On 9 October 2008, the Icelandic Financial Supervisory Authority ("FME") appointed a Resolution Committee of Kaupthing Bank hf. (the "Bank"), in accordance with article 5 of legislative act 125/2008 on the Authority for Treasury Disbursements due to Unusual Financial Market Circumstances etc (the"Act"). The Act was passed by Parliament on 6 October 2008, providing the FME with the authority and power to intervene in the operations of financial undertakings with the aim of responding to the unusual circumstances in the Icelandic financial market.

On 21 October 2008, the FME decided to transfer a part of the Bank's operations to a New Kaupthing Bank that has been incorporated and which is fully owned by the Icelandic Government. This decision has been made to ensure continued banking operations for Icelandic individuals and businesses.

The decision of the FME on 21 October 2008 to transfer part of the Bank’s operations to a New Kaupthing Bank hf. means, inter alia, that the New Kaupthing Bank hf. takes over all of the Bank's deposits in Iceland, and also the bulk of the Bank's assets that relate to its Icelandic operations, such as loans and other claims. In turn the FME has decided that New Kaupthing Bank hf. shall issue a bond to the Bank, equivalent to the surplus of assets over liabilities at fair value (based on a valuation by independent parties, see further details in FME's decision of October 21). Other assets and liabilities will remain in the Bank, which will in turn remain under the control of the Resolution Committee. A final settlement between the New Kaupthing Bank hf. and the Bank will be made within 90 days from the FME's decision. An English translation of the decision can be found on the FME's website at the following address:

See more on FME's website

The Resolution Committee has all the powers of the former Board of Directors of the Bank and will as a result undertake all affairs of the Bank, including supervision of its assets and its business operations. The Committee shall adhere to and carry out decisions made by the FME on the basis of Article 100 a of Act No. 161/2002 as amended. Directly following the establishment of the Committee, the Committee focused on ensuring the on-going business of the Bank while protecting the interests of creditors and other stakeholders. Following the establishment by the FME of the New Kaupthing Bank, the Resolution Committee continues to focus on maximising the realisation of assets for creditors, and to help co-ordinate communication with creditors and other stakeholders.

By order of the District Court of Reykjavik dated 24 November, the Bank was placed into a procedure under Icelandic statutory law which has resulted in a cessation of payments to creditors and a moratorium over claims against Kaupthing.(For further information on moratorium, please see).

Due to the situation, Kaupthing Bank is not allowed by law to make payments on any bonds. We will provide further updated as soon as the matter clarifies.

In the current financial market environment, it is not possible to estimate at this stage the realisable value of the assets. Due to this, and other uncertainties, it is therefore not possible to estimate the total payments to the Bank's creditors.

Further details on the timing of asset realisation and payments to creditors will be released when they become available. Please refer to this website for updates.

Regular update information will be posted to this website as it becomes available. Information will also be made available through the creditors' committee process (see below).

Further questions can be sent to the e-mail address: creditorcontact@kaupthing.com

Senior and subordinated debt whether bonds or loans remain in the Bank, Kaupthing Bank.

Common shares rank junior to both senior and subordinated debt in the capital structure. As a result it is very unlikely that holders of common shares will receive a payout, but that depends on numerous factors and remains to be seen.

The Bank has full banking license. However, the current operations are mostly limited to preserving the assets of the Bank.

The Resolution Committee is committed to the protection of the Bank's asset base and no "fire-sale" bids have been entertained. The recovery ratio of the Bank's debt is however uncertain at this date.

The FME has directed that New Kaupthing Bank hf. will issue a bond to the Bank. It is proposed that the value of the bond will represent the surplus of assets over liabilities at a fair value (based on valuation by independent parties). The form and composition of the bond is still undecided.

Given present circumstances and in order to ensure the appropriate treatment of creditors, it is unlikely that payments, including coupon payments, will be made to bondholders at this time.

We will provide further updates in terms of the timing of any payments as soon as possible.

According to Article 103 of the Act on Financial Undertakings No. 161/2002, cf. Article 6 of Act No. 125/2008 (the emergency legislation), claims for deposits, pursuant to the Act on Deposit Guarantees and an Investor Compensation Scheme, shall have priority as provided for in Article 112, paragraph 1, of the Act on Bankruptcy etc. No. 21/1991, when dividing the estate of a bankrupt financial undertaking.

Unsecured bonds are normal unsecured claims and come next in priority after the claims under Articles 109 – 112 of the Act on Bankruptcy etc. No. 21/1991, cf. Article 113 of the Act.

The Registration of Interest form on the creditor information section of the Bank's websiteis simply a mechanism for the Bank to ensure that it has a complete and up to date record of those with an interest in the Bank. There is no requirement at this stage for formal claims against the Bank to be filed or registered and as such your registration of any interest will not affect claims you may have either now or in the future.

The Resolution Committee fully realizes the sensitive nature of the information compiled via the forms posted on the website. Therefore, the committee does not intend to disclose the information to any third parties except potentially any advisors/consultants all of whom will be required to sign confidentiality agreements before viewing the information.

According to guidance from the FME, all actual bank accounts are transferred from the old bank to the new bank, regardless of who the customer was (both from credit institutions and customers). In the case of money market agreements, the FME decided to categorise such transfers as deposits, except in instances when the counterparty of the bank was another financial undertaking. So deposits from financial undertakings transferred to the New Kaupthing bank are only bank accounts that credit institutions have in the bank.

According to the FME, creditors of Kaupthing Bank can get readers‘ access to a physical copy of the report upon certain conditions being met. These are:

Signing Hold Harmless Letters with Deloitte and Oliver Wyman
Signing Confirmation of Confidentiality with FME
Signing Confidentiality Agreement with NKB

All parties listed above reserve the right to validate the reasons put forward by the creditors to view the reports.
A creditor interested in accessing these reports should e-mail creditorcontact@kaupthing.com stating the name of the entity along with information on current exposure and the reasons behind the request.

The Bank is pursuing a considered strategy to maximise the value and realisation of owned subsidiaries and other assets. The Bank has not, and does not intend to, enter into any unnecessary quick 'fire sale' of subsidiaries or assets. The Bank does not consider that selling assets in the current market environment to be generally consistent with maximising the realisable value of its assets. In certain limited circumstances, particular regulatory factors affecting some overseas assets has meant that selling those assets has been consistent with maximising or protecting the value of subsidiaries or other assets of the Bank.

In addition, various media services have correctly reported that on 3 November 2008 the Swedish branch of the Bank sold its pension unit, Kaupthing Pension Consulting (KPC) to a group of employees. The sale was concluded to meet customer demand for a totally independent pension consultancy. The business was sold for SEK 5m and comprised 21 employees.

Kaupthing Bank is currently in moratorium under Icelandic law. The liabilities which the bank can repay while in moratorium are restricted to liabilities which would rank as priority claims if the bank were to enter insolvent liquidation. According to the Icelandic Act on Financial Undertakings no. 161/2002, claims for deposits made with the parent company and its branches, including the German branch, are priority claims if the bank were to enter insolvent liquidation, thus allowing the bank to repay those claims while in moratorium.



Die Kaupthing Bank steht derzeit unter einem isländischemMoratorium. Zu den
Verbindlichkeiten, die in diesem Stadium bezahlt werden können, gehören Verbindlichkeiten,
die im Insolvenzfall als bevorrechtigte Forderungen gelten würden. Nach dem isländischen
Gesetz 161/2002 sind Kundeneinlagen bei der isländischen Muttergesellschaft sowie
ausländischen Niederlassungen, darunter der deutschen Niederlassung, bevorrechtigt. Dies
erlaubt der Bank die Rückzahlung der Einlagen trotz des Moratoriums.

To start the repayment process, letters will be sent to all customers of Kaupthing Edge Germany outlining the payment procedure. These letters have been sent out and we estimate that the German postal service will be delivering the letters to recipients as of 25 May – 30 May. Please note that depositors will be required to respond to the letters in order to initiate the repayment process, whereby customers will have the opportunity to confirm or change their contact and account details. This is necessary to ensure that the contact and account details of each depositor are correct when payments are made. In due course, after the receipt of customer replies, the balance of deposits as it was when the branch was placed into moratorium will be repaid. It is difficult to estimate how long time this process will take as it depends on some external factors such as the speed of customer replies. The bank will however, endeavour to make these repayments as quickly as possible.



Um den Rückzahlungsprozess zu starten, wurden alle Kunden mittels eines Briefes angeschrieben. In diesem Schreiben wird der gesamte Ablauf der Rückzahlung dokumentiert und erklärt. Die Kundenbriefe wurden am 22. Mai 2009 aus Island heraus verschickt und treffen seit dem 25.05.2009 fortlaufend bei den Kunden ein . Wir gehen derzeit davon aus, dass alle Kundenbriefe bis zum 30.05.2009 zugestellt sein müßten. Bitte beachten Sie, dass eine Bestätigung der Anleger erforderlich ist (Anlage 1 ODER Anlage 2) , um den Rückzahlungsprozess zu beginnen; dabei werden Sie als Kunden die Möglichkeit haben, Ihre Kontakt- und Kontodaten zu bestätigen (Anlage 1) oder gegebenenfalls zu ändern. (Anlage 2) Dies ist notwendig, um sicherzustellen, dass alle Kontakt- und Kontodaten korrekt sind, wenn die Zahlungen erfolgen. Nach Eingang der Kundenantworten werden alle Kundeneinlagen, die sich zum Zeitpunkt der Verhängung des Moratoriums auf den Konten der Kaupthing Bank befanden zurückgezahlt. Es ist derzeit schwer zu sagen, wie lange dieser Prozess dauern wird, da einige externe Faktoren den Prozess beeinflussen, zum Beispiel die Geschwindigkeit der Kunden-Antworten. Die Bank wird sich jedoch bemühen, die Rückzahlungen so schnell wie möglich durchzuführen.

According to the Icelandic Act on Financial Undertakings no. 161/2002, accrued but unpaid interest is not considered a priority claim and will therefore not be repaid at this stage. Accrued interest may be considered a non-priority "senior" claim and can as such be claimed against the bank. However, interest on term deposits which has already been credited to the client accounts before 9 October 2008 will be paid together with the initial principal as it is now considered to be a part of the principal.



Nach dem isländischen Gesetz 161/2002 über Kreditinstitute sind rechnerisch aufgelaufene, aber nicht ausgezahlte Zinsen keine bevorrechtigten Forderungen und werden deshalb derzeit nicht ausgezahlt. Angefallene Zinsen können möglicherweise als ungesicherte sonstige Forderungen gegenüber der Bank geltend gemacht werden. Dagegen wurden Zinsen, die auf Festgeldkonten vor dem 9. Oktober angefallen sind, dem Guthaben zugeschrieben und werden zusammen mit den Einlagen ausgezahlt, da sie als Teil des Kapitals betrachtet werden.

If a customer had a term deposit account which matured before 9 October 2008 then such interest was added to the principal at the expiry of the term. It then became a part of the principal and therefore constituted a deposit which is a priority claim. As previously explained, the bank is now paying priority claims in full: claims for accrued interest will rank with all other "senior" claims.



Wenn ein Kunde sein Geld auf einem Festgeldkonto angelegt hatte und dieses vor dem 9. Oktober 2008 fällig wurde, wurden die Zinsen nach dem Ablauf der Anlageperiode dem Guthaben gutgeschrieben. Die ausgezahlten Zinsen wurden damit ein Teil des angelegten Kapitals und dadurch Teil der bevorrechtigten Forderungen. Wie bereits erläutert, wird die Bank alle Einlagen, die bevorrechtigte Forderungen sind, in vollen Umfang zurückzahlen. Zinsansprüche auf die Einlagen von Tagesgeldkonten werden aber im Rang wie alle anderen nicht-bevorrechtigten Forderungen (“Senior Claims“) behandelt werden.

How much of the "senior" claims is paid back depends on the future value of the bank's assets. The bank is currently managing its assets with the aim of preserving their value. The bank is committed to ensuring that the maximum value for each asset will be passed on to the creditors of the bank, including depositors, at a later stage.

At the moment, we do not know when or to what extent interest payments will be made. A formal claim process has not yet started with respect to "senior" claims. Notice of the commencement of a formal claim process will be posted on the bank's websites www.kaupthing.com and www.kaupthingedge.de and advertised in national newspapers. Depositors are advised to visit the bank's website regularly.



Zum jetzigen Zeitpunkt kann die Bank nicht genau sagen, wann und in welchem Umfang, Zinszahlungen erfolgen werden. Ein formelles Verfahren zur Bedienung der sonstigen Forderungen hat derzeit noch nicht begonnen. Sobald ein solches Verfahren beginnt, wird dies auf den Interseiten www.kaupthing.com und www.kaupthingedge.debekanntgegeben und in überregionalen Zeitungen veröffentlicht. Anlegern wird empfohlen, die Webseiten der Bank regelmäßig zu besuchen.

No action from depositors is required at this stage as a formal claim process has not started with respect to "senior" claims. Notice of the commencement of a formal claim process will be posted on the bank's websites www.kaupthing.com and www.kaupthingedge.de and advertised in national newspapers. Depositors are advised to visit the bank's website regularly.



Im jetzigen Stadium ist keine gesonderte Maßnahme erforderlich, da zu diesem Zeitpunkt noch kein Verfahren wegen sonstiger Forderungen durchgeführt wird. Der Beginn eines solchen Verfahrens wird auf den Webseiten der Bank unter www.kaupthing.com und www.kaupthingedge.de mitgeteilt. Darüber hinaus wird die Bank das auch in überregionalen Tageszeitungen veröffentlichen. Wir empfehlen auch an dieser Stelle noch einmal allen Kunden, die o.g. Webseiten regelmäßig zu besuchen.

No, the call centre has been closed down.



Nein, das Service- Center wurde geschlossen.

Yes.



Mit erfolgter Rückzahlung werden alle Konten seitens der Bank geschlossen.

The bank does not provide any services via telephone but customers can write to the bank:




To: Kaupthing Bank hf.
Attention: The Resolution Committee
Borgartun 19
105 Reykjavik
Iceland,



or



send an email to germanhelpdesk@kaupthing.com



Please note that this helpdesk, germanhelpdesk@kaupthing.com, will not be able to answer any general enquires regarding the repayment process, timing of repayment, payment of interest etc. Provided answers to those enquiries can be found in the Q&A section on the bank's websites www.kaupthing.com and www.kaupthingedge.de. In order to ensure that the bank can assist those customers who need assistance with filling out this form, only questions directly related to this form should be sent to this helpdesk.



Please also note that all changes related to customer or account details can only be submitted as described above and not via email or letter.



As before, you are encouraged to visit the bank's online information centres www.kaupthing.com and www.kaupthingedge.de where you can find comprehensive and updated information about the repayment process and we strive to provide answers to frequently asked questions.




Wie unter Punkt 11. beschrieben, ist das Service-Center der Bank geschlossen. In Fällen, in denen Sie Unterstützung beim Ausfüllen der Kontakt- und Kontodaten gemäss Anlage zum Brief benötigen, wenden Sie sich bitte schriftlich an folgende Adresse:

Kaupthing Bank hf.
Attention: The Resolution Committee
Borgartun 19
105 Reykjavik
Iceland,

oder

senden Sie eine E-Mail germanhelpdesk@kaupthing.com

Bitte beachten Sie, dass der Hilfedienst unter germanhelpdesk@kaupthing.com, keine allgemeinen Fragen zum Rückzahlungsprozess, zum genauen Zeitpunkt der Rückzahlung, zum Umgang mit den Zinsen und anderen Themen beantworten kann. Hilfestellung wird hier nur zu den die Themenbereichen rund um die Aktualisierung der Kontakt- und Kontodaten gegeben.

Antworten auf "allgemeine" Fragen zum Abwicklungsprozess finden Sie auf den Webseiten www.kaupthing.com und www.kaupthing-edge.de im Bereich "Fragen und Antworten zum Rückzahlungsprozess".

Wir empfehlen noch einmal, regelmäßig die Online Zentren der Bank unter www.kaupthing.com und www.kaupthing-edge.de zu besuchen. Hier finden Sie umfassende und aktuelle Informationen über die Rückzahlung, und wir versuchen, Antworten auf häufig gestellte Fragen zu geben.

You just have to send back the signed page (Anlage 1 OR Anlage 2)



Nein, nur die unterschriebene Anlage (Anlage 1 ODER Anlage 2)

If you send the answer in the enclosed envelope, you don't need a postal fee. The bank has already paid for return postal fee cost.



Wenn Sie die Antwort in dem beigefügten Umschlag zurücksenden fällt für Sie kein Porto an. Das Porto wurde bereits von der Bank bezahlt.

Yes, the return envelope is valid according to international postal agreement article 13.4.1. UPU for International Business Reply Service IBRS.

Ja, gemäß internationalem Postabkommen ist der Rückumschlag gültig freigemacht. Die Regelung findet sich in Artikel 13.4.1 UPU als Regelung über den internationalen Rückantwort-Service IBRS.

Yes, it is necessary to send back to the Bank all the letters that you have to write on (Schedule 1 or Schedule 2).



Ja, es ist in jedem Fall erforderlich alle erhaltenen Briefe in Form der Anlage 1 ODER Anlage 2 unterschrieben an die Bank zurück zu senden.

The notice of termination clarifies in the first place that no future deposits can be made. Interest claims you may have remained unaffected. Such claims have to be claimed in the Icelandic insolvency proceeding in due course.



Die Kündigung stellt klar, dass keine zukünftigen Anlagen mehr möglich sind. Die Geltendmachung von Zinsansprüchen wird dadurch nicht berührt. Solche Ansprüche müssen zu gegebener Zeit im isländischen Insolvenzverfahren geltend gemacht werden.

No it is not necessary to add the account number to attachment 1. It is also not necessary to add an account number on each letter if the customer got two or more letters.



Es ist nicht erforderlich bei Rücksendung der Anlage 1, unabhängig von der Anzahl, die Kontonummer zu ergänzen.

The customer can return all attachments within 1 return envelope assumed he is able to close the envelope.



Es können alle Anlagen in einen Umschlag gepackt werden, sofern der Umschlag dann noch geschlossen werden kann. Der Freiumschlag deckt die Kosten in dem Fall ab.