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9/4/03 DRAFT VERSION

AGREEMENT BETWEEN

KENAI PENINSULA ARCTIC WINTER GAMES

2006 HOST SOCIETY, INC.

AND

KENAI PENINSULA BOROUGH

THIS CONTRACT is entered into on this ______ day of _________________, 2003 between the KENAI PENINSULA BOROUGH, 144 N. Binkley, Soldotna, Alaska 99669 (hereinafter "Borough") and the Kenai Peninsula Arctic Winter Games 2006 Host Society, _____________, Alaska __________, (hereinafter "Host Society").

WITNESSETH:

WHEREAS, the Arctic Winter Games International Committee, hereinafter the "Committee" is the registered copyright holder of the name "Arctic Winter Games", the Arctic Winter Games Symbol and the Arctic Winter Games medal design, and is the permanent governing body of the Arctic Winter Games; and

WHEREAS, the borough submitted a bid to stage the 19^th Arctic Winter Games in the Kenai Peninsula Borough, and in the municipalities of Kenai, Soldotna, and Homer; and

WHEREAS, the Committee awarded the staging of the 19^th Arctic Winter Games, hereinafter "Games" to the Borough to host the Games in March 2006 subject to certain terms and conditions as contained in an agreement executed April 16, 2003 by the Borough and the Committee ("KPB-IC Agreement"); and

WHEREAS, paragraph 36 of the KPB-IC Agreement requires the Borough to enter into a formal arrangement with the Host Society to give effect to the terms and conditions of that agreement, requiring the Host Society to abide by the terms of that agreement, and providing for the right of the borough and municipalities to override decisions of the Host Society if necessary in the best interests for the conduct of the games;

NOW THEREFORE, in consideration of the mutual promises and covenants herein contained, and subject to the conditions herein set forth, the parties hereby agree as follows:

ARTICLE ONE

ENGAGEMENT

1. Appointment: The Borough hereby contracts with the Host Society to manage and stage the Games in accordance with the terms and conditions of this contract.

2. Term: Subject to the terms and conditions set forth herein, this Contract shall take effect upon the date set forth at the end of this contract and shall continue in full force and effect until March 31, 2007, or until all requirements contained in this contract and other documents incorporated herein by reference are fully and finally satisfied, whichever occurs first. Upon written agreement of the parties, the contract may be extended for an additional six-month term.

3. Relationship Between the Parties: The Host Society and the Borough shall cooperate with each other in good faith to carry out the purposes of this Contract.

ARTICLE TWO

HOST SOCIETY SERVICES

1. Manage and Stage Games: The Host Society agrees to manage and stage the 19th Arctic Winter Games during the month of March 2006, in accordance with the terms and conditions contained in this agreement and the KPB-IC Agreement. If there is a conflict between this agreement and the KPB-IC Agreement, the KPB-IC Agreement shall govern. It is understood and agreed that this agreement compels the Host Society, on behalf of the Borough, to perform most functions required of the Borough in the KPB-IC Agreement.

2. Borough control: The Host Society agrees that the Kenai Peninsula Borough retains the right to override the decisions of the Host Society if necessary in the best interests for the conduct of the Games. The Host Society is responsible to and controlled by the Borough as provided in paragraph 2 of the KPB-IC Agreement.

3. Host Society Board of Directors: The Board of Directors of the Host Society shall include one member who is an Assembly member, the Chief Administrative Officer, or a department manager of the Borough. At least one member of the Committee and/or designee, resident in Alaska, shall be an ex officio member of the Board of Directors of the Host Society.

4. Funding: The Host Society shall be responsible for obtaining adequate funds and donations of services, materials and equipment to meet the budget forming part of the Borough's bid to the Committee, which was presented in January 2003.

5. Staging Cultural Program, Social Events and Sporting Displays: The Host Society, in conjunction with the Borough, shall stage as part of the 19th Arctic Winter Games, a program, acceptable to the Committee, which will include cultural events, exhibitions, social events, and sporting displays and shall present this program to the Committee for approval not later than October 1, 2005. The Host Society agrees to adhere to the hosting guidelines as outlined in the Committee's Staging Manual.

6. Reports: The Host Society shall provide to the Borough and the President of the Committee, on at least a quarterly basis, the following documents:

a. Copies of current financial reports including Balance Sheets, Revenue and Expense Statements, and Budget Forecasts.

b. Written reports to the Borough and the President of the Committee of its activities and problems experienced. Further the Host Society shall answer to any specific inquiries addressed to it by the Committee, so that the Committee will be sufficiently informed of the Host Society's progress and in a position to offer assistance where required.

7. Meetings with Host Society: The Host Society agrees to the following meeting requirements:

a. The Host Society shall meet with the Directors of the Committee at the Committee's Directors' request. In particular, it is anticipated that meetings will be convened during the fall of 2004, the spring and fall of 2005, and January of 2006. At the spring and fall meeting in 2005 the Committee will formally receive verbal and written reports from Host Society personnel including the Manager, Sports Coordinator, Cultural Coordinator, and Committee Chairs as requested by the Committee. The Committee may, in its discretion, decide not to convene certain anticipated meetings or alternately to delegate a sub-committee to meet with the Host Society.

b. The Host Society Manager, Sports Coordinator, and other appropriate personnel (either volunteer or staff) shall meet with the Chefs-de-Mission and Committee Technical Director at any meetings scheduled in advance of the Games by the Technical Director and shall attend all meetings convened by the Technical Director during each day of the Games.

c. The Host Society Manager, Cultural Coordinator, and other appropriate personnel shall meet with the Committee's Cultural Program Director and Chefs-de-Mission or their representatives at all meetings scheduled in advance of the Games and shall attend all meetings scheduled by the said Director during Games Week.

d. The Executive Committee or other group of the Host Society which will be responsible for directing, managing and coordinating the Games during Games Week shall include in its meetings and meet with the International Committee's Host Society Liaison Director for the purpose of enhancing overall communications between the two organizations.

2. Minutes: The Host Society shall keep minutes of all executive meetings and of any general meetings of its board. Although these minutes need not be verbatim, they shall be of sufficient detail to disclose the tenor of discussions on agenda items and not merely a record of the motions and resolutions presented at a given meeting. The Host Society shall provide to the Borough and all members of the Board of Directors of the Committee copies of the minutes of all meetings.

3. Liaison: The Host Society shall establish proper liaison with the Committee as required by the Borough and Committee, and specifically with any directors of the Committee designated by it to oversee specific functions. Further the Host Society shall ensure that liaison is established with the next Host Society hosting the 2008 Games.

4. Attendance at 18^th Arctic Winter Games: The Host Society agrees to send the Games Manager and such other representatives of the Borough and Host Society as it deems appropriate to the 18th Arctic Winter Games in 2004 to be staged in Regional Municipality of Wood Buffalo, Alberta, Canada, for the purpose of observing and studying the manner in which the Games are staged.

5. Facilities: The Host Society shall ensure that adequate facilities, in the opinion of the Committee, shall be provided for staging of all sports, awards presentations, ceremonies and cultural events and for the accommodation and dining of participants as are required.

a. Without limiting the generality of the foregoing, the Host Society shall take all necessary steps to ensure that all necessary educational, government or privately owned or operated facilities and equipment are obtained or made available for the 19th Arctic Winter Games. It is specifically understood that the Committee shall have final approval for all proposed sporting venues.

b. Without limiting the generality of the foregoing, the Host Society shall ensure that sufficient accommodation of acceptable standards in the opinion of the Committee shall be available to house the athletes, coaches, officials, and guests of the 19th Arctic Winter Games.

6. Ticket and Transportation Systems: The Host Society shall ensure that an adequate ticket or pass system and an adequate transportation system are established with a view to providing the athletes, coaches and officials:

� Free access to all sports venues;

� Free transportation from residences to all venues at the Games sites and return to the residences.

3. Records: The Host Society shall maintain adequate records of its business affairs and shall ensure that official and accurate sports records are maintained for the 19th Arctic Winter Games; and it shall turn over to the Committee within thirty (30) days of the conclusion of the 19th Arctic Winter Games such of its promotional material, computerized registration and results program, business and sports records as the Committee may require.

4. Accounting at Conclusion: The Host Society shall account to the Borough and Committee in accordance with generally accepted accounting principles for its revenue and expenses within one hundred eighty (180) days of the conclusion of the 19th Arctic Winter Games.

5. Manner of Conducting Games and Use of Logo: The Host Society shall ensure that the 19th Arctic Winter Games are staged in a dignified manner, and shall prevent any undue commercial or political exploitation thereof, and shall forthwith inform the Committee of any commercial or political exploitation thereof, or unauthorized reproduction of the name "Arctic Winter Games," the Arctic Winter Games Symbol, the Committee flag design, the Arctic Winter Games Committee "logo use" policy, or other Committee properties. The Arctic Winter Games International Committee Logo shall be the predominant logo of the Games, and its use shall be in compliance with the terms and conditions of the KPB-IC Agreement.

6. Exclusive Sporting Event: The Host Society shall ensure that the 19th Arctic Winter Games shall be operated as an independent event as required by the KPB-IC Agreement. Additionally, the Host Society shall ensure that the 19^th Arctic Winter Games shall not include a State, Regional or National championship in any sport, nor shall any kind of championship or other sport event be staged by or on the premises of the Borough, School District, or any Municipalities within or near the Borough area during the period of the Arctic Winter Games, except with the prior written approval of the Committee. The Host Society shall take all reasonable steps to prevent private organizations from conducting any such events during the period of the Arctic Winter Games.

7. Installation and Operation of Equipment: The Host Society shall ensure that all necessary personnel and logistical support are provided for the installation and operation of equipment used in sports competition and other events associated with the Arctic Winter Games.

8. Medals: The Committee shall provide sufficient gold, silver, and bronze Arctic Winter Games medals to the Host Society for awards in all of the sports listed in the technical package and may, in its discretion, provide medals for coaches, officials, and mission staff. The Committee shall submit an invoice for the cost of all medals to the Host Society, which shall be responsible for payment of same.

9. Catering Facilities and Menus: The Host Society shall ensure that there are adequate catering facilities to a standard acceptable to the Committee for feeding the athletes, coaches, officials, mission staff, and guests taking part in the Arctic Winter Games. Specifically, the Host Society shall make available a selection of a minimum of two (2) entrees at each evening meal and further specifically shall provide the Committee with a proposed menu not later than October 1, 2005.

10. Video Production: The Host Society shall cause to be produced within six (6) months of the closing of the 19th Arctic Winter Games, at its expense, a professionally produced video (CD, DVD, or VHS or other technology of similar or better quality) depicting the 19th Arctic Winter Games. The video shall be of such size, content, language, style, format, and distribution as is approved in writing by the Committee, and up to two thousand five hundred (2,500) copies, or such lesser quantity as it may specify, shall be delivered to the Committee free of charge.

11. Opening and Closing Ceremonies: The Host Society acknowledges the importance to the Games of the opening and closing ceremonies, and agrees to conduct the opening and closing ceremonies of the Games in accordance with the directions set out in paragraphs 19a - 19j of the KPB-IC Agreement.

12. Identification of Sports Venues: The Host Society shall ensure that each sports venue and other places associated with the Games are decorated and identified with flags, banners and signs, in accordance with the Arctic Winter Games Staging Manual, and shall attempt to have at every sporting venue a public address announcer who can introduce the competitors, announce results and make other public service announcements.

13. Special Guests: The Host Society agrees to satisfy the requirements in the KPB-IC Agreement, paragraph 21, regarding Special Guests on behalf of the Borough.

14. Hospitality Suites: In addition to reserving a hospitality suite for officials and a hospitality suite for mission staff, the Host Society shall reserve a lounge for coaches in the Athlete's Village or Villages.

15. Changes in Number of Participants, Guest Units and Sports: The Host Society recognizes and agrees that the Committee has reserved the right to change the number of athletes, coaches, mission staff, and guest units, and to select the sports and sports categories for the Games as set out in paragraphs 23(a), (b) and (c) of the KPB-IC Agreement.

16. Compliance with Proposal for Staging the 19^th Arctic Winter Games: Subject to the successful negotiation of contracts with the municipalities of Kenai, Soldotna, and Homer, as may be necessary, the Host Society warrants, covenants, and agrees that no substantial departure shall be made from the proposal for staging the 19th Arctic Winter Games in the Kenai Peninsula Borough and the Municipalities of Kenai, Soldotna, and Homer as represented to the Committee in the Borough proposal of January 2003, without first obtaining the consent of the Committee.

17. Hotel Accommodations and Car Rentals for the Committee: For all meetings with the Host Society and or the Kenai Peninsula Borough and the Municipalities of Kenai, Soldotna, and Homer, the Host Society will be responsible for hotel accommodations and transportation in the community for the Committee. For the Games, hotel accommodations and car rentals will be provided for each Committee member four days prior to the start of the Games and for the duration of the Games.

18. Capital Requirements: The Host Society shall take all reasonable steps necessary to ensure compliance with the capital requirements contained in paragraph 26 of the KPB-IC Agreement.

19. Transportation Contingency Plan: The Host Society will develop and submit to the Committee a transportation contingency plan for athletes competing in Alpine Skiing and Snowboarding in the event weather or other conditions require that they stay at the venue overnight.

20. Advance Committee Approval Required: Where in this agreement anything must be done to the satisfaction of the Committee or requires the approval of the Committee, the Host Society shall not proceed with or implement that thing without first fully apprising the Committee in that respect and obtaining the approval of the Committee.

21. Communications with Borough and Committee:

a. Generally, the Host Society shall ensure that the Borough and the Committee are fully informed, through its President, of all aspects of the preparation for and staging of the 19th Arctic Winter Games and shall take all necessary steps to communicate adequately with the Borough and President of the Committee and/or his designee to achieve this end.

b. All official correspondence may be done via email or facsimile where possible.

22. General Manager, Sports Coordinator and Coordinator of Culture: The Host Society shall employ, at its expense, a full time General Manager for the 19th Games, commencing on or before December 15^th, 2003; and further, shall employ a full time Sports Coordinator for the 19^th Arctic Winter Games, commencing at least twenty four (24) months prior to the Games; and further shall employ a full time Coordinator of Culture commencing at least twelve (12) months prior to the Games. The Host Society agrees to replace forthwith the General Manager, the Sports Coordinator, and/or the Coordinator of Culture upon notice in writing from the President of the Committee or from the Borough, wherein just cause for termination has been provided in accord with common law and other relevant law.

23. Television Coverage: The Host Society agrees to arrange for television coverage of the 19th Arctic Winter Games to include and ensure the widest possible coverage in Alaska, Greenland, Nunavik, Nunavut, Northwest Territories, and Yukon. The Committee will appoint a representative to the Host Society group responsible for negotiating these arrangements and will retain final approval authority on all broadcast agreements.

24. Final Report: Upon conclusion of the Games, the Host Society agrees to prepare a Comprehensive Final Report evaluating the Games with a view to same being a resource for future host societies within sixty (60) days of the conclusion of the Games and to provide copies of the said report to each member of the Board of Directors on the Arctic Winter Games International Committee and to the Borough.

25. Assignability. The Host Society shall not assign any interest in this agreement and shall not transfer any interest in the same (whether by assignment or novation) without the prior written consent of the Borough thereto.

26. Interest of Host Society. The Host Society covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. The Host Society further covenants that in the performance of this Agreement no person having any such interest shall be employed.

27. Defense and Indemnification. The Host Society shall indemnify, defend, save and hold the Borough, its elected and appointed officers, agents and employees, harmless from any and all claims, demands, suits, or liability of any nature, kind or character including costs, expenses, and attorneys fees resulting from the Host Society or the Host Society's officers, agents, employees, partners, attorneys, suppliers, and subconsultants' performance or failure to perform this Agreement in any way whatsoever. This includes but is not limited to claims for (1) personal injuries, (2) death, (3) economic loss, (4) property damages, whether tangible or intangible, (5) contract violations, (6) violation of statutes, ordinances, constitutions, rules or regulations, or other laws, (7) or any other kind of loss sustained by any person, or property arising from Consultant's performance or failure to perform under this Agreement. This defense and indemnification responsibility includes claims alleging acts or omissions by the Borough or its agents that are said to have contributed to the losses, failure, violations, or damage. However, the Host Society shall not be responsible for any damages or claim arising from the sole negligence or willful misconduct of the Borough, its agents, or employees.

28. Permits, Laws and Taxes. The Host Society shall acquire and maintain in good standing all permits, licenses and other entitlements necessary to the performance under this Agreement. All actions taken by the Host Society under this Agreement shall comply with all applicable federal, state, and local regulations including, but not limited to, those laws related to wages, taxes, social security, workers compensation, nondiscrimination, licenses, and registration requirements. The Host Society shall pay all taxes pertaining to its performance under this Agreement.

29. Insurance. The Host Society and all subcontractors, if any, shall be responsible for the purchase and maintenance of minimum insurance coverage as specified in paragraphs A and B of this section. This insurance coverage shall be in acceptable form, for the amounts described below, and shall remain in effect for the life of this Agreement. This insurance shall be primary and exclusive of any other insurance carried by the Borough.

A. Commercial General Liability insurance shall not be less than $250,000 per occurrence.

B. Commercial Auto Liability insurance shall not be less than $250,000 combined single limit bodily injury and property damage per occurrence.

C. Event insurance in an amount acceptable to the Borough and International Committee, to be obtained for the Arctic Winter Games event. The Host Society shall not be required to obtain this coverage until it is available, but in any event not more than one year before the games are staged.

D. Worker's compensation and employers liability insurance shall be provided for all Host Society employees performing work under this Agreement, in the amount required by Alaska statutes.

E. Directors and officers insurance.

F. Certificate(s) of insurance as described in paragraphs A, B, C and D of this section shall be provided by the Host Society, and certificates as described in paragraphs A and B by all subcontractors, or their insurance companies or their agents. The Borough shall be named as an additional insured on the policies specified in paragraph A, B and C for the work specified in this Agreement. Certificates of insurance, acceptable in form and content, will be delivered upon request to:

Kenai Peninsula Borough

Risk Management

144 N. Binkley Street

Soldotna, AK 99669

G. There shall be no cancellation or material change of the insurance coverage, or intent not to renew the insurance coverage as specified in this Agreement, without thirty (30) days prior written notice to the Borough. Notice of cancellation, material change in coverage, or intent not to renew will be delivered to the address designated in paragraph F of this section. Cancellation or material change in insurance coverage without written authorization by the Borough is a material breach of this Agreement. Upon renewal or change in policies during this Agreement, certificates of insurance shall be delivered to the address designated in paragraph F of this section.

H. All policies will include a waiver of subrogation against the Borough. The Borough will not accept a tender of defense alleging bad faith.

ARTICLE THREE

BOROUGH REQUIREMENTS

1. Liability Insurance: The Borough agrees to either extend its comprehensive general and liability insurance coverage to the Host Society or otherwise obtain comprehensive general and auto liability insurance for the Host Society as excess coverage for a value acceptable to the Committee and to have same in place for coverage during the 19^th Arctic Winter Games. Coverage obtained by the borough shall exclude event coverage for the 19^th Arctic Winter Games, unless otherwise agreed upon in writing by the parties to this agreement.

9. Board Members: The Borough agrees to provide personnel as required by the KPB-IC Agreement to serve as members of the Host Society board of directors.

ARTICLE FOUR

MUTUAL PROVISIONS

1. Agreements with Third Parties: The Borough and Host Society shall mutually cooperate in negotiating and entering agreements with third parties as may be necessary to prepare for and stage the 19^th Arctic Winter Games. It is anticipated that such third parties shall include without limitation the cities of Soldotna, Kenai and Homer for the successful staging of the Games.

2. Modifications: The parties may mutually agree to modify the terms of this agreement. Modifications to this agreement shall be incorporated into this agreement by written amendments signed by both parties.

3. Jurisdiction; Choice of Law: Any civil action arising from this Agreement shall be brought in the superior court for the third judicial district of the state of Alaska at Kenai. The law of the state of Alaska shall govern the rights and obligations of the parties.

4. Non-Waiver: The failure of the Borough at any time to enforce a provision of this Agreement shall in no way constitute a waiver of the provisions, nor in any way affect the validity of this Agreement or any part thereof, or the right of the Borough thereafter to enforce each and every protection hereof.

5. Agreement Administration:

A. The Borough Mayor, or his designee, will be the representative of the Borough administering this Agreement.

B. The services to be furnished by the Host Society shall be administered, supervised, and directed by the Host Society President or other party designated by the Host Society Board of Directors. In the event that the individual named above or any of the individuals identified in the proposal to perform work under this Agreement is unable to serve for any reason, the Host Society shall appoint a successor in interest subject to written approval of the Borough.

6. Integration. This instrument and all appendices, amendments hereto and documents incorporated by reference, embody the entire agreement of the parties. There are no promises, terms, conditions, or obligations other than those contained herein; and this Agreement shall supersede all previous communications, representations, or agreements, either oral or written, between the parties.

7. Interpretation and Enforcement. This Agreement is being executed by the parties following negotiations between them. It shall be construed according to the fair intent of the language as a whole, not for or against any party. The titles of sections in this Agreement are not to be construed as limitations or definitions but are for identification purposes only.

8. Relationship of the Parties. The services to be rendered under this Agreement are those of an independent contractor. The Host Society will not at any time directly or indirectly act as an agent, servant or employee of the Borough or make any commitments or incur any liabilities on behalf of the Borough without the Borough's express consent.

9. Severability. If any section or clause of this Agreement is held invalid by a court of competent jurisdiction, or is otherwise invalid under the law, the remainder of this Agreement shall remain in full force and effect.

10. Notices. Any notice required pertaining to the subject matter of this Agreement shall be personally delivered or mailed by prepaid first-class, registered or certified mail to the following addresses:

Kenai Peninsula Borough: Borough Mayor

144 N. Binkley Street

Soldotna, AK 99669

Host Society: President

P.O. Box 1659

Soldotna, AK 99669

The parties do hereby execute this agreement on the date(s) set forth below:

KENAI PENINSULA BOROUGH HOST SOCIETY

___________________________________ __________________________________

Signature Signature

By: Dale Bagley By: Dave Carey

Its: Mayor Its: Vice-President

Dated: Dated:

ATTEST: APPROVED AS TO FORM AND

LEGAL SUFFICIENCY BY:

Borough Clerk Borough Attorney

ACKNOWLEDGMENTS

STATE OF ALASKA )

) ss.

THIRD JUDICIAL DISTRICT )

The foregoing instrument was acknowledged before me this ____ day of , 2003, by Dale Bagley, Mayor of the Kenai Peninsula Borough, an Alaska municipal corporation, for and on behalf of the corporation.

_________________________________

Notary Public for State of Alaska

My Commission Expires: __________

STATE OF ALASKA )

) ss.

THIRD JUDICIAL DISTRICT )

The foregoing instrument was acknowledged before me this ____ day of , 2003, by Dave Carey, Vice President of the Kenai Peninsula Arctic Winter Games 2006 Host Society, for and on behalf of the corporation.

_________________________________

Notary Public for State of Alaska

My Commission Expires: __________