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of the TWA Service until such time as an individual PAA terminal is established, after which time it will operate from such terminal. 

PAA shall have the right to request up to 50% by type of equipment of the available schedule flight hours which can reasonably be operated by NYA using the V-107 equipment and S-61 equipment referred to above for additional frequencies of PAA Service and for the provision of regularly scheduled common carrier service between Teterboro and Republic Airports and to and from Teterboro and Republic Airports on the one hand and any other points in the New York Metropolitan area; provided, that in the event of such request an equitable adjustment shall be made in the level of the Primary Support Payment provisions as set forth in paragraph 6(i). In the event such additional services are instituted the same shall be included in the term "PAA Service" for the purpose of this Agreement. 

3. For the purpose of the Agreement, the term "Operating Deficit" means the excess, if any, of the cost reasonably and economically incurred by NYA in the performance of the PAA Service over the revenue derived by NYA (including passenger, freight, mail and express) from the PAA Service. For this purpose such NYA operating and non-operating costs which are in whole or in part allocable to the performance of the PAA Service, including costs incurred on account of the PAA Service prior to its inauguration, shall be allocated to such Service pursuant to a mutually acceptable accounting guide detailing the manner in which NYA costs are to be allocated and the manner in which Operating Deficit is to be computed using such allocations. Exhibit B attached sets forth the basic methods of allocation on which such accounting guide is to be prepared. Any disagreements regarding the contents of such accounting guide shall be referred to Price, Waterhouse, or other mutually acceptable public accounting firm, for final determination on generally accepted accounting principles, subject to the basic methods of allocation set forth in Exhibit B. Any disagreements regarding the application of such accounting guide to the allocation of any cost shall be referred to such firm for final determination. Any disagreement between the parties as to whether costs in connection with providing the PAA Service have been reasonably and economically incurred shall be submitted to arbitration pursuant to the rules of the American Arbitration Association. 

4. The fares applicable to the schedules as referred to in paragraph 2 hereof and as set forth in Exhibit A hereto shall be $12.00 between the Pan Am Building Heliport and either Newark or John F. Kennedy International Airports and shall remain in effect except as may be otherwise required by action of the Civil Aeronautics Board or except at NYA and PAA may otherwise mutually agree. In any event, before NYA files any tariff or schedule revisions concerning such service it shall consult with PAA. 

5. NYA shall furnish at its cost all personnel, facilities, equipment and supplies needed to provide the PAA Service except that PAA shall furnish at its cost,  (except for passenger/landing fees, which, however, shall be no greater than at John F. Kennedy International Airport), the Pan Am Building Heliport, and related facilities at the Pan Am Building in Manhattan, and shall, subject to necessary approval of the Port of New York Authority, furnish at its cost the ramp area and associated gate and ticket counter space at John F. Kennedy International Airport and, when individual terminals are established at Newark Airport.

6. PAA will pay to NYA:

(i) a Primary Support Payment in the amount of any NYA Operating Deficit for the PAA Service but not in excess of $400,00 in calendar year 1968, prorated on the basis of a 365-day calendar year from the commencement of the term of the Agreement, $300,000 in calendar year 1969, $200,000 in calendar year 1970, $100,000 in calendar year 1971 and $50,000 in each full calendar year thereafter throughout the term of this contract provided however, that should the NYA Operating Deficit in the PAA Service exceed the stated amount of the Primary Support Payment

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