185000000 IT Holding Finance SA

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In addition, the change of control provisions contained in the indenture may not protect holders of the Notes in the event of certain highly leveraged transactions, including reorganizations, restructurings or mergers, because these transactions may not involve a change in voting power or beneficial interest of the magnitude required to trigger the change of control provisions. See “Description of the Notes—Purchase of Notes upon a Change of Control”. Your ability to recover under the share charges to be granted following the discharge and satisfaction of the 2005 Notes will be limited. In order to secure our obligations under the New Credit Agreement and the Guarantee of the Notes by the Company, the Company will grant first-ranking security interests in the share capital of certain of its direct subsidiaries (the “Share Charges”) following the satisfaction and discharge of the 2005 Notes. You may not be able to recover on the Share Charges if the proceeds realized from such sale or sales is less than the total aggregate amount owed under the New Credit Agreement, the Notes and the 2005 Notes. If so, you will not recover anything under the Share Charges or you will not recover the aggregate amount of the obligations under the Notes, respectively. There are risks regarding the enforceability of the Share Charges under Italian law. Under Italian law, a security interest created pursuant to a share pledge is not validly enforceable for the benefit of the beneficiaries who are not a party to the relevant pledge agreement creating the security interest. Therefore, The Bank of New York, as registered holder of the Notes, and the Trustee are entering into an agreement with the Issuer and the Company under which they will become the holder of the secured claim for the benefit of the holders of the Notes. However, if a challenge to the validity or enforceability of the security interest created by the Share Charges were successful, holders of the Notes might be unable to recover any amounts under the Share Charges. The Share Charges are governed by Italian law and provide that the rights with respect to the Notes, the Guarantees and the Indenture must be exercised by the Joint Security Agent on behalf of the holders of the Notes and in respect of the entire outstanding amount of the Notes. As a consequence, holders of the Notes may not, individually or collectively, take any direct action to enforce any rights in their favor under the Share Charge. The holders of the Notes may only act through the Joint Security Agent. The named beneficiaries in the Share Charges are the Joint Security Agent, the lenders under the New Credit Agreement specifically identified as such in the Share Charges, the Trustee and the registered holder of the Notes, which will be The Bank of New York Depository (Nominees) Limited. With respect to Share Charges governed by Italian law, our Italian counsel has advised us that there is some uncertainty under Italian law (i) if beneficial owners of the Notes that are not identified as registered holders in the Share Charges will be deemed to have a valid and perfected security interest under the Share Charges and (ii) as to the validity of any security interest created in favor of The Bank of New York Depository (Nominees) Limited, as registered holder of the Notes. Also, under Italian law, in the event that the Company entered into insolvency proceedings, the security interest created under the Share Charges could be subject to potential challenges by a court appointed officer or by other creditors of the Company under the “claw-back” provisions of Italian insolvency law. If any challenge to the validity or the perfection of the security interest created by the Share Charges was successful, holders of the Notes may not be able to recover any amounts under the Share Charges. Fraudulent transfer statutes may limit your rights as a holder of the Notes. Our obligations under the Notes are guaranteed by the Guarantors. The Guarantors are organized under the laws of Italy. Each of the Guarantees may be subject to review under the provisions of Italian law relating to prohibiting fraudulent instruments, deeds or acts. The following discussion of Italian law describes generally applicable terms and principles, which are defined under Italy’s fraudulent transfer statutes. In an insolvency proceeding, it is possible that creditors of the Guarantors may challenge the Guarantees and intercompany obligations as fraudulent instruments. If so, such provisions may permit a court, if it makes certain findings, to: 18
• avoid or invalidate all or a portion of the Guarantors’ obligations under the Guarantees; • direct that holders of the Notes return any amounts paid under a Guarantee to the relevant Guarantor or to a fund for the benefit of its creditors; and • take other action that is detrimental to you. If we cannot satisfy our obligations under the Notes and any Guarantee is found to be a fraudulent instrument, we cannot assure you that we can ever repay in full any amounts outstanding under the Notes. In addition, the liability of each Guarantor under the indenture will be limited to the amount that will result in its Guarantee not constituting a fraudulent instrument or improper corporate distribution, and there can be no assurance as to which standard a court would apply in making any such determination of the maximum liability of each Guarantor. In general, in order to avoid or invalidate any of these actions, a court must determine that, at the time the Guarantees were issued, the Guarantor: • issued such Guarantee with the intent of hindering, delaying or defrauding its current or future creditors; or • received less than reasonably equivalent value for incurring the debt represented by the Guarantees on the basis that the Guarantees were incurred solely for the Issuer’s benefit or some other basis and (i) was insolvent or rendered insolvent by reason of the issuance of the Guarantee, (ii) was engaged, or about to engage, in a business or transaction for which the Guarantor’s assets were unreasonably small or (iii) intended to incur, or believed it would incur, debts beyond its ability to make required payments as and when they would become due. Different jurisdictions evaluate insolvency by applying different criteria, but a Guarantor is generally considered to have been insolvent at the time it issued a guarantee if: • its liabilities exceeded the fair market value of its assets; • it could not pay its debts as and when they become due; or • the present saleable value of its assets is less than the amount required to pay its total existing debts and liabilities, including contingent liabilities, as they mature or become absolute. We cannot assure you as to which standard a court would apply in assessing whether a Guarantor was “insolvent” as of the date it issued the Guarantees. Nor can we assure you that, regardless of the method of valuation, a court would not determine that a Guarantor was insolvent on that date, or that a court would not determine, regardless of whether or not a Guarantor was insolvent on the date its Guarantee was issued, that payments to holders of the Notes constituted fraudulent instruments on other grounds. The insolvency laws of Italy and Luxembourg may not be as favorable to you as the bankruptcy laws of the jurisdictions with which you are familiar. Italy We are subject to Italian laws governing creditors’ rights and bankruptcy, insolvency and restructuring proceedings. In general, these Italian laws are considered to be more favorable to debtors and to the trustee in bankruptcy than the regimes of certain other jurisdictions, including the United States. Moreover, the enforcement of security interests by creditors in Italy can be time-consuming and expensive. Under Italian law, a company must be declared insolvent by a court. Insolvency occurs when a debtor is no longer able to regularly meet its obligations as and when they become due on a permanent, rather than temporary, basis. 19
Page 1 and 2: CONFIDENTIAL Rule 144A Global Note
Page 3 and 4: Definitions In this annual report:
Page 5 and 6: • risks related to our principal
Page 7 and 8: Our Strategic Refocusing Program Du
Page 9 and 10: manufacturing of our products to th
Page 11 and 12: income tax on a consolidated basis
Page 13 and 14: (3) Net working capital is defined
Page 15 and 16: We must anticipate trends and respo
Page 17 and 18: We are subject to significant restr
Page 19: event of a foreclosure on the secur
Page 23 and 24: a maximum of two years); (ii) a pro
Page 25 and 26: • pursuant to article 445 of the
Page 27 and 28: Our Company DESCRIPTION OF BUSINESS
Page 29 and 30: Versus is a medium-priced fashion b
Page 31 and 32: in print (fashion magazines and new
Page 33 and 34: We maintain a close working relatio
Page 35 and 36: Licensor and Brands Gianni Versace
Page 37 and 38: Legal proceedings Ordinary Course L
Page 39 and 40: OPERATING AND FINANCIAL REVIEW AND
Page 41 and 42: each year, when payments to our sup
Page 43 and 44: Income taxes In 2004, we incurred a
Page 45 and 46: Facilities and bank overdraft facil
Page 47 and 48: • €150.0 million principal amou
Page 49 and 50: Contractual obligations The followi
Page 51 and 52: An impairment loss in respect of go
Page 53 and 54: Salvatore Vicari has been a directo
Page 55 and 56: PRINCIPAL SHAREHOLDERS The table be
Page 57 and 58: invoiced to us by Pavia e Ansaldo -
Page 59 and 60: The Board of Directors IT Holding S
Page 61 and 62: REPORT OF THE AUDITORS The Board of
Page 63 and 64: IT HOLDING S.p.A. CONSOLIDATED BALA
Page 65 and 66: Acquisition of Subsidiary During 20
Page 67 and 68: IT HOLDING S.P.A. NOTES TO THE CONS
Page 69 and 70: IT HOLDING S.p.A. Notes to the cons
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IT HOLDING S.p.A. Notes to the cons
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