SHAREHOLDERS MEETING OF ICELANDIC GROUP HF. JANUARY 16, 2007 AT 11:00 AM. Motion 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: "The shareholders 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. This 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. During 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 right. 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 creditor. 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 division, before 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 Company. Otherwise than 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.