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. CONTRACTOR shall not include the cost of any State tax exempted by the Act in . his pay estimates or monthly statements, nor shall DISTRICT pay for any such tax which the CONTRACTOR may pay as a result of failure to apply for, or use, a tax exempt certificate. D. Additional Withholding of Pay Estimates or Monthly Statements . . The DISTRICT may, at its sole discretion, withhold sums from progress payment money due the CONTRACTOR. Such withholding can be made for, but is not limited to, any of the following described reasons; and whenever the reasons for such withholding no longer exist, the DISTRICT will make payment of the sums withheld. . 1. FAILURE TO REPAIR, REPLACE OR REDO DEFECTIVE WORK. If, within three (3) business days after being notified by DISTRICT, CONTRACTOR has not begun to repair, replace or redo defective work the DISTRICT may retain as much money as it believes necessary to insure that the defective work is repaired, replaced, or properly redone. . 2. CLAIMS AGAINST THE CONTRACTOR OR DISTRICT. If claims in connection with the work have been filed against the CONTRACTOR OR DISTRICT, the DISTRICT will withhold sufficient sums to satisfy such claims in accordance with applicable law. . 3. FAILURE TO OBTAIN PERMITS AND LICENSES. Should the CONTRACTOR fail to satisfy all requirements for licensing and fail to satisfy all requirements for permits, the DISTRICT may withhold all or parts of progress payments. . 4. F AlLURE TO COMPLY WITH APPLICABLE LAWS. The DISTRICT may withhold all or parts of progress payments if the CONTRACTOR has failed to comply with all applicable laws, ordinances, rules, and regulations. 5. FAILURE TO MAINTAIN AN ADEQUATE RATE OF PROGRESS. . 6. FAILURE TO SATISFACTORILY REPLACE AND/OR REPAIR PUBLIC AND/OR PRIVATE PROPERTY DESTROYED OR DAMAGED DURING THE PROGRESS OF THE WORK. Applicable to all damages and destruction caused in part or in total by CONTRACTOR, his employees, agents and subcontractors. . . 13