                                                                                            ACCEPTED
                                                                                        03-15-00423-CV
                                                                                                7966631
                                                                             THIRD COURT OF APPEALS
                                                                                        AUSTIN, TEXAS
                                                                                 11/24/2015 10:53:22 AM
                                                                                      JEFFREY D. KYLE
                                                                                                 CLERK
                     IN THE THIRD COURT OF APPEALS

                                                                       FILED IN
                                                                3rd COURT OF APPEALS
                              NO. 03-15-00423-CV                    AUSTIN, TEXAS
                                                               11/24/2015 10:53:22 AM
                   STAR OPERATIONS, INC.                          JEFFREY D. KYLE
                                                                        Clerk
                              and
       GREAT AMERICAN INSURANCE COMPANY OF NEW YORK
                           Appellants
                              VS.
                        DIG TECH, INC.
                            Appellee

                   Appealed from the 22nd Judicial District Court
                             Caldwell County, Texas

                               BRIEF OF
                   APPELLANTS STAR OPERATIONS, INC.
                    AND GREAT AMERICAN INSURANCE
                        COMPANY OF NEW YORK


                                             James H. Robichaux
                                             SBN 17083000
                                             jrobichaux@branscombpc.com
                                             Clinton W. Twaddell, III
                                             SBN 24071537
                                             ctwaddell@branscombpc.com
                                             BRANSCOMB PC
                                             802 N. Carancahua, Suite 1900
                                             Corpus Christi, TX 78401-0036
                                             Telephone: 361/886-3800
                                             Telecopier: 361/886-3805


                      ORAL ARGUMENT REQUESTED




{C1208515.DOCX:}
                   IDENTITY OF PARTIES AND COUNSEL

Appellant:                                    Star Operations, Inc.

Lead Counsel at Trial & on Appeal:            James H. Robichaux
                                              BRANSCOMB PC
                                              802 N. Carancahua, Suite 1900
                                              Corpus Christi, TX 78401-0036
                                              Telephone: 361/886-3800
                                              Telecopier: 361/886-3805

Appellant:                                    Great American Insurance
                                              Company of New York

Lead Counsel on Appeal 1:                     Clinton W. Twaddell, III
                                              BRANSCOMB PC
                                              802 N. Carancahua, Suite 1900
                                              Corpus Christi, TX 78401-0036
                                              Telephone: 361/886-3800
                                              Telecopier: 361/886-3805

Appellee:                                     Dig Tech, Inc.

Lead Counsel at Trial & on Appeal:            Brian Melton
                                              Chanler A. Langham
                                              SUSMAN GODFREY, LLP
                                              1000 Louisiana Street, Suite 5100
                                              Houston, TX 77002
                                              Telephone: 713/651-9366
                                              Telecopier: 713/651-6666




1
 James H. Robichaux was lead trial counsel for Great American Insurance Company of New
York.

{C1208515.DOCX:}                          i
                               RECORD LEGEND

        References to the one-volume Clerk’s Record are denoted “CR __.”

References to live testimony in the Reporter’s Record are denoted “RR Vol. __ at

[page]: [line]–[line].” Reporter’s Record Volumes 23-34 containing the trial

exhibits are not internally paginated. Accordingly, references to trial exhibits are

denoted “RR Vol. __: PX/DX __, at__,” with Plaintiff’s exhibits denoted “PX” and

Defendants’ exhibits denoted “DX.”

                          STATEMENT OF THE CASE

        Dig Tech, Inc. (“Dig Tech”) brought this lawsuit against Star Operations,

Inc. (“Star Operations” or “Star”) alleging breach of an oral contract. Dig Tech

claimed to be Star’s subcontractor on a federally funded highway project (the

“Project”). The Project’s purpose was to construct sections of the SH130 toll road

southeast of Austin, Texas. Great American Insurance Company (“GAIC”) was the

payment bond surety for Star on the Project.

        Star denied the existence of any enforceable contract between itself and Dig

Tech. Star also asserted that Dig Tech had failed to comply with federally

mandated and applicable statutes, rules, and regulations that were conditions

precedent to (1) the formation and/or enforcement of any purported contract

between Star and Dig Tech; and (2) any obligation of Star to pay Dig Tech on any

purported contract.


{C1208515.DOCX:}                          x
            condition precedent to any payment obligation arising against Star
            in favor of Dig Tech on any purported contract between Star and
            Dig Tech ...................................................................................................23

        C. Issues 5-7: The trial court erred in awarding Dig Tech contract
           damages because it was undisputed that Dig Tech failed to: (1)
           obtain a written contract with Star; (2) obtain TxDOT approval to
           its purported verbal contract with Star; or (3) provide statutorily
           compliant “certified payroll” to Star ........................................................25

 II.    Issues 8-11: The trial court erred in applying the law to Dig Tech’s
        claim(s) against the GAIC payment bonds ....................................................26

        A. Issue 8: The trial court erred in refusing to dismiss Dig Tech’s
           claim(s) against the GAIC payment bonds for lack of jurisdiction
           because the federal Miller Act applied to the claim(s).............................26

        B. Issue 9: If the Texas McGregor Act applied to Dig Tech’s payment
           bond claim(s), the trial court erred in ruling as a matter of law that
           Dig Tech perfected any claim against the bonds......................................27

        C. Issue 10: If the McGregor Act applied to Dig Tech’s payment
           bond claim(s), the trial court erred in denying GAIC’s Motion for
           Instructed Verdict and its Motion for Judgment Notwithstanding
           the Verdict because Dig Tech failed as a matter of law to perfect
           any payment bond claim under the McGregor Act ..................................32

        D. Issue 11: Alternatively, if the McGregor Act applied to Dig Tech’s
           payment bond claim(s) and a fact issue existed as to whether Dig
           Tech perfected any claim against the bonds, the trial court erred in
           refusing to submit GAIC’s proposed jury questions on whether Dig
           Tech substantially complied with the McGregor Act’s notice
           requirements .............................................................................................32




{C1208515.DOCX:}                                          iii
III.          Issue 12: The trial court erred in awarding damages to Dig Tech
              without any evidence of Dig Tech’s actual damages as net loss
              after reduction of income tax payments or unpaid income tax
              liability as required by TEX. CIV. PRAC. & REM. CODE § 18.091 ............. 33

IV.           Issue 13: The trial court erred in awarding attorney’s fees to Dig
              Tech because Dig Tech failed to segregate recoverable attorney’s
              fees from unrecoverable attorney’s fees ...................................................35

 V.           Issue 14: The trial court erred in awarding Dig Tech costs of
              deposition transcripts as “taxable costs” when Dig Tech did not
              notice or initiate the depositions ...............................................................37

Conclusion ...................................................................................................................39

Prayer ...........................................................................................................................40

Certificate of Compliance ............................................................................................41

Certificate of Service ...................................................................................................41

Index to Appendix ........................................................................................................42




{C1208515.DOCX:}                                              iv
                                     INDEX OF AUTHORITIES

                                          FEDERAL AUTHORITIES

U.S. Supreme Court:

American Tel. and Tel. Co. v. Central Office Telephone, Inc.,
524 U.S. 214 (1998) .................................................................................................16

Federal Crop Ins. Corp. v. Merrill,
332 US 380 (1947) ...................................................................................................22

U.S. Courts of Appeal:

Century Marine, Inc. v. U.S.,
153 F.3d 225 (5th Cir. 1998).....................................................................................22

Clem Perrin Marine Towing, Inc. v. Panama Canal Co.,
730 F.2d 186 (5th Cir. 1984) ...................................................................................14

Continental Cas. Co. v. C.O. Brand, Inc.,
355 F.2d 969 (5th Cir. 1966).....................................................................................26

Gen. Eng’g & Mach. Works v. O’Keefe,
991 F.2d 775 (Fed. Cir. 1993)............................................................................15, 22

U.S. v. New Orleans Pub. Surv., Inc.,
553 F.2d 459 (5th Cir. 1977) (vacated on other grounds,
New Orleans Public Service, Inc. v. U.S., 436 U.S. 942 (1978)) ............................14

Worthen v. Fidelity Nat. Prop. & Cas. Ins. Co.,
463 Fed. Appx. 422 (5th Cir. 2012) ..........................................................................22

U.S. District Courts:

Dingle v. Halliburton Co., Civil Action No. H-05-3719,
2006 WL 2729286 (S.D. Tex. Sept. 25, 2006) (not reported) .................................15

Ex rel. United Rentals, Inc. v. Hartford Fire Ins. Co.,
339 F. Supp.2d 799, 801-02 (W.D. Tex. 2004) .......................................................27

{C1208515.DOCX:}                                          v
UPMC Braddock v. Harris,
934 F. Supp. 2d 238 (D.D.C., 2013)
vacated on other grounds as moot 584 Fed.Appx.1 (D.C. Cir. 2014) ..............15, 22

U.S. Court of Claims:

G.L. Christian and Assocs. v. U.S.,
312 F.2d 418 (Ct. Cl. 1963) ...............................................................................14, 19

U.S.C.:

40 U.S.C. § 3131 ......................................................................................................26

C.F.R.:

23 CFR § 635.102 ....................................................................................................20

23 CFR § 635.103 ....................................................................................................14

23 CFR § 635.116(b) ...............................................................................................20

                                            TEXAS AUTHORITIES

Texas Supreme Court:

Associated Indem. Corp. v. CAT Contracting, Inc.,
964 S.W.2d 276 (Tex. 1998)........................................................................21, 24, 33

Centex Corp. v. Dalton,
840 S.W.2d 952 (Tex. 1992)....................................................................................21

Christus Health Gulf Coast v. Aetna, Inc.,
397 S.W.3d 651 (Tex. 2013)....................................................................................34

Clayton W. Williams, Jr., Inc. v. Olivo,
952 S.W.2nd 523, 529 (Tex. 1997) .........................................................23, 24, 25, 33

Combs v. Healthcare Services, Corp.,
401 S.W.3d 623 (Tex. 2013)....................................................................................34

{C1208515.DOCX:}                                           vi
Hohenberg Bros. Co. v. George E. Gibbons & Co.,
537 S.W.2d 1 (Tex. 1976) ........................................................................................21

In re Bank One, N.A.,
216 S.W.3d 825 (Tex. 2007) ...................................................................................19

In re 24R, Inc.,
324 S.W.3d 564 (Tex. 2010)....................................................................................19

Jones v. Liberty Mutual Ins. Co.,
745 S.W.2d 901 (Tex. 1988)....................................................................................34

McKinley v. Stripling,
763 S.W.2d 407, 410 (Tex. 1989)..........................................................23, 24, 25, 33

NAFTA Traders, Inc. v. Quinn,
339 S.W.3d 84 (Tex. 2011) ......................................................................................16

Nat’l Prop. Holdings, LP v. Westergren,
453 S.W.3d 419 (Tex. 2015) (per curiam) ..............................................................22

Tex. Dep’t. of Parks & Wildlife v. Miranda,
133 S.W.3d 173 (Tex. 2004)....................................................................................27

Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299 (Tex. 2006)....................................................................................35

Wallace v. Briggs,
348 S.W.2d 523, 527 (Tex. 1961)............................................................................38

Texas Courts of Appeal:

Big Bird Tree Service v. Gallegos,
365 S.W.3d 173 (Tex. App. – Dallas 2012, pet. denied.) ........................................34

Bundren v. Holly Oaks Townhomes Ass’n, Inc.,
347 S.W.3d 421 (Tex. App.—Dallas 2011, pet. denied) ...................................37, 38

Capital Indemn. Corp. v. Kirby Restaurant Equipment

{C1208515.DOCX:}                                       vii
Dist.] 2007, no pet.); Big Bird Tree Service v. Gallegos, 365 S.W.3d 173, 179

(Tex. App. – Dallas 2012, pet denied).

       A court may not judicially amend a statute and add words that are not

explicitly contained in the language of the statute. Jones v. Liberty Mutual Ins.

Co., 745 S.W.2d 901, 902 (Tex. 1988). As the Supreme Court stated recently, “the

bar for reworking the words of our Legislature passed into law is high and should

be.” Combs v. Healthcare Services, Corp., 401 S.W.3d 623, 630 (Tex. 2013).

Stated differently, the Supreme Court has said that in matters of statutory

construction, the Court takes the Legislature “at its word.” Christus Health Gulf

Coast v. Aetna, Inc., 397 S.W.3d 651, 654 (Tex. 2013). The Court’s analysis

begins (and often ends) with the Legislature’s chosen language. Id. at 653. This

voted-on language is what constitutes the law; “the Judge’s inquiry is at an end.”

Id. at 653-654.

       The language of the statute is clear. As a precondition to recovery of its

damages, Dig Tech was required to present evidence of such lost earnings after

reduction for any income tax payments made or unpaid tax liability that would

have accrued as a result of such recovery. Since the invoices would be ordinary

revenue, they would constitute “earnings” within the meaning of the Internal

Revenue Code and federal income tax would be due and owing. Dig Tech’s failure

to present evidence net of the unpaid tax liability precludes Dig Tech’s recovery.



{C1208515.DOCX:}                         34
  Appellants objected to the failure of the charge – specifically Jury Questions Nos.

  4 and 8 – on the grounds that they failed to comply with § 18.091. (RR Vol. 9 at

  144:25–145:15). Accordingly, Appellants are entitled to reversal and rendition of a

  take nothing judgment in their favor as to actual damages in light of Dig Tech’s

  failure to present the evidence in the statutorily required manner and its failure to

  secure a jury finding of damages in compliance with § 18.091.

IV.      Issue 13: The trial court erred in awarding attorney’s fees to Dig Tech
         because Dig Tech failed to segregate recoverable attorney’s fees from
         unrecoverable attorney’s fees

         Dig Tech readily admitted that in order to recovery attorney’s fees, it was

  required to segregate incurred attorney’s fees relating solely to a claim for which

  attorney’s fees are unrecoverable pursuant to the Supreme Court decision of Tony

  Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex. 2006). (RR Vol. 5

  at 191:21–192:2 (Dig Tech attorney David Pfeuffer)). Simply because the facts are

  “intertwined” does not make fees incurred on an unrecoverable claim – such as

  Star’s tort counterclaim – recoverable. Failure to segregate such fees precludes

  recovery.

         In cross-examination Dig Tech’s sole witness on the issue of attorney’s fees

  – David Pfeuffer – freely admitted that he made no attempt to look at the discovery

  submitted by Star to Dig Tech on its counterclaims. Instead he concluded that the

  unrecoverable attorney’s fees Dig Tech incurred in drafting and responding to


  {C1208515.DOCX:}                         35
                               RECORD LEGEND

        References to the one-volume Clerk’s Record are denoted “CR __.”

References to live testimony in the Reporter’s Record are denoted “RR Vol. __ at

[page]: [line]–[line].” Reporter’s Record Volumes 23-34 containing the trial

exhibits are not internally paginated. Accordingly, references to trial exhibits are

denoted “RR Vol. __: PX/DX __, at__,” with Plaintiff’s exhibits denoted “PX” and

Defendants’ exhibits denoted “DX.”

                          STATEMENT OF THE CASE

        Dig Tech, Inc. (“Dig Tech”) brought this lawsuit against Star Operations,

Inc. (“Star Operations” or “Star”) alleging breach of an oral contract. Dig Tech

claimed to be Star’s subcontractor on a federally funded highway project (the

“Project”). The Project’s purpose was to construct sections of the SH130 toll road

southeast of Austin, Texas. Great American Insurance Company (“GAIC”) was the

payment bond surety for Star on the Project.

        Star denied the existence of any enforceable contract between itself and Dig

Tech. Star also asserted that Dig Tech had failed to comply with federally

mandated and applicable statutes, rules, and regulations that were conditions

precedent to (1) the formation and/or enforcement of any purported contract

between Star and Dig Tech; and (2) any obligation of Star to pay Dig Tech on any

purported contract.


{C1208515.DOCX:}                          x
                                             INDEX TO APPENDIX

•   Item 1 .................................................................................................. Final Judgment
•   Item 2 ................................................................................... Jury Charge and Verdict
•   Item 3 ............................................................................................TEX. R. CIV. P. 140
•   Item 4 ............................................................................................TEX. R. CIV. P. 141
•   Item 5 .......................................................................................... 23 C.F.R. § 635.102
•   Item 6 .......................................................................................... 23 C.F.R. § 635.103
•   Item 7 ........................................................................................... 23C.F.R. § 635.116
•   Item 8A........................................................ TEX. CIV. PRAC. & REM. CODE § 18.091
•   Item 8B ........................................................ TEX. CIV. PRAC. & REM. CODE § 31.007
•   Item 9 ............................................................................................... 40 U.S.C. § 3131
•   Item 10 ........................................................................ TEX. GOV’T CODE § 2253.001
•   Item 11 ........................................................................ TEX. GOV’T CODE § 2253.041
•   Item 12 ........................................................................ TEX. GOV’T CODE § 2253.047
•   Item 13 ........................................................................ TEX. GOV’T CODE § 2253.048
•   Item 14 ............................ DX1: Star/Central Texas Subcontract CSUB116 Excerpts
•   Item 15 ................... DX2: Dig Tech/Central Texas Subcontract CSUB122 Excerpts
•   Item 16 ............................ DX3: Star/Central Texas Subcontract CSUB140 Excerpts
•   Item 17 ........................ DX119: Facility Concession Agreement Excerpt (page 175)
•   Item 18A........................ DX119: Facility Concession Agreement Excerpt (page 69)
•   Item 18B ........................................... Rule 11 Regarding Supplementation of Record
•   Item 19 .....................................................DX9: Dig Tech Certified Payroll Excerpts
•   Item 20 ...... PX63: Mike Kiehnau Email Regarding Communication from Dig Tech
•   Item 21 ...................................................................PX183: Dig Tech Letter to GAIC




    {C1208515.DOCX:}                                          42
mandated condition precedent to formation and/or enforcement of any purported

contract between Star and Dig Tech.

                                     Issue No. 3

        The trial court erred in refusing to submit proposed jury question(s) on Dig

Tech’s failure to obtain TxDOT’s approval to its purported contract with Star,

which was a federally mandated condition precedent to formation and/or

enforcement of any purported contract between Star and Dig Tech.

                                     Issue No. 4

        The trial court erred in refusing to submit proposed jury question(s) on Dig

Tech’s failure to provide statutorily compliant “certified payroll” to Star, which

was a federally mandated condition precedent to any payment obligation arising

against Star on any purported contract between Star and Dig Tech.

                                     Issue No. 5

        The trial court erred in awarding Dig Tech contract damages because a

writing was a federally mandated condition precedent to contract formation and

enforceability, and it was undisputed that Dig Tech failed to comply with such

condition.

                                     Issue No. 6

        The trial court erred in awarding Dig Tech contract damages because

TxDOT approval to any purported contract with Star was a federally mandated


{C1208515.DOCX:}                         xii
                                                        - - - - - - - - - - - - · - · - - - ---·




                                                 CAUSE 12·0•337

                                                                  §
                                                                  §      IN THE DISTRICT COURT
                               Plaintiff,                         §
                                                                  §
                                                                  §
                                                                  §      22I'Il> JUDICIAL DISTRieT
       ST!\.R OPERATIONS, INC.                                    §
       GREAT AMERICAN INSURANCE                                §
      'COI\I(P.AN¥ OF NEW YORK                                    §
                                                                  §      Cb.LDWJ!)J.,;L C"OlJ'NT'i';
                                                                  §      TEXAS
                               Defendants.                        §
                                                FJ~M.. ln'JD:GMENT

                On   'February 2:0, :20T5, the Court entered a traditional summary judgment against

      DefehdantStat Operations, Inc.'s (''Star Opet;ations") counterclaim for fraud.

                On February 23, 201.5, the   Court <:ailed fuis   l)ase for   -tri'al,   The Plaintiff Dig Tech, Inc.

      ("Dig Tech") appeared in person and through its attorneys           and. annqJmg~d read.y {or t!ial,       The

       Defendants Stat Operations, Inc. ("Star Operations") and Great Americanlnsurance Company of

      New   York ("G.t\!C") appeared in person and through their attorneys and announced ready for
      trial. The Court then empanelled and swore in a jury consisting of twelve jurors, and the case

      proceeded to trial.

                On February 26 and March 4, the Court ruled that Djg Tech sUbstantially complied with

      the notice provisions of the McGregor Act and that the Miller Act does not apply to Dig Tech's

      claims.

                On March 4, 2015, the Court submitted questions, definitions, and instructions to the juryi ·

      On March 5, 2015, the jury returned a unanimous Verdict. The jury's unanimous Verdict was

      received, filed, and entered of record.




                                                          1




-·
                                    Appendix
                                          .. Item 1
     ---· - - - - - - - - - - - - - - - - -
                                                           ~
Tech failed as a matter of law to perfect any payment bond claim under the

McGregor Act.

                                       Issue 11

        If the McGregor Act applied to Dig Tech’s payment bond claim(s) and a fact

issue existed as to whether Dig Tech perfected any claim against the bonds, the

trial court erred in refusing to submit GAIC’s proposed jury questions on whether

Dig Tech substantially complied with the McGregor Act’s notice requirements.

                                     Issue No. 12

        The trial court erred in awarding damages to Dig Tech without any evidence

of Dig Tech’s actual damages as net loss after reduction of income tax payments or

unpaid income tax liability as required by TEX. CIV. PRAC. & REM. CODE § 18.091.

                                     Issue No. 13

        The trial court erred in awarding attorney’s fees to Dig Tech because Dig

Tech failed to segregate recoverable attorney’s fees from unrecoverable attorney’s

fees.

                                     Issue No. 14

        The trial court erred in awarding costs for copies of deposition transcripts to

Dig Tech as “taxable costs” when Dig Tech did not notice or initiate the

depositions.




{C1208515.DOCX:}                          xiv
                           STATEMENT OF FACTS

       Background. This case arises out of construction on a federally funded

highway project, specifically construction of SH130 toll road sections southeast of

Austin, Texas. Appellant Star was a subcontractor hired by the design/build

contractor Central Texas Highway Constructors (“Central Texas”) to construct

infrastructure for the illumination, signal, intelligent transportation, and toll

collection systems. Appellee Dig Tech claims it had a verbal agreement with Star

to provide boring (horizontal hole-drilling) work for the installation of electrical

conduit. Dig Tech also had its own written contract with Central Texas which was

not the primary subject of this litigation, but whose terms will be relevant to this

appeal as explained below. The following diagram illustrates the pertinent

contractual relationships (both disputed and agreed):




{C1208515.DOCX:}                         1
          Dig Tech never formed an enforceable contract with Star. It was

undisputed and uncontroverted that the Project involved the use of federal funds.

(Appx Item 14, RR Vol. 16: DX1at p. 69 (Star Subcontract CSUB116 with Central

Texas); Appx Item 15, RR Vol. 18: DX2 at p. 117 (Dig Tech Subcontract

CSUB122 with Central Texas); Appx Item 16, RR Vol. 19: DX3 at p. 69 (Star

Subcontract CSUB140 with Central Texas); Appx Item 17, RR Vol. 34: DX119 at

p. 175 (Facility Concession Agreement)). Because the Project was federally

funded, both federal law and the prime contract required that any lower-tier

subcontracts be in writing and approved by TxDOT. Further, as a condition of

payment on any lower-tier subcontract, any subcontractor (in this case Dig Tech)

was required to submit statutorily compliant “certified payroll” to the upstream

contractor (in this case, Star), attesting under oath that it had properly categorized

and paid its workers according to federally recognized worker classifications and

federally promulgated prevailing wage rates for the workers’ respective crafts.2

(Appx Item 19, RR Vol. 22: DX9; Appx Item 14, RR Vol. 15: DX1 at pp. 11-12

(art. 9.4 and 9.6.1(a)), and at p. 15 (art. 10; 10.3(d)); RR Vol. 16: DX1 at p. 90 (art.

VII(1)(e)); Appx Item 15, RR Vol. 17: DX2 at pp. 11-12 (art. 9.4 and 9.6.1(a)), and

at p. 15 (art. 10; 10.3(d)); RR Vol. 18: DX2 at p. 139 (Art. VII(1)(e)); Appx Item




2
    The specifics of what constitutes “compliant certified payroll” are discussed in detail below.


{C1208515.DOCX:}                                   2
16, RR Vol. 19: DX3 at 68, 69, 84-88, 94, 95, 98-100; Appx Item 17, RR Vol. 34:

DX119 at p. 175 (art. 23.1); Appx Item 18A (art. 10.2.3)). 3 4

       Dig Tech was fully aware of these requirements at all relevant times. As

shown in the diagram above, prior to Dig Tech discussing any alleged oral

agreement with any employee of Star, Dig Tech had its own written subcontract

with Central Texas. (Appx Item 15, RR Vol. 17: DX 2). This written subcontract

with Central Texas contained various provisions—identical to those in the

Star/Central Texas subcontracts—which specifically placed Dig Tech on actual

notice that any agreement it might enter into on the Project: (1) had to be in

writing; (2) had to be approved by Central Texas and TxDOT; and (3) required Dig

Tech to provide statutorily compliant certified payroll as a condition of payment.

(Appx Item 15, RR Vol. 17: DX2 at pp. 11-12 (art. 9.6.1), p. 15 (art. 10.3(d)); RR

Vol. 18: DX2 at pp. 116-117, pp. 135-138 (art. V(1)(d)(iii))).

       Dig Tech claims it performed work for Star Operations as a lower-tier

subcontractor on the Project between October, 2011 and April, 2012. (RR Vol. 14:

PX89 (Dig Tech invoices)). However, it is undisputed and uncontroverted that Dig


3
  Pages 68 and 69 of DX119 were omitted from RR Vol. 33 by the court reporter. The missing
page 69 is included in the Appendix as Item 18A. Appellee does not oppose this
supplementation, as noted in the Rule 11 Agreement included in the Appendix as Item 18B.
4
  For the convenience of the Court excerpts from the three subcontracts and the Facility
Concession Agreement between TxDOT and SH 130 Concession Company are collectively
gathered and attached in the Appendix. The pertinent contract provisions in each of the three
subcontracts are identical; they sometimes simply appear on different pages of the respective
contracts.


{C1208515.DOCX:}                             3
Tech had no written agreement with Star Operations for the work Dig Tech claims

it performed for Star. (RR Vol. 4 at 62: 9-14; 64: 8-11, 20-24; 67:10-24; 68: 22-

70:8; 70:19-24; 71:16-22 (Dig Tech corporate representative Bodie Leslie); RR

Vol. 5 at 124:7–125:11; 125: 20-126:3 (Dig Tech owner Mike Furry); RR Vol. 13:

PX71 (Letter from Star’s counsel to Dig Tech’s counsel)). The uncontroverted

testimony established that Dig Tech’s alleged verbal subcontract with Star

Operations was never approved by Central Texas or TxDOT. (RR Vol. 7 at 173:8–

174:7; 189:17-25; 197:8-12; 211:19 –213:9; RR Vol. 8 at 66:9-16 (Central Texas

representative Michael Kiehnau)).

       Further, Dig Tech’s own representatives acknowledged that its certified

payroll was noncompliant and that some of its laborers were both misclassified and

paid below the statutorily mandated minimum hourly wage rates. (RR Vol. 6 at

10:19–11:25; 13:13-20; 14:19 –15:19; 16:23–18:5; 18:16 –19:6; 20:1-8; 20:21–

22:4; 23:16–24:4; 24:8–33:16 (Dig Tech office manager Tracy Lambert); RR Vol.

5 at 126:16–127:7 (Dig Tech owner Mike Furry)). This was confirmed by

testimony of Central Texas, Star’s owner, and an unchallenged government

contracts expert witness. (RR Vol. 8 at 20:4–30:12 (Central Texas representative

Mike Kiehnau); RR Vol. 8 at 126:17-20; 136:8– 137:11; 165: 10-21 (Star




{C1208515.DOCX:}                        4
Operations’ owner Lana Lewis); RR Vol. 8 at 95:8–108:1; 119:17–122:2

(Government contracts expert, John Dulske)). 5

       Dig Tech claims the purported verbal contract with Star was formed between

former Dig Tech employee Bodie Leslie and former Star employees Maury

Milliorn and Anthony Lopez. Dig Tech argues that each of these individuals had

legal authority to contract for their respective employers. However, Mr. Leslie

confirmed that Milliorn and Lopez both had advised him that they lacked authority

to bind Star Operations or enter into any subcontract on behalf of Star Operations.

(RR Vol. 4 at 67:10–68:25; 69:24–71:5; 71:16–72:10; 92:2-24; 115:15-22 (Dig

Tech representative Bodie Leslie); RR Vol. 4 at 210:16-19 (former Star employee

Maury Milliorn)). Dig Tech’s owner (Mike Furry) and its designated corporate

representative (Bodie Leslie) confirmed that Dig Tech made no attempt to contact

Star’s owner Lana Lewis to determine the scope of Lopez’s or Milliorn’s authority,

who had previously advised Dig Tech they lacked authority to contract on behalf

of Star. (RR Vol. 4 at 72:2-24; 115:15-22 (Dig Tech representative Bodie Leslie);

RR Vol. 5 at 110:10-15 (Dig Tech owner Mike Furry)).

       Dig Tech sued both Star Operations and its payment bond surety GAIC. (CR

53-57). In their live pleadings, Star Operations and GAIC repeatedly raised the
5
 For the convenience of the Court, an exemplary copy of one of Dig Tech’s certified payrolls is
attached in the Appendix as Item 19 (RR Vol. 22: DX9). The four misclassified employees are
highlighted. The two employees who were never paid at least the minimum statutorily mandated
wage rates were Sintico Chaparro and Josue Chaparro. The testimony confirms the
misclassification and underpayment was consistent on all twenty-six certified payrolls.


{C1208515.DOCX:}                              5
failure of the condition(s) precedent, specifically that: (1) any agreement between

Star Operations and Dig Tech was required by federal law to be in writing and

approved by TxDOT to be enforceable; and (2) Dig Tech’s failure to provide

compliant certified payroll was a condition precedent to any payment obligation.

(CR 1346-1358 at Pars. 4, 6(e), and 7). Each of the three written subcontracts with

Central Texas (Star’s subcontracts CSUB116 and CSUB140, and Dig Tech’s

subcontract CSUB122) contained an identical Art. 10 which provided:

       Payment is subject to complying with items 10.1-10.11 below:

       *****

       10.3 INVOICE REQUIREMENTS:

       (d)     Certified payrolls, for the invoice period, if required by the
               Agreement Documents.

(Appx Item 14, RR Vol. 15: DX1 at p. 15 (Art. 10); Appx Item 15, RR Vol. 17:

DX2 at p. 15 (Art. 10); Appx Item 16, RR Vol. 18: DX3 at p. 15 (Art. 10)).

       This contract provision prohibited Star Operations from seeking or receiving

any payment from Central Texas for work Dig Tech allegedly performed in light of

its admittedly non-compliant certified payroll in violation of both the contract

provisions and federal law. As a condition precedent for Star being paid for work

allegedly performed for Star by Dig Tech, Star had to submit Dig Tech’s certified




{C1208515.DOCX:}                          6
       If you answered Question 10 "Yes", then answer the following question. Otherwise, do
not answer the following question.

                                            Question 11

        Did Dig Tech, Inc. interfere because it had a good-faith belief that it had aright to
threaten garnislunent for the work it performed?

       Answer:         "Yes" or "No".

       Answer:




                                                 15
on the federally funded project must be in writing to be enforceable; and/or (2)

mandating accurate certified payroll as a condition precedent of payment.

       Dig Tech’s failure to perfect claims against the GAIC payment bonds.

Star and GAIC also alleged that Dig Tech failed to comply with conditions

precedent to perfecting its claims upon the surety GAIC. (CR1350-1352 at Pars. 8-

9). Dig Tech also failed to prove that it complied with these conditions precedent.

       This was a “public works” contract on State Highway 130, governed by

either the federal Miller Act or TEX. GOV’T. CODE CH. 2253 (the McGregor Act). If

the Miller Act applied, exclusive jurisdiction was in federal court. If the McGregor

Act applied, in order to perfect any claim against the bonds, Dig Tech was required

to provide multiple specific, statutorily-mandated notices to the “prime” 7 and the

surety. Dig Tech failed to offer evidence of compliance with any of the statutory

notice provisions.

       At the close of Dig Tech’s case GAIC moved for a directed verdict on Dig

Tech’s claims for failure to prove compliance with TEX. GOV’T. CODE CH. 2253 as

a condition precedent to GAIC’s liability, which the trial court denied. (RR Vol. 5

at 223:23–227:19; 229:14–230:3; 232:9-15). GAIC submitted proposed jury

questions relating to Dig Tech’s (non)compliance with the McGregor Act. Instead,

7
 As discussed below, the “prime” is statutorily defined to be the entity with the direct contract
with the State (i.e., TXDOT). It is undisputed that the only entity with a direct contract with
TxDOT was SH 130 Concession Company, LLC as reflected in the Facility Concession
Agreement (Appx Item 17, RR Vol. 32: DX119).


{C1208515.DOCX:}                               8
the trial court ruled as a matter of law that the federal Miller Act did not apply, and

that Dig Tech had “substantially complied” with the McGregor Act, thus

perfecting its bond claim(s). The trial court denied GAIC’s request to submit the

issue of Dig Tech’s compliance with the McGregor Act’s notice requirements to

the jury. (RR Vol. 9 at 136:18–137:7; 141:1–142:18).

       Dig Tech failed to submit evidence of damages in compliance with Texas

Civil Practice and Remedies Code § 18.091. TEX. CIV. PRAC. & REM. CODE §

18.091 requires that a claimant present evidence of damages “in the form of a net

loss after reduction for income tax payments or unpaid tax liability pursuant to any

federal income tax law.” When Dig Tech’s representative Mike Furry was

questioned as to whether Dig Tech’s requested damages conformed to this

requirement, Dig Tech objected and the trial court sustained its objection. (RR Vol.

5 at 101:14-103:19 (Dig Tech owner Mike Furry)). By Offer of Proof pursuant to

TEX. R. EVID. 103, Appellants established that Dig Tech did not comply with the

mandatory provisions of § 18.091 which are a precondition to such recovery. (RR

Vol. 5 at 111:19–113:10 (Dig Tech owner Mike Furry)).

       Dig Tech failed to segregate recoverable from unrecoverable attorney’s

fees. In addition to the contract and bond claims made the subject of this appeal,

the trial court litigation also involved certain counterclaims by Star against Dig

Tech. Dig Tech’s attorney’s fees incurred in defending these counterclaims were



{C1208515.DOCX:}                          9
                                                       ------······   -····   ·--··




                                    VERDICT CERTIFICATE

Check one:

_X_ Our verdict is unanimous.       All twelve of us have agreed to each and every answer. The
presiding juror has signed the certificate for all twelve of us.



                                                             Printed arne of Prestdmg Juror

       Our verdict is not unanimous. Eleven of us have agreed to each and every answer and
have signed the certificate below.

__ Our verdict is not unanimous. Ten of us have agreed to each and every answer and have
signed the certificate below.

              SIGNATURE                                            NAME PRINTED

1.

2.

3.

4.

5.

6.
7.

8.

9.

10.

11.




                                                22




                                            •   1703
Star Operations and GAIC timely filed a Motion for New Trial on May 11, 2015.

(CR 1862-1868). The Motion for New Trial was overruled by operation of law.

Appellants filed their Notice of Appeal with the trial court on July 9, 2015,

perfecting their appeal to this Court. (CR 1910-1912).

                          SUMMARY OF ARGUMENT

       Because the Project was a federally funded highway project, all contracts on

the Project were governed by federal law. Federal law required as a condition

precedent to forming an enforceable contract that – among other things – any

lower-tier subcontract be in writing and approved by TxDOT. In addition, pursuant

to provisions of the Davis Bacon Act and related applicable federal regulations, as

a condition to the receipt of payment all contractors, subcontractors, and

downstream (lower-tier) subcontractors had to provide statutorily compliant

certified payroll with respect to its hourly employees to their upstream contractor.

       The failure of any of these conditions precedent is fatal to the rights of any

subcontractor to seek payment. It is uncontroverted that Dig Tech’s alleged oral

contract with Star Operations and its certified payroll did not comply with these

requirements. As such, no enforceable contract was formed and even if it was, Dig

Tech had no right to payment from Star. The trial court refused to apply federal

law and refused to charge the jury on the existence and/or compliance with these

federally mandated conditions precedent.



{C1208515.DOCX:}                         11
       Separately, the surety bonds provided by Appellant GAIC were governed by

either the federal Miller Act, in which case the trial court lacked subject matter

jurisdiction, or by provisions of the Texas Government Code Chapter 2253 (the

McGregor Act). The McGregor Act provides strict notice requirements in order to

perfect any bond claim. While it is undisputed that Dig Tech did not comply with

these notice requirements, the trial court nonetheless granted an instructed verdict

in favor of Dig Tech that it had perfected claims against both GAIC bonds, refused

to grant an instructed verdict for GAIC, and refused to submit GAIC’s requested

jury questions regarding compliance with the notice provisions of the Act.

       Further, in presenting its evidence to recover attorney’s fees, Dig Tech failed

to segregate attorney’s fees incurred in pursuing those claims for which attorney’s

fees are potentially recoverable from attorney’s fees incurred in defending Star’s

counterclaims, for which recovery is not allowed. Similarly, it failed to present its

damages in compliance with TEX. CIV. PRAC. & REM. CODE § 18.091 - being the

“net loss after reduction of income tax payments or unpaid income tax liability[.]”

       Finally, the trial court improperly awarded Dig Tech costs for deposition

transcript photocopies even though Dig Tech neither noticed nor initiated the

depositions. For each of these reasons the judgment entered by the trial court is

flawed. The trial court committed reversible error, requiring reversal and rendition

of a take nothing judgment in favor of Appellants.



{C1208515.DOCX:}                          12
                                    ARGUMENT

I.      Issue 1: The trial court erred in failing to apply federal law to Dig Tech’s
        contract claim because the project was undisputedly a federally funded
        highway project, which automatically invoked federal law

        The uncontroverted evidence in the case was that the Project was a federally

 funded highway project. Dig Tech’s own witnesses confirmed in cross-

 examination that they knew or assumed the Project was federally funded. (RR Vol.

 4 at 90:23–91:2 (Dig Tech representative Bodie Leslie); RR Vol. 6 at 20:1-8 (Dig

 Tech office manager Tracy Lambert)). Dig Tech’s subcontract with Central Texas

 was admitted without objection, as were Star’s two subcontracts with Central

 Texas. (DX1-3). The three subcontracts contained identical pertinent terms and

 conditions, including Attachment 1 to Exhibit 8 (FEDERAL REQUIREMENTS

 FOR FEDERAL-AID HIGHWAY PROJECTS), which states:

        GENERAL – The work herein proposed will be financed in whole or
        in part with Federal funds, and therefore all of the statutes, rules and
        regulations promulgated by the Federal Government and applicable to
        work financed in whole or in part with Federal funds will apply to
        such work.8




 8
  Appx Item 14, RR Vol. 16: DX1 at p. 69 (Star Subcontract CSUB116 with Central Texas);
 Appx Item 15, RR Vol. 18: DX2 at p. 117 (Dig Tech Subcontract CSUB122 with Central
 Texas); Appx Item 16, RR Vol. 19: DX3 at p. 69 (Star Subcontract CSUB140 with Central
 Texas)


 {C1208515.DOCX:}                         13
       Further, because this project was federally funded, federal contract

regulations applied as a matter of law, irrespective of whether they were expressly

incorporated into the text of the contracts. Specifically, 23 CFR § 635.103 states:

       The policies, requirements, and procedures prescribed in this subpart
       [entitled “Contract Procedures” and embracing §§ 635.101-127] shall
       apply to all Federal aid highway projects.

(See Appx Item 6). In G.L. Christian and Assocs. v. U.S., 312 F.2d 418 (Ct. Cl.

1963), the United States Supreme Court held that when the subject matter of a

contract is governed by valid federal regulations, the regulations are incorporated

into the contract as a matter of law, regardless of whether the parties agree to be

bound by them. The Fifth Circuit has applied Christian to hold:


       Government contracts are different from contracts between ordinary
       parties. The Government has the unrestricted power to determine
       those with whom it will deal, and to fix the terms and conditions upon
       which it will make needed purchases. Agreement to such conditions is
       unnecessary: where regulations apply and require the inclusion of a
       contract clause in every contract, the clause is incorporated into the
       contract, even if it has not been expressly included in a written
       contract or agreed to by the parties…[W]e would reach [this
       conclusion] even in the absence of any oral or written agreements to
       particular terms[.]

       U.S. v. New Orleans Pub. Surv., Inc., 553 F.2d 459, 469 (5th Cir. 1977)

(emphasis added) (vacated on other grounds, New Orleans Public Service, Inc. v.

U.S., 436 U.S. 942 (1978)); see also Clem Perrin Marine Towing, Inc. v. Panama

Canal Co., 730 F.2d 186, 188 (5th Cir. 1984) (federal form was “part of the

{C1208515.DOCX:}                         14
§ 18.091. Proof of Certain Losses; Jury Instruction, TX CIV PRAC & REM§ 18.091




  Vernon's Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annas)
      Title 2. Trial, Judgment, and Appeal
         Subtitle B. Trial Matters
           Chapter 18. Evidence
              Subchapter D. Certain Losses

                                    V.T.C.A., Ch~l Practice & Remedies Code§ 18.091

                                    § 18.091. Proof of Certain Losses; Jmy Instruction

                                                Effective: September 1, 2003
                                                          Currentness


(a) Notwithstanding any other law, if any claimant seeks recovery for loss of earnings, loss of earning capacity, loss of
contributions of a pecuniary value, or loss of inheritance, evidence to prove the loss must be presented in the form of a net loss
after reduction for income tax payments or unpaid tax liability pursuant to any federal income tax law.


(b) If any claimant seeks recovery for loss of earnings, loss of earning capacity, loss of contributions of a pecuniary value, or
loss of inheritance, the court shall instruct the jury as to whether any recovery for compensatory damages sought by the claimant
is subject to federal or state income taxes.


Credits
Added by Acts 2003, 78th Leg., ch. 204, § 13.09, eff. Sept. 1, 2003.



Notes of Decisions (3)

V. T. C. A., Civil Practice & Remedies Code§ 18.091, TX CIV PRAC & REM§ 18.091
Cunent through the end of the 2015 Regular Session of the 84th Legislature

 End of Document                                                    i'J 20 1511wmson Reuters. No claim to original U.S. Government Works.




V'ip•;!l.•;o,vNext © 2015 Thomson Reuters.     ~lo   claim to original U.S. Government Works.

                                    Appendix Item 8A
       Pursuant to the Supremacy Clause of the United States Constitution, federal

law applicable to the Project governs. NAFTA Traders, Inc. v. Quinn, 339 S.W.3d

84, 97-98 (Tex. 2011). State courts “must follow” applicable federal law. NAFTA

Traders, Inc. v. Quinn, 339 S.W.3d 84, 91 (Tex. 2011). The United States Supreme

Court has made clear that even in state-law breach of contract claims, if federal law

is involved, the federal law requirements are incorporated into the state-law based

breach of contract cause of action. American Tel. and Tel. Co. v. Central Office

Telephone, Inc., 524 U.S. 214, 222 (1998). If the state-law based breach of contract

action cannot be sustained in the event federal law is properly applied, then the

state-law breach of contract claim fails as a matter of law. Id.

       In American Tel. and Tel. Co., the plaintiff brought a state-law breach of

contract claim. Defendants argued that because federal law applied, the breach of

contract claim failed. The United States Supreme Court ruled that by applying the

applicable federal law, the state-law breach of contract claim could not be

sustained, since it depended upon facts and circumstances that were precluded by

the applicable federal law. The Supreme Court reached this decision despite the

plaintiff’s contention that it was pursuing claims solely based upon a state-law

breach of contract theory. Just as in American Tel. & Tel. Co., Star Operations

consistently argued that the SH130 Project involved the use of federal funds and




{C1208515.DOCX:}                          16
therefore a written subcontract was required by applicable federal law. (CR 1346-

1358 at Pars. 4, 7).

       Moreover, in addition to federal requirements being included in the contracts

by operation of law pursuant to the Christian Doctrine, the federal contract

requirements were also expressly incorporated into any and all contracts on the

Project, including any purported subcontract between Dig Tech and Star.

Specifically, the Facility Concession Agreement (“FCA”) between TxDOT and SH

130 Concession Company provides:

       Developer shall comply and require its Contractors to comply with all
       federal requirements applicable to transportation projects that
       receive federal credit or funds, including those set forth in Exhibit 8.

(Appx Item 17, RR Vol. 34: DX119 at p.175) (emphasis added). The FCA also

provides:

       [E]ach Contract shall include terms and conditions sufficient to ensure
       compliance by that Contractor with the requirements of the FCA
       Documents, and shall include those terms that are specifically
       required by the FCA Documents to be included therein including, to
       the extent applicable, those set forth in Exhibit 8.

(Appx Item 18A: DX119 at p. 69 (Art. 10.2.3); Appx Item 18B, Rule 11

Agreement). Exhibit 8, entitled “FEDERAL REQUIREMENTS FOR FEDERAL-

AID CONSTRUCTION PROJECTS,” was included in each subcontract pursuant

to the “flow-down” provisions of the FCA, discussed infra. (Appx Item 14, RR

Vol. 16: DX1 at pp. 69, 73, 86, 88-90, 98-99, 102-103; Appx Item 15, RR Vol. 18:



{C1208515.DOCX:}                         17
§ 2253.001. Definitions, TX GOVT § 2253.001




      (C) reasonable rental and actual running repair costs for construction equipment used, or reasonably required and delivered
      for use, directly to carry out work at the project site; or



      (D) power, water, fuel, and lubricants used, or ordered and delivered for use, directly to cany out a public work.



   (7) "Retainage" means the part of the payments under a public work contract that are not required to be paid within the month
   after the month in which the public work labor is performed or public work material is delivered under the contract.



   (8) "Specially fabricated material" means material ordered by a prime contractor or subcontractor that is:



      (A) specially fabricated for use in a public work; and



      (B) reasonably unsuitable for another use.



   (9) "Subcontractor" means a person, firm, or corporation that provides public work labor or material to fulfill an obligation
   to a prime contractor or to a subcontractor for the performance and installation of any of the work required by a public work
   contract.


Credits
Added by Acts 1993, 73rd Leg., ch. 268, § I, eff. Sept. I, 1993. Amended by Acts 1999, 76th Leg., ch. 62, § 8.20, eff. Sept.
1, 1999.


Editors' Notes

                                                        REVISOR'S NOTE

                                                         2008 Main Volume

          (1) The definitions of"governmental entity," "payment bond beneficiary," "public work contract," and "specially
          fabricated material" are added to the revised law for drafting convenience and to eliminate frequent, unnecessary
          repetitions of the substance of the definitions.

          (2) In the definitions of"public work contract," "public work labor," and "public work material," the revised law
          substitutes the phrases "carrying out" and "to cany out" for the source law term "prosecution" because the terms
          are synonymous and the former is more commonly used.

          (3) In the definition of"prime contractor," the revised law substitutes the term "public work contract" for the source
          law term "formal contract" because this section defines "public work contract" to mean "a contract for constructing,
          altering, or repairing a public building or carrying out or completing any public work" and it is clear from the
          context ofthe source law that "formal contract" is intended to refer to a "public work contract."

          (4) In the definition of"prime contractor," the revised law substitutes the term ''governmental entity" for the source
          law list of governmental entities with whom the prime contractor may contract because the revised law defines
          "governmental entity" to mean those entities.


\-'V~e·ill·:r·.vNext   © 2015 Thomson Reuters. ~lo claim to original US. Government Works.                                         2
DX3 at p. 87 (Art. VII(e))). Further, these provisions were incorporated into Dig

Tech’s own written contract with Central Texas (Appx Item 15, RR Vol. 17: DX2

at p. 11), which imputed actual knowledge to Dig Tech of their applicability. In re

Bank One, N.A., 216 S.W.3d 825, 827 (Tex. 2007, orig. proceeding) (holding

arbitration clause in a contract incorporated by reference into a signature card

signed by account holder was binding on account holder). Therefore, Dig Tech is

conclusively presumed to have knowledge that any enforceable contract on a

federally funded highway project must be in writing, as a mandatory provision of

any procurement of Dig Tech’s services. Id.

       Pursuant to Christian and its progeny, and in light of the express provisions

of the written contracts applicable to the Project, all actual and potential contracts

for work on the Project incorporated all applicable federal laws, statutes, rules, and

regulations. Therefore, they became part of any purported contract between Star

Operations and Dig Tech on the SH 130 Project. G.L. Christian and Assocs. v.

U.S., 312 F.2d 418, 427 (Ct. Cl. 1963); In re Bank One, N.A., 216 S.W.3d 825, 826

(Tex. 2007); In re 24R, Inc., 324 S.W.3d 564, 567 (Tex. 2010).

       Having established that federal contract requirements applied to this Project,

the next inquiry is determining what those requirements were and whether they

were met.

A.     Issues 2 and 3: The trial court erred in refusing to submit proposed jury
       question(s) on: (1) Dig Tech’s failure to procure a written contract with Star;

{C1208515.DOCX:}                          19
§ 2253.001. Definitions, TX GOVT § 2253.001




Notes of Decisions (42)

V. T. C. A., Government Code§ 2253.001, TX GOVT § 2253.001
Current through the end of the 2015 Regular Session of the 84th Legislature

 End of Document                                                 (!J 20 J 5 Thomson Reuters. No claim to original U.S. Government Works




'NP"·ll·'C'.VNext © 2015 Thomson F\euters. No claim to original lJ S Government Works.                                                3
such written, TxDOT-approved agreement. In paragraphs 4 and 7 of their live

pleading Appellants specifically denied the performance of all conditions

precedent and specifically raised the applicability of federal law to the Project and

any contract claims of Dig Tech. (CR 1346-1358). Specific denials included the

failure of Dig Tech to comply with the condition precedent of a written contract as

required by applicable federal law. As such, Dig Tech bore, but could not meet, the

burden of proving that it had an enforceable agreement, since its alleged agreement

was admittedly verbal and in violation of applicable federal law.

       “A party seeking to recover under a contract bears the burden of proving that

all conditions precedent have been satisfied.” Associated Indem. Corp. v. CAT

Contracting, Inc., 964 S.W.2d 276, 283 (Tex. 1998). A condition precedent may

either be a condition to the formation of a contract or to an obligation to perform

an existing agreement. Hohenberg Bros. Co. v. George E. Gibbons & Co., 537

S.W.2d 1, 3 (Tex. 1976); Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex.

1992); Fitzgibbons v. Hughes, Id. A condition precedent will be implied when

there is “obvious necessity” or—as here—there are “public policy reasons” for it.

Snyder v. Eanes ISD, 860 S.W.2d 692, 696 (Tex. App. – Austin 1993, writ

denied.).

       Dig Tech will no doubt urge that it was unfamiliar with or unaware of these

legal requirements. This argument fails factually and legally. Dig Tech’s own



{C1208515.DOCX:}                         21
written subcontract with Central Texas (Appx Item 15, RR Vol. 17: DX2)

contained these requirements, imputing actual and constructive knowledge of their

applicability. “As a matter of law, it is conclusively presumed parties know the

law and contracted with reference to it.” Snyder, 860 S.W.2d at 697. A party who

signs a contract is charged by law with knowledge of its contents. Nat’l Prop.

Holdings, LP v. Westergren, 453 S.W.3d 419, 425 (Tex. 2015) (per curiam)

(holding that “the law presumes that a party knows and accepts the terms of a

contract the party signs, and it is not the Court’s role to protect the parties from

their own agreements.”). This is particularly true with respect to federal rules,

regulations, and contract requirements. General Engineering & Machine Works v.

O’Keefe, 991 F.2d 775, 780 (Fed. Cir. 1993); Century Marine, Inc. v. United

States, 153 F.3d 225, 228 (5th Cir. 1998); Worthen v. Fidelity Nat. Prop. & Cas.

Ins. Co., 463 Fed.Appx.422 (5th Cir. 2012); UPMC Braddock v. Harris, 934 F.

Supp. 2d 238, 259 (USDC 2013) ) vacated on other grounds as moot 584

Fed.Appx.1 (D.C. Cir. 2014); Federal Crop Ins. Corp. v. Merrill, 332 US 380

(1947).

       The trial court must render judgment against the party who had the burden

of proof on a missing element when (1) the opposing party objected to the missing

element, (2) an affirmative finding on the missing element is essential to the claim

or defense, and (3) the missing element is not established as a matter of law in



{C1208515.DOCX:}                         22
favor of the party with the burden of proof. McKinley v. Stripling, 763 S.W.2d 407,

410 (Tex. 1989) (rendition by Court of Appeals affirmed where trial court failed to

submit jury issue on proximate cause and defendant objected to absence of such

issue); Physicians & Surgeons Gen. Hosp. v. Koblizek, 752 S.W.2d 657, 660 (Tex.

App.—Corpus Christi 1988, writ denied) (rendition against plaintiff where trial

court improperly failed to submit questions on essential elements of premises

liability claim and defendant objected and submitted questions on issue). When the

opposing party objects to a missing element, a court cannot deem the missing

element in favor of the party with the burden of proof on that element. See

Physicians & Surgeons, 752 S.W.2d at 660. In such a case, the party with the

burden of proof did not secure a finding on the omitted element, which forecloses

that claim or defense. Clayton W. Williams, Jr., Inc. v. Olivo, 952 S.W.2d 523, 529

(Tex. 1997); Dallas Cty. Med. Coc’y v. Ubinas-Brache, 68 S.W.3d 31, 40 (Tex.

App.—Dallas 2001, pet. denied).

       Appellants properly preserved error by objecting to the court’s refusal to

submit jury questions on failure of contract formation for lack of compliance with

federal requirements and failure of conditions precedent. The trial court improperly

denied submission of these various jury questions. (RR Vol. 9 at 136:10-17;

142:19–144:24).

B.     Issue 4: The trial court erred in refusing to submit proposed jury question(s)
       on Dig Tech’s failure to provide statutorily compliant “certified payroll” to

{C1208515.DOCX:}                         23
§ 2253.048. Mailing Notice, TX GOVT § 2253.048




  Vernon's Texas Statutes and Codes Annotated
    Government Code (Refs & Annas)
      Title 10. General Government (Refs &Annas)
        Subtitle F. State and Local Contracts and Fund Management
           Chapter 2253. Public Work Perfmmance and Payment Bonds (Refs &Annas)
             Subchapter C. Notice Requirements

                                           V.T.C.A., Government Code§ 2253.048

                                                  § 2253.048. Mailing Notice

                                                 Effective: September 1, 2001
                                                           Currentness


(a) A notice required by this subchapter to be mailed must be sent by certified or registered mail.


(b) A notice required by this subchapter to be mailed to a prime contractor must be addressed to the prime contractor at the
contractor's residence or last known business address.


(c) A person satisfies the requirements of this subchapter relating to providing notice to the surety if the person mails the notice
by certified or registered mail to the surety:


  (1) at the address stated on the bond or on an attachment to the bond;


  (2) at the address on file with the Texas Deparhnent oflnsurance; or


  (3) at any other address allowed by law.


Credits
Added by Acts 1993, 73rdLeg., ch. 268, § l, eff. Sept. 1, 1993. Amended by Acts2001, 77th Leg., ch. 380, § 4, eff. Sept. 1,2001.


V. T. C. A., Government Code§ 2253.048, TX GOVT § 2253.048
Current through the end of the 2015 Regular Session ofthe 84th Legislature

 Eud of Document                                                     (["'l   20 IS Thomson Reuters_ No claim to original U.S_ Government Works.




W?''li·?;wNext © 20'15 Thomson Reuters.        ~lo   claim to original   U.S. Government Works.
                                     Appendix Item 13
Koblizek,752 S.W.2d 657, 660 (Tex. App. – Corpus Christi 1988, writ denied);

Dallas Cty. Med. Co’y v. Ubinas-Brache, 68 S.W.3d 31, 40 (Tex. App. – Dallas

2001, pet. denied).

C.     Issues 5-7: The trial court erred in awarding Dig Tech contract damages
       because it was undisputed that Dig Tech failed to: (1) obtain a written
       contract with Star; (2) obtain TxDOT approval to its purported verbal
       contract with Star; or (3) provide statutorily compliant “certified payroll” to
       Star

       Since applicable federal law renders the oral agreement Dig Tech sued upon

unenforceable as a matter of law, Appellants are entitled to reversal and rendition

of a take nothing judgment in their favor. McKinley v. Stripling, 763 S.W.2d 407,

410 (Tex. 1989); Physicians & Surgeons Gen. Hosp. v. Koblizek, 752 S.W.2d 657,

660 (Tex. App. – Corpus Christi 1988, writ denied); Clayton W. Williams, Jr., Inc.

v. Olivo, 952 S.W.2nd 523, 529 (Tex. 1997); Dallas Cty. Med. Co’y v. Ubinas-

Brache, 68 S.W.3d 31, 40 (Tex. App. – Dallas 2001, pet. denied).

       The uncontroverted evidence at trial showed that Dig Tech’s purported

contract with Star was verbal and unapproved by TxDOT. The uncontroverted

evidence also showed Dig Tech failed to provide Star statutorily compliant

“certified payroll.” As set out above, as a matter of law, these facts prevented

formation of an enforceable contract upon which Dig Tech could recover payment.

Star raised these issues repeatedly at trial and in its Motion for Judgment

Notwithstanding the Verdict. The trial court erred in overruling such motion and in


{C1208515.DOCX:}                          25
  ultimately awarding Dig Tech contract damages because the uncontroverted

  evidence conclusively negated Dig Tech’s contract cause of action.

II.      Issues 8-11: The trial court erred in applying the law to Dig Tech’s claim(s)
         against the GAIC payment bonds

         Star and GAIC asserted at trial and continue to contend that the federal

  Miller Act applies to this federally funded public works project, which places

  exclusive subject matter jurisdiction over the bond dispute in federal court.

  However, if the Texas McGregor Act applies, the uncontroverted evidence at trial

  showed that Dig Tech failed to comply with its notice requirements and therefore

  failed to perfect any bond claims as a matter of law.

  A.     Issue 8: The trial court erred in refusing to dismiss Dig Tech’s claim(s)
         against the GAIC payment bonds for lack of jurisdiction because the federal
         Miller Act applied to the claim(s)

         The federal Miller Act requires contractors on “public work” projects to

  provide performance and payment bonds. 40 U.S.C. § 3131. “[A] public work

  within the Miller Act is any work in which the United States is interested and

  which is done for the public and for which the United States is authorized to

  expend funds.” Continental Cas. Co. v. C.O. Brand, Inc., 355 F.2d 969, 974 (5th

  Cir. 1966). The Project is admittedly a federally funded project for the purpose of

  creating a roadway for public use, triggering the Miller Act analysis.




  {C1208515.DOCX:}                         26
       When the Miller Act applies, the McGregor Act does not. TEX. GOV’T. CODE

§ 2253.001, et seq.; see Ex rel. United Rentals, Inc. v. Hartford Fire Ins. Co., 339

F. Supp.2d 799, 801-02 (W.D. Tex. 2004). Dig Tech had the burden of pleading

facts showing the trial court had subject-matter jurisdiction. Appellants properly

preserved this issue by asserting in their live pleading a Plea to the Jurisdiction

(CR 1352-1353 at Par. 10). See Tex. Dep’t. of Parks & Wildlife v. Miranda, 133

S.W.3d 174, 176 (Tex. 2004).

       Exclusive jurisdiction of the Miller Act claims lies in federal court. See Ex

rel. United Rentals, 339 F. Supp. 2d at 803. Accordingly, if the Miller Act applied,

Dig Tech could not meet its burden to properly establish the trial court’s subject-

matter jurisdiction over the bond claims against GAIC.

B.     Issue 9: If the Texas McGregor Act applied to Dig Tech’s payment bond
       claim(s), the trial court erred in ruling as a matter of law that Dig Tech
       perfected any claim against the bonds

       Assuming the Miller Act did not apply, as the trial court ruled (RR Vol. 5 at

223:23–227:19; 229:14–230:3; 232: 9-15), the McGregor Act would apply.

Because the evidence showed that Dig Tech failed to perfect any bond claim

against GAIC under the McGregor Act, the trial court erred in holding Dig Tech

perfected any claim.

       It is undisputed that there were two separate subcontracts between Star and

Central Texas with two separate surety bonds. Dig Tech claimed it performed work


{C1208515.DOCX:}                         27
under each subcontract. In order to perfect a bond claim on each of the bonds (or

either of them) under the McGregor Act, Dig Tech was required to comply with

the terms of the McGregor Act. This included a requirement that Dig Tech:

       …mail to the prime contractor written notice of a claim for any
       unpaid public work, labor performed, or public work material
       delivered … on or before the 15th day of the second month after each
       month in which the labor was performed or the material was
       delivered.

TEX. GOV’T. CODE § 2253.047(c). Dig Tech was also required to mail to both the

surety (GAIC) and the prime contractor:

       …written notice of the claim…on or before the 15th day of the third
       month after each month in which any such claimed labor was
       performed or any of the claimed material was delivered [and a] sworn
       statement of account that states in substance: (1) the amount claimed
       is just and correct; [and] (2) all just and lawful offsets, payments, and
       credits known to the affiant have been allowed.

TEX. GOV’T. CODE § 2253.041 (emphasis added). All notices to the prime

contractor and the surety were required to be sent by Registered or Certified Mail.

TEX. GOV’T CODE § 2253.048(a). Because Dig Tech claims work under each of

Star’s subcontracts, it was required to provide notice on each bond and produce

evidence on the value of work claimed on each Star subcontract (and GAIC bond).

       For purposes of compliance with the McGregor Act, the “prime contractor”

is the “person, firm, or corporation that makes a public work contract with a

government entity.” TEX. GOV’T. CODE § 2253.001(3). As reflected in the FCA

admitted into evidence (Appx Item 17, RR Vol. 32: DX119), SH130 Concession

{C1208515.DOCX:}                          28
Company, LLC was the sole entity with a direct contract with TxDOT. Neither

Central Texas, nor Star, nor Dig Tech had a contract with any government entity.

Thus, only SH130 Concession Company qualifies as the “prime contractor” for

purpose of complying with the McGregor Act.

       The uncontroverted and undisputed evidence established that Dig Tech

provided no notice to SH130 Concession Company (the prime contractor) at any

time, in any format, on either bond. The evidence also conclusively shows Dig

Tech provided no sworn statement of account to GAIC complying with the

mandatory provisions of TEX. GOV’T. CODE § 2253.041. Instead Dig Tech argued

that it “substantially complied” by sending an email to Central Texas—not the

“prime contractor”—dated March 16, 2012 (Appx Item 20, RR Vol. 12: PX63) and

a single letter to GAIC dated May 1, 2012 that did not contain the statutorily-

mandated sworn statement of account (Appx Item 21, RR Vol. 15: PX 183). As to

the latter notice, it only referenced CSUB-140 (Appx Item 16, RR Vol. 18: DX3).

It did not reference CSUB-116 (Appx Item 14, RR Vol. 15: DX1). It did not meet

the sworn statement requirement. Clearly, Dig Tech did not provide the statutorily-

mandated notices required to perfect a claim for any work in October, 2011

through April, 2012. Accordingly, Dig Tech failed to prove that it perfected its

claims on the GAIC bonds.




{C1208515.DOCX:}                        29
       At trial, Dig Tech claimed that even though it did not provide timely and

compliant notices properly accompanied by sworn statements of account, it

nevertheless       “substantially complied” with   the   McGregor    Act’s   notice

requirements. It is true that a claimant may maintain a McGregor Act bond claim

despite semantic variances from the statutory notice language under the doctrine of

“substantial compliance.” See, e.g. Featherlite Bldg. Products Corp. v.

Constructors Unlimited, Inc., 714 S.W.2d 68, 69 (Tex. App.—Houston [14th Dist.]

1986, writ ref’d n.r.e.) (substantial compliance held where sworn statement of

account stated amounts were “due and unpaid” instead of “just and correct.”);

Capitol Indemn. Corp. v. Kirby Restaurant Equipment and Chemical Supply Co.,

Inc., 170 SW.3d 144, 148 (Tex. App.—San Antonio 2005, pet. denied) (substantial

compliance held where sworn statement of account stated the claim was “currently

unpaid and owing,” “now due,” and represented the “current payment due,” instead

of “just and correct.”).

       However, Texas courts require strict—not merely “substantial” compliance

with the Act’s notice deadlines. Suretec Ins. Co. v. Myrex Industries, 232 S.W.3d

811, 816 (Tex. App.—Beaumont 2007, pet. denied) (distinguishing failure to

provide timely notice from “substantial compliance” cases involving semantic

variances from statutory language; holding “substantial compliance” will not

satisfy requirement that bond notices be made timely; concluding that untimely



{C1208515.DOCX:}                         30
notice barred claim even though it was only one day late and the deadline fell on a

Sunday.); see also Laboratory Design & Equipment, Inc. v. Brooks Development

Authority, No. 04-07-00284-CV, 2008 WL 36614 at *3 (Tex. App.—San Antonio

Jan. 2, 2008, no pet.) (Claimant failed to perfect bond claim under McGregor Act

where notices were untimely). Moreover, when the claimant fails to provide the

required sworn statement of account, the claimant does not substantially comply

with the Act and fails to perfect its bond claim. See Laboratory Design &

Equipment, Inc., 2008 WL at *3 (Claimant failed to perfect bond claim where it

failed to provide any sworn statement of account as required; specifically rejecting

argument that notice efforts constituted “substantial compliance.”).

       Dig Tech’s lone notice to GAIC was unaccompanied by any sworn

statement of account, and therefore did not substantially comply with the Act. Id.;

TEX. GOV’T. CODE § 2253.041. Dig Tech offered no evidence that it ever provided

any notice at all to the prime contractor (SH130 Concession Company) as required

by TEX. GOV’T. CODE §§ 2253.001, 2253.041, and 2253.047. Accordingly, Dig

Tech failed to prove it perfected its bond claims.

       Despite failing to prove claim perfection and instead of submitting jury

questions on compliance, Dig Tech requested that the Court rule as a matter of law

that it had “substantially complied with the notice provisions such that GAIC has




{C1208515.DOCX:}                          31
                                                                         Agreement #CS UB116
                                                                                                             I
                                                                                                             I

                                                                        SH130 Segments 5 and 6
                                                                          Illumination and Signal
                 Iii      that each laborer or mechanic has been paid not iess that the
                          applicable wage rate and fringe benefits or r;ash equivalent for the
                          classifica tion of wo1ked performed, as specified In the applicable
                          wage determination Incorporated into the contract.

           e.    The weekly submission of a properly executed certification set forth
                 on the reverse side of Optional Form WH~347 shall satisfy the
                 requirement for submission of the 11Statement of Compllance 0
                 required by paragraph 2d ofthis Section V.

           f.    The falsification of any of tho above certfficatlons may subject t11e
                 contractor to clvil or criminal prosecution under 18 U.S.C. 1001 and
                 31    u.s.c. 231.
           g.    The contractor or subcontrdctor sl1all make the records required
                 under paragraph 2b of this Sectlor\ V available for inspection,
                 copying, or transcription by autllorized representatives of the SHA,
                 the FHWA, or the DOL, and shall petmlt such representatives to
                 interview employees during working hours on the job. If the
                 contractor or subcontractor fails to submit the required records or to
                 mal<e them available, the SHA, the FHWA, the DOL, or all may,
                 after wrltt~n notice to ti1e contractor, sponsor, applicant, or owner,
                 take such clctions as may be necessary to cause the suspension of
                 any "further payment, advance, or guarantee of funds. Furthermore,
                 failure to submit the required records upon request or to make suol1
                 records available may be grounds for debarment action pursuant to
                  29 CFR 5.12.

VI.   RECORD OF MATERIALS, SUPPLIES) AND LABOR

      1.   On all Fedeml~aid contracts on the National Highway System, except
           those which provide soiely for the installation of protective devices at
           railroad grade crossings, those which are constructed on a force accoutit
           or direct labor basis, highway beautification contracts, and contracts for
           which the total final construction cost fot· roadway and bridge ls less than
           $1,000,000 (2:3 CFR 635) the contractor shall:

           a.     Become famHiar with the list of specific materials and supplies
                  contained in Form FHWA-47, "Statement of Materials and Labor
                  Used by Developer of Highway Construction Involving Federal
                  Funds," prior to the commGncement of work under this contract.

            b.     Maintain a record of the total cost of all materials and supplfes
                   purchased for and incorporated in the work, and also of the
                   quantities of those speci'fic materials and supplies listed on Form
                   FHWA~47, and in the units shown on Form FHWA-47.




                                                              Excerpt from Pac!llly Conc<~sslon Agre•Jmanl
   requirements and by requesting jury questions on this issue. (RR Vol. 9 at 136:18–

   137:7; 141:1–142:18). To the extent the evidence did not conclusively prove Dig

   Tech failed to provide the required notices, these questions were required to go to

   the jury and the court erred in refusing to include them in the charge.

          In light of the fact that Dig Tech failed to obtain jury findings of compliance

   with its condition precedent to perfect its claim(s) on the bonds, GAIC is entitled to

   a reversal and the rendition of a take nothing judgment in its favor. Associated

   Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 283 (Tex. 1998);

   McKinley v. Stripling, 763 S.W.2d 407, 410 (Tex. 1989); Clayton W. Williams, Jr.,

   Inc. v. Olivo, 952 S.W.2nd 523, 529 (Tex. 1997).

III.      Issue 12: The trial court erred in awarding damages to Dig Tech without any
          evidence of Dig Tech’s actual damages as net loss after reduction of income
          tax payments or unpaid income tax liability as required by TEX. CIV. PRAC.
          & REM. CODE § 18.091

          As a precondition to recovering its damages, Dig Tech was required to

   present evidence of such damages in the form of “net loss after reduction of

   income tax payments or unpaid income tax liability pursuant to any federal income

   tax law.” TEX. CIV. PRAC. & REM. CODE § 18.091. The case law is clear. Contrary

   to Dig Tech’s arguments at trial, this statute does not apply “only to personal injury

   claims.” See Interconex, Inc. v. Ugarov, 224 S.W.3d 523 (Tex. App.—Houston [1st




   {C1208515.DOCX:}                          33
Dist.] 2007, no pet.); Big Bird Tree Service v. Gallegos, 365 S.W.3d 173, 179

(Tex. App. – Dallas 2012, pet denied).

       A court may not judicially amend a statute and add words that are not

explicitly contained in the language of the statute. Jones v. Liberty Mutual Ins.

Co., 745 S.W.2d 901, 902 (Tex. 1988). As the Supreme Court stated recently, “the

bar for reworking the words of our Legislature passed into law is high and should

be.” Combs v. Healthcare Services, Corp., 401 S.W.3d 623, 630 (Tex. 2013).

Stated differently, the Supreme Court has said that in matters of statutory

construction, the Court takes the Legislature “at its word.” Christus Health Gulf

Coast v. Aetna, Inc., 397 S.W.3d 651, 654 (Tex. 2013). The Court’s analysis

begins (and often ends) with the Legislature’s chosen language. Id. at 653. This

voted-on language is what constitutes the law; “the Judge’s inquiry is at an end.”

Id. at 653-654.

       The language of the statute is clear. As a precondition to recovery of its

damages, Dig Tech was required to present evidence of such lost earnings after

reduction for any income tax payments made or unpaid tax liability that would

have accrued as a result of such recovery. Since the invoices would be ordinary

revenue, they would constitute “earnings” within the meaning of the Internal

Revenue Code and federal income tax would be due and owing. Dig Tech’s failure

to present evidence net of the unpaid tax liability precludes Dig Tech’s recovery.



{C1208515.DOCX:}                         34
  Appellants objected to the failure of the charge – specifically Jury Questions Nos.

  4 and 8 – on the grounds that they failed to comply with § 18.091. (RR Vol. 9 at

  144:25–145:15). Accordingly, Appellants are entitled to reversal and rendition of a

  take nothing judgment in their favor as to actual damages in light of Dig Tech’s

  failure to present the evidence in the statutorily required manner and its failure to

  secure a jury finding of damages in compliance with § 18.091.

IV.      Issue 13: The trial court erred in awarding attorney’s fees to Dig Tech
         because Dig Tech failed to segregate recoverable attorney’s fees from
         unrecoverable attorney’s fees

         Dig Tech readily admitted that in order to recovery attorney’s fees, it was

  required to segregate incurred attorney’s fees relating solely to a claim for which

  attorney’s fees are unrecoverable pursuant to the Supreme Court decision of Tony

  Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex. 2006). (RR Vol. 5

  at 191:21–192:2 (Dig Tech attorney David Pfeuffer)). Simply because the facts are

  “intertwined” does not make fees incurred on an unrecoverable claim – such as

  Star’s tort counterclaim – recoverable. Failure to segregate such fees precludes

  recovery.

         In cross-examination Dig Tech’s sole witness on the issue of attorney’s fees

  – David Pfeuffer – freely admitted that he made no attempt to look at the discovery

  submitted by Star to Dig Tech on its counterclaims. Instead he concluded that the

  unrecoverable attorney’s fees Dig Tech incurred in drafting and responding to


  {C1208515.DOCX:}                         35
discovery dealing solely with Star’s counterclaim were simply “intertwined” with

attorney’s fees that would have been incurred by Dig Tech in relation to its own

breach of contract claim. (RR Vol. 5 at 217:2–218:21) (David Pfeuffer). Mr.

Pfeuffer admitted that – without looking at the discovery – he merely assumed

that the discovery would have been attributable to both Dig Tech’s breach of

contract claim and Star’s counterclaim. In other words, Dig Tech made no attempt

to segregate the recoverable attorney’s fees attributable to responding to discovery

pertaining to its breach of contract claim from unrecoverable attorney’s fees

incurred in drafting or responding to discovery that was attributable solely to Star

Operations’ counterclaim.

       Dig Tech’s sole expert witness on attorney’s fees failed to properly

investigate and analyze the discovery at issue to determine if it was in fact

“intertwined” between Dig Tech’s claims and the counterclaims or if it was

attributable only to the counterclaims. It was Dig Tech’s burden to segregate the

fees that were not recoverable. It chose not to do so. By virtue of Dig Tech’s

failure to segregate the discreet attorney’s fees, Dig Tech was precluded from

recovering the attorney’s fees it incurred at the trial of this case. Accordingly,

Appellants are entitled to reversal and rendition of judgment in their favor

eliminating any claim for attorney’s fees incurred at the trial of the case.




{C1208515.DOCX:}                          36
V.         Issue 14: The trial court erred in awarding Dig Tech costs for copies of
           deposition transcripts as “taxable costs” when Dig Tech did not notice or
           initiate the depositions

           Dig Tech moved for entry of final judgment on March 13, 2015, submitting

 its original bill of costs totaling $8,666.16. Subsequently, Dig Tech amended its

 bill of costs three times: (1) on March 16, 2015 Dig Tech submitted its First

 Amended Bill of Costs totaling $25,845.85; (2) on March 23, 2015 Dig Tech

 submitted its Second Amended Bill of Costs totaling $29,149.48; and (3) on April

 16, 2015 Dig Tech submitted its Third Amended Bill of Costs totaling $5,556.61.

 With each amendment Dig Tech added additional unreasonable and unrecoverable

 costs until its Third Amended Bill of Costs when Dig Tech removed certain

 improper costs. (CR 1826-1861).

           However, even in its Third Amended Bill of Costs it continued to seek

 amounts for deposition transcript photocopies for depositions Dig Tech neither

     noticed nor initiated. These specifically included the depositions of Mike Kiehnau,

     Eric Salazar, Ana Garcia, Gaylon Chapman, Michael Furry, Tracy Lambert, and

     Bodie Leslie. The total amount of these improper costs that were requested by Dig

     Tech and awarded by the trial court is the sum of $3,573.21.

           “Costs are not recoverable unless they are expressly provided for by statute,

     rule, or under principles of equity.” Bundren v. Holly Oaks Townhomes Ass’n, Inc.,

     347 S.W.3d 421, 440 (Tex. App.—Dallas 2011, pet. denied); Gumpert v. ABF


 {C1208515.DOCX:}                            37
Freight System, Inc., 312 S.W.3d 237, 241 (Tex. App.—Dallas 2010, no pet.). “A

court may include the following items in awarding costs: (1) fees of the clerk and

service fees due the county; (2) fees of the court reporter for the original

stenographic transcripts necessarily obtained for use in the suit; (3) masters,

interpreters, and guardians ad litem appointed pursuant to these rules and state

statutes; and (4) such other costs and fees as may be permitted by these rules and

state statutes.” TEX. CIV. PRAC. & REM. CODE § 31.007(b).

       Regardless, “the power to allocate costs does not encompass the power to

tax as costs items that are not allowed as taxable court costs.” Hatfield v. Solomon,

316 S.W.3d 50, 67 (Tex. App.—Houston [14th Dist.] 2010, no pet.). Moreover, the

courts have specifically rejected certain proposed costs as not recoverable:

               (1) copy or reproduction fees; 11
               (2) travel related expenses; 12
               (3) delivery services (Id.);
               (4) binding of briefs (Id.);
               (5) transcripts of testimony not elicited (Id.);
               (6) legal support (Id.);
               (7) secretarial overtime (Id.); and
               (8) expert fees.13



11
   TEX. R. CIV. P. 141 (“[n]o fee for a copy of a paper not required by law or these rules to be
copied shall be taxed in the bill of costs.”).
12
   Wallace v. Briggs, 348 S.W.2d 523, 527 (Tex. 1961); Shenandoah Assocs. v. J& K Properties,
Inc., 741 S.W.2d 470, 487 (Tex. App.—Dallas 1987, writ denied) (incidental litigation expenses
are not recoverable as taxable court costs).
13
   May v. Ticor Title Ins., 422 S.W.3d 93, 106 (Tex. App.—Houston [14th Dist.] 2014, rehearing
overruled) (“Generally, in Texas, expert fees are not recoverable as court costs.”) (citing
Bundren, 347 S.W.3d at 421) (citations omitted).


{C1208515.DOCX:}                              38
       Costs for copies or reproductions of deposition transcripts that do not

represent the original stenographic recording (e.g., copies of depositions not

initiated by a party) are not recoverable. Gumpert v. ABF Freight System, Inc., 312

S.W.3d 237 at 241 (Tex. App.—Dallas 2010, no pet.) (“because no statute or rule

authorizes the recovery of the costs to videotape a deposition or obtain a copy of a

deposition transcript, we conclude that the trial court erred by awarding [prevailing

party] those costs.”) (distinguishing cases including Crescendo Inv., Inc. v. Brice,

61 S.W.3d 465 (Tex. App.—San Antonio 2001, pet. denied) and Fasken Land &

Minerals, Ltd. v. Occidental Permian Ltd., 225 S.W.3d 577 (Tex. App.—El Paso

2005, pet. denied) cited by Dig Tech in its motion for entry to judgment and award

of costs); TEX. R. CIV. P. 140 (no fee for copy); TEX. CIV. PRAC. & REM. CODE §

31.007(b) (costs for “original stenographic transcripts”). Thus, deposition

transcript copy costs for depositions of witnesses other than Lana Lewis (the only

deposition noticed and initiated by Dig Tech) are not recoverable.

                                    Conclusion

       As reflected in Issue Nos. 1-7, Dig Tech failed to comply with mandatory

federal requirements: (1) that any agreement for work on the Project be in writing

and approved by TxDOT; and (2) that it provide compliant certified payroll to Star

as a precondition of payment. As reflected in Issue Nos. 8-11, Dig Tech failed to

perfect its bond claims against the surety GAIC in compliance with either the


{C1208515.DOCX:}                         39
federal Miller Act or TEX. GOV’T. CODE § 2253, et. seq. (McGregor Act). As

reflected in Issue No.12, Dig Tech failed to present damages in compliance with

TEX. CIV. PRAC. & REM. CODE § 18.091. As reflected in Issue No. 13, Dig Tech

failed to properly segregate pre-trial attorney’s fees to only seek those that were

recoverable. Finally, as reflected in Issue No. 14, the taxable costs awarded by the

trial court to Dig Tech were excessive, including recovery for photocopies of

deposition transcripts neither noticed nor initiated by Dig Tech. Star and GAIC are

each entitled to reversal and rendition of take nothing judgments in their favor.

                                          Prayer

       FOR ALL OF THE FOREGOING REASONS, Appellants request that this

Court reverse the judgment of the trial court and render a take nothing judgment in

favor of Appellants, and grant Appellants such further relief to which they may be

entitled.


                                       Respectfully submitted,

                                       BRANSCOMB|PC
                                       802 N. Carancahua, Suite 1900
                                       Corpus Christi, TX 78401-0036
                                       Telephone: 361/886-3800
                                       Telecopier: 361/886-3805

                                       /s/ James H. Robichaux
                                       James H. Robichaux
                                       SBN 17083000
                                       jrobichaux@branscombpc.com
                                       Clinton W. Twaddell, III

{C1208515.DOCX:}                         40
                                      SBN 24071537
                                      ctwaddell@branscombpc.com

                                      ATTORNEYS FOR APPELLANTS STAR
                                      OPERATIONS, INC. AND GREAT
                                      AMERICAN INSURANCE COMPANY
                                      OF NEW YORK

                      CERTIFICATE OF COMPLIANCE

      I certify that this document was produced on a computer using Microsoft
Word and contains 9,749 words, as determined by the computer software’s word-
count function, excluding the sections of the document listed in Texas Rule of
Appellate Procedure 9.4(i)(1).

                                      /s/ James H. Robichaux
                                      James H. Robichaux




                         CERTIFICATE OF SERVICE

      I hereby certify that the foregoing has been forwarded to counsel of record in
accordance with the applicable Tex. R. Civ. P. as listed below on this the 20th day
of November, 2015.

Brian Melton
Chanler A. Langham
SUSMAN GODFREY L.L.P.
1000 Louisiana Street Suite 5100
Houston, TX 77002-5096

                                      /s/ James H. Robichaux
                                      James H. Robichaux




{C1208515.DOCX:}                        41
                                                                                                       :


                                                                        Agreement #CSUB122
                                                                       SH130 Segments 5 and 6
                                                Fumlsh and Install Electric Distribution Facilities

            any subcontractor ·responsible thereof shall be liable to the affected
            employee for his/her unpaid wages. In addition, such contractor and
            subcontractor shall be liable to the United States (in the case of work done
            under contract for the District of Columbia or a territory, to such District or
            to such territory) for liquidated damages. Such liquidated damages shall
            be computed with respect to each individual laborer, mechanic, watchman,
            or guard employed in violation of the clause set forth in paragraph 7, In the
            sum -of $10 for each calendar day on which such employee was required
            or permitted to work in excess of the standard work week of 40 hours
            without payment of the overtime wages required by the clause set forth in
            paragraph 7.                                             ~

      9.    Withholding for Unpaid Wages and Liquidated Damages:

            The SHA shall upon its own action or upon written request of any
            authorized representative of the DOL withhold, or cause to be withheld,
            from any monies payable on account of work performed by the contractor
            or subcontractor under any such contract or any other Federal contract
            with the same prime contractor, or. any other Federally-assisted contract
            subject to the Contract Work Hours and Safety Standards Act, which is
            held by the same prim~ contractor, such sums as may be determined to
            be necessary to satisfy any liabilities of such.. contractor or subcontractor
            for unpaid wages and liquidated damages as provided in the clause set
            forth in paragraph 8 above.

V.    STATEMENTS AND PAYROLLS

      (Applicable to all Federal-aid construction contracts exceeding $2,000 and to all
      related subcontracts, except for Projects located on roadways classified as local
      roads or rural collectors, which are exempt.)

      1.    Compliance with Copeland Regulations (29 CFR 3)

            The contractor shall comply with the Copeland Regulations of the
            Secretary of Labor which are herein incorporated by reference.

      2.    Payrolls and Payroll Records:

            a.     Payrolls and basic records relating thereto shall be maintained by
                   the contractor and each subcontractor during the course of the
                  .work and preserved for a period of 3 years from the date of
                   completion of the contract for all laborers, mechanics, apprentices,
                   trainees, watchmen, helpers, and guards working at the site of the
                   work.




135

                                                                                        C0670272.PDF
                                                        - - - - - - - - - - - - · - · - - - ---·




                                                 CAUSE 12·0•337

                                                                  §
                                                                  §      IN THE DISTRICT COURT
                               Plaintiff,                         §
                                                                  §
                                                                  §
                                                                  §      22I'Il> JUDICIAL DISTRieT
       ST!\.R OPERATIONS, INC.                                    §
       GREAT AMERICAN INSURANCE                                §
      'COI\I(P.AN¥ OF NEW YORK                                    §
                                                                  §      Cb.LDWJ!)J.,;L C"OlJ'NT'i';
                                                                  §      TEXAS
                               Defendants.                        §
                                                FJ~M.. ln'JD:GMENT

                On   'February 2:0, :20T5, the Court entered a traditional summary judgment against

      DefehdantStat Operations, Inc.'s (''Star Opet;ations") counterclaim for fraud.

                On February 23, 201.5, the   Court <:ailed fuis   l)ase for   -tri'al,   The Plaintiff Dig Tech, Inc.

      ("Dig Tech") appeared in person and through its attorneys           and. annqJmg~d read.y {or t!ial,       The

       Defendants Stat Operations, Inc. ("Star Operations") and Great Americanlnsurance Company of

      New   York ("G.t\!C") appeared in person and through their attorneys and announced ready for
      trial. The Court then empanelled and swore in a jury consisting of twelve jurors, and the case

      proceeded to trial.

                On February 26 and March 4, the Court ruled that Djg Tech sUbstantially complied with

      the notice provisions of the McGregor Act and that the Miller Act does not apply to Dig Tech's

      claims.

                On March 4, 2015, the Court submitted questions, definitions, and instructions to the juryi ·

      On March 5, 2015, the jury returned a unanimous Verdict. The jury's unanimous Verdict was

      received, filed, and entered of record.




                                                          1




-·
                                    Appendix
                                          .. Item 1
     ---· - - - - - - - - - - - - - - - - -
                                                           ~
•




                 The Comt, having considered the pleadings, the evidence, the jury Verdict, and the

         applicable law, hereby renders Judgment in favor of Plaintiff Dig Tech and against Star

         Operations and GAIC on all claims asserted.

                 Accordingly, it is ORDERED that Dig Tech have and recover from Star Operations and

         GA!C, jointly and severally:

                 1.         Actual damages in t\J.e amount of $728~524.

                 :;z,.      Rea!!onable and necess!U'Y attorneys? fees in the iunount of $330,950 for the

         pros~cution of this case thr.ough J)ldgm!lnt,

                 3.         Reasonable and necessary' attorne,ys' fees fn the. amount of $60,030 for

         representation through appeal to the court of [\ppeals; ,$8,625 for-representation at the: petition for

         review s(ag!l in the Supreme Court of Texas; $~;62~ for representation at the merits briefing

         stage in the Supreme Court of Texas; and $34,500 for representation through oral argument and

         the complelion ofproceer!i!'lgs in t)le SupKeme Court of Texas.

                 4.         All Cotlrt costs, pursuant to Texas mill oJ ¢.1\rii Procedqre ~31, incl1.1ding the cost

         of deposition transcripts and subpoenas necessarily obtained for-use in this. suit, in the amount of
         ~§,84§.8§. ~ s,ss~a.l>l ~':l       rdl,h J !'II.   Pl-.,·n~;th' lh.·rJ Jl..,,,.J, d l'!!il\ ofC~r,+-.,.
                 5.         Prejudgment interest, .fJ'IfSiiaffi tQ     'Fex~  Prgp@l't'i Code § 28.003-, on the unpaid
                                              '5%                         ~ "i11 't~C1.7Lj- Apr."llb ~111
         invoice amounts at the rate of 1-8% in the amount of$68,HM' up to Mareh                G, 20Hi, flfte aeettting
    .,
         daily iR tQ.s ame.'Bnt of $11:2...79. ~~il the date q£ thfg; Judgtneilt.

                 6.         Post judgment interest on all of the above amounts at the rate of 5% compounded

         annually, from the date of this Judgment is entered until all mounts are paid in full.

                 It is further ORDERED that Star Operations take nothing on its fraud and tortious

         interference counterclaims against Dig Tech.



                                                                 2
         3619506vl/014338




                                                                1621
  ~   ------~-------                                     -------------




             It is further ORDERED that Dig Tech substantially complied with the                                                                                           noti~e .Provisions

      of the McGregor Act in order to perfect its bond claim against GAIC. Accordingly, GAIC is

      obligated under the terms of its bond to make the payments that Star Operations failed to make.

            "'-1'Ji1S: (l)riignten€ fimilty; tl"fupn"S\7S rof'',altclallns:;aml ·all p·arlies./anlt IS.,san'-appealablc
            <-~·   ..   ___ ,_,' .,. ___.,~..   _. .•.   --··---   .   ---~-   ._, ----   --.--   '   ,_,_ --·-----------f.
                                                                                                                       .•·   ---- -   .. -   .•,.   -~·-'-·   .,   .   •       -·"   -- .



      _final Jlldgm~nt~,

             The Court· ORDERS Execu\ion to issue for this Final Judgmeat.




                                                                                                                                              _     FlLEDtliisLit:df&I~2~/S
                                                                                                                                                                   TINA MORGAN FREEMAN          l
                                                                                                                                                                                   I
                                                                                                                                                        CLERKDISTRICTS~T-CALDWELLCO.,TX.
                                                                                                                                                      •J'J/a•tiJ. Fu,- i~    ·· . ,,
                                                                                                                                                    BY-~- .. ::__._.~~ __ Deputr· i
                                                                                                                                                                                                ~
                                                                                                                                                                                                '




GA\ c
                                                                                              3
·:L··




                                               CAUSE 12-0-337

        DIG TECH, INC.                                      §
                                                            §       IN THE DISTRICT COURT
                              Plaintiff,                    §
                                                            §
        v.                                                  §
                                                            §       22ND JUDICIAL DISTRICT
        STAR OPERATIONS, INC.                               §
        GREAT AMERICAN INSURANCE                            §
        COMPANY OF NEW YORK                                 §
                                                            §       CALDWELL COUNTY,
                                                            §       TEXAS
                              Defendants.                   §

                                 CORRECTEDCHARGEOFTHECOURT

        LADIES AND GENTLEMEN OF TilE JURY:


               After the closing arguments, you will go to the jury room to decide the case, answer the
        questions that a1e attached, and. reach a verdict. You may discuss the case with other jurors only
        when you a1e all together in the jury room.

                Remember my previous instructions: Do not discuss the case with anyone else, either in
        person or by any other means. Do not do any independent investigation about the case or
        conduct any resea~ch. Do not look up any words in dictiona~ies or on the Internet. Do not post
        information about the case on the Internet. Do not share any special knowledge or experiences
        with the other jurors. Do not use your phone or any other electronic device during your
        dellberations for any reason.

                Any notes you have taken a1e for your own personal use. You may take your notes back
        into the jury room and consult them during deliberations, but do not show or read your notes to
        your fellow jurors during your deliberations. Your notes a1e not evidence. Each of you should
        rely on your independent recollection of the evidence and not be influenced by the fact that
        another juror has or has not taken notes.

               Here ale the instructions for answering the questions.

               1.     Do not let bias, prejudice, or sympathy play any pait in your decision.

                2.      Base your answers only on the evidence admitted in court and on the law that is in
        these instructions and questions. Do not consider or discuss any evidence that was not admitted
        in the courtroom.


                                                        2




                                   Appendix Item 2
                                                                                            ..   -~   ...
     ,---·. - --------·-
.'


                                                                                            Agreement #CSUB122
                                                                                           SH130 Sogments 5 and 6
                                                                    Furnish and Install Electric Distribution Facilities

                            1.   On all Federal·ald contracts on the National Highway System, except
                                 those which provide solely for the Installation of protectJve devices at
                                 railroad grade crossings, those which are constructed on a force account
                                 or direct labor basis, highway beautification contracts, and contracts for
                                 which the total final construction cost for roadway and bridge Is less than
                                 $1,000,000 (23 CFR 635) the contractor shall:

                                 a.     Become familiar with the list of specific materials and supplies
                                        contained ln Form FHWA-47, "Statement of Materials and Labor
                                        Used by Developer of Highway Construction Involving Federal
                                        Funds," prior to the commencement of work under tl1ls contract.

                                 b.     Maintain a record of the total cost of all materia-ls and supplies
                                        purchased for and Incorporated in the work, and also of the
                                        quantities of those specific materials and supplies fisted on Form
                                        FHWA-47, and In the units shown on Form FHWA-47.

                                 c.     Furnish, upon the completion of the contract, to the SHA resident
                                        engineer on Form FHWA47 together with the data required in
                                        paragraph 1b relative to materials and supplies, a final labo•·
                                        summary of all contract work indicating the total hours worked and
                                        the total amount earned.

                            2.   At the prime contractor's option, either a single report covering all contract
                                 work or separate reports for the contractor and for each subcontract shall
                                 be submitted.

                     VII.   SUBLETTING OR ASSIGNING THE CONTRACT

                            1.   The contractor shall perform with Its own organization contract work
                                 amounting to not less than 30 percent (or a greater percentage if specified
                                 elsewhere In the contract) of the total original contract price, excluding any
                                 specialty items designated by the State. Specialty ftems may be
                                 performed by subcontract and the amount of any such specialty Items
                                 performed may be deducted from the total original contract price before
                                 computing the e~mount of work required to be performed by the
                                 contractor's own organization (23 CFR 635),

                                 a.     "Its own organization" shalf be construed to· Include only workers
                                        employed and paid directly by the prime contractor and equipment
                                        owned or rented by the prime contractor, with or witbout operators.
                                        Such term does not include employees or equipment of a
                                        subcontractor, assignee, or agent of the prime contractor.



     I
     J.
                       II
                                                                                                            C0670277..PDF
another trial. If a juror breaks any of these rules, tell that person to stop and report it to me
immediately.

                          DEFINITIONS AND GENERAL INSTRUCTIONS

        You are instructed to use the following definitions when the defined words appear in
specific questions                                                                   ·

       "Dig Tech" shall refer to Plaintiff Dig Tech, Inc.

       "Star Operations" shall collectively refer to Defendant Star Operations, Inc.

       "Central Texas" shall refer to Central Texas Highway Constructors, LLC.




                                                4
                                          Question 1

       Did Dig Tech and Star Operations agree that Dig Tech would conduct boring work for
Star Operations, and that Star Operations would pay Dig Tech for such boring work?

              In deciding whether the parties reached an agreement, you may consider what
              they said and did in light of the surrounding circumstances, including any earlier
              course of dealing. You may not consider the parties' unexpressed thoughts or
              intentions.

              A party's conduct includes the conduct of another who acts with the party's
              authority or apparent authority.

             Apparent authority exists if a party (1) knowingly permits another to hold himself
             out as having authority or, (2) through lack of ordinary care, bestows on another
             such indications of authority that lead a reasonably prudent person to rely on the
             apparent existence of authority to his detriment. Only the acts of the party sought
             to be charged with responsibility for the conduct of another may be considered in
             determining whether apparent authority exists.

             A party's conduct includes conduct of others that the party has ratified.
             Ratification may be express or implied.

             Implied ratification occurs if a party, though he may have been unaware of
             Unauthorized conduct taken on his behalf at the time it occurred, retains the
             benefits of the transaction involving the unauthorized conduct after he acquired
             full knowledge of the unauthorized conduct. Implied ratification results in the
             ratification of the entire transaction.

                  )

Answer:      ''Yes" or "No".


Answer:               ~es




                                               5
       If you answered Question 1 "Yes", then answer the following question. Otherwise, do
not answer the following question.


                                         Question 2

      Did Star Operations fail to comply with the agreement?

      Answer:        ''Yes" or "No.

      Answer:         \/es




                                             6
       If you answered Question 2 "Yes", then answer the following question. Otherwise, do not
answer the following question.

                                           Question 3

       Was Star Operations' failure to comply excused?

              Failure to comply by Star Operations is excused by Dig Tech's previous failure to
              comply with a material obligation of the same agreement.

              The circumstances to consider in determining whether a failure to comply is
              material include:

              1.     the extent to which the injured party will be deprived of the benefit which
                     he reasonably expected;

              2.     the extent to which the injured party can be adequately compensated for
                     the part ofthat benefit of which he will be deprived;

              3.     the extent to which the party failing to perform or to offer to perform will
                     suffer forfeiture;

              4.     the likelihood that the party failing to perform or to offer to perform will
                     cure his failure, taking into account the circumstances including any
                     reasonable assurances;

              5.     the extent to which the behavior of the party failing to perform or to offer
                     to perform comports with standards of good faith and fair dealing.

              Failure to comply by Dig Tech is excused if compliance is waived by Star
              Operations. Waiver is an intentional surrender of a known right or intentional
              conduct inconsistent with claiming the right.

Answer:       "Yes" or "No".

Answer:




                                                7
       If you answered Question 3 "Yes", do not answer the following question.

                                          Question 4

      What sum of money, if any, if paid now in cash, would fairly and reasonably compensate
Dig Tech for its damages; if any, that resulted from Star Operations' failure to comply?

       Consider the following elements of damages, if any, and none other.

       The reasonable value of the work performed by Dig Tech at the time and place it was
       performed.

       Answer in Dollars and Cents, if any.

       Answer:      tlJ.<).$, s-a4. ~;Q




                                              8




                                              ·~·
If you answered Question 1 "Yes", do not answer the fol'Q,wirt!fquestion.

                                   Question 5

Did Dig Tech perform compensable work for Star Operations?

       One party performs compensable work if valuable services are rendered or
       materials furnished for another party who knowingly accepts and uses them and if
       the party accepting them should know that the performing party expects to be paid
       for the work.

Answer:       ''Yes" or ''No.

Answer:




                                        9
       If you answered Question 5 "Yes", then answer the following question. Otherwise, do not
answer the following question.


                                          Question6

       Do you find that Star Operations has been unjustly enriched with respect to the work you
have found Dig Tech performed?

       Answer:       "Yes" or "No.

       Answer:




                                              10
       If you answered Question 5 "Yes", then answer the following question. Otherwise, do not
answer the following question.


                                          Question 7

        Do you find that Dig Tech would be unjustly penalized if Star Operations were pennitted
to retain the benefits of Dig Tech's work without paying anything in return?

       Answer:       "Yes" or ''No.

       Answer:




                                              11
      If you answered Questions 5, 6, and 7 "Yes", then answer the following question.
Otherwise, do not answer the following question.


                                              Question 8

       What is the reasonable value of such compensable work at the time and place that it was
performed?

       Answer in Dollars and Cents, if any.

       Answer:




                                              12
      If you answered Question 4 or Question 8, then answer the following question.
Otherwise, do not answer the following question.

                                               Question 9

        What are the reasonable fees for the necessary services of Dig Tech's attorneys, stated in
dollars and cents?

Answer with an amount for each of the following:

       I.      For representation in the trial court.
                 1$.                   (')0
       Answer:     3"301 9SO.

       2.      For representation through appeal to the court of appeals.

       Answer:     1J 60,     0?:.0· tll<!:>


       3.     For representation at the petition for review stage in the Supreme Court of Texas.

       Answer: ·       d/ ?J 1 6a. S ·co

       4.     For representation at the merits briefing stage in the Supreme Court of Texas.

       Answer: .:t[ ~ 1 b a~.       <:IO




       5.     For representation through oral argument and the completion of proceedings in
              the Supreme CourtofTexas.

       Answer:     $ 3'-/,.SCO




                                                  13
                                            Question 10

      Did Dig Tech, Inc. intentionally interfere with the contract between Star Operations, Inc.
and Central Texas Highway Constructors, LLC?

              Interference is intentional if connnitted with the desire to interfere with the
              contract or with the belief that interference is substantially certain to result.

       Answer:        "Yes" or "No".

       Answer:




                                                 14
       If you answered Question 10 "Yes", then answer the following question. Otherwise, do
not answer the following question.

                                            Question 11

        Did Dig Tech, Inc. interfere because it had a good-faith belief that it had aright to
threaten garnislunent for the work it performed?

       Answer:         "Yes" or "No".

       Answer:




                                                 15
       If you answered Question 11 "No", then answer the following question. Otherwise, do
not answer the following question.

                                          Question 12

       What sum of money, if any, if paid now in cash, would fairly and reasonably compensate
Star Operations for its damages, if any, proximately caused by Dig Tech's inte1ference?

              "Proximate cause" means a cause that was a substantial factor in bringing about
              an event, and without which cause such event would not have occurred. In order
              to be a proximate cause, the act or omission complained of must be such that a
              person using the degree of care required of him would have foreseen that the
              event, or some similar event, might reasonably result therefrom. There may be
              more than one proximate cause of an event.

              Consider the following elements of damages, if any, and none other.

                  •   the difference, if any, in the reasonable and necessary attorneys' fees
                      incurred for the "Dig Tech Claim," and the fees awarded by the arbitration
                      tribunal for the "Dig Tech Claim," if any

              Do not add any amount for interest on damages, if any.


       Answer in Dollars and Cents, if any:

       Answer:




                                               16 .
        Answer the following question only if you answered "Yes" to Question 10. Otherwise,
do not answer the following Question.

      To answer "Yes" to the following Question, your answer must be unanimous.
Otherwise, you must not answer the Question.

                                         Question 13


      Do you find by clear and convincing evidence that the harm to Star Operations resulted
from malice on the part of Dig Tech?

       "Clear and convincing evidence" means the measure or degree of proof that produces a
       firm belief or conviction of the truth of the allegations sought to be established.

       "Millice" means a specific intent by Dig Tech to cause substantial injury or harm to Star
       Operations.


Answer:       "Yes" or "No".

Answer:          No




                                               17




                                              ·~·                                     -- - - - - -   ······---'
      Answer the following question only if you unanimously answered "Yes" to Question 13.
Otherwise, do not answer the following Question.

       You must unanimously agree on the amount of any award of exemplary damages.

                                               Question 14

       What sum of money, if any, if paid now in cash, should be assessed against Dig Tech and
awarded to Star Operations as exemplary damages, if any, for the conduct of Dig Tech found in
response to Question 13.

       "Exemplary damages" means an amount that you may in your discretion award as a
penalty ofby way of punishment.

       Factors to consider in awarding exemplary damages, if any, are-

       l.     The nature of the wrong.

       2.     The character of the conduct involved.

       3.     The degree of culpability of Dig Tech.

       4.     The situation and sensibilities of the parties concerned.

       5.     The extent to which such conduct offends a public sense of justice and propriety.

       6.     The net worth of Dig Tech in dollars and cents, if any.

       Answer in dollars at1d cents, if any.

       Answer:




                                                   18
                                   Question 15

Do either of the parties have "unclean hands"?

       A party has "unclean hands" if its own conduct in connection with the same
       matter or transaction has been unconscientious, unjust, or marked by a want of
       good faith, or if it has violated the principles of equity and righteous dealing,
       which injured the other party.

Answer "Yes" or "No" for each of the following:

a.     DigTech

       Answer: ·_NI-'!.lo.oL.._._ __

b.     Star Operations

       Answer:   -~+'e=-'"s'------




                                         19




                                        noo
Presiding Juror:

        1.      When you go into the jury room to answer the questions, the first thing you will
need to do is choose a presiding juror.

       2.     The presiding juror has these duties:

               a.     have the complete charge read aloud if it will be helpful to your
                      deliberations;

               b.     preside over your deliberations, meaning manage the discussions, and see
                      that you follow these instructions;

               c.     give written questions or comments to the bailiff who will give them to the
                      judge;

               d.     write down the answers you agree on;

              e.    . get the signatures for the verdict certificate; and

               f.     notifY the bailiff that you have reached a verdict.

       Do you understand the duties of the presiding juror? If you do not, please tell me now.




                                                 20




                                                 1701
                       Instructions for Signing the Verdict Certificate:

       1.     You may answer the questions on a vote of 10 jurors. The same 10 jurors must
agree on every answer in the charge. This means you may not have one group of 10 jurors agree
on one answer and a different group of 10 jurors agree on another answer.

       2.     If 10 jurors agree on every answer, those 10 jurors sign the verdict.

               If 11 jurors agree on every answer, those 11 jurors sign the verdict.

              If all 12 of you agree on every answer, you are unanimous and only the presiding
              juror signs the verdict.
       3.      All jurors should deliberate on every question. You may end up with all 12 of
you agreeing on some answers, while only 10 or .11 of you agree on other answers. But when
you sign the verdict, only those 10 who agree on every answer will sign the verdict.

        4.     There are some special instructions some Questions explaining how to answer
those questions. Please follow the instructions. If all twelve of you answer those questions, you
will need to complete a second verdict certificate for those questions.

       Do you understand these instructions? If you do not, please tell me now.



                                               Aut
                                             JUDGE PRESIDING


                                                            J;='.:.Wl {{)11.~1'1\r\ ~
                                               l"ILED   thls.i,)_.._da'y'o\~-- 2'20L
                                                                 ~?.-:J,D~ M
                                                     TINA MORGAN       FRE   MAN
                                                 CLERK DISTRICT COURT, CALDWELL CO., TX

                                               By    ~~ 'Wle.G~                 Deputy




                                                21
                                                       ------······   -····   ·--··




                                    VERDICT CERTIFICATE

Check one:

_X_ Our verdict is unanimous.       All twelve of us have agreed to each and every answer. The
presiding juror has signed the certificate for all twelve of us.



                                                             Printed arne of Prestdmg Juror

       Our verdict is not unanimous. Eleven of us have agreed to each and every answer and
have signed the certificate below.

__ Our verdict is not unanimous. Ten of us have agreed to each and every answer and have
signed the certificate below.

              SIGNATURE                                            NAME PRINTED

1.

2.

3.

4.

5.

6.
7.

8.

9.

10.

11.




                                                22




                                            •   1703
                                                                      .   ··----------   --- · - - - - -




-<



                                       ADDITIONAL CERTIFICATE

            I certify that the jury was unanimous in answering the following questions. All twelve of .
     us have agreed to each of the answers. The presiding juror has signed the certificate for all
     twelve of us.

            Question Nos. 13 and 14.


        ~·~~
     Signatur~Presiding Juror                                   Printed Name of Presiding Juror




                                                    23
Rule 140. No Fee for Copy, TX R RCP Rule 140




  Vernon's Texas Rules Annotated
   Texas Rules of Civil Procedure
      Part II. Rules of Practice in District and County Courts
        Section 6. Costs and Security Therefor

                                           TX Rules of Civil Procedure, Rule 140

                                                  Rule 140. No Fee for Copy

                                                          Currentness


No fee for a copy of a paper not required by law or these rules to be copied shall be taxed in the bill of costs.


Credits
Oct. 29, 1940, eff. Sept. I, 1941.



Notes of Decisions (4)

Vernon's Ann. Texas Rules Civ. Proc., Rule 140, TX RRCP Rule 140
Current with amendments received through 611/2015

 End of Document                                                     10 20 !5 Thomson Reuters. No claim to original U.S. Government Works_




'"Vc::c.tl.o;\vNeKt © 20'15 Thomson Reuters. No claim to original U.S. Government Works.
                                       Appendix Item 3
Rule 141. Court May Otherwise Adjudge Costs, TX R RCP Rule 141




  Vernon's Texas Rules Annotated
   Texas Rules of Civil Procedure
      Part II. Rules of Practice in District and County Courts
        Section 6. Costs and Security Therefor

                                          TX Rules of Civil Procedure, Rule 141

                                      Rule 141. Court May Otherwise Adjudge Costs

                                                        Currentness


The court may, for good cause, to be stated on the record, adjudge the costs otherwise than as provided by law or these rules.


Credits
Oct. 29, 1940, eff. Sept. l, 1941.



Notes of Decisions (211)

Vernon's Ann. Texas Rules Civ. Proc., Rule 141, TX R RCP Rule 141
Current with amendments received through 6/1/2015

 End of Document                                                   rQJ 2015 Thomson Reuters_ No claim to original U.S. Government Works_




\-"ii?'ill8·.vNext © 2015 Thomson Reute1·s. No claim to original U.S. Government VVo1·ks.
                                      Appendix Item 4
§ 635.102 Definitions., 23 C.F.R. § 635.102




    KeyCite Yellow Flag- Negative Treatment
Proposed Regulation

  Code of Federal Regulations
    Title 23. Highways
      Chapter I. Federal Highway Administration, Department of Transportation
         Subchapter G. Engineering and Traffic Operations
           Pmt 635. Construction and Maintenance (Refs &Annas)
              Subpart A. Contract Procedures (Refs &Annas)

                                                     23 C.F.R. § 635.102

                                                   § 635.102 Definitions.

                                                        Currentness


As used in this subpart:

Administrator means the Federal Highway Administrator.

Calendar day means each day shown on the calendar but, if another definition is set forth in the State contract specifications,
that definition will apply.

Contract time means the number of workdays or calendar days specified in a contract for completion of the contract work. The
term includes authorized time extensions.

Design-build project means a project to be developed using one or more design-build contracts.

Division Administrator means the chiefFH\VA official assigned to conduct business in a particular State. A State is as defined
in 23 U.S.C. 101.

Force account means a basis of payment for the direct performance of highway construction work with payment based on the
actual cost of labor, equipment, and materials furnished and consideration for overhead and profit.

Formal approval means approval in writing or the electronic transmission of such approval.

Incentive/disincentive for early completion as used in this subpart, describes a contract provision which compensates the
contractor a certain amount of money for each day identified critical work is completed ahead of schedule and assesses a
deduction for each day the contractor overruns the incentive/disincentive time. Its use is primarily intended for those critical
projects where traffic inconvenience and delays are to be held to a minimum. The amounts are based upon estimates of such
items as traffic safety, traffic maintenance, and road user delay costs.

Liquidated damages means the daily amount set forth in the contract to be deducted from the contract price to cover additional
costs incurred by a State transportation department because of the contractor's failure to complete the contract work within the
number of calendar days or workdays specified. The term may also mean the total of all daily amounts deducted under the
tenns of a particular contract.




W''''illa·.vNex! © 2015 Thomson Reuters. No claim to original U.S. Government Works.
                                         Appendix Item 5
                                                                                                         .---..


                                                                                                                      Agreement #CSUB140
                                                                                                                     SH130 Segments 5 and (i
                                                                                        Intelligent Transportation and Tofl Collection Systems
     ..·
                 GENERAL   OI~:CISION :   TX200?0129 02/09/2007 1'Xl29

                 Dal:-e: February 9, 2007
                 General Decision Nwnbec: TX20070129 02/09/2007

                 Superseded General Decision Number: TX20030l 29


                 C oPst ~uctio~      Types: Heavy and Highway

                 Counties; il.ransas , Atascosa, Au stin , Bai~dera , Bastrop, Bee ,
                 Bl anco, Burnet, Ccrld·.~ell , Calhoun, Colorado, De Witt, Fayette,
                 F:cio, G"illesp.te, Goliad, Gonzales, Jackson, ,J.im Wells, i\aJ;nes,
                 K<;;ndall, Kerr, Kle-b-:rg, Lava~;;a, Lee, Live Oak , .Llano, t<lason,
                 Me>tagoxda, Medina, Refugio, Wharton and Nllaon Counties in Texas ,

                 HEAVY CONSTHIJCTlON PROJf~CTS (excluding darn
                 construction). !HGJllvJ\Y CONt;'l'RUCTIDN l'ROJJ::C'J'S (excluding tunnels,
                 building
                 structures in rein: aJ:ea p:~.-ojectu k rail -road consT..ruct.i.on;
                 bascuJ.e , l:luspension & J>pandrel - an:h b r idges desiqned foJ: .
                 conmu~.rcia l navigation , bridges i1wolving marine construction;
                 and other major bridqes) .

                 t•todificat ion Number              Publication Date
                                 0                    02/09/2007
                  SUTX2005-023 09/08/2005
                 H!!:A'J'( CONS'I'RIJCTION i.>P,OJECTS     HIGHI~A.Y COl~STRUC'i'lON   PROJECTS

                                                                                        Fringes
                   Carpenter, ... . .. . . ........ . .. $ 11.70
                   Mechanic ., . . . . . . . . . . . . . . . . . . .. $ 12.18
                   A~~\ ,alc Ol~t~ibu~UL o ~~ldLUL •• , $ 12.57
                   Asphal1: paving machine ope-cator.';l 1 1 .60
                   Asphalt Rake 1: . . .. . •... , .. . ..... $ l. O, 63
                   Asphill t: Shoveler •.......... . ... $ 9. 23
                   Bro<:>m or: S1~eeper Operator ... . , . $ 9, 32
                   Bulldozt'!-J: operator          .. . .. . , .... -~ 11. 69
                   Concca&e Finiuher, Paving . , . ... $ 11.64
                   Co ncrete J:i!li::~her, StruccUJ:es .. $ 10 . 23
                   Concrete Rubber: . . . . . , . . . . . , .. . . $ 9. 00
                    Crans , Clrunshell , Backhoe,
                    DGrrick, Dragltne, Shovel
                    Ope~ator    .. ... ... . . . .. , . .. .. . . . . G 12 . 00
                    I!J.ag9er . . ........ . . . .... , , , . . .. S 8.60
                    rorm Bui l der/Setter., Structures$ J.O.Sl
                    li'orm Settur, Pavin g & Curb .... . $ 9.48
                    1-'o>Jndat ion Dl:i ll Operator.,       ·
                    Tr.uck Mounted .................. $ 14.58
                    f'ront End l.oade:;: OperattJr ...•.. $ 10.62
                    Laborer, coL'llllon. , •.. . .•.... _..• $ 0.91
                    Laborer , Utility. , . ...... . ..... $ 9.21
                    Motor Grader Operator Pine
                    Grade .. .....• . .. .. . . ... . . . . . .. - ~ 15 . 15
                    Hotor Grader Ope r ator RQUgh .. . . $ 12 , 95
                    Pavement 11arking t-1achioe
                    Opexator .... . ..... . ..... . ... , .. $ 13 . 32
           ··.       Pipelayer . . •.. . , . ..... . , , . . .. . . $    9.71
\_                   Roller    Op(~ rul:or,    l'ueumatic,
                            Page 98 of 135 Pagss                                                                  Excerpt from raclllty Concession Agreement
§ 635.103 Applicability., 23 C.F.R. § 635.103




  Code of Federal Regulations
   Title 23. Highways
      Chapter I. Federal Highway Administration, Depattment ofTranspmtation
        Subchapter G. Engineering and Traffic Operations
           Part 635. Construction and Maintenance (Refs & Aunos)
             Subpart A. Contract Procedures (Refs & Aunos)

                                                      23 C.F.R. § 635.103

                                                    § 635.103 Applicability.

                                                         Currentness


The policies, requirements, and procedures prescribed in this subpart shall apply to all Federal-aid highway projects.


Credits
[62 FR 6873, Feb. 14, 1997; 69 FR 7118, Feb. 13, 2004]

SOURCE: 51 FR 27534, Aug. I, 1986; 52 FR 36921, Oct. 2, 1987; 53 FR 1922, Jan. 25, 1988; 56 FR 37004, Aug. 2, 1991; 58
FR 38975, July 21, 1993; 60 FR 44273, Aug. 25, 1995; 62 FR 6872, Feb. 14, 1997; 64 FR 71289, Dec. 21, 1999; 67 FR 75924,
Dec. 10, 2002; 71 FR 66454, Nov. 15, 2006; 72 FR 45336, Aug. 14, 2007; 78 FR 5717, Jan. 28,2013, unless otherwise noted.


AUTHORITY: Sec. 1525 ofPub.L. 112-141, Sec. 1503 orPub.L. 109-59, 119 Stat. 1144; 23 U.S.C. 101 (note), 109, 112,
113, 114, 116, 119, 128, and 315; 31 U.S.C. 6505; 42 U.S.C. 3334,4601 et seq.; Sec. 1041(a), Pub.L. 102-240, 105 Stat. 1914;
23 CFR 1.32; 49 CFR 1.85(a)(l).


Current through Oct. 15, 2015; 80 FR 62427.

 End of Document                                                     !l)   2015 Thomson Reuters_ No claim to original U.S. Government Works.




V\t<?'~,[[.::p,vNext'   © 2015 Thomson Reuters. No claim to   ori~Jinal U.S.    Government Works.

                                          Appendix Item 6
§ 635.116 Subcontracting and contractor responsibilities., 23 C.F.R. § 635.116




    Code of Federal Regulations
     Title 23. Highways
        Chapter I. Federal Highway Administration, Department ofTranspmtation
          Subchapter G. Engineering and Traffic Operations
             Pmt 635. Construction and Maintenance (Refs &Annas)
               Subpart A. Contract Procedures (Refs &Annas)

                                                      23 C.F.R. § 635.116

                                 § 635.116 Subcontracting and contractor responsibilities.

                                                          Currentness


(a) Contracts for projects shall specify the minimum percentage of work that a contractor must perform with its own
organization. This percentage shall be not less than 30 percent of the total original contract price excluding any identified
specialty items. Specialty items may be performed by subcontract and the amount of any such specialty items so performed may
be deducted from the total original contract before computing the amount of work required to be performed by the contractor1s
own organization. The contract amount upon which the above requirement is computed includes the cost of materials and
manufactured products which are to be purchased or produced by the contractor under the contract provisions.


(b) The STD shall not permit any of the contract work to be performed under a subcontract, unless such arrangement has been
authorized by the STD in writing. Prior to authorizing a subcontract, the STD shall assure that each subcontract is evidenced
in writing and that it contains all pertinent provisions and requirements of the prime contract. The Division Administrator may
permit the SID to satisfy the subcontract assurance requirements by concurrence in a STD process which requires the contractor
to certify that each subcontract arrangement will be in the form of a written agreement containing all the requirements and
pertinent provisions of the prime contract. Prior to the Division Administrator's concurrence, the STD must demonstrate that
it has an acceptable plan for monitoring such certifications.


(c) To assure that all work (including subcontract work) is performed in accordance with the contract requirements, the
contractor shall be required to furnish:


      (I) A competent superintendent or supervisor who is employed by the finn, has full authority to direct performance of
      the work in accordance with the contract requirements, and is in charge of all construction operations (regardless of who
      pe1fonns the work), and;


      (2) Such other of its own organizational resources (supervision, management, and engineering services) as the STD
      contracting officer determines are necessary to assure the performance of the contract.


(d) In the case of a design-build project, the following requirements apply:


      (1) The provisions of paragraph (a) of this section are not applicable to design-build contracts;




Nr:·•.tl.•;•.vNext © 2015 Tllomson Reuters. No claim to original U.S. Government Works.
1


                                       Appendix Item 7
§ 635.116 Subcontracting and contractor responsibilities., 23 C.F .R. § 635.116



     (2) At their discretion, the STDs may establish a minimum percentage of work that must be done by the design-builder.
     For the purpose of this section, the tenn design-builder may include any firms that are equity participants in the design-
     builder, their sister and parent companies, and their wholly owned subsidiaries;


      (3) No procedure, requirement or preference shall be imposed which prescribes minimum subcontracting requirements or
      goals (other than those necessary to meet the Disadvantaged Business Enterprise program requirements of 49 CFR part 26).


Credits
[67 FR 75925, Dec. 10, 2002]

SOURCE: 51 FR 27534, Aug. 1, 1986; 52 FR 36921, Oct. 2, 1987; 53 FR 1922, Jan. 25, 1988; 56 FR37004, Aug. 2, 1991; 58
FR38975, July 21, 1993; 60 FR 44273, Aug. 25, 1995; 62 FR 6872, Feb. 14, 1997; 64 FR 71289, Dec. 21, 1999; 67 FR 75924,
Dec. 10, 2002; 71 FR 66454, Nov. 15, 2006; 72 FR 45336, Aug. 14, 2007; 78 FR 5717, Jan. 28, 2013, unless otherwise noted.


AU1HORITY: Sec. 1525 ofPub.L. 112-141, Sec. 1503 ofPub.L. 109-59, 119 Stat. 1144; 23 U.S.C. 101 (note), 109, 112,
113, 114, 116, 119, 128, and 315; 31 U.S.C. 6505; 42 U.S.C. 3334,4601 etseq.; Sec. 104l(a), Pub.L. 102-240, 105 Stat. 1914;
23 CPR 1.32; 49 CFR 1.85(a)(1).


Current through Oct. 15, 20 15; 80 FR 62427.

 F.nd of DOCUTll('Ut                                              1Q   2015 Thomson Reuters. No claim to original U.S. Govemment Works




V\12:Al.:hvNext © 2015 Thornson Reuters. No claim to original U.S. Government Works.                                                 2
/




                  FACILITY CONCESSION AGREEMENT
                                                          .     .
                  SH 130 S·EGMENTS s ·AN.D ·6 FACILITY


                                            .    .
                                            B~tw~eh


                          Texas Department ofTransportation

                                            · .and

                           SH ·1 30 Concession Company, LLC
                               0        '




                                        Dated March 22,·2'007




                                                                          EXHIBIT
                                                                    1-D
                                                                      .~ X!!r_
                                                                     <.
                                                                                •
    EXECUTION VERSION ·
    324B69_12.DOC



                          . ..; . ...
§ 31.007. Parties Responsible for Accounting of Own Costs, TX CIV PRAC & REM §...




  Vernon's Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 31. Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 31.007

                               § 31.007. Parties Responsible for Accounting of Own Costs

                                                           Currentness


(a) Each party to a suit shall be responsible for accurately recording all costs and fees incurred during the course of a lawsuit,
if the judgment is to provide for the adjudication of such costs. If the judgment provides that costs are to be borne by the party
by whom such costs were incurred, it shall not be necessary for any of the parties to present a record of court costs to the court
in connection with the entry of a judgment.


(b) A judge of any court may include in any order or judgment all costs, including the following:


  (1) fees of the clerk and service fees due the county;


  (2) fees of the court reporter for the original of stenographic transcripts necessarily obtained for use in the suit;


  (3) masters, interpreters, and guardians ad litem appointed pursuant to these rules and state statutes; and


  (4) such other costs and fees as may be permitted by these rules and state statutes.


Credits
Added by Acts 1987, 70th Leg., ch. 663, § 3, eff. Sept. 1, 1987.



Notes of Decisions (20)

V. T. C. A., Civil Practice & Remedies Code § 31.007, TX CIV PRAC & REM § 31.007
Current through the end of the 2015 Regular Session of the 84th Legislature

End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.




                                     Appendix Item 8B
               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                    1
§ 3131. Bonds of contractors of public buildings or works, 40 USCA § 3131




  United States Code Annotated
    Title 40. Public Buildings, Property, and Works (Refs &Annes)
      Subtitle II. Public Buildings and Works
         Part A. General
           Chapter 31. General
              Subchapter III. Bonds

                                                40 U.S.C.A. § 3131
                      Formerly cited as 40 USCA § 270a;40 USCA § 270d;40 USCA §270d-1

                                § 3131. Bonds of contractors of public buildings or works

                                               Effective: September 27, 2006
                                                         Currentness


(a) Definition.--In this subchapter, the term "contractor'' means a person awarded a contract described in subsection (b).


(b) Type of bonds required.--Before any contract of more than $100,000 is awarded for the constmction, alteration, or repair
of any public building or public work ofthe Federal Government, a person must furnish to the Government the following bonds,
which become binding when the contract is awarded:


  (1) Performance bond.--A performance bond with a surety satisfactory to the officer awarding the contract, and in an amount
  the officer considers adequate, for the protection of the Government.


  (2) Payment bon d.--A payment bond with a surety satisfactory to the officer for the protection of all persons supplying labor
  and material in canying out the work provided for in the contract for the use of each person. The amount of the payment
  bond shall equal the total amount payable by the terms of the contract unless the officer awarding the contract determines,
  in a writing supported by specific findings, that a payment bond in that amount is impractical, in which case the contracting
  officer shall set the amount of the payment bond. The amount of the payment bond shall not be less than the amount of the
  performance bond.


(c) Coverage for taxes in performance bond.--


  (1) In general.--Every performance bond required under this section specifically shall provide coverage for taxes the
  Govemrnent imposes which are collected, deducted, or withheld from wages the contractor pays in canying out the contract
  with respect to which the bond is furnished.


  (2) Notice.--The Government shall give the surety on the bond written notice, with respect to any unpaid taxes attributable
  to any period, within 90 days after the date when the contractor files a return for the period, except that notice must be given
  no later than 180 days from the date when a return for the period was required to be filed under the Internal Revenue Code
  of 1986 (26 U.S.C. 1 et seq.).


  (3) Civil action.--The Government may not bring a civil action on the bond for the taxes--



\·V"'''·il.';wNexr © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                                      Appendix Item 9
§ 3131. Bonds of contractors of public buildings or works, 40 USCA § 3131




     (A) unless notice is given as provided in this subsection; and


     (B) more than one year after the day on which notice is given.


(d) Waiver of bonds for contracts performed in foreign countries.--A contracting officer may waive the requirement of a
performance bond and payment bond for work under a contract that is to be performed in a foreign country if the officer finds
that it is impracticable for the contractor to furnish the bonds.


(e) Authority to require additional bonds.--This section does not limit the authority of a contracting officer to require a
perfotmance bond or other security in addition to those, or in cases other than the cases, specified in subsection (b).

CREDIT(S)
 (Pub.L. 107-217, § 1, Aug. 21,2002,116 Stat. 1147; Pub.L. 109-284, § 6(8), Sept. 27,2006, 120 Stat. 1213.)



Notes of Decisions (500)

40 U.S.C.A. § 3131,40 USCA § 3131
Current through P.L. 114-51 approved 9-24-2015

 End ofDocumeut                                                       t:~   20 IS Thomson Reuters. No claim to original U.S. Govenm1ent Works.




\Vc·c;[[:::·.vNext © 20"15 Thomson Reuters. l'lo claim to original U.S. l3overnrnent Worl<s.                                                2
           22.5.3. If Developer elects to deposit the Financial Model Formulas and Base Case
    Financial Model into an Intellectual Prope·rty Escrow rather than deliver them directly to TxDOT,
    Developet shall:

                       22.-5.3.1 lpclude with the deposit of the Flnancla.l Model Formulas and Base .
     Case Financial Model a complete set of tha assumptions, trf!ffic·.models, traffic data and other
     data that form part of the Base Case Financial Model, including projections and calculations with
     respect to revenues, expenses, the repayment of Facility Deot and Distributions to equity
     investors;

                        22.5.3.2 . Also deposit, as and when prepared, each Base Case Financial
     Model Update and a complete set of the updated and revised assumptions, ~raffic models, traffic
     data and ·other data that form part of the Base Case Financial Model Update, including updated
     and revised projections and calculations. with respect to revenues, expenses, the rep~yment of
     ·Facility Debt and Distributions to equity lnv13stors; and                                 ·

                         22.5.3.3 Deposit them In a form or forms that are acceptable to TxDOT, that
    .fully reveal· their content on an Open Bool< Basis, and that will convenle.ntly enable TxDOT at
     any time upon request to.galn access thereto. and to etectronic.ally operate and manipulate the
     same in order. to run projections and scenarios respecting the Facility and to P.rint out and
     examine such projections and scenarios .

            . 22.5.4 The tnteliectual Property Escrows shall survive expiration or earlier termination
               .  .
     of this Agreement regardless
                        .         of the reason.

                                 ARTICLE 23. FEDERAL REQUIREMENTS

     23.1    Compliance with·Federal Requirements

              Regardless of whether federal c~edit or funds are made available to Developer for the
     Facility, Developer shall comply and require its Contractors to comply with all federal .
     requirements applicable to transportation projects that receive federal credn or funds, including
     those set forth ffl Exhibit 8, If Developer uses TIFIA credit or loans to finance the Facility or any
     portion thereof, Developer shall provide any compliance certifications and milestone payrnent
     schedules required In connection with TIFIA. ·

     23.2    R,ole of and Cooperation with FH~A

          . Developer acl<nowledges and agrees that FHWA will have certain approval rights with
       respect to the Facility, hicludlng the right to provide certain oversight and technical services With
       respect to the Work, If federal" credit or funds are made available to Developer-for the Facility.
       Developer shall cooperate with FHWA in the reasonable exercise of FHWA's duties· and
     . responsibilitle~ in connection with ttJe Facility.    ·     ·                            ·

                                      ARTIClE 24. ·MISCELLANEOUS

    · 24.1   Replacement of Independent Engineer

            24.1.1    The Parties recognize that from time. to time it will pe necessary to·replace the
     Independent Engineer In the event any par:tY to the Independent Engineer Agreement elects not
     to extend or renew it at expiration of its. term, or in the event it Is terminated ln accordance with

\    TEXAS DEPARTMENT OF TRANSPORTATION                 -175 - .                         EXECLTTION VERSION
     SH 130 Segments 5 and 6                                                FACILITY CONCESSION /\GREE'MENT
     324869_12.000
                                                                                                                         ,.   ....

                                                                                                                              /
                                                                                                                    .'                                                                                                                    .   ....




                                                                                                                                     (o) WHEf!c<Ff'.tNGE-aENI:fCTS·ARI:O.P~q fJ)I'CASii
., _::r;_
      ·....~.L·~~--'\~·\.~!l..!:,1"'-~~·r~..,.,...,.---
                                         -\-            --~t>:!;....~!.:.!t~~c:.I.g....:~.l!'~
                                                                                        · ~O.·~Se:J:...,,;___ __                              0 -     ~ llillarer cr mec1'1311lc 1is'tecr.iil.lli2·al10<'~ r!lterence~ ~ hal;\~_rr.P:slo:l.
  '              tNaiim>fsi~hi;!oc>):P<:i'f.Yl                                         (Td!aJ.                                                        ilt'I.-Iditallill6n'lhe~. a.'Ta:iio\:nl'nzit m~; 111ah'lhe.tun·bfll!e:api?bei!bi4'.
 do fl:::rdw-~t"'~                                                                                                                                                                                 D'
                                                                                                                                                      bll~'l'ioiltlf.Wo!gB ra!s·PlUS':lhe·arnbilnl IAe-retUiriidrffi:fliG' 6i!lle6ts-.b$:)iShl<f
                                                                                                                                                      ii'tlhe co'lllr~!c:t,:tll~tils;,o:ad-in tae~ton-4{c' oola-:·:.

                                                                                                                                     ~6).l~J{(.;&nOtofS




      !3) Tnal ~; 2ljlpr0hllces .e'mplcyelj irs ll>a ';!lmva por1od ale: dllli: te§'JS.!eiei' in ':i 156713 lil:e
~~e-,ti.U.':iilf pt~. r&g!s[W<! ..:lith a .Sla~·apf!!enlbsJiip 8Qfncy ~c!                    ay
                                                                             Uft!: Btlt'eau bf
~)ln!nl1d1Ghlp~d-'((p!ij::l'g, llt:>.led.SlaWs ~l!Mof L21!or, 6/"lr no.SUCII~~ eJ:Isls.ltrn
~· ~~ (e~d.w'..l{,Uta SUfea/J or.Ap;ite'ntlcasht/l=d Tla~"lg.·UrilCOd Sltlles'Pitpai",.rilentoor Labor.

      (~) t~Yw·..r.:P.E FRINGE l'li;N~ AAE I?Altl:To APF\iOilED'Pt:ANs', 'Fl.JNOS,·PR i>!lOOAAMS
               ·o       I!>~ lo :h3. tmsldtp>~.'\'~~ .~es pO:Ito-eaelt ~or m~c i::le.d 1o
                        the·a'Scl.•" re.'M!tlced p~oif, Pf!Y~!s of;Jr~c ~~ lliO.l(sfaC.ln l!1JI ~c!
                        f>'8'<0. been cr '"~'    = rnalll> to at~pro;>i"~ programs ~ lhe. bet'.&li! of such
                        amj)!I:>)IU3.=ilir as llo!Ctf iri ~, .4(c) tictcwt.        ·
§ 2253.001. Definitions, TX GOVT § 2253.001




Notes of Decisions (42)

V. T. C. A., Government Code§ 2253.001, TX GOVT § 2253.001
Current through the end of the 2015 Regular Session of the 84th Legislature

 End of Document                                                 (!J 20 J 5 Thomson Reuters. No claim to original U.S. Government Works




'NP"·ll·'C'.VNext © 2015 Thomson F\euters. No claim to original lJ S Government Works.                                                3
§ 2253.041. Notice Required for Claim for Payment for Labor... , TX GOVT § 2253.041




  Vernon's Texas Statutes and Codes Annotated
    Government Code (Refs & Annas)
      Title 10. General Government (Refs & Annas)
        Subtitle F. State and Local Contracts and Fund Management
           Chapter 2253. Public Work Performance and Payment Bonds (Refs &Annas)
             Subchapter C. Notice Requirements

                                             V.T.C.A., Government Code§ 2253.041

                             § 2253.041. Notice Required for Claim for Payment for Labor or Material

                                                          Currentness


(a) To recover in a suit under Section 2253.073 on a payment bond for a claim for payment for public work labor performed
or public work material delivered, a payment bond beneficiary must mail to the prime contractor and the surety written notice
ofthe claim.


(b) The notice must be mailed on or before the 15th day of the third month after each month in which any of the claimed labor
was performed or any of the claimed material was delivered.


(c) The notice must be accompanied by a sworn statement of account that states in substance:


  (I) the amount claimed is just and correct; and


   (2) all just and lawful offsets, payments, and credits known to the affiant have been allowed.


(d) The statement of account shall include the amount of any retainage applicable to the account that has not become due under
the terms of the public work contract between the payment bond beneficiary and the prime contractor or between the payment
bond beneficiary and a subcontractor.


Credits
Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. I, 1993.


Editors' Notes

                                                       REVISOR'S NOTE

                                                       2008 Main Volume

          (1) The revised law substitutes the term "payment bond beneficiary" for the source law term "claimant" for the
          reason stated in Revisor's Note (3) under Section 2253.021 of this chapter.

          (2) The revised law substitutes the terms "public work labor" and "public work material" for the source law terms
          "labor" and "material" for the reason stated in Revisor's Note (4) under Section 2253.021 of this chapter.


V'o';cc.tl.ci·.vNe~t   © 2015 Tllomson Reuters. No claim to original U.S. Government Works.                                   1
                                        Appendix Item 11
§ 2253.041. Notice Required for Claim for Payment for Labor... , TX GOVT § 2253.041




Notes of Decisions (80)

V. T. C. A., Govennnent Code§ 2253.041, TX GOVT § 2253.041
Current through the end of the 2015 Regular Session of the 84th Legislature

End ofDorument                                                   1{5   20 I 5 Thomson Reuters. No claim to original U.S. Government Works.




V\"":'.ii.,;•,vNext' © 20'15 Thomson Reuters. No claim to original U.S. Government Wmks.                                                2
§ 2253.047. Additional Notice Required for Payment Bond ... , TX GOVT § 2253.047




  Vernon's Texas Statutes and Codes Annotated
    Government Code (Refs & Annos)
     Title 10. General Government (Refs & Annas)
       Subtitle F. State and Local Contracts and Fund Management
          Chapter 2253. Public WorkPelformance and Payment Bonds (Refs &Annos)
            Subchapter C. Notice Requirements

                                          V.T.C.A., Government Code§ 2253.047

                         § 2253.047. Additional Notice Required for Payment Bond Beneficiary
                            Without Direct Contractual Relationship With Prime Contractor

                                                             Currentness


(a) To recover in a suit under Section 2253.073 on a payment bond, a payment bond beneficiary who does not have a direct
contractual relationship with the prime contractor for public work labor or material must mail notice as required by this section.


(b) A payment bond beneficiary who contracts with a subcontractor for retainage must mail, on or before the 15th day of the
second month after the date of the beginning of the delivery of public work material or the perfmmance of public work labor,
written notice to the prime contractor that:


  (1) the contract provides for retainage; and


  (2) generally indicates the nature of the retainage.


(c) The payment bond beneficiary must mail to the prime contractor written notice of a claim for any unpaid public work labor
performed or public work material delivered. The notice must be mailed on or before the 15th day of the second month after
each month in which the labor was performed or the material was delivered. A copy of the statement sent to a subcontractor
is sufficient as notice under this subsection.


(d) The payment bond beneficiary must mail to the prime contractor, on or before the 15th day of the second month after the
receipt and acceptance of an order for specially fabricated material, written notice that the order has been received and accepted.


(e) This section applies only to a payment bond beneficiary who is not an individual mechanic or laborer and who makes a
claim for wages.


Credits
Added by Acts 1993, 73rd Leg., ch. 268, § I, eff. Sept. 1, 1993.


Editors' Notes

                                                         REVISOR'S NOTE



'•,Vc";\[.';'.vNext © 20'15 Thomson Reuters.     ~lo   claim to original U.S. (3overnment Works.

                                     Appendix Item 12
§ 2253.047. Additional Notice Required for Payment Bond ... , TX GOVT § 2253.047



                                                     2008 Main Volume

        (1) The revised law substitutes the term "payment bond beneficiary," for the source law term "claimant" for the
        reason stated in Revisor's Note (3) under Section 2253.021 of this chapter.

        (2) The revised law substitutes the term "retainage" for the source law phrase "agreements ... by which payments
        are not to be made in full therefor in the month next following each month in which the labor was performed or the
        materials were delivered" because Section 2253.001 of this chapter defines "retainage" to mean "the part of the
        payments under a public work contract that are not required to be paid within the month after the month in which
        the public work labor is performed or public work material is delivered under the contract."

        (3) The revised law substitutes the terms "public work labor," "public work material," and "public work labor or
        material" for the source law terms "labor" and "material" for the reason stated in Revisor's Note (4) under Section
        2253.021 of this chapter.

        ( 4) The revised law substitutes the term "specially fabricated material" for the source law phrase ~~specially
        fabricated item or items as described in paragraph C(b )(2)"because the description in the referenced paragraph is
        codified in Section 2253.00 I (8) ofthis code as the definition of"specially fabricated material."




Notes of Decisions (2)

V. T. C. A., Government Code§ 2253.047, TX GOVT § 2253.047
Current through the end of the 2015 Regular Session of the 84th Legislature

 End of Document                                                   10 2015 Thomson Reuters. No claim lo original U.S. Govermnenl Works.




'1'/P·~;ila·.vNext   © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                             2
§ 2253.048. Mailing Notice, TX GOVT § 2253.048




  Vernon's Texas Statutes and Codes Annotated
    Government Code (Refs & Annas)
      Title 10. General Government (Refs &Annas)
        Subtitle F. State and Local Contracts and Fund Management
           Chapter 2253. Public Work Perfmmance and Payment Bonds (Refs &Annas)
             Subchapter C. Notice Requirements

                                           V.T.C.A., Government Code§ 2253.048

                                                  § 2253.048. Mailing Notice

                                                 Effective: September 1, 2001
                                                           Currentness


(a) A notice required by this subchapter to be mailed must be sent by certified or registered mail.


(b) A notice required by this subchapter to be mailed to a prime contractor must be addressed to the prime contractor at the
contractor's residence or last known business address.


(c) A person satisfies the requirements of this subchapter relating to providing notice to the surety if the person mails the notice
by certified or registered mail to the surety:


  (1) at the address stated on the bond or on an attachment to the bond;


  (2) at the address on file with the Texas Deparhnent oflnsurance; or


  (3) at any other address allowed by law.


Credits
Added by Acts 1993, 73rdLeg., ch. 268, § l, eff. Sept. 1, 1993. Amended by Acts2001, 77th Leg., ch. 380, § 4, eff. Sept. 1,2001.


V. T. C. A., Government Code§ 2253.048, TX GOVT § 2253.048
Current through the end of the 2015 Regular Session ofthe 84th Legislature

 Eud of Document                                                     (["'l   20 IS Thomson Reuters_ No claim to original U.S_ Government Works.




W?''li·?;wNext © 20'15 Thomson Reuters.        ~lo   claim to original   U.S. Government Works.
                                     Appendix Item 13
                                              92


     1
     2
     3
     4

     5
     6
     7
     8

     9

    10
    11
               DEFENDANT'S EXHIBIT 1
    12   SUBCONTRACT AGREEMENT NO . CSUB116
/
    13
    14

    15

    16

    17
    18

    19

    20
    21
    22
    23
    24
    25            (Back to index)




         Appendix Item 14
!
    .....
I
\




            Central Texas Highway Constructors LLC
            1914 Borchert Drive
            Locld1art1 Texas 78644

            23 June 2010



            Star Operations, Inc.
            Attention: Lana Huif
            1622 Saratoga BoLJievard
            Corpus Christi, Texas 7_8417

            Telephone: 361.852.2120

            VIA OVERNIGHT MAH.

            Reference:    Subcontract Agreement No. CSU0'116-IIIumlnation and Signal
                          SH 130 Segments 5 and 6

            Dear Ms. Huff:

            Find enclosed one (1) fully exe,iuted Subcontract Agreement (with DVDs) for the
            referenced Scope of Work.

            1. This letter will serve as a Full Notice to Proceed and commences the
                Performance Period as defined In Article l3 of the Agreement.
            2.. Promptly provide paylTlent and performance bonds compliant with Artlc;le 7 of
                the AgreemeAt.
            3. Your repiesentatlve was provided the latest set of Issued for Construction
                (iFC) drawings oh 16 June 2010. A courtesy copy ofthat DVD Is enclosed for
                your reference and use.
            4. Your principal points of contact for this Work are Gary Doty (V.P.
                Construction), Bobby Massingill (Segment 5. ·1 Manager), Javier Garcia
                (Segment 5.2 Manager), Scott Cromad~ (Segment 6.1 Manager), and Felix
                fVh:lfq\.les (Segment 6.2 IV!anager), 612-462· 7500.
            5. Please contact Ms. Sonia Malllo, CFO, 512-462~7506, to discuss
                administrative Interface., e.g. Invoicing, sales tax, and so forth.
            6. Please cont;;-1ct Ms. Evelyn Cu!onge, DBE Coordinator, 5'12-4£52-7517, to
                discuss any DBE-related Issues.
            7. Please contact Mr. Estebt~n Trlgueros, Quality Manager, 612-462-.7504, to
                discuss quality control and quality assurance of the Worl<.
            8. Your point of contact for envlro.nmental compliance is Ms. Jennifer Oshel,
                C'TxHC Environmental Manager, 512-462-7505.
            9. Your point of contact for lleulth and safety compliance Is Mr. Jeny Walley,
                Health and Safety Manager, s·J2-80·J-2572.

            Contact me If you have any questions, 512-462-7510. Than!< you.

                                                         EXHIBIT
                                                                                    SIP C0853864.PDF
                                                            J
                                                                                                        Agreement #C~UB116
                                                                                                        H130 SegrMnts 5 and 6
                                                                                            .            Illumination .,nd Signal
days to correct Its failure. If Seller has not corrected Itt; f11iluro or made arrangements acooptoble to D&G Contractor to do
so within such tlme period or if Seller fails to perform in accorda11r.e w<lh an' acceptable plan for correotlvo action, then, in
addition to its other rights and remedies, D&C Contruclor may require Sellar to increase lls con~-truclion r.qulpment and
workers, Increase working hc~n; or olherwlSJJ uucelerale Its performanc;<~ untll tho Wcrl< Is back on Schedule, all wilhout
o:ddllional cost io D&C Contractor. D,'!..C Contractor reserves lhe right to porfonn some or all of tile Work with Its own farces
and to contraot wH11 other3 for some, baci{·CI1srging excess costs to the Seller. Upon request, Sellar shf.lll prompUy provide
D&C Contractor with adequate assurance saUsfactory to D&C Contractor of Selh~r'r, oblllty to fully perform its obligations
under the /\greoment Documents in lhG t!mB and manner provided.'

9.3     P.BQ§IlES.S_REPOHTS. Seller shall furnish D&C Contractor weeldy progress reports and such other reports as
D&C Contractor muy reasonably request to verify actual progress t~nd to predl<:t futur<~ progress. Work product will be
transmitted a!l noted In Exhibit A-1.

0.4      Sl.~JlQQN_TRACTS. Sell~r shall nol GUbt:witnld 1my Work, or use a tl1ird party or hrol(er to furnish any labor for !he
Wcrl1, without the prior wli\len consent of o.'lcC Contra.::tcr, which consent shall not bo unrea~onably withheld or delt~yed.
S~ller $hall b~ so!ely responGiblo for the engagement and management of lis Subcontraotors In the performl:lnce of the
Worl<, for U1o performance of Work by ils Subc~Jntractom and for oil nets or omissions of Subcontractors. Sellet shall insure
that all 1Nork furniohed or performed by Subcontractom conforms to the requlrem<mls of the Agreement Documents.
Nellher the consent by D&C Contmctor, nor anything contained herein, shall r,reat;} any conlractual relationship between
<~ny lower tier Subcontractor and D&C Contractor. All lower-Her suboontractll must contain 1he terms end conditions that
are lncorpomted In !his Agreement.

No Subcontreclor Is lntflnded to be or sllall be dr!~med to be a third party beneficiary or the Agreement Each agreement
bctwr:tlll Sellt:r ami any Subconirac!or !ihnll be In wtliing, and shall be assignable ttl D&C Contractor upon the completion
or termination of tho Work. A r.opy of each ~uch flgreernent wllh p1iclng removed sl1all be provided to D&C Contractor upon
requ(~5t,


In no event shall the right of UH~ Sc<ller hereunder to suhconlract reilove the Sa!ler from any of its obligations !lnd
responsibilities to achieve Substonllel Complelion and Final Accapt<mce of tho Work, :Js rnqulred unde•· the terms of the
D&C Contract, for payment of wa..qes of laborers and for equipment and rnalerials furnished for the D&C Worl~, as well as
for satisfaction of all indemnities ot Seller contained herein. l'he Seller agrees that II I~ fully responsibie to !he D&C
Contractor for the acts and omissions of Its subcontractors and of per~ons elt11er dlreetly or lndireclly employed by them as
it is for the acts and omissions of pemons directly employed by lha Seller. Tho Seller shall obtain e!l ner.essary information
from it!; subcontractors engaged In the J)&C Work, fn nrdAr to ensnre thRt thP.Ir work t:•.oofnnns with thP- RrJIJP.r's wnrlc Thf!
Seller is responslble for L\nd shall check the con-octr)ocs of any portion of the D&C Worl< performed by Us subcon\raclors,

9.5-     .!?JTE CQliJDIJJQN.~ Other U)an for a Relief Event, Sailor shall have the sole responsibility to establish that tha
natw·e and location of the Work, the Site, nnd the genc~ml and local r:onditlnns are such that the Work can bo perto1'med on
the Site, including but not Urnlted to, the following:

            (a)    Transporlalion, acce!;s, disposal, h<mdllng and storage of materials;
            (b)    Av<dlublllty ar,d quallly of labor, wat-er, electric power and road condition:;;
            (c)    Cllrnatic conditions ond sGasons;
            (d)    Physical oondl!lons at lhe SHe and the Proj(tcl as a whole;
            (<1)   Topography, subsurface and ground surtace conditions; and
            (f)    ConstrucUo11 equlpmont and faciiJUeu necdocJ preliminilry to and dt~ring thl.l Jmrfurrnance of Seller's Worl<.

The fal!ure of Seller to acquaint Itself with any upplicab!o conditions will not relieve Seller of tho responsibility for properly
estimating the dlfficullles or fol' the oosl of RtJocessfulty performing Seller's obligations in the time and manner proVIded
under the Agreement Documents.

9.6     COMPLIANCE 1NJI1:1..1AWli          Seller nh<1il fully comply wrth all Laws applicable to Sellar and to lhc Worl<. See
Altailhment P for additional proje<:tspecllfc requirement~;.




     --------~------~
                                                                                                     Agreement #CS UB116
                                                                                                    SH130 Segments 5 and 6
                                                                                                      Illumination and Signal
9.6.1   PREVAILING WAGES


a)        Seller shall pay or cause to be paid to all applicable workers employed by it or its Contractors to perform the Work
not less than the prevailing rates of wages, as provided in Attachment P, in the statutes and regula lions applicable to public
work contraet3, Including Chapter 225U of the Texas Government Code. TxDOT, Seller and its Contractors shall comply
with all Laws pertaining to prevailing wage~;. For the purposG of applying such Laws, the Facility shall be treated as a
public work paid for in whole or in part with puhllc funds (regardless of whether public funds are actually used to pay for the
Facility).
b)      It Is Seller's sole responsibility to determine the wage rates required to be paid. In the event rates of wages and
benefits change while this Agreement is in effect, Seller shall bear U)e cost of such changes and shall have no Claim
against D&C Contractor on account of such changes. Without limiting the foregoing, no Claim will be allowed which Is
based upon Seller's lack of knowledge or a misunderstanding of any such requirements or Seller's failure to include In the
B<lse Case Financial Model or Base Case Financial Model Updates adequate increases in such wages over the duration of
this Agreement and the Lease.
c)       Any Issue between Seller or a subcontractor and any affected worker relating to any alleged violation of Section
2258.023 of the Texas Government Code tl)at Is not resolv~d before the 15th day aner the date TxDOT makes Its inlt1al
determination under Section 2258.052 of the Texas Government Code (as to whether good cause exists to believe that a
violation occurred) shall be submitted to binding arbitration in accordance with the Texas General Arbitration Act, Chapter
171 of the Civil Practice and Remedies Coce.
d)      Seller shall comply and cause Its subcontractors to comply with all Laws regarding notice and posting of Intent to
pay prevailing wages, and any other noli co or posting of prevailing wage requirements and prevailing wage rates.

9.7    HAZARDOUS SUBSTANCES. Seller shall Immediately Notify D&C Contractor If Seller encounter:; pre-existing
Hazardous Substances at the Site. The D&C Contractor has a separate contract with a Hazardous Materials Contractor to
remadlate Hazardous Substances. The Seller shall not remedlate pre-existing Hazardous Substances under this
Agreement. However, Seller is responsible for any of Its r~leases of Hazardous Substances.

In accordance with the FCA, applicable Laws (Including specifically Environmental Laws) and all Environmental Approvals,
the Contractor shRII tal<e all reasonable steps to protact tho environment on and off the planned Facility Right of Way on
which it performs any of the D&C Work ond to avoid damage or nuisance to persons or to property of the public or others,
resulting from pollution, noise or other causes arising as a consequence of its performance of the D&C Work, subject to the
allocation of responsibility therefore as provided in the D&C Agreement.

g,8      CLEANING UP. Seller shall at all times l<eep the Site and surrounding area clean and free from rubbish caused by
Seller's operations. Prior to completing its Work in an area, Seller ~hall remove all accumulated rubbish caused by Seller's
operations and Seller's equipment, tools, machinery and materials. Seller shall dispose of all rubbish caused by Seller's
operations at a site and by the means designated at the sole discretion of Seller in a manner that is In compllancG with all
Laws.

9.9     LABOR. MATERIAL. AND HAULING

        0.0.1 LAOOR. Seller will provlcle only sl<llled, competent workers and supervision for the performunce of Its
Work and will be responsible for assuring harmonious labor relationships on the Project among its workers at the Site. All
Individual~ performing the Work shall have the skill and experience and any licenses or certifications required to perform
tho Work assigned to U1em. Seller shall lmmcdiately remove from the Project, w hen requested to do so by O&C Contractor,
any person to whom D&C Contractor reasonably objects, and such person m~y not thereafter reenter the Site without D&C
Contractor's prior consent.

Any uniforms worn by personnel of Seller-Related Entitles shall bear colors, lettering, badges or other Identifiers to assure
clear differentiation from uniforms worn by TxOOT employees.




          12
                                                                                                                Agreement IIC:3UB116
                                                                                                              SH1"30 Segments 5 and 6
                                                                                                                  lllurnlnalion and Signal
      9.H      ST{\NDARO 0 1: CARE. lhe standard of care for all servlces/worl< performed by Sellar and ils subcontractors
      pursuant lo this ,1\.greement shall be the cure and sl<iU orcllnarlly used by members of lha prolessi~)r1/trada praoUcirrg under
      similar conditions at lhe same tlme and looallty of \he Project. Seller agrees to investigate und remedy promptly, and
      without cost to D&C Contractor or Developer, any Defective Services of which it receives Nolica within the longer or twelve
      (12) months frorn D&C Contractor's Final Acceptanc(') of the Sarvico6 or the parlod during which any Developer Party or
      any third perty may make a claim against D&C Contractor related to the Services ar any negligent act or omission of tha
      Seller Party or a Seller subcontractor (eaoh as defined betow). In ad~llllon, Seller through lh!'J Insurance provided ror In
      Article o shall reimburse O&C Contractor for all (easonable costs Incurred to accomp!lsh neoded repair:;, additions,
      replar.ements or corrections to Seller's work which result from the Seller'$ DefecUve Services. For this Ariicle 9.17.,
      Dafecliv\'1 Services are defined as ~my Work \ht1t falls to salls(y the following: (a) in cornp!lanca wlth Laws; (b) In accordance
      wllh all applicable st~n dards and codes; (c) In accord!!nce wllh the provisions ot this Agreemenl and the Facility
      Concession Agreement, Tachnlcal Requirements, Tac:hnloal Documents, and Reference lnformatiPn Documents (all FCA7
      related documents are Incorporated by reference); and (d) tw performed In accordance wiU1 the st11ndard of care, sk!ll and
      diligence ordinarily used by members of the dasign profession performing services of o similar typa and nature al U1fl same
      lime and In U1e locale of the Project.

      9.18 £It!l9AL STANDARDS ..Wi!hln 30 days after l!w Effective Dale, Seller !lhall adopt written policies specific to lhls
      project establishing ethical standards of conduc\ for Sei!C!r and all Sellar-Related Entitles, inciiJdlng Seller's supervisory and
      managen1ent personnel In desling with (a) lhe O&C Controclor, (b) \he Developer (c) TxDOT and lha Independent Engineer
      and (d) utnployment relallons. Such policy !!hall be subj(-Jctto review and comment by tho D&C Contractor prior to adoption
      and shell Include U1e ethical standards lisled In Altachtnenl Q.

                                                         /\Rl'ICLE 10,    PAYMF.NT

      Undl~puted Invoices shall be due andpayahle seven (7) days after D&C Contractor receives payment from Developer, but
      not more than NET 60 days from the date of receipt of the undlc;putecllnvolce. rayrn ant is subject to complylrg with Items
      10 1 -· 10.'i1 below,
·'
      10.1    PAY,!VlENL D&C Ccntr·actor and SaUer h<~vu al)reed to u payment am{)unl for Seller's Worl( activities to serve as a
'·    basis for oofllputing parUal payments. .

      10.2     £AR...I!.N- PAYMEN'llt On the     26~1 calendar day or each tnonlh, Seller will furnish D&C Contractor an invoice
               meeting !he requlram<tnts In Hern 10.3.

       10.3    .1!:-l"{QlQs_REQlJ IREMENT~~
               (a)      1\ detailed Invoice per Segment (5.1. 6.2, IU, 6.2). in a fom1 and content acceptable to D&C Contractor,
                        seltln~ out the portion of U1e Agreement Price anocable to tho Work uctually perfonned to date by Seller to
                        acoompllsh each of the activities shown in lh!' Scope of Work and Schedule, along with supporting
                        dor.-umentallon ;at; D&C Contractor may reasonably require to substanllale Snller'!l right to paymont of the
                        invoiced arnor~nls, especially sales end uee tax (see Artlclo 2. ro: Tex~)S sales and usa tax);
               (b)      A prog1:ess report of Seller'u Worl\ lncludlng the 'Texas sales MO usc taY.es paid by Sellef and Seller's
                        Subcontractors (see Article 2) and supporting documcntB;
               (c}      Seller's Partial Waiver and Relo<Jso of Liens, Amdavlt of Bills Paid :.mct lndemnlf!C'.allon, r:ompleted and
                        axeclll13u In accordance with the form attached hereto as Attachment F;
               (d)      Cerlitrod payrolls, for the Invoice period, If raqtrired by the Agreement Documents; and
               (e)      Three (3) copies of SelletJs invoh:e                                    ·

                        Submit Invoice and docurnenls to tho following addreus:

                                 Central ToxuB HIOhWFJY Constructors, LLC
                                 Accou!lts Puyuble                  ·
                                 P.O. Box 1110
                                 locl<hart, lX 7fl64tl




                  15


 '·
                                                                                              Agreement #CS UB ·11 6
                                                                                             SH130 Segments 5 and 6
                                                                                                Illumination and Signal
during the progress of tht! Work, and (e) drawings and engineering data submitted by Seller during the progress of the
Worl~. provided such drawings and data are acceptable to D&C Contractor.

Effective Dote shall mean the date given In paragraph one of this Agreement.

Excusable Delay Is one caused by an Excusable Delay Event. For the Seller to obtain a time extension, the delay must
affect overall completion of the Seller's Scope of Worl(, I.e. the delay must cause a day-for-day extension to the critical
path.

Excusahlt'l Delay Events with respect to Seller's timely performance of the Work shall be defined as a Relief Event or as a
D&C Contractor-caused event to the extent that the event results In a delay \hal prevents Seller from completing Its overall
Scope of Work, provided thai such events are not due to any act. omission, negligence, recklessness, willful misconduct,
breach of contract or Law by Seller or by any parties for which Seller is responsible, and, further provided, that such events
(or the effects of such events) could not have been avoided by the exercise of caution, due diligence, or reasonable efforts
by Seller or by any par1les for which Seller is responsible. D&C Contractor-caused Excusable Delay Events include, but
are not limited to, D&C Contractor failures to {1) provide materials that the D&C Contractor is providing to Seller (e.g.
retaining wall bacl(fill, flexible base course material, lime material, retaining wall panels and hardware, retaining wall coping,
precast beams, precast deck panels, precast concrete trarnc barrier, concrete, rebar), or (2) perform Work provided by
D&C Contractor or by D&C Con tmctor'n Subcontractors (e.g. rebar assembly, fine grading prior to form worl(, drilled shafts,
traffic control not within Seller's Scope of Worl(, redesign,) that directly impact the Seller's Worl<.

Facility Concession Agreement (FCA) Is tho agreement between the Developer and the Texas Department of
Transportation. The FCA and related FCA documents are incorporated by reference Into this Subcontract Agreement.

Force MaJeure Event means the occurrence of any of the following events that materially end adversely affects
performance of Developer's obligations, provided lha\ such events (or the effects of such events) could not have been
avoided by the exercise of caution, due diligence, or reasonable efforts by Developer: (a) war (including civil war and
revolution), invasion, armed conflict, violent act of foreign enemy, military or armed blockade, or military or armed takeover
of the Facility, In each case occurring within the State of Texas; (b) any act of terrorism or sabotage that causes direct
physical damage to the Facility; and (c) nuclear explosion·.

Hazardous Substances shall mean any substances, the release of which Into, or the presence of which In, the environmen t
gives rise to any liability or obligation to remove, clean up, encapsulate or otherwise remedlate such release or presence
thereof under any Laws.

Indemnified Partv. shall mean the State of Texas, Developer, and their respecllve officers, directors, agents ~>nd employees,
D&C Contractor, their subsidiaries and Affiliates and their officers, directors. partners, agents, and employees.

Laws shall mean any taw, code, stEJtute, regulation, rule, ordinance, judgment, Injunction, or other court order, or other
requirement of a governmental authority having jurisdiction over the Work, or the Project or the construction or operation
thereof or party, and wh ich is valid and applicable thereto.

Materials shall mean all materials (direct and Indirect), supplies, goods, and equiprnent, which are necessary for Seller to
accomplish Its Scope of Worl<.

Milestone Dates shall mean those dates stated in the Agreement.

Non-Excusable Delay Events shall mean any act or neglect of Seller or its Subcontractors or any other event or occurrence
that may Interfere with or delay the Work that is not specified as an Excusable Delay Event.

Notice or Notify shall mean a notice in writing given to the Party's designated representative deemed duly given on the date
of receipt.

Party(les) shall mean D&C Contractor and Seller, as defined in paragraph one of this Agreement.




          ~0
                                                              Agreement #CSU13116
                                                             SH 130 Segmen1s 6 and G
                                                               Illumination and Signal
                                          ATTACHMENLJ:


                                    FEDERAL REQUIREMENTS


Exhibit Des<;riptlon                                                No. of Pages

Attachment 1 -Federal Provisions                                            2

Attachment 2 - FHWA Form 1273                                              28

Attachment 3 -Wage Detennlnation of the Secretary of Labor

Altac;hmenl 4 - Equal Employment Opportunity                                6

Altachrnonl 5- Afiirmallve Action                                           5

Altachment6 - Debarment and Suspension Certificallon

Atluchmen\ 7 - Lobbying Certification

Attachment 8 - Compliance with 2:3\J.S.C. §·129{a)(3)

Aliachmcnt 0- Compliance wiU1 Buy Amerlcn Requirements                      2




(){)
                                                                             Agn~ement #CSUB·I16
                                                                            SH130 Segments 5 and 6
                                                                              lllumlnaUon and Slgn!.il

                                  A)'TACHMENT 1 TO EXHIJ31T ~

     FEDERAL REQUIREMENTS FOR               PED~RAL~AJD       CONSTRUCTION PROJECTS

        CENERAL·-·The wori< horein proposed will be financed in whole or in part with Federal
funds , and thorofare all of the statutes, rules and regulations promulgated by the Federal
Government and appllcabl0 to work financed In whole or In part with Federal funds will apply to
such work. Tht~ "Required Contract Provisions, Federal-Aid Construction Contracts, Form
FHWA 1273," are lnGiuded in this Exhibit 8. Whenever in said required contract provisions
references are made to:

              (a)    "SHA contracting officer", "SHA resident englneeJJ', or "authorized
       representative of Lhe SHA". such referonces shall be construed to ITlean TxDOT or its
       Authorizeci Representative;

               (b)      "contractor'', "prime contractor", "bidder" or "prospective primary
       participant", such refere nces shall be construed to mean the Design-Build Contractor or
       its authorizet1 representative;

               (c)     "contract'' or "prime contract", such referenc.es shall be construed io mean
       the Design-Build Contract; and

               (d)    "subcontractor", "supplier", ''vendor", "prospective lower tier participant'' or
       "lower tier subcontractor'', such references shall be construed to mean subcontractors,
       suppliers and vendors of the Design-Build Contractor, Including lower tier
       subcontractors.

        PERFORMANCE OF PREVIOUS CONTRACT.-In addition to tl1e provisions In Section
II, "Nondiscrimination," and Sev-tlon VII, ''SublaUing or Assigning the Contract." of the Form 1273
required contract provisions, the Developer shall cause the contractor to comply with the
folfowing:

       The bidder shall execute the CERTIFICATION WITH REGARD TO THE
       PERFORMANCE OF PREVIOUS CONTRACTS OR SUBCONTI~ACTS SUBJECT TO
       T HE EQUAL OPPORTUNITY CLAUSE AND THE FILING OF REQUIRED REPORTS
       located In the proposal. No request for subletting or assigning any portion of tho
       contract In excess of $1 0,000 w!ll be considered under th~1 provisions of Section VII of
       the required contract provisions unless such request Is aco-ampanled by the
       CERTlFICATION referred to above, executed by the proposed subcontractor.

         NON-COLLUSION PROVlSION.- The provisions ln this section are applicable to all
contracts except contracts for Federal Ald Secondary Projects. Title 23, United States Code,
Section 112, requires as a condition precedent to approval by the Federal Highway
Administrator of the contract fOI' lhls work that each bidder file a sworn statement executed by,
or on behalf of, the person, finn, association. or corporation to whom such contract is to be
awarded, cetiify!ng that such person, firm , associZttlon, or corporation has not, eithet· directly or
lrtdlrectly, entered into any agreement, participated In any collusion, or otherwise taken any
action ll'l restraint of free competitive bidding it~ connection with the submitted bid. A form to
make the non-collusion affidavit statement requirl3d by Section 11 2 as a certification under




69
                                                               Agreement #CSUB116
                                                             SH130 Segmenis 5 and (3
                                                                 Illumination and Signal

GENERAL

1.   These contract provisions shall apply to all work pe1iormed on the contract
     by the contractor's own organization and with the assistance of worl<ers
     under the contractor's immediate superintendence and to all wort<
     performed on the contract by piecework, station work, or by subcontract.

2.   Except as otherwise provided fat• In each section, the contractor shall
     Insert In each subcontract all of the stipulations contained in these
     Required Contract Provisions, a nd further require their inclllsion in any
     lower tier subcontract or purchase order that may in turn be made. The
     Required Contract Provisions shall not be incorporated by reference In
     any case. The p1 ime contractor shall be responsible for compllat1ce by any
     subcontractor or lower tier subcontractor with these Required Contract
     Provisions.

3.   A breach of any of the stipulations contained in these Required Conlract
     Provisions shall be sufficient grounds for tem1inatlon of the contract.

4.   A breach of the following clauses of the Requimd Contract Provisions may
     also be grounds for debarment as provided In 29 CFR 5.12:

            Section 1, paragraph 2:

            Section IV, paragraphs 1, 2, 3, 4, and 7;

            Section V, paragraphs 1 and 2a through 2g.

5.   Disputes arising out of tl1e labor standards provisions of Section IV
     (except paragraph 5) and Section V of these Required Contract Provisions
     shall not be subject to the general disputes claLt$e of this contract. Such
     disputes shall be resolved in accordance with the procedures of the U.S.
     DGpartment of Labor (DOL) as se1 forth in 29 CFR 5, 6, and 7. Disputes
     within the meaning of this clause include disputes between the cont!'actor
     (or any of Its subcontractors) and the contracting agency, the DOL, or the
     contractor's employees or their representatives.

6.   Selection of Labor. During the performance of this contract, the contractor
     shall not:

     a.     discriminate against labor from any other State, possession, or
            territory of the United States (except for employment preference for
            Appalachian contracts, when applicable, as specified in Attachment
            A), or




                                                   Excerpt from Facility Concession Agreomont
    u.s. )Jepartment of labor                                                                         PAYROLL
    Employment Standards Administration                 (For Con tractor's Opt ional Use; See Instructions at www.doi.gov/esa/Whdlfonns/wh347instr.htm)
    wa9eandHour D'IVISIOn
                      • ·                           p ersons are not requlred to respond to lhe colle cllon o f ·nrormatlon
                                                                                                                I           unless I"t displays a currenUy valid OMB conlrol number                                                                       Rev DEc. ~008   -
    NAME OF CONTRACTOR               OR SUBCONTRACTOR                                                             ADDRESS                                                                                                                                                             OMB No.: 12'15-<l149
    DIG TECH lNC.                                                                                                 402 TECHNOLO~.Y DR!~ tiA~~OP.T~ 7!1602                                                                                                                              E!Cpires: 12/31/2011

    PAYROLL NO.
    19
                                                                                FOR WEEK ENDING
                                                                                      2/2612012 :
                                                                                                                      y                                         !                ..
                                                                                                                                                                                ~~     I,
                                                                                                                                                                                         PROJECT AND LOCATION
                                                                                                                                                                                       : SH130; SEC. 5.2 JOB #1528
                                                                                                                                                                                            '               •           I
                                                                                                                                                                                                                                                          PROJECT OF CONTRACT NO.


                                       (1)                                         (2}                (3)                             (4) DAY AND DATE                                (5)       (6)         (7)                                                                                             (9)
                                                                                                                                                                                                                                                        . (8)
                                                                                                   WORK             ,.:M         T      w      Th       F       sa sn                                                                              DEOUCTIOI~S


                                                                                    ~~
                                                                                    co
                                                                                            ClASSIFICATION           "'
                                                                                                                    gs :ro-   .. 121 .~ ·1~ · IP ... 124 ·'· j:ZS. :t2.6.                                                                                     .....,..,
                                                                                    -')::
                                                                                            (as s e l by ?revai!lng
                                                                                                                    ~                                                                                                                                     SUPPORT~·

                                                                                 0~~
       NAME. ADDRESS & INDIVIDUAL IDENTIFYING NUMBER                                             WageUsl)                                                                                                    OEIIITAU
                                                                                                                                                                                                         GROSS
                                                                                                                                 HOURS WORKED EACH DAY                                                                 WitH·                                    sc.
     (e.g., LAST FOUR DIGITS OF SOCIAL SECURITY NUMBER)                                                                                                                          TOTAL       RATE OF AMOUtrr HEAl.iii HOLDING                                              SOCIAL                  NET WAGES PAID
                       OF WORKER                                                 gd                                                                                             ~lOURS         PAY    EARNED INSUR.     TAll                  Medicate
                                                                                                                                                                                                                                                          llalUCTIOOol
                                                                                                                                                                                                                                                                 s
                                                                                                                                                                                                                                                                                        TOTAL
                                                                                                                                                                                                                                                                          SI:CUfliTY DalUCTlOICS      FOR WEEK
    WilliAM B. LESLIE XXX-XX                                                        0       SUPERVISOR                                                                      0               0.00     0.00                                                                                          0.00
                                                                                            "SALARY"                 0
                                                                                                                                                                                                                                                                                            0.00
                                                                                            EMPLOYEE                                                                        0               0.00       0.00
                                                                                                           s
    FP.ANCISCO C. ARIAS XXX-XX                                                      0       BACI<HOE.DERRI o                                                                0               21.75      0.00                                                                                        :269.31
                                                                                            CK,SHOVEL                                                                                                                  12.03       34.00        4 .66                         13.50     64.19
                                                                                            OPERATOR                 s                         10       13                  23              14.50      333.50

    HENRY C. MARTINE'.Z XXX-XX                                                      1       BACKHOE,DERRI 0                                                                 0               23.25      0.00                                                                                        295.70
                                                                                            CK,SHOVEL                                                                                                                  12.03       12.00        4.99           17.31          14.47     130.80
                                                                                                                                               10       13                  23              15.60      356.50
                                                                                            OPERATOR                 s
    DANIEL M. CHAPARRO XXX-XX                                                       3       BACKHOE,OERRI 0                                                                 0               26.25      0.00                                                                                        0.00
                                                                                            CK.SHOVEL                                                                                                                                                                                       0.00
                                                                                            OPERATOR      s                                                                 0               17.50      0.00

    MARIO S. OTERO XXX-X                                                            6       TRUCK DRIVER                                                                    0               21.75      0.00                                                                                        303.31
                                                                                                                     0
                                                                                            TANDEM AXLE                                                                                                                12.03                    4.66                          13.50     30.19
                                                                                                                                               10       13                  23              14.50      333.50
                                                                                            SEMI-TRAILER             s
    JOSUE M. CHAPARRO XXX-XX.                                                       3       LABORER,                                                                        0               20.25      0.00                                                                                        277.61
                                                                                                                     0
                                                                                            COMMON                                                                                                                     12.03        4.00        4.33                          12.53     32.69
                                                                                                                     s                         10       '13                 23              13.50      310.50

    JOSE P. MENDEZ XXX-XX-                                                          6       TRUCK DRIVER                                                                    0               20.25      0.00                                                                                        0.00
                                                                                                                     0
                                                                                            TANDEM AXLE                                                                                                                                                                                     0.00
:                                                                                           SEMI·TRAILER             s                                                      0               13.50      0.00
     1
    S., __..:o B. CHAPARRO XXX-XX                                                   0       BACKHOE.DERRI O                                                                 0               21.75      0.00                                                                                        0.00
                                                                                            CK,SHOVEL                                                                                                                                                                                       0.00
                                                                                            OPERATOR                 s                                                      0               14.50      0.00

    INDALECIO S. OSORIO XXX-XX-                                                     2       LABORER,                                                                        0               15.00      0.00                                                                                        0.00
                                                                                                                     0
                                                                                            COMMON                                                                                                                                                                                          0.00
                                                                                                                     s                                                      0               10.00      0.00


    Whl1a C1lmfliOiion of Form WH-3<7 b opGonoJ.lr is mooda1cxy lOt covesed cotllr.><lo<s ond subc<:lnlr.lclo<s perfonnlng wot1t on Fedenlly fi.o>oncod or as:;i:;lod con61ruc!lon contrac!S rc respond 1o the lnl011!\31ion coiJocllon oontalnod In 29 C.F.R. §§ S.3, S.S(o). The Co~elond Ad (40 U.S.C. § 3145)
    aonl~:>clors ond subconi<3Ciors perfonning \1/0rk 011 Foder.!Jiy Gnanccd or assiSied conslruclion eonlracts lo "furnish ..eeldy a $lalemeni..Wt res,c:IIC lhe l"i'90S paid e:!Cit l!fllplo)oee during !lt6 ptOCeding weal<.- U.S. Oepatlrnenl oll.llbor (DOL) ragui:Jtlons at29 C.F.R.li 5.5{a)(3)(i) requitu
    ccrtlraclors to submilwoekly a copy of aDpayrOlls to the Federal agency conllacllng lor or ranancinglho conalrucllon projec~ acccmponled by a signed •storomenl D( Complloncn• lndlcafing thallhe payrols aro correet and complete and !hoi each labcRr20 C.F.R. § SS(a)(3)(i) roquke arnltaC1otS
    Jos.bntl! w•eJ:Iy • copy ol :all P•yrons to lite Fcdero! agency conltaciJnglor or fnanc!ng lito co""lruclion projocl. o~:<Cmp:oroled by a signed -Slil!emenl oiComplion:e•lndlcollng lltoLrite Dlll""l$ aro corrocland complete and U1aleach laborer or Mechanic h;;o boen pold nollosslh;an 111C proper
    Oavis.Socon P'""DIIing wogo roro lor lhe ''""'' porfonMd. DOL and federal con!fl>d'"'g ogencios recalvf1g 1his iniortnliGon rovll~;> lhe inlormallon 10 determlnelhalemployees h""" reccll..,d logoly required~· and fringe bene rots.


                                                                                                                                            Pubfic Burden Statement
    We eslirllale tt\31 is \OIIItal<e an a•Jotnge of5S minut"'ro complete thio CQilaCUon, lncJudiltg lime lor rovlel:llno lns!IUCiions, ••arching eldoling dolO sources. galherlno and maintaining the dolo ncedod, and compiellng • nO re...,wlng 1!\e cclccf""' o( lnlormolion. lil'DU ha1~ ony ccmnl<nts «oonling

    Utcoe c:omoloo "'ony or~•r •"P•ol ol "''• co!oo:Gon. including auooCJ:llcns for reducing !his burden. send litem lo Ul& Admlnislrnlor. Wage and HourOlyi:;ion, I!SA. U.S. Oepor1monl or Labor, Room 53S02. 200 ConoO!ullonAvencJo. H.VI. WadtingLGn. O.C. 20210
                                                                                                                                                                                                                                                          r           .                 .
                                                                                                                                                                                                                                                          !     DgTec/Star 062
                                                                         Agreement #CS UB116
                                                                                                             I
                                                                                                             I

                                                                        SH130 Segments 5 and 6
                                                                          Illumination and Signal
                 Iii      that each laborer or mechanic has been paid not iess that the
                          applicable wage rate and fringe benefits or r;ash equivalent for the
                          classifica tion of wo1ked performed, as specified In the applicable
                          wage determination Incorporated into the contract.

           e.    The weekly submission of a properly executed certification set forth
                 on the reverse side of Optional Form WH~347 shall satisfy the
                 requirement for submission of the 11Statement of Compllance 0
                 required by paragraph 2d ofthis Section V.

           f.    The falsification of any of tho above certfficatlons may subject t11e
                 contractor to clvil or criminal prosecution under 18 U.S.C. 1001 and
                 31    u.s.c. 231.
           g.    The contractor or subcontrdctor sl1all make the records required
                 under paragraph 2b of this Sectlor\ V available for inspection,
                 copying, or transcription by autllorized representatives of the SHA,
                 the FHWA, or the DOL, and shall petmlt such representatives to
                 interview employees during working hours on the job. If the
                 contractor or subcontractor fails to submit the required records or to
                 mal<e them available, the SHA, the FHWA, the DOL, or all may,
                 after wrltt~n notice to ti1e contractor, sponsor, applicant, or owner,
                 take such clctions as may be necessary to cause the suspension of
                 any "further payment, advance, or guarantee of funds. Furthermore,
                 failure to submit the required records upon request or to make suol1
                 records available may be grounds for debarment action pursuant to
                  29 CFR 5.12.

VI.   RECORD OF MATERIALS, SUPPLIES) AND LABOR

      1.   On all Fedeml~aid contracts on the National Highway System, except
           those which provide soiely for the installation of protective devices at
           railroad grade crossings, those which are constructed on a force accoutit
           or direct labor basis, highway beautification contracts, and contracts for
           which the total final construction cost fot· roadway and bridge ls less than
           $1,000,000 (2:3 CFR 635) the contractor shall:

           a.     Become famHiar with the list of specific materials and supplies
                  contained in Form FHWA-47, "Statement of Materials and Labor
                  Used by Developer of Highway Construction Involving Federal
                  Funds," prior to the commGncement of work under this contract.

            b.     Maintain a record of the total cost of all materials and supplfes
                   purchased for and incorporated in the work, and also of the
                   quantities of those speci'fic materials and supplies listed on Form
                   FHWA~47, and in the units shown on Form FHWA-47.




                                                              Excerpt from Pac!llly Conc<~sslon Agre•Jmanl
,·
                                                                              Agreement #CSUB116
                                                                            SH 130 Segrnenls 5 and 6
                                                                          lllurnlnation and Signal
                 c.     Furnish, upon the completion of the contract, to the SHA resident
                        engineer on Form FHWA-47 together with the data required In
                        paragraph 1b relative to materials and supplies, a flnal labor
                        summary of all contract work indicating tile total hours worked and
                        the total amount earned.

            2.   At the prime c0ntractor's option, eltl-.er a single report covering all contract
                 work or separate reports for the contractor and for each subcontract shall
                 be submitted.

     VII.   SUBLETTING OR ASSIGNING THE CONTRACT

            1.   Th0 contractor shall perform with Its own organization contract work
                 amounting to not less than 30 percent (or a greater percentage if specified
                 elsewhere In the contract) of the total original contract price, excluding any
                 specialty items designated by the State. Specialty items may be
                 performed by subcontract and the amount of any such specialty items
                 performed may be deducted from the total original contract price before
                 computing the amount of work required to be performed by tile
                 contrar-tor's own organization {23 CFR 635).

                 a.     "Its own organization" shalf be construed to Include OJ!IY workers
                        employed and paid directly by the prime contractor and eqLiipment
                        owned or rented by the prime contractor, with or without operators.
                        Such term does not Include employees or equipment of a
                        subcontractor, assignee, or agent of the prime contractor.

                 b.     "Specialty Items" shaH be construed to be limited to work that
                        requires highly spec!alized knowledge, abilitfes, or equipment not
                        ordtnarl!y available in the type of contracting organizations qualified
                        and expected to bid on the contract as a whole and in general are
                        to bo limited to minor components of the overall contract.

                 c.     The contract amount upon whlch the requirements set forth In
                        paragraph 1 of Section VII is computed includes the cost of material
                        and manufactured products which are to be purchased or produced
                        by the contractor under tile contract provisions.

                 d.     The contractor shall furnish (a) a competent superintendent or
                        supervisor who Is employed by the· firm, has full authority to direct
                        performance of the work. in accordance with the contract
                        requirements, and Is ln charge of all construction operations
                        (regardless of who performs the work) and (b) such other of its own
                        organizatlonal   resources    (supervision,   management,        and
                        engtneerlng services) as the SHA contracting officer determines is
                        necessary to assure the performance of the contract.




                                                                  Excerpt frorn Faclllty Conces~lon Agreomoot
     39
                                                                               Agreement #CSUB11G
                                                                              SH130 Segments 5 and 6
                                                                                Hlumlnation and Signal
                  e.        No portion of the contract sl1all be sublet, assigned or otherwise
                            disposed of except with the written consent of the SHA contraeting
                            officer, or authorized representative, and such consent when given
                            shall not be construed to relieve the contractor of any responsibility
                            for the fulfillment of th e contract. Written consent will be given only
                            after u·1e SHA has assured thflt each subcontract Is evidenced in
                            writing and that it contains all pertineni provisions and requirements
                            of the prime contract.

    VIII.   SAFETY: ACCIDENT PREVENTION

            1.    In the performance of this contract the contractor sl1all comply with all
                  app!icabiEl Federal, State, and local lavvs governing safety,. health, and
                  sanitation (23 CFR 635). The contractor shall provide all safeguards,
                  safety dovlces and protective equipment and take any other needed
                  actions as it determines, or as the SHA contracting officer may detennine,
                  to be reasonably necessary to protect the life and health of employees on
                  ttle Job !:-Ind. the safety of the public and to protect property In connection
                  with the pe1iormance of the worl< covered by the contract.             ·

            2.    It is a conclitlon of tl1ls contract, and shall be made a condition of each
                  subcontract, which the contractor enters into pursuant to this contract, that
                  the contractor and any subcontractor shall not permit any employee, in
                  performance of the contract, to work in surroundlng.s o1· under conditions
                  which are unsanitary, hazardous or dangerous to hls/her health or safety,
                  as detem1lned under construction safety and health standards (29 CFR
                  1926) promulgated by the Secretary of Labor, In accordance with Section
                  107 of the Contract Work Hours and Safety Standards Act (40 U.S.C.
                  333). .

            3.    Pursuant to 29 CFR 192.6.3, it is a condition of this contract that the
                  Secretary of Labor or authorized representative thereof, shall have right of
                  enby to any site of mntract perfo1mance to inspect or Investigate the
                  matter of compliance with the construction safety and health standards
                  and to can·y out the duties of the Secretary under Section 107 of the
                  Contract Work Hours and Safely Standards Act (40 U.S.C. 333).

    IX.     FALSE STATEMENTS CONCERNING HIGHWAY PROJECTS

            In order to assure high qualily and durable construction in conformity with
            approved plans and specifications and a l·llgh degree of reliability on statements
            and representations made by engineers, contractors, suppliers, and workers on
            Federal-aid highway Projects, it is essential that all persons concerned with the
            Facility perform their functions as can;lft~lly, thoroughly, and honestly as possible.
            WillfLJI falsification, distortion, or misrepresentation wltll respect to any facts
            related to the Facility is a violation of Federal law. To prevent any
            misunderstanding regmding the seriousness of these and similar acts, U·1e


I
                                                                    Excerpt from FacQity Concession Agr~ament
    90
                                                                                            .......




                                                                                         Agreemant #CSUB116
                                                                                        SH130 Segments 5 and 6
                                                                                            Illumination and Signal

                                             ATI'ACHMENT 3 TO EXHIBIT 8

                                           FEDERAL PREVAILING WAGE RATE


       GENERAL DECISION: TX200700•B 02i01)/200'/ 'IX43

       D:~tc: February 9, 200'1
       General Decision Nllmber: TX20070043 0?../09/2007

       Sup<!r~eded G~ncml   Decision NtUubcr: TX20030043

       State: Te.~us

       \ on!.1ruction Types: I !c;Jvy and I fighway

       Counties: Bdl, 8c;{ar. Bmzos, Comn~ Coryell, Guadnhrpc,
       Hny~. MoLenmm. ~-,.11vis and Willianl:lon Counties in Tcxa,,


       Heavy (excludiug lnnllcls nncl dam.c:) nnd Hl~;~hwuy Constru~tiun
       Project~ (doen nol include building structures in reslllt'eA
       projects). ~'NOT TO BE USED FOR WORK ON SEWAGE OR WAT.ER
       TREATl\o{f;NT PLANTS Ott UFT/PUMP STATIONS tN BEtL, CORYELL,
       McLENNAN AND WILLIAMSON COUN'l'IES.

       Moditlcntion Number Publication Ontc
             0        02/09/2007

       SUTX200j-00 I 0 1/031?.005

                                                      Rate.~      Fringes

        Air Tool Operator.............                $ 16.00         0.00
        AsphAlt DiS(t'ibutor Opemtor...               $ 12.09         0.00
        Asphnlt pnvin~ machine operator               $ 11.82         0.00
        Asphalt Rnker.... u ............              s 9.96          0.00
        ·"-"Phntt Shoveler...............             $ 10.56         0.00
        Broom or Sweeper Opcrnlor......               $ 9.74          0.00
        Bu lldoz.er operuto1· ...........             $ 11.04          0.00
        Cnrpenlcr......................               ~ 12.25          0.00
        Concrete Finisher, Pnvlng......               s 10.53          0.00
        Concrete Fini$her. Smtcmr~s..                 s 10.1>5         0.00
        Co111:rcte Pnving Curbing
        Muchine Opemtor...............                s 14.00         0.00
        C\'llcretc Paving finishing
        Machine Openltor...............               $ 12.00         0.00
        Concrete Rubber................               $ l0.83         0.00
        Ct•au.,, Clnmshell. Bnckhoe,
         Denicl<, Dragline, Shovel
         Opcru1or.......................              :t 13.61\       0.00
        El~ctrician....................               $24.11          0.00
         Flogget•........................             $ 9.49          0.00
         Form Dullder/Senet-. SU11Ciln·es             $ 10.88         0.00
         Form Sttter, Paving & Curb.....              $ 9.89          0.00
         Foundntion Drill Otlr.r.,tor,

.~ .




       98                                                                     E><curpl r,.llll Fncmty Conw~slon A{)feemef\t
                                                                                                                              Agr eement #CS UBi 16
                                                                                                                            S!-1130 Segments 5 and 6
                                                                                                                                llluminatlon and Sisnal

                 True!< Mounted..,...............                                    $ 15.00               0.00
                 Front End Londer Op~·ator......                                     $ 11.36               0.00
                 Laborer, common................                                     $ 9.34                0.00
                 Laborer1 Utility ..............,                                    s 10.12               0.00
                 Mechnnic .......................                                    $ 14.74               o.oo
                 Mixel' opcmtol', Concrete Paviug                                    $ 15.25               0.00
                 Mixer operator.................                                      s10.8.1              0.00
                 Motor Grader Operotor, Fine
                 Grade..........................                                      s 15.26              0.00
                 Motor Grader Opemtor, Rough...                                       s 12.96              0.00
                 Oilet·..................... "'"                                      s 14.71              0.00
                 Painter, Stntcturcs............                                      $ 11.00              0.00
                 l 111Vcment MR1i<ing Machlnu
                 Operator.......................                                      $ ( 1.52             0.00
                 l'ipclnyer......................                                     $ 10.49              0.00
                 Pinner Opcmtor.....~.........                                        $ 17A5               0.00
                 Reillfor~ing Steel Setter,
                  P~wing.........................                                     :1: 15.50            0.00
                  Reil\fot·cing St~el Setter,
                  Structure......................                                     $14.00               0.00
                  Roller Opcr~tor. Pneumatic,
                  Self-Propelled.................                                     $ 9.34               0.00
                  Roller Opemtor. Steel Wheel,
                  Flnl Wheci/Tampitlg.............                                    $ 9.60               0.00
                  Roller Operator, Steel Whc;!l,
                  Plan( Mix.l>avcment.. ...........                                   s i0.24              0.00
                . Scraper Opel'l!tor·...............                                  $ 9.93               0.00
                  Scrviccr.............~........                                      $ I 1.41             0.00
                  Sign rnstnlkr (PGM)...........                                      !S 14.R5             0.00
                  Slip forn) MncJ1illl~ Operator.._.                                  $ 15.17              0.00
                  Sprcndcr Box operator..........                                     $ 10.39              0.00
                  S!ntctural Steel Worker........                                     $ 13.41              0.00
                  Tractor operutor. Cruwler Type.                                     $ 11.10              0.00
                  Traveling Mixer Operatm.......                                      $ 10.04              0.00
                  Trenching machine operator,
                  Heavy..........................                                     $14.22               0.00
                  Truck Drlw:r Tundem 1\..'Je Semi-
                  Tmilcr.............         w   ........                            !!i 10.95            0.00
                  Tmck driver, lowboy-Pioal......                                     $ 15.30              0.00
                  Tcuck driver, Single A~:fe,
                  Hcnvy..........................                                     5 ll.li8             0.00
                  Truck driver, Single Axle,
                  Light.........................                                      $ 9.98               0.00
                  Wagon Drill, Boring M8r.hine,
                  Po~t Hoi.: Driilel' Opcrntor.....                                   $ Jol.65             0.00
                  \Velder.........................                                    !t 14.26             0.00

                ------ ..-....--.....- ..........._............................
                  Wo1·k Zone Darricadc Se1vicer...                                    $ I 1.15             0.00
                                                                              ----· -·-~   ........ ....
                                                                                                  ~




                IJnlistccl clnssifications needed for work not includerl within
                the scope of the dnssificatioqs listed mny be udded after
                award only n~ provided In the labor standards contract clnuses
                (29CFR 5.5 (a) (l) {ii)).
     ..-·....

'·
                                                                                                                  Exceflll from Faca;ty C<Jncess!on Aljreemont
                                                                                                    Agreement #CSUB116
                                                                                                  Sl-1130 Segments 5 and 6
                                                                                                      Illumination and Signal

        GENERAL DECISION: 'l'X20070129 02/09/2007 '1':-<129

        Date:    ~ubr.u~ty      9, 2007
        General Decision Humber: 'l'X20070129 02/09/200'7

        Supel:'vecled General oeciuion                ~h..i!llb£Jr!   1'.:<20030129

        State: '.Ce:-!as

        r.onst ntcl" i en. Ty:;es: HP.avy and II igt)•,,ay

        C:ountl.esr 1\ransas, Atascosa, Austin , B.:m.:lera, Bastr.op, Bee,
        Blanco, Burnet, Callh>~ell, Calh<)un, c.,lore~do, Dt~ t1:i.tt 1 Fayette,
        Frio, G1Llespia, Goliad, Gonzales, Jackson, .Tint Walls, .Ka~:nes,
        l<andall, Kerr, Kleberg, Lavaca, Lee, f~ive Onl<, Llano, Mason,
        r~ataqorda, Neclina, Refuqic, Whar.ton and Wil$on Counties in Texas.

        H'k~.'W'i CONS'l'ROCTlON PROJECTS (exduding dall',
        cons tJ~llction) . HIGIIWAY CONS'l'ROC1'ION PROJEC'rS {excluding tunnels,
        building
        structures in .rest ar.ea p r ojoct.s & railroad con struct:l.on;
        bascul~, suspension & spandrel arch br.idges designed for
        commercial nav.ig<~tion, bridges ilwolving marine COlJStruction;
        and other major brict9eal,

        r-lodification Number                   !?ublication Date
                          ()                     02/09/2007

         SUTX2005-023 09/00/2005

        HEAVY CONSTRUCTION !?ROJI!:C'l'S UI.GHNAY CONSTRUC1':CON PROJECTS

                                                                      Hates           ~r.inges


          Carpenter ..... , , .......• , . . . . $                    11.70
          ~lechanic ••......•.. , •......••. $                        12. 18
          Asphalt DistJ:ibutor: Operatoz: ... $                       12.57
          Asphalt !;}av.tng machine operator:$                        11.60
          Aspha l t RakGr,., . . , ........ , .. . $                  10.63
          Asphalt Shoveler .. . , . , ... , ... , . $                   9.2.3
          Broom or SHeeper. Operato.r: •....• s                         9.32
          Bul l dozer operator ........... $                          ll. 69
          Conc.r:ete finishQr, t'<~'ring., .... $                     [ 1. 64
          Concrete Finisher, Structures,.$                            10.23
          Cone rete Rubber • .. , . . . . .. . ..... $                 9.00
          Cra ne , Clamshell , Dnckhoe,
          Der~:.tr.k, f"l.ragl ine, Shovel
          Oper.C~tor .. . ............. . ...... s                    12.00
          Flaggf!r . ....... , .. , . , .• . .... , .. . $             8.60
          E"orm .fluilde.r /Set:.te1· 1 Str.uctur.·es$                10 . 51
           Form St:!tter, l?av;t.nq         &   Curb . .... $          9. ~a
           Foundation Dr.J.ll Ot)erator,
          Truck Mounted .• . .... , •.•• • ..•• . $ 14.58
          Fr.ont Enu Loader Operator . .. . . . $ ).0 . 62
          J.iiho.rec, <.:ommon • •• . ..•...• •. . .• ~ 8. 9J
          J.a.bor.!l:t: 1 Uti.J i ty. , ,,, , ... . ... , . $          9.21
          t4otor. Gl:ader Operator l!'lne
           Grade . • . . . . . . . . . . . • , . . . . . •. .•• . $ 15 . 15
          Mot:or  Grad~r Opera tor Rough .... $ 12.95

.----

        102                                                                             Excerpt from Fac~Ky ConcoGfllon Agreument
                                                                                  Agreement #CSUB116
                                                                                 SH130 Segments 5 and 6
                                                                                   lllurnlna:tlon and Signal

      Paveml~nt H.:u:ki~tg !-lachine
      Operator .• . ..•.... , .......•... . $          13. 32
      l?ipelaye.r .. ........ .. .. .•..... . $         9.71
      Roller Operator , Pneumatic,
      :;elf-Propelled .... ...... .. ...•. .s           fl.90
      Rolle.t: Opr::rato.r, StP.el v!heel,
      nat l~heel/Tampin<r ..• ..•.... •.. $             9.30
      Roller Operator, Steel Nheal,
      Plant .Mix Paveme n t .. , , , ••...•. ,,        10.59
      Scrape:!: Operator. ..... , . . •.. . ... $       9.05
      Se 1:v!ce.r .. . ... ..• .•.. . .•.. •.. • . $   11.18
      SpreadeJ: Box Operator ..•.. . . . . . $         1}.00
      ·rravellng Ni:< er Ope·r:ator.· ....... $        12.67
      ·rruck. Driver. Singh'! Axl~ Heavy.$             10.8'7
      Truck Driver Singla Axle, J.ight$                10.85
      1'r\U:.k driver, lo~:boy-J!loat, .... $          13 .70
      'l'r.uck Driver., Tandem Axle,
      Semi-Traile~ ........... . ....... $             10.05
      Nork Zone Bdrricade SBrvicer ... $                9. 6.3


WF.LD£RS - Rm:eive rate pre.scr.ibed fvr CL'r.l .tt perfo:t:mitHJ
opel:atlon to whir::h 1~e lding is .lncldental.


                                          ~1ork not incJ.ud«~d within
Unl.1sted cl.<1SS1f1cat.l.ollS nee•jecl for
the scope of the
class1 fi.C<\tions 1:\.sted may be adrJed aft.r,u: awar.d only as
p rovided in tho labor
stundarct~ contract clNuses (29 CFR s:s(a) (1) (ii)) .




In the listing above, the "SO" designation roeans th,;t rates
Listed under the
id<::ntl.fier c!o net .reflect. coll~ctively barga1.ned I•Jage and
frin ge beneftt
:r.ates.  Othe:c deslgnat ions tndicatQ union~; ~~hose r<ste:~ havr~
heon detexm:l.nect
to be p!:evailing.




                    ''lAG!'; DBTERMINA'l'ION APPEAT.S        PHOC~1SS


1.) Has thecfl. been          ;.~n   inlti nl c.locl.sion i n t hn mattor.? This can
bel

·~     an e xisting published wage determination
+      n .'.llll:•rey underlying a ~~age determination
''     a Wag<,! and Hour Division lott.m~ setttilg f<Jrt;h a posil:icm on
ll.   l'laga
       dettl rtnination matter·
"'     a con£onnance (additional clilssi.fioation <1nd rate) ruLing

On s •.tnrey related matter~, in.itial contact, inclurHng requests
foJ~ surcun~ll:-ies
of. SIArveys, shoul d be 11i th l:.he ~h.1.gr~ and Holtr R~;~gional Office



103                                                                     Excerpt fmm FacUity Concession Agreement
                                     94
(


     1
     2
     3
     4
     5
     6
     7

     8

     9       DEFENDANT'S EXHIBIT 2
             AGREEMENT NO. CSUB122
    10
    11
    12
    13
    14
    15
    16
    17

    18

    19
    20
    21
    22
    23
    24
    25          (Back to index)




         Appendix Item 15
      Central Texas Highway Cons1ructors LLC
      1914 Borchert Drive
      Locl<hart, Texas 78644                                                               h. .n EKlnBI'L.L -
                                                                                                                    tl{,r
                                                                                           l)~pt•!lt::lH -·-·----··-
      16 September 2010
                                                                                           Dcolll----- Hp1X.--·--
                                                                                               \'MW cn:.•\Jt:H11: c ·~c: '
      Dig Tech, Inc.
      Attention: Mike Fur('/
      402 Technology Drive
      Bastrop, Texas 78602

      512.321.6644

      VIA OVERNIGHT MAIL

      Reference:        Agroernent No. CSUB 122
                        Furnish and Install Electric DlslrlbuUon Facililles- Biuebonnet Electric Cooperallva
                        SH 130 Segmenlc 5 and 6

      Dear Mr. Furry:

      Find enclosed the fully executed Subcontract Agreement with accompanying DVD.
...
      1. This feller v~ll serve as a Full Notice to Proceed and commences the Performance Pa11od for all
          Segments a~ defined In Article 8 of the Agreement, effective 27 September 2010.
      2. Deliver to CTxHC tho revised letter of credit of credit as soon as practicable.
      3, Ensure that aU Dig Tech field perSonnel attend safety arn.J environmental training prior to deployment.
      4. Your principal points of contact f<.'l' this Work aro Wayne Karlik (UtOity Manager), 817-819-3697, and
         Travis Isaacson (Utilily Design Coordinator), 512462-7522. Please contact them to coordinate
          perfonnance of Um work.
      5. Please contact Ms. Sonia Maillo, CFO, 5'12-~62-7506, to discuss administrative interface, e.g. Invoicing,
          sales lax, and so forth.
      6. Please contact Ms. Evelyn Calonga, DBE Coordinator, 512-462-7517, to discuss any OBE-related
         issues.
      7. Please contact lv1r. Esteban Trlgueros, Quality Manager, 512-462-7!504, to discuss quality control and
          quality assurance of the Work.
      8. Your point of contact for environmental compliance is Ms. Jenl\ifer Oshel, CTxHC Environmental
          Manager, 512-462-7505.
      9. Your point of contact for heallh nnd safety compliance Is Mr. Jerry WaUey, Hea1U1 und Safely Manager,
          512-801-2572.

      Contact mo if you have any questions, !i i2-4G2-i'!i10. Thank you.

      Sincerely,
      CENTRAL TEXAS HIGHWAY CONSTRUCTORS I.LC


      ~~{/ t:tJU,u~/
      Michael l<iehnau
      Project Controls ?Aanager

      cc: Document Control (DT-PC·1009·831 13950)                          EXHIBIT
                                                                                                                      C0670272.PDF
                                                                                                            Agreement #CSUB122
\
                                                                                                          SH130 Segments 5 and 6
                                                                                   Furnish and Install Electric Distribution Facilities


    9.4      SUBCONTRACTS. Seller shall not subcontract any Work, or use a third party or broker to furnish any labor for the
    Work, without the prior written consent of D&C Contractor, which consent shall not be unreasonably withheld or delayed.
    Seller shall be solely responsible for the engagement and management of Its Subcontractors In the performance of the
    Work, for the performance of Work by its Subcontractors and for all acts or omissions of Subcontractors. Seller shall insure
    that all Worit furnished or performed by Subcontractor(l conforms to the requirements of the Agreement Documents.
    Neither the consent by D&C Contractor, nor anything contained herein, shall create any contractual relationship between
    any lower tier Subcontractor and D&C Contractor. All lower-tier subcontracts must contain the terms and condllions that
    are incorporated In this Agreement.

    No Subcontractor Is Intended to be or shall be deemed to be a third party beneficiary of the Agreement. Each agreement
    between Seller and any Subcontractor shall be In wrftlng, and shall be assignable to D&C Contractor upon the completion
    or termination of the Wort<. A copy of each such agreement with prfclng removed shalt be provided to D&C Contractor upon
    request.

    In no event shall the rfght of the Seller hereunder to subcontract relieve the Seller from any of Its obligations end
    responsibilities to achlevo Substantia! Completion and Final Acceptance of the Work, as required under the terms of the
    D&C Contract, for payment of wages of laborers and for equipment and materials furnished for the D&C Work, as well as
    for satisfaction of all indemnities of Seller contained herein. The Seller agrees that It Is fully responsible to the D&C
    Contractor for the acts and omissions of Its subcontractors and of persons either directly or Indirectly employed by them as
    lt is for the acts and omissions of persons directly employed by the Seller. The Seller shall obtain all necessary information
    from its subcontractors engaged In the D&C Work, In order to ensure that their work conforms with the Seller's worl<. The
    Seller Is responsible for and shall check thG correctness of any portion of ihe D&C Work performed by lts subcontractors.

    9.5       SITE CONDITIONS. Seller shall have the sole responslbllity to establish that the nature and location of the Worl<,
    the Site, and the gar1eral and local conditions are such that the Work can be performed on the Site, including but not limited
    to, the following:

            (a)      Transportation, access, disposal, handling and storage of materials;
            (b)      Availabllily and quality of labor, water, electric power and road conditions;
            (c)      CllmaHc conditions and seasons;
            (d)      Physical conditions at !he Site and the Project as a whole;
            (e)      Topography, subsurface and ground surface conditions; and
            {f)      Construction equipment and faciiiUes needed preliminary to and during tho performance of Seller's Work.

    The failure of Seller to acquaint Itself with any applicable conditions will not relieve Seller of the responsibility for properly
    estimating U1a difficulties or for the cost of sucoessful!y performing Seller's obligations in the time and manner provided
    under the Agreement Documents.

    9.6    COMPLIANCE WITH LAWS, Seller shall fully comply with all Laws applicable to Seller and to the Work. See
    Attachment P for addilio11al project specific requirements,

    9.6.1   PREVAILING WAGES

    a)        Seller shall pay or cause to be paid to all applicable workers employed by it or Its Contractors to perform the Work
    not lass than the prevailing rates of wages, as provided in Attachment P, in the statutes and regulations appllcable to public
    work contracts, Including Chapter 2258 of the Texas Government Code. TxDOT, Seller and Its Contractors shall comply
    with all Law~o> pertaining to prevailing wages. For the purpose of applying such l aws, the Facility shalt be treated as a
    public worl( paid for In whole or In part with public funds (regardless of whether public funds are actually used to pay for the
    Facility).
    b)      It Is Seller's sore rosponsibllity to determine the wage rates required to be paid. In the event rates of wages and
    benefits change while this Agreement Is in effect, Sailer shall bear the cost of such changes and shall have no Claim
    against D&C Contractor on account of such changes. Without limiting tha foregoing, no Claim will be allowed which Is




              11

                                                                                                                   C0670272.PDF
 r
 I
 i
 i
_j                                                                                                        Agreement #CSUB122
                                                                                                        SH130 Segments 5 and 6
                                                                                 Furnish and Install Electric Distribution Facilities

     based upon Seller's lack of knowledge or a misunderstanding of any such requirements or Seller's failure to include in the
     Base Case Financial Model or Base Case Financial Model Updates adequate increases In such wages over the duration of
     this Agreement and the Lease.
     c)       Any issue between Seller or a subcontractor and any affected worker relating to any alleged violation of Section
     2258.023 of the Texas Government Code that Is not resolved before the 15th day after the date TxDOT makes Its initial
     determination under Section 2258.052 of the Texas Government Code (as to whether good cause exists to believe that a
     violation occurred) shall be submitted to binding arbitration in accordance with the Texas General Arbitration Act, Chapter
     171 of the Civil Practice and Remedies Code.
     d)      Seller shall comply and cause Its subcontractors to comply with all Laws regarding notice and posting of Intent to
     pay prevailing wages, and any other notice or posting of prevailing wage requirements and prevailing wage rates.

     9.7    HAZARDOUS SUBSTANCES. Seller shall immediately Notify D&C Contractor If Seller encounters pre-existing
     Hazardous Substances at the Site. The D&C Contractor has a separate contract with a Hazardous Materials Contractor to
     remedlate Hazardous Substances. The Seller shall not remedlate pre-existing Hazardous Substances under this
     Agreement. However, Seller is responsible for any of Its releases of Hazardous Substances.

     In accordance with the FCA, applicable Laws (including specifically Environmental Laws) and all Environmental Approvals,
     the Contractor shall take all reasonable steps to protect the environment on and off the planned Facility Right of Way on
     wnfch-·n ·p-eiforms·an·y oftneTi&CWorl<an<na·avord-i::lamage -or-nursanceto persons-or to properw of the·pabllc or·others,
     resulting from pollution, noise or other causes arising as a consequence of its performance of the D&C Work, subject to the
     allocation of responsibility therefore as provided In the D&C Agreement.

     9.8      CLEANING UP. Seller shall at all times keep the Site and surrounding area clean and free from rubbish caused by
     Seller's operations. Prior to completing its Work in an area, Seller shall remove all accumulated rubbish caused by Seller's
     operations and Seller's equipment, tools, machinery and materials. Seller shall dispose of all rubbish caused by Seller's
     operations at a site and by the means designated at the sole discretion of Seller in a manner that is in compliance with all
     Laws.

     9.9     LABOR, MATERIAL, AND HAULING

             9.9.1    LABOR. Seller will provide only skilled, competent workers and supervision for the performance of its
     Work and will be responsible for assuring harmonious labor relationships on the Project among its workers at the Site. All
     individuals performing the Work shall have the skill and experience and any licenses or certifications required to perform
     the Work assigned to them. Seller shall immediately remove from the Project, when requested to do so by D&C Contractor,
     any person to whom D&C Contractor reasonably objects, and such person may not thereafter reenter the Site without D&C
     Contractor's prior consent.

     Any uniforms worn by personnel of Seller-Related Entities shall bear colors, lettering, badges or other identifiers to assure
     clear differentiation from uniforms worn by TxDOT employees.

              9.9.2 MATERIAL. All steel and iron used and all products manufactured from steel and iron must be produced in
     th e United States and all manufacturing processes, including application of a coating, for these materials must occur in the
     United States. Coating Includes all processes which protect or enhance the value of the material to which the coating is
     applied.

              9.9.3 HAULING. Seller agrees to pay any worker, laborer or mechanic for work performed on the Project site,
     and otherwise covered by the Davis-Bacon Act or any other applicable state or federal law, at a rate not less than the
     legally prescribed prevailing wage rate set forth in the Facility Concession Agreement (Attachment 3 to Exhibit 8), which
     rate schedule Is incorporated by this reference for all purposes. The inclusion of such schedule does not relieve Seller from
     responsibility to comply with any applicable state or federal law.

     9.10    INSPECTION OF THE WORK. Seller alone Is responsible for the quality of Its Work and for the proper inspection
 "   of Its Work. D&C Contractor and Developer have the right to inspect all or any portion of the Work designated by D&C




              12
                                                                                                      Agreement #CSUB1 22
                                                                                                    SH130 Segments 5 and 6
                                                                             Furnish and Install Electric Distrlbullon Facilities

9.18     ETHIQAL STANDARDS. Within 30 days after the Effective Date, Seller shall adopt written policies establishing
ethical standards of conduct for Seller and all Seller-Related Entitles, Including Seller's superv1sory and management
personnel in dealing with (a) the D&C Contractor, (b) the Developer (c) TxDOT and the Independent Engineer and (d)
employment relations. Such policy shall be subject to review and comment by the D&C Contractor prior to adoption and
shall lnclude the ethical standards listed in Attachment Q.

                                                 ARTICLE 10. PAYMENT

Undisputed invoices shall be due and payable seven (7) days after D&C Contractor receives payment from Developer, but
not later than 45 days following receipt of such invoice. Payment is subject to complying with Items 10.1 - 10.11 below.

10.1    PAYMENT. D&C Contractor and Seller have agreed to a payment amount for Seller's Worl< activities to seNe as a
basis for computing partial payments. .

10.2    PARTIAL PAYMENTS. On the 251h calendar day of each month, Seller will furnish D&C Contractor an invoice
        meeting the requirements In Item 10,3.

10.3    llfiQICE REQUJREMENJS;

        (a)     A detailed invoice, in a form and content acceptable to D&C Contractor, setHng out the portion of the
                Agreement Price allocable to the Work actually performed to date by Seller to accomplish each of the
                activities shown in the Scope of Work end Schedule, along with supporting documentation as D&C
                Con(ractor may reasonably require to substantiate Seller's right to payment of the Invoiced amounts (also
                see Article 2, re: Texas sales and use tax);
        (b)     A progress report of Seller's Work including 01e Texas sales and use taxes paid by Seller and Seller's
                Subcontractors (see Article 2) and supporting documents;
        (c)     Seller's Partial Waiver and Release of Liens, Affidavit of Bills Paid and Indemnification, completed and
                executed in accordance with the form attached hereto as Attachment F;
        (d)     Certified payrolls, for the invoice period, If required by the Agreement Documents; and
        (e)     Three (3) copies of Seller's Invoice
                Submit rnvolca and documents to the following address:
                        Central Texas Highway Constructors, LLC
                        Accounts Payable
                        P.O. Box 1110
                        Lccki1art, TX 78644
                         Or as directed by D&C Conlractor

10.4     APPLICATION OF PAYMENT, The Application for Payment shall constitute Seller's representation that (i) the
SeNices have been performed consistent with the Contract Documents. (II) Seller's subcontractors and material suppliers
have been paid alt amounts previously received by Seller on account of their services to the extent then due, and (Iii) tl)ere
are no claims, obligations or liens outstanding or unsatlsf!ed for labor, services, taxes, or other items performed, furnished,
or Incurred for or in connection with the Services.                                                                         ·

10.5     RETAINAGE. Retalnaga will be withheld as follows;
         (a)     Ten Percent (10%) retalnage will be withheld on the total Invoiced amount (Including mobilization) until tho
Seller has Invoiced atleast $1.5 million;
         (b)     When the $1.5 miUion invoice threshold has been achteved, as evidenced by tlw Seller's payment
application, the D&C Contractor will release that portloh of retainage withhold for Direct Materials;
         (c)     After the $1.5 trilllion invoice threshold has been achieved, as evidenced by the Seifer's payment
application, the D&C Contractor will continue to withhold ten percent (10%) retainage only on labor, equipment, and
consumables {LEC). This portion of retalnage attribute! to LEC wlll be released when the requirements of Speolal Provision
009-009 of FCA Exhibit 15 are saUsfled.




          16

                                                                                                             C0670272.PDF
                                                                                                       Agreement #CSUB122
                                                                                                    SH130 Segments 5 and 6
                                                                             Furnish and Install Electric Distribution Facilities

D&C Contractor shall mean Central Texas Highway Constructors LLC

Day or day shall mean calendar days unless otherwise expressly specified.

DOL shall mean U.S. Department of Labor.

Defective Work shall mean Work, which fails to satisfy the requirements of Article 12, Warranty.

Developer shall mean the entity in which D&C Contractor has entered into a contract with to perform certain work and is
Identified In paragraph A of the Recitals in this Agreement.

Direct Materials shall mean materials, supplies and equipment to be Incorporated as a permanent part of the Project,
excluding any sales or use tax thereon.

Director may have more than one definition in this Agreement depending upon Its use and context, e.g. Project Director
shall mean the individual with direct responsibility for delivering the SH 130 Segments 5 and 6 to the Developer; Director
may mean someone who serves on a corporate board of directors; In FHWA Form 1273, "Director" means Director, Office
of Federal Contract Compliance Programs, United States Department of Labor, or any person to whom the Director
delegates authority.

Drawings shall mean (a) drawings furnished by D&C Contractor as a basis for bids, (b) supplementary drawings furnished
by D&C Contractor to clarify and to define In greater detail the intent of the Agreement, (c) drawings submitted by Seller
with its bid, provided such drawings are acceptable to D&C Contractor, (d) drawings furnished by D&C Contractor to Seller
during the progress of the Work, and (e) drawings and engineering data submitted by Seller during the progress of the
Work, provided such drawings and data are acceptable to D&C Contractor.

Effective Date shall mean the date given in paragraph one of this Agreement.

Excusable Delay is one caused by an Excusable Delay Event. For the Seller to obtain a time extension, the delay must
affect overall completion of the Seller's Scope of Work, I.e. the delay must cause a day-for-day extension to the critical
path.

Excusable Delay Events with respect to Seller's timely performance of the Work shall be defined as a TxDOT-recognized
Relief Event or as a D&C Contractor-caused event to the extent that the event results in a delay that prevents Seller from
completing its overall Scope of Work, provided that such events are not due to any act, omission, negligence, recl<lessness,
willful misconduct, breach of contract or Law, and, further provided, that such events (or the effects of such events) could
not have been avoided by the exercise of caution, due diligence, or reasonable efforts by Seller. D&C Contractor-caused
Excusable Delay Events include, but are not limited to, D&C Contractor failures to (1) provide materials that the D&C
Contractor Is providing to Seller, or (2) perform Work provided by D&C Contractor or by D&C Contractor's other
Subcontractors that directly impact the Seller's Work.

Facility Concession Agreement {FCA) is the agreement between the Developer and the Texas Department of
Transportation. The FCA and related FCA documents are incorporated by reference Into this Subcontract Agreement.

Force Maleure Event means the occurrence of any of the following events that materially and adversely affects
performance of Developer's obligations, provided that such events (or the effects of such events) could not have been
avoided by the exercise of caution, due diligence, or reasonable efforts by Developer: (a) war (including civil war and
revolution), invasion, armed conflict, violent act of foreign enemy, military or armed blockade, or military or armed takeover
of the Facility, In each case occurring within the State of Texas; (b) any act of terrorism or sabotage that causes direct
physical damage to the Facility; and (c) nuclear explosion.

Hazardous Substances shall mean any substances, the release of which Into, or the presence of which in, the environment
gives rise to any liability or obligation to remove, clean up, encapsulate or otherwise remediate such release or presence
thereof under any Laws.




          29
                                                                                                             C0670272.PDF
                                                                                                             Agreement #CSUB122
                                                                                                           SH130 Segments 5 and 6
                                                                                    Furnish and Install Electric Distribution Facilities


     Indemnified Party shall mean the State of Texas, Developer, and their respective officers, directors, agents and employees,
     D&C Contractor, their subsidiaries and Affiliates and their officers, directors, partners, agents, and employees.

     Laws shall mean any law, code, statute, regulation, rule, ordinance, judgment, injunction, or other court order, or other
     requirement of a governmental authority having jurisdiction over the Work, or the Project or the construction or operation
     thereof or party, and which is valid and applicable thereto.

     Materials shall mean all materials (direet and indirect), supplies, goods, and equipment, which are necessary for Seller to
     accomplish Its Scope of Work.

     Milestone Dates shall mean those dates stated In the Agreement.

     Non-Excusable Delay Events shall mean any act or neglect of Seller or its Subcontractors or any other event or occurrence
     that may Interfere with or delay the Work that is not specified as an Excusable Delay Event.

     Notice or Notify shall mean a notice In writing given to the Party's designated representative deemed duly given on the date
     of receipt.

     Partyfles) shall mean E>&O Contractor and· Seller, as defined in paragr-aph ene ef this· Agr€emeAt.

     Person shall mean an Individual, partnership, corporation, limited liability company, company, business trust. joint stock
     company, trust, unincorporated association, joint venture, Government Authority or other entity of whatever nature.

     Performance Guarantees shall mean those guarantees stated In Section 7 or elsewhere in the Agreement.

     Protect shall mean the project described In paragraph A of the Recitals pf this Agreement, which D&C Contractor will
     perform for the Developer.

     Relief Event means any of the following events, to the extent they result in a material delay or interruption in performance of
     any obligation under the Agreement to the extent that TxDOT or Developer grant relief, and provided such events are
     beyond Seller's control and are not due to any act, omission, negligence, recklessness, willful misconduct, breach of
     contract or Law of any of the Seller, and further provided that such events (or the effects of such events) could not have
     been avoided by the exercise of caution, due diligence, or reasonable efforts by Seller:

             (a)     Force Majeure Event;

             {b)     Fire, explosion, flood, earthquake, hurricane, tornado, riot, national strike or act of terrorism;

             (c)     Change in Law;

             (d)     Discriminatory Action;

             (e)     TxDOT failure to perform or obseNe any of Its material covenants or obligations under the Agreement or
                     other FCA Documents, including failure to pay the Termination Compensation In accordance with the
                     requirements, and within tile time period, set forth in Section E5 of Exhibit 22;

             (f)     TxDOT Change;

             (g)     TxDOT-Caused Delay;

             (h)     Performance of works in the vicinity of the Facility Right of Way carried out by TxDOT or another
                     Governmental Entity, excluding any Utility Adjustment Work by a Utility Owner, that disrupts Seller's onsite
!'                   Work;




               30
                                                                                 Agreement #CSUB122
                                                                               SH130 Segments 5 and 6
                                                        Furnish and Install Electric Distribution facilities

                                         ATTACHMENT P


                                    FEDERAL REQUIREMENTS


Exhibit Description                                                                     No. of Pages

Attachment 1 - Federal Provisions                                                                2

Attachment 2- FHWA Form 1273                                                                    28

Attachment 3- Wage Determlna~on of the Secretary of Labor                                        1

Attachment 4- Equal Employment Opportunity                                                       6

Attachment 5- Affirmative Action                                                                 5

Attachment 6 - Debarment and Suspension Certification                                            1

Attachment 7 - Lobbying Certification

Attachment 8- Compliance with 23 U.S.C. §129(a)(3)

Attachment 9 -Compliance with Buy America Requirements                                           2




                                                                                                C0670272.PDF
                                                                                                    Agreement #CSUB122
                                                                                                  SH130 Segments 5 and 6
                                                                           FUtnish and Install Electric Distribution FaciUtles


                                                      ATTACHMENT 1 TO EXHIBIT 8

                        FEDERAL REQUIREMENTS FOR FEDERAL-AID CONSTRUCTION PROJECTS

                            GENERAL,- The work herein proposed will be financed In whole or in part with Federal
                     funds, and therefore all of the statutes, rules and regulations promulgated by the Federal
                     Government and applicable to work financed in whole or in part with Federal funds will apply to
                     such work. The "Required Contract Provisions, Federal-Aid Construction Contracts, Form
                     FHWA 1273," are included In this Exhibit 8. Wf:\enever in said required contract provisions
                     references are made to:

                                   (a)     "SHA contracting officer", "SHA resident engineer", or "authorized
                            representative of the SHA", such references shall be construed to mean TxDOT or its
                            Authorized Representative;

                                    (b)     "contractor", "prime contractor'', "bidder~ .or "prospective primary
                            participant", such references shall be construed to mean the Design-Build Contractor or
                            Its authorized representative:

                                   (c)    "contract" or "prime contract", such references shall be construed to mean
                            the Design-Build Contract; and

                                   (d)     "subcontractor•, "supplier", "vendor•, "prospective lower tier partlolpant" or
                            "lower tier subco11tractor", such references shall be construed to mean subco-ntractors,
                            suppliers and vendors of the Design-Build Contractor, Including lower tier
                            subcontractors.

                             PERFORMANCE OF PREVIOUS CONTRACT.-In addition to the provisions In Section
                     11. "Nondiscrimination," and Section VII, "Subletting or Assigning the Contract," of the Form 1273
                 •   required contract provisions, the Developer shall cause the contractor to comply with the
                     following:

                            The bldder shall execute the CERTIFICATION WITH REGARD TO THE
                            PERFORMANCE OF PREVIOUS CONTRACTS OR SUBCONTRACTS SUBJECT TO
                            THE; EQUAL OPPORTUNilY CLAUSE AND THE FILING OF REQUIRED REPORTS
                            located In the proposal. No request for subletting or assigning any portion of the
                            contract in excess of $10,000 will be considered under the provisions of Section VII of
                            the required contract provisions unless such request Is accompanied by the
                            CERTIFICATION referred to above, executed by the proposed subcontmctor.

                            NON-COLLUSION PROVISION. -The provisions in this section are applicable to all
                     contracts except contracts for Federal Aid Secondary Projects. Title 23, United States Code,
                     Section 112, requires as a condition precedent to approval by the Federal Highway
                     Administrator of the contract for lhis work that each bidder file a swam statement executed by,
                     or on behalf of, the person, flrm, association, or corporation to whom such contract Is to be
                     awarded, certifying that such person, firm, association. or corporation has not, either directly or




     . ··-   ~




'.
                                                                                                                   C0670272.PDF
                                                                                                       :


                                                                        Agreement #CSUB122
                                                                       SH130 Segments 5 and 6
                                                Fumlsh and Install Electric Distribution Facilities

            any subcontractor ·responsible thereof shall be liable to the affected
            employee for his/her unpaid wages. In addition, such contractor and
            subcontractor shall be liable to the United States (in the case of work done
            under contract for the District of Columbia or a territory, to such District or
            to such territory) for liquidated damages. Such liquidated damages shall
            be computed with respect to each individual laborer, mechanic, watchman,
            or guard employed in violation of the clause set forth in paragraph 7, In the
            sum -of $10 for each calendar day on which such employee was required
            or permitted to work in excess of the standard work week of 40 hours
            without payment of the overtime wages required by the clause set forth in
            paragraph 7.                                             ~

      9.    Withholding for Unpaid Wages and Liquidated Damages:

            The SHA shall upon its own action or upon written request of any
            authorized representative of the DOL withhold, or cause to be withheld,
            from any monies payable on account of work performed by the contractor
            or subcontractor under any such contract or any other Federal contract
            with the same prime contractor, or. any other Federally-assisted contract
            subject to the Contract Work Hours and Safety Standards Act, which is
            held by the same prim~ contractor, such sums as may be determined to
            be necessary to satisfy any liabilities of such.. contractor or subcontractor
            for unpaid wages and liquidated damages as provided in the clause set
            forth in paragraph 8 above.

V.    STATEMENTS AND PAYROLLS

      (Applicable to all Federal-aid construction contracts exceeding $2,000 and to all
      related subcontracts, except for Projects located on roadways classified as local
      roads or rural collectors, which are exempt.)

      1.    Compliance with Copeland Regulations (29 CFR 3)

            The contractor shall comply with the Copeland Regulations of the
            Secretary of Labor which are herein incorporated by reference.

      2.    Payrolls and Payroll Records:

            a.     Payrolls and basic records relating thereto shall be maintained by
                   the contractor and each subcontractor during the course of the
                  .work and preserved for a period of 3 years from the date of
                   completion of the contract for all laborers, mechanics, apprentices,
                   trainees, watchmen, helpers, and guards working at the site of the
                   work.




135

                                                                                        C0670272.PDF
     ·•

                                                                         Agreement #CSUB122
                                                                      SH130 Segments 5 and 6
                                               Furnish and Install Electric Distribution Facilities

              b.   The payroll records shall. contain the name, social security number,
                   and address of each such employee; his or her correct
                   classification;. hourly rates of wages paid (including rates of
                   contributions. or costs anticipated for bona fide· fringe benefits or
                   cash equivalent thereof the types described In Section 1(b)(2)(B) of
                   the Davis Bacon Act); daily and weekly number of hours worked;
                   deductions made; and actual wages. paid. In addition, for
                   Appalachian contracts, the payroll records shall contain a notatron
                   indicating whether the employee does, or does not, normally reside
                   lA the labor area as defined in Attachment A, paragraph 1.
                   Whenever the Secretary of Labor, pursuant to Section IV,
                   paragraph 3b, has found that the wages of any laborer or mechanic
                   include the amount of any costs reasonably anticipated in providing
                   benefits under a plan or program described in Section 1(b)(2)(B) of
                   the Davis Bacon Act, the contractor and each subcontractor shall
                   maintain records which show that the commitment to provide such
                   benefits is enforceable, that the plan or program is financially
                   responsible, that the plan or program has been communicated in
                   writing· to the laborers or mechanics affected, and show the cost
                   anticipated or the actual cost Incurred in providing benefits.
                   Developers or subcontractors employing apprentices or trainees
                   under approved programs shall maintain written evidence of the
                   registration of apprentices and trainees, and ratios and wage rates
                   prescribed in the applicable programs.

              c.   Each contractor and subcontractor shalf furnish, each week in
                   which any contract work Is performed, to the SHA resident engineer
                   a --payroll - of ·wages patd ·each-·· of---its- employees (Including
                   apprentices, trainees, and llelpers, described in Section IV,
                   paragraphs 4 and 5, and watchmen and guards engaged on work
                   during the preceding weekly payroll period). The payroll submitted
                   shall set out accurately and completely all of the information
                   required to be maintained under paragraph 2b of this Section V.
                   This information may be submitted in any form desired. Optional
                   Form WH-347 is avail'able for this purpose and may be purchased
                   from the Superintendent of Documents (Federal stock number 029-
                   005-0014-1), U.S. Government Printing Office, Washington, D.C.
                   20402. The- prime contractor is responsible for the submission of
                   copies of payrolls by all subcontractors.

              d.   Each payroll submitted shall be a9companled by a "Statement of
                   Compliance," signed by the contractor or subcontractor or his/her

!·
i
r




          3
                                                                                      C0670272.PDF
                                                                    Agreement #CSUB122
                                                                   SH130 Segments 5 and 6
                                            Furnish and Install Electric Distribution Facilities

               agent who pays or supervises the payment of the persons
               employed under the contract and shall certify the following:

               i.    that the payroll for the payroll period contains the information
                     required to be maintained under paragraph 2b of this Section V
                     and that such information is correct and complete;

               il.   that such laborer or mechanic (including each helper, apprentice,
                     and trainee) employed on the contract during the payroll period
                     has been paid the full weekly wages earned, without rebate, either
                     directly or Indirectly, and that no deductions have been made
                     either directly or Indirectly from the full wages earned, other than
                     permissible deduc1ions as set forth in the Regulations, 29 CFR 3;

               iii   that each laborer or mechanic has been paid not Jess that the
                     applicable wage rate and fringe benefits or cash equivalent for the
                     classification of worked performed, as specified in the applicable
                     wage determination Incorporated into the contract.

          e.   The weeldy submission of a properly executed certification set forth
               on the reverse side of Optional Form WH·347 shall satisfy the
               requirement for submission of the "Statement of Compliance"
               required by paragraph 2d of this Section V.

          f.   The falsification of any of the above certifications may subject the
               contractor to civil or criminal prosecution under 18 U.S.C. 1001 and
               31 U.S.C. 231.
                .              .
          g.   The contractor or subcontractor shall make the records required
               under paragraph 2b of this Section V available for inspection,
               copying, or transcription by authorized representatives of the SHA,
               the FHWA, or the DOL, and shall permit such representatives to
               interview employees during working hours on the job. If the
               contractor or subcontractor fails to submit the required records or to
               make them available, the SHA, the FHWA, the DOL, or all may,
               after written notice to the contractor, sponsor, applicant, or owner,
               take such actions as may be necessary to cause the suspension of
               any further payment, advance, or guarantee of funds. Furthermore,
               failure to submit the required records upon request or to make such
               records available may be grounds for debarment action pursuant to
               29 CFR 5.12.

VJ.   RECORD OF MATERIALS, SUPPLIES, AND LABOR




137

                                                                                    C0670272.PDF
                                                                                            ..   -~   ...
     ,---·. - --------·-
.'


                                                                                            Agreement #CSUB122
                                                                                           SH130 Sogments 5 and 6
                                                                    Furnish and Install Electric Distribution Facilities

                            1.   On all Federal·ald contracts on the National Highway System, except
                                 those which provide solely for the Installation of protectJve devices at
                                 railroad grade crossings, those which are constructed on a force account
                                 or direct labor basis, highway beautification contracts, and contracts for
                                 which the total final construction cost for roadway and bridge Is less than
                                 $1,000,000 (23 CFR 635) the contractor shall:

                                 a.     Become familiar with the list of specific materials and supplies
                                        contained ln Form FHWA-47, "Statement of Materials and Labor
                                        Used by Developer of Highway Construction Involving Federal
                                        Funds," prior to the commencement of work under tl1ls contract.

                                 b.     Maintain a record of the total cost of all materia-ls and supplies
                                        purchased for and Incorporated in the work, and also of the
                                        quantities of those specific materials and supplies fisted on Form
                                        FHWA-47, and In the units shown on Form FHWA-47.

                                 c.     Furnish, upon the completion of the contract, to the SHA resident
                                        engineer on Form FHWA47 together with the data required in
                                        paragraph 1b relative to materials and supplies, a final labo•·
                                        summary of all contract work indicating the total hours worked and
                                        the total amount earned.

                            2.   At the prime contractor's option, either a single report covering all contract
                                 work or separate reports for the contractor and for each subcontract shall
                                 be submitted.

                     VII.   SUBLETTING OR ASSIGNING THE CONTRACT

                            1.   The contractor shall perform with Its own organization contract work
                                 amounting to not less than 30 percent (or a greater percentage if specified
                                 elsewhere In the contract) of the total original contract price, excluding any
                                 specialty items designated by the State. Specialty ftems may be
                                 performed by subcontract and the amount of any such specialty Items
                                 performed may be deducted from the total original contract price before
                                 computing the e~mount of work required to be performed by the
                                 contractor's own organization (23 CFR 635),

                                 a.     "Its own organization" shalf be construed to· Include only workers
                                        employed and paid directly by the prime contractor and equipment
                                        owned or rented by the prime contractor, with or witbout operators.
                                        Such term does not include employees or equipment of a
                                        subcontractor, assignee, or agent of the prime contractor.



     I
     J.
                       II
                                                                                                            C0670277..PDF
·.
 __                                                                             Agroament #CSUB122
                                                                              SH130 Segments 5 and 6
                                                       Furnish and Install Eleclrio Distribution Facilities

                   b.     "Specialty Items" shall be construed to be limited to work that
                          requires highly specialized know[edge, abilities, or equipment not
                          ordinarily avalfable In the type of contracting organizations qualifl€d
                          and expected to bid on the contract as a whole and in general are
                          to be limited to minor components of the overall contract.

                   c.     The contract amount upon which the requirements set forth In
                          paragraph 1 of Section VIlis computed includes the cost of material
                          and manufactured products which are to be purchased or produced
                          by the contractor under the contract provisions.
                   d.     The contractor shall furnish (a) a competent superintendent or
                          supervisor who Is employed by the firm, has full authority to direct
                          performance of the worl< In accordance with the contract
                          requirements, and is in charge of all construction operations
                          (regardless of who performs tha work) and (b) such other o'f its own
                          organizational   resources    (supervision, management, and
                          engmeerlng services) as the SHA contracting officer determines Is
                          necessary to assure the performance of the contt·act.

                   e.     No portion of the contract shall be sublet, assigned or otherwise
                          disposed of except with the written consent of tile SHA contracting
                          officer, or authorized representative, and such consent when glven
                          shall not be construed to relieve the contractor of any responsibility
                          for the fulfillment of the contracl Wr!Hen consent will be given only
                          after the SHA has assured that each subcontract is evidenced in
                          writing and that it contains all pertinent provisions and requirements
                          of the prime contract.

      VIII.   SAFETY: ACCIDENT PREVENTION

              1.   In the performance of this contract the contractor shall comply with all
                   applicable Federal, State, and local laws governing safety, health, and
                   sanitation (23 CFR 635). The contractor shall provide all safeguards,
                   safety devices and protective equipment and take any other needed
                   actions as it determines, -or as the StiA contracting officer may determine,
                   to be reasonably necessary to protect the life and health of employees on
                   the job and the safety of the public ancl to protect property in connection
                   with the petformance of the work covered by the contract.

              2.   It is a condition of this contract, and shall be made a condition of each
                   subcontract, which the contractor enters into pursuant to this contract, that
                   the contractor and any subcontractor shall not permlt any employee, in




      13

                                                                                               C0670272.PDF
                                                                                      Agreement #CSUB122
                                                                                    SH130 Segments 5 and 6
                                                             Furnish and Install Electric Distribution Facilities

                                    ATTACHMENT 3 TO EXHIBIT 8

                              FEDERAL PREVAILING WAGE RATE


GENERAL DECISION: TX20070043 02/09/2007 TX43·

Dale: February 9, 2007
General Decision Number: TX20070043 02/09/2007

Superseded-General Decision Number: TX20030043

State: Texas

Constmction Types: Heavy and Highway

Counties: BeH, Bexar, Brazos, Coma!, Coryell, Guadalupe,
Hays, McLennan, Travis and Williamson Counties in Texas.

Heavy (excluding tunnels and dams) and Highway Conshuction
Projects (does not include building structures in rest area
projects). "'NOTTOBEUSEDFOR WORKONSEWAGEOR WATER
TREATMENT PLANTS ORLIFT/PUMP STATIONSINBELL, CORYELL,
McLENNAN AND WilLIAMSON COUNTIES.

Modification Number Publication Date
      0        02/09/2007

SUTX2005-001 01/03/2005

                                          Rates     Fringes

 Air Tool Operator........... ..          $16.00       0.00
 Asphalt Distributor Operator...          $12.09       0.00
 Asphalt paving machine operator          $ 11.82      0.00
 Asphalt Raker................ ..         $ 9.96       0.00
 Asphalt Shoveler............. ..         $10.56       0.00
 Broom or Sweeper Operator......          $ 9.74       0.00
 Bulldozer operator .......... .          $ 11.04      0.00
 Carpenter..................... .         $12.25       0.00
 Concrete Finisher, Paving......          $10.53           o.oo.
 Concrete Finisher, Structures..          $ 10.95          0.00
 Concrete Paving Curbing
 Machine Operator............. ..         $14.00           0.00
 Concrete Paving Finishing
 Machine Operator.............. .         $ 12.00          0.00
 Concrete Rubber............... .         $ 10.88          0.00
 Crane, ClamsheH, Backhoe,
 Derrick, Dragline, Shovel
 Operator.......................          $ 13.66          0.00
 Electrician................... .         $ 24.11          0.00
 Flagger....:.................. .         $ 9.49           0.00




148
                                                                                                      0670272.PDF
                                                                           Agreement #CSUB1 22
                                                                         SH130 Segments 5 and 6
                                                  Furnish and Install Electric Distribution Facilities

Form Builder/Setter, Structures       $ 10.88   0.00
Form Setter, Paving & Curb.....       $ 9.89    0.00
Foundation Drill Operator,
Truck Mounted................. .      $15.00    0.00
Front End Loader Operator......       $11.36    0.00
Laborer, common................       $ 9.34    0.00
Laborer, Utility............. ..      $10.12    0.00
Mechanic...................... .      $14.74    0.00
Mixer operator, Concrete Paving       $15.25    0.00
Mixer operator................ .      $10.83    0.00
Motor Grader Operator, Fine
Grade..........................       $15.26    0.00
Motor Grader Operator, Rough...       $12.96    0.00
Oiler......................... .      $14.71    0.00
Painter, Structures ........... .     $11.00    0.00
Pavement Marking Machine
Operator.......................       $ 11.52   0.00
Pipelayer......................       $10.49    0.00
Planer Operator................       $ 17.45   0.00
Reinforcing Steel Setter,
Paving.........................       $15.50    0.00
Reinforcing Steel Setter,
Structure.................... ..      $14.00    0.00
Roller Operator, Pneumatic,
Self-Propelled.................       $ 9.34    0.00
Roller Operator, Steel Wheel,
Flat WheeVTamping............ .       $ 9.60    0.00
Roller Operator, Steel Wheel,
Plant Mix Pavel.l1ent............ .   $10.24    0.00
Scraper Operator............. ..      $ 9.93    0.00
Servicer..................... ..      $ 11.41   0.00
Sign Installer (PGM)......... ..      $14.85    0.00
Slip Form Machine Operator.....       $15.17    0.00
Spreader Box: operator..........      $10.39    0.00
Structural Steel Worker...... ..      $ 13.41   0.00
T1·actor operator, Crawler Type.      $11.10    0.00
Traveling Mixer Operator.......       $10.04    0.00
Trenching machine operator,
Heavy..........................       $14.22    0.00
Truck Driver Tandem Axle Semi-
Trailer....................... .      $10.95    0.00
Truck driver, lowboy-Float.. ...      $15.30    0.00
Truck driver, Single Axle,
Heavy........................ ..      $11.88    0.00
Tmck driver, Single Axle,
Light. ........................ .     $ 9.98    0.00
Wagon Drill, Boring Machine,
Post Hole Driller Operator.....       $14.65    0.00
Welder........................ .      $14.26    0.00
Work Zone Barricade Servicer...       $ 11.15   0.00




149

                                                                                           C0670272.PDF
                                                                                          Agreement #CSUB122
                                                                                        SH130 Segments 5 and 6
                                                                 Furnish and Install Electric Distribution Facilities



Unlisted classifications needed for work not included within
the scope of the classificatious listed may be added after
award only as provided in the labor standards contract clauses
(29CFR 5.5 (a) (1) (ii)).



In the listing above, the "SU" designation means that rates
listed under the identifier do not reflect collectively
bargained wage and fringe benefit rates. Other designations
indicate unions whose rates have been determined to be
prevailing.



       WAGE DETERMINATION APPEALS PROCESS

1.) Has there been an initial decision in the matter? This can
be:

* an existing published wage detennination
* a survey underlying a wage determination
* a Wage and Hour Division letter setting f01th a position on
  a wage determination matter
"' a conformance (additional classification and rate) ruling

On survey related matters, initial contact, including requests
for summaries ofsurveys, should be with the Wage and Hour
Regional Office for-the area in which the suwey was conducted
because those Regional Offices have responsibility for the
Davis-Bacon survey program. If the response from this initial
contact is not satisfactory, then the process described in 2.)
and 3.) should be followed.

With regard to any other matter not yet ripe for the formal
process described here, initial contact should be with the
Branch of Construction Wage Determinations. Write to:

           Branch of Construction Wage Detenn.inations
           Wage and Hour Division
           U.S. Department ofLabor
           200. Constitution Avenue, N.W.
           Washington, DC 20210

2.) If the answer to the question in 1.) is yes, then an
interested party (those affected by the action) can request
review and reconsideration from the Wage and Hour Administrator
(See 29 CFR Part 1.8 and 29 CFR Patt 7). Write to:

           Wage and Hour Administrator
           U.S. Depattment of Labor




160
                                                                                                           0670272.PDF
                                                                                           Agreement #CSUB122
                                                                                         SH130 Segments 5 and 6
                                                                  Furnish and Install Electric Distribution Facilities

           200 Constitution Avenue, N.W.
           Washington, DC 20210

The request should be accompanied by a full statement of the
interested party's position and by any inf01mation (wage
payment data, project description, area practice material,
etc.) that the requestor considers relevant to the issue.

3.) If the decision of the Administrator is not favorable, an
interested party may appeal directly to t!1e Administrative
Review Board {formerly the Wage Appeals Board). Write to:

           Administrative Review Board
           U.S. Department of Labor
           200 Constitution Avenue, N.W.
           Washington, DC 20210

4.) All decisions by the Administrative Review Board are final.



 END OF GENERAL DECISION




151

                                                                                                          C0670272.PDF
                                                                                         Agreement #CSUB122
                                                                                        SH130 Segments 5 and 6
                                                                 Furnish and Install Electric Distribution Facilities


GENERAL DECISION: TX20070129 02/09/2007 TX129
Date: February 9, 2007
General Decision Number : TX20070129 02/09/2007
Superseded General Decision Number: TX20030129
State : Texas

Construction Types: Heavy and                High~my       ·
Counti es: Aransas , Atascosa, Austin, Bandera, Bastrop, Bee,
Blanco, Burnet, Caldwell, Calhoun, Colorado, De Witt, Fayette,
Frio, Gillespie, Goliad, Gonzales, Jackson, Jim Wells, Karnes,
Kendall, Kerr, Kleberg, Lavaca, Lee , Live Oak, Llano, Mason ,
Matagorda, Medina, Refugio, Wharton and Wilson Counties in Texas.
HEAVY CONSTRUCTION PROJECTS (excluding dam
construction) .HIGHWAY CONSTRUCTION PROJECTS (excluding tunnels,
building
struct ures in rest area projects & railroad construction;
bascule, suspension & spandrel arch bridges designed for
commercial navigation, bridges involving marine construction;
and other major bridges) .
Modification Number                 Publication Date
                0                    02/09/2007
 SOTX2005-023 09/08/2005
HEAVY CONSTRUCTION PROJECTS HIGmlAY CONSTRUCTION PROJECTS

                                                       Rates               Fringes
  Carpenter. . . . . . . . . . . . . • . . . . . . $   11 . 70
  Hechanic •.. ....• .. • .. • ... . .. .. $           12.18
  Asphalt Distributor Operator ... $                   12.57
  Asphalt paving machine operator$                     11. 60
  Asphalt Raker • . •.. . . . .. , ... . • . . $       10.63
  Asphalt Shoveler •.. •. . .. . . .. . .. $            9 . 23
  Broom or Sweeper Operator ... .•. $                   9 .32
  Bull dozer operator •. • ... . .... $                11.69
  Concrete Finisher, Paving .. .. .. $                 11 .64
  Concrete Finisher, Structures . . $                  10 . 23
  Concrete Rubber •. . . • . , .. ..•. . • ,.$          9 . 00
  Crane, Clamshell, Backhoe,
  Derrick, Dragline, Shovel
  Operator ... . ..• . .... .. •• .. . . . . . $       12 . 00
  Flagger . .. ... . .•. ..•. .• . . .. .• •. $         8 . 60
  Form Builder/Setter, Structures$                     10.51
  Form Setter, Paving & Curb ..• . . $                  9.48
  Foundation Drill Operator,
  Truck Mounted .. . .. . • ..• . . . .... . $         14.58
  Front End Loader Ope rator .. . . . . $              10 . 62
  Laborer, common .. . . • •..•.. . . . . . $           8.91
  taborer, Utility . ••• . .. . . . •.. . . $           9.21




152
                                                                                                        C0670272.PDF
                                                                                      Agreement #CSUB122
                                                                                    SH130 Segments 5 and 6
                                                             Furnish and Install Electric Distribution Facilities

    Motor Grader Oper~tor Fine
    Grade . . . .. . ..... .•. ,,,,., ••.• .. $     15.15
    Motor Grader Operator Rough .... $              12.95
    Pavement Marking Machine
    Operator ..•••. . , •• , ... .... . . • . • $   13.32
    Pipelaye.r . . . • ....... ... ...... . . $      9.71
    Roller Operator, Pneumatic,
    Self-Propelled ...•...•••... .... $              8.90
    Roller Operator, Steel Wheel,
    Flat Wheel/Tamping .... .. ....... $             9.30
    Roller Operator, Steel Wheel,
    Plant Mix Pavement .... • ........ $            10 .59
    Scraper Operator ........ . ...... $             9.85
    Ser·vicer .. .. .. ,, .......... .. . , .$      11.18
    Spreader Box Operator .. . .. . .. . . $        13.00
    Traveling Mixer Operator .. ... . . $           12.67
    Truck Driver Single Axle Heavy .$               10.87
    Truck Driver Single Axle, Light$                10.85
    Truck driver, lowboy-Float ..... $              13.70
    Truck Driver, Tandem Axle,
    Semi-Trailer... .... ...... . ...... $ 10.05
    Work Zone Barricade Servicer ... $ 9.63


WELDERS - Receive rate prescribed for craft performing
operation to which welding is incidental.


Unlisted classifications needed for work not included within
the scope of the
classifications listed may be added aft er a1-1ard only as
provided in the labor
standards contract clauses (29 CFR 5.5 (a) (1) (ii)) .




In the listing above, the " SU" designation means t hat rates
listed unde r the
identifier do not refl ect collectively bargained wage and
fringe benefit
rates . Other designations indicate unions whose rates have
been determined
to be prevailing.




                  WAGE DETERMINATION APPEALS PROCESS
1.) Has there bee n an initial decision in the matter? This can
be:

* an existing published wage determination
*     a survey underlying a wage determination
* a Wage and Hour Division letter setting forth a pos ition on
a 1-1age




163

                                                                                                     C0670272.PDF
                                                                          Agreement # CSUB122
                                                                        SH130 Segments 5 and 6
                                                 Furnish and Install Electric Distribution Facilities

          determination matter
    *     a conformance (additional classification and rate) ruling
    On survey related matters, initial contact, . including      requests
    for surro:naries
    of surveys, should be with the Wage and Hour Regional        Office
    for the area i n
    \'lhich the survey wa.s conducted because those Regional     Offices
    have
    responsibility for the Davis-Bacon survey program. I f       the
    response from this
    initial contact is not satisfactory, then the process        described
    in 2.) and
    3.) should be followed.
    With r egard to any other mat.ter not yet ripe for the formal
    process
    described here, initial contact should be ~lith the Branch of
    Construction
    Wage Determinations. Write to:
              Branch of Construction Wa ge Determinations
              Wage and Hour Divi sion
              U.S. Department of Labor
              200 Constitution Avenue, N.W.
              Washington, DC 20210

    2 . ) If the answer to the question in 1.) is yes, then an
    interested party
     (those affected by the action) can request review and
    reconsideration from
    t he Wage and Hour Administrator (See 29 CFR Part 1 . 8 and 29 CFR
    Part 7).
    Write to:
              Wage and Hour Administrator
              U.S. Department of Labor
              ZOO Constitution Avenue, N.W .
              Washington, DC 20210
    The request should be accompanied by a full stat~ment of the
    interested
    party' s position and by any information (wage payment data,
    project
    description, area practice material, et c.) that the requestor
    consi ders
    relevant to the issue .

    3 .) If the decision of the Administrator is not favorable, an
    interested
    party may appeal directly to the Administrative Revie\'/ Board
    (formerly the
    Wage Appeals Board). Wri te to :
              Administrative Review Board
              U.S . Department of Labor
~             200 Constitution Avenue, N. W.
I
!
'




    154
                                                                                        C0670272.PDF
                                            96

 /

      1
      2

      3
      4

      5

      6

      7

      8

      9         DEFENDANT ' S EXHIBIT 3
            SUBCONTRACT AGREEMENT CSUB140
     10
     11

     12
,.
     13

     14
     15

     16

     17

     18

     19
     20
     21
     22
     23
     24
     25            (Back to index)




          Appendix Item 16
.
                                                                                                  Agreement #CSUB140
                                                                                                 SH130 Segments 5 and 6
                                                                    Intelligent Transportation an~_!oil Collection Systems


                                                SUBCONTRACT AGREEMENT
                                                   TABLE OF CONTENTS

                            Recitals
                            Article 1. Scope of Work
                            Artlclo 2. Agreement Price
                            Article 3. Schedule
                            Article 4. Indemnity
                                       4.1      lt1demnification
                                        4.2     Genarallndemnity
                                        4.3     Patent h1demnlt\!
                                        4.4     Indemnity for Borrowad Construction Equiptnent
                                        4.5     Indemnity for Safety VIolations
                            Article 5. Insurance
                                        5.1     9eneral lnsuranOG Requirements
                                        5.2     Required Coverage
                            A1ilcle 6. Agreement Documents
                            Artlcla 7. Security for Performanca
                            Article 8. Liquidated Damages
                            Article 9. Performance of the Work
                                        9.1      Scheduling the Work
                                        9.2      Timeliness
                                        9.3      Progress Reports
                                        9.4      Subcontracts
                                        9.5      Site Conditions
                                        9.6      Compliance with Laws
                                        9.7      Hazardous Substancas
                                        9.8      Cleaning Up
                                        9.9      Lapor, Materials, Hauling
                                        9..10    lnspoctlon of the Work
                                        9:11     Occupancy
                                        9.12     Taxes, Licenses, Permits and Fees
                                        9.13     furnished Material
                                         9.14    Represent!'ltives
                                        9.15     Stop Work Orders
                                         9.16    Quality Control
                                         9.17    Standard of Care
                                         9.18     Ethical Standard§
                            Article 10. Payment
                                         10.1 · Schedule of Values
                                         10.2     partial Payments
                                         10,3     liwolca Requirements
                                         10.4     Application for payment
                                         10.5     Retainage
                                         10.6     Payment Not Accaptai1CQ
                                         10.7     Payments Withheld
                                         10.8     Payment Offset
                                         10.9    Final Payment
                                         10.10   Seller's Payment Obligations


    ,--~.




                                                            EXt-liBIT
            Paga 1 of 135 Pages                       ~~
            ------~----------~------~-~                       3
                                                       .-· ·


                                                                                                                 Agreement #ICSUB'140
                                                                                                               SH130 Segments 5 and 6
'                                                                                 Intelligent Transportation and Toll Collection Systems
            workers, increase working hours or otherwise accelerate Its performance until the Work Is back on Schedule, all without
            additional cost to D&C Contractor. D&C Contractor reserves the right to perform some or all of the Worl< with Its own forces
            and to contract with others for same, bacl<-charging excess costs to the Seller. Upon reques·t, Seller shall promptly provide
            D&C Contractor with adequate assurance salisfactoly to D&C Contractor of Sellar's ability to fully perform its obligations
            under the Agreement Documents In the lime and manner provided.

            9.3     PROGRESS REPORTS. Seller shall furnlsl1 D&C Contractor weekly progress reports and such other reports as
            O&C Contractor may reasonably request to verlfy actual progress and to predict future progress. Work product will be
            transmitted as no!ed in Exhibit A-1.

            9.4      SUBCONTRACTS. Seiler shall not subcontract any Work, or use a third party or broker to furnish any labor for the
            Work, without the prior writien consent of D&C Contractor, which consent shall not be unreasonably withheld or delayed.
            Seller shall be solely responsible for the engagement and management of its Subcontractors In the perfom1ance of the
            Work, for the performance of Worl< by its Subcontractors and for all acts or omissions of Subcontractors. Seller shall Insure
            that all Worl< furnished or perrormed by Subcontractors confonns to the requirements of the Agreement Documents.
            Neither the consent by D&C Conb-actor. nor anything contained herein, shall create any contractual relationship between
            any lower t ier Subcontractor and D&C Contractor. All lower-tier subcontracts must contain the terms and conditions lhat
            are incorporated In this Agreement.

            No Subcontractor is intended to be or shall be deemed to be a third party beneficiary of lhe Agreement. Each agreement
            t.Jelween Seller and any Subt;ontractor shall be in writing, and shall be assignable to D&C Contractor upon the completion
            or termination o f the Work A copy of each such agreement wilh pricing removed shall be provided to D&C Contractor upon
            request.

            In no event shall the right of the Seller hereunder to subcontract relieve the Seller from any of its obligations and
            responsibilities to achieve Substantial Completion and Final Acceptance of the Work, as required under the terms of lhe
            D&C Contract, for payment of wages of labore rs and for equipment and meterials furnisl)ed for the D&C Work, as well as
            for satisfaction of all indemnities of Seller contained herein. The Seller agrees that it Is fully responsible to the D&C
     ···.
            Contractor for the acts and omissions of its subcontractors and of persons either directly or Indirectly employed by them as
            It is for the acts and omissions of persons dlroctly employed by the Seller. The Seller shall obtain all necessary information
            from its subcontractors engaged in the D&C Work, in order to ensure that their work conforms with the Seller's work. The
            Seller is responsible for and shall checl( the correctness of any poriion of the D&C Work perfom1ed by its subcontractors.

            9.5      SITE CONDITIONS. Other !han for a Relief Event Seller shall have the sole responsibility to establish that the
            nature and location of the Worl<, the Site, and the general and local conditions are such that the Worl< can be performed on
            the Site, including but not limited to, the following:

                    (a)          Transportation, access, disposal. handling and storage of materials;
                    (b)          Availability and quality of labor, water, electric power and road conditions;
                     (c)         Climatic conditions and seasons;
                     (d)         Physical conditions at the Site and the Project as a whole;
                     (e)         Topography, subsutiace and ground surface conditions; and
                     (r)         Construction equlprnent and facilities needed preliminary to and during the performance of Seller's Work.

            The failure of Seller to acquaint ilsell' with any applicable conditions will not relieve Seller of the responsibility for properly
            estimating the difficulties or for the r..osl of successfully performing Seller's obligations h1 the time and manner provided
            under the Agreement Documents.

            9.6    COMPLIANCE WITH LA~                Seller shall fully comply with all Laws applicable to Seller and to the Worl<. See
            Attachment P for addltlonai project specific requirements.

            9.6.1    E.REVAILING WAGES




    --~




                           Page 11 of 135 Pages

            - - - - - ·...- -·ob,,........____ _ _ _·~-~---·--------------~---------
                                                                                                      ......


                                                                                                                   Agreement #C8UB140
                                                                                                                  SH1 30 Segments 5 and 6
                                                                                     Intelligent Transportation and Toll Collection Systems
            a)       Seller shall pay or cause to be paid to all applicable workers employed by it or its Contractors to perform the Worl~
            not less than the prevailing rates of wages, as provided in Attachment P, in the statutes and regulations applicable to public
            work contracts, including Chapter 2258 of the Texas Government Code. TxDOT, Seller and Its Contractors shall comply
            with all Laws pettalnlng to prevailing wages. For the purpose of applying such Laws, the Facility shall be treated as a
            public wot1< pald for In whole or In part with public funds (regardless of whether public funds are actually used to pay for the
            Facility).
            b)      It is Seller's sole rf,lspo·nfllblfity to detetmlne the wage rates required to be paid. In the event rates of wages and
            benefit~ change while this Agreernent is In effect, Seller shall be~r the cost of such changes and shall have no Claim
            against D&C Contractor on account of such changes. Without llmiiing the foregoing, no Claim will be allowed which is
            based upon Seller's lack of knowledge or a misunderstanding of any sucll requirements or Seller's failure to Include ln the
            Base Case Financial Model or Base Case Financial Model Updates adequate increases in such wages over the duration of
            this Agreement and the Lease.

            c)       Any issue between Seller or a subcontractor and any affected worker relating to any alleged violation of Section
            2258.023 of the Texas Government Code that is not resolved before the 15th clay after the date TxDOT makes its Initial
            determination under Section 2258.052 of the Texas Govemrnent Code (as to whether good cause exists to believe that a
            violation occurred) shall be submitted to binding arbitration in accordance wilh the Texas General Arbitration Act , Chapter
            171 of the Civil Practice and Remedies Code.
            d)      Seller shall comply and cause its subcontractors to comply with aU Laws regarding notice and posting of intent to
            pay prevailing wages•.and any othe.r notice or posting of prevailing wage requirements and pr'3vaillng wage rates.

            9.7    .t:J.e..z~gDOUS SUBS"[8~1.;§~ Seller shall immediately Notify D&C Conb·actor If Seller encou11ler~ prt~~existing
            Hazardous Substances at the Site. The D&C Contractor has a separate contract with a Hazardous Materials Contractor to
            renwdiate HazardOlls Substances. The Seller shall not remediate pre-existing Hazardous Substances Linder !his
            Agreement. However, Seller is responsible for any o·f Its releases of Hazardous Substances.

            In accordance wiih the FCA, applicable Laws (Including spHcifically Environmental Laws) and all Environrnenta l Approvals,
            the Contractor shall take all reasonable steps to pro1ecl the environment on and off the p\anned Facility Right of Way on
            which it pe1forms any of the D&C Work and to avoid damage or nuisance to persons or to properly of the public or others,
            resulting fro m pollution, nolsa o r other causes arising as a consequence of its performance of the D&C Worl<, subject to the
            allocation of responsibility therefore as provided in the D&C Agreement.

             9.8      CLEANING UP. Seller shall at all times keep' the Site and surrounding area clean and free from rubbish caused by
             Seller's operations. Prior to completing its Work In an area, Seller shall remove all accumulated rubbish <...-aused by Seller's
             operations and Seller's equipment, tools, machinery and matetials. Seller shall dispose of all rubbish caused by Seller's
             operations ~1t a site and by the means designat<~d at the sole discre1ion of Sellar In a manner that Is in compliance wllh all
             Laws.

             9.9     LABOR. MATERIAL AND HAULING

                     9.9. 1 LABOR. Seller will provide only skillecl, competent workers and supervision for U1e petiormance of its
             Work and will be responsible for assuring harmonious loL1or relationships on the Project among its 1".1orkers at the Site. Ail
             lndlvidualo performing the Work shall have the skill and 0xperience and any licen ses or oartifications requited to perform
             1he Worl< assigned to i hem. Seller shall immediately remove from the Project, when raque$led to do so by D&C Con\raclo r,
             any person to whom D&C Contractor reasonably objects, and such person may not thereafter reenter the Site without D&C
             Contractor's prior consent.

             Any uniforms wom by personnel of Seller-Related Entitles shall bear colors, lettering, badges or other identifiers to assure
             clear differentiation frorn uniforms worn by TxDOT employees.

                     9.9.2     MAT~ All steel and iron used and all products manufactured from steel and iron must be produced In
             the United Sl::1!es and all manufacturing processes, including appllcatron of a coaling, for lhese materials m ust occur In the




     ~··-


·-                      Poga 12 of 135 Pages
,.- .                                                                                                                Agreement #CSUB140
                                                                                                                    SH130 Segments 5 and 6
'                                                                                      lntelllgent Transportation and Toll Collection Systems
             similar conditions at the same time and locality of \he Project. Seller agrees to Investigate and remedy promptly, and
             without cost to D&C Contractor or Developer, any Defective Services of which it receives Notice within the longer of twelve
             (12) months from D&C Contractor's Final A.cceptance of the Services or the period during which any Develpper Party or
             any third party may make a olalm against D&C Contractor related to the Services or any negligent act or omission of the
             Seller Party or a Seller subcontractor (each as defined below). In addition, Seller through the insurance provided for in
             Article 5 shall reimburse D&C ·Contractor for all reasonable costs Incurred to accomplish needed mpalrs, additions,
             replacements or con·ectlons to Seller's work which result 'from the Seller's Defective Services. For this Article 9.17,
             Defective Services are defined as any Worl< that fails to satisfy tho following: (a) In compliance with Laws; (b) In accordance
             with all applicable standards and codes; (c) In accordance with the provisions of this Agreement and the Facility ·
             Concession Agreement, Technical Requirements, Technical Documents, and Reference Information Documents (all FCA-
             related documents are Incorporated by reference); and (d) be performed in accordance with the standard of care, skill and
             diligence ordinarily used by members of the design profession performing services of a similar type and nature at the same
             time and In the locale of the Project

             9.18     ETI-IICAL STANDARDS. Within 30 days after the Effective Date, Seller shall adopt written policies specific to this
             project establishing ethical standards of conducl for Seller and all Seller-Related Entities, including Seller's supervisory and
             management personnel in dealing with (a) the O&C Contractor, (b) the Developer (c) TxDOT and the Independent Engineer
             and (d) employment relations. Such policy shall be subject to review and comment by the D&C Contractor prior to adoption
             and shall include the ethical standards listed In Attachment Q.

                                                                  ARTICLE 10.    PAYMENT

             Invoices shall ba due and payable compliant with Promp1 Payment criteria (i.e. ·to-days after receipt of payment from
             Developer), but not more than NET 60 days after receipt of an undisputed invoice. Payment Is subject to complying with
             items 10.1-10.11 below.                                                          ·

             10.1    PAYMENT. D&C Contractor and Seller have agreed to            a payment amount for Seller's Wort< activities to serve as a
             basis for compuling partial payments. .
                                                              1
             10.2    PARTIAL PAYMENTS. On the 2o h calendar day of each month, Seller will furnish D&C Contractor an invoice
                     meeting the requirements In Item ·1 0.3.

             '10.3    INVOICE REQUIREMENTS:

                      (a)         A detailed invoice per Segment (5.1, 5.2, 6. 1, 6,2), In a form and content acceptable to D&C Contractor,
                                  setting out the portion of the Agreement Price allocable to the Work actually performed to date by Seller to
                                  accomplish each of the activities shown in the Scope       of  Work and Schedule, along with supporting
                                  documentation as D&C Contractor may reasonably require to substantiate Seller's right to payment of the
                                  invoiced amounts, especially sales and use 1ax (see Article 2, re: Texas sales and use lax);
                      (b)         Seller's updated Schedule per Agreement Exhibit A 1;
                      (c)         A progress report of Seller's Work Including the Texas sales and use taxes paid by Seller and Seller's
                                  Subcontractors (see Article 2) and supporting documents;
                      (d)         Seller's Partial Waiver and Release of Liens, Affidavit of Bills Patd end Indemnification, cornpleled and
                                  executed in accordance with the form atlached hereto as Attachment F;
                      (e)         Certified payrolls, for the Invoice period, if required by the Agreement Documents; and
                      (f)         One (1) copy of Seller's invoice

                                  Submit invoice and documents to lhe following a~ dress:

                                           Central Texas Highway Constructors, LLC
                                           Accounts Payable
                                           1914 Borchert Drive
                                           Locl<hart, TX 78644

                                            Or as directed by D&C Con1ractor


    .... .
        ·~




                            Page 15 of 135 Pages
                                                                                                     Agreement #CSUB140
                                                                                                   St-1130 Segments 5 and 6
                                                                      Intelligent Transportation and Toll Collection Systems


CTxHC shall mean Central Texas Highway Constructors LLC.

D&C Contractor shall mean Central Texas Highway Constructors LLC

Day or day shall mean calendar dayq unless otherwise expressly specified.

DOL shall mean U.S. Department of Labor.

Defective Services are defined as any Work that fails to satisfy the following: (a) in compliance with Laws; (b) in accordance
with all applicable standards and codes; (c) in accordance with the provisions of this Agreement and the Facility
Concession Agreement, Technical Requirements, Technical Documents, and Reference Information Documents (as they
pertain to the Seller's Scope of Work all FCA-related documents are incorporated by reference); and (d) be performed in
accordance with the standard of care, skill and diligence ordinarily used by members of the trade performing services of a
similar type and nature at the same time and in the locale of the Project.

Defective Work shall mean Work, which fails to satisfy the requirements of Article 12, Warranty.

Developer shall mean the entity in which D&C Contractor has entered into a contract with to perform certain work and is
identified in paragraph A. of the Recitals in this Agreement.

Direct Materials shall mean materials, supplies and equipment to be incorporated as a permanent part of the Project,
excluding any sales or use tax thereon.

Director may have more than one definition in this Agreement depending upon its use and context, e.g. Project Director
shall mean the individual with direct responsibility for delivering the SH 130 Segments 5 and 6 to the Developer; Director
may mean someone who serves on a corporate board of directors; In FH\NA Form 1273, "Director" means Director, Office
of Federal Contract Compliance Programs, United States Department of Labor, or any person to whom the Director
delegates authority.

Drawings shall mean (a) drawings furnished by D&C Contractor as a basis for bids, (b) supplementary drawings furnished
by D&C Contractor to clarify and to define in greater detail the intent of the Agreement, (c) drawings submitted by Seller
with its bid , provided such drawings are acceptable to D&C Contractor, (d) drawings furnished by D&C Contractor to Seller
during the progress of the Work, and (e) drawings and engineering data submitted by Seller during the progress of the
Work, provided such drawings and data are acceptable to D&C Contractor.

 Effective Date shall mean the date given in paragraph one of this Agreement.

 Excusable Delay is one caused by an Excusable Delay Event. For the Seller to obtain a lime extension, the delay must
 affect overall completion of the Seller's Scope of Work, i.e. the delay must cause a day-for-day extension to the critical
 path.

 Excusable Delay Events with respect to Seller's timely performance of the Work shall be defined as a Relief Event or as a
 D&C Contractor-caused event to the extent that the event results in a delay that prevents Seller from completing its overall
 Scope of Work, provided that such events are not due to any act, omission, negligence, recklessness , willful misconduct,
 breach of contract or Law by Seller or by any parties for which Seller is responsible, and, further provided, lhat such events
 (or the effects of such events) could not have been avoided by the exercise of caution, due diligence, or reasonable efforts
 by Seller or by any parties for which Seller is responsible. D&C Contractor-caused Excusable Delay Events include, but
 are not limited to, D&C Contractor failures to (1) provide materials that the D&C Contractor is providing to Seller or (2)
 perform Worl< provided by D&C Contractor or by D&C Contractor's Subcontractors that directly impact the Seller's Worl<.

 Facility Concession Agreement (FCA) is the agreement between the Developer and the Texas Department of
 Transportation. The FCA and related FCA documents are incorporated by reference into this Subcontract Agreement.




            Page 30 of 135 Pages
                                                                                                 Ayroetnent #CSUB140
·,                                                                                              SH130 Segments 5 and 6
                                                                   Intelligent Transporta11on and Toll Collection Systems
                                                       ATIACHMENTP


                                              FEDERAL REQUIREMENTS


     Exhibit Description                                                            No. of Pages

     Attachment 1 - Federal Provisions                                                       2

     Attachment 2- FHWA Form 127~~                                                          28

     Attachment 3 - Wage Determination of the Secretary of Lnbor

     Attachment'~- Equal Employment Opportunity                                              6

     Attachment 5 - Affirmative Action                                                       5

     AUachment 6- Debarment and Suspension CertificoUon                                      1

     Attachment 7 - Lobbying Certification                                                   1

     Attachment 8- Compliance with 23 U.S.C. ~129(a)(3)

     Attac:hment 9 - Compliance with Buy America Requirements                                2




               'Page GO of 136 Pages
                                                                                                      Agreement #CSUB·I40
                                                                                                    SH130 Segments 5 and 6
                                                                        Intelligent Tra115portation and Toll Collection Systems

                                                   ATTACHMENT ·t TO EXHIBIT 8

                  FEDERAL REQUIREMENTS r.:oR FEDERAL~AID CONSTRUCTION PROJECTS

               GENERAL.-The work herein proposed will be financed in whole or in part with Federal funds, and
       thererot"e all of the statutes, rules and regulations promulgated by the Federal Government and applicable to
       work financed in whole or in pari with Federal funds will apply to such work. The "Required Contract Provisions,
       Federal-Aid Construction Contracts, Form FHWA 1273," are included in this Exhibit 8. Whenever in said
       required contract provisions references an'l made to:

                     (a}    "SHA contracting officer", "SHA resident engineer", or "authorized representative of tlie
              SHA", such references shall be construed to mean TxDOT or its Allti'\Orized Representative;

                     (b)    "contractor", "prime contractor", "bidder" or "prospective primary participant", such
              references shall be construed to mean the Design-Build Contractor or its authorized representative;

                     (c)     "contract" or "prime contract", such references s11all be construed to rneail the Design-
              Build Contract; and

                     (d)     "sul,contractor", "supplier", "vendor", "prospective lower tier pa1ticipant" or "lower tier
              subcontractor", such ref-erences shall be construed to mean subcontractors, suppliers and vendors of the
              Design-Build Contractor, including lower tier subcontractors.

               PERFORMANCE OF PREVIOUS CONTRACT.-In addition to the provisions In Section II,
··..   "Nondiscrimination," and Section VII, "Subletting or Assigning the Contract," of the Form 1273 required contract
       provisions, the Developer shall cause the contractor to cornply with the following:

              The bidder shall execute the CERTIFICATION WITH· REGARD TO THE PERFORMANCE OF
              PREVIOUS CONTRACTS OR SUBCONTRACTS SUBJECT TO THE EQUAL OPPORTUNITY CLAUt?E
              AND THE FILING OF REQUIRED REPORTS located in the proposal. No request for subletting or
              assigning any portion of the contract in excess of $10,000 will be considered under' the provisloos of
              Section VII of the required contract provisions unless such request is accompanied by the
              CERTIFICATION referred to above, executed by the proposed subcontractor.

               NON··COLLUSION PROVISION.- The provisions in this section are applicable to aH contracts except
       contracts for Federal Aid Secondary Projects. Title 23, United States Code, Section 1 'I 2, requires as a condition
       precedent to approval by the Federal Highway Administrator of the c:ontract for this worl< that eacll bidder file a
       sworn statement ·executed by•. or on behalf of, the person, fitm, association, or corporation to whom such
       contract is to be awarded, certifying that such person, firm. association, or corporation has not, either direc11y or
       indirectly, entered Into any agreement, participated in any collusion, or othe1wise taken any action In restraint of
       free competitive bidding In connection with the submitted bid, A forrn to make the non·collusion affidavit
       statement required by Section 11 2 as a certification under penalty of perjury rather than as a sworn statement
       as permitted by 28 U.S. C., Sec. 1746, is included In the Proposal.

               PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN SUBCONTRACTING.-Part 26,
       Title 49, Code of Federal Regulations applies to this Facility. Pertinent sections of said Code aro incorporated
       within other sections of the Contract and the TxDOT DBE Program.

               CONVICT PRODUCED MATERIALS

                        a.        FHWA Federal-aid Projects are subject to 23 CFR § 635.417, Convict produced materials.



                 Page 6fJ of 135 Pages
                                                                                                           Agreement #CSUB140
                                                                                                         Sl-1130 Segments 5 and 6
                                                                            Intelligent Transportation and Toll Collection Systems
                            satisfy any liabilities of suc11 contractor or subcontractnr for unpaid wages and liquidated
                            damages as provided in the clause set forth in paragraph 8 above.

             V.   STATEMENTS AND PAYROLLS

                  (Applicable to all Federal-aid construction contracts exceeding $2,000 and to all related
                  subcontracts, except for Projects located on roadways classified as local roads or rural
                  collectors, which are exernpt.)

                  1.        Compliance with Copeland Regulations (29 CFR 3)

                            The contractor shall comply with {he Copeland Regulations of the Secretary of Labor
                            which are herein incorporated by reference.

                  2.        Payrolls and Payroll Records:

                            a.        Payrolls and basic records relating thereto shall be maintained by the contractor
                                      and each subcontractor during the course of the worl< and preserved for a period
                                      of 3 years from the date of compietion of the contract for all laborers, mechanics,
                                      apprentices, trainees, watchmen, helpers, and guards working at the site of the
                                      work.

                             b.       Tile payroll records shall contain the name, social security number, and address of
/                                     each such employee; his or her correct classification; hourly rates of wages paid
       •·.                            (including rates of contributions or costs anticipated for bona fide fringe benefits or
                                      cash equivalent thereo-f the types described in Section 1(b ){2)(B) of the Davis .
                                      Bacon Act); daily and weekly number of hours worked; deductions made; and
                                      actual wages paid. In addition, for Appalachian contracts, the payroll records shall
                                      contain a notation indicating whether the employee does, or does not, normally
                                      reside in the labor area as defined In ,Attachment A, paragraph 1. Whenever the
                                      Secretary of Labor, pursuant to Section IV, paragraph 3b, has found that the
                                      wages of any laborer or mechanic Include the amount of any costs reasonably
                                      anticipated in providing benefits under a plan or program described in Section
                                       1(b )(2)(B) of the Davis Bacon Act, the contractor and each subcontractor shall
                                      maintain records which show that the commitment to provide such benefits is
                                      enforceable, that the plan or program is financially responsible, that the plan or
                                       program has been communicated in writing to the laborers or mechanics affected,
                                       and show the cost anticipated or the actual cost incurred in providing benefits.
                                       Developers or subcontractors employing apprentices or trainees under approved
                                       programs shall maintain wril1en evidence of the registration of apprentices and
                                       trai0ees, and ratios and wage rates prescribed in the applicable programs.

                              c.       Each contractor and subcontractor shall furnish, each week In which any contract
                                       work is performed, to the SHA resident engineer a payroll of wages paid each of
                                       its employees (including apprentices, trainees, and helpers, described in Section
                                       IV, paragraphs 4 and 5, and watchmen and guards engaged on work during the
                                       preceding weel<ly payroll period). The payroll submitted shall set out accurately
                                       and completely all of the information required to be maintained under paragraph
    ....._                             2b of this Section V. This information may be submitted in any form desired .
                                                                                                EX<~orpt   frnm Fal"Jlily Co'lcesslon Agreement
                       P2ge 8tl of 135 Pages
                                                                                               Agreement #CSUB140
                                                                                               SH130 Segments 5 and 6
                                                                  Intelligent Transportation and Toll Collection Systems
                       Optional Form WH-347 Is available for this purpose and may be purchased from
                       the Superintendent of Documents (Federal stock number 029-005w0014-1 ), U.S.
                       Government Printing Office, Washington, D.C. 20402. The prime contractor Is
                       responsible for the submission of copies of payrolls by all subcontractors.
                                                                  !   •
             d.        Each payroll submitted. shall be accompanied by a "Statement of Compliance,"
                       signed by tl1e contractor or subcontractor or ~Is/her agent who pays or supervises
                       the payment of the persons employed under the contract and shall certify the
                       following:

                       I.       that the payroll for the payro!l period contains the Information required to be
                                maintained under paragraph 2b of this Section V aNd that such lnformatlcm Is
                                correct and complete;

                       II.      that such laborer or mechanic (Including each helper, appr~ntlca, and trainee)
                                employed on the contract during the payroll period has been paid the full weekly
                                wages earned, without rebate, either directly or Indirectly, and that no deductions
                                have been made either directly or indirectly from the full wages earned, other than
                                permi~slbie deductions as set forth In the Regulations, 29 CFR 3;

                       Iii      that each laborer or mechanic has been paid not less that the appllcable wage rate
                                and fringe benefits or cash equivalent for the classification of worked performed,
                                as specl1Jed In the applicable wage determination Incorporated Into the contract.

             e.        The weekly submission of a properly executed certification set forth on the reverse
                       side of Optional Form WH-347 shall satisfy the requirement for submission of the
                       "Statement of Compliance" required by paragraph 2d of this Section V.
              f.       The falsification of any of the above certifications may subject the contractor to
                       civil or criminal prosecution under 18 U.S.C. 1001 and 31 U.S.C. 231.
              g.       The contractor or subcontractor shall make the records required under paragraph
                       2b of this Section V available for inspection, copying, or transcription by authorized
                       representatives of the SHA, the FHWA, or the DOL, and shall permit such
                       representatives to Interview employees during. working hours on the job. If the
                       contractor or subcontractor falls to submit the required records or to mal<e them
                       available, the SHA, the FHWA, the DOL, or all may, after written notice to the
                       contractor, sponsor, applicant, or owner, take such actions as may be necessary
                       t~ cause the suspension of any furthe1· payment, advance, or guarantee of funds.
                       Furthermore, failure to submit the required records upon request or to make such
                       records available may be grounds for debarment action pursuant to 29 CFR 5.12.

VI.   RECORD OF MATERIALS, SUPPLIES, AND LABO~

      1.      On all Federal-aid contracts on the National Highway System, except those which
              provide solely for the installation of protective devices at railroad grade crossings, those
              which are constructed on a force account or dlrect labor basis, highway beautification
              contracts, and contracts for which the total final construction cost for roadway and bridge
              is less than $1 ,OOO,OCO (23 CFR 635) the contractor shall:

                                                                                     Excerpt from Feclllty Concenslon Agrsemont
       Page 815 or 135 f'ages
                                                                                              Agreement #CSUB140
                                                                                             SH130 Segments 6 and 6
                                                                 lntellfgent Transportation and Toll Collection Systems
                 a..      Become familiar with the list of specific materials and supplies contained In Form
                          FHWA-47, "Statement of Materials and Labor Used by Developer of Highway
                          Construction Involving Federal Funds," prior to the commencement of worl< under
                          this contract.

                 b.       Maintain a record of the total cost of all materials and supplies purchased for and
                          incorporated in the work, and also of the quantities of those specific materials and
                          supplies listed on Form FHWA-47, and in the units shown on Form FHWA-47.

                 c.       Furnish, upon the completion of the contract, to the SHA resident engineer on
                          Form FHWA-47 together with the data required In paragraph 1b relative to
                          materials and supplies, a final labor summary of all contract yvork Indicating the
                          tC?tal hours worked and the total amount earned.

       2.        At the prime contractor's option, either a single report covering all contract work or
                 separate reports for the contractor and for each subcont1·act shall be submitted.

Vll.   SUBLETTING OR ASSIG~lNG TliE CONTRACT
       1.        The conlrac;tor shall perfurm wiih its own organization contract work amounting to not
                 less than 30 percent (or a greater percentage If specified elsewhere In the contract) of the
                 total original contract price, excluding any specialty items designated by the State.
                 Specialty items may be performed by subcontract and the amount of any such specialty
                  items performed may be deducted from the total original .contract price before computing
                  the amount of work required to be parfonned by the contr.actor's own organization (23
                  CFR635).
                           11
                  a.        1ts own organization" shall be construed to include only workers employed and
                           paid directly by the prime contractor and equipment owned or rented by ti'le prime
                           contractor, with or without operators. Such term does not include employees or
                           equipment of a subcontractor, asslgn·ee, ot· agent of the prime contractor.

                  b.       "Specialty Items" shall be construed to be limited to work that requires highly
                           speclalizect lmowledge, abilities, or equipment not ordinarily available in the type of
                           contracting organizations qualified and expected to bid on the contract as a whole
                           and in general are to be limited to minor components of the overall contract.

                  c.       Tho contract amount upon which the requirements set forth ln paragraph 1 of
                           Section VII Is computed il1cludes the cost of material and manufactured products
                           which are to te purchased or produced by the contractor under the contract
                           provisions.

                  d.       The contractor shall furnish (a) a competent superintendent or supervisor who is
                           employed by the firm, has full authority to direct performance of the work in
                           accordance with the contract requirements, and Is in charge of all construction
                           operations (regardless of who performs the work) and (b) such other of its own
                           organl2:ational resources (supervision, management, and engineering services) as
                           the SHA contl'acting officer determines Is necessary to assure tho performance of
                           t!1e contract.      ·                                        ·               ·

                                                                                     Excerpt from FaciUiy Concession Agrllement
            PDge 66 of 135 Pages
                                                                                                         Agreement #CSUB140
                                                                                                        SH130 Segments 5 and 6
                                                                            lntelllgMt Transportation and Toll Collection Systems
                          e.         No portion of the contract shall be sublet, assigned or otherwise disposed of
                                     except with the written ·consent of the SHA contracting officer, or authorized
                                     representative, and such consent when given shall 11ot be construed to relieve the
                                     contractor of any responsibility for the fulfillment of the contract. Written consent
                                     will be given only after the SHA has assured that each subcontract is evidenced in
                                     writing and that It contains all pertinent provisions and requirements of the prime
                                     contract.

     VIII.    SAFETY: ACCIDENT PREVF.NTtON

              ·1.         In the performance of this contract the contractor shall comply witt\ all applicable Federal,
                          State, and local laws governing safety, health, and sanitation (23 CFR 635). The
                          contractor shall provide all St;lfeguards, safety devices and protecUve equipment and take
                          any othe1· needed actions as it determines, or as the SHA contracting officer may
                          determine, to be reasonably necessary to protect the life and health of employees on the
                          job and the safety of the public and to protect property In connection with the
                          performance of the work covered by the contract.

              2.          It Is a condition of this contract, and shall be made a condition of each subcontract, which
                          the contractor enters Into pursuant to this contract, that the contractor and any
                          subcontractor shall not pem1it any employee, In performance of the contract, to work in
                          surroundings or under conditions which are unsanitary, hazardous or dangerous to
                          his/her health or safety, as determined under construction sa:fety and health standards
                          (29 CFR 1926) promulgated by the Secretary of Labor, In accordance with Section 107 of
                          the Contract W.ork Hours and .Safety Standards Act {40 U.S.C. 333).
              3.          Pursuant to 29 CFR 1926.3, it is a condition of this contract that the Secretary of Labor or
                          authorized representative thereof, shall have right of entry to any site of contract
                          performance to Inspect or Investigate the matter of compliance with the construction
                          safety and health standards and to carry out the duties of the Secretary under Sec.:tion
                          107 of the Contract Work Hours and Safety Standards Act (40 U .S.C. 333).

     IX.      FALSE STATEMENTS CONCERNING HIGHWAY PROJECTS

               In order to assure high quality and durabla construction In conformity with approved plans and
               speci'flcatlons and a hlgh degree of reliability on statements and representations made by
               engineers, contractors, suppliers, and workers on Federal-aid highway Projects, it is essential
             . that ~II persons concerned with the FacUlty perform their functions as carefully, thoroughly, and
               honestly as possible. Willful falsification~ distortion, or misrepresentation with respect to any
               facts related to the Facility is a violation of Federal law. To prevent any misunderstanding
               regarding the seriousne~ of these and similar acts, the following notice shall be posted on each
               Federal-aid highway Facility {23 CFR 635) in one or more places where it is readily available to
               all persons concerned with the Facility:

                                             NOTICE TO ALL PERSONNEL ENGAGED ON
                                                FEDERAI.·AID HIGHWAY PROJECTS

      18 U.S.C. 1020 reads as follows:
-,


                                                                                               Excerpt from FeciU\y Concession AgteQmanl
                    Page 67 of 135   Paoeo
                                                                                                    Agreement #CSUB140
                                                                                                   SH130 Segments 6 and '6·
                                                                     Intelligent Transportatlo1 1and Toll Collection Systems
                                           ATTACHMENT 3 TO EXHIBIT 8

                                       FEDERAL PREVAILING WAGE RATE


GENERAL DECISION: TX20070043 02/09/2007 TX43

Date: February 9, 2007
General Decision Nwnbcr: TX20070043 02/09/2007

Superseded General Decision Number: TX20030043

State: Texas

Construction Types: Heavy and Highway

Counties: Bell, Bexar, Bl'azos, Coma!. Coryell, Guadalupe,
Hays, McLennan, Travis and Williamson Counties lu Texas.

Heavy (c~tcluding tunnels and dams) and Highway Conslruction
Projects (does not include building structures In l'est area
projects). ~NOT TO BB USED .FOR WORK ON SEWAGE OR WATER
TREATMENT .PLANTS OR LIFT/.PUMP STATIONS IN BELL, CORYELL,
McLENNAN AND Wlf~LIAMSQN COt)NTIES.

Modification Number Publtcation Date
      0      . 02/09/2007

 SUT.X2005-00l 01/03/2005

                                            Rates       .Fringes

  Air Tool Operator.............            $ 16.00          0.00
  Asphalt Distributor Ope1-ator...          $ 12.09          0.00
  A&phalt p1wlng machine operatOT           $ 11.82          0.00
  Asphalt Raker..................           $ 9.96           0.00
  Asphalt Shoveler...............           $ 10.56           0.00
  Broom or Sweeper Operator......           s 9.74           0.00
  Bulldozer operator ...........            $11.04           0.0()
  Carpente1·......................          $12.25           0.00
  Concrete Fiu;sher, .Paving......          $10.53           0.00
  Concrete Finisher, Structures..           $ l0.95          0.00
  Concrete J?aving Curbing
  Machin.e Op!lrntor...............         $14.00            0.00
  Concrete,l)aving Finishing
  Machine Operator...........,_.            $ 12.00           0.00
  Concrete R\tbber................          $ 10.88           0.00
  Cnme, Clamshell, Backhoe,
  Detrick, Drngline, Shovel
   Operator.......................           $ 13.66          0.00
   Blectriciao..:.................           $24.11           0.00
   Flagger......................-            $ 9.49           0.00
   Fonn Bnllder/Sctter, Structures           !R 10.88         0.00
   Form Setter, Paving & Curb.....           $ 9.89           0.00
   Foundation Drlll Operator,
   Truck Mounted.................            $1.5.00          0.00
   .Front End Loader Operator......          $ l l.36         0.00
    Laborer, commou................          $ 9.34           0.00
    Laborer, Utility...............          $10.12           0.00
              Page 94 of 135 Pages                                                        Excerpt from FacUlty Concession Agreement
                                                                                                                                   Agreement #CSUB140
                                                                                                                                 SH130 Segments 5 and 6
                                                                                                    Intelligent Transportation and Toll Collection Systems
 MecbHnic.......................                                        $ 14.74             0.00
 Mixer operator, Concrete Paving                                        $ 15.25             0.00
 Mixer cpcmtor.................                                         s 10.83             0.00
 Motor Grader Operator, Fine
 Grade..........................                                        s 15.26             0.00
 Motor Orndcr Operator, Rough...                                        s 12.96             0.00
 Oiler..........................                                         s 14.'11           0.00
 Painter, Structures............                                         $ 11.00            0.00
  Pavement Mark.int~ Machine
  Operator. ......................                                       S IU2              0.00
  Pipelayr.r......................                                       g 10.49            0.00
  Planer Operator................                                        $ 17.45            0.00
  Reinforcing Steel Setter,
  Paving.........................                                        $ 15.50            0.00
  Reinforcing Steel Setter,
· Sllucture......................                                        s 14.00            0.00
  Roller Op.-:rator, Pneumrtl:ic,
  Self-Propelled .................                                       $ 9,34             0.00
  Roller Operator, Steel Whee~
  Flat Wheel/Tamping.............                                        $ 9.60             0.00
  Roller Opcrntor, Steel Wheel.
  P lant Mix Paven'Je11L...........                                      $ 10.24            0.00
  Semper Opcrutor...............                                         s 9.93             0.00
  Servicer.......................                                        s !1.41            0.00
  Sign Installer (PGM)...........                                        $ 14.85            0.00
  Slip Form Machine Operator.....                                         s15. 17           0.00
  Spreader Box opcmlor..........                                         $ 10.39            0.00
  Structural Steel Worker........                                        $ 1.3.41           0.00
  Tractor operator, Cruwler Type.                                        $ 11. 10           0.00
  Traveling Ivli.xer Operator.......                                     $ 10.04            0.00
  Trcncl1iug machine operator,
  l:lt:avy..........................                                      s 14.22           0.00
  T111Ck Driver Tandem Axle Semi-
 Trailer........................                                          $ 10.95           0.00
 Truck driver, lowboy-Float.....                                          s 15.30           0.00
 Tmck driver, Sb1gle Axle,
 Heavy ..........................                                         s 11.88            0.00
 Truck dr!ver, Single Axle,
 J_ight. .........................                                        s    9.98          0.00
  Wagon Drill, Boling Mac:Oinc,
  Post Hole Driller Opemtor.....                                          s 14.65            0.00
  Welder.................. - .....                                         $ 14.26           0.00
    Work. Zone Banicode Servicer...                                           s 11.15
.....-·- -.o..-............____,.....___..,_.,_ ........_ .....___.................. _ __
                                                                                             0.00




 Unlisted classifications ueedcQ for work nol included within
 the scope of the clnssiticalions listed may be added af1el
 nwnrd only as provided in tbe labor standnrds contmct clauses
 (29CFR 5.5 (a) (I) (ii)).



 In the listing above, !h:: "SU" clesiguntion means that mtes
 listed under the ide1l£ifier do noL reflect collectively
 bargained. wage und fringe benefii rates. Othcl' designations
 indicate ltllions whose rates have been determined Lo be
 prevailing.
                  Ppga 95 of 135 Pages                                                                                  Excerpt ftom Ft~clfily Concession Agreement
                                                                                                         .---..


                                                                                                                      Agreement #CSUB140
                                                                                                                     SH130 Segments 5 and (i
                                                                                        Intelligent Transportation and Tofl Collection Systems
     ..·
                 GENERAL   OI~:CISION :   TX200?0129 02/09/2007 1'Xl29

                 Dal:-e: February 9, 2007
                 General Decision Nwnbec: TX20070129 02/09/2007

                 Superseded General Decision Number: TX20030l 29


                 C oPst ~uctio~      Types: Heavy and Highway

                 Counties; il.ransas , Atascosa, Au stin , Bai~dera , Bastrop, Bee ,
                 Bl anco, Burnet, Ccrld·.~ell , Calhoun, Colorado, De Witt, Fayette,
                 F:cio, G"illesp.te, Goliad, Gonzales, Jackson, ,J.im Wells, i\aJ;nes,
                 K<;;ndall, Kerr, Kle-b-:rg, Lava~;;a, Lee, Live Oak , .Llano, t<lason,
                 Me>tagoxda, Medina, Refugio, Wharton and Nllaon Counties in Texas ,

                 HEAVY CONSTHIJCTlON PROJf~CTS (excluding darn
                 construction). !HGJllvJ\Y CONt;'l'RUCTIDN l'ROJJ::C'J'S (excluding tunnels,
                 building
                 structures in rein: aJ:ea p:~.-ojectu k rail -road consT..ruct.i.on;
                 bascuJ.e , l:luspension & J>pandrel - an:h b r idges desiqned foJ: .
                 conmu~.rcia l navigation , bridges i1wolving marine construction;
                 and other major bridqes) .

                 t•todificat ion Number              Publication Date
                                 0                    02/09/2007
                  SUTX2005-023 09/08/2005
                 H!!:A'J'( CONS'I'RIJCTION i.>P,OJECTS     HIGHI~A.Y COl~STRUC'i'lON   PROJECTS

                                                                                        Fringes
                   Carpenter, ... . .. . . ........ . .. $ 11.70
                   Mechanic ., . . . . . . . . . . . . . . . . . . .. $ 12.18
                   A~~\ ,alc Ol~t~ibu~UL o ~~ldLUL •• , $ 12.57
                   Asphal1: paving machine ope-cator.';l 1 1 .60
                   Asphalt Rake 1: . . .. . •... , .. . ..... $ l. O, 63
                   Asphill t: Shoveler •.......... . ... $ 9. 23
                   Bro<:>m or: S1~eeper Operator ... . , . $ 9, 32
                   Bulldozt'!-J: operator          .. . .. . , .... -~ 11. 69
                   Concca&e Finiuher, Paving . , . ... $ 11.64
                   Co ncrete J:i!li::~her, StruccUJ:es .. $ 10 . 23
                   Concrete Rubber: . . . . . , . . . . . , .. . . $ 9. 00
                    Crans , Clrunshell , Backhoe,
                    DGrrick, Dragltne, Shovel
                    Ope~ator    .. ... ... . . . .. , . .. .. . . . . G 12 . 00
                    I!J.ag9er . . ........ . . . .... , , , . . .. S 8.60
                    rorm Bui l der/Setter., Structures$ J.O.Sl
                    li'orm Settur, Pavin g & Curb .... . $ 9.48
                    1-'o>Jndat ion Dl:i ll Operator.,       ·
                    Tr.uck Mounted .................. $ 14.58
                    f'ront End l.oade:;: OperattJr ...•.. $ 10.62
                    Laborer, coL'llllon. , •.. . .•.... _..• $ 0.91
                    Laborer , Utility. , . ...... . ..... $ 9.21
                    Motor Grader Operator Pine
                    Grade .. .....• . .. .. . . ... . . . . . .. - ~ 15 . 15
                    Hotor Grader Ope r ator RQUgh .. . . $ 12 , 95
                    Pavement 11arking t-1achioe
                    Opexator .... . ..... . ..... . ... , .. $ 13 . 32
           ··.       Pipelayer . . •.. . , . ..... . , , . . .. . . $    9.71
\_                   Roller    Op(~ rul:or,    l'ueumatic,
                            Page 98 of 135 Pagss                                                                  Excerpt from raclllty Concession Agreement
                                                                                                 Agreement #CSUB140
                                                                                               SH-130 Segmen1s 5 and 6
                                                                  Intelligent Transportation and Toll Collection Systems
  Self-Propelled ........ , ... . . . .. $      8.90
  Roller Operator I Steel vlheel,
  Flat l"lheel/Tamping . . .. . .•.. . ... $    9.30
  Roller Operator., S teel Hheel,
  Plant Mix Pavemen t .. , . . .. . ..... $    10.59
  Scra pet· Operator. . . . ......... . , $     9.85
  Servicer ........... . ..... . . . ... $     11.18
  Spreader Box Operato1.· ... . ... . .. $     13.00
  •rraveling ["1ixer Operator . .... . . $     12.67
  '.('ruck Driver Singl e .ll.xle Heavy.$      l0.07
  Truck Driver Single Ax le, J,ight:;>         10.85
  Truck driver, J.owboy-l!'loat .. . .. S      1 3 . '10
  Truck Driver, Tandem AY.le ,
  Semi-Trailer· ......... . . ..... . .. ~     10.05
  Work Zone Ba rricade Sex:vicer . . . $         9.63


i4ELDERS -Receive rate prescribed for cl."a f t perfor.ming
operation t o >Jhic h v1e lding i s inc].dental.


Unlisted classifica t ion s needed for work not inc l uded wit hin
t he sc,,pe of the
c:lassiflcations l.tsted may be a dded after a1~ard only as
provided i n the labor
standards contract c lauses (29 CFR 5.5(al (1) (ii) J .




In ;:he listing above , the "SU" des ignat i on means !:hat rates
lis ted under l:he
.identifieJ~ do not ref.lect collecti vely bargained wage and
fringe bene fit:
rates. 0;;-.her des ignations indicate unions 1·1hcse rates h ave
b:!en determined
to be. prevaili11g .




                WAGS DETERHINA'riON APPEALS            PROC~:ss


1.1 Has t here been an initial decision in the matt er? This can
be:

    a n existing published w~g ~ determination
    a sur:\fP.y underlyi ng a \iage determ.tnat..i.on
    a Nage and Hour Division l etter. aetting forth a position on
a 1·1age
      determination matter
* a confo rma nce (additional c lassification and r ate ) ruling
On survey related ma'.:.ters , initial cont.act, including r equests
for. summa rie:;
of surveys, should be 1-1ith t.he h'age and Hou r RtO!g i onal Office
for the a .r ea in
\•;hich t he survey was conducted because those Regional Offices
have
 xe.~ponsibil.i.t.y for the Davis-Bacon su1~vey p r ogram . If th(;l
 response f.rom t his
 initial contac t is not s atisfactory, then the pl.·ocess described
 in 2 .) o.nd
 3 . ) s h OLtJ.d be f o l l owed.
          Page 99 ol 135 Pages                                                        E)(Cerpt irom Facilliy ConrJ:ssion Agreement
                                                                                          --....
                                                                                       ....




                                                                                                    Agreeme nt #CSUa140
                                                                                                   SH'I30 Segments 5 and 6
                                                                      Intelligent Transportation and Toll Collection Systems

l'lith regarcl to any other matter: not yet ripe for the formal
process
d;;,s•:ribed hsr.e, ini\.ial com:act should be with .:he 8ranch of
Construction
~lage Dete:cminat).ons .   i'~rite to:


         Br-anch of Construction Wage Detenn.i.nations
         Wage and Hour Div.i si.on
         u.s . Depa rtment of l.abor.
         200   Consti~:.ution        Avenue, N;W,
         i'iash1ngton, DC 20210

2.) If ~he answer t o the question in 1.) is yes, t hen an
1nterested party
( thos~ a f fee ted by thc. act.i.on) can requesT. review and
reconsideration f.xom
the ~la ge and ~l OllT.' .Z;.d;ninistratcc (See 29 CFR Par:t 1 . 8 and 29 CFR
Pa:::t 7 ).
~lrite to:


         \\lag a and Hou:r 1\dm.i .nist.J:a t.o1:
         u.s . De9a.rtrnent of LabOI"
         200 Constitution l\venue, N. vl.
         Y.iashington , DC 2 0210

'l'he req•.w~·.:. should be accomp::mied by a full statement of the
intt:!rest:ed
parr.y' s position a nd by any infonnaU.on (1~age paym<Z!nt: data,
project
d;:)bCJ:i~t.ion, a rea pr::~ct..ice material, ete .} i:hat the requestor
considers
rele,rant to t he issue.

3.) lf the dec.i.td.on oj: the Adrnjnist.rator is not. fa,rorable, an
interested
party may appe'!C\1 directly t() t he Administr.ativt?. Rev i ec~ Board
(fOLtnCLly t he
WAge Appeals Board) . Write to:

          Admin:i.strative          Revi.e~'   Board
          u. s. Department ot Labor
          200 Constitution Avenue, N.lq.
          \4ashingt.ou, DC 20210

 4.) l\l l decisl. ons by the Administrative           Rr::vie~l   Board are final.

                END Of:' GENERAL DECISION




          Pa(l?. 100 of 135 Pegas                                                             E.xcerpt lro<n FadUty Concession AgrB'.!mcnt
                                                135

     /

    I.    1

          2

          3

          4

          5

          6
          7

          8

          9

         10
                   DEFENDANT'S EXHIBIT 119
         11     FACILITY CONCESSION AGREEMENT
         12
    r
\        13

         14
         15
         16
         17
         18

         19
         20
         21

         22
         23
         24

/        25
                         (Back to index)
-




              Appendix Item 17
/




                  FACILITY CONCESSION AGREEMENT
                                                          .     .
                  SH 130 S·EGMENTS s ·AN.D ·6 FACILITY


                                            .    .
                                            B~tw~eh


                          Texas Department ofTransportation

                                            · .and

                           SH ·1 30 Concession Company, LLC
                               0        '




                                        Dated March 22,·2'007




                                                                          EXHIBIT
                                                                    1-D
                                                                      .~ X!!r_
                                                                     <.
                                                                                •
    EXECUTION VERSION ·
    324B69_12.DOC



                          . ..; . ...
           22.5.3. If Developer elects to deposit the Financial Model Formulas and Base Case
    Financial Model into an Intellectual Prope·rty Escrow rather than deliver them directly to TxDOT,
    Developet shall:

                       22.-5.3.1 lpclude with the deposit of the Flnancla.l Model Formulas and Base .
     Case Financial Model a complete set of tha assumptions, trf!ffic·.models, traffic data and other
     data that form part of the Base Case Financial Model, including projections and calculations with
     respect to revenues, expenses, the repayment of Facility Deot and Distributions to equity
     investors;

                        22.5.3.2 . Also deposit, as and when prepared, each Base Case Financial
     Model Update and a complete set of the updated and revised assumptions, ~raffic models, traffic
     data and ·other data that form part of the Base Case Financial Model Update, including updated
     and revised projections and calculations. with respect to revenues, expenses, the rep~yment of
     ·Facility Debt and Distributions to equity lnv13stors; and                                 ·

                         22.5.3.3 Deposit them In a form or forms that are acceptable to TxDOT, that
    .fully reveal· their content on an Open Bool< Basis, and that will convenle.ntly enable TxDOT at
     any time upon request to.galn access thereto. and to etectronic.ally operate and manipulate the
     same in order. to run projections and scenarios respecting the Facility and to P.rint out and
     examine such projections and scenarios .

            . 22.5.4 The tnteliectual Property Escrows shall survive expiration or earlier termination
               .  .
     of this Agreement regardless
                        .         of the reason.

                                 ARTICLE 23. FEDERAL REQUIREMENTS

     23.1    Compliance with·Federal Requirements

              Regardless of whether federal c~edit or funds are made available to Developer for the
     Facility, Developer shall comply and require its Contractors to comply with all federal .
     requirements applicable to transportation projects that receive federal credn or funds, including
     those set forth ffl Exhibit 8, If Developer uses TIFIA credit or loans to finance the Facility or any
     portion thereof, Developer shall provide any compliance certifications and milestone payrnent
     schedules required In connection with TIFIA. ·

     23.2    R,ole of and Cooperation with FH~A

          . Developer acl<nowledges and agrees that FHWA will have certain approval rights with
       respect to the Facility, hicludlng the right to provide certain oversight and technical services With
       respect to the Work, If federal" credit or funds are made available to Developer-for the Facility.
       Developer shall cooperate with FHWA in the reasonable exercise of FHWA's duties· and
     . responsibilitle~ in connection with ttJe Facility.    ·     ·                            ·

                                      ARTIClE 24. ·MISCELLANEOUS

    · 24.1   Replacement of Independent Engineer

            24.1.1    The Parties recognize that from time. to time it will pe necessary to·replace the
     Independent Engineer In the event any par:tY to the Independent Engineer Agreement elects not
     to extend or renew it at expiration of its. term, or in the event it Is terminated ln accordance with

\    TEXAS DEPARTMENT OF TRANSPORTATION                 -175 - .                         EXECLTTION VERSION
     SH 130 Segments 5 and 6                                                FACILITY CONCESSION /\GREE'MENT
     324869_12.000
                    ARTICLE 10. CONTRACTING AND LABOR PRACTICES

 10.1    Disclosure of Contracts and Contractors

         ·10.1.1 . Developer shall provide TxDOT ~nd the Independent Engineer with a list of all
. Contract~, the Contractors thereunder, guarantees of Key Contracts and . the guarantors
  thereunder with each monthly report . required under this Agreement or the Technical"
  Requirements. Developer shall allow TxDOT and th~ Independent Engineer ready access to all
  Contracts and records regarding · Contracts, indudh1g amendments and supplemel')ts. to Key
  Contracts and guarantee·s thereof; provided, however, that Developer may provide access
  theretq· by ~epositlng unredacted copies In the Intellectual Property Escrow as provided In
  Section 22.5.

         10.1.2 ·Within five days after Developer enters into a definitive agreement with any
 Cont~actor, Developer shall notify TxDOT In writJng of the name, address, phone mirnber and ·
 authorized representative of such Contractor.              ·

 10.2    Responsibility for Work, ·Cont~actors and Employees

          10.2.1    Developer shall retain or cause tq be retained only Contractors "that are
  qualified, experienced and capable lh the performance of the portion of ·the Work assigned.
  Developer shall assure that each Contractor has at the time of execution of the Contract, and
. maintains at all times during p~rformance of the assigned Work, all licenses required by
  applicable Laws.                                      ·                          ·

         10.2.2 The retention of Contractors by Developer will not relieve Dev~ioper of" its
  responsibilities hereunder or for the quality of the Work or materials or services provided by it.
  Developer will at all times be held fully respo"nsible· to TxDOT for" the. a·qtions, omissions,
· negligence, willful miscondu.ct, or breach of applicable Law or contract by· Contractors..

        · 10.2.3 Each Contract shall include · terms and conditions sufficient to ensure
 compliance by the Contractor with the requirements. of the FCA Documents, and shall include
 those terms that are specifically required by the . FCA Documents to be Included therein
 including, to the extent applicable, those set forth in Exhibit 8.

         1Q.2.4· Nothing in this Agreement will create any contractual relationship between
 TxDOT .and any Cdntractor. No Contract entered Into by or under Developer shall impose· any
 obligation or liability upon TxDOT to any Contractor or any of its employees.

         10.2.5 Develope~ shall supervise and be fully responsible for the actions, omissions,
 negligence, wi.flfi,JI misconduct, or breach . of applicable Law or contract by any member or
 employee of Developer or any Developer-Related ·Entity, l3s though all .such individuals were
 direc!IY employed by.Develdper.           ·            ·                                 ·

 10.3    Key Contracts; Contractor Qualific~tions

         10.3.1    Use of and Change in Key Contractors

         Developer shall retain, e!llploy and utilize the· firms and organizations spe~ifically listed
 in the Facility Management Plan to fill the corresponding Key C~ntractor positions listed therein.
 Developer shall not terminate any Key Contract with a K~y Contractor, or permit or suffer a·n y

  TEXAS DEPARTMENT OF TRANSPORTATION               -69 -                           EXECUTION VERSION
  SH 130 Segments 5 and 6                                             FACILITY CONCESSION AGREEMENT
· 324B?9_12.DOC




                       Appendix Item 18A
                                BRANSCOMB                                                       PC
Clinton W. Twaddell, III
Direct Dial: (512)735-7809
Email: ctwaddell@branscombpc.com


                                                                                                                   46147.0104

                                                          October 21,2015


       VIA ELECTRONIC MAIL
       Chanler A. Langham
       SUSMAN GODFREY LLP
       1000 Louisiana Street, Suite 51 00
       Houston, Texas 77002-5096

                Re:       Cause No. 03-15-00423, Star Operations, Inc. and Great American
                          Insurance Company of New York vs. Dig Tech, Inc., pending before the
                          Third Court of Appeals, Austin, Texas

       Dear Chanler:

                Please allow your signature in the space provided below to indi cate your agreement that
       Dig Tech does not oppose Star and GAIC's request to supplement the reporter s record with the
       attached pages 68 and 69 of the Facility Concession Agr ement which was admitted in evidence
       at trial as Defendants' Exhibit 119.


                                                                Respectfully,

                                                               (b~~J/-f;UF
                                                                Clinton W. Twaddell, III

       Enclosure




      {Cll99547.DOC:l)

          802 N. Carancahua, Ste. 1900, Corpus Christi, 'IX 78401-0036   I P:361-886-3800 F:361-886-3805 I www.branscombpc.com


                                      Appendix Item 18B
  and Facility Manag~ment Plan and (c) to verify the Independent Engineer's. proper performanGe
  of Its responsibilities and obligatrons. TxDOT shall conduct sudt activity in accordance with
  Developer's safety .procedures and manuals, ·~ nd In a manner that does not .unreasonably
  Interfere with normal cpnstructlon activity or normal operation and maintenance of the Facility.

                     9.3.2.2    Refer to Section 22.2 for TxDOT's rights to audit Developer an(;f its
  Contractors. Developer acknowledges and agrees that TxDOT will have the right to audit,
  monitor and inspect the Independent Eng ineer and Its compliance with Good Industry Practice:
  and Its responsibilities and obligations under the Independent Engineer Agreement.       ·

    .               9.3.2.3    Tx00T will not conduct formal prior reviews of Design Documents
 ex9ept 'to the extent necessary or advisable to comply with FHWA requirements or unless
 TxDOT ~hooses .to do so during any period there exists an uncured Persistent Developer
 Default for which "I:"xDOT has given notice to developer.
                                        .                        '           .
          9.3.3        Rights   o~   Cooperation and Access; Increased Oversight

                      9~3.3.1 . Developer at all times shall ~oordinate and cooperate, and require
  its Contractors .to coordinate and cooperate, with the Independent Engineer to facilitate the full, .
 ·effiCient, effective and timely performance by the Independent Engineer of his or her monitoring,
  Inspection, sampling, measuring, testing, reporting,· auditing, and other. ?Verslght functions .

                    9.3.3.2    Developer at all times shall coordinate and cooperate, ~nd require
 its Contractors to coordinate aljd cooperate, with TxDOT and its Authorized Representative to
 facilitate TxDOT's oversight activities. Developer shall cause Its representatives to be available
 at all reasonable times for co~sultation with TxDOT arid the Independent Engineer.

                     9.3.3.3    Without limiting the foregoing, Developer ::;hall afford TxDOT, its
 Auth orrzed Representative and the Independent Engineer (:a} safe and unrestricted access to
 the Facility at all times, (b) safe .access during normal business hours to Developer's Facility
 offices and operations build ings and (c) ·unrestricted acces's to data ·respecting the Facility
 design, construction, operations and maintenance, and the Utility Adjustmel')t Work. Without
 limiting the foregoing, Developer shall deliver. to' TxDOT and the Independent Engineer. upon
 request accurate and· complete books, records, data and Information regarding Work, 'the
 Facility and the Utility Adjustment Work, In the f9rmat required by ~he TechniCal Requirements,

                  9.3.3,4    TxDOT and the Independent Engineer shali have tlie right to
 Increase the type and level of their oversight during any period the~e e)!:lsts an. uncured
 Persistent Developer Default for which TxDOT has given notice to Developer.

          9.3.4       Testing and Test Results

         Each of the Independent Engine~r and TxDOT shall have the right to attend and witness .
 any tests and verifications to be conducted pursuant to the Technical Requirements arid
 applicable Management Plans, including accuracy, availability and performance tests of the
 Electronic Toll Collection System. Developer shall provid e to the .Independent Engineer and
 TxDOT all test results and reports (which ·may be provided in electronic format in accordance
 with th~ Technical Requirements) within ten days after Developer receives them .
        ..

 TEXAS DEPARTMENT OF TRANSPORTATION                   - 68 -                       EXECUTION VERSION
· SH 130 Segments 5 and 6                                             FACILITY CONCESSIOr-j AGREEMENT
 324869_12.DOC
                     ARTICLE 10. CONTRACTING AND LABOR PRACTICES

  10.1    Disclosure of Contract$ and Contractors

        ·1'0.1.1 . Developer shall provide TxDOT a.nd the Independent Engineer with a list of all
 Contract~.   the Contractors thereunder, guarantees of Key Contracts and . the guarantors
 thereunder with each monthly report . required under this Agreement or the Technical'
 Requlreriiemts. ·Developer shall allow TxDOT and th~ lndeperiCferifEnglneer ready access to all
 Contracts and records regarding ·Contracts, indudln·g amendments and suppfemel')ts. to Key
 Contracts and guarantee's thereof; provided, however, that Developer may provide access
 theretq by ~epositlng unredacted copies In the Intellectual Property Escrow as provided In
 Section 22.5.

         10.1.2   Within five days after Developer enters Into a definitive agreement with any
 Contractor, Developer shall notify TxDOT In writ,ing of the name, address, phone nurnber and
 authorized representative of such Contractor.               ·

 10.2     Responsibility for·Work, Contractors and Employees

          10.2.1    Developer shall retain or cause to be retained only Contractors 'that are
  qualified, experienced and capable ih the performance of the portion of ·the Work assigned.
  Developer shall assure that each Contractor has at the time of execution of the Contract, and
. maintains at all times during performance of the assigned Work, all licenses required by
  applicable Laws.                                      ·
                                              .                .
         10.2.2 The retention of Contractors b.y Developer will not relieve Developer of· its
  responsibilities hereunder or fo.r the quality of the Work or materials or services prbvided by it.
  Developer will at all times be held fully .respo·nslble· to TxDOT for' the. a·ctlons, omissions,
· negligence, willful mlscondu.ct, or breach of applicable Law or contract by· Contractors..

        · 10.2.3    Each Contract shall Include · terms and conditions sufficient to ensure.
 compliance by the Contractor with the requirements. of the FCA Do~uments, and shall include
 those terms that are specifically required by the . FCA Documents to be included therein
 Including, to the extent applicable, those set forth In Exhibit 8.

         1Q.2.4· Nothing in this Agreement will create any contractual relationship between
 TxDOt .and any Contractor. No Contract entered Into by or under Developer shall Impose' any
 obligation or liability upon TxDOT to any Contractor or any of its employees.

         10.2.5 Developer shall supervise and be fuily responsible for the actions, omissions,
 negligence, wlflft,ll misconduct, or breach .of applicable Law or contract by any member or
 employee of Developer or any Developer-Related· Entity, as though all. such Individuals were
 directly employed bypeveldper.                        ·                                  ·

 10.3    Key Contracts; Contractor Qualific~tlons

         10.3.1    Use of and Change in Key Contractors

         Developer shall retain, employ and utilize the 'firms and organizations spe~ifically listed
 In the Facility Management Plan to fill the corresponding Key Contractor positions listed therein.
 Developer shall not terminate any Key Contract with a K~y Contractor, or permit or suffer a·ny

 TEXAS DEPARTMENT OF TRANSPORTATION                - 69 -                          EXECUTION VERSION
 SH 130 Segments 5 and 6                                              FACILITY CONCESSION AGREEMENT
· 3248~9_12.DOC
                                                     1 01


 1
 2
 3
 4
 5
 6
 7
 8
        DEFENDANT ' S EXHIBIT 9
 9             PAYROLL
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25         (Back to index )



     Appendix Item 19             SIP C1168698.PDF
                                                                                                                                                                                                                                                    11 JC EXHIBIT__LL
                                                                                                                                                                                                                                                   ])<!JXoiiCOI_u.:__

                                                                                                                                                                                                                                                   0;11!'-Rpu__                      _
                                                                                                                                                                                                                                                         ""'·'WtoLrr..~noor.: L'lM



    OoioJD-d\(-\\                                                                                                                                 lb) WIIEP.E FRINGl! BENI!fl'i'S ARE Pof. IO IN CASH

    '·-~--p-.,,-1.>_______uO:. .!~.L~!.!.·~c ~r%!1qsu..__                                                                                                  0 -     EiKJ1 1ilbOf'or o· m!chOO:c •~ted in lh& al>o'I'O ra:e:ront'!d J):))'l'b'l hoi btGn r•!'ic.J,
                                                                                                                                                                   uslmlkahtd on\~.,) pc.yroV, lln ilmOunl ~~ kss ltlan ti\s sun1 of lh: £f'lrl.ic:r.t>::
    c!O llW~I.iy 610te:                                                                                                                                            be sic hou't \'J•ge rCJic flus ll~ :.mount of the ronu.-ed lrir. o' t:snof1it ilS 5S!I1d
                                                                                                                                                                   n the cet\tr:ct et.car>' ts no!ed Jn s~clion 4(c) blkv.\'.
                                                                                                             -.~ ...                             (c) C::!~CEPTIO:..S

                                                                                                                                                           E:.:CEPfiOH (Cn.AFT)




    :U ptrsons l!rnfllotc.d on snitl l"oi~c.J h:lvo b~~n pckllhe fu~ w~~lf.ly w.-pos eurne:d, th:~l no r~bl\lo-s heve
    blon ar v.!U ta m•d~ ~!lln:r c.lirec~ ~1i"rtctly lo or on brllall ot said

    - - - --                                   · lY~c;3fc"'-               :1::1><:.                                    frO<., lh> tun
                                               (Conti:lc:C>f or SubcoulrtJtlor)
    wtel\fy w3!)4::o earnGj by :ny f)GISM r.nd lha' no d~tluttOOJ havo betf'l r.laUC tiHmr ch"cci"J 01 ~coctty
    rrom lha lull wr..gn eetned IJ.y any prrson. ~hCU" thon pClfml~s,ibto tlcdutllMs at ~li"C!cJ In Hcgoftlion$, Pelf
    ~J ~!7t·1~0?~~~~~[~~~~6cJJ:~,~~~~~rc,oL~l~ ~om~~:~~~~:~~~~:,;~· ;u. z:mer.detJ (48 s1~t ~46,
       2




                                                                                                                                          11£1/.J/Ul!i:

.          (2) ihal c:~"~ lla~ro:Js olh!tv1isc uodcl llli~ ~nrratl re:qvlrt:LI lo lH~ ~Wmi!tct.llor the ~bcve pericld             tliQ
"-...._,ufi':C'l ond conlplela: ihnl L'1.) rn~g• r.:.lols fc:rlil\ICIIC!U 01 rntthOJntu cont;:~:ntd lh'-ltll'l DIC: nolle"s thon U'd
       O?:llic:aiJia w.'itQ r;lijs cont~nall in nny \'r;)OII lli!l~rtnlr.~llo-1 incOI'p~tcHJ Into ll'le COOit11d: th:>l lho
       cl.l~s.ii•t&r.orn 'el f01th 1!\c.rcin for e:~ch llUO!.tt 01 rMc.lu:u!c conlort<l \·,i!h the work'~' pcrlclfoUtl.
          U). 1h:'l! ,, ny ~!m:oln:i~u omp:oyad ln lin :JilO'IO pzrloLI 010 duty •c:::g:'.lt.:orcll ''' a bOu~ f.cb
    lfll.,:onhcUit•p PiQOI"i):"\ t~!;llt\!r.':ld '~~th • S!tl: tppt.:!totlet;:shlp uuwcy u:<:Cti)lli!cd tt1 U\:. Durol'u or
    ·"PP:-3ntJcoslllp mHi Tro:llllno. Un!lad Sl:o.te:. O~j)<:~tlm.:!nf o/L:UOr, or If no :;uch t?COO:-.it~d tlQ.lncye.:i'IIS h o
                                                                                                                                                                                            -\:\.
    Slr.lt-, ~r.:: rooiU.:oto~cJ \Y.IIllhO fhJrett.u of Af!ll:~n\itcshlp ~n-.1 l'r;,inino, Uni:al.l Sl;'lle,; 09pDrlr·l!nl C~ll.:~bor,
           (·l) Th;~t:
                  (o) VIH~fl( f-RING( GEI-I(fiTS AA~ Pf.IO TO •\PPRO•IEO PLAHS, fUNDS, Oft PHOORM.!S
                         0   -   ~~ i1t$d~Qn to \ll!l b3!.!c: Mu1l~· w~g3 r;iu p;,IIJ lo <'tch labOre.r 01 Ul!;th.l.'\!c liUCc.J 5n
                                 lilt al>ovb rcirru.c:IJ {>3~1011, poynw.nls of frinl).J bontrilf a~ l_llf~d 5n t:tl c.onttocl
                                 ha..,, IJl~n Ct tJ.\U b! JolDtJ~ lo ~p;lfon:ioto P'"''"ms lot U"lt bmilil oi suc;h
                                 O:Tt(llt-)"~:U.   e:-cepl o~ mtetJ ln Uclit.n '-It:) ba'c1:1.


                                                                                                                                                                                                                         DgTcc/Stnl' 028




                                                                                                                                         EXHIBIT

                                                                                                                                                q
                                                                                                                                                                                                                   S/P C1168698.PDF
                                                                                                                         ,.   ....

                                                                                                                              /
                                                                                                                    .'                                                                                                                    .   ....




                                                                                                                                     (o) WHEf!c<Ff'.tNGE-aENI:fCTS·ARI:O.P~q fJ)I'CASii
., _::r;_
      ·....~.L·~~--'\~·\.~!l..!:,1"'-~~·r~..,.,...,.---
                                         -\-            --~t>:!;....~!.:.!t~~c:.I.g....:~.l!'~
                                                                                        · ~O.·~Se:J:...,,;___ __                              0 -     ~ llillarer cr mec1'1311lc 1is'tecr.iil.lli2·al10<'~ r!lterence~ ~ hal;\~_rr.P:slo:l.
  '              tNaiim>fsi~hi;!oc>):P<:i'f.Yl                                         (Td!aJ.                                                        ilt'I.-Iditallill6n'lhe~. a.'Ta:iio\:nl'nzit m~; 111ah'lhe.tun·bfll!e:api?bei!bi4'.
 do fl:::rdw-~t"'~                                                                                                                                                                                 D'
                                                                                                                                                      bll~'l'ioiltlf.Wo!gB ra!s·PlUS':lhe·arnbilnl IAe-retUiriidrffi:fliG' 6i!lle6ts-.b$:)iShl<f
                                                                                                                                                      ii'tlhe co'lllr~!c:t,:tll~tils;,o:ad-in tae~ton-4{c' oola-:·:.

                                                                                                                                     ~6).l~J{(.;&nOtofS




      !3) Tnal ~; 2ljlpr0hllces .e'mplcyelj irs ll>a ';!lmva por1od ale: dllli: te§'JS.!eiei' in ':i 156713 lil:e
~~e-,ti.U.':iilf pt~. r&g!s[W<! ..:lith a .Sla~·apf!!enlbsJiip 8Qfncy ~c!                    ay
                                                                             Uft!: Btlt'eau bf
~)ln!nl1d1Ghlp~d-'((p!ij::l'g, llt:>.led.SlaWs ~l!Mof L21!or, 6/"lr no.SUCII~~ eJ:Isls.ltrn
~· ~~ (e~d.w'..l{,Uta SUfea/J or.Ap;ite'ntlcasht/l=d Tla~"lg.·UrilCOd Sltlles'Pitpai",.rilentoor Labor.

      (~) t~Yw·..r.:P.E FRINGE l'li;N~ AAE I?Altl:To APF\iOilED'Pt:ANs', 'Fl.JNOS,·PR i>!lOOAAMS
               ·o       I!>~ lo :h3. tmsldtp>~.'\'~~ .~es pO:Ito-eaelt ~or m~c i::le.d 1o
                        the·a'Scl.•" re.'M!tlced p~oif, Pf!Y~!s of;Jr~c ~~ lliO.l(sfaC.ln l!1JI ~c!
                        f>'8'<0. been cr '"~'    = rnalll> to at~pro;>i"~ programs ~ lhe. bet'.&li! of such
                        amj)!I:>)IU3.=ilir as llo!Ctf iri ~, .4(c) tictcwt.        ·
                                                                                                                                             r        '

                       )                                                                                                                                                                                                                                                                               J
                                                                                                                                        •'
                                                                                                                                                                                                                                                                                        ~··    '·


 'Q:S;·Dei>aitmont:-o( J:.a:,or.
  empi~Sta:n'deTcl.!iJI·dmBtt.\Uon
 W<~!!ir.    ··•   oarolviSIEn                                   PGtllons:tlti!'nbtrll<l!ilrooto"ilf'Ptma'tt1.1/ls eaf!6clioit:i;rWd.rmati~s$ trd!sp~ a ctmenUV :.ratld·G~9·.Ccrib'dl rniil'!lil!li                                   ~:Oelo..2QOtl
 .N!\fwl~ OF·COriTAACTOR                          OR SUBCONTAACTOR                                                           ADDRESS                                                                                                                              oMS No:. tzrs-.oms
 Jllc;tec:H !Nc.                                                                                                             ~Q1'.ftCi;IYel!iCGY GR\VE mr.roP..:~ ~02                                                                                  ~r'= 'f?1S.11'.0!m:1
                                                                                                                                                                                                                                      PR€lJecT <DF. CONTRJ>iCT NO.
 P~Y.ROL!oNO.                                                    fORWEEK!ENOINCl
                                                                                                  c;.J                                                                   '!"ROJEt;T:<'INDp~~~~·
 :.t.                               ..                                       ft~~·                                                                                 SMt30, 5.2.J~V~,!f.1. .'.. , W.S.t.                                                            .
                                          '(11                       '(2)            '(8)                      (4!.DXY JI!'IQI>Al&                                (S}               fl.}.                                                                                                     (Sl}
                                                                                                                                                                           .(6}                                                      IS.>.
                                                                                 W:O'Rl{    .
                                                                                              ~M         T      w 11J. I~                Se 5n ·                                                                              ~JE!IU®l~
                                                                     ~.!']· c~sslFiC'A"rto!li
                                                                     §g·· {~~'P(~.g T;·.        :5       f.8 t9      1.~0.   11t:       1(1?-t~·
        .Niii.E:;-ADOP.E$~ lllOMO.UAL il:ieiflF{,IN~MEIER
  ·(lf<C.,.l,A$1'-Ri!Jit'Ci~'W,.j~·~i~MBERI.
 Wn.J..W4 e.t.ES!.:lE ·xxx;.xx
                                                                 ~i
                                                                 ~·.
                                                                     tJ
                                                                                     y~~

                                                                             ~PEIMSOR.
                                                                             "Sf..i.M<'
                                                                             f36Pl~
                                                                                                 s·
                                                                                               . ,.


                                                                                                 b
                                                                                                         HOUI\SWOAAEO~O'AY

                                                                                                                                                          G
                                                                                                                                                                TOTAL.
                                                                                                                                                           . !'\OURS·
                                                                                                                                                                            l'((;r;!.ct.=' ~

                                                                                                                                                                           0.00
                                                                                                                                                                               pq.
                                                                                                                                                                                            ·GI{~


                                                                                                                                                                                                       =       -~-
                                                                                                                                                                                        . :I<ARI\IEO' 'LQSIJ~ r · TA>!>
                                                                                                                                                                                        0.:00
                                                                                                                                                                                       ..
                                                                                                                                                                                        a.oo-
                                                                                                                                                                                                                           Me<lle="
                                                                                                                                                                                                                                      ~
                                                                                                                                                                                                                                      ~~ -~ .                         ·~·
                                                                                                                                                                                                                                                                  '"D:!.ruc:ndf$


                                                                                                                                                                                                                                                                      ·<!.OG'
                                                                                                                                                                                                                                                                                   UE't~,IID
                                                                                                                                                                                                                                                                                       A:IR·weeK
                                                                                                                                                                                                                                                                                   o.oo·
                                                                                               ~ <t                                                       Q               0;00
                                                                                                                                                                                             ..
 PRAAlCISCQ.C.:AAIAS XXX..                                                                                                                                                                                                                                                         O.Oil
                                                                      0      ~HOS.DEI'lSI.o
                                                                             CK,stroVB..
                                                                                                                                                          Q:              21.76         0..00         ..                                                              .DJlll
                                                                                              -s'0.
                                                                                                                                                                          '14150·      . 0.00
                                                                             a~~                                                                          G                                                                                                       :
 Hto'NRY 0,-MAATlNEZ ·XXJ!'.-XX                                       1      SACI<HOE.pf!RRI                                 4.5 II
                                                                                                                                              -           1;5,6           zras.         ~                                                                                          7!P.62.
                                                            3
                                                                             ~.lt;.sflo~
                                                                             Ol?l:AATO,&        ~·
                                                                                                         f1     11    '11    ?·                           40              15-!iO;       620.1l0'      ..
                                                                                                                                                                                                      ·~1~-      aa:oo      t3,3$       ~.at          '3ti..6ll' ·t70.2G
 omaM.· ~Re JOO'f~-9                                                                                                                                                                                                                                                               1l:QQ
                                                                             ~~ERRJ p                                                                                     ~             ~
                                                                      3                                                                                   ll'
                                                                                                                                                                                        :                                                                              O.QO
                                                                             0~7~                                                                                                       ~
                                                                                              . s
                                                                                                                                                          0                '1.7:.50.
                                                                                ..
 Ml<ijlpfii. OTEflO .lOOi·.l0!-                                      6       m~ c~·             d                            a           9.               14              i2't..1S:     :80<.50                                                                                    ew.sz
                                                                             tllflbi:M-~ :                                                                                                                       a'j:.op   "1£.33                     ~!'-~           'S@a
                                                                                                         1Z     1t Tf                                     -~~             1~;lUl        580.00'
                                                                             .sew.~ S·                                       6;15
                                                                              .                                                                                                                   '
.(OSUE.M1CliAPARRO X:<X-X:X·                                         G       LABORERv                                        4.5         9·               1&6             2D.25·        Zl;J-                                                                                      69t:43
                                                                             to~O.~             9·                                                                                                              ¥~>.Pi)    i'l,j'g                    .g'.{;~S        1tt;9S
                                                                                              .$         11     11    1'f.   7:                           .<1.0           13.59'       ,_.
                                                                                                                                                                                       SAe>.oo
                                                                                                                                                                                                                                             .   ..
·J~E·P::M!:NDEZ :XXle~2                                              B       iRUCK~C:R                                       6          g.                1'-1            *!:25.       i!33.51l:                                                                 ..                752.97
                                                                             T~AXl.E            9                             ..                                                                                2~11!1·    11,911,                    34~             -zo.sa.
                                                                             ~E&J;-1l<AJtER   ·s·        1!!    11    11     §;~                          40              13:517       f54().00
!?INJICO.B. CHAP~O XXX-XX                                            0        B'ACXJ:IOE.'OERRl O                                                         0               21.7(5       O'.oQ                                                                                       a:l}.O
                                                                            · CK..SH01/EL                                                                                                                                                                              0.00
                                                                              0PERAtol:t       [s                                                         0               14.50·       f.O,P,D.
                                                                ..                                                                 ..                ·-
!I>IDAU:c:IO s. OSORJO'                  XXX~-:                      '2      LAB.Pl:U::"R.                                                       :        0               16.00        0.00                                                                                        ~.00
                                                                             OOMMO~            rci: '                                                                                                                                                                  O,Qq
                                                                                                                                                                          1¢.00        ~01>
                                                                                                s                                                         0




                                                                                                                   'PIIllR~ S'l.!rol:n Sta~a~

Wo~4r.lll>>ht,.onU\'<f•;•~rat.,.{;,:~~:bcoO.caon. fll~-l>t"'~~=~~dol:l~lllorlna~lh•~•~d,.;,d~""""'~{l!:lcOII~~flomocy =nctJ\O-~.;
II\O:Io""'""twuo::yolll<lrllti>OClPOhl2l?OI!cc!!jmi~nw~wrrod<A:lnq;w>bl#tlcm:..
                                                                              .mrbl.n1JoU,.Aa.~IMW""""1!11Wl>""OMsl~,!O$'-U.S..Oer-aolmonr.a!Ln6or,~S3502,20~_.,..""~vo.N,W,W.<>'I'rGJion,O.C.2D~1~




                       ·;,.1
                   \       !
                   'C...·. '
                               I;                                                                                                                                                                                                                                                             . jY!'
    Oa!e

           --
            O;} ,~ i

               \

    cJo hereby s1ae:
                             - \ e;_
                   .('Q.~'-\ \_c,IIY\\;,~';'"\-
                     (Name ol Signatory Part\')                                                      (Title)
                                                                                                                                       (ll) WHERE FRIN.GE BENEFITS .O.RE PAID IN CAS:~


                                                                                                                                                0 -     Each laborer or mcchanic listed in ~ abo~ r-aferenQld peyroll has b~an paid,
                                                                                                                                                        as indicated on the pa)'n:lll, an amount not less ihM the sum of the aj>pli<:abla
                                                                                                                                                        basic llourty wage rata plus t11a amount of t.~e required fringe t»..neftts as listad
                                                                                                                                                        in ihe contract, excapt as not::d in section ~(c) bslov1.
           (1) That I pay or sup~rvise lhe payment o: th<> ~rsons employed by
                                                                                                                                       (c) EXCEPTIONS
    ----------~--,.,<::::..;\~s~\.l.!: e~e:; .\- . .;:.---\'--='=::"'~c.=..:,..___________ on the-
                                         (Contractor or SUbcont.;-actor)                                                                        ExCE?TJOi~ (CRAFT) .                                            EXPLANATIOI~

     s\\ -\
  . ..
               'lC    S~'{\'\Q~\- .$ .).,
                      (BUilding or Wor1c)
                                                        c.'i'C!. fo •\   ; thst during the payroU period commencing on the
                                                                                       .L
(        ->,'-           ,.. \,                                               .... ,   "t"""'   ,-
\...._-
      .:>__    day of     H!: nJ"-<"'l      .~ <::>\~ , andenc!ingthe<><_'b
                                                                          _ _ dayof !'e\.•\><W''f                ~\~ ,
    all p<;rsons employed on said project have bean paid the iuU weekly wages earned, that no rebates hava
    been or will ba mada either direc'Jy o; indlTEcUy to or on behali oi said

    ________                       D_.:;\::;,..~.:..;S~..,.\!..-=.E'.:::C:,.:h.,:._~-==-=-"'.::C. ;: ·--------from ths full
                                          (Conrrnclor or Subcontractor)

    ...aetdy wages earned by any person ond that no deductions hava been made either clirectly or lndlrac!ly
    from the 'iull wa;Jes eOJmed by any person, oiher than permissible deduclions as defined in Regulations, Part
    3 (2.9 C.F.R. Sublille A), issued by the Secretary oi Labor under the Copeland Act, as amended (48 Stat. 946,
    63 Starl 10B, 72 StaL 9G7; 76 Slal357; 40 U.S. C.§ 3145), and described below:




                                                                                                                                f'.EM.>.RI:S:

f..--,    (2) That any payrolls oth<:rwise undar U1is conL<~ct required to be submitted for Ills above period ara
1..._.-·rracl and coro1pleta; Gtal lh<: wag:a rat:-s ior laborers or mechanics contained th:?reln ara not less i11an lha
    applicable wag;; rates contalnad In any wage datarmlnailon incorporated into H1a contracl; li'lal Ute
    da>siTicalions 521 forih lharein for each laborer o~ m::chanlc conform with the wOll< ha psrlormed.

        (3) That any apprantic.as empl"'rood in the abo'la P?riod are duly registsred In a bona iide
    appr;;nlice5hip program rc;gistrracl wit.'l a State apprenticgshlp ag:ancy recogn~d by the Bureau oi
    Appr.onticcshlp and Training, United S lares Dapartment of Labor, or ii no such racognioad agancy e;dsts in a
    Stata. are rcglslaroo witl1 !he Bureau or /l.pprsnUc::sship and Training, UnitEd SiatGs Department or Labor.

         (4)Thal:
               (a) W!-IERE FRii\JGE BENEFITS ARE P.~ID TO APPROV:::D PLAhiS, FUI\JOS, OR PROGR."J-AS

                    u    -   rn addition to   i.i1;,   bosic hourly YSg.:!' mtes paid to eoc:.'l laborer or m=ch~ie listed in
                             the cobove re!er.:nc:-d payroll, paymants of fringe b::nefils 35 nstad in the contract
                             ha•1e b3ei1 or "''n be made lo appropriate programs ior the benefit of such
                             smployess, .e::c~pt ~s no~ in s~clion ~(c) batow.

                                                                                                                                                                                                         ( DgTec/Star .061
                                                                                                                                                                                                         ....   __ ___ _
    u.s. )Jepartment of labor                                                                         PAYROLL
    Employment Standards Administration                 (For Con tractor's Opt ional Use; See Instructions at www.doi.gov/esa/Whdlfonns/wh347instr.htm)
    wa9eandHour D'IVISIOn
                      • ·                           p ersons are not requlred to respond to lhe colle cllon o f ·nrormatlon
                                                                                                                I           unless I"t displays a currenUy valid OMB conlrol number                                                                       Rev DEc. ~008   -
    NAME OF CONTRACTOR               OR SUBCONTRACTOR                                                             ADDRESS                                                                                                                                                             OMB No.: 12'15-<l149
    DIG TECH lNC.                                                                                                 402 TECHNOLO~.Y DR!~ tiA~~OP.T~ 7!1602                                                                                                                              E!Cpires: 12/31/2011

    PAYROLL NO.
    19
                                                                                FOR WEEK ENDING
                                                                                      2/2612012 :
                                                                                                                      y                                         !                ..
                                                                                                                                                                                ~~     I,
                                                                                                                                                                                         PROJECT AND LOCATION
                                                                                                                                                                                       : SH130; SEC. 5.2 JOB #1528
                                                                                                                                                                                            '               •           I
                                                                                                                                                                                                                                                          PROJECT OF CONTRACT NO.


                                       (1)                                         (2}                (3)                             (4) DAY AND DATE                                (5)       (6)         (7)                                                                                             (9)
                                                                                                                                                                                                                                                        . (8)
                                                                                                   WORK             ,.:M         T      w      Th       F       sa sn                                                                              DEOUCTIOI~S


                                                                                    ~~
                                                                                    co
                                                                                            ClASSIFICATION           "'
                                                                                                                    gs :ro-   .. 121 .~ ·1~ · IP ... 124 ·'· j:ZS. :t2.6.                                                                                     .....,..,
                                                                                    -')::
                                                                                            (as s e l by ?revai!lng
                                                                                                                    ~                                                                                                                                     SUPPORT~·

                                                                                 0~~
       NAME. ADDRESS & INDIVIDUAL IDENTIFYING NUMBER                                             WageUsl)                                                                                                    OEIIITAU
                                                                                                                                                                                                         GROSS
                                                                                                                                 HOURS WORKED EACH DAY                                                                 WitH·                                    sc.
     (e.g., LAST FOUR DIGITS OF SOCIAL SECURITY NUMBER)                                                                                                                          TOTAL       RATE OF AMOUtrr HEAl.iii HOLDING                                              SOCIAL                  NET WAGES PAID
                       OF WORKER                                                 gd                                                                                             ~lOURS         PAY    EARNED INSUR.     TAll                  Medicate
                                                                                                                                                                                                                                                          llalUCTIOOol
                                                                                                                                                                                                                                                                 s
                                                                                                                                                                                                                                                                                        TOTAL
                                                                                                                                                                                                                                                                          SI:CUfliTY DalUCTlOICS      FOR WEEK
    WilliAM B. LESLIE XXX-XX                                                        0       SUPERVISOR                                                                      0               0.00     0.00                                                                                          0.00
                                                                                            "SALARY"                 0
                                                                                                                                                                                                                                                                                            0.00
                                                                                            EMPLOYEE                                                                        0               0.00       0.00
                                                                                                           s
    FP.ANCISCO C. ARIAS XXX-XX                                                      0       BACI<HOE.DERRI o                                                                0               21.75      0.00                                                                                        :269.31
                                                                                            CK,SHOVEL                                                                                                                  12.03       34.00        4 .66                         13.50     64.19
                                                                                            OPERATOR                 s                         10       13                  23              14.50      333.50

    HENRY C. MARTINE'.Z XXX-XX                                                      1       BACKHOE,DERRI 0                                                                 0               23.25      0.00                                                                                        295.70
                                                                                            CK,SHOVEL                                                                                                                  12.03       12.00        4.99           17.31          14.47     130.80
                                                                                                                                               10       13                  23              15.60      356.50
                                                                                            OPERATOR                 s
    DANIEL M. CHAPARRO XXX-XX                                                       3       BACKHOE,OERRI 0                                                                 0               26.25      0.00                                                                                        0.00
                                                                                            CK.SHOVEL                                                                                                                                                                                       0.00
                                                                                            OPERATOR      s                                                                 0               17.50      0.00

    MARIO S. OTERO XXX-X                                                            6       TRUCK DRIVER                                                                    0               21.75      0.00                                                                                        303.31
                                                                                                                     0
                                                                                            TANDEM AXLE                                                                                                                12.03                    4.66                          13.50     30.19
                                                                                                                                               10       13                  23              14.50      333.50
                                                                                            SEMI-TRAILER             s
    JOSUE M. CHAPARRO XXX-XX.                                                       3       LABORER,                                                                        0               20.25      0.00                                                                                        277.61
                                                                                                                     0
                                                                                            COMMON                                                                                                                     12.03        4.00        4.33                          12.53     32.69
                                                                                                                     s                         10       '13                 23              13.50      310.50

    JOSE P. MENDEZ XXX-XX-                                                          6       TRUCK DRIVER                                                                    0               20.25      0.00                                                                                        0.00
                                                                                                                     0
                                                                                            TANDEM AXLE                                                                                                                                                                                     0.00
:                                                                                           SEMI·TRAILER             s                                                      0               13.50      0.00
     1
    S., __..:o B. CHAPARRO XXX-XX                                                   0       BACKHOE.DERRI O                                                                 0               21.75      0.00                                                                                        0.00
                                                                                            CK,SHOVEL                                                                                                                                                                                       0.00
                                                                                            OPERATOR                 s                                                      0               14.50      0.00

    INDALECIO S. OSORIO XXX-XX-                                                     2       LABORER,                                                                        0               15.00      0.00                                                                                        0.00
                                                                                                                     0
                                                                                            COMMON                                                                                                                                                                                          0.00
                                                                                                                     s                                                      0               10.00      0.00


    Whl1a C1lmfliOiion of Form WH-3<7 b opGonoJ.lr is mooda1cxy lOt covesed cotllr.><lo<s ond subc<:lnlr.lclo<s perfonnlng wot1t on Fedenlly fi.o>oncod or as:;i:;lod con61ruc!lon contrac!S rc respond 1o the lnl011!\31ion coiJocllon oontalnod In 29 C.F.R. §§ S.3, S.S(o). The Co~elond Ad (40 U.S.C. § 3145)
    aonl~:>clors ond subconi<3Ciors perfonning \1/0rk 011 Foder.!Jiy Gnanccd or assiSied conslruclion eonlracts lo "furnish ..eeldy a $lalemeni..Wt res,c:IIC lhe l"i'90S paid e:!Cit l!fllplo)oee during !lt6 ptOCeding weal<.- U.S. Oepatlrnenl oll.llbor (DOL) ragui:Jtlons at29 C.F.R.li 5.5{a)(3)(i) requitu
    ccrtlraclors to submilwoekly a copy of aDpayrOlls to the Federal agency conllacllng lor or ranancinglho conalrucllon projec~ acccmponled by a signed •storomenl D( Complloncn• lndlcafing thallhe payrols aro correet and complete and !hoi each labcRr20 C.F.R. § SS(a)(3)(i) roquke arnltaC1otS
    Jos.bntl! w•eJ:Iy • copy ol :all P•yrons to lite Fcdero! agency conltaciJnglor or fnanc!ng lito co""lruclion projocl. o~:<Cmp:oroled by a signed -Slil!emenl oiComplion:e•lndlcollng lltoLrite Dlll""l$ aro corrocland complete and U1aleach laborer or Mechanic h;;o boen pold nollosslh;an 111C proper
    Oavis.Socon P'""DIIing wogo roro lor lhe ''""'' porfonMd. DOL and federal con!fl>d'"'g ogencios recalvf1g 1his iniortnliGon rovll~;> lhe inlormallon 10 determlnelhalemployees h""" reccll..,d logoly required~· and fringe bene rots.


                                                                                                                                            Pubfic Burden Statement
    We eslirllale tt\31 is \OIIItal<e an a•Jotnge of5S minut"'ro complete thio CQilaCUon, lncJudiltg lime lor rovlel:llno lns!IUCiions, ••arching eldoling dolO sources. galherlno and maintaining the dolo ncedod, and compiellng • nO re...,wlng 1!\e cclccf""' o( lnlormolion. lil'DU ha1~ ony ccmnl<nts «oonling

    Utcoe c:omoloo "'ony or~•r •"P•ol ol "''• co!oo:Gon. including auooCJ:llcns for reducing !his burden. send litem lo Ul& Admlnislrnlor. Wage and HourOlyi:;ion, I!SA. U.S. Oepor1monl or Labor, Room 53S02. 200 ConoO!ullonAvencJo. H.VI. WadtingLGn. O.C. 20210
                                                                                                                                                                                                                                                          r           .                 .
                                                                                                                                                                                                                                                          !     DgTec/Star 062
                                                                                                                   Page 1 of2


           Subj:    Rt:: Dig-Tach Payments
           Date:   3/16/2012 2:23:17 P.M. Central Daylight Time
           From:   l<lehnaum@cjxhc.com
           To:     Starooer@a,,J.com                            .
           CC:     mjke@digtech-llnetech cvm, woodp@otxhc.com,·aarv.dotv@zachrvcorp.cOIJ) ·
           16March2012                                    · ·

           Lana,

           Thank you for your prompt response.

           Sincerely,

           Mike Klehnau


           Central Texas Highway Constructors LLC
           1914 Borchert Drive
           Lockhart, Texas 78644

           512.402.7510

           CONFIDENTIAUTY NOTICE: This communicatlon and any accompanying document(s) are confidential and
           privileged. They are intended for the sole use of the addressee. If you receive this transmission in error, you are
           advised that any disclosure, copying, distribution, or !he taking of any action in raliance upon the communication
···-....   is strictly prohibited. Mt'lreover, any such Inadvertent disclosure shall not compromise or waive the attorney·client
           privilege as to this communlcation or otherwise. If you have recelv.ed this oommunlcaHon in error, please contact
           me at my Interne! address ~;md destroy all copies of !he original message.




           From: S\aroper@aol.com [mallto:Starooer@aoi.GQ!I!]
           Sent: Friday, March 16, 2012 2:20 PM
           To: kiehnautn@cbdlc.com
           Subjed: Re: Dig-Tech Payments

           Mike,

           The invoices are set up for payment on Tuesday, n~xt week:

           Sincerely,
           Lana Lewis
           Star Operations, Inc.


           In a message dated 311612012 1:52:48 P.M. Central Daylightl1me, ldahnaum@otxhc:com wntes:

             16 March 2012

             Lana,

             CTxHC received today Ule attached letter from Dig-Tech. Please review it and let us know as soon as
             possible Star Operations' payment slatus to Dig-Tech.                                              aiJB&IB!Biilliilfll
             Kind regards,                                                                                             PLAINTIFF
                                                                                                                        EXRIB11'
             Mike Kiehnau                                                                                                  _9_l_
                                                                                                                        f"A 1'2-0-:n7

                                                                                                                                   Star00254
                                            Tuesday, December II, 2012 AOL: Staroper




                                     Appendix Item 20
                                 ()                                           (.   \
                                                                              \.._.)


Mike Furry
From:
Sont:
                            Mike Klehnau [kiehnaum@clxho.com]
                            Friday, March 16, 2012 2:23PM
                                                                                                                  -
To:                         Staroper@aol.com
Co:                         mike@digtech-llnetech.com; Phil Wood; Gary Doty
Subject:                    RE: Dig-Tach Payments


16 March 2012

l ana,

Thank you for your prompt response.

Sincerely,

Mike Kfehnau

Central Texas Highway Constructors l lC
1914 Borchert Drive
lockhart, Texas 78644

512.462.7510

CONFIDENTIALITY NOTICE: This communication and any accompanying documenl(s) are confidential and plivlleged.
They are Intended for the sole use of the addressee. If you receiye this transmission In error, you are advised that any
disclosure, copying, distribution, or the taking of any action In reliance upon the communication Is strictly prohibited.
Moreover, any such Inadvertent disclosure shall not compromise or waive the attorney-client privilege as to this
communication or otherwise. If you have received this communication In error, please contact me at my Internet address
and destroy all copies of the original message.




From: Staroper@aol.com [maflto:StaroP.er@aol.com]
Sent: Friday, March 16, 2012 2:20 PM
To: kiehnaum@ctxhc.com
Subject: Re: Dig-Tech Payments

Mike,

The Invoices are set up for payment on Tuesday, next week.

Sincerely,
Lana Lewis
Star Operations, Inc.


In a message dated 3116/201?. 1:57.:48 P.M. Central Daylfght Time, klehneum@ctxhc.com writes:
 16 March 2012

 Lana,

 CTxHC received today the attad1ed letter from Dig-Tech. Please review It and let us know as soon as possible
 Star OperaUons' payment status to Dig-Tech.

 Kind regards,                                                                                   ,
                                                                                                 ' DgTec/Star 024           .---......
                                     [)
                                     '·· ,.
    Mike Kiehnau

    Central Texas Highway Constructors LLC
    1914 Borchert Drive
    Lockhart, Texas 78644

    512.462.7510

    CONFIDENTIALITY NOTICE: This communication and any accompanying document(s) are confidential and
    privileged. TI1ey are Intended for the sole use of the addressee. If you receive this transmission In error, you are
    advised that any disclosure, copying, distribution, or the taking of any action In reliance upon the communication
    Is strictly prohibited. Moreover, any such Inadvertent disclosure shall not compromise or waive the attorney-
    client privilege as to this communication or otherwise. If you have received this communication in error, please
    contact me at my internet address and destroy all copies of the original message.




                                                                                                         DgTec/Star 025
                                                                 2



\
                                                                                               (·   .\




                 W. STEPHEN RODGERS
                  Board Certified Civil Trial Law                                                           Email: rodgers@rodgersmfller.com
                  Texas Board oflegal Specialization                                                        Website: Wll'l\',rqclgersmiller .com
                 JON E. MILLER
                  Board Cert!6cd Civil Trial J..nw
                  Texas Board of Legal Specialization                                                                             OfCoUll§d
                 MAlliE PORTALES RODRIGUEZ                                                                                    JAMES B. BOND

                                                                       May 1, 2012

                          Great American Insurance Company                       CRRR # 7010 3090 00013525 5382
                          of New York
                          P.O. Box 2575
                          Cincinnati OH 45201

                          Attention: Jacqueline Kirk

                          Re:      Nonpayment of Invoices from Dig Tech, Inc. on SH130 Segments 5 and 6 Project

    ··----·               Dear Ms. Kirk:

                          Your name appears as attorneyMln~fact on Agreement #CSIB140 "SH130 Segments 5 and 6-
                          Intelligent Transportation and Toll Collectton Systems Bond No. CA3059458." Please be advised
                          that this law firm represents Dig Tech, Inc. in their claim for unpaid amounts due to thelr labor and
                          materials provided to your principal, Star Operations, Inc. on the above referenced project.

                          The further purpose of this letter is to advise you that no payments have been made. at all to our
                          client and suit will be filed on the above bond on the 91 51 day after April 4, 2012, the last day on
                          which Dig Tech's work or labor was done or perfomted, if all invoices have not been paid in full by
                          that time. All Invoices and claims for payment have been prevlously forwarded to Star Operations,
                          Inc. at P.O. Box 4100, Corpus Christi Texas 78469. For your reference the invoices and
                          descriptions of work are reproduced and enclosed with this letter.

                          Should you have any questions about this matter, please do not hesitate to contact me directly.



                         (TJj)lf})"
                         Wf/;;;                                                                                                    PLAINTIFF
                                                                                                                                    EXIDBJT
                          WSR/jp                                                                                                       183
                                                                                                                                  CA l~~.Q-337 . :
f

     "r.. . ••




                          4444C.\RTERCREilKPARKWAY, SurrE2.:>8, BRYAN, TDXAS 7'/802                      Tl:iLEPHONB: {979) 260-9911
                                                                                                            FAa>lM!LE:(979) 846-7083



                                                        Appendix Item 21
     :MAY 1, 2012
     PAGE2




     cc:
                                                                         CRRR #7010 3090 0001 3525 5399
     Star Operations, Inc.
     P.O. Box 4100
     Corpus Christi TX 78469
                                                                         CRRR #7010 3090 0001 3525 5405
     Central Texas Highwa~ Constructors, LLC
     Attention: Mike Kiehnau
     1914 Borchert Drive
     Lockhart, TX 78644




                            .......- 1- - -- .. .. .. - - - --                 · ·-·· ·----~- "=~~-··-·-~--




                                                                                     ·-.•




                             -...J    2. Artlcla Number
                  2.Aructi 2 · '1                                          7 01 0 3 0 9 D 0 0 01 3 52 5 53 8 2
                      PS~:~ :s~ ~~_Form 38~ ~,-~~~~roY20~0~4==.=.c.i:..~Oom~es~tl~o~Rs~tu'=rn~R~_ec~e~~~~~-:;:;-;~ .;;!,~~~'*""""'--102119
                                                                                                                                     --s.o2.-M-.1540~
                                         (rrunsfer fiom seiVICfl fabaO
                  .




·'
                                                                                                         TE!-EPHONL!! (979) 260-9911
       4444 CARTER CREEK PARKWAY, SUITE 208, BRYAN, TEXAS 77802                                            FACSIMJLE:(979) 846-7083
                                                                                              -··
                                               . -- l                                         (     .l




                                        GREAT AMERICAN INSUBANCE COMPANY OF NEW YORK
                                                               Now York
         Administrative Office: 560 WALNUT STAE~T • CINOINNATI, OHIO 45202 • 513-SBD-5000 • FAX 613-723·2740
The number or persons nuthori7JJd by
thle power of attorney Is not more thnn THREE                                                       No. 014670
                                                        POW!:R OF ATTORNEY
       I<NOW ALL MElN E3Y THESE PRESeNTS: That the GREAT AMERICAN INSURANCE COMPANY OF NEW YOf.U<, a corporation
organized nnd exls\lng under and by vlrtuFI of the laws of the State of New York, doos hereby nomlnato, oonstllute and appoint the
pt~rson or porsons namod below Us ln1o nnd lawrul nttornoy-ln-ract, for It and In Its nome, pluoo nnd stand to oxocuto on behalf of
the said Company, as auroty, any and otl hondu, underh11dnos and oontraola of suretynhlp, or other wfllten obllgatlomlin the nature
theroof; provldocl thnt tho liability of thn.sald Company on nny such bond, undertaking or contrnct of suretyship a~oculod under this
authority shall not oxcooc.J the llmlllltatocJ below.
                     Namo                                               Address                                  Limit of Power
 LARRY H. Sf:NI(EL                                               ALL OF                                              · ALL
 PAMELA PROKOP                                                   HOUSTON, TEXAS                                        $76,000,000
 JACQlJP.t.INE KIA!<


       This Power of Attorney revokes all previous powers lnsued on behalf of the atlornoy(s)·in·fact named above.
       IN WITNESS WHEREOF. the GREAT AMERICAN INSURANCE COMPANY OF NEW YORK has caused those presents to be signed
nnd attested by lls appropriate officers and Its corporate seal herounto arttxed thfa t71ll day ot     JANUARY     ~011
    · Attost                                                           GREAT AMERICAN INSURANCE COMPANY OF NEW YORK




                       :hq.•rwrlSl'rfi'IHI'\




STATE OF OHIO, COUNTY OF HAMILTON·ss:
         On this 17TH dny of            JAN\JARY       ,   2011    , before tne personaliy appe«rod DAVID C. KITCHIN, to me known,
baing duly sworn, deposes and says that he resides In Cincinnati, Ohio, that he Is a Divisional Senior Vloe Preslthmt of the Bond
Division of Great American Insurance Company of New York, the Company described In and which executed lht~ above Instrument;
1hat ho knows the seal; that It Wa!! so affixed by authority of his office under the By-Laws of said Compooy, and that he signed
his name thereto by like authority.



 .
·..~
   ~:
       ''"'~,
       .~~       ...                     KAABJ L GROSHEIM
                                 NOTARY PUBLIC STAT£ Or OHIO
                                MY COMMISSION tXPIRES 02-20·11
                                                                                  .. . .·
                                                                                      ; .\                     '-''"-·   ' .:,)· ·.v/Ll...J
  ~.!·),'
       This Power ol Attorney Is granted by !iUthorlty of 1he folloWing resolutions adopted fly tllo Board                     of Directors of Great
American lnsuranc;e Cornpany of New York by unRnlmous written consent dated May 14, 2009,
          RESOLVED: That tile Divisional President, the several Divisional Senior Vice Presidents, D/11/slonal Vice PresldatJfs and Divisional
A,;sislunt VIce Presldanls, or any one of /llem, be and llamby /s authorized, from time to time, to appoint one or more 1\ttorneys·ln·Fac:t
to BXBCII!Q on behalf of U1e Company, as sural>~ any and all bonds, underta/(fngs and contmcts of surelysfllp, or other wtlllen obligations
In the nnt!Jre tllareot,·to prescribe tllfllr respective dulles nnd ths respoctlvellmlls of their authority; and to revoke any such appolntmonr
at any time.                                                                        .                     _
         At:SO!.VE:O FURTI·IGR: l"hat 1/Je Company sua/and 1/le sfgnaturo of any of the aforosald ofllcers and any Secretary or Ass/slenl
Secreta1y of lho Company may be offlxod by facsimile to any power of atrornoy or certlfloRto of aftharg/ven lor the exooul/on of any bond,
undartaklng, contract of suratys/1/p, or oi/Jer written obllgalfon In tl1a natura t11areof, suoh signature cmd stlaf wllan so used baing hereby
lldopl8d by the Company as tile original signature of suclt officer and the original sool ol tile Cornpany, lobe valid and binding upon tile
comptm)' wllll the same force and effect as IIJough manually affixed.
                                                       CERTIFICATION
         I, STEPHEN C. BERAHA, ABslstant Secretary or Great American Insurance Compony of New York, do horal>y oertlfy that
the foragoh'g Power ol Allorno'y and the Resolutions of 1ho Boord of Directors of May 14, 2009 have not been ravokoclrmd are
now In full foroe ond effect.
         Signed ancl sealed this 15thday or    June                             , 2011


 J .
    ..·'··.....
        ,   .,   •


·.\_l-_.·;; r
0,1 ID5F [l/2010)
                                                                                  (




                                   Great American lnsurc'Ulce Compiltl)' of New York
                                   Great American AIJlance ln.surftru::e Company
                                   Great American Insurance CortlpiWy



IMPORTANT NO'l'ICE:
Th obtnhl lnfoLmndon or tna\:e 11 c:ompWnt:

You rnoy contoot th~ 'Chxlll.Depllltillnut ofinsnrnnco lo obtnln i11formnrioo on compunies,
coverugas, rigbu or complaints nt:

                                        1-800-152-3439

Ydu mtty IVritb the TI!Xf.S .Dcparlluenl of lnrorancc nt:

                                        P.O. Box 149104
                                        Au~tiu, TX 78714~9104
                                        F~lll-512-475·1771

YcnJr notiee of chum ngo.lnst the nttachetl bond may be givou to lhc sm-cty compAny tlu1.t last111d ·
tho !loud by ~r:.odlng It Ul the foUowlorr oddru':

Mnill.ng A\ldreu:                       GrnntAmodcun lou1.rnnca Compnny Chlm
                                        P.O. Box 2575
                                        Clnchmntl, Ohio 45201

                                        Orent Amnrlcan Iiuurance Corupany CI.AJm
                                        .580WeloutStre~t                      .
                                        71hPlaor
                                        Cincl.nWiti, Ohlo 45201

Yon m~Y tJso contact tho OCtlllt Alnencll\ lru;umoce Compnny Clnlm offic~ by telephone ot:

Tele~hone Numher;                       1-51.3-369·.'!069

l'R.EMIDM Oll CUlM DlSPOTES:
U you hnvc l\ dUpUte COI.lc:erning a prcri:Uum, }10U &boul!\ contn~t the nseot :fint.Jf you !JII.VO U
d~putc conccrnlnn n ollilin, you :rhould cornnot the compno.y fur.t. H tbc: dlcpuru 1~ nol rnsolved,
JDIIlD6.Y contscl tJm'Ib.xll.S Dcpo.rtment ofln~ce •

.ATrACIImiS NOTICE 10 YOtm BOND:

ibJs no!lee ia !or lufonnndou onl)' rwd doer. not become n ptlrl or condlpoo of the ottn.;bcd
d!lcurnent.
/
\




                            Il\1PORTANT NOTICE

                  TO OBTAIN INFOHM.A.'l"'ION OR MAKE A COMJ.>LAJNT:
             YOU MAY CON1'ACT THE TEXAS DE.PARTIY.I:ENT OF INSURANCE
               TO OBTAJNJNFORMATION ON COIY.LPANIES, COVERAGES,
                          lUGRTS OR COM:PLAJNTS AT~


                                  1~800-252-3439

              YOU MAY wruTE TEE TEXAS DEPARTMENT OF JNSlJRANCE:


                              P. 0. BOX 149104
                         A1JSTIN, TEXAS 78714~9104
                            FAX#(51Z) 475-1771


                       PREMf01V.C OR CLAJM DISPUTES:
             SHOULD YOUHAVE A DISI'U'IE CONCERNJNG YOUR PREMIUM
              OR ABOUT A CL.AIM, YOU SHOULD CONTACT TIIE A.GENT OR
            COlYfPi}.:N"Y FIRST. 1F T'BE DISPUTE IS NOT RESOLVED, YOU MAY
                . CONTACT THE TEXAS DEPARTIV.OINT OF INSURANCE.



                 t-iTTACH T'BIS NOTICE TO YOUR I~OLICY

            TBIS NOTICE IS FORINFORMA110N ON~YAND DOES NOT BECOME
                 APART OR CONDT110N OF THE ATTACHED DOCUMENT.




    .. ..
      -~
                                            ,    \

                                            ·--1
                                                                                                                            Agreement #CSUB140
                                                                                                                           SH130 Segments 5 end 6
                                                                                              Intelligent Transportation and Toll Collection Systems
                                                                                                          Bond No. CA306945B
                                                                          ATTAGH.M.e.W.l

                                             SUBCONTRAC'f LABOR AND MATERIAL PAYMENT BONO
       KNOW ALL MEN BY Tlii:SE PRESENTS~ Thot Sl« Oporollau,rna.                                   aSi principal, haretnaller callea Principal, and
        Gr«~1Mlltlconln~"4n~oampon~•IN~,Y~tiNoVJYoa            corporation, as suroty, haiillnaflsf cntfad Surely, are held end firmly bound unto
       GENT~AL TEXAS HIGHWAY CONSll'\.W::;;]p ~~ h~Ccas Obfioom, hurah,ertar caJiod Obllgao, for thCJ use nod benefit of Claimants os
       herein below defined In lha amount of          ~11\~ou~OO't
                                                       J:f.                   Ooltars {$3.100.IXXl.oo , ror the payrr,ant whereof P.rlno!pal and Surety
       bind themselves, their hetts, oxocutors, J8mfrus?rators, sur.celfsors and assigns, oln y und saverally, firmly by these prosanls.
       WHEREAS, Principal has by \Willen agreement dated 1:_11'/ 18, ~01 1                         entered Into a subcontract •hffh Obligee for
       s1113:1 §ownn\0 ~ ""' o"In aocorrlance with drawings and spaclficattiin~; propar<td by                                       whloh nubcontract Is by
       rofurence made a port hereof, and Is hereafter referrod to as the Subconlracl. ·•tnto~g!nt Tro.1tpDl111Ut~1 and Tot ooJocUm6~tamt
       NOW, 'rHEREFORE, THE CONDITION OF THIS 0!3LIGATION Ia such that If the Principal shall prompUy make payment for all
       Claimants as hereinafter defined, for all labor and tn!lterlnl uued or reasonably required for usa In the patformnnoo. of the Subcontract,
       then this obligation shall be void; otherwise, It shall remain In lull force and effect, subject, however, to the following CDOdlllonn:
       1.     A Claimant Is defined os one who (~tmlsho.l.llabor, materlnl, or both, used or reasonably required for use In the performance of the
              SubeontrnrJ, lobar and malarial belno construed to lnoluda lhnt part of wotar, gaa, powur, light, heat, all, gasoline, telephone serv!c'a
              or rental of aqulpment dimotly applicable to lha SubcontracL
       2.     PrlnolpAl ~nd Surely heroby Iolnlly and aevorally _     agree wiU1 the Obllgeo that ove!Y .Claimant as herain defined, who. has not been
              paid In fUll bofora the explralfon o A pll!lod -of nlnely (00) days after the date on whloh the last of such Claimant's work or labor was
              dona or parlormad, or matGrial& wero fuml$had by such Claimant, may sua on this bond for the use or guoh Clelmarlt, prosecute the
              sull to final judgment of ouch sum or sums art mny br;r)usU}• due Claimant, and hove axocutlon U1areon. The Obflgee shall not bn
              liabln for lho P.liymont of any costs or expaMas t.>f DtiY auoh &\Jit.
       3.     1-lo suit or Dctlon shall be communced hmroundar by any Clefroent (a) nfler lho explraUon of 26 mMthe following lha date on which
              Ptinclpnl con~ad wotl; on e11ld S~rbcontract, It being und~rslootl. however, that If any llmllatlon embodied In thls bond Is prohibited by
              ~;~ny law contrulllno the oom:lructlon hereof, such llmllatlon shall.be deemod to be nmendecl so us to bO egualto tho IYilnlmum period
              of llmllallon permitted by such law, {b) olhE!r than In a state COI!rt of compe\Snl jurtsdlcUon In and for th0 county or othar political
              subdivision of lha ntate In which the pro)act, or l'lny part thc;Jreof, Is situated, or In tbe Unltad 6tataa Dlallir.t Court fllr th1:1 dlatrlot In
              which tho proJoct, or any part thereof, Is lllluntad, and. not ateewhare.        .
       4.     The amount of thl~> bond shall ba reduced by nnd to lhe extent o1 .any peymanl or payments made I" good faith hacounder.
       S.     The amount of this bond shall be lncrear.ed by the ampunt of any chango ordort~ Issued 1o \he Subeoniraol betwoen Prlnclpal ahd
              Obllooe, nollco to surety or 1110 lasuanoa of ouch chDnge ordors baing ht!roby willvocl,
        6.    At'iY alterntlona, addltlontl or chonges which may bG mud a In 11\a term a of lha Subcontraot or In the work to be patfarmed under It or
              tho glving by the OblfgGo of an~r conoont to at~slgn ur aublellha worl< or MY part lhareof, or tho ohllng 01 ony oxtenolon of time for
              I he porformenca of the Subcontract o; any !orb011ranoo on the pnrt of either the Obligea or the Principal to the other, llhBII not In <my
              way raloaso thG Prlnclpel ami lho Surety, or ellhor of them, their respective heirs, executors, ·odmlnlstmtors, successors or assigns
              from tholr llol)lllly horoundor, n!ll!ce to ltle Surety of any such alteration, nhongo, eddillnn,.consanl, BXtanslon or forbeanmce beln!j.
              hereb~• walv!!cl,

        Slgnl!d and sa Bled this~,- day of           Jum             •   20.~.




                                                                                                                               (sool)




,-..
             ----~P~e~ge~6~4~o~
                              f .~
                                I~~~~P~ao~e~3--~-------------~----------------·--------------·----------~---~------
