Ardagh Glass Finance plc - Irish Stock Exchange

LIMITATIONS ON VALIDITY AND ENFORCEABILITY OF THE GUARANTEES
Set out below is a summary of certain limitations on the enforceability of the Guarantees in each
of the jurisdictions in which the Guarantors are organized (except Guernsey). It is a summary only, and
proceedings of bankruptcy, insolvency or a similar event, could be initiated in any of these jurisdictions
and in the jurisdiction of organization of a future guarantor of the Senior Notes. The application of
these various laws in multiple jurisdictions could trigger disputes over which jurisdictions’ law should
apply and could adversely affect your ability to enforce your rights and to collect payment in full under
the Senior Notes and the Guarantees.
The following is a brief description of certain aspects of insolvency law in Ireland, Germany,
England and Wales, Denmark, Sweden, The Netherlands, Poland and Italy. In the event that any one
or more of the Issuer, the Guarantors or any other of the Parent Guarantor’s subsidiaries experienced
financial difficulty, it is not possible to predict with certainty in which jurisdiction or jurisdictions
insolvency or similar proceedings would be commenced, or the outcome of such proceedings.
Ireland
Difference in Insolvency Law
The Issuer, the Parent Guarantor, and Ardagh Treasury Limited, Ardagh Glass Sales Limited and
Ardagh Corporate Services Limited, each a Subsidiary Guarantor, are incorporated under the laws of
Ireland. Any insolvency proceedings applicable to any of them will be likely to be governed by Irish
insolvency laws. Irish insolvency laws differ from the insolvency laws of the United States and may
make it more difficult for holders of the Senior Notes to recover the amount in respect of the Senior
Notes or of the Parent Guarantor’s or an Irish Subsidiary Guarantor’s Guarantee of the Senior Notes
than they would have recovered in a liquidation or bankruptcy proceeding in the United States.
Priority of Secured Creditors
Irish insolvency laws generally recognize the priority of secured creditors over unsecured creditors.
The lenders under the Amended and Restated Anglo Irish Senior Secured Credit Facility, the holders
of the 2009 Notes and the lenders under various other secured facilities have, or will have, liens on
certain of the assets of the Issuer and the material operating subsidiaries of the Parent Guarantor. The
priority attaching to those security interests is governed by the Intercreditor Agreement.
Preferential Creditors
Under Section 285 of the Irish Companies Act, 1963 (as amended) (the ‘‘1963 Act’’), in a
winding-up of an Irish company preferential debts are required to be paid in priority to all other debts
other than those secured by a fixed charge.
The preferential debts will comprise, among other things, any amounts owed in respect of local
rates and certain amounts owed to the Irish Revenue Commissioners for income/corporation/capital
gains tax, VAT, PAYE, social security and pension scheme contributions and remuneration, salary and
wages of employees and certain contractors and the expenses of liquidations and examinership (should
either occur) of the Irish company.
Fraudulent Preference
Under Irish insolvency law, if an Irish company goes into liquidation, a liquidator may apply to the
court to have certain transactions disclaimed if the related contract amounted to a fraudulent
preference. Section 286 of the 1963 Act provides that any conveyance, mortgage, delivery of goods,
payment, execution or other act relating to property made or done by or against an Irish company,
which is unable to pay its debts as they become due in favor of any creditor or any person on trust for
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