CONVERTIBLE HYBRID BOND

Transcription

1 UNOFFICIAL OFFICE TRANSLATION 1 (8) CONVERTIBLE HYBRID BOND 1. Parties Lender Keskinäinen Eläkevakuutusyhtiö Ilmarinen (Business ID ) (the Lender ) Borrower Nurminen Logistics Oyj (Business ID ) (the Borrower or the Company ) 2. Background and Purpose (The Lender and the Borrower hereinafter jointly referred to as the Parties and separately as the Party ) The Parties have drafted agreements, attached here as appendix 1, on the share purchase of real estate companies Kiinteistö Oy Luumäen Suoanttilantie 101 (Business ID , formerly Kiinteistö Oy Corallo ) and Kiinteistö Oy Vainikkalan Huolintatie 13 (Business ID , formerly Kiinteistö Oy Camelia ) on 2 November 2009, in relation to which the Company has financial debt ( Financial Debt ) (Fin. Rahoitusvelka ) to the Lender. The Purpose of this agreement is to convert and prematurely mature the amount of Financial Debt, as defined below in the Clause 3, into a hybrid bond (Fin. Hybridilaina), which includes a right to convert the loan into the shares of the Borrower. The Parties have agreed that the conditions in the share purchase agreements, attached here as appendix 1, will be amended due to the subscription with amendment agreements, attached here as appendix 2, which shall be signed in connection to this agreement. The amount of the Financial Debt specified in the Clause 3 shall be paid by set-off so that EUR 1,500,000 shall be converted into a hybrid bond with this agreement. In addition to the aforementioned agreements attached here as appendix 1, the Parties have also entered into similar share purchase agreements regarding other independent real estate companies. The Company has Financial Debt to the Lender also based on these agreements ( Other Financial Debt ) (Fin. Muu rahoitusvelka). The Borrower shall, in connection to the signing of this agreement, arrange a share issue ( Share Issue ) (Fin. Osakeanti), in which the Lender shall convert two million four hundred fifty-eight thousand four hundred euros (EUR 2,458,400.00) of the Other Financial Debt into the shares of the Borrower. Pursuant to the Share Issue and this agreement, the amount converted from the Other Financial Debt and the Financial Debt is combined three million nine hundred fifty-eight thousand four hundred euros (EUR 3,958,400.00).

2 UNOFFICIAL OFFICE TRANSLATION 2 (8) 3. Principal Amount 4. Priority of the Bond 5. Interest The principal amount of the hybrid bond is EUR one million five hundred thousand (EUR 1,500,000.00) (the Bond ). The Bond is an equity loan (Fin. Oman pääoman ehtoinen laina), which ranks: 1. junior in right to payment of other debt liabilities of the Company (including possible future capital loans of the Company); 2. in priority to payment of the Company s other items categorised as equity; and 3. in priority to payment of similar loans categorised as equity (hybrid loans) possibly issued by the Company in the future. If the Company is unwound through liquidation, bankruptcy or restructuring, the priority of the Bond shall rank pari passu with a debenture bond specified in the Finnish Promissory Note Act, Section 34 Sub-Section 2, i.e. the Bond shall be paid when all lenders with a higher priority to payment have received a full payment. The repayment of the Bond has not been secured with a guarantee or any other security. The Bond may not be used for set-off other than with receivables based on the subscription price of the Company s shares or with a debt liability with equal or junior priority to the Bond. The Company does not have any other hybrid loans on the day of the signing. As long as the Bond has not been repaid, redeemed or converted into shares, the Company may not issue or prematurely mature, by way of exemption from the loan terms and conditions, any other similar equity loans (hybrid loans), which rank in priority to payment over this Bond. This does not limit the Company s right to issue capital loans to the group companies. The Bond bears a fixed annual interest rate of 4.00 % until 31 December Thereafter the Bond bears a fixed annual interest rate of 8.00 %. If the credit ratings of the Company quoted by Bisnode Finland Oy is below the rating BBB-, the annual fixed interest rate of the Bond shall increase from the aforementioned by an additional 4.00 percentage units. If the interest of the Bond is not paid in cash, as defined below, the interest accrued to the Bond shall be capitalized annually on 31 December to the principal of the Bond ( Capitalized Interest ) (Fin. Pääomitettu korko). The Capitalized Interest bears a fixed annual interest rate of 8.00 %. The interest shall accrue on the basis of the actual number of days elapsed in the relevant interest period excluding the first day and including the last day of the interest period. The interest will be calculated on the basis of the actual number of days elapsed divided by 365 (in the case of leap year, 366).

3 UNOFFICIAL OFFICE TRANSLATION 3 (8) The Company may, in its discretion, pay annually the interest accrued to the Bond and the Capitalized Interest accrued from any interest period. The accrued annual interest and the possible Capitalized Interest shall, however, be paid, if the Company immediately during the preceding 12 months, in its discretion, distributes or decided to distribute assets to the shareholders by paying dividend, lowering the share capital, acquiring its own shares from all of its shareholders or in any other way as defined in the Finnish Companies Act (excluding the minority dividend in accordance with the Finnish Companies Act), pays or decides to pay interest or other refunds or payments to the securities with equal or junior priority to payment to the Bond. In this case, the Company shall always pay first the accrued interest to the Bond and the possible Capitalized Interest accrued, and only after that the dividends, other assets, payments and repayments in accordance with the decision. If the annual interest rate of the Bond or the Capitalized Interest is paid in cash based on the aforementioned conditions, the payment shall be made in arrears on the next day after 31 January to the bank account assigned by the Lender. 6. Repayment and Redemption of the Bond 6.1 Maturity and Redemption of the Bond on or after 1 January 2021 The Bond has no maturity date. The Lender cannot demand for the redemption of the Bond. The Company has the possibility to redeem the Bond in part or in whole as of 1 January 2021 at the nominal value added with possible Capitalized Interest and accrued interest. 6.2 Redemption of the Bond prior 1 January 2021 If the Company intends to redeem the Bond, the Lender shall be notified of the redemption no later than 14 days prior to the redemption date. The Company may redeem the Bond in full, at any time, at the nominal value of the Bond added with all accrued interest accumulated to the nominal value of the Bond, and the interest, which should have been accrued if the Bond had been repaid on 1 January 2021 (the Redemption Price ), if the tax legislation or the interpretation of it shall change so that the Company will be subject to a larger than minor amount of Bond related tax, payments, or liabilities or if the tax authority does not accept the current or future way of the Company to treat the Bond related income or expenditure in its tax report, which may cause the Company larger than minor additional tax, payment or charges, which the Company may not avoid with reasonable available measures. The Company may redeem the Bond in full, at any time, at the Redemption Price if the Company and its auditors state that the Bond may not be credited as equity in the Company s consolidated financial statement of the group according to the IFRS standards (International Financial Reporting Standards) or any other subsequent standards of the European Union or a standard applied in Finland. The Company may redeem the Bond in full, at any time, at the Redemption Price if the Company reduces its share capital or other asset categorised as restricted

4 UNOFFICIAL OFFICE TRANSLATION 4 (8) 6.3 Lender s Right to Conversion in Redemption 7. Terms of Share Subscription equity, amends the articles of association pursuant to the Finnish Companies Act, Chapter 14, Section 17, participates in a merger or demerger or is a subject to a creditor protection process pursuant to the Finnish Companies Act, Chapters 14, 15 and 17. If in connection to the aforementioned event, and in connection to the creditor protection process, a creditor objects this particular event, the Company may redeem the Bond in full at the nominal value added with the possible accrued interest. The Company may redeem the Bond in full, at any time, at the Redemption Price if the Company issues one or more equity instruments prior 1 January 2021, which combined have at least the value equal to the Redemption Price provided that the assets received from the issue have not been used directly or indirectly as payment for securities or instruments, with equal or junior priority to the Bond. If the Company intends to redeem the Bond due to an above mentioned situation, the Lender shall be notified of the redemption no later than 30 days prior the redemption date. If the Company notifies the Lender of the redemption as specified in the Clause 6.1 or 6.2, the Lender shall be given a priority to convert the principal of the Bond and the possible accrued Capitalized Interest into shares pursuant to the conditions specified in Clause Conversion Period and Conversion Price If the Borrower intends to use its right to convert due to the above mentioned situation, the Lender shall notify the Company of the use of the conversion right no later than 7 days prior the Company notifies the redemption date. The Bond includes a special right granting a right to convert the principal of the Bond and the accrued Capitalized Interest, as defined below, into new shares or shares held by the Company by subscribing the shares. The Lender has the right to subscribe, no more than, five million three hundred thirty thousand euros (EUR 5,330,000.00) of the Bond and the accrued Capitalized Interest as new shares or shares held by the Company by paying the subscription price through setting off the Bond receivable with the subscription price of the shares. The first conversion period shall commence on 1 January 2018 and end no later than 31 December 2020 (the First Conversion Period ) (Fin. Ensimmäinen vaihtoaika). The second conversion period shall commence on 1 January 2021 and end on 16 June 2022 (the Second Conversion Period ) (Fin. Toinen vaihtoaika). During the First Conversion Period the conversion price of the share is EUR (1.3 times the subscription price of the share EUR 0.28/share confirmed by the Board of Directors of the Company during the Share Issue, the First Conversion Price ) (Fin. Ensimmäinen vaihtokurssi).

5 UNOFFICIAL OFFICE TRANSLATION 5 (8) During the Second Conversion Period the conversion price of the share is EUR (1.6 times the subscription price of the share EUR 0.28/share, confirmed by the Board of Directors of the Company during the Share Issue, Second Conversion price ) (Fin. Toinen vaihtokurssi). During the conversion, the Capitalized Interest shall include the interest accrued during the ongoing interest period to the date of the conversion. The number of shares issued based on the conversion right is determined by dividing the combined value of the nominal value of the Bond and the possibly accrued Capitalized Interest with the conversion price. The Board of Directors of the Company has the right to determine whether the Company issues new shares or gives shares held by the Company. If the shares given due to the conversion right are shares held by the Company, the possible withholding tax shall be paid by the Company. No fractional shares shall be issued or given in connection to the conversion right. The number of shares issued shall be rounded down to the nearest whole share. Rounding off the shares does not incur any payment or other compensation. 7.2 Conversion Process and Entries to the Book-Entry Account The conversion of the Bond to shares shall follow the provisions of subscription of shares laid down in the Finnish Companies Act. The Lender is entitled to use its right to conversion during the conversion period by notifying the Company in writing with a conversion notice ( Conversion Notice ) (Fin. Vaihtoilmoitus) filled in as instructed by the Company. The Conversion Notice shall be submitted to the Company during its business hours. A submitted Conversion Notice is irrevocable. The Conversion Notice constitutes a subscription of new shares. The conversion date of the Bond is the following day of the banking day when the Company received the Conversion Notice ( Conversion Date ). The Company shall, without undue delay, take all measures required to register the converted shares to the Trade Register (Fin. Kaupparekisteri) and to the appropriate bookentry account no later than fourteen (14) days from the Conversion Date. 7.3 Increase of the Number of the Shares and Entry of the Subscription Price The number of the Company shares can be increased by changing the principal of the Bond and Capitalized Interest without a limitation, if new shares are being issued during the subscription. The subscription price of the shares shall be credited to the Company s invested unrestricted equity (Fin. sijoitetun vapaan pääoman rahasto).

6 UNOFFICIAL OFFICE TRANSLATION 6 (8) 7.4 Right to Dividend and Other Shareholder Rights The right of the new shares to the dividend and other shareholder rights shall commence from the registration of the new shares. If new shares have been issued in the conversion, the Lender has the right to the dividend and other shareholder rights when the shares have been registered into the Lenders book-entry account. 7.5 Share Issues, Option Rights, and Other Special Rights Entitling to Shares Prior the End of the Conversion Period If the Company decides to arrange a Share Issue or issue new option rights or other special rights granting the shareholder a priority to subscribe (Fin. Merkintäetuoikeus) before the end of the Second Conversion Period, the Lender has the same or equal right with the shareholder. 7.6 Rights of the Lender in Certain Special Situations 8. Transfer of the Bond The equality will be carried out as resolved by the Board of Directors: 1. the conversion price shall be amended with a so called share issue limitation, which changes the number of shares issued; or 2. the Lender is given an equal priority to subscription as the shareholder; or 3. a combination of the methods defined in the Sections 1 and 2 above. The Lender s position is not affected by the acquisition of the Company s own shares, redemption or acquisition of other special rights granting the right to the shares. If the Company is put into liquidation before the end of the Conversion Period, the Lender shall have a right to subscribe within the time limit set forth by the Board of Directors prior the beginning of the liquidation. If someone has over 90 % of the shares and votes, and thereby a right and an obligation to redeem the rest of the shares pursuant to the Finnish Companies Act Chapter 18 Section 1 prior to the end of the Second Conversion Period, the Lender shall be given an opportunity to use its right to subscribe within the time limit set forth by the Board of Directors, after which the right to convert no longer exists. If the Company decides to merge into another company or merges or into a new company established in a combination merger or decides to demerger, the lenders shall be given a right to convert within the time limit set forth by the Board of Directors, after which the right to convert no longer exists. In the aforementioned situations, the Lender has no right to claim the Company to redeem the special rights granting rights to the shares for a fair price. The Lender has no right to transfer this convertible promissory note without a written consent from the Borrower prior to 31 December As of 1 January

7 UNOFFICIAL OFFICE TRANSLATION 7 (8) 9. Applicable Law and Dispute Resolution 2019 the Lender has the right to transfer this convertible promissory note without a written consent from the Borrower. If this convertible promissory note is being transferred in breach of this Clause, the unused right to convert shall expire at the moment of the transfer. This Bond and these conditions shall be governed by and construed in accordance with Finnish law. Any dispute arising out of or in connection with this Bond or this agreement shall be settled, by first priority, through negotiations between the parties. If these disputes cannot be settled within a reasonable time, the disagreement shall be, by the request of the Parties, settled in the court of arbitration pursuant to the rules of the arbitration committee (Fin. Välityslautakunta) of the Finnish Chamber of Commerce (Fin. Keskuskauppakamari). The court of arbitration shall be composed of three (3) arbitrators, one of which is appointed by the Company, one if which is appointed by the Lender and one of which, the chairman of the court of arbitration, is appointed by the two already elected arbitrators. If the Party does not fulfil its obligation to appoint an arbitrator or the arbitrators cannot unanimously decide on the election of the chairman, the Chamber of Commerce shall appoint an arbitrator on the request of the Party. The arbitration shall take place in Helsinki in Finnish.

8 UNOFFICIAL OFFICE TRANSLATION 8 (8) Place and date Helsinki, 17 July 2017 Signatures NURMINEN LOGISTICS OYJ KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ILMARINEN Appendices: Appendix 1 Two share purchase agreements Appendix 2 Two amendment agreements to the agreements as Appendix 2