EXHIBIT 78
SHARE SALE AND PURCHASE
TIME CONTRACT
Between:
Mediobanca S.p.A., with address at Xxxxxxxxx Xxxxxx, 0, Xxxxx, Company Capital
392,848,832.50 Euros, Enrolment number with the Milan Business Register, Tax
Code and VAT number 00714490158 (hereinafter referred to as the "SELLER")
- on one hand -, and:
Olimpia S.p.A., with address at Xxxxx Xxxxx, 000, Xxxxx, Company Capital
1,860,233,510 Euros, Enrolment number with the Milan Business Register, Tax Code
and VAT number 03232190961 (hereinafter referred to as the "PURCHASER")
on the other hand -
(hereinafter, the Purchaser and the Seller will be referred to jointly as the
"PARTIES" and each individually as the "PARTY").
PREMISES
(a) The Purchaser, on February 1, 2005, holds a shareholding in the
ordinary company capital of Telecom Italia S.p.A. equal to about 17%
and is interested in increasing this shareholding
(b) Having acknowledged that:
(i) on December 22, 2004, an Extraordinary Shareholders'
Meeting of the Purchaser Shareholders approved a company
capital increase by payment, offered as an option to the
Shareholders, for an amount of up to 2,000,000,000 Euros
(ii) this capital increase in mainly aimed at providing the
Purchaser with the financial means for purchasing further
ordinary shares in Telecom Italia S.p.A.
(c) The Purchaser intends to ensure itself a package of Telecom Italia
S.p.A. shares by means of the time-based purchasing at a set maximum
price and for a set overall expense, also to limit the possible
consequences deriving from any market fluctuations
(d) The Seller is willing to sell the Purchaser ordinary Telecom Italia
S.p.A. shares at the terms and conditions specified in this share
sale and purchase time contract.
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GIVEN THE ABOVE,
The Parties hereby agree the following:
ARTICLE 1 - PREMISES
The Premises to this share sale and purchase time contract (hereinafter referred
to as the "CONTRACT") are an integral and substantial part of the Contract.
ARTICLE 2 - SUBJECT OF THE CONTRACT
2.1 The Seller undertakes to sell to the Purchaser, who undertakes to buy
from the Seller, at the terms and conditions specified in this
Contract, a certain quantity of ordinary Telecom Italia S.p.A.
shares, with a nominal value of 0.55 Euros each, regular use
(hereinafter referred to as the "SHARES") at a purchase price
(hereinafter referred to as the "PURCHASE PRICE") in any case not
above a price of 3.50 Euros per Share (the "MAXIMUM PRICE"). The
quantity of Shares subject to sale and the Purchase Price will be
established on the basis of Article 4 below.
2.2 If, between the date of this Contract and the Closing date (as
defined in Article 5.1 below), the average weighted price per
ordinary Telecom Italia S.p.A. share (the Official Price) is higher
than the Maximum Price for a period of seven consecutive days on
which the Stock Exchange is open (hereinafter, the "SIGNIFICANT
EVENT"), one of the Parties may ask the other Party to arrange a
meeting, during which the Parties will negotiate in good faith any
modifications to the conditions set in this Contract for purchasing
the Shares. The meeting will be set up by the end of the three
consecutive days on which the Stock Exchange is open after receipt of
the request of the more diligent Party but the request for a meeting
may no longer be presented, and the resulting prerogatives of the
Seller will be considered to have been waived, after five consecutive
days on which the Stock Exchange is open from the occurrence of the
Significant Event (note that this waiving has no effect in relation
to any eventual repetition of a Significant Event). If no agreement
is reached within the five consecutive days on which the Stock
Exchange is open after the date of the meeting (the "CONSULTATION
TERM"), the Seller will sell to the Purchaser, and the Purchaser will
buy from the Seller, at the Purchase Price, the quantity of Shares
which, on that date, are owned by the Seller in accordance with this
Contract and whose extent will be promptly communicated to the
Purchaser. The transfer of the Shares to the Purchaser will take
place by the seventh consecutive day on which the Stock Exchange is
open after the date of the Consultation Term.
ARTICLE 3 - DECLARATIONS AND GUARANTEES
3.1 The Seller hereby declares and guarantees in favor of the Purchaser
on the date of this Contract and on the Closing date (as defined
below) that:
(i) the signing by the Seller of this Contract has been duly
authorized by the competent organs of the Seller and this
authorization is valid and effective; this signing or the
implementation of the obligations of the Seller do not
require any authorizations from judicial or administrative
authorities which have not been obtained and which are not
still valid and effective;
(ii) the Seller will have, on the date immediately before the
Closing date, the ownership and the full and free use of
the Shares, free of any pledges, uses or other constraints
or obligations in favor of the Seller or third parties;
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(iii) this Contract and the obligations which this Contract
creates are valid and binding and effective for the
Seller, are susceptible to execution, also in specific
form, in compliance with the regulations specified
therein;
(iv) this Contract is not a breach by the Seller of Article 180
of Italian Legal Decree of February 24, 1998, no. 58.
3.2 The Purchaser hereby declares and guarantees in favor of the Seller
on the date of this Contract and on the Closing date (as defined
below) that:
(i) the signing by the Purchaser of this Contract will be, by
the Closing date, duly authorized by the competent organs
of the Purchaser and this authorization will be valid and
effective on the Closing date; this signing or the
implementation of the obligations of the Purchaser will
not require, on the Closing date, any authorizations from
judicial or administrative authorities which have not been
obtained and which will not then be valid and effective;
(ii) this Contract and the obligations which this Contract
creates are valid and binding and effective for the
Purchaser, are susceptible to execution, also in specific
form, in compliance with the regulations specified
therein;
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(iii) this Contract is not a breach by the Purchaser of Article
180 of Italian Legal Decree of February 24, 1998, no. 58.
ARTICLE 4 - QUANTITY OF SHARES AND PURCHASE PRICE
4.1 The Purchase Price will be established in good faith by the Seller,
on the basis of the criteria established in Article 4.2 below. The
Purchase Price in any case may not exceed the Maximum Price. The
quantity of shares will be established by dividing the overall amount
of 283,000,000 Euros made available by the Purchaser for purchasing
the Shares by the Purchase Price as established by the Seller, with
rounding off to the lower full share figure. Therefore, if the
Purchase Price and the Maximum Price are the same, the quantity of
Shares transferred will be 80.857.143 Shares; this notwithstanding
the hypotheses specified in Article 2.2 above.
4.2 In establishing the Purchase Price, the Seller will refer to the
price conditions identified overall by the Seller in the market as
well as any financial expenses sustained during the course of the
operations carried out to obtain the Shares within the Closing date
(as defined below).
4.3 The Purchase Price, established in accordance with Article 4.2 above,
as well as the quantity of Shares to be transferred will be
communicated by the Seller to the Purchaser by the end of the third
working day prior to the Closing date, notwithstanding the
regulations specified in Article 2.2 above. The product of the
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Purchase Price and the quantity of Shares to be transferred is
hereinafter referred to as the "SALE VALUE".
4.4 The Purchaser will have the right to request from the Seller, at any
time, documented information about the market price conditions and
the other elements specified in paragraph 4.2 above and, when it
receives this request, the Seller will be obliged to promptly provide
the Purchaser with all the information reasonably requested.
ARTICLE 5 - CLOSING
5.1 Unless otherwise agreed between the parties, the date for the
execution of this Contract (hereinafter referred to as the "CLOSING")
will be set by the Purchaser and communicated to the Seller with
prior notice of at least seven days on which the Stock Exchange is
open. This date will in any case be between February 28, 2005 and May
30, 2005. If the Purchaser will not set and communicate to the Seller
the date within May 23, 2005, the Closing will be automatically set
on May 31, 2005.
5.2 On the Closing date, the ownership of the Shares will be transferred
to the Purchaser by the Seller on full payment of the Sale value. The
payment of the Sale value by the Purchaser will be made in Euros,
with the value date being the Closing date, in the form of a bank
draft to the current bank account which will be communicated by the
Seller to the Purchaser at least two working days before the Closing
date.
5.3 On the Closing date, the ownership of the Shares sold will be
transferred by the Seller through Monte Titoli S.p.A. to the deposit
account held by the Purchaser at Telecom Italia S.p.A., Milan
headquarters, the details of which will be communicated by the
Purchaser to the Seller at least two working days before the Closing
date.
5.4 At the time of the transfer of the Shares and the payment of the Sale
value, the Parties will sign a special declaration detailing the
reciprocal receipt of items.
ARTICLE 6 - EXPENSES AND DUTIES
6.1 Notwithstanding the regulations specified in Article 4.2 above, each
Party will be responsible for the expenses sustained for implementing
and signing this Contract and for complying with the obligations
specified therein. The expenses for the Stock Exchange transfer tax
(fixed stamp duty) are the responsibility of the Purchaser. No other
repayment will be due from the Purchaser to the Seller in relation to
this Contract.
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ARTICLE 7 - APPLICABLE LAW AND DISPUTES
7.1 This Contract is regulated by Italian Law.
7.2 The Parties refer irrevocably and completely to the exclusive domain
of Milan Law Court for any dispute deriving from this Contract or in
any way relating to the implementation or interpretation of this
Contract.
ARTICLE 8 - COMMUNICATIONS
Any communication required or permitted by the regulations specified in this
Contract must be carried out, unless otherwise indicated in this Contract
itself, in writing and will be considered to be effectively and validly carried
out on receipt of these written communications, if sent by letter or telegram,
or at the time of recognition of receipt in the form of a special declaration
(also by fax), provided the communications are addressed as follows:
If to the Seller: If to the Purchaser
Mediobanca S.p.A. Olimpia S.p.A.
Piazzetta Xxxxxx, 1 Xxxxx Xxxxx, 000
00000 Xxxxx 20126 Milan
Tel: 00 0000000 Tel: 00 00000000
Fax: 00 0000000 Fax: 00 00000000
Attention: Dr. Francesco Xxxxxxx Xxxxx Attention: Ing. Xxxxxxx Xxxxx
ARTICLE 9 - NEGOTIATION BETWEEN THE PARTIES
The Parties hereby acknowledge that they have negotiated this Contract and the
terms and conditions contained therein. Therefore, there is no need for specific
approval of clauses in this Contract.
Milan, February 16, 2005
Olimpia S.p.A. Mediobanca S.p.A.
[signature] [signature]
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