Certain agreements regarding Group borrowings contain special clauses which, in the event of failure to comply with certain economic and financial covenants, envisage the lending banks’ option to claim repayment if the company involved does not immediately remedy the infringement of such covenants as required under the terms and conditions of the agreements.

At 31 December 2011 all the contractual clauses relating to medium and long term financial liabilities were fully complied with by the group.

Below is a description of the main covenants relating to the borrowings of the operating sub-holding companies outstanding at year end.

Sogefi S.p.A., the parent company of the group’s sub-holding operating in the automotive sector, has undertaken to comply with a series of “covenants” as summarised below:

• syndicated loan of € 160 million: ratio of consolidated net financial position to consolidated EBITDA of 3.5 or lower; ratio of EBITDA to net financial expense no lower than 4;
• loan of € 100 million: ratio of consolidated net financial position to consolidated EBITDA lower than 4;
• loan of € 60 million: ratio of consolidated net financial position to consolidated EBITDA lower than 3.5;
• loan of € 100 million: ratio of consolidated net financial position to consolidated EBITDA of 3.5 or lower; ratio of consolidated EBITDA to net financial expense no lower than 4.

For borrowings regarding power plant construction, through a number of its subsidiaries the Sorgenia group has undertaken to comply with covenants requiring that the ratio of consolidated net debt to the sum of debt plus equity (gearing ratio) remains between 64% and 80%, depending on the loan, and that the operating cash flow net of tax during construction of the power plants is higher than 1.05 times the debt service coverage ratio.

The KOS Group has undertaken to comply with a series of covenants in relation to a number of loans, details of which are as follows:

• revolving credit facilities for a total of € 47 million (zero payable at 31 December 2011) obtained by the Parent Company KOS: ratio of consolidated net financial position to consolidated equity lower than 2.5;
• syndicated loan for a total remaining at 31 December 2011 of approximately € 22.1 million obtained by Residenze Anni Azzurri S.r.l.: ratio of net financial position to EBITDA lower than 3.88 and ratio of consolidated net financial position to consolidated equity lower than 2.19;
• syndicated loan for a total remaining at 31 December 2011 of approximately € 29.3 million obtained by Istituto di Riabilitazione Santo Stefano S.r.l.: ratio of net financial position to EBITDA lower than 5.8, ratio of consolidated net financial position to consolidated equity below 1.5, and a debt service coverage ratio of above 0.8;
• loan for a total remaining at 31 December 2011 of approximately € 4.9 million obtained by Medipass S.p.A.: ratio of net financial position to EBITDA lower than 3.6, ratio of consolidated net financial position to consolidated equity lower than 3.5, and a debt service coverage ratio above 1.