Exhibit 27
TERM SHEET
Parties Pirelli S.p.A. ("Pirelli"), Edizione Holding S.p.A. ("Edizione"),
IntesaBCI S.p.A. ("IntesaBCI"), Unicredito Italiano S.p.A.
("Unicredito Italiano") (jointly, the "Present Olimpia
Shareholders"), Olimpia S.p.A. ("Olimpia") and Xxxx S.p.A.
("Hopa"). It is agreed that Parties shall be understood to mean
every party, even if acting through controlled firms, trustees,
or intermediaries.
Structure of the Transaction It shall be executed as follows:
- Holy S.p.A., a firm in which Hopa holds 100% control (the
"Controlled Company"), as of the effective date of the merger
covered by a subsequent point, shall own: (i) 163,558,339 million
Olivetti 2001 - 2010 1.5% bonds convertible to Olivetti shares,
issued by Olivetti (the "Olivetti Bonds") and 99,941,661 million
Olivetti shares for a total book value of 476,935,000 Euros, free
of any encumbrances of any type or nature; (ii) a 19.999% equity
stake in the capital stock of Holinvest, free of any encumbrances
of any type or nature, for a total book value of 385.4 million
Euros (Holinvest shall have the characteristics indicated infra);
(iii) net cash of 98.8 million Euros, plus any dividends for the
98,975,110 Olivetti shares possibly distributed by Olivetti
during the period between the Date of this Agreement and the
effective date of the merger described hereinafter. The
Controlled Company shall therefore have a net worth of no less
than 961,135,000 million [sic] Euros and shall have no debt or
liabilities.
- the Controlled Company shall be merged by absorption into
Olimpia; Olimpia's assets and liabilities prior to the merger
shall substantially conform to those indicated in the balance
sheet in Attachment A, with the exception of the impact of the
normal passage of time on the routine management of the company,
and they shall include the interest charges accrued on the
financial debt of Olimpia indicated in the statement of financial
position contained in Attachment A. It is anticipated that the
merger procedure shall be completed by April 30, 2003 and that,
due to the share exchange rate, the equity stake in Olimpia held
by Hopa shall be 16% after the merger.
Olimpia Shareholders Following the above-described transaction, Xxxxxxx should have
the following shareholders: Pirelli (50.40%), Edizione (16.80%),
Hopa (16.00%), Unicredito Italiano (8.40%), IntesaBCI (8.40%).
Holinvest S.p.A. Shareholders Following the above-described transaction, Holinvest S.p.A.
("Holinvest") should have the following shareholders: Hopa
(80.001%), Olimpia (19.999%).
Suspensive Condition The validity and effectiveness of this agreement (the
"Agreement") among the Parties covering the entire transaction is
conditional upon the fact that no later than February 15, 2003
(a) Holinvest, Hopa, Fingruppo Holding S.p.A., Banca Monte dei
Paschi di Siena S.p.A., Compagnia Assicuratrice Unipol S.p.A.,
Banca Popolare di Lodi S.c.a x.x. and other private parties, as
parties to a pool agreement regarding Hopa (the "Hopa Controlling
Companies"), will have sold all the Olivetti S.p.A. ("Olivetti")
shares held, except as provided infra with respect to the Hopa
Controlling Companies, and it is agreed that in any case all of
the Olivetti shares held by Olimpia, the Present Olimpia
Shareholders, Hopa, Holinvest, the Controlled Company, the other
firms controlled by Hopa, and the Hopa Controlling Companies may
not exceed 30% of the Olivetti capital stock with voting rights
and that (b) Holinvest will have company assets consisting of
134,721,109 Olivetti Bonds, 163,558,339 1.5% Olimpia 2001-2007
bonds redeemable as Olivetti shares/bonds ("Xxxxxxx Xxxxx"), as
well as other financial instruments, including derivatives
pertaining to Olivetti shares, the value of which shall be
indexed to the value of 486,502,431 Olivetti shares (said
instruments, with the exception of Olivetti shares, shall have
the characteristics set forth in Attachment B and shall be
referred to hereinafter as "Olivetti Instruments"), and a net
worth (corrected for the contractual Olivetti share value of 1.20
Euros) of no less than 220,000,000.00 Euros, without prejudice to
the fact that Holinvest's debt/equity ratio shall not exceed 1/1
(with the understanding that for the purposes of calculating this
ratio under this Agreement, the book values determined on the
basis of Italian accounting principles currently in effect shall
be utilized, and must also include financial obligations, even if
not entered on the accounting system, which are in the nature of
a debt but only a potential debt such as, for example, forward
contracts, put options assigned to third parties, prepaid swaps,
etc.). Holinvest shall have a maximum financial debt level (net
after cash or liquid credits considered to be cash equivalents
and interest charges accrued between the date of this Agreement
and the merger effective date and maintaining unchanged the
minimum adjusted contractual Olivetti share value indicated
hereinabove) which must not exceed 721,750,000 Euros.
It is agreed that Hopa shall have the right to hold Olivetti
Instruments pertaining to a maximum number of 40 million Olivetti
shares and the Hopa Controlling Companies shall have the
obligation to (i) promptly notify all the Parties of its current
Olivetti share holdings prior to signing the pertinent
contractual provisions which shall reflect the content of the
Agreement (in accordance with the paragraph on "Other
Agreements"; (ii) divest, by February 15, 2003, every Olivetti
share held in excess of the 1 million Olivetti shares for each of
the Hopa Controlling Companies and (iii) by February 15, 2003,
amend, effective immediately upon the signing of the contractual
provisions in question, the pool agreement regarding Hopa that
currently is binding upon them, so that any of said companies
holding for any reason and on any basis Olivetti shares in excess
of 1 million units shall automatically result in cancellation, on
the basis of an express cancellation clause in the pool
agreement, with respect to a party which is confirmed to have
holdings in excess of 1 million Olivetti shares.
Olimpia Shareholder Agreements Hopa signs a shareholder agreement with the Present Olimpia
Shareholders, the subject of which is reciprocal relationships as
Olimpia shareholders with respect to the provisions set forth in
this Agreement and, specifically:
(a) Xxxx shall have the right to appoint a single Olimpia
director, and the Present Olimpia Shareholders obligate
themselves to do everything in their power so that Hopa may
appoint its designated director at Olivetti, Telecom Italia
S.p.A. ("Telecom Italia"), Telecom Italia Mobile S.p.A
("XXX"), Seat-Pagine Gialle S.p.A. ("Seat"). The first
directors designated are indicated in Attachment C to the
Agreement. In the event of the replacement or the expiration
of the term of each director so designated by Xxxx, Xxxx
shall have the right to appoint a successor with the consent
of Pirelli, which consent may not be unreasonably denied;
(b) The director appointed by Xxxx shall have the right to
object and oppose, without that impeding the determination
of the will of the governing body (but thereby resulting in
a deadlock situation ("Deadlock") with a dispute resolution
mechanism similar to that currently existing between Pirelli
and Edizione, and a provision for a verification of a
Deadlock situation by an arbitration board which can be
initiated by the parties), in regard to the following
Reserved Matters: (A) within the Olimpia Board of Directors:
(i) a recommendation with respect to a vote at an Olivetti
special shareholder meeting; (ii) purchases, sales and acts
of disposition of any nature pertaining to equity stakes
with a value in
excess of 100,000,000 Euros per individual transaction or for
multiple transactions carried out within the same calendar
year, without prejudice to the fact that, should the ratio
between internal capital and third-party capital in the
company (the debt/equity ratio under this Agreement is
defined in the "Suspensive Condition" paragraph) be more
favorable than the ratio set forth in point (iii)
hereinafter, that limit shall not apply in instances of the
sale by Olimpia of Olivetti shares or Olivetti convertible
bonds or equivalent Olivetti financial instruments as long
as and provided that ratio, even after such sales, is less
than 1/1; (iii) the determination of the ratio between the
Company's internal capital and third party capital
("debt/equity") (which in any case must not exceed 1/1) and
the modalities, terms, and conditions for the use of
external sources of financing; (iv) proposals for decisions
to be submitted to a Company special shareholder meeting;
(B) at an Olimpia Special Shareholder Meeting: in relation
to any matter falling within its authority and
responsibility (provided that it involves deciding against
the proposals referred to in point (iv) hereinabove in
regard to which there is an agreement between Hopa and the
Present Olimpia Shareholders);
(c) in the event of a public purchase offer for Olivetti shares,
Hopa obligates itself, in the event of a request by the
Present Olimpia Shareholders, to ensure that its director
does not oppose Olimpia's agreement to the public purchase
offer;
(d) Hopa as well as its own controlled firms, the Hopa
Controlling Companies, the Present Olimpia Shareholders, and
their respective controlling and/or controlled firms (with
the understanding that in the instance of the Hopa
Controlling Companies the possible holding of Olivetti
shares in excess of 1 million units each shall result in
automatic cancellation, with respect to the party causing
the event, of the pool agreement regarding Hopa, as
previously amended), obligate themselves not to acquire
Olivetti shares, with the exception, in the instance of
Pirelli, of the exercise of rights existing prior to the
signing of the Agreement with regard to the exercise of call
options and swap contracts whose purpose is to acquire
Olivetti shares and bonds described in detail in Attachment
D; and also with the exception of the purchase of Olivetti
shares already allowed by the current shareholder agreement
regarding Olimpia, UniCredito, and Intesa BCI and the second
amendment of the agreement between the shareholders of
Pirelli and Edizione dated February 13, 2002; it is agreed
that the purchase of convertible bonds and/or warrants that
grant
the right to subscribe to convertible bonds and the exercise
of the resulting rights shall be allowed only pursuant to
consent by the other party, which consent shall not be
unreasonably denied, with the exception, however, of
Xxxxxxxxx's freedom [to do so], within the limits of the
provisions of this term sheet;
(e) the Present Olimpia Shareholders obligate themselves not to
alter Xxxxxxx's company purpose, to ensure that Olimpia does
not hold equity stakes and financial investments other than
the Equity Stake in Olivetti (as defined and described
hereinafter), Olivetti Bonds and Olivetti Instruments, and
ensure that Olimpia's debt/equity ratio does not exceed 1/1,
without prejudice to the provisions of the "Accelerated
Deadlock" paragraph;
(f) Xxxx and the Present Olimpia Shareholders obligate
themselves to vote to change to 83.5% the special
shareholder meeting decision-making quorum provided by the
bylaws;
(g) the Present Olimpia Shareholders shall ensure that, on the
occasion of the partial spin-off of Olimpia (the "Spin-off",
please see infra), Hopa shall be allocated a proportional
share of Olimpia assets and liabilities as of the dates
indicated hereinafter: in the event of a Deadlock, the date
provided by the "Deadlock Under Olimpia Shareholder
Agreements" paragraph set forth hereinafter, or the
expiration date of the shareholder agreements as provided by
the "Expiration of shareholder agreements regarding Olimpia
and Holinvest" paragraph hereinafter, or in the event of an
Accelerated Deadlock, the date of the 3rd day following the
event that resulted in the Accelerated Deadlock within the
meaning of the "Accelerated Deadlock" paragraph set forth
hereinafter (each of which dates is a "Relevant Date"). This
is without prejudice to the fact that (x) the assets of the
spin-off firm prior to the Relevant Date must show (A)
alternatively, (i) in the absence of Extraordinary
Transactions (as defined infra) an equity stake (in shares
or equivalent financial instruments) of no less than 25% of
the capital stock of Olivetti; or (ii) the equity stake
consisting of Olivetti shares or equivalent financial
instruments resulting from the exchange rate for Olivetti
shares resulting for any possible merger or spin-off
transactions completed prior to the Relevant Date the
parties to which are Olivetti, on the one hand, and one or
more companies directly or indirectly controlled by
Olivetti, on the other hand, without prejudice to the fact
that for the purpose of calculating the Olimpia equity stake
in Olivetti result from the aforementioned merger or
spin-off transactions, the relevant Olimpia equity stake in
Olivetti shall be considered to be 25% of the capital stock
of Olivetti, even should that equity stake in reality be
greater ("Extraordinary Transactions"; in both instances set
forth in (i) and (ii) said equity stake in Olivetti shall be
referred to as the "Equity Stake in Olivetti"); (B) 19.999%
(or Olimpia's different percentage equity stake in
Holinvest) of Holinvest or the proportional share of
Holinvest assets and liabilities and that (y), as of the
Relevant Date, the debt/equity ratio must not exceed 1/1;
(h) the Present Olimpia Shareholders obligate themselves to
ensure that Olimpia does not sell or transfer its own Equity
Stake in Olivetti to parties controlled by Olimpia or that
are members of groups in which the Present Olimpia
Shareholders are parent firms, without prejudice to the
provisions of the "Accelerated Deadlock" paragraph;
(i) joint sale rights and obligations pertaining to Hopa's
equity stake in Olimpia in favor of and binding upon Xxxx,
taking into account the provisions of the "Accelerated
Deadlock" paragraph;
(j) the provisions of the "Deadlock Under Olimpia Shareholder
Agreements," "Accelerated Deadlock," "Expiration of
Shareholder Agreements Regarding Olimpia and Holinvest" and
"Penalty" paragraphs .
Deadlock Under Olimpia Shareholder In the event of a Deadlock at Olimpia caused by a disagreement
Agreements regarding the Reserved Matters referred to in the paragraph under
point (b) hereinabove, that has occurred at any point in time
during the term of the agreement, beginning with the thirty-sixth
month following the adoption of shareholder agreements ("Initial
Term Expiration"), Xxxx shall have to right to have Olimpia and
the Present Olimpia Shareholders adopt a decision for the
Spin-off within the cognizant corporate governing bodies of
Olimpia. In that event, Xxxxxxx and Xxxxxxxxx shall decide upon,
with the consent of all the shareholders, which hereby obligate
themselves to so consent, the Spin-off and the partial spin-off
of Holinvest (the "Holinvest Spin-off") which shall allocate to
Hopa and Olimpia, respectively, a proportional share of the
assets and liabilities of Olimpia and Holinvest, respectively,
employing the most appropriate procedures and technical
methodologies, in order to ensure that:
(i) Hopa is assigned a proportional share of the Olimpia assets
and liabilities existing as of the Initial Term Expiration,
without prejudice to the fact that (a) the assets of the spin-off
firm prior to the aforementioned date must show at least the
Equity Stake in Olivetti, (b) the number of shares or equivalent
financial instruments pertaining to Olivetti shares resulting
from the Extraordinary Transactions that are to be allocated to
Hopa on the occasion of the Spin-off shall be equal to a
percentage of the Olivetti shares or equivalent financial
instruments owned by Olimpia representing Hopa's percentage
equity stake in Olimpia, (c), as of the Initial Term Expiration,
the debt/equity ratio must not exceed 1/1, and (d) Hopa must also
be allocated 16% (or the different Hopa percentage equity stake
in Olimpia) of 19.999% (or the different Olimpia percentage
equity stake in Holinvest) of Holinvest assets and liabilities;
(ii) Hopa is paid, according to the terms and modalities to be
determined, an additional amount of cash representing the
equivalent value of a premium of 0.60 Euros per Olivetti share or
equivalent financial instrument included in the proportional
share of the Equity Stake in Olivetti resulting from the
Spin-off, excluding in all instances the Holinvest proportional
share and the proportional share of the Olivetti shares or
equivalent financial instruments underlying the Holinvest shares
allocated to Hopa under the Spin-off;
(iii) Xxxxxxx is assigned a proportional share of Holinvest
assets and liabilities as of the Initial Term Expiration, without
prejudice to the fact that (x) Holinvest's debt/equity ratio as
of said date may not exceed 1/1 and (y) Holinvest assets as of
that same date shall not include financial instruments other than
Olivetti Bonds or other Olivetti Instruments.
Should the Deadlock situation be submitted for verification by an
arbitration board, which must render a decision regarding whether
Xxxx's opposition or objection is in good faith, Olimpia and the
Present Olimpia Shareholders may in no event delay the Spin-off
procedures and Hopa shall be paid in cash, according to terms and
modalities to be agreed, the premium referred to in point (ii)
hereinabove, at the rate of 0.35 Euros per Olivetti share or
equivalent financial instrument included in the proportional
share of the Equity Stake in Olivetti resulting from the Spin-off
(excluding, in all instances, the proportional share of Holinvest
and the proportional share of Olivetti shares or equivalent
financial instruments underlying the Holinvest shares allocated
to Hopa under the Spin-off); the difference of 0.25 Euro
(computed like the aforementioned 0.35 Euro premium) shall be
adjusted according to those same terms and modalities should the
arbitration procedure result in a favorable outcome for Hopa. In
all instances, the Spin-off must be completed in Xxxx's interest
within 6 months following the Initial Term Expiration, without
prejudice to the provisions of the "Penalty" paragraph.
Accelerated Deadlock Should any of the following events occur at any time during the
term of the Olimpia shareholder agreement:
(a) a decision to merge Olimpia and/or Olivetti with companies
other than the companies directly or indirectly controlled;
(b) Olimpia ceases to hold an equity stake in Olivetti that is
at least equal to the Equity Stake in Olivetti, including
as a result of the and/or contribution of all or part of
the Equity Stake in Olivetti to companies that are members
of groups in which the Present Olimpia Shareholders are
members or parent firms, or the sale, in part or in toto,
of the Equity Stake in Olivetti to third parties for an
in-kind consideration (for example, through an exchange or
non-cash investment);
(c) the debt/equity ratio at Olimpia is altered so as to exceed
1/1 and that ratio is not restored within 45 days following
the date of the response that Xxxxxxx has sent to Hopa
within 5 days of each request by the latter regarding the
ratio as of the date of the request;
(d) the Present Olimpia Shareholders decide to contribute all
or part of the equity stake in Olimpia to companies
belonging to groups in which they are parent firms;
(e) provisions are made for the sale, in part or in toto, of
the Present Olimpia Shareholders' equity stake in Olimpia
to companies that are members of groups in which they are
the parent firms, for a consideration that is less than the
market value of the Olimpia equity stake in Olivetti plus
0.60 Euros per share or equivalent financial instrument
pertaining to Olimpia's Olivetti shares, without prejudice
to the fact that Hopa shall not be subject to a drag along
requirement. Nevertheless, the sale or the contribution
referred to in letter (d) hereinabove by one of the Present
Olimpia Shareholders of its equity stake in Olimpia to
companies that are and remain controlled by it within the
meaning of Article 2359, 1) of the Civil Code, or, in the
instance of Intesa BCI and Unicredito Italiano, to
companies subject to the joint control of same within the
framework of the respective bank group to which they belong
for as long as said membership in the group should last,
shall not constitute a relevant event for the purposes of
Accelerated Deadlock, without prejudice to the fact that in
that event Hopa shall not be subject to a drag along
requirement. Likewise, the sale of IntesaBCI's and/or
Unicredito Italiano's equity stakes in Olimpia to Pirelli
in
implementation of the Existing Agreement (as defined and
described infra), with Pirelli succeeding to the
obligations vis-a-vis Hopa assumed by an individual selling bank
under the Agreement and the contractual provisions that
shall be signed, as provided infra, by January 31, 2003,
shall not constitute relevant events;
(f) provisions are made for the sale, in part or in toto, of
the Present Olimpia Shareholders' equity stake in Olimpia
to third parties for an in-kind consideration (for example,
through an exchange or non-cash investment), should the
third party not assume vis-a-vis Hopa the same obligations
as the Present Olimpia Shareholders under the Olimpia
shareholder agreements, without prejudice to the fact that
in that event Hopa shall not be subject to the drag along
requirement.
In all such instances, Xxxx shall have the right to have Xxxxxxx
and the Present Olimpia Shareholders adopt a decision for a
Spin-off within the cognizant Olimpia corporate governing bodies
as soon as possible, and said Spin-off shall be carried out and
completed within a period of 6 months following the occurrence of
the event. The provisions of the "Deadlock under Xxxxxxx
Shareholder Agreements" paragraph shall be applied to said
Spin-off (with the exception of (x) the different initial term
expiration which, in the event of an Accelerated Deadlock, shall
be the date of the occurrence of the relevant event (without
prejudice to the fact that the Parties shall ensure, with respect
to matters falling under their authority and responsibility, that
the effects of the relevant event, in the above-indicated
circumstances other than a change in the debt/equity ratio set
forth in point (c) and the sale for a cash payment provided by
point (b), are made to be such as not to harm or prejudice the
Spin-off) and with the exception of the date of the determination
of the proportional share of the assets and liabilities, which
shall not coincide with the Initial Term Expiration, but with the
date of the 3rd day following the date on which the relevant
event occurred and (y) the non-applicability of the dispute
resolution mechanism, because Accelerated Deadlock shall enter
into effect as a result of the mere occurrence of any of the
events provided hereinabove) and Xxxx must proceed to decide upon
and implement within that same period of time the Holinvest
Spin-off as provided hereinabove (likewise with the exception, as
provided supra, of a different initial term expiration and a
different Relevant Date).
As an exception to the foregoing, the premium (calculated using
the same modalities and procedures provided in the event of a
Deadlock) due Hopa in the event that that provided in point (b)
hereinabove should occur, shall be increased from
0.60 Euros to 0.70 Euros.
Holinvest Shareholder Agreements Olimpia signs a shareholder agreement with Hopa covering their
reciprocal relationships as Holinvest shareholders, including the
provisions of this term sheet, and specifically:
(a) Xxxxxxx's right to designate a director for election to the
board;
(b) Hopa shall ensure that, should it request the Spin-off in
the instances provided hereinabove, the Holinvest Spin-off
shall also be carried out (and the Present Olimpia
Shareholders shall have the right to obtain same) and, on
that occasion, (see infra), Olimpia shall receive a
proportional share of Olivetti Instruments owned by it as
of the Relevant Date, without prejudice to the provisions
of point (e) hereinafter or, should an event occur that
results in a Deadlock or an Accelerated Deadlock, as of the
pertinent Relevant Date, with the precondition that as of
said date Holinvest's debt/equity ratio may not exceed 1/1;
(c) preemptive rights (structured similarly to the preemptive
right provided by the Olimpia bylaws) and joint sale
rights;
(d) lock-up obligation, for a 20-month period following the
effective date of the agreement, binding upon Hopa with
respect to the equity stake it holds in Holinvest;
(e) lock-up obligation, for a 20-month period following the
effective date of the agreement, binding upon Holinvest
with respect to all the Olivetti Instruments it owns,
without prejudice to Holinvest's right to freely dispose of
Olivetti Instruments throughout the term of the shareholder
agreements (without applying the preemptive right referred
to in point (f) hereinafter), provided Holinvest maintains
throughout the lock-up period ownership of a number of
securities representing no less than 65% and no more than
125% of the securities contained in Attachment (B), without
prejudice to the fact that the shares of companies
controlled directly or indirectly by Olivetti may not
exceed 10% of the assets of Holinvest from time to time,
without prejudice to the provisions regarding the
composition of the assets of Holinvest in the event
of a Holinvest Spin-off;
(f) following the lock-up period provided by point (e)
hereinafter, in regard to transactions involving sales of
Olivetti Instruments, Olivetti shall be allowed to divest
provided that Olimpia is granted a preemptive right under
equal conditions. Such right may be exercised by Xxxxxxx
within a period of 48 hours following receipt of the
pertinent communication;
Holinvest Bylaws The provisions of the shareholder agreement regarding preemption
and joint sale shall also be incorporated into the Holinvest
bylaws. Holinvest's company purpose shall be amended to allow the
company to operate as a holding company and financial company
whose sole purpose is holding Olivetti shares, Olivetti
convertible bonds, derivative financial instruments pertaining to
Olivetti shares or shares in companies directly or indirectly
controlled by Olivetti. The Parties each obligate themselves,
with respect to the matters falling within their authority and
responsibility, not to exercise with respect to Hopa the
drag-along right provided by the bylaws, in all instances in
which such right is excluded under the provisions of the
"Accelerated Deadlock" paragraph.
Joint Sale of Holinvest and Without prejudice to the provisions of the "Accelerated Deadlock"
Olimpia Equity Stakes paragraph hereinabove, until such time as the Spin-off has taken
place, in the event of a reduction in Pirelli's equity stake in
Olimpia, including through a non-cash investment in third parties
and in the event of a sale to third parties, including in several
tranches, Hopa/Holinvest shall have the right to sell to the
purchasing third party or to the third party receiving a non-cash
investment, at their discretion and depending on the
circumstances: (A) should Pirelli, as a result of such a
reduction, whether in conjunction with Unicredito and Intesa BCI
(or not), retain a total equity stake in the capital stock of
Olimpia in excess of 50% of the capital stock plus one share: (i)
a percentage share of its own equity stake in Holinvest equal to
the percentage invested or sold by Pirelli in relation to the
50.4% stake or (ii) a percentage stake of Olivetti Instruments
held by Holinvest equal to the percentage invested or sold by
Pirelli in relation to the 50.4% stake; or (iii) a percentage
stake of its own equity stake in Olimpia equal to the percentage
invested or sold by Pirelli in relation to the 50.4% stake; (B)
in any other instance, its entire equity stake in Olimpia and/or
its entire equity stake in Holinvest;
In the event Hopa exercises the above-indicated rights, the
transfers must be completed, without prejudice to the provisions
specified infra, at a value equal to the Olimpia share
price or at a value equal to the Olivetti share price or the
price of the Olivetti equivalent financial instrument utilized to
determine Olimpia's NAV. In the above-indicated instances, the
Present Olimpia Shareholders shall have the obligation to execute
the sale in accordance with the above-specified terms at the same
value indicated hereinabove and Hopa, should the joint sale right
be exercised, shall have the obligation to assure that sale.
Term of the Olimpia Shareholder The Olimpia shareholder agreement shall have a three-year term,
Agreement unless there is an agreed extension, where there has not been a
notice of termination communicated by one of the parties within 3
months of the expiration date.
Term of the Holinvest Shareholder The Holinvest shareholder agreement shall have a three-year term,
Agreement and shall have the same expiration date as the Olimpia agreement.
Regardless of the absence of a renewal of the Olimpia shareholder
agreement and the Holinvest shareholder agreement, upon the
expiration of the three-year term of said agreements, with the
exception of an instance of an Accelerated Deadlock (in which
case this paragraph shall not apply), Hopa obligates itself and
it obligates itself to ensure that Holinvest grants to Olimpia,
by adopting the appropriate agreements, effective on the date of
the expiration of the three-year term of the shareholder
agreements in question, a preemptive right with a two-year term,
covering the Olivetti Instruments owned by Holinvest as well as a
proportional share of the equity stake in Olivetti allocated to
Hopa under the Spin-off, either directly or indirectly (said
Olivetti Instruments and said proportional share shall be
referred to in their entirety as the "Post-Spin-off Equity Stake
in Olivetti") as of the expiration for said three-year term,
which [preemptive right] may be exercised by Olimpia within 15
days following the pertinent notice, solely in the circumstance
that it pertains to the sale of a percentage of the Post-Spin-off
Equity Stake in Olivetti such that, as a result of said sale,
Hopa and Holinvest have total holdings of (i) 65% of the
proportional share of the equity stake in Olivetti allocated from
the Spin-off or (ii) 65% of the Olivetti instruments owned by
Holinvest as of the Relevant Date, whichever is less.
Expiration of the Olimpia and Upon the expiration of the Olimpia and Holinvest shareholder
Holinvest Shareholder Agreements agreements (as possibly extended by mutual consent), Xxxxxxx and
Holinvest, as the case may be, shall decide, with the consent of
all the shareholders, who hereby obligate themselves to provide
such consent, to carry out the Spin-off as well as the Holinvest
Spin-off which shall allocate to Hopa and Olimpia, respectively,
a proportional share of the assets and liabilities of Olimpia and
Holinvest, respectively, determined
with reference to the expiration date of the pertinent
shareholder agreements, in accordance with the most appropriate
procedures and technical methodologies, in order to ensure that:
(i) Hopa is allocated the proportional share of Olimpia assets
and liabilities, as indicated hereinabove; (ii) Hopa is paid or
allocated, according to terms and procedures to be agreed, cash
equal to the equivalent value of an Olivetti share premium equal
to the pro forma majority premium allocable to Olivetti shares or
equivalent financial instruments at Olimpia and in any case no
less than 0.35 Euros per share or equivalent financial instrument
included in Olimpia's proportional share of Olivetti shares or
equivalent financial instruments to be allocated to Hopa on the
occasion of the Spin-off, not including, in all instances, the
proportional share of Holinvest and the proportional share of
Olivetti shares or equivalent financial instruments underlying
the Holinvest shares allocated to Hopa from the Spin-off
("Majority Premium per Share"); (iii) Olimpia is to be allocated
a proportional share of Olivetti Instruments existing at
Holinvest in addition to any shares/bonds/warrants generated by
transactions in the Olivetti capital stock as of the expiration
date of the shareholder agreements and a proportional share of
the Holinvest liabilities as of that same date, consistent with a
debt/equity ratio which may not exceed 1/1 as of the Relevant
Date and without prejudice to Holinvest assets as of that date,
which shall not include anything but Olivetti convertible bonds
issued by Olivetti and bonds convertible into Olivetti shares or
other financial instruments, including derivatives, pertaining to
Olivetti shares.
The Majority Premium per Share shall be jointly determined by the
parties to the Olimpia shareholder agreement or, failing
agreement by even a single one of the latter, by two investment
banks of international standing, one selected by the Present
Olimpia Shareholders and one selected by Xxxx, without prejudice
to the fact that the Majority Premium per Share shall in any
event be either 0.35 Euros as indicated hereinabove or the
premium determined by the aforementioned investment banks,
whichever is greater.
In any event, the Spin-off must be completed in Xxxx's interest
within 6 months following the expiration of the shareholder
agreements, without prejudice to the provisions of the "Penalty"
paragraph.
Provisions Applicable in the In the event of a Spin-off and a Holinvest Spin-off, the Parties
Event of a Spin-off and a shall observe and apply the following principles.
Holinvest Spin-off
Within the framework of a uniform plan:
(1) The Holinvest Spin-off must be carried out and enter into
effect prior to the effective date of the Spin-off, and
must allocate to a beneficiary in which Xxxxxxx holds a
100% interest a proportional share of Holinvest assets and
liabilities as provided hereinabove, without prejudice to
the possibility of the alternative of a cash settlement, at
the request of Hopa, which is equal to the spread,
calculated at market prices, between the difference between
the assets and liabilities that would have belonged to the
beneficiary in the event of a spin-off;
(2) Subsequently, and without interruption, Xxxxxxx shall carry
out the Spin-off, and allocate to a beneficiary in which
Hopa holds a 100% interest a proportional share of the
Olimpia assets and liabilities as provided hereinabove,
without prejudice to the possibility of the alternative of
a cash settlement, at the request of the Present Olimpia
Shareholders, equal to the spread, calculated at market
prices, between the difference between the assets and
liabilities that would have belonged to the beneficiary in
the event of a spin-off, plus the majority premium
applicable as agreed in this term sheet;
(3) simultaneously with or immediately after the foregoing, in
accordance with the terms and procedures that shall be
agreed, Hopa shall be paid or allocated cash representing,
as the case may be, the majority premium applicable in the
event of a Deadlock or an Accelerated Deadlock (and
provided said premium has not already been paid at the time
of the cash settlement provided hereinabove).
(4) the adoption of a spin-off agreement covering the Spin-off
shall be conditional upon the adoption by Holinvest/Hopa of
the agreements regarding the granting of the preemptive
rights to Xxxxxxx provided in the "Term of the Holinvest
Shareholder Agreement" paragraph, which in turn has the
Suspensive condition of the completion of the Spin-off.
Provisions Applicable in the Event In the event of the failure to complete the Spin-off (and
of Failure to Complete the provided that it is not a function of the failure to complete the
Holinvest and Olimpia Spin-offs Holinvest Spin-off) within a period of 6 months following the
within the Established Time pertinent request (in the instance of an Accelerated Deadlock) or
Frames. Penalty. within a period of 6 months following the Initial Term Expiration
(in the instance of a Deadlock), or within a period of 6 months
following the expiration of the Olimpia shareholder agreements
(should a Deadlock or an Accelerated Deadlock not be declared by
Xxxx), the Present Olimpia Shareholders obligate themselves to
pay Hopa promptly total compensation of 0.70 Euros per Olivetti
share or equivalent financial instrument owned by Olimpia to
which Hopa would have been entitled under the Spin-off (according
to the provisions of the "Deadlock under the Olimpia Shareholder
Agreements" paragraph), without prejudice to the fact that,
should the Spin-off be completed within the next 6-month period
(the "Second Period"), without prejudice to all the terms and
conditions and reference dates applicable to the Spin-off as
provided hereinabove and with the payments provided hereinabove,
said compensation shall be returned by Hopa simultaneously with
the delivery of the securities to which Hopa is entitled and the
applicable premium plus accrued interest at an annual rate of the
3 month Euribor for the period between the time frame within
which the Spin-off should have been completed and the Second
Period.
During the Second Period, the compensation payment shall be
retained on a provisional basis and shall become final upon the
expiration of said period of time, should the Spin-off not be
completed.
Other Agreements
I - No later than January 31, 2003, the Parties shall reflect
the content of the Agreement in the appropriate contractual
provisions and shall negotiate possible penalties in the
event of nonperformance, without prejudice to the penalties
provided hereinabove.
II - Pirelli, Edizione and Hopa formally note and acknowledge
that the provisions of this Agreement do not prevail over
and in any event do not prejudice the validity and
effectiveness of the agreements contained in the shareholder
agreement adopted on September 14, 2001 (amended on
September 26, 2001) by Pirelli, Unicredito Italiano and
Intesa BCI (the "Existing Agreement"). Specifically, the
performance of obligations or the exercise of the rights and
prerogatives provided for Unicredito Italiano and/or Intesa
BCI under the Existing Agreement shall not in any way
constitute nonperformance with respect to this Agreement
and/or the final contractual provisions, nor shall they
create liability for Unicredito Italiano and/or Intesa BCI.
List of Attachments - Attachment A: Olimpia Balance Sheet
- Attachment B: Olivetti Instruments Characteristics
- Attachment C: First Designated Directors
- Attachment D: Allowed Transactions
Milan, December 19, 2002
Pirelli S.p.A. Edizione Holding S.p.A. IntesaBCI S.p.A.
---------- ---------- ----------
Unicredito Italiano S.p.A. Xxxxxxx S.p.A Hopa S.p.A.
---------- ---------- ----------
OLIMPIA S.p.A ATTACHMENT A
Head office of record - Xxxxx Xxxxx , 000, Xxxxx
Capital Stock of 1,562,596,150 Euros, fully paid-in
Tax identification code, VAT file number, and Milan Companies
Registry No. 03232190961
R.E.A. No. 1659224
Figures stated in Euros
BALANCE SHEET
September 30, 2002
A S S E T S
A) CREDITS WITH SHAREHOLDERS FOR PAYMENTS DUE
-------------
0
-------------
B) FIXED ASSETS
I) - INTANGIBLE -------------
0
-------------
II) - TANGIBLE -------------
0
-------------
III) - FINANCIAL
Equity stakes in affiliated companies 7,989,930,645
Other securities 620,000,360
-------------
8,609,931,005
-------------
-------------
-------------
TOTAL FIXED
ASSETS 8,609,931,005
=============
C) WORKING CAPITAL
I) - INVENTORY -------------
0
-------------
II) - CREDITS
With others due within 12 months 118,404
-------------
118,404
-------------
III) - FINANCIAL ASSETS THAT DO NOT
CONSTITUTE CAPITALIZATIONS -------------
0
-------------
IV) - LIQUIDITIES
Bank and postal deposits 1,261,207
-------------
1,261,207
-------------
-------------
TOTAL
WORKING
CAPITAL 1,379,611
=============
D) ACCRUED INCOME AND PREPAID EXPENSES
Accrued income 15,054,866
Prepaid expenses 62,939,139
-------------
TOTAL
ACCRUED
INCOME AND
PREPAID
EXPENSES 77,994,005
=============
-------------
TOTAL ASSETS 8,689,304,621
=============
OLIMPIA S.p.A ATTACHMENT A
Head office of record - Xxxxx Xxxxx , 000, Xxxxx
Capital Stock of 1,562,596,150 Euros, fully paid-in
Tax identification code, VAT file number, and Milan Companies
Registry No. 03232190961
R.E.A. n. 1659224
Figures stated in Euros
BALANCE SHEET
September 30, 2002
L I A B I L I T I E S
A) CAPITAL AND RESERVES
I) - CAPITAL STOCK 1,562,596,150
II) - SHARE PREMIUM RESERVE 3,637,403,874
VIII) - PROFIT (LOSS) CARRIED FORWARD (31,371,787)
IX) - FISCAL YEAR PROFIT (LOSS) (132,949,165)
-------------
TOTAL
CAPITAL
AND
RESERVES 5,035,679,072
-------------
-------------
B) RISK AND CHARGE RESERVES 0
-------------
-------------
C) EMPLOYEE XXXXXXXXX PAY 0
-------------
D) DEBT
Bond indebtedness
a) convertible beyond the 12 month period 753,826,639
Debt with banks
a) due within 12 months 206,500,000
b) due beyond 12 months 2,574,684,449
Debt with suppliers
a) due within 12 months 140,872
Debt with controlling companies
a) due within 12 months 75,000
Tax indebtedness
a) due within 12 months 16,706
Other debt
a) due within 12 months 67,404
-------------
TOTAL
DEBT 3,535,311,070
-------------
E) ACCRUED EXPENSES AND DEFERRED INCOME
Accrued expenses 118,314,479
-------------
TOTAL
ACCRUED
EXPENSES
AND
DEFERRED
INCOME 118,314,479
=============
-------------
TOTAL
LIABILITIES 8,689,304,621
=============
SUSPENSE ACCOUNTS
Security:
- Pledging of securities 2,755,202,375
Other Suspense Accounts
- Purchase of securities futures 360,653,768
-------------
TOTAL
SUSPENSE
ACCOUNTS 3,115,856,143
=============
Attachment (B) Olivetti Instruments
- 134,721,109 1.5% Olivetti 2001-2010 convertible bonds
- 163,558,339 1.5% Olimpia 2001-2007 bonds
- 486,502,431 instruments indexed to the performance of Olivetti shares
issued by a leading financial institution, with the following approximate
characteristics:
- 5-year maturity;
- exclusive discretionary right of the issuer to pay for the instrument
at maturity by physical delivery of 486,502,431 Olivetti shares or the
equivalent in cash, at the market price at the time of maturity, of
486,502,431 Olivetti shares;
- in the event of a request for early payment of the instrument by the
bearer, the issuer shall pay only the cash equivalent, at the market
price at the time of the early redemption, of 486,502,431 Olivetti
shares, except in very extraordinary instances of low market liquidity
(established in advance in the terms of the financial instrument: in
that event the issuer, also at its sole and complete discretion, may
deliver a mix of cash and Olivetti shares);
- payment to the bearer of periodic interest equal to 85% of the
dividends for 486,502,431 Olivetti shares.
Attachment (C) First Designated Directors
------------------------------------------------------------
Company Designated Person
------------------------------------------------------------
Olimpia S.p.A. Xxxxxx Xxxxxx
------------------------------------------------------------
Olivetti S.p.A. Xxxxxx Xxxxxxx
------------------------------------------------------------
Telecom Italia S.p.A. Xxxxxxxx Xxxxxxxx
------------------------------------------------------------
Telecom Italia Mobile S.p.A. Xxxxxxxx Xxxxxxxx
------------------------------------------------------------
Seat-Pagine Gialle S.p.A. Xxxxxx Xxxxxxx
------------------------------------------------------------
Attachment D
Derivatives Contracts on Olivetti Shares/Convertible Bonds
1) Share Swap Transaction with XX Xxxxxx Xxxxx Bank covering 100,000,000 shares
of Olivetti common stock or, in certain situations, a similar number of
Olivetti 1.5% 2001-2010 convertible bonds:
o effective date: February 8, 2001;
o reference price: 1.4213 Euros per share of Olivetti common stock;
o maturity date: December 2006
o number of securities: 100,000,000;
o settlement: physical delivery of the securities or cash settlement of the
spreads
2) Call Option with XX Xxxxxx Xxxxx Bank on 100,000,000 shares of Olivetti
common stock or 100,000,000 Olivetti 1.5% 2001-2010 convertible bonds:
o effective date: November 7, 2001, amended on December 9, 2002
o strike price: 1 Euro per share of Olivetti common stock; 1 Euro (plus any
interest possibly accrued) for each Olivetti 1.5% 2001-2010 convertible
bond;
o maturity date: 35 business days prior to October 5, 2007;
o settlement: physical delivery of the securities or cash settlement of the
spreads
3) Convertible Bond Asset-Swap with Credit Agricole Xxxxxx XX Bank on
200,000,000 Olivetti 1.5% 2001-2010 convertible bonds:
o effective date: November 14, 2001, amended on November 27, 2002
o strike price: 1 Euro
o maturity date: November 23, 2006
o settlement: physical delivery of the securities or cash settlement of the
spread
