December 28, 2005
Between : [Party A]
Mediobanca Banca di Credito Finanziario S.p.A.
Piazzetta Xxxxxx, 1
Milano
and : [Party B]
Edizione Holding SpA
Xxxxxxxxxxx, 00
00000 XXXXXXX
ZERO COST COLLAR OPTION TRANSACTION
-----------------------------------
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.
This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2000 ISDA Definitions (including the Annex thereto) (the "2000
Definitions") and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (the "Equity Definitions", and together with the 2000
Definitions, the "Definitions"), in each case as published by the International
Swaps and Derivatives Association, Inc. ("ISDA"). In the event of any
inconsistency between the 2000 Definitions and the Equity Definitions, the
Equity Definitions will govern. In the event of any inconsistency between the
Definitions and this Confirmation, this Confirmation will govern.
This Confirmation evidences a complete and binding agreement between you and us
as to the terms of the Transaction to which this confirmation relates. In
addition, you and we agree to use all reasonable efforts to promptly negotiate,
execute, and deliver an agreement in the form of the ISDA Master Agreement (the
"ISDA Form"), with such modification as you and we will in good faith agree.
Upon the execution by you and we of such an agreement, this Confirmation will
supplement, form a part of, and be subject to, that agreement. All provision
contained or incorporated by reference in this agreement, this Confirmation,
together with all other documents referring to the ISDA form (each a
"Confirmation") confirming transaction (each "a Transaction") entered into
between you an we (notwithstanding anything to the contrary in a Confirmation)
shall supplement, form a part of, and be subject to an agreement in the form of
the ISDA form as if you and we had executed an agreement in such form on the
trade Date of the first such Transaction between you and us.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
General Terms for the call leg
Option Type : Call
Milan - 28 Dec 2005 1/6
Seller: Mediobanca SpA
Buyer : Edizione Holding SpA
Strike Price : EUR 2,6072, subject to the declaration by the
Issuer of a gross ordinary dividend of EUR
0,1093 during the period from, and including
the Trade Date to and including the Expiration
Date (the "Assumed Dividend"). Should the
Issuer declare an ordinary dividend that
exceeds the Assumed Dividend, the Calculation
Agent will reduce the Strike Price by 100,00
per cent of the difference between the
declared dividend and the Assumed Dividend.
Should the Issuer declare an ordinary dividend
that is less than the Assumed Dividend, the
Calculation Agent will increase the Strike
Price by 100,00 per cent of the difference
between the declared dividend and the Assumed
Dividend.
General Terms for the put leg
Option Type : Put
Seller : Edizione Holding SpA
Buyer : Mediobanca SpA
Strike Price : EUR 2,2897, subject to the declaration by the
Issuer of a gross ordinary dividend of EUR
0,1093 during the period from and including
the Trade Date to and including the Expiration
Date (the "Assumed Dividend"). Should the
Issuer declare an ordinary dividend that
exceeds the Assumed Dividend, the Calculation
Agent will reduce the Strike Price by 100,00
per cent of the difference between the
declared dividend and the Assumed Dividend.
Should the Issuer declare an ordinary dividend
that is less than the Assumed Dividend, the
Calculation Agent will increase the Strike
Price by 100,00 per cent of the difference
between the declared dividend and the Assumed
Dividend.
For both the legs:
Trade Date : December 28, 2005
Option Style : European
Shares : Telecom Italia SpA - IT0003497168
Number of Options : 10,000,000,00
Milan - 28 Dec 2005 - 2 - 2/6
Option Entitlement : One Share per Option
Premium per Option : EUR 0,00
Exchange : The Italian Stock Exchange
Related Exchange : The Italian Derivatives Market
Clearance System : Monte Titoli S.p.A.
Procedure for Exercise
Expiration Time : At the close of trading on the Exchange
Expiration Date : June 16, 2006
Partial Exercise Applicable
Automatic Exercise : Applicable
Party A's Telephone Number and Mediobanca Banca di Credito Finanziario
Telex and/or Facsimile Number S.p.A.
and Contact Details for Purpose
of Giving Notice
Xxxxxxxxx Xxxxxx, 0
Xxxxxx
Xxxxxxxxx : X. Xxxxx - X. Xxxxxxxx
Tel. : x00 00 0000 000 - 872
Fax : x00 00 0000 000
Party B's Telephone Number Attention: Edizione Holding SpA,
Telephone Number and Telex Calmaggiore, 23
and/or Facsimile Number and 31100 TREVISO
Contact Details for Purpose of Attention: Xxxxxx Xxxx
Giving Notice Amministratore Delegato
Tel 0000 000 000 Fax 0000 000000
Reference Price : means the average of the "Prezzo Ufficiale" of
the Shares, on the two business days before
the Expiration Date and the Expiration Date
(for the avoidance of doubt this will be an
average of three prices), as determined by the
Calculation Agent.
Prezzo Ufficiale : means the price as published by the Exchange
at the close of each trading day having the
meaning ascribed thereto in the Rules of the
Markets Organised and Managed by the Italian
Stock Exchange, as current from time to time.
Settlement Terms
Physical Settlement : Applicable
Settlement Method Election Applicable
Otherwise
Milan - 28 Dec 2005 - 3 - 3/6
Cash Settlement : Applicable if required from Party B five
business days before the Expiration Date, h.
17.00 Milan time.
Settlement Currency : Euro
Cash Settlement Payment Date : Three Currency Business Days after the
relevant Valuation Date
Adjustments
Method of Adjustment : Calculation Agent Adjustment
Extraordinary Events
Consequences of Merger Events :
a) Share-for-Share : Alternative Obligation
b) Share-for-Other : Options Exchange Adjustment
c) Share-for-Combined : Options Exchange Adjustment
Tender Offer : Applicable
a) Share-for-Share : Modified Options Exchange Adjustment
b) Share-for-Other : Modified Options Exchange Adjustment
c) Share-for-Combined : Modified Options Exchange Adjustment
For such purposes "Modified Options Exchange Adjustment" means (i) where the
specified Options Exchange is the Italian Stock Exchange and Eurex, Options
Exchange Adjustment; and (ii) in all other situations, Calculation Agent
Adjustment.
Nationalization or Insolvency : Cancellation and Payment (Calculation Agent
Determination)
Additional Disruption Events :
Change in Law: Not Applicable
Failure to Deliver : Applicable
Insolvency Filing : Applicable
Determining Party : In respect of "Insolvency Filing",
means Mediobanca.
Hedging Disruption Not Applicable
Milan - 28 Dec 2005 - 4 - 4/6
Increased Cost of Hedging Not Applicable
Loss of Stock Borrow Not Applicable
Increased Cost of Stock Borrow Not Applicable
2. Calculation Agent Mediobanca.
3. Account Details :
Payments to the Seller : Banca Intesa - Parma
Swift : XXXXXXXXXXX
In favour of: MEDIOBANCA
Swift: XXXXXXXXXXX
Account: 1035/96/41
Payments to the Buyer : Edizione Holding SpA
Banca Intesa SpA - Treviso
Swift: XXXXXXXX000
In Favor of: Edizione Holding S.p.A.
Account:
XX00 X000 0000 0000 0000 0000 000
4. Offices
The Office of Party A for the
Transaction is: Milano
The Office of Party B for the
Transaction is: Treviso
5. Additional Representations
Non-Reliance Applicable
Agreements and Acknowledgements
Regarding Hedging Activities Applicable
Additional Acknowledgements Not Applicable
Milan - 28 Dec 2005 - 5 - 5/6
Confirmed as of the date first above written :
Mediobanca - Banca di Credito Finanziario S.p.A.
By: By:
Name : Name :
Title : Title :
Authorized Signature Authorized Signature
Edizione Holding SpA
By: By:
Name : Name :
Title : Title :
Authorized Signature Authorized Signature
Milan - 28 Dec 2005 - 6 - 6/6
