board representation AND BOARD COMMITTEES
1.After the issue of the First Tranche Bond, and for so long as all the principal sum payable under the First Tranche Bond remains outstanding, and subject to compliance with all applicable laws, regulations, the Listing Rules and any requirements of the Stock Exchange or any other applicable authorities, Mr. shall nominate a representative of the Investor for appointment as a non-executive Director to the board of XX. The Investor shall procure that such Director nominated by Mr. Liu shall forthwith resign forthwith upon Mr. ceasing to have to nominate such a Director. [Note: this clause is not applicable in the other Co-Investor Agreements
2.Subject to First Tranche Completion having taken place, and for so long as all the principal sum payable under the First Tranche Bond remains outstanding, XX shall establish a Compensation Committee and an Audit Committee on or before 31 December 2005. The composition of such committees shall be as follows:
(a)the Compensation Committee shall comprise 2 independent non-executive Directors and 1 non-executive Director;
(b)the Audit Committee shall comprise 3 independent non-executive Directors; and
(c)the Chairman of each committee, whom shall not be an executive Director, shall be elected by voting within the relevant committee.
3.Subject to First Tranche Completion having taken place, and for so long as all the principal sum payable under the First Tranche Bond remains outstanding, XX shall establish a Manufacturing and Operations Committee and an Investment/International Development Committee. For so long as the Investor's Relevant Shareholding Interest in XX is not less than 8%, the Director nominated by the Investor shall be a member of the Investment/International Development Committee, provided that the Investor and such Director nominated by the Investor shall have executed a non-competition undertaking [in a form satisfactory to XX, the terms of which shall be [the same] as the non-competition undertaking given by the Founders in favour of XX. The Investor shall procure such member to forthwith resign from the committees when the Investor's Relevant Shareholding Interest in XX is less than 8%.
4.After the issue of the First Tranche Bond, and for so long as all the principal sum payable under the First Tranche Bond remains outstanding, the appointment or change of appointment of the Chairman, Chief Executive Officer and Chief Financial Officer of XX shall require the approval of not less than 80% of the votes of the board of Directors.