iesy Repository GmbH - Irish Stock Exchange

Existing Notes share ratably in all of the security. In addition, in certain circumstances the collateral subject to the Security,
consisting of the equity interests in New iesy, iesy Hessen and iesy GP and the Proceeds Loans, may be pledged to other
creditors on a basis that is superior to the claim of the Notes or pursuant to which other debt is entitled to share ratably in the
collateral, such as in case of the issuance of any Additional Notes. If you (or the Trustee on your behalf) receive any proceeds
of an enforcement of Security prior to the satisfaction of the claims of those that are superior or ratable with those of the
Notes, you (or the Trustee on your behalf) will be required to turn over such proceeds until superior claims are satisfied and
until ratable claims are equally satisfied. Hence, you will recover less from the proceeds of an enforcement of the Security
than you otherwise would have.
In addition, pursuant to the Intercreditor Agreement, the Security will also be subject to a standstill on enforcement of
179 days, subject to certain exceptions. In the event of an enforcement of the security in favor of the lenders under the Senior
Credit Facilities, subject to compliance with the Intercreditor Agreement, and in certain other circumstances, the Security
may be released without the need for any consent from the Noteholders or the Trustee.
As a result of these and other provisions governing the Subsidiary Guarantees and the Security and in the Intercreditor
Agreement, you may not be able to recover any amounts under the Subsidiary Guarantees or the Security in the event of a
default on the Notes.
It is possible that the Security may not be enforceable.
Under German law, a security interest may not be enforceable for the benefit of beneficiaries who are not a party to the
relevant pledge agreement creating such security interest. A pledge is a so-called “accessory” security interest (akzessorische
Sicherheit) which means that the existence of the pledge is dependent on the existence of the underlying secured claim. At the
same time, pledges require that the pledgee and the secured creditor be the same person. Pledges cannot be held by third
parties who do not hold the secured claim. The holders of interests in Notes from time to time will not be party to such pledge
agreements. In order to permit holders of Notes from time to time to have a secured claim, the Intercreditor Agreement to
which the Trustee will become a party provides for the Security Trustee to be a joint and several creditor of each holder of
Notes from the date of the issuance of the Notes until full repayment. The effect of this provision will be to give the Security
Trustee a pledge equal to the amount outstanding under the Notes. The Security Trustee will undertake not to exercise that
pledge without the consent of the Trustee. However, the Security Trustee’s right will not be limited to any extent in whatever
capacity to take any action to protect or to preserve any rights under the Subsidiary Guarantees or the Security or to enforce
any security interest created thereby as contemplated by the Intercreditor Agreement or the Security Documents (or to take
any action reasonably incidental to any of the foregoing). This procedure has not yet been tested under German law, and we
cannot assure you that it will eliminate or mitigate the risk of the unenforceability of the pledge under German law.
Moreover, under German law, in the event that the Issuer or any pledgor would be subject to insolvency proceedings,
the Security could also be subject to potential challenges under the “claw back” provisions of German insolvency law (in
addition to the avoidance rights described above). If any challenge to the validity or enforceability of the Security is
successful, you may not be able to recover any amounts under the Security.
You may not be able to enforce, or recover any amounts under, the Subsidiary Guarantees or security granted by a
subsidiary of the Issuer due to contractual restrictions on enforcement relating to German corporate law requirements.
The enforcement by any holder of the Notes, the Trustee or the Security Trustee of the Subsidiary Guarantees or the
Security will be limited by virtue of specific limitation language within the Subsidiary Guarantees and the agreements
creating such security, respectively, reflecting the requirements under the capital maintenance rules imposed by Sections 30
and 31 et seq. of the German Limited Liability Companies Act. These capital maintenance rules prohibit the direct or indirect
repayment of a German limited liability company’s registered share capital to its shareholders (including payments pursuant
to guarantees or security in favor of the debt of such shareholders).
Payments under the Subsidiary Guarantees or with respect to the Security will be limited if, and to the extent that, such
payments would cause the net assets (excluding, according to recent case law, up-stream and cross-stream intercompany
loans and similar receivables) of such Subsidiary Guarantor or security provider (if it is a limited liability company) or, in the
case of a Subsidiary Guarantor or security provider which is a limited partnership such as iesy Hessen, the net assets of its
general partner to fall below the amount of its registered share capital (Stammkapital). If such event occurs, the Trustee is not
entitled to enforce such Subsidiary Guarantee or security, respectively, save for the amount which may be enforced without
diminishing the registered share capital of such Subsidiary Guarantor or security provider or, in the case of a limited
partnership, the registered share capital of its general partner.
In addition, German court rulings have recently held that the shareholder of a German limited liability company must
not deprive a limited liability company of the liquidity necessary for it to meet its own payment obligations. Although these
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