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Mr. Steve Sarkozy, City Manager August 29, 2000 Page 4 COMPENSATION For Basic Services rendered, the Owner, agrees to compensate the Architect monthly on the basis of a multiple of two and one-half (2.5) times Direct Personnel Expense to an estimated professional fee of Sixty Thousand Dollars ($60,000.00) plus Reimbursable Charges at cost for expenses incurred by the Architect, the Architect's employees and consultants in the interest of the Project. Reimbursable Charges are in addition to the compensation for Basic Services and are estimated to be $3,000. Direct Personnel Expense is defined as the direct salaries of all the personnel engaged on the Project and the cost of mandatory and customary contributions and benefits. Reimbursable Charges include the costs of travel expenses; long-distance communications; reproduction and mailing; data processing; automated drafting; photographic production techniques; and any state or local taxes imposed on services by the Architect for the Project. Payments for professional services rendered and for Reimbursable Charges shall be made monthly upon presentation of the Architect's invoices. Payments due the Architect under this Agreement will include a service charge of one and one-half percent (1.5%) per month or the maximum permissible by applicable law, whichever is less, on any amount not paid within thirty (30) days after the date of an invoice. Compensation for services shall be subject to adjustment if the scope of work changes substantially or the duration of the Project extends beyond sixteen weeks from commencement of the project. OTHER TERMS AND CONDITIONS This Agreement shall be governed by Minnesota Law. The Owner shall provide all necessary information for this Project, and the Architect shall be entitled to rely on the accuracy and completeness of such information. The Owner shall designate in writing a representative authorized to act in the Owner's behalf, and shall furnish required information, approvals and decisions as expeditiously as necessary for the orderly progress of the Architect's services. For the purposes of this Agreement, the Owner's designated representative is Mr. Steve Sarkozy. Because of factors beyond the control of the Architect and the Owner, any bid amounts, negotiated construction costs or other costs may vary from estimates or evaluations which the Architect may prepare. Accordingly, the Architect does not warrant such estimates or evaluations. This Agreement may be terminated by either party upon seven (7) days' written notice should the other party fail substantially to perform in accordance with its terms through no fault of the party initiating the termination. In the event of termination not the fault of the - .