Series A Preference Ordinary Shares
1. RESOLVED that, a class of Ordinary Shares in the capital of XL CAPITAL
LTD, an exempted limited company under the laws of the Cayman Islands
(the "Company"), designated as "Series A Preference Ordinary Shares."
The Series A Preference Ordinary Shares shall be cumulative preference
ordinary shares with a nominal value of US$0.01 and, subject to the
Articles of Association of the Company (the "Articles") and the
provisions of and restrictions contained in the Companies Law (2002
Revision) and every statutory modification or re-enactment thereof for
the time being in force (the "Law"), have the following preferences
and rights and shall be subject to the following restrictions:
(a) Liquidation Preference. On any voluntary or involuntary
return of assets on liquidation, dissolution, winding-up or
otherwise of the Company, the assets of the Company legally
available for distribution among shareholders shall be applied
first in repaying to the holders of the Series A Preference
Ordinary Shares (the "Holders") an amount equal to US$25.00 per
Series A Preference Ordinary Share (inclusive of the nominal
amount thereof) plus all accrued and unpaid dividends (whether or
not earned or declared), if any, to the date fixed for
distribution, in preference to the repayment of such nominal
amount of and any share premium or other amounts paid on the
Class A Ordinary Shares and the Class B Ordinary Shares
(together, the "Ordinary Shares") or any other shares ranking
junior in right of payment to the Series A Preference Ordinary
Shares as to the voluntary or involuntary return of assets on
liquidation, dissolution, winding-up or otherwise of the Company
or as to dividends (including the Ordinary Shares, the "Junior
Shares") to the holders of such Junior Shares, without interest
on such unpaid dividends. In the event that upon any such
voluntary or involuntary return of assets on liquidation,
dissolution, winding-up or otherwise, the assets of the Company
available are insufficient to pay the amount of the liquidation
distributions on all outstanding Series A Preference Ordinary
Shares as referred to above and the corresponding amounts payable
on all other shares ranking pari passu with the Series A
Preference Ordinary Shares with respect to the payment of
dividends and amounts upon any voluntary or involuntary return of
assets on liquidation, dissolution, winding-up or otherwise of
the Company ("Parity Shares"), then the holders of the Series A
Preference Ordinary Shares and all such Parity
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Shares shall share ratably in such distribution of assets in
proportion to the full liquidating distributions to which they
would otherwise be respectively entitled. The Series A Preference
Ordinary Shares shall not be convertible into or exchangeable for
any other shares of the Company.
(b) Dividend Rights. (i) The holders of the Series A Preference
Ordinary Shares shall be entitled to receive cumulative
preferential cash dividends in respect of their Series A
Preference Ordinary Shares at the percentage rate per annum on
their liquidation value specified by the Attorney on the date of
pricing of such shares (the "Pricing Date"). Such dividends shall
be payable in arrears in equal amounts (except as set forth below
with respect to the initial dividend period) on 31st March, 30th
June, 30th September and 31st December when and if declared by
the Directors in each year or, if such date is not a business
day, on the business day immediately after such date. Such
dividends will begin to accrue and will be cumulative from the
date of original issuance. The first dividend, which if declared
will be payable on 31 December 2002, will represent the period of
time from and will accrue from the date of original issuance up
to 31 December 2002. The dividend for such initial period and any
other dividend payable on the Series A Preference Ordinary Shares
for any partial dividend period shall be computed on the basis of
a 360-day year consisting of twelve (12) 30-day months. Dividends
will be payable to holders of record as they appear in the
Company's register of members at the close of business on the
applicable record date, which will be one day prior to the
dividend payment date as long as all of the Series A Preference
Ordinary Shares remain in book-entry form. If any of the Series A
Preference Ordinary Shares are not in book-entry form, the record
date will be 15 days prior to the dividend payment date (whether
or not such date is a business day). Holders of Series A
Preference Ordinary Shares will not be entitled to any dividends
in excess of full cumulative dividends as described above.
Dividends on the Series A Preference Ordinary Shares will accrue
and will be fully cumulative, whether or not there are funds
legally available for the payment of such dividends and whether
or not the dividends are declared. No interest or sum of money in
lieu of interest will be payable on any dividend payment or on
any payment on Series A Preference Ordinary Shares which is in
arrears. Any dividend payment made on Series A Preference
Ordinary Shares will first be credited against the earliest
accrued but unpaid dividend due with respect to Series A
Preference Ordinary Shares which remains payable.
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(ii) As long as any Series A Preference Ordinary Shares are
outstanding, no dividends or other distributions may be declared
or paid or set apart for payment on any class or series of Parity
Shares for any period unless either (1) full cumulative dividends
have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such
payments on the Series A Preference Ordinary Shares for all
dividend periods terminating on or prior to the dividend payment
date on such Parity Shares, or (2) all dividends declared upon
the Series A Preference Ordinary Shares and any Parity Shares are
declared pro rata so that the amount of dividends declared per
share on the Series A Preference Ordinary Shares and any Parity
Shares will in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the Series A Preference
Ordinary Shares and such Parity Shares bear to each other.
(iii) As long as any Series A Preference Ordinary Shares are
outstanding (1) no dividends (other than those paid in Ordinary
Shares or other shares ranking junior in right of payment to the
Series A Preference Ordinary Shares as to dividends and as to any
voluntary or involuntary return of assets on liquidation,
dissolution, winding-up or otherwise of the Company (including
the Ordinary Shares, "Fully Junior Shares")) may be declared or
paid or set apart for payment upon any Junior Shares, (2) no
other distribution (other than those paid in Fully Junior Shares)
may be declared or paid or set apart for payment upon any Junior
Shares and (3) no Junior Shares will be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other
acquisition of Ordinary Shares made for purposes of any employee
incentive, stock, benefit or any similar plan of the Company or
any of its subsidiaries) for any consideration (or any moneys be
paid to or made available for a sinking fund or the redemption of
any Junior Shares) by the Company (except by conversion into or
exchange for Fully Junior Shares), unless, in any such case, full
cumulative dividends on the Series A Preference Ordinary Shares
and any Parity Shares have been or contemporaneously are declared
and paid, or declared and a sum sufficient for the payment
thereof set apart for payment, for all dividend periods
terminating on or prior to the date such dividends or
distributions are declared or paid on the Junior Shares, or such
Junior Shares are redeemed, purchased or otherwise acquired.
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(c) Voting Rights. (i) Subject to clause (iii) below, and unless
required by law or court order, the holders of Series A
Preference Ordinary Shares shall not be entitled to receive
notice of nor to attend nor to vote at any general meeting of the
Company.
(ii) The holders of Series A Preference Ordinary Shares
shall be entitled to one vote for each share held at any separate
general meeting of that class or series (i.e., preference
ordinary shares or Series A Preference Ordinary Shares,
respectively), subject to the provisions of Article 41 of the
Articles. Subject to the applicable provisions of the Articles
and the Law, unless the Series A Preference Ordinary Shares have
been previously redeemed or called for redemption (and funds
necessary for such redemption have been set apart by the Company
in trust for the benefit of the holders of the Series A
Preference Ordinary Shares so called for redemption), the Company
may not take any action which would vary the rights attached to
the Series A Preference Ordinary Shares and no class or series of
shares may be created which ranks senior to the Series A
Preference Ordinary Shares as to dividend rights or as to the
return of assets on liquidation, dissolution, winding-up or
otherwise of the Company, in each case, without the approval of a
special resolution in writing by the holders of 100% of the
Series A Preference Ordinary Shares or the sanction of a special
resolution passed by the votes of at least two-thirds of the
outstanding Series A Preference Ordinary Shares cast at a
separate general meeting of the holders of the Series A
Preference Ordinary Shares. At every separate meeting of the
holders of the Series A Preference Ordinary Shares, the necessary
quorum shall be any one or more persons present in person or by
proxy holding not less than 50% of the issued shares of that
class. Notwithstanding the foregoing and subject to the
applicable provisions of the Articles and the Law, holders of the
Series A Preference Ordinary Shares are not entitled to vote on
any sale of all or substantially all of the assets of the
Company, and the issuance of any shares that are in parity with
the Series A Preference Ordinary Shares with respect to payment
of dividends and distribution of assets in liquidation.
(iii) If at any time the equivalent of six (6) or more full
quarterly dividends (whether consecutive or not) on any series of
Preference Ordinary Shares (including the Series A Prefer-
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ence Ordinary Shares) shall be in arrears (whether or not such
dividends shall have been earned or declared), then during such
period until all such arrearages in dividends shall have been
paid in full, and only during such period (the "Voting Period"),
the holders of such series of Preference Ordinary Shares
(including Series A Preference Ordinary Shares) voting together
with any other series or classes of Preference Ordinary Shares
also in arrears shall be entitled by ordinary resolution at a
separate meeting of such holders to elect two persons and
nominate such elected persons for appointment by the Board of
Directors as additional Directors of the Company. In no event
shall there be more than two Directors elected by the holders of
Preference Ordinary Shares (whether voting alone as a series or
class or with another series or class so in arrears).
(iv) Any Director who shall have been elected pursuant to
paragraph (2)(c)(iii) above may be removed at any time during a
Voting Period, either for or without cause, by, and only by,
ordinary resolution of the holders of the outstanding Preference
Ordinary Shares of the relevant series at a special separate
general meeting of such holders called for that purpose. Any
vacancy thereby created may be filled during such Voting Period
by ordinary resolution of the holders of Preference Ordinary
Shares of all the relevant series at such a meeting. Any Director
elected by holders of Preference Ordinary Shares pursuant to this
provision, or by any Director so elected as herein contemplated,
who dies, resigns or otherwise ceases to be a Director during a
Voting Period shall, except as otherwise provided in the
preceding sentence, be replaced by the remaining Director
theretofore elected by the holders of Preference Ordinary Shares
nominating a replacement for appointment by the Board of
Directors, provided that if no remaining additional Director is
then in office, additional Directors will be elected in
accordance with the procedures described above. At the end of the
Voting Period, the holders of Preference Ordinary Shares of all
of the relevant series shall be automatically divested of all
voting powers vested in them by this provision, but subject
always to subsequent vesting of such voting power in the holders
of Preference Ordinary Shares in the event of any similar
cumulated arrearage in payment of quarterly dividends occurring
thereafter. The term of all Directors elected and appointed
pursuant to this
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provision shall in all events expire at the end of the applicable
Voting Period and if the size of the Board was increased for
purpose of the additional Directors, the number of Directors
constituting the Board shall be reduced accordingly. The
provisions of the Articles relating to general meetings and the
provisions of Article 41 of the Articles shall apply, mutatis
mutandis, to every such separate meeting, except that the
necessary quorum shall be any one or more persons present in
person or by proxy holding not less than fifty percent (50%) of
the issued Preference Ordinary Shares of the relevant series.
(d) Redemption. The Company shall be entitled to redeem all or
any of the Series A Preference Ordinary Shares as follows:
(i) Subject to clauses (ii), (iii) and (iv), the Series A
Preference Ordinary Shares shall not be redeemable by the Company
prior to the date to be determined by the Attorney on the Pricing
Date. On or after such date, the Company shall be entitled at any
time in whole or from time to time in part by not less than
thirty (30) days nor more than sixty (60) days' prior written
notice to the relevant Holders, in such form and given in such
manner as the Directors shall from time to time determine and in
accordance with paragraph (e) below, to redeem all or any of the
Series A Preference Ordinary Shares pursuant to this clause for
cash at a redemption price of US$25.00 per share being redeemed
(inclusive of the nominal value thereof) plus all accrued and
unpaid dividends, if any, thereon to the date of redemption,
without interest on such unpaid dividends.
(ii) At any time prior to the date determined by the
Attorney on the Pricing Date, if the Company shall have submitted
to the holders of Ordinary Shares a proposal for an amalgamation,
consolidation, merger, arrangement, reconstruction,
reincorporation, de-registration or any other similar transaction
involving the Company that requires or shall have submitted any
proposal for any other matter that, as a result of any change in
Cayman Islands Law after 9 August 2002 (whether by enactment or
official interpretation), requires, in each case, a vote of the
holders of the Series A Preference Ordinary Shares voting
separately as a single class (alone or with one or more class or
series of Preference Ordinary Shares), the Company shall be
entitled by not
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less than thirty (30) days nor more than sixty (60) days prior
written notice to the relevant Holders, in such form and given in
such manner as the Directors shall from time to time determine
and in accordance with paragraph (e) below, to redeem all Series
A Preference Ordinary Shares pursuant to this clause for cash at
a redemption price of US$26.00 per share being redeemed
(inclusive of the nominal value thereof), plus all accrued and
unpaid dividends, if any, to the date of redemption.
(iii) If there is a "change in tax law" that would require
the Company or any successor company to pay additional amounts
with respect to the Series A Preference Ordinary Shares on the
next succeeding dividend payment date, and the payment of those
additional amounts cannot be avoided by the use of any reasonable
measures available to the Company or any successor company, the
Company shall be entitled at any time thereafter by not less than
thirty (30) days nor more than sixty (60) days prior written
notice to the relevant Holders, in such form and given in such
manner as the Directors shall from time to time determine and in
accordance with paragraph (e) below, to redeem any or all Series
A Preference Ordinary Shares pursuant to this clause for cash at
a redemption price of US$25.00 per share being redeemed
(inclusive of the nominal value thereof) plus accrued and unpaid
dividends, if any, to the date of redemption. For the purposes of
this provision, a "change in tax law" shall be (a) a change in or
amendment to laws, regulations or rulings of any jurisdiction,
political subdivision or taxing authority described in the next
sentence, (b) a change in the official application or
interpretation of those laws, regulations or rulings, or (c) any
execution of or amendment to any treaty affecting taxation to
which any jurisdiction, political subdivision or taxing authority
described in the next sentence is party after 9 August 2002. The
jurisdictions, political subdivisions and taxing authorities
referred to in the previous sentence are (a) the Cayman Islands
or any political subdivision or governmental authority of or in
the Cayman Islands with the power to tax, (b) any jurisdiction
from or through which the Company or its paying agent is making
payments on the Series A Preference Ordinary Shares or any
political subdivision or governmental authority of or in that
jurisdiction with the power to tax, or (c)
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any other jurisdiction in which the Company or its successor
company is organized or generally subject to taxation or any
political subdivision or governmental authority of or in that
jurisdiction with the power to tax.
(iv) If the entity formed by a consolidation, merger or
amalgamation involving the Company or the entity to which the
Company conveys, transfers or leases substantially all of its
properties and assets is required to pay additional amounts in
respect of any tax, assessment or governmental charge imposed on
any holder of Series A Preference Ordinary Shares as a result of
a change in tax law that occurred after the date of the
consolidation, merger, amalgamation, conveyance, transfer or
lease, and the payment of those amounts cannot be avoided by the
use of any reasonable measures available to the Company or any
successor company, the Company shall be entitled at any time
thereafter by not less than thirty (30) days nor more than sixty
(60) days prior written notice to the relevant Holders, in such
form and given in such manner as the Directors shall from time to
time determine and in accordance with paragraph (e) below, to
redeem any or all Series A Preference Ordinary Shares pursuant to
this clause for cash at a redemption price of US$25.00 per share
being redeemed, (inclusive of the nominal value thereof), plus
all accrued and unpaid dividends, if any, to the date of
redemption.
(e) Notice of any redemption described herein will be mailed at
least thirty (30) days but not more than sixty (60) days before
the redemption date to each holder of record of Series A
Preference Ordinary Shares to be redeemed at the address shown in
the register of members of the Company. Each notice will state as
appropriate: (1) the redemption date; (2) the number of Series A
Preference Ordinary Shares to be redeemed; (3) the redemption
price; (4) the place or places where certificates for Series A
Preference Ordinary Shares are to be surrendered for payment of
the redemption price if any such certificates are outstanding;
and (5) where applicable, that dividends on the Series A
Preference Ordinary Shares to be redeemed will cease to accrue on
such redemption date. If fewer than all Series A Preference
Ordinary Shares are to be redeemed, the notice mailed to each
such holder thereof will also specify the number of Series A
Preference Ordinary Shares to be
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redeemed from such holder. The notice shall contain (i) the name
and address of the relevant bank or trust company to be used for
purposes of redemption (if any) and (ii) a statement as to the
deposit or intent to deposit the redemption funds in such trust
account.
(f) If fewer than all of the Series A Preference Ordinary Shares
are to be redeemed, the number of shares to be redeemed will be
determined by the Directors in their absolute discretion and such
Series A Preference Ordinary Shares may be redeemed pro rata from
the holders of record in proportion to the number of Series A
Preference Ordinary Shares held by such holders (with adjustments
to avoid redemption of fractional shares), by lot or by any other
method determined by the Directors to be equitable in the
Directors' sole discretion.
(g) If notice of redemption of any Series A Preference Ordinary
Shares has been given and if the funds necessary for such
redemption have been set apart by the Company in trust for the
benefit of the holders of Series A Preference Ordinary Shares so
called for redemption, then from and after the redemption date,
dividends will cease to accrue on the Series A Preference
Ordinary Shares being redeemed, the Series A Preference Ordinary
Shares will no longer be deemed to be outstanding and all rights
of the holders of such shares will terminate, except the right to
receive the redemption price.
(h) The holders of Series A Preference Ordinary Shares at the
close of business on a dividend record date will be entitled to
receive the dividend payable with respect to such Series A
Preference Ordinary Shares on the corresponding dividend payment
date notwithstanding the redemption thereof between the dividend
record date and the corresponding dividend payment date or a
default in the payment of the dividend due.
(i) Unless full cumulative dividends on all Series A Preference
Ordinary Shares and all Parity Shares shall have been declared
and paid, or declared and a sum sufficient for the payment
thereof set apart for payment for all past dividend periods
terminating on or prior to the date of a redemption, purchase or
other acquisition, no Series A Preference Ordinary Shares or any
Parity Shares may be
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redeemed, purchased or otherwise acquired by the Company unless
all Series A Preference Ordinary Shares and any Parity Shares are
redeemed; provided, that, the Company may acquire fewer than all
of the Series A Preference Ordinary Shares or any Parity Shares
pursuant to a purchase or exchange offer made on the same terms
to holders of all Series A Preference Ordinary Shares and Parity
Shares as determined in good faith by the Board of Directors of
the Company.
(j) The Company, subject to (1) the special rights granted to any
of the Company's issued and outstanding shares and (2) the
Company's requirement pursuant to clause (i) to make a purchase
or exchange offering on the same terms to holders of all
outstanding Series A Preference Ordinary Shares and Parity
Shares, may purchase Series A Preference Ordinary Shares. Any
such purchase made by the Company may be made in the open market,
by tender to all holders of Series A Preference Ordinary Shares,
by private agreement or otherwise as the Directors see fit. Any
Series A Preference Ordinary Shares purchased by the Company for
its own account (other than in the ordinary course of business of
dealing in securities) will be canceled by the Company and will
no longer be issued and outstanding.
(k) The Series A Preference Ordinary Shares may be purchased or
redeemed by the Company either out of profits or from the
proceeds of a fresh issue of shares or out of capital or the
share premium account.
(l) Payment of the redemption amount shall only be effected upon
surrender to the Company for cancellation of any share
certificate in respect of the Series A Preference Ordinary Shares
(to the extent such certificates are outstanding) to be redeemed
and shall be made as promptly as practicable. If any certificate
so surrendered includes Series A Preference Ordinary Shares not
being redeemed, a new certificate for the remaining Series A
Preference Ordinary Shares shall be issued to the holder in
accordance with the Articles of Association of the Company
without charge to such holder.
(m) The Directors may make such further regulations concerning
the administerial process of redemption as they shall from time
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to time deem necessary so long as the rights of the Holders are
not varied.
(n) The rights conferred upon the holders of any class or series
of the Series A Preference Ordinary Shares shall not be deemed to
be varied by the creation or issue of any Parity Shares, Junior
Shares or Fully Junior Shares.
(o) Payments of Additional Amounts. Payments on the Series A
Preference Ordinary Shares shall be made free and clear of and
without deduction or withholding for or on account of any present
or future taxes, assessments or other governmental charges
imposed by any jurisdiction, political subdivision or taxing
authority described in clause 1(d)(iii) of these Resolutions,
unless the deduction or withholding of such taxes, assessments or
other governmental charges is required by law, regulations or
rulings or the application or official interpretation of such
law, regulations or rulings. In that event, the Company shall pay
or cause to be paid additional amounts to the registered holders
of the Series A Preference Ordinary Shares as additional
dividends to make up for any deduction or withholding for any
present or future taxes, assessments or other governmental
charges imposed by any jurisdiction, political subdivision or
taxing authority described in clause 1(d)(iii) of these
Resolutions in respect of any amounts that the Company or a
successor company must pay with respect to the Series A
Preference Ordinary Shares, so that the net amounts paid to the
holders of the Series A Preference Ordinary Shares, after that
deduction or withholding, shall equal the respective amounts that
would have been receivable by such holders had no such
withholding or deduction been required. However, the Company
shall not be obligated to pay additional amounts to any holder
that:
(i) resides in or is a citizen of the jurisdiction,
political subdivision or taxing authority imposing the taxes,
assessments or other governmental charges that would otherwise
trigger the Company's obligation to pay additional amounts; or
(ii) is a fiduciary, partnership, limited liability company
or other pass-thru entity if, and to the extent that, the payment
of additional amounts would be required by a jurisdiction,
political subdivision or taxing authority described in clause
1(d)(iii) of
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these Resolutions to be included in the income for tax purposes
of a beneficiary or settlor with respect to that fiduciary or a
member of that partnership, limited liability company or other
pass-thru entity who would not have been entitled to any
additional amounts had that beneficiary, settlor or member held
those Series A Preference Ordinary Shares directly.
In addition, the Company shall not be obligated to pay any additional
amounts to a holder of Series A Preference Ordinary Shares on account
of:
(i) any tax, assessment or other governmental charge that
would not have been imposed but for the existence of any present
or former connection between the holder, or certain other
persons, and the taxing jurisdiction or political subdivision, or
any Series A Preference Ordinary Shares presented for payment
more than thirty (30) days after the Relevant Date;
(ii) any estate, inheritance, gift, sales, transfer,
personal property or similar tax, assessment or other
governmental charge;
(iii) any tax, assessment or other governmental charge that
is payable otherwise than by withholding or deduction from
payment of the liquidation preference of or any dividends on the
Series A Preference Ordinary Shares;
(iv) any tax, assessment or other governmental charge that
is imposed or withheld by reason of the failure by the holder or
the beneficial owner of the Series A Preference Ordinary Shares
to promptly comply with a request by the Company to (a) provide
information, documents, certifications or other evidence
concerning the nationality, residence or identity of the holder
or beneficial owner or (b) make and deliver any declaration or
other similar claim, other than a claim for refund of a tax,
assessment or other governmental charge withheld by the Company,
or satisfy any information or reporting requirements, which, in
the case of clauses (a) or (b), is required or imposed by a
statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or
part of that tax, assessment or other governmental charge; or
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(v) any combination of the items identified by the
subparagraphs above.
The "Relevant Date" means, in respect of any payment, the date on
which such payment first becomes due and payable, but if the full
amount of the moneys payable has not been received by the depositary
on or prior to such due date, it means the first date on which, the
full amount of such moneys having been so received and being available
for payment to holders, notice to that effect shall have been duly
given to the holders of the Series A Preference Ordinary Shares; and
be it further
(p) No Preemptive Rights. The Series A Preference Ordinary Shares
shall not be entitled to the benefits of any retirement or
sinking fund. No holder of Series A Preference Ordinary Shares,
solely by reason of any such holding, has or will have any
preemptive right to subscribe for any additional issue of the
Company's shares of any class or series or to any security
convertible into any such shares.
(q) Ranking. Any class or series of shares of the Company shall
be deemed to rank (1) prior to the Series A Preference Ordinary
Shares, as to the payment of dividends and as to any voluntary or
involuntary return of assets on liquidation, dissolution,
winding-up or otherwise of the Company, if the holders of such
class or series shall be entitled to the receipt of dividends or
of amounts distributable upon any voluntary or involuntary return
of assets on liquidation, dissolution, winding-up or otherwise,
as the case may be, in preference or priority to the holders of
the Series A Preference Ordinary Shares, (2) on a parity with
Series A Preference Ordinary Shares, as to the payment of
dividends and as to distribution of assets upon any voluntary or
involuntary return of assets on liquidation, dissolution,
winding-up or otherwise of the Company, whether or not the
dividend rates, dividend payment dates or redemption or
liquidation prices per share thereof shall be different from
those of the Series A Preference Ordinary Shares, if the holders
of such class or series and the Series A Preference Ordinary
Shares shall be entitled to the receipt of dividends and of
amounts distributable upon any voluntary or involuntary return of
assets on liquidation, dissolution, winding up or otherwise of
the Company in proportion to their respective amounts of accrued
and unpaid dividends per share or liquidation preferences,
without preference or priority one over the other and (3) junior
to the Series A Preference Ordinary Shares, as to the payment of
divi-
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dends and as to distribution of assets upon any voluntary or
involuntary return of assets on liquidation, dissolution,
winding-up or otherwise of the Company, if such class or series
is ordinary shares or other shares ranking junior in right of
payment to Series A Preference Ordinary Shares as to dividends
and/or as to the distribution of assets upon any voluntary or
involuntary return of assets on liquidation, dissolution,
winding-up or otherwise of the Company; and be it further
2. RESOLVED that, in the event that the holders of the Preference Ordinary
Shares elect two persons and nominate such elected persons for appointment
by the Board of Directors as additional Directors of the Company pursuant
to paragraph 1(c)(iii) of these Resolutions during a Voting Period, the
Board of Directors hereby, pursuant to Article 52 of the Articles, increase
the number of persons consisting of the Board of Directors by two persons
(subject to the limit in the number of Directors stated in Article 52) and
hereby appoint, pursuant to Article 82 of the Articles, such persons
elected and nominated by the holders of Preference Ordinary Shares as
additional Directors of the Company. Such additional Directors shall be
apportioned among the classes of Directors in accordance with Article 81(a)
of the Articles. Such appointment is conditional upon and subject to the
following:
(a) the term of office of each such Director shall in all events
automatically expire at the end of the applicable Voting Period;
and
(b) prior to the appointment of each such elected person as a
Director becoming effective, each such person shall provide to
the Company notice in writing that he resigns the office of
Director, in the form attached to these Resolutions, which form
is hereby approved, such notice to only be effective upon the
earliest of: (i) the expiration of the Voting Period during which
such Director was appointed or (ii) the passing of an ordinary
resolution by the holders of the relevant series of outstanding
Preference Ordinary Shares for the removal of such Director (in
accordance with paragraph 1(c)(iv) of these Resolutions); and be
it further
3. RESOLVED that, in the event that it is necessary for any Director
elected and nominated by the holders of Preference Ordinary Shares to be
removed from office in accordance with the provisions of paragraph 1(c)(iv)
of these Resolutions, the Board of Directors shall put a Special Resolution
to the Company at the immediately following Annual General Meeting of the
Com-
-15-
pany for the removal of such Director or Directors pursuant to Article
81(b) of the Articles; and be it further
4. RESOLVED that, in the event that to give effect to the rights granted to
the holders of Preference Ordinary Shares by the provisions of paragraph
1(c)(iii) of these Resolutions it is necessary to increase the limit in the
number of Directors specified in Article 52 of the Articles, the Directors
shall put an ordinary resolution to the Company at the next Annual General
Meeting of the Company to increase the limit in the number of Directors;
and be it further
5. RESOLVED, that the Company be, and it hereby is, authorized to issue and
sell up to 23,000,000 Series A Preference Ordinary Shares, par value
US$0.01 (including Series A Preference Ordinary Shares to be sold pursuant
to any over-allotment option), to one or more underwriters to be named in
an underwriting agreement at a price at which issued and sold by the
Company, in such number and at such price, rate of dividends, and other
terms and conditions of such Series A Preference Ordinary Shares to be
determined by the Attorney (as defined below) upon the issue of such
shares. All such determinations in respect of the Series A Preference
Ordinary Shares made by the Attorney, including, without limitation,
approval of the form of share certificate, are hereby ratified and
confirmed.