Schematrentaquattro S.p.A. EUR 200 million Unsecured Guaranteed Exchangeable Bonds due 2016 Exchangeable into shares of Pirelli & C. S.p.A.

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1 NOT FOR DISTRIBUTION IN OR INTO THE US, CANADA OR JAPAN OR ANY OTHER COUNTRIES WHERE OFFERS OR SALES WOULD BE FORBIDDEN UNDER APPLCIABLE LAWS OR This indicative term sheet comprises only a summary of the terms of the proposed exchangeable bonds (the "Bonds") which are subject to change. This is not an offering memorandum or prospectus and should not be treated as offering material of any sort and is for information purposes only. The information herein is indicative only and must be considered in conjunction with and subject to the publicly available information of Schematrentaquattro S.p.A. (the "Issuer"), Edizione S.r.l. (the "Guarantor") and Pirelli & C. S.p.A. and to amendment in its entirety by the final Terms and Conditions relating to these securities. Although the indicative information herein is reflective of the terms of the Bonds contemplated as of the time of this communication, there is no assurance that the Bonds will actually be issued. The Bonds will be issued on the basis of final Terms and Conditions that are expected to be delivered to investors prior to or upon settlement. Before making any investment decision and entering into any transaction in relation to the Bonds, you should take steps to ensure that you understand the transaction and have made an independent assessment of the appropriateness of the transaction in the light of your own objectives. You should make sure that you have sufficient information available in relation to the Issuer, the Guarantor and Pirelli & C. S.p.A. before making an investment in the Bonds. Prospective purchasers should carefully review the sections "Exchange Right" and "Settlement upon Exchange" and the final Terms and Conditions. Schematrentaquattro S.p.A. EUR 200 million Unsecured Guaranteed Exchangeable Bonds due 2016 Exchangeable into shares of Pirelli & C. S.p.A. Issuer: Guarantor: Securities Offered: Status of the Bonds: Status of the Guarantee: Security: Exchange Property: Schematrentaquattro S.p.A. (the "Issuer"), 100% owned by Edizione S.r.l. Edizione S.r.l. (the Guarantor ) Euro denominated guaranteed bonds (the "Bonds") exchangeable into existing ordinary shares of Pirelli & C. S.p.A. ( Pirelli or the Company ) listed on Borsa Italiana (ISIN: IT , Bloomberg ticker: PC IM, Reuters: PECI.MI) (the "Shares") The Bonds will constitute direct, unconditional, unsubordinated and (subject to the negative pledge on capital markets indebtedness) unsecured obligations of the Issuer The Guarantee will constitute direct, unconditional, unsubordinated and (subject to the negative pledge on capital markets indebtedness) unsecured obligations of the Guarantor Guarantee means the guarantee granted by the Guarantor in respect of of (i) the due and punctual payment of all sums from time to time payable by the Issuer in respect of the Bonds, as and when the same become due and payable, whether at maturity, upon early redemption, upon acceleration or otherwise, provided that the amount of this payment guarantee will be limited to 130% of the aggregate principal amount of the Bonds and of the interest on such Bonds accrued but not paid as at any date on which such amount falls to be determined and (ii) the due and punctual performance by the Issuer of all of the Issuer's other obligations (other than payment obligations) in respect of the Bonds The Issuer will not grant any kind of security over the Shares The Exchange Property will initially comprise 14,434,805 Shares, which represents approximately 3.03% of the Company s share capital on the Launch Date of the Bonds and each bond will initially represent 7, Shares The Exchange Property will be subject to adjustment and to conversion in cash as THIS DOCUMENT IS BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON DIRECTLY OR INDIRECTLY TO ANY OTHER PERSON OR PUBLISHED IN WHOLE OR IN PART FOR ANY PURPOSE. NEITHER THIS DOCUMENT NOR ANY COPY OF IT MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES, CANADA OR JAPAN. THE DISTRIBUTION OF THIS DOCUMENT IN OTHER JURISDICTIONS MAY BE RESTRICTED BY LAW AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTIONS. BY ACCEPTING THIS DOCUMENT YOU AGREE TO BE BOUND BY THE FOREGOING INSTRUCTIONS. THIS DOCUMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR SALE OR SUBSCRIPTION OF OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON OR IN CONNECTION WITH ANY COMMITMENT WHATSOEVER. INVESTORS SHOULD NOT SUBSCRIBE FOR ANY BONDS REFERRED TO HEREIN EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN THE FINAL VERSION OF THE TERMS AND CONDITIONS OF THE BONDS WHEN AVAILABLE. EACH PERSON RECEIVING THIS DOCUMENT SHOULD CONSULT HIS/HER PROFESSIONAL ADVISOR TO ASCERTAIN THE SUITABILITY OF THE BONDS AS AN INVESTMENT. NONE OF THE ISSUER, GUARANTOR, PIRELLI & C. S.P.A. NOR ANY OF THE JOINT BOOKRUNNERS MAKES ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE BONDS FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE BONDS OR (III) THE FUTURE PERFORMANCE OF THE BONDS EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS. THE JOINT BOOKRUNNERS, OR ANY OF THEIR RESPECTIVE AFFILIATES MAY FROM TIME TO TIME HAVE LONG OR SHORT POSITIONS IN, OR BUY AND SELL, BONDS, SHARES, FUTURES OR OPTIONS IDENTICAL OR RELATED TO THOSE MENTIONED HEREIN.

2 Rating: provided in the terms and conditions of the Bonds (the Conditions ) None for the Issuer or the Guarantor. The Bonds will not be rated Issue Size: EUR 200 million Launch Date: 20 November 2013 Closing Date: Expected on or around 29 November 2013 Final Maturity Date: Denomination of the Bonds: Issue / Redemption Price: Coupon / Yield to maturity: Exchange Premium: Reference Share Price: Initial Exchange Price: EUR Expected to be around 29 November 2016 (3 years) EUR 100,000 (the Principal Amount ) 100% of the Principal Amount 0.25% per annum, payable annually in arrear on 29 November of each year, with the first coupon to be paid on 29 November % over the Reference Share Price EUR corresponding to the Volume Weighted Average Price ( VWAP ) of the Shares on Borsa Italiana between launch and pricing Exchange Right: Exchange Period: Issuer Call: Unless previously redeemed or purchased and cancelled and subject as provided in Settlement upon Exchange below, each Bond will be exchangeable at the option of the holders of the Bonds (the Bondholders ) during the Exchange Period into a pro rata share of the Exchange Property From the 41 st day after the Closing Date until the 31 st day preceding the Maturity Date, or in the event of an Issuer Call (as described below), until the 7 th day preceding the applicable early redemption date The Bonds may be redeemed at the option of the Issuer in whole but not in part at their outstanding Principal Amount plus accrued interest on or after 21 December 2015 (2 years + 22 days), subject to the value of the pro rata share of the Exchange Property deliverable on exchange of a Bond exceeding 130% of the Principal Amount of a Bond on at least 20 trading days in any period of 30 consecutive trading days ending not earlier than the 5 th day prior to the date on which the optional redemption notice is given to the Bondholders In addition to the above, the Bonds may be redeemed at the option of the Issuer, at their outstanding Principal Amount plus accrued interest, and in any event subject to the conversion right in favour of the Bondholders, in case the Exchange Property, further to an offer to the holders of any Shares, consists wholly of cash trading day means a day (other than a Saturday or Sunday) on which commercial banks are open for business in London and Milan and the Trans- European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) is operating 2

3 Investor Put: Clean-Up Call: Settlement upon Exchange: None, except upon occurrence of (i) a Change of Control in relation to the Issuer or the Guarantor (ii) a Delisting Event in relation to the Shares (iii) a Public Offer for the Shares which consists wholly or partly of cash and which is accepted by the Issuer (in accordance with Take-over Protection) each bondholder will have the right to require the Issuer to redeem such Bond at the Principal Amount plus accrued interest Change of Control shall occur if any person or persons acting together hold, own or acquire more than 50% of the voting rights of the Issuer or of the Guarantor Delisting Event means the occurrence of the following: the Shares at any time ceasing to be admitted to listing on Borsa Italiana S.p.A. or (if the Shares have been admitted to listing and trading on another Recognised Stock Exchange in place of (and not in addition to) Borsa Italiana S.p.A.) on another Recognised Stock Exchange, save that the movement of listing and trading from one Recognised Stock Exchange to another Recognised Stock Exchange shall not itself constitute a Delisting Event The Issuer may redeem all, but not some only, of the Bonds at their Principal Amount, plus accrued interest, at any time if 85% or more of the aggregate Principal Amount of the Bonds originally issued shall have been previously redeemed, exchanged or purchased and cancelled Upon the exercise of its Exchange Rights by any Bondholder, the Issuer may elect (a Cash Election ) by giving written notice to the relevant Bondholder by no later than the date (the Cash Election Exercise Date ) falling 5 trading days following the relevant Exchange Date to satisfy exercise of the relevant Exchange Rights in whole or in part by making payment to the relevant Bondholder of the Cash Alternative Amount in lieu of delivering the relevant Exchange Property Exchange Date, in respect of any bond, means the Milan business day following the delivery by a Bondholder of its exchange notice in respect of such bond Cash Alternative Amount means a sum in cash in EUR equal to the average of the Value on each trading day in the Cash Alternative Calculation Period of the relevant pro rata share of the Exchange Property Cash Alternative Calculation Period means the period of 20 consecutive trading days commencing on the date falling 2 trading days after the Cash Election Exercise Date Value of the Exchange Property on any day means the EUR equivalent of the aggregate of: (i) the value of publicly traded securities (including Shares) included in the Exchange Property, which shall be deemed to be the VWAP of such securities on such day; and (ii) the value of all other assets (other than cash) and publicly traded securities for which a value cannot be determined pursuant to (i) above included in the Exchange Property, which shall be deemed to be the value on such day as certified by an Independent Financial Adviser; and (iii) the value of cash, which shall be deemed to be the amount thereof 3

4 Settlement upon Redemption: Upon redemption on the Maturity Date, the Issuer may, by giving notice (a Share Settlement Option Notice ), on or after the day immediately following the last day of the Exchange Period and not later than the date which is expected to be 26 trading days prior to the Maturity Date, elect to satisfy its obligation to redeem the Bonds by delivering the Relevant Exchange Property and paying, on the Maturity Date the Cash Settlement Amount together with accrued interest up to the Maturity Date Cash Settlement Amount means, in respect of a Bond, an amount (if any) calculated by the Calculation Agent, by which the principal amount of such Bond exceeds the sum of (i) in respect of Exchange Property excluding cash, 99 per cent. of the arithmetic average of the Value of the Relevant Exchange Property on each of the trading days in the Averaging Period, plus (ii) in respect of Exchange Property consisting of cash, the Value of the Relevant Exchange Property Averaging Period means the period of 20 trading days preceding the Valuation Date and ending on and including the Valuation Date, provided that, if, on the date the Share Settlement Option Notice is given, a day falling in the Averaging Period is due to be a trading day but such day subsequently is not a trading day, the Averaging Period shall not, as a result, be extended, and shall begin on the date which was, as of the date of the Share Settlement Option Notice, expected to be the first trading day in the Averaging Period, end on the Valuation Date (or the date on which the Valuation Date is deemed to fall) as aforesaid Valuation Date means the date falling 6 trading days prior to the Maturity Date Adjustment of the Exchange Property: Dividend Entitlement: Dividend Protection: Take-Over Protection: The Bonds will contain customary provisions for the adjustment of the Exchange Property in the event of the occurrence of certain dilutive events relating to the Company including, inter alia, share sub-divisions, consolidations and redenominations, rights issues, bonus issues, reorganisations and capital distributions. The rights of the Bondholders will be maintained by adjusting the Exchange Property as set out in the Conditions No right to dividend paid by reference to a payment date prior to exchange notice Cash payment in respect of any dividend paid by reference to a payment date falling between exchange notice and delivery Protection for any cash dividend amount paid in any relevant calendar year to the extent the aggregate amount of cash dividends in that calendar year, exceeds a per share amount of EUR 0.38 for 2014, EUR 0.40 for 2015 and EUR 0.42 for 2016 The Issuer shall have absolute discretion to accept or reject any Public Offer for any equity shares comprised in the Exchange Property ( Equity Shares ), provided that the Issuer will not accept such Public Offer (i) prior to the date falling seven days prior to the final acceptance date in respect thereof, and (ii) unless the value of the consideration offered for the Equity Shares pursuant to the Public Offer or, where there is any alternative consideration, unless the value of the consideration accepted by the Issuer, is equal to or greater than the value of such Equity Shares If the Issuer accepts any Public Offer for Equity Shares or if the Equity Shares are 4

5 Form: Negative Pledge: Events of Default: subject to compulsory acquisition as a result of such Public Offer then, with effect from the settlement of such offer, the Exchange Property will consist, in whole or in part, of the consideration received for the Equity Shares acquired under the Public Offer In the event of a Public Offer for Equity Shares accepted by the Issuer which consists wholly or partly of cash, each bondholder will have the right to require the Issuer to redeem such Bond at the Principal Amount plus accrued interest Registered form Yes, in respect of any Relevant Indebtedness or Guarantee of Relevant Indebtedness, subject to certain exceptions including amounts up to EUR 50 million as stated in the Conditions Yes, in relation to the Issuer and the Guarantor, as detailed in the Conditions Cross-default: Yes, in relation to the Issuer and the Guarantor, subject to a threshold of EUR 50 million Taxation: Tax Gross-Up: Tax Call: Governing Law: Listing: Documentation: Clearing System: Subject to the provisions set forth in Legislative Decree n. 239 of April 1999, 1st Italian financial transaction tax applicable upon exchange (0.2% from 1 January 2014), payable by the Issuer Yes Yes English law Application will be made to list the Bonds on the Third Market (MTF) of the Vienna Stock Exchange on or prior to the Closing Date There will be no offering document produced in connection with the offering. Investors will only receive this indicative term sheet, the Conditions of the Bonds and, after pricing, the final pricing terms. Investors will need to make their investment decision based solely on publicly available information Euroclear Bank / Clearstream Luxembourg Clearing Codes: ISIN: XS / Common Code: Lock-up: Selling Restrictions: Joint Bookrunners: Trustee: Settlement Agent: 90 days for the Issuer and the Guarantor The Bond offering is an offer to qualified institutional investors only There are restrictions on the offer, sale, and delivery of the Bonds, inter alia, in the United States, the United Kingdom and other jurisdictions Private offer pursuant to Regulation S (Cat. 2) only, TEFRA Rules do not apply, No Rule 144A placement. No sale into the United States, Canada, Japan or in any other jurisdiction in which offers or sales would be prohibited by applicable law. Standard restrictions apply elsewhere, including in the EEA BNP PARIBAS, BofA Merrill Lynch BNP Paribas Trust Corporation UK Limited BNP Paribas 5

6 Principal Paying Agent, Transfer and Exchange Agent: Calculation Agent: BNP Paribas Securities Services, Luxembourg Conv-Ex Advisors Limited Use of Proceeds: General corporate purposes Timetable (indicative): Launch / Bookbuilding begins: 20 November 2013 Bookbuilding ends / Pricing / Allocations: 20 November 2013 Closing: expected on 29 November 2013 DISCLAIMERS: IMPORTANT YOUR ATTENTION IS DRAWN TO THE DISCLAIMERS BELOW AND ANY PURCHASE OF BONDS WILL BE DEEMED TO BE MADE IN ACCEPTANCE AND ACKNOWLEDGMENT BY YOU OF, AND SUBJECT TO (I) THE TERMS OF SUCH DISCLAIMERS AND (II) THE FINAL TERMS AND CONDITIONS IN RESPECT OF THE SECURITIES WHICH ALL PURCHASERS ARE DEEMED TO HAVE REVIEWED AND FOUND SATISFACTORY, PRIOR TO THE CLOSING. PLEASE REQUEST A COPY OF THE TERMS AND CONDITIONS IF YOU HAVE NOT RECEIVED THEM. IMPORTANT INFORMATION For further information on this transaction, please call your regular contact at the Joint Bookrunners. THE INFORMATION CONTAINED IN THIS DOCUMENT IS SUBJECT TO CHANGE WITHOUT NOTICE AND SUBJECT TO CHANGE IN ITS ENTIRETY BY REFERENCE TO THE INFORMATION SET OUT IN THE FINAL TERMS AND CONDITIONS RELATING TO THE BONDS (AS DEFINED BELOW). THIS DOCUMENT IS NOT AN OFFERING CIRCULAR OR PROSPECTUS OR LISTING PARTICULARS AND IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR MADE AVAILABLE IN WHOLE OR IN PART TO ANY OTHER PERSON FOR ANY PURPOSE, WITHOUT THE PRIOR CONSENT OF BNP PARIBAS AND MERRILL LYNCH INTERNATIONAL, TOGETHER (TOGETHER THE JOINT BOOKRUNNERS ). THIS DOCUMENT IS DIRECTED EXCLUSIVELY TO MARKET PROFESSIONALS AND INSTITUTIONAL INVESTORS AND IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE RELIED UPON IN SUBSTITUTION FOR THE EXERCISE OF INDEPENDENT JUDGEMENT. IT IS NOT INTENDED AS INVESTMENT ADVICE AND UNDER NO CIRCUMSTANCES IS IT TO BE USED OR CONSIDERED AS AN OFFER TO SELL (OR BUY), OR A SOLICITATION OF AN OFFER TO BUY (OR SELL), ANY SECURITY NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY BONDS. ANY DECISION TO PURCHASE ANY OF THE BONDS AND/OR THE ORDINARY SHARES TO BE ISSUED UPON EXCHANGE OF THE BONDS AND/OR NOTIONALLY UNDERLYING THE BONDS (THE "SETTLEMENT SHARES" AND, TOGETHER WITH THE BONDS, THE "SECURITIES") SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT REVIEW BY YOU OF THE ISSUER S, THE GUARANTOR'S AND PIRELLI & C. S.P.A.'S PUBLICLY AVAILABLE INFORMATION. NONE OF THE JOINT BOOKRUNNERS NOR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS DOCUMENT OR THE ISSUER S, THE GUARANTOR'S AND PIRELLI & C. S.P.A.'S PUBLICLY AVAILABLE INFORMATION. THIS DOCUMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO, AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN, THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF, THE US SECURITIES ACT OF 1933, AS AMENDED ("US SECURITIES ACT"). THIS DOCUMENT IS NOT AN OFFER TO SELL (OR BUY) SECURITIES, OR THE SOLICITATION OF ANY OFFER TO BUY (OR SELL) SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN CANADA OR JAPAN OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE IS NOT PERMITTED WITHOUT SPECIFIC EXEMPTIONS OR AUTHORIZATIONS FROM THE COMPETENT AUTHORITIES. THE SECURITIES MENTIONED IN THIS DOCUMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS DEFINED IN THE US SECURITIES ACT) ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE 6

7 US SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION. YOU SHOULD CONSULT YOUR PROFESSIONAL ADVISER TO ASCERTAIN THE SUITABILITY OF THE SECURITIES AS AN INVESTMENT. FOR THE AVOIDANCE OF DOUBT, NEITHER THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A. NOR THE JOINT BOOKRUNNERS MAKE ANY REPRESENTATION OR WARRANTY THAT THEY INTEND TO ACCEPT OR BE BOUND TO ANY OF THE TERMS HEREIN NOR SHALL THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A. OR THE JOINT BOOKRUNNERS BE OBLIGED TO ENTER INTO ANY FURTHER DISCUSSIONS OR NEGOTIATIONS PURSUANT THERETO BUT SHALL BE ENTITLED IN THEIR ABSOLUTE DISCRETION TO ACT IN ANY WAY THAT THEY SEE FIT IN CONNECTION WITH THE PROPOSED TRANSACTION. THIS IS NOT AN OFFER TO SELL (OR BUY), NOR A SOLICITATION OF AN OFFER TO BUY (OR SELL) ANY SECURITIES AND ANY DISCUSSIONS, NEGOTIATIONS OR OTHER COMMUNICATIONS THAT MAY BE ENTERED INTO, WHETHER IN CONNECTION WITH THE TERMS SET OUT HEREIN OR OTHERWISE, SHALL BE CONDUCTED SUBJECT TO CONTRACT. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS OR WILL BE MADE AS TO, OR IN RELATION TO, AND NO RESPONSIBILITY OR LIABILITY IS OR WILL BE ACCEPTED BY THE JOINT BOOKRUNNERS, THE ISSUER OR THE GUARANTOR OR BY ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES OR AGENTS AS TO OR IN RELATION TO THE ACCURACY OR COMPLETENESS OF THIS DOCUMENT, PUBLICLY AVAILABLE INFORMATION ON THE ISSUER OR THE GUARANTOR OR PIRELLI & C. S.P.A. OR ANY OTHER WRITTEN OR ORAL INFORMATION MADE AVAILABLE TO ANY INTERESTED PARTY OR ITS ADVISERS AND ANY LIABILITY THEREFORE IS HEREBY EXPRESSLY DISCLAIMED. AN INVESTMENT IN THE SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN MAKING ANY DECISION TO PURCHASE THE SECURITIES, YOU WILL BE DEEMED TO: (A) HAVE SUCH BUSINESS AND FINANCIAL EXPERIENCE AS IS REQUIRED TO GIVE YOU THE CAPACITY TO PROTECT YOUR OWN INTERESTS IN CONNECTION WITH THE SECURITIES; (B) NOT RELY ON ANY INVESTIGATION THAT ANY OF THE JOINT BOOKRUNNERS OR ANY OF THEIR RESPECTIVE AFFILIATES, OR ANY PERSON ACTING ON BEHALF OF ANY OF THE JOINT BOOKRUNNERS OR ANY OF THEIR RESPECTIVE AFFILIATES, MAY HAVE CONDUCTED WITH RESPECT TO THE ISSUER, THE GUARANTOR OR THE SECURITIES; (C) HAVE MADE YOUR OWN INVESTMENT DECISION REGARDING THE SECURITIES BASED ON YOUR OWN KNOWLEDGE AND INVESTIGATION OF THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A. AND THE SECURITIES; (D) MAKE AND RELY ON YOUR OWN ASSESSMENT OF THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A., THEIR RESPECTIVE SUBSIDIARIES, THE SECURITIES AND THE TERMS OF THE PLACEMENT BASED ON THE TERMS AND CONDITIONS AND OTHER SUCH INFORMATION AS IS PUBLICLY AVAILABLE AND YOU DEEM REASONABLY SUFFICIENT (WHICH YOU ACKNOWLEDGE YOU HAVE BEEN ABLE TO ACCESS, READ AND UNDERSTAND); AND (E) CONSULT YOUR OWN INDEPENDENT ADVISERS OR OTHERWISE SATISFY YOURSELF CONCERNING, WITHOUT LIMITATION, ACCOUNTING, REGULATORY, TAX OR OTHER CONSEQUENCES IN THE LIGHT OF YOUR PARTICULAR SITUATION UNDER THE LAWS OF ALL RELEVANT JURISDICTIONS GENERALLY. THE JOINT BOOKRUNNERS AND THEIR RESPECTIVE SUBSIDIARIES AND AFFILIATES MAY PERFORM SERVICES FOR, OR SOLICIT BUSINESS FROM, THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A. OR MEMBERS OF THEIR RESPECTIVE GROUPS, MAY MAKE MARKETS IN THE SECURITIES OF THE ISSUER, THE GUARANTOR PIRELLI & C. S.P.A. OR MEMBERS OF THEIR RESPECTIVE GROUPS AND/OR HAVE A POSITION OR EFFECT TRANSACTIONS IN SUCH SECURITIES. COPIES OF THIS DOCUMENT ARE NOT BEING, AND MUST NOT BE, MAILED, OR OTHERWISE FORWARDED, DISTRIBUTED OR SENT IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH MAILING WOULD BE ILLEGAL, OR TO PUBLICATIONS WITH A GENERAL CIRCULATION IN THOSE JURISDICTIONS, AND PERSONS RECEIVING THIS DOCUMENT (INCLUDING CUSTODIANS, NOMINEES AND TRUSTEES) MUST NOT MAIL OR OTHERWISE FORWARD, DISTRIBUTE OR SEND IT IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH MAILING WOULD BE ILLEGAL OR TO PUBLICATIONS WITH A GENERAL CIRCULATION IN THOSE JURISDICTIONS. YOU SHOULD PROCEED ON THE ASSUMPTION THAT YOU MUST BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE SECURITIES FOR AN INDEFINITE PERIOD. NEITHER THE ISSUER, THE GUARANTOR NOR THE JOINT BOOKRUNNERS MAKE ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE JOINT BOOKRUNNERS OR THEIR RESPECTIVE AFFILIATES MAY, FOR THEIR OWN ACCOUNT, ENTER INTO ASSET SWAPS, CREDIT DERIVATIVES OR OTHER DERIVATIVE TRANSACTIONS RELATING TO THE SECURITIES AT THE SAME TIME AS THE OFFER AND SALE OF THE SECURITIES OR IN SECONDARY MARKET TRANSACTIONS. 7

8 THE JOINT BOOKRUNNERS OR ANY OF THEIR RESPECTIVE AFFILIATES MAY FROM TIME TO TIME HOLD LONG OR SHORT POSITIONS IN OR BUY AND SELL SUCH SECURITIES OR DERIVATIVES. NO DISCLOSURE WILL BE MADE OF ANY SUCH POSITIONS. THE AMOUNT OF ANY SUCH PURCHASES WILL BE DETERMINED AT THE TIME OF PRICING OF THE SECURITIES AND WILL BE SUBJECT TO TOTAL DEMAND RECEIVED AND FINAL ALLOCATIONS. IN CONNECTION WITH THE OFFERING OF THE BONDS, EACH OF THE JOINT BOOKRUNNERS AND ANY OF THEIR RESPECTIVE AFFILIATES ACTING AS AN INVESTOR FOR THEIR OWN ACCOUNT MAY TAKE UP BONDS AND IN THAT CAPACITY MAY RETAIN, PURCHASE OR SELL FOR ITS OWN ACCOUNT SUCH BONDS AND ANY BONDS OF THE ISSUER, THE GUARANTOR OR PIRELLI & C. S.P.A. OR ANY RELATED INVESTMENTS AND MAY OFFER OR SELL SUCH SECURITIES OR OTHER INVESTMENTS OTHERWISE THAN IN CONNECTION WITH THE OFFERING OF THE BONDS. THE JOINT BOOKRUNNERS DO NOT INTEND TO DISCLOSE THE EXTENT OF ANY SUCH INVESTMENT OR TRANSACTIONS OTHERWISE THAN IN ACCORDANCE WITH ANY LEGAL OR REGULATORY OBLIGATION TO DO SO. THE JOINT BOOKRUNNERS ARE ACTING ON BEHALF OF THE ISSUER AND THE GUARANTOR AND NO ONE ELSE IN CONNECTION WITH THE SECURITIES AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE JOINT BOOKRUNNERS, OR FOR PROVIDING ADVICE IN RELATION TO THE SECURITIES. PURSUANT TO ARTICLE 26(B) OF COMMISSION DIRECTIVE 2006/73/EC OF 10 AUGUST 2006 IMPLEMENTING DIRECTIVE 2004/39/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL (THE SO-CALLED MIFID DIRECTIVE), IN CONNECTION WITH THE PLACING OF THE BONDS, THE JOINT BOOKRUNNERS WILL RECEIVE FROM THE ISSUER A COMMISSION BASED ON THE PRINCIPAL AMOUNT OF BONDS ISSUED. ANY ALLOCATION OF THE BONDS IS MADE EXPRESSLY SUBJECT TO THE TERMS AND DISCLOSURE SET OUT IN THE FINAL TERMS AND CONDITIONS OF THE BONDS TO BE PRODUCED IN RESPECT OF THE BONDS IN DUE COURSE, AND ON THE CONDITION THAT ANY OFFERING OF THE BONDS COMPLETES AND THAT THE BONDS ARE ISSUED. IN PARTICULAR, IT SHOULD BE NOTED THAT ANY SUCH OFFERING AND FORMAL DOCUMENTATION RELATING THERETO WILL BE SUBJECT TO CONDITIONS PRECEDENT AND TERMINATION EVENTS, INCLUDING THOSE WHICH ARE CUSTOMARY FOR SUCH AN OFFERING. ANY SUCH OFFERING WILL NOT COMPLETE UNLESS SUCH CONDITIONS PRECEDENT ARE FULFILLED AND ANY SUCH TERMINATION EVENTS HAVE NOT TAKEN PLACE OR THE FAILURE TO FULFIL SUCH CONDITIONS PRECEDENT OR THE OCCURRENCE OF A TERMINATION EVENT HAS BEEN WAIVED, IF APPLICABLE. THE JOINT BOOKRUNNERS RESERVE THE RIGHT TO EXERCISE OR REFRAIN FROM EXERCISING THEIR RIGHTS IN RELATION TO THE FULFILMENT OR OTHERWISE OF ANY SUCH CONDITION PRECEDENT OR THE OCCURRENCE OF ANY TERMINATION EVENT IN SUCH MANNER AS THEY MAY DETERMINE IN THEIR ABSOLUTE DISCRETION. NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A., THE JOINT BOOKRUNNERS OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE SECURITIES OR POSSESSION OR DISTRIBUTION OF THIS DOCUMENT OR ANY PUBLICITY MATERIAL RELATING TO SUCH SECURITIES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES ARE REQUIRED BY THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A., AND THE JOINT BOOKRUNNERS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS. EEA SELLING RESTRICTION AND DEEMED INVESTOR REPRESENTATIONS THIS DOCUMENT AND THE OFFER OF THE BONDS WHEN MADE ARE ONLY ADDRESSED TO AND DIRECTED, IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHICH HAVE IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A RELEVANT MEMBER STATE ), AT PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC AND SUBSEQUENT AMENDMENTS) AND PURSUANT TO THE RELEVANT IMPLEMENTING RULES AND REGULATIONS ADOPTED BY EACH RELEVANT MEMBER STATE ( QUALIFIED INVESTORS ). EACH PERSON WHO INITIALLY ACQUIRES ANY SECURITIES OR TO WHOM ANY OFFER OF SECURITIES MAY BE MADE WILL BE DEEMED TO HAVE REPRESENTED, ACKNOWLEDGED AND AGREED THAT IT IS A QUALIFIED INVESTOR, AS DEFINED ABOVE. A PROSPECTUS IS NOT REQUIRED TO BE PUBLISHED PURSUANT TO THE PROSPECTUS DIRECTIVE. THIS DOCUMENT IS A FINANCIAL PROMOTION. IN ADDITION, IN THE UNITED KINGDOM, THIS DOCUMENT IS BEING DISTRIBUTED ONLY TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE ORDER ) OR (II) WHO FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, AND 8

9 (III) TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS ). THIS DOCUMENT MUST NOT BE ACTED ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OTHER THAN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS. IN THE CASE OF ANY SECURITIES BEING OFFERED, OR SHOULD THE OFFER BE ADDRESSED, TO AN INVESTOR IN ITS CAPACITY AS A FINANCIAL INTERMEDIARY AS THAT TERM IS USED IN ARTICLE 3(2) OF THE PROSPECTUS DIRECTIVE, SUCH INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT THE SECURITIES ACQUIRED BY IT IN THE OFFERING HAVE NOT BEEN ACQUIRED (OR SOLD) ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS OR PERSONS IN THE UK AND OTHER MEMBER STATES (WHERE EQUIVALENT LEGISLATION EXISTS) FOR WHOM SUCH INVESTOR HAS AUTHORITY TO MAKE DECISIONS ON A WHOLLY DISCRETIONARY BASIS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE ISSUER, THE JOINT BOOKRUNNERS OR ANY OTHER MANAGER OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE, UNLESS THE PRIOR CONSENT OF THE JOINT BOOKRUNNERS HAS BEEN OBTAINED TO SUCH OFFER OR RESALE. THE ISSUER, THE GUARANTOR, PIRELLI & C. S.P.A. AND THE JOINT BOOKRUNNERS AND OTHERS WILL RELY UPON THE TRUTH AND ACCURACY OF THE FOREGOING REPRESENTATIONS, ACKNOWLEDGEMENTS, AND AGREEMENTS. NOTWITHSTANDING THE ABOVE, A PERSON WHO IS NOT A QUALIFIED INVESTOR AND WHO HAS NOTIFIED THE JOINT BOOKRUNNERS OF SUCH FACT IN WRITING MAY, WITH THE WRITTEN CONSENT OF THE JOINT BOOKRUNNERS, BE PERMITTED TO PURCHASE SECURITIES. 9