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the revenue derived by NYA (including passenger, freight, mail and express) from the TWA Service. For this purpose such NYA operating and non-operating costs which are in whole or in part allocable to the performance of the TWA Service, including costs incurred by NYA on account of the TWA 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 allocated and the manner in which Operating Deficit is to be computed using such accounting guide is to be prepared. Any disagreements regarding the contents of such account 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 A. 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 the costs in connection with providing the TWA Service have been reasonably or economically incurred shall be submitted to arbitration pursuant to the rules of the American Arbitration Association.

4. The fares applicable as of the date hereof to the TWA Service shall remain in effort except as may otherwise be required by action of the Civil Aeronautics Board or except as NYA and TWA may otherwise mutually agree. In any event, before NYA files any tariff or schedule revisions concerning such service it shall consult with TWA. 

5. NYA shall furnish at its cost all personnel, facilities, equipment and supplies needed to provide the TWA Service, except that TWA 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 required at LaGuardia Airport and at John F. Kennedy International Airport and, when made available by TWA, at Newark airport.

6. TWA will pay NYA:

i. a Primary Support Payment in the amount of any NYA Operating Deficit for the TWA Service but not in excess of $400,000 in calendar year 1968, prorates on the basis of a 365-day calendar year from the commencement of the term in this 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 TWA Service exceed the stated amount of the Primary Support Payment in the specified period, and should the NYA Operating Deficit in the PAA Service be equal to or less than the stated amount of the Primary Support Payment under the PAA Operating Agreement un such specified period, TWA will provide an additional support payment to the extent of the excess Operating Deficit for such period and provided further that should the Operating  Deficits in both the TWA and the PAA Services exceed the stated amount of the Primary Support Payments in any specified period under both Operating Agreements, NYA shall sell and deliver to TWA and TWA shall purchase common stock of NYA at $3.50 per share to the extent that the excess Operating Deficit in the TWA Service is equal to the excess Operating Deficit in the PAA Service and shall pay any Deficit in the TWA Service beyond such parity as an additional support payment, and the foregoing Primary Support Payments for calendar year 1968 and 1969 shall be added together and treated as a single specified period for purposes of determining the amount of any additional support payments as defined herein and the delivery of any common stock of NYA to TWA and its purchase thereof as set forth above.

(ii) a fee in the amount of $100,000 for each full calendar year prorated for any lesser period for which a computation is required.

Prorata Primary Support Payments and fee payments shall be made monthly by TWA subject to final settlements in respect of the period ending December 31, 1969 and each calendar year thereafter during the term of this Agreement. 

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