TNAG-2413-FCO40-3515-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-fina-1992 — Page 64

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be valid and be recognised and protected by the Hong Kong Special Administrative Region Government from 1 July 1997.

1.

EQUITY

2.

AGREEMENT

Government will contribute an initial equity of $16.6 billion MOD ($13.6 billion March 1991); to be paid up in part by conversion of the amounts advanced by Government to the Authority, and the balance to be subscribed in cash.

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CALLABLE EQUITY

(A)

Government will also provide callable equity in the form of a standby facility, convertible as provided in paragraph 4, of $8.5 billion MOD ($5.9 billion March 1991) against which the Authority may draw in any of the following events:

(i)

(ii)

(iii)

an increase in project cost (that is, the cost of construction including operating and financing costs);

project delay after the Target Date and only to the extent that the net revenue (including any Passenger Terminal Charge but after deduction of operating expenses) from Kai Tak operations ("the Kai Tak surplus") available to the Authority is not sufficient to cover the additional costs of such delay;

if the aggregate of the real estate revenues raised before the Target Date plus the aggregate of any drawings under this sub- paragraph (iii) are less than the cumulative total amounts set out in Annex A;

2