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Exhibit 2.6
[Side Letter]
1. Reference is made to (i) the Agreement for the Sale and Purchase of
100% of the Shares in tele.ring Telekom Service GmbH ("tele.ring"),
100% of the Partnership Interest in tele.ring Telekom Service GmbH &
Co KEG and for the Call-Option regarding the Sale and Purchase of 100%
of the Shares in Mannesmann 3G Mobilfunk GmbH (the 'Agreement') and
(ii) a letter agreement between Mannesmann Eurokom GmbH ('MEU') and
EHG Einkaufs- und Handels GmbH ('EHG') dated 29 June 2001 regarding
certain tax issues in connection with the transactions contemplated in
the Agreement (the 'Letter Agreement'). Terms used in this side letter
shall have the same meaning as in the Agreement or the Letter
Agreement.
Clause 2 of the Letter Agreement provides that if the funding preceding
the repayment of intra-group debt prior to Closing (the 'Repayment'), is
considered, in a binding decision of the relevant tax authority, in
whole or in part to be income for the purposes of Austrian corporate
income tax, and any such income is greater than the accumulated tax loss
carry forward of tele.ring as of December 31, 2000, plus any additional
losses (for tax purposes) incurred by tele.ring in the period from
January 1, 2001 until the Closing Date, with such additional losses to
be determined on the basis of an interim pro forma tax balance sheet as
of the Closing Date as if it was a year end tax balance sheet (the 'Pro
Forma Closing Tax Balance') to be prepared by tele.ring and audited or
reviewed by a certified public accountant reasonably satisfactory to EHG
following the preparation of the Closing Balance Sheet under the
Agreement (together the 'Closing Tax Loss Carry Forward'), MEU shall
fully compensate tele.ring Telekom Service GmbH on a net basis, upon
EHG's request, for the hypothetical tax burden under Austrian corporate
income tax laws resulting from the full excess of any such tax income as
described above over the Closing Tax Loss Carry Forward. Vodafone has
funded tele.ring in a manner sufficient to build up an equity basis that
is, in the view of Vodafone, solid and sufficient and puts tele.ring in
a position to pay off its existing creditors. tele.ring GmbH inter alia
decided to repay the entire amount of the Intra-Group Debt ("Repayment")
prior to the Closing.
The Parties hereto agree that for purposes of preparing the Pro Forma
Closing Tax Balance, tele.ring shall not perform any extraordinary
depreciation of certain or all of its fixed assets, provided that, if
(i) the Repaymentis considered, in a binding decision of the relevant
tax authorithy, in whole or in part to be income for purposes of
Austrian corporate income tax, and (ii) for the purposes of the Pro
Forma Closing Tax Balance (which shall be prepared as if it was a
year-end tax balance sheet), a legal requirement under Austrian tax law
for an extraordinary depreciation of certain or all of the fixed assets
of tele.ring existed, the full amount of additional losses (for tax
purposes) that would have resulted from such extraordinary depreciation
of assets in the Pro Forma Closing Tax Balance shall, for purposes of
determining the compensation under Clause 2 of the Letter
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Agreement, -- be treated as if it were part of the Pro Forma Closing Tax
Balance (i.e., added to the Closing Tax Loss Carry Forward) and reduce
MEU's obligation to compensate tele.ring under Clause 2 of the Letter
Agreement accordingly.
The Parties agree that the time limit as set out in Schedule 6 Clause 2
of the Agreement shall not apply to the Purchaser's possible claim for
compensation under Clause 2 of the Letter Agreement. For the purposes of
this claim a time limit of five years applies. Such five year period
shall begin on the date when tele.ring GmbH's corporate income tax for
the fiscal year 2001 is assessed by the relevant tax authority in a
binding decision; provided that the running of such five year period
shall be suspended by any tax audit or inspection of tele.ring GmbH for
the fiscal year 2001 as well as by or during any appeal pending before
Austrian administrative bodies or courts on tele.ring's corporate income
tax for the fiscal year 2001.
2. Each of the Parties hereto shall treat as strictly confidential (i)
this side letter and all information received or obtained as a result
of entering into or performing the arrangements embodied herein and
(ii) the provisions of, the negotiations relating to, the subject
matter and the parties of the Letter Agreement. Any party may disclose
information which would otherwise be confidential if and to the extent
required to claim or defend its rights under this side letter or the
Letter Agreement in an arbitral proceeding in accordance with Clause 5
below.
3. This side-letter constitutes an amendment to the Letter Agreement which
in turn constitutes an amendment to the Agreement.
4. This side letter shall be governed by and construed in accordance with
the laws of Austria without regard to the principles of conflict of laws
thereof.
5. In the event of any dispute, controversy or claim arising out of or in
connection with the arrangements embodied herein (including any
schedule or attachment hereto) or the breach, termination or validity
of this document, the Parties shall use all reasonable endeavors to
resolve the matter on an amicable basis. If one Party serves formal
written notice on the other Party or Parties that a material dispute,
controversy or claim of such a description has arisen and the Parties
are unable to resolve the dispute within a period of thirty (30) days
from the service of such notice, then the dispute, controversy or
claim shall be referred to the respective senior executives of the
parties hereto. No recourse to arbitration by one Party against the
other Party or Parties under this Side Letter and/or the arrangements
embodied herein shall take place unless and until such procedure has
been followed.
If the senior executives of the Parties hereto shall have been unable to
resolve any dispute, controversy or claim referred to them within a
period of ten (10) days from referral to the senior executives, that
dispute, controversy or claim shall be referred to and finally settled
by arbitration under and in accordance with the
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Rules of Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with those rules. The place of
arbitration shall be Zurich, Switzerland. The arbitration proceedings
shall be conducted, and the award shall be rendered, in the English
language.
The Parties hereto hereby waive any rights of application and appeal to
any court or tribunal of competent jurisdiction (including without
limitation the courts of Germany, Austria, Switzerland, the United
States of America and England) to the fullest extent permitted by law in
connection with any question of law arising in the course of the
arbitration or with respect to any award made except for actions
relating to enforcement of this arbitration clause or an arbitral award
and except for actions seeking interim or other provisional relief in
aid of arbitration in any court of competent jurisdiction.
Dusseldorf, this 29th day of June, 2001
/s/
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Mannesmann Eurokom GmbH
/s/
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tele.ring Telekom Service GmbH
/s/
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EHG Einkaufs und Handels GmbH
