INVITATION TO EXTRAORDINARY GENERAL MEETING OF PAYNOVA AB (PUBL.)

Fri, Jul 06, 2007 09:26 CET

(NGM: PAY)

Shareholders of Paynova AB (publ.), org. no. 556584-5889, are hereby invited to attend the company’s Extraordinary General Meeting on Monday, 30 July 2007 at 18.00 at the Scandic Anglais, Humlegårdsgatan 23, Stockholm, Sweden.

REGISTRATION

To be entitled to attend the meeting, shareholders must be registered in the share register kept by VPC AB by Tuesday, 24 July 2007 and give notice of their attendance at the company no later than 16:00 on Tuesday, 24 July 2007. Notification can be sent by mail to Paynova AB, Box 23059, SE-104 35 Stockholm, Sweden, by fax +46 (0)8-517 100 29 or by e-mail: anm@paynova.com. It should include the shareholder’s name, personal or corporate ID number, address, telephone number and shareholding.

Shareholders whose shares are registered with a fund manager must, in order to be entitled to participate in the meeting, request their fund manager to register their shares in their own names, so that the person in question is registered as a shareholder by Tuesday, 24 July 2007. This registration may be temporary.

AGENDA OF THE MEETING

Proposed agenda

1. Opening of the meeting

2. Election of a chairman for the meeting

3. Establishment and approval of voting list

4. Approval of the agenda

5. Election of one or two minutes-checkers

6. Checking whether the meeting has been duly convened

7. The board’s proposal for a new issue of shares with preferential rights for shareholders

8. The board’s proposal for an issue of option rights for a new subscription of shares, “Option rights 2009”

9. The board’s proposal for an issue of option rights for a new subscription of shares, “Option rights 2010”

10. The board’s proposal for authorisation

11. Conclusion of the meeting

The board’s proposal for a decision as per points 7, 8, 9 and 10

As announced on 30 May 2007, Paynova intends to strengthen its balance sheet and secure the company’s financing plan through a guaranteed preferential rights issue. There are four reasons for this:

1. The company’s previous financing plan was based on the recent preferential rights issue of around MSEK 19 and an outstanding option scheme of a further MSEK 19 or so providing the company with the necessary capital in addition to capital from operations.

The company’s subscription options designated 2005/2007 (TO3), which expired as of 31 May 2007, carried entitlement to subscription to a total of 746,160 shares. At the end of the subscription period, 4,257,090 subscription options had been utilised, meaning the number of shares increased by 425,709 and that the share capital increased by SEK 42,570.90. Paynova was thus provided with SEK 5,099,993.80.

The preferential rights issue that concluded in June 2007, and which has now been registered with the Swedish Companies Registration Office, meant the number of shares increased by 1,642,645 to a total of 34,920,218 shares, and that the share capital increased by SEK 164,264.50 to SEK 3,492,021.80. Paynova was thus provided with SEK 19,383,211.

Paynova’s share price recently has meant that capital from the option schemes could not be obtained as planned. The board of Paynova thus believes that the existing capital and business-generated operating capital is insufficient to cover the company’s capital requirements. In addition, Paynova has also faced extraordinary costs associated with the company’s active participation in the industry’s consolidation during spring 2007. This has burdened the company’s capital base.

2. A strengthening of Paynova’s balance sheet and equity ratio is also required to ensure the pace of the implementation and development work. During the early part of the second quarter, Paynova has worked intensively to recover the time lost by the company following the termination of the partnership with Xponse in February. Among other things, several important components have been implemented in Paynova’s payment service during May, further strengthening the company’s competitiveness. A strengthening of the balance sheet would further speed up this work and also contribute to the company being able to function more proactively on the market.

3. Paynova’s underlying market, e-retail, is continuing to show very strong growth, and the company believes, as before, that there is potential for significantly increased transaction volumes. After commencing a refinement of transaction volumes during 2006, which concluded in spring 2007, Paynova’s transaction volumes are growing again on a monthly basis. With its financing secured, Paynova can intensify efforts within the prioritised segments of retail, travel and online gaming with increased resources within sales and marketing. This will allow further growth in the company’s income. A strong balance sheet also allows implementation of larger customers than previously.

4. Paynova’s aim is to continue to actively participate in the consolidation of the industry. During spring 2007, Paynova has faced significant costs in connection with the initiatives taken to participate in the consolidation of the industry. The strengthening of the company’s balance sheet will give Paynova the financial strength and liquidity required to be able to continue to actively participate in the market’s consolidation.

The board now proposes that the meeting make a decision on the new issue of shares with preferential rights for shareholders, so that each whole number of eight (8) old shares provides entitlement to subscribe to one (1) new share. Anyone who is assigned one (1) share in the new share issue will also be given one (1) Option Right 2009 and one (1) Option Right 2010.

Maths O. Sundqvist, through a wholly-owned company, has agreed to issue an issue guarantee of MSEK 50, involving subscription to all shares in the issue not subscribed to with or without preferential rights up to the sums specified above. In connection with the issue of the share guarantee with regard to the preferential rights issue now proposed, he also took over non-utilised subscription options 2005/2007 (TO3) through a wholly-owned company, and used them for the new subscription to a total of SEK 4,999,996.70 on 31 May 2007.

As compensation for the above guarantees with regard to the transfer of option rights and the preferential rights issue now proposed, the board proposes that the general meeting also authorise the board to make a decision on a targeted new issue of shares to Maths O. Sundqvist through a company, to a value corresponding to nine (9) per cent of the issue guarantees pledged, totalling SEK 54,999 996.70 kronor. For more details, see point 10.

The board’s proposal for a decision on a new issue of shares as per point 7

The board proposes that the general meeting makes a decision that the board’s share capital, currently totalling SEK 3,492,021.80, be increased by a maximum of SEK 436,502.70, or the higher sum of a maximum of SEK 461,402.40, which can be actualised on full utilisation of the company’s option rights designated “Option rights 2007”, “Option rights 2008” and “TO10”, whereby a new subscription to a maximum of 1,991,983 shares, each share with a quota value of SEK 0.10 kronor, may be arranged. Thus, a maximum of 4,614,024 new shares may be subscribed to within the scope of the new issue, with a maximum of 248,997 shares being subscribed to with the support of shares obtained after the utilisation of existing subscription options, which may be used in connection with the issue. The last day for subscription utilising the company’s “Option rights 2007”, “Option rights 2008” and “TO10” option rights in order for the shares acquired through such a subscription to carry entitlement to participation in the issue is 20 July 2007.

Anyone registered as a Paynova shareholder on the record date has preferential rights to subscribe to one (1) new share for each whole number of eight (8) shares owned. The new shares must be subscribed to during the period from Wednesday, 8 August 2007 to Wednesday, 22 August 2007 inclusive. The record date for obtaining subscription rights is Monday, 6 August 2007. The new shares will be issued at a price of SEK 11 per share.

The new shares carry a dividend entitlement, if a dividend is agreed, for the financial year 2007 onwards, provided the new shares have been registered and entered in the share register kept by VPC AB before the record date for dividends.

In the event of full subscription to the proposed preferential share issue, the dilution effect will correspond to around 13.2 per cent of the share capital and votes.

The board’s proposal for an issue of “Option rights 2009” for a new subscription of shares, as per point 8

The board proposes that the general meeting, with deviation from shareholders’ preferential rights, makes a decision on a targeted issue of a maximum of 4,365,027 option rights, or the higher sum of a maximum of 4,614,024 option rights which can be actualised on full utilisation of the company’s option rights designated “Option rights 2007”, “Option rights 2008” and “TO10”, whereby a new subscription to a maximum of 1,991,983 shares may be arranged. Thus, a maximum of 4,614,024 option rights may be subscribed to within the scope of this decision on a new issue, with a maximum of 248,997 being subscribed to with the support of shares obtained after the utilisation of existing subscription options.

It is proposed, with deviation from shareholders’ preferential rights, that the option rights be subscribed to by Mangold Fondkommission AB with entitlement and obligation to transfer the option rights free of charge to those subscribing to the shares in the preferential rights issues as per point 7 above. Each share paid for and subscribed to carries entitlement to one (1) Option right 2009. The reason for the deviation from the shareholders’ preferential rights is to enable a structure for the preferential rights issue through which each share owner receives one (1) “unit”of one (1) share, one (1) Option right 2009 and one (1) Option right 2010.

The option rights must be subscribed to by 22 August 2007.

One (1) option right entitles the owner to subscribe to one (1) new share in the company at a subscription price of SEK 6. By utilising the option rights, the share capital will be increased by a maximum of SEK 461,402.40.

The subscription period for new subscription to shares supported by these option rights runs from 1 November 2008 to 31 January 2009 inclusive. In the event of the shares being fully subscribed in the preferential rights issue proposed by the board, the dilution effect, on full utilisation of the option rights, will correspond to around 11.7 per cent of the share capital and votes.

The board’s proposal for an issue of “Option rights 2010” for a new subscription of shares, as per point 9

It is proposed, with deviation from shareholders’ preferential rights, that the option rights be subscribed to by Mangold Fondkommission AB with entitlement and obligation to transfer the option rights free of charge to those subscribing to the shares in the preferential rights issue as per point 7 above. Each share paid for and subscribed to carries entitlement to one (1) Option right 2010. The reason for the deviation from the shareholders’ preferential rights is to enable a structure for the preferential rights issue through which each share owner receives one (1) “unit” of one (1) share, one (1) Option right 2009 and one (1) Option right 2010.

The option rights must be subscribed to by 22 August 2007.

The subscription period for subscribing to shares supported by these option rights runs from 1 November 2009 to 31 January 2010 inclusive. In the event of the shares being fully subscribed in the preferential rights issue proposed by the board, the dilution effect, on full utilisation of the option rights, will correspond to around 11.7 per cent of the share capital and votes.

The board’s proposal for authorisation as per point 10

The board proposes that the meeting authorise the board to make a decision on an increase in the share capital through a targeted new issue of shares to Maths O. Sundqvist through a company before the next annual general meeting. This proposal means that the board will be authorised to make a decision on deviation from shareholders’ preferential rights and also to decide on the terms of the issue.

The reason for the deviation from the preferential rights is that the company must pay the agreed guarantee compensation for the above issue guarantees pledged. The guarantee compensation will be paid in the form of shares in the company at a value corresponding to nine (9) per cent of Maths O. Sundqvist’s maximum subscription commitment as per the guarantee agreement, amounting to SEK 4,949,999.70.

The issue price, as agreed, will be the quota value of the share, i.e. SEK 0.10. The maximum number of shares that the board can decide to issue as a result of the authorisation must be determined based on the company’s average closing price over a period of two (2) weeks immediately preceding the general meeting’s decision on the preferential rights issue as per point 7 above, calculated as follows:

(i) the value of the subscription commitment,

divided by

(ii) the average closing price of the Paynova share during a period of two (2) weeks immediately preceding the extraordinary general meeting that makes the decision on the new issue,

multiplied by

(iii) 0.09.

Other terms for the share issues proposed as per points 7, 8 and 9 and the authorisation as per point 10

The share issues proposed as per points 7, 8 and 9 and the authorisation as per point 10 are proposed crosswise, conditional on the general meeting making a decision in accordance with all of the board’s proposals as per these points.

Several major Paynova shareholders, together representing slightly more than fifty per cent of the share capital and votes, have undertaken to vote for the proposed issues and the proposed authorisation. As the decisions proposed as per points 8, 9 and 10 above will be implemented with deviation from shareholders’ preferential rights, it is necessary for decisions at the meeting to be supported by shareholders with at least two thirds of both the specified votes and the shares represented at the meeting.

DOCUMENTS

The board’s full proposal as per points 7, 8, 9 and 10 above and documents in accordance with chapter 13 § 6 and chapter 14 § 8 of the Swedish Companies’ Act and the company’s quarterly report issued in 2007 will be available at the company from Monday 16 July 2007. The documents will be sent free of charge to any shareholders who request it and provide their postal address. These documents will also be available at the general meeting.

Stockholm, July 2007

Paynova AB (publ.)

The board

ABOUT PAYNOVA

Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, e-retailers can get a payment guarantee for around twenty payment options in 10 languages with 8 currencies in a security-certified interface (PCI). Consumers can open an account, a Paynova Wallet, for free on the Internet to make purchases simpler and more secure, as well as look after transfers between family members, friends and acquaintances. Paynova has agreements with around 1,400 e-retailers. Most are found in the following prioritised segments: travel, retailing and media/network games. The company has been listed on NGM Equity since February 2004. For more information: www.paynova.com

INVITATION TO EXTRAORDINARY GENERAL MEETING OF PAYNOVA AB (PUBL.)

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