Document:

<PAGE>

                                                                   EXHIBIT 4.124

                                                                  CONFORMED COPY

                                 LOAN AGREEMENT

                              dated March 26, 2003

                                     between

                             LIBERTY FUNDING, L.L.C.

                                    as Lender

                                       and

                          MARCONI COMMUNICATIONS, INC.

                                   as Borrower

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                            PAGE
<S>               <C>                                                                       <C>
Article 1         DEFINITIONS.............................................................    1

        1.1       Definitions.............................................................    1

Article 2         THE LOAN AND SECURITY THEREFOR..........................................    2

        2.1       The Loan................................................................    2

        2.2       Loan Documents; Security................................................    2

        2.3       Lender's Fees and Costs.................................................    3

Article 3         REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE COVENANTS...................    4

        3.1       Relating to Borrower....................................................    4

        3.2       Relating to the Properties..............................................    5

        3.3       Survival of Representations.............................................    6

        3.4       Affirmative Covenants...................................................    6

Article 4         CONDITIONS PRECEDENT....................................................    7

        4.1       Initial Advance.........................................................    7

        4.2       All Advances............................................................    8

        4.3       Holdback................................................................    9

        4.4       Advances After an Event of Default Cured by a Third Party...............    9

        4.5       Subordination and Intercreditor Agreement...............................    9

Article 5         ADVANCES................................................................    9

        5.1       Requirements............................................................    9

        5.2       Disbursements of Loan Proceeds..........................................    9

Article 6         REPORTING REQUIREMENTS..................................................   10

        6.1       Financial Reports; Required Notices.....................................   10

Article 7         EVENTS OF DEFAULT.......................................................   11

        7.1       Events of Default.......................................................   11

        7.2       Remedies................................................................   12

Article 8         MISCELLANEOUS...........................................................   13

        8.1       Notices.................................................................   13

        8.2       Jurisdiction and Venue..................................................   14

        8.3       Successors and Assigns; Participations; Assignments.....................   14
</TABLE>

                                      -i-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                            PAGE
<S>               <C>                                                                       <C>
        8.4       No Joint Venture........................................................   15

        8.5       Number and Gender.......................................................   15

        8.6       Captions................................................................   15

        8.7       Governing Law...........................................................   15

        8.8       Time of the Essence.....................................................   15

        8.9       Counterparts............................................................   16

        8.10      Amendments..............................................................   16

        8.11      Limitation of Liability.................................................   16

        8.12      Borrower's Representatives..............................................   16
</TABLE>

                                      -ii-

<PAGE>

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT (this "Agreement") is made this 26th day of March
2003, by and between LIBERTY FUNDING, L.L.C., a Delaware limited liability
company ("Lender"), and MARCONI COMMUNICATIONS, INC., a Delaware corporation
("Borrower").

                                   BACKGROUND

         Borrower has requested Lender to extend a revolving credit facility to
Borrower in a principal amount not to exceed Twenty-two Million Five Hundred
Thousand Dollars ($22,500,000) outstanding at any time (the "Loan") to be used
for working capital and other general corporate purposes of Borrower. The Loan
will be secured by, inter alia, a first mortgage lien on the real property and
improvements thereon, consisting of six buildings, including one building
currently under construction (the "Construction Building"), containing an
aggregate of not less than 574,000 square feet and located at 3000 Marconi
Drive, Warrendale, Allegheny County, Pennsylvania, as more particularly
described on Exhibit "A" attached hereto and made a part hereof ( collectively,
the "Property").

         NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby and in consideration of the mutual promises contained herein, covenant
and agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         1.1      Definitions. Whenever used in this Agreement, the following
words and phrases shall have the respective meanings ascribed to them in the
Sections of this Agreement referred to below:

                  (a) "Assignment of Leases" - as defined in subsection
2.2(b)(4) hereof.

                  (b) "Borrower" - as defined in the caption to this Agreement.

                  (c) "Commitment Fee" - as defined in subsection 2.3(a) hereof.

                  (d) "Construction Building" - as defined in the Background to
this Agreement.

                  (e) "Dispute Notice" - as defined in subsection 2.3(b)(3)
hereof.

                  (f) "Environmental Agreement" - as defined in subsection
2.2(b)(5) hereof.

                  (g) "Event of Default" - as defined in Section 7.1 hereof.

<PAGE>

                  (h) "Financing Statements" - as defined in subsection
2.2(b)(6) hereof.

                  (i) "Lender" - as defined in the caption to this Agreement.

                  (j) "Loan" - as defined in the Background to this Agreement.

                  (k) "Loan Documents" - as defined in subsection 2.2(b) hereof.

                  (l) "Maturity Date" - as defined in Section 2.1 hereof.

                  (m) "Mortgage" - as defined in subsection 2.2(b)(2) hereof.

                  (n) "Note" - as defined in subsection 2.2(a) hereof.

                  (o) "Participant" - as defined in subsection 8.3(b)(3) hereof.

                  (p) "Property" - as defined in the Background to this
Agreement.

                  (q) "Requests" - as defined in Section 5.1 hereof

                  (r) "Unused Commitment Fee" - as defined in subsection 2.3(b)
hereof.

                                    ARTICLE 2

                         THE LOAN AND SECURITY THEREFOR

         2.1      The Loan. Subject to all of the terms and conditions
hereinafter set forth, Lender agrees to advance the proceeds of the Loan to
Borrower from time to time until the thirtieth (30th) day preceding the Maturity
Date (as hereinafter defined). Advances of the Loan shall not exceed an
aggregate principal amount outstanding at any time of $22,500,000 and, subject
to the other terms and conditions of this Agreement, Borrower may borrow, repay
and reborrow the proceeds of the Loan. The outstanding principal balance of the
Loan, together with all accrued and unpaid interest thereon and all other sums
due under the Loan Documents, shall become due and payable in full, without
notice or demand, on November ___, 2004 (the "Maturity Date"). All prepayments
on the Loan shall be applied as provided in Section 4 of the Note.

         2.2      Loan Documents; Security.

                  (a) The Loan shall be evidenced by Borrower's note of even
date herewith (the "Note") in the stated principal amount of the Loan, and shall
be repaid with the interest, at the times and otherwise in accordance with the
terms and conditions of the Note.

                  (b) As security for the Note and the performance by Borrower
of all its obligations hereunder and thereunder, the following documents are
being executed and delivered to Lender simultaneously herewith:

                                      -2-

<PAGE>

                           (1) An open-end mortgage and security agreement (the
"Mortgage") encumbering the Property, the improvements now or hereafter erected
thereon, including all building materials, and fixtures necessary or incidental
to the construction, operation, use, and maintenance thereof and all renewals
and replacements thereof or additions thereto, and such other property as Lender
may reasonably require, all as more specifically described in the Mortgage;

                           (2) An assignment of leases of even date herewith
(the "Assignment of Leases") executed by Borrower in favor of Lender, assigning
to Lender all of Borrower's right, title and interest in and to all existing and
future leases of all or any part of the Property;

                           (3) An indemnity agreement regarding environmental
matters of even date herewith (the "Environmental Agreement") executed by
Borrower in favor of Lender, pursuant to which Borrower provides certain
assurances and indemnities to Lender with respect to environmental matters
affecting the Property; and

                           (4) Financing statements (the "Financing Statements")
authorized by Borrower for Lender to file, pursuant to which the security
interests in the fixtures granted to Lender in the Loan Documents are to be
perfected.

         The Note, Mortgage, Assignment of Leases, Environmental Agreement,
Financing Statements, and all other documents executed by Borrower evidencing
and securing the Loan (collectively with this Agreement, the "Loan Documents")
shall be in form and substance satisfactory to Lender, and all necessary filing
and recording fees with respect thereto shall be paid by Borrower. The Loan
Documents are incorporated herein by reference.

         2.3      Lender's Fees and Costs. As compensation for Lender's expenses
in committing to make the Loan Borrower shall pay Lender the following fees:

                  (a) A commitment fee equal to six percent (6%) of the maximum
amount of the Loan, or $1,350,000, which is earned and payable in full on the
date hereof (the "Commitment Fee"). Borrower hereby acknowledges that the
Commitment Fee constitutes liquidated damages and is fair and reasonable
compensation to Lender for all of its expenses, work and services arising from
the negotiation and preparation the Loan Documents and in arranging the Loan, as
well as the loss of other investment opportunities by reason of allocating the
amount of the Loan for the term provided herein; and

                  (b) An unused commitment fee equal to one percent (1%) per
annum on any portion of the Loan not drawn by Borrower (the "Unused Commitment
Fee"), payable quarterly, in arrears, which Unused Commitment Fee may be paid
from the unused portion of the Loan.

                           (1) Lender will endeavor to provide a written
accounting of the Unused Commitment Fee three (3) business days prior to the due
date thereof, but failure to provide such accounting shall not extend the due
date or excuse Borrower in anyway from making a timely payment of amounts owed,
nor impose any liability on Lender.

                                      -3-

<PAGE>

                           (2) In the event that Lender does not provide such
accounting, Borrower shall make a reasonable accounting of the amount of the
Unused Commitment Fee and shall deliver it to Lender along with the quarterly
payment of the Unused Commitment Fee as so calculated by Borrower.

                           (3) If Lender disputes Borrower's accounting, Lender
shall send Borrower a written notice setting forth Lender's calculation of the
disputed amount owed (the "Dispute Notice"). Borrower shall pay Lender the
amount the discrepancy between Borrower's and Lender's calculation as set forth
in Lender's Dispute Notice within two (2) business days of Borrower's receipt of
Lender's Dispute Notice. Borrower's failure to pay the full amount calculated by
Lender to be due as set forth in the Dispute Notice shall not constitute an
Event of Default hereunder unless and until Borrower fails to make timely
payment in full of the disputed amount determined by Lender as set forth in the
Dispute Notice.

Such compensation shall be in addition to the interest and all other amounts
which Borrower must pay to Lender under the Note and hereunder. Borrower shall
pay or reimburse Lender for all costs and expenses, including, but not limited
to, the fees and expenses of Lender's attorneys and inspecting engineers and/or
architects, incurred by Lender in connection with the preparation, review,
modification and enforcement of the Loan Documents, and the disbursement,
administration and collection of the Loan, including, without limitation, any
Lender's attorney's fees and expenses incurred in connection with an action or
proceeding under Title 11 of the United States Code.

                                    ARTICLE 3

              REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE COVENANTS

         3.1      Relating to Borrower. Borrower specifically represents and
warrants to Lender that:

                  (a) Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified to do business in the Commonwealth of Pennsylvania.

                  (b) Borrower has all requisite power and authority to own and
operate its properties and to carry on its business as now conducted and as
presently planned to be conducted. Without limiting the generality of the
foregoing, Borrower: (i) has the power to engage in all the transactions
contemplated by this Agreement, and (ii) has full power, authority and legal
right to execute and deliver, and to comply with the provisions of this
Agreement and the other Loan Documents to be executed by Borrower and all other
documents relating hereto or thereto, which documents constitute the legally
binding obligations of Borrower, enforceable against Borrower in accordance with
their respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditor's rights.

                                      -4-

<PAGE>

                  (c) There is no suit, action, proceeding or investigation
pending or to the knowledge of Borrower threatened against or affecting Borrower
or the Property which, if adversely resolved, would: (i) materially adversely
affect the operation of the Property, (ii) materially adversely affect the
ability of Borrower to perform its obligations under the Loan Documents, or
(iii) materially adversely affect the business, operations, condition (financial
or otherwise) or prospects of Borrower.

                  (d) No consent, approval or other authorization of or by any
court, administrative agency or other governmental authority is required in
connection with the execution or delivery by Borrower of this Agreement or any
other Loan Document or compliance with the provisions hereof or thereof.

                  (e) Neither the execution nor delivery of this Agreement or
any other Loan Document will conflict with or result in a breach of any
applicable law, judgment, order, writ, injunction, decree, rule or regulation of
any court, administrative agency or other governmental authority, or of any
agreement or other instrument to which Borrower is a party or by which it is
bound, or constitute a default under any thereof, or, except as expressly
contemplated herein, result in the creation or imposition of any lien, charge or
encumbrance upon any property of Borrower.

                  (f) There has been no material adverse change in the financial
condition of Borrower since the date of the last financial information
previously submitted to Lender.

                  (g) No Event of Default has occurred and is continuing or
exists under this Agreement or any other Loan Document, and no event has
occurred and is continuing or exists that, with the passage of time or giving of
notice or both, will constitute an Event of Default hereunder or under any other
Loan Document.

         3.2      Relating to the Properties. Borrower specifically represents
and warrants to Lender that:

                  (a) All improvements to the Property and the use of the
Property comply in all material respects with all applicable statutes, rules and
regulations pertaining to zoning and land use and no notices of violation have
been issued by any governmental authority that remain outstanding. With the
exception of the Construction Building, all required permits, licenses and
certificates, including certificates of occupancy to the extent required, for
the lawful use and operation of the Property have been obtained.

                  (b) No written notice of taking by eminent domain or
condemnation of the part of any Property has been received, and Borrower has no
knowledge that any such proceeding is contemplated. No part of the Property has
been damaged or injured as a result of any fire, explosion, accident, flood, or
other casualty which is not now fully restored.

                  (c) The Property abuts and has direct access to a
legally-opened public right-of-way.

                                      -5-

<PAGE>

                  (d) Electricity, public potable water and sanitary sewer and,
if applicable, natural gas service are available at the Property and are of
sufficient capacity to service the improvements located thereon.

                  (e) There are no leases or arrangements to lease or other
similar agreements with respect to the use and occupancy of all or any portion
of the Property and Borrower has sole possession of the Property.

         3.3      Survival of Representations. All of the representations and
warranties of Borrower in this Agreement shall survive the making of this
Agreement and shall be continuing. Each and every Request submitted by Borrower
for funds under this Agreement shall constitute a new and independent
representation and warranty to Lender with respect to all of the matters set
forth in this Agreement as of the date of each such application.

         3.4      Affirmative Covenants.

                  (a) Borrower shall within six (6) months following the date
hereof and only after ten (10) days prior written notice to Lender of the
Borrower's performance of any required field activities: (i) remove from the
Property, and properly dispose all solid waste and other debris located on the
Property, including the scattered debris along the access road near the western
property boundary, the debris near the intersection of Brush Creek Road and
Marconi Drive on the eastern portion of the property and the debris located near
the old silo structure on the property, and (ii) complete the work identified in
Section 6.3 - Recommendations of the the Report titled "Phase I Environmental
Site Assessment Marconi Communications 1000 Marconi Drive Warrendale,
Pennsylvania 15090," prepared by Environmental Resources Management, Inc. dated
February 2003, including any remediation, testing, monitoring and /or
investigation, all in accordance with applicable laws and to Lender's
satisfaction in Lender's sole and absolute discretion; and ( iii) provide to
Lender a certified report from a qualified professional engineering firm
satisfactory to Lender documenting that the removal, remediation, testing,
monitoring and investigation has been completed in accordance with all
applicable laws.

                  (b) Borrower shall, within six (6) months following the date
hereof complete the following repairs identified in that certain Due Diligence
Report prepared by H.F. Lenz Company, dated January 31, 2003 in accordance with
applicable laws and to Lender's satisfaction in Lender's sole and absolute
discretion: (i) with respect to Buildings 1, 4, and 5, retrofit the gas lines
feeding the boiler systems with a control train approved by Borrower's insurance
carrier; (ii) with respect to Buildings 2 and 4, investigate and repair the
natural gas leak; (iii) with respect to Building 4, repair the EPDM roof
flashing along the parapet wall; and (iv) with respect to Building 5, repair the
crack in the horizontal joint along the west masonry wall.

                                      -6-

<PAGE>

                                    ARTICLE 4

                              CONDITIONS PRECEDENT

         4.1      Initial Advance. The making of the initial advance of the Loan
by Lender to Borrower is subject to the satisfaction of the following conditions
precedent:

                  (a) Delivery of Loan Documents. The Note, Mortgage, and other
Loan Documents shall have been properly executed by Borrower and the other
parties thereto as hereinabove described and delivered to Lender. The Mortgage,
Assignment of Leases, Financing Statements and other documents intended to be
placed of record shall have been duly recorded or filed in the appropriate
public offices. The Mortgage shall be a first lien on good and marketable fee
simple title to the Property, free and clear of all prior liens, restrictions,
easements and other encumbrances and title objections except such as may have
been approved in writing by Lender.

                  (b) Delivery of Other Documents. The following shall have been
delivered to Lender at Borrower's expense, each of which must be in form and
substance satisfactory to Lender:

                           (1) Title Insurance. A marked-up title report of a
reputable title insurance company satisfactory to Lender, representing that
company's commitment to issue in favor of Lender, but at the expense of
Borrower, a standard ALTA mortgagee title insurance policy, insuring the lien of
the Mortgage as a first lien on the Property without a survey exception, free
and clear of all prior liens (including possible mechanics' liens) and
encumbrances, subject only to such objections and exceptions as Lender may
approve and containing such affirmative endorsements as Lender may require. It
shall also be Borrower's responsibility to comply with any reinsurance
requirements stipulated by Lender.

                           (2) Survey. Lender shall be furnished with a plan of
survey of the Property prepared for and certified to Lender by a registered land
surveyor approved by Lender. The surveyor shall also certify the acreage of the
Property and that each of the properties comprising the Property are contiguous
and that there are no gores, gaps, overlaps or strips of land separating them.
The survey shall show the location and width of all easements and encroachments
affecting the Property, the location of all improvements, curb-cuts, flood
hazard areas, wetlands, and bodies of water on the Property and all roads and
utility lines (including water, sewer, electric and, if applicable, gas)
abutting the Property and shall certify whether the roads are publicly
dedicated. The survey shall comply with the minimum detail requirements for land
title surveys as adopted by the American Land Title Association and American
Congress on Surveying and Mapping, shall be dated currently and shall be
otherwise satisfactory to Lender.

                           (3) Certificates of Occupancy. With the exception of
the Construction Building, copies of all certificates of occupancy to the extent
required, for the lawful use and operation of the Property.

                                      -7-

<PAGE>

                           (4) Insurance. Originals (or certified copies) of all
such policies or certificates evidencing such insurance, which Borrower is
required to obtain and maintain pursuant to the requirements of the Mortgage.

                           (5) Legal Opinion. The favorable opinion of counsel
to Borrower addressed to Lender, in form and substance satisfactory to Lender,
covering such matters as Lender may require.

                           (6) Financial Statements. Current Monthly Management
Packages (including salient financial details) for Borrower in the form
previously submitted to Lender.

                           (7) Environmental Audit. An environmental audit from
a qualified engineering firm or firms satisfactory to Lender.

                           (8) Building Inspection Report. With the exception of
the Construction Building, a property inspection report from a qualified
engineering firm or firms satisfactory to Lender confirming that the
improvements are structurally sound, all mechanical systems are in good working
order and that there are no material capital expenditures or deferred
maintenance obligations required pursuant to the property inspection report.

                           (9) Corporate Documents. Copies of Borrower's
articles or certificate of incorporation and bylaws, together with any
amendments thereto, incumbency certificate, and resolutions of its Board of
Directors authorizing the transactions contemplated by this Agreement, certified
to be true, correct, and complete by Borrower's secretary or assistant
secretary, together with current good standing certificates issued by the State
of Delaware and the Commonwealth of Pennsylvania.

                  (c) Fees, Charges, and Premiums. Borrower shall have paid for
all premiums on insurance policies required by the Mortgage, all conveyancing
and recording charges in connection with the closing of the Loan, for Lender's
fee(s) and the legal fees and disbursements of Lender's attorneys in connection
with this transaction, and for any transfer or documentary stamp taxes due under
any Federal, State or municipal law.

         4.2      All Advances. Each advance of the Loan shall be subject to the
satisfaction of each of the following conditions precedent:

                  (a) Representations and Warranties. All representations and
warranties set forth in Article 3 hereof shall remain true and correct as of the
date of such advance.

                  (b) No Default. There shall be no Event of Default then
uncured (as determined by Lender in its sole discretion) under this Agreement or
any other Loan Document, and no event shall have occurred and be continuing
which, with the passage of time or the giving of notice or both, could
constitute an Event of Default hereunder.

                                      -8-

<PAGE>

                  (c) Title Insurance. At all times the advances made by Lender
hereunder are to be fully covered by title insurance in accordance with the
Pennsylvania Open End Mortgage Act and the endorsements issued by the title
insurance company with respect thereto.

         4.3      Holdback. The last $25,000 of the Loan shall not be available
for advance until Borrower has complied with the affirmative covenant contained
in Section 3.4(a) to Lender's satisfaction in Lender's sole and absolute
discretion. The $25,000 holdback shall in no way limit Borrower's liability or
obligations hereunder or under the Loan Documents nor shall it limit Lender's
remedies with respect environmental conditions on the Property.

         4.4      Advances After an Event of Default Cured by a Third Party. If
any third party cures an Event of Default under this Agreement or any other Loan
Document within the same cure period provided Borrower under this Agreement or
the other Loan Documents, or any longer cure period as Lender may accept, and
the Loan is not accelerated, then notwithstanding such cure Lender shall have no
further obligation to make any subsequent Loan advances hereunder to or for the
account of Borrower and the outstanding balance of the Loan shall be repaid as
provided in the Loan Documents.

         4.5      Subordination and Intercreditor Agreement. Borrower may not
grant any additional subordinate lien encumbering the Property without Lender's
prior written consent. Lender's consent to a second mortgage lien on the
Property in favor of The Law Debenture Trust Company of New York subordinate to
the lien of the Mortgage is subject to the delivery by Borrower to Lender of a
mortgage subordination and intercreditor agreement by and among Borrower, Lender
and such subordinate lender in the exact form attached hereto as Exhibit "B" and
made a part hereof, with any changes in such agreement being subject to Lender's
approval in Lender's sole and absolute discretion.

                                    ARTICLE 5

                                    ADVANCES

         5.1      Requirements. Borrower shall give Lender written notice in the
form prescribed by Lender requesting an advance of a portion of the Loan,
specifying the amount requested (the "Requests"). All Requests must be in the
minimum amount of $1,000,000 and shall be subject to the following notice
periods: (a) for Requests in the amount of $1,000,000, Borrower shall give
Lender not less than three (3) business days written notice and no more than two
(2) Requests in any ten (10) day period; and (b) for Requests in excess of
$1,000,000, Borrower shall give Lender not less than ten (10) days written
notice. Each Request shall be irrevocable once given and binding on the
Borrower.

         5.2      Disbursements of Loan Proceeds. Subject to satisfaction of the
applicable conditions set forth in Article 4 for such borrowing, Lender will
make the proceeds of such borrowing available to the Borrower no later than
12:00 noon (New York time) in immediately available funds on the date and at the
account specified by the Borrower in the Request.

                                      -9-

<PAGE>

                                    ARTICLE 6

                             REPORTING REQUIREMENTS

         6.1      Financial Reports; Required Notices.

                  (a) Borrower shall furnish or cause to be furnished to Lender:

                           (1) within 30 days after the end of each calendar
quarter, Monthly Management Packages (including salient financial details) for
Borrower in the form previously submitted to Lender, which Monthly Management
Packages shall be certified as true and correct by the chief financial officer
of Borrower.

                           (2) within 45 days after the end of each calendar
quarter, an operating statement covering the operation of each Property during
the prior calendar quarter, setting forth in such detail as Lender shall
reasonably request the status of leasing, the income, expenses and cash flow and
other financial information relating to each Property, which operating statement
shall be certified as true and correct by the chief financial officer of
Borrower;

                           (3) within 90 days after the end of each fiscal year
of Borrower and within 60 days after the end of the first half of each interim
fiscal year, Borrower shall deliver to Lender a certificate dated as of the end
of such fiscal year or half, as the case may be, signed on behalf of Borrower by
its President or chief financial officer, stating that as of the date thereof no
Event of Default hereunder has occurred and is continuing or exists, or if an
Event of Default hereunder has occurred and is continuing or exists, specifying
in detail the nature and period of existence thereof and any action with respect
thereto taken or contemplated to be taken by Borrower;

                           (4) within 10 days after the filing thereof, copies
of Marconi, Inc.'s complete federal income tax return for each year so long as
such tax return is included as part of the Borrowers financial information; and

                           (5) with reasonable promptness, such other financial
and other information respecting the financial condition, business or operations
of Borrower as Lender may from time to time reasonably request.

                  (b) Borrower shall notify Lender promptly in writing of the
occurrence of any of the following:

                                    (1) a fire or other casualty causing damage
to the Property in excess of $250,000;

                                    (2) receipt of written notice of eminent
domain proceedings or condemnation of all or any part of the Property;

                                    (3) receipt of written notice required under
the Environmental Indemnity;

                                      -10-

<PAGE>

                                    (4) receipt of any default or termination
notice from any tenant of all or any portion of the Property;

                                    (5) receipt of any default or acceleration
notice from the holder of any lien or security interest in the Property or any
portion thereof, including, but not limited to, any default or acceleration
notice or any other correspondence with respect to non-performance from any
subordinate lender, as described in the subordination and intercreditor
agreement to be executed as provided herein, or from any other lender who has
entered into a credit facility with Borrower; and

                                    (6) commencement of any material litigation
or other proceedings affecting Borrower or the Property.

                                    ARTICLE 7

                                EVENTS OF DEFAULT

         7.1      Events of Default. Each of the following shall, at the option
of Lender, constitute an event of default (each, an "Event of Default")
hereunder:

                  (a) except as provided in Section 2.3(b)(2), if default or
breach shall be made in the payment of any sum required to be paid under the
terms of any of the Loan Documents when and as the same shall become due and
payable; provided, however that Borrower shall have a three (3) day grace period
for a payment default, but not more than twice in any twelve (12) consecutive
month period nor upon maturity of the Loan; or

                  (b) if a default or breach (other than a default or breach in
the payment of any sum required to be paid under the terms of any of the Loan
Documents and defaults or breaches under Section 4.5 of the Mortgage as to which
no grace period applies), shall be made in the due observance or performance of
any other provision of any of the Loan Documents to be observed or performed by
Borrower, and such default is not cured within thirty (30) days after the
sending of written notice from Lender; or

                  (c) if by decree of a court of competent jurisdiction Borrower
shall be adjudicated bankrupt or insolvent, or any of Borrower's property shall
have been sequestered, and such decree shall have continued undischarged and
unstayed for sixty (60) days after the entry thereof, or if any proceedings
under the Federal Bankruptcy Code or any similar statute applicable to Borrower,
as now or hereafter in effect, shall be instituted against Borrower and is
consented to by the respondent or an order for relief shall be entered in such
proceeding or such proceeding shall not be dismissed within sixty (60) days
after such filing, or if Borrower shall institute any such proceeding or shall
consent to the institution of any such proceeding against Borrower under any
such law, or if Borrower shall make an assignment for the benefit of Borrower's
creditors or shall admit in writing Borrower's inability to pay debts generally
as they become due or shall consent to the appointment of a receiver or
liquidator or trustee of Borrower or of all or any part of its or their
property; or

                                      -11-

<PAGE>

                  (d) if any representation or warranty made by Borrower in any
document evidencing or securing the Loan proves to be incorrect, now or
hereafter, in any material respect; or

                  (e) if any improvement essential to the continued operation of
the Property is substantially damaged or destroyed by an uninsured casualty and
Borrower fails to commence restoration or repair of the damage caused thereby in
a manner reasonably satisfactory to Lender within thirty (30) days following the
occurrence of such loss or damage; or

                  (f) if Borrower (i) shall default in any payment of any
obligation (or set of related obligations) under any agreement to which it is
party in respect of indebtedness in excess of $1,000,000 in aggregate amount
beyond any period of grace with respect thereto or, if such obligation or
obligations is or are payable or repayable on demand, shall fail to pay or repay
such obligation or obligations when demanded or (ii) shall default in the
observance of any covenant, term or condition contained in any agreement or
instrument by which such obligation or obligations is or are created, secured or
evidenced if the effect of such default is to cause or to permit the holder or
holders of such obligation or obligations (or a trustee or agent on behalf of
such holder or holders) to cause, all or part of such obligation or obligations
to become due before its or their otherwise stated maturity; or

                  (g) if one or more judgments for the payment of money shall
have been entered against Borrower, which judgment or judgments exceed
$1,000,000 in the aggregate, and such judgment or judgments shall remain
undischarged and unstayed for a period of thirty (30) consecutive days; or

                  (h) if any execution shall have been levied against any part
of the Property or against any other property of Borrower and shall continue
unstayed and in effect for a period of fifteen (15) days; or

                  (i) if Lender receives a notice under 42 Pa.C.S. Section
8143(b) from any person or entity or a notice under 42 Pa.C.S. Section 8143(c)
from Borrower.

         7.2      Remedies. Upon the occurrence of any Event of Default, Lender
may exercise any or all of the following rights and remedies as Lender may deem
necessary or appropriate:

                  (a) Refuse to make any further advances hereunder and/or
terminate Lender's commitment to make the Loan;

                  (b) Declare immediately due and payable all monies advanced
under the Note which are then unpaid, with all arrearages of interest, and
accordingly accelerate payment thereof; and

                  (c) Exercise all other remedies available to Lender under any
of the Loan Documents, or available to Lender under applicable law, it being the
intention of the parties that the remedies provided in this Agreement shall be
in addition to and not in substitution of the

                                      -12-

<PAGE>

rights and remedies which would otherwise be vested in Lender at law or in
equity, all of which rights and remedies are specifically reserved by Lender,
and the failure of Lender to exercise any remedy herein provided shall not
constitute a waiver by Lender nor preclude the resort to any other appropriate
remedy or remedies herein provided or prevent the subsequent or concurrent
resort to any other remedy or remedies which by law or equity shall be vested in
Lender for the recovery of damages or otherwise in the event of a breach of any
of the undertakings of Borrower hereunder, and any waiver by Lender of any
rights or remedies hereunder must, to be effective, be in writing, and such
waiver shall be limited in its effect to the condition or default specified
therein, but no such waiver shall extend to any subsequent condition or default
or impair any right consequent thereon.

                                    ARTICLE 8

                                  MISCELLANEOUS

         8.1      Notices. Except as otherwise provided in this Agreement, all
notices, requests, demands and other communications that this Agreement requires
or permits a party to give the other party shall be in writing and shall be
given to such party at its address set forth below or at such other address as
shall be designated by such party in a notice to the other party complying with
the terms of this Section. Unless this Agreement specifically provides
otherwise, all notices, requests, demands and other communications provided for
hereunder shall be effective (A) if given by mail, three Business Days after
placing in the United States mail, postage prepaid, certified mail, return
receipt requested (B) if given by courier service guaranteeing next business day
delivery, one Business Day after delivery to the courier service with the fee
for next business day delivery paid by the sender or (C) if given by any other
means, when actually received by the addressee.

                           If to Borrower:

                           Marconi Communications, Inc.
                           3000 Marconi Drive
                           Warrendale, PA 15086-7502
                           Attention: General Counsel
                           Facsimile: 724-742-4660

                                      -13-

<PAGE>

                           with a copy to:

                           Allen & Overy
                           1221 Avenue of the Americas
                           New York, NY 10020
                           Attention: Hugh McDonald, Esq.
                           Facsimile: 212-610-6399

                           If to Lender:

                           Liberty Funding, L.L.C.
                           c/o Oaktree Capital Management, LLC
                           333 South Grand Avenue, 28th Floor
                           Los Angeles, CA 90071
                           Attention: Sean Armstrong
                           Facsimile: 213-830-6392

                           with a copy to:

                           Oaktree Capital Management, LLC
                           1301 Avenue of the Americas, 34th Floor
                           New York, NY  10019
                           Attention: Marc Porosoff, Esq.
                           Facsimile: 212-284-1905

         8.2      Jurisdiction and Venue. For the purpose of enforcing the
performance of Borrower's obligations hereunder and under the other Loan
Documents, and otherwise in connection with the Loan, Borrower hereby consents
to the jurisdiction and venue of the courts of the Commonwealth of Pennsylvania
or of any federal court located in such state, including without limitation the
Court of Common Pleas of Allegheny County and the United States District Court
for the Western District of Pennsylvania. Borrower hereby waives the right to
trial by jury in any action arising hereunder, under the other Loan Documents or
otherwise in connection with the Loan.

         8.3      Successors and Assigns; Participations; Assignments.

                  (a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Borrower, Lender, any future holder of the Note
and their respective successors and assigns, except that Borrower may not assign
or transfer any of its rights hereunder or interests herein without the prior
written consent of Lender, and any purported assignment without such consent
shall be void. Lender shall be permitted to assign any of its rights hereunder
or its interests herein to (x) any affiliate of Lender or Oaktree Capital
Management, LLC, (y) any unrelated third party that has a net worth of at least
four (4) times the unfunded amount of the

                                      -14-

<PAGE>

Loan at the time of such assignment or transfer, or (z) any other party with the
prior written consent of Borrower, which consent shall not be unreasonably
withheld, delayed or conditioned.

                  (b) Participations. Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell participations to one or more commercial banks or other persons (each a
"Participant") in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Loan and the Note), provided that

                           (i)      Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged,

                           (ii)     Lender shall remain solely responsible to
the Borrower for the performance of such obligations, and

                           (iii)    Borrower shall continue to deal solely and
directly with Lender in connection with Lender's rights and obligations under
this Agreement and each of the other Loan Documents.

                  (c) Financial and Other Information. The Borrower authorizes
Lender to disclose on a confidential basis to any Participant or Purchasing
Lender (each, a "transferee") and any prospective transferee any and all
financial and other information in Lender's possession concerning Borrower and
its subsidiaries and affiliates which has been or may be delivered to Lender by
or on behalf of such persons in connection with this Agreement or any other Loan
Document, any application for the Loan or Lender's credit evaluation of such
persons.

         8.4      No Joint Venture. Nothing herein nor the acts of the parties
hereto shall be construed to create a partnership or joint venture between
Borrower and Lender. Nothing in this Agreement shall be construed to make Lender
liable to anyone for goods delivered or services performed by them upon any
Property or for debts or claims accruing to them against Borrower.

         8.5      Number and Gender. For purposes of this Agreement the neuter
shall be deemed to include the masculine and the feminine, and the singular
shall be deemed to include the plural and the plural the singular, as the
context may require.

         8.6      Captions. The captions contained herein are not a part of this
Agreement. They are only for the convenience of the parties and do not in any
way modify, amplify, or give full notice of any of the terms, covenants or
conditions of this Agreement.

         8.7      Governing Law. This Agreement shall be governed by and
interpreted in accordance with the law of the Commonwealth of Pennsylvania.

         8.8      Time of the Essence. Whether or not elsewhere herein expressly
stated, all dates and times for performance herein set forth shall be of the
essence of this Agreement.

                                      -15-

<PAGE>

         8.9      Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.

         8.10     Amendments. This Agreement may only be amended in writing,
pursuant to an instrument executed by Lender and Borrower.

         8.11     Limitation of Liability. The liability of Borrower hereunder
shall be limited to the extent provided in Section 6.7 of the Mortgage.

         8.12     Borrower's Representatives. Prior to the first Loan advance
Borrower shall provide Lender a certification listing those persons who are
authorized to submit Requests, reports, and other required documents on behalf
of Borrower and otherwise deal with Lender on behalf of Borrower with respect to
the Loan, together with the title of and specimen signature for each such
person. Borrower may from time to time deliver an updated certification as to
Borrower's authorized representatives. Lender may conclusively rely on such
certification and any update thereto as evidence of the authority of the persons
listed thereon, and may refuse to accept any Request or other document from a
representative of Borrower not listed on such certification or an update
thereto; provided that Lender shall be fully protected in accepting and acting
upon any Request, report or other documentation that Lender receives from a
person purporting to act on behalf of Borrower if Lender in good faith believes
such person is authorized to do so, even if such person is not listed on such
certification or an update thereto.

                                      -16-

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, the day and year first above written.

                                     LIBERTY FUNDING, L.L.C.

                                     By R. S. BERNARD
                                       Name: RUSSEL S. BERNARD
                                       Title: PRINCIPAL

                                     By S. SCHULMAN
                                       Name: STEPHANIE SCHULMAN
                                       Title: VIVE PRESIDENT, LEGAL

                                     MARCONI COMMUNICATIONS, INC.

                                     By: S. M. BARTO
                                        Name: STEVEN M. BARTO
                                        Title: VICE PRESIDENT FINANCE, AMERICAS

<PAGE>

                                   Exhibit "A"

                        Legal Description of the Property

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 1 on a
subdivision plan titled Fore Systems Plan of Lots Revised, recorded in the
Recorder's Office of Allegheny County in Plan Book Volume 212, pages 102 to 105,
bounded and described as follows:

         BEGINNING at a point on the Westerly line of Brush Creek Road, variable
width, said point being the Northeast corner of Lot 1 in the Fore Systems Plan
of Lots Revised (Plan), said point also being on the Northwest line of Lot 1 in
the Lang Partnership Plan of Lots No. 1, as recorded in Plan Book Volume 145,
pages 117 and 118; thence along the dividing line between Lot 1 in the Plan and
Lots 1 and 2 in the Lang Partnership Plan of Lots No. 1, South 44(degree) 15'
39" West, 481.25 feet to a point at the Northeast corner of property now or
formerly of the County of Allegheny; thence along the dividing line of Lot 1 in
the Plan and property now or formerly of the County of Allegheny, South
46(degree) 54' 44" West, 522.60 feet to a point at the common corner of Lot 1
and Lot 2 in the Plan; thence along the dividing line between Lot 1 and Lot 2 in
the Plan, the following 9 courses and distances: North 47(degree) 44' 08" WEst,
622.34 feet to a point; thence North 12(degree) 08' 22" West, 173.41 feet to a
point; thence North 52(degree) 54' 13" East, 111.32 feeT to a point; thence
North 02(degree) 08' 38" West, 170.09 feet to a point; thence by an arc of a
circle deflecting to the left in a Northeastwardly direction, having a radius of
2,515.00 feet and an arc distance of 108.35 feet to a point of reverse curve;
thence by an arc of a circle deflecting to the right in a Southeastwardly
direction, having a radius of 218.00 feet and an arc distance of 128.71 feet to
a point; thence North 28(degree) 17' 39" East, 297.08 feet to a point; thence
North 87(degree) 09' 25" East, 315.64 feet to a point; theNce North 44(degree)
08' 45" East, 185.00 feet to a point on the westerly line of Brush Creek Road,
variable width; thence along the westerly line of Brush Creek Road, variable
width, the following 4 courses and distances: South 45(degree) 51' 15" East,
105.49 feet to a point; thencE by an arc of a circle deflecting to the right in
a Southeastwardly direction, having a radius of 1,875.00 feet and an arc
distance of 116.17 feet to a point; thence South 42(degree) 18' 15" East, 127.49
feet to a point; thence by an arc of a circle deflecting to the lEft in a
Southeastwardly direction, having a radius of 6,800.00 feet and an arc distance
of 356.04 feet to a point; thence South 45(degree) 18' 15" East, 5.71 feet to a
point at the place of beginning.

         Containing 861,250.27 square feet or 19.772 acres.

Being designated as Block 9923-X, Lot 88152 in the Deed Registry Office of
Allegheny County, Pennsylvania.

SECOND DESCRIBED

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 2 on a
subdivision plan titled Fore Systems Plan of Lots Revised, recorded in the
Recorder's Office of Allegheny County in Plan Book Volume 212, pages 102 to 105,
being bounded and described as follows:

<PAGE>

         BEGINNING at a point on the Southerly line of Knob Road, 41.50 feet
wide, said point being the Northwest corner of Lot 2 in the Fore Systems Plan of
Lots Revised (Plan), said point also being the Northeast corner of Lot 3 in the
Plan; thence along the dividing line between Lot 2 and Lot 3, the following 8
courses and distances: South 00(degree) 29' 53" West, 250.00 feet to a point;
Thence South 73(degree) 26' 50" West, 464.95 feet to a point; thence North
86(degree) 20' 08" West, 138.14 feet to a point; thence South 02(dEgree) 11' 33"
West, 350.00 feet to a point; thence South 41(degree) 25' 23" East, 170.00 feet
to a point; thence South 26(degree) 43' 39" East, 204.75 feeT to a point; thence
South 18(degree) 58' 59" East, 192.82 feet to a point; thence South 47(degree)
29' 15" East, 612.36 feet to a point on the NortHerly line of property now or
formerly of the County of Allegheny, said point also being the Southwest corner
of Lot 2 in the Plan; thence along the dividing line of Lot 2 and property now
or formerly of the County of Allegheny, North 46(degree) 54' 44" East, 267.30
feet to a poInt at the common corner of Lot 2 and Lot 1 in the Plan; thence
along the dividing line between Lot 2 and Lot 1 in the Plan, the following 9
courses and distances: North 47(degree) 44' 08" West, 622.34 feet to a point;
thence North 12(degree) 08' 22" West, 173.41 feet to a pOint; thence North
52(degree) 54' 13" East, 111.32 feet to a point; thence North 02(degree) 08' 38"
West, 170.09 feet to a point; thence by an arc Of a circle deflecting to the
left in a Northeastwardly direction, having a radius of 2,515.00 feet and an arc
distance of 108.35 feet to a point of reverse curve; thence by an arc of a
circle deflecting to the right in a Southeastwardly direction, having a radius
of 218.00 feet and an arc distance of 128.71 feet to a point; thence North
28(degree) 17' 39" East, 297.08 feet to a point; thence North 87(degree) 09' 25"
East, 315.64 feet to a point; thence North 44(degree) 08' 45" East, 185.00 feet
to a point on the westerly line of Brush Creek Road, variablE width; thence
along the westerly line of Brush Creek Road, variable width, North 45(degree)
51' 15" West, 316.92 feet to a point on thE Southerly line of Knob Road, 41.50
feet wide; thence along the Southerly line of Knob Road, the following 3 courses
and distances: by an arc of a circle deflecting to the left in a Southwestwardly
direction, having a radius of 50.00 feet and an arc distance of 39.10 feet to a
point; thence South 89(degree) 20' 25" West, 188.02 feet to a point; thence
North 89(degree) 30' 07" West, 88.71 feet To a point at the place of beginning.

         Containing 650,301.86 square feet or 14.929 acres.

Being designated as Block 9923-X, Lot 88153 in the Deed Registry Office of
Allegheny County, Pennsylvania.

THIRD DESCRIBED

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 3 on a
subdivision plan titled Fore Systems Plan of Lots Revised, recorded in the
Recorder's Office of Allegheny County in Plan Book Volume 212, pages 102 to 105,
bounded and described as follows:

         BEGINNING at a point on the Southerly line of Knob Road, 41.50 feet
wide, said point being the Northwest corner of Lot 3 in the Fore Systems Plan of
Lots (Plan); thence along the Southerly line of Knob Road, the following 9
courses and distances: by an arc of a circle deflecting to the left in a
Northeastwardly direction, having a radius of 41,975.00 feet and an arc distance
of 38.72 feet to a point; thence North 87(degree) 19' 04" East, 216.34 feet to a
point; thence

                                     - 2 -

<PAGE>

North 87(degree) 38' 22" East, 631.36 feet to a Point; thence by an arc of a
circle deflecting to the left in a Northeastwardly direction, having a radius of
2,450.00 feet and an arc distance of 62.98 feet to a point; thence North
86(degree) 10' East, 28.06 feet to a point; thence by an arc of a circle
deflecting to the right iN a Northeastwardly direction, having a radius of
5,425.00 feet and an arc distance of 113.75 feet to a point; thence North
87(degree) 22' 05" East, 169.83 feet to a point; thence by an arc of a circle
deflecting to the right in a Northeastwardly direction, having a radius of
2,675.00 feet and an arc distance of 146.13 feet to a point; thence South
89(degree) 30' 07" East, 35.62 feet to a point at the NortheAst corner of Lot 3
in the Plan, said point also being the Northwest corner of Lot 2; thence along
the dividing line between Lot 3 and Lot 2, the following 8 courses and
distances: South 00(degree) 29' 53" West, 250.00 feet to a point; thence South
73(degree) 26' 50" WEst, 464.95 feet to a point; thence North 86(degree) 20' 08"
West, 138.14 feet to a point; thence South 02(degree) 11' 33" West, 350.00 feet
to a Point; thence South 41(degree) 25' 23" East, 170.00 feet to a point; thence
South 26(degree) 43' 39" East, 204.75 feet to a point; thence South 18(dEgree)
58' 59" East, 192.82 feet to a point; thence South 47(degree) 29' 15" East,
612.36 feet to a point on the Northerly line of property now or formerly of the
County of Allegheny, said point also being the Southeast corner of Lot 3 in the
Plan; thence along the dividing line of Lot 3 and property now or formerly of
the County of Allegheny, South 46(degree) 54' 44" West, 34.59 feet to a point;
thence continuing along saiD dividing line, South 49(degree) 07' 33" West,
704.95 feet to a point at the common corner of Lot 4 and Lot 3 in the Plan;
thence along the dividing line between Lot 4 and Lot 3 in the Plan, the
following 9 courses and distances: North 30(degree) 16' 21" West, 464.81 feet To
a point; thence by an arc of a circle deflecting to the left in a
Northeastwardly direction, having a radius of 516.00 feet and an arc distance of
154.70 feet to a point; thence North 42(degree) 30' 45" East, 283.74 feet to a
point; thence North 45(degree) 43' 09" West, 587.23 feet to a point; thence
South 84(degree) 55' 17" West, 94.52 feet to a point; thence South 05(degree)
04' 43" East, 91.68 feet to a point; Thence by an arc of a circle deflecting to
the right in a Southwestwardly direction, having a radius of 185.00 feet and an
arc distance of 106.48 feet to a point; thence North 63(degree) 13' 37" West,
579.82 feet to a point; thence North 02(degree) 17' 22" West, 879.76 feet to a
Point at the place of beginning.

         Containing 1,463,154.04 square feet or 33.589 acres.

Being designated as Block 9923-X, Lot 88154 and Block 9923-X, Lot 88150 in the
Deed Registry Office of Allegheny County, Pennsylvania.

FOURTH DESCRIBED

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 4 on a
subdivision plan titled "FORE Systems Plan of Lots Revised" dated September 11,
1996, last revised December 1, 1998, and recorded in the Allegheny County
Recorder of Deeds Office in Plan Book Volume 212, pages 102 to 105, being
bounded and described as follows:

         BEGINNING at a point on the Southerly line of Knob Road, 41.50 feet
wide, said point also being the Northwest corner of Lot 4 in the FORE Systems
Plan of Lots Revised ("Plan"), and also being the Northeast corner of property
now or formerly of the County of Allegheny as recorded in Deed Book Volume 4483,
page 66, and Deed Book Volume 6551, page 243; thence

                                     - 3 -

<PAGE>

along the dividing line between Lot 4 in the Plan and property now or formerly
of the County of Allegheny, the following five courses and distances, viz: South
44(degree) 03' 59" East, 186.32 feet to a point; thence South 07(degree) 51' 29"
East, 1,794.26 feet to a point; thence South 42(degree) 49' 21" East, 375.00
feet to a point; thence South 71(degree) 03' 04" East, 509.71 feet to a point;
thence North 37(degree) 03' 18" East, 226.12 feet to a point; thence through
property now or formerly of the County of Allegheny, also being the Southerly
line of proposed Lot 4 in the Plan, North 49(degree) 07' 33" East, 203.00 feet
to a point at the common corner of Lot 4 and Lot 3 in the Plan; thence along the
dividing line between Lot 4 and Lot 3 in the Plan, the following nine courses
and distances, viz: North 30(degree) 16' 21" West, 464.81 feet to a point;
thence by an arc of a circle deflecting to the left in a Northeastwardly
direction, having a radius of 516.00 feet and an arc distance of 154.70 feet to
a point; thence North 42(degree) 30' 45" East, 283.74 feet to a point; thence
North 45(degree) 43' 09" West, 587.23 feet to a point; thence South 84(degree)
55' 17" West, 94.52 feet to a point; thence South 05(degree) 04' 43" East, 91.68
feet to a point; thence by an arc of a circle deflecting to the right in a
Southwestwardly direction, having a radius of 185.00 feet and an arc distance of
106.48 feet to a point; thence North 63(degree) 13' 37" West, 579.82 feet to a
point; thence North 02(degree) 17' 22" West, 879.76 feet to a point on the
Southerly line of Knob Road, 41.50 feet wide; thence along the Southerly line of
Knob Road, 41.50 feet wide, by an arc of a circle deflecting to the right in a
Southwestwardly direction, having a radius of 41,975.00 feet and an arc distance
of 399.30 feet to a point at the place of beginning.

         Containing 1,444,637.32 square feet or 33.089 acres.

Being designated as Block 9923-X, Lot 88155 and Block 9923-X, Lot 88151 in the
Deed Registry Office of Allegheny County, Pennsylvania.

                                     - 4 -

<PAGE>

                    SUBORDINATION AND INTERCREDITOR AGREEMENT

                            DATED ________ ___, 2003

                                     BETWEEN

                             LIBERTY FUNDING, L.L.C.

                                       AND

                   THE LAW DEBENTURE TRUST CORPORATION P.L.C.

                                     - 5 -

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    PAGE
<S>                                                                                                                 <C>
ARTICLE 1............................................................................................DEFINED TERMS    2

         Section 1.1...................................................................................Definitions    2

ARTICLE 2..............................................................SUBORDINATION; LIMITED STANDSTILL; PAYMENTS    6

         Section 2.1.................................................................................Subordination    6

         Section 2.2............................................Limited Standstill;  Limitation on Lenders' Rights    6

         Section 2.3..........................................................Non-Interference by Security Trustee    6

ARTICLE 3.........................................................................SUBSTITUTE PERFORMANCE; CONSENTS    7

         Section 3.1.............................................................................Notice of Default    7

         Section 3.2........................................Performance by Security Trustee; Waiver of Subrogation    7

         Section 3.3...................................................................Consent by Security Trustee    7

         Section 3.4........................................................................Bankruptcy of Borrower    7

ARTICLE 4................................................................COVENANTS, REPRESENTATIONS AND WARRANTIES    8

         Section 4.1.....................................................................................Covenants    8

         Section 4.2...............................................Representations and Warranties of Senior Lender    10

         Section 4.3............................................Representations and Warranties of Security Trustee    11

ARTICLE 5............................................................................................MISCELLANEOUS    12

         Section 5.1.......................................................................................Notices    12

         Section 5.2..................................................................................Modification    13

         Section 5.3..........................................................................WAIVER OF JURY TRIAL    13

         Section 5.4.................................................................................Governing Law    13

         Section 5.5..................................................................................Counterparts    14

         Section 5.6........................................................................Successors and Assigns    14

         Section 5.7..................................................................No Third Party Beneficiaries   14

         Section 5.8..................................................................................Severability   14

         Section 5.9.....................................................................................No Waiver   14

         Section 5.10..........................................................................Joinder By Borrower   14
</TABLE>

                                       -i-

<PAGE>

                    SUBORDINATION AND INTERCREDITOR AGREEMENT

         THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this "Agreement") is
made as of ______ __, 2003, by and between LIBERTY FUNDING, L.L.C., a California
limited liability company ("Senior Lender"), and THE LAW DEBENTURE TRUST
CORPORATION P.L.C. as the security trustee for and on behalf of the Secured
Creditors (each as defined below) ("Security Trustee").

                                    RECITALS

         1.       MARCONI COMMUNICATIONS, INC., a Delaware corporation
("Borrower"), has executed a Note (the "Liberty Note") in the sum of
$22,500,000.00 dated ____________, 2003 in favor of Senior Lender, payable with
interest and upon the terms and conditions described therein, evidencing
(together with all other amounts due and payable under the other Senior Loan
Documents (as hereinafter defined) a first mortgage loan (the "Senior Loan")),
which Liberty Note is secured by, among other things, an Open-End Mortgage and
Security Agreement (as the same may be hereafter amended, extended, restated,
supplemented, increased, consolidated, renewed or otherwise modified or replaced
from time to time, the "Senior Mortgage") covering certain real property and
improvements thereon located in the County of Allegheny, Commonwealth of
Pennsylvania, as more particularly described on Schedule A attached hereto and
made a part hereof, and all fixtures and other property described in the Senior
Mortgage, including, but not limited to, property described as the "Mortgaged
Premises" in the Senior Mortgage (collectively, the "Property") and an
Assignment of Leases and Rents covering all of Borrower's rights under all Rents
(as hereinafter defined) and Leases (as hereinafter defined) now or hereafter
affecting the Property or any portion thereof (as the same may be hereafter
amended, extended, restated, supplemented, increased, consolidated, renewed or
otherwise modified or replaced from time to time, the "Senior ALR"), which
Senior Mortgage and Senior ALR are intended to be filed in the real estate
records of Allegheny County, Pennsylvania. The proceeds of the Senior Loan shall
be advanced to Borrower from time to time as provided in a Loan Agreement dated
as of even date therewith (the "Senior Loan Agreement") between Borrower and
Senior Lender.

         2.       As part of the financial restructuring of Marconi Corporation
PLC ("Corp."), Borrower has, pursuant to the terms of the Note Guarantees (as
defined below), guaranteed the obligations of Corp. under certain indentures
(the "Note Indentures") pursuant to which Corp. has issued notes in the
aggregate principal amount of the equivalent of L450,000,000 (the "Senior
Notes") and the equivalent of the aggregate of (1) $300,000,000 plus (2) the
U.S. Dollar equivalent L117,270,000 (the "Junior Notes"). In addition, Borrower
has, pursuant to the terms of the New Bonding Guarantee (as defined below),
guaranteed the obligations of Corp. under a L50,000,000 performance bonding
facility (the "New Bonding Facility"). Borrower's guarantee obligations under
the Note Guarantees and the New Bonding Guarantee are secured by, among other
things, a second Mortgage and Security Agreement (the "Subordinate Mortgage") on
the Property. All obligations of Borrower to Security Trustee pursuant to the
Note Guarantee of the obligations under the Note Indentures and the New Bonding
Facility as such obligations relate to the Property and the Subordinate Mortgage
shall collectively constitute the "Subordinate Loan".

<PAGE>

         3.       The Security Trustee is entering into this Agreement at the
direction and on behalf of the trustee (the "Senior Indenture Trustee") of the
Senior Notes (on behalf of the holders of the Senior Notes) and the trustee (the
"Junior Indenture Trustee" and together with the Senior Indenture Trustee, the
"Indenture Trustees") of the Junior Notes (on behalf of the holders of the
Junior Notes) by virtue of a power of attorney dated [______________].

         NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby covenant and agree as follows:

                                    ARTICLE 9

                                  DEFINED TERMS

         9.1      DEFINITIONS. The following terms shall have the meanings
herein specified unless the context otherwise requires (such meanings to apply
to such terms in both the singular and plural forms):

                  "Agreement" means this Subordination and Intercreditor
Agreement between Senior Lender and Security Trustee.

                  "Applicable Party" means Senior Lender and Security Trustee,
as applicable.

                  "Bankruptcy Code" shall have the meaning provided in Section
3.3(a).

                  "Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the New York or other day on which
banking institutions are authorized or obligated to close in New York.

                  "Enforcement Action" means the commencement of the exercise of
any remedies against the Property, Leases or Rents, including the commencement
of any foreclosure proceeding, the exercise of any power of sale, the sale by
advertisement, the taking of a deed or assignment in lieu of foreclosure, the
obtaining of a receiver or the taking of any other enforcement action against,
or the taking of possession or control of, any of the Property including, all
Leases and Rents, provided, however, that the term "Enforcement Action" shall
not include (a) requests and demands made upon Borrower by delivery of notices
to Borrower, (b) assertion or enforcement of any right of Security Trustee to
receive payment from proceeds of a foreclosure sale of the Property which may
remain after payment of costs and expenses of such foreclosure and payment and
satisfaction in full of the Senior Indebtedness, (c) the exercise by Security
Trustee of any of its rights and remedies against any indemnitors under any of
the Subordinate Loan Documents, (d) the submission of a proof of claim by
Security Trustee, the Indenture Trustees, or the holders of any of the Senior
Notes or Junior Notes (collectively, the "Noteholders") in any Insolvency
Proceeding, (e) efforts by Security Trustee, the Indenture Trustees or the
Noteholders to obtain adequate protection or relief from the automatic stay
under the United States Bankruptcy Code other than adequate protection which
concerns or relates to the Property, Rents and Leases, and with respect to
relief from the automatic stay, seek relief to exercise rights against

                                     - 2 -

<PAGE>

the Property, Rents and Leases only to the extent Senior Lender also obtains
relief from the automatic stay and Senior Lender's rights under this Agreement
are not impaired or adversely affected, (f) efforts by Security Trustee, the
Indenture Trustees or the Noteholders to convert an Insolvency Proceeding to a
liquidation proceeding, (g) the voting by Security Trustee, the Indenture
Trustees or the Noteholders on, or the objecting by the Security Trustee, the
Indenture Trustees or the Noteholders to approval of, a plan of reorganization
involving Borrower under an Insolvency Proceeding, or (h) Security Trustee, the
Indenture Trustees' or the Noteholders' defending any action by Borrower
(including Borrower's estate under an Insolvency Proceeding) seeking to avoid
any liens granted to, or to reject any agreements with, Security Trustee, the
Indenture Trustees or the Noteholders.

                  "Indenture Trustees" shall have the meaning provided in the
third recital hereof.

                  "Insolvency Proceeding" means any proceeding under Title 11 of
the United States Code (11 U.S.C. Sec. 101 et. seq.) or any other insolvency,
liquidation, reorganization or other similar proceeding concerning Borrower, any
action for the dissolution of Borrower, any proceeding judicial or otherwise)
concerning the application of the assets of Borrower, for the benefit of its
creditors, the appointment of or any proceeding seeking the appointment of a
trustee, receiver or other similar custodian for all or any substantial part of
the assets of Borrower or any other action concerning the adjustment of the
debts of Borrower, the cessation of business by Borrower, except following a
sale, transfer or other disposition of all or substantially all of the assets of
Borrower in a transaction permitted under the Senior Loan Documents.

                  "Junior Indenture Trustee" shall have the meaning provided in
the third recital hereof.

                  "Junior Notes" shall have the meaning provided in the second
recital hereof.

                  "Leases" means all leases and licenses now or hereafter
affecting the Property or any portion thereof, together with all extensions,
renewals and modifications thereof and subleases thereunder, and together with
all guaranties of any tenant's or subtenant's performance thereunder.

                  "Liberty Note" shall have the meaning provided in the first
recital hereof.

                  "New Bonding Facility" shall have the meaning provided in the
second recital hereof.

                  "New Bonding Guarantee" means the guarantee and indemnity
given by, amongst others, Borrower relating to the New Bonding Facility.

                  "Note Guarantees" means the guarantees and indemnities granted
by, amongst others, Borrower relating to the Note Indentures.

                  "Note Indentures" shall have the meaning provided in the
second recital hereof.

                                     - 3 -

<PAGE>

                  "Opinions" shall have the meaning provided in Section 4.3(b)
hereof.

                  "Person" means any individual, corporation, trust, trustee,
partnership, unincorporated association, government, governmental agency, or
court or other authority, including without limitation, any officer appointed by
any court or other authority.

                  "Property" shall have the meaning provided in the first
recital hereof.

                  "Protective Advances" shall mean any amounts advanced by
Senior Lender to protect, preserve and/or secure any of the collateral securing
the Senior Loan, including, without limitation, all sums advanced to (a) pay
real estate taxes and other governmental charges which could constitute a prior
lien on the Property, Rents and Leases, (b) pay insurance premiums on any
insurance policies issued with respect to the Property, Leases and Rents, (c)
secure, safeguard and maintain the Property, Leases and Rents in the condition
required by the Senior Mortgage and (d) enforce the Senior Mortgage and the
other Senior Loan Documents, including attorneys' fees and court costs.

                  "Rents" means all rents (whether denoted as minimum rent,
percentage rent, additional rent or otherwise), income, profits and other sums
due or to become due under the Leases, or any of them, including, without
limiting the generality of the foregoing, deficiency rents, security deposits
and liquidated damages following default or late payment of rent, premiums
payable by any lessee upon the exercise of a cancellation privilege provided for
in any Lease and all proceeds payable under any policy of insurance covering
loss of rents resulting from untenantability caused by destruction or damage to
the Property, all awards and other compensation heretofore and hereafter to be
made to Borrower for any taking by eminent domain, either permanent or
temporary, of all or any part of the Property together with any and all rights
and claims of any kind which Senior Lender may have against any lessee under any
Lease or any subtenants or occupants of the Property.

                  "Secured Creditors" shall have the meaning provided in the
STID.

                  "Senior ALR" shall have the meaning provided in the first
recital hereof.

                  "Senior Event of Default" means an Event of Default under and
as defined in the Senior Loan Documents.

                  "Senior Indebtedness" shall mean, collectively, all of the
indebtedness, liabilities and obligations of Borrower evidenced by the Liberty
Note and the other Senior Loan Documents and all amounts due or to become due
pursuant to the Senior Loan Documents, including interest thereon and any other
amounts payable in respect thereof or in connection therewith.

                  "Senior Indenture Trustee" shall have the meaning provided in
the third recital hereof.

                  "Senior Lender" shall have the meaning provided in the first
recital hereof.

                                     - 4 -

<PAGE>

                  "Senior Loan" shall have the meaning provided in the first
recital hereof and, in addition, shall include, and all agreements and
subordinations made by Security Trustee hereunder shall extend to, (a)
discretionary additional advances of principal by Senior Lender to Borrower in
the maximum aggregate amount of $2,500,000, it being understood and agreed that
Senior Lender has made no commitment for such advances of principal in amounts
which exceed the maximum commitment set forth in the Senior Loan Documents, but
reserves the right to do so in its sole discretion, (b) all accrued and unpaid
interest due on the Senior Loan, together with all late fees and other charges
and amounts (including, without limitation, all costs of collection and
attorneys' fees and court costs) due or which, with the passage of time, may
become due under the Senior Loan Documents, whether before or after default and
(c) all Protective Advances made by Senior Lender, together with all interest
thereon, whether advanced before or after default.

                  "Senior Loan Agreement" shall have the meaning provided in the
first recital hereof.

                  "Senior Loan Documents" shall mean the Senior Loan Agreement,
the Liberty Note, the Senior Mortgage, the Senior ALR and any and all other
instruments, documents and agreements now or hereafter evidencing, securing or
relating to the Senior Indebtedness.

                  "Senior Mortgage" shall have the meaning provided in the first
recital hereof.

                  "Senior Notes" shall have the meaning provided in the second
recital hereof.

                  "STID" means the Security Trust and Intercreditor Deed
between, inter alia, the Security Trustee, Law Debenture Trust Company of New
York as Senior Indenture Trustee, JPMorgan Chase Bank as Junior Indenture
Trustee, Corp. as issuer, and certain obligors defined therein, including the
Borrower.

                  "Subordinate Event of Default" means an Event of Default under
and as defined in the Subordinate Loan Documents.

                  "Subordinate Indebtedness" shall mean, collectively, all of
the indebtedness, liabilities and obligations of Borrower due or to become due
pursuant to the Subordinate Loan Documents, including interest thereon and any
other amounts payable in respect thereof or in connection therewith.

                  "Subordinate Loan" shall have the meaning provided in the
second recital hereof.

                  "Subordinate Loan Documents" shall mean the Subordinate
Mortgage and, solely to the extent it relates to the Property and Leases and
Rents, the Senior Notes, Junior Notes, Note Indentures, the documents evidencing
the New Bonding Facility and all other instruments, documents and agreements now
or hereafter evidencing, securing or relating to the Subordinate Indebtedness.

                                     - 5 -

<PAGE>

                  "Subordinate Mortgage" shall have the meaning provided in the
second recital hereof.

                                   ARTICLE 10

                   SUBORDINATION; LIMITED STANDSTILL; PAYMENTS

         10.1     SUBORDINATION. Any and all rights and interests of Security
Trustee in and to the Property and Leases and Rents is, and shall continue to
be, subject and subordinate in priority and payment to the Senior Mortgage and
Senior ALR. Security Trustee hereby acknowledges and agrees that the Borrower's
guarantee obligations under the Note Guarantees is secured by, among other
things, the Subordinate Mortgage on the Property, and Security Trustee hereby
intentionally and unconditionally, subordinates the lien or charge of the
Subordinate Mortgage in favor of the lien or charge of the Senior Mortgage and
Senior ALR upon the Property, Leases and Rents.

         10.2 LIMITED STANDSTILL; LIMITATION ON LENDERS' RIGHTS. Notwithstanding
Security Trustee's rights under applicable law or any provision of the
Subordinate Loan Documents to the contrary, Security Trustee hereby acknowledges
and agrees that it shall not take any Enforcement Action against the Property,
the Leases or Rents until, in any such case, the earlier of the date (i) of
written confirmation by Senior Lender of the satisfaction in full of the Senior
Indebtedness in accordance with its terms without the possibility of a
Reinstatement Distribution or (ii) Security Trustee receives the written consent
of Senior Lender to take any Enforcement Action. Security Trustee hereby waives
any right it may have to require that Senior Lender marshal any assets of
Borrower in favor of Security Trustee and Security Trustee agrees that, it shall
not acquire, by subrogation or otherwise, any lien, estate, right or other
interest in any of the Property, the Leases or Rents or the proceeds therefrom
that is or may be prior to, or of equal priority to, any of the Senior Loan
Documents or the liens, rights, estates and interests of Senior Lender created
thereby. Nothing contained herein shall restrict or impair the rights and
remedies of Security Trustee against Borrower or under the Subordinate Loan
Documents or with respect to any collateral now or hereafter given to secure
Borrower's guarantee obligations under the Note Guarantees other than the
Property, Leases and Rents.

         10.3     NON-INTERFERENCE BY SECURITY TRUSTEE. Until such time as
Security Trustee is permitted to take an Enforcement Action against the
Property, the Leases or Rents in accordance with the terms of Section 2.2,
Security Trustee shall not institute any judicial or administrative proceeding
against Senior Lender in connection with Senior Lender's interest in the
Property, Leases or Rents, and, in all events, Security Trustee shall not take
or institute any action, which directly or indirectly would interfere with or
delay the exercise by Senior Lender of its rights and remedies in respect of the
Property, Leases or Rents or any part thereof or under the Senior Loan Documents
or this Agreement. Without limiting the generality of the foregoing, in the
event of a bankruptcy or insolvency of Borrower, Security Trustee shall not
object to or oppose any efforts by Senior Lender to obtain relief from the
automatic stay under Section 362 of the United States Bankruptcy Code, obtain
adequate protection under Sections 361 and 363 of the United States

                                     - 6 -

<PAGE>

Bankruptcy Code or to seek to cause the Borrower's bankruptcy estate to abandon
the Property (or any portion thereof) that is subject to the Senior Mortgage.

                                   ARTICLE 11

                        SUBSTITUTE PERFORMANCE; CONSENTS

         11.1     NOTICE OF DEFAULT. In the event of a Senior Event of Default,
Senior Lender will provide to Security Trustee a copy of any related notice of
default delivered to Borrower, and such notice shall be sent to Security Trustee
in the manner provided for in Section 5.1 hereof. In the event of a Subordinate
Event of Default, Security Trustee will provide to Senior Lender a copy of any
related notice of default delivered to Borrower and such notice shall be sent to
Senior Lender in the manner provided for in Section 5.1 hereof. The failure of
the Applicable Party to provide any such notice to the other, or notice of any
other default to which the other may be entitled to notice hereunder, shall not
affect, limit, modify, or waive in any manner or respect (i) Borrower's default
or breach under the applicable loan documents or (ii) the Applicable Party's
rights and remedies pursuant to the applicable loan documents with respect to
any default by Borrower or any indemnitor or guarantor; and provided further,
that the foregoing shall not and shall not be deemed to limit, affect, modify or
waive in any manner or respect (but shall impose no obligation on the Applicable
Party with respect to the exercise thereof) the Applicable Party's rights and
remedies upon the occurrence of a default.

         11.2     PERFORMANCE BY SECURITY TRUSTEE; WAIVER OF SUBROGATION.
Security Trustee hereby absolutely and irrevocably waives, to the fullest extent
permitted by applicable law, and agrees that it shall not seek to enforce in any
manner whatsoever, any rights it may have, by contract, at law or in equity, to
be subrogated to Senior Lender's rights against Borrower under the Senior Loan
Documents or to Senior Lender's liens, interests, estates or rights on, in or to
the Property, Leases or Rents until payment in full of the Senior Indebtedness
in accordance with its terms or acquisition of the Senior Indebtedness by
Security Trustee, whereupon Security Trustee shall be entitled to be subrogated
to Senior Lender's rights and remedies against Borrower under the Senior Loan
Documents and to Senior Lender's liens and security interests on the Property,
Leases or Rents.

         11.3     CONSENT BY SECURITY TRUSTEE. Security Trustee hereby
acknowledges that any lawful action taken by or on behalf of Senior Lender in
the exercise of Senior Lender's rights and/or remedies under the Senior Loan
Documents or at law or in equity and in accordance with the terms and conditions
thereof and hereof, (including, without limitation, any foreclosure or
acquisition of title to the Property or any part thereof by deed in lieu of
foreclosure or otherwise) is expressly permitted hereby and does not require its
consent including, without limitation, at the option of Senior Lender, the sale,
whether separately or together, of all or any portion of the Property.

                                     - 7 -

<PAGE>

         11.4     BANKRUPTCY OF BORROWER.

                  11.4.1   This Agreement shall be applicable both before and
after the commencement, whether voluntary or involuntary, of any case by or
against Borrower under the United States Bankruptcy Code, as amended from time
to time, any successor statute or rule promulgated thereunder (collectively, the
"Bankruptcy Code") and all references herein to Borrower shall be deemed to
apply to the fee title owner of the Property as a debtor-in-possession and to
any trustee in bankruptcy for the estate of the fee title owner of the Property.

                  11.4.2   In the event Senior Lender is required under any
bankruptcy or other law to return to Borrower, the estate in bankruptcy thereof,
any third party or any trustee, receiver or other similar representative of
Borrower any payment or distribution of assets, whether in cash, property or
securities, including, without limitation any of the Property or any proceeds of
the Property previously received by Senior Lender on account of the Senior Loan
(a "Reinstatement Distribution") then to the maximum extent permitted by law,
this Agreement and the subordination of the lien of the Subordinate Loan in such
Property or proceeds shall be reinstated with respect to any such Reinstatement
Distribution. Senior Lender shall not be required to contest its obligation to
return such Reinstatement Distribution.

                                   ARTICLE 12

                    COVENANTS, REPRESENTATIONS AND WARRANTIES

         12.1     COVENANTS.

                  12.1.1   Security Trustee hereby covenants and agrees with
Senior Lender that, without limiting the generality of any other provisions of
this Agreement, Senior Lender may (subject to the terms of this Agreement and
any applicable laws) at any time and from time to time without the consent of,
or notice to, Security Trustee, and without incurring responsibility to Security
Trustee, upon or without any terms or conditions and in whole or in part:

                  (a) change the manner, place or terms of payment or
performance of, and/or change or extend the time of payment or performance of,
renew or alter, any portion of the Senior Indebtedness or any other obligations
of any Person evidenced or secured by the Senior Loan Documents, any security
therefor, or any liability incurred directly or indirectly in respect thereof;

                  (b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever securing, the Senior
Indebtedness or any other obligations of any Person evidenced or secured by the
Senior Loan Documents, or any liabilities incurred directly or indirectly in
respect thereof, and/or any offset there against;

                  (c) exercise or refrain from exercising any rights of Senior
Lender under the Senior Loan Documents against Borrower or others or otherwise
act or refrain from acting;

                                     - 8 -

<PAGE>

                  (d) settle or compromise any portion of the Senior
Indebtedness or any other obligations of any Person evidenced or secured by the
Senior Loan Documents, any security therefor or any liability incurred directly
or indirectly in respect thereto;

                  (e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of Borrower under the Senior Loan Documents to
Senior Lender regardless of what liability or liabilities of Borrower under the
Senior Loan Documents remain unpaid or unperformed; and/or

                  (f) consent to or waive any breach of, or any act, omission or
default under, any of the Senior Loan Documents, or, except as expressly
provided herein, otherwise amend, modify or supplement any of the Senior Loan
Documents or any other instruments or agreements executed and delivered in
connection therewith or otherwise relating thereto.

                  12.1.2   As a material inducement to Senior Lender's execution
and delivery of this Agreement, Security Trustee further covenants and agrees
until satisfaction in full of the Senior Indebtedness as follows:

                  (a) With respect to tenants of the Property which are not in
arrears in the payment of rent or any other sums due under their respective
leases, Security Trustee shall not without the prior written consent of Senior
Lender name any tenant under a lease of the Property as a party defendant in any
action or proceeding or consent to any such request from Borrower for such
action if Security Trustee's consent is needed under the Subordinate Loan
Documents; nor will Security Trustee take or consent to any other action with
respect to all or any portion of the Property, the effect of which would be to
terminate any tenant of any portion of the Property whose payment of rent and
any other sums due under the lease is current without the prior written consent
of Senior Lender;

                  (b) In the event Senior Lender shall release, for the purposes
of restoration of all or any part of the improvements on or within the Property,
its right, title and interest in and to the proceeds under policies of casualty
insurance thereon, and/or its right, title and interest in and to any awards, or
its right, title and interest in and to other compensation made for any damages,
losses or compensation or other rights by reason of a taking in eminent domain
(or deed in lieu thereof), Security Trustee shall release for such purpose all
of its right, title and interest, if any, in and to all such insurance proceeds
or awards and Security Trustee agrees that the balance of such proceeds
remaining shall be applied in accordance with the Senior Loan Documents,
including, without limitation, to reduction of principal of the Senior Loan;

                  (c) Anything contained in the Subordinate Loan Documents to
the contrary notwithstanding, it is hereby acknowledged and agreed that if and
to the extent Senior Lender agrees to grant non-disturbance agreements to any
tenants of the Property, Security Trustee shall consent to or approve such
non-disturbance agreements if the Subordinate Loan Documents provide that
Security Trustee's consent or approval is needed;

                  (d) Without limitation to the foregoing, no provision or
requirement of the Subordinate Loan Documents that Security Trustee's consent or
approval be obtained for any act

                                     - 9 -

<PAGE>

or determination by Borrower in connection with the use, leasing, operation,
management and maintenance of the Property shall (i) limit, alter, modify or
affect, in any manner or respect whatsoever, Senior Lender's rights and remedies
pursuant to the Senior Loan and Senior Loan Documents, or (ii) create or impose
any obligation or liability on Senior Lender to act, refrain from acting or make
any inquiry as to whether any such consent or approval of Security Trustee has
been obtained or requested by Borrower in connection with any action, failure to
act, or determination relative to the Senior Loan, the Property or Borrower; and

                  (e) After Security Trustee receives written notice of a Senior
Event of Default and during the continuance of such Senior Event of Default,
Security Trustee shall promptly pay to Senior Lender all Rents collected by or
on behalf of Security Trustee until the Senior Loan is satisfied and paid in
full.

         12.2     REPRESENTATIONS AND WARRANTIES OF SENIOR LENDER. Senior Lender
hereby makes the following representations and warranties to Security Trustee as
of the date hereof:

                  12.2.1   Senior Lender has the power, authority and legal
right to execute, deliver and perform this Agreement. This Agreement has been
duly authorized by all necessary action of Senior Lender, duly executed and
delivered by Senior Lender and constitutes valid and binding obligations of such
party enforceable against Senior Lender in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting rights of creditors
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

                  12.2.2   Neither the execution, delivery or performance by
Senior Lender of this Agreement nor compliance by it with the terms and
provisions hereof (i) will contravene any provision of any law, statute, rule or
regulation or any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any lien upon any of the property or assets of
Senior Lender pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement, loan agreement, partnership agreement or any other agreement,
contract or instrument to which Senior Lender is a party or by which it or any
of its property or assets is bound or to which it may be subject or (iii) will
violate any provision of the organizational documents of Senior Lender.

                  12.2.3   No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with (except as have been
obtained or made prior to the date hereof), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
by Senior Lender of this Agreement or (ii) the legality, validity, binding
effect or enforceability of this Agreement with respect to Senior Lender.

                  12.2.4   Senior Lender entered into the loan transactions
contemplated by its respective loan documents and made its loan without reliance
upon any information or advice from Security Trustee. Senior Lender made its own
underwriting analysis in connection with its

                                     - 10 -

<PAGE>

loan, its own credit review of Borrower, and investigated all matters pertinent,
in Senior Lender's judgment, to its determination to make its loan and to
execute and deliver its respective loan documents.

         12.3     REPRESENTATIONS AND WARRANTIES OF SECURITY TRUSTEE. Security
Trustee hereby makes the following representations and warranties to Senior
Lender as of the date hereof:

                  12.3.1   Security Trustee has the power, authority and legal
right to execute, deliver and perform this Agreement. In addition, Security
Trustee represents and warrants to Senior Lender that Security Trustee has the
power, authority and legal right to act for and bind the Indenture Trustees.
This Agreement has been duly authorized by all necessary action of Security
Trustee, duly executed and delivered by Security Trustee and subject to the
assumptions and qualifications in the Opinions, constitutes valid and binding
obligations of such party enforceable against Security Trustee in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

                  12.3.2   To the best of Security Trustee's knowledge and
belief, and subject to the assumptions and qualifications in the legal opinions
of even date herewith addressed to Senior Lender in form and substance
satisfactory to Senior Lender in its sole and absolute discretion (the
"Opinions"):

                  (a) Neither the execution, delivery or performance by Security
Trustee of this Agreement nor compliance by it with the terms and provisions
hereof (i) will contravene any provision of any law, statute, rule or regulation
or any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any lien upon any of the property or assets of
Security Trustee pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement, partnership agreement or any other
agreement, contract or instrument to which the Security Trustee is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the organizational documents of Security
Trustee.

                  (b) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as have been
obtained or made prior to the date hereof), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
by the Security Trustee of this Agreement or (ii) the legality, validity,
binding effect or enforceability of this Agreement with respect to Security
Trustee.

                  12.3.3   Security Trustee has not relied upon any information
or advice from Senior Lender.

                                     - 11 -

<PAGE>

                                   ARTICLE 13

                                  MISCELLANEOUS

         13.1     NOTICES. All notices, consents, approvals, requests, demands,
instruments or other communications to be made, given or furnished pursuant to,
under or by virtue of this Agreement (each, a "notice") shall be in writing and
shall be deemed given or furnished if addressed to the party intended to receive
the same at the address of such party as set forth below (i) upon receipt when
personally delivered at such address, (ii) five (5) Business Days after the same
is deposited in the mail as first class registered or certified mail, return
receipt requested, postage prepaid, (iii) two (2) Business Days after the date
of delivery of such notice to an international, reputable commercial courier
service or (iv) on the day of the transmission of the facsimile so long as it s
received in its entirety by 5:00 p.m. Eastern Standard Time on a Business Day
and the original of same is received the next Business Day via overnight
delivery as provided in clause (iii) above.

If to Senior Lender:       Liberty Funding, L.L.C.
                           c/o Oaktree Capital Management, LLC
                           333 South Grand Avenue, 28th Floor
                           Los Angeles, CA 90071
                           Attention: Sean Armstrong
                           Facsimile: 213-830-6392

with a copy to:            Liberty Funding, L.L.C.
                           c/o Oaktree Capital Management, LLC
                           1301 Avenue of the Americas, 34th Floor
                           New York, NY 10019
                           Attention: Marc Porosoff, Esq.
                           Facsimile: 212-284-1905

If to Security Trustee:    The Law Debenture Trust Corporation P.L.C.
                           Fifth Floor
                           100 Wood Street
                           London EC2V 7EX
                           Attention: Manager, Trust Administrator
                           Facsimile: +44 207 696 5261

If to Borrower:            Marconi Communications, Inc.
                           3000 Marconi Drive
                           Warrendale, PA 15086-7502
                           Attention: Rob Dougherty
                           Facsimile: 724-742-4660

                                     - 12 -

<PAGE>

with a copy to:            Allen & Overy
                           1221 Avenue of the Americas
                           New York, NY 10020
                           Attention: Hugh McDonald, Esq.
                           Facsimile: 212-610-6399

Any party may change the address to which any notice is to be delivered to any
other address by furnishing written notice of such change at least fifteen (15)
days prior to the effective date of such change to the other parties in the
manner set forth above, but no such notice of change shall be effective unless
and until received by such other parties. Notices may be given on behalf of any
party by its attorneys.

         13.2     MODIFICATION. No provision of this Agreement may be changed,
waived, discharged or terminated orally, by telephone or by any other means
except by an instrument in writing signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought.

         13.3     WAIVER OF JURY TRIAL. SENIOR LENDER AND SECURITY TRUSTEE EACH
EXPRESSLY AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, ANY AND EVERY RIGHT IT MAY HAVE TO A
TRIAL BY JURY.

         13.4     GOVERNING LAW.

                  13.4.1   This Agreement shall be governed by and construed
according to the laws, from time to time in effect, of the Commonwealth of
Pennsylvania and the laws of the United States of America. To the fullest extent
permitted by law, each Applicable Party hereby unconditionally and irrevocably
waives any claim to assert that the law of any other jurisdiction governs this
Agreement.

                  13.4.2   Any legal suit, action or proceeding against Security
Trustee or Senior Lender arising out of or relating to this Agreement shall be
instituted in any Federal or state court in Philadelphia, Pennsylvania and each
of Senior Lender and Security Trustee waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding,
and each of Senior Lender and Security Trustee hereby irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding.

         13.5     COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original. Such counterparts shall
constitute but one and the same instrument and shall be binding upon, and shall
inure to the benefit of, each of the undersigned individually as fully and
completely as if all had signed one instrument.

         13.6     SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of (a) Senior Lender and its successors and assigns,
including without limitation, any holder of the Liberty Note and (b) Security
Trustee, and its permitted successors and assigns. Senior Lender will endeavor
to give Security Trustee notice of a transfer of its respective loan,

                                     - 13 -

<PAGE>

but such notice is a courtesy only, and the failure to give any such notice
(timely or at all) shall not affect, limit, impair, modify or alter in any
respect whatsoever, or constitute a waiver of, any of the terms or provisions
hereof or its rights or remedies hereunder or under Senior Loan Documents.

         13.7     NO THIRD PARTY BENEFICIARIES. Nothing contained in this
Agreement shall be deemed to indicate that this Agreement has been entered into
for the benefit of any Person other than Senior Lender and Security Trustee and
their respective successors and assigns, and no other Person shall be a third
party beneficiary hereof.

         13.8     SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         13.9     NO WAIVER.

                  13.9.1   No waiver shall be deemed to be made by Senior Lender
of any of its rights hereunder, or under Senior Loan Documents, unless the same
shall be in writing and signed by Senior Lender, and each waiver, if any, shall
be a waiver only with respect to the specific instances involved and shall in no
way impair the rights of Senior Lender in any other respect or at any other
time.

                  13.9.2   No waiver shall be deemed to be made by Security
Trustee of any of its rights hereunder, or under the Subordinate Loan Documents
to the extent that such documents relate to the Property, unless the same shall
be in writing and signed by Security Trustee, and each waiver, if any, shall be
a waiver only with respect to the specific instances involved and shall in no
way impair the rights of Security Trustee in any other respect or at any other
time.

         13.10    JOINDER BY BORROWER. Borrower, by its execution below, hereby
consents to and agrees to be bound by the terms and conditions of this Agreement
to the extent applicable to Borrower.

                                     - 14 -

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

SENIOR LENDER:                            LIBERTY FUNDING, L.L.C.

                                          By: OAKTREE CAPITAL MANAGEMENT,
                                          LLC, its Manager

                                          By: __________________________________
                                          Name:
                                          Title:

                                          By: __________________________________
                                          Name:
                                          Title:

SECURITY TRUSTEE:                         THE LAW DEBENTURE TRUST
                                          CORPORATION P.L.C.

                                          By: __________________________________
                                          Name:
                                          Title:

                                          CONSENTED AND AGREED TO THIS ___
                                          DAY OF ___________, 2003

BORROWER:                                 MARCONI COMMUNICATIONS, INC.

                                          By:___________________________________
                                          Name:
                                          Title:

<PAGE>

                                   SCHEDULE A

                                  Real Property

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 1 on a
subdivision plan titled Fore Systems Plan of Lots Revised, recorded in the
Recorder's Office of Allegheny County in Plan Book Volume 212, pages 102 to 105,
bounded and described as follows:

         BEGINNING at a point on the Westerly line of Brush Creek Road, variable
width, said point being the Northeast corner of Lot 1 in the Fore Systems Plan
of Lots Revised (Plan), said point also being on the Northwest line of Lot 1 in
the Lang Partnership Plan of Lots No. 1, as recorded in Plan Book Volume 145,
pages 117 and 118; thence along the dividing line between Lot 1 in the Plan and
Lots 1 and 2 in the Lang Partnership Plan of Lots No. 1, South 44(degree) 15'
39" West, 481.25 feet to a point at the Northeast corner of property now or
formerly of the County of Allegheny; thence along the dividing line of Lot 1 in
the Plan and property now or formerly of the County of Allegheny, South
46(degree) 54' 44" West, 522.60 feet to a point at the common corner of Lot 1
and Lot 2 in the Plan; thence along the dividing line between Lot 1 and Lot 2 in
the Plan, the following 9 courses and distances: North 47(degree) 44' 08" West,
622.34 feet to a point; thence North 12(degree) 08' 22" West, 173.41 feet to a
point; thence North 52(degree) 54' 13" East, 111.32 feet to a point; thence
North 02(degree) 08' 38" West, 170.09 feet to a point; thence by an arc of a
circle deflecting to the left in a Northeastwardly direction, having a radius of
2,515.00 feet and an arc distance of 108.35 feet to a point of reverse curve;
thence by an arc of a circle deflecting to the right in a Southeastwardly
direction, having a radius of 218.00 feet and an arc distance of 128.71 feet to
a point; thence North 28(degree) 17' 39" East, 297.08 feet to a point; thence
North 87(degree) 09' 25" East, 315.64 feet to a point; thence North 44(degree)
08' 45" East, 185.00 feet to a point on the westerly line of Brush Creek Road,
variable width; thence along the westerly line of Brush Creek Road, variable
width, the following 4 courses and distances: South 45(degree) 51' 15" East,
105.49 feet to a point; thence by an arc of a circle deflecting to the right in
a Southeastwardly direction, having a radius of 1,875.00 feet and an arc
distance of 116.17 feet to a point; thence South 42(degree) 18' 15" East, 127.49
feet to a point; thence by an arc of a circle deflecting to the left in a
Southeastwardly direction, having a radius of 6,800.00 feet and an arc distance
of 356.04 feet to a point; thence South 45(degree) 18' 15" East, 5.71 feet to a
point at the place of beginning.

         Containing 861,250.27 square feet or 19.772 acres.

Being designated as Block 9923-X, Lot 88152 in the Deed Registry Office of
Allegheny County, Pennsylvania.

SECOND DESCRIBED

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 2 on a
subdivision plan titled Fore

                                   Page 1 of 4

<PAGE>

Systems Plan of Lots Revised, recorded in the Recorder's Office of Allegheny
County in Plan Book Volume 212, pages 102 to 105, being bounded and described as
follows:

         BEGINNING at a point on the Southerly line of Knob Road, 41.50 feet
wide, said point being the Northwest corner of Lot 2 in the Fore Systems Plan of
Lots Revised (Plan), said point also being the Northeast corner of Lot 3 in the
Plan; thence along the dividing line between Lot 2 and Lot 3, the following 8
courses and distances: South 00(degree) 29' 53" West, 250.00 feet to a point;
thence South 73(degree) 26' 50" West, 464.95 feet to a point; thence North
86(degree) 20' 08" West, 138.14 feet to a point; thence South 02(degree) 11' 33"
West, 350.00 feet to a point; thence South 41(degree) 25' 23" East, 170.00 feet
to a point; thence South 26(degree) 43' 39" East, 204.75 feet to a point; thence
South 18(degree) 58' 59" East, 192.82 feet to a point; thence South 47(degree)
29' 15" East, 612.36 feet to a point on the Northerly line of property now or
formerly of the County of Allegheny, said point also being the Southwest corner
of Lot 2 in the Plan; thence along the dividing line of Lot 2 and property now
or formerly of the County of Allegheny, North 46(degree) 54' 44" East, 267.30
feet to a point at the common corner of Lot 2 and Lot 1 in the Plan; thence
along the dividing line between Lot 2 and Lot 1 in the Plan, the following 9
courses and distances: North 47(degree) 44' 08" West, 622.34 feet to a point;
thence North 12(degree) 08' 22" West, 173.41 feet to a point; thence North
52(degree) 54' 13" East, 111.32 feet to a point; thence North 02(degree) 08' 38"
West, 170.09 feet to a point; thence by an arc of a circle deflecting to the
left in a Northeastwardly direction, having a radius of 2,515.00 feet and an arc
distance of 108.35 feet to a point of reverse curve; thence by an arc of a
circle deflecting to the right in a Southeastwardly direction, having a radius
of 218.00 feet and an arc distance of 128.71 feet to a point; thence North
28(degree) 17' 39" East, 297.08 feet to a point; thence North 87(degree) 09' 25"
East, 315.64 feet to a point; thence North 44(degree) 08' 45" East, 185.00 feet
to a point on the westerly line of Brush Creek Road, variable width; thence
along the westerly line of Brush Creek Road, variable width, North 45(degree)
51' 15" West, 316.92 feet to a point on the Southerly line of Knob Road, 41.50
feet wide; thence along the Southerly line of Knob Road, the following 3 courses
and distances: by an arc of a circle deflecting to the left in a Southwestwardly
direction, having a radius of 50.00 feet and an arc distance of 39.10 feet to a
point; thence South 89(degree) 20' 25" West, 188.02 feet to a point; thence
North 89(degree) 30' 07" West, 88.71 feet to a point at the place of beginning.

         Containing 650,301.86 square feet or 14.929 acres.

Being designated as Block 9923-X, Lot 88153 in the Deed Registry Office of
Allegheny County, Pennsylvania.

THIRD DESCRIBED

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 3 on a
subdivision plan titled Fore Systems Plan of Lots Revised, recorded in the
Recorder's Office of Allegheny County in Plan Book Volume 212, pages 102 to 105,
bounded and described as follows:

         BEGINNING at a point on the Southerly line of Knob Road, 41.50 feet
wide, said point being the Northwest corner of Lot 3 in the Fore Systems Plan of
Lots (Plan); thence along the

                                  Page 2 of 4

<PAGE>

Southerly line of Knob Road, the following 9 courses and distances: by an arc of
a circle deflecting to the left in a Northeastwardly direction, having a radius
of 41,975.00 feet and an arc distance of 38.72 feet to a point; thence North
87(degree) 19' 04" East, 216.34 feet to a point; thence North 87(degree) 38' 22"
East, 631.36 feet to a point; thence by an arc of a circle deflecting to the
left in a Northeastwardly direction, having a radius of 2,450.00 feet and an arc
distance of 62.98 feet to a point; thence North 86(degree) 10' East, 28.06 feet
to a point; thence by an arc of a circle deflecting to the right in a
Northeastwardly direction, having a radius of 5,425.00 feet and an arc distance
of 113.75 feet to a point; thence North 87(degree) 22' 05" East, 169.83 feet to
a point; thence by an arc of a circle deflecting to the right in a
Northeastwardly direction, having a radius of 2,675.00 feet and an arc distance
of 146.13 feet to a point; thence South 89(degree) 30' 07" East, 35.62 feet to a
point at the Northeast corner of Lot 3 in the Plan, said point also being the
Northwest corner of Lot 2; thence along the dividing line between Lot 3 and Lot
2, the following 8 courses and distances: South 00(degree) 29' 53" West, 250.00
feet to a point; thence South 73(degree) 26' 50" West, 464.95 feet to a point;
thence North 86(degree) 20' 08" West, 138.14 feet to a point; thence South
02(degree) 11' 33" West, 350.00 feet to a point; thence South 41(degree) 25' 23"
East, 170.00 feet to a point; thence South 26(degree) 43' 39" East, 204.75 feet
to a point; thence South 18(degree) 58' 59" East, 192.82 feet to a point; thence
South 47(degree) 29' 15" East, 612.36 feet to a point on the Northerly line of
property now or formerly of the County of Allegheny, said point also being the
Southeast corner of Lot 3 in the Plan; thence along the dividing line of Lot 3
and property now or formerly of the County of Allegheny, South 46(degree) 54'
44" West, 34.59 feet to a point; thence continuing along said dividing line,
South 49(degree) 07' 33" West, 704.95 feet to a point at the common corner of
Lot 4 and Lot 3 in the Plan; thence along the dividing line between Lot 4 and
Lot 3 in the Plan, the following 9 courses and distances: North 30(degree) 16'
21" West, 464.81 feet to a point; thence by an arc of a circle deflecting to the
left in a Northeastwardly direction, having a radius of 516.00 feet and an arc
distance of 154.70 feet to a point; thence North 42(degree) 30' 45" East, 283.74
feet to a point; thence North 45(degree) 43' 09" West, 587.23 feet to a point;
thence South 84(degree) 55' 17" West, 94.52 feet to a point; thence South
05(degree) 04' 43" East, 91.68 feet to a point; thence by an arc of a circle
deflecting to the right in a Southwestwardly direction, having a radius of
185.00 feet and an arc distance of 106.48 feet to a point; thence North
63(degree) 13' 37" West, 579.82 feet to a point; thence North 02(degree) 17' 22"
West, 879.76 feet to a point at the place of beginning.

         Containing 1,463,154.04 square feet or 33.589 acres.

Being designated as Block 9923-X, Lot 88154 and Block 9923-X, Lot 88150 in the
Deed Registry Office of Allegheny County, Pennsylvania.

FOURTH DESCRIBED

         ALL THAT CERTAIN lot situate in the Township of Marshall, County of
Allegheny and Commonwealth of Pennsylvania, being designated as Lot 4 on a
subdivision plan titled "FORE Systems Plan of Lots Revised" dated September 11,
1996, last revised December 1, 1998, and recorded in the Allegheny County
Recorder of Deeds Office in Plan Book Volume 212, pages 102 to 105, being
bounded and described as follows:

                                  Page 3 of 4

<PAGE>

         BEGINNING at a point on the Southerly line of Knob Road, 41.50 feet
wide, said point also being the Northwest corner of Lot 4 in the FORE Systems
Plan of Lots Revised ("Plan"), and also being the Northeast corner of property
now or formerly of the County of Allegheny as recorded in Deed Book Volume 4483,
page 66, and Deed Book Volume 6551, page 243; thence along the dividing line
between Lot 4 in the Plan and property now or formerly of the County of
Allegheny, the following five courses and distances, viz: South 44(degree) 03'
59" East, 186.32 feet to a point; thence South 07(degree) 51' 29" East, 1,794.26
feet to a point; thence South 42(degree) 49' 21" East, 375.00 feet to a point;
thence South 71(degree) 03' 04" East, 509.71 feet to a point; thence North
37(degree) 03' 18" East, 226.12 feet to a point; thence through property now or
formerly of the County of Allegheny, also being the Southerly line of proposed
Lot 4 in the Plan, North 49(degree) 07' 33" East, 203.00 feet to a point at the
common corner of Lot 4 and Lot 3 in the Plan; thence along the dividing line
between Lot 4 and Lot 3 in the Plan, the following nine courses and distances,
viz: North 30(degree) 16' 21" West, 464.81 feet to a point; thence by an arc of
a circle deflecting to the left in a Northeastwardly direction, having a radius
of 516.00 feet and an arc distance of 154.70 feet to a point; thence North
42(degree) 30' 45" East, 283.74 feet to a point; thence North 45(degree) 43' 09"
West, 587.23 feet to a point; thence South 84(degree) 55' 17" West, 94.52 feet
to a point; thence South 05(degree) 04' 43" East, 91.68 feet to a point; thence
by an arc of a circle deflecting to the right in a Southwestwardly direction,
having a radius of 185.00 feet and an arc distance of 106.48 feet to a point;
thence North 63(degree) 13' 37" West, 579.82 feet to a point; thence North
02(degree) 17' 22" West, 879.76 feet to a point on the Southerly line of Knob
Road, 41.50 feet wide; thence along the Southerly line of Knob Road, 41.50 feet
wide, by an arc of a circle deflecting to the right in a Southwestwardly
direction, having a radius of 41,975.00 feet and an arc distance of 399.30 feet
to a point at the place of beginning.

         Containing 1,444,637.32 square feet or 33.089 acres.

Being designated as Block 9923-X, Lot 88155 and Block 9923-X, Lot 88151 in the
Deed Registry Office of Allegheny County, Pennsylvania.

                                  Page 4 of 4<PAGE>
                                                                   EXHIBIT 4.125
                                                                  CONFORMED COPY

                                                                  [Marconi LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: www.marconi.com

                                                           14 February, 2003

Banca Monte dei Paschi di Siena SpA
Agenzia 3
Via Trari 23/25
15125 Genova
Italy

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Euro Equivalents for each of those Bonds is E5,631,771
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of E2,815,885.50 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro
Equivalents of those of the Bonds listed in schedule 2 to this letter that
remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

D.A. ROUSE                                           C.D. HARBOUR
D.A. ROUSE                                           C.D. HARBOUR
DEP. GENERAL MANAGER                                 SENIOR MANAGER

For and behalf of
BANCA MONTE DEI PASCHI DI SIENA SPA

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set
out in the column headed "Euro Equivalent" in schedule 2 to this letter.

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means HSBC Bank plc.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING  BANK REFERENCE  BENEFICIARY                        LOCAL VALUE    PAYMENT     EXCHANGE
  COMPANY       COMPANY                                                                     CURRENCY     RATE E1
                                                                                                         12 FEB 03
------------  -----------  --------------  -------------------------------   -------------  --------  ------------
<S>            <C>        <C>             <C>                               <C>              <C>      <C>
    1             2             3                             4               5                 6          7
MCSpA           MCSpA      203/2360/001    TELECOM ITALIA S.P.A.             6,500,000,000    ITL      1,936.27
MCSpA           MCSpA      7155701         TELENOR NETT AS                       5,000,000    NOK        7.4738
MCSpA           MCSpA      7150201         TELENOR NETT AS                       1,134,993    DKK        7.4336
MCSpA           MCSpA      7137801         BELTELECOM                          199,005,100    ITL      1,936.27
MCSpA           MCSpA      7019301         RICEVITORE CAPO DOGANA              175,000,000    ITL      1,936.27
MCSpA           MCSpA      7019501         THE EMIRATES TLC                        289,498    AED        3.9430
MCSpA           MCSpA      7019601         THE EMIRATES TLC                        111,756    AED        3.9430
MCSpA           MCSpA      779/5/88        MIN. PPTT-ASST-ROMA                  24,712,000    ITL      1,936.27
MSud            MSud       7007701         SPI                               1,700,000,000    ITL      1,936.27
MSud            MSud       7019101         RICEV. CAPO DOGANA GENOVA           300,000,000    ITL      1,936.27
MSud            MSud       7018801         DHL INTERNATIONAL                   100,000,000    ITL      1,936.27
MSud            MSud       7009401         REGIONE CAMPANIA                     79,200,000    ITL      1,936.27
MSud            MSud       7017601         MIN. INDUSTRIA COM. ARTIGIANATO      17,270,000    ITL      1,936.27
MSud            MSud       7009201         RICEV. CAPO DOGANA NAPOLI             8,000,000    ITL      1,936.27
MSud            MSud       7017801         PRESIDENTE PRO-TEMPORE PROV.CA        6,240,000    ITL      1,936.27
MSud            MSud       7019201         MINISTERO COMUNICAZIONI                2,150,000    ITL      1,936.27
MSud            MSud       7003201         AMM. PROVINCIALE DI CASERTA           2,000,000    ITL      1,936.27
MSud            MSud       7004601         AMM. PROVINCIALE DI CASERTA           2,000,000    ITL      1,936.27
MSud            MSud       203.2360.1.92   COMUNE DI MARCIANISE                  1,000,000    ITL      1,936.27
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING     EURO     LATEST EXPIRY
  COMPANY       COMPANY    EQUIVALENT      DATE
------------  ----------- -----------  -------------
<S>            <C>        <C>          <C>
    1             2            8               9
MCSpA           MCSpA      3,356,970    31-Dec-06
MCSpA           MCSpA        669,004    15-Jul-03
MCSpA           MCSpA        152,684    16-Feb-15
MCSpA           MCSpA        102,778    15-Jul-01
MCSpA           MCSpA         90,380    31-Dec-02
MCSpA           MCSpA         73,421    16-Feb-02
MCSpA           MCSpA         28,343     6-Feb-02
MCSpA           MCSpA         12,763       U/L
MSud            MSud         877,977       U/L
MSud            MSud         154,937    31-Dec-02
MSud            MSud          51,646       U/L
MSud            MSud          40,903    31-Dec-99
MSud            MSud           8,919    29-Sep-03
MSud            MSud           4,132     8-Apr-99
MSud            MSud           3,223    19-Oct-04
MSud            MSud           1,110    10-Apr-02
MSud            MSud           1,033       U/L
MSud            MSud           1,033       U/L
MSud            MSud             516       U/L
</TABLE>

COMPANY KEY

MCSpA    Marconi Communications SpA
MSud              Marconi Sud

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

           [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF HSBC BANK PLC]

To:      Banca Monte dei Paschi di Siena SpA
         (the "BENEFICIARY")

                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), HSBC Bank plc
(the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER
OF CREDIT") in your favour on the following terms and conditions:

1.      DEFINITIONS

(a)     In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the
        Euro Equivalents for each of the Bonds that remain outstanding at that
        time.

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means 14 February 2004 and each anniversary
        thereof, being the date on which the Beneficiary must certify to the
        Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding
        on that date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that
        Bond set out in the column headed "Euro Equivalent" in schedule 1 to
        this Letter of Credit.

        "EXPIRY DATE" means the earlier of:

        (i)  14 February 2008 (or such later expiry date applicable as a result
             of an extension pursuant to paragraph 4(c)); and

        (ii) the date on which the Total L/C Amount is reduced to zero pursuant
             to a reduction under paragraph 3.

        "ORIGINAL BONDS OUTSTANDING" means E5,631,771.

                                       5
<PAGE>

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means E2,815,885.50, as reduced in accordance
        with paragraph 3 of this Letter of Credit.

2.      ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

REDUCTION IN TOTAL L/C AMOUNT

(a)      If:

         (i)      on a Certification Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding (as certified by the Beneficiary)
                  on that date; or

         (ii)     on a Presentation Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding on that date (after deducting the
                  Euro Equivalent for each Bond that is the subject of each
                  relevant Notification),

         the Total L/C Amount shall, subject to paragraph (b) below,
         automatically reduce accordingly.

(b)      Any reduction in the Total L/C Amount under sub-paragraph (a) above
         shall only be applied if:

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than E100,000; or

         (ii)     if as a result of such reduction the Total L/C Amount would be
                  zero.

                                       6
<PAGE>

3.       EXPIRY

(a)      The Issuing Bank will be released from its obligations under this
         Letter of Credit on the Expiry Date with no further liability on the
         part of the Issuing Bank except for any Demand validly presented in
         accordance with paragraph 2(a) of this Letter of Credit that remains
         unpaid.

(b)      When the Issuing Bank is no longer under any further obligations under
         this Letter of Credit, the Beneficiary must, on request, return the
         original of this Letter of Credit to the Issuing Bank.

(c)      It is a condition of this irrevocable Letter of Credit that, not more
         than 30 days before the present or each future Expiry Date, the
         Beneficiary may (unless the relevant Expiry Date occurs as a result of
         the value of this Letter of Credit being reduced to zero) request it to
         be extended for an additional period of one year from the present or
         each future Expiry Date. If the Issuing Bank elects not to extend this
         Letter of Credit for such additional period the Beneficiary may, on or
         prior to the applicable Expiry Date, make a Demand for an amount not to
         exceed the remaining balance of the Total L/C Amount.

4.       PAYMENTS

         All payments under this Letter of Credit shall be made in Euro and for
         value on the due date to the account of the Beneficiary specified in
         the Demand.

5.       DELIVERY OF DEMAND

         Each Demand shall be in writing, and, unless otherwise stated, may be
         made by letter or fax and must be received in legible form by the
         Issuing Bank at its address and by the particular department or officer
         (if any) as follows:

         HSBC Bank plc
         [Canada Place
         Canary Wharf
         London    E14 5AH]
         Fax:               [                ]
         Telex:             [                ]
         Attention:         [Trade Services Department]

6.       ASSIGNMENT

         The Beneficiary's rights under this Letter of Credit may not be
         assigned or transferred.

7.       UCP

         Except to the extent it is inconsistent with the express terms of this
         Letter of Credit, this Letter of Credit is subject to the Uniform
         Customs and Practice for Documentary Credits (1993 Revision),
         International Chamber of Commerce Publication No.500.

8.       GOVERNING LAW

         This Letter of Credit is governed by English law.

                                       7
<PAGE>

9.       JURISDICTION

         The courts of England have exclusive jurisdiction to settle any dispute
         arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
HSBC BANK PLC
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                      BONDS

<TABLE>
<CAPTION>
INDEMNIFYING      CONTRACTING     BANK REFERENCE      BENEFICIARY                          LOCAL VALUE    PAYMENT        EXCHANGE
  COMPANY           COMPANY                                                                              CURRENCY         RATE E1
                                                                                                                         12 FEB 03
------------      -----------     --------------      -------------------------------     -------------  --------      ------------
<S>                <C>             <C>               <C>                                 <C>              <C>            <C>
    1                 2                3                                4                     5             6              7
MCSpA               MCSpA           203/2360/001      TELECOM ITALIA S.P.A.               6,500,000,000    ITL            1,936.27
MCSpA               MCSpA           7155701           TELENOR NETT AS                         5,000,000    NOK              7.4738
MCSpA               MCSpA           7150201           TELENOR NETT AS                         1,134,993    DKK              7.4336
MCSpA               MCSpA           7137801           BELTELECOM                            199,005,100    ITL            1,936.27
MCSpA               MCSpA           7019301           RICEVITORE CAPO DOGANA                175,000,000    ITL            1,936.27
MCSpA               MCSpA           7019501           THE EMIRATES TLC                          289,498    AED              3.9430
MCSpA               MCSpA           7019601           THE EMIRATES TLC                          111,756    AED              3.9430
MCSpA               MCSpA           779/5/88          MIN.PPTT-ASST-ROMA                     24,712,000    ITL            1,936.27
MSud                MSud            7007701           SPI                                 1,700,000,000    ITL            1,936.27
MSud                MSud            7019101           RICEV.CAPO DOGANA GENOVA              300,000,000    ITL            1,936.27
MSud                MSud            7018801           DHL INTERNATIONAL                     100,000,000    ITL            1,936.27
MSud                MSud            7009401           REGIONE CAMPANIA                       79,200,000    ITL            1,936.27
MSud                MSud            7017601           MIN.INDUSTRIA COM.ARTIGIANATO          17,270,000    ITL            1,936.27
MSud                MSud            7009201           RICEV.CAPO DOGANA NAPOLI                8,000,000    ITL            1,936.27
MSud                MSud            7017801           PRESIDENTE PRO-TEMPORE PROV.CA          6,240,000    ITL            1,936.27
MSud                MSud            7019201           MINISTERO COMUNICAZIONI                 2,150,000    ITL            1,936.27
MSud                MSud            7003201           AMM.PROVINCIALE DI CASERTA              2,000,000    ITL            1,936.27
MSud                MSud            7004601           AMM.PROVINCIALE DI CASERTA              2,000,000    ITL            1,936.27
MSud                MSud            203.2360.1.92     COMUNE DI MARCIANISE                    1,000,000    ITL            1,936.27
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING      CONTRACTING        EURO        LATEST EXPIRY
  COMPANY           COMPANY       EQUIVALENT         DATE
------------      -----------   --------------   -------------
<S>                <C>             <C>          <C>
    1                 2              8               9
MCSpA               MCSpA           3,356,970    31-Dec-06
MCSpA               MCSpA             669,004    15-Jul-03
MCSpA               MCSpA             152,684    16-Feb-15
MCSpA               MCSpA             102,778    15-Jul-01
MCSpA               MCSpA              90,380    31-Dec-02
MCSpA               MCSpA              73,421    16-Feb-02
MCSpA               MCSpA              28,343     6-Feb-02
MCSpA               MCSpA              12,763       U/L
MSud                MSud              877,977       U/L
MSud                MSud              154,937    31-Dec-02
MSud                MSud               51,646       U/L
MSud                MSud               40,903    31-Dec-99
MSud                MSud                8,919    29-Sep-03
MSud                MSud                4,132     8-Apr-99
MSud                MSud                3,223    19-Oct-04
MSud                MSud                1,110    10-Apr-02
MSud                MSud                1,033       U/L
MSud                MSud                1,033       U/L
MSud                MSud                  516       U/L
</TABLE>

COMPANY KEY

MCSpA    Marconi Communications SpA
MSud     Marconi Sud

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      HSBC Bank plc

                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF BANCA MONTE DEI
PASCHI DI SIENA SPA DATED [                        ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.     [We certify that [        ] became due and payable on [      ] to [     ]
       pursuant to the terms of our guarantee number [ ] issued in favour of
       [        ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI
       COMPANY NAME] of such in writing (copy enclosed) not less than five
       business days prior to the date of this demand. However, we have not
       received payment of the sum of [       ] (being the amount due but unpaid
       under the Bonds).] [OR]

       [We certify that the amount of this drawing E[____________] under
       HSBC Bank plc Letter of Credit No. [ ] represents funds due to us as we
       have received notice from HSBC Bank plc of their decision not to extend
       this Letter of Credit for an additional period and the following Bonds in
       schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND
       NUMBERS]]

2.     We therefore demand payment of the sum of E[        ].

3.     Payment should be made to the following account:

       Name:

       Account Number:

       Bank:

4.     The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR BANCA MONTE DEI PASCHI DI SIENA SPA

                                       10
<PAGE>

                                                                  CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                               18 February, 2003

National Westminster Bank plc
135 Bishopsgate
London EC2M 3UR

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the US Dollar Equivalents for each of those Bonds is US$1,527,151
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of US$763,575.50 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the US
Dollar Equivalents of those of the Bonds listed in schedule 2 to this letter
that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

[AUTHORISED SIGNATORY]

For and behalf of
NATIONAL WESTMINSTER BANK PLC

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means JPMorgan Chase Bank.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

"US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of
that Bond set out in the column headed "US Dollar Equivalent" in schedule 2 to
this letter.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING     BANK                      BENEFICIARY                  LOCAL VALUE   PAYMENT       EXCHANGE
  COMPANY      COMPANY      REFERENCE                                                              CURRENCY     RATE US$1
                                                                                                                12 FEB 03
------------  ----------- -------------    ----------------------------------------  -----------   --------     ---------
     1            2             3                             4                           5           6            7
<S>           <C>        <C>              <C>                                        <C>            <C>         <C>
MCplc (MSIL)   MSIplc     TFPCYG 205868    China Resources (Hldg) Co Ltd              11,000,000     HKD         7.7993
MCplc (MML)    MM(I)L     59707            Emirates Holdings Electronics                  33,920     GBP         0.6187
MCplc (MSIL)   MSIL       TFPCYG 252273    Tunisia Telecom                                35,105     USD         1.0000
MCplc (MML)    MM(I)L     261190           International Aeradio (Emirates) L Dubai       25,001     EUR         0.9315
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING   US DOLLAR      LATEST
  COMPANY      COMPANY      EQUIVALENT     EXPIRY
                                             DATE
------------  -----------   ----------   ---------
<S>           <C>          <C>          <C>
     1            2              8            9
MCplc (MSIL)   MSIplc       1,410,383     2-Feb-01
MCplc (MML)    MM(I)L          54,825    20-Jan-03
MCplc (MSIL)   MSIL            35,105    31-Dec-01
MCplc (MML)    MM(I)L          26,838     7-Nov-03

                            1,527,151
</TABLE>

COMPANY KEY
MCplc            Marconi Corporation plc
MSIplc           Mobile Systems International plc
MSIL             Metapath Software International Ltd
MM(I)L           Marconi Mobile (International) Ltd

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

        [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK]

To:      National Westminster Bank plc
         (the "BENEFICIARY")

                                                                          [DATE]

               IRREVOCABLE STANDBY LETTER OF CREDIT NO. [         ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase
Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.      DEFINITIONS

(a)     In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the US
        Dollar Equivalents for each of the Bonds that remain outstanding at that
        time.

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means 18 February 2004 and each anniversary
        thereof, being the date on which the Beneficiary must certify to the
        Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding
        on that date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EXPIRY DATE" means the earlier of:

        (i)   18 February 2008 (or such later expiry date applicable as a result
              of an extension pursuant to paragraph 4(c)); and

        (ii)  the date on which the Total L/C Amount is reduced to zero pursuant
              to a reduction under paragraph 3.

        "ORIGINAL BONDS OUTSTANDING" means US$1,527,151.

                                       5
<PAGE>

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means US$763,575.50, as reduced in accordance with
        paragraph 3 of this Letter of Credit.

        "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in
        respect of that Bond set out in the column headed "US Dollar Equivalent"
        in schedule 1 to this Letter of Credit.

2.      ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

3.      REDUCTION IN TOTAL L/C AMOUNT

(a      If:

        (i)      on a Certification Date the Total L/C Amount exceeds the
                 Adjusted Bonds Outstanding (as certified by the Beneficiary)
                 on that date; or

        (ii)     on a Presentation Date the Total L/C Amount exceeds the
                 Adjusted Bonds Outstanding on that date (after deducting the
                 US Dollar Equivalent for each Bond that is the subject of each
                 relevant Notification),

         the Total L/C Amount shall, subject to paragraph (b) below,
         automatically reduce accordingly.

(b)      Any reduction in the Total L/C Amount under sub-paragraph (a) above
         shall only be applied if:

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than US$100,000; or

                                       6
<PAGE>

        (ii)     if as a result of such reduction the Total L/C Amount would be
                 zero.

4.      EXPIRY

(a)     The Issuing Bank will be released from its obligations under this
        Letter of Credit on the Expiry Date with no further liability on the
        part of the Issuing Bank except for any Demand validly presented in
        accordance with paragraph 2(a) of this Letter of Credit that remains
        unpaid.

(b)     When the Issuing Bank is no longer under any further obligations under
        this Letter of Credit, the Beneficiary must, on request, return the
        original of this Letter of Credit to the Issuing Bank.

(c)     It is a condition of this irrevocable Letter of Credit that, not more
        than 30 days before the present or each future Expiry Date, the
        Beneficiary may (unless the relevant Expiry Date occurs as a result of
        the value of this Letter of Credit being reduced to zero) request it to
        be extended for an additional period of one year from the present or
        each future Expiry Date. If the Issuing Bank elects not to extend this
        Letter of Credit for such additional period the Beneficiary may, on or
        prior to the applicable Expiry Date, make a Demand for an amount not to
        exceed the remaining balance of the Total L/C Amount.

5.      PAYMENTS

        All payments under this Letter of Credit shall be made in US Dollars and
        for value on the due date to the account of the Beneficiary specified in
        the Demand.

6.      DELIVERY OF DEMAND

        Each Demand shall be in writing, and, unless otherwise stated, may be
        made by letter or fax and must be received in legible form by the
        Issuing Bank at its address and by the particular department or officer
        (if any) as follows:

        JPMorgan Chase Bank
        [1 Chaseside
        Bournemouth
        Dorset BH7 7DA]
        Fax:               [01202 34 37 30]
        Telex:             [              ]
        Attention:         [              ]

7.      ASSIGNMENT

        The Beneficiary's rights under this Letter of Credit may not be assigned
        or transferred.

8.      UCP

        Except to the extent it is inconsistent with the express terms of this
        Letter of Credit, this Letter of Credit is subject to the Uniform
        Customs and Practice for Documentary Credits (1993 Revision),
        International Chamber of Commerce Publication No. 500.

                                       7
<PAGE>

9.      GOVERNING LAW

        This Letter of Credit is governed by English law.

10.     JURISDICTION

        The courts of England have exclusive jurisdiction to settle any dispute
        arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
JPMORGAN CHASE BANK
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                      BONDS

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING      BANK                      BENEFICIARY                   LOCAL VALUE  PAYMENT      EXCHANGE
  COMPANY       COMPANY      REFERENCE                                                              CURRENCY     RATE US$1
                                                                                                                 12 FEB 03
------------  -----------  -------------    ----------------------------------------   -----------  --------     ---------
<S>            <C>        <C>              <C>                                         <C>          <C>           <C>
     1             2             3                           4                              5        6               7
MCplc (MSIL)    MSIplc     TFPCYG 205868    China Resources (Hldg) Co Ltd               11,000,000   HKD           7.7993
MCplc (MML)     MM(I)L     59707            Emirates Holdings Electronics                   33,920   GBP            0.6187
MCplc (MSIL)    MSIL       TFPCYG 252273    Tunisia Telecom                                 35,105   USD           1.0000
MCplc (MML)     MM(I)L     261190           International Aeradio (Emirates) L Dubai        25,001   EUR           0.9315
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING   US DOLLAR       LATEST
  COMPANY       COMPANY     EQUIVALENT      EXPIRY
                                             DATE
------------  -----------   -----------   ---------
<S>            <C>           <C>         <C>
     1             2             8            9
MCplc (MSIL)    MSIplc       1,410,383     2-Feb-01
MCplc (MML)     MM(I)L          54,825    20-Jan-03
MCplc (MSIL)    MSIL            35,105    31-Dec-01
MCplc (MML)     MM(I)L          26,838     7-Nov-03

                             1,527,151
</TABLE>

COMPANY KEY
MCplc            Marconi Corporation plc
MSIplc           Mobile Systems International plc
MSIL             Metapath Software International Ltd
MM(I)L           Marconi Mobile (International) Ltd

                                        9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      JPMorgan Chase Bank
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF NATIONAL WESTMINSTER
BANK PLC DATED [                        ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.      [We certify that [           ] became due and payable on [             ]
        to [      ] pursuant to the terms of our guarantee number [     ] issued
        in favour of [        ] on behalf of [MARCONI COMPANY NAME]. We have
        notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not
        less than five business days prior to the date of this demand. However,
        we have not received payment of the sum of [         ] (being the amount
        due but unpaid under the Bonds).] [OR]

       [We certify that the amount of this drawing US$[____________] under
       JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us
       as we have received notice from JPMorgan Chase Bank of their decision not
       to extend this Letter of Credit for an additional period and the
       following Bonds in schedule 1 to this Letter of Credit remain
       outstanding: [INDICATE BOND NUMBERS]]

2.     We therefore demand payment of the sum of US$[        ].

3.     Payment should be made to the following account:

       Name:

       Account Number:

       Bank:

4.     The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR NATIONAL WESTMINSTER BANK PLC

                                       10

<PAGE>

                                                                  CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                               19 February, 2003

The HongKong and Shanghai Banking Corporation Limited
Lending Services Division
APH CRM
L10 HSBC Main Building
1 Queen's Road Central
Hong Kong

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the US Dollar Equivalents for each of those Bonds is US$3,359,294
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of US$1,679,647 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the US
Dollar Equivalents of those of the Bonds listed in schedule 2 to this letter
that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

LEWIS WILSON

For and behalf of
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means Barclays Bank PLC.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

"US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of
that Bond set out in the column headed "US Dollar Equivalent" in schedule 2 to
this letter.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING         BANK        BENEFICIARY                                       LOCAL VALUE   PAYMENT      EXCHANGE
  COMPANY       COMPANY         REFERENCE         4                                                 5         CURRENCY     RATE US$1
   1             2                3                                                                             6          12 FEB 03
                                                                                                                              7
------------  -----------     ------------    ---------------------------------------------      ----------   --------     ---------
<S>            <C>           <C>             <C>                                                <C>          <C>           <C>
MCIL            MCIL          PEBTKY210078    SpeedNet Incorporated                              1,201,448     USD          1.0000
GEC(HK)L        GEC(HK)L      HKH037096       Dragages - Zen Pacific Joint Venture               7,415,000     HKD          7.7993
MCAL            MCAL          38434           MTR Corporation Limited                            5,043,833     HKD          7.7993
MCAL            MCAL          39905           ERG Transit Systems (HK) Limited                   2,672,850     HKD          7.7993
MCIL            MCIL          39825           Loxley business Information Technology Co Ltd.        44,599     GBP          0.6187
MCIL            MCIL          40156           Loxley business Information Technology Co Ltd.        40,583     GBP          0.6187
MCIL            MCIL          40220           Korea Telecom                                         61,555     EUR          0.9315
GECSingPL       GECSingPL     PEBSGH931199    Housing & Development Board                           24,541     SGD          1.7586
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING        US DOLLAR      LATEST
  COMPANY       COMPANY          EQUIVALENT     EXPIRY
   1             2                   8           DATE
                                                    9
------------  -----------        ----------    ---------
<S>            <C>              <C>           <C>
MCIL            MCIL             1,201,448     06-Jan-03
GEC(HK)L        GEC(HK)L           950,726        U/L
MCAL            MCAL               646,703     30-Nov-03
MCAL            MCAL               342,704     01-Sep-03
MCIL            MCIL                72,085     02-Jan-03
MCIL            MCIL                65,594     26-Mar-03
MCIL            MCIL                66,079     10-Jan-04
GECSingPL       GECSingPL           13,955     26-Mar-03

                                 3,359,294
</TABLE>

COMPANY KEY
-----------
MCIL                  Marconi Communications International Ltd
MCCL                  Marconi Communications China Ltd
MCAL                  Marconi Communications Asia Ltd
GEC(HK)L              GEC (Hong Kong) Ltd
GECSingPL             GEC Singapore Pty Ltd

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

         [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC]

To:      The HongKong and Shanghai Banking Corporation Limited
         (the "BENEFICIARY")
                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank
PLC (the "ISSUING BANK") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.      DEFINITIONS

(a)     In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the US
        Dollar Equivalents for each of the Bonds that remain outstanding at that
        time.

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means 19 February 2004 and each anniversary
        thereof, being the date on which the Beneficiary must certify to the
        Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding
        on that date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EXPIRY DATE" means the earlier of:

         (i)      19 February 2008 (or such later expiry date applicable as a
                  result of an extension pursuant to paragraph 4(c)); and

         (ii)     the date on which the Total L/C Amount is reduced to zero
                  pursuant to a reduction under paragraph 3.

        "ORIGINAL BONDS OUTSTANDING" means US$3,359,294.

                                       5
<PAGE>

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means US$1,679,647, as reduced in accordance with
        paragraph 3 of this Letter of Credit.

        "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in
        respect of that Bond set out in the column headed "US Dollar Equivalent"
        in schedule 1 to this Letter of Credit.

2.      ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

3.      REDUCTION IN TOTAL L/C AMOUNT

(a)      If:

         (i)      on a Certification Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding (as certified by the Beneficiary)
                  on that date; or

         (ii)     on a Presentation Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding on that date (after deducting the
                  US Dollar Equivalent for each Bond that is the subject of each
                  relevant Notification),

         the Total L/C Amount shall, subject to paragraph (b) below,
         automatically reduce accordingly.

(b)      Any reduction in the Total L/C Amount under sub-paragraph (a) above
         shall only be applied if:

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than US$100,000; or

                                       6
<PAGE>

         (ii)     if as a result of such reduction the Total L/C Amount would be
                  zero.

4.       EXPIRY

(a)      The Issuing Bank will be released from its obligations under this
         Letter of Credit on the Expiry Date with no further liability on the
         part of the Issuing Bank except for any Demand validly presented in
         accordance with paragraph 2(a) of this Letter of Credit that remains
         unpaid.

(b)      When the Issuing Bank is no longer under any further obligations under
         this Letter of Credit, the Beneficiary must, on request, return the
         original of this Letter of Credit to the Issuing Bank.

(c)      It is a condition of this irrevocable Letter of Credit that, not more
         than 30 days before the present or each future Expiry Date, the
         Beneficiary may (unless the relevant Expiry Date occurs as a result of
         the value of this Letter of Credit being reduced to zero) request it to
         be extended for an additional period of one year from the present or
         each future Expiry Date. If the Issuing Bank elects not to extend this
         Letter of Credit for such additional period the Beneficiary may, on or
         prior to the applicable Expiry Date, make a Demand for an amount not to
         exceed the remaining balance of the Total L/C Amount.

5.       PAYMENTS

         All payments under this Letter of Credit shall be made in US Dollars
         and for value on the due date to the account of the Beneficiary
         specified in the Demand.

6.       DELIVERY OF DEMAND

         Each Demand shall be in writing, and, unless otherwise stated, may be
         made by letter or fax and must be received in legible form by the
         Issuing Bank at its address and by the particular department or officer
         (if any) as follows:

         Barclays Bank PLC
         [Guarantees Department
         UK International Operations Centre - Manchester
         P O Box 84
         6th Floor
         4 Exchange Quay
         Salford M5 3PL]
         Fax:               [0161 911 6402]
         Telex:             [                ]
         Attention:         [Guarantees Department]

7.       ASSIGNMENT

         The Beneficiary's rights under this Letter of Credit may not be
         assigned or transferred.

                                       7
<PAGE>

8.       UCP

         Except to the extent it is inconsistent with the express terms of this
         Letter of Credit, this Letter of Credit is subject to the Uniform
         Customs and Practice for Documentary Credits (1993 Revision),
         International Chamber of Commerce Publication No. 500.

9.       GOVERNING LAW

         This Letter of Credit is governed by English law.

10.      JURISDICTION

         The courts of England have exclusive jurisdiction to settle any dispute
         arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
BARCLAYS BANK PLC
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                     BONDS

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING       BANK         BENEFICIARY                                   LOCAL VALUE  PAYMENT      EXCHANGE
  COMPANY       COMPANY       REFERENCE            4                                            5       CURRENCY    RATE US$1
   1              2              3                                                                        6         12 FEB 03
                                                                                                                          7
------------  -----------   ------------    ---------------------------------------------  -----------  --------    ---------
<S>            <C>         <C>             <C>                                             <C>           <C>          <C>
MCIL            MCIL        PEBTKY210078    SpeedNet Incorporated                           1,201,448     USD          1.0000
GEC(HK)L        GEC(HK)L    HKH037096       Dragages - Zen Pacific Joint Venture            7,415,000     HKD          7.7993
MCAL            MCAL        38434           MTR Corporation Limited                         5,043,833     HKD          7.7993
MCAL            MCAL        39905           ERG Transit Systems (HK) Limited                2,672,850     HKD          7.7993
MCIL            MCIL        39825           Loxley business Information Technology Co Ltd.     44,599     GBP          0.6187
MCIL            MCIL        40156           Loxley business Information Technology Co Ltd.     40,583     GBP          0.6187
MCIL            MCIL        40220           Korea Telecom                                      61,555     EUR          0.9315
GECSingPL       GECSingPL   PEBSGH931199    Housing & Development Board                        24,541     SGD          1.7586
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING   US DOLLAR     LATEST
  COMPANY       COMPANY     EQUIVALENT    EXPIRY
   1              2             8          DATE
                                            9
------------  -----------   ----------  ---------
<S>            <C>          <C>        <C>
MCIL            MCIL         1,201,448  06-Jan-03
GEC(HK)L        GEC(HK)L       950,726     U/L
MCAL            MCAL           646,703  30-Nov-03
MCAL            MCAL           342,704  01-Sep-03
MCIL            MCIL            72,085  02-Jan-03
MCIL            MCIL            65,594  26-Mar-03
MCIL            MCIL            66,079  10-Jan-04
GECSingPL       GECSingPL       13,955  26-Mar-03

                             3,359,294
</TABLE>

COMPANY KEY
-----------
MCIL                  Marconi Communications International Ltd
MCCL                  Marconi Communications China Ltd
MCAL                  Marconi Communications Asia Ltd
GEC(HK)L              GEC (Hong Kong) Ltd
GECSingPL             GEC Singapore Pty Ltd

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      Barclays Bank PLC
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF THE HONGKONG AND
SHANGHAI BANKING CORPORATION LIMITED DATED [                        ] (THE
"LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.     [We certify that [                 ] became due and payable on
       [               ] to [      ] pursuant to the terms of our guarantee
       number [      ] issued in favour of [        ] on behalf of [MARCONI
       COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing
       (copy enclosed) not less than five business days prior to the date of
       this demand. However, we have not received payment of the sum of
       [          ] (being the amount due but unpaid under the Bonds).] [OR]

       [We certify that the amount of this drawing US$[____________] under
       Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as
       we have received notice from Barclays Bank PLC of their decision not to
       extend this Letter of Credit for an additional period and the following
       Bonds in schedule 1 to this Letter of Credit remain outstanding:
       [INDICATE BOND NUMBERS]]

2.     We therefore demand payment of the sum of US$[        ].

3.     Payment should be made to the following account:

       Name:

       Account Number:

       Bank:

4.     The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

                                       10

<PAGE>

                                                                  CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                               26 February, 2003

BNP Paribas
10 Harewood Avenue
London NW1 6AA

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Euro Equivalents for each of those Bonds is E3,778,202
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of E1,889,101 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

                                       1
<PAGE>

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro
Equivalents of those of the Bonds listed in schedule 2 to this letter that
remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

PAUL TUMIM                                           TARIQ KAZI
PAUL TUMIM                                           TARIQ KAZI

For and behalf of
BNP PARIBAS

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set
out in the column headed "Euro Equivalent" in schedule 2 to this letter.

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means JPMorgan Chase Bank.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
INDEMNIFYING      CONTRACTING        BANK          BENEFICIARY                                 LOCAL VALUE     PAYMENT    EXCHANGE
   COMPANY          COMPANY       REFERENCE                                                                    CURRENCY   RATE (E)1
                                                                                                                          12 FEB 03
    1               2               3                      4                                           5          6            7
------------      -----------     -------------    ----------------------------------------   -------------    --------   ----------
<S>               <C>            <C>              <C>                                        <C>                <C>       <C>
MCL (MCCL)         MCCL           GTE/2000.0607    Foundasia (HK) Limited                         5,961,337      HKD         8.3727
MCL (MCAL)         MCAL           GTE/2000.0632    Hongkong Electric Co., Ltd.                      762,405      USD         1.0735
MMSpA              MMSpA          4808             A.T.M.                                     1,230,000,000      ITL       1,936.27
MCSEAL             MCSEAL         970678           Singapore Telecommunications Ltd               1,255,000      SGD         1.8878
MCSA               MCSA                            Cardimmo                                       3,660,000      FFR         6.5596
MMSpA              MMSpA          4505/99          A.T.M.                                       402,000,000      ITL       1,936.27
MCL (MCAL)         MCAL           GTE/990747       China Electric Power Technology Import &         139,359      USD         1.0735
                                                   Export Corp.
MCL (GEC(HK)L)     GEC(HK)L       GTE/990036       Hong Kong Government - 1041/EM/97              1,000,000      HKD         8.3727
MCL                GECSingPL      970519           Power Supply Ltd                                  50,000      SGD         1.8878
MCL                GECSingPL      968288           Housing &  Development Board                      17,050      SGD         1.8878
MCL                GECSingPL      969965           Kian Hiap Construction Pte Ltd                     9,100      SGD         1.8878
MCL                GECSingPL      970174           PWD EMS Pte Ltd                                    1,500      SGD         1.8878
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING      CONTRACTING       EURO               LATEST
   COMPANY          COMPANY       EQUIVALENT           EXPIRY
                                                        DATE
    1               2                   8                9
------------      -----------     ----------         ---------
<S>               <C>             <C>               <C>
MCL (MCCL)         MCCL              711,997         31-Oct-05
MCL (MCAL)         MCAL              710,205         31-Jan-05
MMSpA              MMSpA             635,242         18-Jan-04
MCSEAL             MCSEAL            664,795         31-Dec-04
MCSA               MCSA              557,961            U/L
MMSpA              MMSpA             207,616         25-Jul-03
MCL (MCAL)         MCAL              129,818         04-Aug-03

MCL (GEC(HK)L)     GEC(HK)L          119,436            U/L
MCL                GECSingPL          26,486            U/L
MCL                GECSingPL           9,032            U/L
MCL                GECSingPL           4,820            U/L
MCL                GECSingPL             795         02-Aug-03

                                   3,778,202
</TABLE>

COMPANY KEY
-----------
MCL                 Marconi Communications Ltd
MCIL                Marconi Communications International Ltd
MCCL                Marconi Communications China Ltd
MCAL                Marconi Communications Asia Ltd
GEC(HK)L            GEC (Hong Kong) Ltd
GECSingPL           GEC Singapore Pty Ltd
MMSpA               Marconi Mobile SpA

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

        [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK]

To:      BNP Paribas
         (the "BENEFICIARY")
                                                                          [DATE]

                         IRREVOCABLE STANDBY LETTER OF CREDIT NO. [          ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase
Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.      DEFINITIONS

(a)     In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the
        Euro Equivalents for each of the Bonds that remain outstanding at that
        time.

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means 26 February 2004 and each anniversary
        thereof, being the date on which the Beneficiary must certify to the
        Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding
        on that date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that
        Bond set out in the column headed "Euro Equivalent" in schedule 1 to
        this Letter of Credit.

        "EXPIRY DATE" means the earlier of:

        (i)      26 February 2008 (or such later expiry date applicable as a
                 result of an extension pursuant to paragraph 4(c)); and

        (ii)     the date on which the Total L/C Amount is reduced to zero
                 pursuant to a reduction under paragraph 3.

        "ORIGINAL BONDS OUTSTANDING" means E3,778,202.

                                       5
<PAGE>

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means E1,889,101, as reduced in accordance with
        paragraph 3 of this Letter of Credit.

2.      ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

3.      REDUCTION IN TOTAL L/C AMOUNT

(a)      If:

         (i)      on a Certification Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding (as certified by the Beneficiary)
                  on that date; or

         (ii)     on a Presentation Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding on that date (after deducting the
                  Euro Equivalent for each Bond that is the subject of each
                  relevant Notification),

         the Total L/C Amount shall, subject to paragraph (b) below,
         automatically reduce accordingly.

(b)      Any reduction in the Total L/C Amount under sub-paragraph (a) above
         shall only be applied if:

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than E100,000; or

         (ii)     if as a result of such reduction the Total L/C Amount would be
                  zero.

                                       6
<PAGE>

4.       EXPIRY

(a)      The Issuing Bank will be released from its obligations under this
         Letter of Credit on the Expiry Date with no further liability on the
         part of the Issuing Bank except for any Demand validly presented in
         accordance with paragraph 2(a) of this Letter of Credit that remains
         unpaid.

(b)      When the Issuing Bank is no longer under any further obligations under
         this Letter of Credit, the Beneficiary must, on request, return the
         original of this Letter of Credit to the Issuing Bank.

(c)      It is a condition of this irrevocable Letter of Credit that, not more
         than 30 days before the present or each future Expiry Date, the
         Beneficiary may (unless the relevant Expiry Date occurs as a result of
         the value of this Letter of Credit being reduced to zero) request it to
         be extended for an additional period of one year from the present or
         each future Expiry Date. If the Issuing Bank elects not to extend this
         Letter of Credit for such additional period the Beneficiary may, on or
         prior to the applicable Expiry Date, make a Demand for an amount not to
         exceed the remaining balance of the Total L/C Amount.

5.       PAYMENTS

         All payments under this Letter of Credit shall be made in Euro and for
         value on the due date to the account of the Beneficiary specified in
         the Demand.

6.       DELIVERY OF DEMAND

         Each Demand shall be in writing, and, unless otherwise stated, may be
         made by letter or fax and must be received in legible form by the
         Issuing Bank at its address and by the particular department or officer
         (if any) as follows:

         JPMorgan Chase Bank
         [1 Chaseside
         Bournemouth
         Dorset BH7 7DA]
         Fax:               [01202 34 37 30]
         Telex:             [                ]
         Attention:         [                ]

7.       ASSIGNMENT

         The Beneficiary's rights under this Letter of Credit may not be
         assigned or transferred.

8.       UCP

         Except to the extent it is inconsistent with the express terms of this
         Letter of Credit, this Letter of Credit is subject to the Uniform
         Customs and Practice for Documentary Credits (1993 Revision),
         International Chamber of Commerce Publication No. 500.

9.       GOVERNING LAW

         This Letter of Credit is governed by English law.

                                       7
<PAGE>

10.      JURISDICTION

         The courts of England have exclusive jurisdiction to settle any dispute
         arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
JP MORGAN CHASE BANK
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                     BONDS

<TABLE>
<CAPTION>
INDEMNIFYING    CONTRACTING       BANK          BENEFICIARY                                  LOCAL VALUE      PAYMENT     EXCHANGE
   COMPANY        COMPANY       REFERENCE                                                                     CURRENCY    RATE (E)1
                                                                                                                          12 FEB 03
    1              2              3                            4                                    5           6              7
--------------  -----------    -------------    -----------------------------------------   -------------     --------    ----------
<S>             <C>           <C>              <C>                                         <C>                <C>        <C>
MCL (MCCL)       MCCL          GTE/2000.0607    Foundasia (HK) Limited                          5,961,337      HKD          8.3727
MCL (MCAL)       MCAL          GTE/2000.0632    Hongkong Electric Co., Ltd.                       762,405      USD          1.0735
MMSpA            MMSpA         4808             A.T.M.                                      1,230,000,000      ITL        1,936.27
MCSEAL           MCSEAL        970678           Singapore Telecommunications Ltd                1,255,000      SGD          1.8878
MCSA             MCSA                           Cardimmo                                        3,660,000      FFR          6.5596
MMSpA            MMSpA         4505/99          A.T.M.                                        402,000,000      ITL        1,936.27
MCL (MCAL)       MCAL          GTE/990747       China Electric Power Technology Import &          139,359      USD          1.0735
                                                Export Corp.
MCL (GEC(HK)L)   GEC(HK)L      GTE/990036       Hong Kong Government - 1041/EM/97               1,000,000      HKD          8.3727
MCL              GECSingPL     970519           Power Supply Ltd                                   50,000      SGD          1.8878
MCL              GECSingPL     968288           Housing &  Development Board                       17,050      SGD          1.8878
MCL              GECSingPL     969965           Kian Hiap Construction Pte Ltd                      9,100      SGD          1.8878
MCL              GECSingPL     970174           PWD EMS Pte Ltd                                     1,500      SGD          1.8878
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING    CONTRACTING       EURO             LATEST
   COMPANY        COMPANY       EQUIVALENT         EXPIRY
                                                   DATE
    1              2               8                 9
-------------   -----------     ----------       ---------
<S>             <C>            <C>              <C>
MCL (MCCL)       MCCL              711,997       31-Oct-05
MCL (MCAL)       MCAL              710,205       31-Jan-05
MMSpA            MMSpA             635,242       18-Jan-04
MCSEAL           MCSEAL            664,795       31-Dec-04
MCSA             MCSA              557,961          U/L
MMSpA            MMSpA             207,616       25-Jul-03
MCL (MCAL)       MCAL              129,818       04-Aug-03

MCL (GEC(HK)L)   GEC(HK)L          119,436          U/L
MCL              GECSingPL          26,486          U/L
MCL              GECSingPL           9,032          U/L
MCL              GECSingPL           4,820          U/L
MCL              GECSingPL             795       02-Aug-03

                                 3,778,202
</TABLE>

COMPANY KEY
-----------
MCL                 Marconi Communications Ltd
MCIL                Marconi Communications International Ltd
MCCL                Marconi Communications China Ltd
MCAL                Marconi Communications Asia Ltd
GEC(HK)L            GEC (Hong Kong) Ltd
GECSingPL           GEC Singapore Pty Ltd
MMSpA               Marconi Mobile SpA

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      JPMorgan Chase Bank
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF BNP PARIBAS DATED
[                        ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.      [We certify that [                 ] became due and payable on
        [               ] to [      ] pursuant to the terms of our guarantee
        number [      ] issued in favour of [        ] on behalf of [MARCONI
        COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in
        writing (copy enclosed) not less than five business days prior to the
        date of this demand. However, we have not received payment of the sum of
        [         ] (being the amount due but unpaid under the Bonds).] [OR]

        [We certify that the amount of this drawing E[____________] under
        JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us
        as we have received notice from JPMorgan Chase Bank of their decision
        not to extend this Letter of Credit for an additional period and the
        following Bonds in schedule 1 to this Letter of Credit remain
        outstanding: [INDICATE BOND NUMBERS]]

2.      We therefore demand payment of the sum of E[        ].

3.      Payment should be made to the following account:

        Name:

        Account Number:

        Bank:

4.      The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR BNP PARIBAS

                                       10
<PAGE>

                                                                  CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: www.marconi.com

                                                               28 February, 2003

HSBC Bank plc
8 Canada Square
London E14 5HQ

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Sterling Equivalents for each of those Bonds is
(pound)2,965,295 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of
schedule 2 to this letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of (pound)1,482,647.50 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

                                       1
<PAGE>

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the
Sterling Equivalents of those of the Bonds listed in schedule 2 to this letter
that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

[AUTHORISED SIGNATORY]

For and behalf of
HSBC BANK PLC

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means Barclays Bank PLC.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

"STERLING EQUIVALENT" means, for a Bond, the Sterling amount in respect of that
Bond set out in the column headed "Sterling Equivalent" in schedule 2 to this
letter.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
INDEMNIFYING CONTRACTING      BANK         BENEFICIARY                                    LOCAL VALUE   PAYMENT      EXCHANGE
  COMPANY      COMPANY      REFERENCE            4                                             5        CURRENCY    RATE(POUND)1
    1            2             3                                                                          6         12 FEB 03
                                                                                                                        7
------------ -----------  -------------    ---------------------------------------        -----------   --------    ------------
<S>           <C>        <C>              <C>                                             <C>           <C>        <C>
MCplc (MCL)    MCL        140099           TETREL LOAN NOTES                               1,017,787     GBP         1.0000
MCplc (MCL)    MCAL       167126           CLP Power Hong Kong Ltd.                        5,000,000     HKD        12.6063
MCplc (MCL)    MCGmbH     102/167214       Deutsche Auto-Leasing GmbH, Bad Homburg           400,000     EUR         1.5057
MCplc (MCL)    MCL        11942496         HM Customs                                        500,000     GBP         1.0000
MCIL           MCIL       152833           Birmingham CoC - US Customs                        75,000     GBP         1.0000
MCplc (MCL)    MCIL       102/165022B      PT Comunicacoes SA                                 61,565     EUR         1.5057
MCplc (MCL)    MCGmbH     102/167191       Nordwest Leasing, Bremen                           57,342     EUR         1.5057
MCL            MCL        144686           Heather Trust for the Arts                         34,455     GBP         1.0000
MCplc (MCL)    MCL        102/094218/94    S.A.G.R.O.                                        134,067     SAR         6.0612
MCplc (MCL)    MCL        167427           Fincantieri CNI SpA                               748,000     EUR         1.5057
MCplc (MCL)    MCL        167426           Fincantieri CNI SpA                               136,700     EUR         1.5057
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING     STERLING     LATEST
  COMPANY       COMPANY      EQUIVALENT    EXPIRY
    1             2                8        DATE
                                            9
------------  -----------    ---------- ---------
<S>           <C>           <C>        <C>
MCplc (MCL)    MCL           1,017,787  29-Jun-04
MCplc (MCL)    MCAL            396,826  28-Nov-06
MCplc (MCL)    MCGmbH          265,657  31-Dec-04
MCplc (MCL)    MCL             500,000     U/L
MCIL           MCIL             75,000   4-Jul-03
MCplc (MCL)    MCIL             40,888  31-Oct-03
MCplc (MCL)    MCGmbH           38,083  17-Dec-02
MCL            MCL              34,455     U/L
MCplc (MCL)    MCL              22,119  24-Jan-04
MCplc (MCL)    MCL             485,714  06-Jan-05
MCplc (MCL)    MCL              88,766  30-Jun-08

                             2,965,295
</TABLE>

COMPANY KEY
MCL                   Marconi Communications Ltd
MCIL                  Marconi Communications International Ltd
MCplc                 Marconi Corporation plc
MCAL                  Marconi Communications Asia Ltd
MCGmbH                Marconi Communications GmbH

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

         [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC]

To:      HSBC Bank plc
         (the "BENEFICIARY")
                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank
PLC (the "ISSUING BANK") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.      DEFINITIONS

(a)     In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the
        Sterling Equivalents for each of the Bonds that remain outstanding at
        that time.

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means 28 February 2004 and each anniversary
        thereof, being the date on which the Beneficiary must certify to the
        Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding
        on that date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EXPIRY DATE" means the earlier of:

        (i)      28 February 2008 (or such later expiry date applicable as a
                 result of an extension pursuant to paragraph 4(c)); and

        (ii)     the date on which the Total L/C Amount is reduced to zero
                 pursuant to a reduction under paragraph 3.

        "ORIGINAL BONDS OUTSTANDING" means(pound)2,965,295.

                                       5
<PAGE>

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "STERLING EQUIVALENT" means, for a Bond, the Sterling amount in respect
        of that Bond set out in the column headed "Sterling Equivalent" in
        schedule 1 to this Letter of Credit.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means (pound)1,482,647.50, as reduced in accordance
        with paragraph 3 of this Letter of Credit.

2.      ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

3.      REDUCTION IN TOTAL L/C AMOUNT

(a)      If:

         (i)      on a Certification Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding (as certified by the Beneficiary)
                  on that date; or

         (ii)     on a Presentation Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding on that date (after deducting the
                  Sterling Equivalent for each Bond that is the subject of each
                  relevant Notification),

         the Total L/C Amount shall, subject to paragraph (b) below,
         automatically reduce accordingly.

(b)      Any reduction in the Total L/C Amount under sub-paragraph (a) above
         shall only be applied if:

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than(pound)100,000; or

         (ii)     if as a result of such reduction the Total L/C Amount would be
                  zero.

                                       6
<PAGE>

4.       EXPIRY

(a)      The Issuing Bank will be released from its obligations under this
         Letter of Credit on the Expiry Date with no further liability on the
         part of the Issuing Bank except for any Demand validly presented in
         accordance with paragraph 2(a) of this Letter of Credit that remains
         unpaid.

(b)      When the Issuing Bank is no longer under any further obligations under
         this Letter of Credit, the Beneficiary must, on request, return the
         original of this Letter of Credit to the Issuing Bank.

(c)      It is a condition of this irrevocable Letter of Credit that, not more
         than 30 days before the present or each future Expiry Date, the
         Beneficiary may (unless the relevant Expiry Date occurs as a result of
         the value of this Letter of Credit being reduced to zero) request it to
         be extended for an additional period of one year from the present or
         each future Expiry Date. If the Issuing Bank elects not to extend this
         Letter of Credit for such additional period the Beneficiary may, on or
         prior to the applicable Expiry Date, make a Demand for an amount not to
         exceed the remaining balance of the Total L/C Amount.

5.       PAYMENTS

         All payments under this Letter of Credit shall be made in Sterling and
         for value on the due date to the account of the Beneficiary specified
         in the Demand.

6.       DELIVERY OF DEMAND

         Each Demand shall be in writing, and, unless otherwise stated, may be
         made by letter or fax and must be received in legible form by the
         Issuing Bank at its address and by the particular department or officer
         (if any) as follows:

         Barclays Bank PLC
         [Guarantees Department
         UK International Operations Centre - Manchester
         P O Box 84
         6th Floor
         4 Exchange Quay
         Salford M5 3PL]
         Fax:               [0161 911 6402]
         Telex:             [                ]
         Attention:         [Guarantees Department]

7.       ASSIGNMENT

         The Beneficiary's rights under this Letter of Credit may not be
         assigned or transferred.

8.       UCP

         Except to the extent it is inconsistent with the express terms of this
         Letter of Credit, this Letter of Credit is subject to the Uniform
         Customs and Practice for Documentary Credits (1993 Revision),
         International Chamber of Commerce Publication No. 500.

                                       7
<PAGE>

9.       GOVERNING LAW

         This Letter of Credit is governed by English law.

10.      JURISDICTION

         The courts of England have exclusive jurisdiction to settle any dispute
         arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
BARCLAYS BANK PLC
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                      BONDS

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING      BANK        BENEFICIARY                                      LOCAL VALUE  PAYMENT      EXCHANGE
  COMPANY       COMPANY      REFERENCE          4                                                5       CURRENCY    RATE(POUND)1
     1           2             3                                                                           6         12 FEB 03
                                                                                                                          7
------------  -----------  -------------   ---------------------------------------          -----------  --------    ------------
<S>            <C>        <C>             <C>                                              <C>            <C>         <C>
MCplc (MCL)     MCL        140099          TETREL LOAN NOTES                                1,017,787      GBP          1.0000
MCplc (MCL)     MCAL       167126          CLP Power Hong Kong Ltd.                         5,000,000      HKD         12.6063
MCplc (MCL)     MCGmbH     102/167214      Deutsche Auto-Leasing GmbH, Bad Homburg            400,000      EUR          1.5057
MCplc (MCL)     MCL        11942496        HM Customs                                         500,000      GBP          1.0000
MCIL            MCIL       152833          Birmingham CoC - US Customs                         75,000      GBP          1.0000
MCplc (MCL)     MCIL       102/165022B     PT Comunicacoes SA                                  61,565      EUR          1.5057
MCplc (MCL)     MCGmbH     102/167191      Nordwest Leasing, Bremen                            57,342      EUR          1.5057
MCL             MCL        144686          Heather Trust for the Arts                          34,455      GBP          1.0000
MCplc (MCL)     MCL        102/094218/94   S.A.G.R.O.                                         134,067      SAR          6.0612
MCplc (MCL)     MCL        167427          Fincantieri CNI SpA                                748,000      EUR          1.5057
MCplc (MCL)     MCL        167426          Fincantieri CNI SpA                                136,700      EUR          1.5057
</TABLE>

[Table continues below]

<TABLE>
<CAPTION>
INDEMNIFYING  CONTRACTING     STERLING        LATEST
  COMPANY       COMPANY      EQUIVALENT       EXPIRY
     1           2              8             DATE
                                                9
------------  -----------    ----------    ---------
<S>            <C>          <C>           <C>
MCplc (MCL)     MCL          1,017,787     29-Jun-04
MCplc (MCL)     MCAL           396,826     28-Nov-06
MCplc (MCL)     MCGmbH         265,657     31-Dec-04
MCplc (MCL)     MCL            500,000        U/L
MCIL            MCIL            75,000      4-Jul-03
MCplc (MCL)     MCIL            40,888     31-Oct-03
MCplc (MCL)     MCGmbH          38,083     17-Dec-02
MCL             MCL             34,455        U/L
MCplc (MCL)     MCL             22,119     24-Jan-04
MCplc (MCL)     MCL            485,714     06-Jan-05
MCplc (MCL)     MCL             88,766     30-Jun-08

                             2,965,295
</TABLE>

COMPANY KEY
MCL                   Marconi Communications Ltd
MCIL                  Marconi Communications International Ltd
MCplc                 Marconi Corporation plc
MCAL                  Marconi Communications Asia Ltd
MCGmbH                Marconi Communications GmbH

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      Barclays Bank PLC
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF HSBC BANK PLC DATED
[                        ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.     [We certify that [                 ] became due and payable on
       [               ] to [      ] pursuant to the terms of our guarantee
       number [      ] issued in favour of [        ] on behalf of [MARCONI
       COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing
       (copy enclosed) not less than five business days prior to the date of
       this demand. However, we have not received payment of the sum of
       [          ] (being the amount due but unpaid under the Bonds).] [OR]

       [We certify that the amount of this drawing (pound)[____________] under
       Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as
       we have received notice from Barclays Bank PLC of their decision not to
       extend this Letter of Credit for an additional period and the following
       Bonds in schedule 1 to this Letter of Credit remain outstanding:
       [INDICATE BOND NUMBERS]]

2.     We therefore demand payment of the sum of(pound)[        ].

3.     Payment should be made to the following account:

       Name:

       Account Number:

       Bank:

4.     The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR HSBC BANK PLC

 Registered in England & Wales No.3846429 Registered Office New Century Park,
                          PO Box 53, Coventry CV3 1HJ

<PAGE>

                                                         CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                                  14 March, 2003

Australia and New Zealand Banking Group Limited
Minerva House
Montague Close
London SE1 9DH

For the attention of:  Nigel Marks - Asset Management

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)  the Bonds which have been issued by you on behalf of us and/or any
     Subsidiaries;

(b)  any counter indemnity that we and/or any Subsidiary may have given to you
     (or which may arise at law) in respect of any liability which you incur
     under those Bonds; and

(c)  any rights you may have in relation to those Bonds to require cash
     collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Euro Equivalents for each of those Bonds is euro 1,995,828
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of euro 997,914 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)  upon an Insolvency of us or of the relevant Subsidiary;

(b)  to call for cash collateral, reimbursement or otherwise in respect of a
     Bond in the event a call is made, or a valid notice to call for payment is
     issued, by a beneficiary under that Bond; or

(c)  upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro
Equivalents of those of the Bonds listed in schedule 2 to this letter that
remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

[AUTHORISED SIGNATORY]

For and behalf of
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set
out in the column headed "Euro Equivalent" in schedule 2 to this letter.

"INSOLVENCY" means, in relation to any person, any of the following:

(a)  the commencement of a voluntary winding up, within the meaning of section
     84 of the Insolvency Act 1986 (save where such winding up is for the
     purposes of a reconstruction or amalgamation while solvent);

(b)  the appointment of an administrator or liquidator under the Insolvency Act
     1986 or the appointment of an administrative receiver or receiver, or
     proposals are made or issued for a voluntary arrangement within the meaning
     of Part I of that Act (save where such occurrence is for the purposes of a
     solvent reconstruction or amalgamation); or

(c)  the occurrence of any event in a jurisdiction outside the United Kingdom of
     Great Britain and Northern Ireland which is analogous to any of the events
     referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means JPMorgan Chase Bank.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
  INDEMNIFYING      CONTRACTING         BANK
     COMPANY          COMPANY        REFERENCE                  BENEFICIARY
  ------------      -----------      ---------                  -----------
<S>                 <C>              <C>                        <C>
        1                2               3                            4

MCL                 MCIL                01/245          Onitelecom-Infocomunicacoes S.A.

MCL                 MCIL                01/247          PT Comunicacoes S.A.

MCL                 MCIL                00/517          Portugal Telecom S.A.

MCL                 MCIL                01/080          PT Comunicacoes S.A.

M Aus               M Aus                55800          Abbey Capital Real Estate Pty Ltd

MCL                 MCIL                00/518          Portugal Telecom S.A.

MCL                 MCIL                00/044          China National Machinery I/E Co.

                                  COMPANY KEY

                                  MCL                   Marconi Communications Ltd

                                  MCIL                  Marconi Communications International Ltd

                                  MCCL                  Marconi Communications China Ltd

                                  M Aus                 Marconi Australia Pty Ltd

</TABLE>

<TABLE>
<CAPTION>                                                                   EXCHANGE           EURO
  INDEMNIFYING      CONTRACTING                            PAYMENT          RATE euro1       EQUIVALENT      LATEST
     COMPANY          COMPANY          LOCAL VALUE         CURRENCY         12 FEB 03          DATE         EXPIRY
  ------------      -----------        -----------         --------       ------------      ----------      ------
<S>                 <C>                <C>                <C>               <C>             <C>            <C>
        1                2                  5                 6                 7               8              9

MCL                 MCIL                    1,302,775        EUR               1.0000          1,302,775      31-Mar-03

MCL                 MCIL                      366,406        EUR               1.0000            366,406      31-Jan-04

MCL                 MCIL                      118,078        EUR               1.0000            118,078      13-May-03

MCL                 MCIL                      103,851        EUR               1.0000            103,851      27-Apr-03

M Aus               M Aus                     154,506        AUD               1.8166             85,052      14-Jun-06
                                                                                               ---------
MCL                 MCIL                       12,916        EUR               1.0000             12,916       8-Feb-03
                                                                                               ---------
MCL                 MCIL                        7,246        USD               1.0735              6,750      30-Nov-01
                                                                                               ---------
                                                                                               1,995,828
                                                                                               ---------
</TABLE>

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

        [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK]

To:      Australia and New Zealand Banking Group Limited
         (the "BENEFICIARY")
                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase
Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.   DEFINITIONS

(a)  In this Letter of Credit:

     "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro
     Equivalents for each of the Bonds that remain outstanding at that time.

     "BONDS" means those bonds, guarantees or letters of credit, indemnities or
     like instruments listed in schedule 1 to this Letter of Credit issued by
     the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

     "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
     banks are open for general business in London.

     "CERTIFICATION DATE" means 14 March, 2004 and each anniversary thereof,
     being the date on which the Beneficiary must certify to the Company (with a
     copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date.

     "COMPANY" means Marconi Corporation plc.

     "DEMAND" means a demand for a payment under this Letter of Credit in the
     form of schedule 2 to this Letter of Credit together with, where relevant,
     a copy of the written request to the Company or the relevant Subsidiary
     demanding payment pursuant to the terms of the relevant Bond.

     "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that
     Bond set out in the column headed "Euro Equivalent" in schedule 1 to this
     Letter of Credit.

     "EXPIRY DATE" means the earlier of:

     (i)  14 March, 2008 (or such later expiry date applicable as a result of an
          extension pursuant to paragraph 4(c)); and

     (ii) the date on which the Total L/C Amount is reduced to zero pursuant to
          a reduction under paragraph 3.

     "ORIGINAL BONDS OUTSTANDING" means euro 1,995,828.

                                       5
<PAGE>

     "NOTIFICATION" means a notification from the Beneficiary to the Account
     Party, the Company or any Subsidiary that certain Bonds have expired or
     been cancelled (and are therefore no longer outstanding).

     "PRESENTATION DATE" means each date on which the Account Party presents to
     the Issuing Bank a copy of one or more Notifications.

     "SUBSIDIARY" means any subsidiary of the Company within the meaning of
     section 736 of the Companies Act 1985, as amended by section 144 of the
     Companies Act 1989.

     "TOTAL L/C AMOUNT" means euro 997,914, as reduced in accordance with
     paragraph 3 of this Letter of Credit.

2.   ISSUING BANK'S AGREEMENT

(a)  The Beneficiary may request a drawing or drawings under this Letter of
     Credit by giving to the Issuing Bank a duly completed Demand. In order to
     constitute a valid Demand, a Demand must be received by the Issuing Bank by
     11 a.m. (London time) on or before the Expiry Date.

(b)  Subject to the terms of this Letter of Credit, the Issuing Bank
     unconditionally and irrevocably undertakes to the Beneficiary that, within
     ten Business Days of receipt by it of a Demand, it will pay to the
     Beneficiary the amount demanded in that Demand.

(c)  The Issuing Bank will not be obliged to make a payment under this Letter of
     Credit if as a result the aggregate of all payments made by it under this
     Letter of Credit would exceed the Total L/C Amount.

3.   REDUCTION IN TOTAL L/C AMOUNT

(a)  If:

     (i)  on a Certification Date the Total L/C Amount exceeds the Adjusted
          Bonds Outstanding (as certified by the Beneficiary) on that date; or

     (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds
          Outstanding on that date (after deducting the Euro Equivalent for each
          Bond that is the subject of each relevant Notification),

     the Total L/C Amount shall, subject to paragraph (b) below, automatically
     reduce accordingly.

(b)  Any reduction in the Total L/C Amount under sub-paragraph (a) above shall
     only be applied if:

     (i)  the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the
          relevant Certification Date or Presentation Date (as applicable) by
          more than euro 100,000; or

     (ii) if as a result of such reduction the Total L/C Amount would be zero.

                                       6
<PAGE>

4.   EXPIRY

(a)  The Issuing Bank will be released from its obligations under this Letter of
     Credit on the Expiry Date with no further liability on the part of the
     Issuing Bank except for any Demand validly presented in accordance with
     paragraph 2(a) of this Letter of Credit that remains unpaid.

(b)  When the Issuing Bank is no longer under any further obligations under this
     Letter of Credit, the Beneficiary must, on request, return the original of
     this Letter of Credit to the Issuing Bank.

(c)  It is a condition of this irrevocable Letter of Credit that, not more than
     30 days before the present or each future Expiry Date, the Beneficiary may
     (unless the relevant Expiry Date occurs as a result of the value of this
     Letter of Credit being reduced to zero) request it to be extended for an
     additional period of one year from the present or each future Expiry Date.
     If the Issuing Bank elects not to extend this Letter of Credit for such
     additional period the Beneficiary may, on or prior to the applicable Expiry
     Date, make a Demand for an amount not to exceed the remaining balance of
     the Total L/C Amount.

5.   PAYMENTS

     All payments under this Letter of Credit shall be made in Euro and for
     value on the due date to the account of the Beneficiary specified in the
     Demand.

6.   DELIVERY OF DEMAND

     Each Demand shall be in writing, and, unless otherwise stated, may be made
     by letter or fax and must be received in legible form by the Issuing Bank
     at its address and by the particular department or officer (if any) as
     follows:

     JPMorgan Chase Bank
     [1 Chaseside
     Bournemouth
     Dorset    BH7 7DA]
     Fax:               [01202 343730]
     Telex:             [                ]
     Attention:         [                ]

7.   ASSIGNMENT

     The Beneficiary's rights under this Letter of Credit may not be assigned or
     transferred.

8.   UCP

     Except to the extent it is inconsistent with the express terms of this
     Letter of Credit, this Letter of Credit is subject to the Uniform Customs
     and Practice for Documentary Credits (1993 Revision), International Chamber
     of Commerce Publication No. 500.

9.   GOVERNING LAW

     This Letter of Credit is governed by English law.

                                       7
<PAGE>

10.  JURISDICTION

     The courts of England have exclusive jurisdiction to settle any dispute
     arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
JPMORGAN CHASE BANK
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                      BONDS

<TABLE>
<CAPTION>
  INDEMNIFYING      CONTRACTING         BANK
     COMPANY          COMPANY        REFERENCE                   BENEFICIARY
  ------------      -----------      ---------                   -----------

<S>                 <C>              <C>                  <C>
        1                2               3                            4

MCL                 MCIL                 01/245           Onitelecom-Infocomunicacoes S.A.

MCL                 MCIL                 01/247           PT Comunicacoes S.A.

MCL                 MCIL                 00/517           Portugal Telecom S.A.

MCL                 MCIL                 01/080           PT Comunicacoes S.A.

M Aus               M Aus                 55800           Abbey Capital Real Estate Pty Ltd

MCL                 MCIL                 00/518           Portugal Telecom S.A.

MCL                 MCIL                 00/044           China National Machinery I/E Co.

</TABLE>

<TABLE>
<CAPTION>

                                                                        EXCHANGE                         LATEST
  INDEMNIFYING      CONTRACTING                         PAYMENT        RATE euro 1          EURO         EXPIRY
     COMPANY          COMPANY       LOCAL VALUE         CURRENCY        12 FEB 03        EQUIVALENT       DATE
  ------------      -----------     -----------         --------       ------------      ----------      ------

<S>                 <C>             <C>                 <C>            <C>               <C>             <C>
        1                2               5                 6                 7               8              9

MCL                 MCIL                 1,302,775        EUR                  1.0000       1,302,775      31-Mar-03

MCL                 MCIL                   366,406        EUR                  1.0000         366,406      31-Jan-04

MCL                 MCIL                   118,078        EUR                  1.0000         118,078      13-May-03

MCL                 MCIL                   103,851        EUR                  1.0000         103,851      27-Apr-03

M Aus               M Aus                  154,506        AUD                  1.8166          85,052      14-Jun-06
                                                                                            ---------
MCL                 MCIL                    12,916        EUR                  1.0000          12,916       8-Feb-03
                                                                                            ---------
MCL                 MCIL                     7,246        USD                  1.0735           6,750      30-Nov-01
                                                         ---------
                                                         1,995,828
                                                         ---------

                                 COMPANY KEY

                                 MCL                     Marconi Communications Ltd

                                 MCIL                    Marconi Communications International Ltd

                                 MCCL                    Marconi Communications China Ltd

                                 M Aus                   Marconi Australia Pty Ltd

 </TABLE>

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      JPMorgan Chase Bank
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED DATED [ ], 2003 (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.   [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the
     terms of our guarantee number [ ] issued in favour of [ ] on behalf of
     [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in
     writing (copy enclosed) not less than five business days prior to the date
     of this demand. However, we have not received payment of the sum of [ ]
     (being the amount due but unpaid under the Bonds).] [OR]

     [We certify that the amount of this drawing euro[____________] under
     JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us as
     we have received notice from JPMorgan Chase Bank of their decision not to
     extend this Letter of Credit for an additional period and the following
     Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE
     BOND NUMBERS]]

2.   We therefore demand payment of the sum of euro[ ].

3.   Payment should be made to the following account:

     Name:

     Account Number:

     Bank:

4.   The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
<PAGE>

                                                             CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                               18 March 2003

Unicredit Banca D'Impresa SpA
Filiale Genova Centro
Via Petrarca 2-16121 Genova
Att. neg Sigg. Romeo/Stellino
Swift Address:  UNICRIT2V
Italy

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)  the Bonds which have been issued by you on behalf of us and/or any
     Subsidiaries;

(b)  any counter indemnity that we and/or any Subsidiary may have given to you
     (or which may arise at law) in respect of any liability which you incur
     under those Bonds; and

(c)  any rights you may have in relation to those Bonds to require cash
     collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Euro Equivalents for each of those Bonds is euro 11,410,137
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of euro7,000,000 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)  upon an Insolvency of us or of the relevant Subsidiary;

(b)  to call for cash collateral, reimbursement or otherwise in respect of a
     Bond in the event a call is made, or a valid notice to call for payment is
     issued, by a beneficiary under that Bond; or

(c)  upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro
Equivalents of those of the Bonds listed in schedule 2 to this letter that
remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

BURCHI ANDREA                               ROMEO GIOVANNI
BURCHI ANDREA                               ROMEO GIOVANNI
BRANCH CHIEF MANAGER                        SENIOR ACCOUNT MANAGER

For and behalf of
UNICREDIT BANCA D'IMPRESA SPA

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "outstanding" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set
out in the column headed "Euro Equivalent" in schedule 2 to this letter.

"INSOLVENCY" means, in relation to any person, any of the following:

(a)  the commencement of a voluntary winding up, within the meaning of section
     84 of the Insolvency Act 1986 (save where such winding up is for the
     purposes of a reconstruction or amalgamation while solvent);

(b)  the appointment of an administrator or liquidator under the Insolvency Act
     1986 or the appointment of an administrative receiver or receiver, or
     proposals are made or issued for a voluntary arrangement within the meaning
     of Part I of that Act (save where such occurrence is for the purposes of a
     solvent reconstruction or amalgamation); or

(c)  the occurrence of any event in a jurisdiction outside the United Kingdom of
     Great Britain and Northern Ireland which is analogous to any of the events
     referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means HSBC Bank plc.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>

   INDEMNIFYING      CONTRACTING       BANK
     COMPANY           COMPANY       REFERENCE            BENEFICIARY
   ------------      -----------     ---------            -----------
<S>                  <C>            <C>                   <C>
        1                 2              3                     4
MCSpA               MCSpA           460010778854      BASICTEL S.P.A.
MCSpA               MCSpA           28744             TIM-TELECOM ITALIA MOBILE SPA
MSud                MSud            6232/08           UFFICIO IVA
MCSpA               MCSpA           460010880150      9 TELECOM RESEAU
MCSpA               MCSpA           460010880221      TELECOM ITALIA S.P.A. DIR. GEN.
MCSpA               MCSpA           460010260990      TELECOM ITALIA
MCSpA               MCSpA           460010765846      FERROVIE DELLO STATO
MCSpA               MCSpA           460010765852      FERROVIE DELLO STATO
MCSpA               MCSpA           59970             UNIVERSITA' DEGLI STUDI
MCSpA               MCSpA           460011081716      MAROC TELECOM S.A.
MCSpA               MCSpA           59985             SINELEC
MCSpA               MCSpA           59983             SINELEC
MCSpA               MCSpA           4310/26           IRITEL S.p.A ROMA
MCSpA               MCSpA           4863-94           FERROVIE DELLO STATO S.P.A.
MCSpA               MCSpA           460011081719      MAROC TELECOM S.A.
MCSpA               MCSpA           460010766259      FERROVIE DELLO STATO
MMSpA               MMSpA           460010879941      LEBANESE INTERIOR SECURITY FORCE
MMSpA               MMSpA           4600105077165     COMANDO GENERALE ARMA CC
MMSpA               MMSpA           460011271307      MINISTERO INTERNO P.S.
MCSpA               MCSpA           460010172082      TELECOM ITALIA
MMSpA               MMSpA           3894-31           COMANDO ARMA CC
MMSpA               MMSpA           460010779601      CHINA AVIATION SUPPLIES IMP. & EXP.

</TABLE>

<TABLE>

<CAPTION>
                                 EXCHANGE
                   PAYMENT     RATE euro1          EURO           LATEST
LOCAL VALUE       CURRENCY       12 FEB 03        EQUIVALENT      EXPIRY DATE
-----------       --------     ------------       ----------      -----------
<S>                <C>            <C>            <C>             <C>
     5               6              7                 8               9
     3,172,568      EUR              1.0000       3,172,568        31-Mar-03
 4,800,000,000      ITL            1,936.27       2,478,993           U/L
 2,966,896,000      ITL            1,936.27       1,532,274        31-Dec-02
     1,250,000      EUR              1.0000       1,250,000         6-Aug-06
 1,700,000,000      ITL            1,936.27         877,977        31-Jan -03
   400,000,000      ITL            1,936.27         206,583           U/L
   348,323,328      ITL            1,936.27         179,894           U/L
   328,972,032      ITL            1,936.27         169,900           U/L
   162,400,000      ITL            1,936.27          83,873           U/L
       750,000      MAD             10.7050          70,061        16-Feb-02
   129,177,524      ITL            1,936.27          66,715        31-Mar-01
   112,553,098      ITL            1,936.27          58,129        14-Apr-01
    76,667,914      ITL            1,936.27          39,596           U/L
    69,911,251      ITL            1,936.27          36,106           U/L
       150,000      MAD             10.7050          14,012        16-Feb-02
    10,920,000      ITL            1,936.27           5,640           U/L
       456,910      EUR              1.0000         456,910        15-Aug-03
   835,322,800      ITL            1,936.27         431,408           U/L
   371,493,000      ITL            1,936.27         191,860           U/L
    80,000,000      ITL            1,936.27          41,317           U/L
    68,050,000      ITL            1,936.27          35,145           U/L
        12,000      USD              1.0735          11,178        30-Nov-01

                                                 ----------
                                                 11,410,137
                                                 ----------
</TABLE>

COMPANY KEY
MCSpA    Marconi Communications SpA
MMSpA    Marconi Mobile SpA
MSud     Marconi Sud SpA

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

           [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF HSBC BANK PLC]

To:           Unicredit Banca D'Impresa SpA
              (the "BENEFICIARY")

Through:      UniCredito Italiano S.p.A.
              Via San Protaso 3
              20121 Milano (Italy) Attn: Mr D'Elia (+39 02 8862 3571)

                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), HSBC Bank plc
(the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER
OF CREDIT") in your favour on the following terms and conditions:

1.   DEFINITIONS

(a)  In this Letter of Credit:

     "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro
     Equivalents for each of the Bonds that remain outstanding at that time.

     "BONDS" means those bonds, guarantees or letters of credit, indemnities or
     like instruments listed in schedule 1 to this Letter of Credit issued by
     the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

     "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
     banks are open for general business in London.

     "CERTIFICATION DATE" means 18 March, 2004 and each anniversary thereof,
     being the date on which the Beneficiary must certify to the Company (with a
     copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date.

     "COMPANY" means Marconi Corporation plc.

     "DEMAND" means a demand for a payment under this Letter of Credit in the
     form of schedule 2 to this Letter of Credit together with, where relevant,
     a copy of the written request to the Company or the relevant Subsidiary
     demanding payment pursuant to the terms of the relevant Bond.

     "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that
     Bond set out in the column headed "Euro Equivalent" in schedule 1 to this
     Letter of Credit.

     "EXPIRY DATE" means the earlier of:

     (i)  18 March, 2008 (or such later expiry date applicable as a result of an
          extension pursuant to paragraph 4(c)); and

                                       5
<PAGE>

     (ii) the date on which the Total L/C Amount is reduced to zero pursuant to
          a reduction under paragraph 3.

     "ORIGINAL BONDS OUTSTANDING" means euro11,410,137.

     "NOTIFICATION" means a notification from the Beneficiary to the Account
     Party, the Company or any Subsidiary that certain Bonds have expired or
     been cancelled (and are therefore no longer outstanding).

     "PRESENTATION DATE" means each date on which the Account Party presents to
     the Issuing Bank a copy of one or more Notifications.

     "SUBSIDIARY" means any subsidiary of the Company within the meaning of
     section 736 of the Companies Act 1985, as amended by section 144 of the
     Companies Act 1989.

     "TOTAL L/C AMOUNT" means euro7,000,000, as reduced in accordance with
     paragraph 3 of this Letter of Credit.

2.   ISSUING BANK'S AGREEMENT

(a)  The Beneficiary may request a drawing or drawings under this Letter of
     Credit by giving to the Issuing Bank a duly completed Demand. In order to
     constitute a valid Demand, a Demand must be received by the Issuing Bank by
     11 a.m. (London time) on or before the Expiry Date.

(b)  Subject to the terms of this Letter of Credit, the Issuing Bank
     unconditionally and irrevocably undertakes to the Beneficiary that, within
     ten Business Days of receipt by it of a Demand, it will pay to the
     Beneficiary the amount demanded in that Demand.

(c)  The Issuing Bank will not be obliged to make a payment under this Letter of
     Credit if as a result the aggregate of all payments made by it under this
     Letter of Credit would exceed the Total L/C Amount.

3.   REDUCTION IN TOTAL L/C AMOUNT

(a)  If:

     (i)  on a Certification Date the Total L/C Amount exceeds the Adjusted
          Bonds Outstanding (as certified by the Beneficiary) on that date; or

     (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds
          Outstanding on that date (after deducting the Euro Equivalent for each
          Bond that is the subject of each relevant Notification),

     the Total L/C Amount shall, subject to paragraph (b) below, automatically
     reduce accordingly.

(b)  Any reduction in the Total L/C Amount under sub-paragraph (a) above shall
     only be applied if:

     (i)  the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the
          relevant Certification Date or Presentation Date (as applicable) by
          more than euro100,000; or

                                       6
<PAGE>

     (ii) if as a result of such reduction the Total L/C Amount would be zero.

4.   EXPIRY

(a)  The Issuing Bank will be released from its obligations under this Letter of
     Credit on the Expiry Date with no further liability on the part of the
     Issuing Bank except for any Demand validly presented in accordance with
     paragraph 2(a) of this Letter of Credit that remains unpaid.

(b)  When the Issuing Bank is no longer under any further obligations under this
     Letter of Credit, the Beneficiary must, on request, return the original of
     this Letter of Credit to the Issuing Bank.

(c)  It is a condition of this irrevocable Letter of Credit that, not more than
     30 days before the present or each future Expiry Date, the Beneficiary may
     (unless the relevant Expiry Date occurs as a result of the value of this
     Letter of Credit being reduced to zero) request it to be extended for an
     additional period of one year from the present or each future Expiry Date.
     If the Issuing Bank elects not to extend this Letter of Credit for such
     additional period the Beneficiary may, on or prior to the applicable Expiry
     Date, make a Demand for an amount not to exceed the remaining balance of
     the Total L/C Amount.

5.   PAYMENTS

     All payments under this Letter of Credit shall be made in Euro and for
     value on the due date to the account of the Beneficiary specified in the
     Demand.

6.   DELIVERY OF DEMAND

     Each Demand shall be in writing, and, unless otherwise stated, may be made
     by courier or SWIFT message and must be received in legible form by the
     Issuing Bank at its address and by the particular department or officer (if
     any) as follows:

     HSBC Bank plc
     [Canada Place
     Canary Wharf
     London E14 5AH]
     Fax:               [                ]
     SWIFT:             [                ]
     Attention:         [Trade Services Department]

7.   ASSIGNMENT

     The Beneficiary's rights under this Letter of Credit may not be assigned or
     transferred.

8.   UCP

     Except to the extent it is inconsistent with the express terms of this
     Letter of Credit, this Letter of Credit is subject to the Uniform Customs
     and Practice for Documentary Credits (1993 Revision), International Chamber
     of Commerce Publication No. 500.

                                       7
<PAGE>

9.   GOVERNING LAW

     Except to the extent it is inconsistent with the express terms of this
     Letter of Credit or the Uniform Customs and Practice for Documentary
     Credits (1993 Revision), International Chamber of Commerce Publication No.
     500, this Letter of Credit is governed by English law.

10.  JURISDICTION

     The English courts have non-exclusive jurisdiction to settle any dispute in
     connection with this Letter of Credit.

CONFIRMING BANK

We hereby authorize UniCredito Italiano S.p.A. to add its confirmation to this
letter of credit and upon agreement by UniCredito Italiano S.p.A. to add its
confirmation to this letter of credit by way of an exchange of letters,
UniCredito Italiano S.p.A. shall be designated as the "Confirming Bank" (within
the meaning of the UCP) of this letter of credit.

Subject to UniCredito Italiano S.p.A. agreeing to add its confirmation to this
letter of credit, on presentation by you to UniCredito Italiano S.p.A. of a
demand for payment together with a certification that

          (i)  you have made a demand for the amount set forth in such demand
               for payment to us in accordance with the letter of credit; and

          (ii) the amount demanded in such demand for payment is due and unpaid
               by us under this letter of credit for a period of ten business
               days of receipt by us of such demand

UniCredito Italiano S.p.A will pay to you the amount demanded in such demand for
payment.

Any and all fees, costs and expenses claimed by UniCredito Italiano S.p.A. in
connection with this letter of credit will be borne by you

Yours faithfully,

For and on behalf of
HSBC BANK PLC
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                    THE BONDS

<TABLE>
<CAPTION>
   INDEMNIFYING      CONTRACTING       BANK
     COMPANY           COMPANY       REFERENCE            BENEFICIARY
   ------------      -----------     ---------            -----------
<S>                <C>             <C>                 <C>
        1                 2                3                  4
MCSpA               MCSpA           460010778854        BASICTEL S.P.A.
MCSpA               MCSpA           28744               TIM-TELECOM ITALIA MOBILE SPA
MSud                MSud            6232/08             UFFICIO IVA
MCSpA               MCSpA           460010880150        9 TELECOM RESEAU
MCSpA               MCSpA           460010880221        TELECOM ITALIA S.P.A. DIR. GEN.
MCSpA               MCSpA           460010260990        TELECOM ITALIA
MCSpA               MCSpA           460010765846        FERROVIE DELLO STATO
MCSpA               MCSpA           460010765852        FERROVIE DELLO STATO
MCSpA               MCSpA           59970               UNIVERSITA' DEGLI STUDI
MCSpA               MCSpA           460011081716        MAROC TELECOM S.A.
MCSpA               MCSpA           59985               SINELEC
MCSpA               MCSpA           59983               SINELEC
MCSpA               MCSpA           4310/26             IRITEL S.p.A ROMA
MCSpA               MCSpA           4863-94             FERROVIE DELLO STATO S.P.A.
MCSpA               MCSpA           460011081719        MAROC TELECOM S.A.
MCSpA               MCSpA           460010766259        FERROVIE DELLO STATO
MMSpA               MMSpA           460010879941        LEBANESE INTERIOR SECURITY FORCE
MMSpA               MMSpA           4600105077165       COMANDO GENERALE ARMA CC
MMSpA               MMSpA           460011271307        MINISTERO INTERNO P.S.
MCSpA               MCSpA           460010172082        TELECOM ITALIA
MMSpA               MMSpA           3894-31             COMANDO ARMA CC
MMSpA               MMSpA           460010779601        CHINA AVIATION SUPPLIES IMP. & EXP.

</TABLE>

<TABLE>
<CAPTION>
                                                                          EXCHANGE
   INDEMNIFYING      CONTRACTING                            PAYMENT      RATE euro1         EURO            LATEST
     COMPANY           COMPANY            LOCAL VALUE       CURRENCY      12 FEB 03         EQUIVALENT      EXPIRY DATE
   ------------      -----------          -----------       --------     ------------       ----------      -----------
<S>                <C>                    <C>               <C>          <C>                <C>             <C>
        1                 2                    5               6              7                 8                9
MCSpA               MCSpA                      3,172,568      EUR              1.0000       3,172,568        31-Mar-03
MCSpA               MCSpA                  4,800,000,000      ITL            1,936.27       2,478,993           U/L
MSud                MSud                   2,966,896,000      ITL            1,936.27       1,532,274        31-Dec-02
MCSpA               MCSpA                      1,250,000      EUR              1.0000       1,250,000         6-Aug-06
MCSpA               MCSpA                  1,700,000,000      ITL            1,936.27         877,977        31-Jan -03
MCSpA               MCSpA                    400,000,000      ITL            1,936.27         206,583           U/L
MCSpA               MCSpA                    348,323,328      ITL            1,936.27         179,894           U/L
MCSpA               MCSpA                    328,972,032      ITL            1,936.27         169,900           U/L
MCSpA               MCSpA                    162,400,000      ITL            1,936.27          83,873           U/L
MCSpA               MCSpA                        750,000      MAD             10.7050          70,061        16-Feb-02
MCSpA               MCSpA                    129,177,524      ITL            1,936.27          66,715        31-Mar-01
MCSpA               MCSpA                    112,553,098      ITL            1,936.27          58,129        14-Apr-01
MCSpA               MCSpA                     76,667,914      ITL            1,936.27          39,596           U/L
MCSpA               MCSpA                     69,911,251      ITL            1,936.27          36,106           U/L
MCSpA               MCSpA                        150,000      MAD             10.7050          14,012        16-Feb-02
MCSpA               MCSpA                     10,920,000      ITL            1,936.27           5,640           U/L
MMSpA               MMSpA                        456,910      EUR              1.0000         456,910        15-Aug-03
MMSpA               MMSpA                    835,322,800      ITL            1,936.27         431,408           U/L
MMSpA               MMSpA                    371,493,000      ITL            1,936.27         191,860           U/L
MCSpA               MCSpA                     80,000,000      ITL            1,936.27          41,317           U/L
MMSpA               MMSpA                     68,050,000      ITL            1,936.27          35,145           U/L
MMSpA               MMSpA                         12,000      USD              1.0735          11,178        30-Nov-01

                                                         ----------
                                                         11,410,137
                                                         ----------
</TABLE>

COMPANY KEY
MCSpA    Marconi Communications SpA
MMSpA    Marconi Mobile SpA
MSud     Marconi Sud SpA

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:   HSBC Bank plc
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF UNICREDIT BANCA D'IMPRESA
SPA DATED [ ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.   [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the
     terms of our guarantee number [ ] issued in favour of [ ] on behalf of
     [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in
     writing (copy enclosed) not less than five business days prior to the date
     of this demand. However, we have not received payment of the sum of [ ]
     (being the amount due but unpaid under the Bonds).] [OR]

     [We certify that the amount of this drawing euro[____________] under HSBC
     Bank plc Letter of Credit No. [ ] represents funds due to us as we have
     received notice from HSBC Bank plc of their decision not to extend this
     Letter of Credit for an additional period and the following Bonds in
     schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND
     NUMBERS]]

2.   We therefore demand payment of the sum of euro[ ].

3.   Payment should be made to the following account:

     Name:

     Account Number:

     Bank:

The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR UNICREDIT BANCA D'IMPRESA SPA

<PAGE>
                                                             CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                              25 March 2003

Banco Santander Central Hispano, S.A., London Branch
Santander House
100 Ludgate Hill
London EC4M 7NJ

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)  the Bonds which have been issued by you on behalf of us and/or any
     Subsidiaries;

(b)  any counter indemnity that we and/or any Subsidiary may have given to you
     (or which may arise at law) in respect of any liability which you incur
     under those Bonds; and

(c)  any rights you may have in relation to those Bonds to require cash
     collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Euro Equivalents for each of those Bonds is euro 6,010,121
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of euro 3,005,060.50 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)  upon an Insolvency of us or of the relevant Subsidiary;

(b)  to call for cash collateral, reimbursement or otherwise in respect of a
     Bond in the event a call is made, or a valid notice to call for payment is
     issued, by a beneficiary under that Bond; or

(c)  upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro
Equivalents of those of the Bonds listed in schedule 2 to this letter that
remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

[AUTHORISED SIGNATORY]                               [AUTHORISED SIGNATORY]

For and behalf of
BANCO SANTANDER CENTRAL HISPANO, S.A., LONDON BRANCH

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set
out in the column headed "Euro Equivalent" in schedule 2 to this letter.

"INSOLVENCY" means, in relation to any person, any of the following:

(a)  the commencement of a voluntary winding up, within the meaning of section
     84 of the Insolvency Act 1986 (save where such winding up is for the
     purposes of a reconstruction or amalgamation while solvent);

(b)  the appointment of an administrator or liquidator under the Insolvency Act
     1986 or the appointment of an administrative receiver or receiver, or
     proposals are made or issued for a voluntary arrangement within the meaning
     of Part I of that Act (save where such occurrence is for the purposes of a
     solvent reconstruction or amalgamation); or

(c)  the occurrence of any event in a jurisdiction outside the United Kingdom of
     Great Britain and Northern Ireland which is analogous to any of the events
     referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means Barclays Bank PLC.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>

   INDEMNIFYING      CONTRACTING        BANK
     COMPANY           COMPANY        REFERENCE       BENEFICIARY     LOCAL VALUE
   ------------      -----------      ---------       -----------     -----------
<S>                  <C>              <C>             <C>
        1                 2               3                4               5
MCL                 MCESA                             RETEVISION     1,000,000,000

</TABLE>

<TABLE>
<CAPTION>                                            EXCHANGE
   INDEMNIFYING      CONTRACTING      PAYMENT       RATE euro 1        EURO         LATEST
     COMPANY           COMPANY        CURRENCY       12 FEB 03       EQUIVALENT    EXPIRY DATE
   ------------      -----------      --------      ------------     ----------    -----------
<S>                  <C>              <C>           <C>              <C>           <C>
        1                 2              6              7              8               9
MCL                 MCESA               ESP          166.3860       6,010,121      30-Jun-09

                                                                    6,010,121
</TABLE>

                             COMPANY KEY
                             -----------
                             MCL               Marconi Communications Ltd
                             MCESA             Marconi Communications Espana, SA

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

         [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC]

To:      Banco Santander Central Hispano, S.A., London Branch
         (the "BENEFICIARY")

                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank
PLC (the "ISSUING Bank") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.   DEFINITIONS

(a)  In this Letter of Credit:

     "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro
     Equivalents for each of the Bonds that remain outstanding at that time.

     "BONDS" means those bonds, guarantees or letters of credit, indemnities or
     like instruments listed in schedule 1 to this Letter of Credit issued by
     the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

     "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
     banks are open for general business in London.

     "CERTIFICATION DATE" means 25 March, 2004 and each anniversary thereof,
     being the date on which the Beneficiary must certify to the Company (with a
     copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date.

     "COMPANY" means Marconi Corporation plc.

     "DEMAND" means a demand for a payment under this Letter of Credit in the
     form of schedule 2 to this Letter of Credit together with, where relevant,
     a copy of the written request to the Company or the relevant Subsidiary
     demanding payment pursuant to the terms of the relevant Bond.

     "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that
     Bond set out in the column headed "Euro Equivalent" in schedule 1 to this
     Letter of Credit.

     "EXPIRY DATE" means the earlier of:

     (i)  10 July 2009 (or such later expiry date applicable as a result of an
          extension pursuant to paragraph 4(c)); and

     (ii) the date on which the Total L/C Amount is reduced to zero pursuant to
          a reduction under paragraph 3.

                                       5
<PAGE>

     "ORIGINAL BONDS OUTSTANDING" means euro 6,010,121.

     "NOTIFICATION" means a notification from the Beneficiary to the Account
     Party, the Company or any Subsidiary that certain Bonds have expired or
     been cancelled (and are therefore no longer outstanding).

     "PRESENTATION DATE" means each date on which the Account Party presents to
     the Issuing Bank a copy of one or more Notifications.

     "SUBSIDIARY" means any subsidiary of the Company within the meaning of
     section 736 of the Companies Act 1985, as amended by section 144 of the
     Companies Act 1989.

     "TOTAL L/C AMOUNT" means euro 3,005,060.50, as reduced in accordance with
     paragraph 3 of this Letter of Credit.

2.   ISSUING BANK'S AGREEMENT

(a)  The Beneficiary may request a drawing or drawings under this Letter of
     Credit by giving to the Issuing Bank a duly completed Demand. In order to
     constitute a valid Demand, a Demand must be received by the Issuing Bank by
     11 a.m. (London time) on or before the Expiry Date.

(b)  Subject to the terms of this Letter of Credit, the Issuing Bank
     unconditionally and irrevocably undertakes to the Beneficiary that, within
     ten Business Days of receipt by it of a Demand, it will pay to the
     Beneficiary the amount demanded in that Demand.

(c)  The Issuing Bank will not be obliged to make a payment under this Letter of
     Credit if as a result the aggregate of all payments made by it under this
     Letter of Credit would exceed the Total L/C Amount.

3.   REDUCTION IN TOTAL L/C AMOUNT

(a)  If:

     (i)  on a Certification Date the Total L/C Amount exceeds the Adjusted
          Bonds Outstanding (as certified by the Beneficiary) on that date; or

     (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds
          Outstanding on that date (after deducting the Euro Equivalent for each
          Bond that is the subject of each relevant Notification),

     the Total L/C Amount shall, subject to paragraph (b) below, automatically
     reduce accordingly.

(b)  Any reduction in the Total L/C Amount under sub-paragraph (a) above shall
     only be applied if:

     (i)  the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the
          relevant Certification Date or Presentation Date (as applicable) by
          more than euro 100,000; or

     (ii) if as a result of such reduction the Total L/C Amount would be zero.

                                       6
<PAGE>

4.   EXPIRY

(a)  The Issuing Bank will be released from its obligations under this Letter of
     Credit on the Expiry Date with no further liability on the part of the
     Issuing Bank except for any Demand validly presented in accordance with
     paragraph 2(a) of this Letter of Credit that remains unpaid.

(b)  When the Issuing Bank is no longer under any further obligations under this
     Letter of Credit, the Beneficiary must, on request, return the original of
     this Letter of Credit to the Issuing Bank.

(c)  It is a condition of this irrevocable Letter of Credit that, not more than
     30 days before the present or each future Expiry Date, the Beneficiary may
     (unless the relevant Expiry Date occurs as a result of the value of this
     Letter of Credit being reduced to zero) request it to be extended for an
     additional period of one year from the present or each future Expiry Date.
     If the Issuing Bank elects not to extend this Letter of Credit for such
     additional period the Beneficiary may, on or prior to the applicable Expiry
     Date, make a Demand for an amount not to exceed the remaining balance of
     the Total L/C Amount.

5.   PAYMENTS

     All payments under this Letter of Credit shall be made in Euro and for
     value on the due date to the account of the Beneficiary specified in the
     Demand.

6.   DELIVERY OF DEMAND

     Each Demand shall be in writing, and, unless otherwise stated, may be made
     by letter or fax and must be received in legible form by the Issuing Bank
     at its address and by the particular department or officer (if any) as
     follows:

     Barclays Bank PLC
     [Guarantees Department
     UK International Operations Centre - Manchester
     P O Box 84
     6th Floor
     4 Exchange Quay
     Salford M5 3PL]
     Fax:               [0161 911 6402]
     Telex:             [                ]
     Attention:         [Guarantees Department]

7.   ASSIGNMENT

     The Beneficiary's rights under this Letter of Credit may not be assigned or
     transferred.

8.   UCP

     Except to the extent it is inconsistent with the express terms of this
     Letter of Credit, this Letter of Credit is subject to the Uniform Customs
     and Practice for Documentary Credits (1993 Revision), International Chamber
     of Commerce Publication No. 500.

                                       7
<PAGE>

9.   GOVERNING LAW

     This Letter of Credit is governed by English law.

10.  JURISDICTION

     The courts of England have exclusive jurisdiction to settle any dispute
     arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
BARCLAYS BANK PLC
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                    THE BONDS

<TABLE>
<CAPTION>
                                                                                            EXCHANGE
INDEMNIFYING    CONTRACTING       BANK                                        PAYMENT     RATE euro 1        EURO          LATEST
  COMPANY         COMPANY       REFERENCE     BENEFICIARY    LOCAL VALUE     CURRENCY      12 FEB 03       EQUIVALENT    EXPIRY DATE
------------    -----------     ---------     -----------   -------------    --------     ------------     ----------    -----------
<S>               <C>              <C>           <C>        <C>                 <C>         <C>           <C>            <C>
     1               2              3              4             5               6             7              8                9
MCL             MCESA                   RETEVISION          1,000,000,000       ESP         166.3860      6,010,121      30-Jun-09

                                                                                                          6,010,121
</TABLE>

                             COMPANY KEY
                             -----------
                             MCL               Marconi Communications Ltd
                             MCESA             Marconi Communications Espana, SA

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      Barclays Bank PLC
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCO SANTANDER CENTRAL
HISPANO, S.A., LONDON BRANCH DATED [ ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.   [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the
     terms of our guarantee number [ ] issued in favour of [ ] on behalf of
     [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in
     writing (copy enclosed) not less than five business days prior to the date
     of this demand. However, we have not received payment of the sum of [ ]
     (being the amount due but unpaid under the Bonds).] [OR]

     [We certify that the amount of this drawing euro [____________] under
     Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as we
     have received notice from Barclays Bank PLC of their decision not to extend
     this Letter of Credit for an additional period and the following Bonds in
     schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND
     NUMBERS]]

2.   We therefore demand payment of the sum of euro [ ].

3.   Payment should be made to the following account:

     Name:

     Account Number:

     Bank:

The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR BANCO SANTANDER CENTRAL HISPANO, S.A., LONDON BRANCH
<PAGE>

                                                          CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                                3 April 2003

Banco Santander Central Hispano, S.A., New York Branch
45 East 53rd Street
New York, NY 10022

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)  the Bonds which have been issued by you on behalf of us and/or any
     Subsidiaries;

(b)  any counter indemnity that we and/or any Subsidiary may have given to you
     (or which may arise at law) in respect of any liability which you incur
     under those Bonds; and

(c)  any rights you may have in relation to those Bonds to require cash
     collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the US Dollar Equivalents for each of those Bonds is US$100,000
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of US$50,000 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)  upon an Insolvency of us or of the relevant Subsidiary;

(b)  to call for cash collateral, reimbursement or otherwise in respect of a
     Bond in the event a call is made, or a valid notice to call for payment is
     issued, by a beneficiary under that Bond; or

(c)  upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the US
Dollar Equivalents of those of the Bonds listed in schedule 2 to this letter
that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

CHRIS HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

[AUTHORISED SIGNATORY]                               LUIS PASTOR
                                                     LUIS PASTOR

For and behalf of
BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary (including, for the avoidance of doubt,
any such bond, guarantee, letter of credit, indemnity or other like instrument
issued by you in favour of a named third party beneficiary to support a Bond
issued by such beneficiary on behalf of us and/or any Subsidiary). A Bond is
"OUTSTANDING" until you (acting reasonably) are satisfied that you have no
further liability under that Bond (and, for the avoidance of doubt, you shall be
satisfied that you have no further liability under a Bond once you have received
a form of release from the beneficiary of the Bond in a form and substance
satisfactory to you or once the original Bond has been returned to you).

"INSOLVENCY" means, in relation to any person, any of the following:

(a)  the commencement of a voluntary winding up, within the meaning of section
     84 of the Insolvency Act 1986 (save where such winding up is for the
     purposes of a reconstruction or amalgamation while solvent);

(b)  the appointment of an administrator or liquidator under the Insolvency Act
     1986 or the appointment of an administrative receiver or receiver, or
     proposals are made or issued for a voluntary arrangement within the meaning
     of Part I of that Act (save where such occurrence is for the purposes of a
     solvent reconstruction or amalgamation); or

(c)  the occurrence of any event in a jurisdiction outside the United Kingdom of
     Great Britain and Northern Ireland which is analogous to any of the events
     referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means Barclays Bank PLC.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

"US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of
that Bond set out in the column headed "US Dollar Equivalent" in schedule 2 to
this letter.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>
INDEMNIFYING      CONTRACTING
   COMPANY          COMPANY         TYPE OF BOND             ISSUER OF BOND                      BENEFICIARY
------------      -----------       ------------             --------------                      -----------
<S>              <C>             <C>                 <C>                                 <C>
        1                2               3                         4                                  5

MInc., c/o        MCInc           Standby Letter     Banco Santander Central Hispano,     Banco Santander - Chile in
MDSInc                            of Credit          Miami Agency (whose obligations      respect of the performance bond
                                                     in respect of the Bond have          issued by Banco Santander -
                                                     been transferred to Banco            Chile in respect of sales
                                                     Santatander Hispano, S.A.,           contract number DR 012001
                                                     New York Branch)                     between MCInc and ENTEL.
</TABLE>

<TABLE>
<CAPTION>
                                                                               LATEST
INDEMNIFYING      CONTRACTING                      PAYMENT      US DOLLAR      EXPIRY
  COMPANY          COMPANY          LOCAL VALUE    CURRENCY     EQUIVALENT      DATE
------------      -----------       -----------    --------     ----------     ------
<S>              <C>                <C>            <C>          <C>            <C>
        1                2               6            7             8              9
                                    100,000        USD           100,000       25-Apr-04
MInc., c/o        MCInc
MDSInc

                                                                 -------
                                                                 100,000
                                                                 -------

                   COMPANY KEY
                   -----------
                   MInc                             Marconi Inc.
                   MDSInc                           Marconi Data Systems Inc.
                   MCInc                            Marconi Communications Inc

</Table>

                                       4

<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

         [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC]

To:  Banco Santander Central Hispano, S.A., New York Branch
     (the "BENEFICIARY")
                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank
PLC (the "ISSUING Bank") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.   DEFINITIONS

(a)  In this Letter of Credit:

     "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the US
     Dollar Equivalents for each of the Bonds that remain outstanding at that
     time.

     "BONDS" means those bonds, guarantees or letters of credit, indemnities
     reimbursement arrangements or like instruments listed in schedule 1 to this
     Letter of Credit issued by the Beneficiary on behalf of the Company and/or
     its Subsidiary/ies.

     "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
     banks are open for general business in London.

     "CERTIFICATION DATE" means 3 April 2004 and each anniversary thereof, being
     the date on which the Beneficiary must certify to the Company (with a copy
     to the Issuing Bank) the Adjusted Bonds Outstanding on that date.

     "COMPANY" means Marconi Corporation plc.

     "DEMAND" means a demand for a payment under this Letter of Credit in the
     form of schedule 2 to this Letter of Credit together with, where relevant,
     a copy of the written request to the Company or the relevant Subsidiary
     demanding payment pursuant to the terms of the relevant Bond.

     "EXPIRY DATE" means the earlier of:

     (i)  3 April 2008 (or such later expiry date applicable as a result of an
          extension pursuant to paragraph 4(c)); and

     (ii) the date on which the Total L/C Amount is reduced to zero pursuant to
          a reduction under paragraph 3.

     "ORIGINAL BONDS OUTSTANDING" means US$100,000.

                                       5
<PAGE>

     "NOTIFICATION" means a notification from the Beneficiary to the Account
     Party, the Company or any Subsidiary that certain Bonds have expired or
     been cancelled (and are therefore no longer outstanding).

     "PRESENTATION DATE" means each date on which the Account Party presents to
     the Issuing Bank a copy of one or more Notifications.

     "SUBSIDIARY" means any subsidiary of the Company within the meaning of
     section 736 of the Companies Act 1985, as amended by section 144 of the
     Companies Act 1989.

     "TOTAL L/C AMOUNT" means US$50,000, as reduced in accordance with paragraph
     3 of this Letter of Credit.

     "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect
     of that Bond set out in the column headed "US Dollar Equivalent" in
     schedule 1 to this Letter of Credit.

2.   ISSUING BANK'S AGREEMENT

(a)  The Beneficiary may request a drawing or drawings under this Letter of
     Credit by giving to the Issuing Bank a duly completed Demand. In order to
     constitute a valid Demand, a Demand must be received by the Issuing Bank by
     11 a.m. (London time) on or before the Expiry Date.

(b)  Subject to the terms of this Letter of Credit, the Issuing Bank
     unconditionally and irrevocably undertakes to the Beneficiary that, within
     ten Business Days of receipt by it of a Demand, it will pay to the
     Beneficiary the amount demanded in that Demand.

(c)  The Issuing Bank will not be obliged to make a payment under this Letter of
     Credit if as a result the aggregate of all payments made by it under this
     Letter of Credit would exceed the Total L/C Amount.

3.   REDUCTION IN TOTAL L/C AMOUNT

(a)  If:

     (i)  on a Certification Date the Total L/C Amount exceeds the Adjusted
          Bonds Outstanding (as certified by the Beneficiary) on that date; or

     (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds
          Outstanding on that date (after deducting the US Dollar Equivalent for
          each Bond that is the subject of each relevant Notification),

     the Total L/C Amount shall, subject to paragraph (b) below, automatically
     reduce accordingly.

(b)  Any reduction in the Total L/C Amount under sub-paragraph (a) above shall
     only be applied if:

     (i)  the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the
          relevant Certification Date or Presentation Date (as applicable) by
          more than US$100,000; or

                                       6
<PAGE>

     (ii) if as a result of such reduction the Total L/C Amount would be zero.

4.   EXPIRY

(a)  The Issuing Bank will be released from its obligations under this Letter of
     Credit on the Expiry Date with no further liability on the part of the
     Issuing Bank except for any Demand validly presented in accordance with
     paragraph 2(a) of this Letter of Credit that remains unpaid.

(b)  When the Issuing Bank is no longer under any further obligations under this
     Letter of Credit, the Beneficiary must, on request, return the original of
     this Letter of Credit to the Issuing Bank.

(c)  It is a condition of this irrevocable Letter of Credit that, not more than
     30 days before the present or each future Expiry Date, the Beneficiary may
     (unless the relevant Expiry Date occurs as a result of the value of this
     Letter of Credit being reduced to zero) request it to be extended for an
     additional period of one year from the present or each future Expiry Date.
     If the Issuing Bank elects not to extend this Letter of Credit for such
     additional period the Beneficiary may, on or prior to the applicable Expiry
     Date, make a Demand for an amount not to exceed the remaining balance of
     the Total L/C Amount.

5.   PAYMENTS

     All payments under this Letter of Credit shall be made in US Dollars and
     for value on the due date to the account of the Beneficiary specified in
     the Demand.

6.   DELIVERY OF DEMAND

     Each Demand shall be in writing, and, unless otherwise stated, may be made
     by letter or fax and must be received in legible form by the Issuing Bank
     at its address and by the particular department or officer (if any) as
     follows:

     Barclays Bank PLC
     [Guarantees Department
     UK International Operations Centre - Manchester
     P O Box 84
     6th Floor
     4 Exchange Quay
     Salford M5 3PL]
     Fax:               [0161 911 6402]
     Telex:             [                ]
     Attention:         [Guarantees Department]

7.   ASSIGNMENT

     The Beneficiary's rights under this Letter of Credit may not be assigned or
     transferred.

                                       7
<PAGE>

8.   UCP

     Except to the extent it is inconsistent with the express terms of this
     Letter of Credit, this Letter of Credit is subject to the Uniform Customs
     and Practice for Documentary Credits (1993 Revision), International Chamber
     of Commerce Publication No. 500.

9.   GOVERNING LAW

     This Letter of Credit is governed by English law.

10.  JURISDICTION

     The courts of England have exclusive jurisdiction to settle any dispute
     arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
BARCLAYS BANK PLC
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                      BONDS

<TABLE>
<CAPTION>

  INDEMNIFYING      CONTRACTING
     COMPANY          COMPANY       TYPE OF BOND             ISSUER OF BOND                      BENEFICIARY
  ------------      -----------     ------------             --------------                      -----------
<S>               <C>             <C>                <C>                                  <C>
        1                2               3                         4                                  5

MInc., c/o        MCInc           Standby Letter     Banco Santander Central Hispano,     Banco Santander - Chile in
MDSInc                            of Credit          Miami Agency (whose obligations      respect of the performance bond
                                                     in respect of the Bond have          issued by Banco Santander -
                                                     been transferred to Banco            Chile in respect of sales
                                                     Santander Central Hispano, S.A.,     contract number DR 012001
                                                     New York Branch)                     between MCInc and ENTEL.

</TABLE>

<TABLE>
<CAPTION>
                                                                               LATEST
  INDEMNIFYING      CONTRACTING                    PAYMENT      US DOLLAR      EXPIRY
     COMPANY          COMPANY       LOCAL VALUE    CURRENCY     EQUIVALENT      DATE
  ------------      -----------     -----------    --------     ----------     ------
<S>               <C>               <C>            <C>          <C>           <C>
        1                2               6            7             8             9

MInc., c/o        MCInc                 100,000      USD           100,000    25-Apr-04
MDSInc

                               -------
                               100,000
                               -------
</TABLE>

                   COMPANY KEY
                   -----------
                   MInc                               Marconi Inc.
                   MDSInc                             Marconi Data Systems Inc.
                   MCInc                              Marconi Communications Inc

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:  Barclays Bank PLC
                                                                          [DATE]
Dear Sirs

STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCO SANTANDER CENTRAL
HISPANO, S.A., NEW YORK BRANCH DATED [ ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.   [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the
     terms of our guarantee number [ ] issued in favour of [ ] on behalf of
     [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in
     writing (copy enclosed) not less than five business days prior to the date
     of this demand. However, we have not received payment of the sum of [ ]
     (being the amount due but unpaid under the Bonds).] [OR]

     [We certify that the amount of this drawing US$[____________] under
     Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as we
     have received notice from Barclays Bank PLC of their decision not to extend
     this Letter of Credit for an additional period and the following Bonds in
     schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND
     NUMBERS]]

2.   We therefore demand payment of the sum of US$[ ].

3.   Payment should be made to the following account:

     Name:

     Account Number:

     Bank:

4.   The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH

                                       10
<PAGE>
                                                                  CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                                   17 April 2003

Banca Nazionale del Lavoro SpA
Area Territoriale Nord Ovest
Attn.: Mr. F. Sperduti
Largo Eros Lanfranco, 2
16121 - Genova
Italy

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

This letter sets out our agreement in relation to the Bonds.

The Bonds set out in schedule 2 to this letter are the only Bonds currently
outstanding in respect of which you may have certain rights to call for cash
collateral from us and/or any Subsidiary. As at the date of this letter the
aggregate of the Euro Equivalents for each of those Bonds is Euro135,167
("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this
letter.

In consideration for our procuring the issue of the Letter of Credit in your
favour in an aggregate amount of Euro67,583.50 you hereby agree to waive
unconditionally and irrevocably (with effect from the date on which the Letter
of Credit is delivered to you) all of your rights to call for cash collateral
(or the equivalent) in respect of the Bonds. This waiver shall not apply to the
extent of any rights you may have against us and/or any Subsidiary:

                                       1
<PAGE>

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the above waiver).

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro
Equivalents of those of the Bonds listed in schedule 2 to this letter that
remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification
Date. In accordance with the terms of the Letter of Credit, if the Total L/C
Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the
Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the
Letter of Credit shall be reduced accordingly. In addition to any adjustments
made to the Total L/C Amount of the Letter of Credit on a Certification Date, if
and to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the Letter
of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and
the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

C.C. HOLDEN

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

[AUTHORISED SIGNATORY]                               F. PAOLETTI
                                                     F. PAOLETTI

For and behalf of
BANCA NAZIONALE DEL LAVORO SPA

                                       2
<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set
out in the column headed "Euro Equivalent" in schedule 2 to this letter.

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means JPMorgan Chase Bank.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

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

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

                                       3
<PAGE>

                               SCHEDULE 2 - BONDS

<TABLE>
<CAPTION>

  INDEMNIFYING     CONTRACTING            BANK
    COMPANY          COMPANY           REFERENCE               BENEFICIARY
    -------          -------           ---------               -----------
<S>                  <C>              <C>                 <C>
       1                2                   3                        4
    -----             -----            -----------           --------------
    MCSpA             MCSpA              26687-L           MINISTERO POSTE ALGERI
    -----             -----            -----------           --------------
    MCSpA             MCSpA              26686-K           MINISTERO POSTE ALGERI
    -----             -----            -----------           --------------
    MCSpA             MCSpA            43/626309/H           TELECOM ITALIA
    -----             -----            -----------           --------------
    MCSpA             MCSpA              23374/N             AMM.POSTE TELEC.
    -----             -----            -----------           --------------

</TABLE>

<TABLE>
<CAPTION>

                                                                               EXCHANGE                  LATEST
   INDEMNIFYING     CONTRACTING                             PAYMENT            RATE EURO      EURO       EXPIRY
     COMPANY          COMPANY             LOCAL VALUE       CURRENCY          27 JAN 03    EQUIVALENT     DATE
     -------          -------             -----------        ---               --------    ----------   ---------
 <S>                  <C>                <C>               <C>                 <C>         <C>         <C>
        1                2                    5               6                   7             8           9
     -----             -----               ----------        ---               --------      ------     ---------
     MCSpA             MCSpA              119,307,000        ITL               1,936.27      61,617        U/L
     -----             -----               ----------        ---               --------      ------     ---------
     MCSpA             MCSpA               79,538,300        ITL               1,936.27      41,078        U/L
     -----             -----               ----------        ---               --------      ------     ---------
     MCSpA             MCSpA               60,375,000        ITL               1,936.27      31,181     21-Apr-03
     -----             -----               ----------        ---               --------      ------     ---------
     MCSpA             MCSpA                2,500,000        ITL               1,936.27       1,291        U/L
     -----             -----               ----------        ---               --------      ------     ---------
                                                                                            135,167
                                                                                            -------

 COMPANY KEY
 -----------
    MCSpA            Marconi Communications SpA
    -----            --------------------------

</TABLE>

                                       4
<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

        [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK]

To:               Banca Nazionale del Lavoro SpA
                  (the "BENEFICIARY")

                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase
Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit
("LETTER OF CREDIT") in your favour on the following terms and conditions:

1.       DEFINITIONS

(a)      In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the
        Euro Equivalents for each of the Bonds that remain outstanding at that
        time.

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means 17 April 2004 and each anniversary thereof,
        being the date on which the Beneficiary must certify to the Company
        (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that
        date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that
        Bond set out in the column headed "Euro Equivalent" in schedule 1 to
        this Letter of Credit.

        "EXPIRY DATE" means the earlier of:

         (i)      17 April 2008 (or such later expiry date applicable as a
                  result of an extension pursuant to paragraph 4(c)); and

         (ii)     the date on which the Total L/C Amount is reduced to zero
                  pursuant to a reduction under paragraph 3.

                                       5
<PAGE>

        "ORIGINAL BONDS OUTSTANDING" means Euro135,167.

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means Euro67,583.50, as reduced in accordance with
        paragraph 3 of this Letter of Credit.

2.       ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

3.       REDUCTION IN TOTAL L/C AMOUNT

(a)      If:

         (i)      on a Certification Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding (as certified by the Beneficiary)
                  on that date; or

         (ii)     on a Presentation Date the Total L/C Amount exceeds the
                  Adjusted Bonds Outstanding on that date (after deducting the
                  Euro Equivalent for each Bond that is the subject of each
                  relevant Notification),

         the Total L/C Amount shall, subject to paragraph (b) below,
         automatically reduce accordingly.

(b)      Any reduction in the Total L/C Amount under sub-paragraph (a) above
         shall only be applied if:

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than Euro100,000; or

         (ii)     if as a result of such reduction the Total L/C Amount would be
                  zero.

                                       6
<PAGE>

4.       EXPIRY

(a)     The Issuing Bank will be released from its obligations under this
        Letter of Credit on the Expiry Date with no further liability on the
        part of the Issuing Bank except for any Demand validly presented in
        accordance with paragraph 2(a) of this Letter of Credit that remains
        unpaid.

(b)     When the Issuing Bank is no longer under any further obligations under
        this Letter of Credit, the Beneficiary must, on request, return the
        original of this Letter of Credit to the Issuing Bank.

(c)     It is a condition of this irrevocable Letter of Credit that, not more
        than 30 days before the present or each future Expiry Date, the
        Beneficiary may (unless the relevant Expiry Date occurs as a result of
        the value of this Letter of Credit being reduced to zero) request it to
        be extended for an additional period of one year from the present or
        each future Expiry Date. If the Issuing Bank elects not to extend this
        Letter of Credit for such additional period the Beneficiary may, on or
        prior to the applicable Expiry Date, make a Demand for an amount not to
        exceed the remaining balance of the Total L/C Amount.

5.       PAYMENTS

        All payments under this Letter of Credit shall be made in Euro and for
        value on the due date to the account of the Beneficiary specified in the
        Demand.

6.       DELIVERY OF DEMAND

        Each Demand shall be in writing, and, unless otherwise stated, may be
        made by letter or fax and must be received in legible form by the
        Issuing Bank at its address and by the particular department or officer
        (if any) as follows:

        JPMorgan Chase Bank
        [1 Chaseside
        Bournemouth
        Dorset BH7 7DA]
        Fax:               [01202 34 37 30]
        Telex:             [                ]
        Attention:         [                ]

7.       ASSIGNMENT

        The Beneficiary's rights under this Letter of Credit may not be assigned
        or transferred.

8.       UCP

        Except to the extent it is inconsistent with the express terms of this
        Letter of Credit, this Letter of Credit is subject to the Uniform
        Customs and Practice for Documentary Credits (1993 Revision),
        International Chamber of Commerce Publication No. 500.

9.       GOVERNING LAW

        This Letter of Credit is governed by English law.

                                       7
<PAGE>

10.      JURISDICTION

        The courts of England have exclusive jurisdiction to settle any dispute
        arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
JPMORGAN CHASE BANK
By:

                                       8
<PAGE>

                                   SCHEDULE 1
                                   THE BONDS

<TABLE>
<CAPTION>

  INDEMNIFYING     CONTRACTING            BANK
    COMPANY          COMPANY           REFERENCE               BENEFICIARY             LOCAL VALUE
    -------          -------           ---------               -----------             -----------
<S>                  <C>               <C>                     <C>                     <C>
       1                2                  3                        4                       5
    -----             -----            -----------           --------------             ----------
    MCSpA             MCSpA              26687-L           MINISTERO POSTE ALGERI      119,307,000
    -----             -----            -----------           --------------             ----------
    MCSpA             MCSpA              26686-K           MINISTERO POSTE ALGERI       79,538,300
    -----             -----            -----------           --------------              ---------
    MCSpA             MCSpA            43/626309/H           TELECOM ITALIA             60,375,000
    -----             -----            -----------           --------------              ---------
    MCSpA             MCSpA              23374/N             AMM.POSTE TELEC.            2,500,000
    -----             -----            -----------           --------------              ---------
</TABLE>

<TABLE>
<CAPTION>

                                                       EXCHANGE                     LATEST
  INDEMNIFYING     CONTRACTING         PAYMENT         RATE EURO       EURO         EXPIRY
    COMPANY          COMPANY           CURRENCY        27 JAN 03     EQUIVALENT      DATE
  ------------     -----------         --------        ---------     ----------    ---------
<S>                  <C>               <C>             <C>           <C>           <C>
       1                2                  6               7              8             9
    -----             -----               ---          --------        ------       ---------
    MCSpA             MCSpA               ITL          1,936.27        61,617         U/L
    -----             -----               ---          --------        ------       ---------
    MCSpA             MCSpA               ITL          1,936.27        41,078         U/L
    -----             -----               ---          --------        ------       ---------
    MCSpA             MCSpA               ITL          1,936.27        31,181      21-Apr-03
    -----             -----               ---          --------        ------       ---------
    MCSpA             MCSpA               ITL          1,936.27         1,291         U/L
    -----             -----               ---          --------        ------       ---------
                                                                      135,167
                                                                      -------
</TABLE>

                                     COMPANY KEY
                                     -----------
                                     MCSpA            Marconi Communications SpA

                                       9
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      JPMorgan Chase Bank

                                                                          [DATE]

Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF BANCA NAZIONALE DEL
LAVORO SPA DATED [            ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.      [We certify that [                 ] became due and payable on
        [               ] to [      ] pursuant to the terms of our guarantee
        number [      ] issued in favour of [        ] on behalf of
        [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such
        in writing (copy enclosed) not less than five business days prior to the
        date of this demand. However, we have not received payment of the sum of
        [          ] (being the amount due but unpaid under the Bonds).] [OR]

       [We certify that the amount of this drawing Euro[____________] under
       JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us
       as we have received notice from JPMorgan Chase Bank of their decision not
       to extend this Letter of Credit for an additional period and the
       following Bonds in schedule 1 to this Letter of Credit remain
       outstanding: [INDICATE BOND NUMBERS]]

2.      We therefore demand payment of the sum of Euro[        ].

3.      Payment should be made to the following account:

        Name:

        Account Number:

        Bank:

The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR BANCA NAZIONALE DEL LAVORO SPA

<PAGE>

                                                                  CONFORMED COPY

                                                                  [MARCONI LOGO]

                                                         MARCONI CORPORATION PLC
                                                 338 EUSTON ROAD, LONDON NW1 3BT
                                                        TELEPHONE: 020 7543 6913
                                                              FAX: 020 7409 7748
                                                        WEBSITE: WWW.MARCONI.COM

                                                                  13th May, 2003

Banca Intesa SpA
Filiale Grandi Clienti,
Via XXV Aprile, 5,
16123 Genova,
Italy.

For the attention of: Dott. Nino Bertacchi.

Dear Sirs,

MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE

We refer to:

(a)      the Bonds which have been issued by you on behalf of us and/or any
         Subsidiaries;

(b)      any counter indemnity that we and/or any Subsidiary may have given to
         you (or which may arise at law) in respect of any liability which you
         incur under those Bonds; and

(c)      any rights you may have in relation to those Bonds to require cash
         collateral (or the equivalent) from us and/or any Subsidiary.

We also refer to the standby letter of credit number DCSLDI711169 issued by HSBC
Bank plc in favour of IntesaBci "Grandi Clienti", Genoa Branch dated 3 July 2002
with a face value of Euro 10,226,894 (the "VAT FACILITY LC").

This letter sets out our agreement in relation to the Bonds and the VAT Facility
LC.

The Bonds set out in part A of schedule 2 to this letter are the only Bonds
denominated in euro (the "EURO BONDS") currently outstanding in respect of which
you may have certain rights to call for cash collateral from us and/or any
Subsidiary. The Bonds set out in part B of schedule 2 to this letter are the
only Bonds denominated in US dollars (the "US BONDS") currently outstanding in
respect of which you may have certain rights to call for cash collateral from us
and/or any Subsidiary. As at the date of this letter the aggregate outstanding
amount of the Euro Bonds is Euro 8,867,287 (the "ORIGINAL EURO OUTSTANDING") and
the aggregate outstanding amount of the US Bonds is US$41,158 (the "ORIGINAL US
OUTSTANDING"), based on the amounts set out in column 5 of parts A and B
respectively of schedule 2 to this letter.

In consideration for our procuring the issue of a Letter of Credit in your
favour in an aggregate amount of Euro 8,867,287 (the "EURO LC") and a Letter of
Credit in your favour in an aggregate amount of US$41,158 (the "US LC") you
hereby agree:

<PAGE>

(i)      to waive unconditionally and irrevocably (with effect from the date on
         which both the Euro LC and the US LC are delivered to you) all of your
         rights to call for cash collateral (or the equivalent) in respect of
         the Bonds (the "WAIVER");

(ii)     that (with effect from the date on which both the Euro LC and the US LC
         are delivered to you) the VAT Facility LC shall be deemed to be
         cancelled and HSBC Bank plc shall have no further obligation or
         liability (actual or contingent) under or in respect of the VAT
         Facility LC; and

(iii)    immediately after receipt by you of both the Euro LC and the US LC , to
         return the VAT Facility LC to HSBC Bank plc and to provide written
         confirm to HSBC Bank plc (copied to us) that the VAT Facility LC has
         been cancelled.

The Waiver shall not apply to the extent of any rights you may have against us
and/or any Subsidiary:

(a)      upon an Insolvency of us or of the relevant Subsidiary;

(b)      to call for cash collateral, reimbursement or otherwise in respect of a
         Bond in the event a call is made, or a valid notice to call for payment
         is issued, by a beneficiary under that Bond; or

(c)      upon an acceleration under the Notes,

(but in each case only to the extent that you would have had such rights except
for the Waiver).

The rights and remedies of the parties in relation to, and the terms and
conditions of, the Bonds continue in full force and effect, save as expressly
varied or waived by this letter.

On each anniversary of this letter (each a "CERTIFICATION DATE") you will
certify to us (with a copy to the Issuing Bank):

(i)      the aggregate amount of the Euro Bonds listed in part A of schedule 2
         to this letter that remain outstanding (the "ADJUSTED EURO
         OUTSTANDING"); and

(ii)     the aggregate amount of the US Bond listed in part B of schedule 2 to
         this letter that remain outstanding (the "ADJUSTED US OUTSTANDING"),

on that Certification Date. In accordance with the terms of the Euro LC, if the
Total L/C Amount (as defined in the Euro LC) of the Euro LC exceeds the Adjusted
Euro Outstanding on a Certification Date, the Total L/C Amount of the Euro LC
shall be reduced accordingly. In accordance with the terms of the US LC, if the
Total L/C Amount (as defined in the US LC) of the US LC exceeds the Adjusted US
Outstanding on a Certification Date, the Total L/C Amount of the US LC shall be
reduced accordingly. In addition to any adjustments made to the Total L/C Amount
of either or both of the Euro LC and the US LC on a Certification Date, if and
to the extent that you confirm to us or any Subsidiary that any of the Bonds
listed in schedule 2 to this letter have expired or been cancelled, the relevant
Letter of Credit contains a mechanism for reducing the Adjusted Euro Outstanding
or Adjusted US Outstanding as appropriate, and the Total L/C Amount accordingly.

This letter shall be governed by the laws of England and Wales. Each party to
this letter agrees that the Courts of England are to have exclusive jurisdiction
to settle any disputes which may arise out of or in connection with this letter.

<PAGE>

This letter may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

Please confirm your agreement to the terms of this letter by signing below.

Yours faithfully

SALIM ALAM

For and behalf of
MARCONI CORPORATION PLC

We hereby agree to the above.

LAWRENCE WYBRANIEC                                   FRANCESCO MOGLIA
LAWRENCE WYBRANIEC                                   FRANCESCO MOGLIA

For and behalf of
BANCA INTESA SPA

<PAGE>

                             SCHEDULE 1: DEFINITIONS

In this letter:

"BOND" means any bond, guarantee, letter of credit, indemnity or other like
instrument issued by you in favour of a named third party beneficiary on behalf
of us and/or any Subsidiary to secure the performance of any obligation owed by
us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you
(acting reasonably) are satisfied that you have no further liability under that
Bond (and, for the avoidance of doubt, you shall be satisfied that you have no
further liability under a Bond once you have received a form of release from the
beneficiary of the Bond in a form and substance satisfactory to you or once the
original Bond has been returned to you).

"INSOLVENCY" means, in relation to any person, any of the following:

(a)      the commencement of a voluntary winding up, within the meaning of
         section 84 of the Insolvency Act 1986 (save where such winding up is
         for the purposes of a reconstruction or amalgamation while solvent);

(b)      the appointment of an administrator or liquidator under the Insolvency
         Act 1986 or the appointment of an administrative receiver or receiver,
         or proposals are made or issued for a voluntary arrangement within the
         meaning of Part I of that Act (save where such occurrence is for the
         purposes of a solvent reconstruction or amalgamation); or

(c)      the occurrence of any event in a jurisdiction outside the United
         Kingdom of Great Britain and Northern Ireland which is analogous to any
         of the events referred to in paragraphs (a) or (b) above.

"ISSUING BANK" means HSBC Bank plc.

"LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the
form set out in schedule 3 to this letter.

"NOTES" means the notes to be issued by the Company in connection with a scheme
of arrangement under section 425 of the Companies Act 1985.

"SUBSIDIARY" means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985, as amended by section 144 of the Companies Act
1989.

<PAGE>

                         PART A SCHEDULE 2 - EURO BONDS

<TABLE>
<CAPTION>

                                                                                                                  LATEST
INDEMNIFYING   CONTRACTING        BANK                                                                            EXPIRY
  COMPANY       COMPANY         REFERENCE              BENEFICIARY                     LOCAL VALUE                 DATE
  -------       -------         ---------              -----------                     -----------                 ----
<S>              <C>              <C>                    <C>                             <C>                      <C>
    1              2                3                      4                               5                        6
  -------       -------         ---------              -----------                     -----------                 ----
MCSpA            MCSpA            38881             TELECOM ITALIA SPA                 3,976,718                30-Jun-06
-----            -----            -----             ------------------                 ---------                ---------
MCSpA            MCSpA            38710             EDISONTEL SPA                      1,291,142                15-Aug-04
-----            -----            -----             -------------                      ---------                ---------
MCSpA            MCSpA            38680             TELECOM ITALIA SPA                   981,268                31-Dec-04
-----            -----            -----             ------------------                   -------                ---------
MCSpA            MCSpA           47/3303            TELECOM ITALIA MOBILE                725,105                31-Dec-04
-----            -----           -------            ---------------------                -------                ---------
MCSpA            MCSpA           47/3517            TELECOM ITALIA                       697,217                      U/L
-----            -----           -------            --------------                       -------                      ---
MCSpA            MCSpA            38939             TELECOM ITALIA SPA                   364,541                31-Dec-03
-----            -----            -----             ------------------                   -------                ---------
MCSpA            MCSpA            38713             COMUNE DI REGGIO CALABRIA            150,950                31-Mar-05
-----            -----            -----             -------------------------            -------                ---------
MCSpA            MCSpA            38794             FERROVIE DELLO STATO                 121,367                30-Jun-03
-----            -----            -----             --------------------                 -------                ---------
MCSpA            MCSpA            38580             MAROC TELECOM SA                     105,903                      U/L
-----            -----            -----             ----------------                     -------                      ---
MCSpA            MCSpA            38764             TELECOM ITALIA S.P.A.                103,291                31-Mar-05
-----            -----            -----             ---------------------                -------                ---------
MCSpA            MCSpA            38600             AUTOSTRADA DEL BRENNERO SPA           55,467                31-Dec-03
-----            -----            -----             ---------------------------           ------                ---------
MCSpA            MCSpA            38813             BRISSAGO SRL                          54,228                15-May-07
-----            -----            -----             ------------                          ------                ---------
MCSpA            MCSpA            38643             DHL INTERNATIONAL SRL                 51,646                      U/L
-----            -----            -----             ---------------------                 ------                      ---
MCSpA            MCSpA            38635             AZIENDE INDUSTRIALI MUNICIPALI        45,747                      U/L
-----            -----            -----             ------------------------------        ------                      ---
MCSpA            MCSpA            38793             FERROVIE DELLO STATO                  36,152                      U/L
-----            -----            -----             --------------------                  ------                      ---
MCSpA            MCSpA           66/9740            UFFICIO IVA MILANO                    28,602                31-Jan-04
-----            -----           -------            ------------------                    ------                ---------
MCSpA            MCSpA            4/99              WIND TELECOMUNICAZIONI                25,823                      U/L
-----            -----            ----              ----------------------                ------                      ---
MCSpA            MCSpA            5/99              WIND TELECOMUNICAZIONI                25,823                      U/L
-----            -----            ----              ----------------------                ------                      ---
MCSpA            MCSpA          328506095           SIRTI SPA MILANO                      12,753                 6-Feb-87
-----            -----          ---------           ----------------                      ------                 --------
MCSpA            MCSpA          328200372           SIRTI SPA MILANO                       7,863                      U/L
-----            -----          ---------           ----------------                       -----                      ---
MCSpA            MCSpA          328907347           SELENIA SPA ROMA                       5,681                31-Jan-90
-----            -----          ---------           ----------------                       -----                ---------

                               COMPANY KEY
                               -----------
                                 MMSpA               Marconi Mobile SpA
                                 -----               ------------------
                                 MCSpA               Marconi Communications SpA
                                 -----               --------------------------

</TABLE>

<PAGE>

                          PART B SCHEDULE 2 - US BONDS

<TABLE>
<CAPTION>
                                                                                                          LATEST
    INDEMNIFYING    CONTRACTING         BANK                                                              EXPIRY
      COMPANY         COMPANY        REFERENCE           BENEFICIARY                   LOCAL VALUE         DATE
      -------         -------        ---------           -----------                   -----------         ----
<S>                   <C>              <C>                  <C>                           <C>             <C>
         1              2                3                    4                             5               6
      -------         -------        ---------           -----------                   -----------         ----
       MCSpA           MCSpA           38448            ITALTEL S.P.A.                    41,158         31-May-03
       -----           -----           -----            --------------                    ------         ---------

                                     COMPANY KEY
                                     -----------
                                       MMSpA            Marconi Mobile SpA
                                       -----            ------------------
                                       MCSpA            Marconi Communications SpA
                                       -----            --------------------------
</TABLE>

<PAGE>

                          SCHEDULE 3: LETTER OF CREDIT

           [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF HSBC BANK PLC]

To:      [Banca Intesa SpA]
         (the "BENEFICIARY")

                                                                          [DATE]

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ]

At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), HSBC Bank plc
(the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER
OF CREDIT") in your favour on the following terms and conditions:

1.       DEFINITIONS

(a)      In this Letter of Credit:

        "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate amount of
        the Bonds that remain outstanding at that time. A Bond is "outstanding"
        until the Beneficiary (acting reasonably) is satisfied that it has no
        further liability under that Bond (and, for the avoidance of doubt, the
        Beneficiary shall be satisfied that it has no further liability under a
        Bond once it has received a form of release from the beneficiary of the
        Bond in a form and substance satisfactory to the Beneficiary or once the
        original Bond has been returned to the Beneficiary).

        "BONDS" means those bonds, guarantees or letters of credit, indemnities
        or like instruments listed in schedule 1 to this Letter of Credit issued
        by the Beneficiary on behalf of the Company and/or its Subsidiary/ies.

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in London.

        "CERTIFICATION DATE" means [o] May 2004(1) and each anniversary thereof,
        being the date on which the Beneficiary must certify to the Company
        (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that
        date.

        "COMPANY" means Marconi Corporation plc.

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of schedule 2 to this Letter of Credit together with, where
        relevant, a copy of the written request to the Company or the relevant
        Subsidiary demanding payment pursuant to the terms of the relevant Bond.

        "EXPIRY DATE" means the earlier of:

         (i)      [o] May 2008(2) (or such later expiry date applicable as a
                  result of an extension pursuant to paragraph 4(c)); and

--------
(1) Date to be 12 months from the date of the letter agreement

Registered at London N 67307  REGISTERED OFFICE: New Century Park, PO Box 43,
Coventry CV3 1HJ
<PAGE>

        (ii)      the date on which the Total L/C Amount is reduced to zero
                  pursuant to a reduction under paragraph 3.

        "ORIGINAL BONDS OUTSTANDING" means [Euro ][US$][o].

        "NOTIFICATION" means a notification from the Beneficiary to the Account
        Party, the Company or any Subsidiary that certain Bonds have expired or
        been cancelled (and are therefore no longer outstanding).

        "PRESENTATION DATE" means each date on which the Account Party presents
        to the Issuing Bank a copy of one or more Notifications.

        "SUBSIDIARY" means any subsidiary of the Company within the meaning of
        section 736 of the Companies Act 1985, as amended by section 144 of the
        Companies Act 1989.

        "TOTAL L/C AMOUNT" means [Euro ][US$][o](3), as reduced in accordance
        with paragraph 3 of this Letter of Credit.

2.      ISSUING BANK'S AGREEMENT

(a)     The Beneficiary may request a drawing or drawings under this Letter of
        Credit by giving to the Issuing Bank a duly completed Demand. In order
        to constitute a valid Demand, a Demand must be received by the Issuing
        Bank by 11 a.m. (London time) on or before the Expiry Date.

(b)     Subject to the terms of this Letter of Credit, the Issuing Bank
        unconditionally and irrevocably undertakes to the Beneficiary that,
        within ten Business Days of receipt by it of a Demand, it will pay to
        the Beneficiary the amount demanded in that Demand.

(c)     The Issuing Bank will not be obliged to make a payment under this Letter
        of Credit if as a result the aggregate of all payments made by it under
        this Letter of Credit would exceed the Total L/C Amount.

3.      REDUCTION IN TOTAL L/C AMOUNT

(a)     If:

        (i)      on a Certification Date the Total L/C Amount exceeds the
                 Adjusted Bonds Outstanding (as certified by the Beneficiary)
                 on that date; or

        (ii)     on a Presentation Date the Total L/C Amount exceeds the
                 Adjusted Bonds Outstanding on that date (after deducting the
                 amount of each Bond that is the subject of each relevant
                 Notification),

        the Total L/C Amount shall, subject to paragraph (b) below,
        automatically reduce accordingly.

(b)     Any reduction in the Total L/C Amount under sub-paragraph (a) above
        shall only be applied if:

---------
(2) Date to be 5 years after the date of the letter agreement

Registered at London N 67307  REGISTERED OFFICE: New Century Park, PO Box 43,
Coventry CV3 1HJ
<PAGE>

         (i)      the Total L/C Amount exceeds the Adjusted Bonds Outstanding on
                  the relevant Certification Date or Presentation Date (as
                  applicable) by more than Euro 100,000; or

         (ii)     if as a result of such reduction the Total L/C Amount would be
                  zero.

4.       EXPIRY

(a)      The Issuing Bank will be released from its obligations under this
         Letter of Credit on the Expiry Date with no further liability on the
         part of the Issuing Bank except for any Demand validly presented in
         accordance with paragraph 2(a) of this Letter of Credit that remains
         unpaid.

(b)      When the Issuing Bank is no longer under any further obligations under
         this Letter of Credit, the Beneficiary must, on request, return the
         original of this Letter of Credit to the Issuing Bank.

(c)      It is a condition of this irrevocable Letter of Credit that, not more
         than 30 days and no less than 20 days before the present or each future
         Expiry Date, the Beneficiary may (unless the relevant Expiry Date
         occurs as a result of the value of this Letter of Credit being reduced
         to zero) request it to be extended for an additional period of one year
         from the present or each future Expiry Date. Within 10 days of the
         receipt by the Issuing Bank of any such request and prior to the Expiry
         Date, the Issuing Bank will inform the Beneficiary whether that request
         has been accepted. If the Issuing Bank elects not to extend this Letter
         of Credit for such additional period or makes no election the
         Beneficiary may, on or prior to the applicable Expiry Date, make a
         Demand for an amount not to exceed the remaining balance of the Total
         L/C Amount.

5.       PAYMENTS

         All payments under this Letter of Credit shall be made in [Euro][US
         dollars] and for value on the due date to the account of the
         Beneficiary specified in the Demand.

6.       DELIVERY OF DEMAND

         Each Demand shall be in writing, and, unless otherwise stated, may be
         made by letter or fax and must be received in legible form by the
         Issuing Bank at its address and by the particular department or officer
         (if any) as follows:

         HSBC Bank plc
         [Address]
         Fax:               [                ]
         Telex:             [                ]
         Attention:         [                ]

7.       ASSIGNMENT

         The Beneficiary's rights under this Letter of Credit may not be
         assigned or transferred.

--------
(3) To be the same as the Original Bonds Outstanding

Registered at London N 67307  REGISTERED OFFICE: New Century Park, PO Box 43,
Coventry CV3 1HJ
<PAGE>

8.       UCP

         Except to the extent it is inconsistent with the express terms of this
         Letter of Credit, this Letter of Credit is subject to the Uniform
         Customs and Practice for Documentary Credits (1993 Revision),
         International Chamber of Commerce Publication No. 500.

9.       GOVERNING LAW

         This Letter of Credit is governed by English law.

10.      JURISDICTION

         The courts of England have exclusive jurisdiction to settle any dispute
         arising out of or in connection with this Letter of Credit.

Yours faithfully,

For and on behalf of
HSBC BANK PLC
By:

Registered at London N 67307  REGISTERED OFFICE: New Century Park, PO Box 43,
Coventry CV3 1HJ
<PAGE>

                                   SCHEDULE 1
                                      BONDS

           [ATTACH SCHEDULE OF EURO BONDS OR US BONDS AS APPROPRIATE]

<TABLE>
<CAPTION>

                                                                                                                  LATEST
INDEMNIFYING   CONTRACTING        BANK                                                                            EXPIRY
  COMPANY       COMPANY         REFERENCE              BENEFICIARY                     LOCAL VALUE                 DATE
  -------       -------         ---------              -----------                     -----------                 ----
<S>              <C>            <C>                 <C>                               <C>                       <C>
    1              2                3                      4                               5                        6
  -------       -------         ---------              -----------                     -----------                 ----
MCSpA            MCSpA            38881             TELECOM ITALIA SPA                 3,976,718                30-Jun-06
-----            -----            -----             ------------------                 ---------                ---------
MCSpA            MCSpA            38710             EDISONTEL SPA                      1,291,142                15-Aug-04
-----            -----            -----             -------------                      ---------                ---------
MCSpA            MCSpA            38680             TELECOM ITALIA SPA                   981,268                31-Dec-04
-----            -----            -----             ------------------                   -------                ---------
MCSpA            MCSpA           47/3303            TELECOM ITALIA MOBILE                725,105                31-Dec-04
-----            -----           -------            ---------------------                -------                ---------
MCSpA            MCSpA           47/3517            TELECOM ITALIA                       697,217                      U/L
-----            -----           -------            --------------                       -------                      ---
MCSpA            MCSpA            38939             TELECOM ITALIA SPA                   364,541                31-Dec-03
-----            -----            -----             ------------------                   -------                ---------
MCSpA            MCSpA            38713             COMUNE DI REGGIO CALABRIA            150,950                31-Mar-05
-----            -----            -----             -------------------------            -------                ---------
MCSpA            MCSpA            38794             FERROVIE DELLO STATO                 121,367                30-Jun-03
-----            -----            -----             --------------------                 -------                ---------
MCSpA            MCSpA            38580             MAROC TELECOM SA                     105,903                      U/L
-----            -----            -----             ----------------                     -------                      ---
MCSpA            MCSpA            38764             TELECOM ITALIA S.P.A.                103,291                31-Mar-05
-----            -----            -----             ---------------------                -------                ---------
MCSpA            MCSpA            38600             AUTOSTRADA DEL BRENNERO SPA           55,467                31-Dec-03
-----            -----            -----             ---------------------------           ------                ---------
MCSpA            MCSpA            38813             BRISSAGO SRL                          54,228                15-May-07
-----            -----            -----             ------------                          ------                ---------
MCSpA            MCSpA            38643             DHL INTERNATIONAL SRL                 51,646                      U/L
-----            -----            -----             ---------------------                 ------                      ---
MCSpA            MCSpA            38635             AZIENDE INDUSTRIALI MUNICIPALI        45,747                      U/L
-----            -----            -----             ------------------------------        ------                      ---
MCSpA            MCSpA            38793             FERROVIE DELLO STATO                  36,152                      U/L
-----            -----            -----             --------------------                  ------                      ---
MCSpA            MCSpA           66/9740            UFFICIO IVA MILANO                    28,602                31-Jan-04
-----            -----           -------            ------------------                    ------                ---------
MCSpA            MCSpA            4/99              WIND TELECOMUNICAZIONI                25,823                      U/L
-----            -----            ----              ----------------------                ------                      ---
MCSpA            MCSpA            5/99              WIND TELECOMUNICAZIONI                25,823                      U/L
-----            -----            ----              ----------------------                ------                      ---
MCSpA            MCSpA          328506095           SIRTI SPA MILANO                      12,753                 6-Feb-87
-----            -----          ---------           ----------------                      ------                 --------
MCSpA            MCSpA          328200372           SIRTI SPA MILANO                       7,863                      U/L
-----            -----          ---------           ----------------                       -----                      ---
MCSpA            MCSpA          328907347           SELENIA SPA ROMA                       5,681                31-Jan-90
-----            -----          ---------           ----------------                       -----                ---------

                               COMPANY KEY
                               -----------
                                 MMSpA               Marconi Mobile SpA
                                 -----               ------------------
                                 MCSpA               Marconi Communications SpA
                                 -----               --------------------------

</TABLE>

Registered at London N 67307  REGISTERED OFFICE: New Century Park, PO Box 43,
Coventry CV3 1HJ
<PAGE>

                                    US BONDS

<TABLE>
<CAPTION>
                                                                                                          LATEST
    INDEMNIFYING    CONTRACTING         BANK                                                              EXPIRY
      COMPANY         COMPANY        REFERENCE           BENEFICIARY                   LOCAL VALUE         DATE
      -------         -------        ---------           -----------                   -----------         ----
<S>                   <C>              <C>              <C>                            <C>               <C>
         1              2                3                    4                             5               6
      -------         -------        ---------           -----------                   -----------         ----
       MCSpA           MCSpA           38448            ITALTEL S.P.A.                    41,158         31-May-03
       -----           -----           -----            --------------                    ------         ---------

                                     COMPANY KEY
                                     -----------
                                       MMSpA            Marconi Mobile SpA
                                       -----            ------------------
                                       MCSpA            Marconi Communications SpA
                                       -----            --------------------------
</TABLE>

Registered at London N 67307  REGISTERED OFFICE: New Century Park, PO Box 43,
Coventry CV3 1HJ
<PAGE>

                                   SCHEDULE 2
                                 FORM OF DEMAND

To:      HBSC Bank plc

                                                                          [DATE]

Dear Sirs

STANDBY LETTER OF CREDIT NO. [        ] ISSUED IN FAVOUR OF BANCA INTESA SPA
DATED [                        ] (THE "LETTER OF CREDIT")

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the
same meaning when used in this Demand.

1.      [We certify that [ ] became due and payable on [ ] to [ ] pursuant to
        the terms of our guarantee number [ ] issued in favour of [ ] on behalf
        of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of
        such in writing (copy enclosed) not less than five Business Days prior
        to the date of this demand. However, we have not received payment of
        such sum (being the amount due but unpaid in respect of the Bonds).]
        [OR]

        [We certify that the amount of this drawing [Euro ][US$][____________]
        under [Issuing Bank] Letter of Credit No. [ ] represents funds due to us
        as we have not received notice from [Issuing Bank] of their decision to
        extend this Letter of Credit for an additional period and the following
        Bonds in schedule 1 to this Letter of Credit remain outstanding:
        [INDICATE BOND NUMBERS]]

2.      We therefore demand payment of the sum of [Euro ][$][ ].

3.      Payment should be made to the following account:

        Name:

        Account Number:

        Bank:

4.      The date of this Demand is not later than the Expiry Date.

Yours faithfully

(Authorised Signatory)
FOR BANCA INTESA SPA

                                       13

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