Some of the loan agreements in favour of the Group contain special clauses which envisage, in the event of failure to comply with certain economic and financial covenants, the possibility that the lending banks may require the loans to be repaid if the company involved does not immediately remedy the infringement of the said covenants as per the terms and conditions of the loan agreements.

At December 31 2010 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 the end of the year.

Sogefi S.p.A., the parent company of the Group’s sub-holding operating in the automotive sector, has undertaken to observe a series of covenants which are summarized below:

• a 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;
• a loan of € 100 million: ratio of consolidated net financial position to consolidated EBITDA lower than 4;
• a loan of € 50 million: ratio of consolidated net financial position to consolidated EBITDA lower than 3.5;
• a loan of € 40 million from the European Investment Bank (EIB); ratio of consolidated net financial position to consolidated EBITDA 3.5 or lower; ratio of consolidated EBITDA to consolidated net financial expense no lower than 4.

For all the loan agreements indicated above the income and expense from non-ordinary operations are excluded from the EBITDA calculation.

The Sorgenia group through some of its subsidiaries has undertaken in relation to loans for the construction of power plants to respect covenants that require that the ratio of consolidated net debt to the sum of debt plus equity (gearing ratio) remain between 64% and 80%, depending on the loan and that the operating cash flow net of tax during the period of construction of the power plants be higher than 1.05 times the disbursements for repayment of capital and interest as set out in the repayment schedule (debt service coverage ratio).

These commitments were entered into on a total credit facility amount of approximately € 1,250 million.

The KOS group has undertaken to observe a series of covenants in relation to certain loans. Details are as follows:

• revolving credit lines for a total of € 33 million obtained by the parent company of the KOS group: ratio of consolidated net financial position to consolidated equity below 2.5;
• syndicated loan for a total of approximately € 30 million obtained by Residenze Anni Azzurri S.r.l.: ratio of net financial position to EBITDA below 3.8 and ratio of consolidated net financial position to consolidated equity lower than 2.2;
• syndicated loan for a total of approximately € 34 million obtained by Istituto di Riabilitazione Santo Stefano S.r.l.: ratio of net financial position to EBITDA lower than 6.8, ratio of consolidated net financial position to consolidated equity lower than 1.6, and a debt service coverage ratio of above 0.8;
• loan of approximately € 0.3 million obtained by Redancia S.r.l.: ratio of net financial position to EBITDA lower than 3.0, ratio of consolidated net financial position to consolidated equity below 2.1, and a debt service coverage ratio of above 1.05.