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4. It is understood that all engineering projects may only be initiated by <br />THE CITY. THE ENGINEER agrees to work on a budget basis for the <br />preliminary study phase of engineering projects even though the <br />project eventually may be completed on a fee basis. The preliminary <br />study fee in this case shall be fully credited to the final fee. Any phase <br />of a project may be initiated by THE CITY. <br />5. It is understood that special meetings with City Officials and Staff or <br />City Council meetings attended in conjunction with project shall be <br />included in the fees for those projects. THE ENGINEER shall furnish <br />a representative to attend other City Council meetings at the request <br />of THE CITY at no additional cost. <br />6. The hourly rates listed in Schedule B are for 2004 and 2005. Starting <br />January 1, 2006 and each January 1St, thereafter, rates will be <br />increased at a rate of three (3) percent per year. <br />7. The provisions of this Agreement are severable. If any portion hereof <br />is, for any reason, held by a Court of competent jurisdiction, to be <br />contrary to law, such decision shall not affect the remaining provisions <br />of the Agreement. <br />8. THE ENGINEER shall promptly notify THE CITY if it or its principals <br />secure any interest in any real estate or development proposals or <br />accepts a contract with any client owning real estate or having a <br />development proposal in the City of Little Canada. <br />9. THE ENGINEER shall allow THE CITY, or its duly authorized agent, <br />reasonable access to such of THE ENGINEER'S books and records, <br />documents, accounting procedures and practices as are pertinent to <br />all services provided under this Agreement. <br />10. THE ENGINEER is an independent contractor. No employee of THE <br />ENGINEER and no other persons employed by THE ENGINEER in <br />the performance of its activities as provided for under this Agreement <br />shall be considered employees of THE CITY. No employees of THE <br />CITY or no other persons employed by THE CITY in the performance <br />of its activities as provided for under this Agreement shall be <br />considered employees of THE ENGINEER. <br />11. This Agreement may be amended by mutual written agreement of the <br />parties hereto. <br />12. THE ENGINEER shall indemnify, defend, and hold harmless THE <br />CITY, and all of its officers, employees, elected officials, and agents <br />from and against any and all costs, suits, liability, penalties, damages, <br />demands, expenses, and claims of damages, including reasonable <br />attorneys' fees, which may arise by reason of any act, negligent or <br />otherwise, done by THE ENGINEER arising out of or relating to this <br />- 1 2 - <br />