Panostaja Oyj - Company Announcement

PANOSTAJA ARRANGES A SHARE ISSUE AND AN OFFERING OF CONVERTIBLE CAPITAL LOAN

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PanostajaOyj                        STOCK EXCHANGE RELEASE                 
16.12.2010 10:15 

PANOSTAJA ARRANGES A SHARE ISSUE AND AN OFFERING OF CONVERTIBLE CAPITAL LOAN

The Board of Directors of Panostaja Oyj has today 16 December 2010 decided on a
share issue based on the authorization granted by Panostaja Oyj's Annual
General meeting on 18 December 2007. In the share issue the company offers,
deviating from the shareholders' pre-emptive subscription right, up to
4,000,000 new shares of the company to Finnish institutional investors for
subscription. In addition, the Board of Directors of Panostaja has resolved to
offer convertible capital loan up to an aggregate amount of EUR 15,000,000,
deviating from the shareholders' pre-emptive subscription right, to Finnish
institutional investors for subscription. 

The company intends to use the net proceeds from the share issue and the
convertible capital loan to enforce its growth strategy and to strengthen the
capital structure of the company. The company aims to focus on its business
idea following its fundamental business strategy and on the development of
existing business segments.In the coming years, the retirement of the 'baby
boom' generation, ever worsening changes in the business environment and
globalisation will bring to the market a large number of companies that can be
acquired. Active development of shareholder value and financial opportunities
create a solid foundation for significant operational expansion. In addition to
this the company aims to buy back note units of the convertible subordinated
loan 2006 in order to improve the maturity schedule of the company's long-term
debt. 

The subscription price is EUR 1.45 per share in the share issue, which is based
on the market price of the share of the company in NASDAQ OMX Helsinki Oy. The
close price of the share of the company on 15 December 2010 was EUR 1.49 and
the 30-day volume-weighted average share price was EUR 1,48. The subscription
period of the new shares will commence immediately and expire at 20 December
2010. The subscription price shall be entered into the invested unrestricted
equity reserve of the company. The accepted subscriptions shall be paid at
latest at 5 January 2011 in accordance with the instructions given by the
subscription place. The new shares will be registered with the trade register
on or about 11 January 2011 and will be recorded on the subscriber's book-entry
account on or about 11.1.2011. Trading in the new shares on NASDAQ OMX Helsinki
Oy commences on or about 11.1.2011. The Board of Directors of Panostaja shall
decide on the procedure in case of a possible oversubscription. The terms and
conditions of the share issue are set out in the appendix to this release. 

The full aggregate amount of the offered convertible capital loan is up to EUR
15,000,000. The issue price of the loan is 100 % and the aggregate amount of
the notes will bear annual interest at the rate of 6.5 %. The maturity of the
loan shall be from 7 February 2011 to 1 April 2016. The minimum subscription
amount of the loan is EUR 50,000 and the subscription period is from 10 January
2011 to 31 January 2011. The original conversion rate of the share is EUR 2.20
and the offered convertible capital loan/notes entitles the note unit holders
to convert the full aggregate amount of the loan to up to 6,818,181 new shares
in the company calculated on basis of the original conversion rate. The
conversion period of the loan notes will commence on 1 August 2011 and expire
on 1 March 2016. The conversion rate of the shares shall be entered into the
invested unrestricted equity reserve of the company. The Board of Directors of
Panostaja shall decide on the procedure in case of a possible oversubscription.
The terms and conditions of the offered convertible capital loan are set out in
the appendix to this release. 

Certain holders of the note units of the convertible subordinated loan 2006 who
represent in total EUR 11,581,250 of the nominal aggregate amount of the loan,
have committed to sell their total holdings of note units at a price
corresponding to the nominal value of the note units added with accrued
interest to the transaction date and subscribe for the offered convertible
capital loan with a minimum of EUR 5,750,000. In addition to this Panostaja has
committed to accept subscriptions of the relevant investors worth of minimum
EUR 5,750,000. 

Danske Bank Corporate Finance is acting as financial adviser of Panostaja in
the arrangement and as the sole manager of the share issue and the convertible
capital loan. 

PanostajaOyj

Board of Directors

Additional information: CEO Juha Sarsama + 358 40 774 2099

Danske Bank Corporate Finance

Director Pekka Hiltunen +358 10 546 7929

Appendix:

TERMS AND CONDITIONS OF A DIRECTED SHARE ISSUE

The Board of Directors of Panostaja Oyj has today 16 December 2010 decided on a
directed share issue of maximum of 4,000,000 new shares ("New Shares") in the
company based on the authorization granted by Panostaja Oyj's Annual General
meeting on 18 December 2007 ("Share Issue"). 

1        Subscription right and deviation from the pre-emptive subscription
right of a shareholder 

All New Shares are offered for subscription in deviation from the shareholders'
pre-emptive subscription right to domestic institutional investors selected by
the Board of Directors of the company. 

The Share Issue is a part of the transaction where the company issues a
convertible capital loan of EUR 15,000,000 and aims to buy back note units of
the convertible subordinated loan 2006. The company intends to use the net
proceeds from the share issue and the new convertible capital loan to enforce
its growth strategy and to strengthen the capital structure of the company.
Therefore, there are weighty financial grounds on the part of the company to
the deviation from the shareholders' pre-emptive subscription right as
indicated in Chapter 9 Section 4 Paragraph 1 of the Companies Act. 

2        Subscription of the shares

The subscription period for the New Shares commences on 16 December 2010 at
10.30 a.m. and expires on 20 December 2010 at 16.00 p.m. The Board of Directors
may extend the share subscription period. 

The subscription of New Shares shall take place at the office of the Share
Issue's manager Danske Bank Corporate Finance or other location decided by the
Board of Directors. 

Investors shall give Danske Bank Corporate Finance a binding subscription
undertaking where they authorize Danske Bank Corporate Finance or a person
nominated by it to make the subscription. 

The Board of Directors decides on the procedure in case of possible
oversubscription. In under-subscription the Board of Directors may decide who
is entitled to and which procedure needs to be followed in order to subscribe
for the New Shares which have not been subscribed. 

Notice on approved subscriptions will be sent to the investors who have given a
subscription undertaking. 

3        Subscription price for the shares and payment of the subscription price

The subscription price for the New Shares is 1,45 euro per share.

The subscription price is based on the market price of the share of the company
in NASDAQ OMX Helsinki Oy. The close price of the share of the company on 15
December 2010 was EUR 1,49 and the 30-day volume-weighted average share price
was EUR 1,48. 

The subscription price shall be paid at latest on 5 January 2011 in accordance
with the instructions given by the subscription place. The Board of Directors
may extend the period for payment of the subscription price. 

The subscription price of the New Shares shall be entered into the invested
unrestricted equity reserve of the company. 

4        Dividend and other shareholder rights

The New Shares entitle their holder to dividend distribution and to other
shareholder rights from the point of time when the New Shares have been
registered with the Trade Register and combined with the existing shares of the
company. 

5        Recording of New Shares on book-entry account and trading on New Shares

The New Shares will be entered into the book-entry securities system and
recorded on the subscribers' book-entry accounts as soon as the New Shares have
been registered with the Trade Register, which shall take place on or about 10
January 2011. The first trading day of the New Shares with the existing shares
of the company is on or about 11 January 2011. After this date the New Shares
will be traded under the same trading symbol ("PNA1V") and the same ISIN code
(FI0009800379) as the existing shares of the company and the New Shares are not
separated from the company's existing shares in book-entry accounts or in
trading. 

These terms and conditions have been made in Finnish and in English. In the
case of any discrepancy between the Finnish and English terms and conditions,
the Finnish terms and conditions shall prevail. 

PANOSTAJA OYJ'S CONVERTIBLE CAPITAL LOAN 2011

The Board of Directors of Panostaja Oyj (the "Issuer" or the "Company") has on
16 December 2010 decided on an issuance of Convertible Capital Loan based on
the authorization granted by Panostaja Oyj's Annual General meeting on 18
December 2007 with the following terms and conditions: 

I Terms and Conditions of the Convertible Capital Loan

1. Amount of the Convertible Capital Loan

The amount of the Convertible Capital Loan (the "Loan") shall be a maximum of
EUR 15,000,000. 

The Loan shall be issued to a maximum of 300 note units with a nominal value of
EUR 50,000 each ("debentuuri", as referred to in the Promissory Loan Act,
Paragraph 5 Section 34, hereinafter "Note Unit"). 

The Board of Directors of Panostaja Oyj (the "Board of Directors") is entitled
to increase the amount of Loan and the number of Note Units in oversubscription
situation and amend the Terms and Conditions of the Loan accordingly. 

The Loan Notes shall be issued in electronic format in OM-system kept by
Euroclear Finland Oy ("Euroclear Finland"). 

ISIN code of the Loan is FI4000019864.

Principal of the Loan shall be recorded as a separate item to the balance sheet.

2. Subscription Right

The Loan shall be offered for subscription by domestic institutional investors,
selected by the Board of Directors, with deviation from the shareholders'
pre-emptive right to subscribe for securities. The minimum amount of a
subscription for the Loan shall be EUR 50,000, i.e. one (1) Note Unit. 

There are weighty financial grounds for taking the Loan as the funds received
from the Loan are necessary in order to strengthen the financial position,
optimize the capital structure and enable investments of the Company. The issue
rate and the conversion rate have been defined market-based. 

The Board of Directors shall decide who shall have the right to subscribe for
any Note Units left unsubscribed. 

The Board of Directors shall decide on the procedure to be observed in the
event of oversubscription, whereby the Board of Directors shall have the
possibility of reducing subscriptions. The Board of Directors shall have the
right to reject any subscription made in its entirety. 

3. Offer Period and Place of Subscription

The period for receiving subscription offers shall commence on 10 January 2011
at 9.00 am. and end on or about 31 January 2011 at 4.00 pm. The offer period
can be ended sooner despite of the current subscription status of the Loan. 

Danske Bank Corporate Finance shall act as the manager of the Loan (the"Manager"). 

Sampo Pankki Oyj shall act as the issuer agent (the "Issuer Agent"). The Issuer
Agent reserves the right at any time to cancel its nomination as issuer agent
and nominate new issuer agent(s). Subscription offers shall be received in
writing at: 

Danske Bank Corporate Finance

Pohjoisesplanadi 37 A

00100 Helsinki

Fax +358 (0)10 546 2567

Tel. +358(0)10 546 3170

4. Issue Rate and Approval of Subscription Offers

The rate of issue of the Loan is one hundred (100) per cent.

The Board of Directors shall decide on approval of the subscription offers
after the close of the Offer Period. The Board of Directors shall have the
right to reject any subscription. The subscribers shall be notified in writing
of approval or rejection of their subscription offers on or about 1 February
2011. 

5. Payment of Subscriptions

Subscribers shall pay the Note Units no later than 7 February 2011 in
accordance with separate instructions to be specified later. 

6. Maturity

The Loan shall be dated 7 February 2011.

The maturity of the Loan shall be from 7 February 2011 to 1 April 2016. The
Loan shall be repaid in a bullet payment on 1 April 2016, provided that the
conditions of repayment specified in Section 7 are met. 

7. Repayment and purchase of the Loan

A) Repayment at Maturity

The principal of the Loan may be repaid only to the extent that the amount of
the unrestricted equity of the Company and the amount of all capital loans of
the Company upon payment exceeds the amount of loss in accordance with the
balance sheet approved for the preceding financial year or with the balance
sheet included in more recent financial statements. 

Should the conditions for repayment of the Loan not be met at maturity, the
principal of the Loan shall be repaid in part to the extent that this is
possible, within the scope of the conditions of repayment. In other respects,
the repayment of the Loan shall be deferred to be paid on the corresponding day
of the following year until the Loan is paid in full. 

B) Repayment Prior to Maturity

The Company shall, furthermore, have the right, as from 1 January 2012, to
repay the principal of the Loan in full at the rate of 100 per cent with
interest accrued up to the date of the repayment, providing that 

a) the conditions for repayment mentioned in Section A) above and for payment
of interest mentioned in Section 8 are met, and that 

b) the trade-weighted average price of the Panostaja share on NASDAQ OMX
Helsinki Oy Stock Exchange, after 1 January 2012 or immediately prior to this
date, has, during 20 of 30 consecutive trading days, exceeded the exchange
price determined in these Terms and Conditions of the Loan, at least by 100
percent. 

In addition to the situation mentioned above, the Company shall, furthermore,
have the right to repay the principal of the Loan in full at the rate of 100
per cent with interest accrued up to the date of the repayment, provided that
there is an amendment to the laws or regulations of the State of Finland, any
municipality or any authority having power to tax or general application or
official interpretation of such law or regulation changes to the effect that: 

(i)       The Company is obliged or becomes obliged to withhold tax at source,
tax deduction or other comparable tax or fee from the interests payable to the
Note Units; or 

(ii)   The Company is not entitled to deduct interests payable to the Note
Units in its income taxation in Finland to the same extent as on the starting
date of the loan period. 

As a precondition for the repayment of the Loan, an internationally well-known
independent legal advisor or auditing firm selected by the Board of Directors
shall have given a written statement confirming that (a) the above mentioned
change has taken place or is about to take place and that (b) the Company has
or will have an obligation to pay additional payments in question as a
consequence of the change or the Company is not entitled to make the above
mentioned deduction in its income taxation. 

Additionally, it is a precondition for the repayment of the Loan that the above
mentioned change enters into force on the starting date of the loan period or
thereafter. 

The Company shall notify the Note Unit holders (the "Note Unit Holder") of the
exercise of the aforementioned right of repayment and of the relevant measures
not later than 30 days and not earlier than 60 days prior to the Repayment
Date. 

The principal of the Loan shall not accrue interest for the period after the
announced Repayment Date. 

The Company shall, in addition to the repayment specified here, reserve for Note

Unit Holders a special right of conversion pursuant to Sections 11 and 18.

Should a Note Unit Holder wish to exercise his right of conversion instead of
the repayment as specified here, he/she/it must demand conversion of the Note
Units into shares not later than 14 days prior to the Repayment Date announced
by the Company. The Note Unit Holder shall, in this case, have the right to set
as a condition for the conversion into shares that repayment be effected on the
Repayment Date announced by the Company. 

After the conversion has taken place, the Company must, without delay, notify
the relevant registration authorities of the number of shares that have been
issued against the Note Units. 

C) Other Matters Pertaining to Repayment

Note Unit Holders shall be notified of repayment of the Loan, in accordance
with Section 19, no later than 30 days prior to repayment. 

The principal of the Loan shall be repaid to the party who, at the commencement
of the Repayment Date, is entitled to receive the payment according to the
information recorded in the relevant book-entry account. If the book-entry unit
issued for a Note Unit is subject to temporary registration at the commencement
of the maturity date, as specified in these Terms and Conditions of the Loan,
or if the book-entries issued for the Note Unit have been recorded in a
consignment account at the commencement of the maturity date, the repayment
shall be made on the basis of the information recorded in the relevant
book-entry account. If repayment is not possible on the basis of the
information recorded in the 

Bondholder Register, payment shall be made to a party who can demonstrate that
the book-entry issued for the Note Unit belonged to him/her/it at the
commencement of the maturity date, in accordance with the Terms and Conditions
of the Loan. 

D) Purchase

In accordance with the applicable laws and regulations and taking into account
the preconditions of the stock exchange where the Note Units may be publicly
traded from time to time, the Issuer or Issuer's subsidiary may at any time
purchase Note Units from open market or other way at any price. If the Issuer
or its subsidiary makes a public tender offer for the Note Units, it shall be
made equally to all Note Unit Holders. 

E) Annulment

All the Note Units redeemed, purchased or changed by the Issuer shall be
annulled without undue delay and they will not be re-issued or re-sold. 

8. Interest

The annual fixed interest to be paid on the principal of the Loan is 6.5 per
cent. 

The interest shall be paid annually in arrears on 1 April (hereinafter"Interest Payment Date"), for the first time on 1 April 2012, and for the last
time at maturity. If an Interest Payment Date is not a banking day, interest
can be paid on the following banking day. 

The first Interest Period shall commence on 7 February 2011 and end on the
first Interest Payment Date. Each subsequent Interest Period shall commence on
the previous Interest Payment Date and end on the following Interest Payment
Date. The final Interest Period shall end on the day by which the Loan is
repaid in full. 

Interest shall accrue according to actual days, exclusive of the first and
inclusive of the last day of each Interest Period. The number of days in the
interest year shall be 365 (basis for calculation of interest "actual/365"). 

Interest on the Loan can be paid annually only to the extent that the amount of
the unrestricted equity of the Company and the amount of all capital loans of
the Company upon payment exceeds the amount of loss in accordance with the
balance sheet approved for the preceding financial year or with the balance
sheet included in more recent financial statements. 

Interest left unpaid shall remain a liability of the Company and shall earn
annual interest of two (2) percentage points in excess of the interest rate
payable on the Loan. The Company shall be permitted to pay interest, the
payment of which it has previously deferred, as well as the interest accrued on
it in full or in part, at a date which it shall announce. If payment is made in
part, the interest accrued on the original interest shall be payable first. 

Interest left unpaid and the interest which has accrued on it must be paid,
nevertheless, in full 

a) on the first banking day following approval of the Company's balance sheet,
providing this is possible according to the balance sheet on the conditions set
out in the previous paragraph, or 

b) on repayment of the principal of the Loan. Interest left unpaid shall not
earn further interest for the time after the announced Repayment Date. 

The Company shall notify Note Unit Holders, in accordance with Section 19, of
the deferral of payment of interest and the payment of interest left unpaid not
later than five (5) banking days prior to the Interest Payment Date. 

Interest accrued on interest left unpaid shall rank senior on the Interest

Payment Date, after which unpaid interest balances shall be paid and then the
interest earned for the previous year. 

If the Loan cannot be repaid at maturity, the interest payable on the unpaid
principal of the Loan shall be two (2) percentage points in excess of the
annual interest rate confirmed to this Loan. 

Interest shall be paid to a party who, according to the information recorded in
the Bondholder Register at the commencement of the maturity date under the
Terms and Conditions of the Loan, is entitled to receive such payment. 

If the book-entry unit issued for a Note Unit is subject to temporary
registration at the commencement of the maturity date, as specified in these 

Terms and Conditions of the Loan, or if the book-entries issued for the Note
Unit have been recorded in a consignment account at the commencement of the
maturity date, the payment shall be made on the basis of the information
recorded in the relevant book-entry account. If payment is not possible on the
basis of the information recorded in the Bondholder Register, payment shall be
made to a party who can demonstrate that the book-entry issued for the Note
Unit belonged to him/her at the commencement of the maturity date, in
accordance with the Terms and Conditions of the Loan. 

The Company can pay dividends to its shareholders if, and only if, the interest
to be paid on this Loan, as well as any unpaid interest and interest accrued on
it, have been taken into account as an imputed reduction in unrestricted
equity. 

The provisions governing a Note Unit Holder's right to the payment of interest
upon conversion of Note Units into shares are set out hereinafter in Section
14. 

9. Priority Ranking of the Loan

Should the Company be placed in liquidation, the Loan shall fall due for
repayment 90 days after the notice of liquidation has been entered into the
Trade Register. 

The Loan is a capital loan whose principal and interest may be paid on
dissolution or bankruptcy of the Company solely at a priority ranking below
that of all other creditors. 

This Loan shall have the same priority ranking as Company's capital loan,
registered at 15 January 2007, and any capital loans or comparable instruments
which the Company may issue in the future. 

Any receivable based on the Loan may not be netted against Company's claim from
the Note Unit Holder. 

The Loan is not secured by a guarantee or other collateral.

10. Payments

All the payments related to Note Units shall be made in accordance with the
regulations concerning book-entry system and book-entry accounts as well as
rules and decisions of Euroclear Finland in force from time to time. 

II Terms and Conditions of Conversion into Shares

Note Units can be converted to new Panostaja shares in accordance with the
following instructions: 

11. Conversion Rate

Each Note Unit in the amount of EUR 50,000 entitles the Note Unit Holder to
convert the Note Unit into new Panostaja shares. 

The number of shares to be provided based on the conversion right shall be
calculated by dividing the Note Unit with the conversion rate in force at the
Conversion Date (as defined below) (the "Conversion Rate"). The original
Conversion Rate of the share is EUR 2.20 and it shall be reduced in accordance
with Section 16 below. The Conversion Rate shall at all times be no less than
EUR 0.01 per share. 

The Loan shall be convertible into a maximum total of 6,818,181 new shares
calculated on basis of the original Conversion Rate. 

If a Note Unit Holder, upon conversion of Note Units into shares, receives a
fraction of a share, he/she/it shall receive a cash payment for said fraction.
The price of the share in such a case shall be the closing price of the share
in continuous trading on the preceding trading day. If a Note Unit Holder
converts more than one Note Unit into shares at the same time, the number of
full shares shall be calculated on the basis of the number of all the Note
Units. 

Principal of the Loan per converted share shall be entered into the invested
unrestricted equity reserve of the Issuer. 

12. Conversion Period

The conversion period for the Loan shall commence on 1 August 2011 and end on 1
March 2016 or when the Note Units are paid back before the maturity. 

The Board of Directors may temporarily suspend conversion of the Note Units
into shares for a specified period, for a reason mentioned in Section 15 or for
some other weighty reason. 

Save for the situation where the Issuer gives a repayment notification in
accordance with Section 7 B, the Note Unit Holder may not use the conversion
right during the time period which commences on the record date of the interest
payable to the Note Unit and ends on the date when the interest in question is
paid. 

13. Conversion Procedure

Note Unit Holder may use conversion right during the Conversion Period by
delivering a signed and duly completed notification of conversion (the"Notification of Conversion") to the Issuer Agent during its customary opening
hours. The Notification of Conversion shall be made by following the
instructions and by using the form in force from time to time provided by the
Issuer Agent 

Notification of Conversion is irreversible after it has been delivered.

The conversion date of a Note Unit is the banking day which follows the date on
which the Issuer Agent has received the Notification of Conversion (the"Conversion Date"). 

The Note Units applied in making a conversion shall be removed from the Note
Unit Holder's book-entry account at the same time as the shares received as a
result of conversion are registered in the book-entry account. 

The Company shall have the right, upon receipt of a Notification of Conversion,

to record in the relevant book-entry account a restriction on transfer
concerning the Note Unit which is used in making the conversion, without
recourse to the Note Unit Holder. 

14. Dividend Rights and Other Shareholder Rights

Shares will be eligible for dividend with respect to the financial year in
which the conversion to new shares takes place. Other shareholder rights shall
commence from the date on which the new shares are entered into the Trade
Register. 

When Note Units are converted into shares, the Note Unit Holder shall not be
entitled to interest accrued on the principal of the Loan from the beginning of
the preceding Interest Period. If, however, interest is due from a previous
Interest Period and the interest accrued on this amount has not been paid by
the conversion date, owing to a cause mentioned in Section 8 of the Terms and
Conditions of the Loan, or if it cannot be paid in accordance with said
Section, the provisions of Section 8 shall be applied to the payment of said
interest and to the interest accrued on it, and when the conversion is made, a
separate certificate for the amount of interest due shall be issued to the Note
Unit Holder. 

15. Share Issues as well as Convertible Capital Loans, Stock Options, and

Other Special Rights entitling to Shares prior to the Close of the Conversion
Period 

If the Company, prior to the close of the conversion period, issue shares, new
stock options or convertible capital loans or other special rights entitling to
shares, the Note Unit Holder shall have a right which is the same or equal to
that of shareholders. His/her principle of equality shall be implemented in a
manner decided by the Board of Directors such that 

a) the number of shares which can be received through conversion is changed, or

b) the Note Unit Holder is offered a similar pre-emptive right of subscription
to that of shareholders, or 

c) a combination of the methods mentioned above in Sections a) and b) is used.

If the Company, prior to the close of the conversion period, issue shares, new
stock options or convertible capital loans or other special rights entitling to
shares in deviation from the shareholders' pre-emptive right, this shall have
no impact on the status of the Note Unit Holder. 

16. Rights of Note Unit Holders in Certain Special Cases

Acquisition and Redemption of Shares, Stock Options and Other Special Rights
entitling to Shares 

If the Company, prior to the close of the conversion period, acquires or
redeems its own shares from all shareholders in accordance to the shareholders'
pre-emptive right, the Note Unit Holders shall have a right which is the same
or equal to that of a shareholder. Equality shall be implemented as decided by
the Board of Directors, either by changing the number of shares in conversion,
or by giving the Note Unit Holder an opportunity to exercise his/her conversion
right before the acquisition of Company's shares begins, within a period of
time determined by the Board of Directors. 

If the Company acquires or redeems stock options or other special rights
entitling to shares rights before the end of the conversion period, this shall
have no impact on the status of the Note Unit Holder. In addition, Section 7 D
shall be applied to acquisition of the Note Units. 

Distribution of Dividends, Distribution of Assets out of the Non-Restricted
Equity Fund or Decrease of the Share Capital 

If the Company decides to distribute dividends or assets out of the
non-restricted equity fund before the end of the conversion period, the
Conversion Rate shall be reduced with the amount of dividend or distributed
non-restricted equity per share on each record date of the dividend or
non-restricted equity distribution. 

If the Company decides to decrease share capital before the end of the
conversion period, the Conversion Rate shall be changed in a way specified in
the decision regarding decrease of share capital or by giving the Note Unit
Holder an opportunity to exercise his/her/its conversion right before the
decision regarding decrease of share capital is made in the general meeting. 

Liquidation

If the Company is placed in liquidation, dissolved or taken out from company
register before the end of the conversion period, the Note Unit Holder shall be
given an opportunity to exercise his/her conversion right before the
liquidation begins or the Company is dissolved or taken out from company
register, within a period of time determined by the Board of Directors. 

Redemption Right and Obligation

If a redemption right and obligation to all of the Company's shares, as
referred to in Chapter 18 Section 1 of the Finnish Companies Act, arises to any
of the shareholders, before the end of the conversion period, on the basis that
a shareholder possesses over 90% of the shares and the votes of the shares of
the Company, the Note Unit Holders shall be given a possibility to use their
right of conversion into shares, within a period of time determined by the
Board of Directors, after which period the conversion right shall lapse. 

Transformation from Public Limited Company in to Limited Company

It he Company is transformed from public limited company in to limited company
before the end of the conversion period, the Note Unit Holders shall be given a
possibility to use their right of conversion into shares, within a period of
time determined by the Board of Directors. 

Merger and De-merger

If the Company resolves to merge into another company as the company being
acquired or into a company to be formed in a combination merger, or if the 

Company resolves to be de-merged, the Note Unit Holders shall, before the
merger or de-merger, be given the right to use their right of conversion into
shares, within a period of time determined by the Board of Directors, after
which period the conversion right shall lapse. 

III OTHER MATTERS

17. Technical Amendments

The Board of Directors shall have the right to amend the technical procedures
connected with the Loan in respect of payments and conversion into shares or
other similar matter, without the consent of Note Unit Holders or Note Unit
Holders' meeting. 

The Company shall advise Note Unit Holders of any amendments, in accordance
with Section 19. 

The Loan shall be applied for public listing on NASDAQ OMX Helsinki Oy.

18. Note Unit Holders' Meeting

(A) The Board of Directors shall have the right to convene a meeting of the
Note Unit Holders of this Loan (the "Note Unit Holders' Meeting") to decide on
amendments to the Terms and Conditions of the Loan. 

(B) Notice of a Note Unit Holders' Meeting shall be published no later than 10
days prior to the meeting, in accordance with Section 19. The notice shall
specify the date, hour, place, and agenda of the meeting, as well as the
procedure for registering to attend the meeting. 

(C) The Note Unit Holders' Meeting must be held in Tampere and its chairman
shall be appointed by the Company. 

(D) The Note Unit Holders' Meeting shall have a quorum if one or more persons
together holding at least 70% of the outstanding principal amount of the Loan
are present. The Note Unit Holders' Meeting shall, nevertheless, only have a
quorum for passing an extraordinary resolution pursuant to Section 18 (I) if
one or more persons are present who together represent at least 70% of the
outstanding principal amount of the Loan. 

(E) If the Note Unit Holders' Meeting does not have a quorum within 30 minutes
of the time for starting the meeting as set forth in the notice, consideration
of the agenda of the meeting can be deferred to a new Note Unit Holders'
Meeting, at the request of the Company, said meeting to be held within no less
than 14 days and no more than 28 days at a place designated by the Company. 

The new Note Unit Holders' Meeting shall have a quorum if one or more persons
together representing at least 30% of the outstanding principal amount of the
Loan are present. The new Note Unit Holders' Meeting shall, nevertheless,
constitute a quorum for the purpose of passing an extraordinary resolution
pursuant to Section 18 (I) only if one or more persons are present who together
represent at least 70% of the outstanding principal amount of the Loan. 

(F) Notice of a new Note Unit Holders' Meeting to be held owing to an
adjournment, shall be published in the same manner as the notice convening the
original meeting. The notice shall furthermore state the conditions under which
a quorum shall be constituted. 

(G) Note Unit Holders' voting rights shall be determined on the basis of the
principal amount of Note Units held. Panostaja and the consolidated companies
of the Panostaja Group shall not hold voting rights at the Note Unit Holders'
Meeting. 

Resolutions of the Note Unit Holders' Meeting shall be passed by a simple
majority of the votes cast. Should the voting result in a tie, the chairman
shall have the casting vote. An extraordinary resolution pursuant to Section 18
(I) shall be passed, however, only if it obtains at least three-quarters of the
votes cast. 

(H) A representative of the Company and a person authorized to act for the

Company shall have the right to attend and speak at a Note Unit Holders'
Meeting. 

(I) A Note Unit Holders' Meeting shall have the right to decide on the
following matters, which may be set forth in a proposal of the Board of
Directors, subject to an extraordinary resolution supported by a minimum of
three-quarters of the votes cast: 

(a) altering the basis for calculation of interest on the Loan,

(b) changing the denomination of the Loan,

(c) amending the conditions under which a Note Unit Holders' Meeting shall have
a quorum or amending the qualified majority requirement for passing an
extraordinary resolution and 

(d) amending Section 9 of the Terms and Conditions of the Loan.

(J) Resolutions passed by a Note Unit Holders' Meeting shall be binding upon all

Note Unit Holders, regardless of whether they are present at a meeting and of

whether the resolution of the Note Unit Holders' Meeting has been entered in

their Note Units. Note Unit Holders are obliged to inform subsequent transferees

of the Note Units of the resolutions of the Note Unit Holders' Meeting.

(K) Terms and Conditions of the Loan, the amendment of which requires the
approval of a General Meeting of Shareholders of Panostaja may not be amended
by a resolution of a Note Unit Holders' Meeting before the General Meeting of
Shareholders has given its approval. 

(L) Where, in accordance with the Terms and Conditions of the Loan, the Company
may unilaterally decide on a measure, a decision taken on such a matter shall
not require the approval of a Note Unit Holders' Meeting. 

(M) A reduction of the principal or the interest of the Loan and an amendment
to the second last paragraph of Section 8 of these Terms and Conditions, shall
require the consent of all the Note Unit Holders as given at a Note Unit
Holders' Meeting or in some other certifiable manner. 

19. Notices

Note Unit Holders shall be obliged to inform the Company in case of changes in
his/her contact information or in case he/she transfers his/her Note Units. 

Note Unit Holders shall be advised of matters pertaining to the Loan by means
of a notice published in national daily newspaper designated by the Board of
Directors. Note Unit Holders shall be considered to have received notification
when the notice has been published in national daily newspaper designated by
the Board of Directors. 

In addition to the procedure described in the previous paragraph, the Company
can deliver notifications concerning the Loan in writing directly to Note Unit 

Holders, making said delivery to the addresses they have informed to the
Company. Mailed notification shall be considered to have been delivered on the
date when the delivery has been left in the post office. In this context, a
Note Unit Holder is deemed to be the party who, on the day of publication of
the notice, has been entered as a Note Unit Holder for the Loan in the
Bondholder Register which is kept by Euroclear Finland. 

20. Statute of Limitations

Where payment of the principal or interest has not been possible, due to
missing contact information, within three (3) years of the date on which
payment was first due under the Terms and Conditions of this Loan, the right to
any and all payment shall be forfeit. 

21. Delay in payment

Panostajashall be entitled to immediately collect an unpaid payment in
accordance in Section 5 from the Note Unit Holder, if the Note Unit Holder has
not been able to meet the payment schedule of unpaid Note Units. This possible
delay in payments shall not result in cancellation of already paid Note Units. 

22. Governing Law

This Convertible Capital Loan shall be governed by Finnish law, and disputes
arising in respect of them shall be resolved in a competent court in Finland. 

23. Force Majeure

Panostajacannot be held responsible for the unreasonable impairment of its
operations due to a case of force majeure or a similar cause. 

24. Information

All the documents concerning this Convertible Capital Loan shall be received

in writing at Panostaja Oyj, Postitorvenkatu 16, 33840 Tampere

These terms and conditions have been made in Finnish and in English. In the case

of any discrepancy between the Finnish and English terms and conditions, the

Finnish terms and conditions shall decide.

The information contained herein is not for release, publication or
distribution, directly or indirectly, in or into Australia, Canada, Japan,
South Africa or the United States. The information contained herein does not
constitute an offer of securities for sale in the United States, nor may the
securities be offered or sold in the United States absent registration or an
exemption from registration as provided in the U.S. Securities Act of 1933, as
amended, and the rules and regulations thereunder. There is no intention to
register any portion of the offering in the United States or to conduct a
public offering of any securities in the United States. 

The information contained herein shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the securities
referred to herein in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration, exemption from registration or
qualification under the securities laws of any such jurisdiction. 

Copies of this announcement are not being made and may not be distributed or
sent into Australia, Canada, Japan, South Africa or the United States.