LOAN CONTRACT
BETWEEN
Olimpia S.p.A., a lawfully established Italian company with legal headquarters
in Milan, Xxxxx Xxxxx 000, with wholly paid-in share capital of 1,400,000,000
Euros, inscribed in the Milan Trade Register under number 03232190961, taxpayer
code and VAT number 03232190961, duly authorized and represented for purposes of
signing this Contract by virtue of council decision handed down on September 27,
2001 (the "Borrower") by Xx. Xxxxxx Xxxxxxxxx and Xx. Xxxxxxx Xxxxxx, as
representatives with joint signatures authorized to stipulate this Contract by
virtue of special powers of attorney granted on October 2, 2001 by Xxxxxxx
Xxxxx, Eng., Company Director, in a document authenticated by Xx. Xxxx Xxxxx,
Notary Public in Milan, dated October 2, 2001;
AND
Banca Monte dei Paschi di Siena S.p.A., a lawfully established Italian company
with legal headquarters in Siena, Xxxxxx Xxxxxxxxx, 0, share capital of
2,614,329,931,772 lire, inscribed in the Siena Trade Register under number 9782,
taxpayer code and VAT number 00884060526, duly authorized to sign this Contract
by virtue of the decision handed down by the Executive Committee of the Bank on
September 27, 2001 (the "Bank"), in the person of [handwritten] Xxxxxx Xxxxx,
authorized to stipulate this Contract by virtue of special powers of attorney
granted by Mr. Piergiorgio Primavera, Vice Deputy General Manager of the Bank,
in a document authenticated by Mr. Vieri Xxxxxx, Notary Public in Siena, dated
October 2, 2001;
WHEREAS
- the Bank pledges to issue, with letter dated
September 19, 2001 (the "Letter"), a loan (the "Loan")
totaling 516,456,000 Euros, to be repayed within six years,
with Borrower entitled to repay the amount in advance as of
the sixth month counting from the date of issuance accepted on
the same date by the Borrower;
- the Letter follows an agreement signed on July 30,
2001, as stipulated in an exchange of letters between Xxxx
X.X. (the "Seller"), the party of the first part, and Pirelli
S.p.A. ("Pirelli") and Edizione Holding S.p.A. ("Edizione
Holding"), the party of the second part, for the purpose of
selling a shareholding in Olivetti S.p.A ("Olivetti") by the
Seller to Pirelli and Edizione Holding, or a company
designated by the latter, corresponding to 1,552,662,120
common shares of Olivetti stock and 68,409,125 Olivetti
2001-2002 subscription warrants (jointly, the "Shareholding")
under the terms and conditions referred to herein (the
"Agreement").
- on September 19, 2001, the parties that signed the
Agreement and the Borrower, as designated purchaser of the
Shareholding, following an exchange of letters, signed a
document integrated into the Agreement (the "Document").
- within the context of operations with regard to the
Agreement and the Document, the Borrower declares that it is
willing to accept the Loan set forth in the first paragraph of
these premises;
NOW THEREFORE,
in consideration that the premises and annexes contained herein form an integral
and essential part of this Contract, the parties hereto do mutually covenant,
stipulate and agree as follows:
1. The Bank shall provide the Borrower with a loan totaling 516,456,000 Euros
(five hundred and sixteen million, four hundred and fifty-six thousand Euros).
The Borrower must use the Loan exclusively for paying the
Seller the acquisition price for the agreed Shareholding pursuant to the
Agreement, as set forth in the Document.
2. The Loan, which is not revolving, shall be disbursed in a single lump sum at
the time of payment of the acquisition price of the Shareholding, by means of
the Bank placing the amount in question at the disposal of the Borrower. The
corresponding request for issuance (the "Request"), which shall be delivered to
the Bank at least 1 business day in advance (the "Business days" being
understood as a bank business day in Milan), shall be in accordance with Annex 1
to this Contract, and shall be signed by a person invested with the necessary
powers.
The Request must be delivered to the Bank by no later than
October 31, 2001, with issuance to be made no later than 3 business days from
the date of presentation of said Request. Should the Bank fail to receive the
Request by the said date, this contract shall be considered to be rescinded, and
the Bank will no longer be required to issue the Loan.
3. The Borrower pledge to repay the Loan, in a single payment, at the conclusion
of the sixth year counting from the date of issuance ("Due Date"), in addition
to any other amounts such as the Borrower may still owe the Bank for interest
and any documented additional charges (the "Additional Charges").
The Borrower is entitled to make payment in advance of all or
any part of the Loan, in the incontestable judgment of the Borrower and which
the Bank may not refuse, beginning as of the sixth month counting from the date
of issuance, upon prior notice of at least 5 Business Days, for which no penalty
may be levied, with it being understood that the Borrower is entitled to repay
all or any part of the Loan only upon expiration of an interest period.
It is understood that once the Bank has received the aforesaid
notice from the Borrower, the advanced payment date becomes final and is subject
to all the consequences set forth in the final paragraph of Clause 7 below if
said payment is not made punctually by the advanced expiration date stated in
the notice.
In no instance shall the advanced partial payments be less
than 20,000,000 Euros.
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With the exception of a possible merger or absolute
contribution in kind by the Borrower into Pirelli and/or Edizione Holding and/or
into or with a Pirelli and/or Edizione Holding subsidiary and/or controlling
company, by intergroup transfers (as defined below), as well as a merger or
absolute contribution in kind by the Borrower into or with a listed company that
is directly or indirectly active in the telecommunications sector, if Pirelli
and Edizione Finance International S.A. should cease to hold, jointly or
severally, even through a 100%-held subsidiary, any interest in the Borrower
allowing control of the Borrower, the Borrower shall be obliged to repay in
advance, within 15 days counting from the time it relinquishes control as
defined below, the entire amount of the Loan, together with interest and other
Additional Charges outstanding.
Likewise, with the exception of a possible merger or absolute
contribution in kind by Olivetti into the Borrower and/or into or with a Pirelli
and/or Edizione Holding subsidiary and/or controlling company, as well as a
merger or absolute contribution in kind by Olivetti into or with a listed
company directly or indirectly active in the telecommunications sector, if the
Borrower should cease to hold, for any reason whatsoever, a shareholding in
Olivetti greater than 20% of its capital, the Borrower shall be obliged to repay
in advance, within 15 days counting from the time when the aforesaid
shareholding drops below the indicated percentage, the entire amount of the
Loan, together with interest and other Additional Charges outstanding.
By "intergroup transfers" is meant the sale or transfer by a
contribution in kind of Olimpia shares held by Pirelli S.p.A. and/or Edizione
Finance International S.A. to companies belonging to the respective group
understood as the company and/or other entities directly or indirectly
controlled by the transferors or their controlling companies pursuant to art.
2359, first paragraph, no. 1, of the Civil Code.
By "control" is meant control as defined in art. 2359, first
paragraph, no. 1, of the Civil Code.
For payment of amounts owed to the Bank by the Borrower,
involving capital as well as interest and Additional Charges, the Borrower
pledges to pay the amount in question on the respective due date to the Bank's
Milan branch, giving simultaneous notice directly to the Bank.
It is understood than whenever a payment date, for any reason
whatsoever, does not fall on a Business day, payment shall be considered due on
the first Business day immediately afterwards, with the consequences set forth
in the second paragraph of Clause 4 below.
4. The Borrower pledges to make payment to the Bank, at the end of the first six
months of the year, as well as on the Due Date - without prejudice to the
provisions of the last paragraph of Clause 3 above whenever a payment does not
fall on a Business day - the amount of interest due in each period on the loan
still due , together with any other expenses due, whose total shall be timely
communicated by the Bank to the Borrower.
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For calculation purposes, each interest period shall include
as its first day the day of payment of interest for the preceding period (or,
initially, the date of issuance), with the last day being the one preceding the
payment date of interest for the period in question (or, at the end of the loan
period, the day prior to the Due Date). In instances such as those referred to
in the final paragraph of Clause 3 above, the interest period shall be extended
to the day preceding that of the deferred payment, and for the ensuing period
shall therefore be counted from the deferred payment date.
Interest shall be calculated at an annual rate, based on the
actual number of days and using 360 as a divisor, with semiannual updates
effective at the onset of each interest period, based on the 6-month Euro
Interbank Offered Rate, valid for regulatory purposes as of the first day of the
period in question, at 11:00 a.m. (Central Europe Time), by the Euribor Panel
Steering Committee (as a rule two business days prior to the aforesaid
regulatory day) and published by Reuters, currently on page ATIA01, as well as
in the leading financial newspapers ("Euribor"), plus a fixed margin of 0.50.
It is also understood that if it is not possible to obtain the
Eurobor rate, as defined above, on the day scheduled for calculating the rate
applicable to an interest period, the Eurobor rate shall be replaced by an
arithmetic mean (rounded off to the next highest sixteenth of a point) of the
interbank selling rates for the interest period in question, as quoted by at
least two of the following banks:
S. Paolo I.M.I; Chase Manhattan Bank, Milan branch; Societe
Generale, Milan branch.
A margin of 0.50 shall also be added to the rate determined
using this alternative method.
Whenever the applicable interest rate, as calculated pursuant
to this Clause 4, exceeds the maximum limit allowed by law, it shall be
considered as automatically reduced to this maximum allowed limit.
The bank shall inform the Borrower, in writing and in a timely
manner, of the interest rate to be applied for each interest period.
It is hereby understood that if:
a. for any reason whatsoever the Euribor cannot be obtained as needed to
determine the rate to be applied to an interest period, and consequently also
the alternative method indicated above cannot be used, or
b. modifications should be made to the tax system regarding the Bank's means of
financing, or if there is a modification of the current handling of interbank
deposits as regards reserve requirements and/or their tax system, with harm to
the Bank,
the Bank shall be entitled to change the manner of calculating the rate as
indicated above; accordingly, the Bank shall inform the Borrower by fax with
regard to the new rate conditions by which the Loan will be able to continue.
The Borrower, within thirty days of this communication, must send notice to the
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Bank agreeing to the new conditions, or otherwise rescinding the Contract, in
the latter case pledging to repay the Loan in advance, without penalty, upon
expiration of the said thirty days following the above notice from the Bank. If
the said thirty days ends after the conclusion of the interest period during
which the Bank notice was sent, the rate in effect at the time of said notice
shall be adopted up till the day of repayment. If the Borrower does not reply to
the said notice from the Bank, calculation of the new rate applicable to the
Loan shall be understood as definitively accepted, and therefore the Loan will
continue under the new rate conditions reported by the Bank.
5. The Borrower, upon formally notifying the Bank that it acknowledges that the
veracity of the following declarations and statements are an essential factor to
the stipulation of this Contract by the Bank, shall declare and affirm the
following to the Bank:
(a) the Borrower is a legally constituted and existing company, currently
exercising its rights in full; it is not insolvent, or undergoing voluntary
winding up, bankruptcy, compulsory administrative liquidation, composition with
creditors, temporary receivership or extraordinary administration, or similar
legal proceedings, nor does the Borrower foresee or feel a threat of being
subjected to such proceedings, nor has it transferred its assets to creditors;
(b) the Borrower has been invested with every power and authority needed for
signing this Contract, for complying with obligations arising therefrom, and for
utilizing the Loan in accordance with the provisions of Clause 1 of this
Contract;
(c) the Borrower's corporate bodies, in accordance with the provisions of their
corporate bylaws, have adopted the necessary resolutions and other measures
relating to the approval and signing of this Contract, and of every other
document or contract hereto related;
(d) the signing of this Contract together with the fulfillment of obligations
arising therefrom is not in conflict with laws or legal acts that are in any
case binding on the Borrower, as well as with judiciary, administrative or
arbitration measures to which the Borrower may be subject;
(e) the Borrower has not breached contracts or failed to comply with other
transactions to which it is a party, nor is there evidence of failure to comply
with same such as would prejudice the Borrower's ability to fulfill its
obligations arising from this Contract, or more generally, from its own
economic, financial and managerial situation;
(f) this Contract sets forth obligations to the Borrower that are binding,
legitimate, valid, actionable and capable of being performed pursuant to its
terms and conditions;
(g) the Borrower declares that its own net worth by the value date of issuance
will total at least 5,200,000,000 Euros (five billion two hundred million
Euros).
Declarations under the previous letters (a) through (g) shall be
reiterated on the date of issuance of the Loan, and at the beginning of each
interest period throughout the time this Contract is effective, until each of
the Bank's credit terms has been wholly and definitively satisfied. For each
case, the Borrower shall promptly inform the Bank of any event capable of
affecting, and substantially modifying, the circumstances of said declarations.
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6. Also taking into consideration the recommendations of the Supervisory
Authorities engaged in monitoring bank clientele, in accordance with Bank
confidentiality, the Borrower pledges to comply with the following until final
settlement of the Loan:
(i) to deliver, for each fiscal year, a copy of its annual balance sheet and the
semiannual report, within ninety and thirty days, respectively, of their
approval,;
(ii) to deliver a copy of the consolidated financial statements for the group to
which the Borrower belongs, within ninety days of their approval;
The Borrower also pledges the following:
(a) not to acquire shares in other companies, with
the exception of those in Olivetti, companies that are
subsidiaries of Olivetti, and companies in the
telecommunications sector, with total amounts in the latter
case not exceeding 250 million Euros, without the prior
written consent of the Bank, which shall not be denied without
good reason;
(b) to refrain from distributing or approving extra
dividends, share premiums or any other of the Borrower's
earnings or reserves;
(c) to ensure that, up till the Due Date, the ratio
between the Borrower's net financial indebtedness and its net
assets does not exceed 1:1. The Bank shall verify said ratio
based on the Borrower's balance sheet and semiannual report.
For purposes of this Contract, "net financial indebtedness"
shall be understood as the algebraic sum of the following
items - current, or potential - to be attributed to assets
pursuant to article 2424 of the Civil Code for the period in
question: "bonds" + "convertible bonds" + "debts to banks" +
"debts to other financial institutions" + "debts reflecting
credit instruments" + "financial debts owed to
subsidiary/associated/controlling companies + "other items
leading to financial indebtedness" - "liquidity" - "financial
activities other than long-term investments, other stock"-
"financial credits to subsidiary/associated/controlling
companies provided they are not subordinate and do not
constitute long-term investments"; "net assets" shall be
understood as the algebraic sum of the following items
pursuant to article 2424 of the Civil Code: net assets
(liabilities under major class A, net of profits to be
distributed), minus credits towards partners for payments
still due (item A under assets), minus the reserve for own
stock hold in its portfolio (item A(V) of liabilities);
(d) to obtain written approval from the Bank before
agreeing to create guarantees or obligations for Olivetti
shares or warrants, with the exception of guarantees or
obligations granted for such shares or warrants against the
total contracted loans up to a maximum of 2,800,000,000 Euros.
(e) to inform the Bank of any change, event, fact,
act, circumstance or series of changes, events, facts, acts
and/or circumstances of any nature whatsoever (including those
of a technical, economic, administrative, capital, financial
6
or legal nature), even when generally known and which,
individually or jointly, have given or could give rise to a
substantially negative modification in the capital, economic
or financial situation of the Borrower and/or Olivetti, and
their subsidiaries as a whole, or which could compromise the
Bank's credit terms or expectations of repayment and which the
Olimpia Board of Directors is or should have been aware of by
having exercised due diligence. Moreover, to report any press
release regarding proposed potential mergers, splits,
consolidations, dissolutions, liquidations, modifications of
corporate organization, capital reductions and any other
similar proposed operation relating to Olimpia or Olivetti.
7. It is expressly agreed that verification of circumstances attributable to the
Borrower pursuant to article 1186 of the Civil Code shall give cause for
forfeiture by the Borrower of the benefits of each term and condition set forth
in this Contract, with said circumstances specified as follows:
(a) Convocation of a general meeting to vote on the
presentation of an application for admission of the Borrower
to any legal proceeding whatsoever or any other similar
proceeding;
(b) The presentation by a third party of an
application for admission to any legal proceeding whatsoever
or any other similar proceeding, provided that such is not
evidently used as an excuse, or done rashly.
(c) Transfer by the Borrower of assets to creditors
or restructuring of its debt by means of consolidations,
extensions and/or transactions.
This Contract shall be legally rescinded pursuant to article 1456 of the Civil
Code upon verification of any of the following circumstances:
(a) Failure to pay in full and on time any amount
whatsoever owed under the terms and conditions of this
Contract, within 7 Business days from the first notice sent by
the Bank to the Borrower after the relative due date, with it
being understood that in each instance interest on arrears
shall be applicable as stipulated in the final paragraph of
this Clause 7;
(b) Use of the Loan for purposes other than those set
forth in Clause 1 of this Contract;
(c) False declarations made by the Borrower pursuant
to Clause 5 of this Contract;
(d) Failure by the Borrower to fulfill the
obligations set forth in Clause 6 of this Contract (to submit
its balance sheets, including consolidated balance sheets, and
semiannual reports; prohibition of acquiring shares without
prior consent of the Bank; obligation to respect the ratio
between net financial indebtedness and net assets; prohibition
of granting real guarantees or obligations without the prior
consent of the Bank; obligation to report notable events).
7
The Bank shall be entitled to rescind this Contract pursuant to article 1845 of
the Civil Code upon verification of any of the following circumstances:
(a) Borrower distributes or approves distribution of extra dividends, share
premiums or any other of its earnings or reserves;
(b) Borrower violates legal standards or those with force of law in any way that
substantially diminishes the Borrower's ability to fulfill the financial
obligations assumed pursuant to this Contract;
(c) Borrower ceases to carry out its current business activities, or undertakes
an activity substantially different from the one currently exercised;
(d) If all or a majority of the Borrower's administrative body is removed by act
of any authority whatsoever,
(e) Failure to make scheduled payment that is not promptly remedied, of any
financial indebtedness, even partial indebtedness, relating to third parties,
for an amount totaling more than 10 million Euros.
(f) following verification of forfeiture, annulment or rescission, repayment in
advance is requested for the loan granted to the Borrower by Banca Antoniana
Popolare Veneta scarl, on October 3, 2001, for an amount totaling 180,759,915
Euros, and/or the loan granted to the Borrower by Interbanca, on October 3,
2001, for an amount totaling 77,468,534 Euros.
Upon verification of any instance of forfeiture, annulment or rescission
referred to in the previous paragraphs, and upon expiration of any period
contractually granted to remedy same, the Bank shall notify the Borrower in
writing that the benefits of terms and conditions have been forfeited, that it
intends to invoke the express clause of rescission or its right to rescind or to
give notification of rescission, depending on the circumstances. The Bank shall
be entitled to request advanced repayment of all sums owed by the Borrower as
capital and interest, additional charges and any other amount pursuant to this
Contract within fifteen days from the date of receipt of said notification.
It is understood that, irrespective of receiving, or even entitlement to same,
by the Bank, of all sums owed for any reason whatsoever and which are still
outstanding on the due date (even advanced due dates), from the due date until
the payment date interest shall accrue on arrears at three percentage points
above the rate as calculated pursuant to Clause 4. Whenever the applicable
interest rate on arrears as currently calculated exceeds the maximum limit
allowed by law, it shall be considered as automatically reduced to this maximum
allowed limit.
8. This Contract is governed by Italian law. Any dispute arising in regard to
same shall be assigned exclusively to Italian jurisdiction, with the Court of
Milan holding exclusive jurisdiction.
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The legal address of the Banks is its headquarters in Siena,
Xxxxxx Xxxxxxxxx, xx. 0, and the legal address of the Borrower is its
headquarters in Milan, Xxxxx Xxxxx, xx. 000, X.X.X. 00000.
Communications by registered mail with faxed advanced
notification shall be addressed to no. 0577 / 296292 for the bank (Attn.: Drs.
Manfriani/Xxxxxxxxxxx), and to 026442.2461 for the borrower (Attn.: Xx. Xxxxxx
Xxxxxx).
The Borrower and the Bank agree to inform the other party
promptly of any change in legal address or fax number, with the understanding
that any modifications will become effective only after receipt of the
respective communication by the addressees.
9. The Borrower shall be fully liable for any expense or charge arising from or
in relation to this Contract, as well as all taxes, for registration or
otherwise, owed at any time pursuant to this Contract and/or other documents or
contracts in connection or in reference thereto.
All payments owed by the Borrower pursuant to this Contract,
relating to capital, interest, additional commissions or other fees, shall be
made without any deductions or withholding with respect to taxes or other
expenses, unless said deductions or withholding are legally required, in which
case the Borrower shall:
(a) immediately pay the Bank an additional amount equal to that of the deduction
or withholding, so that the amount received by the Bank is equal to the amount
it would have received had there been no deduction or withholding.
(b) pay the relative tax authorities or similar authorities, by the legal date
set forth, the entire amount of the deduction or withholding, including the
amount of the deduction or withholding applied to any additional amount paid as
stipulated in this paragraph;
(c) provide the Bank with the following, within the term established by law for
payment:
(i) a validly issued receipt from the competent tax authority which
shows all the sums deducted or withheld; or
(ii) if said receipt cannot be issued, a certificate of deduction or
equivalent proof of the deduction or withholding.
10. The Borrower may not grant or transfer any of its rights and/or obligations
pursuant to this Contract. The Bank may, at any time, upon prior notification to
the Borrower, transfer all or part of its credits and rights arising from this
Contract, and the Borrower hereby pledges to give its automatic approval to any
such transfers. It is understood by the parties that no obligation or contingent
liability, even of a fiscal nature, such as might eventually arise from or in
relation to such transfers by the Bank, will apply to the Borrower.
11. This Contract is valid and binding, and creates and shall create rights and
obligations for the benefit of the parties and their successors, transferees, or
those entitled to same for any reason whatsoever.
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12. The Bank's account statements, records and accounting records in general
shall always constitute full proof irrespective of the place and for all effects
of the claimable credits of the Bank in relation to the Borrower and arising
from this Contract, other than instances of evident mistakes.
13. The Borrower's obligations to pay all amounts owed, of any type whatsoever,
by the established dates, and also in general the fulfillment of its obligations
arising from this Contract, may not be suspended or deferred even in the case of
dispute, including legal dispute, such as may be raised by the Borrower or third
parties, or which may also arise as a result of any measures taken by competent
authorities, with it being understood that the Borrower is entitled to contest
the relative matter, after payment has been made.
14. Any future annulment, voiding or ineffectiveness of one or more clauses of
this Contract shall not give rise to the annulment, voiding or ineffectiveness
of the Contract as a whole, or of any other clause.
[handwritten] London, 10-3-2001
Olimpia SpA [2 illegible signatures]
Banca Monte dei Paschi de Siena SpA [illegible signature]
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For such needs as may arise, the following clauses are hereby specifically
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approved, under the provisions of art. 1341 of the Civil Code:
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Art. 2 (Utilization of credit line)
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Art. 6, a (Prohibition of acquiring shares without prior consent of Bank)
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Art. 6 b (Abstention from distributing dividends, premiums, revenues and
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reserves)
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Art. 6 d (prohibition to create guarantees or obligations without prior written
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approval from the Bank)
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Art. 7, par. 1, a, b, c (Forfeiture of benefits of terms and conditions)
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Art. 7, par. 3, a, b, c, d and e (right of rescission of contract)
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Art. 8 (Regulatory laws, jurisdiction, competent court)
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Art. 10 (transfer of contract)
------------------------------
Art. 12 (evidentiary effect of documents)
-----------------------------------------
Art. 13 (limits to entitlement to propose exceptions)
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Olimpia SpA [2 illegible signatures]
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ANNEX 1
Request for Issuance of Credit Line
Date..............
To: Banca Monte dei Paschi di Siena SpA
General Management
Ufficio Grandi Gruppi
Xxxxxx Xxxxxxxxx, 0
Siena
RE: Loan Contract signed on.................
In reference to article 1 of the above Loan Contract, we hereby request the
issuance of the loan in the amount of ............................. Euros, on
........................ (date), by crediting the amount to our current account
no. 55946,79 at your Milan branch office, in the name of the Borrower...........
We also hereby confirm that:
(a) the declarations and guarantees made in accordance with
article 5 of the Loan Contract are true, correct, and complete
as of today and they shall be so also on the date of issuance
(b) No instance of forfeiture of the benefits of the
terms and conditions, rescission or annulment as set forth in
article 7 of the Loan Contract has occurred as of today's date
and will not occur as of the date of issuance or as a result
of the issuance
Sincerely,
Olimpia S.p.A.
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