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ARTICLE III - Engineering <br />1. "Preliminary engineering" as used herein includes all preliminary work related to the project, <br />including, but not restricted to preliminary surveys and reports, laboratory work, soil <br />investigations, preparation of plans, designs, and advertising. "Construction engineering" as <br />used herein includes actual inspection and supervision of construction work, construction <br />staking, laboratory and field testing, field reports and records, estimates, final reports, and <br />allowable expenses of employees engaged in such activities. <br />2. Preliminary and construction engineering costs included in the estimate contained in Exhibit <br />A are eligible project costs. STATE reimbursement to LOCAL AGENCY will be on the basis <br />of the actual cost thereof to LOCAL AGENCY including compensation and expense of <br />personnel working on the project, required materials, and automotive expense provided, <br />however, that LOCAL AGENCY shall contribute its general administrative and overhead <br />expense. <br />ARTICLE IV - Miscellaneous Provisions <br />1. If STATE is named as a defendant in any suit arising from the construction, maintenance or <br />operation of the project, LOCAL AGENCY will, at request of STATE, assume full <br />responsibility for the conduct of the defense or will provide such assistance as STATE will <br />require, and will pay any judgments issued against STATE and all costs in connection with <br />the defense. STATE reserves the right to represent itself in any litigation in which STATE's <br />interests are at stake. <br />2. LOCAL AGENCY shall maintain an accurate and detailed record of costs for this project. <br />Such records shall be retained and made available to STATE's auditors for examination for <br />minimum period of three years from date of final payment of expenditures from Bicycle <br />Transportation Account. <br />3. Upon acceptance of the completed project by the awarding authority, or upon the contractor's <br />being relieved of the duty of maintaining and protecting certain portions of the work, LOCAL <br />AGENCY shall assume responsibility for maintaining the project. <br />4. Minor changes may be made in the project as described in Exhibit A upon notice to STATE. <br />No major change, however, may be made in said project except pursuant to an amendment to <br />this agreement duly executed by STATE and LOCAL AGENCY. <br />5. LOCAL AGENCY shall certify CEQA compliance or documentation of Categorical <br />Exemption determination as defined in Title 14 of the State Administrative Code -Department <br />of Resources guidelines. <br />6. Nothing in the provisions of this agreement is intended to create duties or obligations to or <br />rights in third parties not parties to this agreement or affect the legal liability of either party to <br />this agreement by imposing any standard of care different than the standard of care imposed <br />by law. <br />7. It is understood and agreed that neither the STATE nor any of its officers or employees is <br />responsible for any damage or liability occurring by reason of anything done or omitted to be <br />done in connection with the project. It is understood and agreed that pursuant to Government <br />Code section 895.4 LOCAL AGENCY shall defend, indemnify and save harmless the <br />STATE, all officers and employees from all claims, suits or actions of every name, kind and <br />description brought forth, or on account of, injuries to or death of any person including but <br />