MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform

enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform)

LIMITED LIABILITY COMPANIES SRL Formalities and procedures for incorporation: the company must be incorporated before an Italian Notary Public. The parties can appear personally or be represented by attorneys-in-fact. When the incorporating members are foreign companies, it is advisable that the individual appearing in front of the Italian Notary Public be entitled in force of a special power of attorney, even if such individual is actually the legal representative of the quota-holder(s).

STOCK CORPORATIONS SPA Formalities and procedures for incorporation: the company must be incorporated before an Italian Notary Public. The parties can appear personally or be represented by attorneys-in-fact. When the incorporating members are foreign companies, it is advisable that the individual appearing in front of the Italian Notary Public be entitled in force of a special power of attorney, even if such individual is actually the legal representative of the shareholder(s).

Srl may be incorporated only by means of Spa may be incorporated by means of a a simultaneous constitution procedure. simultaneous constitution procedure or by means of a public subscription. Sole quota-holder: an Italian Srl can be Sole shareholder: an Italian Spa can be incorporated also with a sole quota-holder incorporated also with a sole shareholder (art. 2463, 1, of the Italian Civil Code, (art. 2325 and 2328, 1, ICC). hereinafter ICC). Liability of the sole quota-holder: should the company be insolvent, with reference to the obligation arisen in the period in which the quotas belonged to a sole quota-holder, the latter shall be liable without limitation (i) until the communication to the Register of Enterprises of the existence of a sole quota-holder have been duly performed and/or (ii) in the event contributions have not been fully paid in (art. 2462, 2, ICC). Liability of the sole shareholder: should the company became insolvent, with reference to the obligation arisen in the period in which the shares belonged to a sole shareholder, the latter shall be liable without limitation in the event that (i) contributions have not been fully paid in and/or (ii) until the communication to the Register of Enterprises of the existence of a sole shareholder have been duly performed (art. 2325, 2, ICC).

Minimum capital: Euro 10.000,00 (ten Minimum capital: Euro 120.000,00 (one thousand/00), (art. 2463, 1, no. 4, ICC). hundred and twenty thousand/00), (art. 2327, ICC). 1

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) Initial contribution to be paid in at the incorporation: 25% of the contributions in cash, to be deposited with a bank. In the event of a sole quota-holder, 100% of the contributions in cash. The initial contribution shall be replaced with the deposit of an insurance policy or bond (art. 2464, 4, ICC). Contributions: under the Reform, quota-holder can make contributions works and services to be granted for amount equal to their entire value, insurance policy or bond. Initial contribution to be paid in at the incorporation: 25% of the contributions in cash, to be deposited with a bank. In the event of a sole shareholder, 100% of the contributions in cash (art. 2342, ICC).

a Contributions: contributions of performing work or services an prohibited (art. 2342, 5, ICC). by

by are

Quotas: under the Reform it is not longer valid the principle of the strict proportionality between contributions and quotas.

Shares: under the Reform, an Italian Spa can issue shares with no face value. In this event, the by-laws must specify only the subscribed corporate capital and the number of issued shares, assuming that such shares are equal fractions of the share capital as well. Therefore, they do not represent any absolute value, but only a percentage, on the basis of which shareholders rights can be quantified. The company may issue several classes of shares such as, for example, (i) shares which are differently affected by losses, (ii) shares granting different voting rights, (iii) shares granting dividends depending on the companys business results within a specific sector, (iv) shares without voting rights, etc.

Administrative body: according to the Reform, an Italian Srl can be managed by (i) a Board of Directors, or (ii) a Sole Director or (iii) more Directors that will act jointly or severally. Should a Board of Directors be appointed, the company by-laws may provide that decisions can be held by way of written consultation or consent 2

Management and control systems: the Reform provides for three different management and control systems: (i) the traditional system; (ii) the monistic system and (iii) the dual system. (i) the traditional system provides for the following corporate bodies: - Shareholders meeting,

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) expressed in writing, without the need to - Board of Directors for the management hold a formal meeting (art. 2475, 4, of the company and ICC). - Board of Statutory Auditors for the control over the management. In case the company does not avail itself of the venture capital market (for example, companies which are not listed at stock exchange markets) and it is not obliged to draw the consolidated financial statement, it shall vest the Board of Statutory Auditors with the accounting audit, if this is provided for in the by-laws (art. 2409-bis, 3, ICC). Otherwise, the accounting control activity is granted to an external auditor. (ii) the monistic system provides for the following corporate bodies: - Shareholders meeting, - Board of Directors, - Management Control Committee appointed by the Board of Directors among its members which is entrusted with monitoring activities relating to the organizational structure of the company and the internal control, administrative and accounting system. It performs the Board of Statutory Auditors tasks. The accounting control activity is granted to an external auditor. (iii) the dual system provides for the following corporate bodies: - Shareholders meeting, - Management Board which directors are appointed by the Supervisory Board (equivalent to the Board of Directors), - Supervisory Board appointed by the ordinary Shareholders meeting. The accounting control activity is granted to an external auditor.

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) Duration of the Directors charge: Duration of the Directors charge: not directors shall be appointed for an exceeding three accounting periods. The unlimited period of time. expiration date corresponds to the date scheduled for the meeting that shall resolve upon the approval of the financial statement regarding the last accounting period of the directors charge (art. 2383, 2, ICC). Functions of the Directors: Directors generally represent and manage the company. In any case, the administrative body is competent for the drafting of the financial statement, for the drafting of project of merger and demerger, for decisions relating to the increase of the corporate capital (art. 2475, 5, ICC). Functions of the Directors: Directors generally represent and manage the company. The by-laws can not provide for the transfer of any management powers from the Board of Directors to the Shareholders Meeting which is only entitled to give specific authorizations to the Directors without prejudice to their The quota-holders can be vested with own liabilities. significant tasks in the management of the company by the by-laws or by the directors that may submit to the quotaholders approval the decisions on specific issues. Corporate liability action Directors: it can be started also quota-holder that may ask, if circumstances occur, for a revocation of directors. against by each specific judicial Corporate liability action against Directors: it can be started also by shareholders representing at least 1/5 of the corporate capital or the higher majority provided for by the by-laws (not exceeding 1/3), (art. 2393-bis, 1, ICC). For the companies availing themselves of the venture capital (for example, listed companies), a majority of 1/20 is required (the by-laws may provide for a lower majority), (art. 2393-bis, 2, ICC). Quota-holders decisions and resolutions: the company by-laws may provide that quota-holders can decide upon general matters by way of consent expressed in writing or by way of written consultation. However, if the company by-laws does not provide for the 4 Shareholders decisions and resolutions: the shareholders are allowed to decide upon general matters only through ordinary and extraordinary meetings. Decisions held by means of written consultation and/or consent expressed in writing, are not allowed.

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) possibility of written consultation or for consent to be expressed in writing, and, in any case, with reference to specific matters (i.e. for the amendment of the deed of incorporation, for the approval of material changes to the business purpose of the company or when a number of quota-holder representing at least 1/3 of the corporate capital or one or more directors request the adoption of a resolution), quota-holders must resolve by means of a meeting (art. 2479 ICC). Quota-holders meeting - calling: the deed of incorporation shall set out the modalities of calling of the quota-holders meeting so to ensure the timely communication of the agenda. Lacking specific provisions, the notice of call shall be given by way of registered mail, to be sent at least 8 days before the meeting (art. 2479-bis, ICC). Shareholders meeting calling: the notice of call have to be published in the Official Gazette or in a newspaper (to be specified in the company by-laws), at least 15 days before the date of the meeting. Where allowed by the by-laws, should the company do not avail itself of venture capital, the notice of call may be sent to shareholders by suitable means, allowing to provide evidence of receipt, at least 8 days before the meeting (art. 2366, ICC). The shareholders meeting can also be convened, within the limits provided for by art. 2367, 3, ICC, by shareholders holding one tenth of the share capital or even less, if provided so by the by-laws (art. 2367, ICC). Quota-holders decisions - quorum: unless otherwise provided for by the company by-laws, quota-holders decisions shall be adopted with the favorable vote of at least one half of the corporate capital (art. 2479, 6, ICC). Shareholders meetings - quorum: Shareholders meeting can be ordinary or extraordinary, depending on issues to be discussed upon and it can be on first and/or second or further calls. Quorum first call (art. 2368, ICC) - Ordinary meeting: it is regularly constituted with the presence of at least one half of the corporate capital and validly resolves with the favorable vote of the absolute majority, unless otherwise provided for by the by-laws.

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) - Extraordinary meeting: validly resolves with the favorable vote of the at least more than one-half of the corporate capital, unless otherwise provided for by the by-laws. Quorum second call or further calls (art. 2369, ICC) - Ordinary meeting: it validly resolves on the item of the agenda whatever may be the number of shareholders in attendance. - Extraordinary meeting: generally it is regularly constituted with the presence of more than one-third of the corporate capital and resolves with the favorable vote of at least two-third of the capital there represented. The company by-laws may provide for different majorities. Section 2369 of the Italian Civil Code also provides for specific majorities regarding specific items. Quota-holders meetings in plenary form: notwithstanding the lack of notice of calling, resolutions are validly held when the entire corporate capital and all the appointed Directors and Auditors are in attendance or have been informed and no one opposes to the resolution at issue (art. 2479-bis, 5, ICC). Shareholders meetings in plenary form: notwithstanding the lack of notice of calling, resolutions are validly held when the entire capital and the majority of Directors and Statutory Auditors are present (art. 2366, 4, ICC).

Board of Statutory Auditors: the Board of Statutory Auditors: it must be appointment of a Board of Statutory appointed only in the companies with a Auditor is not always necessary. traditional management system. Should the capital of the Italian Srl exceed the amount of Euro 120.000,00, it will be necessary to appoint a Board of Statutory Auditors. The Board must also be appointed in the event for two subsequent financial years two of the following limits have been exceeded:

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) - total of the assets shown in the F/S: Euro 4,400,000.00; - turnover: Euro 8,800,000.00; - employees: 50 units. The obligation at issue ceases if two of the above limitations are not exceeded for two years (art. 2477, ICC). Functions of the Board of Statutory Functions of the Board of Statutory Auditors: it performs controls over the Auditors: it performs controls over the management of the company. management of the company. Accounting audit: unless otherwise Accounting audit: it generally shall be provided for by the company by-laws, the exercised by an Auditor or by an Audit accounting audit is granted to the Board company. of Statutory Auditors (art. 2477, ICC). Should a company choose a traditional The accounting audit of an Italian Srl can management system, does not avail itself also be granted to an Auditor, without of the venture capital market and it is not prejudice of the other functions granted to obliged to draw the consolidated financial the Board of Statutory Auditors, if so is statement, it can vest the Board of allowed by the companys by-laws Statutory Auditors with the accounting audit (art. 2409-bis, 3, ICC). Minority rights: the quota-holders that do not participate to the management of the company are entitled to be informed by the directors about the carrying out of the business and to inspect the companys books and documents relating to the management of the company, also by way of professionals of their trust (art. 2476, 2, ICC). Minority rights: minorities have no special rights to exercise like inspecting documents and starting the corporate liability action against Directors, except for the followings. The shareholders shall (i) call the meeting within the limits provided for by the above paragraph Shareholders meeting calling, (ii) start the corporate liability action against directors within the limits provided for by the above paragraph Corporate liability action against Directors and (iii) report to tribunal. In particular, with regards to this latter issue, if there is a basis for suspicion of serious irregularities in the management by the directors in violation of their duties, which may damage the company or one or more of the controlled companies, shareholders representing one-tenth of the companys capital or, in companies which make recourse to the market of risk

MAJOR ANALOGIES AND DIFFERENCES BETWEEN ITALIAN SRL AND ITALIAN SPA as per the Corporate Law Reform enacted by Legislative Decree No. 6 of January 17, 2003 and its following modifications (hereinafter, the Reform) capital, one-twentieth of the companys capital, can report the facts to the tribunal with a recourse to be served also on the company. The by-laws may provide for lawer percentages of participation (art. 2409, 1, ICC). Quota-holders agreements: no particular Shareholders agreements: the Reform provisions are set by the law. introduced several provisions regarding terms and public disclosure of the shareholders agreements (art. 2341-bis and 2341-ter, ICC). Assets designated for a specific business Assets designated for a specific business transaction: the Reform does not provide transaction: under the Reform and in for any special rule about such item. order to extend financial opportunities for Italian Spa, a company may provide for the constitution of (i) assets destined for a specific deal and (ii) loans destined for a specific deal (art. 2447-bis and followings, ICC).