iesy Repository GmbH - Irish Stock Exchange

We are subject to significant restrictive debt covenants, which limit our operating flexibility.
The Senior Credit Facilities and the indentures for the Notes and the Existing Notes contain (or will contain) covenants
that significantly restrict our ability to, among other things:
• incur additional indebtedness;
• pay dividends or make other distributions;
• make certain other restricted payments and investments;
• create liens;
• issue shares of subsidiaries;
• impose restrictions on the ability of our subsidiaries to pay dividends or make other payments to us;
• repurchase shares;
• transfer or sell assets;
• merge or consolidate with other entities;
• enter into transactions with affiliates;
• impair the Security; and
• engage in certain types of business.
These covenants could limit our ability to finance our future operations and capital needs and our ability to pursue
acquisitions and other business activities that may be in our interest.
The Senior Credit Facilities also require us to maintain specified financial ratios and satisfy specified financial tests.
Our ability to meet these financial ratios and tests may be affected by events beyond our control and, as a result, we cannot
assure you that we will be able to meet these ratios and tests. In the event of a default under the Senior Credit Facilities or
certain other defaults under other agreements, the lenders could terminate their commitments under the Senior Credit
Facilities and declare all amounts owed to them to be due and payable. Borrowings under other debt instruments that contain
cross-default or cross-acceleration provisions, including the Notes, may, as a result, also be accelerated and become due and
payable. We may be unable to pay these debts in such circumstances.
Under German insolvency law we may have to file for insolvency when we are over indebted, even if we are still able to
meet all payment obligations.
Under German law, a reason for the commencement of insolvency proceedings (Insolvenzgrund) would not only exist
in case of illiquidity (Zahlungsunfähigkeit) or imminent illiquidity (drohende Zahlungsunfähigkeit) of the Issuer, but also in
case of its over indebtedness (Überschuldung). Over indebtedness is based solely on a balance sheet test (measured by fair
market or liquidation values rather than by book values) and exists when the debtor’s assets no longer cover existing
liabilities. Hence, over indebtedness may occur if the debtor has still enough liquidity to meet its current obligations. Once
the over indebtedness has occurred, the management is under an obligation to file for insolvency within three weeks unless
the over indebtedness is remedied by equity contributions or subordination of liability. Delayed filing for insolvency is a
criminal offense for the management. Unforeseen adverse events resulting in losses or write-offs or requiring reserves may
trigger over indebtedness and commencement of insolvency proceedings of any of the Issuer or the Subsidiary Guarantors if
their respective net equity at that time is not sufficient to offset such losses, write-offs or reserves. See “—We depend on
payments from our subsidiaries to make payments on the Notes, and our subsidiaries will be subject to various restrictions on
making such payments.”
If iesy Hessen becomes insolvent, New iesy and the Issuer, as limited partners, would be subordinated to all other
creditors of iesy Hessen.
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