1. wfw.com1 The reform of the Italian Bankruptcy Law and its impact on the Preventative Composition with Creditors Furio Samela, Partner Watson, Farley & Williams Shipping and the Law 2012 - Villa Pignatelli, Naples 8 October 2012

2. wfw.com The reform of the Italian Bankruptcy Law The Italian Royal Decree No. 267 of 16 March 1942, as amended and supplemented from time to time (the “Bankruptcy Law”), has been recently further amended and supplemented by law No. 134 of 7 August 2012 (the “Law”). The Law amended, inter alia, some of the provisions provided for by articles 160 and ff. of the Bankruptcy Law relating to the preventative composition with creditors (Concordato Preventivo), which has now become more similar to Chapter 11 in the U.S..

3. wfw.com The plan for the Concordato Preventivo The debtor must present, inter alia, a reasoned economic and financial plan (the “Plan”) for the repayment of all secured and unsecured creditors. The Plan does no longer need to be mandatorily filed together with the request for the Concordato Preventivo. Indeed, the competent Court may grant to the debtor a period ranging from 60 to 120 days (which may be further extended, upon reasonable grounds, for a further 60-day period) in order to file the Plan. The Plan shall be published in the competent companies’ registry. The possibility to switch to article 182-bis of the Bankruptcy Law.

4. wfw.com The effects of the Concordato Preventivo on pending agreements In the request for the Concordato Preventivo filed with the Court, the debtor may request the termination or the suspension of agreements which are pending on the date of the filing of the request for the Concordato Preventivo. In such cases, the counterparty is entitled to be compensated for the damages caused to it as a result of the debtor’s default. However, the relevant compensation for damages will be payable as it had arisen prior to the Concordato Preventivo. This means that the compensation for damages would be payable with the proceeds arising out of the Concordato Preventivo (moneta concordataria).

5. wfw.com Financings obtained during the Concordato Preventivo The debtor who files a request for the Concordato Preventivo may request the authorisation of the Court to enter into loan agreements whose proceeds shall be considered as “super priority credits”. An independent expert appointed by the debtor, following the verification of the financial needs of the debtor until the homologation (omologa), shall certify that such loans are aimed at better satisfying the creditors. A debtor who files a request for the Concordato Preventivo providing for the continuation of the business activity may request the authorisation of the Court to pay prior outstanding credits due in exchange of assets and services, provided that the independent expert certifies that such assets and services are needed for the continuation of the business activity

6. wfw.com The Concordato con Continuitá Aziendale The Law introduced a new type of Concordato Preventivo (the “Concordato con Continuità Aziendale”) which will be applicable in case the Plan filed by the debtor provides for (i) the continuation of the business activity, or (ii) the transfer of the business management or (iii) the contribution of the business management into one or more companies (also newly incorporated). In such cases, the following further and specific provisions shall apply: (a)the Plan shall also detail (i) costs and revenues envisaged following the continuation of the business activity, (ii) the financial needs and (iii) the funds available to cover the exposure; (b)the report of the independent expert shall also certify that the continuation of the business activity provided for in the Plan is aimed at better satisfying the creditors;

7. wfw.com The Concordato con Continuitá Aziendale (c)the Plan may provide for a moratorium (up to one year) in respect of repayment of the credits secured, inter alia, by a pledge or a mortgage, unless the Plan provides for the sale of the mortgaged or pledged asset; and (d)the agreements which are pending on the date of the filing of the request for the Concordato con Continuità Aziendale cannot be automatically terminated as a consequence of the opening of such proceeding. Any provision of the relevant agreement providing for such automatic termination is null and void.

8. wfw.com Conclusion The Law represents a significant step forward in the reform of the Bankruptcy Law. The changes set out in the Law will surely be of help to companies in financial difficulties to which more flexible instruments will be available. However, the changes introduced by the Law have been tailored so as to be mostly in favour of companies in financial difficulties and, in doing so, the Law may prejudice solvent companies which should now deal with, inter alia, (i) an anticipated protection ensured by an automatic stay imposed as soon as the request for Concordato Preventivo (without the Plan being drafted) is published in the companies’ registry, and (ii) the termination or suspension of agreements already entered into.

9. wfw.com9 Contact Furio Samela Partner fsamela@wfw.com T: +39 06 68 40 581 Rome

10. wfw.com All references to ‘Watson, Farley & Williams’ and ‘the firm’ in this presentation mean Watson, Farley & Williams LLP and/or its affiliated undertakings. Any reference to a ‘partner’ means a member of Watson, Farley & Williams LLP, or a member or partner in an affiliated undertaking, or an employee or consultant with equivalent standing and qualification. This presentation constitutes attorney advertising. © Watson, Farley & Williams 2012