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                                                              Exhibit 4.(a)(xvi)


                      MADGE.WEB LIMITED (IN ADMINISTRATION)
                         WEXHAM SPRINGS, FRAMEWOOD ROAD

                                 WEXHAM, SLOUGH
                                BERKSHIRE SL3 6PJ

Madge Networks N.V.
Transpolis Schipol Airport
Polaris Avenue 23
2132 Hoofddorp
The Netherlands

27th April, 2001

Dear Sirs

MADGE.WEB LIMITED (IN ADMINISTRATION) ("THE COMPANY")

In this letter I am writing to record the agreement we have reached for the
purpose of maintaining the operation and availability of the Company's
telecommunications networks and services in the UK, Europe and Asia Pacific
(together, "THE NETWORK(S)"). As you appreciate, the Company cannot continue to
trade in administration without having available to it an amount which has been
estimated by the Company's administrators (the "ADMINISTRATORS") to be US$6
million (the "TOTAL FUNDING REQUIREMENT"). It is estimated that this sum should
enable the Company's network operations and services to be continued for a
period of up to four weeks in administration. You have agreed to make the Total
Funding Requirement (less such amounts as are in the Company's bank accounts as
at the Effective Date, and are freely available, or will, when cleared, become
freely available, to it (such net amount being the "MADGE FUNDING")) available
to the Company on the terms set out below, at any time after we receive a letter
countersigned by you confirming your agreement with the terms of this letter
(the "EFFECTIVE DATE"). Furthermore, by contersigning a copy of this letter, you
hereby confirm that you currently have sufficient funds at your disposal to make
the Madge Funding available.

1.    (a)   The Madge Funding (which shall not exceed the Total Funding
      Requirement) will be made available by you by way of a committed
      interest-bearing loan (the "LOAN"), which may be drawn in any number of
      separate tranches. Provided that a request is received by you prior to 10
      a.m. (London time) on any day, the requested amount shall be paid by 2
      p.m. (London time) on that same day, provided that the amount requested,
      when aggregated with all other amounts (i) provided by you under the terms
      of this letter agreement which remain outstanding at that date, and (ii)
      the drawdown of which have been requested hereunder but which have not yet
      been drawn, does not exceed the Madge Funding.  If a request is received
      by you after 10 a.m. (London time) on any day, the requested amount shall
      be paid by 12 noon (London time) on the following day upon which you are
      open for general business.  Amounts drawn under this letter agreement
      shall be credited in cleared funds to an account as instructed by the
      Administrators.  Amounts may be drawn in accordance with the terms of this
      letter agreement at any time.  The initial amount of US$3.5 million (less
      such amounts as are in the Company's bank accounts as at the Effective
      Date, and are freely available, or will, when cleared, become freely
      available, to it) will be provided to us automatically (without the need
      for any further request) on the Effective Date.  It is our current
      expectation that  the remaining portion of the Madge Funding will be drawn
      approximately two weeks after the Effective Date.


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      (b) Interest on each amount advanced pursuant to the terms of this letter
      agreement (an "ADVANCE") shall be charged at the rate of seven per. cent
      per annum above the average British Bankers Association Interest
      Settlement Rate, which is displayed on the appropriate page of Telerate at
      or about 11.00 a.m. on the date upon which the Advance is paid into our
      account in accordance with sub-paragraph (a) above, for the offering of
      deposits in US Dollars for the period for which it is anticipated that
      such Advance is to be outstanding ("LIBOR"). All interest in relation to
      each Advance (the "INTEREST") shall accrue whilst that Advance is
      outstanding, and shall be added to the aggregate amount which is due to
      you, and which will be paid or repaid in accordance with paragraph 2 below
      following a disposal. Interest shall cease to accrue upon the earlier to
      occur of (i) in relation to Interest accruing on any amount, repayment of
      that amount in accordance with the terms of this letter agreement, (ii)
      the discharge of the administration order, or (iii) a liquidation of the
      Company.

2.    (a)   The Loan and all accrued Interest shall be repayable and, as the
            case may be, payable if and to the extent that realisations after
            (i) payment of the costs of realisation from the sale or other
            disposal of all or some of the Company's assets, (ii) discharge of
            all liabilities which fall to be discharged under Section 19(4), (5)
            and (6) of the Insolvency Act 1986 and (iii) discharge of all
            amounts due to preferential creditors as at the date of the
            administration order, (but subject to paragraph 2(b) of this
            letter), exceed US$2 million (such excess, the "EXCESS") and, in any
            event, pro rata with the repayment of any supplier of goods and/or
            services in respect of the period after the Administrators'
            appointment to the Company who agrees to waive payment from the
            Company in respect of the provision of those goods and/or services
            on terms that the amount(s) so waived shall constitute a loan to the
            Company to be treated in the same way as Advances made under the
            terms of this letter agreement. The Loan and all Interest shall only
            be repayable (or, as appropriate, payable) out of the Excess and
            shall not be repayable (or payable) in any other circumstances other
            than by way of dividend paid pro rata to the Company's
            non-preferential unsecured creditors ranking pari passu inter se.

      (b)   Furthermore, you acknowledge that (i) the agreement constituted by
            this letter as accepted by you is a contract entered into by the
            Administrators in the course of carrying out their functions, and
            (ii) the liability of the Company to repay the Loan and pay all
            accrued Interest in accordance with the terms of this letter shall
            constitute a liability incurred under Section 19(5) of the
            Insolvency Act 1986 but that the liability to repay the Loan and pay
            the Interest shall be discharged strictly in accordance with the
            terms of this letter and the terms of this letter shall constitute a
            variation to the manner and priority otherwise afforded to the
            liability to repay the Loan and pay the Interest under Section 19(5)
            of the Insolvency Act 1986.

      (c)   Notwithstanding the provisions of sub-paragraphs (a) and (b) above,
            we reserve the right (in our sole discretion) to repay any amount
            advanced in accordance with the provisions of this letter agreement,
            or pay any Interest, at any time earlier than is otherwise provided
            for in this letter agreement. We shall use reasonable endeavours to
            make any such reserves as we (in our sole discretion) deem
            appropriate in the circumstances to the intent that the balance not
            so reserved can be repaid to you in accordance with the provisions
            of this letter agreement as soon as we (in our sole discretion)
            consider practicable.

3.    The Administrators undertake that they will not draw on funds advanced to
      the Company by way of the Loan except to the extent required for the
      purpose of achieving one or more of the purposes set out in the
      administration order and/or in bringing the administration to a close.


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4.    You acknowledge that the cash requirement forecasts set out in the
      Schedule are estimated forecasts only, the Administrators in their
      preparation having used their reasonable efforts on the basis of the
      information then actually known to them, and the Company's cash and
      funding requirements may be lesser or greater than set out in the
      forecasts. You agree that the funding requirement is subject to certain
      key assumptions as to the way the stakeholders in the business will react.
      In practice, the stakeholders may react in ways different to those
      anticipated and accordingly the funding requirement may be different to
      those estimated. The provision of the funding does not guarantee continued
      network operations. The Administrators shall deliver to you weekly updates
      to the cash requirement forecasts.

5.    The Administrators shall, if you so request, provide you not more than
      once weekly with a summary setting out how the Loan has been utilised by
      the Company and, following the disposal of the Network(s) or the
      Network(s) ceasing to operate or upon the Administrators' discharge
      (whichever is the sooner), produce an account of how the monies advanced
      by way of Loan have been applied by the Administrators. Furthermore, the
      Administrators shall consult and communicate with you to the extent that
      is reasonable in order to keep you informed of the progress of the
      administration towards achieving the purposes for which the administration
      order was made.

6.    We may on future occasions request you to provide further funds by way of
      loan in respect of continuing the Company's business should the estimate
      of the Total Funding Requirements prove insufficient, but acknowledge and
      accept that you will be under no obligation to agree to any such funding
      request beyond the Madge Funding.

7.    Subject to you making prompt payment of each amount requested by us on the
      due date and subject to our calculation of the Total Funding Requirement
      proving to be sufficient for its purpose, we agree that we shall (subject
      to any order of the Court to the contrary) use our reasonable endeavours,
      whilst the sale of the Company as a going concern continues to be pursued,
      to cause the Company to continue to operate the Network(s) until such time
      as we cease to be in control of the Company or its assets or a material
      part of them or the operation of the Network(s), whether through a sale of
      the Company's business or the Network(s) or otherwise.

8.    For the avoidance of doubt, should you fail to advance to the Company any
      part of the Loan requested by the Company on the due date in accordance
      with the terms of this letter agreement, or should our calculation of the
      Total Funding Requirement prove that the resultant funds available in the
      administration (taking into account the Madge Funding and any and all
      other realisations, recoveries and/or payments received by the Company
      from whatever source) will be insufficient, the Company, acting by its
      Administrators, may, and shall be entitled to, cease operating the
      Network(s) immediately upon the expiry of not less than 24 hours' notice
      (not including weekends) by fax to you.

10.   You confirm that you shall not at any time now or in the future make or
      exercise any set-off, counterclaim, retention, deduction or withholding or
      assert any claim in respect of, or seek in any way to recoup, the Loan or
      any shortfall in repayment by the Company of the Loan against the Company,
      other than as provided for in this letter.

11.   It is agreed that the Administrators act at all times as agents of the
      Company and without personal liability under this letter and in relation
      to causing the Company to continue to operate the Network(s) and its
      business generally.

12.   Save as specifically recorded in this letter, it is agreed that all the
      pre-existing terms and conditions on which the Company operates the
      Network(s) and otherwise conducts its


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      business shall continue to apply and be in full force and effect (subject
      only to the express terms thereof) and nothing in this letter will effect
      any further variation of such terms express or implied.

13.   This letter shall be governed by and construed in accordance with English
      law and it is agreed that the Courts of England and Wales shall have
      non-exclusive jurisdiction in relation to any matters arising under this
      letter.

Please confirm your agreement to the above terms and conditions by signing and
returning the attached duplicate of this letter where indicated.

Yours faithfully,



/s/ Neville Khan
---------------------------
Neville Kahn

Joint Administrator for and on behalf of Madge.web Limited (in administration)



We hereby confirm our agreement to the terms of your letter dated 27th
April, 2001


/s/ Christopher Bradley
---------------------------
Name:  Christopher Bradley

Title: Secretary and CFO
       Authorised signatory for and on behalf of Madge Networks N.V.

Date: 27 April 2001


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                                    SCHEDULE

                            CASH REQUIREMENT FORECAST

                                [insert details]


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