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Under the heading ‘Restructuring and resolution of Cyprus Popular Bank and Bank of Cyprus’, paragraphs 1.23 to 1.27 of the Memorandum of Understanding of 26 April 2013 (‘the disputed paragraphs’) are worded as follows: ‘1.23. The accounting and economic value assessment mentioned has revealed that the two largest banks of Cyprus were insolvent. To address this situation the government has implemented a far reaching resolution and restructuring plan. In order to prevent the build-up of future imbalances and to restore the viability of the sector, while preserving competition, a fourfold strategy has been adopted which does not involve taxpayers’ money. 1.24. First, all Greek-related assets (including shipping loans) and liabilities were carved-out, estimated in the adverse scenario respectively at EUR 16.4 and 15.0 billion. The Greek assets and liabilities were acquired by Piraeus Bank, the restructuring of which will be dealt with by the Greek authorities. The carve-out was based on an agreement signed on 26 March 2013. With the book value of the assets at EUR 19.2 billion, the carve-out has substantially reduced the cross exposures between Greece and Cyprus. 1.25. With respect to the [United Kingdom] branch of [Cyprus Popular Bank Public Co. Ltd; “Cyprus Popular Bank”], all the deposits were transferred to the [United Kingdom] subsidiary of [Trapeza Kyprou Dimosia Etaireia Ltd; “Bank of Cyprus”]. The associated assets were folded into … Bank of Cyprus. 1.26. Second, Bank of Cyprus is taking over via a purchase and assumption procedure the Cypriot assets of Cyprus Popular Bank at fair value, as well as the insured deposits and Emergency Liquidity Assistance exposure at nominal value. The uninsured deposits of Cyprus Popular Bank will remain in the legacy entity. The value of the transferred assets will be higher than the transferred liabilities with the difference corresponding to the recapitalisation of Bank of Cyprus by Cyprus Popular Bank amounting to 9% of the risk weighted assets transferred. Bank of Cyprus is recapitalised to reach a core tier one ratio of 9% under the adverse scenario of the stress test by the end of the programme which should help restoring confidence and normalising funding conditions. The conversion of 37.5% of the uninsured deposits in Bank of Cyprus into class A shares with full voting and dividend rights provides the largest part of the capital needs with additional equity contributions from the legacy entity of Cyprus Popular Bank. Part of the remaining uninsured deposits of Bank of Cyprus will be temporarily frozen. 1.27. Third, to ensure that the capitalisation targets are met, a more detailed and updated independent valuation of the assets of Bank of Cyprus and Cyprus Popular Bank will be completed, as required by the bank resolution framework, by end June 2013. To this end, no later than mid-April 2013, the terms of reference of the independent valuation exercise will be agreed in consultation with the [European Commission], ECB, and IMF. Following that valuation, and if required, an additional conversion of uninsured deposits into class A shares will be undertaken to ensure that the core tier one target of 9% under stress by end-programme can be met. Should the bank be found to be overcapitalised relative to the target, a share-reversal process will be undertaken to refund depositors by the amount of over-capitalisation.’