SHAREHOLDERS MEETING OF ICELANDIC GROUP HF.
JANUARY 16, 2007 AT 11:00 AM.
to authorize the Board of Directors to take on credit with special conditions
The Board of Directors of Icelandic Group hf. has the
following proposition regarding an authorization to take on credit with special
conditions providing the creditor a right to convert his claim to shares in the
company in accordance with chapter VI of the Act respecting public limited
companies no. 2/1995.
The loan shall be subordinated and shall give way for
all other claims except a claim for the refund of equity.
The loan shall be governed by special loan agreements
which will accompany the motion and shall be added to the Articles of Association
if the motion is approved.
The motion includes an authorization for the increase
of the Company’s share capital by up to ISK 1.100.000.000 and an authorization
for the Board of Directors, in accordance with article 47 of the Act respecting
public limited companies no. 2/1995, to change article 2 of the Articles of
Association following the increase of share capital leading from the conversion
of the loan into shares in the company. The board’s motion is following:
meeting, held on January 16th 2007, agrees, with reference to chapter VI of the
Act respecting Public Limited Companies, especially Article 47, to take on
credit which provides the creditor with a right to convert his claim to shares
in the company. The company is authorized to issue debt instruments up to the amount
of ISK 5.000.000.000 or an equivalent amount in euros and the lending period
shall be five years. The debt bears annual interest which shall be LIBOR + 5%.
Interest shall be paid annually, for the first time on December 31st 2007. Half
of the interest shall be paid on the maturity date and the other half added to
the capital and shall be paid on the final settlement day, December 31st 2011.
When calculating interest, the interest shall be added to the capital in
accordance with the aforesaid. The company is not authorized to pay the
interest until the ratio interestbearing debt/EBITDA is below 5 according to
the calculation of the company’s auditor.
loan is subordinated and shall give way to all other claims except claims for
the refund of equity. In the case of insolvency or dissolution of the Company the
loan shall be refunded after all other general claims but before claims for the
refund of equity.
the period December 1st 2011 to December 31st 2011 the
creditor is authorized to convert the capital of the debt, along with the
interest, to shares in Icelandic Group hf. In the same manner the creditor may, on the maturity dates for interest (for
the first time on December 31st 2007), convert the loan or part of the loan,
though never less than 20% of the dept’s capital along with accrued interest to
shares. The exchange rate shall be the weighed average sales price of shares in
Icelandic Group hf. as
listed in the Iceland Stock Exchange during the period January
11th to January 15th 2007, calculated by company’s auditors.
Should the creditor choose to
convert his claim to shares in Icelandic Group hf. he shall notify the company
in writing. The Board of Directors shall, as soon as possible, issue the shares
in Icelandic Group hf. to the creditor free of charge to fulfill the conversion
Should the loan be converted to
shares in Icelandic Group hf. full payment is deemed to have taken place when
the creditor has issued new shares in Icelandic Group hf. in the name of the
creditor. Shares are issued electronically in accordance with article 2.03 of
the company’s Articles of Association and the company is deemed to have
fulfilled its duties when the shares have been inserted in the computer system
of the Icelandic Securities Depository using the registry number of the
If the share capital
of the borrower will be increased during the loan period the creditor will not
have a preemptive right to new shares. Should the borrower be dissolved during
the period, this includes the merging of the company with others and its
the loan has been converted to shares or it paid, the commitment shall give way
to other debts of the borrower (but be equal to other subordinated loans which
will be taken according to this authorization) but superior to equity in the
stated above, a decision regarding the decrease of share capital in the
company, issuing of subordinated notes, loans or subscriptions will not affect
the legal status of the creditor before his claim is converted to shares.
Paragraph 4 of
Article 47 of the Act respecting public limited companies shall apply regarding
the conversion of shares.
The Board of
Directors is authorized to increase the share capital by up to the nominal
amount of ISK 1.100.000.000 to fulfill the above mentioned obligation. The shareholders’
priority right shall not apply to the increase according to this authorization. The new shares shall grant rights in
the company from the registration date of the increase.
If the motion is approved it will be added to the
Articles of Association as a new clause no. 12.1 along with a sample of the
debt instruments accompanying this motion and shall be considered to be a part
of the articles as clause no. 12.2”
The Board of Directors
of Icelandic Group hf.