Questions & Answers on the Insolvency Filing

Version: 18 April 2012

1.     What is the current status of the insolvency proceedings?

The insolvency proceedings officially commenced upon the order of the District Court of Furth on February 28, 2012. The order is published on the website of the insolvency administrator under www.schubra.de.

2.     Are the subsidiaries also affected by this insolvency filing?

At present, the insolvency filing relates only to the parent company, the Solar Millennium AG. The subsidiaries are legally independent entities and are therefore not directly impacted by the filing. They will continue to do business. To date, it has only been necessary to file for the insolvency of one subsidiary, the H2 Herten GmbH. The extent to which the insolvency filing of the Solar Millennium AG will have an impact on the other subsidiaries is part of the review by the insolvency administrator and the management of the subsidiaries.

3.     What will happen to the planned projects and those currently under construction?

The insolvency administrator is continuing the negotiations begun during the insolvency filing.

With regard to the power plant projects currently under construction, the insolvency administrator is examining in how far these can be completed as scheduled. An investor has already been found for the projects in the USA, and the contract should go into force in March 2012.

4.     What are the next steps in the insolvency proceedings?

The decision to initiate proceedings has been sent to all known creditors. In the same mailing, the creditors received the documents necessary for filing their claims. Claim filings should be sent back to the insolvency administrator by March 20, 2012. The other insolvency deadlines are based on the decision to initiate proceedings.

5.     Is Solar Millennium still capable of taking action? 

The insolvency administrator is now running the business together with the Executive Board. The Company is therefore capable of taking action and making decisions.

6.     I think I have a claim against the Company. Where and when can I assert this claim?

Claims against the Company must be filed with the insolvency administrator. All creditors known to the insolvency administrator will receive a mailing with the documents needed to file a claim. This mailing has been sent. Creditors that have not received the mailing by March 15, 2012 are requested to file their claim using the claim form published on the website of the insolvency administrator under www.schubra.de. The creditors of bonds 4 through 8 are requested to wait for a claim form to be sent to them, however, as much of the information will already be filled in and this will greatly simplify and accelerate the processing of their claims.

• What will happen with my fund shares?

Solar Millennium AG launched closed funds to finance two of its projects, namely “Andasol Fonds GmbH & Co. KG” and “Ibersol Fonds GmbH & Co. KG”. In terms of company law, the structures of the two funds are virtually identical. Neither fund has filed for insolvency. Both are legally autonomous companies. This means that investors who have bought shares in the funds are limited partners of the respective fund companies and are consequently not directly creditors of Solar Millennium AG.

• What will happen with my shares?

Shareholders are partners in Solar Millennium AG and will thus only be entitled to payment when the claims of all other creditors have been 100% satisfied; shareholder claims classify as subordinate insolvency claims in terms of § 39 InsO [German Insolvency Act]. The insolvency court has not issued a request to file such claims.

• What will happen with bond funds?

The owners of partial debentures are creditors in the insolvency proceedings and, when the insolvency proceedings have been concluded, they will obtain the same percentage as all other unsecured creditors. To do so they must file their claim with the insolvency administrator. It is not possible to predict today how high the percentage will be.

• What is my deadline for filing proof of debt for the schedule of creditors' claims?

The insolvency court has set March 20, 2012 as the deadline for filing claims. Creditors should file their claims within this deadline to facilitate speedy processing. This deadline is no preclusive period, meaning that filing is still possible after expiry thereof. Here, however, one has to note that subsequent filing of claims will delay the proceedings, while the insolvency court can also charge a fee of EUR 15 per claim for the processing of delayed filings.

• To what extent can I assert claims for interest payments?

Interest payments accrued until the opening of insolvency proceedings can be filed together with the bond claim. For the creditors of bonds 4 through 8, the interest has already been calculated and included in the claim form. Any interests that accrue after opening of the proceedings may only be filed as a subordinate insolvency claim if and when the insolvency court issues a respective notice (§ 39 (1) (1) InsO). The court has not issued such a request to file subordinate claims, as it is unlikely that such subordinate claims can be satisfied.

• Do I have to file my claim in duplicate?

Please use the documents prepared by the insolvency administrator to file your claim. These do not have to be filled out in duplicate. If you use documents not prepared by the insolvency administrator, then we request that you fill them out in duplicate and send both copies.

• What proof must I submit with the claim form?

To prove that you are the creditor, it is necessary to submit a securities account statement dated February 28, 2012 identifying that the individual filing the claim is the owner of the bonds. This record is absolutely necessary, because only the account statement can positively identify the claimant as the actual insolvency creditor in terms of § 38 InsO.

If the institution handling the account is not able to provide a securities account statement dated February 28, 2012, the claimant may submit confirmation by the institution handling the account certifying that the corresponding bonds were held by the account holder as of February 28, 2012 (the name of the account holder, the security identification number, and the nominal amount invested must be clearly stated in this confirmation). Another alternative to an account statement dated February 28, 2012 is an account statement covering a longer period of time which also clearly shows that the bonds for which the proof of debt for the schedule of creditors' claims was filed were still managed in this account on February 28, 2012.

• What if the initial fund subscriber is not the same as the account holder?   
  
  There are conceivable arrangements whereby A has subscribed to a bond but is not keeping in it his or her own account, but rather in the account of B.    
  
  In such an arrangement, it must be determined whether the bond was transferred from A to B (e.g., grandfather A gives the bond to grandson B as a gift), in which case the creditor is actually B, in whose name the account is held. In such cases, we ask that, upon receipt of the prepared claim form, the new creditor be entered into the change field, that the new creditor's account statement be attached, and that the new creditor sign the form before sending it back.  
  
  The second alternative is that A wishes to remain the creditor him or herself and has merely placed the bond in another's account for safekeeping, such that account holder B is keeping the bond "in trust" for A. In such cases, A is still the creditor and does not need to change the prepared claim form. In addition to attaching the account statement of B, A should submit a confirmation by B stating that B asserts no claims on the bond, but rather only holds it for A.

• Which rank do my bond shares have compared to other claims?

Bond claims and any interests that accrue until the insolvency proceedings are opened do not classify as subordinate insolvency claims in terms of § 38 InsO, meaning they will be treated the same as all other insolvency claims. Only the interests that accrue after the proceedings are opened are subordinate claims.

• Am I to involve a legal representative or "shareholder advocate"? Is it necessary to join a shareholder protection association?

This is entirely your personal decision. Neither the insolvency administrator nor Solar Millennium Invest AG can give a recommendation in this respect. However, you do not need to be represented by a legal counsel to file claims in the insolvency proceedings. The insolvency administrator cannot make a recommendation on whether to join a protection association either. However, it is advisable to scrutinize offers with regard to respectability and the scope of performance.

• Will there be a creditors' meeting for all creditors? When and how will creditors be informed?

Now that the insolvency proceedings are underway, there will be a creditors’ meeting for all creditors on June 4, 2012. In addition, there will be a separate meeting on May 15, 2012 for all bond creditors of bonds 4 through 8, where these will elect a joint representative to represent their interests during the proceedings. The dates for both these meetings were set by the insolvency court. The orders are published on the website of the insolvency administrator under www.schubra.de. In the creditors’ meetings, the insolvency administrator will give a report and inform the creditors on the proceedings.

After these dates, the insolvency administrator will publish information on the course of the proceedings on his website www.schubra.de in an area that is accessible to the Company’s creditors (Creditor Information System CIS).

• Has a creditors' committee of inspection been created? How many persons are members in this committee and who are they?

The insolvency court appointed an interim creditors’ committee of inspection upon commencement of the insolvency proceedings. The final committee will be elected by the creditors’ meeting.

7.     What are the requirements for participating in the election of a common representative on May 15, 2012?

Please note that bond creditors who would like to participate in electing a common representative on the election date will have to prove that they are the bond holder on that date.

This entails providing a so-called "certificate of non-transferability" from the institution handling the account identifying that the bond creditor voting on May 15, 2012 is the owner of the bonds and also certifying that the bonds are not at his or her disposal until May 15, 2012 has passed. This certificate of non-transferability is issued by the bank upon request and many banks offer the option to order one online. If you have any questions in this regard, please contact the institution handling your account.

We ask that you send a copy of this certificate to the insolvency administrator (IA) at the address below no later than May 4, 2012:

Mr. Volker Böhm, Esq.
as IA of SM AG
Eisenbahnstraße 19-23
77855 Achern

 and bring the original of the certificate with you to the meeting.

Creditors of bond 8 (security number: ISIN DE000A1H3K23) must submit the relevant blocking certificate to the insolvency administrator, together with their registration to participate in the vote, postmarked no later than three working days before the meeting (May 11, 2012). If this proof has not arrived in due time, the bond creditor cannot be allowed to participate in the meeting.

If you have engaged a proxy to participate in the election on your behalf, please give him or her the blocking certificate in addition to the power of attorney.

We ask you to understand that individual queries regarding the status of the proceedings cannot be answered and that detailed information on the individual projects cannot be published as yet. We thank you for your understanding!