EXHIBIT 5
EURO 1,000,000,000
CREDIT AGREEMENT
FOR
PIRELLI S.P.A.
PROVIDED BY
CITIBANK, N.A.
ARRANGED BY
SALOMON BROTHERS INTERNATIONAL LIMITED
NY2:\1076790\01\N2%%01!.DOC\67793.0001
INDEX
CLAUSE HEADING
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1. INTERPRETATION
2. THE FACILITY
3. PURPOSE
4. CONDITIONS PRECEDENT
5. UTILISATION OF THE FACILITY
6. INTEREST
7. MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
8. REPAYMENT
9. CANCELLATION
10. TAXES
11. TAX RECEIPTS
12. INCREASED COSTS
13. ILLEGALITY
14. REPRESENTATIONS
15. FINANCIAL INFORMATION
16. [INTENTIONALLY LEFT BLANK]
17. COVENANTS
18. EVENTS OF DEFAULT
19. DEFAULT INTEREST AND INDEMNITY
20. CURRENCY OF ACCOUNT AND PAYMENT
21. PAYMENTS
22. [INTENTIONALLY LEFT BANK]
23. FEES
24. COSTS AND EXPENSES
25. BENEFIT OF AGREEMENT
26. ASSIGNMENTS
27. DISCLOSURE OF INFORMATION
28. CALCULATION AND EVIDENCE OF DEBT
29. ROLE OF THE ARRANGER
30. REMEDIES AND WAIVERS
31. PARTIAL INVALIDITY
32. NOTICES
33. EUROPEAN MONETARY UNION
i
34. LANGUAGE
35. GOVERNING LAW
36. ENFORCEMENT
37. COUNTERPARTS
ii
THIS AGREEMENT is made this 9th day of August, 2001
BY
(1) PIRELLI S.P.A. incorporated under the laws of Italy registered with the
Companies' Registrar of Milan No. 00886890151 and having its registered
address at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ (the "BORROWER");
(2) CITIBANK, N.A. (MILAN BRANCH) (the "BANK"); and
(3) SALOMON BROTHERS INTERNATIONAL LIMITED (the "ARRANGER").
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement:
"ADVANCE" means, save as otherwise provided herein, an advance
made or to be made by the Bank hereunder;
"AMOUNT" means, in relation to any Advance, the amount thereof
requested in the Notice of Drawdown relating thereto;
"AVAILABLE FACILITY" means, at any time and save as otherwise
provided herein, the Bank's Commitment at such time less the
aggregate amount of the Advances which are then outstanding
and not due for repayment;
"COMMITMENT" means, in relation to the Bank at any time and
save as otherwise provided herein euro 1,000,000,000;
"COMMITMENT PERIOD" means the period commencing on the date of
this Agreement and ending on the date falling 364 days after
the date of this Agreement;
"EURIBOR" means, in relation to any Advance or unpaid sum, the
rate per annum at which the Bank was offering to prime banks
in the European Interbank Market deposits in the currency in
which such Advance or unpaid sum is to be denominated and for
the specified period at or about 11.00 a.m. (Brussels time) on
the Quotation Date for such period and, for the purposes of
this definition, "SPECIFIED PERIOD" means the Term of such
Advance or, as the case may be, the period in respect of which
EURIBOR falls to be determined in relation to such unpaid sum;
"EURO" has the meaning given to it in Clause 33;
"EVENT OF DEFAULT" means, any of those events specified in
Clause 18.1;
"FACILITY" means the credit facility granted to the Borrower
pursuant to this Agreement;
"FACILITY OFFICE" means the office identified with the Bank's
signature below or such other office as it may from time to
time notify to the Borrower;
"GROUP" means, the Borrower and each of its subsidiaries for
the time being;
"MARGIN" means 0.20 per cent per annum;
"MATERIAL MEMBER OF THE GROUP" means the Borrower and any
subsidiary of the Borrower other than NewCo (except in
relation to (d) below) whose gross assets (excluding
intra-Group items) then equal or exceed 5 per cent. of the
gross assets of the Group. For this purpose:
(a) the gross assets of a subsidiary of the Borrower will
be determined from its financial statements
(unconsolidated if it has subsidiaries) upon which
the latest audited financial statements of the Group
have been based;
(b) if a subsidiary of the Borrower becomes a member of
the Group after the date on which the latest audited
financial statements of the Group have been prepared,
the gross assets of that subsidiary will be
determined from its latest financial statements;
(c) the gross assets of the Group will be determined from
its latest audited financial statements, adjusted
(where appropriate) to reflect the gross assets of
any company or business subsequently acquired or
disposed of; and
(d) if a Material Member of the Group disposes of all or
substantially all of its assets to another subsidiary
of the Borrower, it will immediately cease to be a
Material Member of the Group and the other subsidiary
(including for these purposes NewCo) will immediately
become a Material Member of the Group (if it is not
already); the subsequent financial statements of
those subsidiaries and the Group will be used to
determine whether those subsidiaries are Material
Members of the Group or not.
If there is a dispute as to whether or not a company is a
Material Member of the Group, a certificate of the auditors of
the Borrower will be, in the absence of manifest error,
conclusive.
"NEWCO" means the acquisition vehicle used for the Olivetti
Acquisition;
"NEWCO FACILITY" means the proposed new facility to be made
available to NewCo for the purposes of providing finance for
the Olivetti Acquisition;
"NOTICE OF DRAWDOWN" means a notice substantially in the form
set out in the Second Schedule;
"OLIVETTI ACQUISITION" has the meaning given to it in Clause
3;
"ORIGINAL CONSOLIDATED FINANCIAL STATEMENTS" means, the
audited consolidated financial statements of the Group for its
financial year ended 31st December, 2000;
"PERMITTED ENCUMBRANCE" means:
(i) any encumbrance over assets acquired after the date
hereof granted in favour of a national export credit
institution or other like governmental or
international agency;
(ii) any encumbrance arising pursuant to an order of
attachment or injunction restraining disposal of
assets or similar legal process arising in connection
with court proceedings being contested by the
Borrower in good faith;
(iii) any encumbrance arising solely by operation of law in
the ordinary course of trade or contained in any
contract for the purchase or sale of goods or
services entered into in the ordinary course of the
trade of the company creating the same;
(iv) any encumbrance over assets of NewCo or its
subsidiaries securing indebtedness under the NewCo
Facility;
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(v) any encumbrance in existence on the date hereof,
provided the amount secured thereby is not
subsequently increased; and
(vi) other encumbrances securing an aggregate principal
amount of not more than euro 500,000,000.
"POTENTIAL EVENT OF DEFAULT" means, any event which with the
expiry of a grace period or the giving of a notice (in each
case as specified in Clause 18) would be an Event of Default;
"QUOTATION DATE" means, in relation to any period for which an
interest rate is to be determined hereunder, the day on which
quotations would ordinarily be given by prime banks in the
European Interbank Market for deposits in euro on the first
day of that period Provided that, if for any such period
quotations would ordinarily be given on more than one date,
the Quotation Date for that period shall be the last of those
dates;
"REPAYMENT DATE" means, in relation to any Advance, the last
day of the Term thereof;
"TERM" means, in relation to any Advance, save as otherwise
provided herein, the period for which such Advance is borrowed
as specified in the Notice of Drawdown relating thereto;
"TERMINATION DATE" means the date falling 364 days after the
date of this Agreement;
"TRANSFER CERTIFICATE" means a certificate substantially in
the form of the Third Schedule; and
"TRANSFER DATE" means the date specified in a Transfer
Certificate upon which the transfer of rights and obligations
constituted thereby is to become effective;
"TRANSFEREE" means any person to whom the Bank assigns or
otherwise transfers all or any of its rights and obligations
under this agreement in accordance with Clause 26;
"VAT" means value added tax or any similar tax.
1.2 Any reference in this Agreement to:
the "BANK" shall be construed so as to include its and any
subsequent successors, transferees and assigns in accordance
with their respective interest;
a "BUSINESS DAY" shall be construed as a reference to a day
(other than a Saturday, Sunday or bank holiday) on which banks
are generally open for business (a) in London and Milan, and
(b) in relation to payment of an Advance in euros, London and
a day on which the Trans-European Automated Real-time Cross
Settlement Express Transfer System (TARGET) is operating;
a "CLAUSE" shall, subject to any contrary indication, be
construed as a reference to a clause hereof;
an "ENCUMBRANCE" shall be construed as a reference to a
mortgage, charge, pledge, lien, hypothecation or other
security interest securing any obligation of any person or any
other type of preferential arrangement (including, without
limitation, title transfer and retention arrangements) having
a similar effect;
the "EQUIVALENT" on any given date in one currency (the "FIRST
CURRENCY") of an amount denominated in another currency (the
"SECOND CURRENCY") is a reference to the amount of the first
currency which could be purchased with the amount of the
second currency at the spot rate of exchange quoted by the
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Bank at or about 11.00 a.m. on such date for the purchase of
the first currency with the second currency;
a "HOLDING COMPANY" of a company or corporation shall be
construed as a reference to any company or corporation of
which the first-mentioned company or corporation is a
subsidiary;
"INDEBTEDNESS" shall be construed so as to include any
obligation (whether incurred as principal or as surety) for
the payment or repayment of money, whether present or future,
actual or contingent;
"INDEBTEDNESS FOR BORROWED MONEY" shall be construed so as to
include any indebtedness of any person for or in respect of:-
(i) money borrowed or raised and premiums (if any) and
capitalised interest in respect thereof;
(ii) the principal and premiums (if any) and capitalised
interest in respect of any debenture, bond, note,
loan stock or similar instrument;
(iii) liabilities in respect of any letter of credit,
acceptance credit, ▇▇▇▇ discounting or note purchase
facility and any receivables purchase, factoring or
discounting arrangement (whether or not with recourse
to any member of the Group);
(iv) rental or hire payments under leases or hire purchase
agreements (whether in respect of land, machinery
equipment or otherwise) entered into primarily for
the purpose of raising finance;
(v) the deferred purchase price of assets or services in
respect of transactions which have the commercial
effect of borrowing or which otherwise finance its or
any of its subsidiaries, operations or capital
requirements (except any such arrangement entered
into in the ordinary and usual course of trading and
having a term not exceeding 90 days from the date on
which the liability was originally incurred);
(vi) liabilities in respect of any foreign exchange
agreement, currency or interest purchase or swap
transactions or similar arrangements;
(vii) all obligations to purchase, redeem, retire, defease
or otherwise acquire for value any share capital of
any person or any warrants, rights or options to
acquire such share capital in respect of transactions
which have the commercial effect of borrowing or
which otherwise finance its or any of its
subsidiaries, operations or capital requirements;
(viii) any other transactions having the commercial effect
of borrowing entered into by any person to finance
its operations or capital requirements; and
(ix) all indebtedness for borrowed money of other persons
referred to in paragraphs (i) to (viii) above
guaranteed directly or indirectly in any manner by
such person, or having the commercial effect of being
guaranteed directly or indirectly by such person by
virtue of an agreement (a) to pay or purchase such
indebtedness for borrowed money or to advance or
supply funds for the payment or purchase of such
indebtedness for borrowed money, (b) to purchase or
lease (as lessee) property, or to purchase services,
primarily for the purpose of enabling the debtor to
make payment of such indebtedness for borrowed money,
(c) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for
property or services irrespective of whether such
property is received or such services are rendered)
or (d) otherwise to assure any person to whom
4
indebtedness for borrowed money is owed against loss
with respect thereto;
a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day
in the next succeeding calendar month save that, where any
such period would otherwise end on a day which is not a
business day, it shall end on the next succeeding business
day, unless that day falls in the calendar month succeeding
that in which it would otherwise have ended, in which case it
shall end on the immediately preceding business day Provided
that, if a period starts on the last business day in a
calendar month or if there is no numerically corresponding day
in the month in which that period ends, that period shall end
on the last business day in that later month (and reference to
"MONTHS" shall be construed accordingly);
a "PERSON" shall be construed as a reference to any person,
firm, company, corporation, government, state or agency of a
state or any association or partnership (whether or not having
separate legal personality) of two or more of the foregoing;
a "SCHEDULE" shall, subject to any contrary indication, be
construed as a reference to a schedule hereto;
a "SUBSIDIARY" of a company or corporation shall be construed
as a reference to any company or corporation:
(i) which is controlled, directly or indirectly, by the
first-mentioned company or corporation; or
(ii) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the
first-mentioned company or corporation; or
(iii) which is a subsidiary of another subsidiary of the
first-mentioned company or corporation,
and for these purposes, a company or corporation shall be
treated as being controlled by another if that other company
or corporation is able to direct its affairs and/or to control
the composition of its board of directors or equivalent body;
"TAX" shall be construed so as to include any tax, levy,
impost, duty or other charge of a similar nature (including,
without limitation, any penalty or interest payable in
connection with any failure to pay or any delay in paying any
of the same);
"VAT" shall be construed as a reference to valued added tax
including any similar tax which may be imposed in place
thereof from time to time; and
the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of a
company or corporation shall be construed so as to include any
equivalent or analogous proceedings or proceedings with a
similar or analogous effect under the law of the jurisdiction
in which such company or corporation is incorporated or any
jurisdiction in which such company or corporation carries on
business including the seeking of liquidation, winding-up,
reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors.
1.3 Save where the contrary is indicated, any reference in this
Agreement to:
(i) this Agreement or any other agreement or document
shall be construed as a reference to this Agreement
or, as the case may be, such other agreement or
document as the same may have been, or may from time
to time be, amended, varied, novated or supplemented;
5
(ii) a statute shall be construed as a reference to such
statute as the same may have been, or may from time
to time be, amended or re-enacted; and
(iii) a time of day shall be construed as a reference to
London time.
1.4 Clause and Schedule headings are for ease of reference only.
2. THE FACILITY
The Bank grants to the Borrower through the Facility Office, upon the
terms and subject to the conditions hereof, a euro credit facility in
an aggregate amount of the Commitment.
3. PURPOSE
3.1 The Facility is intended for the purposes of supporting the
Group's commercial paper programmes and the general corporate
purposes of the Group (but not including acquisitions other
than the direct or indirect acquisition of a less than 30%
interest in Olivetti S.p.A. under the transaction announced on
28th July, 2001 (the "Olivetti Acquisition")) and,
accordingly, the Borrower shall apply all amounts raised by it
hereunder in or towards those purposes only.
3.2 Without prejudice to the obligations of the Borrower under
Clause 3.1, the Bank shall not be obliged to concern itself
with the application of amounts raised by the Borrower
hereunder.
4. CONDITIONS PRECEDENT
Save as the Bank may otherwise agree, the Borrower may not deliver any
Notice of Drawdown hereunder unless the Bank has confirmed to the
Borrower that it has received all of the documents listed in the First
Schedule and that each is, in form and substance, satisfactory to the
Bank. The Bank will give this confirmation promptly after receiving
such documents in form and substance satisfactory to it.
5. UTILISATION OF THE FACILITY
5.1 Save as otherwise provided herein, the Borrower may from time
to time request the making of an Advance under the Facility by
the delivery to the Bank, not later than 11.00 a.m. on the
business day before the Quotation Date for the proposed
Advance, of a duly completed Notice of Drawdown.
5.2 Each Notice of Drawdown delivered to the Bank pursuant to
Clause 5.1 shall be irrevocable and shall specify:
(i) the proposed date for the making of the Advance
requested, which shall be any business day falling
before the Termination Date;
(ii) the amount of the Advance requested, which shall be
an amount or integral multiple of euro 10,000,000
which shall not exceed the Availability Facility;
(iii) the proposed Term of the Advance requested, which
shall be a period of one, three or six months or such
other period as the Bank (in its absolute discretion)
may agree, provided that the Repayment Date shall be
no later than the Termination Date; and
(iv) the account to which the proceeds of the proposed
drawdown are to be paid.
5.3 If the Borrower requests an Advance in accordance with the
preceding provisions of this Clause 5 and, on the proposed
date for the making of such Advance:
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(i) the event mentioned in Clause 7 shall not have
occurred;
(ii) the Amount of such Advance does not exceed the
Available Facility;
(iii) either:
(a)(1) no Event of Default or Potential Event
of Default has occurred and is continuing;
and
(2) the representations set out in Clause 14 are
true on and as of the proposed date for the
making of such Advance; or
(b) the Bank agrees (notwithstanding any matter
mentioned at (1) or (2) above to make such
Advance,
then, save as otherwise provided herein, such Advance will be
made in accordance with the provisions hereof.
6. INTEREST
6.1 On the Repayment Date relating to each Advance the Borrower
shall pay accrued interest on that Advance.
6.2 The rate of interest applicable to an Advance from time to
time during its Term shall be the rate per annum which is the
sum of the Margin and EURIBOR on the Quotation Date therefor.
7. MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
If, at or about 11.00 a.m. on the Quotation Date for the Term in
respect of an Advance the Bank was, by reason of circumstances
affecting the European Interbank Market, not offering to prime banks in
the European Interbank Market deposits in euro for the proposed
duration of such Term, then, notwithstanding the provisions of Clause
6:
(i) the Bank shall notify the Borrower of such event;
(ii) such Advance shall not be made; and
(iii) if the Bank so requires, within five days of such notification
the Bank and the Borrower shall enter into negotiations with a
view to agreeing a substitute basis for determining the rates
of interest which may be applicable to Advances in the future
and any such substitute basis that is agreed shall take effect
in accordance with its terms and be binding on the Borrower
and the Bank.
8. REPAYMENT
8.1 The Borrower shall repay each Advance made to it in full on
the Repayment Date relating thereto, provided that the
Borrower shall repay all Advances outstanding hereunder by the
Termination Date.
8.2 The Borrower shall not repay all or any part of any Advance
outstanding hereunder except at the times and in the manner
expressly provided herein but, subject to the terms and
conditions hereof, shall be entitled to reborrow any amount
repaid.
7
9. CANCELLATION
9.1 The Borrower may, by giving to the Bank not less than thirty
days' prior notice to that effect, cancel the whole or any
part (being an amount or integral multiple of euro 10,000,000)
of the Bank's Commitment to the extent of the Available
Facility at the date such notice is given.
9.2 Any notice of cancellation given by the Borrower pursuant to
Clause 9.1 shall be irrevocable and shall specify the date
upon which such cancellation is to be made and the amount of
such cancellation.
10. TAXES
10.1 All payments to be made by the Borrower to the Bank hereunder
shall be made free and clear of and without deduction for or
on account of tax unless the Borrower is required to make such
a payment subject to the deduction or withholding of tax, in
which case the sum payable by the Borrower in respect of which
such deduction or withholding is required to be made shall be
increased to the extent necessary to ensure that, after the
making of the required deduction or withholding, the Bank
receives and retains (free from any liability in respect of
any such deduction or withholding) a net sum equal to the sum
which it would have received and so retained had no such
deduction or withholding been made or required to be made.
10.2 Without prejudice to the provisions of Clause 10.1, if the
Bank is required to make any payment on account of tax (not
being a tax imposed on the net income of the Facility Office
by the jurisdiction in which it is incorporated or in which
the Facility Office is located) or otherwise on or in relation
to any sum received or receivable by it hereunder (including,
without limitation, any sum received or receivable under this
Clause 10) or any liability in respect of any such payment is
asserted, imposed, levied or assessed against the Bank, the
Borrower shall, upon demand of the Bank, promptly indemnify
the Bank against such payment or liability, together with any
interest, penalties and expenses payable or incurred in
connection therewith.
10.3 If the Bank intends to make a claim pursuant to Clause 10.2,
it shall notify the Borrower of the event by reason of which
it is entitled to make such claim Provided that nothing herein
shall require the Bank to disclose any confidential
information relating to the organisation of its affairs.
11. TAX RECEIPTS
11.1 If, at any time, the Borrower is required by law to make any
deduction or withholding from any sum payable by it hereunder
(or if thereafter there is any change in the rates at which or
the manner in which such deductions or withholdings are
calculated), the Borrower shall promptly notify the Bank.
11.2 If the Borrower makes any payment hereunder in respect of
which it is required to make any deduction or withholding, it
shall pay the full amount required to be deducted or withheld
to the relevant taxation or other authority within the time
allowed for such payment under applicable law and shall
deliver to the Bank, within thirty days after it has made such
payment to the applicable authority, an original receipt (or a
certified copy thereof) issued by such authority evidencing
the payment to such authority of all amounts so required to be
deducted or withheld in respect of such payment.
12. INCREASED COSTS
12.1 If, by reason of (i) any change in law or in its
interpretation or administration and/or (ii) compliance with
any request from or requirement of any central bank or other
fiscal, monetary or other authority (including, without
limitation, a request or requirement which affects the manner
in which the Bank or any holding company of the Bank is
required to or does maintain capital resources having regard
8
to such Bank's obligations hereunder and to amounts owing to
it hereunder):
(a) the Bank or any holding company of the Bank incurs a
cost as a result of the Bank's having entered into
and/or performing its obligations under this
Agreement and/or assuming or maintaining a commitment
under this Agreement and/or making one or more
Advances;
(b) there is any increase in the cost to the Bank or any
holding company of the Bank of funding or maintaining
all or any of the advances comprised in a class of
advances formed by or including the Advances; or
(c) the Bank or any holding company of the Bank becomes
liable to make any payment on account of tax or
otherwise (not being a tax imposed on the net income
of the Bank's Facility Office by the jurisdiction in
which it is incorporated or in which the Facility
Office is located) on or calculated by reference to
the amount of the Advances and/or to any sum received
or receivable by it hereunder,
then the Borrower shall, from time to time on demand of the
Bank, promptly pay to the Bank amounts sufficient to indemnify
it or reimburse any such holding company against, as the case
may be, (1) such cost, (2) such reduction in such rate of
return (or such proportion of such reduction as is, in the
opinion of the Bank, attributable to its obligations
hereunder), (3) such increased cost (or such proportion of
such increased cost as is, in the opinion of the Bank,
attributable to its funding or maintaining Advances) or (4)
such liability.
12.2 If the Bank intends to make a claim pursuant to Clause 12.1,
it shall notify the Borrower of the event by reason of which
it is entitled to do so Provided that nothing herein shall
require the Bank to disclose any confidential information
relating to the organisation of its affairs.
12.3 The Bank shall not be entitled to recover any amounts under
this Clause 12 already recovered from the Borrower under
Clause 10.
13. ILLEGALITY
13.1 If, at any time, it is unlawful (or will become unlawful on a
future specified date) for the Bank to make, fund or allow to
remain outstanding all or any of the Advances, then the Bank
shall, promptly after becoming aware of the same, deliver to
the Borrower a certificate to that effect and:
(i) the Bank shall not thereafter be obliged to make any Advances
and the amount of its Commitment shall be immediately reduced
to zero; and
(ii) the Borrower shall on the earlier of such date as the Bank
shall specify and the date upon which the relative law or
regulation comes into effect, repay each outstanding Advance
together with accrued interest thereon and all other amounts
owing to the Bank hereunder.
13.2 If, at any time, it is or becomes unlawful for the Borrower to
comply with any or all of its obligations hereunder or any of
the obligations of the Borrower hereunder are not or cease to
be legal, valid and binding, then the Bank may by written
notice to the Borrower:
(i) cancel the Commitment; and
(ii) require that the Borrower repays all outstanding Advances
together with accrued interest thereon and all other amounts
owing to the Bank under this Agreement.
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Any such notice from the Bank will take effect in accordance
with its terms.
14. REPRESENTATIONS
14.1 The Borrower represents and warrants that:
(i) it is a corporation duly organised under the laws of
Italy with power to enter into this Agreement and to
exercise its rights and perform its obligations
hereunder and all corporate and other action required
to authorise its execution of this Agreement and its
performance of its obligations hereunder has been
duly taken;
(ii) under the laws of Italy in force at the date hereof,
it will not be required to make any deduction or
withholding from any payment it may make hereunder;
(iii) the claims of the Bank against the Borrower under
this Agreement will rank at least pari passu with the
claims of all its other unsecured creditors save
those whose claims are preferred solely by any
bankruptcy, insolvency, liquidation or other similar
laws of general application;
(iv) in any proceedings taken in Italy in relation to this
Agreement, it will not be entitled to claim for
itself or any of its assets immunity from suit,
execution, attachment or other legal process;
(v) all acts, conditions and things required to be done,
fulfilled and performed in order (a) to enable it
lawfully to enter into, exercise its rights under and
perform and comply with the obligations expressed to
be assumed by it in this Agreement, (b) to ensure
that the obligations expressed to be assumed by it in
this Agreement are legal, valid and binding and (c)
to make this Agreement admissible in evidence in
England have been done, fulfilled and performed;
(vi) under the laws of Italy in force at the date hereof,
it is not necessary for the enforceability of this
Agreement that this Agreement be filed, recorded or
enrolled with any court or other authority in Italy
or that any stamp, registration or similar tax be
paid on or in relation to this Agreement; and
(vii) the obligations expressed to be assumed by it in this
Agreement are legal and valid obligations binding on
it in accordance with the terms hereof.
14.2 The Borrower further represents and warrants that:
(i) no member of the Group has taken any corporate action
nor have any other steps been taken or legal
proceedings been started or (to the best of the
Borrower's knowledge and belief, having made all
reasonable enquiry) threatened against any member of
the Group for its winding-up, dissolution,
administration or re-organisation or for the
appointment of a receiver, administrator,
administrative receiver, trustee or similar officer
of it or of any or all of its assets or revenues;
(ii) no member of the Group is in breach of or in default
under any material agreement to which it is a party
or which is binding on it or any of its assets;
(iii) no investigation or action with a reasonable prospect
of success or administrative proceeding of or before
any court or agency which (i) could be reasonably
likely to have a material adverse effect on the
business, condition (financial or otherwise) or
results of operations of any member of the Group or
the ability of the Borrower to perform its
obligations hereunder or (ii) purports to affect the
legality, validity or enforceability of this
Agreement;
10
(iv) the Original Consolidated Financial Statements were
prepared in accordance with all applicable laws and
accounting principles generally accepted in Italy and
consistently applied and were were audited by
PriceWaterhouseCoopers;
(v) since publication of the Original Consolidated
Financial Statements, there has been no material
adverse change in the business, condition (financial
or otherwise) or results of operations of any member
of the Group;
(vi) as at the date as of which the Original Consolidated
Finance Statements were prepared no member of the
Group had any liabilities (contingent or otherwise)
which were not disclosed thereby (or by the notes
thereto) or reserved against therein nor any
unrealised or anticipated losses arising from
commitments entered into by it which were not so
disclosed or reserved against;
(vii) all of the written information supplied by any member
of the Group to the Bank in connection herewith is
true, complete and accurate in all material respects
and it is not aware of any material facts or
circumstances that have not been disclosed to the
Bank and which might, if disclosed, adversely affect
the decision of a person considering whether or not
to provide finance to the Borrower;
(viii) save as permitted by Clause 17.2(i), no encumbrance
exists over all or any of the present or future
revenues or assets of any member of the Group;
(ix) the execution of this Agreement and its exercise of
its rights and performance of its obligations
hereunder will not result in the existence of nor
oblige any member of the Group to create any
encumbrance over all or any of its present or future
revenues or assets; and
(x) the execution of this Agreement and its exercise of
its rights and performance of its obligations
hereunder do not and will not:
(a) conflict with any agreement, mortgage, bond
or other instrument or treaty to which it is
a party or which is binding upon it or any
of its assets;
(b) conflict with its constitutive documents and
rules and regulations; or
(c) conflict with any applicable law, regulation
or official or judicial order.
14.3 Each of the representations and warranties constituted in
Clauses 14.1 and 14.2 shall survive the execution of this
Agreement, are made on the date hereof and shall be deemed to
be repeated on the last day of each Interest Period and the
first day of each Term with reference in each case to the
facts and circumstances then subsisting.
15. FINANCIAL INFORMATION
15.1 The Borrower shall:
(i) as soon as the same become available, but in any
event within 60 days after their approval by a
shareholders' meeting of the Borrower, deliver to the
Bank the audited consolidated financial statements of
the Group for each financial year;
(ii) as soon as the same become available, but in any
event within 60 days after the approval by the board
of directors of the Borrower, deliver to the Bank the
consolidated financial statements of the Group for
each half of each of its financial years; and
11
(iii) from time to time on the request of the Bank, furnish
the Bank with such information about the business and
financial condition of the Group as the Bank may
reasonably require.
15.2 The Borrower shall ensure that:
(i) each set of financial statements delivered by it
pursuant to Clause 15.1 is prepared on the same basis
and in accordance with all applicable laws and with
the same accounting principles as were used in the
preparation of the Original Consolidated Financial
Statements and in accordance with accounting
principles generally accepted in Italy and
consistently applied; and
(ii) each set of financial statements delivered by it
pursuant to paragraph (i) of Clause 15.1 has been
audited by auditors of international repute.
16. [INTENTIONALLY LEFT BLANK]
17. COVENANTS
17.1 The Borrower shall:
(i) obtain, comply with the terms of and do all that is
necessary to maintain in full force and effect all
authorisations, approvals, licences and consents
required in or by the laws and regulations of Italy,
and any other applicable jurisdiction to enable it
lawfully to enter into and perform its obligations
under this Agreement or to ensure the legality,
validity, enforceability or admissibility in evidence
in England of this Agreement;
(ii) procure that each member of the Group maintains
insurance's on and in relation to its business and
assets with reputable underwriters or insurance
companies against such risks and to such extent as is
usual for companies carrying on a business such as
that carried on by such member of the Group whose
practice is not to self insure;
(iii) after the delivery of any Notice of Drawdown and
before the proposed making of the Advance requested
therein, notify the Bank of the occurrence of any
event which results in or may reasonably be expected
to result in any of the representations contained in
Clause 14 being untrue at or before the time of the
proposed making of such Advance;
(iv) promptly inform the Bank of the occurrence of any
Event of Default or Potential Event of Default and,
upon receipt of a written request to that effect from
the Bank, confirm to the Bank that, save as
previously notified to the Bank or as notified in
such confirmation, no Event of Default or Potential
Event of Default has occurred;
(v) ensure that at all times the claims of the Bank
against it under this Agreement rank at least pari
passu with the claims of all its other unsecured
creditors save those whose claims are preferred by
any bankruptcy, insolvency, liquidation or other
similar laws of general application; and
(vi) comply with and procure that each other member of the
Group complies with all applicable laws (including,
without limitation, environmental laws).
17.2 The Borrower shall ensure that no member of the Group shall,
without the prior written consent of the Bank (not to be
unreasonably withheld or delayed):
12
(i) create or permit to subsist any encumbrance over all
or any of its present or future revenues or assets
other than a Permitted Encumbrance;
(ii) make any loans, grant any credit or give any
guarantee or indemnity (save in any case in the
ordinary course of business, provided that the
Borrower may not give any guarantee or indemnity in
respect of the NewCo Facility) to or for the benefit
of any person or otherwise voluntarily assume any
liability, whether actual or contingent, in respect
of any obligation of any other person; or
(iii) (disregarding sales of stock in the ordinary course
of trade) sell, lease, transfer or otherwise dispose
of, by one or more transactions or series of
transactions (whether related or not), the whole or
any part (the book value of which is five per cent or
more of the book value of the whole) of its revenues
or its assets, save where such disposal is either:
(1) of obsolete assets sold at market value on
arms length terms;
(2) of assets disposed of on arms length terms
at market value where the proceeds of sale
are applied in or towards the acquisition of
substantially similar assets;
(3) a disposal which has been announced by the
Borrower before the date of this Agreement
("announced disposals") or of other assets
where the aggregate book value of all assets
disposed of under this sub-paragraph (3)
does not exceed the aggregate book value of
the assets the subject of the announced
disposals;
(4) a disposal (not being a disposal covered by
the previous provisions of this paragraph
(iii)) of assets on arms length terms at
market value where the aggregate book value
of such assets disposed of over the life of
the Facility does not exceed 10% of the
gross assets of the Group as shown in the
Original Consolidated Financial Statements.
17.3 If the Borrower has or incurs any indebtedness for borrowed
money secured by an encumbrance or any of the Borrower's
subsidiaries shall have or incur any indebtedness for borrowed
money, other than:
(a) indebtedness for borrowed money of any person
acquired by a member of the Group under arrangements
in existence at the date of acquisition, provided
those arrangements are not entered into in
contemplation of the acquisition and the amount
available to be borrowed thereunder is not
subsequently increased;
(b) any derivative transaction protecting against or
benefiting from fluctuations in any rate or price
entered into in the ordinary course of business;
(c) indebtedness of NewCo and its subsidiaries under the
NewCo Facility in an aggregate principal amount not
exceeding euro 3,500,000,000; and
(d) any indebtedness for borrowed money in addition to
that specified in paragraphs (a)-(c) above, in an
aggregate principal amount not exceeding euro
2,000,000,000,
then the Borrower will promptly notify the Bank. Following
notice under this Clause 17.3, the Bank may, by notice to the
Borrower, cancel the Commitment and require that the Borrower
repays all outstanding Advances together with all accrued
interest thereon and all other amounts owing to the Bank under
this Agreement. Any such notice from the Bank will take effect
in accordance with its terms.
13
17.4 The Borrower shall not enter into any amalgamation, demerger,
merger or reconstruction otherwise than under a transaction
agreed by the Bank unless it notifies the Bank in writing of
the relevant transaction on or immediately after its official
announcement or, if earlier, its consummation. Following
notice under this Clause 17.4, the Bank may by notice to the
Borrower, cancel the Commitment and require that the Borrower
repays all outstanding Advances together with all accrued
interest thereon and all other amounts owing to the Bank under
this Agreement. Any such notice from the Bank will take effect
in accordance with its terms.
18. EVENTS OF DEFAULT
18.1 If:
(i) the Borrower fails to pay any sum due from it
hereunder at the time, in the currency and in the
manner specified herein; or
(ii) any representation or statement made or deemed to be
made by the Borrower in this Agreement or in any
notice or other document, certificate or statement
delivered by it pursuant hereto or in connection
herewith is or proves to have been incorrect or
misleading in any material respect when made or
deemed to have been made; or
(iii) the Borrower fails duly to perform or comply with any
of the obligations expressed to be assumed by it in
any of Clauses 15, 16 or 17; or
(iv) the Borrower fails duly to perform or comply with any
other obligation expressed to be assumed by it in
this Agreement or the syndication letter referred to
in paragraph 8 of the First Schedule and (if capable
of remedy) such failure is not remedied within
fourteen days after the Bank has given notice thereof
to the Borrower; or
(v) any indebtedness for borrowed money of any member of
the Group in an aggregate amount of euro 100,000,000
or more is not paid within fourteen days of the
original due date or any such indebtedness for
borrowed money of any member of the Group is declared
to be due and payable prior to its specified maturity
by reason of the occurrence of a default or a
mandatory prepayment event (howsoever described),
provided that it will not be an Event of Default
under this paragraph (v) if the relevant member of
the Group is contesting its liability to pay the
relevant amount in good faith and by appropriate
proceedings; or
(vi) any Material Member of the Group is, by reason of
financial difficulties, unable to pay its debts as
they fall due, commences negotiations with any one or
more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or
makes a general assignment for the benefit of or a
composition with its creditors; or
(vii) any Material Member of the Group takes any corporate
action or other steps (other than frivolous or
vexatious steps with no reasonable prospect of
success) are taken or legal proceedings are started
for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or
similar officer of it or of any or all of its
revenues and assets; or
(viii) any execution or distress is levied against, or an
encumbrance takes possession of the whole or any
material part of, the property, undertaking or assets
of any Material Member of the Group; or
14
(ix) there is any substantial change to the overall
business line of the Group other than by reason of
the Olivetti Acquisition; or
(x) any person or group of persons acting in concert gain
control of the Borrower, where:
(1) "control" means the power to direct the
management and policies of an entity,
whether through the ownership of voting
capital, by contract or otherwise; and
(2) "acting in concert" means acting together
pursuant to an agreement or understanding
(whether formal or informal); or
(xi) any event or series of events occurs which has had or
will have a materially adverse effect on the
business, condition (financial or otherwise) or
results of operations of the Group or on the ability
of the Borrower to comply with any of its obligations
hereunder; or
(xii) the Borrower or any other person commences
proceedings or takes any other action challenging the
validity of any of its obligations or any of the
Bank's rights hereunder,
then, and in any such case and at any time thereafter, the
Bank may by written notice to the Borrower:
(a) declare the Advances to be immediately due and
payable (whereupon the same shall become so payable
together with accrued interest thereon and any other
sums then owed by the Borrower hereunder) or declare
the Advances to be due and payable on demand of the
Bank; and/or
(b) declare that the Bank's Commitment shall be
cancelled, whereupon the same shall be reduced to
zero.
18.2 If, pursuant to Clause 18.1, the Bank declares the Advances to
be due and payable on demand of the Bank, then, and at any
time thereafter, the Bank may by written notice to the
Borrower call for repayment of the Advances on such date as it
may specify in such notice (whereupon the same shall become
due and payable on such date together with accrued interest
thereon and any other sums then owed by the Borrower
hereunder) or withdraw its declaration with effect from such
date as it may specify in such notice.
18.3 If, pursuant to Clause 18.1(a), the Bank declares the Advances
to be due and payable on demand, the Term in respect of any
such Advance shall, if the Bank subsequently demands payment
before the scheduled Repayment Date in respect of such
Advance, be deemed (except for the purposes of Clause 19.4) to
be of such length that it ends on the date that such demand is
made.
19. DEFAULT INTEREST AND INDEMNITY
19.1 If any sum due and payable by the Borrower hereunder is not
paid on the due date therefor in accordance with the
provisions of Clause 21 or if any sum due and payable by the
Borrower under any judgement of any court in connection
herewith is not paid on the date of such judgement, the period
beginning on such due date or, as the case may be, the date of
such judgement and ending on the date upon which the
obligation of the Borrower to pay such sum (the balance
thereof for the time being unpaid being herein referred to as
an "unpaid sum") is discharged shall be divided into
successive periods, each of which (other than the first) shall
15
start on the last day of the preceding such period and the
duration of each of which shall (except as otherwise provided
in this Clause 19) be selected by the Bank.
19.2 During each such period relating thereto as is mentioned in
Clause 19.1 an unpaid sum shall bear interest at the rate per
annum which is the sum from time to time of one per cent, the
Margin and EURIBOR on the Quotation Date therefor Provided
that:
(i) if, for any such period, EURIBOR cannot be
determined, the rate of interest applicable to such
unpaid sum shall be the sum from time to time of one
per cent, the Margin and the rate per annum equal to
the cost to the Bank of funding such unpaid sum for
such period from whatever source it may select; and
(ii) if such unpaid sum is all or part of an Advance which
become due and payable on a day other than the last
day of the Term thereof, the first such period
applicable thereto shall be of a duration equal to
the unexpired portion of that Term and the rate of
interest applicable thereto from time to time during
such period shall be that which exceeds by one per
cent the rate which would have been applicable to it
had it not so fallen due.
19.3 Any interest which shall have accrued under Clause 19.2 in
respect of an unpaid sum shall be due and payable and shall be
paid by the Borrower at the end of the period by reference to
which it is calculated or on such other date or dates as the
Bank may specify by written notice to the Borrower.
19.4 If the Bank received or recovers all or any part of an Advance
otherwise than on the last day of the Term thereof, the
Borrower shall pay to the Bank on demand an amount equal to
the amount (if any) by which (i) the additional interest which
would have been payable on the amount so received or recovered
had it been received or recovered on the last day of the Term
thereof exceeds (ii) the amount of interest which in the
opinion of the Bank would have been payable to the Bank on the
last day of the Term thereof in respect of a deposit in the
currency of the amount so received or recovered equal to the
amount so received or recovered placed by it with a prime bank
in London for a period starting on the third business day
following the date of such receipt or recovery and ending on
the last day of the applicable Term.
19.5 The Borrower undertakes to indemnify the Bank against:
(i) any cost, claim, loss, expense (including legal fees)
or liability together with any VAT thereon, which it
may sustain or incur as a consequence of the
occurrence of any Event of Default or any default by
the Borrower in the performance of any of the
obligations expressed to be assumed by it in this
Agreement;
(ii) any loss it may suffer as a result of its entering
into, or performing, any foreign exchange contract
for the purposes of Clause 21; and
(iii) any loss it may suffer as a result of its funding an
Advance requested by the Borrower hereunder but not
made by reason of the operation of any one or more of
the provisions hereof.
19.6 Any unpaid sum shall (for the purposes of this Clause 19,
Clause 12.1 and the Fourth Schedule) be treated as an advance
and accordingly in this Clause 19 and Clause 12.1 the term
"Advance" includes any unpaid sum and "Term", in relation to
an unpaid sum, includes each such period relating thereto as
is mentioned in Clause 19.1.
16
20. CURRENCY OF ACCOUNT AND PAYMENT
20.1 Euro is the currency of account and payment for each and every
sum at any time due from the Borrower hereunder.
20.2 If any sum due from the Borrower under this Agreement or any
order or judgement given or made in relation hereto has to be
converted from the currency (the "first currency") in which
the same is payable hereunder or under such order or judgement
into another currency (the "second currency") for the purpose
of (i) making or filing a claim or proof against the Borrower,
(ii) obtaining an order or judgement in any court or other
tribunal or (iii) enforcing any order or judgement given or
made in relation hereto, the Borrower shall indemnify and hold
harmless the Bank from and against any loss suffered as a
result of any discrepancy between (a) the rate of exchange
used for such purpose to convert the sum in question from the
first currency into the second currency and (b) the rate or
rates of exchange at which the Bank may in the ordinary course
of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgement, claim or
proof.
21. PAYMENTS
21.1 On each date on which this Agreement requires an amount to be
paid by the Borrower, the Borrower shall pay the same in
immediately available, freely transferable, cleared funds to
such account as the Bank may from time to time notify to the
Borrower for settlement of payments in the relative currency.
21.2 All payments required to be made by the Borrower hereunder
shall be calculated without reference to any set-off or
counterclaim and shall be made free and clear of and without
any deduction for or on account of any set-off or
counterclaim.
22. [INTENTIONALLY LEFT BLANK]
23. FEES
23.1 The Borrower shall pay to the Bank a commitment commission on
the amount of the Available Facility from day to day during
the period beginning on the date hereof and ending on the last
day of the Commitment Period, such commitment commission to be
calculated at the rate of 0.05 per cent. per annum and payable
in arrears on the last day of each successive period of three
months which ends during such period and on the last day of
the Commitment Period.
23.2 The Borrower shall pay to the Bank fees on the dates and in
the amounts specified in the letter dated on or about the date
hereof and designated as the "Fees Letter".
24. COSTS AND EXPENSES
24.1 The Borrower, from time to time on demand of the Bank, shall
reimburse the Bank for all costs and expenses (including legal
fees) together with any VAT thereon incurred by it in
connection with the negotiation, preparation and execution of
this Agreement and the completion of the transactions herein
contemplated.
24.2 The Borrower shall, from time to time on demand of the Bank,
reimburse the Bank for all costs and expenses (including legal
fees) together with any VAT thereon incurred in or in
connection with the preservation and/or enforcement of any of
its rights under this Agreement.
24.3 The Borrower shall pay all stamp, registration and other taxes
to which this Agreement or any judgement given in connection
herewith is or at any time may be subject and shall, from time
17
to time on demand, indemnify the Bank against any liabilities,
costs, claims and expenses resulting from any failure to pay
or any delay in paying any such tax.
25. BENEFIT OF AGREEMENT
This Agreement shall be binding upon and ensure to the benefit of
each party hereto and its or any subsequent successors and assigns.
26. ASSIGNMENTS
26.1 The Borrower shall not be entitled to assign or transfer all
or any of its rights, benefits and obligations hereunder.
26.2 The Bank may, with the prior consent of the Borrower, at any
time assign or otherwise transfer all or any of its rights and
benefits hereunder. The Borrower shall not unreasonably
withhold or delay its consent and shall be deemed to have
given its consent five business days after the Bank's written
request for consent unless it is expressly refused within that
time.
26.3 If the Bank wishes to transfer all or any of its rights,
benefits, and/or obligations hereunder as contemplated in
Clause 26.2, then such transfer may be effected by the
delivery to the Borrower of a duly completed and duly executed
Transfer Certificate in which event, on the later of the
Transfer Date specified in a transfer certificate
substantially in the form displayed in the Fourth Schedule and
the fifth business day after the date of delivery of such
Transfer Certificate to the Borrower:
(i) to the extent that in such Transfer Certificate the
Bank seeks to transfer its rights and obligations
hereunder, the Borrower and the Bank shall be
released from further obligations towards one another
hereunder and their respective rights against one
another hereunder and their respective rights against
one another shall be cancelled (such rights and
obligations being referred to in this Clause 26.3 as
"discharged rights and obligations");
(ii) each of the Borrower and the Transferee party thereto
shall assume obligations towards one another and/or
acquire rights against one another which differ from
such discharged rights and obligations only insofar
as such Borrower and such Transferee have assumed
and/or acquired the same in place of such Borrower
and the Bank; and
(iii) the Transferee and the Borrower shall acquire the
same rights and assume the same obligations between
themselves as they would have acquired and assumed
had such Transferee been an original party hereto as
a Bank the rights and/or obligations acquired or
assumed by it as a result of such transfer.
26.4 No additional amount shall be payable by the Borrower under
Clause 11.2 (Tax Receipts) to any Transferee located outside
Italy and which will perform its obligations under this
Agreement.
27. DISCLOSURE OF INFORMATION
The Bank may disclose to any actual or potential assignee or to any
person who may otherwise enter into contractual relations with the
Bank in relation to this Agreement such information about the
Borrower and the Group as the Bank shall consider appropriate.
28. CALCULATIONS AND EVIDENCE OF DEBT
28.1 Interest and commitment commission shall accrue from day to
day and shall be calculated on the basis of:
18
(a) a year of 360 days; and
(b) the actual number of days elapsed.
28.2 The Bank shall maintain in accordance with its usual practice
accounts evidencing the amounts from time to time lent by and
owing to it hereunder; in any legal action or proceeding
arising out of or in connection with this Agreement, the
entries made in such accounts shall (in the absence of
manifest error) be conclusive evidence of the existence and
amounts of the obligations of the Borrower therein recorded.
28.3 A certificate of the Bank as to (i) the amount by which a sum
payable to it hereunder is to be increased under Clause 10.1
or (ii) the amount for the time being required to indemnify it
against any such cost, payment or liability as is mentioned in
Clause 10.2 or 12.1 shall, in the absence of manifest error,
be conclusive for the purposes of this Agreement.
29. ROLE OF THE ARRANGER
29.1 The Arranger has no obligations of any kind to the parties
under this Agreement and is not responsible to the Bank for
the adequacy, accuracy or completeness of this Agreement or
any statement or information (whether written or oral) made in
or supplied in connection with this Agreement.
29.2 The Arranger may:
(a) carry on business with the Borrower or its related
entities; and
(b) retain any profits or remuneration it receives under
this Agreement (or in connection with this Agreement)
or in relation to any other business it carries on
with the Borrower or its related entities.
30. REMEDIES AND WAIVERS
No failure by the Bank to exercise, nor any delay by the Bank in
exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
31. PARTIAL INVALIDITY
If, at any time, any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction shall in any way be affected or
impaired thereby.
32. NOTICES
32.1 Each communication to be made hereunder shall be made in
writing but, unless otherwise stated and subject to Clause
32.3, may be made by telex, fax or letter.
32.2 Any communication or document to be made or delivered by one
person to another pursuant to this Agreement shall (unless
that other person has by fifteen days' written notice to the
other specified another address) be made or delivered (in
English, marked for the attention of the correct person and in
legible form) to that other person at the address identified
with its signature below (or in the case of a transferee bank,
at the end of the Transfer Certificate to which it is a party
19
as transferee bank) and shall be deemed to have been made or
delivered when despatched by facsimile (provided such
facsimile is correctly addressed and a confirmation report
confirming completed transmission to the correct facsimile
number is received at the transmitting terminal) or by tested
telex (confirmed by the recipient's answerback message) or (in
the case of any communication made by letter) when received by
the relevant party.
32.3 Each communication made by fax hereunder is to be confirmed in
writing on the same day as the relative fax communication
shall have been made. No facsimile message received shall be
invalidated by failure by either party to give such written
confirmation.
33. EUROPEAN MONETARY UNION
33.1 In this Clause 33 and in each other provision of this
Agreement to which reference is made in this Clause 33
expressly or impliedly, the following terms have the meanings
given to them in this Clause 33:
"EMU" means Economic and Monetary Union as contemplated in the
Treaty on European Union;
"EMU LEGISLATION" means legislative measures of the European
Council for the introduction of, changeover to or operation of
European Economic and Monetary Union;
"EURO" means the single currency of participating member
states of the European Union;
"EURO UNIT" means the currency unit of the euro;
"NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a participating member state;
"PARTICIPATING MEMBER STATE" means each state so described in
any EMU regulation; and
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25
March 1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the
Maastricht Treaty (which was signed at Maastricht on 1
February 1992 and came into force on 1 November 1993), as
amended from time to time.
33.2 If any Advance would, but for this provision, be capable of
being made either in the euro or in a national currency unit,
such Advance shall be made in the euro.
33.3 Without prejudice and in addition to any method of conversion
or rounding prescribed by any EMU legislation, each reference
in this Agreement to a fixed amount or fixed amounts in a
national currency unit to be paid to or by the Bank shall be
replaced by a reference to such comparable and convenient
fixed amount or fixed amounts in the euro unit as the Bank may
from time to time specify; and
33.4 The Borrower shall, from time to time on demand of the Bank,
pay to the Bank for the account of the Bank the amount of any
cost or increased cost incurred by, or of any reduction in any
amount payable to or in the effective return on its capital
to, or of interest or other return foregone by, the Bank or
any holding company of the Bank as a result of the
introduction of, changeover to or operation of the euro in any
participating member state (including, but not limited to, any
reserve asset requirements of any European Central Bank) other
than any such cost or reduction or amount foregone reflected
in the Associated Costs Rate.
20
34. LANGUAGE
Any notice given in connection with this Agreement must be in English
and any other document provided in connection with this Agreement must
be in English or (unless the Bank otherwise agrees) accompanied by a
certified English translation. In this case, the English translation
prevails unless the document is a statutory or other official document.
35. GOVERNING LAW
This Agreement is governed by English law.
36. ENFORCEMENT
36.1 The English courts have exclusive jurisdiction to settle any
dispute in connection with this Agreement and any other
agreement in connection with this Agreement and are the most
appropriate and convenient courts to settle any such dispute.
36.2 This Clause is for the benefit of the Bank only. To the extent
allowed by law, the Bank may take proceedings in any other
court and concurrent proceedings in any number of
jurisdictions.
36.3 The Borrower appoints Pirelli International Limited of ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ as its agent under this
Agreement (and any related agreement) for service of process
in any proceedings before the English courts. If any person
appointed as process agent is unable for any reason to act as
agent for service of process, the Borrower must immediately
appoint another agent on terms acceptable to the Bank. Failing
this, the Bank may appoint another agent for this purpose. The
Borrower agrees that failure by a process agent to notify it
of any process will not invalidate the relevant proceedings.
This Clause does not affect any other method of service
allowed by law.
36.4 The Borrower irrevocably and unconditionally:
(a) agrees not to claim any immunity from proceedings
brought by the Bank against it in relation to this
Agreement (and any related agreement) and to ensure
that no such claim is made on its behalf;
(b) consents generally to the giving of any relief or the
issue of any process in connection with proceedings
described under paragraph (a) above; and
(c) waives all rights of immunity in respect of it or its
assets.
37. COUNTERPARTS
The Agreement may be executed in any number of counterparts. This has
the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
21
THE FIRST SCHEDULE
CONDITIONS PRECEDENT DOCUMENTS
BORROWER
1. A copy of the constitutional documents of the Borrower.
2. A copy of a resolution of the board of directors of the Borrower
covering the Borrower's entry into this Agreement and related
documents.
3. A specimen of the signature of each person authorised on behalf of
the Borrower to execute all witness the execution of this Agreement
or to sign or send any document or notice in connection with this
Agreement.
4. A certificate of an authorised signatory of the Borrower certifying
that each copy document specified in this First Schedule is correct,
complete and in full force and effect as at a date no earlier than
the date of this Agreement.
5. Evidence that the agent of the Borrower under this Agreement for
service of process in England and Wales has accepted its appointment
LEGAL OPINIONS
6. A legal opinion of ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇, legal advisers in Italy to
the Arranger and the Bank.
7. A legal opinion of ▇▇▇▇▇ & Overy, London, legal advisers in England
to the Arranger and the Bank.
OTHER DOCUMENTS AND EVIDENCE
8. The Fees Letter and a syndication letter in form and substance
acceptable to the Arranger and the Bank duly executed by the
Borrower.
22
THE SECOND SCHEDULE
NOTICE OF DRAWDOWN
FROM: PIRELLI S.P.A
TO: CITIBANK, N.A. (MILAN BRANCH)
DATED:
Dear Sirs,
1. We refer to the agreement (as from time to time amended, varied,
novated or supplemented, the "Facility Agreement") dated 9th August,
2001 and made between ourselves as borrower and yourselves as lender.
Terms defined in the Facility Agreement shall have the same meaning
in this notice.
2. We hereby give you notice that, pursuant to the Facility Agreement
and upon the terms and subject to the conditions contained therein,
we wish an Advance to be made to us as follows:-
(i) Amount _____________________________________
(ii) Drawdown Date _____________________________________
(iii) Term _____________________________________
(iv) Currency _____________________________________
3. We confirm that, at the date hereof, the representations set out in
Clause 14 of the Facility Agreement are true and no Event of Default
or Potential Event of Default has occurred.
4. The proceeds of this drawdown should be credited to [account
details].
Yours faithfully,
----------------------------
for and on behalf of
Pirelli S.p.A
23
THIRD SCHEDULE
FORM OF TRANSFER CERTIFICATE
To:
TRANSFER CERTIFICATE
Relating to the agreement (as from time to time amended, varied, novated or
supplemented, ("the Facility Agreement") dated 9th August, 2001 whereby, a
credit was made available to Pirelli S.p.A. (the "Borrower").
1. Terms defined in the Facility Agreement shall, subject to any
contrary indication, have the same meanings herein. The terms Bank
and Transferee are defined in the schedule hereto.
2. The Bank (i) confirms that the details in the schedule hereto under
the heading "Bank's Commitment" and/or "Advance(s)" accurately
summarises its Commitment and/or as the case may be, its
participation in, and the Term and Repayment Date of one or more of
existing Advances and (ii) requests the Transferee to accept the
transfer to the transferee of the portion specified in the schedule
hereto of, as the case may be its Commitment and/or its participation
in such Advance(s) by counter-signing and delivering this Transfer
Certificate to the Borrower at its address specified in the Facility
Agreement.
3. The Transferee hereby requests the Borrower to accept this Transfer
Certificate as being delivered to the Borrower pursuant to and for
the purposes of Clause 26.3 of the Facility Agreement so as to take
effect in accordance with the terms thereof on the Transfer Date or
on such later date as may be determined in accordance with the terms
thereof.
4. The Transferee warrants that it has received a copy of the Facility
Agreement together with such other information as it has required in
connection with the transaction and that it has not relied and will
not hereafter rely on the Bank to check or enquire on its behalf into
the legality, validity, effectiveness, adequacy, accuracy or
completeness of the Facility Agreement or any such information and
further agrees that it has not relied and will not rely on the Bank
to assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the
Borrower.
5. The Transferee hereby undertakes with the Bank and the Borrower that
it will perform in accordance with their terms all those obligations
which by the terms of the Facility Agreement will be assumed by it
after delivery of this Transfer Certificate to the Borrower and
satisfaction of the conditions (if any) subject to which this
Transfer Certificate is expressed to take effect.
6. The Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Facility Agreement or any document
relating thereto and assumes no responsibility for the financial
condition of the Borrower or for the performance and observance by
the Borrower of any of its obligations under the Facility Agreement
or any document relating thereto and any and all such conditions and
warranties, whether express or implied by law or otherwise, are
hereby excluded.
7. The Bank hereby gives notice that nothing herein or in the Facility
Agreement (or any document relating thereto) shall oblige the Bank to
(i) accept a re-transfer from the Transferee of the whole or any part
of its rights, benefits and/or obligations under the Facility
Agreement transferred pursuant hereto or (ii) support any losses
directly or indirectly sustained or incurred by the Transferee for
any reason whatsoever including, without limitation, the
non-performance by any party to the Facility Agreement (or any
document relating thereto) of its obligations under any such
document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) and (ii) above.
24
8. The Transfer Certificate and the rights and obligations of the
Parties hereunder shall be governed by and construed in accordance
with English Law.
THE SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Commitment:
Amount of Term and
Bank's Participation Repayment Dates Portion Transferred
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
Facility Office:
Attention:
Telex:
Answerback:
Fax:
25
THE BORROWER
SIGNED BY: _____________________ Address: ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
duly authorised signatory for Fax: 0039 02 64422461
and on behalf of PIRELLI S.P.A. Attention: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
THE BANK
SIGNED BY: _____________________ Address: Foro ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
duly authorised signatory for Fax: 0039 02 864 74860
and on behalf of CITIBANK, N.A. Telex: 310227 CITBKA I
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
THE ARRANGER
SIGNED BY: _____________________ Address: 33 Canada Square,
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
duly authorised signatory for
and on behalf of
SALOMON BROTHERS INTERNATIONAL LIMITED
26