Document:

Exhibit
10.1 

  

JUDGMENT
SETTLEMENT AGREEMENT

 

This
Judgment Settlement Agreement (this “Agreement”) is entered into as of December 10, 2018 by and between John
M. Fife, an individual (“Lender”), and MPhase Technologies, Inc., a New Jersey corporation (“Borrower”).

 

A. Borrower
previously sold and issued to St. George Investments LLC, a Utah limited liability company (formerly known as St George Investments
LLC, an Illinois limited liability company) (“SGI”) that certain Convertible Note dated September 13, 2011
in the original principal amount of $357,500.00 (subject to an increase to up to $557,500 upon the occurrence of certain events)
(the “Note”) pursuant to that certain Securities Purchase Agreement dated September 13, 2011 by and between
SGI and Borrower (the “Purchase Agreement,” and together with the Note and all other documents entered into
in conjunction therewith, the “Transaction Documents”).

 

B. Effective
as of October 17, 2011, SGI assigned the Note and its rights under all other Transaction Documents to Lender pursuant to a certain
Assignment of Convertible Note (the “Assignment”).

 

C. Following
the Assignment, Lender and Borrower entered into a certain Standstill and Restructuring Agreement (the “Standstill Agreement”)
pursuant to which Lender agreed to not convert a certain portion of the outstanding balance of the Note into share’s
of Borrower’s Common Stock in exchange for certain payments from Borrower.

 

D. Borrower
did not make such payments and Lender ultimately filed a lawsuit against Borrower in the Eastern Division of the Northern District
of Illinois in the United States District Court, Case No. 12-cv-9647 (the “Lawsuit”).

 

E. On
December 15, 2014, Lender was granted summary judgment in the Lawsuit and on January 28, 2015 a judgment was entered against Borrower
(the “Judgment”).

 

F.  Lender
agreed to refrain and temporarily forbear from exercising and enforcing certain remedies against Borrower with respect to the
Judgment pursuant to the terms and conditions of a certain Forbearance Agreement dated February 9, 2015 entered into between Lender
and Borrower (as amended, the “Forbearance Agreement”).

 

G. Borrower
failed to comply with the terms of the Forbearance Agreement and, as a result thereof, the Forbearance Agreement was terminated.

 

H. Subsequently,
on August 18, 2017, Borrower and Lender agreed to settle the Judgment pursuant to a certain Judgment Settlement Agreement entered
into between Borrower and Lender (as amended, the “Prior Settlement Agreement”).

 

I. Borrower
also failed to comply with the terms of the Prior Settlement Agreement and, as a result thereof, the Prior Settlement Agreement
was terminated and, therefore, Lender has the right to seek all recourse available to it under the terms of the Judgment and applicable
law.

 

     

     

    

 

J. Nevertheless,
Lender has agreed, subject to the terms, conditions and understandings expressed in this Agreement, to refrain and forbear temporarily
from exercising and enforcing remedies against Borrower with respect to the Judgment as provided in this Agreement and Borrower
and Lender desire to settle the Judgment on the terms and conditions set forth herein.

 

NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

 

1. Recitals.
Each of the parties hereto acknowledges and agrees that the recitals set forth above in this Agreement are true and accurate,
are contractual in nature, and are hereby incorporated into and made a part of this Agreement.

 

2. Forbearance.
Subject to the terms, conditions and understandings contained in this Agreement, Lender hereby agrees to refrain and forbear from
exercising and enforcing its remedies pursuant to the Judgment or under applicable laws related thereto (the “Forbearance”)
for the period beginning on the date hereof and ending on the the earlier of (a) any breach by Borrower of its obligations
set forth in this Agreement, and (b) the date on which Borrower has received the full Settlement Amount (as defined below).

 

3. Settlement
Payments. Borrower and Lender agree that Borrower may satisfy the Judgment in full by making cash payments (the aggregate
of the cash payments payable to Lender under this Section 3 that are necessary to satisfy the Judgment, the “Settlement
Amount”) to Lender in an amount equal to (a) $15,000.00, which amount is payable upon execution of this Agreement (and
which Lender hereby acknowledges having received), plus (b) either (i) $265,000.00, provided such amount is received by Lender
on or before January 15, 2019, (ii) $280,000.00, provided such amount is received by Lender on or before February 15, 2019, or
(iii) $375,000.00, which amount, if Borrower elects this option, shall be payable as follows: (1) Borrower shall make a payment
to Lender in the amount of $15,000.00 on or before January 15, 2019, and (2) Borrower shall continue making payments of $15,000.00
each month (each, an “Installment Payment”), with the first such Installment Payment being due and payable
on or before February 15, 2019 and with each additional Installment Payment being due and payable to Lender on or before the same
day of each month thereafter until January 15, 2020, when Borrower shall pay to Lender the entire unpaid portion of the Settlement
Amount (which would be equal to $195,000.00 if Borrower elects this option and pays each required Installment Payment prior to
its due date). Each payment made pursuant to this Section 3 shall be made by Borrower to Lender via wire transfer of immediately
available funds.

 

4.  Payment
in Full. Upon satisfaction of all of Borrower’s obligations under this Agreement, including without limitation payment
of the full Settlement Amount, Borrower shall be deemed to have paid the entire Judgment Amount in full, Borrower shall have no
further obligations under the Judgment, the Judgment shall be deemed to be satisfied, and Lender will file a satisfaction of judgment
with the court that issued the Judgment.

 

5.  Failure
to Comply. Borrower understands that the Forbearance, Lender’s agreement to settle the Judgment for the Settlement Amount,
and all other obligations, restrictions, and limitations of or on Lender hereunder shall terminate immediately upon the occurrence
of any breach of this Agreement (including, without limitation, Borrower’s obligation to pay the Settlement Amount as and
when required hereunder). In any such case, Lender may seek all recourse available to it under the terms of the Judgment, this
Agreement, or applicable law following any breach, including without limitation enforcing the Judgment for the full amount awarded
pursuant thereto (less the sum of any payments made to Lender hereunder or under the Prior Settlement Agreement, which shall be
credited against the amount of the Judgment in such event).

 

     2

     

    

 

6.  Judgment.
Borrower represents, warrants and acknowledges that it was properly served the complaint and all other applicable documents related
to the Lawsuit and that the Judgment was properly entered. Borrower further agrees that it will not challenge the Judgment or
otherwise seek to have the Judgment set aside. In furtherance of the foregoing, Borrower acknowledges that the representations
and warranties in the prior sentence are a material inducement to Lender to enter into this Agreement and that but for such representations
and warranties from Borrower, Lender would not have entered into this Agreement or agreed to settle the Judgment for the Settlement
Amount.

 

7.  Representations,
Warranties and Agreements. In order to induce Lender to enter into this Agreement, Borrower, for itself, and for its affiliates,
successors and assigns, hereby acknowledges, represents, warrants and agrees as follows:

 

(a) 
Borrower has full power and authority to enter into this Agreement and to incur and perform all obligations and covenants contained
herein, all of which have been duly authorized by all proper and necessary action. No consent or approval of Borrower, and no
consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity
of this Agreement or the performance of any of the obligations of Borrower hereunder.

 

(b) 
All understandings, representations, warranties and recitals contained or expressed in this Agreement are true, accurate, complete,
and correct in all respects; and no such understanding, representation, warranty, or recital fails or omits to state or otherwise
disclose any material fact or information necessary to prevent such understanding, representation, warranty, or recital from being
misleading. Borrower acknowledges and agrees that Lender has been induced in part to enter into this Agreement based upon Lender’s
justifiable reliance on the truth, accuracy, and completeness of all understandings, representations, warranties, and recitals
contained in this Agreement. There is no fact known to Borrower or which should be known to Borrower which Borrower has not disclosed
to Lender on or prior to the date hereof which would or could materially and adversely affect the understandings of Lender expressed
in this Agreement or any representation, warranty, or recital contained in this Agreement.

 

(c) 
Except as expressly set forth in this Agreement, Borrower acknowledges and agrees that neither the execution and delivery of this
Agreement nor any of the terms, provisions, covenants, or agreements contained in this Agreement shall in any manner release,
impair, lessen, modify, waive, or otherwise affect the liability and obligations of Borrower under the terms of the Judgment or
applicable law related thereto.

 

(d) 
Borrower has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or
causes of action of any kind or nature whatsoever against Lender, directly or indirectly, arising out of, based upon, or in any
manner connected with, the transactions contemplated hereby, whether known or unknown, which occurred, existed, was taken, permitted,
or begun prior to the execution of this Agreement. To the extent any such defenses, affirmative or otherwise, rights of setoff,
rights of recoupment, claims, counterclaims, actions or causes of action exist or existed, such defenses, rights, claims, counterclaims,
actions and causes of action are hereby waived, discharged and released. Borrower hereby acknowledges and agrees that the execution
of this Agreement by Lender shall not constitute an acknowledgment of or admission by Lender of the existence of any claims or
of liability for any matter or precedent upon which any claim or liability may be asserted.

 

     3

     

    

 

(e) 
Borrower hereby acknowledges that it has freely and voluntarily entered into this Agreement after an adequate opportunity and
sufficient period of time to review, analyze, and discuss (i) all terms and conditions of this Agreement, (ii) any and all other
documents executed and delivered in connection with the transactions contemplated by this Agreement, and (iii) all factual and
legal matters relevant to this Agreement and/or any and all such other documents, with counsel freely and independently selected
by Borrower (or had the opportunity to be represented by counsel). Borrower further acknowledges and agrees that it has actively
and with full understanding participated in the negotiation of this Agreement and all other documents executed and delivered in
connection with this Agreement after consultation and review with its counsel (or had the opportunity to be represented by counsel),
that all of the terms and conditions of this Agreement and the other documents executed and delivered in connection with this
Agreement have been negotiated at arm’s-length, and that this Agreement and all such other documents have been negotiated,
prepared, and executed without fraud, duress, undue influence, or coercion of any kind or nature whatsoever having been exerted
by or imposed upon any party by any other party. No provision of this Agreement or such other documents shall be construed against
or interpreted to the disadvantage of any party by any court or other governmental or judicial authority by reason of such party
having or being deemed to have structured, dictated, or drafted such provision.

 

(f) There
are no proceedings or investigations pending or threatened before any court or arbitrator or before or by, any governmental, administrative,
or judicial authority or agency, or arbitrator, against Borrower.

 

(g) There
is no statute, regulation, rule, order or judgment and no provision of any mortgage, indenture, contract or other agreement binding
on Borrower, which would prohibit or cause a default under or in any way prevent the execution, delivery, performance, compliance
or observance of any of the terms and conditions of this Agreement and/or any of the other documents executed and delivered in
connection with this Agreement.

 

(h) Borrower
is solvent as of the date of this Agreement, and none of the terms or provisions of this Agreement shall have the effect of rendering
Borrower insolvent. The terms and provisions of this Agreement and all other instruments and agreements entered into in connection
herewith are being given for full and fair consideration and exchange of value.

 

8. Governing
Law; Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah without regard
to the principles of conflict of laws. Each party consents to and expressly agrees that the exclusive venue for arbitration of
any dispute arising out of or relating to this Agreement or the relationship of the parties or their affiliates shall be in Salt
Lake County, Utah. Each party hereto submits to the exclusive jurisdiction of any state or federal court sitting in Salt Lake
County, Utah in any proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the proceeding
may only be heard and determined in any such court and hereby expressly submits to the exclusive personal jurisdiction and venue
of such court for the purposes hereof and expressly waives any claim of improper venue and any claim that such courts are an inconvenient
forum. Each party hereto hereby irrevocably consents to the service of process of any of the aforementioned courts in any such
proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its address as set forth in the
Purchase Agreement, such service to become effective ten (10) days after such mailing. BORROWER HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

     4

     

    

 

9. Counterparts.
This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same instrument. The exchange of copies of this Agreement
and of signature pages by facsimile transmission or other electronic transmission (including email) shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile transmission or other electronic transmission (including email) shall be deemed
to be their original signatures for all purposes.

 

10. Attorneys’
Fees. In the event of any arbitration or action at law or in equity to enforce or interpret the terms of this Agreement, the
parties agree that the party who is awarded the most money shall be deemed the prevailing party for all purposes and shall therefore
be entitled to an additional award of the full amount of the attorneys’ fees and expenses paid by such prevailing party
in connection with the arbitration, litigation and/or dispute without reduction or apportionment based upon the individual claims
or defenses giving rise to the fees and expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s
power to award fees and expenses for frivolous or bad faith pleading.

 

11. 
No Reliance. Borrower acknowledges and agrees that neither Lender nor any of its officers, directors, members, managers,
equity holders, representatives or agents has made any representations or warranties to Borrower or any of its agents, representatives,
officers, directors, or employees except as expressly set forth in this Agreement and, in making its decision to enter into the
transactions contemplated by this Agreement, Borrower is not relying on any representation, warranty, covenant or promise of Lender
or its officers, directors, members, managers, equity holders, agents or representatives other than as set forth in this Agreement.

 

12. 
Severability. If any part of this Agreement is construed to be in violation of any law, such part shall be modified to
achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force
and effect.

 

13. Entire
Agreement. This Agreement and all other documents referred to herein, supersede all other prior oral or written agreements
between Borrower, Lender, its affiliates and persons acting on its behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein, neither Lender nor Borrower makes any representation,
warranty, covenant or undertaking with respect to such matters. Notwithstanding the foregoing, nothing herein shall alter or modify
the Judgment or Lender's rights thereunder, except that Lender agrees to settle the Judgment for the Settlement Amount so long
as Borrower does not breach (as determined in Lender's sole discretion) any of its obligations set forth herein and nothing herein
shall alter, modify, waive or terminate any right of Lender under applicable law to execute on any assets of Borrower or otherwise
seek to enforce Lender's rights pursuant to the Judgment.

 

     5

     

    

 

 

14.
Amendments. This Agreement may be amended, modified, or supplemented only by written agreement of the parties. No provision
of this Agreement may be waived except in writing signed by the party against whom such waiver is sought to be enforced.

 

15. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Lender
hereunder may be assigned by Lender to a third party, including its affiliates, in whole or in part. Borrower may not assign this
Agreement or any of its obligations herein without the prior written consent of Lender.

 

16.
Time of Essence. Time is of the essence of this Agreement.

 

17. Notices.
Unless otherwise specifically provided for herein, all notices, demands or requests required or permitted under this Agreement
to be given to Borrower or Lender shall be given at such address as has been previously provided to the other party.

 

18. Further
Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

[Remainder
of page intentionally left blank]

 

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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.

 

	 	BORROWER:

	 	 	 
	 	MPHASE
                                         TECHNOLOGIES, INC.

	 	 	 
	 	By:	/s/
    Ronald A. Durando
	 	Name:	Ronald
    A. Durando
	 	Title:	President

	 	 	 
	 	LENDER:
	 	 	 
	 	/s/
    John M. Fife
	 	John
    M. Fife, an individual

 

  

[Signature
Page to Judgment Settlement Agreement]Exhibit 10.63

    

    

    

    Amendment 4

    

    

    to the

    

    

    Vehicle Terms and Conditions 

     

      

    between

    

    

    Brightline Trains LLC

    

    

    and

    

    

    Siemens Industry Inc.

    

    

    Amendment 4 (“Amendment 4”), dated November 30, 2018, to the Vehicle Terms and Conditions Agreement with an effective date of August 15, 2014, by and between Brightline Trains LLC (f/k/a All Aboard Florida - Operations LLC), a limited liability company
          duly formed and validly existing under the laws of the State of Delaware, with a principal business
          address of 161 NW 6th ST,
        Suite 900, Miami, Florida 33136 (“Brightline” or “Owner”) and Siemens Industry, Inc., a corporation duly formed and validly existing under the laws of the State of Delaware with a principal business address of 7464 French Road, Sacramento, CA 95828 (“SII” or “Contractor”) Each of Brightline and SII may be referred to herein as a “party” or
          collectively as the “parties.”

    

    

    WITNESSETH:

    

    

    Whereas, Owner and Contractor entered into the Vehicle Terms and Conditions Agreement pursuant to which Owner agreed to
          purchase from Contractor, and Contractor agreed to sell to Owner, a new fleet of trains, as amended by Amendment No. 1, dated July 17, 2015, as amended by Amendment No. 2, dated May 15, 2017,  and as amended by Amendment No. 3, dated June 1, 2018 (“VTC”);

    

    

    Whereas, The parties have agreed to extend the Notice to Proceed (“NTP”) date for the Phase 2 Trains;

    

    

    Now, therefore be it resolved, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and for other good and valuable consideration , the parties hereby agree as follows:

    

    

    1.          Defined Terms. All defined terms expressed in the VTC shall, unless expressed to the contrary herein or the context otherwise requires, continue to have the same meanings where used in this Amendment 4.

    

    

    2.          Amendments. Owner and Contractor hereby amend the VTC, as follows:

    

    

    a)          The Phase 2 purchase price, before escalation, shall not increase above the price set forth in paragraph 2(a) of Amendment No. 3,
        so long as Purchaser provides an NTP
          to Contractor on or before January 31, 2019. For the avoidance of doubt, escalation will apply to the purchase price in accordance with Exhibit 11 which  is  amended herewith to reflect the change in the planned NTP date.

    

    

    
      
        

    

    
    b)          Paragraph 2(b) of Amendment No. 3 to the VTC is deleted in its entirety, and the following
          paragraph 2(b) is substituted in lieu thereof:

    

    

    Owner will have a “grace period” of
          five months ending on January 31, 2019, to provide Contractor with an NTP. In this case, the Delivery Schedule set forth in Exhibit 19 will be extended for up to a corresponding number of days equal to the number of days from August 30, 2018 to the date the NTP is issued, but in no event will the Delivery Schedule shift out by more than an additional five months.

    

    

    On or before issuance of the NTP, Owner shall have the option to eliminate the last (20) coaches in the Delivery Schedule from the Phase 2 Trains purchase. If Owner exercises that option, then the entire purchase price for those 20 Coaches shall be deducted from the Phase 2 purchase price, and the parties shall execute an amendment to the Agreement reflecting the
          reduction in Coaches and price.

    

    

    In the event that an NTP is not issued by Owner on or prior to January
          31, 2019, Contractor shall nonetheless, construct 3 Type l (Smart) Coaches for Owner, to be delivered on or before January 31, 2024.

    

    

    Owner is granted an option to order 2 additional Type 1 (Smart) Coaches
          for an additional $8.5 million with a 50% down payment on July 31, 2019, 25% at completion of the
          carshells and the remaining 25% to be paid upon shipment of the 5th
        coach  from the Contractors’ facility. Shipment of the 5th coach would be no later than February 28, 2024.

    

    

    If Owner decides to exercise a re-start of Phase 2 NTP after January 31, 2019, the Parties shall mutually agree on a revised delivery schedule and pricing schedule. The Phase 2 re-start Order must
          be received by the Contractor no later than January 14, 2022.

    

    

    3.          Paragraph 2(e) of Amendment No. 3 is deleted in its entirety.

    

    

    4.          Exhibit 11 (Escalation Formula), as modified in Amendment No. 3, is deleted in its entirety and the revised and restated Exhibit
          11, attached hereto, is substituted in lieu thereof and incorporated herein by reference.

    

    

    5.          Full Force and Effect; Conflicts. This Amendment 4 shall be read in conjunction with the VTC, all terms and conditions of which shall continue to have full force and effect, except to the extent as varied by this Amendment 4. This Amendment 4 is executed in accordance with Section 45 of the VTC. In the event of any conflict or inconsistency between the terms of this Amendment 4 and the VTC, as amended, the terms of Amendment 4 will govern.

    

    

    6.          Entire Agreement. This Amendment 4 supersedes any previous written or oral agreement between
          the parties in relation to the matters dealt with in this  Amendment and it contains the whole agreement between the parties relating to the subject matter of this Amendment 4
            as of the date hereof.

    
      2

      
        

    

    

    

    

    

    7.          Counterparts. This Amendment 4 may be executed in multiple counterparts, each of which shall be deemed an original, but
          all of which together shall constitute one and the same instrument. In making proof of this Amendment 4, it

          shall not be necessary to produce or account for more than one such counterpart.

    

    

    

    

    [SIGNATURES ON FOLLOWING PAGE]

    
      3

      
        

    

    

    

    

    

    In witness whereof, the parties hereto have caused this Amendment 4 to be executed by their duly authorized representatives as of the date first written above.

    

    

    	
            Brightline Trains LLC

          	 	
            Siemens Industry, Inc.

          
	 	 	 
	
            /s/ Patrick Goddard

          	 	
            /s/ Marc Buncher

          
	
            Signature

          	 	
            Signature

          
	 	 	 
	 	 	 
	
            Patrick Goddard

          	 	
            Marc Buncher

          
	
            Print Name

          	 	
            Print Name

          
	 	 	 
	
            President

          	 	
            President

          
	
            Print Title

          	 	
            Print Title

          
	 	 	 
	 	 	 
	 	 	
            /s/ Marsha Smith

          
	 	 	
            Signature

          
	 	 	 
	 	 	
            Marsha Smith

          
	 	 	
            Print Name

          
	 	 	 
	 	 	
            Vice President, Finance

          
	 	 	
            Print Title

          

     

          

    
      4

      
        

    

    EXHIBIT 11

    

    

    Escalation Formula

    

    

    Part 1 - Phase 2 and Option Prices

    

    

    Phase 2 Pricing

    

    

    The Phase 2 price, before escalation, as set forth in Amendment No. 3 is valid for an order placement (NTP) through January 31, 2019. The price will be
        escalated per the Escalation Approach below.

    

    

    The escalation time period shall be calculated from the mid-point of production of the planned delivery schedule outlined in Exhibit 19 of Amendment No. 3 to
        the then planned mid-point of production of the schedule at the time of the  placement  of  the  Phase  2  NTP.  For  the avoidance of doubt, the change in mid-point of production, consequently the escalation  time period, will not exceed the
        number of months, or portion thereof, from  August  30,  2018 to  the date that the NTP is issued.

    

    

    The escalation shall not apply to the following  portions of the  purchase price: The  $7,608,375.75 previously paid, and the $11,000,000 restart fee, as
        referenced in paragraph 2(a) of Amendment No. 3.

    

    

    The escalation sum shall be paid in a lump sum in conjunction with the payment of Milestone 6 as identified in the Third Revised And Restated Exhibit 5.

    

    

    Option Pricing

    

    

    The Option Price, as set forth in Part 1 of Exhibit 7 (Prices) of the VTC dated August 15, 2014, shall be adjusted at the time of placement of the order in
        accordance with the terms and conditions of Section 5.2 of the VTC dated August 15, 2014.

    

    

    For the Option orders, the escalation time period shall be calculated from the mid-point of production of Phase 1, until the mid-point of production of each
        Option Order.

    

    

    Escalation approach

    

    

    For all adjustments, the percentage change shall be rounded to the nearest hundredth of a percentage point and the line item prices shall be rounded to the 
        nearest dollar.  This index will vary depending upon prevailing economic conditions, but will not be lower than .233 percent (%) per month to cover unforeseen cost factors over the entire option period.

    

    

    The escalation formula shall be calculated as follows:

    

    

    
      
        	

              	1.	
                One hundred (100) % of the Phase 2 Price or the Option
                      Price shall be adjusted due to percentage adjustment in the applicable Producer  Price  Index  (PPI)  as  described below.

              

      

    

    

    

    
      
        	

              	2.	
                Escalation adjustment index data source: United States Department of Labor, Bureau of Labor Statistics Producer Price Index Industry, Data Series ID: PCU 336510

              

      

    

    
      5

      
        

    

    Industry: Railroad Rolling Stock Manufacturing, Product : Railroad Rolling Stock Manufacturing.

    

    

    
      
        	

              	3.	
                Should PCU 336510, Railroad Rolling Stock Manufacturing, be discontinued, then the following index shall be
                      used: United States Department of Labor, Bureau of Labor Statistics Producer Price Index
                      Industry, Data Series ID: PCUOMFG-OMFG, Industry: Total Manufacturing Industries, Product: Total Manufacturing Industries.

              

      

    

    

    

    
      
        	

              	4.	
                The BLS PPI may be found at http://www.bls.gov/ppi/. Under PPI Databases, click on the “One Screen Data Search” for Industry Data, and a new browser window will open (make sure your browser’s
                      pop-up blocker is disabled). Find the appropriate higher-level code number in Block 1. Click on the appropriate code and the code, and lower hierarchal codes should be listed in Block 2. Click on the correct code in Block 2, then on “Add to Your Selection” in Block 3. Then click on “GET DATA” in Block 3, and a new window should open with
                      the index table. (“OMFG” is the second from the bottom of the list).

              

      

    

    

    

    
      
        	

              	5.	
                The “escalation time period” shall be as described above and shall be calculated in months, rounded up to the next complete month.

              

      

    

    

    

    
      
        	

              	6.	
                The “index factor” shall be derived by determining the average monthly  escalation over the most recent
                      available 12 month period prior to the placement of the order for the Phase 2 Trains or Option Train and then multiplying the average monthly escalation by the relevant “escalation time period”.

              

      

    

    

    

    
      
        	

              	7.	
                The “fixed factor” shall be determined by using .233% price escalation per month, compounded for the number of months in the “escalation time period”.

              

      

    

    

    

    
      
        	

              	8.	
                If the “index factor” is determined to be lower than the “fixed factor”, then the “fixed factor” shall be used to determine the escalated prices.

              

      

    

    

    

    
      
        	

              	9.	
                The resulting escalated prices for Phase 2 Trains and Option Train shall be determined by taking the prices and multiplying that by the sum of 1 + the “index factor” or the “fixed factor” whichever is higher.

              

      

    

    

    

    

    

  

  6

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