<PAGE>

                                                                    EXHIBIT 4.78

                                                                  CONFORMED COPY

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                   AGREEMENT FOR THE CREATION OF A PLEDGE OVER
                    BANK ACCOUNTS OF MARCONI HOLDINGS S.P.A.

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<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                     PAGE
<S>                                                                        <C>
1.  Recitals And Definitions.............................................    5

2.  Creation Of A Pledge Over Bank Account...............................    8

3.  Confirmation Of Creation Of Pledge...................................    9

4.  Secured Obligations..................................................   10

5.  Validity Of The Security.............................................   11

6.  Exercise Of Rights Of Pledge.........................................   12

7.  Assignment, Transfer Or Amendments...................................   12

8.  Pledgor's Undertakings...............................................   13

9.  Security Trustee.....................................................   13

10. Release Of The Pledge................................................   14

11. Election Of Domicile And Notice......................................   14

12. Miscellaneous........................................................   15

13. Governing Law And Jurisdiction.......................................   15

14. Expenses, Cost And Taxes.............................................   15

Schedule A1..............................................................   17

Schedule A2..............................................................   20

Schedule B...............................................................   23

Schedule C...............................................................   24

Schedule D...............................................................   29

Schedule E...............................................................   30

Schedule F...............................................................   31

Schedule G...............................................................   33
</TABLE>

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                   CONSTITUTION OF A PLEDGE OVER BANK ACCOUNTS

By this Agreement,

                                     BETWEEN

(1)      Marconi Holdings S.p.A. (the "PLEDGOR"), a company incorporated in
         Italy, with registered office at Genova, via Ambrogio Negrone, 1, with
         share capital equal to(euro)26,248,560.00, registered under No./Tax
         Code 00891140154 of the Companies' Register of Genova, represented,
         severally, by Mary Angela Skelly, born in London, UK, on 11 January
         1961; Kevin David Smith, born in Birmingham, UK, on 13 July 1962; Craig
         George Donaldson, born in Dunfermline, Scotland, on 30 July 1969;
         Thomas Charles Ryley Shepherd, born in Hereford, UK, on 8 August 1967;
         William Edwin Johnson, born in Poole, UK, on 31 July 1969; Christopher
         Charles Holden, born in Leeds, UK, on 12 November 1948, duly authorised
         by virtue of a power of attorney executed on 15 May 2003

                                       AND

(2)      The Law Debenture Trust Corporation p.l.c. (the "SECURITY TRUSTEE"), a
         company incorporated in England and Wales, with registered office at
         Fifth Floor, 100 Wood Street, London EC2V 7EX, England with share
         capital equal to L5,000,000, registered under No. 01675231 of the
         Companies' Register of England and Wales, Tax code 374/1167019320/A,
         which participates in the execution of this Agreement on its own behalf
         as Secured Creditor and also as common representative (mandatario con
         rappresentanza) in the name and on behalf of the other Secured
         Creditors (as defined below) pursuant to the power conferred on it
         under Clause 6.5 (Declaration of Trust and Appointment as Administrator
         (Italy)) of the Security Trust and Intercreditor Deed (as defined
         below), represented by Richard David Rance, born in Amersham on 30
         September 1955, duly authorised by virtue of a resolution of the board
         of directors of the Security Trustee dated 30 August 2002;

                                     WHEREAS

(A)      Law Debenture Trust Company of New York, as "Senior Note Trustee", and,
         among others, Marconi Corporation plc, as "Issuer", executed on or
         about 19 May 2003 an indenture denominated "Senior Note Indenture"
         (this indenture, as from time to time amended, will be referred to
         below as the "SENIOR NOTE INDENTURE"), under which Marconi Corporation
         plc issued or will issue US dollar 717,139,584 notes (these notes will
         be referred to below as the "SENIOR NOTES"). Schedule A1 to this
         Agreement contains a table summarising the main financial terms of the
         Senior Note Indenture.

(B)      JPMorgan Chase Bank, as "Junior Note Trustee", and, among others,
         Marconi Corporation plc, as "Issuer", executed on or about 19 May 2003
         an indenture denominated "Junior Note Indenture" (this indenture, as
         from time to time amended, will be referred to below as the "JUNIOR
         NOTE INDENTURE"), under which Marconi Corporation plc issued or will
         issue US dollar 486,881,472 notes (these notes will be

                                     - 3 -
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         referred to below as the "JUNIOR NOTES"). Schedule A2 to this Agreement
         contains a table summarising the main financial terms of the Junior
         Note Indenture.

(C)      HSBC Bank plc, as "Agent" and "Security Trustee", and certain financial
         institutions as "Banks" have made available to Marconi Bonding Limited
         as "Applicant" a committed multicurrency revolving facility for the
         issue of bonds in an aggregate amount equal to (pound) 50,000,000
         pursuant to a facility agreement executed on 27 March 2003 (the "NEW
         BONDING FACILITY AGREEMENT") between HSBC Bank plc, the financial
         institutions defined in that agreement as "Banks" and as "Issuing
         Banks" (together, the "BONDING FINANCE PARTIES"), Marconi Bonding
         Limited as "Applicant", Marconi Corporation plc as "Company" and
         certain other companies of the Marconi Group (as defined below) as
         "Indemnifying Companies" (together, the "BONDING OBLIGORS").

(D)      The New Bonding Facility Agreement has been made available for the
         purpose of supporting the obligations owed by the Bonding Obligors to
         third parties where such obligations are incurred in the ordinary
         course of the Marconi Group's trade or business but not for the purpose
         of supporting any obligation of the members of the Marconi Group under
         the Indentures (as defined below).

(E)      Under the New Bonding Facility Agreement, each Indemnifying Company (as
         defined therein) undertakes to indemnify the relevant Issuing Bank (as
         defined therein) against any cost, loss or liability incurred by that
         Issuing Bank in acting as the Issuing Bank under any Bond (as defined
         in the New Bonding Facility Agreement) granted in favour of the
         Pledgor.

(F)      Schedule B, Part I, to this Agreement contains the list of the New
         Bonding Facility Banks and New Bonding Facility Agent to the New
         Bonding Facility Agreement. Schedule B, Part II, to this Agreement
         contains a table summarising the main financial terms of the New
         Bonding Facility Agreement.

(G)      The Notes (as defined below) have been issued under the terms of the
         Indentures, as described in Schedules A1 and A2 and the New Bonding
         Facility Agreement has been granted subject to, among other things, the
         granting of the pledge over bank accounts under this Agreement.

(H)      Each of the companies listed under Schedule C, Part I, of this
         Agreement as "Guarantor" (and among them the Pledgor) have guaranteed,
         by executing on or about 19 May 2003 a guarantee denominated "Senior
         Note Guarantee" (the "SENIOR GUARANTEE"), the obligations of the Issuer
         under the Senior Note Indenture and the Senior Notes.

(I)      Each of the companies listed under Schedule C, Part I, of this
         Agreement as "Guarantor" (and among them the Pledgor) have guaranteed,
         by executing on or about 19 May 2003 a guarantee denominated "Junior
         Note Guarantee" (the "JUNIOR GUARANTEE"), the obligations of the Issuer
         under the Junior Note Indenture and the Junior Notes.

(J)      Each of the companies listed under Schedule C, Part II, of this
         Agreement as "Guarantor" (and among them the Pledgor) have guaranteed
         by executing on or about 19 May 2003 a guarantee denominated the
         Composite Guarantee (the "COMPOSITE GUARANTEE" and, together with the
         Senior Guarantee and the Junior Guarantee,

                                     - 4 -
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         collectively, the "GUARANTEES"), among other things, certain
         obligations under the New Bonding Facility Agreement, the Security
         Trust and Intercreditor Deed, as defined below, and any Security
         Documents.

(K)      The aggregate of the obligations of the Pledgor as guarantor under the
         Guarantees are limited under the Security Trust and Intercreditor Deed
         to the higher of:

         (1)      an amount corresponding to the Net Worth (as defined below) of
                  the Pledgor, as resulting from its last approved financial
                  statements at the time it executes or accedes to the
                  Guarantees; and

         (2)      an amount corresponding to the Net Worth (as defined below) of
                  the Pledgor, as resulting from its most recent approved
                  financial statements at the time the Guarantees are enforced.

         "NET WORTH" means, for the purposes of this clause, the total value of
         the "Patrimonio Netto" of the Pledgor pursuant to the definition of
         Article 2424 of the Italian Civil Code.

(L)      Marconi Corporation plc and, among others, The Law Debenture Trust
         Corporation plc, executed on or about 19 May 2003 an agreement
         denominated "Escrow Agreement", under which Marconi Corporation plc has
         established certain escrow accounts which HSBC Bank plc as "Escrow
         Bank" for the deposit of certain amounts in order to fund the mandatory
         redemption of some or all of the Notes (as defined below) and to
         satisfy certain obligations on the Existing Performance Bond as defined
         in the Escrow Agreement

(M)      The Law Debenture Trust Corporation p.l.c., as "Security Trustee", Law
         Debenture Trust Company of New York, as "Senior Note Trustee", JPMorgan
         Chase Bank, as "Junior Note Trustee", Marconi Corporation plc, as
         "Issuer" and, among others, the Pledgor as "Guarantor", executed on or
         about 19 May 2003 a security trust and intercreditor deed to regulate,
         among other things, the ranking of secured liabilities, the powers of
         the Security Trustee, and the enforcement of the security interests
         (the "SECURITY TRUST AND INTERCREDITOR DEED").

(N)      The Security Trust and Intercreditor Deed, the New Bonding Facility
         Agreement and the Guarantees will be referred to below as the "SECURED
         CONTRACTS".

(O)      The Pledgor currently owns the accounts indicated in the attached
         Schedule D, respectively held at the banks listed in the same Schedule
         (the "ACCOUNTS").

(P)      In relation to the above, the Pledgor intends to grant in pledge, and
         hereby so grants in pledge, the amounts at any time credited on the
         Accounts and the claims of the Pledgor for the restitution of the
         balance from time to time existing on the Accounts, jointly and on a
         pro-indiviso basis in favour of the Secured Creditors (as defined
         below), as security for the Secured Obligations (as defined below).

               THIS BEING AGREED, it is hereby agreed as follows:

1.       RECITALS AND DEFINITIONS

1.1      The Recitals and Schedules are an integral and substantial part of this
         Agreement.

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1.2      The terms defined in the Security Trust and Intercreditor Deed have the
         same meaning where used capitalised in this Agreement, unless otherwise
         agreed or specified or the context otherwise requires.

1.3      Headings in this Agreement are for ease of reference only and do not
         affect its interpretation.

1.4      Unless the context requires otherwise, every reference in this
         Agreement to an Article, Paragraph or Schedule will refer to an
         article, paragraph or schedule to or of this Agreement.

1.5      Notwithstanding any provision to the contrary contained herein, the
         parties agree that this Agreement is subject in all respects to the
         terms of the Security Trust and Intercreditor Deed and for the
         avoidance of doubt, in the event of any inconsistency, the provisions
         of the Security Trust and Intercreditor Deed shall prevail, subject
         however to the application of the mandatory provisions of Italian law.

1.6      The parties hereto each acknowledge that the Security Trustee, when
         acting hereunder, shall be acting in accordance with and subject to the
         terms of the Security Trust and Intercreditor Deed.

1.7      In this Agreements the term:

         1.7.1    "BONDING FACILITY ENFORCEMENT EVENT" shall mean the occurrence
                  of both of the following circumstances:

                  (a)      an acceleration of any Secured Obligations arising
                           under the New Bonding Facility Agreement or any
                           declaration that any Secured Obligations arising
                           under the New Bonding Facility Agreement are
                           prematurely due and payable (other than solely as a
                           result of it becoming unlawful for a Secured Creditor
                           to perform its obligations under the New Bonding
                           Facility Agreement) or any failure by any Obligor to
                           pay any principal amount in respect of any Secured
                           Obligations arising under the New Bonding Facility
                           Agreement whether on maturity or otherwise; and

                  (b)      the Security Trustee, in accordance with the terms of
                           the Security Trust and Intercreditor Deed, having
                           taken any step or steps to enforce this Agreement
                           following the occurrence of an Enforcement Event;

         1.7.2    "BUSINESS DAY" means a day (other than Saturday or Sunday) on
                  which commercial banks are open for general business in
                  London, New York and Milan;

         1.7.3    "DEPOSITORY BANKS" means any of the banks listed in Schedule
                  D;

         1.7.4    "ENFORCEMENT EVENT" means the acceleration of any Secured
                  Obligations (other than Secured Obligations arising under the
                  New Bonding Facility Agreement) or any declaration that any
                  Secured Obligations (other than Secured Obligations arising
                  under the New Bonding Facility Agreement) are prematurely due
                  and payable (other than solely as a result of it becoming

                                     - 6 -
<PAGE>

                  unlawful for a Secured Creditor to perform its obligations
                  under the Secured Contracts) or any failure by any Obligor to
                  pay any principal amount in respect of any Secured Obligations
                  (other than Secured Obligations arising under the New Bonding
                  Facility Agreement) whether on maturity or otherwise;

         1.7.5    "EVENT OF DEFAULT" has the meaning given to such term in the
                  Security Trust and Intercreditor Deed;

         1.7.6    "INDENTURES" means the Senior Note Indenture and the Junior
                  Note Indenture and "INDENTURE" means either of them;

         1.7.7    "INTERIM BONDING FACILITY DOCUMENTS" means the Bonding
                  Documents referred to in the Interim Bonding Facility Letter
                  (as defined below);

         1.7.8    "INTERIM BONDING FACILITY LETTER" means the facility letter
                  dated 10 May 2002, as amended on 24 October 2002, between HSBC
                  Bank plc, Barclays Bank p.l.c., JPMorgan Chase Bank and
                  Marconi Bonding Limited in an amount up to L150,000,000 (or
                  the equivalent in other currencies) for the issuance of bonds,
                  guarantees, letters of credit, indemnities and similar
                  instruments;

         1.7.9    "ITALIAN CIVIL CODE" means the Italian civil code, as approved
                  by Royal Decree no. 262 of 16 March 1942, as subsequently
                  amended and supplemented;

         1.7.10   "MARCONI GROUP" means Marconi Corporation plc and all of its
                  direct or indirect subsidiaries;

         1.7.11   "NOTE TRUSTEES" means the Senior Note Trustee and the Junior
                  Note Trustee collectively and the "NOTE TRUSTEE" means either
                  of them;

         1.7.12   "NOTES" means the Senior Notes and the Junior Notes,
                  collectively;

         1.7.13   "OBLIGOR" means each of the Issuer and the Guarantors as
                  defined in the Security Trust and Intercreditor Deed;

         1.7.14   "SECURED CREDITORS" means The Law Debenture Trust Corporation
                  p.l.c. with registered office at Fifth Floor, 100 Wood Street,
                  London EC2V 7EX, England, in its capacity as Security Trustee;
                  any Receiver or Delegate; The Bank of New York with registered
                  office at One Wall Street, New York, New York, 10286, USA, in
                  its capacity as Depositary, as Senior Noteholder (as defined
                  in the Senior Guarantee) (for such time as it is the holder of
                  the Global Senior Notes, as such term is defined in the Senior
                  Note Indenture), as Junior Noteholder (as defined in the
                  Junior Guarantee) (for such time as it is the holder of the
                  Global Junior Notes, as such term is defined in the Junior
                  Note Indenture), as the Paying Agent and as the Registrar; Law
                  Debenture Trust Company of New York with registered office at
                  767 Third Avenue, 31st Floor, New York, New York, 10017, USA,
                  in its capacity as the Senior Note Trustee (for itself and as
                  trustee for the holders of the Senior Notes); JPMorgan Chase
                  Bank acting through an office at Trinity Tower, 9 Thomas More
                  Street, London, E1W 1YT, in its capacity as the Junior Note
                  Trustee (for itself and as trustee for the holders of the
                  Junior Notes); HSBC Bank plc, with registered office at City
                  Corporate

                                     - 7 -
<PAGE>

                  Banking Centre, 27-32 Poultry, London EC2P 2BX, England, in
                  its capacity as Escrow Bank; the New Bonding Facility Agent
                  and each of the New Bonding Facility Banks (as defined in the
                  Security Trust and Intercreditor Deed and as set forth in
                  Schedule B Part 1); and their assignees ("cessionari") and/or
                  successors ("successori") whether universal ("a titolo
                  universale") or singular ("a titolo particolare");

         1.7.15   "SECURED OBLIGATIONS" has the meaning specified in Article 4;

         1.7.16   "SECURITY" means any security granted by the Pledgor, as of
                  the date of this Agreement, in favour of the Secured Creditors
                  or some of them in relation to the Secured Contracts;

         1.7.17   "SECURITY TRUSTEE" means The Law Debenture Trust Corporation
                  p.l.c. (and any Delegate pursuant to Clause 16 (Delegation and
                  Additional Security Trustee) of the Security Trust and
                  Intercreditor Deed), appointed by the Secured Creditors
                  pursuant to the Security Trust and Intercreditor Deed, to act
                  as common representative ("mandatario con rappresentanza") for
                  the purpose of entering into this Agreement on their behalf
                  and undertaking any other actions and exercising any right,
                  remedy, power and discretion in relation to the creation,
                  perfection, maintenance, enforcement and release of the
                  security created by this Agreement;

         1.7.18   "TEMPORARY BONDING FACILITY DOCUMENTS" means the Bonding
                  Documents referred to in the Temporary Bonding Facility
                  Letter; and

         1.7.19   "TEMPORARY BONDING FACILITY LETTER" means the facility letter
                  dated 8 February 2002 between HSBC Bank plc, Barclays Bank PLC
                  and Marconi Bonding Limited in an amount up L50,000,000 (or
                  the equivalent in other currencies) for the issuanCE of bonds,
                  guarantees, letters of credit, indemnities and similar
                  instruments.

1.8      In this Agreement the expression "TO DISPOSE OF" shall mean (in
         relation to any Account) to withdraw or transfer, and "DISPOSAL" shall
         be construed accordingly.

2.       CREATION OF A PLEDGE OVER BANK ACCOUNT

2.1      The Pledgor grants in pledge, jointly and on a pro-indiviso basis in
         favour of the Secured Creditors, as security for the Secured
         Obligations (as defined in Article 4):

         2.1.1    each and all of its rights in the Accounts;

         2.1.2    all of the sums from time to time credited on the Accounts,
                  including any future payments made by third parties or by
                  order of the Pledgor on the Accounts; and

         2.1.3    its claim for restitution of the balance from time to time
                  existing on the Accounts.

2.2      The pledge created by this Agreement shall take effect subject to, and
         shall not restrict the ability of the Pledgor to create any (a)
         security or (b) other arrangement under which money or claims to, or
         the benefit of, a bank or other account may be applied, set-off,

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         made subject to a combination of accounts or otherwise subject to time
         deposit arrangements or other flawed asset rights (whether or not such
         security is or is to be created on, before or after the date of this
         Agreement) which secures obligations under and/or in respect of:

         2.2.1    the Interim Bonding Facility Documents;

         2.2.2    the Temporary Bonding Facility Documents;

         2.2.3    the New Bonding Facility Agreement;

         2.2.4    the Existing Performance Bonds; and

         2.2.5    any other bonding facility expressly permitted pursuant to
                  Section 4.07 (Limitations on Indebtedness and Preferred Stock)
                  of the Senior Note Indenture and Section 4.06 (Limitations on
                  Indebtedness and Preferred Stock) of the Junior Note
                  Indenture,

         in each case as a result of the provision of cash collateral as
         permitted pursuant to the terms of the Indentures or any of them, the
         Escrow Agreement or the Security Trust and Intercreditor Deed.

3.       CONFIRMATION OF CREATION OF PLEDGE

3.1      Within 10 (ten) Business Days after the date of this Agreement, the
         Pledgor must serve (i.e. complete service process on) each of the
         Depository Banks, by way of a Court Bailiff (i.e. "notifica a mezzo
         ufficiale giudiziario"), with a statement duly signed by its legal
         representative and bearing a date certain ("data certa"), in the form
         indicated in Schedule E, to ensure that the pledge created by this
         Agreement benefits from the features indicated in Articles 2787 and
         2800 of the Italian Civil Code with reference to each and all rights in
         the Accounts, any sums from time to time credited on the Accounts
         (including any future payments effected by third parties or by order of
         the Pledgor) and the claims for restitution of the balance from time to
         time existing on the Accounts. The original of the service report must
         be delivered to the Security Trustee within 5 (five) Business Days
         following the date of service.

3.2      The obligation as described under Paragraph 3.1 may be replaced by
         delivery by the Pledgor to the Security Trustee, within 10 (ten)
         Business Days from execution of this Agreement, of a notarised
         statement of acceptance of the constitution of pledge rendered by the
         Depository Banks in accordance with the form described in Schedule F.

3.3      Without prejudice to Paragraph 3.1, the Pledgor must serve by way of a
         Court Bailiff each of the Depository Banks quarterly with copies of the
         monthly bank statement referred to the last relevant month ("estratti
         conti mensili") in the form described under Schedule G, within 20
         (twenty) Business Days from the end of that quarterly period. The
         originals of the service reports must be mailed by registered letter or
         courier to the Security Trustee within 10 (ten) Business Days from
         receipt of the same service reports by the Pledgor. The first such
         monthly bank statement shall be delivered within 20 (twenty) Business
         Days after the end of June 2003.

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<PAGE>

3.4      The obligation to deliver the service reports described under Paragraph
         3.3 may be replaced by a statement of acceptance from each of the
         Depository Banks, set out at the foot of the bank statement received
         from the Pledgor, in accordance with the form set out in Schedule F,
         signed before a Notary and bearing a date certain ("data certa"),
         pursuant to Article 2704 of the Italian Civil Code. The originals of
         the statements of acceptance must be delivered to the Security Trustee
         within 10 (ten) Business Days from receipt of the same originals by the
         Pledgor.

3.5      In addition to the above, the Security Trustee is authorised, and is
         irrevocably empowered by the Pledgor, to act in its name and on its
         behalf in this respect, to carry out the service process on the
         Depository Banks described under Paragraph 3.1, for and on behalf of
         the Pledgor, quoting the balance of each of the Accounts and providing
         confirmation that, under this Agreement, the Pledgor's claims for
         restitution of the related balance have been granted in pledge in
         favour of the Security Trustee on behalf of the Secured Creditors.

3.6      Subject to Paragraph 3.7, the Pledgor may only dispose of sums on the
         Accounts in compliance with the provisions of the Secured Contracts,
         for the sole purpose of satisfying the debts of the Pledgor vis-a-vis
         the Secured Creditors under (i) the Secured Contracts and/or (ii) any
         Secured Obligations (as defined under Article 4) due at that time.

3.7      Notwithstanding Paragraph 3.6, the Secured Creditors, acting through
         the Security Trustee, consent to the Pledgor making disposals of sums
         from the Accounts on a daily basis, it being understood that the
         Secured Creditors, also acting through the Security Trustee, have a
         right to revoke such consent at any time.

3.8      In both of the above cases under Paragraph 3.6 and 3.7, the relevant
         sums will be deemed released from the pledge created by this Agreement,
         which will remain in full force and effect in respect of the remaining
         balance of the Accounts.

3.9      The right to dispose of any sum deposited on the Accounts will in any
         event terminate upon receipt of notification sent by the Security
         Trustee, pursuant to Article 6, following which the Depository Banks
         must refuse to perform any instructions received from the Pledgor and
         must act solely in compliance with instructions received from the
         Security Trustee.

4.       SECURED OBLIGATIONS

4.1      The pledge created by this Agreement jointly secures, for their entire
         value, and without there being any requirement to previously request
         payment from, or enforce any other security against ("senza beneficio
         della preventiva escussione"), the Pledgor as a guarantor under the
         Guarantees, all rights and claims, existing and future, of the Secured
         Creditors vis a vis the Pledgor arising under the Secured Contracts.

4.2      Notwithstanding Paragraph 4.1 above, it is understood that:

         4.2.1    in respect of Secured Obligations owed by the Pledgor in its
                  capacity as guarantor (i.e. as person guaranteeing third
                  parties' obligations or committing itself to perform third
                  parties' obligations or covenanting to pay third parties'

                                     - 10 -
<PAGE>

                  obligations) under any of the Secured Contracts, the aggregate
                  amount of such Secured Obligations under any and all Security
                  will be subject to the limitation applied to the Guaranteed
                  Obligations in the Security Trust and Intercreditor Deed as
                  indicated in Recital (K) above; and

         4.2.2    in respect of any Secured Obligations owed by the Pledgor
                  other than in its capacity as guarantor (as detailed in
                  Paragraph 4.2.1 above), the aggregate amount of such Secured
                  Obligations under any and all Security will not be subject to
                  any limitation.

4.3      It is understood that any parallel debt obligation, covenant to pay
         obligation or commitment to perform obligation of the Pledgor
         (including, by the way of example, the obligations under Clauses 3.1,
         6.3 and 8.4 of the Security Trust and Intercreditor Deed) are subject
         to the same limitations indicated in Paragraph 4.2 above in connection
         with the nature of the obligations they refer to; that is,

         4.3.1    if the parallel debt obligation, covenant to pay obligation or
                  commitment to perform obligation refers to Secured Obligations
                  owed by the Pledgor in its capacity as guarantor as detailed
                  in Paragraph 4.2.1 above, the limitations indicated in
                  Paragraph 4.2.1 shall apply; and

         4.3.2    if the parallel debt obligation, covenant to pay obligation or
                  commitment to perform obligation refers to Secured Obligations
                  owed by the Pledgor other than in its capacity as guarantor as
                  detailed in Paragraph 4.2.1 above, the limitations indicated
                  in Paragraph 4.2.1 shall not apply.

4.4      The pledge created by this Agreement also secures, equally ("in pari
         grado") with the other claims referred to in this Article, any credit
         of the Secured Creditors vis-a-vis the Pledgor arising under the
         Secured Contracts as a consequence of the provision of any facilities
         to be granted by the Secured Creditors in excess of those already
         provided under the Secured Contracts, or after their maturity as
         originally provided in the Secured Contracts, or after notice of
         termination of these contractual relationships.

4.5      The claims which are secured by the pledge created by this Agreement
         are referred to as the "SECURED OBLIGATIONS".

5.       VALIDITY OF THE SECURITY

5.1      The pledge created by this Agreement will remain in force in its
         entirety notwithstanding any partial repayment or satisfaction of the
         Secured Obligations, until the Secured Obligations are satisfied in
         full, and, unless previously released pursuant to Article 10, until the
         relative payments made by the Pledgor, if any, are: (i) not capable of
         being declared null or voidable, or (ii) no longer subject to being
         declared unenforceable, ineffective or reduced as a consequence of
         bankruptcy claw-back ("revocatoria fallimentare") as the relevant
         hardening periods provided for under Articles 65 or 67 of the Italian
         Bankruptcy Law (R.D., 16 March 1942, No. 267) have expired.

5.2      The pledge created by this Agreement is in addition to any other
         security or guarantee of which the Security Trustee may or will have
         the benefit now or in the future in respect of all or some of the
         Secured Obligations.

                                     - 11 -
<PAGE>

5.3      The pledge created by this Agreement will remain in full force and
         effect notwithstanding any subsequent amendments to the Secured
         Contracts or to the Secured Obligations, including, for example, any
         extension of the terms of repayment, partial or total assignment or
         transfer of the Secured Contracts or of the Secured Obligations, or any
         other amendments to the terms and conditions applicable under the
         Secured Contracts or under the Secured Obligations.

6.       EXERCISE OF RIGHTS OF PLEDGE

         The Pledgor accepts that for the purposes of enforcing the pledge
         created by this Agreement, at any time after the occurrence of an
         Enforcement Event or of a Bonding Facility Enforcement Event and the
         Security Trustee (acting on instructions received pursuant to the terms
         of the Security Trust and Intercreditor Deed) giving notice to the
         Issuer thereof and upon receipt by the Pledgor of notice thereof from
         the Security Trustee, the Security Trustee has the right, in its
         absolute discretion, to give instructions to the Depository Banks to
         transfer the amounts resulting from the balance on the Accounts to an
         account opened in the name of the Security Trustee and has the right to
         retain such amounts on behalf of the Secured Creditors and apply them
         in satisfaction of the Secured Obligations, pursuant to Article 2803 of
         the Italian Civil Code. In relation to the above, the Depository Banks
         are therefore authorised to dispose of the relevant amounts in
         accordance with the instructions received from the Security Trustee.

7.       ASSIGNMENT, TRANSFER OR AMENDMENTS

7.1      The Security Trustee may assign and transfer all or any of its rights
         and obligations under this Agreement in accordance with the Security
         Trust and Intercreditor Deed. The Security Trustee shall be entitled to
         disclose such information concerning the Pledgor and this Agreement as
         the Security Trustee considers appropriate to any actual or proposed
         direct or indirect successor or to any person to whom information may
         be required to be disclosed by any applicable law.

7.2      To the extent permitted under the Security Trust and Intercreditor
         Deed, any assignment or transfer of the Secured Contracts or of the
         Secured Obligations will be and take effect as an assignment or
         transfer of the contract ("cessione del contratto") and/or the
         assignment or transfer of the rights under the contract ("cessione del
         credito"), as the case may be, without novative effect ("efficacia
         novativa") on the contract themselves or on the Secured Obligations
         existing at the time the assignment or transfer is perfected.

7.3      If requested by the Security Trustee, the Pledgor hereby undertakes to
         notify the Depository Banks of the transfer of the rights of pledge
         following an assignment in favour of any party who will be indicated as
         the assignee, in whole or in part, of the Secured Contracts or of any
         credit deriving under the same, in any deed of transfer executed
         between such party and each Secured Creditor (or its assignee). For the
         avoidance of doubt, when such assignment takes place on or after the
         exchange of all or any Global Senior Notes or Global Junior Notes for
         Definitive Registered Senior Notes or Definitive Registered Junior
         Notes (as the case may be), the Pledgor shall only be required to
         notify the Depository Banks of such information in respect of
         assignments of such Definitive Registered Senior Notes or Definitive
         Registered Junior Notes (as the case may be) as it knows or can acquire
         using all commercially reasonable and

                                     - 12 -
<PAGE>

         practicable efforts (including by making request of the Registrar). For
         the purposes of this Paragraph 7.3, the terms "Global Senior Notes",
         "Definitive Registered Senior Notes", "Global Junior Notes" and
         "Definitive Registered Junior Notes" shall have the meanings given to
         such terms in the Senior Note Indenture and the Junior Note Indenture
         respectively.

7.4      Without prejudice to the Paragraphs above and to Article 8 below, the
         Pledgor confirms and accepts that the pledge created by this Agreement
         will remain in full force and effect and will be binding on the
         Pledgor, its successors and assignees even after any change in all or
         any of the Secured Contracts or in all or any of the Secured
         Obligations - to the extent such changes are made in compliance with
         the provisions of the Secured Contracts (including, without limitation,
         the extension of the facilities; the postponement of the terms of
         reimbursement of the outstanding amounts; or the accession to any of
         the Secured Contracts of any additional obligor), and to this purpose
         the Pledgor expressly agrees to the continuation of the pledge created
         by this Agreement, in case of changes in all or any of the Secured
         Contracts or in all or any of the Secured Obligations (including by way
         of novation of all or any of the Secured Contracts under English law);

7.5      Without prejudice to Paragraph 7.3 above, any cost incurred as a result
         of transfer or assignments of the rights arising under this Article 7,
         are for the account of the Pledgor.

8.       PLEDGOR'S UNDERTAKINGS

8.1      The Pledgor must from time to time and at any time, promptly and at its
         own expense enter into and execute any further documents and deeds and
         undertake all further actions (including making all filings and
         registrations) which are necessary and requested by the Security
         Trustee in order to create, perfect, protect and maintain the
         effectiveness of the pledge created by this Agreement or for the
         exercise of all rights, powers and remedies of the Security Trustee
         provided by or pursuant to this Agreement or by law and/or to
         facilitate the realisation of the rights pledged pursuant to the
         Agreement. For the avoidance of doubt, the undertaking in this Article
         8 shall include an undertaking by the Pledgor to enter into and execute
         any deeds of confirmation under Article 1232 of the Italian Civil Code
         which may be requested by the Security Trustee following a change in
         all or any of the Secured Contracts or a change in all or any of the
         Secured Obligations.

8.2      Except as not expressly prohibited under the terms of the Indentures,
         the Pledgor shall not:

                  (a)      create or permit to arise any mortgage, charge or
                           lien or other security interest on the Accounts or
                           any interest in or part of the Accounts; or

                  (b)      sell or attempt to sell or otherwise dispose of the
                           Accounts or any interest in or part of the Accounts.

9.       SECURITY TRUSTEE

         The Pledgor acknowledges that The Law Debenture Trust Corporation
         p.l.c., as Security Trustee, is appointed as "mandatario con
         rappresentanza" under Clause 6.5 (Declaration of Trust and Appointment
         as Administrator (Italy)) of the Security Trust and Intercreditor Deed.

                                     - 13 -
<PAGE>

10.      RELEASE OF THE PLEDGE

         Upon full and final satisfaction of the Secured Obligations, upon
         expiry of any hardening period which may be applicable to the relevant
         payments (as provided above under Paragraph 5.1), or if previously, at
         the occurrence of the circumstances as specified in Clause 5.3 (Release
         of Transaction Security on Discharge of Secured Obligations) and Clause
         5.4 (Release of Transaction Security in Connection with Permitted
         Disposals) of the Security Trust and Intercreditor Deed, the pledge
         created by, and the obligations under, this Agreement will cease to be
         in full force and effect, and, at the request and cost of the Pledgor,
         the Security Trustee (in accordance with the terms and subject to the
         conditions and circumstances set out in the Security Trust and
         Intercreditor Deed and without recourse to, or any representation or
         warranty by, the Security Trustee or any of its nominees) will consent
         to the release of the pledge created by this Agreement, provided that
         at the occurrence of the circumstances specified in Clause 5.4 (Release
         of Transaction Security in Connection with Permitted Disposals) of the
         Security Trust and Intercreditor Deed, the pledge created by, and the
         obligations under, this Agreement will cease to be in full force and
         effect only in respect of the Accounts and all sums credited to the
         Accounts forming part of the Transaction Security (as defined in the
         Security Trust and Intercreditor Deed) so released pursuant to that
         clause and the Security Trustee's consent to the release of the pledge
         created by the Agreement will be limited to the assets so released.

11.      ELECTION OF DOMICILE AND NOTICE

         For the purpose of this Agreement and of the security rights arising
         under this Agreement, the Pledgor elects domicile at the address
         referred to below. The Pledgor may be sent any communication relating
         to this Agreement and to the pledge rights created by this Agreement at
         the elected domicile, including notice of any legal proceedings and
         records of any judicial proceedings related to this Agreement and to
         the pledge created by this Agreement. Unless otherwise agreed upon, any
         notice or communication to be sent to any of the parties to this
         Agreement shall be made and delivered in accordance with the provisions
         of the Security Trust and Intercreditor Deed.

         If to the PLEDGOR:

         Marconi Holdings S.p.A.
         Via Lodovico Calda 5,
         16153 Genova
         Italy
         Attention: Presidente del Consiglio di Amministrazione
         Telephone: +39/010/6002861
         Fax: +39/010/6002928

         With copy to:
         Mr. Marco Arato
         Bonelli Erede Pappalardo - Studio Legale
         Via Padre Santo, 5/8

                                     - 14 -
<PAGE>

         16122 Genova
         Italy
         Telephone: +39/010/84621
         Fax: +39/010/813849

         If to the SECURITY TRUSTEE:

         Fifth Floor
         100 Wood Street
         London EC2V 7EX
         England
         Tel. +44/20/7606/5451
         Fax. +44/20/7696/5261

         To the Attention of: Manager Trust Administration

12.      MISCELLANEOUS

12.1     No amendment to the provisions of this Agreement, or to the pledge
         created by this Agreement, and no waiver of the rights arising under
         this Agreement, will be effective unless the amendment or waiver is in
         writing and executed by the Pledgor and by the Security Trustee.

12.2     This Agreement is made in the English language only. However, where an
         Italian translation of a word or phrase appears in the text of this
         Agreement, the Italian translation of the word or phrase prevails.

13.      GOVERNING LAW AND JURISDICTION

13.1     This Agreement and the rights arising under the pledge created by this
         Agreement are governed by Italian law.

13.2     Unless otherwise provided for by mandatory law, the Court of Milan has
         the exclusive jurisdiction to hear any dispute arising between the
         parties out of this Agreement and the pledge created by this Agreement.
         Notwithstanding the foregoing, the right of the Secured Creditors to
         have recourse to any other competent judge pursuant to any applicable
         provision of the law remains unprejudiced.

14.      EXPENSES, COST AND TAXES

14.1     EXPENSES

         The Pledgor shall, from time to time and promptly on demand by the
         Security Trustee, reimburse to the Security Trustee all costs and
         expenses (including legal fees) on a full indemnity basis together with
         any applicable VAT incurred by the Security Trustee and any Delegate
         (provided that in relation to Paragraph 14.1.1 of this Article 14, such
         costs and expenses must be properly incurred) in connection with:

         14.1.1   the execution, release and discharge of this Agreement and the
                  Security created or intended to be created in respect of the
                  Accounts and the perfection of the

                                     - 15 -
<PAGE>

                  Security contemplated in this Agreement or in any such
                  documents or forming part of the Security created or intended
                  to be created in respect of the Accounts:

         14.1.2   the actual or contemplated exercise, preservation and/or
                  enforcement of any of the rights, powers and remedies of, or
                  the performance of the duties and obligations of, the Security
                  Trustee or any Delegate, or any amendment or waiver in respect
                  of this Agreement;

         14.1.3   the foreclosure of any Accounts; and

         14.1.4   the preservation and/or enforcement of the Security created or
                  intended to be created in respect of the Accounts,

         which shall carry interest from the date of such demand until so
         reimbursed at the rate and on the basis as mentioned in Clause 18.4
         (Interest on Demands) of the Security Trust and Intercreditor Deed.

14.2     TAXES

         The Pledgor shall pay, promptly on demand of the Security Trustee all
         stamp, registration, notarial and other similar Taxes or fees paid or
         payable by the Security Trustee in connection with any action taken or
         contemplated by or on behalf of the Security Trustee for perfecting,
         enforcing, releasing, cancelling, reassigning or resolving any doubt
         concerning, or for any other purpose in relation to this Agreement any
         amendment thereto, any transfer and/or assignment of the rights and/or
         obligations under the same or the Security created or intended to be
         created in respect of the Accounts and shall, from time to time,
         indemnify the Security Trustee promptly on demand against any
         liabilities, costs, claims and expenses resulting from any failure to
         pay by the Pledgor or any delay by any Pledgor in paying any such Taxes
         or fees.

14.3     This Agreement is subject to registration in "caso d'uso", as provided
         in Law No. 131 of April 26, 1986, as subsequently amended, as it is an
         agreement executed outside the Republic of Italy.

London, 19 May 2003

W JOHNSON

MARCONI HOLDINGS S.P.A.
REPRESENTED BY: _____________________________________

R. D. RANCE

THE LAW DEBENTURE TRUST CORPORATION p.l.c.
SECURED CREDITOR AND SECURITY TRUSTEE
REPRESENTED BY: RICHARD DAVID RANCE

                                     - 16 -
<PAGE>

                                   SCHEDULE A1

  (Summary of Terms and Conditions of the Senior Note Indenture and the Senior
                                     Notes)

ISSUER:                Marconi Corporation plc

CURRENCY:              US Dollars

NOTIONAL AMOUNT:       US $ 717,139,584

ACCRUED INTEREST:      8 per cent. per annum, payable quarterly in arrears

LEGAL MATURITY DATE:   30 April 2008

DEPOSITORY:            The Bank of New York

ISSUE DATE:            19 May 2003

RATING:                pending

GOVERNING LAW:         English

                         DESCRIPTION OF THE SENIOR NOTES

Each series of each tranche of the Senior Notes will initially be represented by
one or more global notes in bearer form without interest coupons attached (each
a "Global Senior Note" and together the "Global Senior Notes"). Title to the
Global Senior Notes will pass by delivery. The holder of any certificate
representing any series of any tranche of Senior Notes, including any Global
Senior Note (the "holder"), is the person that has possession of the
certificate, in the case of a bearer certificate, and the person in whose name
the certificate is registered, in the case of a certificate in registered form.

The Global Senior Notes will be deposited on issue with The Bank of New York, as
depositary (the "Depositary") pursuant to a Deposit Agreement. Under the Deposit
Agreement, the Depositary will issue certificateless depositary interests to The
Depositary Trust Company ("DTC") and certificated depositary interests (and,
together with the certificateless depositary interests, "CDI" or "CDIs") to
Euroclear and/or Clearstream, Luxembourg, which together represent a 100 per
cent. interest in each underlying Global Senior Note. The CDIs will be
registered in the name of Cede & Co., as nominee of DTC (with respect to CDIs
issued to DTC) or the nominee of a common depositary for Euroclear and
Clearstream, Luxembourg (with respect to CDIs issued to Euroclear and/or
Clearstream, Luxembourg). Upon acceptance by DTC, Euroclear and/or Clearstream,
Luxembourg of the CDIs for entry into their respective book-entry settlement
systems, beneficial interests in the CDIs (the "Book-Entry Interests") will be
issued by DTC, Euroclear and/or Clearstream, Luxembourg and traded through their
respective book-entry systems.

The Book-Entry Interests will not be held in definitive form. Book-Entry
Interests will be held by or through persons that have accounts with DTC,
Euroclear and/or Clearstream, Luxembourg

                                     - 17 -
<PAGE>

(the "direct participants") or persons that hold interests through direct
participants (the "indirect participants" and, together with direct
participants, "participants").

Ownership of the Book-Entry Interest will be shown on, and the transfer of
ownership will be effected only through, records maintained in book-entry from
by DTC, Euroclear, Clearstream, Luxembourg and their participants. Book-Entry
Interests will be transferable only as units in the same authorized
denominations as the Senior Notes of the series to which they correspond. Unless
any series of the Senior Notes is exchanged in whole or in part for other
securities of the Issuer, or the applicable Global Senior Note is exchanged for
the Senior Notes in definitive register form (the "Definitive Registered
Notes"), the CDIs representing notes of a series held by DTC, Euroclear and/or
Clearstream, Luxembourg may not be transferred except as a whole between DTC,
Euroclear and/or Clearstream, Luxembourg, a nominee of DTC, the nominee of a
common depositary for Euroclear and Clearstream, or their respective successors.

So long as the Depositary or its nominee is the holder of the Global Senior
Note(s) representing the Senior Notes of a series, the Depositary or its nominee
will be considered the sole holder of the Global Senior Note(s) for all purposes
under the Senior Note Indenture. Except in the limited circumstances when
Definitive Registered Notes can be issued, described below, no participant or
other person will be entitled to have the Senior Notes registered in its name,
receive or be entitled to receive physical delivery of Definitive Registered
Notes or be considered the owner or holder of the Senior Notes under the Senior
Note Indenture or the Deposit Agreement. Accordingly, each person owning a
Book-Entry Interest must rely on the procedures of the Depositary and DTC,
Euroclear and/or Clearstream, Luxembourg and, if the person is not a direct
participant in DTC, Euroclear and/or Clearstream, Luxembourg, such person must
rely on the procedure of the direct participant or other securities intermediary
through which the person owns its interest, to exercise any rights and
obligations of a holder under the Senior Note Indenture, the applicable series
of Senior Notes or the Deposit Agreement.

So long as DTC, Euroclear and/or Clearstream, Luxembourg hold the CDIs
representing the Senior Notes, the Book-Entry Interests (and corresponding
Global Senior Notes) will not be exchangeable for Definitive Registered Notes
except if:

         -   DTC, Euroclear or Clearstream, Luxembourg notify the Depositary
             that it is unwilling or unable to continue to hold the CDI or CDIs,
             or if at any time DTC is unable to or ceases to be a clearing
             agency registered under the US Exchange Act, and in either case a
             successor to DTC is not appointed by the Depositary at the written
             request of the Issuer within 120 days;

         -   The Depositary notifies the Issuer and the Senior Note Trustee that
             it is unwilling or unable to continue to act as Depositary, and the
             Issuer is unable to appoint a successor depositary within 120 days;

         -   Upon request of DTC, Euroclear, Clearstream, Luxembourg, the Issuer
             or the Trustee, in the event that a winding up of the Issuer or an
             Event of Default under the Senior Note Indenture has occurred and
             is continuing;

                                - 18 -
<PAGE>

         -   Euroclear or Clearstream, Luxembourg is closed for business for a
             continuous period of 14 days (other than by reason of legal
             holiday) or announces an intention permanently to cease business;
             or

Any Global Senior Note that is exchangeable pursuant to the above shall be
exchangeable for Definitive Registered Notes of the same series bearing interest
at the same rate, having the same date of issuance, the same date or dates from
which such interest shall accrue, the same Interest Payment Dates on which such
interest shall be payable, the same Stated Maturity, redemption provisions,
Relevant Currency and other terms and of different denominations aggregating a
like amount as the Global Senior Note of the series so exchangeable.

                                     - 19 -
<PAGE>

                                   SCHEDULE A2

  (Summary of Terms and Conditions of the Junior Note Indenture and the Junior
                                     Notes)

ISSUER:                Marconi Corporation plc

CURRENCY:              US Dollars

NOTIONAL AMOUNT:       US $ 486,881,472

ACCRUED INTEREST:      10 per cent. per annum, or 12 per cent. if the Issuer
                       elects to pay interest in the form of PIK notes

LEGAL MATURITY DATE:   31 October 2008

DEPOSITORY:            The Bank of New York

ISSUE DATE:            19 May 2003

RATING:                Pending

GOVERNING LAW:         English

                         DESCRIPTION OF THE JUNIOR NOTES

Each series of each tranche of the Junior Notes will initially be represented by
one or more global notes in bearer form without interest coupons attached (each
a "Global Junior Note" and together the "Global Junior Notes"). Title to the
Global Junior Notes will pass by delivery. The holder of any certificate
representing any series of any tranche of Junior Notes, including any Global
Junior Note (the "holder"), is the person that has possession of the
certificate, in the case of a bearer certificate, and the person in whose name
the certificate is registered, in the case of a certificate in registered form.

The Global Junior Notes will be deposited on issue with The Bank of New York, as
depositary (the "Depositary") pursuant to a Deposit Agreement. Under the Deposit
Agreement, the Depositary will issue to The Depositary Trust Company ("DTC")
certificateless depositary interests and certificated depositary interests (and,
together with the certificateless depositary interests, the "CDI" or "CDIs") to
Euroclear and/or Clearstream, Luxembourg CDIs, which together represent a 100
per cent. interest in each underlying Global Junior Note. The CDIs will be
registered in the name of Cede & Co., as nominee of DTC (with respect to CDIs
issued to DTC) or the nominee of a common depositary for Euroclear and
Clearstream, Luxembourg (with respect to CDIs issued to Euroclear and/or
Clearstream, Luxembourg). Upon acceptance by DTC, Euroclear and/or Clearstream,
Luxembourg of the CDIs for entry into their respective book-entry settlement
systems, beneficial interests in the CDIs (the "Book-Entry Interests") will be
issued by DTC, Euroclear and/or Clearstream, Luxembourg and traded through their
respective book-entry systems.

                                     - 20 -
<PAGE>

The Book-Entry Interests will not be held in definitive form. Book-Entry
Interests will be held by or through persons that have accounts with DTC,
Euroclear and/or Clearstream, Luxembourg (the "direct participants") or persons
that hold interests through direct participants (the "indirect participants"
and, together with direct participants, "participants").

Ownership of the Book-Entry Interest will be shown on, and the transfer of
ownership will be effected only through, records maintained in book-entry form
by DTC, Euroclear, Clearstream, Luxembourg and their participants. Book-Entry
Interests will be transferable only as units in the same authorized
denominations as the Junior Notes of the series to which they correspond. Unless
any series of the Junior Notes is exchanged in whole or in part for other
securities of the Issuer, or the applicable Global Junior Note is exchanged for
the Junior Notes in definitive register form (the "Definitive Registered
Notes"), the CDIs representing notes of a series held by DTC, Euroclear and/or
Clearstream, Luxembourg may not be transferred except as a whole between DTC,
Euroclear and/or Clearstream, Luxembourg, a nominee of DTC, the nominee of a
common depositary for Euroclear and Clearstream, or their respective successors.

So long as the Depositary or its nominee is the holder of the Global Junior
Note(s) representing the Junior Notes of a series, the Depositary or its nominee
will be considered the sole holder of the Global Junior Note(s) for all purposes
under the Junior Note Indenture. Except in the limited circumstances when
Definitive Registered Notes can be issued, described below, no participant or
other person will be entitled to have the Junior Notes registered in its name,
receive or be entitled to receive physical delivery of Definitive Registered
Notes or be considered the owner or holder of the Junior Notes under the Junior
Note Indenture or the Deposit Agreement. Accordingly, each person owning a
Book-Entry Interest must rely on the procedures of the Depositary and DTC,
Euroclear and/or Clearstream, Luxembourg and, if the person is not a direct
participant in DTC, Euroclear and/or Clearstream, Luxembourg, such person must
rely on the procedure of the direct participant or other securities intermediary
through which the person owns its interest, to exercise any rights and
obligations of a holder under the Junior Note Indenture, the applicable series
of Junior Notes or the Deposit Agreement.

So long as DTC, Euroclear and/or Clearstream, Luxembourg hold the CDIs
representing the Junior Notes, the Book-Entry Interests (and corresponding
Global Junior Notes) will not be exchangeable for Definitive Registered Notes
except if:

         -   DTC, Euroclear or Clearstream, Luxembourg notify the Depositary
             that it is unwilling or unable to continue to hold the
             certificateless depositary interest or interests, or if at any time
             DTC is unable to or ceases to be a clearing agency registered under
             the US Exchange Act, and in either case a successor to DTC is not
             appointed by the Depositary at the written request of the Issuer
             within 120 days;

         -   The Depositary notifies the Issuer and the Junior Note Trustee that
             it is unwilling or unable to continue to act as Depositary, and the
             Issuer is unable to appoint a successor depositary within 120 days;

         -   Upon request of DTC, Euroclear, Clearstream, Luxembourg, the Issuer
             or the Trustee, in the event that a winding up of the Issuer or an
             Event of Default under the Junior Note Indenture has occurred and
             is continuing;

                                     - 21 -
<PAGE>

         -   Euroclear or Clearstream, Luxembourg is closed for business for a
             continuous period of 14 days (other than by reason of legal
             holiday) or announces an intention permanently to cease business;
             or

Any Global Junior Note that is exchangeable pursuant to the above shall be
exchangeable for Definitive Registered Notes of the same series bearing interest
at the same rate, having the same date of issuance, the same date or dates from
which such interest shall accrue, the same Interest Payment Dates on which such
interest shall be payable, the same Stated Maturity, redemption provisions,
Relevant Currency and other terms and of different denominations aggregating a
like amount as the Global Junior Note of the series so exchangeable.

                                     - 22 -
<PAGE>

                                   SCHEDULE B

                                     PART I

     (List of the New Bonding Facility Banks and New Bonding Facility Agent)

NEW BONDING FACILITY BANKS

HSBC Bank plc, with registered office at 8 Canada Square, London E14 5HQ.

JPMorgan Chase Bank, acting through an office at Trinity Tower, 9 Thomas More
Street, London E1W 1YT.

NEW BONDING FACILITY AGENT

HSBC Bank plc, with registered office at 8 Canada Square, London E14 5HQ.

                                     PART II

     (Summary of Terms and Conditions of the New Bonding Facility Agreement)

FACILITY: Multicurrency revolving facility

MAXIMUM AGGREGATE PRINCIPAL AMOUNTS: E50,000,000

INTEREST RATE: fronting fee of 0.10% per annum plus bonding fee of 0.50% per
annum;

DEFAULT INTEREST: the default interest rate shall be the interest rate equal to
the applicable LIBOR plus 2.0% per annum plus 0.50% per annum plus the
applicable mandatory cost (if any) for successive interest period;

REPAYMENT: the availability period under the New Bonding Facility Agreement will
end on the date which is 18 (eighteen) months after the Effective Date of the
Scheme, provided that such availability period may be extended to a date which
is up to 30 (thirty) months after the Effective Date of the Scheme, but, in each
case, letters of credit which have been made available during such availability
period may continue after the availability period has come to the end. When used
in this Schedule, the terms "Effective Date" and "Scheme" shall have the meaning
given to such terms in the New Bonding Facility Agreement.

                                     - 23 -
<PAGE>

                                   SCHEDULE C

                              (LIST OF GUARANTORS)

PART I

Marconi Communications Inc.

Marconi Networks Worldwide, Inc.

Marconi Communications Technology, Inc.

Marconi Communications Federal, Inc.

Marconi Acquisition Corp.

Marconi Intellectual Property (Ringfence) Inc.

Marconi Communications Limited, a private limited company incorporated under the
laws of England and Wales

Marconi Communications Optical Networks Limited

Marconi Communications, S.A. de C.V.

Marconi Communications de Mexico, S.A. de C.V.

Marconi Communications Exportel, S.A. de C.V.

Administrativa Marconi Communications, S.A. de C.V.

Marconi Communications BV

Marconi Communications GmbH, a private company incorporated under the laws of
Germany

Metapath Software International Limited

Mobile Systems International Holdings Limited

GPT Special Project Management Limited

Marconi Communications Limited, a private limited company incorporated under the
laws of the Republic of Ireland

Marconi Communications International Limited

Marconi Communications China Limited

Marconi Communications International Investments Limited

Marconi Communications International Holdings Limited

Marconi Communications Investments Limited

Marconi Communications Holdings Limited

                                     - 24 -
<PAGE>

Marconi (Bruton Street) Limited

Marconi (DGP1) Limited

Marconi (DGP2) Limited

Marconi Bonding Limited

Marconi Optical Components Limited

Associated Electrical Industries Limited

English Electric Company Ltd

Marconi (Elliott Automation) Limited

Elliott-Automation Holdings Limited

Marconi Aerospace Unlimited

Marconi UK Intellectual Property Limited

Marconi (NCP) Limited

Highrose Limited

Marconi Inc.

Marconi Holdings, LLC

Marconi Communications North America Inc.

FS Holdings Corp.

FS Finance Corp.

Marconi Software International, Inc.

Metapath Software International (US), Inc.

Metapath Software International, Inc.

Marconi Intellectual Property (US), Inc.

Regents Place, Inc.

Marconi Communications Holdings GmbH

Marconi Communications GmbH, a private company incorporated under the laws of
Switzerland

Marconi Communications Real Estate GmbH

Marconi Holdings S.p.A.

Marconi Communications S.p.A.

                                     - 25 -
<PAGE>

Marconi Sud S.p.A.

Marconi Australia Holdings Pty Limited

Marconi Australia Pty Limited

Marconi Communications Asia Limited

G.E.C. (Hong Kong) Limited

Bruton Street Overseas Investments Limited

PART II

Marconi Communications Inc.

Marconi Networks Worldwide, Inc.

Marconi Communications Technology, Inc.

Marconi Communications Federal, Inc.

Marconi Acquisition Corp.

Marconi Intellectual Property (Ringfence) Inc.

Marconi Communications Limited, a private limited company incorporated under the
laws of England and Wales

Marconi Communications Optical Networks Limited

Marconi Communications, S.A. de C.V.

Marconi Communications de Mexico, S.A. de C.V.

Marconi Communications Exportel, S.A. de C.V.

Administrativa Marconi Communications, S.A. de C.V.

Marconi Communications BV

Marconi Communications GmbH, a private company incorporated under the laws of
Germany

Metapath Software International Limited

Mobile Systems International Holdings Limited

GPT Special Project Management Limited

Marconi Communications Limited, a private limited company incorporated under the
laws of the Republic of Ireland

Marconi Communications International Limited

                                     - 26 -
<PAGE>

Marconi Communications China Limited

Marconi Communications International Investments Limited

Marconi Communications International Holdings Limited

Marconi Communications Investments Limited

Marconi Communications Holdings Limited

Marconi (Bruton Street) Limited

Marconi (DGP1) Limited

Marconi (DGP2) Limited

Marconi Bonding Limited

Marconi Optical Components Limited

Associated Electrical Industries Limited

English Electric Company Ltd

Marconi (Elliott Automation) Limited

Elliott-Automation Holdings Limited

Marconi Aerospace Unlimited

Marconi UK Intellectual Property Limited

Marconi (NCP) Limited

Highrose Limited

Marconi Inc.

Marconi Holdings, LLC

Marconi Communications North America Inc.

Regents Place Inc.

FS Holdings Corp.

FS Finance Corp.

Marconi Software International, Inc.

Metapath Software International (US), Inc.

Metapath Software International, Inc.

Marconi Intellectual Property (US), Inc.

                                     - 27 -
<PAGE>

Regents Place, Inc.

Marconi Communications Holdings GmbH

Marconi Communications GmbH, a private company incorporated under the laws of
Switzerland

Marconi Communications Real Estate GmbH

Marconi Holdings S.p.A.

Marconi Communications S.p.A.

Marconi Sud S.p.A.

Marconi Communications Telemulti Ltda

Marconi Australia Holdings Pty Limited

Marconi Australia Pty Limited

Marconi Communications Asia Limited

G.E.C. (Hong Kong) Limited

Bruton Street Overseas Investments Limited

                                     - 28 -
<PAGE>

                                   SCHEDULE D

                                   (Accounts)

<TABLE>
<CAPTION>
DEPOSITORY           ACCOUNT                                              BALANCE AS OF
BANK NAME            NUMBER             ADDRESS              ABI/CAB       30/04/2003       CURRENCY
-----------------------------------------------------------------------------------------------------
<S>               <C>               <C>                    <C>            <C>               <C>
BANCA
COMMERCIALE                         via XXV  Aprile
ITALIANA          2430702-01-55     5r, Genova             03069/01456      5,479.87           EUR

-----------------------------------------------------------------------------------------------------
UNICREDIT
BANCA                               via Petrarca 2r,
D'IMPRESA         4953321           Genova                 03226/01400      1,589.68           EUR

-----------------------------------------------------------------------------------------------------
BANCA
NAZIONALE                           via Catalani 6r,
DEl LAVORO        370               Genova                 01005/01410      1,224.32           EUR

-----------------------------------------------------------------------------------------------------
BANCA DI                            Via Ursone de
ROMA              40051,39          Sestri 5r, Genova      03002/01412      2,247.83           EUR

-----------------------------------------------------------------------------------------------------
                                    Via Fieschi 4,
SAN PAOLO IMI     114021            Genova                 01025/01400      3,111,710.7        EUR

-----------------------------------------------------------------------------------------------------
MONTE  DEI
PASCHI DI                           Via Travi 23r,
SIENA             6614/77           Genova                 01030/01403      372,024.16         EUR

-----------------------------------------------------------------------------------------------------
                                    via Sestri 114r,
BANCA CARIGE      17154/80          Genova                 06175/01421      3,004,705.94       EUR

-----------------------------------------------------------------------------------------------------
</TABLE>

                                     - 29 -
<PAGE>

                                   SCHEDULE E

                             [Pledgor's letterhead]

            NOTIFICATION TO DEPOSITORY BANKS PURSUANT TO ARTICLE 3.1

TO:      [-]

         [-]

Dear Sirs,

CONSTITUTION OF A PLEDGE OVER BANK ACCOUNTS

We hereby notify you that by way of a pledge agreement executed on 19 May 2003
between Marconi Holdings S.p.A. (hereinafter the "PLEDGOR") and The Law
Debenture Trust Corporation p.l.c. (the "SECURITY TRUSTEE") on its behalf and as
representative of the other Secured Creditors (as defined therein), the Pledgor
created a pledge over its claim for restitution of the balance from time to time
existing on the accounts indicated hereunder (hereinafter the "ACCOUNTS"). The
undersigned also hereby grants you an irrevocable mandate to withdraw or
transfer the sums deposited on the Accounts for and in favour of the Secured
Creditors. Until notified to the contrary by the Security Trustee, the Pledgor
is authorised to withdraw or transfer the sums on the Accounts. You shall not be
held liable for the withdrawal or transfer of the sums deposited on the Account
by the Pledgor, unless you have acted with gross negligence or wilful
misconduct. Any sums withdrawn or transferred shall be deemed as released from
the pledge, which shall, however, remain in full force and effect in respect of
the balance from time to time existing on the Accounts.

Kind Regards.

[locations] [date]

MARCONI HOLDINGS S.p.A.

Account:

Account No. 1 [-]

                                     - 30 -
<PAGE>

                         [Carta intestata della Societa]

           NOTIFICA ALLE BANCHE DEPOSITARIE AI SENSI DELL'ARTICOLO 3.1

A:       [-]

         [-]

Egregi Signori,

COSTITUZIONE IN PEGNO DEI CONTI CORRENTI BANCARI

Con la presente Vi notifichiamo che, con contratto costitutivo di pegno
sottoscritto in data 19 maggio 2003 tra Marconi Holdings S.p.A. (in seguito il
"COSTITUENTE") e The Law Debenture Trust Corporation p.l.c. (il "SECURITY
TRUSTEE"), il quale ha agito per proprio conto e per conto dei Creditori
Garantiti (Secured Creditors) ivi indicati, il Costituente ha costituito in
pegno il credito per la restituzione del saldo in ogni tempo esistente sui conti
correnti bancari indicati in calce alla presente (in seguito i "CONTI
CORRENTI"). Con la presente, inoltre, la scrivente Vi conferisce mandato
irrevocabile a prelevare o trasferire somme depositate sui Conti Correnti per
conto e a favore dei Creditori Garantiti. Sino a diversa comunicazione da parte
del Security Trustee, il Costituente potra prelevare o trasferire le somme a
valere sui Conti Correnti. Non sarete ritenuti responsabili per il ritiro o il
trasferimento di somme depositate nei Conti Correnti se non in caso di colpa
grave o dolo. Laddove prelevate o trasferite si intenderanno liberate dal pegno
il quale rimarra comunque in piena efficacia rispetto al saldo in ogni tempo
esistente sui Conti Correnti.

Cordiali saluti.

[luogo] [data]

MARCONI HOLDINGS S.p.A.

CONTO CORRENTE:

Account No. 1 [-]
                                   SCHEDULE F

      (Statement of Acceptance by Depository Banks Pursuant to Article 3.2)

                                     - 31 -
<PAGE>

TO:      The Law Debenture Trust Corporation p.l.c. (in its capacity as Security
Trustee of the Secured Creditors)

Att.: [-]

COPY TO: [-]
Att.:    [-]

Dear Sirs,

Following the communication sent to us, we hereby acknowledge and accept that on
19 May 2003 an agreement creating a pledge over bank accounts (the "PLEDGE
AGREEMENT") was executed between Marconi Holdings S.p.A. (hereinafter the
"PLEDGOR") and The Law Debenture Trust Corporation p.l.c. (the "SECURITY
TRUSTEE") on its behalf and as representative of the other Secured Creditors (as
defined therein), by which the Pledgor created a pledge for the benefit of the
Security Trustee (for itself and as representative of the other Secured
Creditors) over the claim for restitution of the balance from time to time
existing on the bank accounts indicated below (the "ACCOUNTS"). The undersigned
entity acknowledges and accepts its obligation to withdraw or transfer the sums
deposited on the Accounts for and in favour of the Secured Creditors. We
acknowledge that until notified to the contrary by the Security Trustee, the
Pledgor is authorised to withdraw or transfer the sums on the Account. Any sums
withdrawn or transferred shall be deemed as released from the pledge, which
shall, however, remain in full force and effect in respect of the balance from
time to time existing on the Accounts. The undersigned entity will not be held
responsible for the utilisation of the sums by the Pledgor unless such
undersigned entity has acted with gross negligence or wilful misconduct.

This statement is issued by [-], in its capacity as Depository Bank for the
pledged Account.

Kind Regards.

[location, date]

_______________________

[DEPOSITORY BANK]

ACCOUNT:

Account No. 1 [-]

         DICHIARAZIONE DI ACCETTAZIONE DELLE BANCHE DEPOSITARIE AI SENSI
                               DELL'ARTICOLO 3.2

A:       The Law Debenture Trust Corporation p.l.c. (in qualita di Security
         Trustee dei Creditori Garantiti)

                                     - 32 -
<PAGE>

         Att.: [-]

         COPIA A:
         Att.:    [-]

Egregi Signori,

facendo seguito alla comunicazione inviataci, con la presente prendiamo atto ed
accettiamo che in data 19 maggio 2003 e stato sottoscritto un contratto
costitutivo di pegno su conti correnti (il "CONTRATTO DI PEGNO") tra Marconi
Holdings S.p.A. (il "COSTITUENTE") e The Law Debenture Trust Corporation p.l.c.
(il "SECURITY TRUSTEE"), che ha agito per proprio conto ed in rappresentanza
degli altri Creditori Garantiti (Secured Creditors) ivi indicati, mediante il
quale e stato costituito in pegno a favore del Security Trustee (per proprio
conto nonche in rappresentanza degli altri Creditori Garantiti), il credito per
la restituzione del saldo in ogni tempo esistente sui conti correnti bancari
indicati in calce alla presente (i "CONTI CORRENTI"). Il sottoscritto ente
prende atto ed accetta l'obbligo di disporre delle somme depositate sui Conti
Correnti per conto e a favore del Security Trustee (per proprio conto nonche in
rappresentanza degli altri Creditori Garantiti) nel momento in cui riceva
comunicazione da parte dei The Law Debenture Trust Corporarion p.l.c., in
qualita di Security Trustee. Sino a diversa comunicazione da parte del Security
Trustee, il Costituente potra prelevare o trasferire somme a valere sui Conti
Correnti in conformita del contratto sopra menzionato. Laddove prelevate o
trasferite le somme si intenderanno liberate dal pegno, il quale rimarra
comunque in piena efficacia rispetto al saldo in ogni tempo esistente sui Conti
Correnti. La scrivente non sara ritenuta responsabile dal Costituente per il
ritiro o il trasferimento delle somme depositate nei Conti Correnti se non in
caso di colpa grave o dolo.

La presente dichiarazione viene rilasciata da [-], in qualita di Banca
Depositaria dei Conti Correnti costituiti in pegno.

Cordiali saluti.
[luogo e data]

_______________________

[BANCA DEPOSITARIA]

ACCOUNT:
Account No. 1 [-]

                                   SCHEDULE G

                (LETTER OF NOTIFICATION TO THE DEPOSITORY BANKS)

TO:      [-]

                                     - 33 -
<PAGE>

COPY TO: The Law Debenture Trust Corporation p.l.c. (in its capacity as Security
Trustee of the Secured Creditors)

Pursuant to the agreement for the creation of a pledge over bank accounts
executed on 19 May 2003 between Marconi Holdings S.p.A. and The Law Debenture
Trust Corporation p.l.c., the undersigned Marconi Holdings S.p.A. confirms that:

the amount of Euro [ - ], which at the date hereof is the balance of the account
held at your bank, number [-] in the name of [-]

is constituted in pledge in favour of the Secured Creditors, as defined in the
above mentioned agreement in compliance with the terms of the same.

[certain date]

____________

[[-]]

Schedule: written printout of the bank statement of the Account

                                     - 34 -
<PAGE>

                   LETTERA DI NOTIFICA ALLE BANCHE DEPOSITARIE

A:       [-]

COPIA A: The Law Debenture Trust Corporation p.l.c. (in qualita di Security
Trustee dei Creditori Garantiti

Ai sensi della scrittura per la costituzione di diritti di pegno sui conti
correnti bancari sottoscritta in data 19 maggio 2003 tra Marconi Holdings S.p.A.
(in seguito il "COSTITUENTE") e The Law Debenture Trust Corporation p.l.c. (in
seguito il "SECURITY Trustee"), la scrivente Marconi Holdings S.p.A. conferma
che:

la somma di Euro [-] costituente il saldo in data odierna del conto corrente
acceso presso di Voi, numero [-], intestato ad [-]

sono costituite in pegno a favore dei Creditori Garantiti, cosi come definiti
nella suddetta scrittura e secondo i termini della stessa.

[data certa]

____________

[[-]]

All.: stampa cartacea dell'estratto conto di ciascuno dei Conti Correnti

                                     - 35 -