EXHIBIT 4.23
CONFORMED COPY
DATED 26 MARCH 2003
MARCONI PLC
AND
MARCONI CORPORATION PLC
AND
BAE SYSTEMS PLC
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DEED OF NOVATION AND AMENDMENT
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[ALLEN & OVERY LOGO]
London
CO:986110.10
THIS DEED is made on 26 March 2003
BETWEEN:
(1) Marconi plc (registered number 3846429) whose registered office is at
New Century Park, PO Box 53, Coventry, Warwickshire, CV3 1HJ (MARCONI);
(2) Marconi Corporation plc (formerly known as The General Electric
Company, p.l.c.) (registered number 67307) whose registered office is
at New Century Park, PO Box 53, Coventry, Warwickshire, CV3 1HJ
(CORPORATION); and
(3) BAE SYSTEMS plc (formerly known as British Aerospace Public Limited
Company) (registered number 1470151) whose registered office is at 6
Carlton Gardens, London, SW1Y 5AD (BAE).
WHEREAS:
(A) In 1999 Corporation and BAE entered into a series of agreements
relating to the merger of the Marconi Group's defence businesses with
BAE. Subsequently these agreements were novated from Corporation to
Marconi. Marconi entered into all other agreements in connection with
the merger.
(B) On 28 August 2002 Corporation and, inter alios, Marconi concluded
indicative non-binding heads of terms, subsequently amended by an
addendum dated 13 December 2002, setting out the principles for a
proposed restructuring of Corporation and Marconi (the RESTRUCTURING).
(C) Corporation wishes to assume all the rights, obligations, liabilities
and duties of Marconi in relation to the agreements set out in schedule
1 to this deed and all other agreements entered into between BAE and
Marconi which contain a reference to a "GEC Sub Potential Compensation
Amount" or a "BAE Sub Potential Compensation Amount" to be recognised
under the Payment Deed (the AGREEMENTS), insofar as any of the rights
exist, and the obligations and duties remain undischarged or
unfulfilled and, subject thereto, BAE wishes to release Marconi from
all such obligations, liabilities and duties.
(D) This deed is supplemental to the Agreements.
THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 Unless otherwise defined in this deed, words and expressions defined in
the Transactions Agreement or the Payment Deed (each as defined in
schedule 1) shall have the same meaning wherever used in this deed.
1.2 The following expressions shall mean:
EFFECTIVE DATE means the date on which an office copy of the Order of
Court sanctioning the scheme of arrangement under section 425 of the
Companies Act 1985 between Corporation and its scheme creditors (the
principal commercial terms of which are not materially different to
those set out in the draft of the Chairman's letter in the explanatory
statement initialled for the purpose of identification by Allen & Overy
and Linklaters) shall have been delivered to the Registrar of Companies
for registration.
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OUTSTANDING REDUCTION AMOUNT means:
(i) in respect of the first Calculation Date falling after 29
November 2002 an amount equal to US$18,600,000, and
(ii) in respect of any subsequent Calculation Date, the Outstanding
Reduction Amount for the immediately preceding Calculation
Date less the amount, if any, by which the GEC Sub Total for
the immediately preceding Calculation Date was reduced under
clause 5.1(b) of this deed.
NON-CONSOLIDATION ASSUMPTION has the meaning given to it in the Tax
Deed (as defined in schedule 1).
2. EFFECT
2.1 This deed shall take effect on the Effective Date.
3. NOVATION
3.1 Corporation undertakes to BAE and to Marconi to assume, satisfy,
discharge, perform or fulfil each obligation, liability and duty of
Marconi, whether present or future, actual or contingent, ascertained
or unascertained, as provided for in the Agreements to the extent that
any such obligation, liability or duty remains undischarged or
unfulfilled as if Corporation were named in the Agreements as a party
in place of Marconi.
3.2 BAE hereby agrees to release Marconi from each such obligation,
liability and duty referred to in clause 3.1 above.
3.3 BAE confirms and agrees that Corporation shall be entitled to all
rights and benefits of Marconi as provided for in the Agreements as if
Corporation were named in the Agreements as a party in place of Marconi
provided that BAE shall not have any greater obligation or liability
under any of the Agreements than it would have had if the Agreements
had not been novated pursuant to this clause 3 except to the extent
that such obligation or liability is greater than the obligation or
liability that it would have had only by reason of the scheme of
arrangement under section 425 of the Companies Act 1985 between Marconi
and its scheme creditors (the SCHEME).
3.4 Marconi confirms and agrees that it waives, and shall not make any
claim or commence any proceedings or take any other action in respect
of, any such rights or benefits as are referred to in clause 3.3 above
and agrees to release BAE from each obligation, liability and duty of
BAE to Marconi as provided for in the Agreements provided that nothing
in this deed shall operate as a release or discharge of any obligation,
liability or duty of BAE in respect of any act or default on the part
of BAE before the Effective Date.
3.5 Other than as amended by this deed, the Agreements shall continue in
full force and effect.
4. AMENDMENTS
4.1 BAE and Corporation also agree that, in addition to the novation of the
Agreements as set out in clause 3 above:
(i) the definition of "GEC Sub" in clause 1.2 of the Payment Deed
(as amended by the Amendment to the Transactions Agreement (as
defined in schedule 1)) shall be amended by deleting the words
"Marconi Ansty Limited (incorporated in England
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and Wales with number 4109365)" and replacing them with the
words "Marconi Communications Limited (incorporated in England
and Wales with number 703317)"; and
(ii) clause 27.11 of the Transactions Agreement shall be amended by
deleting the words "Marconi Ansty Limited (incorporated in
England and Wales with number 4109365)" and replacing them
with the words "Marconi Communications Limited (incorporated
in England and Wales with number 703317)".
5. COMPROMISE OF EXISTING TAX ARRANGEMENTS
5.1 BAE and Corporation further agree that:
(a) no amount should be recognised, in respect of any Calculation
Date on or after 30 November 2001 as a GEC Sub Potential
Compensation Amount or a BAE Sub Potential Compensation Amount
to the extent that such amount has been taken account of in
the GEC Sub Potential Compensation Amounts in Marconi's
notices dated 18 October 2002 and 26 November 2002 or in the
BAE Sub Total in BAE's notice dated 6 December 2002 (each of
which are set out in schedule 2); and
(b) the amount of the GEC Sub Total for the first Calculation Date
falling after 29 November 2002 and any subsequent Calculation
Date shall be reduced by the lower of:
(i) the Outstanding Reduction Amount; and
(ii) the aggregate of:
(A) any GEC Sub Potential Compensation Amounts
recognised at any time during the period to
which the relevant Calculation Date falling
after 29 November 2002 relates, to the
extent that such GEC Sub Potential
Compensation Amounts: (1) are recognised
pursuant to clause 4 of the Tax Deed and
relate to US Federal tax in respect of the
year to 31 March 2000; or (2) are recognised
pursuant to clause 3 of the Tax Deed (under
the Non-Consolidation Assumption set out in
the Tax Deed) and relate to US Federal tax
in respect of the eight months to 29
November 1999; and
(B) any amounts calculated pursuant to the
Payment Deed as if there were interest in
respect of any of the GEC Sub Potential
Compensation Amounts referred to in (A)
above.
5.2 The parties agree that the provisions of clause 5.1 above shall be in
full and final settlement of any claims the parties may have under the
Payment Deed in respect of any Calculation Date which occurred at any
time between 30 November 2001 and 29 November 2002 (inclusive) and, for
the avoidance of doubt, the provisions of clause 27.10 of the
Transactions Agreement, as incorporated into the Payment Deed by clause
9.1 of the Payment Deed shall not apply to this deed.
6. INDEMNITY
6.1 Subject to clauses 5 and 6.2 Corporation agrees to indemnify and keep
indemnified BAE and each member of the BAE group against all losses,
liabilities, costs and expenses (LOSSES) to
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the extent that they are greater than the Losses which would have been
incurred by BAE and each member of the BAE group if clauses 3 and 4 of
this deed had not been entered into.
6.2 No indemnity is, or shall be, given by Corporation under clause 6.1 in
respect of any Losses incurred by BAE or any member of the BAE group to
the extent that they are only greater than the Losses which would have
been incurred by BAE or any member of the BAE group by reason of the
Scheme had clauses 3 and 4 of this deed not been entered into.
7. GENERAL
7.1 This deed may be executed in any number of counterparts, all of which
taken together shall constitute one and the same deed and any party may
enter into this deed by executing a counterpart.
7.2 A person who is not a party to this deed has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of
this deed, nor of any of the Agreements (as novated and amended by this
deed).
7.3 Notices to Corporation in relation to the Agreements and this deed
shall be sent to The Company Secretary at New Century Park, PO Box 53,
Coventry, Warwickshire, CV1 1HJ in the same manner as under the
provisions of the Transactions Agreement.
7.4 This deed is governed by, and shall be construed in accordance with,
English law. Each party submits to the jurisdiction of the English
courts for all purposes relating to this deed.
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IN WITNESS of which this deed has been executed and has been delivered on the
date which appears first on page 1.
EXECUTED as a deed by ) MICHAEL PARTON
Marconi plc ) Director
acting by MICHAEL PARTON ) MARY SKELLY
and MARY SKELLY ) Director/Secretary
EXECUTED as a deed by ) MICHAEL PARTON
Marconi Corporation plc ) Director
acting by MICHAEL PARTON ) MARY SKELLY
and MARY SKELLY ) Director/Secretary
EXECUTED as a deed by ) M. LESTER
BAE SYSTEMS plc ) Director
acting by M. LESTER ) AUTHORISED SIGNATORY
and AUTHORISED SIGNATORY ) Director/Secretary
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SCHEDULE 1
THE AGREEMENTS
1. Transactions Agreement between The General Electric Company, p.l.c. and
British Aerospace Public Limited Company dated 27 April 1999 (as
supplemented by a supplementary agreement entered into between The
General Electric Company. p.l.c. and British Aerospace Public Limited
Company dated 7 October 1999) (the TRANSACTIONS AGREEMENT).
2. Payment Deed between The General Electric Company, p.l.c. and British
Aerospace Public Limited Company dated 27 April 1999 (the PAYMENT
DEED).
3. Letter Agreement dated 2 November 2001 entered into between Marconi plc
and BAE SYSTEMS plc, amending the terms of the Transactions Agreement
and the Payment Deed (the AMENDMENT TO THE TRANSACTIONS AGREEMENT).
4. General Deed of Covenant between Marconi plc and British Aerospace
Public Limited Company dated 29 November 1999.
5. Deed of Undertaking and Guarantee between Marconi plc, The General
Electric Company plc and British Aerospace Public Limited Company dated
29 November 1999.
6. Tax Deed of Covenant between Marconi plc and British Aerospace Public
Limited Company dated 29 November 1999 (the TAX DEED).
7. EASAMS Agreement between Marconi plc and British Aerospace Public
Limited Company dated 29 November 1999.
8. Services Agreement between Marconi plc and British Aerospace Public
Limited Company dated 29 November 1999.
9. Technology Access Agreement between Marconi plc and British Aerospace
Public Limited Company dated 29 November 1999.
10. Completion Accounts Agreement dated 11 February 2000 between Marconi
plc and British Aerospace Public Limited Company.
11. Agreement dated 11 February 2000 between Marconi plc and British
Aerospace Public Limited Company relating to the JORN Project.
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