On 11 September 2018, LBI and the UK Financial Services Compensation Scheme (“FSCS”) agreed to discontinue proceedings at the District Court of Reykjavik where FSCS had claimed compensation of its interest expense from 8 October 2008 until 22 April 2009 under a subsidiary guarantee provided by LBI to Heritable Bank prior to its bankruptcy proceedings. The agreement will release from reserves held on escrow for disputed article 113 claims, cash of €9.5 million, and Convertible Notes of €4.3 million which will subsequently be cancelled. No consideration has been or will be paid to FSCS in respect of such agreement.

Pursuant to Condition 9.2(a) of the Convertible Notes due 2035, LBI ehf. hereby gives notice of its intention to make an unscheduled payment in respect of the Convertible Notes on 5 October 2018 of €9.5 million.

In accordance with the terms and conditions of the Convertible Notes, further detail will be provided on 24 September 2018.