185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2004
Ferré Finance S.A. 7% Guaranteed Notes due 2005
At 31 December 2004, Euro 175 million in principal amount were outstanding (2003: Euro 200 million). The
notes fall due on May 10, 2005 however, Euro 80,434 thousand nominal value were repurchased following the
voluntary tender offer closed in January 2005 (see note 9). Interest accrues at a rate of 7% per annum and is
payable in arrears on May 10 each year. The use of the proceeds of the issue of the 2012 senior notes deposited in
the escrow account, (see note 11) is restricted to the repayment of these 2005 notes.
The 2005 Note Trust Deed contains certain covenants pursuant to which:
• the Issuer and the Company must ensure that the net borrowing ratio of the Company is no greater than certain
thresholds, which vary over time;
• the Issuer and the Company have agreed not to sell, lease or otherwise dispose of certain strategic and nonstrategic
trademarks or other intellectual property rights of the Company or any asset related thereto, except for
certain agreed exceptions; provided that the proceeds of such sale, lease or disposal are reinvested in the core
business activities of the Company or used to pay amounts due and payable under the 2005 Notes or, if no such
amounts are at that time due and payable, other debt within the Company;
• the Issuer and the Company have agreed not to grant security or charge certain trademarks of the Company,
unless such security or charge is granted in order to secure the permitted indebtedness only; and
• the Issuer and the Company have agreed to deliver certain financial information and compliance certificates.
IT Holding Finance S.A. Euro 150 million 9 7/8% Senior Notes due 2012
The notes were issued in October 2004 and fall due in November 2012 for a principal amount of Euro 150 million.
Interest accrues at a rate of 9 7/8% per annum and is payable in arrears on May 15 and November 15 of each year
beginning on May 15, 2005. Up to 35% of the aggregate principal amount of the notes may be redeemed prior to
November 15 2007, with the net proceeds from certain equity offerings. In addition, any time after May 15, 2006,
the notes may be redeemed, all or in part, by paying a “make-whole” premium.
The Notes are guaranteed on a senior basis by the Company and each of the subsidiaries ITTIERRE S.p.A., ITC
S.p.A. and MALO S.p.A. and rank equally with any of the guarantors’ existing and future unsubordinated
obligations and senior to any subordinated indebtedness.
Upon the satisfaction and discharge of the 2005 Notes, the guarantees provided by the Company and ITTIERRE
S.p.A. will be secured on an equal and ratable basis with all obligations of the Company under the Euro 85 million
loan agreement, by a first priority pledge of the equity interests in GIANFRANCO FERRÉ S.p.A., MALO S.p.A.
and ITTIERRE S.p.A..
If the Company experiences a "Change of Control", holders of the Notes will have the right to require the Issuer to
repurchase the Notes at a purchase price equal to 101% of their aggregate principal amount, plus accrued and
unpaid interest, if any, to the date of the purchase.
The indenture governing the Notes, among other things, limits the ability of the Company and certain subsidiaries,
subject to certain limitations, exceptions and qualifications, to:
• make certain payments, including dividends or other distributions;
• incur or guarantee additional debt and issue preferred stock;
• make certain investments or acquisitions and participate in joint ventures;
• prepay or redeem subordinated debt or equity;
• engage in certain transactions with affiliates;
• consolidate or merge with or into other companies;
• sell all or substantially all of our assets or those of our subsidiaries;
• issue or sell share capital of certain subsidiaries;
• create or incur certain liens or enter into sale and leaseback transactions; and
• enter into unrelated businesses.
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