Exhibit 8(a)
Milan, September 14, 2001
PIRELLI S.p.A.
Viale Sarca, 222
20126 - MILAN
Dear Sirs,
Pursuant to our conversations, we propose the following:
"INSTRUMENT BETWEEN PARTNERS
Between Pirelli S.p.A., with headquarters in Milan, Xxxxx Xxxxx 000,
company capital 1,043,094,358.28 Euros, recorded with the Register of Companies
of Milan, Tax Code and VAT No. 00886890151, in the person of the chairman of the
Board of Directors, Xx. Xxxxx Xxxxxxxxxx Provera, in possession of the necessary
powers of attorney following the decision by the Board of Directors of July 28,
2001 (hereinafter "Pirelli")
- Party of the first part -
and
UniCredito Italiano S.p.A., with headquarters in Genoa, Xxx Xxxxx 0,
Xxxxxxx Xxxxxxxxxx xx Xxxxx, Piazza Cordusio, company capital 2,523,215,059
Euros, recorded with the Register of Companies of Genoa, Tax Code and VAT No.
00348170101, in the person of the Deputy General Director, Xx. Xxxxxx Xxxxxxx,
in possession of the
necessary powers of attorney following the decision by the Board of Directors of
August 3, 2001 (hereinafter "UCI") and IntesaBCI S.p.A., with headquarters in
Milan, Piazza Xxxxx Xxxxxxx 10, company capital 3,488,995,258.84 Euros, recorded
with the Register of Companies of Milan, Tax Code 00799960158, VAT No.
10810700152, in the person of Managing Director Xxxx Xxxxxxx, in possession of
the necessary powers of attorney following the decision by the Board of
Directors of September 14, 2001 (hereinafter "BCI")
- Party of the second part -
Given that
(a) on July 30, 2001, Pirelli and Edizione Holding S.p.A. (hereinafter
"Edizione") signed an offer for the acquisition, directly or through
subsidiaries to be designated by the Execution Date, as indicated
herein, by XXXX X.X. of Olivetti Shares and Olivetti Warrants (as
defined in paragraphs 1.05 and 1.27, respectively);
(b) the offer of Pirelli and Edizione was accepted on the same date by XXXX
X.X. and therefore the Contract (as defined in paragraph 1.06) was
drawn up. UCI and BCI (the "New Partners") took note of the Contract;
(c) in order to proceed with the acquisition of the Olivetti Shares and the
Olivetti Warrants, Pirelli and Edizione Finance International S.A.
(hereinafter "Edizione Finance" and together with Pirelli, the "Current
Partners") constituted, on August 3, 2001, the Company (as defined in
paragraph 1.22), held 20% (twenty percent) by Edizione Finance, a
company controlled by Edizione, and 80% (eighty percent) by Pirelli;
the Company is governed by the bylaws enclosed herewith under A (the
"Bylaws");
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(d) on August 7, 2001, Pirelli and Edizione signed an Instrument for the
regulation of their mutual relations as partners of the Company. The
New Partners took note of the aforementioned agreement;
(e) based on the agreements between the Current Partners, dated August 9,
2001, the Company received a transfer from Kallithea S.p.A. (a
subsidiary of Pirelli) of 147,337,880 Olivetti common shares--equal to
approximately 2% of Olivetti's company capital--as well as from Pirelli
Finance (Luxembourg) S.A. (a subsidiary of Pirelli) and from Edizione,
for a total of 265,302,250 Olivetti common shares, equal to 3.64% of
Olivetti's company capital;
(f) on August 29, 2001, the Current Partners formally designated the
Company as a vehicle for the acquisition of the Olivetti Shares and the
Olivetti Warrants;
(g) on August 29, 2001, the shareholders' meeting of the Company decided,
among other things, on a capital increase (of 15,000 Euros--represented
by 15,000 shares with a par value of 1 Euro each, assigned to Pirelli
in the proportion of 80% (equal to 12,000 shares) and Edizione Finance
in the proportion of 20% (equal to 3,000 shares) to 576,936,635 Euros,
to take place including in several stages, and with split-up being
permitted, by allocating 576,921,635 Euros in cash and the issue of
576,921,635 new common shares with a par value of 1 Euro each, reserved
under option to shareholders in proportion to the number of shares
owned, with an issue premium of 9.40 Euros per share;
(h) the Current Partners have immediately underwritten and paid part of the
capital increase and respective issue premium, for a total of
1,199,985,020 Euros;
(i) following such underwriting and payment, 92,306,540 shares will be
issued in favor of Pirelli for a par value of 92,306,540 Euros,
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and 23,076,635 shares in favor of Edizione Finance with a par value of
23,076,635 Euros;
(j) Pirelli has offered to UCI and BCI that each purchase a minority
interest in the Company; each of the New Partners wishes to purchase,
individually, a holding of 10% of the company's capital and therefore
to purchase from Pirelli, respectively, 11,539,817 shares and
11,539,817 shares of the Company, including the option rights
concerning the capital increase referred to in recital (g) so as to
allow for the underwriting and payment, under the conditions decided
upon by the Shareholders' Meeting referred to in item (g) of the
recitals, by each of the New Partners of 38,460,183 shares of the
Company with an expenditure of 399,985,903.20 Euros;
(k) Pirelli and the New Partners intend to agree on the principles of
acquisition and underwriting of a capital portion of the Company, as
well as the mutual relations as partners of said Company;
(l) Pirelli commits to obtain from Edizione Finance an irrevocable waiver
declaration in favor of UCI and BCI concerning all its rights and
claims in connection with the acquisition, respectively, of the Olimpia
UCI Holding and of the Olimpia BCI Holding (as defined below), as well
as a declaration of awareness, with waiver of any reservation,
concerning the commitments made by Pirelli versus the New Partners and
the rights and powers of the latter, acknowledged under this
Instrument, in particular with waiver by Edizione Finance, as of now,
of the preferred rights on the transfers under the sale and
acquisitions rights governed by this Agreement; this declaration will
be given by Pirelli to both New Partners as of the Execution Date.
Given these recitals,
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which are an integral and essential part of the Agreement, it is set forth and
agreed as follows:
ARTICLE I
DEFINITIONS
In addition to the terms defined in other clauses of the Instrument (as defined
in paragraph 1.19), for the purposes thereof, the terms listed below have the
meaning specified next to it for each of them:
1.01 "Olimpia Capital Increase": the capital increase referred to in recital
(g) above.
1.02 "Current Partners": Edizione Finance and Pirelli, jointly.
1.03 "Olimpia BCI Shares": the shares of Olimpia acquired by BCI pursuant to
Article II, referred to in recital (j).
1.04 "Olimpia UCI Shares": the shares of Olimpia acquired by UCI pursuant to
Art. II, referred to in recital (j).
1.05 "Olivetti Shares": 1,552,662,120 common shares of Olivetti S.p.A.,
subject of the Contract.
1.06 "Contract": the offer dated July 30, 2001, from Pirelli and Edizione to
XXXX X.X., accepted on the same date, concerning the purchase and sale
of the Olivetti Shares and the Olivetti Warrants.
1.07 "Execution Date": the second Business Day (as defined in paragraph
1.11) prior to the Closing Date of the Contract.
1.08 "Signing Date": date of signing of this Instrument.
1.09 "BCI Option Rights": the Option Rights of Olimpia acquired by BCI
pursuant to Art. II.
1.10 "UCI Option Rights": the Option Rights of Olimpia acquired by UCI
pursuant to Art. II.
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1.11 "Business Day": any calendar day except Saturdays, Sundays and days the
banks are closed in the market of Milan for performance of their normal
activity.
1.12 "IRR" (gross Internal Rate of Return): discount rate on an annual base
and under compound capitalization, which makes the value of all
incoming cash flows equal to the value of the outgoing cash flows
related to the investment.
1.13 "New UCI Shares": shares arising from the Olimpia capital increase
underwritten by UCI pursuant to Article II below.
1.14 "New BCI Shares": shares arising from the Olimpia capital increase
underwritten by BCI pursuant to Article II below.
1.15 "Olivetti": the company Olivetti S.p.A., with headquarters in Ivrea,
Xxx Xxxxxx Xx. 00.
1.16 "Olimpia UCI Holding": Olimpia UCI Shares and New Olimpia UCI Shares.
1.17 "Olimpia BCI Holding": Olimpia BCI Shares and New Olimpia BCI Shares.
1.18 "Party or Parties": Pirelli, UCI and BCI, jointly or separately.
1.19 "Instrument": the present Instrument, signed today between Pirelli, UCI
and BCI.
1.20 "Seat": the company Seat-Pagine Gialle S.p.A., with headquarters in
Milan, Corso di Porta Vigentina No. 33/35.
1.21 "Olivetti Companies": the companies Olivetti S.p.A., Telecom Italia
S.p.A., Telecom Italia Mobile S.p.A. and Seat-Pagine Gialle S.p.A.
1.22 "Company" or "Olimpia": the company Olimpia S.p.A., with headquarters
in Milan, Xxx Xxxxx, 000 (formerly Olimpia S.r.l.), which the Current
Partners constituted on August 3,
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2001, for the acquisition of the Olivetti Shares and the Olivetti
Warrants.
1.23 "Telecom Italia": the company Telecom Italia S.p.A., with headquarters
in Turin, Xxx Xxxxxxx Xx. 00.
1.24 "XXX": the company Telecom Italia Mobile S.p.A., with headquarters in
Turin, Xxx Xxxxxxx Xx. 00.
1.25 "Olimpia BCI Securities": Olimpia BCI Shares and BCI Option Rights.
1.26 "Olimpia UCI Securities": Olimpia UCI shares and UCI Option Rights.
1.27 "Olivetti Warrants": 68,409,125 Olivetti 2001-2002 warrants, subject of
the Contract.
ARTICLE II
TRANSFER OF OLIMPIA UCI SECURITIES AND OLIMPIA BCI SECURITIES
AND UNDERWRITING OF THE NEW UCI SHARES AND THE NEW BCI SHARES
2.00 Without prejudice to the provisions of paragraph 10.1 below
concerning the perfecting and complete and regular closing of the
Contract as an essential condition of the agreements referred to in
this Instrument, the commitments made by UCI and BCI referred to
below are also subject to the condition that, on the Execution Date,
the Current Partners, pursuant to the provisions of paragraph 2.03
below, (i) have underwritten and paid the shares arising from the
Olimpia Capital Increase and (ii) have perfected and executed with
the Company the "subordinated partner financing."
2.01 Without prejudice to the provisions of paragraph 10.1 below, UCI and
BCI pledge, not jointly, to purchase from Pirelli, as of the
Execution Date, respectively, the UCI Olimpia Shares and the UCI
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Option Rights (hereinafter the "Olimpia UCI Securities") as well as
the Olimpia BCI Shares and the BCI Option Rights (hereinafter the
"Olimpia BCI Securities") under the following terms and conditions:
2.01.01 Total Price of Olimpia UCI Securities and Olimpia BCI
Securities.
(a) Olimpia UCI Securities will be sold by Pirelli and
purchased by UCI at the total price agreed upon, including
in an aleatory manner, of 120,014,096.8 Euros (the "Total
UCI Price").
(b) The Olimpia BCI Securities will be sold by Pirelli and
purchased by BCI at the total price agreed upon, including
in an aleatory manner, of 120,014,096.8 Euros (the "Total
BCI Price").
2.01.02 Payment Time and Terms.
On the Execution Date, UCI and BCI will pay to Pirelli,
respectively, the Total UCI Price and the Total BCI Price
by separate fund credits, valued as of the Execution Date,
to the checking account with Banca Nazionale del Lavoro,
No. 28301 ABA 01005 CAB 01600 in the name of "Pirelli
S.p.A."
2.01.03 Transfer of Olimpia UCI Securities and Olimpia BCI
Securities.
The Transfer of the Olimpia UCI Securities and Olimpia BCI
Securities will take place, simultaneously on the
Execution Date, at the same time with the payment of the
Total UCI Price and the Total BCI Price, without need for
any further expression of will between the parties, and
will be valid between the parties as of that moment.
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On the same date, at the same tine, all acts necessary or
appropriate will be carried out pursuant to applicable
law--including tax law--in order to perform the transfer
of the Olimpia UCI Securities and the Olimpia BCI
Securities, making it valid for third parties as well,
including the following actions: (a) Pirelli:
(i) will deliver to UCI and BCI the certificates
representing, respectively, the Olimpia UCI
Shares and the Olimpia BCI Shares, duly
endorsed in favor of UCI and BCI, by
appropriate methods, based on applicable laws
in the matter, to transfer to UCI and BCI full
title and full availability of the Shares and
allow the registration of UCI and BCI in the
book of partners of Olimpia, as well as the
option warrants representing the BCI Option
Rights and the UCI Option Rights;
(ii) will sign and exchange and/or cause signature
and exchange of all other acts and documents
(including tax stamps, whenever necessary) that
may be required pursuant to the law;
(iii) will deliver to each of the New Partners an
original of the declaration under the signature
of Edizione Finance, as referred to in recital
(l);
(b) UCI and BCI, each to the extent applicable:
(i) will pay to Pirelli, respectively, the Total
UCI Price and the Total BCI Price;
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(ii) will sign and exchange all other acts and
documents (including tax stamps, whenever
necessary) that may be required pursuant to the
law;
2.01.04 Expenses and charges.
All expenses, costs and charges, including those of a
fiscal nature, related to the transfer of the Olimpia UCI
Holding and of the Olimpia BCI Holding will be borne half
by UCI and BCI, and the other half by Pirelli.
2.02 Without prejudice to the provisions set forth in paragraph 10.1
below, on the Execution Date, UCI and BCI pledge, non-jointly, to
underwrite and pay the Capital Increase of Olimpia, respectively, (i)
with a par value of 38,460,183 Euros, equal to 38,460,183 new Olimpia
shares (the "New UCI Shares") with a total disbursement of
399,985,903.2 Euros, and (ii) with a par value of 38,460,183 Euros,
equal to 38,460,183 new Olimpia shares, with a total disbursement of
399,985,903.2 Euros (the "New BCI Shares").
2.03 At the same time with the underwriting of the Capital Increase of
Olimpia, (i) each of the New Partners, to the extent applicable,
pledges to pay fully the New Olimpia BCI Shares and the New Olimpia
UCI Shares, and (ii) Pirelli and Edizione Finance (whose performance
is guaranteed by Pirelli pursuant to Art. 1381 of the Civil Code), to
the extent applicable, will waive and refrain from underwriting and
paying the residual portion of the Capital Increase, with a par value
of 76,936,635 Euros, equal to 76,936,635 shares, so as to assure
that, at the end of the execution of the Capital Increase, Pirelli
will hold 60%, Edizione
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Finance 20%, and each of the New Partners 10% of the new capital of
the Company. Pirelli and Edizione Finance will pay to the Company, in
the form of "subordinated partners financing" under the same rate
conditions as those established for the financing granted by the pool
of banks, an amount equal to 800,141,004 Euros.
2.04 Pirelli will take steps so that, within 30 (thirty) Business Days of
the Execution Date, the Bylaws are amended so as to set forth the
qualified quorum of 91% of the capital for the validity of the
decisions to amend or eliminate the list voting clause for the
appointment of the directors, as well as to modify the number of the
members of the Board of Directors.
ARTICLE III
MANAGEMENT OF THE COMPANY
3.01 Composition of the Board of Directors.
It is understood that, within the limits allowed by law and for the
entire term of this Instrument:
(i) the Board of Directors of the Company will be made up of
10 (ten) members;
(ii) 1 (one) director out of 10 (ten) will be appointed at the
request and indication of UCI;
(iii) 1 (one) director out of 10 (ten) will be appointed at the
request and indication of BCI;
(iv) should an Executive Committee be created, UCI and BCI will
have, respectively, the right to request at any time the
inclusion of the directors designated by them in said
committee.
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The new Board of Directors, with the composition indicated
above, must be appointed by the Execution Date of the
Contract. It is understood that the power of UCI and BCI to
designate, each, a member of the Board of Directors of the
Company will remain valid even after the first expiration
of this Instrument, if it is extended pursuant to Art. 10.2
(a), provided UCI and BCI hold, jointly, a percentage of
the company capital above 10%. However, if the joint
holding of BCI and UCI in the company capital is 10% or
less, then BCI and UCI may designate, jointly, only one
director.
3.02 Suspension from Office.
Whenever, for any reason, including death, resignations or revocation
by the shareholders' meeting, one of the directors appointed pursuant
to the preceding provisions is suspended from office, within the
limits allowed by law, the replacing director must be appointed by
the Company's Shareholders' Meeting (and prior to this, by
co-optation of the Board of Directors) in the person indicated by the
New Partner which had previously designated the suspended director.
ARTICLE IV
MANAGEMENT OF THE OLIVETTI COMPANY
4.01 Composition of the Board of Directors of the Olivetti Company.
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It is understood that, within the limits allowed by law and for the
entire term of this Instrument, in the Board of Directors of
Olivetti, Telecom, Seat and XXX (the "OLIVETTI COMPANIES"), one
director must be appointed at the request and designation of UCI and
another director at the request and designation of BCI.
The new Board of Directors of the Olivetti Companies, with the
composition established above, will be appointed as soon as possible,
and in any case within 120 (one hundred twenty) days of the Execution
Date of the Contract. It is understood that the power of UCI and BCI
to designate, each, a member of the Board of Directors of Olivetti
Companies will remain valid even after the first expiration of this
Instrument, if it is extended pursuant to Art. 10.2 (a), provided UCI
and BCI hold, jointly, a percentage of the company capital above 10%.
However, if the joint holding of BCI and UCI in the company capital
is 10% or less, then BCI and UCI may designate, jointly, only one
director.
4.02 Suspension from Office.
Whenever, for any reason, including death, resignations or revocation
by the shareholders' meeting, one of the directors appointed pursuant
to the preceding provisions is suspended from office, within the
limits allowed by law, the replacing director must be appointed by
the Company's Shareholders' Meeting (and prior to this, by
co-optation of the Board of Directors) in the person indicated by the
New Partner which had previously designated the suspended director.
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ARTICLE V
BOARD OF AUDITORS OF THE COMPANY
Upon the first renewal, the Parties will consider introducing a principal
auditor of the Company, designated jointly by the New Partners.
ARTICLE VI
KEY ISSUES
Pursuant to Art. VII below, the following will be deemed Key Issues:
a) the decisions of the Extraordinary Shareholders' Meeting and those of
the Board of Directors of the Company, the latter referring to the
following:
- indication as to how to vote in Xxxxxxxx's Ordinary
Shareholders' Meeting on Key Issues, for the purposes of
the application of Articles 104 or 107 T.U. No. 58 of
February 24, 1998, and in matters of acquisition of own
shares, as well as voting in Olivetti's Extraordinary
Shareholders' Meeting;
- acquisition, sale and acts of disposal under any status
(i) of own shares in any amount and (ii) holdings
(including shares and financial instruments of any type
issued by Olivetti and/or the Olivetti Companies) at a
value, by individual operation, above 100,000,000 Euros;
- determination of the ratio between equity and debt
of the Company and methods, terms and conditions for
resorting to outside financing sources;
- draft proposals to be submitted to the Company's
Extraordinary Shareholders' Meeting;
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b) resolutions of the Board of Directors of Olivetti and Telecom,
referring to:
- individual investments above 300 million Euros;
- acquisition, sale and acts of disposal under any status
(i) of own shares in any amount and (ii) affiliate and
subsidiary holdings (including shares and other financial
instruments issued by the Company or the Olivetti
Companies) at a value, by individual operation, above 300
million Euros;
- acts of disposal under any status of companies or branches
thereof, with an individual value above 300 million Euros;
- proposals to call the Extraordinary Shareholders' Meeting
for resolutions in matters of modification of the
corporate purpose, capital operations of any nature,
merger, spin-off, transformation and dissolution;
- operations between Olivetti, Telecom and Gruppo Pirelli,
with an individual value above 50 million Euros;
- operations with related parties.
ARTICLE VII
PROVISIONS ON DEADLOCK
7.01 Obligation to Consult.
Pirelli and the New Partners, the latter jointly between them, pledge
to consult each other previously whenever a decision on one of the
Key Issues must be discussed or decided upon.
7.02 Identification of Deadlock Situations.
For the purposes of this Article VII, "DEADLOCK" is defined as a
situation of disagreement, expressed in the previous consultation
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between Pirelli, on the one hand, and one or both of the New
Partners, on the other hand, on a Key Issue that must be discussed by
one of the corporate management bodies referred to in item (a) or (b)
of Article VI above.
7.03 Procedure.
(a) For compliance with the obligation referred to in paragraph
7.02 above, Pirelli and the New Partners, jointly, pledge to
meet or to consult each other previously by telephone
conference or video conference by the Business Day preceding
the day scheduled for the meeting of the Board or of the
shareholders of the Company, or of the Board of Olivetti or
Telecom, or, immediately, as soon as the news arrive, in the
event of urgent call (or extraordinary urgency, if applicable)
of the meeting of the board of the Company or of Olivetti or
Telecom, pursuant to the applicable bylaws provisions.
(b) In the consultation referred to in this paragraph, Pirelli and
the New Partners will take all reasonable steps to reach an
agreement and/or identify common grounds for the issues
submitted for their examination, pledging, for this purpose,
to act in good faith.
(c) The unjustified absence of a single New Partner or both the
New Partners in the previous consultation stage implies
acceptance of the decisions made by the other subjects and
imposes on the absent subject the obligation of accepting and
respecting such decisions.
7.04 Manifestation of Will.
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(a) Whenever, in the previous consultation referred to in
paragraphs 7.02 and 7.03 above, Pirelli and the New Partners
reach an agreement concerning the issues under consultation,
they are obligated to manifest their will in the competent
venues pursuant to the provisions below:
(i) by giving a common representative delegation to
participate in the Company's Extraordinary
Shareholders' Meeting and casting the vote in said
meeting, in accordance with the decision reached;
(ii) causing their own representatives in the Board of
Directors of the Company and of Olivetti or Telecom to
participate in the meeting of the board, casting the
vote in this venue in accordance with the joint
decisions reached in the previous consultation.
(b) However, in the absence of agreement of the issues under
consultation, the New Partners, if both are dissenting will be
jointly obligated, or the single dissenting New Partner will
be obligated, to abstain or cause abstention from
participating in the shareholders or board meeting and to vote
in this venue or cause voting and/or abstain from manifesting
its will, in any venue and mode, or from taking a position in
the issue under the previous consultation, without prejudice
to the provisions of item (c) below.
(c) Whenever the situation described in item (b) above occurs, the
dissenting New Partners, separately or jointly, will have, or
the single dissenting New Partner will have, the right to send
to Pirelli, by telegram or registered letter, pursuant to
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paragraph 12.02, a "NOTICE OF DEADLOCK" within 15 (fifteen)
days of the end of the consultation referred to in paragraph
7.03.
7.05 Rights of the New Partners.
(a) Whenever UCI and/or BCI send a Notice of Deadlock pursuant to
item (c), paragraph 7.04, the New Partner which sent the
Notice of Deadlock will have the right (which is deemed
exercised by Pirelli's receipt of the Notice of Deadlock,
pursuant to item (c), paragraph 7.04 above) to sell to
Pirelli, which will have the corresponding obligation to buy
from the respective New Partner, respectively, all but not
part of the Olimpia UCI Holding and/or all but not part of the
Olimpia BCI Holding at a price determined pursuant to the
provisions in item (b) below.
(b) For the purposes of item (a) above, the Parties agree,
including in an aleatory manner, that the object of the
decision must be: (x) the price of the Olimpia BCI Holding
and/or Olimpia UCI Holding, corresponding proportionately to
the value of the Company's economic capital ("Price of the
Olimpia UCI Holding" and/or "Price of the Olimpia BCI
Holding"), as well as (y) an increase expressing the
proportion of the increase premium, as if the Olimpia BCI
Holding and/or Olimpia UCI Holding were the expression of
Xxxxxxxx's control, assuming that the latter controls Telecom
and the companies controlled by the latter ("Premium"). The
"Price of the Olimpia UCI Holding" and/or "Price of the
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Olimpia BCI Holding" and the Premium to be proportionately
allocated to both the Holdings will be determined by mutual
consent between Pirelli and each of the New Partners within 10
(ten) Business Days of the date Pirelli received from one of
the New Partners the notice pursuant to item (a) above or, in
the absence of such agreement, from two "investment banks"
with international standing, chosen one by Pirelli (paying the
respective costs) and one by the New Partner that sent the
Notice of Deadlock (paying the respective costs), with the
understanding that if an agreement on the valuation is not
reached within 30 (thirty) Business Days of their appointment,
it will be made by a third and additional "investment bank"
(the costs of which will be paid half by Pirelli and the other
half by the Seller(s)/New Partner(s) of a similar standing,
chosen by agreement of those already appointed at the time the
task is assigned by Pirelli and by the New Partner that sent
the Notice of Deadlock or, in the absence of agreement, by the
Chief Justice of the Court of Milan. The Chief Justice of the
Court of Milan (in the order and in the terms indicated above)
will also be asked to appoint the "investment banks" that
Pirelli or the New Partner that sent the Notice of Deadlock
failed to appoint or replace in the event of subsequent
termination of the task. Whenever both New Partners sent the
Notice of Deadlock, the New Partners will be obligated to
appoint a single "investment bank" by mutual consent.
(c) The valuations referred to in item (b) above and therefore
the Price of the Olimpia BCI Holding and/or the Price of the
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Olimpia UCI Holding and the Premium determined on that basis
will be definitively binding for the Parties, pursuant to
Articles 1349 and 1473 of the Civil Code for the purchase and
sale referred to in item (a) above.
(d) It is furthermore agreed, including in an aleatory manner,
that the price owed by Pirelli will not be lower than the
amounts paid by the New Partner for the acquisition and
underwriting of shares in the Company, less any dividends
received ("FLOOR"), nor higher than an amount which implies,
in connection to the same amounts, less any dividends
received, an annual IRR, including taxes, equal to 15%
("CAP").
(e) The purchase and sale will be closed within 30 (thirty)
Business Days of the Parties' receipt of the communication
concerning the valuation referred to in item (b) above, and
the price referred to in items (b) and (d) above must be paid
in cash, at the same time with the transfer of the Olimpia BCI
Holding and/or the Olimpia UCI Holding referred to in
paragraph 7.06.
7.06 Transfer.
If the Olimpia BCI Holding and/or the Olimpia UCI Holding should be
purchased and sold pursuant to paragraph 7.05 (a), the following
provisions will apply:
(i) the Olimpia BCI Holding and/or the Olimpia UCI Holding will be
deemed transferred with regular enjoyment as of the date
referred to in item (iii) below;
(ii) the ownership right in the Olimpia BCI Holding and/or the
Olimpia UCI Holding purchased and sold will be deemed
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transferred to the buyer as of the date referred to in item
(iii) below;
(iii) the transfer of the Olimpia BCI Holding and/or the Olimpia UCI
Holding and the payment of the respective price will take
place at the headquarters of the Company, at 11:00 a.m. on the
5th (fifth) Business Day after the date the purchase and sale
is deemed closed pursuant to paragraph 7.05 (e), in
compliance, whenever applicable, with the possible
authorizations from the competent authorities with
jurisdiction over the Parties in connection with the purchase
and sale;
(iv) in the act of transfer and payment referred to in item (iii)
above, the Olimpia BCI Holding and/or the Olimpia UCI Holding
will be free of prejudicial pledges, liens, encumbrances or
rights of third parties of any nature; including in light of
the absence of any managerial role of the New Partners and in
an aleatory manner, the purchase and sale will take place
without any further and different guarantee and responsibility
of UCI and/or BCI, including the value, situation and
activities of the Companies and their affiliates;
(v) the expenses, charges and indirect taxes levied on the
purchase and sale of the Olimpia BCI Holding and/or the
Olimpia UCI Holding will be paid by the buyer;
(vi) however, the taxes on any capital gains obtained by the seller
will be paid by the latter;
(vii) at the time of the transfer of the Olimpia BCI Holding and/or
the Olimpia UCI Holding and the payment of the respective
price, the seller will deliver to the buyer the resignations
of
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the directors and, whenever possible, of the auditors of the
Company and of the Olivetti Companies designated by it.
ARTICLE VIII
COLLATERAL ACQUISITIONS
8.01 Commitment of the Parties.
(a) UCI and BCI declare that, as of September 13, 2001, including
through their respective subsidiaries, pursuant to Art. 2359,
first paragraph, c.c., they own Olivetti shares (including
Xxxxxxxx's voting rights held under any status), in an amount
not exceeding, respectively, 6,616,827 Xxxxxxxx shares in
ownership and 46,694,466 Olivetti shares in pledge with voting
right, concerning UCI, and 15,129,380 Olivetti shares in
ownership and 13,865,712 Olivetti shares in pledge with voting
right, concerning BCI.
(b) For the entire term of this Instrument, the parties, including
through their respective subsidiaries and/or parent companies,
pursuant to Art. 2359, first paragraph, c.c., may not acquire
Olivetti shares, bonds convertible to Olivetti shares and/or
Warrants giving right to acquire shares or bonds convertible
to Olivetti shares, issued by Olivetti or by the Olivetti
Companies (including Xxxxxxxx's voting rights held under any
status). It is, however, permitted to UCI and BCI to acquire
and hold such securities within said limit, for each of them,
of 0.40% of Olivetti's capital, as of the Execution Date.
(c) Unless otherwise agreed upon in writing between the Parties,
the Company may not purchase shares and bonds and instruments
indicated in item (a) above in excess of the
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threshold set forth therein, currently established at 30%
(thirty percent), while also taking into account the incidence
for this purpose of the securities referred to in item (b)
above, held by BCI and UCI, as well as own shares held
directly and indirectly, as set forth in the current laws and
regulations, including the instructions issued by CONSOB.
ARTICLE IX
PENALTY FOR BREACH
In the event of breach of one or several commitments made pursuant to the
provisions of this Instrument, the breaching Party, at the simple written
request of the Parties or of the other Party, and without prejudice to any other
of its/their rights (including the right to higher damages), will be obligated
to pay, as penalty, to the complying party or complying Parties, which will take
care of distribution internally, a single and total amount equal, for each
breach, to 5% (five percent) of the amounts paid by the breaching Party for the
acquisitions and subscriptions of shares made in the Company as of that date.
ARTICLE X
TERM
10.01 Effective Date.
The efficacy and validity of this Instrument are subject to complete
and regular execution of the Contract and therefore,
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secondary to obtaining the necessary authorizations, including in
compliance with antitrust regulations, for the acquisition by the
Company of the entire holding in Olivetti represented by the Olivetti
Shares and Olivetti Warrants as set forth therein. It is, however,
understood that in the event of failure to execute the Contract
completely and regularly by January 31, 2002, this Instrument will be
deemed cancelled ipso jure, effective ex tunc and, at the simple
request of UCI and/or BCI, Pirelli will be obligated (i) to acquire
the entire Olimpia BCI Holding and the entire Olimpia UCI Holding at
a price exactly identical to that possibly already paid by UCI and
BCI for the acquisition of the Olimpia UCI Shares, Olimpia BCI
shares, the new UCI Shares and the New BCI Shares, as well as (ii) to
release UCI and BCI from any commitment possibly already made to the
Company.
10.02 Term.
(a) This Instrument will have a term of three years from the
Execution Date of the Contract and will be deemed tacitly
renewed from time to time on expiration for the following two
years, in the absence of an opt-out notice from one of the
Parties, without prejudice to the provisions of paragraph
10.03 below.
(b) Except in the cases required by law, each of the Parties may
opt out of this Instrument before every expiration, with
notice sent 6 (six) months in advance.
10.03 Absence of Renewal.
(a) If, before the first expiration of this Instrument or
successive ones, Pirelli should send to the New Partners,
jointly or
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separately, in the terms set forth in paragraph 12.02, the
opt-out notice referred to in item (ii), paragraph 10.02 (b)
above, UCI and BCI will individually have the right to send to
Pirelli which, upon simple request, will have the
corresponding obligation to acquire, respectively, all but not
part of the Olimpia UCI Holding and Olimpia BCI Holding held
by the New Partner which exercised the option right set forth
herein, under terms and conditions determined, mutatis
mutandis, pursuant to paragraph 7.05 (b) above (and the
provisions mentioned therein), giving notice to Pirelli within
30 (thirty) Business Days.
In all events, it is agreed, including in an aleatory manner,
that the price owed by Pirelli will not be lower than the
amounts paid by the New Partner for the acquisitions and
subscriptions of shares in the Company, less any dividends
received ("FLOOR"), nor higher than an amount which implies,
in connection to the same amounts, less any dividends
received, an annual IRR, including taxes, equal to 15%
("CAP"). The aforementioned price will be paid in cash.
(b) If, on the first expiration date of this Instrument, both or
one of the New Partners should, jointly or separately, send to
Pirelli, in the terms set forth in paragraph 12.02, the
opt-out notice referred to in item (i), paragraph 10.02 (b)
above, Pirelli will have the right to acquire from both New
Partners opting out, or from the single New Partner opting
out, which, upon simple request, will have the corresponding
obligation to sell, respectively, all but not part of the
Olimpia UCI
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Holding and Olimpia BCI Holding held by the New Partner which
exercised the opt out right set forth herein, under terms and
conditions determined, mutatis mutandis, pursuant to paragraph
7.05 (b) above (and the provisions mentioned therein), less
the Premium, giving notice to the New Partner which sent the
opt-out notice, within 30 (thirty) Business Days.
(c) If both or one of the New Partners should send to Pirelli, in
the terms set forth in paragraph 12.02, on the expiration of
the first renewal in the following two years, the opt-out
notice referred to in paragraph 10.02 (a) above, and
therefore, on the expiration of the fifth year after the
effective Date of this Instrument, or on the successive
additional expiration dates, both New Partners opting out,
jointly or separately, or the single New Partner opting out,
will have the right to sell to Pirelli, which, upon simple
request, will have the corresponding obligation to acquire,
respectively, all but not part of the Olimpia UCI Holding
and/or all but not part of the Olimpia BCI Holding held by the
New Partner which exercised the opt out right set forth
herein, under terms and conditions determined, mutatis
mutandis, pursuant to paragraph 7.05 (b) above (and the
provisions mentioned therein), giving notice to the New
Partner that sent the opt-out notice, within 30 (thirty)
Business Days.
In all events, it is agreed, including in an aleatory manner,
that the price owed by Pirelli will not be lower than the
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amounts paid by the New Partner for the acquisitions and
subscriptions of shares in the Company, less any dividends
received ("FLOOR"), nor higher than an amount which implies,
in connection to the same amounts, less any dividends
received, an annual IRR, including taxes, equal to 15%
("CAP").
(d) The payment of the amount referred to in item (a), (b) or (c)
above must be made (i) immediately, at the simple written
request of UCI and/or BCI to be sent to Pirelli at the end of
the term of 30 (thirty) days from the communication sent to
the Parties as to the decision made by the procedure referred
to in paragraph 7.05 (b) above, and (ii) at the same time with
the transfer of the Olimpia UCI Holding and/or the Olimpia BCI
Holding.
ARTICLE XI
CHANGES IN STOCKHOLDING
11.1 For the purposes of this paragraph, "Change of Control" means a
substantial modification in the direct and indirect stockholding
control of Pirelli, which means the stoppage of the control of
Pirelli & C s.a.p.a. over Pirelli S.p.A., as exercised today. If the
Change of control occurs, each of the New Partners will have the
right to transfer, respectively, all but not part of the Olimpia UCI
Holding and/or all but not part of the Olimpia BCI Holding owned by
Pirelli which, upon simple request, will have the obligation to
acquire, under terms and conditions determined, mutatis mutandis,
pursuant to paragraph 7.05 (b) above (and the
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provisions mentioned therein), giving notice to Pirelli within 30
(thirty) Business Days of the date the New Partners, separately or
jointly, declared in writing that they have learned about the Change
of Control, or received written communication about this
circumstance. It is, however, agreed, including in an aleatory
manner, that the price owed by Pirelli will not be lower than the
amounts paid by the New Partner for the acquisitions and
subscriptions of shares in the Company, less any dividends received
("FLOOR"), nor higher than an amount which implies, in connection to
the same amounts, less any dividends received, an annual IRR,
including taxes, equal to 15% ("CAP").
11.2 If Pirelli intends to divest, in any form, part of its holding in the
Company, so that Pirelli would hold less than a majority of the
capital thereof, Pirelli may not sign any agreement in this sense,
being first obligated to give prior timely notice to both the New
Partners about the planned transfer, fully indicating the terms and
conditions of the transfer operation and any possible outside
agreements (of blockage and vote) with the buyers. Within 30 (thirty)
Business Days of receipt of the aforementioned communication, UCI
and/or BCI will, individually, have the right to sell to Pirelli,
which, upon simple request, will have the corresponding obligation to
acquire, respectively, all but not part of the Olimpia UCI Holding
and/or all but not part of the Olimpia BCI Holding held by the New
Partner that exercised the Option
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Right set forth herein, under terms and conditions determined,
mutatis mutandis, pursuant to paragraph 7.05 (b) above, with the
understanding, including in an aleatory manner, that the price owed
by Pirelli will not be lower than the amounts paid by the New Partner
for the acquisitions and subscriptions of shares in the Company, less
any dividends received ("FLOOR").
ARTICLE XII
GENERAL PROVISIONS
12.01 Amendments.
Any amendment to this Instrument will be valid and binding only if it
arises from a written document signed by each of the Parties
concerned.
12.02 Communications and Notices.
Any communication required or allowed by the provisions of this
Instrument must be made in writing, and will be deemed efficiently
and validly made upon its receipt, if sent by letter or telegram, or
at the time of the acknowledgement of receipt by the appropriate
declaration (including by fax), if by fax, provided it is addressed
as follows:
(i) if to UCI, to the following address:
Xxx Xxx Xxxxxxx Xx. 0
00000 MILAN
Attn.: Xx. Xxxxxx Xxxxxxx
Fax No. 00-00000000
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(ii) if to BCI, to the following address:
Piazza Xxxxx Xxxxxxx No. 11
20121 MILAN
Attn.: Managing Director Xxxx Xxxxxxx
Fax No. 00-00000000
(iii) if to Pirelli, to the following address:
Xxxxx Xxxxx Xx. 000
00000 MILAN
Attn.: Xx. Xxxxx Xxxxx
Fax No. 00-00000000
or to a different address, which each Party has the right to
communicate to the other, by the methods set forth in this paragraph
12.02; it is understood that the aforementioned addresses or
different addresses that may be communicated in the future, are also
elected by the Parties as their own domicile for al aspects related
to this Instrument, including possible legal notices or notices
related to the arbitration proceeding referred to in Article XIII
below.
12.03 Tolerance.
Any possible tolerance of acts committed in violation of the
provisions hereof does not constitute a waiver of the rights arising
from the provisions violated, nor of the right to require exact
performance of all terms and conditions hereof.
12.04 Headings.
The headings of the individual articles are included for the sole
purpose of facilitating their reading and therefore must not be
30
taken into consideration in any way for the interpretation of this
Instrument.
12.05 Allocation of Option Rights.
The Parties mutually acknowledge and agree that the compensation for
the mutual rights to buy and sell governed by this Instrument was
considered in the framework of the transfer values and prices of the
respective holdings, so that, for the allocation of said rights, no
further and other compensation is planned or intended.
12.06 Exercise of Rights and Performance of Obligations.
It is understood that (i) all rights allocated under this Instrument
to UCI and BCI must be deemed enforceable also individually, whenever
not otherwise specified in this Instrument, and the failure to
exercise its right by one of the New Partners may not be interpreted
as a waiver thereof; (ii) in the event of failure to exercise or
waiver by one of the New Partners of the right to designate a
director, this right may be exercised in its stead by the other New
Partner, in addition to its own right; (iii) all obligations
undertaken by the New Partners in this Instrument are individual and
not joint.
ARTICLE XIII
DISPUTES
13.01 Arbitration.
Any dispute arising from this Instrument, or from possible execution,
amendment or expending agreements, will be
31
submitted to the unappealable judgment of an Arbitration Board made
up of five arbitrators, who will decide without procedural
formalities, in compliance with the principle of hearing both
parties, but will apply Italian substantive law. The arbitration will
be formal pursuant to the provisions of the Code of Civil procedure
and will be conducted in Milan.
13.02 Appointment of the Arbitrators.
(a) The Party which requests the beginning of the arbitration
proceeding must indicate its claims, at least in general
lines.
(b) The Party which begins the arbitration proceeding must
designate its own arbitrator at the same time, under penalty
of invalidity. Each of the Parties called to arbitration must
designate its own arbitrator within twenty (20) calendar days.
The three arbitrators of the parties will designate the fourth
and fifth arbitrator by mutual consent, indicating the
arbitrator who will fill the position of President of the
Arbitration Board. Whenever the arbitrators appointed as
indicated above cannot reach an agreement on the appointment
of the fourth and/or fifth arbitrator within twenty (20)
calendar days of the appointment of the second arbitrator, he
(they) will be appointed by the Chief Justice of the Court of
Milan, who will take the position if the Party(s) called to
arbitration fails (fail) to appoint its (their) own arbitrator
within the aforementioned term.
If the dispute concerns only two parties, the Parties calling
the arbitration proceeding must designate its own arbitrator
at the same time, under penalty of invalidity. The Party
called to arbitration must designate its own arbitrator within
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twenty (20) calendar days. The arbitrators so appointed will
designate the third arbitrator by mutual consent, to fill the
position of President of the Arbitration Board. Whenever one
of the parties fails to appoint its own arbitrator in a timely
fashion, or whenever the two arbitrators appointed fail to
designate the third arbitrator within twenty (20) calendar
days of the appointment of the second arbitrator, he will be
appointed by the Chief Justice of the Court of Milan.
Whenever the dispute involves more than two parties, the Board
will be made up of three arbitrators appointed by the same
methods indicated in the preceding section, in the event that
the parties spontaneously regroup into two opposed centers of
interest.
13.02 Court of Jurisdiction.
Without prejudice to the above, it is agreed that any lawsuit related
to this Instrument will be under the exclusive jurisdiction of the
Court of Milan."
***
If you agree with all of the above, please send us a letter
reproducing the content hereof, signed by you in token of confirmation and
agreement. Best regards.
UniCredito Italiano S.p.A. IntesaBCI S.p.A.
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