WRITTEN NOTICE OF EXTRAORDINARY GENERAL MEETING
(NGM: PAY)
Shareholders in Paynova AB (publ) are hereby called to an Extraordinary General Meeting on Thursday 14 September 2006 at 6 p.m. at the Board Room in Industrihuset, Storgatan 19, Stockholm.
REGISTRATION
Shareholders wishing to attend the meeting must
· be entered in the share register kept by VPC AB by Friday 8 September 2006,
· register for participation in the general meeting of shareholders by 4 p.m. on Monday 11 September 2006 with Paynova AB, Box 30107, SE-104 25 Stockholm, Sweden, or by fax on +46 (0)8-517 100 29 or by e-mail on anm@paynova.com.
Shareholders may bring a maximum of two assistants to the meeting, provided the number of assistants is registered in accordance with the above-mentioned procedure for participation.
Shareholders whose shares are registered in the name of a nominee must have their shares temporarily registered in their own names in the share register in order to be eligible to participate in the meeting. This process must be completed by Friday 8 September 2006.
PROPOSED AGENDA
- Election of chairman for the meeting.
- Establishment and approval of voting list.
- Approval of the agenda.
- Election of one or two minutes-checkers.
- Checking that the meeting has been duly convened.
- Presentation of the Agreement entered into with Xponse IT Services (P) Ltd.
- Resolution on approval of the Agreement with Xponse IT Services (P) Ltd.
- Resolution on authorisation for the Board to decide to issue offset shares targeted at Xponse IT Services (P) Ltd.
- Conclusion of the meeting.
PROPOSED DECISIONS ETC.
POINT 6 – PRESENTATION OF THE AGREEMENT ENTERED INTO WITH XPONSE IT SERVICES (P) LTD.
As announced in a press release from Paynova on 25 August 2006, Paynova has entered into a Business Management and Restructuring Agreement with Indian company Xponse IT Services (P) Ltd., which is subject to the approval of the shareholders’ meeting.
As outlined in the press release, which can be seen at www.paynova.com, the Agreement entails that Xponse will provide Paynova with services in the following areas: Operational Management Services, Strategic Advice, Execution of the Restructuring Plan, Software Support and Development, Marketing Management Services and other Management Services. The contracted value of these services amounts to MSEK 74.85.
In addition, Xponse undertakes under the Agreement to provide Paynova with an ongoing capital injection of MSEK 1 per month, along with access to a credit facility of MSEK 15, at a joint contracted value of MSEK 15.
The total value of the contracted services listed above amounts to MSEK 89.85.
A positive cash flow for Paynova during the period January – June 2007 will also result in a performance premium of MSEK 12 on the value of the services.
As reimbursement for these services, Paynova will pay a purchase sum in the form of new shares in Paynova equivalent to the value of the above-mentioned services, i.e. a maximum of MSEK 101.85. Payment shall be made on five issue dates in a 12-month period (two in 2006 and three in 2007) and in line with Paynova’s operation developing in accordance with the Agreement and provision of services.
The issues shall take place at an issue rate equivalent to the share price for the 10 days prior to signature of the Agreement (SEK 11.80). This means that a maximum of approximately 8,650,000 shares may be issued. Xponse’s ownership share in Paynova after the transaction has been carried out is estimated at a maximum of around 23 per cent if the additional remuneration mentioned above is paid.
POINT 7 – RESOLUTION ON APPROVAL OF THE AGREEMENT WITH XPONSE IT SERVICES (P) LTD.
The Board proposes that the shareholders’ meeting approve the Agreement entered into with Xponse IT Services (P) Ltd. The Board proposes that such approval be granted subject to the meeting also deciding in favour of the Board’s proposal under Point 8 of the agenda.
POINT 8 – RESOLUTION ON AUTHORISATION FOR THE BOARD TO DECIDE TO ISSUE OFFSET SHARES TARGETED AT XPONSE IT SERVICES (P) LTD.
Provided that the shareholders’ meeting approves the Agreement entered into with Xponse IT Services (P) Ltd. as proposed in Point 7 above, the Board proposes that the shareholders’ meeting resolve on authorisation for the Board to decide to issue offset shares targeted at Xponse IT Services (P) Ltd. as follows:
“The shareholders’ meeting hereby authorises the Board on one or more occasions ahead of the next AGM and in a deviation from the shareholders’ preferential rights to decide to issue new shares targeted at Xponse IT Services (P) Ltd., or to such a Group company or other associated company as instructed by Xponse IT Services (P) Ltd. The authorisation shall encompass the right of the Board to decide upon such new issues, with the proviso that the shares be subscribed for with an entitlement for the share subscriber to buy the shares by offsetting against the claim which the share subscriber has on Paynova AB as a consequence of the services which Paynova AB has received under the Business Management and Restructuring Agreement which Paynova AB has entered into with Xponse IT Services (P) Ltd. on 24 August 2006. With the support of the official authorisation, the number of issued shares shall not exceed 8,650,000.
The issue price shall be based on the market value of the share for the 10 days prior to signing the above-mentioned Agreement, namely SEK 11.80. The reason for deviating from the shareholders’ preferential rights is to enable payment by offset share issues for the services and other contributions received by the Paynova Group in accordance with the Agreement in question.”
A valid resolution in accordance with this proposal requires that the meeting’s decision has the support of shareholders representing a minimum of two thirds of both the votes cast and the shares represented at the meeting.
OTHER
Shareholders jointly representing over 50 per cent of votes in the company have declared their support for the Board’s proposals under Points 7 and 8 of the agenda.
Stockholm, August 2006
The Board of Directors
ABOUT PAYNOVA
Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, e-retailers 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 more secure and simpler, as well as look after transfers between family members, friends and acquaintances.
Paynova has agreements with around 1,000 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