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DRAFT 10/13/67

time at which it can reasonably be anticipated that NYA will become self-sufficient, that TWA's proposal can be outlined as follows:

1. In consideration of NYA's continued performance of the service now being provided under its TWA support agreement, expanded as may be appropriate, for a period of five years commencing January 1, 1968, TWA would contribute to the [[all-up?]] cost of such service, to the extent not covered by revenues, the sum of [[strikethru]]$400,000[[/strikethru]] $1,000,000 per year and would pay to NYA a fee in the amount of [[strikethru]]$100,000[[/strikethru]] $200,000 per year. If in any year the operating deficit is less than [[strikethru]]$400,000[[/strikethru]] $1,000,000 but greater than zero, the fee for such year would be increased in an amount equal to [[strikethru]]25%[[/strikethru]] 50% of the difference between [[strikethru]]$400,000[[/strikethru]] $1,000,000 and the actual deficit. [[strikethru]][If in any year such service results in a profit, determined without regard to any TWA fee, the fee would be $200,000 less 50% of such profit][[/strikethru]][[margin note 1]

2. The balance of the anticipated operating deficit attributable to such TWA supported service would be provided by TWA in consideration of the issuance by NYA of a debt security convertible to NYA common stock. Such security would bear a reasonable interest rate, would have mutually acceptable maturity and repayment provisions, would be subject to redemption on advance notice and would be convertible at any time prior to maturity at an exchange rate reflecting the current market value of NYA stock plus a reasonable premium. TWA's obligation [[margin note 2]]

2

[[margin note 1]] All this and heaven too! Why? [[/margin note 1]]

[[margin note 2]] C. A. B. [[Arrow pointing at CAB]] O. K. otherwise, if defined as long-term capital — not operating deficit. [[/margin note 2]]