pond. The depth of the pond varies between 11 and 20 ft, with the majority of the pond being >15 ft. 2.2 Planned Operations The majority of the mined area now consists of two freshwater ponds with a combined extent of approximately 34 acres. The ponds are currently divided by a narrow section of land on which mining and gravel screening operations are based. Extraction of gravel from the site will be accomplished using a dragline or dredge for mining below the water table. Near surface gravels will be removed using a hydraulic excavator. The section of land dividing the ponds will remain during the mining of the pond bottoms. Once the ponds have been mined to the maximum attainable depth, the gravel screening operation will be re -located off of the B -Tracts property and the ponds connected. At this point, the remaining original ground between the ponds will be mined to recover the available gravels. 2.3 Area to be Mined The area to be mined will vary by year and local demand. In general the majority of mining will consist of excavation of the pond bottoms. Near the end of the mine life, the ponds will be combined and the final configuration of the pit will consist of a single pond covering approximately 52 acres. Final depth of the pond will vary up to 46 ft. See Fig. 4 for reclaimed site drawing. Page 2 12 May 2010 N 2.4 Quantity to be Mined Quantity to be mined would vary from 5,000 cylyr to 89,000 cylyr with the average quantity estimated at 35,000 cylyr based on historic local demand. Beginning in 2010, the expected total quantity to be removed from the material site is 350,000 cy. 3.0 RECLAMATION Upon completion of operations, or prior to the end of the lease agreement with KIB, the operator will complete the site reclamation as specified in this plan. 3.1 Landowner Requirements In addition to the general requirements specified in the ADNR Material Site Reclamation Plan, the Kodiak Island Borough (the landowner) has specified these additional requirements: 3.1.1 Separation from Russian Creek Separation between Russian Creek and the B -Tracts property should be maintained at all times during operation of the material site. Any maintenance of the existing berms required to maintain this separation will be the responsibility of the operator. On completion of operations, the separating berm will be left in a stable state to insure the long term stability of the Russian Creek channel. 3.1.2 Diversion Channel The current water diversion channel located along the southeast limit of the property will be maintained. The channel will be stabilized and reclaimed during the 2010-2011 summer work seasons. Permitting for this work will be coordinated by the State of Alaska Department of Natural Resources, Division of Coastal & Ocean Management. 1. The gravel banks will be sloped to a minimum of 2:1 unless heavily vegetated. Existing overgrown topsoil piles on the SE bank to remain undisturbed as much as practically possible. 2. The banks will be armored with Class I rip -rap to a minimum depth of 18" to prevent ongoing erosion. Riprap will extend from the bottom of the channel to 24" above normal water levels. Total riprap placed below the ordinary high water level is estimated to be 500 yd'. Page 3 12 May 2010 A RECON ► 3. The berm between the channel and pit will be raised and re -enforced. The elevation above the pond built up to a minimum of 48". Separation between the pond and the channel will be a minimum of 20 ft. The separation will be flattened and graded for future equipment access. See Fig. 5 for a typical cross section of the channel and pond separation. 4. The culvert and existing gravel barrier connecting the ponds to the diversion ditch will be removed and the site incorporated into the separation berm. 5. At the time of diversion ditch stabilization and reclamation work, the unpermitted large culvert used to cross the channel near the southerly end of the lot line common to Tracts B-2 and B-3 will be removed entirely, or removed and reinstalled property consistent with the specifications of the ADF&G Fish Habitat Permit. Final determination as to removal or reinstallation will be made by an authorized KIB representative. If reinstalled at that time, this culvert will be removed at the end of the lease agreement unless expressly permitted to remain by an authorized KIB representative. Equipment/Debris Removal The site currently contains miscellaneous construction debris and unused equipment as well as office and maintenance buildings. As part of the site reclamation the following conditions must be met: 1. All equipment not being actively utilized will be removed from the site. 2. All buildings not being actively utilized will be removed from site. 3. All trash and debris will be removed from site. 4. All contaminated soils will be cleaned up and disposed of in an appropriate and timely manner. 5. It is a requirement of the land owner that the site be kept clean and free of any debris, unused equipment, and contaminated soils during operations. As such, this portion of the reclamation is to be completed during 200912010. Buildings, signage, gates and remaining equipment will be removed at the end of the mine life unless specific permission is granted by an authorized KIB representative. Page 4 13 May 2010 RECON ► 3.1.4 Pond Reclamation At the end of mining, the two currently existing ponds will be combined as a single pond. The following measures will be completed to stabilize the ponds: 1. The pond shores will be graded to a water entry slope of 3:1 or flatter. 2. Slopes below waterline shall be no steeper than 2:1. 3. Where practical, the shoreline will be made undulating and irregular to simulate a natural contour and provide potential fish habitat. 4. The shorelines will be covered with topsoil and allowed to naturally re -vegetate. 5. The high water overflow will consist of a rip -rapped spillway with an outflow elevation approximately 18" above the existing creek level. See Fig 6 for a cross section of the outflow design. 3.1.5 Re -contouring The overall site will be re-contoured to a natural and stable state. Specific measures required by the landowner include: 1. All slopes, piles and banks will be reduced to a maximum slope of 3:1. 2. Topsoil stockpiles currently located on the perimeter of the pit will be graded over the exposed gravel surfaces. The topsoil will be compacted using a tracked dozer to reduce erosion and allow a re -growth of native vegetation. Exceptions to the above general conditions are as follows: 1. Older piles located to the SE of the existing diversion ditch to remain undisturbed. 2. Slopes above the freshwater springs located at the south end of the property to remain undisturbed. 3. Specific exceptions may be granted by an authorized KIS representative during the reclamation process. Page 5 12 May 2010 RECON 3.2 Reclamation Schedule The mine life for this operation is currently assumed to be 10 years. For the majority of this time, the entirety of the site will be utilized. Ongoing reclamation will consist of stabilization of the by-pass creek channel and removal of un -used equipment and debris. The conformance schedule is as follows: 2010-2011: 1. Removal of debris, excess equipment, any contaminated soils from site. 2. Stabilization of diversion channel as outlined in Section 3.1.2 2020 or End of Operations: 1. Reclamation of pond shore as outlined in Section 3.1.4. 2. Removal of remaining equipment and buildings. 3. Re -contouring of disturbed ground around the pit perimeter. 4. Placement of topsoil over re -graded ground. 5. Natural vegetation will be allowed to propagate on the site. 3.3 Reclamation Equipment The operator proposes the following reclamation equipment fleet for the reclamation of the B -Tracts site: 2 — 320 series excavators or similar 1 — D6 dozer 1 — 09 dozer 2 — 10 yd trucks Page 6 12 May 2010 &tON ► 4.0 BONDING The operator of the site will be required to post a reclamation bond with the Kodiak Island Borough. The bond will be in an initial amount of $250,000. On completion of the diversion ditch bank reclamation and stabilization to the satisfaction of KIB, the bond will be reduced by $50,000. On completion of the removal of unused equipment, contaminated soils, and construction debris to the satisfaction of KIB, the bond will be reduced by $50,000. The bond will remain at no less than $150,000 for the remainder of the lease period 5.0 SUMMARY This reclamation plan was developed by RECON, LLC on behalf of Kodiak Island Borough. This plan covers the reclamation of the B -Tracts gravel pit during the time period of 2010 through 2020. Responsibility for completion of this plan will rest with Brechan Enterprises, Inc. Please contact Isaac Rowland with RECON, LLC at (907) 322-5545 with any questions. Page 7 12 May 2010 U,ffE„ SIA,►, Fig 1 - B-TrC :..01 Location ( Jp11,«,1W aADRANOE UPART AI Of IME ImEK14K MASK 40MAK tSIA%V K MOUG}I blAX IGKAt. 44WKV I-IsonesCAU %EMM MFOG1 MKI LW-44i 4,uh,ms 1+16x-'-'--^^r` -�.....;J -.f7- 77 as k ._�_. 41 X EUS• :r ` 151. � �� ` �t a'Nr . • ► • fi f � �.� a.�B' aott .C#P'ave(:FP t.oica •'�,{; .tl r r � F /.. Lil- 4-00 �-•. + - .f„ }« w - , I1F + r f I - f� — 'moi~ .+ _ •► � � r_ . , . ��.. ...._. i -iv aL 01 n t ;,r' ,MI3 } .•� 1 ! i ' it U • ! I •1/1 p _, .• rM. ; k Y ` 17•x•1• I' 11t � L rs lir . 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S... ! ....a�.rrr.rrr�r LL__JJ KadAKrest D" Ae ASKA iw01MY w._+. ti r. � � �+ rr-.-_r rte. aF .w Ar,r. r •br1 r a r.W`r.$:: M11KlMr mltlou H1 ti....rr ww rr rriYr w rnrrrr rr .rar..f xrrw • fa_. r ...r• .••+. ••• r arrr.. � w i r+r+r++ren YY n u. orY.l�+�.11M+'r. urrrr r✓fl.a was ir.+..r..r..•rr—err �cw msrse `.rs rale+rvrw ......n..rw .... 1�w.aaaaw n. w+.. wrw. r.++m►wa�..� • � r FV Yr r M •�1 rw � we• rr � W M!.•arnati��w•-h.T•wlr�rJr r.�rr� .MW r�llw r•w•tirrw.rrr wlrTrrll�••rAMrVrMr w I x = 1 4'm G muni± Me: Springs rw y�Y, C / Men � \ . - � � and yomb9Area Pit I AREA TO BE MINED —52 Acres . y r3 � �� • ! � �- :o„ (;Oogfe Fig 4 - Proposed Post Reclamation Site Configuration Pond AP=' RATS MCKD i .� IEQ P 3 3 .... Plf BELL nAts KOVM M ;3.::: ;►::: ':IRAQ: tllAjCi, Pond Outflow wo a�rwc PNOP06Ep P'0_ MECLIINiION _ t ••ts:•t: {::{ii. s:}iii'•.}: • CONRWM TION TYPICAL CROSS SECTION OF DIVERSION CHANNEL 70 iqgrA�j i i Notes: 1-) Channel width may vary from 15 -30 ft or as specified by ADF&G 2.) The separation berm between channel and the ponds be greater than 20' as needed. eight PTING POND B•Tracts Gravel Pit DRAFT TYPICAL SECTION • CHANNEI wa m e• w PLAN VIEW OF OUTFLOW CROSS SECTION OF POND OUTFLOW Pond v v^ -0 1 ` v ChanneV 24.0' 6.0' Normal Channel v 24" OF CLASS 2 RIPRAP B•Tracls Gravel Ph OUTFLOW CHANNEL .n em ava.�a� «.yes'• eno.n „� .�, d�c ��• �. ~ 2 2 ---- amnc w �.. :w.n .� Alaska Department of Natural r,"".ources Land Administration System Page 1 of 1 Alaska Wpper Land RecoMslStatus Plats Recorder's Search State Cabtns Natural Resources F-lind r Alaska DNR Case Abstract File Type; u►S rile Number; _._..?7663 i ❑ Printable Case Fite Abstract See "Township, Range, Section and Acreage? ; 4 s— ,i- -r darchk: 1: Yes C No - �Iisw,S-..� LAS Menu I Case Summary I Case Dotal l I hand Abstract File: LAS 27663 .J r1111 5 arc 1 r 5 is BlaLUpdateo As of 051242010 Cuslorner• 000012033 BRECHAN ENTERPRISES, INC. 2705 MILL ROAD KODIAK AK 99615 Doing Business As: BRECHAN ENTERPRISES, INC, Case Type: 940 NONSTATE LAND RECLAMATION DNR Unit: 200 LAND MANAGEMENT File Location. SCDOLD SCDO LAND SECTION CaseSlatus:50 ACTIVE Slow Date: 05/24/2010 Taral Acres• 54.000 Date Initiated: 05/24/2010 Once of Primary Responsibility LSC LAND -SOU THCNTRL REG Last Transaction Date; 05/24/1010 Case Subtype; 24171_ RECLAMATION PLAN Last Transaction RPACPTD RECLAMATION PLAN ACCEPTED Aferidian. S Tawnslrip: 0285 Range: 021W Section: 36 Section Acres: 54 Search Plats C'nsr Actions 05-24-2010 RECLAMATION PLAN ACCEPTED ACREAGE TO BE MINED: 54 ESTIMATED TOTAL VOLUME: 350000 TYPE OF MATE RIAL: GRAVEL GRAVEL RC:CLAMATION PLAN FDIC SE114SW 4 SGC. 36, KODIAK ISLAND BaROUGH IS THE LAND 011'A'F.R. Legal Description No Legal Description Found Enid of Case Abstract Last updated on 0512412010. Not sure who to contact? Have a question about DNR7 Visit the 1 MD11C I Sformation CentCtr. Report technical problems with this page to the Webmaster. Site optimized for Netscape 7, 1E 5 or above. This elle also requires that all COOKIES must be accepted State or Mesita NFitural fteSOiLmn tA. 1?ojne G!.py ich� Pjivnry, ti innl ,yte) is http://int.dnr.alaska,govlprojectsilaslCase_Abstract.cfm?FileType=LAS&FileNitmber=%2... 5/24M] 0 Xre{: &0 1V4411 A. -TV ao la -�!3 LEASE AND MATERIAL SALES AGREEMENT THIS LEASE and MATERIAL SALES AGREEMENT is made this first day OfJuly, 2010 by and between the Kodiak Island Borough ("Landlord" or "KIB"), a borough organized under the laws of the state of Alaska, and Brechan Enterprises, Inc. ("Tenant" or "BEI"), a corporation incorporated under the laws of the state of Alaska. For and in consideration of the covenants, rents and demises, and upon the tenns and conditions set forth in this agreement, the parties agree as follows: 1. Premises. Landlord hereby lets, leases and demises to Tenant the real estate particularly described as follows: Tracts Bl, B2, B3 and B4A, Bells Flats Alaska Subdivision, generally according to Plat 69-4 (as to Tract B), located in the Kodiak Recording District, Third Judicial District, State of Alaska. Also known as 12247, 125361 and 12583 Middle Bay Drive and 12027 Bells Flats Road ("the premises"). Tenant, upon paying the rents, and performing all of the terms and covenants required by this agreement, shall peaceably and quietly enjoy the premises subject nevertheless, to the terms of this agreement. 2. Term of Lease. The term of this agreement shall be for the period of nine and one- half (9.5) years following the commencement of the term, unless sooner terminated as provided in this agreement. The lease term shall commence on July I, 2010 ("the anniversary date"), and shall expire at 5:00 P.M., prevailing Alaska Time on December 31, 2019. Subject to being approved by the KIB Assembly ("the Assembly"), this agreement may be renewed for two additional five year terns. Tenant must give written notice of its desire to renew this agreement not less than one year prior to the end of the then current term. 3. Rental. In consideration of the demise and leasing of the premises Tenant agrees to pay to Landlord as rental for the premises an annual sum adjusted each June I" for the following year determined as follows: the prime rate plus 2.0% (as an indication of conventional commercial mortgage rate), but not less than six percent (6'%,), of the appraised value ($460,000). Rental will be paid in advance, on or before the first day each month of the lease tern. All rent shall be paid to the Landlord at 710 Mill Bay Road, Kodiak, Alaska 99615, or at such other place as Landlord may designate from time to time in writing. 4. Unit Price for Materials. Consistent with KIBC Chapter 18.60, BEI is also granted the right to purchase gravel by this agreement. BEI shall bear the cost of and shall provide the volume dctcnnination according to KIBC 18.60.040. The volume determination shall be in units of tons which shall be calculated at the rate of one and 7/10 (1.7) tons per cubic yards. Upon execution of this agreement, BEI shall pay to KIB 51,000 as required by KIBC 18.60.050. Lease and Material Sales Agreement Page 1 of 8 BEI shall pay for this gravel the unit price as determined by the Assembly under KiBC 18.60.060 (the `royalty"). BEI shall submit to KIB on an annual basis and not less than thirty days prior to the anniversary date of this agreement, the volume determination of the gravel removed from the premises and the royally payment. KIB reserves the right, but is not obligated to make its own volume determination of the gravel removed from the premises. In the event BEI fails to pay for the gravel forty five (45) days after the anniversary date of this agreement, a penalty of 10% of the amount due shall be assessed. Interest shall aca'ue on the amount due including the penalty at the rate of 12 percent per year from the due date. 5. Alteration of Premises. Except for Tenant's gravel mining operations which are to be conducted consistent with this lease, Tenant shall not make any alterations, additions, or improvements to the premises without first obtaining the written consent of the Borough manager or designee. Any such alterations, additions and improvements consented to by the Borough manager or designee shall be made at Tenant's expense and only after Tenant has secured all required governmental permits. Tenant shall hold Landlord harmless from all liability and liens resulting from the approved work. All alterations, additions and improvements are subject to the terms of KIBC 18.40.140 and Section 3.1 .3 (Equipment/Debris Removal) of the Reclamation Plan. 6. Use of Premises. The premises shall be used as support for Tenant's extraction, remanufacturing and removal of gravel from the premises (generally referred to as "gravel mining") and for no other purpose, without the prior written consent of Borough manager or designee. Tenant shall not use or permit the premises or any part thereof to be used for any purpose in violation of any borough, state, federal or other governmental law, ordinance, rule or regulation. Tenant shall comply with all laws affecting the property and its gravel mining operation. Tenant agrees that it, together with all other persons entering and/or occupying the premises at its request or with its permission, will abide by, keep and observe all reasonable rules and regulations which Landlord may make from time to time for the protection of the surrounding habitat and residential areas. The violation ofany such rules and regulations shall be deemed a material breach of this agreement by Tenant. Tenant shall use, operate and/or install any electrical or mechanical equipment, machinery, or mechanical devices on the premises in compliance with the highest standards applicable to the premises, or to the use, operation, or installation of such equipment, machinery or devices, generally recognized by the profession or industry in which Tenant is engaged. Tenant expressly agrees to comply with the list of stipulations on attached Exhibit A, which are incorporated into and made part of this agreement. 7. Taxes. Tenant shall pay any and all real property taxes based on its possessory interest in the premises, taxes levied on personal property and trade or other fixtures on the premises, severance taxes associated with its resources extracted or produced from the premises, and license and excise fees and occupation taxes covering business conducted on the premises. Lease and Material Sales Agreement Page 2 of 8 8. Utilities. Tenant shall provide at its expense all utilities and services used on the premises. Landlord shall not be liable for any loss or damage caused by or resulting from any variation, interruption or failure of any utilities or services. 9. Maintenance and Repairs. As this is a lease of land, Landlord has no duty to maintain or repair the premises. Tenant shall, at its expense, maintain and repair the premises. Tenant shall commit no waste of any kind in or about the premises, and Tenant shall pay for all damage to the premises caused by Tenant's misuse or neglect of the premises. Landlord shall not be responsible or liable at any time for any loss or damages to Tenant's equipment or other personal property or to Tenant's business except to the extent attributable to Landlord's negligence. Landlord shall not be responsible or liable for any defect, latent or otherwise, in the premises. Nor shall Landlord be responsible or liable for any injury, loss or damage to any person or to any property of Tenant or other person caused by or resulting from bursting, breakage or by or from leakage, stream or snow or ice, running or the overflow of water or sewerage in any part of said premises, or the surrounding area, or for any injury or damage caused by or resulting from acts of nature or the elements, or for any injury or damage caused by or resulting from any defect in the operation or use of any of the premises by any person or by or from the acts or negligence of any occupant of the premises, unless Landlord itself is negligent. 10. Fire and Other Casualty. As this is a lease of land, Landlord has no duty to protect the premises from damage by fire or other casualty. Tenant acknowledges that it must protect its machinery and equipment from damage by lire or other casualty. There will be no reduction in rent in the event that Tenant's machinery and/or equipment is damaged by fire or other casualty. 11. Subletting and Assignment. Tenant shall not sublet the premises, or any part thereof, or assign this lease or any part thereof, nor shall this agreement be assigned in whole or in part by operation of law or through any count proceedings, without the prior written consent of Borough Manager or designee to such subletting or assigning; any such assignment or sublease without Borough Manager or designee's written consent shall be void. Any merger, consolidation, or dissolution to which Tenant is a party, or any change in ownership of a majority of its voting stock outstanding, shall constitute an assignment of this lease for purposes of this paragraph. 12. Indemnification. Tenant shall defend and indemnify Landlord from and against any and all claims, liabilities, or losses of any type arising out of Tenant's occupancy and use of the premises together with reasonable attorney's fees and all costs and expenses incurred by Landlord in negotiating, settling, defending and otherwise acting as a result of such claims. Landlord shall promptly notify Tenant of any loss or claim and shall tender defense of such claim to Tenant prior to negotiating, settling, or defending such claim. l3. Insurance. Tenant, at its sole expense, shall keep or cause to be kept in force for the mutual benefit of Landlord and Tenant comprehensive broad form general public liability Lease and Material Sales Agreement Page 3 of 8 insurance coverage against claims and liability for personal injury, death or property damage arising from the use, occupancy, disuse, or condition of the premises, improvements, or adjoining areas or ways. This insurance shall provide coverage of at least $2,000,000 aggregate, S 1,000,000 per occurrence, 52,000,000 for products/operations and S 1,000,000 for personal and advertising. Landlord shall be an additional named insured in such policy or policies. Such policy or policies shall be written by a responsible insurance company or companies satisfactory to Landlord and licensed to do business in Alaska. All such policies shall be nonassessable and shall contain language to the effect that (1) any loss shall be payable notwithstanding any act or negligence of Landlord that might otherwise result in a forfeiture of the insurance; (2) the insurer waives the right of subrogation against Landlord; (3) the policies are primary and noncontributing with any insurance that may be carried by Landlord; and (4) they cannot be cancelled or materially changed except after thirty (30) days notice by the insurer to Landlord. Upon the signing of this Agreement, certificates of insurance shoxving compliance with the foregoing requirements shall he furnished by Tenant to Landlord for approval. Maintenance of insurance and the performance by Tenant of the obligation under this paragraph shall not relieve Tenant of liability under paragraph 13, above. If Tenant fails or refuses to procure or maintain the required insurance, or fails to provide Landlord with the required proof of insurance and that it is in force and paid for, Landlord may, at Landlord's election and without notice, procure and maintain such insurance, or may terminate this agreement without liability upon written notice to Tenant. Any premiums paid by Landlord shall be treated as an added fee due from Tenant xvith interest at twelve per cent (12%) per year, to be paid on demand. 14. Liens. Tenant will not permit any mechanics', laborers' or material men's liens to stand against the premises for any labor materials furnished to Tenant or claimed to have been furnished to Tenant, or to Tenant's agents in connection with work of any character performed or claimed to have been performed on the premises or improvements by or at the direction of sufferance of Tenant; provided, however, Tenant shall have the right to contest the validity or amount of any such lien or claimed lien. In the event of such contest, Tenant shall give to Landlord such reasonable security as may be demanded by Landlord to insure payment of such lien or such claim of lien. Tenant will immediately pay any judgment rendered with all proper costs and changes and shall have such lien released o1 -judgment satisfied at Tenant's own expense. The foregoing provisions respecting liens shall apply to all liens, of any kind or nature, asserted against the premises, including liens arising out of, incident to, or connected with the use and occupation of the premises by Tenant. 15. Default. If Tenant at any tine during the term of this lease (and regardless of the pendency of any bankruptcy, reorganization, receivership, insolvency or other proceedings, in law, in equity or before any administrative tribunal, which have or might have the effect of preventing Tenant from complying with the terms of this lease) shall: (a) Fail to make payment of any installment of rent, royalty or of any other suns herein specified to be paid by Tenant, and Tenant fails to cure such default within ten (10) days after such failure to make payment: or Lease and Material Sales Agreement Page 4 of 8 (b) Fail to observe or perform any of Tenant's other covenants, agreements or obligations required by this agreement or the attached exhibits (the list of stipulations (Exhibit A), the Reclamation Plan dated May 12, 2010 (Exhibit B), and the Stormwater Pollution Prevention Plan (ExhibitQ all of which are incorporated herein by reference), and if within thirty (30) days after Landlord shall have given to Tenant written notice specifying such default or defaults, Tenant shall not have commenced to cure such default and proceed diligently to cure the same; or (c) Fail to mine gravel from the premises for any twelve (12) months period: (d) If Tenant has filed a Petition under Chapter I 1 of Bankruptcy Act, or a voluntary petition under any other provision of the Bankruptcy Act, or if Tenant finally and without further possibility to appeal or review: (1) is adjudicated as bankrupt or insolvent, or (2) has a receiver appointed for all or substantially all of its business or assets on the ground of Tenant's insolvency; or (3) has itself appointed as a debtor-in-possession; or (4) has a trustee appointed for it after a petition has been filed for tenant's reorganization under the Bankruptcy Act of the United States or any future law of the United Slates having the same general purpose; or (5) it Tenant shall make an assignment for the benefit of creditors then in any such event Landlord shall have the right at its election, then or at any time thereafter, and while such default, defaults or events shall continue, to give Tenant notice of Landlord's intention to terminate this agreement and all Tenant's rights hereunder, on a date specified in such notice, which date shall not be less than ten (10) days after the date of giving of such notice, and on the date specified in such notice, the term of this agreement and all rights granted Tenant hereunder shall come to an end as fully as if this agreement then expired by its own terms, and Tenant hereby covenants peaceably and quietly to yield up and surrender to Landlord the premises, and to execute and deliver to Landlord such instrument or instruments as shall be required by Landlord as will properly evidence termination of Tenant's rights hereunder or its interest therein. In the event of termination of this agreement as in this paragraph provided, Landlord shall have the right to repossess the premises and such structures, buildings, improvements and equipment, either with process of law or through any form of suit or proceeding, as well as the right to sue for and recover all rents and other sums accrued up to the time of such termination, and damages for rent not then accrued. Landlord shall also have the right, without resuming possession of the premises or terminating this agreement, to sue for and recover all rents and other sums, including damages, at any time and from time to time accruing hereunder. 16. Notices. Any and all notices required or permitted under this agreement, unless otherwise specified in writing by the party whose address is changed, shall be mailed, certified or registered mail, or delivered, to the following addresses: LANDLORD: Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 Lease and Material Sales Agreement Page 5 of 8 TENANT: Brechan Enterprises, Inc. 2705 Mill Bay Road Kodiak, Alaska 99615 Any such notices shall be deemed effective on the date of mailing or delivery. 17. Costs Upon Default. In the event either party shall be in default in the performance of any of its obligations under this agreement or an action shall be brought for the enforcement thereof, the defaulting party shall pay to the other all the expenses incurred therefor, including a reasonable attorney's fee. In the event either party shall without fault on its part be made a party to any litigation commenced by or against the other, then such other party shall pay all costs and reasonable attorney's fees incurred or paid by such party in connection with such litigation. 18. Rights or Remedies. Except insofar as this is inconsistent with or contrary to any provision of this agreement, no right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder, or now or hereafter existing at law or in equity or by statute. 19. Waiver and Forbearance. Except to the extent that Landlord may have otherwise agreed in writing, no waiver by Landlord of any breach by "I enant of any of its obligations, agreements or covenants hereunder shall be deemed to be a waiver of any subsequent breach of the same or any other covenant, agreement or obligation. Nor shall any forbearance by Landlord to seek a remedy for any breach of Tenant be deemed a waiver by Landlord of its rights or remedies with respect to such breach. 20. Inspection. Landlord shall at all reasonable times during Tenant's business hours have access to the premises for the purpose of inspection. Landlord shall also be entitled to put "to lease" or "for lease" signs in and about the premises, and to show the premises to prospective tenants, during the last sixty (60) days of this agreement term and any extended term, and during any period of time after Landlord has given Tenant a notice of intention to terminate under paragraphs 3 or 16 of this agreement. 21. Notices of Nonresponsibility. Landlord may enter the demised premises at any time for the purpose of posting notices of nonresponsibility. 22. Successors in Interest. This agreement shall be binding upon and inure to the benefit of the respective heirs, successors and assigns of the parties hereto. 21 Holding Over. In the event that Tenant holds over at or after the end of the tern, the tenancy shall be deemed a month-to-month tenancy commencing on the first day of the holdover period. 24. Signs. Other than "no trespassing" signs and signs necessary for compliance with regulatory requirements, Tenant agrees that no other sign or signs shall be installed on the demised premises without the prior written consent of Landlord. Lease and Material Sales Agreement Page 6 of 8 25. Memorandum of Lease. Tenant agrees that it wi II not record this agreement. At the request of either Landlord or Tenant, the parties shall execute a memorandum lease for recording purposes in lieu of recording this agreement, in such form as may be satisfactory to their respective attorneys. 26. Excuse for Nonperformance. Either party hereto shall be excused from performing any or all of its obligations hereunder Nvith respect to any repair and construction work required under the terms of this agreement for such times the performance of any such obligation is prevented or delayed by an act of God, floods, explosion, the elements, war, invasion, insurrection, riot, mob violence, sabotage, terrorist activity, inability to procure labor, equipment, facilities, materials or supplies in the open market, failure of transportation, strikes, lockouts, action by labor unions, or laws or order of governmental agencies, or any other cause whether similar or dissimilar to the foregoing which is not within the reasonable control of such party. 27. Construction of Lease. This agreement shall be governed by and construed in accordance with the laws of the State of Alaska. Words of gender used in this agreement shall mean and include any other gender, and singular shall mean and include the plural and the plural the singular, where applicable, and when the sense requires. 28. Performance Bond. As required by KIBC 18.60.070 a performance bond is required to protect Landlord's interest and ensure satisfactory compliance with this agreement and the Reclamation Plan (Exhibit B). As noted in section 4 of Exhibit B, the amount ofthe bond may be reduced during the term of this lease. The form of this bond is attached as Exhibit D. 29. Condemnation. If the Premises shall be taken or condemned for any public purpose to such an extent as to render the Premises untenantable, this agreement shall, at the option of either party, cease and terminate as of the date when possession is taken. All proceeds from any taking or condemnation of the Premises shall belong to and be paid to Landlord, and Tenant shall have no right to any portion of the amount that may be awarded or paid to Landlord as a result of such taking. Tenant shall be entitled to pursue any and all damages from the condemner personal to Tenant resulting from condemnation. 30. Subordination and Nondisturbance. This agreement and all of the rights of Tenant hereunder are and shall be subject and subordinate to the lien of every deed of trust and every mortgage now or hereafter placed on the demised premises or any part thereof (except the property of Tenant), and to any and all renewals, modifications, consolidations, replacements, extensions or substitutions orally such mortgage or decd of trust ("encumbrances"). Lease and Material Sales Agreement Pagc 7 of 8 IN WITNESS WHEREOF, the parties have hereunto set their hands and seals this i,/ day of A14:V 2010. TENANT: Brechan Enterprises, Inc. AgAd _ � By: Michael Martin Its President SUBSCRIBED AND SWORN to before me by Michael Martin this i day of 2010, at Kodiak, Alaska. OFFICIAL SEAL Notary Public in and fo Alaska IMELDA RODRIGUEZ My Commission expires: �Q y �p/ NOIARY °UBUC STATE OF ALASKA My Comm. Expres -/-/-i,3 LANDLORD: `D ']'HE KODIAK ISLAND BOROUGH J4 <' SKA SUBSCRIBED Al" s 2010, at Kodiak, Alaska. Borough Mana , Rick Gifford to before me by Rick Gifford this o day of iry#rll e in"and A-Alaska Commission exl s: ATTEST: - 7fh� Borough Clerk, Nova I vier Ogiriil Lease and Material Sales Agreement Pagc 8 of 8 LEASE AND MATERIAL SALES AGREEMENT Stipulations Regarding Gravel Mining Operation EXHIBIT A I. For all public works contracts for the Kodiak Island Borough, the City of Kodiak, or other State or Federal agencies that are subject to competitive bidding Tenant shall (a) quote materials pricing to bidders for the purpose of allowing such bidders to prepare their bid proposals ("the quoted price") and (b) thereafter sell to successful bidders materials at the quoted price. 2. Tenant acknowledges that Landlord has installed three water monitoring wells identified as KDH09-07, -08 and -09. Tenant further acknowledges that it knows where these wells are located and will preserve and protect them. 3. Tenant acknowledges that the gravel to be mined from the premises shall be used primarily for the production of concrete and asphalt. 4. Tenant acknowledges the importance of mining gravel from the ponds to the deepest depth practical. hi order to achieve this, mining of the spit must retain a minimum one hundred (100) foot spit width to separate the two ponds and facilitate efficiency of future land based dragline operations for excavating the bottom of the ponds. Final removal of the spit itself will proceed only with approval of the Borough Manager or designee. 5. Tenant shall coordinate with all appropriate regulatory agencies regarding its extraction and reclamation activities to assure regulatory compliance and minimize potential impacts of its activities. 6. in addition to the terms of the reclamation plan, Tenant shall comply will the following performance standards: a. Buffer Area. Buffer zones as described in the March 1, 2007 BEI letter, and as shown on exhibit A to that letter, shall be maintained and kept in a topography that blends smoothly into the surrounding area. b. Overburden. Overburden shall be stripped, stockpiled, placed, and leveled in the cleared portion of the designated buffer area or transported off site. Existing berms will remain in place for the reduction of visual and noise impacts on nearby properties. Upon completion of excavation, berms will conform to the reclamation plan. c. Trees. No brush, trees, stumps, or parts of trees shall be placed in the excavated area or buffer area. Exhibii A Page 1 of 3 d. Access. Ingress and egress shall be limited to existing points on Middle Bay Drive. Tenant shall not change its point of ingress and egress to the premises without the prior written consent of the KIB Manager or designee. e. Hours of Operation. Tenant shall limit hours of operation on the premises to 7:00 a.m. to 7:00 p.m. Monday through SatUiday. Only routine maintenance on equipment is allowed on Sundays between 7:00 a.m. to 7:00 p.m. There will be no work of any kind on Memorial Day, July 4`�', Labor Day, Thanksgiving and Christmas. f. Haul Road. It is the intent of this agreement to keep loaded trucks off of Middle Bay Drive as much as possible. For purposes of this agreement, Tenant shall operate its vehicles at no more than twenty-five (25) miles per hour on the following roads: A. Loaded trucks shall use Middle Bay Drive at its intersection with Bells Flats Road, then Bells Flats Road and South Sargent Creek Road while traveling between the premises and Chiniak Highway. B. Unloaded trucks may use Middle Bay Drive. C. Also included as a designated haul road is Salmonbeny Drive fronting Block'), Tract A, Bells Flats Alaska Subdivision. If there is a temporaryclosure, by reason of emergency, or for repair or improvement requiring use of an alternative route, BEI shall notify the Borough manager or designee of the reason and duration, which situation will not create liability for Landlord. g. Dust Control. In periods of dry weather when the haul roads become dusty, Tenant shall work with the Womens Bay Service Area to reduce the dust created by its vehicles. A dust pallative will be applied annually by BEI. Relative to its operations on the premises, Tenant shall comply with applicable Alaska Department of Environmental Conservation regulations regarding fugitive dust specifically, and air quality control in general. h. Security. In the interest of increasing site security, the following will be accomplished before June 30, 2010: 1. in collaboration with the Womens Bay Service Area, BEI will install at the two ingress/egress points indentified in 6d with KIB approved traffic control signs that comply with State regulations, and will remove brush to improve line of sight; and, 2. BEI will install gates at the two ingress/egress points to be locked at all times except during authorized hours of operation. In addition, BEI will actively pursue installation of security cameras at the two ingress/egress points identified, as well as the option to locate a caretaker/night watchman residence on site to be continuously occupied during seasonal operations at a minimum. Exhibit A Paee 2 ot-3 i. Public Information. For purposes of answering questions from the public and responding to problems and conflicts, tenant shall establish within the company, and publish and post on site, a phone number as well as designate a resource contact person or position by name. j. Hazardous Materials. The premises shall not be used for the storing of any hazardous material, as defined in AS 29.35.590(6), beyond what is placed within the tanks on Tenant's trucks, dozers and excavators. Exhibit A Pa,,e 3 of 3