EXHIBIT 96
09 May 2006
Pirelli Finance (Luxembourg) S.A.
Luxembourg
Share Forward Transaction
(Our Ref: 10889652)
Dear Sirs,
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Banca Caboto s.p.a., Milan ("Party A") and
Pirelli Finance (Luxembourg) S.A., Luxembourg ("Party B") on the Trade Date
specified below (the "Transaction"). This latter agreement constitutes a
"Confirmation" as referred to in the Agreement specified below.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the "Equity Definitions"), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Confirmation. In
the event of any inconsistency between the Equity Definitions and this
Confirmation, this Confirmation will govern.
This Confirmation evidences a complete binding agreement between you and us to
the terms of the Transaction to which this Confirmation relates.
If the parties have not executed and delivered an agreement in the form of the
ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA Form"), this
Confirmation, together with all other documents referring to the ISDA Form (each
a "Confirmation") confirming transactions (each a "Transaction") entered into
between us (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 we had executed an agreement in such form (but without a
Schedule except for the election of English Law as the governing law and euro as
the Termination Currency) on the Trade Date of the first such Transaction
between us. In the event of any inconsistency between the provisions of that
agreement and this Confirmation, this confirmation will prevail for the purpose
of this Transaction.
The terms of the particular Transaction to which this Confirmation relates are
as follows:
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General Terms:
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Trade Date: 20 April 2006
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Seller: Party A
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Buyer: Party B
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Shares: The ordinary Shares of Telecom Italia
S.p.A. (the "Issuer") ISIN Code
IT0003497168
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Number of Shares: 134,957,885
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Forward Price: (euro)2.367832
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Exchange: Milan Stock Exchange
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Related Exchange(s): Italian Derivatives Marker ("IDEM")
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Clearance System: The principal domestic clearance system
customarily used for settling trades in
the Share on the Settlement Date.
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Settlement Terms:
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Physical Settlement: Applicable
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Settlement Currency: EUR
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Settlement Date: 24 April 2007
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Settlement Method Election: Not Applicable
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Settlement Price: Forward Price
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Share Adjustments:
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Method of Adjustment: Calculation Agent Adjustment
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Extraordinary Events:
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Consequences of Merger Events:
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Share-for-Share: Alternative Obligation
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Share-for-Other: Alternative Obligation
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Share-for-Combined: Alternative Obligation
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Tender Offer: Applicable
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Consequences of Tender Offers:
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Share-for-Share: Calculation Agent Adjustment
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Share-for-Other: Calculation Agent Adjustment
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Share-for-Combined: Calculation Agent Adjustment
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Determining Party: Buyer and Seller
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Composition of Combined Consideration: Not Applicable
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Nationalization, Insolvency or
Delisting: Cancellation and Payment, provided that
it is intended and agreed between the
parties that in no circumstance shall a
"dissolution" of the Issuer occurring in
connection with or deriving from a
Merger Event constitute or be construed
as "Insolvency".
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Determining Party: Buyer and Seller
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Additional Disruption Events:
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Failure to Deliver: Applicable
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Receiving Party: Buyer
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Determining Party: Buyer
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Non-Reliance: Applicable
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Agreements and Acknowledgments
Regarding Hedging Activities: Applicable
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Additional Acknowledgments: Applicable
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ADDITIONAL TERMS
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Calculation Agent: The Seller
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Forward Price Adjustment: The Forward Price will be adjusted by
the Calculation Agent to account for all
Dividends or Extraordinary Dividends
undisclosed at the Trade Date for which
the date on which the Issuer pays the
Dividend Amount to holders of record of
the Shares occurs before or on the
Settlement Date.
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Right to Early Termination: The Buyer may (at its sole and absolute
discretion) give notice (an "Early
Termination Notice") (which shall be
oral telephonic notice, if practicable,
and otherwise written notice) to the
Seller no later than 17:00 hours, London
time, on any Notice Date (as defined
below) of an early termination of this
Transaction in whole or in part only (an
"Early Termination"). The Buyer shall
state in such notice (i) the date on
which any such Early Termination is to
be effected (the "Early Termination
Valuation Date"), which shall be at
least seven (7) Scheduled Trading Days
after the Notice Date, but shall be no
later than the seventh Scheduled Trading
Day preceding the Settlement Date, and
(ii) whether this Transaction is to be
terminated in whole or in part only and,
in the case of a partial termination,
that portion of the Transaction which is
subject to such partial termination. The
Buyer will execute and deliver a written
confirmation confirming the substance of
any telephonic notice within one
Exchange Business Day of that notice.
Failure to provide that written
confirmation will not affect the
validity of the telephonic notice.
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Upon the giving of an Early Termination
Notice, the Calculation Agent shall
provide the parties on the Early
Termination Valuation Date with a
quotation for the Early Termination (an
"Early Termination Quotation") of this
Transaction or of that part of this
Transaction which is subject to the
Early Termination Notice. On the third
Currency Business Day following the
Early Termination Valuation Date (the
"Early Termination Settlement Date") the
Buyer will pay to the other party an
amount equal to the Early Termination
Quotation and in consideration of such
payment, the Seller shall delivery to
the Buyer the relevant Number of Shares.
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"Notice Date" means, any date from and
including 12 July 2006 to, and
including, the seventh Scheduled
"Trading Day preceding the Settlement
Date."
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"Early Termination Quotation" means an
amount as determined by the Calculation
Agent on the Early Termination Valuation
Date and based on the residual number of
days to the Settlement Date, the
relevant interest rate fixed on the
Early Termination Valuation Date and any
Forward Price Adjustment.
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In the case of an early termination of
part of the Transaction only, the
Calculation Agent will make such
adjustments to the Number of Shares or
any other variable relevant to the
settlement or payment terms of this
Transaction as it in good faith
determines appropriate to take account
of such partial early termination.
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Additional Termination Event: The occurrence of the following event
shall constitute an Additional
Termination Event with respect to Party
B, which will be the sole Affected
Party:
- if Pirelli & C. SpA. fails to retain
the control (directly or indirectly)
whether by ownership of an amount of
shares or by ownership of other
securities or contracts, of the majority
of the voting rights in Party B.
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Account Details:
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Account for payments to Party A: To be advised
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Account for payments to Party B: Pirelli Finance (Luxembourg) SA
Credit Suisse First Boston
IBAN XX00 0000 0000 0000 00 000
Via Deutsche Bank AG, Frankfurt
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Offices:
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(a) The Office of Party A for the Transaction is Milan; and
(b) The Office of Party B for the Transaction is Luxembourg.
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us or by sending to us a letter or telex substantially
similar to this letter, which letter or telex sets forth the material terms of
the Transaction to which this Confirmation relates and indicates your agreement
to those terms.
Yours faithfully,
Banca Caboto s.p.a.,
Milan
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By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxxx Name: Xxxxx Xxxxxxx
Title: Head of Middle Office Title: Head of Corporate Equity
Derivatives
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Confirmed as of the date first written,
Pirelli Finance (Luxembourg) S.A.
Luxembourg
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By: /s/ Xxxxxxx Xxxxxxx By: /s/ [illegible]
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Name: Xxxxxxx Xxxxxxx Name: [illegible]
Title: Director Title: Director
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