Notes to Consolidated Balance Sheet (Continued) :

the Transit Commission of the State of New York provided that the proceeds
received from such sale of capital stock shall be used to retire outstanding Prior
Lien bonds or other funded debt of New York City Omnibus Corporation.

(e) As owner of all of the capital stock of Street Railway Liquidating Corporation, which
was organized to carry out certain steps under the Plan of Readjustment and Motor¬
ization, New York City Omnibus Corporation may, on consummation of the Plan and
the partial or complete liquidation of the former company, receive assets in excess
of $1,000 which is the stated value of the stock. However, it should be noted that
in the event there shall be any reorganization or administration expenses which shall
not be paid out of certain funds to be provided therefor and which the Street Railway
Liquidating Corporation shall not be able to pay in full. New York City Omnibu::
Corporation has agreed upon the direction of the Court to use all reasonable efforts
to obtain the consent and approval of the Transit Commission to the extent required
for the lawful use of its revenues and assets for the payment of such claims. How¬
ever, in the opinion of the management, the Street Railway Liquidating Corporation
and New York Railways Corporation should have sufficient funds to pay the reor¬
ganization expenses, etc. mentioned above.