Bond A2A S.p.A 4.875% ( XS0193337796 ) in EUR

A2A S.p.A

99.995 % ⇌

Italy

XS0193337796 ( in EUR )

4.875% per year ( payment 1 time a year)

28/05/2014 - Bond has expired

Prospectus brochure of the bond A2A S.p.A XS0193337796 in EUR 4.875%, expired

100 000 EUR

500 000 000 EUR

The Bond issued by A2A S.p.A ( Italy ) , in EUR, with the ISIN code XS0193337796, pays a coupon of 4.875% per year.
The coupons are paid 1 time per year and the Bond maturity is 28/05/2014

OFFERING CIRCULAR
ASM BRESCIA S.p.A.
(incorporated as a societa` per azioni under the laws of the Republic of Italy)
A500,000,000
4.875 per cent. Notes due 2014
The issue price of the A500,000,000 4.875 per cent. Notes due 2014 (the ``Notes'') of ASM Brescia S.p.A. (the
``Issuer'') is 99.304 per cent. of their principal amount. The Notes constitute obbligazioni pursuant to Articles 2410-et
seq. of the Italian Civil Code.
Unless previously redeemed or cancelled, the Notes will be redeemed at their principal amount on 28 May 2014. The
Notes are subject to redemption in whole, but not in part, at their principal amount at the option of the Issuer at
any time in the event of certain changes affecting taxation in the Republic of Italy. See ``Terms and Conditions of the
Notes Redemption and Purchase''.
The Notes will bear interest from 28 May 2004 at the rate of 4.875 per cent. per annum payable annually in arrear
on 28 May each year commencing on 28 May 2005. Payments on the Notes will be made in euro. Interest payments
to certain Noteholders may be subject to Italian substitute tax (imposta sostitutiva) as described under ``Terms and
Conditions of the Notes Taxation'' and ``Taxation Italy''.
Application has been made to list the Notes on the Luxembourg Stock Exchange.
The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended
(the ``Securities Act'') and are subject to United States tax law requirements. The Notes are being offered outside the
United States by the Managers (as defined in ``Subscription and Sale'') in accordance with Regulation S under the
Securities Act (``Regulation S''), and may not be offered, sold or delivered within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
The Notes have been assigned a rating of A+ by Standard & Poor's, a division of the McGraw-Hill Companies Inc. A
rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or
withdrawal at any time by the assigning rating organisation.
The Notes will be in bearer form and in the denomination of A100,000 each. The Notes will initially be in the form
of a temporary global note (the ``Temporary Global Note''), without interest coupons, which will be deposited on or
around 28 May 2004 (the ``Closing Date'') with a common depositary for Euroclear Bank S.A./N.V., as operator of
the Euroclear System (``Euroclear'') and Clearstream Banking, socie´te´ anonyme (``Clearstream, Luxembourg''). The
Temporary Global Note will be exchangeable, in whole or in part, for interests in a permanent global note (the
``Permanent Global Note''), without interest coupons, not earlier than 40 days after the Closing Date upon
certification as to non-U.S. beneficial ownership. Interest payments in respect of the Notes cannot be collected
without such certification of non-U.S. beneficial ownership. The Permanent Global Note will be exchangeable in
certain limited circumstances in whole, but not in part, for Notes in definitive form in the denomination of A100,000
each and with interest coupons attached. See ``Summary of Provisions Relating to the Notes in Global Form''.
Joint Lead Managers
BARCLAYS CAPITAL
CABOTO
MERRILL LYNCH INTERNATIONAL
Senior Co-Lead Manager
Banca OPI S.p.A.
Co-Lead Managers
Banca Akros S.p.a. - Gruppo
Banco Bilbao Vizcaya
Banca Lombarda e Piemontese Spa
Banca Popolare di Milano
Argentaria, S.A
SG Corporate & Investment Banking
Banca Popolare Di Lodi S.c.a.r.l.,
Calyon Corporate and
London Branch
Investment Bank
Unipol Banca S.p.A.
27 May 2004

The Issuer has confirmed to the Managers named under ``Subscription and Sale'' (the ``Managers'')
that this Offering Circular contains all information regarding the Issuer and its subsidiaries (the
``Subsidiaries'') and the Notes which is (in the context of the issue of the Notes) material; such
information is true and accurate in all material respects and is not misleading in any material
respect; any opinions, predictions or intentions expressed in this Offering Circular on the part of the
Issuer are honestly held or made and have been made after considering all relevant circumstances;
this Offering Circular does not contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information, opinions, predictions or intentions (in light of the
circumstances under which they were made) not misleading in any material respect; and all proper
enquiries have been made to ascertain and to verify the foregoing. The Issuer accepts responsibility
for the information contained in this Offering Circular accordingly.
The Issuer has not authorised the making or provision of any representation or information
regarding the Issuer or the Notes other than as contained in this Offering Circular or as approved
for such purpose by the Issuer. Any such representation or information should not be relied upon as
having been authorised by the Issuer, the Trustee or the Managers.
This Offering Circular has not been submitted to the clearance procedure of Commissione Nazionale
per le Societa` e la Borsa (``CONSOB'') and may not be used in connection with the offering of the
Notes in the Republic of Italy, its territories and possessions and any areas subject to its jurisdictions
(``Italy'') other than to professional investors, as defined by and in accordance with applicable Italian
securities laws and regulations, as more fully set out under ``Subscription and Sale'' below.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Note shall in
any circumstances create any implication that there has been no adverse change, or any event
reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer
or of the Issuer and its Subsidiaries (taken as a whole) since the date of this Offering Circular.
This Offering Circular does not constitute an offer of, or an invitation to subscribe for or purchase,
any Notes.
The distribution of this Offering Circular and the offering, sale and delivery of Notes in certain
jurisdictions may be restricted by applicable law. Persons into whose possession this Offering Circular
comes are required by the Issuer and the Managers to inform themselves about and to observe any
such restrictions. For a description of certain restrictions on offers, sales and deliveries of Notes and
on distribution of this Offering Circular and other offering material relating to the Notes, see
``Subscription and Sale'' below.
In particular, the Notes have not been and will not be registered under the Securities Act and are
subject to United States tax law requirements. Subject to certain exceptions, Notes may not be
offered, sold or delivered in the United States or to U.S. persons.
The authorisation for the offering of Notes has been obtained from the Bank of Italy pursuant to
Article 129 of the Legislative Decree no. 385 of 1 September 1993, as amended.
In this Offering Circular, unless otherwise specified, references to ``A'' or ``euro'' are to the single
currency introduced at the start of the Third Stage of European Economic and Monetary Union
pursuant to the Treaty establishing the European Community, as amended.
Certain figures included in this Offering Circular have been subject to rounding adjustments;
accordingly, figures shown for the same category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which
precede them.
In connection with the issue of the Notes, Barclays Bank PLC (the ``Stabilising Manager'') (or any
person acting for the Stabilising Manager) may from time to time over-allot or effect transactions
with a view to supporting the market price of the Notes at a level higher than that which might
otherwise prevail for a limited period. However, there may be no obligation on the Stabilising
Manager (or any agent of the Stabilising Manager) to do this. Such stabilising, if commenced,
may be discontinued at any time and must be brought to an end after a limited period. Such
stabilising shall be in compliance with all applicable laws, regulations and rules.
1

CONTENTS
Page
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
TERMS AND CONDITIONS OF THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
SUMMARY OF PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM . . . . . . . . . . . . .
14
DESCRIPTION OF THE ISSUER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
BUSINESS DESCRIPTION OF THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
CORPORATE STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
REGULATORY MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
CAPITALISATION AND INDEBTEDNESS OF THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
SUMMARY FINANCIAL INFORMATION RELATING TO THE ISSUER . . . . . . . . . . . . . . . . . . .
57
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75
DOCUMENTS INCORPORATED BY REFERENCE
The following financial statements shall be deemed to be incorporated in, and to form part of, this
Offering Circular:
(i)
the audited consolidated and unconsolidated financial statements of the Issuer as at and for
the year ended 31 December 2002;
(ii)
the audited consolidated and unconsolidated financial statements of the Issuer as at and for
the year ended 31 December 2003; and
(iii) the unaudited consolidated quarterly financial statements of the Issuer as at 31 March 2004.
A copy of this Offering Circular and any document incorporated by reference in this Offering
Circular are made available free of charge at the offices of the Paying Agents. Written or oral
requests for such documents should be directed to the specified offices of any Paying Agent or the
specified office of the Listing Agent in Luxembourg.
2

TERMS AND CONDITIONS OF THE NOTES
The following is the text of the Terms and Conditions of the Notes which (subject to completion and
amendment) will be endorsed on each Note in definitive form:
The A500,000,000 4.875 per cent. Notes due 2014 (the ``Notes'', which expression includes any
further notes issued pursuant to Condition 14 (Further Issues) and forming a single series therewith)
of ASM Brescia S.p.A. (the ``Issuer'') are subject to, and have the benefit of, a trust deed dated 27
May 2004 (as amended or supplemented from time to time, the ``Trust Deed'') between the Issuer
and The Law Debenture Trust Corporation p.l.c. as trustee (the ``Trustee'', which expression includes
all persons for the time being trustee or trustees appointed under the Trust Deed) and are the
subject of a paying agency agreement dated 27 May 2004 (as amended or supplemented from time
to time, the ``Agency Agreement'') between the Issuer, JPMorgan Chase Bank as principal paying
agent (the ``Principal Paying Agent'', which expression includes any successor principal paying agent
appointed from time to time in connection with the Notes), Dexia Banque Internationale a`
Luxembourg S.A. (together with the Principal Paying Agent, the ``Paying Agents'', which expression
includes any successor or additional paying agents appointed from time to time in connection with
the Notes) and the Trustee.
Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement
and subject to their detailed provisions. The holders of the Notes (the ``Noteholders'') and the
holders of the related interest coupons (the ``Couponholders'' and the ``Coupons'', respectively) are
bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency
Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available
for inspection during normal business hours at the registered office for the time being of the
Trustee, being at the date hereof Fifth Floor, 100 Wood Street, London EC2V 7EX and at the
specified offices of each of the Paying Agents, the initial specified offices of which are set out
below.
1.
FORM, DENOMINATION AND TITLE
The Notes are serially numbered and in bearer form in the denomination of A100,000 with Coupons
attached at the time of issue. Title to the Notes and the Coupons will pass by delivery. The holder
of any Note or Coupon shall (except as otherwise required by law) be treated as its absolute owner
for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or
any other interest therein, any writing thereon or any notice of any previous loss or theft thereof)
and no person shall be liable for so treating such holder.
2.
STATUS
The Notes and Coupons constitute (subject to Condition 3) direct, general, unconditional and
unsubordinated obligations of the Issuer which are ``obbligazioni'' pursuant to Articles 2410-et seq.
of the Italian Civil Code and which will at all times rank pari passu among themselves and at least
pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer,
save for such obligations as may be preferred by provisions of law that are both mandatory and of
general application.
3.
NEGATIVE PLEDGE
So long as any Note or Coupon remains outstanding (as defined in the Trust Deed), the Issuer will
not, and the Issuer shall procure that none of its Subsidiaries will, create or permit to subsist (other
than by operation of law) any Security Interest upon the whole or any part of its present or future
undertaking, assets or revenues to secure any Relevant Indebtedness or Guarantee of Relevant
Indebtedness, except for Permitted Encumbrances (as defined below), without (a) at the same time
or prior thereto securing the Notes equally and rateably therewith to the satisfaction of the Trustee
or (b) providing such other security for the Notes as the Trustee may in its absolute discretion
consider to be not materially less beneficial to the interests of the Noteholders or as may be
approved by a Resolution (as defined in the Trust Deed) of Noteholders.
3

In these Conditions:
``Permitted Encumbrances'' means, any Security Interest securing Relevant Indebtedness on assets of
any entity which becomes a Subsidiary of any member of the Group (a ``Group Subsidiary'') after
the issue date of the Notes provided that:
(i)
such Security Interest was existing at the time such entity became a Group Subsidiary;
(ii)
such Security Interest was not created in contemplation of or in connection with such entity
becoming a Group Subsidiary;
(iii) the amount secured at the time such entity becomes a Group Subsidiary is not subsequently
increased or exceeded;
(iv) the repayment date of any amount secured is not extended; and
(v)
the Relevant Indebtedness secured by any Security Interest or Security Interests does not at
any time exceed 10 per cent of the total consolidated assets of the Group;
``Person'' means any individual, company, corporation, firm, partnership, joint venture, association,
organisation, state or agency of a state or other entity, whether or not having separate legal
personality;
``Relevant Indebtedness'' means any present or future indebtedness which is in the form of, or
represented by, any bond, note, debenture, debenture stock, loan stock, certificate or other
instrument which is, intended to be, or capable of being, listed, quoted or traded on any stock
exchange or in any securities market (including, without limitation, any over-the-counter or other
securities market);
``Security Interest'' means any mortgage, charge, pledge, lien or other security interest including,
without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction,
except any Security Interest existing on the assets or property of a Person immediately prior to its
acquisition by or its consolidation or merger with the Issuer or a Subsidiary of the Issuer, provided
that such Security Interest is not created in contemplation of such acquisition, consolidation or
merger and the amount secured by such Security Interest is not thereafter increased;
``Subsidiary'' means, in relation to any person (the ``first person'') at any particular time, any other
person (the ``second person''):
(a)
whose majority of votes in ordinary shareholders' meetings of the second person is held by
the first person; or
(b)
in which the first person holds a sufficient number of votes giving the first person a dominant
influence in ordinary shareholders' meetings of the second person; or
(c)
which is under the dominant influence of the first person by virtue of certain contractual
relationships between the first person and the second person; or
(d)
over whom the first person has the right, by virtue of a contract or an article in the by-laws
of the second person, to exercise a dominant influence, where the applicable law permits such
contracts or articles; or
(e)
over whom the first person alone, on the basis of agreements with other shareholders, has at
its disposal a sufficient number of votes to exercise a dominant influence at ordinary meetings
of the shareholders of the second person,
pursuant to the provisions of Article 2359 of the Italian Civil Code and Article 93 of Legislative
Decree no. 58 of 24 February 1998. An entity which is consolidated only on a proportional basis in
the financial statements of the Issuer shall not be treated as a subsidiary of the Issuer, unless the
Issuer holds the majority of votes at the ordinary shareholders' meetings of such entity.
For the purpose of this Condition 3:
``Guarantee'' means, in relation to any Relevant Indebtedness of any Person, any obligation of
another Person to pay such Relevant Indebtedness including (without limitation):
(a)
any obligation to purchase such Relevant Indebtedness;
(b)
any obligation to lend money, to purchase or subscribe shares or other securities or to
purchase assets or services in order to provide funds for the payment of such Relevant
Indebtedness;
4

(c)
any indemnity against the consequences of a default in the payment of such Relevant
Indebtedness; and
(d)
any other agreement to be responsible for such Relevant Indebtedness.
4.
INTEREST
The Notes bear interest from and including 28 May 2004 (the ``Issue Date'') at the rate of 4.875
per cent. per annum (the ``Rate of Interest'') payable annually in arrear on 28 May in each year
(each, an ``Interest Payment Date'').
Each Note will cease to bear interest from the due date for redemption unless, upon due
presentation, payment of principal is improperly withheld or refused, in which case it will continue
to bear interest at such rate (both before and after judgment) until whichever is the earlier of (a)
the day on which all sums due in respect of such Note up to that day are received by or on behalf
of the relevant Noteholder and (b) the day which is seven days after the Principal Paying Agent or
the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes
up to such seventh day (except to the extent that there is any subsequent default in payment).
The amount of interest payable on each Interest Payment Date shall be A4,875 per each A100,000
in principal amount of the Notes.
Where interest is to be calculated in respect of a period which is shorter than an Interest Period (as
defined below) it will be calculated on the basis of the number of days in the relevant period, from
and including the date from which interest begins to accrue to but excluding the date on which it
falls due, divided by the number of days in the Interest Period in which the relevant period falls
(including the first such day but excluding the last). The period beginning on 28 May 2004 and
ending on, but excluding, the first Interest Payment Date and each successive period beginning on,
and including, an Interest Payment Date and ending on, but excluding, the next succeeding Interest
Payment Date is called an ``Interest Period''.
5.
REDEMPTION AND PURCHASE
(a)
Final redemption: Unless previously redeemed, or purchased and cancelled, the Notes will be
redeemed at their principal amount on 28 May 2014. The Notes may not be redeemed at the
option of the Issuer other than in accordance with this Condition 5.
(b)
Redemption for taxation reasons: The Notes may be redeemed at the option of the Issuer in
whole, but not in part, at any time, on giving not less than 30 nor more than 60 days' notice
to the Noteholders (which notice shall be irrevocable), at their principal amount, together with
interest accrued to but excluding the date fixed for redemption, if, immediately before giving
such notice, the Issuer satisfies the Trustee that:
(i)
the Issuer has or will become obliged to pay additional amounts as provided or referred
to in Condition 7 (Taxation) as a result of any change in, or amendment to, the laws or
regulations of the Republic of Italy or any political subdivision or any authority thereof or
therein having power to tax, or any change in the application or judicial or official
interpretation of such laws or regulations, which change or amendment becomes
effective on or after 27 May 2004; and
(ii)
such obligation cannot be avoided by the Issuer taking reasonable measures available to
it;
provided, however, that no such notice of redemption shall be given earlier than 90 days prior to
the earliest date on which the Issuer would be obliged to pay such additional amounts if a payment
in respect of the Notes were then due.
Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee:
(A)
a certificate signed by two directors of the Issuer stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Issuer so to redeem have occurred; and
(B)
an opinion in form and substance satisfactory to the Trustee of independent legal
advisers of recognised standing to the effect that the Issuer has or will become obliged
to pay such additional amounts as a result of such change or amendment.
5

The Trustee shall be entitled to accept such certificate and opinion as sufficient evidence of the
satisfaction of the circumstances set out in (i) and (ii) above, in which event they shall be
conclusive and binding on the Noteholders.
Upon the expiry of any such notice as is referred to in this Condition 5(b), the Issuer shall be
bound to redeem the Notes in accordance with this Condition 5(b).
(c)
Purchase: The Issuer or any of its Subsidiaries may at any time purchase Notes in the open
market or otherwise and at any price. Such Notes may be held, reissued, resold or, at the
option of the Issuer or its Subsidiaries, surrendered to the Principal Paying Agent for
cancellation. Pursuant to Article 2415 of the Italian Civil Code, the Issuer shall not be entitled
to vote at any meetings of Noteholders in relation to the Notes redeemed or held by it.
(d)
Cancellation: Notes redeemed or purchased by the Issuer or any of its Subsidiaries and
subsequently surrendered for cancellation and any unmatured Coupons attached to or
surrendered with them shall be cancelled forthwith and may not be reissued or resold.
6.
PAYMENTS
(a)
Principal: Payments of principal shall be made only against presentation and (provided that
payment is made in full) surrender of Notes at the specified office of any Paying Agent outside
the United States by Euro cheque drawn on, or by transfer to a Euro account (or other
account to which Euros may be credited or transferred) maintained by the payee with, a bank
in a city in which banks have access to the TARGET System (as defined below).
(b)
Interest: Payments of interest shall, subject to paragraph (f) (Payments other than in respect of
matured Coupons) below, be made only against presentation and (provided that payment is
made in full) surrender of the appropriate Coupons at the specified office of any Paying Agent
outside the United States in the manner described in paragraph (a) (Principal) above.
(c)
Payments subject to fiscal laws: All payments in respect of the Notes are subject in all cases to
any applicable fiscal and other laws and regulations in the place of payment, but without
prejudice to the provisions of Condition 7 (Taxation). No commissions or expenses shall be
charged to the Noteholders or Couponholders in respect of such payments.
(d)
Deduction for unmatured Coupons: If a Note is presented without all unmatured Coupons
relating thereto, then:
(i)
if the aggregate amount of the missing Coupons is less than or equal to the amount of
principal due for payment, a sum equal to the aggregate amount of the missing Coupons
will be deducted from the amount of principal due for payment; provided, however, that
if the gross amount available for payment is less than the amount of principal due for
payment, the sum deducted will be that proportion of the aggregate amount of such
missing Coupons which the gross amount actually available for payment bears to the
amount of principal due for payment;
(ii)
if the aggregate amount of the missing Coupons is greater than the amount of principal
due for payment:
(A) so many of such missing Coupons shall become void (in inverse order of maturity)
as will result in the aggregate amount of the remainder of such missing Coupons
(the ``Relevant Coupons'') being equal to the amount of principal due for payment;
provided, however, that where this sub-paragraph would otherwise require a fraction
of a missing Coupon to become void, such missing Coupon shall become void in its
entirety; and
(B)
a sum equal to the aggregate amount of the Relevant Coupons (or, if less, the
amount of principal due for payment) will be deducted from the amount of
principal due for payment; provided, however, that, if the gross amount available for
payment is less than the amount of principal due for payment, the sum deducted
will be that proportion of the aggregate amount of the Relevant Coupons (or, as
the case may be, the amount of principal due for payment) which the gross amount
actually available for payment bears to the amount of principal due for payment.
Each sum of principal so deducted shall be paid in the manner provided in paragraph (a)
(Principal) above against presentation and (provided that payment is made in full) surrender of
the relevant missing Coupons. No payments will be made in respect of void coupons.
6

(e)
Payments on business days: If the due date for payment of any amount in respect of any Note
or Coupon is not a business day in the place of presentation, the holder shall not be entitled
to payment in such place of the amount due until the next succeeding business day in such
place and shall not be entitled to any further interest or other payment in respect of any such
delay. In this paragraph, ``business day'' means, in respect of any place of presentation, any
day on which banks are open for presentation and payment of bearer debt securities and for
dealings in foreign currencies in such place of presentation and, in the case of payment by
transfer to a Euro account as referred to above, on which the TARGET System is open.
(f)
Payments other than in respect of matured Coupons: Payments of interest other than in
respect of matured Coupons shall be made only against presentation of the relevant Notes at
the specified office of any Paying Agent outside the United States.
(g)
Partial payments: If a Paying Agent makes a partial payment in respect of any Note or Coupon
presented to it for payment, such Paying Agent will endorse thereon a statement indicating
the amount and date of such payment.
In these Conditions, ``TARGET Settlement Day'' means any day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer (TARGET) System is open (``TARGET
System'').
7.
TAXATION
All payments of principal and interest in respect of the Notes and the Coupons by or on behalf of
the Issuer shall be made free and clear of, and without withholding or deduction for or on account
of, any present or future taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or on behalf of Italy, as the case may be, or any
political subdivision thereof or any authority therein or thereof having power to tax, unless the
withholding or deduction of such taxes, duties, assessments or governmental charges is required by
law. In that event the Issuer shall pay such additional amounts as will result in receipt by the
Noteholders and the Couponholders after such withholding or deduction of such amounts as would
have been received by them if no such withholding or deduction had been required, except that no
such additional amounts shall be payable in respect of any Note or Coupon presented for payment:
(a)
in Italy;
(b)
by or on behalf of a holder which is liable to such taxes, duties, assessments or
governmental charges in respect of such Note or Coupon by reason of its having some
connection with Italy other than the mere holding of the Note or Coupon; or
(c)
where such withholding or deduction is imposed on a payment to an individual and is
required to be made pursuant to European Council Directive 2003/48/EC or any other
Directive implementing the conclusions of the ECOFIN Council meeting of 26-27
November 2000 on the taxation of savings income or any law implementing or
complying with, or introduced in order to conform to, such Directive; or
(d)
by or on behalf of a holder who would have been able to avoid such withholding or
deduction by presenting the relevant Note or Coupon to another Paying Agent in a
member state of the European Union; or
(e)
more than 30 days after the Relevant Date except to the extent that the holder of such
Note or Coupon would have been entitled to such additional amounts on presenting such
Note or Coupon for payment on the last day of such period of 30 days; or
(f)
to the extent that interest or any other amount payable is paid to a holder who is a
non-Italian resident individual or legal entity which is resident for tax purposes in a tax
haven country (as defined and listed in the Ministry of Finance Decree of 23 January
2002) or which is resident for tax purposes in a country which does not allow the Italian
tax authorities to obtain appropriate information in respect of the beneficiary of the
payments made from Italy; or
(g)
in relation to any withholding or deduction of any interest, principal or other proceeds of
any Note or Coupon on account of imposta sostitutiva (at the date of issue of the Notes
levied at the rate of 12.5 per cent. (or such rate as may replace it)) pursuant to Italian
Legislative Decree No. 239 of 1 April 1996 as amended from time to time (``Legislative
Decree No. 239'') and in all circumstances in which the procedures set forth in
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Legislative Decree No. 239 in order to benefit from a tax exemption have not been met
or complied with, except where such procedures have not been met or complied with
due to the actions or omissions of the Issuer or its agents.
In these Conditions, ``Relevant Date'' means whichever is the later of (1) the date on which the
payment in question first becomes due and (2) if the full amount payable has not been received in
a city in which banks have access to the TARGET System by the Principal Paying Agent or the
Trustee on or prior to such due date, the date on which (the full amount having been so received)
notice to that effect has been given to the Noteholders.
Any reference in these Conditions to principal or interest shall be deemed to include any additional
amounts in respect of principal or interest (as the case may be) which may be payable under this
Condition 7 (Taxation) or any undertaking given in addition to or in substitution of this Condition 7
(Taxation) pursuant to the Trust Deed.
If the Issuer becomes subject at any time to any taxing jurisdiction other than Italy, references in
these Conditions to Italy shall be construed as references to Italy and/or such other jurisdiction.
8.
EVENTS OF DEFAULT
If any of the following events occurs, then the Trustee at its discretion may and, if so requested in
writing by holders of at least one quarter of the aggregate principal amount of the outstanding
Notes or if so directed by an Resolution, shall (subject, in the case of the occurrence of any of the
events mentioned in paragraphs (b) (Breach of other obligations), (d) (Unsatisfied judgment), (e)
(Security enforced) or to the extent of any event which under the laws of the Republic of Italy has
an analogous effect to the events referred to in paragraphs (d) (Unsatisfied judgment) and (e)
(Security enforced) below and, in relation only to a Material Subsidiary of the Issuer, paragraphs (c)
(Cross-default of Issuer or Material Subsidiary) or (g) (Winding up, etc.) below, to the Trustee having
certified in writing that the occurrence of such event is in its opinion materially prejudicial to the
interests of the Noteholders and, in all cases, to the Trustee having been indemnified or provided
with security to its satisfaction) give notice to the Issuer declaring the Notes to be immediately due
and payable, whereupon they shall become immediately due and payable at their principal amount
together with accrued interest without further action or formality:
(a)
Non-payment: the Issuer fails to pay any amount of principal in respect of the Notes on the
due date for payment thereof or fails to pay any amount of interest in respect of the Notes
on the due date for payment thereof and such failure continues for a period of seven days in
the case of principal and fourteen days in the case of interest; or
(b)
Breach of other obligations: the Issuer defaults in the performance or observance of any of its
other obligations under or in respect of the Notes or the Trust Deed and such default (i) is, in
the opinion of the Trustee, incapable of remedy or (ii) being a default which is, in the opinion
of the Trustee, capable of remedy remains unremedied for 30 days after the Trustee has given
written notice thereof to the Issuer; or
(c)
Cross-default of Issuer or Material Subsidiary:
(i)
any Indebtedness of the Issuer or any of its Material Subsidiaries is not paid when due or
(as the case may be) within any originally applicable grace period;
(ii)
any such Indebtedness becomes due and payable prior to its stated maturity otherwise
than at the option of the Issuer or (as the case may be) the relevant Material Subsidiary
or (provided that no event of default, howsoever described, has occurred) any person
entitled to such Indebtedness; or
(iii) the Issuer or any of its Material Subsidiaries fails to pay when due any amount payable
by it under any Guarantee of any Indebtedness;
provided that the amount of Indebtedness referred to in sub-paragraph (i) and/or sub-
paragraph (ii) above and/or the amount payable under any Guarantee referred to in sub-
paragraph (iii) above individually or in the aggregate exceeds A15,000,000 (or its equivalent in
any other currency or currencies); or
(d)
Unsatisfied judgment: one or more judgment(s) or order(s) for the payment of an amount
(whether individually or in aggregate) in excess of (i) A15,000,000 (or its equivalent in any
other currency or currencies), or (ii) in connection with European Commission decision 2003/
193/EC of 5 June 2003 a judgment or order of payment of an amount in excess of
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A50,000,000 (or its equivalent in any other currency or currencies) which is either capable of
being appealed or contested in good faith or is not being appealed or contested in good faith
is rendered against the Issuer or any of its Material Subsidiaries and continue(s) unsatisfied
and unstayed for a period of 30 days after the date(s) thereof or, if later, the date therein
specified for payment; or
(e)
Security enforced: a secured party takes possession, or a receiver, manager or other similar
officer is appointed, of the whole or a material part of the undertaking, assets and revenues of
the Issuer or any of its Material Subsidiaries; or
(f)
Insolvency, etc.: (i) the Issuer or any of its Material Subsidiaries becomes insolvent or is unable
to pay its debts as they fall due, (ii) an administrator or liquidator of the Issuer or any of its
Material Subsidiaries or the whole or a material part of the undertaking, assets and revenues
of the Issuer or any of its Material Subsidiaries is appointed (or application for any such
appointment is made), (iii) the Issuer or any of its Material Subsidiaries takes any action for a
readjustment or deferment of any of its obligations or makes a general assignment or an
arrangement or composition with or for the benefit of its creditors or declares a moratorium
in respect of any of its Indebtedness or any Guarantee of any Indebtedness given by it or (iv)
an encumbrancer takes possession or a receiver, administrative receiver or other similar person
is appointed of the whole or a material part of the assets or undertaking of the Issuer or any
Material Subsidiary of the Issuer; or
(g)
Winding up, etc.: an order is made or an effective resolution is passed for the winding up,
liquidation or dissolution of the Issuer or any of its Material Subsidiaries; or
(h)
Cessation of business: the Issuer or any Material Subsidiary shall cease or announce that it
shall cease to carry on all or a material part of its business (otherwise than for the purpose of
a solvent amalgamation, merger or reconstruction under which the assets and liabilities of the
Issuer or the Material Subsidiary, as the case may be, are assumed by the entity resulting from
such amalgamation, merger or reconstruction and such entity assumes the obligations of the
Issuer or the Material Subsidiary, as the case may be, in respect of the Notes, and an opinion
of an independent legal adviser of recognised standing in Italy, in the case of the Issuer and in
the relevant jurisdiction of incorporation in the case of the Material Subsidiary has been
delivered to the Trustee confirming the same prior to the effective date of such amalgamation,
merger or reconstruction); or
(i)
Analogous event: any event occurs which under the laws of the Republic of Italy has an
analogous effect to any of the events referred to in paragraphs (d) (Unsatisfied judgment) to
(g) (Winding up) above.
In these Conditions:
``Consolidated Assets'' means the aggregate value of the assets of the Issuer and its Subsidiaries, as
disclosed in the consolidated financial statements of the Issuer and its Subsidiaries most recently
prepared before the time when the determination or examination is being made as required by and
in accordance with the terms hereof;
``Indebtedness'' means any indebtedness of any Person for moneys borrowed or raised (including
any interest); and
``Material Subsidiary'' means, as of any date any Subsidiary of the Issuer which (i) accounts for
more than 5 per cent. of the Consolidated Assets of the Issuer and its Subsidiaries (as disclosed in
the consolidated financial statements of the Issuer) as of such date; or (ii) accounted for more than
5 per cent. of the consolidated revenues of the Issuer and its Subsidiaries (as disclosed in the
consolidated financial statements of the Issuer) for the year ended on or immediately prior to such
date.
For the purpose of this Condition 8:
``Guarantee'' means, in relation to any Indebtedness of any Person, any obligation of another Person
to pay such Indebtedness including (without limitation):
(a)
any obligation to purchase such Indebtedness;
(b)
any obligation to lend money, to purchase or subscribe shares or other securities or to
purchase assets or services in order to provide funds for the payment of such Indebtedness;
(c)
any indemnity against the consequences of a default in the payment of such Indebtedness; and
9