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Tools & Programs: SEP-15

Texas Toll Roads Statewide Open-Road Toll Collection System Project (TX Toll Collection System)

Comprehensive Development Agreement TxDot Statewide Open-Road Toll Collection System

SECTION 11. WARRANTIES

11.1 Warranties

11.1.1 Warranty

(a) Developer warrants that (a) all design, installation, integration and maintenance Work furnished pursuant to the Contract Documents shall conform to all professional engineering principles generally accepted as standards of the industry in the State, (b) the Project shall be free of defects, including design Errors, except to the extent that such defects are inherent in prescriptive specifications included in the Contract Documents, (c) the Project shall be fit for use for the intended function, (d) materials, equipment, software and hardware furnished under the Contract Documents shall be of good quality and new, and (e) the Work shall meet all of the requirements of, and perform in accordance with, the Contract Documents.

(b) Developer warrants (i) that all Software shall be prepared in a workmanlike manner and with professional diligence and skill, (ii) that all Software will function on the machines and with operating systems for which they are designed, and (iii) that all Software will conform to the specifications and functions set forth in the Technical Provisions and Project Segment Supplements relating thereto.

11.1.2 Warranty Term

The Warranty term for each Pilot System and/or Project Segment shall commence upon the applicable Final Acceptance thereof. Subject to extension under Section 11.2, the Warranties shall remain in effect until one year after the Final Acceptance Date for such element. The Warranty term for elements of the Project that will be owned by Persons other than TxDOT (such as Utility Owners) shall commence as of the date of acceptance thereof by such Persons and shall end one year thereafter If TxDOT determines that any of the Work has not met the standards set forth in this Section 11.1 at any time within the Warranty period, then Developer shall correct such Work as specified below, even if the performance of such corrective work extends beyond the stated warranty period. The Pilot System Prices and all Project Segment Prices are deemed to include full compensation to Developer for all warranty obligations hereunder.

11.1.3 Remedy

Within 7 Days of receipt by Developer of notice from TxDOT specifying a failure of any of the Work to satisfy the Warranties or of the failure of any Subcontractor representation, warranty, guarantee or obligation which Developer is responsible to enforce, Developer and TxDOT shall mutually agree when and how Developer shall remedy such violation; provided, however, that in case of an emergency requiring immediate curative action, Developer shall implement such action as it deems necessary and shall notify TxDOT in writing of the urgency of a decision. Developer and TxDOT shall promptly meet in order to agree on a remedy. If Developer does not use its best efforts to proceed to effectuate such remedy within the agreed time, or should Developer and TxDOT fail to reach such an agreement within such 7 Day period (or immediately in the case of emergency conditions), TxDOT shall have the right, but not the obligation, to perform or have performed by third parties the necessary remedy, and the costs thereof shall be borne by Developer. Alternatively, TxDOT may deduct the amount of such costs and expenses from any sums owed by TxDOT to Developer pursuant to this Agreement and/or from any letter of credit then held by TxDOT. TxDOT may agree to accept Nonconforming Work in accordance with Section 5.6.2.

11.1.4 Permits and Costs

Developer shall be responsible for obtaining any required encroachment permits and required consents from any other Persons in connection with Warranty Work. Developer shall bear all costs of Warranty Work, including additional testing and inspections, Developer shall reimburse TxDOT or pay TxDOT's expenses made necessary thereby including any costs incurred by TxDOT for independent quality assurance and/or quality control with respect to the Warranty Work within 10 Days after Developer's receipt of invoices therefore (including, subject to the limitations in Section 17.6, any lost revenue arising from or relating to such Warranty Work). Alternatively, TxDOT may deduct the amount of such costs and expenses from any sums owed by TxDOT to Developer pursuant to this Agreement and/or from any letter of credit then held by TxDOT.

11.2 Applicability of Warranties to Re-Done Work

11.2.1 Original Warranty Work

The Warranties shall apply to all Work re-done, repaired, corrected or replaced pursuant to the terms of this Agreement. The Warranties as to each re-done, repaired, corrected or replaced element of the Work shall extend beyond the original warranty period if necessary to provide at least a one year warranty period regarding all elements of the Project, following acceptance by TxDOT of the re-done, repaired, corrected or replaced Work.

11.2.2 Maintenance Warranty Work

The Warranties shall also apply to all Work re-done, repaired, corrected or replaced by Developer in the performance of its obligation to maintain the Pilot Systems and Project Segments during their respective Maintenance Terms, as the same may be extended by any Maintenance Options. The Warranties as to each such re-done, repaired, corrected or replaced element of the Work during the Maintenance Term shall remain in effect until one year after acceptance by TxDOT of such element of the Work.

11.3 Subcontractor Warranties

11.3.1 Warranty Requirements

Without in any way derogating the Warranties and Developer's own representations and warranties and other obligations with respect to all of the Work, Developer shall obtain from all Subcontractors and cause to be extended to TxDOT, for periods at least coterminous with the Warranties, appropriate representations, warranties, guarantees and obligations with respect to design, installation, integration, materials, workmanship, equipment, tools and supplies furnished by such Subcontractors. All representations, warranties, guarantees and obligations of Subcontractors (a) shall be written so as to survive all TxDOT inspections, tests and approvals, and (b) shall run directly to and be enforceable by Developer and/or TxDOT and their respective successors and assigns. Developer hereby assigns to TxDOT all of Developer's rights and interest in all extended warranties for periods exceeding the applicable Warranty period which are received by Developer from any of its Subcontractors. To the extent that any Subcontractor warranty or guaranty would be voided by reason of Developer's negligence in incorporating material or equipment into the work, Developer shall be responsible for correcting such defect.

11.3.2 Enforcement

Upon receipt from TxDOT of notice of a failure of any of the Work to satisfy any Subcontractor warranty, representation, guarantee or obligation, Developer shall enforce or perform any such representation, warranty, guaranty or obligation, in addition to Developer's other obligations hereunder. TxDOT's rights under this Section 11.3.2 shall commence at the time such representation, warranty, guaranty or obligation is furnished and shall continue until the expiration of Developer's relevant Warranty (including extensions thereof under Section 11.2). Until such expiration, the cost of any equipment, Hardware, Software, material, labor (including re-engineering) or shipping shall be for the account of Developer if such cost is covered by such a representation, warranty, guaranty or obligation and Developer shall be required to replace or repair defective equipment, material or workmanship furnished by Subcontractors. The foregoing provisions concerning Subcontractor warranties are intended to provide TxDOT with an additional Person and source in which to seek recourse if Work fails to meet the requirements of the Contract Documents. In no event shall the foregoing provisions be interpreted to modify, limit, discharge, release, negate or waive the Warranties or Developer's obligations with respect to the Work, and Developer shall not be entitled to use the existence of Subcontractor warranties as a defense to Developer's obligations under this Agreement and the other Contract Documents.

11.4 No Limitation of Liability

Subject to Section 17.6, the foregoing Warranties and Subcontractor warranties are in addition to all rights and remedies available under the Contract Documents or applicable Law or in equity, and shall not limit Developer's liability or responsibility imposed by the Contract Documents or applicable Law or in equity with respect to the Work, including liability for design defects, latent construction defects, strict liability, breach, negligence, willful misconduct or fraud; provided, however, that upon expiration of the Warranties, Developer shall have no further liability hereunder for patent construction defects.

11.5 Damages for Breach of Warranty

Subject to Section 17.6 and in addition to TxDOT's other rights and remedies hereunder, at law or in equity, Developer shall be liable for actual damages resulting from any breach of an express or implied warranty or any defect in the Work, including the cost of performance of such obligations by others.

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Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000
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