GORDON & WILLIAMS, INC. 1 - 2002

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ARTICLE 7 PROGRESS PAYMENTS 7.1 Payments shall be made by the City to the Program Manager for disbursement to Contractors according to the following procedure: 7.2 The City shall make progress payments monthly as the work proceeds. The Program Manager shall furnish a summary breakdown of the total Project Budget, in a format acceptable to the City, showing the amount included therein for each principal category of the work, in such detail as requested, to provide a basis for determining progress payments. 7.3 Unless otherwise provided in the Project Documents, payments shall be made on account of materials and equipment delivered and suitably stored at the site for subsequent incorporation in the work. If approved in advance by the City, payment may similazly be made for materials and equipment suitably stored off the site at a location agreed upon in writing. Payment to Contractors and suppliers for materials and equipment stored on or off the site shall be conditioned upon compliance with procedures satisfactory to the City to establish the City's title to such materials and equipment or otherwise protect the City's interest, and shall include applicable insurance, storage and transportation to the site for such materials and equipment stored off the site. 7.4 Program Manager shall submit to The City its draft request for payment on or about the 25`h day of each month estimating the percentage of completion of each category in the breakdown of the Project Budget as referred to in Article 3 for approval by the City. The Designated City Representative shall review the Program Manager's request for payment and shall inform the Program Manager of any reasons why such request is not suitable for payment, if any. Prior to the submittal to the City, the City will review the requested percentage of completion for each activity. Provided the request is in proper form, the Program Manager shall submit the request to the City. The payment request will be in the format as provided by the City and will refer to the schedule. In the event of any difference between the City's estimate and Program Manager's estimate of completion of a breakdown item, the City's judgment shall prevail. 7.5 Upon receipt of a payment request, the City shall: Review that request promptly for the purpose of determining if the payment request is a proper payment request; and, 2. Return any payment request determined not to be a proper request suitable for payment to Program Manager as soon as practicable, but not later than seven (7) days after receipt. The returned request for payment shall be accompanied by a document setting forth in writing the reasons why the payment request is not proper. 7.6 Any progress payment which is undisputed and properly submitted shall be paid within thirty (30) days of submission. If not so paid, the amount unpaid shall accrue interest to Program Manager equivalent to the legal rate set forth in subdivision (a) of Section 685.010 of the California Code of Civil Procedure. The number of days available to the City to make a payment without