Ardagh Glass Finance plc - Irish Stock Exchange

its hedging arrangements. As at September 30, 2009, on a pro forma basis, after giving effect to the
issuance of the Senior Notes and the application of the net proceeds of this offering as described under
‘‘Use of Proceeds’’, all of the Subsidiary Guarantors on a combined basis would have had outstanding
A505.6 million of senior debt, which would rank senior in right of payment to their Guarantees of the
Senior Notes. Although the Indenture contains restrictions on the ability of the Subsidiary Guarantors
to incur additional debt, any additional debt incurred may be substantial and senior to the Subsidiary
Guarantees. For a complete summary of the terms of, and subordination provisions relating to, the
Senior Notes and the Guarantees, see ‘‘Description of the Notes—Ranking of the Notes and the
Guarantees; Subordination’’.
Upon any payment or distribution to creditors of a Subsidiary Guarantor in respect of an
insolvency event, the holders of senior debt of such Subsidiary Guarantor will be entitled to be paid in
full from the assets of such Subsidiary Guarantor before any payment may be made pursuant to such
Subsidiary Guarantee. Until the senior debt of a Subsidiary Guarantor is paid in full, any distribution
to which holders of the Senior Notes would be entitled but for the subordination provisions shall
instead be made to holders of senior debt of such Subsidiary Guarantor as their interests may appear.
As a result, in the event of insolvency of a Subsidiary Guarantor, holders of senior debt of such
Subsidiary Guarantor may recover more, ratably, than the holders of Senior Notes, in respect of the
Subsidiary Guarantor’s Guarantee in respect thereof.
In addition, the subordination provisions relating to the Subsidiary Guarantees provide:
• customary turnover provisions by the Trustee and the holders of the Senior Notes for the benefit
of the holders of senior debt of such Subsidiary Guarantor;
• that if a payment default on any senior debt of a Subsidiary Guarantor has occurred and is
continuing, such Subsidiary Guarantor may not make any payment in respect of its Guarantee
until such default is cured or waived;
• that if any other default occurs and is continuing on any designated senior indebtedness that
permits the holders thereof to accelerate its maturity and the Trustee receives a notice of such
default, such Subsidiary Guarantor may not make any payment in respect of the Senior Notes,
or pursuant to its Guarantee, until the earlier of the default is cured or waived or 179 days after
the date on which the applicable payment blockage notice is received; and
• that the holders of the Senior Notes and the Trustee are prohibited, without the prior consent of
the applicable senior agent, from taking any enforcement action in relation to such Subsidiary
Guarantee, except in certain circumstances.
The Indenture will also provide that, except under very limited circumstances, only the Trustee will
have standing to bring an enforcement action in respect of the Senior Notes and the Guarantees.
Moreover, the Intercreditor Agreement and the Indenture will restrict your rights as a note holder to
initiate insolvency proceedings or take other legal actions against the Subsidiary Guarantors and by
accepting any Senior Note you will be deemed to have agreed to these restrictions. As a result of these
restrictions, holders of the Senior Notes will have limited remedies and recourse under the Subsidiary
Guarantees in the event of a default by the Issuer or a Subsdiary Guarantor.
The Senior Notes will be structurally subordinated to the liabilities of non-guarantor subsidiaries.
Some, but not all, of our subsidiaries will guarantee the Senior Notes. Generally, holders of
indebtedness of, and trade creditors of, non-guarantor subsidiaries, including lenders under bank
financing agreements, are entitled to payments of their claims from the assets of such subsidiaries
before these assets are made available for distribution to any Guarantor, as direct or indirect
shareholders.
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