ECONOLITE TRAFFIC ENGINEERING 1 -2005

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, , 3. TERM This Agreement shall commence on September I, 2005 and terminate on August 31, 2008, unless terminated earlier in accordance with Section 12, below. The term ofthis Agreement may be extended for two successive one-year terms, upon the mutual written agreement of the parties. The maximum rate increase for each successive term shall be I.) the percentage increase which occurred in the Consumer Price Index (CPI) (All Items, Base 1982- 84= 100) as published by the United States Department of Labor Bureau of Labor Statistics, for All Consumers for the Los Angeles, Riverside, Orange County, CA Metropolitan Statistical Area during the preceding two (2) year period, or 2.) five percent (5%), whichever is lowest. 4. INDEPENDENT CONTRACTOR Contractor shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Contractor performs the services which are the subject matter of this Agreement; however, the services to be provided by Contractor shall be provided in a manner consistent with all applicable standards and regulations governing such services. Contractor shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. PERFORMANCE PROVISIONS If Contractor should neglect to prosecute the work properly, or fail to perform any provisions of this Agreement, three (3) days after delivery of written notice to the Contractor, City may, without prejudice to any other remedy it may have, make good such deficiencies and may deduct the cost thereof from the payment then or thereafter due the Contractor; provided, however, that the Executive Director of the Public Works Agency shall approve such action and certify the amount thereof to be charged to the Contractor. 6. LABOR STRIKE It is the responsibility of the Contractor to provide continuous maintenance services under this Agreement, without interruption, of traffic signal, street lighting and communication facilities in the City. In case of any labor strikes, the Contractor shall provide other means, at its own costs, to provide comparable continuous services as if there were no strike. Failing to do so will cause the City to take whatever action is deemed necessary to provide such service and the cost will be borne by the Contractor. 7. INSURANCE Prior to undertaking performance of work under this Agreement, Contractor shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: 2