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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 12. PAYMENT FOR SERVICES

12.1 Price

12.1.1 Pilot System Price

As full compensation for the Work and all other obligations to be performed by Developer under the Contract Documents with respect to the Pilot Systems, TxDOT shall pay to Developer the lump sum amounts set forth in Exhibit U-1 (each a "Pilot System Price"). The term "Pilot System Price" as used herein shall be subject to adjustment from time to time to account for Change Orders. The Pilot System Prices shall be increased or decreased only by a Change Order issued in accordance with Section 13 or by an Agreement amendment. The Pilot System Prices shall be paid in accordance with Section 12.2. Notwithstanding the foregoing, should TxDOT identify any alternative Pilot System, the Pilot System Price for such Pilot System(s) shall be determined pursuant to the procedures applicable to determining Project Segment Prices as set forth in Section 2.1.1.2 and Section 2.1.1.3 .

12.1.2 Project Segment Prices

12.1.2.1 Hypothetical Project Segment Scenarios

Exhibit U-2 sets forth the lump sum and unit prices included in Developer's Price Proposal establishing prices for the Work that would be required to complete installation of a Pilot System in the Hypothetical Project Segment Scenarios described in Form K of the RFDP. The various lump sum and unit prices were based upon assumptions regarding the conceptual Project design and quantity estimates that would be required to complete the Work, as described in Exhibit U-2. The Parties agree that such lump sum and unit prices for each of the Hypothetical Project Segment Scenarios provide a reasonable framework for establishing the Project Segment Price for any Project Segment designated by TxDOT.

12.1.2.2 Determination of Project Segment Prices

TxDOT shall notify Developer of its intent to issue a Project Segment Supplement for a Project Segment as provided in Section 2.1.1.2, and the Project Segment Price for each Project Segment shall be determined pursuant to the guidelines and procedures set forth in Section 2.1.1.3.

12.1.3 Maintenance Prices

12.1.3.1 Pilot System Maintenance Prices

As full compensation for the Pilot System Maintenance Work for any Pilot System that TxDOT designates as a permanent installation, TxDOT shall pay Developer the lump sum annual Maintenance Price set forth in Exhibit U-3 (the "Pilot System Maintenance Price"). The Pilot System Maintenance Price shall be subject to annual price escalation in accordance with Section 12.1.4, below. Notwithstanding the foregoing, should TxDOT identify any alternative Pilot System, the Pilot System Maintenance Price for such Pilot System(s) shall be determined pursuant to the procedures applicable to determining Project Segment Maintenance Prices as set forth in Section 2.1.1.2 and Section 2.1.1.3.

12.1.3.2 Hypothetical Project Segments

Exhibit U-4 sets forth the lump sum and unit prices included in the Proposal establishing prices for the Maintenance Work that would be required to maintain the Hypothetical Project Segments. The various lump sum and unit prices were based upon assumptions regarding the conceptual Project design and quantity estimates that would be required to complete the Maintenance Work, as described in Exhibit U-4. The Parties agree that such lump sum and unit prices provide a reasonable framework for establishing the Project Segment Maintenance Prices.

12.1.3.3 Determination of Project Segment Maintenance Prices

Project Segment Maintenance Prices for any Project Segments shall be determined as provided in Section 2.1.1.4.

12.1.4 Escalation of Prices.

The Pilot System Maintenance Prices and the prices to be used for establishing the Project Segment Price and Pilot System Maintenance Price for any future Project Segment Supplements shall be adjusted annually commencing on the second anniversary of this Agreement to account for increases or decreases in the costs of labor and materials from the costs as of the Base Month. These adjustments will be made as specified in this Section 12.1.4, regardless of the actual variations in cost of labor and materials for such items, and shall be Developer's sole and exclusive remedy for Pilot System or Project Segment cost variations over the course of the Agreement. Developer agrees that the economic price adjustments pursuant to this Section 12.1.4 shall be the sole basis for adjusting the Pilot System Maintenance Prices, the Hypothetical Project Segment Scenario Prices and the Hypothetical Project Segment Scenario Maintenance Prices to reflect market conditions for purposes of determining the Pilot System Maintenance Prices, the Project Segment Prices and the Project Segment Maintenance Prices. Developer warrants that the prices contained in its Proposal do not include any contingency to cover anticipated increased costs of performance due to price inflation following the Base Month.

(a) Economic price adjustments shall be based on the following indices:

(i) Labor Amounts shall be adjusted in accordance with the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Installation Workers for the [Dallas "" Fort Worth] metropolitan area ("all items") as published by the U.S. Department of Labor, Bureau of Labor Statistics.

(ii) Material Amounts shall be adjusted in accordance with an index which shall be a composite of the Electrical Machinery Index (WPI 117) and the Metal and Metal Products Index (PPI 10), as published by the U.S. Bureau of Labor Statistics. The relative weights of those two indices in determining the composite index shall be calculated by Developer as a result of the average distribution of material prices in the above two index categories, subject to approval by TxDOT.

(b) Beginning with the second anniversary of this Agreement, the economic price adjustment shall be applied each year to the Hypothetical Project Segment Scenario Prices set forth in Exhibit U-2, the Pilot System Maintenance Prices set forth in Exhibit U-3 and the Hypothetical Project Segment Maintenance Prices set forth in Exhibit U-4. On or before each anniversary of this Agreement, commencing with the second anniversary, Developer shall deliver to TxDOT a statement showing the adjustment calculations, using a format approved by TxDOT. The adjustment shall be calculated by individually multiplying the original Project Segment Scenario Prices set forth in Exhibit U-2, the Pilot System Maintenance Prices set forth in Exhibit U-3 and the Hypothetical Project Segment Maintenance Prices set forth in Exhibit U-4, in each case, by a fraction, the numerator of which shall be the most recently published index as of the adjustment date and the denominator of which shall be the index for the month in which this Agreement is executed. Notwithstanding the foregoing, the cumulative amount of adjustment for each adjustment described in Section 12.1.2.2 above shall not exceed 5 % per year.

(c) In the event that any of the indices referenced in this Section ceases to be published, or the method of calculating the index is materially altered, TxDOT shall select another index to be used in place of the discontinued or altered index, or a method of adjusting the altered index. Any new index shall be comparable to the index which it replaces. Foreign (non-U.S.) indices and/or corrections for trading of currency shall not be eligible for use.

12.1.5 Items Included in Prices

Developer acknowledges and agrees that, subject only to Developer's rights under Section 13, each Price includes or will include (a) all designs, equipment, materials, Hardware, Software, labor, insurance, letter of credit and bond premiums, home office, jobsite and other overhead, profit and services relating to Developer's performance of its obligations under the Contract Documents (including all Work, equipment, Hardware, Software, supplies, materials, labor and services provided by Subcontractors and intellectual property rights necessary to perform the Work); (b) performance of each and every portion of the Work; (c) the cost of obtaining all Governmental Approvals (except as specified in Section 2.3.4); (d) all costs of compliance with and maintenance of the Governmental Approvals and compliance with Laws to the extent applicable to the Project; (e) payment of any taxes, duties, permit and other fees and/or royalties imposed with respect to the Work and any equipment, materials, labor or services included therein; and (f) compensation for all risks and contingencies assigned to Developer under the Contract Documents.

12.2 Invoicing and Payment

The following process shall apply to invoicing and payment:

12.2.1 Delivery of Draw Request

On or about the fifth business Day of each month, Developer shall deliver to TxDOT five copies of a Draw Request in the form attached hereto as Exhibit J and meeting all requirements specified herein except as otherwise approved in writing by TxDOT. Each Draw Request shall be executed by a designated and authorized representative of Developer appointed by Developer to have such authority in accordance with this Agreement. Developer acknowledges that TxDOT may obtain funding for portions of the Work from the federal government, local agencies and other third parties, and Developer agrees to segregate Draw Requests for all such Work in a format reasonably requested by TxDOT and with detail and information as reasonably requested by TxDOT. A separate Draw Request shall be required for each Pilot System and Project Segment. Each Draw Request shall be organized to account for applicable reimbursement requirements and to facilitate the reimbursement process.

12.2.2 Contents of Draw Request

Each Draw Request must contain the following items:

(a) Draw Request cover sheet;

(b) Monthly progress report for the applicable Pilot System or Project Segment as described in TP Section ____;

(c) Certification by the Developer that all Work which is the subject of the Draw Request fully complies with the requirements of the Contract Documents subject to any exceptions identified in the certification;

(d) Monthly report of personnel hours for the applicable Pilot System or Project Segment;

(e) Draw Request data sheet(s) and supporting documents, as required by TxDOT to support and substantiate the amount requested (based on quantities and unit prices for unit priced Work for each Pilot System and Project Segment), and based on time and materials for Time and Materials Change Orders for each Pilot System and Project Segment.

(f) DBE utilization report in a format reasonably satisfactory to TxDOT for the applicable Pilot System and Project Segment;

(g) Cash flow curves for the applicable Pilot System and Project Segment;

(h) An approved and updated Project Schedule for the applicable Pilot System and Project Segment; and

  • (i) Such other items as TxDOT reasonably requests.

In addition, no Draw Request shall be considered complete unless it: (1) describes in detail the status of completion as it relates to the Project Schedule for the applicable Pilot System and Project Segment; (2) sets forth in detail the related payments which are then due in accordance with the Project Schedule [for the applicable Pilot System and Project Segment, as of the end of the prior month; (3) in the case of amounts to be paid on a unit price basis, includes invoices, receipts or other evidence establishing the number of units delivered; (4) in the case of amounts invoiced on a time and materials basis, includes all supporting documentation described in Section 13.7; and (5) sets forth in detail the amounts paid to Subcontractors (including Suppliers and sub-subcontractors) from the payments made by TxDOT to Developer with respect to the prior month's Draw Request, including executed unconditional waivers of claims with respect to all amounts so paid.

12.2.3 Draw Request Cover Sheet Contents

The Draw Request cover sheet shall include the following:

(a) Project number and title;

(b) Pilot System or Project Segment number and title;

(c) Request number (numbered consecutively starting with "1");

(d) Total amount earned to date for the applicable Pilot System and Project Segment, as well as for the overall Project; and

(e) Authorized signature, title of signer, and date of signature.

12.2.4 Certification by QC/QA Personnel

Each Draw Request shall include a certificate in the form included in Exhibit J, certifying that:

(a) All Work, including that of designers, Subcontractors, including Suppliers and fabricators, which is the subject of the Draw Request has been checked and/or inspected by the Professional Services Quality Review Personnel (with respect to Professional Services) the Construction Quality Acceptance Personnel (with respect to construction Work) and the Maintenance Quality Acceptance Personnel (with respect to maintenance Work);

(b) Except as specifically noted in the certification, all Work which is the subject of the Draw Request conforms to the requirements of the Contract Documents, the Governmental Approvals and applicable Laws;

(c) The Professional Services Quality Program and the Construction Quality Program and all of the measures and procedures provided therein are functioning properly and are being followed in all respects; and

(d) The Professional Services percentages and construction percentages indicated are accurate and correct.

12.2.5 Report of Personnel Hours

With each Draw Request, Developer shall report the total monthly labor hours for design, construction and maintenance personnel used in connection with the Work which is the subject of the Draw Request.

12.2.6 Draw Request Data Sheets

Draw Request data sheets shall be subdivided into Developer-designated Project elements and shall be attached to a Project-wide report and Draw Request data sheet. It is TxDOT's intent to base payments on a mutually agreed estimate of percentage of Work completed for each Pilot System and Project Segment, not on measured quantities (except as expressly set forth in this Agreement), except that cost plus or unit price Change Order work or items to be paid from an allowance may be paid based upon measured quantities. Developer's designation of activities, phases and elements for each Pilot System and Project Segment and their representation on the applicable final approved Project Schedule(s) and the corrected monthly progress reports shall facilitate this basis of determining periodic payments. Where progress is measured by percentage complete and Days remaining, the percentage shall be calculated using Primavera P3. Developer shall present the format of the Draw Request data sheets for TxDOT approval at least 20 business days prior to the submittal of the first Draw Request. Once the Draw Request format has been approved by TxDOT, the format shall not change without TxDOT's prior written approval.

12.2.7 Payment by TxDOT

Within fifteen business days after TxDOT's receipt of a complete Draw Request, TxDOT will review the Draw Request and all attachments and certificates thereto for conformity with the requirements of the Contract Documents, and shall notify Developer of the amount approved for payment and the reason for disapproval of any remaining invoiced amounts or of any other information set forth in the Draw Request. Developer may include such disapproved amounts in the next month's Draw Request after correction of the deficiencies noted by TxDOT and satisfaction of the requirements of the Contract Documents related thereto. Within five business days after TxDOT's approval of a Draw Request, TxDOT shall pay Developer the amount of the Draw Request approved for payment less any applicable Retainage and less any amounts which TxDOT is otherwise entitled to withhold or deduct with respect to any Pilot System and/or Project Segment. In no event shall Developer be entitled to (a) payment for any activity related to a Pilot System or a Project Segment, as applicable, in excess of the value of the activity times the completion percentage of such activity (for non-unit priced Work), or (b) aggregate payments hereunder in excess of the overall completion percentage for the applicable Pilot TxDOT Statewide Open-Road Toll Collection System for such Pilot System or Project Segment, as applicable.

12.3 Deductions, Exclusions and Limitations on Payment

12.3.1 Retainage

12.3.1.1 On an individual Pilot System and Project Segment basis, TxDOT shall withhold funds (the "Retainage") from each payment for Work to be made to Developer as described in Section 12.2.7 until such time as System Acceptance of the applicable Pilot System or Project Segment is achieved, at which time TxDOT shall cease withholding Retainage as to the applicable Pilot System or Project Segment from future payments. The Retainage shall be an amount equal to 4% of the payment amount, after subtracting any amounts owing for Professional Services.

12.3.1.2 No portion of the Retainage shall be released with respect to an individual Pilot System or Project Segment unless and until all of the following conditions have been met: (a) neither Liquidated Damages nor Stipulated Damages as to such Pilot System or Project Segment shall then be payable to TxDOT; (b) Developer shall have established to TxDOT's reasonable satisfaction that neither Liquidated Damages nor Stipulated Damages as to such Pilot System or Project Segment are anticipated to be payable to TxDOT; (c) neither Liquidated Damages nor Stipulated Damages as to any other Pilot System or Project Segment shall then be payable to TxDOT; (d) Developer shall have established to TxDOT's reasonable satisfaction that neither Liquidated Damages nor Stipulated Damages as to any other Pilot System or Project Segment are anticipated to be payable to TxDOT with respect to the Work; (e) Developer shall have applied in writing for such release; (f) no Event of Default has occurred and no event has occurred that, with the passage of time or the giving of notice, would constitute an Event of Default; and (g) such release shall have been approved in writing by each Surety.

12.3.1.3 TxDOT agrees to release Retainage being withheld for Work performed by Subcontractors, on an individual Pilot System or Project Segment basis, upon receipt of application from Developer stating that the Subcontractor has completed all Work required to be performed under its Subcontract, stating the amount withheld by Developer under the Subcontract, and providing all backup information and stop notice and lien releases as may be required by TxDOT. TxDOT will process such applications once per fiscal quarter, with the first release to occur following completion of 50% of the Work on the applicable Pilot System or Project Segment to which such Subcontract relates.

12.3.1.4 Provided that Developer has satisfied the conditions set forth in Section 12.3.1.2 above, TxDOT agrees to release 50% of the Retainage then held by TxDOT with respect to a Pilot System or a Project Segment 30 Days after achievement of System Acceptance of such Pilot System or Project Segment, subject to the following terms and conditions. The amount to be released shall be reduced by 150% of the amounts estimated by TxDOT that are necessary to pay (a) amounts applied to the payment of Liquidated Damages and Stipulated Damages for that Pilot System or Project Segment plus any other Pilot System and Project Segment, (b) amounts applied to the payment of Losses incurred by TxDOT for which Developer is responsible with respect to any Pilot System and Project Segments, regardless of the source of the Retainage, (c) amounts that TxDOT deems advisable, in its sole discretion, to retain to cover any existing or threatened claims, Liens and stop notices from Subcontractors, laborers, Utility Owners or other third parties relating to the Project, and (d) the estimated cost of repairing any Nonconforming Work or otherwise remedying any breach of contract or warranty by Developer with respect to any Pilot System and Project Segments, regardless of the source of the Retainage.

12.3.1.5 TxDOT shall hold the remainder of the Retainage with respect to a Pilot System or Project Segment until the date the Final Payment of the Price relating to such Pilot System or Project Segment is due hereunder. At such time and provided that Developer has satisfied the conditions set forth in Section 12.3.1.2 above, TxDOT shall release to Developer all remaining Retainage other than 150% of the amounts estimated by TxDOT that are necessary to pay (a) amounts applied to the payment of Liquidated Damages and Stipulated Damages for that Pilot System or Project Segment plus any other Pilot System and Project Segment, (b) amounts applied to the payment of Losses incurred by TxDOT with respect to that Pilot System or Project Segment plus any other Pilot System and Project Segment for which Developer is responsible, (c) amounts that TxDOT deems advisable, in its sole discretion, to retain to cover any existing or threatened claims, Liens and stop notices from Subcontractors, laborers, Utility Owners or other third parties relating to the Project, and (d) the estimated cost of repairing any Nonconforming Work or otherwise remedying any breach of contract or warranty by Developer with respect to that Pilot System or Project Segment plus any other Pilot System and Project Segment. Final payment of such Retainage not applied to the matters identified above shall be made upon Developer's showing, to TxDOT's reasonable satisfaction, that all such matters have been resolved, including delivery to TxDOT of a certification representing that there are no outstanding claims of Developer or any claims, Liens or stop notices of any Subcontractor, laborer, Utility Owner or other third party with respect to the Work.

12.3.1.6 At any time prior to Developer's satisfaction of the conditions to the release of Final Payment of the Price with respect to a Pilot System or Project Segment, TxDOT may withdraw from the Retainage account and apply any funds withheld as Retainage to satisfy any of the items described in clauses (a)-(d) of Sections and 12.3.1.6. In such event, Developer shall, within 10 Days thereafter, replenish the Retainage by delivering to TxDOT sufficient funds to bring the total Retainage to the amount required hereunder.

12.3.1.7 Developer shall have the right to substitute a letter of credit for all or any portion of the Retainage, provided that the conditions set forth in Section 12.3.1.2 above have been satisfied and the letter of credit shall (a) be an unconditional, irrevocable direct pay letter of credit payable immediately upon presentation by TxDOT, issued by a Letter of Credit Bank, (b) be in the amount of 100% of the required Retainage amount, (c) be in a form approved by TxDOT, in its sole discretion, and (d) name TxDOT as the payee. In the event of a TxDOT draw on such letter of credit reducing the amount available to be drawn thereunder to compensate TxDOT for any of the items described in clauses (a)-(d) of Sections 12.3.1.5 and 12.3.1.6, within 10 Days thereafter, Developer shall cause the available amount of the letter of credit to be reinstated to the full amount of the Retainage required hereunder, or shall deliver to TxDOT sufficient funds to bring the total of the available amount under the letter of credit plus the Retainage funds held by TxDOT to an amount equaling the total Retainage required hereunder. Should a Letter of Credit Bank's credit rating fall below that required pursuant to Section 8.2, Developer shall provide substitute Letters of Credit from a financial institution meeting such requirements within 15 Days. Failure to provide such substitute, or to reinstate the available amount of the letter of credit after any draw as provided above, shall entitle TxDOT to draw the full amount of such existing Letter of Credit and hold the same as Retainage.

12.3.2 Deductions

In addition to the deductions provided for under Section 12.3.1, TxDOT may deduct from each progress payment and any Final Payment the following:

(a) Any TxDOT or third party Losses for which Developer is responsible hereunder or any Liquidated Damages or Stipulated Damages which have accrued as of the date of the application for payment or which are anticipated to accrue based on the System Acceptance, Punch List Acceptance and Final Acceptance dates shown in the current Project Schedule(s) for each Pilot System and Project Segment;

(b) If a notice to stop payment, claim or Lien is filed with TxDOT, due to the Developer's failure to pay for labor or materials used in the work, money due for such labor or materials will be withheld from payment to the Developer;

(c) Any sums expended by or owing to TxDOT as a result of Developer's failure to maintain the as-built drawings,

(d) Any sums expended by TxDOT in performing any of Developer's obligations under this Agreement which Developer has failed to perform, and

(e) Any other sums which TxDOT is entitled to recover from Developer under the terms of this Agreement.

The failure by TxDOT to deduct any of these sums from a progress payment shall not constitute a waiver of TxDOT's right to such sums.

All amounts owing by Developer to TxDOT under this Agreement shall earn interest from the date on which such amount is owing at the lesser of (i) 12% per annum or (ii) the maximum rate allowable under applicable Law.

12.3.3 Unincorporated Materials

TxDOT will not pay for materials not yet incorporated in the Work other than precast concrete, reinforcing steel, structural steel, precast concrete members, stone, gravel, sand or other non-perishable materials that will be permanently incorporated in the Work unless all of the following conditions are met:

12.3.3.1 Material shall be (1) delivered to the applicable Project Site, (2) delivered to Developer and promptly stored by Developer in bonded storage at a location approved by TxDOT in its sole discretion, or (3) stored at a Supplier's fabrication site, which must be a bonded commercial location approved by TxDOT, in its sole discretion. Developer shall submit certified bills for such materials with the invoice, as a condition to payment for such materials. TxDOT shall allow only such portion of the amount represented by these bills as, in its sole opinion, is consistent with the reasonable cost of such materials. If such materials are stored at any site not approved by TxDOT, Developer shall accept responsibility for and pay all personal and property taxes that may be levied against TxDOT by any state or subdivision thereof on account of such storage of such material.

12.3.3.2 All such materials so accepted shall be and become the property of TxDOT. Developer at its own cost shall promptly execute, acknowledge and deliver to TxDOT proper bills of sale or other instruments in writing in a form acceptable to TxDOT conveying and assuring to TxDOT title to such material included in any invoice, free and clear of all Liens. Developer, at its own cost, shall conspicuously mark such material as the property of TxDOT, shall not permit such materials to become commingled with non-TxDOT-owned property and shall take such other steps, if any, as TxDOT may require or regard as necessary to vest title to such material in TxDOT free and clear of Liens.

12.3.3.3 The cost and charges for material included in an invoice but which is subsequently lost, damaged or unsatisfactory may be deducted from succeeding invoices if TxDOT, in its sole discretion, determines that is appropriate after considering the availability of insurance coverage and Developer's actions to replace the lost, damaged or unsatisfactory items.

12.3.3.4 Payment for material furnished and delivered as indicated in this Section 12.3.3 will not exceed the amount paid by Developer as evidenced by a bill of sale supported by paid invoice. TxDOT shall withhold Retainage from such payment as specified in Section 12.3.1.

12.3.4 Payments for Mobilization, Bond and Insurance Premiums and As-Build Documents

12.3.4.1 With respect to each Pilot System and Project Segment, Developer shall be entitled to payment for mobilization in installments, in an amount equal to 5% of the applicable Price. The first payment shall be in an equal to 25% of the bid item price for mobilization, payable as part of the first Draw Request. The second payment shall be in an amount equal to 50% of the bid item price for mobilization, payable when at least 10% of the applicable Price (less mobilization) is earned. The third payment shall be in the amount of 25% of the bid item price for mobilization, payable when at least 25% of the applicable Price (less mobilization) is earned.

12.3.4.2 With respect to each Pilot System and Project Segment, the portion of the Price for the applicable Pilot System and Project Segment allocable to bond, letter of credit and insurance premiums shall be payable to reimburse Developer for bond, letter of credit and insurance premiums actually paid, without markup, not to exceed the line item for such premiums set forth in the Proposal or Project Segment Supplement. Any excess portion of the line item for such premiums set forth in the Proposal or Project Segment Supplement shall be payable following System Acceptance.

12.3.4.3 With respect to each Pilot System and Project Segment, the amount payable for as-built documents acceptable to TxDOT shall equal 1% of the applicable Price for the applicable Pilot System and Project Segment. Developer shall not be entitled to payment for the last 1% of the applicable Price until acceptable as-built documents have been delivered to TxDOT.

12.3.5 Equipment

TxDOT shall not pay for direct costs of equipment. Costs of equipment, whether new, used or rented, and to the extent not included in the mobilization payments under Section 12.3.4, shall be allocated to and paid for as part of the activities with which the equipment is associated, in a manner which is consistent with the requirements of Section 12.2.6.

12.4 Final Payment of the Price

Final Payment of the Price for all Work will be made as follows:

12.4.1 On or about the date of Final Acceptance of a Pilot System or Project Segment, Developer shall prepare and submit a proposed Final Draw Request to TxDOT showing the proposed total amount due Developer with respect to such Pilot System or Project Segment, as applicable, including any amounts owing from Change Orders. In addition to meeting all other requirements for invoices hereunder, the Final Draw Request shall list all outstanding PCO Notices with respect to such Pilot System or Project Segment, as applicable, stating the amount at issue associated with each such notice. A Final Draw Request shall be accompanied by (a) evidence regarding the status of all existing or threatened claims, Liens and stop notices of Subcontractors and laborers against Developer or against TxDOT, (b) consent of any Guarantors and Surety to such Final Payment, (c) such other documentation as TxDOT may reasonably require; and (d) the release described in Section 12.4.4, executed by Developer. Prior applications and payments shall be subject to correction in the Final Draw Request. PCO Notices filed concurrently with a Final Draw Request must be otherwise timely and meet all requirements under Sections 13 and 19.

12.4.2 If a Final Draw Request shows no existing or threatened claims, Liens and stop notices of Subcontractors, Utility Owners, railroads or laborers against Developer or against TxDOT, and provided such Final Draw Request has been approved, TxDOT, in exchange for an executed release meeting the requirements of Section 12.4.4 and otherwise satisfactory in form and content to TxDOT, will pay the entire sum found due on the approved Final Draw Request, less the amount of any Losses that have accrued as of the date of the Final Payment of the Price, the costs to complete or remediate uncompleted Work or Nonconforming Work and any other deductions permitted under Section 12.3.2 above.

12.4.3 If a Final Draw Request lists any existing or threatened claims, Liens and stop notices of Subcontractors, laborers, or Utility Owners or railroads against Developer or against TxDOT, or if any is thereafter filed, TxDOT may withhold from the payment of the amounts set forth on the approved Final Draw Request such amount as TxDOT deems advisable to cover any amounts owing or which may become owing to TxDOT by Developer, including the amount of any Losses that have accrued as of the date of the Final Payment of the Price and any other deductions permitted under Section 12.3.2 above, the costs to complete or remediate uncompleted Work or Nonconforming Work, and the amount of any existing or threatened claims, Liens and stop notices of Subcontractors, laborers, Utility Owners and railroads against Developer or against TxDOT.

12.4.4 The executed release from Developer shall be from any and all claims arising from the Work, and shall release and waive any claims against the Indemnified Parties, excluding only those matters identified in any PCO Notices listed as outstanding in the Final Draw Request. The release shall be accompanied by an affidavit from Developer certifying:

(a) that all Work with respect to such Pilot System or Project Segment, as applicable, has been performed in strict accordance with the requirements of the Contract Documents;

(b) that Developer has resolved any claims made by Subcontractors, Utility Owners, laborers, railroads and others against Developer, TxDOT or the Project with respect to such Pilot System or Project Segment, as applicable;

(c) that Developer has no reason to believe that any Person has a valid claim against Developer, TxDOT or the Project which has not been communicated in writing by Developer to TxDOT as of the date of the certificate; and

(d) that all required guarantees, letters of credit, Warranties, insurance, and the Payment Bond and the Performance Bond are in full force and effect.

Each release and the affidavit shall survive a Final Payment.

12.4.5 All prior Draw Requests shall be subject to correction in the Final Draw Request.

12.4.6 TxDOT will review Developer's proposed Final Draw Request, and changes or corrections will be forwarded to Developer for correction within 20 business days. TxDOT shall pay any undisputed amounts with respect to such Pilot System or Project Segment, as applicable, less any Losses that have accrued as of the date of the Final Payment of the Price, the costs to complete or remediate uncompleted Work or Nonconforming Work and any other deductions permitted under Section 12.3.2 above, within 30 Days after its approval of such amounts on the application for Final Payment of the Price, but not earlier than the date of Final Acceptance with respect to such Pilot System or Project Segment, as applicable.

12.5 Final Payment of the Maintenance Price

[TO COME]

12.6 Payment to Subcontractors

12.6.1 No later than 10 Days after receipt of payment from TxDOT, Developer shall promptly pay each Subcontractor, out of the amount paid to Developer on account of such Subcontractor's portion of the Work, the amount to which such Subcontractor is entitled, less any retainage provided for in the Subcontract and any other offsets and deductions provided in the Subcontract or by law. No later than 10 Days after satisfactory completion of all Work to be performed by a Subcontractor, including provision of appropriate releases, certificates and other evidence of the Subcontractor's compliance with all applicable requirements of the Contract Documents, Developer shall return all moneys withheld in retention from the Subcontractor. Such payment shall be made promptly following satisfaction of the foregoing requirements, even if Work to be performed by Developer or other Subcontractors is not completed and has not been accepted. Each Subcontract shall require the Subcontractor to make payments to sub-subcontractors and Suppliers in a similar manner.

12.6.2 For the purpose of this Section 12.6, satisfactory completion shall have been accomplished when:

(a) the Subcontractor has fulfilled the Subcontract requirements and the requirements under the Contract Documents for the subcontracted Work, including the submission of all submittals required by the Subcontract and Contract Documents; and

(b) the Work performed by the Subcontractor has been inspected and approved in accordance with the Contract Documents and the final quantities of the Subcontractor's work have been determined and agreed upon.

12.6.3 The inspection and approval of a Subcontractor's work does not eliminate or impair the Developer's responsibility for the Work. Any delay or postponement of payments to Subcontractors from the above-referenced time frames may occur only for good cause following written approval by TxDOT. Developer shall, by appropriate agreement with each Subcontractor, require each Subcontractor to make payments to sub-subcontractors in a similar manner. TxDOT shall have no obligation to pay or to see to the payment of money to a Subcontractor, except as may otherwise be required by law. Interest on late payments to Subcontractors shall be Developer's responsibility, and shall not be a part of the applicable Price.

12.7 Disputes

Failure by TxDOT to pay any amount in dispute shall not alleviate, diminish or modify in any respect Developer's obligation to perform under the Contract Documents, including Developer's obligation to achieve Final Acceptance of each Pilot System and Project Segment and all Work in accordance with the Contract Documents, and Developer shall not cease or slow down its performance under the Contract Documents on account of any such amount in dispute. Any dispute regarding such payment shall be resolved pursuant to Section 19. Developer shall proceed as directed by TxDOT pending resolution of the dispute. Upon resolution of any such dispute, each party shall promptly pay to other any amount owing.

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