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                                                                    EXHIBIT 4.25

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HSBC BANK PLC                                                 BARCLAYS BANK PLC
POULTRY                                                       54 LOMBARD STREET
LONDON  EC2P 2BX                                              LONDON  EC3P 3AH

To: The Directors
    Marconi Bonding Limited
    1 Bruton Street
    London W1J 6AQ

                                                                     10 May 2002

Dear Sirs,

PERFORMANCE BOND FACILITY

We refer to the temporary bonding facility agreement dated 8 February 2002 made
between HSBC Bank plc ("HSBC"), Barclays Bank PLC ("BARCLAYS") and Marconi
Bonding Limited (the "COMPANY") (the "TEMPORARY BONDING FACILITY"). In light of
the expiry of the availability period under the Temporary Bonding Facility on 29
March 2002, HSBC and Barclays are pleased to offer the Company a new facility
for the issue of Bonds (as defined below) on the terms and conditions referred
to below (the "FACILITY").

1.       INTERPRETATION

1.1      For the purposes of this Facility Letter:

         "ACCEPTANCE DATE" means the date on which the conditions in paragraph 8
         have been satisfied;

         "AFFILIATE" means, with respect to any specified legal entity, any
         entity that is directly or indirectly controlled by or is under direct
         or indirect common control with such specified legal entity where the
         terms "controlled by" and "under direct or indirect common control
         with" mean, in the case of a corporation, the ownership of 50 per cent.
         of the voting shares or securities of such corporation or the ability
         to appoint a majority of the members of the board of directors of such
         corporation.

         "AVAILABLE CREDIT LINE" means, in relation to a Bank at any time (save
         as otherwise provided herein) its Credit Line at such time less the
         Utilised Amount applicable to such Bank;

         "AVAILABILITY PERIOD" means, save as otherwise agreed by the Banks, the
         period commencing on the Acceptance Date and ending on such date as is
         notified by the Banks to the Company in writing.

         "BANK" means each of HSBC, Barclays and (if applicable) each New Bank
         and "BANKS" means all of them;

         "BOND" has the meaning ascribed to it in paragraph 2.2;

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         "BONDING DOCUMENTS" means this Facility Letter (including, for the
         avoidance of doubt, any Bond issued pursuant hereto), each Counter
         Indemnity and each Security over Cash Agreement;

         "BUSINESS DAY" means any day other than a Saturday or Sunday or other
         day on which commercial banks are required or authorised to be closed
         in London;

         "COMMISSION PAYMENT DATE" has the meaning ascribed to it in paragraph
         4.2;

         "COUNTER INDEMNITIES" means the separate counter indemnity agreements
         between the Company and each Bank pursuant to which the Company agrees
         (subject to the terms thereof) to indemnify the relevant Bank against
         any loss, liability or reasonable cost incurred by such Bank in respect
         of or in connection with the Bonding Documents entered into or issued
         by such Bank and "RELEVANT COUNTER INDEMNITY" shall be construed
         accordingly;

         "CREDIT LINE" means in respect of HSBC L30,000,000 and in respect
         of Barclays L30,000,000 or such other amounts as may be agreed between
         the Banks and the Company from time to time (provided that the
         aggregate of the Credit Lines of each of Barclays and HSBC shall not
         exceed the Facility Limit) in each case to the extent not cancelled,
         reduced or transferred by it under this Facility Letter.

         "DEPOSIT" has the meaning given in the relevant Counter Indemnity;

         "ELIGIBLE SUBSIDIARY" means any subsidiary of Marconi plc ("MARCONI"),
         a company incorporated under the laws of England and Wales (registered
         number 3846429) whose registered office is at 1 Bruton Street, London
         W1J 6AQ (and "subsidiary" shall have the meaning given to such term in
         section 736 of the Companies Act 1985);

         "FACILITY LIMIT" means L60,000,000 (or the equivalent in other
         currencies) or such higher amount as may be agreed between the Banks
         and the Company from time to time;

         "FOREIGN CURRENCY BOND" has the meaning ascribed to it in the Relevant
         Counter Indemnity;

         "GROUP" means Marconi and its subsidiaries for the time being;

         "ISSUE DATE" means, in respect of any Bond, the date upon which a Bank
         issues such Bond;

         "L/C CONFIRMATION" has the meaning ascribed to it in paragraph 2.2;

         "NEW BANK" has the meaning ascribed to it in paragraph 7;

         "OUTSTANDING LIABILITY AMOUNT" in relation to a Bond issued by a Bank,
         has the meaning given in the relevant Counter Indemnity;

         "PAYMENT CURRENCY" means, in respect of any Bond, the currency of
         denomination of such Bond;

         "SECURITY OVER CASH AGREEMENTS" means the separate agreements between
         the Company and each Bank setting out the terms and conditions
         applicable to Deposits placed by

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         the Company with the relevant Bank as security for its obligations
         (whether actual or contingent, present or future and whether incurred
         as principal or surety) to indemnify the relevant Bank under the
         Bonding Documents entered into by the Issuing Bank with the Company and
         "RELEVANT SECURITY OVER CASH AGREEMENT" shall be construed accordingly;

         "STERLING EQUIVALENT" means, in relation to an amount of a currency
         other than sterling, the amount of sterling required to purchase such
         other currency amount at the relevant Bank's spot rate of exchange for
         the purchase of such other currency with Sterling at or about 11.00 am
         on the date on which calculation is required;

         "TAX CREDIT" has the meaning ascribed to it in paragraph 6.4; and

         "UTILISED AMOUNT" means, in relation to a Bank on any given date, the
         aggregate of the Outstanding Liability Amounts (and, where the Payment
         Currency of a Bond is not sterling, the amount used in such calculation
         shall be the Sterling Equivalent of the Outstanding Liability Amount in
         respect of such Bond) as at that date for all Bonds issued by that Bank
         and outstanding at that time. A Bond is "OUTSTANDING" until the
         Outstanding Liability Amount in respect of such Bond is reduced to
         zero.

1.2      In this Facility Letter, any reference to (a) a "paragraph" is, unless
         otherwise stated, a reference to a paragraph hereof and (b) "THIS
         FACILITY LETTER" or any other agreement or document is a reference to
         this letter or such agreement or document as amended, varied or
         supplemented from time to time. Paragraph headings are for ease of
         reference only.

1.3      Where applicable, references to the singular include the plural and
         vice versa.

1.4      A person who is not a party to this Facility Letter has no right under
         the Contracts (Rights of Third Parties) Act 1999 to enforce any term of
         this Facility Letter.

2.       FACILITY

2.1      Subject to the restrictions on utilisation and conditions precedent
         outlined below, the Banks agree to make the Facility available to the
         Company. Without prejudice to paragraph 3.3, the Utilised Amount in
         relation to each Bank shall not exceed the Credit Line applicable to
         such Bank.

2.2      At any time during the Availability Period the Company may request a
         Bank to issue a bond, guarantee, letter of credit, confirmation in
         favour of a bank issuing a bond, guarantee or letter of credit (an "L/C
         CONFIRMATION"), indemnity or other like instrument (a "BOND") in favour
         of a named third party beneficiary to secure the performance of any
         obligation owed by the Company or any Eligible Subsidiary to such
         beneficiary or, in the case of an L/C Confirmation, to any beneficiary
         of a bond, guarantee or letter of credit issued by a third party bank.

         (a)      The obligations of each Bank under the Facility are several
                  and no Bank is responsible for the obligations of any other
                  Bank hereunder.

         (b)      Each Bank may separately enforce its rights hereunder and/or
                  under the relevant Counter Indemnity and/or the relevant
                  Security over Cash Agreement.

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2.3      With the agreement of the Company, a Bank may request any of its
         Affiliates to issue a Bond under the Facility on its behalf. The
         parties agree that any such Bond issued by an Affiliate of a Bank
         shall:

         (a)      be deemed to be a Bond issued pursuant to the Bonding
                  Documents by the relevant Bank and subject to the terms
                  thereof;

         (b)      be covered by the terms and subject to the conditions of the
                  Counter Indemnity and the Security over Cash Agreement between
                  the Company and the relevant Bank; and

         (c)      be a Bond in respect of which the Company is obliged to
                  deposit cash as security in the Relevant Account as defined
                  in, and pursuant to the terms of, the relevant Counter
                  Indemnity.

3.       UTILISATION

3.1      Each Bank reserves the right in its absolute discretion to decide
         whether or not to agree to a request for the issuance of a Bond under
         the Facility. Each Bank may at any time cancel its offer to issue
         further Bonds under the Facility and/or decline to issue further Bonds.

3.2      Without prejudice to a Bank's rights under paragraph 3.1, no Bank shall
         be required to issue a new Bond if the sterling amount (or, if the
         Payment Currency of such new Bond is not sterling, its Sterling
         Equivalent) of its maximum prospective liability under the new Bond (as
         at the proposed date of issue of such new Bond) exceeds its Available
         Credit Line.

3.3      The Company agrees with and for the benefit of each Bank that the
         aggregate of the Utilised Amounts in relation to all Banks under the
         Facility shall not exceed the Facility Limit and that the Utilised
         Amount in relation to each Bank under the Facility shall not exceed its
         Credit Line and authorises each Bank to disclose such information to
         the other Banks relating to the Facility and the Utilised Amount
         applicable to it as may be required to monitor compliance with this
         paragraph 3.3. For the purposes of this paragraph 3.3 only, in respect
         of any Bond denominated in a currency other than Sterling, the original
         spot rate of exchange used on the relevant Issue Date to determine the
         Sterling Equivalent of the amount of that Bond shall apply when
         determining the Utilised Amount for the relevant Bank.

4.       COMMISSION

4.1      The Company shall pay to each Bank a fee in respect of each Bond issued
         by that Bank under the Facility.

4.2      Such fee shall be payable in the Payment Currency (as defined in the
         relevant Counter Indemnity) of the relevant Bond (or, in relation to a
         Foreign Currency Bond, in US Dollars) or such other currency as may be
         agreed between the relevant Bank and the Company from time to time
         monthly in advance during the tenor of the relevant Bond, the first
         such payment to be made on the Issue Date of the Bond and payments
         thereafter to be made on the last day of each successive period of one
         month from the Acceptance

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         Date whilst such Bond is outstanding (each a "COMMISSION PAYMENT
         DATE"). The first such fee payable by the Company on the Issue Date of
         the relevant Bond shall be for the period commencing on (and including)
         the Issue Date up to (but excluding) the next following Commission
         Payment Date.

4.3      The fee payable by the Company in respect of each Bond on the relevant
         date pursuant to paragraph 4.2 shall be the higher of:

         4.3.1    the amount representing one per cent. per annum of the
                  Outstanding Liability Amount of such Bond pro rated for the
                  period to which such fee relates; and

         4.3.2    L25 (or its equivalent in the Payment Currency of the relevant
                  Bond or, in relation to a Foreign Currency Bond, US Dollars),

         provided that in respect of the first such payment to be made in
         respect of each Bond the Company shall pay, in addition to and at the
         same time as the amount set out above in this Clause 4.3, a fee of
         L50.

5.       REPRESENTATIONS AND WARRANTIES

5.1      The Company represents and warrants to the Banks as follows:

         5.1.1    it is a corporation duly incorporated and validly existing
                  under the laws of England and Wales.

         5.1.2    its execution and delivery of the Bonding Documents and the
                  performance of its obligations thereunder are within its
                  corporate powers, have been duly authorised by all necessary
                  corporate action (which is and will remain in full force and
                  effect) and do not contravene (i) the Company's constituent
                  documents; (ii) any applicable law or regulation; or (iii) any
                  contractual restriction binding on or affecting the Company;

         5.1.3    no authorisation or approval or other action by, and no notice
                  to or filing with, any governmental authority or regulatory
                  body is required for the due execution, delivery and
                  performance by the Company of the Bonding Documents; and

         5.1.4    the Bonding Documents are the legal, valid and binding
                  obligations of the Company enforceable against it in
                  accordance with their terms subject to equitable principles of
                  general application and subject to applicable bankruptcy,
                  insolvency, reorganisation or other similar laws affecting the
                  enforcement of creditors' rights generally.

6.       COSTS, EXPENSES AND TAXES

6.1      All reasonable fees, costs and expenses, including reasonable legal
         fees and any stamp, value added or other tax incurred by each Bank in
         connection with:

         6.1.1    the execution of the Bonding Documents; and

         6.1.2    the enforcement of the obligations of the Company under the
                  Bonding Documents,

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         shall be reimbursed to the relevant Bank by the Company on demand by
         such Bank on a full indemnity basis and the Company agrees to hold the
         relevant Bank harmless from and against any and all liabilities with
         respect to or resulting from any delay in paying or omission to pay any
         such taxes or fees.

6.2      All payments to be made by the Company to any Bank under the Bonding
         Documents (or any of them) shall be made free and clear of and without
         deduction or withholding for or on account of any set-off or
         counterclaim. If any payment by the Company shall be subject to the
         deduction or withholding of tax, the amount payable by the Company
         shall be increased to the extent necessary to ensure that, after the
         deduction or withholding, the amount received and retained by the
         relevant Bank (free from any liability in respect of any such deduction
         or withholding), other than a tax on its overall net income, is equal
         to the amount which would have been received and retained if no such
         deduction or withholding had been required to be made.

6.3      Should the Company fail to pay any amount owing by it to any Bank
         pursuant to the Bonding Documents within 2 Business Days of demand by
         the relevant Bank, interest shall accrue on the outstanding amount at
         2% above such Bank's base rate from time to time calculated on a daily
         basis from the date such payment was due until such amount is
         discharged in full whether by actual payment or by the exercise of a
         right of set off by the relevant Bank pursuant to the relevant Security
         over Cash Agreement.

6.4      If the Company makes a payment under paragraph 6.2 and the relevant
         Bank determines that:

         (a)      a credit against, relief or remission for, or repayment of tax
                  (a "TAX CREDIT") attributable to that payment or the
                  corresponding payment under the Bonding Documents; and

         (b)      that Bank has obtained, utilised and retained that Tax Credit,

         the Bank shall pay an amount to the Company which is attributable to
         such payment under paragraph 6.2 and which that Bank determines will
         leave it (after that payment) in the same after-tax position as it
         would have been in had the payment not been required to be made by the
         Company.

7.       NEW BANKS

7.1      Any financial institution (a "NEW BANK") may become an additional Bank
         under the Facility by acceding to the terms of this Facility Letter
         with the mutual agreement of, and on terms satisfactory to, each other
         party to this Facility Letter at the date of such accession. From the
         date of such accession such New Bank shall become a Bank with the
         rights and obligations applicable to the Banks as set out herein.

7.2      The Company shall execute a Counter Indemnity and Security over Cash
         Agreement in favour of such New Bank on or about the date of such New
         Bank's accession to the terms of this Facility Letter.

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8.       ACCEPTANCE

         The Facility will become available to the Company for utilisation only
         upon receipt by the Banks of the following documents, each in form and
         substance satisfactory to the Banks:

         (a)      the enclosed duplicate of this Facility Letter duly signed on
                  the Company's behalf as evidence of the terms and conditions
                  stated therein;

         (b)      a certified true copy of a resolution of the Company's Board
                  of Directors:

                  (i)      accepting the Facility and this offer on the terms
                           and conditions stated herein;

                  (ii)     approving the Company's entry into a Counter
                           Indemnity and Security over Cash Agreement with each
                           Bank which is a signatory to this Facility Letter on
                           the date of the Company's acceptance of the terms
                           stated herein;

                  (iii)    authorising a specified person, or persons, to
                           countersign and return to the Bank the enclosed
                           duplicate of this Facility Letter and to execute, on
                           the Company's behalf, the relevant Counter
                           Indemnities and Security over Cash Agreements;

                  (iv)     specifying the names of those officers of the Company
                           whose instructions (jointly or alone) the Banks are
                           authorised to accept in all matters concerning the
                           Facility and this offer once accepted and confirmed
                           specimens of the signatures of those officers and the
                           authorised signatory referred to in sub-paragraph
                           (iii) above, if not already known to the Banks;

         (c)      a certified true copy of the Company's Certificate of
                  Incorporation;

         (d)      properly completed bank mandate letters in the form of the
                  same provided to the Company by each Bank; and

         (e)      the relevant Counter Indemnities and relevant Security over
                  Cash Agreements duly executed by the Company pursuant to the
                  resolutions specified above.

9.       NOTICES

         Any notice or demand to be served by one person on another pursuant to
         the Bonding Documents may be served by leaving it at the address
         specified below (or such other address as such person may have most
         recently specified) or by letter posted by prepaid first-class post to
         such address (which shall be deemed to have been served on the second
         Business Day following the date of posting), or by fax to the fax
         number specified below (or such other number as such person may most
         recently have specified) (which shall be deemed to have been received
         when actually received by the recipient marked for the attention of the
         department or officer (if any) specified by the recipient for such
         purpose).

         Address for notices:

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        COMPANY:

        Address:    1 Bruton Street

                    London W1J 6AQ

        Fax:        (020) 7493 1974

        Attention:  Group Treasurer/Group Assistant Treasurer

         HSBC BANK PLC

         Address:   Telecommunications, Media & Technology Department
                    HSBC Bank plc
                    2nd Floor
                    Poultry
                    London EC2P 2BX

         Fax:       0207 260 4800
         Attention: Head of Telecommunications, Media & Technology Department

         BARCLAYS BANK PLC

         Address:   Stocks, Trade and Export Finance,
                    1st Floor
                    Barclays Capital

                    5 The North Colonnade
                    Canary Wharf
                    London E14 4BB

         Fax:       0207 773 3661
         Attention: Director, STEF

10.      PAYMENTS

10.1     Unless otherwise notified to the other party in writing:

         10.1.1   all payments required to be made by the Company to a Bank
                  under or in connection with the Bonding Documents shall:

                  (i)      in the case of a Deposit, be made as specified in the
                           relevant Counter Indemnity;

                  (ii)     in the case of any other payment, be made at such
                           branch or office and to such account as such Bank may
                           specify from time to time, and

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         10.1.2   all payments required to be made by any Bank to the Company
                  under or in connection with the Bonding Documents shall be
                  made to such account as the Company may specify in writing
                  from time to time.

10.2     In each and every case, payments shall be made without any set-off or
         counterclaim in the currency of denomination in which payment is due
         PROVIDED THAT the foregoing provision shall be without prejudice to
         each Bank's right to apply set-off in respect of the Company's
         obligations under Clause 3 of the relevant Counter Indemnity either
         pursuant to the terms of the relevant Security over Cash Agreement or
         at law as against any Deposit or part thereof held with such Bank.

10.3     All payments shall be made on the due date for such payment or, if that
         day is not a Business Day, then on the next following Business Day.

10.4     No Bank shall be under any obligation to accept any instructions in
         relation to, or receive or make any payment or carry out, any other
         transaction denominated in a currency (other than sterling) on a day on
         which such Bank is not normally open for general business in the
         relevant jurisdiction where such transactions are to be received or
         carried out whether or not such a day is a Business Day.

11.      CERTIFICATES

         Any Bank's certificate of any sum due to it from the Company under the
         Bonding Documents shall (apart from obvious mistake) be prima facie
         evidence.

12.      FORCE MAJEURE

         No Bank shall be liable to the Company for any loss, damage or delay
         attributable in whole or part to action by any government or government
         agency or other force majeure and in particular but not limited to
         strikes, industrial action (except strikes involving such Bank's
         staff), equipment failure or interruption of power supplies. Each Bank
         will always endeavour to give notice generally to customers of any
         anticipated delays by notices in branches.

13.      REMEDIES AND WAIVERS, PARTIAL INVALIDITY

13.1     No failure to exercise, nor any delay in exercising, on the part of any
         Bank, any right or remedy under the Bonding Documents shall operate as
         a waiver thereof, nor shall any single or partial exercise of any right
         or remedy prevent any further or other exercise thereof or the exercise
         of any other right or remedy. The rights and remedies therein provided
         are cumulative and not exclusive of any rights or remedies provided by
         law.

13.2     If, at any time, any provision hereof is or becomes illegal, invalid or
         unenforceable in any respect under the law of any jurisdiction, neither
         the legality, validity or enforceability of the remaining provisions
         hereof nor the legality, validity or enforceability of such provision
         under the law of any other jurisdiction shall in any way be affected or
         impaired thereby.

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14.      SUCCESSORS

         Each Bonding Document shall remain in effect despite any amalgamation
         or merger (however effected) relating to any Bank; and references to a
         Bank shall be deemed to include any assignee or successor in title of
         such Bank and any person who, under the laws of its jurisdiction of
         incorporation or domicile, has assumed the rights and obligations of
         such Bank hereunder or to which under such laws the same have been
         transferred.

15.      COUNTERPARTS

         Each Bonding Document may be executed in any number of counterparts,
         all of which taken together shall constitute one and the same
         instrument.

16.      GOVERNING LAW AND JURISDICTION

         This Facility Letter shall be governed by English law and, for the
         Banks' benefit, the English courts shall have exclusive jurisdiction to
         settle any disputes which may arise from or in connection with it.

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To accept this offer please arrange for the enclosed copy of this letter to be
signed and returned.

Yours faithfully,

Carlton Brown                             Barry Cole
Manager                                   Relationship Manager
For and on behalf of HSBC Bank plc        For and on behalf of Barclays Bank PLC

CARLTON BROWN                             BARRY COLE

Accepted for an on behalf of
Marconi Bonding Limited
(the 'Company'):

J LONG

Date: 10 MAY 2002

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HSBC BANK PLC              BARCLAYS BANK PLC         JP MORGAN CHASE BANK
POULTRY                    54 LOMBARD STREET         125 LONDON WALL
LONDON  EC2P 2BX           LONDON  EC3P 3AH          LONDON EC2Y 5AJ

To: The Directors
    Marconi Bonding Limited
    1 Bruton Street
    London W1J 6AQ

                                                                 24 October 2002

Dear Sirs,

AMENDMENT LETTER TO PERFORMANCE BOND FACILITY LETTER

We refer to the L60,000,000 performance bond facility letter dated 10 May
2002 made between HSBC Bank plc ("HSBC"), Barclays Bank PLC ("BARCLAYS") and
Marconi Bonding Limited (the "COMPANY") (the "THE ORIGINAL FACILITY LETTER").

RECITALS:

(A)      Pursuant to the Original Facility Letter HSBC and Barclays have made a
         bonding facility available to the Company.

(B)      JP Morgan wishes to accede as a New Bank pursuant to the provisions of
         paragraph 7 of the Original Facility Letter.

(C)      The Banks wish to increase the individual Credit Line made available by
         Barclays and HSBC and the aggregate Facility Limit applicable to the
         Facility.

(D)      The Banks and the Company have agreed to amend the Original Facility
         Letter as set out below.

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      DEFINITIONS

         In this Agreement:

         "AMENDED FACILITY LETTER" means the Original Facility Letter, as
         amended by this Letter.

         "EFFECTIVE DATE" means the date on which the Banks have confirmed to
         the Company that they have received each of the documents listed in
         Schedule 1 (Conditions Precedent) in a form and substance satisfactory
         to the Banks.

         "JP MORGAN" means JP Morgan Chase Bank.

         "JPM COUNTER INDEMNITY" means the counter indemnity agreement dated on
         or about the date of this letter between the Company and JP Morgan
         pursuant to which the Company agrees (subject to the terms thereof) to
         indemnify JP Morgan against any loss, liability or

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         reasonable cost incurred by JP Morgan in respect of or in connection
         with the Bonding Documents entered into or issued by JP Morgan.

         "JPM DOCUMENTS" means each of the JPM Counter Indemnity and the JPM
         Security over Cash Agreement.

         "JPM SECURITY OVER CASH AGREEMENT" means the agreement dated on or
         about the date of this letter between the Company and JP Morgan setting
         out the terms and conditions applicable to Deposits placed by the
         Company with JP Morgan as security for its obligations (whether actual
         or contingent, present or future and whether incurred as principal or
         surety) to indemnify JP Morgan under the Bonding Documents entered into
         by JP Morgan with the Company.

1.2      INCORPORATION OF DEFINED TERMS

         (a)      Unless a contrary indication appears, a term defined in the
                  Original Facility Letter or in any notice given under or in
                  connection therewith has the same meaning in this Letter.

         (b)      The principles of construction set out in the Original
                  Facility Letter shall have effect as if set out in this
                  Letter.

1.3      CLAUSES

         (a)      In this Agreement any reference to a "Clause" or "Schedule"
                  is, unless the context otherwise requires, a reference to a
                  Clause or Schedule of this Letter.

         (b)      Clause and Schedule headings are for ease of reference only.

2.       NEW BANK

         With effect from the Effective Date it is agreed by each of the parties
         to this letter that JP Morgan shall accede to the Amended Facility
         Letter as a New Bank pursuant to paragraph 7 (New Banks) of the Amended
         Facility Letter and shall benefit from and shall be subject to all the
         rights and obligations applicable to the Banks as set out in the
         Amended Facility Letter.

3.       AMENDMENT

         With effect from the Effective Date the Original Facility Letter shall
         be amended as set out in Schedule 2 (Amendments to Original Facility
         Letter) and references to the Facility Letter in any Bonding Document
         (howsoever described) shall be construed as a reference to the Amended
         Facility Letter.

4.       REPRESENTATIONS

         The Company makes the representations contained in paragraph 5 of the
         Amended Facility Letter as if each reference therein to the "BONDING
         DOCUMENTS" includes a reference to (a) this Letter; (b) the JPM
         Documents; and (c) (for the purposes of paragraph 5.1.4 only of the
         Amended Facility Letter) the Amended Facility Letter.

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5.       CONTINUITY AND FURTHER ASSURANCE

5.1      CONTINUING OBLIGATIONS

         The provisions of the Bonding Documents shall, save as amended in this
         Letter, continue in full force and effect.

6.       COSTS, EXPENSES AND TAXES

         The reference to Bonding Documents in Clause 6 (Costs, Expenses and
         Taxes) in the Original Facility Letter shall be construed to include
         this Letter, the Amended Facility Letter and the JPM Documents.

7.       MISCELLANEOUS

7.1      INCORPORATION OF TERMS

         The provisions of paragraph 13 (Remedies and Waivers, Partial
         Invalidity) and paragraph 16 (Governing Law and Jurisdiction), of the
         Original Facility Letter shall be incorporated into this Letter as if
         set out in full in this Letter and as if references in those clauses to
         "this Facility Letter" or "the Bonding Documents" are references to
         this Letter.

7.2      COUNTERPARTS

         This Letter may be executed in any number of counterparts, and this has
         the same effect as if the signatures on the counterparts were on a
         single copy of this Letter.

                                     - 3 -

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                                                                  CONFORMED COPY

THIS LETTER has been entered into on the date stated at the beginning of this
Letter.

Yours faithfully,

I F MCMILLAN                              BARRY COLE
----------------------------------        --------------------------------------
For and on behalf of HSBC Bank plc        For and on behalf of Barclays Bank PLC

Name:  I F McMillan                       Name:  Barry Cole

Title: Senior Manager                     Title: Director, Barclays Capital

MICHAEL F WHARRAD
---------------------------------
For and on behalf of JP Morgan Chase Bank

Name:  Michael F Wharrad

Title: Vice President

J LONG

-----------------------------
Accepted for and on behalf of
Marconi Bonding Limited
(the "COMPANY")

Name:  J Long

Title: Director and Company Secretary

                                     - 4 -

<PAGE>

                                                                  CONFORMED COPY

                                   SCHEDULE 1
                              CONDITIONS PRECEDENT

1.       OBLIGORS

         (a)      A copy of this Letter duly signed by the Company.

         (b)      A certified true copy of a resolution of the board of
                  directors of the Company:

                  (i)      approving the terms of, and the transactions
                           contemplated by, this Letter and resolving that it
                           execute this Letter;

                  (ii)     approving the terms of, and the transactions
                           contemplated by the JPM Documents and resolving that
                           it executes them;

                  (iii)    authorising a specified person or persons to execute
                           this Letter and the JPM Documents on its behalf; and

                  (iv)     specifying the names of those officers of the Company
                           whose instructions (jointly or alone) the Banks are
                           authorised to accept in all matters concerning the
                           Facility and confirmed specimens of the signatures of
                           those officers and the authorised signatory referred
                           to in sub-paragraph (iii) above, if not already know
                           to the Banks;

         (c)      A certified true copy of the Company's Certificate of
                  Incorporation and Memorandum and Articles of Association;

         (d)      Properly completed bank mandate letters in the form of the
                  same provided by JP Morgan; and

         (e)      Each of the JPM Documents duly executed by the Company
                  pursuant to the resolutions specified above.

         (f)      A legal opinion of Clifford Chance LLP addressed to JP Morgan
                  in respect of the Amended Facility Letter and the JPM
                  Documents.

                                     - 5 -

<PAGE>

                                                                  CONFORMED COPY

                                   SCHEDULE 2

                     AMENDMENTS TO ORIGINAL FACILITY LETTER

2.       The following amendments shall be made to the definitions in clause 1
         (Interpretation) of the Original Facility Letter.

         "ELIGIBLE SUBSIDIARY" means any subsidiary of Marconi Corporation plc,
         a company incorporated under the laws of England and Wales (registered
         number 00067307) whose registered office is at 1 Bruton Street, London
         W1J 6AQ (and "subsidiary shall have the meaning given to such term in
         section 736 of the Companies Act 1985).

         "GROUP" means Marconi plc (or, if Marconi plc is no longer the ultimate
         holding company of the Marconi group, its successor) and its
         subsidiaries for the time being.

         "JP MORGAN" means JP Morgan Chase Bank;

         "CREDIT LINE" means in respect of Barclays L50,000,000, in respect of
         HSBC L50,000,000 and in respect of JP Morgan L50,000,000 or such other
         amounts as may be agreed between the Banks and the Company from time to
         time (provided that the aggregate of the Credit Lines of each of
         Barclays, HSBC and JP Morgan shall not exceed the Facility Limit) in
         each case to the extent not cancelled, reduced or transferred by it
         under this Facility Letter.

         "FACILITY LIMIT" means L150,000,000 (or the equivalent in other
         currencies) or such higher amount as may be agreed between the Banks
         and the Company from time to time.

         "NEW BANK" means JP Morgan or any other financial institution which
         accedes as such pursuant to paragraph 7 (New Banks).

3.       The following shall be added to the end of clause 9 (Notices) of the
         Original Facility Letter:

         JP Morgan Chase Bank

         Address:   125 London Wall
                    London EC2Y 5AO

         Fax:       020 7777 5237/2348

         Attention: Julie Farrant/Sue Dalton

                                     - 6 -

<PAGE>

                                                                  CONFORMED COPY

HSBC BANK PLC              BARCLAYS BANK PLC             JP MORGAN CHASE BANK
POULTRY                    54 LOMBARD STREET             125 LONDON WALL
LONDON  EC2P 2BX           LONDON  EC3P 3AH              LONDON EC2Y 5AJ

To: The Directors
    Marconi Bonding Limited (the "COMPANY")
    4th Floor, Regents Place
    338 Euston Road
    London NW1 3BT

                                                                 28th March 2003

Dear Sirs,

SECOND AMENDMENT LETTER TO PERFORMANCE BOND FACILITY LETTER

We refer to the L150,000,000 performance bond facility letter dated 10 May 2002
(as amended on 24 October 2002) made between HSBC Bank plc ("HSBC"), Barclays
Bank PLC ("BARCLAYS"), JP Morgan Chase Bank ("JP MORGAN") and Marconi Bonding
Limited (the "COMPANY") (the "ORIGINAL FACILITY LETTER").

RECITALS:

(A)      Pursuant to the Original Facility Letter HSBC, Barclays and JP Morgan
         have made a bonding facility available to the Company.

(B)      The Company wishes to have the ability to renew certain Bonds
         immediately prior to their expiry.

(C)      The Banks and the Company have agreed to amend the Original Facility
         Letter as set out below.

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      DEFINITIONS

         In this Agreement:

         "AMENDED FACILITY LETTER" means the Original Facility Letter, as
         amended by this Letter.

         "EFFECTIVE DATE" means the date on which the Banks have confirmed to
         the Company that they have received each of the documents listed in
         Schedule 1 (Conditions Precedent) in a form and substance satisfactory
         to the Banks.

<PAGE>

                                                                  CONFORMED COPY

1.2      INCORPORATION OF DEFINED TERMS

         (a)      Unless a contrary indication appears, a term defined in the
                  Original Facility Letter or in any notice given under or in
                  connection therewith has the same meaning in this Letter.

         (b)      The principles of construction set out in the Original
                  Facility Letter shall have effect as if set out in this
                  Letter.

1.3      CLAUSES

         (a)      In this Agreement any reference to a "Paragraph" or "Schedule"
                  is, unless the context otherwise requires, a reference to a
                  Paragraph or Schedule of this Letter.

         (b)      Paragraph and Schedule headings are for ease of reference
                  only.

2.       AMENDMENT

         With effect from the Effective Date the Original Facility Letter shall
         be amended as set out in Schedule 2 (Amendments to Original Facility
         Letter) and references to the Facility Letter in any Bonding Document
         (howsoever described) shall be construed as a reference to the Amended
         Facility Letter.

3.       REPRESENTATIONS

         The Company makes the representations contained in paragraph 5 of the
         Amended Facility Letter as if each reference therein to the "Bonding
         Documents" includes a reference to (a) this Letter and (b) (for the
         purposes of paragraph 5.1.4 only of the Amended Facility Letter) the
         Amended Facility Letter.

4.       CONTINUITY AND FURTHER ASSURANCE

4.1      CONTINUING OBLIGATIONS

         The provisions of the Bonding Documents shall, save as amended in this
         Letter, continue in full force and effect.

5.       COSTS, EXPENSES AND TAXES

         The reference to Bonding Documents in paragraph 6 (Costs, Expenses and
         Taxes) in the Original Facility Letter shall be construed to include
         this Letter and the Amended Facility Letter.

6.       MISCELLANEOUS

6.1      INCORPORATION OF TERMS

         The provisions of paragraph 13 (Remedies and Waivers, Partial
         Invalidity) and paragraph 16 (Governing Law and Jurisdiction), of the
         Original Facility Letter shall be incorporated into this Letter as if
         set out in full in this Letter and as if references in those paragraphs
         to "this Facility Letter" or "the Bonding Documents" are references to
         this Letter.

                                     - 2 -

<PAGE>

                                                                  CONFORMED COPY

6.2      COUNTERPARTS

         This Letter may be executed in any number of counterparts, and this has
         the same effect as if the signatures on the counterparts were on a
         single copy of this Letter.

                                     - 3 -

<PAGE>

                                                                  CONFORMED COPY

THIS LETTER has been entered into on the date stated at the beginning of this
Letter.

Yours faithfully,

IAN McMILLAN (signed)                     BARRY COLE (signed)
----------------------------------        --------------------------------------
For and on behalf of HSBC Bank plc        For and on behalf of Barclays Bank PLC

Name:  I F McMILLAN                       Name:  BARRY COLE

Title: SENIOR MANAGER                     Title: DIRECTOR, BARCLAYS
                                                 CAPITAL

MICHAEL WHARRAD (signed)
----------------------------------
For and on behalf of JP Morgan Chase Bank

Name:  MICHAEL F WHARRAD

Title: VP

T.C.R. SHEPHERD (signed)
----------------------------------
Accepted for and on behalf of
Marconi Bonding Limited

Name:  T.C.R. SHEPHERD

Title: LAWYER (AUTHORISED
       SIGNATORY)

                                     - 4 -

<PAGE>

                                                                  CONFORMED COPY

                                   SCHEDULE 1
                              CONDITIONS PRECEDENT

1.       A copy of this Letter duly signed by the Company.

2.       A certified true copy of a resolution of the board of directors of the
         Company approving the terms of, and the transactions contemplated by,
         this Letter and resolving that it execute this Letter.

3.       A certificate of a duly authorised officer of the Company either:

         (a)      confirming that there has been no change:

                  (i)      in the names of the officers whose instructions
                           (whether acting jointly or alone) the Banks are
                           authorised to accept in all matters concerning the
                           Facility (as previously notified to the Banks under
                           the Original Facility Letter); or

                  (ii)     to the Company's Certificate of Incorporation and
                           Memorandum and Articles of Association (as previously
                           delivered to Banks under the Original Facility
                           Letter); or

         (b)      if there has been any change in the information referred to in
                  paragraph (a) above:

                  (i)      setting out the names and specimen signatures of the
                           officers referred to sub-paragraph (a) (i) above;
                           and/or

                  (ii)     attaching a certified true copy of the constitutional
                           documents referred to in sub-paragraph (a) (ii)
                           above.

                                     - 5 -

<PAGE>

                                                                  CONFORMED COPY

                                   SCHEDULE 2
                     AMENDMENTS TO ORIGINAL FACILITY LETTER

1.       The following definitions shall be inserted into paragraph 1
         (Interpretation) of the Original Facility Letter:

         ""CORP SCHEME" means a scheme of arrangement under section 425 of the
         Companies Act 1985 of certain liabilities of Marconi Corporation plc."

         "CORP SCHEME EFFECTIVE DATE" means the date on which the office copy of
         the Orders of the High Court sanctioning the Corp Scheme is delivered
         to the Registrar of Companies for registration as required by Section
         425 of the Companies Act 1985 (as amended).

         "ORIGINAL BOND" means any Bond:

         (a)      issued during the Availability Period having an expiry date
                  which will be automatically extended in accordance with its
                  terms, unless the beneficiary thereof has received
                  notification from the relevant Bank to the contrary;

         (b)      issued during the Availability Period having an expiry date
                  which may be extended by the relevant Bank upon the request of
                  the beneficiary thereof in accordance with the terms thereof;

         (c)      issued during the Availability Period in respect of any
                  Eligible Subsidiary's contractual performance obligations to a
                  third party which has an expiry date falling prior to the
                  completion of performance of those obligations; or

         (d)      issued under the Temporary Bonding Facility Letter which
                  satisfies the criteria set out in paragraphs (a) to (c) above.

         A non-exhaustive list of such Bonds is attached, for illustrative
         purposes only, in the schedule hereto.

         "RENEWAL DATE" means the date on which the relevant Bank issues a
         Renewed Bond in accordance with paragraph 2.4.

         "RENEWED BOND" means any Original Bond as renewed by the Company in
         accordance with paragraph 2.4.

         "SCHEME DOCUMENTS" means the scheme of arrangement (together with the
         explanatory statement and all appendices, schedules and annexures to
         it) to be issued in connection with the Corp Scheme.

         "TEMPORARY BONDING FACILITY LETTER" means the bond issuance facility
         letter dated 8 February 2002 between HSBC, Barclays and the Company. "

2.       The existing definitions of "Bond" and "Eligible Subsidiary" in
         paragraph 1 (Interpretation) of the Original Facility Letter shall be
         deleted and replaced with the following:

                                     - 6 -

<PAGE>

                                                                  CONFORMED COPY

         ""BOND" has the meaning ascribed to it in paragraph 2.2 and includes,
         for the avoidance of doubt, a Renewed Bond issued in accordance with
         paragraph 2.4.

         "ELIGIBLE SUBSIDIARY" means Marconi Corporation plc, a company
         incorporated under the laws of England and Wales (registered number
         00067307) whose registered office is at New Century Park, PO Box 53,
         Coventry, W. Midlands CV3 1HJ, and any of its subsidiaries (and
         "subsidiary" shall have the meaning given to such term in s.736 of the
         Companies Act 1985)."

3.       A new paragraph 2.4 shall be inserted at the end of paragraph 2
         (Facility) of the Original Facility Letter as follows:

         "Notwithstanding the expiry of the Availability Period (whether express
         or otherwise upon the occurrence of the Corp Scheme Effective Date),
         the Company may request the relevant Bank to issue a Renewed Bond at
         least 5 Business Days (or such shorter period as may otherwise be
         agreed between the Company and the relevant Bank) prior to the earliest
         expiry date of the relevant Original Bond PROVIDED THAT:

         (a)      any Renewed Bond issued as a result of such renewal is issued
                  in the same form, on the same terms (save for (i) the expiry
                  date, (ii) the amount, which the parties agree may be less,
                  but not more, than the amount of the Original Bond, and (iii)
                  the granting of security over cash collateral in respect of an
                  Original Bond issued under the Temporary Bonding Facility
                  Letter) and in favour of the same beneficiary as the Original
                  Bond and is, in all other respects, deemed to be issued under
                  this Facility Letter; and

         (b)      the aggregate Outstanding Liability Amount in respect of all
                  Renewed Bonds shall not exceed L40 million."

4.       A new paragraph 2.5 shall be inserted at the end of paragraph 2
         (Facility) of the Original Facility Letter as follows:

         "The parties agree that any such Renewed Bond issued in accordance with
         paragraph 2.4 above shall:

         (a)      be deemed to be a Bond issued pursuant to the Bonding
                  Documents by the relevant Bank and subject to the terms
                  thereof;

         (b)      subject to paragraph 2.6 below, be covered by the terms and
                  subject to the conditions of the Counter Indemnity and the
                  Security over Cash Agreement between the Company and the
                  relevant Bank; and

         (c)      subject to paragraph 2.6 below, be a Bond in respect of which
                  the Company is obliged to deposit cash as security in the
                  Relevant Account as defined in, and pursuant to the terms of,
                  the relevant Counter Indemnity."

5.       A new paragraph 2.6 shall be inserted at the end of paragraph 2
         (Facility) of the Original Facility Letter as follows:

         "In the event that a Renewed Bond is issued in accordance with
         paragraph 2.4 above:

                                     - 7 -

<PAGE>

                                                                  CONFORMED COPY

         (a)      The Deposit relating to the Original Bond which is the subject
                  of the renewal (other than if the Original Bond is a Bond
                  issued under the Temporary Bonding Facility Letter) shall, to
                  the extent that the relevant Bank continues to hold that
                  Deposit, be deemed to constitute the Deposit required for the
                  Renewed Bond in accordance with the terms of the relevant
                  Counter Indemnity, PROVIDED THAT, if as at the Renewal Date,
                  the Outstanding Liability Amount of the Renewed Bond ("RENEWED
                  OUTSTANDING AMOUNT") is less than the Outstanding Liability
                  Amount of the relevant Original Bond (the "ORIGINAL
                  OUTSTANDING AMOUNT"), then the relevant Bank shall release to
                  the Company an amount equal to the amount (if any) by which
                  the Renewed Outstanding Amount is less than the Original
                  Outstanding Amount.

         (b)      If the Original Bond which is the subject of the renewal is a
                  Bond issued under the Temporary Bonding Facility Letter, then:

                  (i)      the Company shall agree in writing with the relevant
                           Bank to transfer, on or before the relevant Renewal
                           Date, the cash collateral held by that Bank in
                           respect of the Outstanding Liability Amount of the
                           Original Bond under the Temporary Bonding Facility
                           Letter into the secured Relevant Account in respect
                           of the relevant Renewed Bond (and the amount so
                           transferred shall constitute the Deposit relating to
                           the Renewed Bond in accordance with the terms of the
                           relevant Counter Indemnity);

                  (ii)     cash collateral deposited under the terms of the
                           Temporary Bonding Facility Letter with the relevant
                           Bank in respect of the Original Bond shall be
                           retained by the relevant Bank and shall be released
                           only:

                           (A)  after the Deposit is made in the Relevant
                           Account in respect of the relevant Renewed Bond in
                           accordance with sub-paragraph (i) above; and

                           (B)  if and to the extent that the Renewed
                           Outstanding Amount of the Renewed Bond is less than
                           the Original Outstanding Amount of the Original Bond
                           (in which case the relevant Bank shall release to the
                           Company an amount equal to the amount (if any) by
                           which the Renewed Outstanding Amount is less than the
                           Original Outstanding Amount); and

                  (iii)    for the avoidance of doubt, the transfer of cash
                           collateral under the Temporary Bonding Facility
                           Letter for the purposes and in accordance with
                           sub-paragraph (i) above shall not constitute "Cash
                           Collateral Releases" (as defined in the Scheme
                           Documents).

6.       A new paragraph 3.4 shall be inserted at the end of paragraph 3
         (Utilisation) of the Original Facility Letter as follows:

         "Without prejudice to a Bank's rights under paragraph 3.1 and for the
         avoidance of doubt, no Bank shall be required to issue a Renewed Bond
         unless:

         (a)      the form of the Renewed Bond has been agreed by the relevant
                  Bank; and

                                     - 8 -

<PAGE>

                                                                  CONFORMED COPY

         (b)      the identity of the beneficiary of the Renewed Bond is
                  satisfactory to the relevant Bank,

         having regard to that Bank's formal internal policies at the relevant
         time, and to all relevant legal and regulatory restrictions."

7.       The words "(or, in respect of a Renewed Bond, on the relevant Renewal
         Date)" shall be inserted after the words "Issue Date" (wheresoever
         occurring) in sub-paragraph 4.2 of paragraph 4 (Commission) of the
         Original Facility Letter.

8.       The schedule marked as "Schedule 1 (Performance Bonds)" and attached to
         this letter shall be inserted as Schedule 1 to the Original Facility
         Letter.

9.       All references in the Original Facility Letter to the "issue"
         (howsoever described) of a Bond shall be deemed to include a reference
         to the issue of a Renewed Bond pursuant to paragraph 2.4 and the
         Original Facility Letter shall be amended and construed accordingly.

                                     - 9 -

<PAGE>

                                                                  CONFORMED COPY

                         SCHEDULE 1 (PERFORMANCE BONDS)

                         REGISTER OF BONDS & GUARANTEES
            BONDS EXPIRING / RECOVERED IN THE PERIOD APR 03 TO SEP 04

<TABLE>
<CAPTION>
                                                                                           EXCHANGE   STERLING   LATEST   EXPECTED
                                                                                           RATE = L1    VALUE    EXPIRY    DATE OF
COUNTRY         BANK                   BENEFICIARY               TYPE LOCAL VALUE CURRENCY                L       DATE    RECOVERY
<S>       <C>              <C>                                   <C>  <C>         <C>      <C>       <C>        <C>       <C>
                                                                                                     52,858,568
China     JPM INTERIM 2    Bank of China                         SBLC  10,000,000   GBP      1.0000  10,000,000 31-Oct-03  1-Mar-07
US        JPM INTERIM 2    JP MORGAN CHASE MANHATTAN BANK        SBLC   9,367,750   USD      1.6098   5,819,201 02-Oct-03  1-Mar-22
UK        JPM INTERIM 2    JABIL CIRCUIT 1 OF 2                  SBLC   5,000,000   GBP      1.0000   5,000,000 30-Apr-04 31-Aug-03
Germany   HSBC INTERIM 2   Mannesmann Mobilfunk GmbH, Dusseldorf  WB    5,000,000   EUR      1.5342   3,259,028 31-Mar-04 29-Aug-06
UK        JPM INTERIM 2    JABIL CIRCUIT 2 OF 2                  SBLC   2,933,000   GBP      1.0000   2,933,000 30-Apr-04 29-Jun-04
US        BARCLAYS         JP MORGAN CHASE MANHATTAN BANK        SBLC   4,558,710   USD      1.6098   2,831,849 26-Oct-03 30-May-05
          INTERIM 2
US        HSBC INTERIM 2   ACE Insurance Company                 SBLC   3,978,137   USD      1.6098   2,471,200 31-May-03 30-May-05
UK        BARCLAYS         Jabil Circuit SPLIT                   SBLC   2,009,700   GBP      1.0000   2,009,700 31-Mar-03 15-Apr-03
          INTERIM 2
US        BARCLAYS         JP MORGAN CHASE MANHATTAN BANK        SBLC   3,030,000   USD      1.6098   1,882,221 28-Jul-03 29-Aug-06
          INTERIM 2
US        HSBC INTERIM     Indemnity Insurance Co of North       SBLC   3,000,000   USD      1.6098   1,863,586 28-Sep-02 29-Aug-06
                           America
          JPM INTERIM 2    BASICTEL                               PB    1,700,000   GBP      1.0000   1,700,000 30-Apr-03 30-May-03
Germany   HSBC INTERIM 2   Mannesmann Mobilfunk GmbH, Dusseldorf  PB    2,500,000   EUR      1.5342   1,629,514 31-Mar-04 29-Aug-05
Kuwait    HSBC INTERIM 2   Ministry of Communications             BB      610,000   KWD      0.4756    1,282,59 01-Mar-03 30-May-03
PRC       HSBC INTERIM 2   ANZ Bank, London for MoR contract      WB    1,456,679   USD      1.6098     904,882 22-May-03 14-Aug-03
US        JPM INTERIM 2    JP MORGAN CHASE (PACIFIC EMPLOYERS)   SBLC   1,400,000   USD      1.6098     869,673 16-Mar-04 30-May-05
Germany   JPM INTERIM 2    Vodafone D2, Dusseldorf                WB    1,000,000   EUR      1.5342     651,806 31-Mar-04 30-May-04
          JPM INTERIM 2    MAROC TELECOM                          WB      600,000   GBP      1.0000     600,000 14-Feb-04 14-Apr-04
China     HSBC INTERIM 2   China National Machinery Import and   ADV      915,000   USD      1.6098     568,394 30-Apr-03 30-May-03
                           Export Corporation
Belgium   BARCLAYS INTERIM Association Momantanee                 PB      800,000   EUR      1.5342     521,444 21-Mar-03 20-Oct-04
          JPM INTERIM 2    OTHER BB                               BB      450,000   GBP      1.0000     450,000 13-Aug-03 12-Sep-03
          JPM INTERIM 2    ITC                                    BB      444,000   GBP      1.0000     444,000 11-Sep-03 10-Nov-03
Australia HSBC INTERIM 2   IP1 (Australia) PTY Ltd.               WB      966,861   AUD      2.8590     338,182 30-Aug-03 29-Oct-03
Australia BARCLAYS         IP1 (Australia) Pty Ltd                PB      966,861   AUD      2.8590     338,182 19-Dec-03 17-Feb-04
          INTERIM A
Germany   JPM INTERIM 2    Vodafone D2, Dusseldorf                PB      500,000   EUR      1.5342     325,903 31-Mar-04 30-May-04
US        BARCLAYS         JP MORGAN CHASE MANHATTAN BANK        SBLC     522,170   USD      1.6098     324,369 27-Aug-03 26-Oct-03
          INTERIM 2
          JPM INTERIM 2    OTHER BB                               BB      300,000   GBP      1.0000     300,000 11-Sep-03 10-Nov-03
India     HSBC INTERIM 2   ANZ                                    PB   21,976,624  INR      77.1947     284,691 30-Dec-03 30-Mar-04
          JPM INTERIM 2    CYTA                                  ADV      259,200   GBP      1.0000     259,200 15-Jul-04 13-Sep-04
          JPM INTERIM 2    OTHER ADV                             ADV      250,000   GBP      1.0000     250,000 14-Aug-04 30-Sep-04
Morocco   BARCLAYS         Maroc Telecom                          RB      349,593  EUR       1.5342     227,867 24-Jun-04 23-Aug-04
          INTERIM 2
Bahrain   HSBC INTERIM 2   Batelco                                WB      320,000   USD      1.6098     198,782 30-Apr-03  1-Apr-03
HK        BARCLAYS         New Cosmos HK Ltd                      PB      285,407   EUR      1.5342     186,030  6-Apr-03  6-Apr-03
          INTERIM A
ITALY     BARCLAYS         FASTWEB                                PB      250,000   EUR      1.5342     162,951 31-Dec-03 29-Feb-04
          INTERIM 2
          JPM INTERIM 2    CHINA NATIONAL TECHNICAL IMPORT &              147,200   GBP      1.0000     147,200 30-May-04 29-Jul-04
                           EXPORT CORPORATION
          JPM INTERIM 2    CHINA NATIONAL POSTAL &                        120,000   GBP      1.0000     120,000 30-Apr-04 29-Jun-04
                           TELECOMMUNICATIONS APPLIANCES
                           CORPORATION
Germany   HSBC INTERIM 2   Syrian Arab Republic                   AP      183,736   EUR      1.5342     119,760  4-Nov-02 29-Dec-03
HK        HSBC INTERIM     World Tender Industrial Ltd            PB   20,191,200   JPY    191.0469     105,687 26-Jan-04 26-Mar-04
Poland    BARCLAYS INTERIM TPSA                                   PB      157,896   EUR      1.5342     102,917 21-Mar-03  1-Apr-03
CYPRUS    BARCLAYS INTERIM Cyprus Telecommunications Authority    PB      116,551   EUR      1.5342      75,969 30-Sep-03 29-Nov-03
          JPM INTERIM 2    AUSTRALIA                                       69,000   GBP      1.0000      69,000 31-Jul-03 30-Aug-03
CYPRUS    BARCLAYS         Cyprus Telecommunications Authority    BB       50,000   CYP      0.8986      55,642 26-Mar-03 30-May-03
          INTERIM 2
Belgium   BARCLAYS INTERIM Association Momantanee                 PB       80,000   EUR      1.5342      52,144 22-Mar-03  1-Apr-03
Belgium   BARCLAYS INTERIM Association Momantanee                 PB       80,000   EUR      1.5342      52,144 22-Mar-03 20-Oct-04
Israel    JPM INTERIM 2    Cellcom                                PB       75,000   USD      1.6098      46,590 31-Dec-03 29-Feb-04
CYPRUS    JPM INTERIM 2    Cyprus TPB                             PB       35,000   CYP      0.8986      38,949 20-Jun-03 20-Jul-03
JORDAN    BARCLAYS         JORDAN TELECOM                         PB       61,845   USD      1.6098      38,418 28-Feb-03 30-May-03
          INTERIM 2
JORDAN    BARCLAYS         JORDAN TELECOM                        ADV       61,845   USD      1.6098      38,418 28-Feb-03 30-May-03
          INTERIM 2
Jordan    BARCLAYS         JTC                                    PB       53,711   USD      1.6098      33,365 30-Apr-04 30-Jun-04
          INTERIM 2
Singapore BARCLAYS INTERIM Singapore Telecommunications Ltd.      PB       30,000   GBP      1.0000      30,000 21-Dec-02 29-Apr-05
CHILE     HSBC INTERIM     COMPANIA DE TELECOMUNICACIONES DE      PB       43,888   USD      1.6098      27,263 30-Jun-03 30-Jul-03
                           CHILE (C.T.C.)
China     HSBC INTERIM 2   China National Technical Import and    WB       41,089   USD      1.6098      25,524 30-Aug-03 29-Oct-03
                           Export Corporation
China     HSBC INTERIM 2   CNTEIC                                 WB       31,565   USD      1.6098      19,608 31-Dec-03 29-Feb-04
Portugal  BARCLAYS         PT COMMUNICACIONES                     WB       27,077   EUR      1.5342      17,649 14-Jul-04 30-Sep-04
          INTERIM A
          JPM INTERIM 2    ARCOR - DB TELEMATIC                            16,000   GBP      1.0000      16,000 31-Oct-03 30-Dec-03
Malta     HSBC INTERIM 2   Maltacom                               BB       12,334   EUR      1.5342       8,039 17-Apr-03 17-May-03
Jordan    BARCLAYS         JTC                                    PB       10,431   USD      1.6098       6,480 30-Apr-04 30-Jun-04
          INTERIM 2
Germany   HSBC INTERIM     Wasser-Und Schiff Ltd                  PB        9,203   EUR      1.5342       5,999 30-Jan-04 30-Mar-04
CYPRUS    BARCLAYS         Cyprus Telecommunications Authority    PB        3,844   EUR      1.5342       2,506 19-Mar-04 29-May-04
          INTERIM 2
Iran      HSBC INTERIM 2   Electronic Components Industries       BB      652,398   USD      1.6098     405,266   NO DATA  1-Apr-03
US        BARCLAYS         JP Morgan Chase                       SBLC     498,695   USD      1.6098     309,787   NO DATA 30-Jan-04
          INTERIM 2
</TABLE>

                                     - 10 -

<PAGE>

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  CONFORMED COPY

                                BARCLAYS BANK PLC

                                 AS ISSUING BANK

                                       AND

                             MARCONI BONDING LIMITED

                                   AS COMPANY

             ------------------------------------------------------

                           COUNTER INDEMNITY AGREEMENT

             ------------------------------------------------------

<PAGE>

                                    CONTENTS

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

2.      The Performance Bond Facility.................    3

3.      The Indemnity.................................    3

4.      Cash Security.................................    4

5.      Revaluation...................................    4

6.      Effectiveness Of Indemnity....................    5

7.      Obligations Absolute..........................    6

8.      Currency Conversion...........................    7

9.      Miscellaneous Clauses.........................    7
</TABLE>

<PAGE>

                           COUNTER INDEMNITY AGREEMENT

THIS AGREEMENT is made on 10 May 2002

BETWEEN

(1)      Barclays Bank PLC, operating through its division Barclays Capital of 5
         The North Colonnade, Canary Wharf, London E14 4BB and fax number 0207
         773 3661 (the "ISSUING BANK"); and

(2)      MARCONI BONDING LIMITED (the "COMPANY") of 1 Bruton Street, London W1J
         6AQ (registered number 3818628).

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      Terms defined in the Bonding Facility Letter and the principles of
         interpretation set out therein shall, unless otherwise provided herein,
         apply to this Agreement.

1.2      In this Agreement:

         "ACCOUNTS" means the Sterling Account, the Euro Account, the Dollar
         Account and any New Currency Account(s).

         "ACCOUNT BALANCE" means, in relation to an Account, the total sum
         standing to the credit of such Account.

         "ADDITIONAL CURRENCY" means any currency approved by the Issuing Bank
         pursuant to Clause 4.3.

         "APPROVED CURRENCY" means Euro, US Dollars, Sterling or any Additional
         Currency.

         "ASSOCIATED ACCOUNT" means any account opened or maintained with the
         Issuing Bank or any investment arrangements entered into by the Issuing
         Bank for the purposes of giving effect to the interest payment
         provisions agreed between the Company and the Issuing Bank from time to
         time pursuant to Clause 4 of the Security over Cash Agreement.

         "BONDING FACILITY LETTER" means the L60,000,000 bond issuance facility
         letter delivered by HSBC Bank plc and Barclays Bank PLC to the Company
         and accepted by the Company on or about the date hereof.

         "CORRESPONDENT" means (unless otherwise agreed by the parties) any bank
         or other financial institution through which the Issuing Bank conducts
         business in a jurisdiction where it does not have its own branch or
         place of business.

         "DEPOSIT" shall have the meaning given to such term in Clause 4.1.

         "DOLLAR ACCOUNT" means the US Dollar denominated account held in the
         name of the Company with the Issuing Bank, sort code 200000 account
         number 88391788, and any Associated Account denominated in US Dollars.

<PAGE>

         "DOLLAR EQUIVALENT" means, in relation to an amount of a currency other
         than US Dollars, the amount of US Dollars required to purchase such
         other currency amount at the Issuing Bank's spot rate of exchange for
         the purchase of such other currency with US Dollars at or about 11.00
         am on the date on which the calculation is required.

         "EURO" means the single currency unit of the Participating Member
         States.

         "EURO ACCOUNT" means the Euro denominated account held in the name of
         the Company with the Issuing Bank, sort code 200000, account number
         75482688 and any Associated Account denominated in Euro.

         "FOREIGN CURRENCY BOND" has the meaning ascribed to it in Clause 4.2.

         "ISSUE DATE" means, in respect of any Bond, the date upon which the
         Issuing Bank issues such Bond.

         "NEW CURRENCY ACCOUNT" has the meaning ascribed to it in Clause 4.3
         which meaning shall include any Associated Account denominated in such
         currency.

         "OUTSTANDING LIABILITY AMOUNT" means, at any time, in respect of any
         Bond issued by the Issuing Bank and outstanding, the maximum amount of
         all liabilities (whether actual or contingent and whether presently
         payable or not) of the Issuing Bank under or in connection with such
         Bond and, for the avoidance of doubt, any liability of the Issuing Bank
         under or in connection with such Bond (whether or not discharged by the
         Issuing Bank) shall not be included in the calculation of the
         Outstanding Liability Amount for a Bond to the extent that the same has
         been reimbursed to the Issuing Bank by the Company in accordance with
         Clause 3 of this Agreement or discharged by way of set off in
         accordance with the terms and subject to the conditions set out in the
         Security over Cash Agreement.

         "PARTICIPATING MEMBER STATE" means any member state of the European
         Union which has adopted the Euro as its lawful currency at the relevant
         time.

         "PAYMENT CURRENCY" means, in respect of any Bond, the currency of
         denomination of such Bond and, in respect of any other part of the
         Secured Obligations, the currency in which such part of the Secured
         Obligations is payable.

         "RELEVANT ACCOUNT" means:

         (a)      in relation to a Bond denominated in Sterling, the Sterling
                  Account;

         (b)      in relation to a Bond denominated in Euro, the Euro Account;

         (c)      in relation to a Bond denominated in US Dollars or any other
                  currency (other than an Approved Currency), the Dollar
                  Account; and

         (d)      in relation to a Bond denominated in an Additional Currency,
                  the relevant New Currency Account.

         "RELEVANT CURRENCY" means, with respect to any Deposit or Account
         Balance which collateralises the Secured Obligations:

<PAGE>

         (a)      where the Payment Currency of the relevant part of the Secured
                  Obligations is Sterling, Sterling;

         (b)      where the Payment Currency of the relevant part of the Secured
                  Obligations is Euro, Euro;

         (c)      where the Payment Currency of the relevant part of the Secured
                  Obligations is US Dollars (or any other currency other than an
                  Approved Currency), US Dollars; and

         (d)      where the Payment Currency of the relevant part of the Secured
                  Obligations is an Additional Currency, such currency.

         "SECURED OBLIGATIONS" means all obligations owing to the Issuing Bank
         under or pursuant to Clause 3 of this Agreement whether present or
         future, actual or contingent, as principal or as surety.

         "SECURITY OVER CASH AGREEMENT" means the agreement dated on or about
         the date hereof between the Issuing Bank and the Company as chargor
         setting out the terms and conditions applicable to Deposits placed by
         the Company with the Issuing Bank.

         "STERLING" means the lawful currency of the United Kingdom from time to
         time.

         "STERLING ACCOUNT" means the sterling denominated account held in the
         name of the Company with the Issuing Bank, sort code 200000, account
         number 30132233, and any Associated Account denominated in Sterling.

         "US DOLLARS" means the lawful currency of the United States of America
         from time to time.

1.3      In this Agreement, any reference to (a) a "Clause" is, unless otherwise
         stated, a reference to a Clause hereof and (b) "this Agreement", the
         "Security over Cash Agreement" or the "Bonding Facility Letter" is a
         reference to this Agreement, the Security over Cash Agreement or the
         Bonding Facility Letter (as applicable) as amended, varied or
         supplemented from time to time. Clause headings are for ease of
         reference only.

2.       THE PERFORMANCE BOND FACILITY

2.1      Pursuant to the terms of the Bonding Facility Letter, the Company
         requests the Issuing Bank to issue Bonds from time to time on the terms
         and subject to the conditions set out in the Bonding Facility Letter.

2.2      It is a condition of the Facility being made available to the Company
         that the Company agrees to indemnify the Issuing Bank on the terms and
         subject to the conditions set out herein.

3.       THE INDEMNITY

         The Company agrees immediately on demand to indemnify the Issuing Bank
         against any loss, liability or reasonable cost incurred by the Issuing
         Bank in respect of or in connection with the Bonding Documents entered
         into or issued by the Issuing Bank.

<PAGE>

4.       CASH SECURITY

4.1      Subject to Clause 4.2, as security for its obligations under Clause 3
         above, the Company undertakes that by no later than 11a.m. on the
         proposed date of issue of a Bond by the Issuing Bank, it shall deposit,
         in the Relevant Currency, an amount equal to the Outstanding Liability
         Amount in respect of such Bond (each such sum, a "DEPOSIT") in the
         Relevant Account.

4.2      If the Payment Currency of a Bond is not an Approved Currency (a
         "FOREIGN CURRENCY BOND"), the relevant Deposit shall be an amount
         sufficient to ensure that the Account Balance (including the amount of
         such Deposit) of the Dollar Account, after deducting an amount equal to
         the aggregate of the Outstanding Liability Amount of each Bond issued
         by the Issuing Bank for which the Payment Currency is US Dollars,
         equals at least 105 per cent of the Dollar Equivalent (as at the
         proposed Issue Date of the Relevant Bond) of the aggregate of the
         Outstanding Liability Amount of each Foreign Currency Bond issued by
         the Issuing Bank (including the Bond to be issued on the proposed Issue
         Date).

4.3      The Company may at any time request that any currency be treated as an
         Approved Currency. If the Issuing Bank agrees (in its sole discretion)
         to such request, an account in such currency shall be opened with the
         Issuing Bank (a "NEW CURRENCY ACCOUNT"). Any Deposit in respect of a
         Bond denominated in such currency shall be paid into the relevant New
         Currency Account in accordance with Clause 4.1.

4.4      Without prejudice to Clause 5 below, the terms and conditions relating
         to each Deposit and the Accounts shall be governed by the Security over
         Cash Agreement.

5.       REVALUATION

5.1      On the last business day of each calendar month (a "REVALUATION DATE"),
         commencing in the month in which the Acceptance Date occurs, the
         Issuing Bank shall calculate the Dollar Equivalent (as at such
         Revaluation Date) of the aggregate of the Outstanding Liability Amount
         of each Foreign Currency Bond issued by the Issuing Bank.

5.2      If on the Revaluation Date:

         (a)      the Account Balance of the Dollar Account, after deducting an
                  amount equal to the aggregate of the Outstanding Liability
                  Amount of each Bond issued by the Issuing Bank and denominated
                  in US Dollars, is less than 105% of the Dollar Equivalent of
                  the aggregate of the Outstanding Liability Amounts determined
                  pursuant to Clause 5.1 above (the amount of such shortfall
                  being the "DOLLAR SHORTFALL"), the Company shall, subject to
                  Clause 5.4, deposit an amount in US Dollars equal to the
                  Dollar Shortfall in the Dollar Account; or

         (b)      the Account Balance of the Dollar Account, after deducting an
                  amount equal to the aggregate of the Outstanding Liability
                  Amount of each Bond issued by the Issuing Bank and denominated
                  in US Dollars, exceeds 105% of the Dollar Equivalent of the
                  aggregate of the Outstanding Liability Amounts determined
                  pursuant to Clause 5.1 above (the amount of such excess being
                  the "DOLLAR

<PAGE>

                  EXCESS"), the Issuing Bank shall, subject to Clause 5.4,
                  release to the Company from the Dollar Account an amount equal
                  to the Dollar Excess.

5.3      The Issuing Bank shall notify the Company of its determination under
         Clause 5.2 within two Business Days of making such determination.
         Subject to Clause 5.4, any payment or release pursuant to Clause 5.2
         shall be made by the relevant party within 2 Business Days of the
         relevant notification.

5.4      If, on any Revaluation Date, the Dollar Shortfall or Dollar Excess
         referred to in Clause 5.2, is less than US$50,000, no payment or
         release shall be required from the Company or the Issuing Bank pursuant
         to this Clause 5.

6.       EFFECTIVENESS OF INDEMNITY

6.1      The indemnity given to the Issuing Bank pursuant to Clause 3, and the
         rights, powers and remedies provided by this Agreement shall be
         cumulative, in addition to and independent of every other security
         which the Issuing Bank may at any time hold in respect of the
         obligations of the Company under the Bonding Documents or any rights,
         powers and remedies of the Issuing Bank in respect of the Facility
         provided by this Agreement or at law (each such right, power and remedy
         under the Agreement and at law being a "RIGHT").

6.2      No failure on the part of the Issuing Bank to exercise, or delay on its
         part in exercising, any Right shall operate as a waiver thereof, nor
         shall any single or partial exercise of a Right preclude any further or
         other exercise of that or any other Right.

6.3      The obligations of the Company under this Agreement shall not be
         discharged, impaired or otherwise affected by:

         6.3.1    any lack of validity, legality, effectiveness or
                  enforceability of (i) the Bonding Documents or any agreement
                  or instrument relating thereto (collectively, the "RELATED
                  DOCUMENTS"); or (ii) any obligation under any Related
                  Document;

         6.3.2    any amendment or waiver of or any consent to departure from or
                  any release of any of the obligations of any party under all
                  or any of the Related Documents other than in accordance with
                  and to the extent expressly stated in any written amendment,
                  waiver, consent or release (and subject to the conditions
                  thereof) (and "written" shall include, for the avoidance of
                  doubt, any communication by electronic mail);

         6.3.3    the existence of any claim, set-off, defence or other right
                  which the Company or any Eligible Subsidiary may have at any
                  time against the Issuing Bank or any other person or entity,
                  whether in connection with the transactions contemplated in
                  the Related Documents, or any unrelated transaction or the
                  attachment (or similar order of court) of any payment under
                  the Bonding Documents;

         6.3.4    any winding-up, dissolution, administration or re-organisation
                  of or other change in the Company, any Eligible Subsidiary or
                  any other company, corporation, partnership or other person;

<PAGE>

         6.3.5    any time or other indulgence being granted to the Company, any
                  Eligible Subsidiary or any other company, corporation,
                  partnership or other person other than in accordance and to
                  the extent expressly stated in any written document
                  (including, for the avoidance of doubt, any communication by
                  electronic mail) referring to such indulgence;

         6.3.6    any failure to take or failure to realise the value of any
                  collateral in respect of the obligations of the Company under
                  the Related Documents or any release, discharge, exchange or
                  substitution of any such collateral other than in accordance
                  with and to the extent expressly stated in any written
                  document (including, for the avoidance of doubt, any
                  communication by electronic mail) referring to such release,
                  discharge, exchange or substitution; or

         6.3.7    any other act, event or omission which but for this provision
                  would or might operate to impair, discharge or otherwise
                  affect the obligations of the Company hereunder.

6.4      The Issuing Bank shall not be obliged to make any demand on the Company
         or any Eligible Subsidiary on whose behalf a Bond was issued, to take
         any action or obtain judgment in any court against any such party or to
         make or file any proof or claim in a liquidation or insolvency of any
         such party or to enforce or seek to enforce any security in respect of
         any obligations of the Company under the Bonding Documents before
         exercising any Right.

7.       OBLIGATIONS ABSOLUTE

         The obligations of the Company under this Agreement shall be
         unconditional and irrevocable, and shall be paid strictly in accordance
         with the terms of this Agreement in all circumstances (save where the
         same arises as a result of the negligence or wilful default of the
         Issuing Bank or where the Issuing Bank has actual notice that the claim
         made under any Bond is fraudulent or forged) including, without
         limitation, the circumstances described in Clauses 7.1 to 7.4
         (inclusive) below.

7.1      The Company irrevocably authorises and directs the Issuing Bank to make
         any payments and comply with any demand which may be claimed or appear
         to the Issuing Bank to be claimed under any Bond issued by the Issuing
         Bank without any reference to or further authority, confirmation or
         verification from the Company and agrees that any payment which the
         Issuing Bank shall make in accordance, or appearing to be in
         accordance, with any Bond issued by it shall be binding upon the
         Company and shall be conclusive evidence that the Issuing Bank was
         liable to make such payment or comply with such demand.

7.2      The Company agrees (without prejudice to the above provision) that any
         demand made upon the Issuing Bank or its Correspondents for payment of
         any sum under any Bond issued by it or any of its Correspondents shall
         be deemed to be a valid and effective demand and the Issuing Bank
         and/or its Correspondents shall be entitled to treat it as such
         notwithstanding any actual lack of authority of the person making the
         demand if (a) the demand appears on its face to be in order; and (b)
         the demand appears to the Issuing

<PAGE>

         Bank or its Correspondents to be made by or on behalf of the
         beneficiary named in such Bond.

7.3      The Company further agrees that, in the event that the relevant Bond
         stipulates that a demand made upon the Issuing Bank or its
         Correspondent shall be accompanied by any document or documents then,
         provided that it or they appear on their face to be in accordance with
         the terms of such Bond, such document or documents shall be deemed to
         be genuine and in accordance with the terms of the relevant Bond.

7.4      The Company finally agrees that the above conditions shall also apply
         to any extension of any Bond issued by the Issuing Bank (whether on the
         same or other terms and whether arising with the Company's agreement or
         by operation of law or otherwise) so that such conditions shall
         continue in respect of any such Bond as extended.

8.       CURRENCY CONVERSION

         For the purpose of or pending the discharge of any of the Secured
         Obligations (including all or any part of an Outstanding Liability
         Amount in respect of any Foreign Currency Bond), the Issuing Bank may
         convert any money received, recovered or realised or subject to
         application by it under this Agreement from the Relevant Currency of
         the Deposit against which the Issuing Bank has exercised any right of
         set off under Clause 3.1 of the Security over Cash Agreement to the
         Payment Currency of the relevant part of the Secured Obligations and
         any such conversion shall be effected at the Issuing Bank's spot rate
         of exchange for the time being for obtaining such Payment Currency with
         the Relevant Currency of the Deposit.

9.       MISCELLANEOUS CLAUSES

         The provisions of paragraph 16 (Governing Law and Jurisdiction) of the
         Bonding Facility Letter shall apply mutatis mutandis as if set out here
         in full.

IN WITNESS WHEREOF this Agreement has been signed on behalf of the Issuing Bank
and the Company on the date specified above.

<PAGE>

THE ISSUING BANK

Barclays Bank PLC

By:    BARRY COLE

Title: DIRECTOR

THE COMPANY

Marconi Bonding Limited

By:    J LONG

Title: DIRECTOR

<PAGE>

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  CONFORMED COPY

                                  HSBC BANK PLC

                                 AS ISSUING BANK

                                       AND

                             MARCONI BONDING LIMITED

                                   AS COMPANY

   ---------------------------------------------------------------------------

                           COUNTER INDEMNITY AGREEMENT

   ---------------------------------------------------------------------------

<PAGE>

                                    CONTENTS

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

2.   The Performance Bond Facility...............................     3

3.   The Indemnity...............................................     3

4.   Cash Security...............................................     4

5.   Revaluation.................................................     4

6.   Effectiveness Of Indemnity..................................     5

7.   Obligations Absolute........................................     6

8.   Currency Conversion.........................................     7

9.   Miscellaneous Clauses.......................................     7
</TABLE>

<PAGE>

                           COUNTER INDEMNITY AGREEMENT

THIS AGREEMENT is made on 10 May 2002

BETWEEN

(1)      HSBC Bank plc of Poultry, London EC2P 2BX and fax number 020 7269 4800
         (the "ISSUING BANK"); and

(2)      MARCONI BONDING LIMITED (the "COMPANY") of 1 Bruton Street, London W1J
         6AQ (registered number 3818628).

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1     Terms defined in the Bonding Facility Letter and the principles of
        interpretation set out therein shall, unless otherwise provided herein,
        apply to this Agreement.

1.2      In this Agreement:

        "ACCOUNTS" means the Sterling Account, the Euro Account, the Dollar
        Account and any New Currency Account(s).

        "ACCOUNT BALANCE" means, in relation to an Account, the total sum
        standing to the credit of such Account.

         "ADDITIONAL CURRENCY" means any currency approved by the Issuing Bank
         pursuant to Clause 4.3.

         "APPROVED CURRENCY" means Euro, US Dollars, Sterling or any Additional
         Currency.

        "ASSOCIATED ACCOUNT" means any account opened or maintained with the
        Issuing Bank or any investment arrangements entered into by the Issuing
        Bank for the purposes of giving effect to the interest payment
        provisions agreed between the Company and the Issuing Bank from time to
        time pursuant to Clause 4 of the Security over Cash Agreement.

        "BONDING FACILITY LETTER" means the L60,000,000 bond issuance facility
        letter delivered by HSBC Bank plc and Barclays Bank PLC to the Company
        and accepted by the Company on or about the date hereof.

        "CORRESPONDENT" means (unless otherwise agreed by the parties) any bank
        or other financial institution through which the Issuing Bank conducts
        business in a jurisdiction where it does not have its own branch or
        place of business.

        "DEPOSIT" shall have the meaning given to such term in Clause 4.1.

        "DOLLAR ACCOUNT" means the US Dollar denominated account held in the
        name of the Company with the Issuing Bank, sort code 40-05-15 account
        number 57401427, and any Associated Account denominated in US Dollars.

<PAGE>

        "DOLLAR EQUIVALENT" means, in relation to an amount of a currency other
        than US Dollars, the amount of US Dollars required to purchased such
        other currency amount at the Issuing Bank's spot rate of exchange for
        the purchase of such other currency with US Dollars at or about 11.00 am
        on the date on which the calculation is required.

        "EURO" means the single currency unit of the Participating Member
        States.

        "EURO ACCOUNT" means the Euro denominated account held in the name of
        the Company with the Issuing Bank, sort code 40-05-15, account number
        57401435 and any Associated Account denominated in Euro.

        "FOREIGN CURRENCY BOND" has the meaning ascribed to it in Clause 4.2.

        "ISSUE DATE" means, in respect of any Bond, the date upon which the
        Issuing Bank issues such Bond.

        "NEW CURRENCY ACCOUNT" has the meaning ascribed to it in Clause 4.3
        which meaning shall include any Associated Account denominated in such
        currency.

        "OUTSTANDING LIABILITY AMOUNT" means, at any time, in respect of any
        Bond issued by the Issuing Bank and outstanding, the maximum amount of
        all liabilities (whether actual or contingent and whether presently
        payable or not) of the Issuing Bank under or in connection with such
        Bond and, for the avoidance of doubt, any liability of the Issuing Bank
        under or in connection with such Bond (whether or not discharged by the
        Issuing Bank) shall not be included in the calculation of the
        Outstanding Liability Amount for a Bond to the extent that the same has
        been reimbursed to the Issuing Bank by the Company in accordance with
        Clause 3 of this Agreement or discharged by way of set off in accordance
        with the terms and subject to the conditions set out in the Security
        over Cash Agreement.

        "PARTICIPATING MEMBER STATE" means any member state of the European
        Union which has adopted the Euro as its lawful currency at the relevant
        time.

        "PAYMENT CURRENCY" means, in respect of any Bond, the currency of
        denomination of such Bond and, in respect of any other part of the
        Secured Obligations, the currency in which such part of the Secured
        Obligations is payable.

        "RELEVANT ACCOUNT" means:

        (a)      in relation to a Bond denominated in Sterling, the Sterling
                 Account;

        (b)      in relation to a Bond denominated in Euro, the Euro Account;

        (c)      in relation to a Bond denominated in US Dollars or any other
                 currency (other than an Approved Currency), the Dollar
                 Account; and

        (d)      in relation to a Bond denominated in an Additional Currency,
                 the relevant New Currency Account.

        "RELEVANT CURRENCY" means, with respect to any Deposit or Account
        Balance which collateralises the Secured Obligations:

<PAGE>

        (a)      where the Payment Currency of the relevant part of the Secured
                 Obligations is Sterling, Sterling;

        (b)      where the Payment Currency of the relevant part of the Secured
                 Obligations is Euro, Euro;

        (c)      where the Payment Currency of the relevant part of the Secured
                 Obligations is US Dollars (or any other currency other than an
                 Approved Currency), US Dollars; and

        (d)      where the Payment Currency of the relevant part of the Secured
                 Obligations is an Additional Currency, such currency.

        "SECURED OBLIGATIONS" means all obligations owing to the Issuing Bank
        under or pursuant to Clause 3 of this Agreement whether present or
        future, actual or contingent, as principal or as surety.

        "SECURITY OVER CASH AGREEMENT" means the agreement dated on or about the
        date hereof between the Issuing Bank and the Company as chargor setting
        out the terms and conditions applicable to Deposits placed by the
        Company with the Issuing Bank.

        "STERLING" means the lawful currency of the United Kingdom from time to
        time.

        "STERLING ACCOUNT" means the sterling denominated account held in the
        name of the Company with the Issuing Bank, sort code 40-04-09, account
        number 01504991, and any Associated Account denominated in Sterling.

        "US DOLLARS" means the lawful currency of the United States of America
        from time to time.

1.3     In this Agreement, any reference to (a) a "Clause" is, unless otherwise
        stated, a reference to a Clause hereof and (b) "this Agreement", the
        "Security over Cash Agreement" or the "Bonding Facility Letter" is a
        reference to this Agreement, the Security over Cash Agreement or the
        Bonding Facility Letter (as applicable) as amended, varied or
        supplemented from time to time. Clause headings are for ease of
        reference only.

2.      THE PERFORMANCE BOND FACILITY

2.1     Pursuant to the terms of the Bonding Facility Letter, the Company
        requests the Issuing Bank to issue Bonds from time to time on the terms
        and subject to the conditions set out in the Bonding Facility Letter.

2.2     It is a condition of the Facility being made available to the Company
        that the Company agrees to indemnify the Issuing Bank on the terms and
        subject to the conditions set out herein.

3.      THE INDEMNITY

        The Company agrees immediately on demand to indemnify the Issuing Bank
        against any loss, liability or reasonable cost incurred by the Issuing
        Bank in respect of or in connection with the Bonding Documents entered
        into or issued by the Issuing Bank.

<PAGE>

4.      CASH SECURITY

4.1     Subject to Clause 4.2, as security for its obligations under Clause 3
        above, the Company undertakes that by no later than 11a.m. on the
        proposed date of issue of a Bond by the Issuing Bank, it shall deposit,
        in the Relevant Currency, an amount equal to the Outstanding Liability
        Amount in respect of such Bond (each such sum, a "DEPOSIT") in the
        Relevant Account.

4.2     If the Payment Currency of a Bond is not an Approved Currency (a
        "FOREIGN CURRENCY BOND"), the relevant Deposit shall be an amount
        sufficient to ensure that the Account Balance (including the amount of
        such Deposit) of the Dollar Account, after deducting an amount equal to
        the aggregate of the Outstanding Liability Amount of each Bond issued by
        the Issuing Bank for which the Payment Currency is US Dollars, equals at
        least 105 per cent of the Dollar Equivalent (as at the proposed Issue
        Date of the Relevant Bond) of the aggregate of the Outstanding Liability
        Amount of each Foreign Currency Bond issued by the Issuing Bank
        (including the Bond to be issued on the proposed Issue Date).

4.3     The Company may at any time request that any currency be treated as an
        Approved Currency. If the Issuing Bank agrees (in its sole discretion)
        to such request, an account in such currency shall be opened with the
        Issuing Bank (a "NEW CURRENCY ACCOUNT"). Any Deposit in respect of a
        Bond denominated in such currency shall be paid into the relevant New
        Currency Account in accordance with Clause 4.1.

4.4     Without prejudice to Clause 5 below, the terms and conditions relating
        to each Deposit and the Accounts shall be governed by the Security over
        Cash Agreement.

5.      REVALUATION

5.1     On the last business day of each calendar month (a "REVALUATION DATE"),
        commencing in the month in which the Acceptance Date occurs, the Issuing
        Bank shall calculate the Dollar Equivalent (as at such Revaluation Date)
        of the aggregate of the Outstanding Liability Amount of each Foreign
        Currency Bond issued by the Issuing Bank.

5.2     If on the Revaluation Date:

        (a)      the Account Balance of the Dollar Account, after deducting an
                 amount equal to the aggregate of the Outstanding Liability
                 Amount of each Bond issued by the Issuing Bank and denominated
                 in US Dollars, is less than 105% of the Dollar Equivalent of
                 the aggregate of the Outstanding Liability Amounts determined
                 pursuant to Clause 5.1 above (the amount of such shortfall
                 being the "DOLLAR SHORTFALL"), the Company shall, subject to
                 Clause 5.4, deposit an amount in US Dollars equal to the
                 Dollar Shortfall in the Dollar Account; or

        (b)      the Account Balance of the Dollar Account, after deducting an
                 amount equal to the aggregate of the Outstanding Liability
                 Amount of each Bond issued by the Issuing Bank and denominated
                 in US Dollars, exceeds 105% of the Dollar Equivalent of the
                 aggregate of the Outstanding Liability Amounts determined
                 pursuant to Clause 5.1 above (the amount of such excess being
                 the "DOLLAR

<PAGE>

                 EXCESS"), the Issuing Bank shall, subject to Clause 5.4,
                 release to the Company from the Dollar Account an amount equal
                 to the Dollar Excess.

5.3     The Issuing Bank shall notify the Company of its determination under
        Clause 5.2 within two Business Days of making such determination.
        Subject to Clause 5.4, any payment or release pursuant to Clause 5.2
        shall be made by the relevant party within 2 Business Days of the
        relevant notification.

5.4     If, on any Revaluation Date, the Dollar Shortfall or Dollar Excess
        referred to in Clause 5.2, is less than US$50,000, no payment or release
        shall be required from the Company or the Issuing Bank pursuant to this
        Clause 5.

6.      EFFECTIVENESS OF INDEMNITY

6.1     The indemnity given to the Issuing Bank pursuant to Clause 3, and the
        rights, powers and remedies provided by this Agreement shall be
        cumulative, in addition to and independent of every other security which
        the Issuing Bank may at any time hold in respect of the obligations of
        the Company under the Bonding Documents or any rights, powers and
        remedies of the Issuing Bank in respect of the Facility provided by this
        Agreement or at law (each such right, power and remedy under the
        Agreement and at law being a "RIGHT").

6.2     No failure on the part of the Issuing Bank to exercise, or delay on its
        part in exercising, any Right shall operate as a waiver thereof, nor
        shall any single or partial exercise of a Right preclude any further or
        other exercise of that or any other Right.

6.3     The obligations of the Company under this Agreement shall not be
        discharged, impaired or otherwise affected by:

        6.3.1    any lack of validity, legality, effectiveness or
                 enforceability of (i) the Bonding Documents or any agreement
                 or instrument relating thereto (collectively, the "RELATED
                 DOCUMENTS"); or (ii) any obligation under any Related
                 Document;

        6.3.2    any amendment or waiver of or any consent to departure from or
                 any release of any of the obligations of any party under all
                 or any of the Related Documents other than in accordance with
                 and to the extent expressly stated in any written amendment,
                 waiver, consent or release (and subject to the conditions
                 thereof) (and "written" shall include, for the avoidance of
                 doubt, any communication by electronic mail);

        6.3.3    the existence of any claim, set-off, defence or other right
                 which the Company or any Eligible Subsidiary may have at any
                 time against the Issuing Bank or any other person or entity,
                 whether in connection with the transactions contemplated in
                 the Related Documents, or any unrelated transaction or the
                 attachment (or similar order of court) of any payment under
                 the Bonding Documents;

        6.3.4    any winding-up, dissolution, administration or re-organisation
                 of or other change in the Company, any Eligible Subsidiary or
                 any other company, corporation, partnership or other person;

<PAGE>

        6.3.5    any time or other indulgence being granted to the Company, any
                 Eligible Subsidiary or any other company, corporation,
                 partnership or other person other than in accordance and to
                 the extent expressly stated in any written document
                 (including, for the avoidance of doubt, any communication by
                 electronic mail) referring to such indulgence;

        6.3.6    any failure to take or failure to realise the value of any
                 collateral in respect of the obligations of the Company under
                 the Related Documents or any release, discharge, exchange or
                 substitution of any such collateral other than in accordance
                 with and to the extent expressly stated in any written
                 document (including, for the avoidance of doubt, any
                 communication by electronic mail) referring to such release,
                 discharge, exchange or substitution; or

        6.3.7    any other act, event or omission which but for this provision
                 would or might operate to impair, discharge or otherwise
                 affect the obligations of the Company hereunder.

6.4     The Issuing Bank shall not be obliged to make any demand on the Company
        or any Eligible Subsidiary on whose behalf a Bond was issued, to take
        any action or obtain judgment in any court against any such party or to
        make or file any proof or claim in a liquidation or insolvency of any
        such party or to enforce or seek to enforce any security in respect of
        any obligations of the Company under the Bonding Documents before
        exercising any Right.

7.      OBLIGATIONS ABSOLUTE

        The obligations of the Company under this Agreement shall be
        unconditional and irrevocable, and shall be paid strictly in accordance
        with the terms of this Agreement in all circumstances (save where the
        same arises as a result of the negligence or wilful default of the
        Issuing Bank or where the Issuing Bank has actual notice that the claim
        made under any Bond is fraudulent or forged) including, without
        limitation, the circumstances described in Clauses 7.1 to 7.4
        (inclusive) below.

7.1     The Company irrevocably authorises and directs the Issuing Bank to make
        any payments and comply with any demand which may be claimed or appear
        to the Issuing Bank to be claimed under any Bond issued by the Issuing
        Bank without any reference to or further authority, confirmation or
        verification from the Company and agrees that any payment which the
        Issuing Bank shall make in accordance, or appearing to be in accordance,
        with any Bond issued by it shall be binding upon the Company and shall
        be conclusive evidence that the Issuing Bank was liable to make such
        payment or comply with such demand.

7.2     The Company agrees (without prejudice to the above provision) that any
        demand made upon the Issuing Bank or its Correspondents for payment of
        any sum under any Bond issued by it or any of its Correspondents shall
        be deemed to be a valid and effective demand and the Issuing Bank and/or
        its Correspondents shall be entitled to treat it as such notwithstanding
        any actual lack of authority of the person making the demand if (a) the
        demand appears on its face to be in order; and (b) the demand appears to
        the Issuing

<PAGE>

        Bank or its Correspondents to be made by or on behalf of the beneficiary
        named in such Bond.

7.3     The Company further agrees that, in the event that the relevant Bond
        stipulates that a demand made upon the Issuing Bank or its Correspondent
        shall be accompanied by any document or documents then, provided that it
        or they appear on their face to be in accordance with the terms of such
        Bond, such document or documents shall be deemed to be genuine and in
        accordance with the terms of the relevant Bond.

7.4     The Company finally agrees that the above conditions shall also apply to
        any extension of any Bond issued by the Issuing Bank (whether on the
        same or other terms and whether arising with the Company's agreement or
        by operation of law or otherwise) so that such conditions shall continue
        in respect of any such Bond as extended.

8.      CURRENCY CONVERSION

        For the purpose of or pending the discharge of any of the Secured
        Obligations (including all or any part of an Outstanding Liability
        Amount in respect of any Foreign Currency Bond), the Issuing Bank may
        convert any money received, recovered or realised or subject to
        application by it under this Agreement from the Relevant Currency of the
        Deposit against which the Issuing Bank has exercised any right of set
        off under Clause 3.1 of the Security over Cash Agreement to the Payment
        Currency of the relevant part of the Secured Obligations and any such
        conversion shall be effected at the Issuing Bank's spot rate of exchange
        for the time being for obtaining such Payment Currency with the Relevant
        Currency of the Deposit.

9.      MISCELLANEOUS CLAUSES

        The provisions of paragraph 16 (Governing Law and Jurisdiction) of the
        Bonding Facility Letter shall apply mutatis mutandis as if set out here
        in full.

IN WITNESS WHEREOF this Agreement has been signed on behalf of the Issuing Bank
and the Company on the date specified above.

<PAGE>

THE ISSUING BANK

HSBC Bank plc

By:    CARLTON BROWN

Title: MANAGER

THE COMPANY

Marconi Bonding Limited

By:    J. LONG

Title: DIRECTOR

<PAGE>

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  CONFORMED COPY

                              JP MORGAN CHASE BANK

                                 AS ISSUING BANK

                                       AND

                             MARCONI BONDING LIMITED

                                   AS COMPANY

   ---------------------------------------------------------------------------

                           COUNTER INDEMNITY AGREEMENT

   ---------------------------------------------------------------------------

<PAGE>

                                    CONTENTS

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

2.   The Performance Bond Facility..........................      3

3.   The Indemnity..........................................      3

4.   Cash Security..........................................      4

5.   Revaluation............................................      4

6.   Effectiveness Of Indemnity.............................      5

7.   Obligations Absolute...................................      6

8.   Currency Conversion....................................      7

9.   Miscellaneous Clauses..................................      7
</TABLE>

<PAGE>

                           COUNTER INDEMNITY AGREEMENT

THIS AGREEMENT is made on 29 October 2002

BETWEEN

(1)     JP MORGAN CHASE BANK (the "ISSUING BANK") of 125 London Wall, London
        EC2Y 5AJ and fax number 020 7777 5237/2348; and

(2)     MARCONI BONDING LIMITED (the "COMPANY") of 1 Bruton Street, London W1J
        6AQ (registered number 3818628).

IT IS AGREED as follows:

1.      DEFINITIONS AND INTERPRETATION

1.1     Terms defined in the Bonding Facility Letter and the principles of
        interpretation set out therein shall, unless otherwise provided herein,
        apply to this Agreement.

1.2     In this Agreement:

        "ACCOUNTS" means the Sterling Account, the Euro Account, the Dollar
        Account and any New Currency Account(s).

        "ACCOUNT BALANCE" means, in relation to an Account, the total sum
        standing to the credit of such Account.

        "ADDITIONAL CURRENCY" means any currency approved by the Issuing Bank
        pursuant to Clause 4.3.

        "APPROVED CURRENCY" means Euro, US Dollars, Sterling or any Additional
        Currency.

        "ASSOCIATED ACCOUNT" means any account opened or maintained with the
        Issuing Bank or any investment arrangements entered into by the Issuing
        Bank for the purposes of giving effect to the interest payment
        provisions agreed between the Company and the Issuing Bank from time to
        time pursuant to Clause 4 of the Security over Cash Agreement.

        "BONDING FACILITY LETTER" means the bond issuance facility letter dated
        10 May 2002 between HSBC Bank plc, Barclays Bank Plc and the Company (as
        amended on or about the date hereof by an amendment letter between HSBC
        Bank plc, Barclays Bank Plc, the Issuing Bank and the Company).

        "CORRESPONDENT" means (unless otherwise agreed by the parties) any bank
        or other financial institution through which the Issuing Bank conducts
        business in a jurisdiction where it does not have its own branch or
        place of business.

        "DEPOSIT" shall have the meaning given to such term in Clause 4.1.

        "DOLLAR ACCOUNT" means the US Dollar denominated account held in the
        name of the Company with the Issuing Bank, sort code 60-92-42 account
        number 24864801, and any Associated Account denominated in US Dollars.

                                      - 1 -

<PAGE>

        "DOLLAR EQUIVALENT" means, in relation to an amount of a currency other
        than US Dollars, the amount of US Dollars required to purchased such
        other currency amount at the Issuing Bank's spot rate of exchange for
        the purchase of such other currency with US Dollars at or about 11.00 am
        on the date on which the calculation is required.

        "EURO" means the single currency unit of the Participating Member
        States.

        "EURO ACCOUNT" means the Euro denominated account held in the name of
        the Company with the Issuing Bank, sort code 60-92-42, account number
        24864802 and any Associated Account denominated in Euro.

        "FOREIGN CURRENCY BOND" has the meaning ascribed to it in Clause 4.2.

        "ISSUE DATE" means, in respect of any Bond, the date upon which the
        Issuing Bank issues such Bond.

        "NEW CURRENCY ACCOUNT" has the meaning ascribed to it in Clause 4.3
        which meaning shall include any Associated Account denominated in such
        currency.

        "OUTSTANDING LIABILITY AMOUNT" means, at any time, in respect of any
        Bond issued by the Issuing Bank and outstanding, the maximum amount of
        all liabilities (whether actual or contingent and whether presently
        payable or not) of the Issuing Bank under or in connection with such
        Bond and, for the avoidance of doubt, any liability of the Issuing Bank
        under or in connection with such Bond (whether or not discharged by the
        Issuing Bank) shall not be included in the calculation of the
        Outstanding Liability Amount for a Bond to the extent that the same has
        been reimbursed to the Issuing Bank by the Company in accordance with
        Clause 3 of this Agreement or discharged by way of set off in accordance
        with the terms and subject to the conditions set out in the Security
        over Cash Agreement.

        "PARTICIPATING MEMBER STATE" means any member state of the European
        Union which has adopted the Euro as its lawful currency at the relevant
        time.

        "PAYMENT CURRENCY" means, in respect of any Bond, the currency of
        denomination of such Bond and, in respect of any other part of the
        Secured Obligations, the currency in which such part of the Secured
        Obligations is payable.

        "RELEVANT ACCOUNT" means:

        (a)      in relation to a Bond denominated in Sterling, the Sterling
                 Account;

        (b)      in relation to a Bond denominated in Euro, the Euro Account;

        (c)      in relation to a Bond denominated in US Dollars or any other
                 currency (other than an Approved Currency), the Dollar
                 Account; and

        (d)      in relation to a Bond denominated in an Additional Currency,
                 the relevant New Currency Account.

         "RELEVANT CURRENCY" means, with respect to any Deposit or Account
         Balance which collateralises the Secured Obligations:

                                      - 2 -

<PAGE>

        (a)      where the Payment Currency of the relevant part of the Secured
                 Obligations is Sterling, Sterling;

        (b)      where the Payment Currency of the relevant part of the Secured
                 Obligations is Euro, Euro;

        (c)      where the Payment Currency of the relevant part of the Secured
                 Obligations is US Dollars (or any other currency other than an
                 Approved Currency), US Dollars; and

        (d)      where the Payment Currency of the relevant part of the Secured
                 Obligations is an Additional Currency, such currency.

        "SECURED OBLIGATIONS" means all obligations owing to the Issuing Bank
        under or pursuant to Clause 3 of this Agreement whether present or
        future, actual or contingent, as principal or as surety.

        "SECURITY OVER CASH AGREEMENT" means the agreement dated on or about the
        date hereof between the Issuing Bank and the Company as chargor setting
        out the terms and conditions applicable to Deposits placed by the
        Company with the Issuing Bank.

        "STERLING" means the lawful currency of the United Kingdom from time to
        time.

        "STERLING ACCOUNT" means the sterling denominated account held in the
        name of the Company with the Issuing Bank, sort code 60-92-42, account
        number 24864803, and any Associated Account denominated in Sterling.

        "US DOLLARS" means the lawful currency of the United States of America
        from time to time.

1.3     In this Agreement, any reference to (a) a "Clause" is, unless otherwise
        stated, a reference to a Clause hereof and (b) "this Agreement", the
        "Security over Cash Agreement" or the "Bonding Facility Letter" is a
        reference to this Agreement, the Security over Cash Agreement or the
        Bonding Facility Letter (as applicable) as amended, varied or
        supplemented from time to time. Clause headings are for ease of
        reference only.

2.      THE PERFORMANCE BOND FACILITY

2.1     Pursuant to the terms of the Bonding Facility Letter, the Company
        requests the Issuing Bank to issue Bonds from time to time on the terms
        and subject to the conditions set out in the Bonding Facility Letter.

2.2     It is a condition of the Facility being made available to the Company
        that the Company agrees to indemnify the Issuing Bank on the terms and
        subject to the conditions set out herein.

3.      THE INDEMNITY

        The Company agrees immediately on demand to indemnify the Issuing Bank
        against any loss, liability or reasonable cost incurred by the Issuing
        Bank in respect of or in connection with the Bonding Documents entered
        into or issued by the Issuing Bank.

                                      - 3 -

<PAGE>

4.      CASH SECURITY

4.1     Subject to Clause 4.2, as security for its obligations under Clause 3
        above, the Company undertakes that by no later than 11a.m. on the
        proposed date of issue of a Bond by the Issuing Bank, it shall deposit,
        in the Relevant Currency, an amount equal to the Outstanding Liability
        Amount in respect of such Bond (each such sum, a "DEPOSIT") in the
        Relevant Account.

4.2     If the Payment Currency of a Bond is not an Approved Currency (a
        "FOREIGN CURRENCY BOND"), the relevant Deposit shall be an amount
        sufficient to ensure that the Account Balance (including the amount of
        such Deposit) of the Dollar Account, after deducting an amount equal to
        the aggregate of the Outstanding Liability Amount of each Bond issued by
        the Issuing Bank for which the Payment Currency is US Dollars, equals at
        least 105 per cent of the Dollar Equivalent (as at the proposed Issue
        Date of the Relevant Bond) of the aggregate of the Outstanding Liability
        Amount of each Foreign Currency Bond issued by the Issuing Bank
        (including the Bond to be issued on the proposed Issue Date).

4.3     The Company may at any time request that any currency be treated as an
        Approved Currency. If the Issuing Bank agrees (in its sole discretion)
        to such request, an account in such currency shall be opened with the
        Issuing Bank (a "NEW CURRENCY ACCOUNT"). Any Deposit in respect of a
        Bond denominated in such currency shall be paid into the relevant New
        Currency Account in accordance with Clause 4.1.

4.4     Without prejudice to Clause 5 below, the terms and conditions relating
        to each Deposit and the Accounts shall be governed by the Security over
        Cash Agreement.

5.      REVALUATION

5.1     On the last business day of each calendar month (a "REVALUATION DATE"),
        commencing in the month in which the Issuing Bank issues its first Bond
        under the Bonding Facility Letter, the Issuing Bank shall calculate the
        Dollar Equivalent (as at such Revaluation Date) of the aggregate of the
        Outstanding Liability Amount of each Foreign Currency Bond issued by the
        Issuing Bank.

5.2     If on the Revaluation Date:

        (a)       the Account Balance of the Dollar Account, after deducting an
                  amount equal to the aggregate of the Outstanding Liability
                  Amount of each Bond issued by the Issuing Bank and denominated
                  in US Dollars, is less than 105% of the Dollar Equivalent of
                  the aggregate of the Outstanding Liability Amounts determined
                  pursuant to Clause 5.1 above (the amount of such shortfall
                  being the "DOLLAR SHORTFALL"), the Company shall, subject to
                  Clause 5.4, deposit an amount in US Dollars equal to the
                  Dollar Shortfall in the Dollar Account; or

        (b)       the Account Balance of the Dollar Account, after deducting an
                  amount equal to the aggregate of the Outstanding Liability
                  Amount of each Bond issued by the Issuing Bank and denominated
                  in US Dollars, exceeds 105% of the Dollar Equivalent of the
                  aggregate of the Outstanding Liability Amounts determined
                  pursuant to Clause 5.1 above (the amount of such excess being
                  the "DOLLAR

                                      - 4 -

<PAGE>

                  EXCESS"), the Issuing Bank shall, subject to Clause 5.4,
                  release to the Company from the Dollar Account an amount equal
                  to the Dollar Excess.

5.3     The Issuing Bank shall notify the Company of its determination under
        Clause 5.2 within two Business Days of making such determination.
        Subject to Clause 5.4, any payment or release pursuant to Clause 5.2
        shall be made by the relevant party within 2 Business Days of the
        relevant notification.

5.4     If, on any Revaluation Date, the Dollar Shortfall or Dollar Excess
        referred to in Clause 5.2, is less than US$50,000, no payment or release
        shall be required from the Company or the Issuing Bank pursuant to this
        Clause 5.

6.      EFFECTIVENESS OF INDEMNITY

6.1     The indemnity given to the Issuing Bank pursuant to Clause 3, and the
        rights, powers and remedies provided by this Agreement shall be
        cumulative, in addition to and independent of every other security which
        the Issuing Bank may at any time hold in respect of the obligations of
        the Company under the Bonding Documents or any rights, powers and
        remedies of the Issuing Bank in respect of the Facility provided by this
        Agreement or at law (each such right, power and remedy under the
        Agreement and at law being a "RIGHT").

6.2     No failure on the part of the Issuing Bank to exercise, or delay on its
        part in exercising, any Right shall operate as a waiver thereof, nor
        shall any single or partial exercise of a Right preclude any further or
        other exercise of that or any other Right.

6.3     The obligations of the Company under this Agreement shall not be
        discharged, impaired or otherwise affected by:

        6.3.1     any lack of validity, legality, effectiveness or
                  enforceability of (i) the Bonding Documents or any agreement
                  or instrument relating thereto (collectively, the "RELATED
                  DOCUMENTS"); or (ii) any obligation under any Related
                  Document;

        6.3.2     any amendment or waiver of or any consent to departure from or
                  any release of any of the obligations of any party under all
                  or any of the Related Documents other than in accordance with
                  and to the extent expressly stated in any written amendment,
                  waiver, consent or release (and subject to the conditions
                  thereof) (and "written" shall include, for the avoidance of
                  doubt, any communication by electronic mail);

        6.3.3     the existence of any claim, set-off, defence or other right
                  which the Company or any Eligible Subsidiary may have at any
                  time against the Issuing Bank or any other person or entity,
                  whether in connection with the transactions contemplated in
                  the Related Documents, or any unrelated transaction or the
                  attachment (or similar order of court) of any payment under
                  the Bonding Documents;

        6.3.4     any winding-up, dissolution, administration or re-organisation
                  of or other change in the Company, any Eligible Subsidiary or
                  any other company, corporation, partnership or other person;

                                      - 5 -

<PAGE>

        6.3.5     any time or other indulgence being granted to the Company, any
                  Eligible Subsidiary or any other company, corporation,
                  partnership or other person other than in accordance and to
                  the extent expressly stated in any written document
                  (including, for the avoidance of doubt, any communication by
                  electronic mail) referring to such indulgence;

        6.3.6     any failure to take or failure to realise the value of any
                  collateral in respect of the obligations of the Company under
                  the Related Documents or any release, discharge, exchange or
                  substitution of any such collateral other than in accordance
                  with and to the extent expressly stated in any written
                  document (including, for the avoidance of doubt, any
                  communication by electronic mail) referring to such release,
                  discharge, exchange or substitution; or

        6.3.7     any other act, event or omission which but for this provision
                  would or might operate to impair, discharge or otherwise
                  affect the obligations of the Company hereunder.

6.4     The Issuing Bank shall not be obliged to make any demand on the Company
        or any Eligible Subsidiary on whose behalf a Bond was issued, to take
        any action or obtain judgment in any court against any such party or to
        make or file any proof or claim in a liquidation or insolvency of any
        such party or to enforce or seek to enforce any security in respect of
        any obligations of the Company under the Bonding Documents before
        exercising any Right.

7.      OBLIGATIONS ABSOLUTE

        The obligations of the Company under this Agreement shall be
        unconditional and irrevocable, and shall be paid strictly in accordance
        with the terms of this Agreement in all circumstances (save where the
        same arises as a result of the negligence or wilful default of the
        Issuing Bank or where the Issuing Bank has actual notice that the claim
        made under any Bond is fraudulent or forged) including, without
        limitation, the circumstances described in Clauses 7.1 to 7.4
        (inclusive) below.

7.1     The Company irrevocably authorises and directs the Issuing Bank to make
        any payments and comply with any demand which may be claimed or appear
        to the Issuing Bank to be claimed under any Bond issued by the Issuing
        Bank without any reference to or further authority, confirmation or
        verification from the Company and agrees that any payment which the
        Issuing Bank shall make in accordance, or appearing to be in accordance,
        with any Bond issued by it shall be binding upon the Company and shall
        be conclusive evidence that the Issuing Bank was liable to make such
        payment or comply with such demand.

7.2     The Company agrees (without prejudice to the above provision) that any
        demand made upon the Issuing Bank or its Correspondents for payment of
        any sum under any Bond issued by it or any of its Correspondents shall
        be deemed to be a valid and effective demand and the Issuing Bank and/or
        its Correspondents shall be entitled to treat it as such notwithstanding
        any actual lack of authority of the person making the demand if (a) the
        demand appears on its face to be in order; and (b) the demand appears to
        the Issuing

                                      - 6 -

<PAGE>

        Bank or its Correspondents to be made by or on behalf of the beneficiary
        named in such Bond.

7.3     The Company further agrees that, in the event that the relevant Bond
        stipulates that a demand made upon the Issuing Bank or its Correspondent
        shall be accompanied by any document or documents then, provided that it
        or they appear on their face to be in accordance with the terms of such
        Bond, such document or documents shall be deemed to be genuine and in
        accordance with the terms of the relevant Bond.

7.4     The Company finally agrees that the above conditions shall also apply to
        any extension of any Bond issued by the Issuing Bank (whether on the
        same or other terms and whether arising with the Company's agreement or
        by operation of law or otherwise) so that such conditions shall continue
        in respect of any such Bond as extended.

8.      CURRENCY CONVERSION

        For the purpose of or pending the discharge of any of the Secured
        Obligations (including all or any part of an Outstanding Liability
        Amount in respect of any Foreign Currency Bond), the Issuing Bank may
        convert any money received, recovered or realised or subject to
        application by it under this Agreement from the Relevant Currency of the
        Deposit against which the Issuing Bank has exercised any right of set
        off under Clause 3.1 of the Security over Cash Agreement to the Payment
        Currency of the relevant part of the Secured Obligations and any such
        conversion shall be effected at the Issuing Bank's spot rate of exchange
        for the time being for obtaining such Payment Currency with the Relevant
        Currency of the Deposit.

9.      MISCELLANEOUS CLAUSES

        The provisions of paragraph 16 (Governing Law and Jurisdiction) of the
        Bonding Facility Letter shall apply mutatis mutandis as if set out here
        in full.

IN WITNESS WHEREOF this Agreement has been signed on behalf of the Issuing Bank
and the Company on the date specified above.

                                      - 7 -

<PAGE>

THE ISSUING BANK

MICHAEL F WHARRAD

--------------------------------------
for and on behalf of
JP Morgan Chase Bank

By:    Michael F Wharrad

Title: Vice President

THE COMPANY

J LONG

--------------------------------------
for and on behalf of
Marconi Bonding Limited

By:    J Long

Title: Director and Company Secretary

                                     - 8 -

<PAGE>

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  CONFORMED COPY

                                BARCLAYS BANK PLC

                                 AS ISSUING BANK

                                       AND

                             MARCONI BONDING LIMITED

                                   AS COMPANY

                 --------------------------------------------------

                          SECURITY OVER CASH AGREEMENT

                 --------------------------------------------------

<PAGE>

                                    CONTENTS

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

2.  Charge......................................................    2

3.  Accounts And Deposits.......................................    2

4.  Interest....................................................    3

5.  Effectiveness Of Security...................................    3

6.  Company's Rights And Undertakings...........................    5

7.  Further Assurance...........................................    5

8.  Power Of Attorney...........................................    5

9.  Subsequent Interests........................................    5

10. Miscellaneous Clauses.......................................    6
</TABLE>

<PAGE>

                          SECURITY OVER CASH AGREEMENT

THIS AGREEMENT is made on 10 May 2002

BETWEEN

(1)      Barclays Bank PLC, operating through its division Barclays Capital of 5
         the North Colonnade, Canary Wharf, London E14 4BB and fax number 020
         773 4661 (the "ISSUING BANK"); and

(2)      MARCONI BONDING LIMITED (the "COMPANY") of 1 Bruton Street, London W1J
         6AQ (registered number 3818628).

WHEREAS

(A)      Pursuant to the terms of the Bonding Facility Letter (as defined below)
         and at the request of the Company, the Issuing Bank (among others) has
         agreed to grant the Company a bond issuance facility;

(B)      the Company has agreed to indemnify the Issuing Bank in respect of any
         liability which the Issuing Bank incurs under the Bonding Facility
         Letter pursuant and subject to the terms of the Counter Indemnity (as
         defined below); and

(C)      as security for its obligations under the Counter Indemnity, the
         Company has agreed to place cash deposits with the Issuing Bank.

IT IS HEREBY AGREED that the cash deposits placed by the Company with the
Issuing Bank shall be held pursuant and subject to the following terms and
conditions:

1.       DEFINITIONS AND INTERPRETATION

1.1      In this Agreement, terms defined in the Counter Indemnity (including by
         incorporation) and the principles of interpretation set out in the
         Bonding Facility Letter shall, unless otherwise provided herein, apply
         to this Agreement.

1.2      In this Agreement:

         "BONDING FACILITY LETTER" means the L60,000,000 bond issuance letter
         delivered by HSBC Bank plc and Barclays Bank plc to the Company and
         accepted by the Company on or about the date hereof.

         "COUNTER INDEMNITY" means the indemnity agreement dated on or about the
         date hereof between the Company and the Issuing Bank under which the
         Company agrees (subject to the terms thereof) to indemnify the Issuing
         Bank against any loss, liability or reasonable cost incurred by the
         Issuing Bank in respect of or in connection with the Bonding Documents
         entered into or issued by the Issuing Bank;

         "SECURED OBLIGATIONS" means all obligations owing to the Issuing Bank
         by the Company under or pursuant to the Counter Indemnity whether
         present or future, actual or contingent, as principal or as surety.

                                       1

<PAGE>

1.3      In this Agreement, any reference to (a) a "Clause" is, unless otherwise
         stated, a reference to a Clause hereof and (b) "this Agreement", "the
         Counter Indemnity" or the "Bonding Facility Letter" is a reference to
         this Agreement, the Counter Indemnity or the Bonding Facility Letter
         (as applicable) as amended, varied or supplemented from time to time.
         Clause headings are for ease of reference only.

2.       CHARGE

2.1      The Company charges the Accounts and the Deposits, with full title
         guarantee, by way of first fixed charge, in favour of the Issuing Bank
         for the payment and discharge of all of the Secured Obligations.

2.2      This Agreement shall constitute notice to the Issuing Bank of the
         charge referred to in Clause 2.1.

3.       ACCOUNTS AND DEPOSITS

3.1      If all or any part of the Secured Obligations are due and payable but
         unpaid, the Issuing Bank shall be entitled (but shall, to the extent
         reasonably practicable, give prior notice of the same to the Company)
         to set-off or transfer all or part of the Account Balance of the
         Relevant Accounts (or any of them) in or towards satisfaction of such
         amount which has become due and payable PROVIDED THAT when discharging
         any part of the Secured Obligations pursuant to this Clause 3.1, such
         liability shall be set off against or transferred from:

         3.1.1    firstly, the Account Balance (if any) of the Account
                  denominated in the Relevant Currency; and

         3.1.2    thereafter, against the Account Balance of any other Account.

3.2      Subject to Clause 3.3, except with the Issuing Bank's prior written
         consent, each Deposit in a Relevant Account shall be maintained on the
         terms that it shall mature on (but not before) the earlier of:

         3.2.1    the first time at which the Issuing Bank reasonably determines
                  (and the Issuing Bank shall make such determination promptly
                  upon a request by the Company) that (a) there are no
                  outstanding Secured Obligations and (b) the Issuing Bank is
                  not under any obligation or liability (whether actual or
                  contingent) under the Bonding Documents;

         3.2.2    subject to and only to the extent stated in Clause 3.4, the
                  close of business in London on the date on which all or any
                  part of any Secured Obligations shall have become due and
                  payable and shall not have been paid upon becoming so due and
                  payable,

         so that, at such time as such Deposit shall mature (or at any time
         thereafter), it shall become repayable to the Company subject to any
         rights of set-off, combination or consolidation in respect of such
         Deposit which the Issuing Bank may be entitled to exercise either under
         this Agreement or at law.

                                       2

<PAGE>

3.3      Notwithstanding Clauses 3.1 and 3.2, if at any time:

         3.3.1    the Outstanding Liability Amount of any Bond is permanently
                  reduced or (in respect of a Bond governed by English law) the
                  expiry date of such Bond has passed or the Issuing Bank
                  (acting reasonably) is satisfied that it has no further
                  liability under that Bond (and, for the avoidance of doubt,
                  the Issuing Bank shall be satisfied that it has no further
                  liability under a Bond once it has received a form of release
                  from the beneficiary of the Bond in a form and substance
                  satisfactory to the Issuing Bank or once the original Bond has
                  been returned to the Issuing Bank); or

         3.3.2    there is a Dollar Excess (as defined in the Counter-Indemnity)
                  which is to be released to the Company pursuant to Clause 5.2
                  of the Counter Indemnity (but subject always to Clause 5.4 of
                  the Counter Indemnity),

         then, subject to any rights of set off or transfer which the Issuing
         Bank has already exercised or is entitled to exercise pursuant to
         Clause 3.1, a corresponding amount of the relevant Deposit or Account
         Balance (as appropriate) in the Relevant Account shall be released from
         the charge created pursuant to Clause 2.1 and shall mature and become
         repayable to the Company.

3.4      If the Company fails to fulfil its indemnity obligations under Clause 3
         of the Counter-Indemnity by close of business in London on the same day
         on which only part of the Secured Obligations become due and payable
         then only so much of the relevant Deposit shall mature as equals the
         amount to be indemnified by the Company pursuant to Clause 3 of the
         Counter Indemnity.

3.5      Save with the Issuing Bank's prior written consent, no right, title or
         interest in relation to any Account or any Deposit or to this Agreement
         shall be (a) capable of assignment or other disposal or (b) the subject
         of (and the Company shall not permit to exist) any security or other
         third party interest other than the security created pursuant to this
         Agreement.

4.       INTEREST

         Interest shall accrue on the balance standing to the credit of each
         Relevant Account at such commercial rate, with such interest periods
         and with such interest payment provisions as the parties may agree from
         time to time. Such interest shall be payable to such account as the
         Company may from time to time direct.

5.       EFFECTIVENESS OF SECURITY

5.1      The security constituted and the rights, powers and remedies provided
         by this Agreement shall be cumulative, in addition to and independent
         of every other security which the Issuing Bank may at any time hold for
         the Secured Obligations or any rights, powers and remedies of the
         Issuing Bank provided by law (each such right, power and remedy under
         this Agreement and at law being a "COLLATERAL RIGHT").

5.2      This Agreement shall remain in full force and effect as a continuing
         arrangement unless and until the Issuing Bank discharges it. Upon the
         maturity of all Deposits pursuant to

                                       3

<PAGE>

         Clause 3.2.1 and PROVIDED THAT (a) there are no outstanding Secured
         Obligations and (b) the Issuing Bank is not under any obligation or
         liability (whether actual or contingent) under the Bonding Documents,
         the Issuing Bank shall, on the Company's request, release the Company
         from its obligations under the Bonding Documents and release the charge
         created pursuant to Clause 2.1.

5.3      No failure on the part of the Issuing Bank to exercise, or delay on its
         part in exercising, any Collateral Right shall operate as a waiver
         thereof, nor shall any single or partial exercise of a Collateral Right
         preclude any further or other exercise of that or any other Collateral
         Right.

5.4      The obligations of the Company under this Agreement and the Collateral
         Rights shall not be discharged, impaired or otherwise affected by:

         5.4.1    any lack of validity, legality, effectiveness or
                  enforceability of (i) the Bonding Documents or any agreement
                  or instrument relating thereto (collectively, the "RELATED
                  DOCUMENTS") or (ii) any obligation under any Related Document;

         5.4.2    any amendment or waiver of or any consent to departure from or
                  any release of any of the obligations of any party under all
                  or any of the Related Documents other than in accordance with
                  and to the extent expressly stated in any written amendment,
                  waiver, consent or release (and subject to the conditions
                  thereof) (and "written" shall include, for the avoidance of
                  doubt, any communication by electronic mail);

         5.4.3    the existence of any claim, set-off, defence or other right
                  which the Company or any Eligible Subsidiary may have at any
                  time against the Issuing Bank or any other person or entity,
                  whether in connection with the transactions contemplated in
                  the Related Documents, or any unrelated transaction or the
                  attachment (or similar order of court) of any payment under
                  the Bonding Documents;

         5.4.4    any winding-up, dissolution, administration or re-organisation
                  of or other change in the Company, any Eligible Subsidiary or
                  any other company, corporation, partnership or other person;

         5.4.5    any time or other indulgence being granted to the Company, any
                  Eligible Subsidiary or any other company, corporation,
                  partnership or other person other than in accordance with and
                  to the extent expressly stated in any written document
                  (including, for the avoidance of doubt, any communication by
                  electronic mail) referring to such indulgence;

         5.4.6    any failure to take or failure to realise the value of any
                  collateral in respect of the obligations of the Company under
                  the Related Documents or any release, discharge, exchange or
                  substitution of any such collateral other than in accordance
                  with and to the extent expressly stated in any written
                  document (including, for the avoidance of doubt, any
                  communication by electronic mail) referring to such release,
                  discharge, exchange or substitution;

                                       4

<PAGE>

         5.4.7    any other act, event or omission which but for this provision
                  would or might operate to impair, discharge or otherwise
                  affect the obligations of the Company hereunder.

5.5      The Issuing Bank shall not be obliged to make any demand on the Company
         or any Eligible Subsidiary on whose behalf a Bond was issued, to take
         any action or obtain judgment in any court against any such party or to
         make or file any proof or claim in a liquidation or insolvency of any
         such party or to enforce or seek to enforce any security held in
         respect of the obligations of the Company under the Bonding Documents
         before exercising any Collateral Right.

6.       COMPANY'S RIGHTS AND UNDERTAKINGS

6.1      Any settlement or discharge hereunder shall be conditional upon no
         payment to the Issuing Bank by or on behalf of the Company being
         avoided or reduced by virtue of any bankruptcy, insolvency, liquidation
         or similar laws of general application and shall in those circumstances
         be void.

6.2      The Company hereby represents and warrants to the Issuing Bank and
         undertakes during the subsistence of this Agreement that:

         6.2.1    it is and will be the sole, lawful and beneficial owner of
                  each Account and each Deposit free from any security interest
                  or third party right except the security and other rights
                  granted to the Issuing Bank under the Bonding Documents; and

         6.2.2    save as provided in the Bonding Documents, it will not sell or
                  dispose of the benefit of all or any of its rights, title and
                  interest in any Account or any Deposit.

7.       FURTHER ASSURANCE

         The Company shall promptly upon notice from the Issuing Bank execute
         all documents and do all things that the Issuing Bank may reasonably
         specify for the purpose of (a) exercising the Collateral Rights or (b)
         securing and perfecting its security over or title to all or any part
         of the Accounts and the Deposits.

8.       POWER OF ATTORNEY

         The Company, by way of security, irrevocably appoints the Issuing Bank
         to be its attorney and in its name, on its behalf and as its act and
         deed to execute, deliver and perfect all documents and do all things
         that the Issuing Bank may consider to be requisite for (a) carrying out
         any obligation imposed on the Company under this Agreement or (b)
         exercising any of the Collateral Rights. The Company shall ratify and
         confirm all things done and all documents executed by the Issuing Bank
         in the proper exercise of that power of attorney.

9.       SUBSEQUENT INTERESTS

         If the Issuing Bank at any time receives notice of any subsequent
         mortgage, assignment, charge or other interest affecting all or any
         part of any Account and/or any Deposit, all payments thereafter made by
         the Company to the Issuing Bank shall be treated as having

                                       5

<PAGE>

         been credited to a new account of the Company and not as having been
         applied in reduction of the Secured Obligations as at the time when the
         Issuing Bank received notice.

10.      MISCELLANEOUS CLAUSES

         The provisions of paragraph 16 (Governing Law and Jurisdiction) of the
         Bonding Facility Letter shall apply mutatis mutandis as if set out here
         in full.

IN WITNESS WHEREOF this Agreement has been signed on behalf of the Issuing Bank
and executed as a deed by the Company and is intended to be and is hereby
delivered by it as a deed on the date specified above.

                                       6

<PAGE>

                                 EXECUTION PAGE

THE ISSUING BANK

Barclays Bank PLC

By:           BARRY COLE

Title:        DIRECTOR

THE COMPANY

EXECUTED as a DEED

by Marconi Bonding Limited

N. C. PORTER  Director

J. LONG       Director/Secretary

                                       7

<PAGE>

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  CONFORMED COPY

                                  HSBC BANK PLC

                                 AS ISSUING BANK

                                       AND

                             MARCONI BONDING LIMITED

                                   AS COMPANY

                   ---------------------------------------------

                          SECURITY OVER CASH AGREEMENT

                   ---------------------------------------------

<PAGE>

                                    CONTENTS

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

2.  Charge.....................................................   2

3.  Accounts And Deposits......................................   2

4.  Interest...................................................   3

5.  Effectiveness Of Security..................................   3

6.  Company's Rights And Undertakings..........................   5

7.  Further Assurance..........................................   5

8.  Power Of Attorney..........................................   5

9.  Subsequent Interests.......................................   5

10. Miscellaneous Clauses......................................   6
</TABLE>

<PAGE>

                          SECURITY OVER CASH AGREEMENT

THIS AGREEMENT is made on 10 May 2002

BETWEEN

(1)      HSBC Bank plc (the "ISSUING BANK") of Poultry, London EC2P 2BX and fax
         number 020 7260 4800; and

(2)      MARCONI BONDING LIMITED (the "COMPANY") of 1 Bruton Street, London W1J
         6AQ (registered number 3818628).

WHEREAS

(A)      Pursuant to the terms of the Bonding Facility Letter (as defined below)
         and at the request of the Company, the Issuing Bank (among others) has
         agreed to grant the Company a bond issuance facility;

(B)      the Company has agreed to indemnify the Issuing Bank in respect of any
         liability which the Issuing Bank incurs under the Bonding Facility
         Letter pursuant and subject to the terms of the Counter Indemnity (as
         defined below); and

(C)      as security for its obligations under the Counter Indemnity, the
         Company has agreed to place cash deposits with the Issuing Bank.

IT IS HEREBY AGREED that the cash deposits placed by the Company with the
Issuing Bank shall be held pursuant and subject to the following terms and
conditions:

1.       DEFINITIONS AND INTERPRETATION

1.1      In this Agreement, terms defined in the Counter Indemnity (including by
         incorporation) and the principles of interpretation set out in the
         Bonding Facility Letter shall, unless otherwise provided herein, apply
         to this Agreement.

1.2      In this Agreement:

         "BONDING FACILITY LETTER" means the L60,000,000 bond issuance letter
         delivered by HSBC Bank plc and Barclays Bank Plc to the Company and
         accepted by the Company on or about the date hereof.

         "COUNTER INDEMNITY" means the indemnity agreement dated on or about the
         date hereof between the Company and the Issuing Bank under which the
         Company agrees (subject to the terms thereof) to indemnify the Issuing
         Bank against any loss, liability or reasonable cost incurred by the
         Issuing Bank in respect of or in connection with the Bonding Documents
         entered into or issued by the Issuing Bank;

         "SECURED OBLIGATIONS" means all obligations owing to the Issuing Bank
         by the Company under or pursuant to the Counter Indemnity whether
         present or future, actual or contingent, as principal or as surety.

                                       1

<PAGE>

1.3      In this Agreement, any reference to (a) a "Clause" is, unless otherwise
         stated, a reference to a Clause hereof and (b) "this Agreement", "the
         Counter Indemnity" or the "Bonding Facility Letter" is a reference to
         this Agreement, the Counter Indemnity or the Bonding Facility Letter
         (as applicable) as amended, varied or supplemented from time to time.
         Clause headings are for ease of reference only.

2.       CHARGE

2.1      The Company charges the Accounts and the Deposits, with full title
         guarantee, by way of first fixed charge, in favour of the Issuing Bank
         for the payment and discharge of all of the Secured Obligations.

2.2      This Agreement shall constitute notice to the Issuing Bank of the
         charge referred to in Clause 2.1.

3.       ACCOUNTS AND DEPOSITS

3.1      If all or any part of the Secured Obligations are due and payable but
         unpaid, the Issuing Bank shall be entitled (but shall, to the extent
         reasonably practicable, give prior notice of the same to the Company)
         to set-off or transfer all or part of the Account Balance of the
         Relevant Accounts (or any of them) in or towards satisfaction of such
         amount which has become due and payable PROVIDED THAT when discharging
         any part of the Secured Obligations pursuant to this Clause 3.1, such
         liability shall be set off against or transferred from:

         3.1.1    firstly, the Account Balance (if any) of the Account
                  denominated in the Relevant Currency; and

         3.1.2    thereafter, against the Account Balance of any other Account.

3.2      Subject to Clause 3.3, except with the Issuing Bank's prior written
         consent, each Deposit in a Relevant Account shall be maintained on the
         terms that it shall mature on (but not before) the earlier of:

         3.2.1    the first time at which the Issuing Bank reasonably determines
                  (and the Issuing Bank shall make such determination promptly
                  upon a request by the Company) that (a) there are no
                  outstanding Secured Obligations and (b) the Issuing Bank is
                  not under any obligation or liability (whether actual or
                  contingent) under the Bonding Documents;

         3.2.2    subject to and only to the extent stated in Clause 3.4, the
                  close of business in London on the date on which all or any
                  part of any Secured Obligations shall have become due and
                  payable and shall not have been paid upon becoming so due and
                  payable,

         so that, at such time as such Deposit shall mature (or at any time
         thereafter), it shall become repayable to the Company subject to any
         rights of set-off, combination or consolidation in respect of such
         Deposit which the Issuing Bank may be entitled to exercise either under
         this Agreement or at law.

                                       2

<PAGE>

3.3      Notwithstanding Clauses 3.1 and 3.2, if at any time:

         3.3.1    the Outstanding Liability Amount of any Bond is permanently
                  reduced or (in respect of a Bond governed by English law) the
                  expiry date of such Bond has passed or the Issuing Bank
                  (acting reasonably) is satisfied that it has no further
                  liability under that Bond (and, for the avoidance of doubt,
                  the Issuing Bank shall be satisfied that it has no further
                  liability under a Bond once it has received a form of release
                  from the beneficiary of the Bond in a form and substance
                  satisfactory to the Issuing Bank or once the original Bond has
                  been returned to the Issuing Bank); or

         3.3.2    there is a Dollar Excess (as defined in the Counter-Indemnity)
                  which is to be released to the Company pursuant to Clause 5.2
                  of the Counter Indemnity (but subject always to Clause 5.4 of
                  the Counter Indemnity),

         then, subject to any rights of set off or transfer which the Issuing
         Bank has already exercised or is entitled to exercise pursuant to
         Clause 3.1, a corresponding amount of the relevant Deposit or Account
         Balance (as appropriate) in the Relevant Account shall be released from
         the charge created pursuant to Clause 2.1 and shall mature and become
         repayable to the Company.

3.4      If the Company fails to fulfil its indemnity obligations under Clause 3
         of the Counter-Indemnity by close of business in London on the same day
         on which only part of the Secured Obligations become due and payable
         then only so much of the relevant Deposit shall mature as equals the
         amount to be indemnified by the Company pursuant to Clause 3 of the
         Counter Indemnity.

3.5      Save with the Issuing Bank's prior written consent, no right, title or
         interest in relation to any Account or any Deposit or to this Agreement
         shall be (a) capable of assignment or other disposal or (b) the subject
         of (and the Company shall not permit to exist) any security or other
         third party interest other than the security created pursuant to this
         Agreement.

4.       INTEREST

         Interest shall accrue on the balance standing to the credit of each
         Relevant Account at such commercial rate, with such interest periods
         and with such interest payment provisions as the parties may agree from
         time to time. Such interest shall be payable to such account as the
         Company may from time to time direct.

5.       EFFECTIVENESS OF SECURITY

5.1      The security constituted and the rights, powers and remedies provided
         by this Agreement shall be cumulative, in addition to and independent
         of every other security which the Issuing Bank may at any time hold for
         the Secured Obligations or any rights, powers and remedies of the
         Issuing Bank provided by law (each such right, power and remedy under
         this Agreement and at law being a "COLLATERAL RIGHT").

5.2      This Agreement shall remain in full force and effect as a continuing
         arrangement unless and until the Issuing Bank discharges it. Upon the
         maturity of all Deposits pursuant to

                                       3

<PAGE>

         Clause 3.2.1 and PROVIDED THAT (a) there are no outstanding Secured
         Obligations and (b) the Issuing Bank is not under any obligation or
         liability (whether actual or contingent) under the Bonding Documents,
         the Issuing Bank shall, on the Company's request, release the Company
         from its obligations under the Bonding Documents and release the charge
         created pursuant to Clause 2.1.

5.3      No failure on the part of the Issuing Bank to exercise, or delay on its
         part in exercising, any Collateral Right shall operate as a waiver
         thereof, nor shall any single or partial exercise of a Collateral Right
         preclude any further or other exercise of that or any other Collateral
         Right.

5.4      The obligations of the Company under this Agreement and the Collateral
         Rights shall not be discharged, impaired or otherwise affected by:

         5.4.1    any lack of validity, legality, effectiveness or
                  enforceability of (i) the Bonding Documents or any agreement
                  or instrument relating thereto (collectively, the "RELATED
                  DOCUMENTS") or (ii) any obligation under any Related Document;

         5.4.2    any amendment or waiver of or any consent to departure from or
                  any release of any of the obligations of any party under all
                  or any of the Related Documents other than in accordance with
                  and to the extent expressly stated in any written amendment,
                  waiver, consent or release (and subject to the conditions
                  thereof) (and "written" shall include, for the avoidance of
                  doubt, any communication by electronic mail);

         5.4.3    the existence of any claim, set-off, defence or other right
                  which the Company or any Eligible Subsidiary may have at any
                  time against the Issuing Bank or any other person or entity,
                  whether in connection with the transactions contemplated in
                  the Related Documents, or any unrelated transaction or the
                  attachment (or similar order of court) of any payment under
                  the Bonding Documents;

         5.4.4    any winding-up, dissolution, administration or re-organisation
                  of or other change in the Company, any Eligible Subsidiary or
                  any other company, corporation, partnership or other person;

         5.4.5    any time or other indulgence being granted to the Company, any
                  Eligible Subsidiary or any other company, corporation,
                  partnership or other person other than in accordance with and
                  to the extent expressly stated in any written document
                  (including, for the avoidance of doubt, any communication by
                  electronic mail) referring to such indulgence;

         5.4.6    any failure to take or failure to realise the value of any
                  collateral in respect of the obligations of the Company under
                  the Related Documents or any release, discharge, exchange or
                  substitution of any such collateral other than in accordance
                  with and to the extent expressly stated in any written
                  document (including, for the avoidance of doubt, any
                  communication by electronic mail) referring to such release,
                  discharge, exchange or substitution;

                                       4

<PAGE>

         5.4.7    any other act, event or omission which but for this provision
                  would or might operate to impair, discharge or otherwise
                  affect the obligations of the Company hereunder.

5.5      The Issuing Bank shall not be obliged to make any demand on the Company
         or any Eligible Subsidiary on whose behalf a Bond was issued, to take
         any action or obtain judgment in any court against any such party or to
         make or file any proof or claim in a liquidation or insolvency of any
         such party or to enforce or seek to enforce any security held in
         respect of the obligations of the Company under the Bonding Documents
         before exercising any Collateral Right.

6.       COMPANY'S RIGHTS AND UNDERTAKINGS

6.1      Any settlement or discharge hereunder shall be conditional upon no
         payment to the Issuing Bank by or on behalf of the Company being
         avoided or reduced by virtue of any bankruptcy, insolvency, liquidation
         or similar laws of general application and shall in those circumstances
         be void.

6.2      The Company hereby represents and warrants to the Issuing Bank and
         undertakes during the subsistence of this Agreement that:

         6.2.1    it is and will be the sole, lawful and beneficial owner of
                  each Account and each Deposit free from any security interest
                  or third party right except the security and other rights
                  granted to the Issuing Bank under the Bonding Documents; and

         6.2.2    save as provided in the Bonding Documents, it will not sell or
                  dispose of the benefit of all or any of its rights, title and
                  interest in any Account or any Deposit.

7.       FURTHER ASSURANCE

         The Company shall promptly upon notice from the Issuing Bank execute
         all documents and do all things that the Issuing Bank may reasonably
         specify for the purpose of (a) exercising the Collateral Rights or (b)
         securing and perfecting its security over or title to all or any part
         of the Accounts and the Deposits.

8.       POWER OF ATTORNEY

         The Company, by way of security, irrevocably appoints the Issuing Bank
         to be its attorney and in its name, on its behalf and as its act and
         deed to execute, deliver and perfect all documents and do all things
         that the Issuing Bank may consider to be requisite for (a) carrying out
         any obligation imposed on the Company under this Agreement or (b)
         exercising any of the Collateral Rights. The Company shall ratify and
         confirm all things done and all documents executed by the Issuing Bank
         in the proper exercise of that power of attorney.

9.       SUBSEQUENT INTERESTS

         If the Issuing Bank at any time receives notice of any subsequent
         mortgage, assignment, charge or other interest affecting all or any
         part of any Account and/or any Deposit, all payments thereafter made by
         the Company to the Issuing Bank shall be treated as having

                                       5

<PAGE>

         been credited to a new account of the Company and not as having been
         applied in reduction of the Secured Obligations as at the time when the
         Issuing Bank received notice.

10.      MISCELLANEOUS CLAUSES

         The provisions of paragraph 16 (Governing Law and Jurisdiction) of the
         Bonding Facility Letter shall apply mutatis mutandis as if set out here
         in full.

IN WITNESS WHEREOF this Agreement has been signed on behalf of the Issuing Bank
and executed as a deed by the Company and is intended to be and is hereby
delivered by it as a deed on the date specified above.

                                       6

<PAGE>

                                 EXECUTION PAGE

THE ISSUING BANK

HSBC Bank plc

By:           CARLTON BROWN

Title:        MANAGER

THE COMPANY

EXECUTED as a DEED

by Marconi Bonding Limited

N. C. PORTER  Director

J. LONG       Director/Secretary

                                       7

<PAGE>

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  CONFORMED COPY

                              JP MORGAN CHASE BANK

                                 AS ISSUING BANK

                                       AND

                             MARCONI BONDING LIMITED

                                   AS COMPANY

                  -------------------------------------------------

                          SECURITY OVER CASH AGREEMENT

                  -------------------------------------------------

<PAGE>

                                    CONTENTS

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

2.  Charge......................................................   2

3.  Accounts And Deposits.......................................   2

4.  Interest....................................................   3

5.  Effectiveness Of Security...................................   3

6.  Company's Rights And Undertakings...........................   5

7.  Further Assurance...........................................   5

8.  Power Of Attorney...........................................   5

9.  Subsequent Interests........................................   5

10. Miscellaneous Clauses.......................................   6
</TABLE>

<PAGE>

                          SECURITY OVER CASH AGREEMENT

THIS AGREEMENT is made on 29 October 2002

BETWEEN

(1)      JP MORGAN CHASE BANK PLC (the "ISSUING BANK") of 125 London Wall,
         London EC2Y 5AJ and fax number 020 7777 5237/2348; and

(2)      MARCONI BONDING LIMITED (the "COMPANY") of 1 Bruton Street, London W1J
         6AQ (registered number 3818628).

WHEREAS

(A)      Pursuant to the terms of the Bonding Facility Letter (as defined below)
         and at the request of the Company, the Issuing Bank (among others) has
         agreed to grant the Company a bond issuance facility;

(B)      the Company has agreed to indemnify the Issuing Bank in respect of any
         liability which the Issuing Bank incurs under the Bonding Facility
         Letter pursuant and subject to the terms of the Counter Indemnity (as
         defined below); and

(C)      as security for its obligations under the Counter Indemnity, the
         Company has agreed to place cash deposits with the Issuing Bank.

IT IS HEREBY AGREED that the cash deposits placed by the Company with the
Issuing Bank shall be held pursuant and subject to the following terms and
conditions:

1.       DEFINITIONS AND INTERPRETATION

1.1      In this Agreement, terms defined in the Counter Indemnity (including by
         incorporation) and the principles of interpretation set out in the
         Bonding Facility Letter shall, unless otherwise provided herein, apply
         to this Agreement.

1.2      In this Agreement:

         "BONDING FACILITY LETTER" means the bond issuance facility letter dated
         10 May 2002 between HSBC Bank plc, Barclays Bank Plc and the Company
         (as amended on or about the date hereof by an amendment letter between
         HSBC Bank plc, Barclays Bank Plc, the Issuing Bank and the Company).

         "COUNTER INDEMNITY" means the indemnity agreement dated on or about the
         date hereof between the Company and the Issuing Bank under which the
         Company agrees (subject to the terms thereof) to indemnify the Issuing
         Bank against any loss, liability or reasonable cost incurred by the
         Issuing Bank in respect of or in connection with the Bonding Documents
         entered into or issued by the Issuing Bank;

         "SECURED OBLIGATIONS" means all obligations owing to the Issuing Bank
         by the Company under or pursuant to the Counter Indemnity whether
         present or future, actual or contingent, as principal or as surety.

                                     - 1 -

<PAGE>

1.3      In this Agreement, any reference to (a) a "Clause" is, unless otherwise
         stated, a reference to a Clause hereof and (b) "this Agreement", "the
         Counter Indemnity" or the "Bonding Facility Letter" is a reference to
         this Agreement, the Counter Indemnity or the Bonding Facility Letter
         (as applicable) as amended, varied or supplemented from time to time.
         Clause headings are for ease of reference only.

2.       CHARGE

2.1      The Company charges the Accounts and the Deposits, with full title
         guarantee, by way of first fixed charge, in favour of the Issuing Bank
         for the payment and discharge of all of the Secured Obligations.

2.2      This Agreement shall constitute notice to the Issuing Bank of the
         charge referred to in Clause 2.1.

3.       ACCOUNTS AND DEPOSITS

3.1      If all or any part of the Secured Obligations are due and payable but
         unpaid, the Issuing Bank shall be entitled (but shall, to the extent
         reasonably practicable, give prior notice of the same to the Company)
         to set-off or transfer all or part of the Account Balance of the
         Relevant Accounts (or any of them) in or towards satisfaction of such
         amount which has become due and payable PROVIDED THAT when discharging
         any part of the Secured Obligations pursuant to this Clause 3.1, such
         liability shall be set off against or transferred from:

         3.1.1    firstly, the Account Balance (if any) of the Account
                  denominated in the Relevant Currency; and

         3.1.2    thereafter, against the Account Balance of any other Account.

3.2      Subject to Clause 3.3, except with the Issuing Bank's prior written
         consent, each Deposit in a Relevant Account shall be maintained on the
         terms that it shall mature on (but not before) the earlier of:

         3.2.1    the first time at which the Issuing Bank reasonably determines
                  (and the Issuing Bank shall make such determination promptly
                  upon a request by the Company) that (a) there are no
                  outstanding Secured Obligations and (b) the Issuing Bank is
                  not under any obligation or liability (whether actual or
                  contingent) under the Bonding Documents;

         3.2.2    subject to and only to the extent stated in Clause 3.4, the
                  close of business in London on the date on which all or any
                  part of any Secured Obligations shall have become due and
                  payable and shall not have been paid upon becoming so due and
                  payable,

        so that, at such time as such Deposit shall mature (or at any time
        thereafter), it shall become repayable to the Company subject to any
        rights of set-off, combination or consolidation in respect of such
        Deposit which the Issuing Bank may be entitled to exercise either under
        this Agreement or at law.

                                     - 2 -

<PAGE>

3.3      Notwithstanding Clauses 3.1 and 3.2, if at any time:

         3.3.1    the Outstanding Liability Amount of any Bond is permanently
                  reduced or (in respect of a Bond governed by English law) the
                  expiry date of such Bond has passed or the Issuing Bank
                  (acting reasonably) is satisfied that it has no further
                  liability under that Bond (and, for the avoidance of doubt,
                  the Issuing Bank shall be satisfied that it has no further
                  liability under a Bond once it has received a form of release
                  from the beneficiary of the Bond in a form and substance
                  satisfactory to the Issuing Bank or once the original Bond has
                  been returned to the Issuing Bank); or

         3.3.2    there is a Dollar Excess (as defined in the Counter-Indemnity)
                  which is to be released to the Company pursuant to Clause 5.2
                  of the Counter Indemnity (but subject always to Clause 5.4 of
                  the Counter Indemnity),

         then, subject to any rights of set off or transfer which the Issuing
         Bank has already exercised or is entitled to exercise pursuant to
         Clause 3.1, a corresponding amount of the relevant Deposit or Account
         Balance (as appropriate) in the Relevant Account shall be released from
         the charge created pursuant to Clause 2.1 and shall mature and become
         repayable to the Company.

3.4      If the Company fails to fulfil its indemnity obligations under Clause 3
         of the Counter-Indemnity by close of business in London on the same day
         on which only part of the Secured Obligations become due and payable
         then only so much of the relevant Deposit shall mature as equals the
         amount to be indemnified by the Company pursuant to Clause 3 of the
         Counter Indemnity.

3.5      Save with the Issuing Bank's prior written consent, no right, title or
         interest in relation to any Account or any Deposit or to this Agreement
         shall be (a) capable of assignment or other disposal or (b) the subject
         of (and the Company shall not permit to exist) any security or other
         third party interest other than the security created pursuant to this
         Agreement.

4.       INTEREST

         Interest shall accrue on the balance standing to the credit of each
         Relevant Account at such commercial rate, with such interest periods
         and with such interest payment provisions as the parties may agree from
         time to time. Such interest shall be payable to such account as the
         Company may from time to time direct.

5.       EFFECTIVENESS OF SECURITY

5.1      The security constituted and the rights, powers and remedies provided
         by this Agreement shall be cumulative, in addition to and independent
         of every other security which the Issuing Bank may at any time hold for
         the Secured Obligations or any rights, powers and remedies of the
         Issuing Bank provided by law (each such right, power and remedy under
         this Agreement and at law being a "COLLATERAL RIGHT").

5.2      This Agreement shall remain in full force and effect as a continuing
         arrangement unless and until the Issuing Bank discharges it. Upon the
         maturity of all Deposits pursuant to

                                     - 3 -

<PAGE>

         Clause 3.2.1 and PROVIDED THAT (a) there are no outstanding Secured
         Obligations and (b) the Issuing Bank is not under any obligation or
         liability (whether actual or contingent) under the Bonding Documents,
         the Issuing Bank shall, on the Company's request, release the Company
         from its obligations under the Bonding Documents and release the charge
         created pursuant to Clause 2.1.

5.3      No failure on the part of the Issuing Bank to exercise, or delay on its
         part in exercising, any Collateral Right shall operate as a waiver
         thereof, nor shall any single or partial exercise of a Collateral Right
         preclude any further or other exercise of that or any other Collateral
         Right.

5.4      The obligations of the Company under this Agreement and the Collateral
         Rights shall not be discharged, impaired or otherwise affected by:

         5.4.1    any lack of validity, legality, effectiveness or
                  enforceability of (i) the Bonding Documents or any agreement
                  or instrument relating thereto (collectively, the "RELATED
                  DOCUMENTS") or (ii) any obligation under any Related Document;

         5.4.2    any amendment or waiver of or any consent to departure from or
                  any release of any of the obligations of any party under all
                  or any of the Related Documents other than in accordance with
                  and to the extent expressly stated in any written amendment,
                  waiver, consent or release (and subject to the conditions
                  thereof) (and "written" shall include, for the avoidance of
                  doubt, any communication by electronic mail);

         5.4.3    the existence of any claim, set-off, defence or other right
                  which the Company or any Eligible Subsidiary may have at any
                  time against the Issuing Bank or any other person or entity,
                  whether in connection with the transactions contemplated in
                  the Related Documents, or any unrelated transaction or the
                  attachment (or similar order of court) of any payment under
                  the Bonding Documents;

         5.4.4    any winding-up, dissolution, administration or re-organisation
                  of or other change in the Company, any Eligible Subsidiary or
                  any other company, corporation, partnership or other person;

         5.4.5    any time or other indulgence being granted to the Company, any
                  Eligible Subsidiary or any other company, corporation,
                  partnership or other person other than in accordance with and
                  to the extent expressly stated in any written document
                  (including, for the avoidance of doubt, any communication by
                  electronic mail) referring to such indulgence;

         5.4.6    any failure to take or failure to realise the value of any
                  collateral in respect of the obligations of the Company under
                  the Related Documents or any release, discharge, exchange or
                  substitution of any such collateral other than in accordance
                  with and to the extent expressly stated in any written
                  document (including, for the avoidance of doubt, any
                  communication by electronic mail) referring to such release,
                  discharge, exchange or substitution;

                                     - 4 -

<PAGE>

         5.4.7    any other act, event or omission which but for this provision
                  would or might operate to impair, discharge or otherwise
                  affect the obligations of the Company hereunder.

5.5      The Issuing Bank shall not be obliged to make any demand on the Company
         or any Eligible Subsidiary on whose behalf a Bond was issued, to take
         any action or obtain judgment in any court against any such party or to
         make or file any proof or claim in a liquidation or insolvency of any
         such party or to enforce or seek to enforce any security held in
         respect of the obligations of the Company under the Bonding Documents
         before exercising any Collateral Right.

6.       COMPANY'S RIGHTS AND UNDERTAKINGS

6.1      Any settlement or discharge hereunder shall be conditional upon no
         payment to the Issuing Bank by or on behalf of the Company being
         avoided or reduced by virtue of any bankruptcy, insolvency, liquidation
         or similar laws of general application and shall in those circumstances
         be void.

6.2      The Company hereby represents and warrants to the Issuing Bank and
         undertakes during the subsistence of this Agreement that:

         6.2.1    it is and will be the sole, lawful and beneficial owner of
                  each Account and each Deposit free from any security interest
                  or third party right except the security and other rights
                  granted to the Issuing Bank under the Bonding Documents; and

         6.2.2    save as provided in the Bonding Documents, it will not sell or
                  dispose of the benefit of all or any of its rights, title and
                  interest in any Account or any Deposit.

7.       FURTHER ASSURANCE

         The Company shall promptly upon notice from the Issuing Bank execute
         all documents and do all things that the Issuing Bank may reasonably
         specify for the purpose of (a) exercising the Collateral Rights or (b)
         securing and perfecting its security over or title to all or any part
         of the Accounts and the Deposits.

8.       POWER OF ATTORNEY

         The Company, by way of security, irrevocably appoints the Issuing Bank
         to be its attorney and in its name, on its behalf and as its act and
         deed to execute, deliver and perfect all documents and do all things
         that the Issuing Bank may consider to be requisite for (a) carrying out
         any obligation imposed on the Company under this Agreement or (b)
         exercising any of the Collateral Rights. The Company shall ratify and
         confirm all things done and all documents executed by the Issuing Bank
         in the proper exercise of that power of attorney.

9.       SUBSEQUENT INTERESTS

         If the Issuing Bank at any time receives notice of any subsequent
         mortgage, assignment, charge or other interest affecting all or any
         part of any Account and/or any Deposit, all payments thereafter made by
         the Company to the Issuing Bank shall be treated as having

                                      - 5 -

<PAGE>

         been credited to a new account of the Company and not as having been
         applied in reduction of the Secured Obligations as at the time when the
         Issuing Bank received notice.

10.      MISCELLANEOUS CLAUSES

         The provisions of paragraph 16 (Governing Law and Jurisdiction) of the
         Bonding Facility Letter shall apply mutatis mutandis as if set out here
         in full.

IN WITNESS WHEREOF this Agreement has been signed on behalf of the Issuing Bank
and executed as a deed by the Company and is intended to be and is hereby
delivered by it as a deed on the date specified above.

                                      - 6 -

<PAGE>

                                 EXECUTION PAGE

THE ISSUING BANK

JP Morgan Chase Bank

MICHAEL F WHARRAD

By:      Michael F Wharrad

Title:   Vice President

THE COMPANY

EXECUTED as a DEED

by Marconi Bonding Limited

CRAIG GEORGE DONALDSON

By:      Craig George Donaldson

Title:   Director

J LONG

By:      J Long

Title:   Director and Company Secretary

                                      - 7 -