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                                                                    EXHIBIT 4.02

                                                                  CONFORMED COPY

                             DATED 19 DECEMBER, 2002

                      RT GROUP TELECOM SERVICES LIMITED (1)

              RT GROUP PLC (IN MEMBERS' VOLUNTARY LIQUIDATION) (2)

                           MARCONI CORPORATION PLC (3)

                              ULTRAMAST LIMITED (4)

                                      -and-

                         JAMES ROBERT DRUMMOND SMITH AND
                            NICHOLAS JAMES DARGAN (5)

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

                                 SETTLEMENT DEED

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

                                  ALLEN & OVERY
                                     London

                               SH/IRT/BK:1071686.1

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THIS AGREEMENT is made by way of deed on 19 December, 2002

BETWEEN:

(1)      RT GROUP TELECOM SERVICES LIMITED, a company incorporated in England
         and Wales (registered number 3963596) whose registered office is at
         20-22 Bedford Row, London WC1R 4JS ("RTS");

(2)      RT GROUP PLC (IN MEMBERS' VOLUNTARY LIQUIDATION), a company
         incorporated in England and Wales (registered number 2904614) whose
         registered office is at 20-22 Bedford Row, London WC1R 4JS ("RG")
         acting by its joint liquidators James Robert Drummond Smith and
         Nicholas James Dargan of Deloitte & Touche, 180 Strand, London WC2R 1WL
         (the "LIQUIDATORS");

(3)      MARCONI CORPORATION PLC, a company incorporated in England and Wales
         (registered number 67307) whose registered office is at New Century
         Park, P.O. Box 53, Coventry CV3 1HJ ("MARCONI");

(4)      ULTRAMAST LIMITED, a company incorporated in England and Wales
         (registered number 4042640) whose registered office is at City Point,
         One Ropemaker Street, London EC2Y 9SS ("ULTRAMAST"); and

(5)      THE LIQUIDATORS.

WHEREAS:

(A)      Ultramast has an issued share capital of L1,000 divided into 1,000
         Ordinary Shares, all of which have been issued fully paid.

(B)      On 14th December, 2000, Marconi and RTS entered into the Ultramast
         Agreement. Following completion of the Ultramast Agreement on 26th
         April, 2001, Marconi was and is the registered holder of and is
         beneficially entitled to 500 Ordinary Shares and RTS was and is the
         registered holder of and is beneficially entitled to 500 Ordinary
         Shares.

(C)      On 1st February, 2002, RTS exercised its rights under the Easynet Put
         Option in respect of the Easynet Shares. Marconi refused to accept
         delivery of the Easynet Shares or to pay the consideration of
         L20,000,000 payable for the Easynet Shares under the Easynet Put Option
         on the basis that it alleged that it was entitled to set-off against
         its obligation to pay for the Easynet Shares a number of claims against
         RTS.

(D)      On 25th March, 2002, RTS commenced the Action seeking payment of sums
         alleged to be due under the Easynet Put Option and on 19th April, 2002,
         RTS made an application for summary judgment. The application was heard
         on 25th July, 2002, when Morison J declined to grant summary judgment
         in the light of Marconi's counterclaims but ordered Marconi to pay the
         sum of L20,000,000, together with accrued interest, into Court.

(E)      This agreement sets out in full the terms of the agreement between the
         parties to settle the Action, to end their arrangements in relation to
         Ultramast, to provide for the completion of the acquisition by Marconi
         of the Easynet Shares, to write off against the share premium account
         of Ultramast the deficit on the profit and loss reserve on its balance
         sheet, to provide for the cancellation of the Marconi Reduction Shares
         and (if applicable) the RTS Reduction Shares through a reduction of
         capital and share premium account of Ultramast and a subsequent
         repayment of capital to Marconi and (if applicable) RTS and to
         terminate the Ultramast Agreement, the relevant part of the Ipsaris
         Agreement and other related agreements.

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                                        4

(F)      On 28th November, 2002, Ultramast increased its authorised share
         capital through the creation of 126 Deferred Shares and adopted new
         articles of association containing the rights attached to those
         Deferred Shares.

(G)      Ultramast has, by virtue of regulation 34 of the Companies (Tables A to
         F) Regulations 1985, which applies to Ultramast, power and authority to
         reduce its share capital in any way.

NOW IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      In this agreement, unless the context otherwise requires, the following
         words and expressions shall have the following meanings:

         "ACCOUNTS"                 accounts of Ultramast for the financial
                                    period ended 31st March, 2002, in the agreed
                                    form;

         "ACTION"                   the action currently proceeding in the
                                    Queen's Bench Division, High Court of
                                    Justice, Commercial Court with Claim Number
                                    2002 Folio 309;

         "AFFILIATE"                in relation to any party, any subsidiary
                                    undertaking or parent undertaking of that
                                    party or any subsidiary undertaking of that
                                    parent undertaking but, for the avoidance of
                                    doubt, neither Ipsaris nor Easynet shall be
                                    taken for the purposes of this agreement as
                                    being an Affiliate of Marconi;

         "AGREED FORM"              in relation to any document, the form of
                                    that document which has been initialled for
                                    the purposes of identification by Marconi's
                                    Solicitors and RTS's Solicitors;

         "APPROVAL TIME"            the time at which the Reduction Order is
                                    made and delivered to Ultramast;

         "APT AGREEMENT"            an agreement for acquisition, management and
                                    construction management services dated 26th
                                    April, 2001 between Albany Partnership
                                    Limited and Ultramast (as varied by a letter
                                    agreement dated 28th November, 2002 made
                                    between Albany Partnership Limited and
                                    Ultramast);

         "CAPITAL REDUCTION"        has the meaning given in sub-clauses
                                    5.1.1(a), 5.1.1(b) and 5.1.1(c);

         "CLAIM"                    each and any claim, counter-claim, cause or
                                    right of action or proceedings, whether at
                                    law or in equity, in any jurisdiction
                                    whatsoever, whether secured, proprietary, by
                                    way of tracing, priority or otherwise,
                                    whether by way of contribution or
                                    subrogation or

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                                       5

                                    otherwise, whether known or unknown to the
                                    parties, whether or not presently known to
                                    the law and whether arising before on or
                                    after the date of this agreement arising out
                                    of or relating to the Joint Venture
                                    Arrangements including, for the avoidance of
                                    doubt, any claim made in the Action but
                                    excluding any claims in respect of :

                                    (a)      any invoices properly raised by RTS
                                             or Marconi (or their respective
                                             Affiliates) on or prior to 30th
                                             September, 2002; or

                                    (b)      any Purchase Orders; or

                                    (c)      this agreement; or

                                    (d)      the APT Agreement; or

                                    (e)      the Participation Agreement;

         "COMPLETION"               the Reduction Order being filed with the
                                    Registrar and completion of the other
                                    matters contemplated by this agreement in
                                    accordance with clause 7;

         "CONDITIONS"               the conditions precedent to Completion set
                                    out in sub-clause 2.1;

         "CONSENT ORDER"            the consent order in the form set out in
                                    Schedule 1 and signed by each of Marconi and
                                    RTS (through Marconi's Solicitors and RTS's
                                    Solicitors respectively) on the date of this
                                    agreement in accordance with sub-clause 6.1;

         "CREDITORS' COMMITTEES"    (a)      the co-ordination committee of the
                                             syndicate banks who have provided
                                             loans to Marconi or its Affiliates;
                                             and

                                    (b)      the informal committee of holders
                                             of bonds issued by Marconi or its
                                             Affiliates;

         "D&T REPORT"               a report dated 26th November, 2002 prepared
                                    by Deloitte & Touche addressed to Ultramast
                                    for the purposes of the Capital Reduction;

         "DEFERRED SHARES"          deferred shares of L1 each in the capital of
                                    Ultramast having the rights and obligations
                                    set out in Schedule 6 (such rights and
                                    obligations being set out in the articles of
                                    association of Ultramast adopted on 28th
                                    November, 2002);

         "EASYNET"                  Easynet Group plc, a company registered in
                                    England and Wales (registered number
                                    3137522) whose

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                                       6

                                    registered office is at 44 Whitfield Street,
                                    London W1P 5RF;

         "EASYNET PUT OPTION"       the put option granted by Marconi to RTS
                                    under clause 11 of the Ipsaris Agreement;

         "EASYNET SHARES"           1,324,054 ordinary shares of 4 pence each in
                                    the capital of Easynet;

         "EMPLOYEES"                Andrew Elliman and Simon Ralph;

         "EMPLOYMENT COSTS"         the properly incurred costs relating to the
                                    employment of the Employees and recharged to
                                    Ultramast under the Secondment Arrangement;

         "ENGLISH MAST AGREEMENT"   an agreement dated 26th April, 2001 between
                                    Marconi and Ultramast relating to the
                                    identification of suitable sites for masts
                                    in England and Wales and the grant of mast
                                    leases;

         "FURTHER MARCONI DEFERRED  has the meaning set out in sub-clause 9.2;
         SHARES"

         "IMPLEMENTATION AGREEMENT" an implementation agreement dated 26th June,
                                    2001 between Marconi, RTS and Ipsaris;

         "INITIAL MARCONI DEFERRED  that number of Deferred Shares the aggregate
         SHARES"                    nominal value of which will constitute not
                                    less than 10 per cent. of the nominal value
                                    of all of the shares in the capital of
                                    Ultramast immediately following the Capital
                                    Reduction (but no more than 63 Deferred
                                    Shares and on the assumption that the
                                    Initial RTS Deferred Shares will be issued
                                    to RTS at the same time) and to be issued by
                                    Ultramast to Marconi in accordance with
                                    sub-clause 4.10;

         "INITIAL RTS DEFERRED      that number of Deferred Shares the aggregate
         SHARES"                    nominal value of which will constitute not
                                    less than 10 per cent. of the nominal value
                                    of all of the shares in the capital of
                                    Ultramast immediately following the Capital
                                    Reduction (but no more than 63 Deferred
                                    Shares and on the assumption that the
                                    Initial Marconi Deferred Shares will be
                                    issued to Marconi at the same time) and to
                                    be issued by Ultramast to RTS in accordance
                                    with sub-clause 4.10;

         "IPSARIS"                  Easynet Telecommunications Limited (formerly
                                    Ipsaris Limited), a company incorporated in
                                    England and Wales (registered number
                                    2883980) whose registered office is at 44
                                    Whitfield Street, London W1P 5RF;

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                                       7

         "IPSARIS AGREEMENT"        the subscription and shareholders agreement
                                    dated 14th December, 2000 between Marconi,
                                    RTS and Ipsaris as amended by a variation
                                    agreement dated 26th April, 2001 between
                                    Marconi, RTS and Ipsaris and as further
                                    amended by the Implementation Agreement;

         "JOINT VENTURE             all of the agreements and other arrangements
         ARRANGEMENTS"              (written or unwritten) in relation to
                                    Ultramast or Ipsaris or shareholdings in
                                    either of them, entered into prior to the
                                    date of this agreement:

                                    (a)      by Marconi (or any of its
                                             Affiliates) on the one hand and
                                             RTS, RG or Ultramast (or any of
                                             their Affiliates) on the other
                                             hand; or

                                    (b)      by Ultramast on the one hand and
                                             RTS or RG (or any of their
                                             Affiliates) on the other hand,

                                    including, without limitation, the Ultramast
                                    Agreement, the Ipsaris Agreement, the
                                    Easynet Put Option, the English Mast
                                    Agreement and the Scottish Mast Agreement;

         "MARCONI REDUCTION AMOUNT" a sum equal to L26,139,000;

         "MARCONI REDUCTION SHARES" the 500 Ordinary Shares registered in the
                                    name of Marconi;

         "MARCONI'S SOLICITORS"     Allen & Overy of One New Change, London
                                    EC4M 9QQ;

         "MARCONI SUBSCRIPTION      a sum equal to the nominal value of the
         MONIES"                    Initial Marconi Deferred Shares;

         "ORACLE AGREEMENT"         an employee licence agreement dated 24th
                                    May, 2001 between Marconi and Oracle
                                    Corporation UK Limited;

         "ORDINARY SHARES"          ordinary shares of L1 each in the capital of
                                    Ultramast;

         "PARENT UNDERTAKING"       has the meaning given in section 258 of the
                                    Companies Act 1985;

         "PARTICIPATION AGREEMENT"  a participation agreement dated 24th
                                    September, 2001 between Marconi and
                                    Ultramast in relation to the allocation of
                                    Oracle software licences granted to Marconi
                                    under the Oracle Agreement;

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                                       8

         "PURCHASE ORDERS"          those purchase orders authorised by
                                    Ultramast as at the date of this agreement
                                    or subsequently in respect of goods or
                                    services provided or to be provided by
                                    Marconi or, as the case may be, RTS (or
                                    their respective Affiliates);

         "RAILTRACK AGREEMENTS"     an agreement dated 26th April, 2001 between
                                    Railtrack plc and RTS relating to the
                                    identification of suitable sites for masts
                                    in Scotland and the grant of mast leases and
                                    an agreement dated 26th April, 2001 between
                                    Railtrack plc and RTS relating to the
                                    identification of suitable sites for masts
                                    in England and Wales and the grant of mast
                                    leases;

         "REDUCTION ORDER"          the order of the Court confirming the
                                    Capital Reduction;

         "REDUCTION TIMETABLE"      the timetable for the Capital Reduction set
                                    out in Schedule 2;

         "REGISTRAR"                the registrar of companies at Companies
                                    House in Cardiff;

         "RTS REDUCTION AMOUNT"     a sum equal to L19,186,026 or such lower
                                    amount as may be required under sub-clause
                                    5.5.1;

         "RTS REDUCTION SHARES"     367 Ordinary Shares registered in the name
                                    of RTS or such lower number of Ordinary
                                    Shares registered in the name of RTS as may
                                    be required under sub-clause 5.5.2;

         "RTS'S SOLICITORS"         Ashurst Morris Crisp of Broadwalk House,
                                    Appold Street, London EC2A 2HA;

         "RTS SUBSCRIPTION MONIES"  a sum equal to the nominal value of the
                                    Initial RTS Deferred Shares;

         "SCOTTISH MAST AGREEMENT"  an agreement dated 26th April, 2001 between
                                    Marconi and Ultramast relating to the
                                    identification of suitable sites for masts
                                    in Scotland and the grant of mast leases;

         "SEALED CONSENT ORDER"     the Consent Order duly sealed by the Court;

         "SECONDMENT ARRANGEMENT"   the unwritten, informal secondment
                                    arrangement under which the Employees are
                                    and have been seconded from Marconi (or its
                                    wholly owned subsidiary Albany Partnership
                                    Limited) to Ultramast;

         "SUBSIDIARY UNDERTAKING"   has the meaning given in section 258 of the
                                    Companies Act 1985; and

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                                       9

         "ULTRAMAST AGREEMENT"      an agreement dated 14th December, 2000
                                    between RTS and Marconi relating to the
                                    subscription for shares and the regulation
                                    of the exercise of their rights in relation
                                    to Ultramast.

1.2      In this agreement, unless the context otherwise requires:

         1.2.1    words denoting persons shall include bodies corporate and
                  unincorporated associations of persons;

         1.2.2    any reference to the singular shall include the plural and
                  vice versa;

         1.2.3    a reference to a clause, sub-clause or Schedule is a reference
                  to a clause, sub-clause or schedule to this agreement; and

         1.2.4    any reference to an enactment includes reference to that
                  enactment as amended, extended or applied by or under any
                  other enactment before, on or after the signature of this
                  agreement.

1.3      The headings in this agreement are for convenience only and do not
         affect its interpretation.

2.       CONDITIONS PRECEDENT

2.1      Completion is conditional on:

         2.1.1    the Court making an order confirming the repayment to Marconi
                  out of Ultramast's capital of the MARCONI REDUCTION AMOUNT and
                  any condition or undertaking imposed by the Court in that
                  order being satisfied, no later than 15th February, 2003 or
                  such later date as Marconi and RTS may agree, such agreement
                  not to be unreasonably withheld or delayed; and

         2.1.2    the Consent Order having been sealed by the Court, no later
                  than 28th February, 2003, or such later date as Marconi and
                  RTS may agree, such agreement not to be unreasonably withheld
                  or delayed.

2.2      Marconi and RTS agree that the Consent Order shall not be lodged with
         the Court for sealing until the Approval Time has occurred.

2.3      Each of the parties shall use all reasonable endeavours to procure the
         satisfaction of these Conditions, including the passing of all
         appropriate resolutions and execution of all reasonably necessary
         documents. If all these Conditions are not fulfilled by the time given
         for their satisfaction and Marconi and RTS do not agree to extend the
         time for satisfaction of these Conditions:

         2.3.1    except for this sub-clause, clauses 1, 11 and 12 and
                  sub-clauses 4.6, 18.1, 18.4 and 18.5, all the other clauses of
                  this agreement shall lapse and cease to have effect; but

         2.3.2    the lapsing of these provisions shall not affect any accrued
                  rights or liabilities of any party.

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                                       10

3.       SETTLEMENT

3.1      Subject to Completion having occurred and subject to the remainder of
         this clause 3, this agreement is in full and final settlement of:

         3.1.1    all and any Claims by Marconi against RTS, RG or Ultramast;

         3.1.2    all and any Claims by RTS against Marconi or Ultramast;

         3.1.3    all and any Claims by RG against Marconi or Ultramast; and

         3.1.4    all and any Claims by Ultramast against RG, RTS or Marconi,

         and, subject to Completion having occurred and subject to the remainder
         of this clause 3, each of the parties mutually irrevocably releases and
         covenants not to sue or threaten to sue each other, or their present or
         former agents, Affiliates, partners, directors or employees in relation
         to any such Claim, provided that this covenant shall not extend to any
         Claim that any party may have against Railtrack plc.

3.2      Subject to Completion having occurred, each party agrees to procure, so
         far as it is able, that none of its Affiliates shall pursue any Claim
         that it may have against any other party or their present or former
         agents, Affiliates, partners, directors or employees.

3.3      Each of RTS and Marconi, in its capacity as a shareholder of Ultramast,
         hereby irrevocably consents to and approves the release of Claims in
         accordance with the terms of this agreement by Ultramast against RTS,
         RG and Marconi and further irrevocably consents to and approves the
         Capital Reduction in accordance with the terms of this agreement. The
         consent and approval given by RTS and Marconi by this sub-clause
         extends for the benefit of Ultramast and the directors of Ultramast.

3.4      In respect of any Claim that Ultramast may have against RG or RTS, this
         clause 3 shall only have effect in relation to any Claim which has or
         may have accrued to Ultramast at the date of Completion, and shall not
         operate to terminate any agreements or arrangements between Ultramast
         on the one hand and RTS or RG (or their respective Affiliates) on the
         other hand. This clause 3 shall not affect any Claim that Ultramast may
         have against RTS or RG (or any of their Affiliates) to the extent that
         such a Claim arises as a result of a breach by Railtrack plc of any
         agreement between Railtrack plc on the one hand and RTS or RG (or any
         of their Affiliates) on the other hand, provided that Ultramast
         undertakes to RTS that, pending Completion, it will not without the
         prior written consent of RTS take or threaten to take any action in
         respect of any such Claim.

3.5      Nothing in this agreement shall affect the obligation or ability of
         Ultramast to discharge any invoice properly raised by RTS or Marconi
         (or any of their respective Affiliates) on or prior to 30th September,
         2002 or any sums payable pursuant to Purchase Orders or any sums
         payable pursuant to clause 10.

4.       PERIOD BETWEEN SIGNING AND COMPLETION

4.1      In the period from the date of this agreement until Completion, each of
         Marconi and RTS shall exercise all rights and powers available to it to
         procure that Ultramast shall:

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                                       11

         4.1.1    carry on its business in the ordinary and usual course; and

         4.1.2    not take any action which would have or might reasonably be
                  expected to have the effect of increasing either the number of
                  its creditors or the amounts owed to those creditors, save in
                  respect of bona fide arms length transactions with creditors
                  in the ordinary and usual course of trading.

4.2      Without prejudice to the generality of sub-clause 4.1 and without
         prejudice to the terms of the Ultramast Agreement, in the period from
         the date of this agreement until Completion, each of Marconi and RTS
         shall exercise all rights and powers available to it to procure that
         Ultramast shall not, without the prior consent (in writing or by
         e-mail) of both Marconi and RTS:

         4.2.1    incur any single item of capital expenditure or any series of
                  items of capital expenditure in excess of L10,000; or

         4.2.2    dispose of or grant any option or right of pre-emption in
                  respect of any part of its assets except in the ordinary
                  course of trading; or

         4.2.3    borrow any money or make any payments out of or drawings on
                  its bank accounts other than in the ordinary course of trading
                  or in accordance with the terms of this agreement; or

         4.2.4    enter into any onerous, unusual, abnormal or long-term
                  contract or commitment including, without limitation, operator
                  agreements, contractor agreements and, to the extent that they
                  are onerous, unusual, abnormal or long-term, supply
                  agreements; or

         4.2.5    make any loan or advance or give any credit to any person
                  other than loans, advances or credit given to persons (not
                  being Affiliates of RTS or Marconi) in the ordinary course of
                  trading; or

         4.2.6    enter into any leasing, vendor finance, hire-purchase, or
                  other agreement or arrangement for payment on deferred terms;
                  or

         4.2.7    enter into any lease, licence or commitment to enter into any
                  lease or licence of land whether for the purposes of erecting
                  telecommunications masts or otherwise; or

         4.2.8    grant or issue any mortgage, charge, debenture or other
                  security or give any guarantee, bond or indemnity; or

         4.2.9    make any change in the terms and conditions of employment of
                  any of its directors or employees or terminate (except for
                  good cause) the employment of any person; or

         4.2.10   make, or announce to any person any proposal to make, any
                  change or addition to any retirement, death or disability
                  benefit of or in respect of any of its current or former
                  directors or employees, or grant or create any additional or
                  new retirement, death or disability benefit; or

         4.2.11   permit any of its insurances to lapse or do anything which
                  would make any policy of insurance void or voidable but, for
                  the avoidance of doubt, shall not take out any new or extend
                  any current policy of insurance for a period in excess of one
                  month; or

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                                       12

         4.2.12   take any action in relation to any contract with British
                  Waterways or Ente Sardo Acquedottie Fognature or any other
                  contract material (or which might reasonably be expected to be
                  material) to the business of Ultramast; or

         4.2.13   bring any claim, action or proceeding against Marconi, RTS or
                  RG; or

         4.2.14   agree, conditionally or otherwise, to do any of the foregoing;
                  or

         4.2.15   take any action which might reasonably be expected adversely
                  to affect the ability of the Court to approve the Capital
                  Reduction.

4.3      Ultramast undertakes to Marconi and RTS that it shall not, without the
         prior consent (in writing or by e-mail) of both of them, take any
         action of the kind described in sub-clause 4.1 or 4.2 above or in
         clause 11.1 of the Ultramast Agreement.

4.4      Within two days of the date of this agreement, Ultramast shall:

         4.4.1    pay to RTS (and, if applicable, its Affiliates) the aggregate
                  sum of L1,641,000 in respect of goods or services provided by
                  RTS or its Affiliates up to and including 30th September, 2002
                  and validly invoiced prior to the date of this agreement; and

         4.4.2    pay to Marconi (and, if applicable, its Affiliates) the
                  aggregate sum of Y60,000 in respect of goods or services
                  provided by Marconi or its Affiliates up to and including 30th
                  September, 2002 and validly invoiced prior to the date of this
                  agreement,

         and, in either such case, receipt by RTS or, as the case may be,
         Marconi (or, if applicable, their respective Affiliates), shall be a
         sufficient discharge by Ultramast of its obligations to pay such sums.

4.5      Notwithstanding the terms of this clause 4, in the period from the date
         of this agreement until Completion, Ultramast shall discharge promptly
         any invoices (other than those invoices referred to in sub-clause 4.4)
         properly raised pursuant to Purchase Orders or pursuant to sub-clause
         10.2.

4.6      Each of Marconi and RTS shall use all reasonable endeavours to procure
         in so far as it is able that the Accounts are audited, approved by the
         board of directors of Ultramast and signed by a director of Ultramast
         by not later than the date of this agreement. For the avoidance of
         doubt only, the approval by the board of directors of Ultramast of the
         Accounts shall not constitute or be deemed to constitute an approval of
         such Accounts by RTS or Marconi or admission by RTS or Marconi of any
         counter claim or claim previously raised by either of them or
         Ultramast.

4.7      In the period from the date of this agreement until Completion, RTS may
         engage in discussions with third parties in relation to the acquisition
         of the Ordinary Shares registered in the name of RTS and may pass
         confidential information relating to Ultramast and its business
         (including, to the extent lawfully permitted by their terms, copies of
         agreements between Ultramast on the one hand and third parties on the
         other) in connection with such discussions to such third parties,
         provided always that such discussions do not adversely affect the
         ability of Ultramast either to carry out the Capital Reduction in
         accordance with the Reduction Timetable or to conduct its business in
         the ordinary course and provided further that any such third party is
         required to enter into confidentiality undertakings for the benefit of
         Ultramast in respect of any confidential information so passed to it.

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                                       13

4.8      Ultramast shall make any request for the consent of Marconi and RTS
         under sub-clause 4.2 or 4.3 in writing or by e-mail, followed on the
         same day by a confirmatory telephone call:

         4.8.1    in the case of Marconi, to Tony Robinson (or, in his absence,
                  to Will Johnson or, in his absence, to Chris Chapple); and

         4.8.2    in the case of RTS, to Richard Womersley-Smith (or, in his
                  absence, to Simon Osborne).

4.9      Each of Marconi and RTS shall reply to any request for consent given in
         accordance with sub-clause 4.8.1 or 4.8.2 (as the case may be) within
         three business days of receipt of that request. In the event that
         Marconi or RTS fails to reply within this period, Marconi or RTS (as
         the case may be) shall be deemed to have consented to that request.

4.10     Each of Marconi and RTS shall procure that Ultramast shall, conditional
         upon the Court making the Reduction Order, allot and issue to Marconi
         at par fully paid the Initial Marconi Deferred Shares and allot and
         issue to RTS at par fully paid the Initial RTS Deferred Shares.

4.11     At any time in the period from the date of this agreement until
         Completion, RTS may, provided that it has complied with clause 22.1 of
         the Ultramast Agreement, transfer all, but not some only, of the
         Ordinary Shares registered in the name of RTS to another company within
         its group (as defined in section 170 of the Taxation of Chargeable
         Gains Act 1992) (an "RTS GROUP COMPANY") provided always that such
         transfer does not adversely affect the ability of Ultramast either to
         carry out the Capital Reduction in accordance with the Reduction
         Timetable or to conduct its business in the ordinary course and further
         provided that the RTS Group Company and the other parties to this
         agreement have entered into a deed of adherence substantially in the
         form set out in Schedule 7 and that RTS procures that the RTS Group
         Company complies with its obligations under that deed of adherence. The
         parties to this agreement hereby undertake and agree to enter into the
         deed of adherence immediately following the entry into such deed by the
         RTS Group Company.

5.       CAPITAL REDUCTION

5.1      Each of Marconi and RTS shall:

         5.1.1    as soon as reasonably practicable after the date of this
                  agreement but, in any event, not later than 20th December,
                  2002, sign a shareholders' written resolution of Ultramast to
                  authorise Ultramast, in accordance with sections 135 to 141 of
                  the Companies Act 1985, to:

                  (a)      reduce the amount standing to the credit of its share
                           premium account for the purpose of creating a reserve
                           against which to write off the accumulated deficit on
                           the profit and loss reserve on its balance sheet;

                  (b)      reduce its share capital and share premium account
                           through the cancellation of the Marconi Reduction
                           Shares and, subject to sub-clause 5.5, the RTS
                           Reduction Shares; and

                  (c)      repay to Marconi out of Ultramast's share capital and
                           its share premium account the MARCONI REDUCTION
                           AMOUNT and repay, subject to sub-clause

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                                       14

                           5.5, to RTS out of Ultramast's share capital and its
                           share premium account the RTS Reduction Amount

                  (the "CAPITAL REDUCTION"); and

         5.1.2    exercise all powers and rights available to it to procure that
                  Ultramast makes an application to the Court pursuant to
                  section 136 of the Companies Act 1985 for an order confirming
                  the Capital Reduction,

         provided that the timing of the compliance by Marconi and RTS with
         their respective obligations under sub-clause 5.1 shall be conditional
         upon the Accounts having been audited and signed as referred to in
         sub-clause 4.6.

5.2      Marconi and RTS shall use their respective reasonable endeavours to
         procure (insofar as they are able) that, in furtherance of the Capital
         Reduction, Ultramast shall take the steps set out in the Reduction
         Timetable and shall use all reasonable endeavours to ensure that those
         steps are taken in accordance with the Reduction Timetable including,
         without limitation, instructing professional advisers to deal with all
         aspects of the Capital Reduction in accordance with the Reduction
         Timetable and undertaking all necessary due diligence into the creditor
         position of Ultramast.

5.3      The day to day legal aspects of the Capital Reduction shall be dealt
         with by RTS's Solicitors (as instructed by Ultramast) in consultation
         with Marconi's Solicitors. RTS shall notify Marconi as soon as it
         becomes aware of any reason why the Capital Reduction may not take
         place either at all or in accordance with the Reduction Timetable. In
         the event of such a notification, Marconi and RTS shall work together
         in good faith with a view to ensuring (insofar as is possible) that the
         Capital Reduction is nevertheless completed and in accordance with, or
         as nearly as is reasonably practicable in accordance with, the
         Reduction Timetable.

5.4      Subject to Ultramast having complied with its obligations under
         sub-clauses 4.4 and 4.5, each of Marconi, RTS and RG shall, and in
         respect of its Affiliates (other than, in the case of Marconi, Marconi
         Communications SpA) shall exercise all powers and rights available to
         it to procure that those Affiliates shall, consent in its capacity as
         creditor to Ultramast to the Capital Reduction and shall take all such
         action and sign all such documents as may reasonably be required to
         satisfy the requirements of the Court under section 137(1) of the
         Companies Act 1985 including, without limitation, agreeing to
         subordinate any claims it may have against Ultramast to the claims of
         any other creditor of Ultramast who does not give such a consent.

5.5      If the level of the actual or contingent creditors of Ultramast is such
         that the Capital Reduction cannot, or is unlikely (based on the advice
         of Queen's Counsel instructed in relation to the Capital Reduction) to,
         be confirmed by the Court:

         5.5.1    the RTS Reduction Amount shall be reduced to such sum, being a
                  multiple of L52,278, as shall allow the Capital Reduction to
                  be confirmed by the Court (based on the advice of Queen's
                  Counsel instructed in relation to the Capital Reduction); and

         5.5.2    the RTS Reduction Shares shall be reduced to the number of
                  Ordinary Shares registered in the name of RTS as would be
                  cancelled on a repayment to RTS of the RTS Reduction Amount
                  (as reduced in accordance with sub-clause 5.5.1) on the basis
                  of L52,278 per Ordinary Share.

<PAGE>

                                       15

5.6      Ultramast undertakes that it shall, to the extent contemplated by this
         agreement, progress the Capital Reduction with all due care and in
         accordance so far as is practicable with the Reduction Timetable.

5.7      Upon receipt of the Reduction Order, Ultramast undertakes that it shall
         not lodge the sealed Reduction Order with the Registrar until
         Completion.

5.8      Notwithstanding any other provision of clause 5, each of Marconi, RTS
         and Ultramast shall take all steps, measures and actions available to
         it to procure (so far as it is able) that Condition 2.1.1 is satisfied
         within the time specified for its satisfaction and that Marconi is paid
         the MARCONI REDUCTION AMOUNT in full under the Capital Reduction in
         accordance with the Reduction Timetable.

6.       CONSENT ORDER

6.1      On the date of this agreement, each of Marconi and RTS shall sign
         (through Marconi's Solicitors and RTS's Solicitors respectively) the
         Consent Order, which shall be held by Marconi's Solicitors to the joint
         order of Marconi and RTS until the Approval Time, whereupon Marconi's
         Solicitors shall lodge it with the Court for the Court's approval (if
         required) and sealing. A copy of the signed Consent Order (marked as
         such) shall be provided to Ultramast and RTS.

6.2      If the Court requires a hearing prior to sealing the Consent Order,
         Marconi and RTS shall use all reasonable endeavours to arrange such
         hearing in accordance with the Reduction Timetable.

6.3      Upon receipt by Marconi's Solicitors of the Sealed Consent Order, it
         shall be copied by Marconi's Solicitors to RTS's Solicitors. Marconi
         and RTS agree that no request for payments out of Court in accordance
         with the Sealed Consent Order shall be made by either of them other
         than at Completion and in accordance with sub-clauses 7.3.1 and 7.4.2
         or as Marconi and RTS otherwise agree.

6.4      Marconi and RTS each acknowledge that, of the L19,186,026 which
         will become payable to Marconi pursuant to the terms of the Consent
         Order, L4,000,000 will, if Completion occurs, be payable in full
         and final settlement of Marconi's counterclaims in the Action in
         respect of sums payable and damages claimed under the Ultramast
         Agreement and L15,186,026 will, if Completion occurs, be payable
         in full and final settlement of Marconi's counterclaims in the Action
         in respect of sums payable and damages claimed under the Ipsaris
         Agreement.

6.5      In accordance with the terms of the Easynet Put Option, RTS covenants
         with Marconi that, subject to the provisions of the Easynet Put Option
         and subject to any disposal effected by Marconi and any encumbrance
         arising as a result of any action on the part of Marconi, as at the
         Approval Time and immediately prior to Completion, it will have the
         right to sell and transfer to Marconi the full legal and beneficial
         interest in the Easynet Shares, free from liens, charges, equities and
         encumbrances and together with all rights attaching to them.

6.6      Marconi covenants with Ultramast that as at the Approval Time and
         immediately prior to Completion it will have full legal and beneficial
         title to the Marconi Reduction Shares free from liens, charges,
         equities and encumbrances. RTS covenants with Ultramast that as at the
         Approval Time and immediately prior to Completion it will have full
         legal and beneficial title to the RTS Reduction Shares free from liens,
         charges, equities and encumbrances.

<PAGE>

                                       16

7.       COMPLETION

7.1      Completion shall take place at the offices of Marconi's Solicitors on
         the business day following the date on which all of the Conditions are
         satisfied or at such other time and place as Marconi and RTS may agree.

7.2      At Completion Ultramast shall:

         7.2.1    lodge the Reduction Order with the Registrar;

         7.2.2    upon notification that the Registrar has registered the
                  Reduction Order, pay to Marconi the MARCONI REDUCTION AMOUNT
                  and pay to RTS the RTS Reduction Amount;

         7.2.3    pay to RTS (or, as the case may be, its Affiliates) all sums
                  outstanding from Ultramast to RTS or any of its Affiliates
                  under invoices properly raised pursuant to Purchase Orders;

         7.2.4    pay to Marconi (or, as the case may be, its Affiliates) all
                  sums outstanding from Ultramast to Marconi or any of its
                  Affiliates under invoices properly raised pursuant to Purchase
                  Orders and any sums owing pursuant to sub-clause 10.2;

         7.2.5    deliver to Marconi a share certificate representing the
                  Initial Marconi Deferred Shares and deliver to RTS a share
                  certificate representing the Initial RTS Deferred Shares; and

         7.2.6    lodge with the Registrar a Form 88(2) in respect of the
                  Initial Marconi Deferred Shares and the Initial RTS Deferred
                  Shares.

7.3      At Completion, RTS shall:

         7.3.1    authorise Marconi's Solicitors to lodge the Sealed Consent
                  Order with the Court together with a request for payment in
                  accordance with its terms;

         7.3.2    pay to Ultramast the RTS Subscription Monies;

         7.3.3    deliver to Ultramast the share certificates representing the
                  RTS Reduction Shares; and

         7.3.4    to the extent necessary, irrevocably release to Marconi the
                  stock transfer form transferring the Easynet Shares to Marconi
                  and the share certificate in respect of the Easynet Shares.

7.4      At Completion, Marconi shall:

         7.4.1    deliver to Ultramast the share certificates representing the
                  Marconi Reduction Shares;

         7.4.2    authorise Marconi's Solicitors to lodge the Sealed Consent
                  Order with the Court together with a request for payment in
                  accordance with its terms;

         7.4.3    pay to Ultramast the Marconi Subscription Monies; and

<PAGE>

                                       17

         7.4.4    deliver to Ultramast the resignations of Tony Robinson and, if
                  requested by RTS, Andrew Elliman and/or any other director of
                  Ultramast appointed by Marconi under the Ultramast Agreement
                  as a director of Ultramast, in each case acknowledging under
                  seal that he has no claim against Ultramast whether for loss
                  of office or otherwise.

7.5      All payments to be made under this agreement to RTS shall be made,
         without deduction or set-off, by telegraphic transfer to the client
         account of RTS's Solicitors and all payments to be made under this
         agreement to Marconi shall be made, without deduction or set-off, by
         telegraphic transfer to the bank account of Marconi which has been
         notified to RTS, RG or Ultramast (as the case may be), save for any
         payment due to Marconi to be received from the Court which shall be
         made to the client account of Marconi's Solicitors.

7.6      Ultramast covenants to Marconi that it shall not, and RTS covenants to
         Marconi that it shall procure that Ultramast shall not, sell, transfer
         or otherwise dispose of the whole or substantially the whole of its
         business and undertaking to a person which is not an Affiliate of
         Ultramast or of Marconi plc prior to 30th September, 2004. RTS
         undertakes that prior to any transfer of any interest in the shares
         held by it in Ultramast it shall secure, for the benefit of Marconi, a
         covenant and undertaking from the transferee in identical terms,
         mutatis mutandis, to the covenant and undertaking imposed on it under
         this clause, whereupon it shall be released from its covenant under
         this clause, provided that where RTS transfers an interest in some but
         not all of the shares held by it in Ultramast, it shall secure a
         covenant and undertaking from each separate transferee in identical
         terms, mutatis mutandis, and shall only be released from its covenant
         under this clause once it has transferred all shares (other than
         Deferred Shares) held by it in Ultramast.

7.7      Marconi and RTS each acknowledge that, subject to the parties having
         complied with their respective obligations at Completion, Marconi shall
         be deemed to have satisfied the price payable to RTS under the Easynet
         Put Option in respect of the Easynet Shares and Marconi shall be
         entitled to be registered as the registered holder of the Easynet
         Shares.

8.       TERMINATION OF CERTAIN AGREEMENTS

8.1      Upon each of the parties having complied with its obligations at
         Completion:

         8.1.1    the Ultramast Agreement shall terminate and be of no further
                  effect save that, notwithstanding any other provision of the
                  Ultramast Agreement or this agreement and regardless of any
                  continuation of any Marconi shareholding in Ultramast, the
                  provisions of clause 14.2 of the Ultramast Agreement, together
                  with any other provisions of the Ultramast Agreement necessary
                  for the interpretation, operation or enforcement of that
                  clause, shall continue to apply until 31st December, 2004
                  (provided that the words "own or" shall be deemed to have been
                  deleted from sub-clause 14.2(B) of the Ultramast Agreement),
                  whereupon those clauses shall terminate and be of no further
                  effect;

         8.1.2    as between Marconi and RTS, the Ipsaris Agreement shall
                  terminate and be of no further effect;

         8.1.3    the English Mast Agreement shall terminate and be of no
                  further effect; and

         8.1.4    the Scottish Mast Agreement shall terminate and be of no
                  further effect.

<PAGE>

                                       18

8.2      On Completion, Marconi shall use its reasonable endeavours to cause
         Easynet to procure that Ipsaris agrees to the termination, without
         liability to Ultramast or RTS, of all the agreements entered into
         between Ipsaris and Ultramast or RTS, provided that Marconi shall not
         be required to take any action which may constitute a breach of:

         8.2.1    paragraph 3.12 or 9.34 of the listing rules issued from time
                  to time by the United Kingdom Listing Authority for the
                  purposes of Part VI of the Companies Act 1985; or

         8.2.2    a relationship agreement dated 26th June, 2001 between Marconi
                  and Easynet.

8.3      Marconi confirms that the relationship agreement referred to in
         sub-clause 8.2.2 provides that Marconi shall exercise all powers of
         control in relation to itself and its associates so as to ensure to the
         extent it is able through its exercise of such powers that at all times
         Easynet and Ipsaris are capable of carrying on, and do carry on, their
         business independently of Marconi and any of its associates.

8.4      For the avoidance of doubt, nothing in this agreement shall affect any
         agreement between Ipsaris on the one hand and RTS, RG or Ultramast on
         the other hand.

8.5      On and after Completion, Marconi undertakes to RTS and Ultramast that
         it shall not, and shall procure that its Affiliates shall not,
         knowingly seek to exert any influence or control it may have, pursuant
         to any contract with British Waterways, over British Waterways in
         relation to Ultramast provided that this sub-clause shall not have any
         effect in relation to a letter dated 26th April, 2001 from Marconi plc
         to British Waterways.

8.6      Marconi shall no later than 5 days from the date of this agreement
         notify (in accordance with the Oracle Agreement) Oracle Corporation UK
         Limited of the transaction contemplated by this agreement and shall use
         its reasonable endeavours to procure (including expressly requesting
         the same) that Oracle Corporation UK Limited treats the 30 software
         licences which are the subject of the Participation Agreement as
         Transferable Licences (within the meaning of the Oracle Agreement) and
         grants to Ultramast a New License Agreement (as defined in the Oracle
         Agreement) at no cost to Ultramast (other than the payment of any
         charges for Services (within the meaning of the Oracle Agreement) for
         the next following annual support period, it being agreed as between
         Marconi and Ultramast that, other than the aggregate sum of
         L20,000 (part of which was invoiced in November, 2002 and part of
         which is to be invoiced in February, 2003) together with the sum of
         approximately L2,000 to be invoiced in December, 2003, Ultramast
         has paid for support in the period up to and including 31st December,
         2002). On and after Completion, notwithstanding any other provision of
         this agreement, the Participation Agreement shall continue in full
         force and effect for a period of 12 months from the date of Completion
         (or, if earlier, until the grant of the New License Agreement),
         whereupon it shall terminate and be of no further effect, save in
         respect of any rights of Marconi or Ultramast accrued under it.

8.7      RTS and RG shall each use all reasonable endeavours to procure that
         Railtrack plc agrees that the exclusivity provisions contained in the
         clauses headed "non-competition" in each of the Railtrack Agreements
         shall remain in full force and effect notwithstanding that Marconi may
         cease to hold 10 per cent. of the share capital of Ultramast.

8.8      On Completion, Marconi undertakes that it shall not (and shall procure
         that its Affiliates shall not), until 31st December, 2004, either on
         its own account or in conjunction with or on behalf of any person, firm
         or company, solicit or endeavour to entice away from Ultramast any

<PAGE>

                                       19

         person who is an officer, manager or employee of the operational
         telecoms staff of Ultramast, whether or not such a person would commit
         a breach by reason of leaving service or office, provided that this
         sub-clause shall not apply in respect of Andrew Elliman or Simon Ralph,
         except to the extent that either of them becomes an employee of
         Ultramast or an Affiliate of Ultramast on or after Completion.

9.       DEFERRED SHARES

9.1      For the purposes of this clause, a "REORGANISATION" shall mean:

         9.1.1    a sub-division or consolidation of the Ordinary Shares;

         9.1.2    a distribution or other capital reorganisation (whether by way
                  of bonus, capitalisation or otherwise) by Ultramast; or

         9.1.3    any event in relation to the Ordinary Shares or the Deferred
                  Shares having a dilutive effect in the proportion of the
                  Deferred Shares in relation to the total number of shares in
                  the capital of Ultramast.

9.2      In the event of a Reorganisation following Completion, such that
         Marconi would cease to hold 10 per cent. of the nominal value of all
         the shares in the capital of Ultramast, Marconi shall subscribe at par
         for such further number of Deferred Shares as would result in Marconi
         continuing to hold 10 per cent. of the nominal value of all the shares
         in the capital of Ultramast (the "FURTHER MARCONI DEFERRED SHARES"),
         provided that:

         9.2.1    RTS shall pay to Marconi a sum equal to the subscription price
                  of the Further Marconi Deferred Shares;

         9.2.2    Marconi shall not be obliged to subscribe the Further Marconi
                  Deferred Shares where such a subscription would have any
                  adverse tax or accounting consequences for Marconi or its
                  Affiliates; and

         9.2.3    RTS shall reimburse Marconi for all of its legal and other
                  professional costs and expenses incurred in dealing with the
                  subscription for the Further Marconi Deferred Shares.

9.3      RTS grants to Marconi an option to require RTS to purchase all of the
         Deferred Shares from time to time issued to Marconi on the terms and
         subject to the conditions set out in Schedule 3 (the "PUT OPTION") and
         Marconi grants to RTS an option to purchase from Marconi all of the
         Deferred Shares from time to time issued to Marconi on the terms and
         subject to the conditions set out in Schedule 3 (the "CALL OPTION").
         The Put Option and the Call Option shall both lapse and cease to be of
         any further effect on the date being the thirtieth anniversary of the
         date of this agreement.

10.      SECONDMENT ARRANGEMENT

10.1     The Secondment Arrangement shall terminate on Completion and be of no
         further effect.

10.2     Marconi shall recharge to Ultramast the Employment Costs which accrue
         up to Completion on exactly the same basis it has done to date under
         the Secondment Arrangement. Ultramast

<PAGE>

                                       20

         shall not be responsible for any Employment Costs in relation to the
         Employees other than the Employment Costs which accrue up to
         Completion.

10.3     With effect from Completion and unless the Employees take up employment
         with Ultramast and/or its Affiliates following Completion, Marconi
         shall perform and discharge all obligations in respect of the Employees
         arising on or after Completion and shall be responsible for all costs
         and liabilities in relation to the Employees arising on or after
         Completion including all costs and liabilities (whether or not these
         costs or liabilities relate to the period of the Secondment
         Arrangement) in relation to any termination of the Employees'
         employment with Marconi or its Affiliates and termination of the
         Secondment Arrangement; and

10.4     Marconi hereby undertakes to indemnify Ultramast against those costs
         and liabilities which it is obliged to discharge under sub-clause 10.3.

10.5     The total aggregate liability of Marconi under sub-clauses 10.3 and
         10.4 shall not exceed the sum of L300,000.

11.      CONFIDENTIALITY

11.1     The terms of this agreement shall be held in complete confidence by
         each of the parties and shall not be disclosed to any other person
         except:

         11.1.1   to the auditors and to the legal advisers of that party to
                  whom the confidentiality obligations set out in this agreement
                  shall extend; or

         11.1.2   where that party is under a legal or regulatory obligation to
                  make such disclosure, but limited to the extent of that legal
                  or regulatory obligation; or

         11.1.3   to the extent that it is already in the public domain (other
                  than as a result of a party's breach of this agreement) or to
                  the extent required by a Court of competent jurisdiction; or

         11.1.4   with the prior written consent of the other parties to this
                  agreement, such consent not to be unreasonably withheld; or

         11.1.5   to the Creditors' Committees who may, for the avoidance of
                  doubt, disclose the terms to any lender to Marconi or any
                  holder of any bond issued by Marconi; or

         11.1.6   to the shareholders of a party, in response to a specific
                  question raised by such a shareholder at a general meeting of
                  that party; or

         11.1.7   to the extent required for the purposes of the Court
                  considering or hearing the Capital Reduction.

11.2     The parties shall take all reasonable steps to make their employees and
         agents aware of the terms of sub-clause 11.1 and to instruct them to
         observe those terms.

11.3     If none of the exceptions at sub-clauses 11.1.1 to 11.1.7 apply and a
         party is asked about the Action or this agreement, the party shall
         respond in accordance with the questions and answers in the agreed form
         and no more.

<PAGE>

                                       21

12.      NON-ADMISSION OF LIABILITY

         Save for sub-clause 6.4, none of the parties makes any admission of
         liability whether by entering into this agreement or otherwise and no
         party shall claim that any other party has admitted any liability by
         entering into this agreement.

13.      PRESS RELEASE

         Marconi and RTS shall each release a press release in the agreed form
         following signature of this agreement.

14.      BREACH

         Each of the parties individually and severally acknowledges, having
         regard to the nature of this settlement, that damages would not be an
         adequate remedy for any breach of this agreement and that the remedies
         of injunction, specific performance and other equitable relief for any
         threatened or actual breach of this agreement should lie to enforce any
         of the obligations herein. Notwithstanding the provisions of this
         clause but without prejudice to the provisions of clause 2, no party
         shall have any right to rescind or otherwise to terminate this
         agreement.

15.      WARRANTY OF AUTHORITY

         Each of the parties warrants to the others that this agreement
         constitutes its legal, valid and binding obligation and that it has
         full power and authority to enter into and perform, and has taken all
         necessary action to authorise its entry into and performance of this
         agreement.

16.      THIRD PARTY RIGHTS

         Save in respect of clause 3, a person who is not a party to this
         agreement shall have no right under the Contracts (Rights of Third
         Parties) Act 1999 to enforce any of its terms. Clause 3 may be varied
         or terminated by agreement between the parties without the consent of
         any person.

17.      FURTHER ASSURANCE

17.1     Each party shall execute and do (or procure to be executed and done by
         any other necessary party) all such deeds, documents, acts and things
         and exercise all rights and powers available to it in respect of any
         other person as may from time to time reasonably be required in order
         to give full effect to this agreement.

17.2     Each party hereby gives all consents necessary to the transactions
         contemplated by this agreement including, without limitation, all
         consents required under the Ultramast Agreement.

<PAGE>

                                       22

18.      GENERAL

18.1     Each party shall bear its own costs in connection with the negotiation,
         execution and implementation of this agreement.

18.2     This agreement shall be binding on the parties, their successors and
         assigns and the name of a party appearing herein shall be deemed to
         include the names of any such successor or assign.

18.3     Each party confirms that this agreement sets out the entire agreement
         and understanding between the parties in relation to the subject matter
         hereof. Each of the parties acknowledges that no representation
         (including pre-contractual negligent and innocent misrepresentations)
         of any nature has been made to that party or relied upon by that party
         in connection with or in relation to this settlement, except as set out
         in this agreement and each of the parties irrevocably waives all rights
         and remedies which, but for this sub-clause, might otherwise be
         available to it in respect of any such representation. This clause
         shall not limit or exclude any liability for fraud.

18.4     This agreement may be executed in any number of counterparts, all of
         which, taken together, shall constitute one and the same agreement and
         any parties may enter into this agreement by executing a counterpart.

18.5     This agreement shall be governed by and shall be construed in
         accordance with English law. The parties submit to the exclusive
         jurisdiction of the English Courts for the purpose (but solely for the
         purpose) of any action to enforce the terms of this agreement.

18.6     Save as may be specifically provided by this agreement, none of the
         rights or obligations under this agreement may be assigned,
         transferred, held on trust or otherwise dealt with in any way without
         the prior written consent of all of the parties.

18.7     A waiver (whether express or implied) by one of the parties of any of
         the provisions of this agreement or of any breach of or default by any
         other party in performing any of those provisions shall not constitute
         a continuing waiver and that waiver shall not prevent the waiving party
         from subsequently enforcing any of the provisions of this agreement not
         waived or from acting on any subsequent breach of or default by any
         other party under any of the provisions of this agreement.

18.8     The invalidity, illegality or unenforceability of any of the provisions
         of this agreement shall not affect the validity, legality or
         enforceability of the remaining provisions of this agreement.

19.      THE LIQUIDATORS

19.1     The Liquidators are entering into and signing this agreement as agents
         of RG and have been acting in that capacity in the negotiation,
         preparation and implementation of this agreement.

19.2     The Liquidators and their staff, employees, advisers and agents shall
         incur no personal liability whatsoever in respect of any matter
         referred to in this agreement or any other deed, instrument or document
         entered into pursuant to it and, without prejudice to the generality of
         the foregoing, in respect of any of the obligations undertaken by RG or
         in respect of any failure on the part of RG to observe, perform or
         comply with any such obligations or in relation to any associated
         arrangements or negotiations whether such liability would arise under
         the Insolvency Act 1986 or otherwise howsoever and any liability to
         which the

<PAGE>

                                       23

         Liquidators or their staff, employees, advisers and agents would
         otherwise be subject (whether in contract, tort or otherwise) is
         expressly excluded.

19.3     Without prejudice to clause 15 and sub-clause 18.3, in favour of the
         Liquidators and RG, all representations (including pre-contractual
         negligent and innocent misrepresentations) and warranties express or
         implied, and whether statutory or otherwise, relating to the subject
         matter of this agreement are excluded.

19.4     Any claim against RG and/or against the Liquidators, or their firm or
         their partners, employees, agents advisers or representatives shall, in
         any event, notwithstanding the above exclusions of liability, be
         irrevocably waived unless made in writing by notice to the Liquidators
         not later than 90 days after the date hereof, the first day of such 90
         days' period to be the day immediately following the date hereof.

19.5     The exclusion of liability in this agreement shall:

         19.5.1   arise and continue notwithstanding the termination of the
                  Liquidators' agency before or after the signing of this
                  agreement and shall operate as waivers of any claims in tort
                  as well as under the law of contract;

         19.5.2   be in addition to and not in substitution for and
                  notwithstanding any right of indemnity or relief otherwise
                  available; and

         19.5.3   continue after Completion.

19.6     The parties further acknowledge and agree that the Liquidators are
         parties to this agreement in their personal capacities only for the
         purposes of receiving the benefit of the exclusions and limitations in
         their favour in this agreement.

19.7     Nothing in this agreement shall operate to restrict or affect in any
         way any right of the Liquidators to an indemnity or to a lien whether
         under section 234 of the Insolvency Act 1986 or otherwise howsoever.

19.8     The Liquidators shall be entitled to retain all such records and
         documents relating to RG or its business or any of its assets as are
         necessary to perform and complete their duties as Liquidators and the
         other parties to the agreement shall render such assistance to the
         Liquidators and their representatives and agents as the Liquidators may
         reasonably require to perform and complete such duties in so far as
         they relate specifically to this settlement deed and directly related
         matters.

19.9     The exclusions and limitations contained in this agreement shall not
         apply in the case of any fraudulent misrepresentation made by RG or the
         Liquidators or their respective agents or insofar as any action against
         any of them is based upon the fraud of RG or the Liquidators or their
         respective agents (and for these purposes "fraud" includes the
         deliberate concealment (to be construed by reference to section 32(2)
         of the Limitation Act 1980) of any fact relevant to any right of action
         against RG or the Liquidators) save insofar as they satisfy the
         requirement of reasonableness as stated in the Unfair Contract Terms
         Act 1977 or, where applicable, would satisfy the requirement of
         reasonableness were references to periods of time to be construed as
         running from the discovery of the fraud or concealment (as the case may
         be) in which event such references shall be so construed.

<PAGE>

                                       24

20.      INDEMNITIES

20.1     Marconi shall indemnify and hold harmless each of Ultramast and RTS or
         the New Party (as defined in the Form of Deed of Adherence in Schedule
         7) and, to the extent applicable, their respective Affiliates against
         all actual costs, claims, demands and expenses (including reasonable
         legal costs and expenses) of whatever nature incurred or suffered by
         it, and arising out of any claim, action or proceeding taken or issued
         by or on behalf of British Waterways (or its predecessors) against
         Ultramast, RTS, Marconi or Marconi plc solely to the extent that such
         claim, action or proceeding is in respect of a letter dated 26th April,
         2001 from Marconi plc to British Waterways or in connection with the
         relationship between Marconi plc and British Waterways created by that
         letter (a "BW CLAIM"), provided always that:

         20.1.1   Ultramast and/or RTS (as the case may be) shall promptly, and
                  in any event within seven days, notify Marconi in writing of
                  any BW Claim of which it becomes aware;

         20.1.2   Marconi shall, at its expense, be entitled to have the conduct
                  of and/or settle all negotiations and litigation arising from
                  any BW Claim to the extent that such negotiations and
                  litigation relate to the BW Claim;

         20.1.3   Ultramast and/or RTS shall, and shall procure so far as they
                  are able that their Affiliates shall, at Marconi's request and
                  with Marconi reimbursing Ultramast, RTS and/or any Affiliate
                  (as the case may be) for all costs and expenses (including
                  reasonable legal costs and expenses) reasonably incurred, give
                  Marconi all assistance reasonably requested by Marconi
                  (including, without limitation, giving access to such
                  employees, documents and records as Marconi may reasonably
                  require provided that such access would not result in RTS
                  and/or Ultramast and/or their respective Affiliates waiving or
                  losing the benefit of any legal privilege they would otherwise
                  have in respect of such employees, documents and records);

         20.1.4   if a BW Claim does not include RTS, Ultramast or any of their
                  Affiliates as a named party to any such claim, action or
                  proceeding, Marconi shall not be obliged to pay the costs,
                  claims, demands or expenses of Ultramast, RTS and/or any of
                  their Affiliates unless it has first received notification of
                  the intention to incur such amounts and Marconi has given its
                  prior written consent to the incurrence of such amounts (such
                  consent not to be unreasonably withheld or delayed);

         20.1.5   neither Ultramast nor RTS shall make any admission of
                  liability or agree to any settlement or compromise of any BW
                  Claim or incur any costs or expenses in relation to a BW Claim
                  except with the prior written consent of Marconi;

         20.1.6   the Liquidators will, while Marconi has conduct of claims as
                  contemplated in this sub-clause 20.1, be kept fully informed
                  of the process and progress of any such negotiation and/or
                  litigation and will be permitted reasonable access to the
                  legal counsel(s) conducting such negotiation and/or litigation
                  for or on behalf of Marconi; and

         20.1.7   the total aggregate liability of Marconi under this sub-clause
                  20.1 shall not exceed L10,000,000.

20.2     RTS, Marconi and Ultramast shall use their respective reasonable
         endeavours to procure, insofar as they are respectively able, that Ente
         Sardo Acquedottie e Fognature ("ESAF") agrees to the termination of an
         agreement dated 30th July, 2002 between ESAF and

<PAGE>

                                       25

         Ultramast (the "CONVENTION") without any liability on the part of
         Ultramast. In using their respective reasonable endeavours to procure
         termination of the Convention, none of RTS, Marconi or Ultramast shall
         make any payment to ESAF without the prior written consent of both RTS
         and Marconi (such consent not to be unreasonably withheld). RTS,
         Marconi and Ultramast shall consult each other with regard to actions
         to be taken to achieve such termination, and shall co-operate with each
         other in good faith with a view to securing, insofar as the parties are
         respectively able, such termination prior to Completion.

20.3     If such termination in a manner reasonably satisfactory to both RTS and
         Marconi (the "REQUIRED TERMINATION") is not achieved prior to
         Completion and Ultramast is required to pay any sum to ESAF (other than
         sums specifically provided for in respect of ESAF in the witness
         statement prepared in connection with the Capital Reduction) in respect
         of the Convention or any leases required to be entered into pursuant to
         it, including as a result of breach or otherwise non-compliance with
         the terms of the Convention (an "ESAF PAYMENT"), Marconi shall
         indemnify and hold harmless RTS against 50 per cent. of all such ESAF
         Payments, provided always that:

         20.3.1   Ultramast and/or RTS (as the case may be) shall promptly, and
                  in any event within seven days, notify Marconi in writing of
                  any ESAF Payment of which it becomes aware;

         20.3.2   RTS, Marconi and Ultramast agree that no steps will be taken
                  by any of them in relation to the Convention or Ultramast's
                  relationship with ESAF, without the prior written consent of
                  both RTS and Marconi (such consent not to be unreasonably
                  withheld);

         20.3.3   in no event shall Marconi's liability under this indemnity,
                  whether in relation to one or more ESAF Payments, exceed in
                  aggregate L1.68 million;

         20.3.4   this indemnity shall only subsist so long as Ultramast remains
                  a subsidiary of either RTS or the New Party (as defined in the
                  Form of Deed of Adherence in Schedule 7); and

         20.3.5   this indemnity shall lapse and cease to have effect if the
                  Required Termination is subsequently achieved or if either of
                  Ultramast or RTS build any mast sites pursuant to the terms of
                  the Convention or otherwise take any other material action
                  with respect to their purported obligations thereunder other
                  than seeking the Required Termination.

20.4     Insofar and to the extent that RTS receives a payment from Marconi
         pursuant to the indemnity provided for in sub-clause 20.3, RTS shall
         forward such sum received to Ultramast subject to the deduction of all
         reasonable costs and expenses (including legal costs and expenses)
         incurred in the process of obtaining such payment from Marconi,
         provided always that this sub-clause shall not have the effect of
         increasing the liability of Marconi under sub-clause 20.3 in any way
         whatsoever.

<PAGE>

                                       26

IN WITNESS whereof the parties hereto have caused this deed to be duly executed
and delivered on the date first written above.

EXECUTED as a DEED by                      )
RT GROUP TELECOM SERVICES LIMITED          )       SIMON OSBORNE
acting by                                  )
and                                        )       PAUL WORTHINGTON

EXECUTED as a DEED by                      )
RT GROUP PLC                               )
(IN MEMBERS' VOLUNTARY LIQUIDATION)        )
acting by James Robert Drummond Smith
one of the Liquidators
(as its agent without personal liability)
in the presence of:
                                                              JAMES SMITH
Signature of witness LOUIS ATTRILL
                                                     AS JOINT LIQUIDATION
                                                         RT GROUP PLC
LOUIS ATTRILL                                 (IN MEMBERS VOLUNTARY LIQUIDATION)
Name of Witness
ASHURST MORRIS CRISP
BROADWALK HOUSE
5 APPORD STREET
LONDON, EC2A 2HA
Address

TRAINEE SOLICITOR
Occupation

<PAGE>

                                       27

EXECUTED as a DEED by                      )
RT GROUP TELECOM SERIVCES                  )
LIMITED                                    )       SIMON OSBORNE
acting by A DIRECTOR                       )
and ITS SECRETARY                          )       PAUL WORTHINGTON

EXECUTED as a DEED by RT                   )
GROUP PLC                                  )       JAMES SMITH
(IN MEMBERS' VOLUNTARY                     )
LIQUIDATION                                )
acting by James Robert Drummond Smith      )
one of the liquidators
(as its agent without personal liability)
in the presence of:

Signature of witness

___________________________________
Name of Witness

___________________________________
___________________________________
___________________________________
Address

___________________________________
Occupation

<PAGE>

EXECUTED as a DEED by                                  )
MARCONI CORPORATION PLC                                )       MICHAEL PARTON
acting by                                              )
and                                                    )       CHRIS HOLDEN

EXECUTED as a DEED by                                  )
ULTRAMAST LIMITED                                      )       SIMON OSBORNE
acting by                                              )
and                                                    )       TONY ROBINSON

EXECUTED as a DEED by                                  )
James Robert Drummond Smith                            )            JAMES SMITH
for and on behalf of himself and Nicholas James Dargan )
in the presence of:

LOUIS ATTRILL
Signature of witness

LOUIS ATTRILL
Name of Witness
ASHURST MORRIS CRISP
BROADWALK HOUSE.
5 APPORD STREET
LONDON, EC2A 2HA
Address

TRAINEE SOLICITOR
Occupation

<PAGE>

EXECUTED as a DEED by MARCONI                          )
CORPORATION PLC                                        )        MIKE PARTON
acting by                                              )
and                                                    )

EXECUTED as a DEED by                                  )
ULTRAMAST LIMITED                                      )        SIMON OSBORNE
acting by A DIRECTOR                                   )
and A DIRECTOR                                         )        TONY ROBINSON

EXECUTED as a DEED by                                  )
by James Robert Drummond Smith                         )        JAMES SMITH
one of the liquidators                                 )
for and on behalf of himself and Nicholas James Dargan )
in the presence of:

Signature of witness

___________________________________
Name of Witness

___________________________________
___________________________________
___________________________________
Address

___________________________________
Occupation

<PAGE>

IN THE HIGH COURT OF JUSTICE                            CLAIM NO. 2002 FOLIO 309

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

CLAIMANT                   RAILTRACK TELECOM SERVICES LIMITED

                                       and

DEFENDANT                  MARCONI CORPORATION PLC

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

                                  CONSENT ORDER

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

The Claimant and Defendant having agreed terms of settlement

BY CONSENT

IT IS ORDERED that:

1.       L19,186,026 of the L20,558,903.90 paid into Court by the Defendant on
         15th August, 2002 pursuant to the Order of Morison J dated 25th, July
         2002 shall be paid to the Defendant's solicitors, Allen & Overy;

2.       the balance of the L20,558,903.90 so paid into Court, together with all
         accrued interest on that L20,558,903.90 shall be paid to the Claimant's
         solicitors, Ashurst Morris Crisp;

3.       this action is hereby discontinued; and

4.       there be no order for costs.

Dated this 21st day of February, 2003

<PAGE>

                                                       CLAIM NO. 2002 FOLIO 309

                                                   IN THE HIGH COURT OF JUSTICE

                                                          QUEEN'S BENCH DIVISION

                                                                COMMERCIAL COURT

                                           CLAIMANT    RAILTRACK TELECOM
                                                       SERVICES LIMITED

                                                                  AND

                                           DEFENDANT   MARCONI CORPORATION
                                                       PLC

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

                                                   CONSENT ORDER

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

                                                   Ashurt Morris Crisp
                                                   Broadwalk House
                                                   5 Appold Street
                                                   London EC2A 2HA

                                                   Ref: JRL
                                                   SOLICITORS FOR THE CLAIMANT

                                                   Allen & Overy
                                                   One New Change
                                                   London EC4M 9QQ

                                                   Ref: SH/IRT
                                                   SOLICITORS FOR THE DEFENDANT

<PAGE>

                                    SCHEDULE 2
                               REDUCTION TIMETABLE

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
          DATE                               ACTION(S)                                   DOCUMENT(S)                  RESPONSIBILITY
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                              <C>                                      <C>
DATE OF THIS AGREEMENT      (1)   Marconi and RTS sign Consent Order (but    (1)   D&T Report                          D&T/U/AMC
UNTIL 20TH DECEMBER, 2002         held by A&O to the order of the parties
                                  pending receipt of the court order         (2)   Instructions to Counsel             AMC
                                  approving the Capital Reduction)
                                                                             (3)   Petition                            AMC/U
                            (2)   Fully investigate the position of
                                  creditors of Ultramast as at date of       (4)   Witness statement                   AMC
                                  witness statement
                                                                             (5)   Certificate of Incorporation and
                            (3)   Draft all court documentation and                Certificates of Incorporation on
                                  circulate to all parties for comment             changes of name                     AMC

                            (4)   Instruct counsel (Martin Moore QC) to      (6)   Memorandum and Articles of
                                  settle all documentation                         Association (including any
                                                                                   changes)                            D&T/U

                                                                             (7)   Accounts

                                                                             (8)   Latest management accounts
                                                                                   (30.09.02)                          U

                                                                             (9)   Evidence of cash balances (e.g.
                                                                                   balance sheet, bank statements)     U

                                                                             (10)  Evidence of how and when loss
                                                                                   arose for purposes of loss
                                                                                   reduction                           AMC

                                                                             (11)  Reduction Order                     AMC/U
</TABLE>

<PAGE>

                                       33

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
          DATE                               ACTION(S)                                   DOCUMENT(S)                  RESPONSIBILITY
------------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                             <C>                                      <C>
                                                                             (12)  Advertisements (one for hearing
                                                                                   and one confirming approval of
                                                                                   reduction)                               AMC

                                                                             (13)  Consent Order (see Schedule 1)           A&O

                                                                             (14)  Application Notice                       AMC

                                                                             (15)  Order for directions                     AMC

                                                                             (16)  Letters of consent to reduction          AMC
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                       34

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
          DATE                               ACTION(S)                                   DOCUMENT(S)                  RESPONSIBILITY
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                              <C>                                      <C>
20TH DECEMBER, 2002         (1)   Marconi and RTS to sign shareholders'      (1)   Shareholders' written resolution
(A.M.)                            written resolution to approve the                (in duplicate)                      AMC
                                  Capital Reduction and amend Articles of
                                  Association                                (2)   Board minutes including
                                                                                   resolutions to approve Accounts,
                            (2)   Board meeting of Ultramast                       management accounts, Capital
                                                                                   Reduction and one director (A.
                            (3)   Director of Ultramast (A. Elliman) to            Elliman) swearing witness
                                  sign witness statement                           statement                           AMC

                                                                             (3)   Witness statement (see above)       AMC

                                                                             (4)   Articles of Association             AMC/ A&O

------------------------------------------------------------------------------------------------------------------------------------
20TH DECEMBER, 2002         (1)   Issue application notice for directions    (1)   Application Notice (see above)      AMC
(P.M.)                            for the Capital Reduction, lodge
                                  petition, witness statement and
                                  supporting papers with Court

                            (2)   File shareholders' written resolution                                                AMC
                                  and amended Articles of Association with
                                  the Registrar
------------------------------------------------------------------------------------------------------------------------------------
16TH JANUARY, 2003          (1)   Hearing of application notice for the                                                AMC/Counsel
                                  Capital Reduction before the court
                                  registrar (in chambers)

                            (2)   Court registrar settles form of order                                                Court/Counsel
                                  for directions and advertisement of
                                  hearing

                            (3)   Book advertisement space in national                                                 AMC
                                  newspaper
------------------------------------------------------------------------------------------------------------------------------------
28TH JANUARY, 2003          (1)   Advertise hearing of petition in           (1)   Advertisement                       AMC
                                  national daily newspaper
------------------------------------------------------------------------------------------------------------------------------------
5TH FEBRUARY, 2003          (1)   Court hearing of petition to confirm                                                 AMC/Counsel
                                  Capital Reduction
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                       35

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
          DATE                             ACTION(S)                                   DOCUMENT(S)                    RESPONSIBILITY
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                            <C>                                        <C>
                            (2)   Lodge Consent Order at court for
                                  sealing                                                                              A&O
------------------------------------------------------------------------------------------------------------------------------------
7TH FEBRUARY, 2003          (1)   Hearing (if necessary) of the Court to                                               AMC/Counsel
                                  approve the Consent Order

                            (2)   Sealed Consent Order issued by Court
------------------------------------------------------------------------------------------------------------------------------------
10TH FEBRUARY, 2003         (1)   Completion                               (1)   Board resolutions                     AMC/A&O
                                                                           (2)   Application for Deferred Shares       AMC
                            (2)   Registrar registers Reduction Order      (3)   Deferred Share certificate
                                 whereupon Capital Reduction is effective  (4)   APT agreement                         AMC/U
                                                                           (5)   Share certificate re Marconi          AMC
                                                                                 Reduction Shares                      Marconi
                                                                           (6)   Share certificate re RTS Reduction
                                                                                 Shares                                AMC
                                                                           (7)   Letter to Companies House enclosing
                                                                                 Reduction Order                       AMC
------------------------------------------------------------------------------------------------------------------------------------
BY 25TH FEBRUARY, 2003    Advertise registration of Reduction Order        (1)   Advertisement (see above)             AMC
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                   SCHEDULE 3
                                PUT & CALL OPTION

1.       INTERPRETATION

In this Schedule, unless the context otherwise requires, the following words and
expressions shall have the following meanings:

"CALL EXERCISE NOTICE"     a notice substantially in the form set out in
                           Schedule 4;

"EXERCISE NOTICE"          a Call Exercise Notice or a Put Exercise Notice (as
                           the context may require);

"OPTION"                   either or both of the Put Option and the Call Option
                           (as the context may require);

"OPTION COMPLETION"        completion of the exercise of an Option as described
                           in paragraph 4;

"OPTION CONSIDERATION"     the consideration payable upon Option Completion as
                           set out in paragraph 3;

"PUT EXERCISE NOTICE"      a notice substantially in the form set out in
                           Schedule 5.

2.       EXERCISE OF THE OPTIONS

2.1      RTS may exercise the Call Option by serving a Call Exercise Notice on
         Marconi at any time after 30th September, 2004.

2.2      Marconi may exercise the Put Option by serving a Put Exercise Notice on
         RTS at any time after the date being the fifteenth anniversary of the
         date of this agreement or, if earlier, upon Railtrack plc agreeing to
         the changes to the Railtrack Agreements contemplated by sub-clause 8.7.

2.3      An Option may be exercised only in respect of all of the Deferred
         Shares issued to Marconi at the time of the relevant Exercise Notice
         (the "OPTION SECURITIES").

2.4      Exercise of an Option shall oblige Marconi to sell and RTS to purchase
         the Option Securities.

2.5      The Option Securities shall be sold free from all liens, charges,
         equities and encumbrances and together with all rights attaching to the
         Option Securities at the date of service of the relevant Exercise
         Notice.

3.       OPTION CONSIDERATION

3.1      The consideration for the acquisition of the Option Securities shall be
         paid by RTS at Option Completion and shall be as provided in paragraph
         3.2.

3.2      The consideration for the acquisition of the Option Securities upon the
         exercise of an Option shall be the sum of L1 for each of the Option
         Securities.

<PAGE>

                                       37

4.       OPTION COMPLETION

4.1      Option Completion of the sale and purchase of the Option Securities
         following the exercise of an Option shall take place at the offices of
         RTS's Solicitors on the date which is the fifth business day after the
         date of service of the Exercise Notice.

4.2      At Option Completion:

         4.2.1    Marconi shall deliver to RTS a transfer or transfers in
                  respect of the Option Securities duly completed in favour of
                  RTS (or as it may direct) together with the certificate(s) for
                  the Option Securities; and

         4.2.2    following delivery of the documents referred to in paragraph
                  4.2.1, RTS shall pay the Option Consideration to Marconi (or
                  to such other person as Marconi may direct).

5.       NON-DISPOSAL

5.1      Until Option Completion, Marconi shall not, without the prior written
         consent of RTS sell, transfer or otherwise dispose of (or agree to do
         so) any of the Option Securities (or any interest in them).

<PAGE>

                                       38

                                   SCHEDULE 4
                          FORM OF CALL EXERCISE NOTICE

                        [ON THE HEADED NOTEPAPER OF RTS]

To:      [Marconi]                                            [DATE]

Dear Sirs

RE: SETTLEMENT AGREEMENT, DATED - DECEMBER, 2002, AND MADE BETWEEN, INTER ALIA,
MARCONI CORPORATION PLC AND RT GROUP TELECOM SERVICES LIMITED (THE "AGREEMENT")

We refer to the Agreement and to the Call Option (as defined in the Agreement)
granted by you to us under clause 9.3 of the Agreement.

We hereby give notice pursuant to paragraph 2 of schedule 3 to the Agreement
that we exercise the Call Option granted by you in respect of all of the Option
Securities (as defined in the Agreement).

Yours faithfully

---------------------------------------
For and on behalf of
RT Group Telecom Services Limited

<PAGE>

                                       39

                                   SCHEDULE 5
                           FORM OF PUT EXERCISE NOTICE
              [ON THE HEADED NOTEPAPER OF MARCONI CORPORATION PLC]

To:      [RTS]                                                [DATE]

Dear Sirs

RE: SETTLEMENT AGREEMENT, DATED - DECEMBER, 2002, AND MADE BETWEEN, INTER ALIA,
MARCONI CORPORATION PLC AND RT GROUP TELECOM SERVICES LIMITED (THE "AGREEMENT")

We refer to the Agreement and to the Put Option (as defined in the Agreement)
granted by you to us under clause 9.3 of the Agreement.

We hereby give notice pursuant to paragraph 2 of schedule 3 to the Agreement
that we exercise the Put Option granted by you in respect of all of the Option
Securities (as defined in the Agreement).

Yours faithfully

----------------------------------------
For and on behalf of
Marconi Corporation plc

<PAGE>

                                       40

                                   SCHEDULE 6
                          RIGHTS OF THE DEFERRED SHARES

The rights attached to and imposed on the Deferred Shares are as follows:

1.       Income and Capital

         Subject to paragraph 2 below, the Deferred Shares shall not confer on
         the holders thereof any entitlement to any participation in the profits
         or the assets of Ultramast.

2.       Winding Up

         The Deferred Shares shall confer on the holders thereof the right, in
         the event of a winding up of Ultramast or other return of capital, to
         receive an amount equal to the nominal value of such Deferred Shares
         but only after the holders of all other shares have received in
         aggregate a distribution in the sum or to the value of L1,000,000,000
         in respect of their holdings.

3.       Voting

         The Deferred Shares shall not confer on the holders thereof any
         entitlement to receive notice of or to attend or vote at any general
         meeting of Ultramast.

<PAGE>

                                       41

                                   SCHEDULE 7
                            FORM OF DEED OF ADHERENCE

         THIS DEED is made on [           ]

         BETWEEN:

(1)      [           ] of [           ] (the NEW PARTY);

(2)      RT GROUP TELECOM SERVICES LIMITED, a company incorporated in England
         and Wales (registered number 3963596) whose registered office is at
         20-22 Bedford Row, London WC1R 4JS ("RTS");

(3)      RT GROUP PLC (IN MEMBERS' VOLUNTARY LIQUIDATION), a company
         incorporated in England and Wales (registered number 2904614) whose
         registered office is at 20-22 Bedford Row, London WC1R 4JS ("RG")
         acting by its joint liquidators James Robert Drummond Smith and
         Nicholas James Dargan of Deloitte & Touche, 180 Strand, London WC2R 1WL
         (the "LIQUIDATORS");

(4)      MARCONI CORPORATION PLC, a company incorporated in England and Wales
         (registered number 67307) whose registered office is at New Century
         Park, P.O. Box 53, Coventry CV3 1HJ ("MARCONI");

(5)      ULTRAMAST LIMITED, a company incorporated in England and Wales
         (registered number 4042640) whose registered office is at City Point,
         One Ropemaker Street, London EC2Y 9SS ("ULTRAMAST"); and

(6)      THE LIQUIDATORS.

WHEREAS:

(A)      RTS, RG, Marconi, Ultramast and the Liquidators (together the
         "CONTINUING PARTIES") are parties to a settlement deed dated [ ]th
         December, 2002 (the "AGREEMENT"). Words and expressions defined in the
         Agreement shall have the same meaning in this deed.

(B)      The New Party proposes to purchase all of the Ordinary Shares
         registered in the name of RTS from RTS.

(C)      This deed is made by the New Party in compliance with clause 4.11 of
         the Agreement.

THIS DEED WITNESSES as follows:

1.       The New Party confirms that it has been supplied with a copy of the
         Agreement.

2.       Subject to clauses 4 and 5 of this deed, the New Party undertakes to
         each of the Continuing Parties to be bound by the Agreement in all
         respects as if the New Party was a party to the Agreement and named in
         it as RTS and to observe and perform all the provisions and obligations
         of the Agreement applicable to or binding on RTS under the Agreement
         insofar as they fall to be observed or performed on or after the date
         of this deed.

3.       Subject to clauses 4 and 5 of this deed, the Continuing Parties
         undertake to the New Party to observe and perform all the provisions
         and obligations of the Agreement applicable to or

<PAGE>

                                       42

         binding on them under the Agreement and acknowledges that the New Party
         shall be entitled to the rights and benefits of the Agreement as if the
         New Party were named in the Agreement as RTS with effect from the date
         of this deed.

4.       The New Party shall not be bound by, and shall not be entitled to
         exercise any rights in relation to, the rights and obligations of RTS
         set out in sub-clauses 2.1.2, 2.2, 3.5, 4.10, 4.11, 6, 7.2.3, 7.2.5,
         7.2.6, 7.3.1, 7.3.2, 7.3.4, 7.7, 8.1.2 or clause 9 of or schedule 3 to
         the Agreement (but, for the avoidance of doubt, these clauses,
         sub-clauses and that schedule shall continue to apply to and be binding
         on RTS).

5.       Nothing in this agreement shall affect the rights of RTS under the
         Agreement or the obligation of RTS to comply with the terms of the
         Agreement, save in respect of sub-clauses 2.1.1, 3.3, 4.1, 4.2, 4.3,
         4.4, 4.7, 4.8, 4.9, 5.1, 5.5, 7.1, 7.2.2, 7.3.3, 8.2 and 8.5 which
         shall no longer apply to RTS but, for the avoidance of doubt, shall
         apply to the New Party.

6.       This deed may be executed in any number of counterparts, all of which
         taken together shall constitute one and the same deed and any party may
         enter into this deed by executing a counterpart.

7.       This deed shall be governed by and shall be construed in accordance
         with English law. The parties submit to the exclusive jurisdiction of
         the English Courts for the purpose (but solely for the purpose) of any
         action to enforce the terms of this deed.

IN WITNESS of which this deed has been executed and has been delivered on the
date which appears first on page 1.