1
EXHIBIT 7.11
Medium Term Financing Contract pursuant to D.P.R. 29 September 1973 n. 601 title
IV, by and between Interbanca S.p.A., a bank located in Milan (hereinafter
"Interbanca") and Targetti Xxxxxx S.p.A., a corporation located in Florence
(hereinafter the "Client").
RECITALS
(a) the main business activity of the Client is the design, manufacturing
and marketing of lighting systems;
(b) the Client has requested a financing of Lit. 15 billion from
Interbanca to be used for increasing of its cash reserves
(c) Interbanca intends to grant such loan upon its review of the financial
information provided by the Client
(d) that each aforementioned party intends to enter in the following
agreement
NOW, THEREFORE, in consideration of the foregoing the parties intend to be
legally bound as follows:
ARTICLE 1
Interbanca will grant to the Client, in full compliance with applicable law, a
financing of Lit. 15 billion to be used as described in the recitals above at
(b).
ARTICLE 2
The financing amount will be made available to the Client through one of
Interbanca's branches. The total amount of the financing shall be funded to the
Client for an amount of Lit. 10 billion within September 30, 1999 and for an
amount of Lit. 5 billion within December 12, 1999. The Client agrees that
Interbanca may terminate this contract if the Client will sustain any changes in
its legal or financial situation which could preclude the Client's performance
of its obligations under this contract. In the eventuality of such a
termination the Client agrees to be responsible for all of the expenses,
including tax expenses, relating to this contract.
ARTICLE 3
(1) The client agrees to pay the following interest for each semester
calculated on the basis of a 365 days year:
(a) INDEX + SPREAD
-- INDEX: the EURIBOR six months interest rate quoted at 11 AM in the
Reuters news service and as published the next day on the "Sole 24
Ore."
-- SPREAD: 0.75 percentage points.
(b) The INDEX will be quoted as of the second business day preceding the
semester for which interest is due. For the first interest payment, the
INDEX will be quoted as of the second day preceding the funding date.
Business days will be determined with reference to the calendar adopted
by the TARGET system ( Transeuropean Automated Real Time Gross
settlement Express Transfer).
1
2
(c) The interest rate as determined by using the formula in (a) above will
be rounded up to 0,001%. If the interest rate in (a) above can not be
calculated, Interbanca and the Client shall agree to an interest rate
for that semester.
(2) The client agrees to pay the amount set by the substitutive tax
required by Art. 18 of D.P.R.29.9.1973 No. 601 as amended.
The interest payments and the relative costs and expenses shall be due in six
months installments. Interest payments will be due from the first funding date
until March 31, 2000. After such date the interest payments will be calculated
only on the amount of principal outstanding as provided in Article 5 below.
Taxes will be deducted from the funding amounts.
ARTICLE 4
The term of this financing will expire on September 30, 2004. The principal
amount shall be reimbursed in 10 payments due every six months as provided by
Article 5 below.
ARTICLE 5
The Client shall reimburse the principal of this financing as follows:
on March 31, 2000 first installment of Lit 1.5 billion
on September 30, 2000 second installment of Lit 1.5 billion
on March 31, 2001 third installment of Lit 1.5 billion
on September 30, 2001 fourth installment of Lit 1.5 billion
on March 31, 2002 fifth installment of Lit 1.5 billion
on September 30, 2002 sixth installment of Lit 1.5 billion
on March 31, 2003 seventh installment of Lit 1.5 billion
on September 30, 2003 eighth installment of Lit 1.5 billion
on March 31, 2004 ninth installment of Lit 1.5 billion
on September 30, 2004 tenth installment of Lit 1.5 billion
ARTICLE 6
Interbanca will fund the amounts due to the Client at the bank chosen by the
Client. All the amounts due to Interbanca shall be paid by Client using the
National Interbank Network (RNI). Eventual currency losses shall be borne by the
Client.
ARTICLE 7
In case of delays in the payments of interest or principal due, or for any other
defaults by the Client, Interbanca will assess a penalty interest which shall be
equal to the six month EURIBOR interest rate plus 3% as quoted on the second
business day preceding January 1st and July 1st of each year. This penalty
interest shall be automatically assessed, without any notice requirement, on
every 30th of June and 31st of March of each year.
2
3
ARTICLE 8
This contract is subject to certain tax benefits pursuant to Title IV of D.P.R.
29/9/1973 No. 601 as amended.
ARTICLE 9
The Client approves all of the restrictive covenants, representation, and
warranties contained in Attachment A attached to this contract. Interbanca shall
have the power to change certain terms of this contract pursuant and in
compliance with Artt. 118 and 161, sub 2 of the Legislative Decree 1 September
1993 No. 385. Pursuant to Art. 117, sub 5 of the above Legislative Decree the
Client agrees to such power and expressly approves pursuant to Art.1341 of the
C.C.
ARTICLE 10
All of the clauses of this contract and of the Attachment A are essential and
non-divisible. Modifications and amendments to this contract will be enforceable
only if in writing.
ATTACHMENT A
Various Article 1. The Client shall for the duration of the
Covenants of the financing and until the payment of all outstanding
Client amounts of principal and interest due:
(a) immediately communicate to Interbanca any
decision for a merger, divestiture, liquidation,
change in the certificate of incorporation,
reductions of the share capital, bankruptcy or other
extraordinary actions not in the ordinary course of
business;
(b) send Interbanca, within 60 days of the relative
shareholder's approval, its financial statements;
(c) communicate to Interbanca any additional medium
or long term debt to be incurred;
(d) immediately communicate to Interbanca any changes
to its business activities;
(e) provide Interbanca with any and all documents
Interbanca shall request;
(f) notify Interbanca of any event or change of
events which may substantially effect its financial
condition;
Obligations of the Article 2. The Client may not defer, for any reason
Client which May whatsoever including a lawsuit among the parties of
not be Deferred this financing contract, its obligations to pay all
of the amounts due at the set dates or any of its
other obligation under this financing contract.
Expenses Article 3. The Client shall be responsible for all
costs and expenses relating to this financing
contract.
3
4
Truthfulness of
Financial
Information Article 4. The Client represents and warrants as to
the truthfulness of the financial statements and of
the other documentation provided to Interbanca.
Termination Article 5. The Client expressly acknowledges and
accepts the following as valid grounds for the
termination of this financing contract by Interbanca;
(a) a delay or default, including partial payment, in
the payment of any of the principal and/or interests
amounts due;
(b) a merger, divestiture, liquidation, change in the
certificate of incorporation, reductions of the share
capital, bankruptcy or other extraordinary actions
not in the ordinary course of business, without the
prior written consent of Interbanca;
(c) any material differences with the financial,
legal or any other documentation provided by the
Client to Interbanca;
(d) the filing of a bankruptcy proceeding or any
other event which evidences a worsening of the
financial situation of the Client or which may
substantially negatively effect the regular business
of the Client, or the default of the Client on any
other financing contract with Interbanca.
(e) the occurrence of any of the events contemplated
by Art. 1186 C.C.
(f) the default or delay on any of the obligations of
the Client pursuant to this financing contract
Penalties Article 6. if any of the events contemplated by
Article 5 above should occur, this financing contract
shall automatically terminate without any need for a
judicial determination on such termination.
Interbanca shall send notification to the Client of
such termination by registered mail. In the event of
such termination all amounts of principal and
interest outstanding, including the interest that
Interbanca expects to receive for the duration of
this financing, and including related costs and
expenses, shall become immediately due. The penalty
interest will be due on all of such sums and will be
assessable every 30th of June and 31st of March of
each year. All of the present and future guarantees
for this financing given to Interbanca shall be
enforceable at the discretion of Interbanca. The
Client will further be responsible for a damages
payment equal to 2% of the residual amounts
outstanding at the date of termination.
Prepayment Article 7. After 18 months from the execution of this
contract the Client may prepay without
penalty all of the outstanding amounts by giving
Interbanca 1 month notice. If such prepayment will
not be on one of the set dates for the payment of the
principal or the interests amounts, the Client shall
pay the interest due to Interbanca until the next
payment date. If the Client shall prepay only part of
the outstanding amounts, such pre-payment will
proportionally reduce the subsequent payment
installments set by this contract, unless Interbanca
shall decide otherwise. Any prepayment will not
re-establish any of the financing availability
existing prior to such pre-payment.
Taxes Article 8. The Client shall be responsible for the
taxes due pursuant Artt. 17 and 18 of D.P.R.
29/9/1973 No. 601 and for any future taxes which may
be payable by Interbanca pursuant this financing
contract. Interbanca may deduct such taxes from the
funding amounts or may simply request payment from
the Client.
4
5
Successors and Article 9. All of the obligations assumed by the
Assigns Client pursuant to this financing contract shall bind
any successor or assign of the Client.
Jurisdiction and Article 10. The Tribunal of Milan shall have
Legal Fees jurisdiction on this financing contract. Any fees and
all legal expenses and fees will be of the sole
responsibility of the Client.
Effectiveness of Article 11. The Client recognizes the full
the Accounts effectiveness as evidence of the accounting of
Interbanca Interbanca for the determination the Client's
outstanding debt.
Election of Article 12. For the purposes of this financing
Domicile contracts, Interbanca elects its domicile in Milan
and the Client in Xxxxxxxx.
5
