XXL.EE

ANNOUNCEMENT



SHAREHOLDERS' ANNUAL AND EXTRAORDINARY GENERAL MEETINGS



The management board of AS XXL.EE (address Tartu St. 87D, Tallinn; 

registry code 10040414) hereby calls:



1. Extraordinary general meeting of shareholders



Extraordinary general meeting of shareholders will be held on 

18.06.2000, beginning at 15:00, at the offices of XXL.EE at Pärnu St. 

139, Tallinn. 

In accordance with the Supervisory Board decision of 08.06.2000, the 

EGM will discuss the following issues:



a) appointment of chairman and secretary to the meeting;



b) management's report about activities in 1999 and 2000 financial 

years;



c) cancellation of resolutions made by 29.04.2000 extraordinary 

general meeting of AS XXL.EE shareholders (agenda items 1.1.- 1.10.);



d) reduction of AS XXL.EE share capital; 

The purpose of share capital reduction is to cover net loss posted in 

1998/99 financial year (net loss in 01.07.1998-31.12.1999 financial 

year was EEK 53,806,289). The company's reserve capital funds are not 

sufficient to cover the loss, it also lacks other reserves. Proceeds 

from simplified share capital reduction will be used to cover the 

company's loss. The company does not have treasury shares. The 

company's chief executive will make a proposal to shareholders' 

general meeting to reduce the company's share capital as follows: 

- share capital amount will be reduced in simplified manner, for 

purpose of covering the company's net loss, in accordance with the 

provisions of article 1 of § 362 of the Commercial Code;

- share capital amount will be reduced by 50%, or by EEK 10,000,000 

(ten million), through cancellation of shares. Altogether 

1,000,000 (one million) AS XXL.EE shares will be cancelled, 

whereas all cancelled shares are of the same type;

- shares will be cancelled on equal basis from amongst all shares, 

i.e. 50% of shares owned by a shareholder are to be cancelled. If 

a shareholder owns odd number of shares, 1 (one) share less is to 

be cancelled (e.g. if a shareholder owns 3 shares, 1 share is to 

be cancelled), and such non-cancelled shares will be cancelled 

from the account of shareholder who owns the largest number of the 

company's shares, provided that this shareholder agrees to this 

decision. Cancellation of shares will take place, and cancelled 

shares are removed from circulation on 03.07.2000 at 8:00 a.m., in 

accordance with a shareholders' list from the Estonian Central 

Depository for Securities. No payments will be made to 

shareholders upon reduction of share capital. 



e) AS XXL.EE chief executive's written clarification about share 

capital increase, incl. grounds for cancellation of pre-emptive right 

and issue price. 



f) increase of AS XXL.EE share capital;

The company's chief executive will make a proposal to shareholders' 

general meeting to increase the company's share capital as follows:

- share capital amount will be increased in a bid to improve the 

company's liquidity. Share capital amount will be increased 

through additional payments;

- share capital amount will be increased through issue of 375 000 

(three hundred and seventy-five thousand) same type shares, at EEK 

10 (ten) par value. The new share capital amount will be EEK 

13,750,000 (thirteen million seven hundred and fifty thousand);

- new shares will be subscribed and payments for the subscribed 

share will be made at the venue of the company from the period of 

adoption of such resolution by the shareholders' general meeting 

until 03.07.2000 at 8:00 a.m. The shares will be issued at price 

of EEK 30 (thirty) above par per share. If the share issue is 

fully subscribed and paid, the company will receive EEK 15,000,000 

(fifteen million) through share capital increase. The payment for 

shares will take place in monetary form in 2/3 part (up to 

250,000 shares), to the company's account at Hansapank (code 767) 

No. 221001123451, and in 1/3 part (up to 125,000 shares) through 

non-monetary payment in the form of monetary claims against AS 

XXL.EE. Each subscriber must subscribe and pay for minimum of 

12,500 (twelve thousand and five hundred) shares, i.e. minimum 

issue price of EEK 500,000 (five-hundred thousand). The 

shareholders will not be granted a pre-emptive right to subscribe 

for shares to be issued. In case of oversubscription of share 

issue, the supervisory board will decide on pre-term ending of 

subscription period, also allocation of shares between the 

subscribers and cancellation of oversubscribed shares. 



2. Annual general meeting of shareholders



Annual general meeting of shareholders will be held on 02.07.2000, 

beginning at 15:00, at the offices of XXL.EE at Pärnu St. 139, 

Tallinn. 

In accordance with the Supervisory Board decision of 08.06.2000, the 

AGM will discuss the following issues:



a) appointment of chairman and secretary to the meeting;



b) management report, profit allocation proposal; 



c) approval of annual report;



d) allocation of profit;



e) recall and election of supervisory board members;



f) appointment of auditor. 



The annual report is available from 15.06.2000 during the workdays at 

the offices of AS XXL.EE (Pärnu St.139, Tallinn).  



All general meeting attendants must present an identification 

document (passport or driver's license); the representatives also 

need to present a proxy. Corporate shareholders must present 

documents certifying its status and representative's right of 

representation (excerpt from Commercial Registry card, not older than 

15 days; foreign corporate shareholders must present a relevant 

document certified in accordance with Estonian laws)



The list of shareholders will be closed for participating at EGM on 

16.06.2000, at 15:00 p.m. Registration of AGM attendants will take 

begin 30 minutes before the beginning of EGM.



Shareholders' voting rights on the EGM will be determined based on 

shareholders list from the Estonian Central Depository for 

Securities, as of 16.06.2000 at 15:00; shareholders' voting rights on 

the AGM will be determined based on shareholders list from the 

Estonian Central Depository for Securities, as of 30.06.2000 at 

15:00. Registration of general meeting attendants will begin 30 

minutes before the beginning of general meeting, and end by beginning 

time of general meeting.





Arho Anttila, arho@xxl.ee

Chief Executive

+372 6 507 500