Document:

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                                                                    EXHIBIT 4.38

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP
                                                                  CONFORMED COPY

                             MARCONI CORPORATION PLC
                                    AS ISSUER

                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.
                               AS SECURITY TRUSTEE

                        THE PERSONS LISTED IN SCHEDULE 1
                                  AS GUARANTORS

                     LAW DEBENTURE TRUST COMPANY OF NEW YORK
                             AS SENIOR NOTE TRUSTEE

                               JPMORGAN CHASE BANK
                             AS JUNIOR NOTE TRUSTEE

                                  HSBC BANK plc
                  AS NEW BONDING FACILITY AGENT AND ESCROW BANK

                              THE BANK OF NEW YORK
                    AS DEPOSITARY, PAYING AGENT AND REGISTRAR

                     THE PERSONS LISTED IN PART A SCHEDULE 2
                            AS INTRA-GROUP CREDITORS

                     THE PERSONS LISTED IN PART B SCHEDULE 2
                            AS INTRA-GROUP BORROWERS

                        THE PERSONS LISTED IN SCHEDULE 3
                          AS NEW BONDING FACILITY BANKS

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                      SECURITY TRUST AND INTERCREDITOR DEED

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                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                             PAGE
<S>                                                                                <C>
1.     Definitions And Interpretation...........................................     2

2.     Additional Parties.......................................................    16

3.     Parallel Debt Obligation.................................................    18

4.     Consent To Relevant Documents............................................    18

5.     The Security And The Guarantees..........................................    18

6.     Trust For Secured Creditors..............................................    23

7.     Amendments, Consents And Waivers.........................................    26

8.     Ranking Of Secured Obligations And Priorities............................    30

9.     Undertakings.............................................................    33

10.    Action And Enforcement Action............................................    38

11.    Turnover By The Secured Creditors........................................    41

12.    Sharing..................................................................    42

13.    Security Trustee As Party To Escrow Agreement............................    43

14.    Security Trustee's Actions...............................................    43

15.    Resignation Of Security Trustee..........................................    52

16.    Delegation And Additional Security Trustee...............................    54

17.    Power Of Attorney........................................................    55

18.    Fees, Expenses And Stamp Taxes...........................................    56

19.    Indemnities..............................................................    58

20.    Notices..................................................................    60

21.    Benefit Of Deed..........................................................    62

22.    Preservation.............................................................    63

23.    Priorities Not Affected..................................................    63

24.    Miscellaneous............................................................    64

25.    Winding Up Of Trust......................................................    65

26.    Perpetuity Period........................................................    65

27.    Counterparts.............................................................    66

28.    Governing Law And Jurisdiction...........................................    66

Schedule 1 GUARANTORS...........................................................    67

Schedule 2 INTRA-GROUP PARTIES..................................................    69

       Part A Intra-Group Creditors.............................................    69

       Part B Intra-Group Borrowers.............................................    70
</TABLE>

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<TABLE>
<S>                                                                                 <C>
Schedule 3 NEW BONDING FACILITY BANKS...........................................    72

Schedule 4 PRE-ACCELERATION PAYMENT PRIORITIES..................................    73

Schedule 5 POST-ACCELERATION PAYMENT PRIORITIES.................................    74

Schedule 6 SECURITY TRUSTEE RESERVED MATTERS....................................    75

Schedule 7 ACCESSION LETTERS....................................................    76

       Part A Intra-Group Accession Letter......................................    76

       Part B Guarantor Accession Letter........................................    78

Schedule 8 AGENT/TRUSTEE/NEW BONDING FACILITY BANK ACCESSION LETTER.............    80

Schedule 9 GUARANTEE LIMITATIONS................................................    81
</TABLE>

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THIS DEED is dated 19 May 2003

BETWEEN:

(1)      MARCONI CORPORATION PLC as the issuer of the Senior Notes and the
         Junior Notes (each as defined below) (the "ISSUER");

(2)      THE LAW DEBENTURE TRUST CORPORATION P.L.C. as security trustee (the
         "SECURITY TRUSTEE");

(3)      THE PERSONS LISTED IN SCHEDULE 1 (GUARANTORS) as subsidiary guarantors
         (together with any person who accedes to this Deed as a "Guarantor"
         (the "GUARANTORS"));

(4)      LAW DEBENTURE TRUST COMPANY OF NEW YORK as senior note trustee (the
         "SENIOR NOTE TRUSTEE");

(5)      JPMORGAN CHASE BANK as junior note trustee (the "JUNIOR NOTE TRUSTEE");

(6)      HSBC BANK plc as security trustee and agent under the New Bonding
         Facility Agreement (the "NEW BONDING FACILITY AGENT" and the "ESCROW
         BANK");

(7)      THE PERSONS LISTED IN SCHEDULE 3 (NEW BONDING FACILITY BANKS) as banks
         under the New Bonding Facility Agreement (together with any person who
         accedes to this Deed as a "New Bonding Facility Bank" (the "NEW BONDING
         FACILITY BANKS"));

(8)      THE BANK OF NEW YORK as depositary, paying agent and registrar (the
         "DEPOSITARY", the "PAYING AGENT" and the "REGISTRAR");

(9)      THE PERSONS LISTED IN PART A OF SCHEDULE 2 (INTRA-GROUP PARTIES) as
         intra-group creditors (together with any person who accedes to this
         Deed as an "Intra-Group Creditor" (the "INTRA-GROUP CREDITORS")); and

(10)     THE PERSONS LISTED IN PART B OF SCHEDULE 2 (INTRA-GROUP PARTIES) as
         intra-group borrowers (together with any person who accedes to this
         Deed as an "Intra-Group Borrower" (the "INTRA-GROUP BORROWERS")).

WHEREAS:

(A)      The Issuer has issued or is to issue the Senior Notes pursuant to the
         Senior Note Indenture.

(B)      The Issuer has issued or is to issue the Junior Notes pursuant to the
         Junior Note Indenture.

(C)      The obligations of the Issuer in respect of the Notes are secured by
         Security in favour of the Security Trustee, as security trustee for the
         Secured Creditors, over certain of the Issuer's assets.

(D)      The obligations of the Issuer in respect of the Notes are guaranteed by
         each of the Guarantors under the Guarantees (other than Marconi
         Communications Telemulti Ltda, (a Brazilian company) that will neither
         provide a Guarantee nor provide any Security

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         (but the quotas (equity interests) in which will be pledged as Security
         by its parent company) and which will be deemed to be a Guarantor for
         the purposes of the covenants in the Indentures and this Deed). The
         obligations of each of the Guarantors are secured by Security in favour
         of the Security Trustee, as security trustee for the Secured Creditors,
         over certain assets of certain of the Guarantors.

(E)      Marconi Bonding Limited, the Issuer, certain Subsidiaries of the Issuer
         (the "INDEMNIFYING COMPANIES"), the New Bonding Facility Agent and the
         New Bonding Facility Banks have on 27 March 2003, entered into the New
         Bonding Facility Agreement.

(F)      The obligations of the Indemnifying Companies under the New Bonding
         Facility Agreement are guaranteed by the Issuer and the obligations of
         the Issuer under such Guarantee are guaranteed by each Guarantor (other
         than Marconi Communications Telemulti Ltda, (a Brazilian company) that
         will neither provide a Guarantee nor provide any Security (but the
         quotas (equity interests) in which will be pledged as Security by its
         parent company) and which will be deemed to be a Guarantor for the
         purposes of the covenants in the Indentures and this Deed). Such
         obligations are secured by Security in favour of the Security Trustee,
         as security trustee for the Secured Creditors, over certain of the
         Issuer's assets and over certain assets of certain of the Guarantors.

(G)      The Intra-Group Creditors and the Intra-Group Borrowers have agreed
         that, subject to the terms and conditions of this Deed, the Intra-Group
         Liabilities shall be subordinated in right of payment to the Secured
         Obligations.

(H)      The parties hereto have entered into this Deed in order to regulate the
         claims of the Secured Creditors and the Intra-Group Creditors against
         the Obligors under the Relevant Documents and in respect of the
         Intra-Group Liabilities and the rights of priority and enforcement of
         the Secured Creditors in respect of the Security Documents.

(I)      It is intended by the parties hereto that this Deed shall take effect
         as a deed.

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      DEFINITIONS

         In this Deed:

         "ACTION" means:

         (a)      the acceleration of any Secured Obligations or any Intra-Group
                  Liabilities or any declaration that any Secured Obligations or
                  any Intra-Group Liabilities are prematurely due and payable
                  (other than solely as a result of it becoming unlawful for a
                  Secured Creditor to perform its obligations under the Relevant
                  Documents) or (other than in respect of an Intra-Group
                  Liability which is payable on demand in accordance with its
                  original terms) payable on demand;

         (b)      the exercise of any right of set-off or the taking or
                  receiving of any payment (other than in each case in respect
                  of Permitted Payments whilst permitted under

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                  Clause 9.5 (Permitted Payments)) in respect of any Secured
                  Obligations or any Intra-Group Liabilities;

         (c)      suing for, commencing or joining any legal or arbitration
                  proceedings to recover, or in respect of, any Secured
                  Obligations or any Intra-Group Liabilities;

         (d)      the entering into of any composition, assignment or
                  arrangement with any Obligor in connection with any Secured
                  Obligations or any Intra-Group Liabilities of that Obligor
                  (other than any arrangement whereby the Intra-Group
                  Liabilities of any Intra-Group Borrower owed to any
                  Intra-Group Creditor are waived or released);

         (e)      petitioning, applying or voting for, or taking any steps
                  (including the appointment of any liquidator, receiver,
                  examiner, administrator, custodian, manager, assignee,
                  trustee, sequestrator or similar officer) in relation to, the
                  winding up, dissolution, administration, examinership or
                  reorganisation of any Obligor, or any analogous procedure or
                  step in any jurisdiction; and

         (f)      the exercise of any right to require any Obligor to pay,
                  prepay, redeem, purchase, terminate or otherwise acquire any
                  of the Secured Obligations (other than in each case in respect
                  of Permitted Payments whilst permitted under Clause 9.5
                  (Permitted Payments)).

         "ADDITIONAL AMOUNTS" shall have the meaning ascribed to it in the
         applicable Indenture.

         "ADDITIONAL GUARANTOR" means any member of the Group which accedes to
         this Deed as a Guarantor in accordance with Clause 2.3 (Additional
         Guarantors).

         "ADDITIONAL REMUNERATION" has the meaning ascribed to it in Clause 18.1
         (Security Trustee Fee).

         "ADDITIONAL REMUNERATION FEE LETTER" has the meaning ascribed to it in
         Clause 18.1 (Security Trustee Fee).

         "AGENCY AGREEMENT" means the agency agreement between the Issuer, the
         Guarantors, the Note Trustees, the Paying Agent and the Registrar dated
         on or about the date of this Deed.

         "AGENT/TRUSTEE/NEW BONDING FACILITY BANK ACCESSION LETTER" means an
         accession letter substantially in the form set out in Schedule 8
         (Agent/Trustee/New Bonding Facility Bank Accession Letter).

         "AMERICAN GUARANTOR" means for the purposes of Clause 24.5 (Guarantee
         Limitations) and Schedule 9 (Guarantee Limitations) only, any Guarantor
         whose Relevant Jurisdiction is a state of the United States of America
         or the District of Columbia.

         "APPLICABLE SECURITY DOCUMENTS" means the Brazilian Security Documents,
         the Guernsey Security Documents and the Mexican Security Documents.

         "ASSET SALE" shall have the meaning ascribed to it in the Indentures.

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         "ATTORNEY" has the meaning ascribed to it in sub-clause 17.1.2 of
         Clause 17.1 (Appointment).

         "AUSTRALIAN GUARANTOR" means any Guarantor whose Relevant Jurisdiction
         is a state or territory of Australia.

         "BANKRUPTCY LAW" means Title 11 of the United States Code (11 U.S.C.
         101 et. seq.), or any similar United States federal or state law or any
         relevant law in any other jurisdiction of organisation or location of
         any assets of any Obligor or Significant Subsidiary or any similar law
         (including, without limitation, (a) the laws of the United Kingdom
         relating to moratorium, administration, bankruptcy, insolvency,
         receivership, winding-up, liquidation, reorganisation or relief of
         debtors, and (b) the laws of any other jurisdictions relating to
         bankruptcy, moratorium, insolvency, receivership, reorganisation or
         other relief of debtors and composition with creditors or any amendment
         to, succession to or change in such law).

         "BRAZILIAN SECURITY DOCUMENTS" means all Security Documents governed by
         Brazilian law and "BRAZILIAN SECURITY DOCUMENT" means any of them.

         "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
         commercial banks are open for general business in London and New York
         and (in relation to any date for payment or purchase of a currency
         other than euro) the principal financial centre of that currency.

         "DEBT REPRESENTATIVE" means, in relation to the Senior Notes, the
         Senior Note Trustee, in relation to the Junior Notes, the Junior Note
         Trustee and, in relation to the New Bonding Facility Agreement, the New
         Bonding Facility Agent.

         "DEFAULT" has the meaning ascribed to it in the applicable Relevant
         Document.

         "DELEGATE" means any delegate, agent, attorney, Attorney, co-trustee or
         additional but separate trustee (including any trustee under any deeds
         of trust for the purpose of the US Security Documents (referred to in
         Schedule 2 of the Indentures)), custodian, depository or Receiver
         appointed by the Security Trustee in accordance with the terms hereof
         and/or the Security Documents.

         "DEPOSIT AGREEMENT" means the deposit agreement dated on or about the
         date of this Deed between the Issuer and the Depositary.

         "DOLLAR EQUIVALENT" means with respect to any monetary amount in a
         currency other than United States Dollars, at any time of determination
         thereof, the amount of United States Dollars obtained by translating
         the amount of such foreign currency into United States Dollars at the
         Bloomberg Composite Spot Rate for the purchase of United States Dollars
         with the applicable currency at 11.30 on the previous Business Day
         prior to such determination.

         "DUTCH GUARANTOR" means any Guarantor whose Relevant Jurisdiction is
         The Netherlands.

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         "ENFORCEMENT ACTION" means:

         (a)      the taking of any steps to enforce or collect or require the
                  enforcement or collection of any of the Transaction Security
                  (including the crystallisation of any floating charge forming
                  part of the Transaction Security);

         (b)      the making of any demand in relation to any Guarantee,
                  indemnity or other assurance against loss in respect of any
                  Secured Obligations or the exercising of any right to require
                  any Obligor to pay, prepay, redeem, purchase, terminate or
                  otherwise acquire any of the Secured Obligations (other than
                  in each case in respect of Permitted Payments whilst permitted
                  under Clause 9.5 (Permitted Payments)); and

         (c)      in relation to the Italian Mortgages, the giving of
                  instructions to the Secured Creditors who are the
                  beneficiaries under the Italian Mortgages to take the actions
                  set out in (a) and (b) above.

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

         "ENGLISH GUARANTOR" means any Guarantor whose Relevant Jurisdiction is
         England or Wales.

         "ESCROW ACCOUNTS" means the Existing Performance Bond Escrow Account
         and the Mandatory Redemption Escrow Account.

         "ESCROW AGREEMENT" means the escrow agreement dated on or about the
         date of this Deed and made between the Security Trustee, the Issuer,
         the New Bonding Facility Agent, the New Bonding Facility Security
         Trustee (as defined therein) and the Escrow Bank establishing and
         setting out the terms and conditions of each of the Escrow Accounts.

         "EVENT OF DEFAULT" means any event or circumstance specified as such in
         any of the Relevant Documents.

         "EXISTING PERFORMANCE BONDS" means surety bonds, appeal bonds, bid
         bonds, performance bonds, letters of credit, bank guarantees or other
         obligations of a like nature issued by a bank, insurance company or
         other financial institution on behalf of the Issuer or any of its
         Subsidiaries in existence on the Issue Date and not issued pursuant to
         an Interim Bonding Facility, until such bonds, letters of credit,
         guarantees or other obligations expire, terminate or are cancelled.

         "EXISTING PERFORMANCE BOND ESCROW ACCOUNT" means the escrow account
         established pursuant to the Escrow Agreement to be used to satisfy any
         liabilities owed by the Issuer

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         and/or its Subsidiaries to certain providers of Existing Performance
         Bonds for a period of 12 months from such Issue Date.

         "FEE LETTER" has the meaning ascribed to it in Clause 18.1 (Security
         Trustee Fee).

         "GERMAN GUARANTOR" means any Guarantor whose Relevant Jurisdiction is
         the Federal Republic of Germany.

         "GERMAN SECURITY" means any Security held by or granted to or through
         the Security Trustee or any Secured Creditor, as the case may be,
         pursuant to any German Security Document and held and/or administered
         by the Security Trustee on behalf of or in trust for all or any of the
         Secured Creditors hereunder, and any addition or replacement or
         substitution thereof.

         "GERMAN SECURITY DOCUMENTS" means all Security Documents governed by
         German law and "GERMAN SECURITY DOCUMENT" means any of them.

         "GROUP" means the Issuer and its Subsidiaries from time to time.

         "GUARANTEE" means any guarantee of any of the Secured Obligations.

         "GUARANTEE LIMITATIONS" means the guarantee limitations set out in
         Schedule 9 (Guarantee Limitations).

         "GUARANTEED OBLIGATIONS" means the Secured Obligations guaranteed by
         the Guarantors under the Guarantees.

         "GUARANTOR ACCESSION LETTER" means an accession letter substantially in
         the form set out in Part B of Schedule 7 (Accession Letters) pursuant
         to which a member of the Group accedes to this Deed as a Guarantor.

         "GUERNSEY SECURITY DOCUMENTS" means all Security Documents governed by
         Guernsey law and "GUERNSEY SECURITY DOCUMENT" means any of them.

         "HONG KONG GUARANTOR" means any Guarantor whose Relevant Jurisdiction
         is The Hong Kong SAR.

         "INDEMNIFYING COMPANIES" has the meaning given to it in paragraph (E)
         of the recitals of this Deeds.

         "INDENTURES" means the Senior Note Indenture and the Junior Note
         Indenture collectively and "INDENTURE" means either of them.

         "INITIAL SECURITY DOCUMENTS" means the Guarantees guaranteeing the
         Secured Obligations and the security documents, each to be dated on or
         before the Issue Date that are set forth in the Indentures.

         "INSOLVENCY EVENT" means any of the following events:

         (1)      the entry by a court of competent jurisdiction of (a) a decree
                  or order for relief in respect of any Obligor or any
                  Significant Subsidiary, in an involuntary case or proceeding
                  under any Bankruptcy Law or (b) a decree or order (i)
                  adjudging

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                  any Obligor or any Significant Subsidiary bankrupt or
                  insolvent, (ii) approving as properly filed a petition seeking
                  moratorium, reorganization, arrangement, adjustment or
                  composition of or in respect of any Obligor or any Significant
                  Subsidiary under any Bankruptcy Law, (iii) appointing a
                  custodian, administrator, receiver, administrative receiver,
                  manager, liquidator, assignee, trustee, sequestrator or other
                  similar official of any Obligor or any Significant Subsidiary
                  or of any substantial part of their respective properties, or
                  (iv) ordering the winding up or liquidation of the affairs of
                  any Obligor or any Significant Subsidiary, and in each case
                  any such decree or order for relief continues to be in effect,
                  or any such other decree or order continues unstayed and in
                  effect, for a period of 60 consecutive calendar days, in the
                  case of each of clauses (a) and (b) otherwise than, in the
                  case of a Subsidiary, for the purposes of or pursuant to an
                  amalgamation, reorganization or restructuring while solvent on
                  terms approved by the Senior Note Trustee (in the case of the
                  Senior Notes) or the Junior Note Trustee (in the case of the
                  Junior Notes) or by the Relevant Holders of the Senior Notes
                  (in the case of the Senior Notes) or the Junior Notes (in the
                  case of the Junior Notes);

(2)

         (a)      commencement by any Obligor or any Significant Subsidiary of a
                  voluntary case or proceeding or process (whether or not
                  requiring the order of a court or tribunal) under any
                  Bankruptcy Law or of any other case or proceeding to be
                  adjudicated bankrupt or insolvent, or filing for or having
                  been granted a moratorium on payment of its debts or filing
                  for bankruptcy or having been declared bankrupt,

         (b)      consent by any Obligor or any Significant Subsidiary to the
                  entry of a decree or order for relief in respect of any
                  Obligor or any Significant Subsidiary in an involuntary case
                  or proceeding under any Bankruptcy Law or to the commencement
                  of any bankruptcy or insolvency case or proceeding against any
                  Obligor or any Significant Subsidiary,

         (c)      filing of a petition or answer or consent by any Obligor or
                  any Significant Subsidiary seeking reorganization or relief
                  under any Bankruptcy Law,

         (d)      any Obligor or any Significant Subsidiary (i) consenting to
                  the filing of such petition or to the appointment of, or
                  taking possession by, an administrator, custodian, receiver,
                  manager, liquidator, assignee, trustee, sequestrator or other
                  similar official of any Obligor or such Significant Subsidiary
                  or of any substantial part of their respective properties,
                  (ii) making an assignment for the benefit of its creditors
                  generally or (iii) admitting in writing its inability to pay
                  its debts generally as they become due,

         (e)      the approval by stockholders of any Obligor or any Significant
                  Subsidiary of any plan or proposal for the liquidation or
                  dissolution of any Obligor or any Significant Subsidiary,

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<PAGE>

         (f)      the whole or any substantial part of the assets of any Obligor
                  or any Significant Subsidiary being placed under
                  administration or receivership or administrative receivership
                  or any other analogous proceedings under the laws of any
                  relevant jurisdiction, or

         (g)      any Obligor or any Significant Subsidiary taking any corporate
                  action in furtherance of any such actions in this definition,

         in the case of each of clauses (a) through (g) otherwise than, in the
         case of a Subsidiary of the Issuer, for the purposes of or pursuant to
         an amalgamation, reorganization or restructuring while solvent on terms
         approved by the Senior Note Trustee (in the case of the Senior Notes)
         or the Junior Note Trustee (in the case of the Junior Notes) or by
         Relevant Holders of the Senior Notes (in the case of the Senior Notes)
         or the Junior Notes (in the case of the Junior Notes).

"INSOLVENCY EVENT OF DEFAULT" means an Insolvency Event that is an Event of
Default under the applicable Indenture.

"INSTRUCTING TRUSTEE" means:

         (a)      prior to the discharge in full of the Secured Obligations
                  under the Senior Notes and the Senior Note Indenture, the
                  Senior Note Trustee acting on the instructions of the Relevant
                  Holders of the Senior Notes; and

         (b)      following the discharge in full of the Secured Obligations
                  under the Senior Notes and the Senior Note Indenture and prior
                  to the discharge in full of the Secured Obligations under the
                  Junior Notes and the Junior Note Indenture, the Junior Note
                  Trustee acting on the instructions of the Relevant Holders of
                  the Junior Notes.

         "INTERIM BONDING FACILITY" has the meaning ascribed to it in the
         Indentures.

         "INTRA-GROUP ACCESSION LETTER" means an accession letter substantially
         in the form set out in Part A of Schedule 7 (Accession Letters)
         pursuant to which a member of the Group accedes to this Deed as an
         Intra-Group Creditor or an Intra-Group Borrower.

         "INTRA-GROUP DOCUMENTS" means any and all agreements and other
         instruments under or by which any Intra-Group Liabilities are
         outstanding or evidenced including any instrument pursuant to which the
         same is novated, varied, supplemented or amended from time to time.

         "INTRA-GROUP LIABILITIES" means all present or future sums, liabilities
         and obligations whatsoever (actual or contingent) payable, owing, due
         or incurred by any Intra-Group Borrower to any Intra-Group Creditor
         (whether pursuant to an Intra-Group Document or otherwise), other than
         sums, liabilities and obligations arising in the ordinary course of
         business which do not constitute Indebtedness (as defined in the
         Indentures).

         "INTRA-GROUP PARTIES" means the Intra-Group Borrowers and the
         Intra-Group Creditors from time to time.

         "IRISH GUARANTOR" means any Guarantor whose Relevant Jurisdiction is
         Ireland.

                                     - 8 -

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         "ISSUE DATE" has the meaning ascribed to it in the Indentures.

         "ITALIAN GUARANTOR" means any Guarantor whose Relevant Jurisdiction is
         Italy.

         "ITALIAN MORTGAGE" means the mortgages (ipoteche), governed by Italian
         law, granted by any Italian Guarantor in favour of any of the Secured
         Creditors party to such mortgages as the beneficiaries and "Italian
         Mortgage" means any of them.

         "JUNIOR NOTE INDENTURE" means the indenture pursuant to which the
         Junior Notes are issued.

         "JUNIOR NOTES" means the dollar denominated Guaranteed Junior Secured
         Notes due 2008 plus any Junior PIK Notes issued or to be issued by the
         Issuer in accordance with the Junior Note Indenture.

         "JUNIOR PIK NOTES" means any Junior Notes issued and constituting
         interest or Additional Amounts paid in kind on outstanding Junior
         Notes.

         "MANDATORY REDEMPTION ESCROW ACCOUNT" means the escrow account
         established pursuant to the Escrow Agreement into which, in accordance
         with the Junior Note Indenture and the Senior Note Indenture, certain
         amounts will be paid to be applied, inter alia, towards the mandatory
         redemption of the Junior Notes and/or the Senior Notes.

         "MATERIAL AMENDMENT" means any amendment or waiver to the Senior Notes,
         the Senior Note Indenture or the New Bonding Facility Agreement which:

         (a)      increases or changes the basis on which interest accrues or is
                  payable;

         (b)      alters any provisions relating to the amount, currency or date
                  of any repayment;

         (c)      increases the maximum principal amount of the Senior Notes or
                  the amount of the available commitment under the New Bonding
                  Facility Agreement from the principal amount and available
                  commitment as at the date hereof;

         (d)      changes the basis on which fees or other like payments are
                  made or calculated;

         (e)      in relation to the Senior Notes and the Senior Note Indenture
                  only, amends the definition of Asset Sale or Section 4.03
                  (Asset Sales) of the Senior Note Indenture; or

         (f)      in relation to the Senior Notes and the Senior Note Indenture
                  only, introduces any new covenants, Defaults or Events of
                  Default or amends the provisions of Section 6.01(4) or the
                  related provisions of Section 6.03, 6.10 or 6.15 of the Senior
                  Note Indenture.

         "MCHI" means Marconi Communications Holdings, Inc., a Delaware
         corporation.

         "MCHI PLAN OF LIQUIDATION AND DISSOLUTION" shall have the meaning
         ascribed to it in the Indentures.

         "NEW BONDING FACILITY AGREEMENT" means the L50,000,000 (or the
         equivalent in other currencies) committed revolving bonding facility
         agreement dated 27 March 2003

                                     - 9 -

<PAGE>

         among the New Bonding Facility Agent, the New Bonding Facility Banks,
         Marconi Corporation plc, Marconi Bonding Limited and the Indemnifying
         Companies for the issuance of bonds, guarantees, letters of credit,
         indemnities and similar instruments.

         "NEW BONDING FACILITY FINANCE PARTIES" means the Finance Parties (as
         defined in the New Bonding Facility Agreement).

         "NON-US GUARANTORS" means any Subsidiary of the Issuer which is a
         Guarantor, other than a US Guarantor.

         "NOTE TRUSTEES" means each of the Senior Note Trustee and the Junior
         Note Trustee and "NOTE TRUSTEE" means either of them.

         "NOTES" means the Senior Notes and the Junior Notes, collectively.

         "OBLIGOR" means each of the Issuer and the Guarantors.

         "ORIGINAL TRANSACTION SECURITY" means the Transaction Security as at
         the date hereof.

         "PARTY" means a party to this Deed.

         "PAYMENT DATE" means any date on which a payment, prepayment, purchase
         or redemption (whether such payment, prepayment, purchase or redemption
         is a payment, prepayment, purchase or redemption of principal, interest
         or premium or is a payment or prepayment of Additional Amounts, fees,
         commission or otherwise) is made or is permitted to be made by an
         Obligor (including, without limitation, whether directly or indirectly
         by use of amounts standing to the credit of an Escrow Account in
         accordance with the Escrow Agreement) in accordance and in compliance
         with the terms of the Relevant Documents.

         "PAYMENT STOP EVENT" means:

         (a)      the failure by any Obligor to pay on the due date any amount
                  payable under the Senior Notes or the Senior Note Indenture;
                  and/or

         (b)      the acceleration of amounts due under the Senior Notes or the
                  Senior Note Indenture following the occurrence of an Event of
                  Default under the Senior Notes or the Senior Note Indenture,

        PROVIDED THAT a Payment Stop Event shall cease to be continuing if:

         (i)      the relevant Default under the Senior Notes or the Senior Note
                  Indenture has been remedied or waived and, if amounts due
                  under the Senior Notes have been accelerated, any such
                  acceleration has been rescinded in accordance with the Senior
                  Note Indenture; or

         (ii)     the Required Holders of at least a majority of the principal
                  amount of the then outstanding Senior Notes consent in writing
                  to the cessation of the relevant Payment Stop Event; or

         (iii)    the Secured Obligations arising under the Senior Notes and the
                  Senior Note Indenture have been discharged in full,

                                     - 10 -

<PAGE>

         and, in the case of (i), (ii) or (iii), the Senior Note Trustee will
         promptly issue a written notice to the other Debt Representatives, the
         Security Trustee and the Issuer notifying them that the relevant
         Payment Stop Event has ceased to be continuing.

         "PERMITTED PAYMENTS" means, in relation to any Relevant Document,
         Intra-Group Document or, as the case may be, Intra-Group Liability:

         (a)      scheduled payments (which shall include the payment on demand
                  of Intra-Group Liabilities which are payable on demand in
                  accordance with the original terms of the relevant Intra-Group
                  Liabilities) and mandatory prepayments of principal, premium,
                  if any, and interest (including default interest) payable in
                  accordance with the terms of the Relevant Document or
                  Intra-Group Document;

         (b)      the exercise of any right of set-off in relation to
                  Intra-Group Liabilities;

         (c)      any payment or reimbursement of costs, expenses, commitment
                  fees, commissions, Taxes (other than a tax on income), letter
                  of credit, bond or guarantee issuance fees and fees (including
                  legal fees) payable to, and sums payable under any indemnity
                  to, any agent, trustee or issuing bank (which for the
                  avoidance of doubt shall include the Security Trustee, the
                  Escrow Bank, the Note Trustees, the New Bonding Facility Agent
                  and the New Bonding Facility Banks) payable in accordance with
                  the terms of the Relevant Document, the Intra-Group Documents
                  or the Interim Bonding Facility;

         (d)      any payment of any Intra-Group Liabilities arising in respect
                  of any indemnity, counter-indemnity, reimbursement, Tax
                  gross-up or increased costs (whether arising under contracts
                  or applicable law) of any Intra-Group Borrower to any
                  Intra-Group Creditor in connection with any indemnity (whether
                  arising under contract or applicable law) given by the
                  Intra-Group Creditor to certain providers of Existing
                  Performance Bonds or the Interim Bonding Facility;

         (e)      sums payable in respect of any applicable indemnity,
                  counter-indemnity, Tax gross-up or of any increased costs in
                  accordance with the terms of the Relevant Documents or, as the
                  case may be, the Intra-Group Documents;

         (f)      prepayment in accordance with the terms of the Relevant
                  Document, or as the case may be, of the Intra-Group
                  Liabilities as a result of it becoming unlawful for an
                  Obligor, a Secured Creditor, or as the case may be, an
                  Intra-Group Creditor or an Intra-Group Borrower to perform its
                  obligations under the Relevant Document or, as the case may
                  be, in relation to the relevant Intra-Group Liabilities;

         (g)      voluntary prepayment of Intra-Group Liabilities which are
                  advanced as term loans under the Intra-Group Documents;

         (h)      the purchase or acquisition of the Intra-Group Liabilities by
                  a member of the Group in any manner which is not restricted by
                  the terms of the Indentures;

                                     - 11 -

<PAGE>

         (i)      application of amounts standing to the credit of the Escrow
                  Accounts in prepayment of the Notes in accordance with the
                  terms of the Escrow Agreement and the Indentures; and

         (j)      the optional redemption, purchase, repurchase, acquisition or
                  retiring for value, in the open market or otherwise and at any
                  price by the Issuer or any Guarantors of any Senior Notes or
                  Junior Notes in each case in accordance with and subject to
                  the restrictions contained in the relevant Indenture,

         PROVIDED THAT save as expressly permitted by Section 4.11(c)(2)
         (Transaction with Affiliates) of the Senior Note Indenture and Section
         4.10(c)(2) (Transaction with Affiliates) of the Junior Note Indenture,
         payments of any Intra-Group Liabilities owed by the Issuer or a Non-US
         Guarantor to a Subsidiary of the US Parent (as defined in the
         Indentures) shall be excluded from the definition of Permitted Payment.

         "POST-ACCELERATION PAYMENT PRIORITIES" shall mean the payment
         priorities set out in Schedule 5 (Post-Acceleration Payment
         Priorities).

         "PRE-ACCELERATION PAYMENT PRIORITIES" shall mean the payment priorities
         set out in Schedule 4 (Pre-Acceleration Payment Priorities).

         "RECEIVER" means a receiver or manager or administrative receiver of
         the whole or any part of the Transaction Security.

         "RELEVANT DOCUMENTS" means this Deed, any Agent/Trustee/New Bonding
         Facility Bank Accession Letter, any Guarantor Accession Letter, the
         Indentures, the Escrow Agreement, the Notes, the New Bonding Facility
         Agreement, the Security Documents (including the Guarantees of the
         Senior Notes, the Guarantee of the Junior Notes and the Composite
         Guarantee (each as defined in the Indentures), the Fee Letter and any
         Additional Remuneration Fee Letter and any notices issued and any other
         documents or agreements entered into in connection with or relating to
         such documents.

         "RELEVANT HOLDERS" means in relation to any tranche of Notes, the
         Required Holders of at least 25 per cent. of the principal amount of
         the then outstanding Notes in such tranche, PROVIDED THAT in relation
         to any instruction to any Note Trustee, if instructions inconsistent
         with such instructions have been given to the relevant Note Trustee by
         the holders of a majority of the principal amount of the then
         outstanding applicable Notes, then the holders of such majority shall
         be the "RELEVANT HOLDERS".

         "RELEVANT JURISDICTION" means, in relation to a Guarantor, its
         jurisdiction of incorporation, or, if not incorporated, its seat or
         principal place of business.

         "REQUIRED HOLDERS" shall have the meaning ascribed to it in the
         applicable Indenture.

         "SECURED CREDITORS" means the Security Trustee, any Receiver or
         Delegate, the Depositary, the Paying Agent, the Registrar, the Senior
         Note Trustee (for itself and as trustee for the holders of the Senior
         Notes), the Junior Note Trustee (for itself and as trustee for the
         holders of the Junior Notes), the Escrow Bank, the New Bonding Facility
         Agent and each of the New Bonding Facility Banks and their successors
         and assigns.

                                     - 12 -

<PAGE>

         "SECURED OBLIGATIONS" means all present and future indebtedness,
         liabilities and obligations (for the avoidance of doubt, including any
         liabilities and obligations which have been cash-collateralised by the
         Obligors) at any time of any Obligor under the Relevant Documents, both
         actual and contingent and whether incurred solely or jointly or in any
         other capacity together with any of the following matters relating to
         or arising in respect of those liabilities and obligations:

         (a)      any refinancing, novation, deferral or extension;

         (b)      any obligation relating to any increase in the amount of such
                  obligations;

         (c)      any claim for damages or restitution; and

         (d)      any claim as a result of any recovery by an Obligor of a
                  payment or discharge, or non-allowability, on the grounds of
                  preference,

         and any amounts that would be included in any of the above but for any
         discharge, non-provability or unenforceability of those amounts in any
         insolvency or other proceedings (including interest accruing after the
         commencement of any insolvency or other proceedings).

         "SECURITY" means a mortgage, charge, pledge, lien or other security
         interest securing any obligation of any person or any other agreement
         or any guarantee, indemnity or assurance against loss or arrangement
         having a similar effect.

         "SECURITY DOCUMENTS" means (1) the Initial Security Documents securing
         the Secured Obligations, (2) any other pledge agreements, security
         agreements, mortgages, deeds of trust and other agreements, instruments
         and documents entered into from time to time by the Issuer or any
         Subsidiary of the Issuer creating or granting any Guarantee, indemnity
         or Security in favour of any of the Secured Creditors or the Security
         Trustee, as trustee for the Secured Creditors, as security for any of
         the Secured Obligations and (3) any other agreements, instruments and
         documents executed and delivered pursuant to any of the foregoing, in
         the case of each of clauses (1) through (3), as amended, modified,
         restated or supplemented from time to time.

         "SECURITY TRUSTEE RESERVED MATTERS" shall have the meaning ascribed to
         it in Schedule 6 (Security Trustee Reserved Matters).

         "SENIOR NOTE INDENTURE" means the indenture pursuant to which the
         Senior Notes are issued.

         "SENIOR NOTES" means the US dollar denominated Guaranteed Senior
         Secured Notes due 2008 issued or to be issued by the Issuer.

         "SIGNIFICANT SUBSIDIARY" shall have the meaning ascribed to it in the
         relevant Indenture.

         "STANDSTILL EVENT" means the occurrence of a Default under the Senior
         Notes.

         "STANDSTILL NOTICE" means a notice delivered to the Security Trustee
         (with a copy to the Issuer and the other Debt Representatives) by the
         Senior Note Trustee in accordance with

                                     - 13 -

<PAGE>

         Clause 9.7 (Issue of Standstill Notice), notifying the Security Trustee
         of a Standstill Event.

         "STANDSTILL PERIOD" means the period from the date of issuance of a
         Standstill Notice and ending on the earlier of:

         (a)      the expiration of a period of 179 days after the date of the
                  issuance of such Standstill Notice by the Senior Note Trustee;

         (b)      the date on which the Senior Note Trustee has confirmed in
                  writing to the Security Trustee (with a copy to the Issuer and
                  the other Secured Creditors) that the Default under the Senior
                  Notes in respect of which that Standstill Notice was issued is
                  no longer continuing;

         (c)      the date on which the Senior Note Trustee has confirmed in
                  writing to the Security Trustee (with a copy to the Issuer and
                  the other Secured Creditors) that the Standstill Notice has
                  been cancelled by the Senior Note Trustee acting on the
                  instructions of the Required Holders of at least a majority of
                  the aggregate principal amount of the then outstanding Senior
                  Notes; and

         (d)      the date on which the Senior Note Trustee has confirmed in
                  writing to the Security Trustee (with a copy to the Issuer and
                  the other Secured Creditors) that the Secured Obligations
                  under the Senior Notes and the Senior Note Indenture have been
                  discharged in full and there are no further liabilities under
                  the Senior Notes or the Senior Note Indenture.

         "SUBSIDIARY" has the meaning ascribed to it in the applicable
         Indenture.

         "SWISS GUARANTOR" means any Guarantor whose Relevant Jurisdiction is
         Switzerland.

         "TAX" means any tax, duty, levy, impost, assessment or other
         governmental charge of whatever nature (including penalties, interest
         and other liabilities related thereto).

         "TRANSACTION SECURITY" means any guarantee (including the Guarantees)
         guaranteeing the payment of the Secured Obligations and any Security
         created or expressed to be created in favour of the Security Trustee or
         any Secured Creditor under the Security Documents.

         "TRUE UP AMOUNT" has the meaning ascribed to it in Clause 11.1
         (Turnover).

         "TRUSTEE ACTS" means both the Trustee Act 1925 and the Trustee Act 2000
         of England and Wales.

         "US GUARANTORS" means the US Parent (as defined in the applicable
         Indenture) and any of its Subsidiaries that are Guarantors.

         "VAT" means value added tax as provided for in the Value Added Tax Act
         1994 and any other tax of a similar nature.

                                     - 14 -

<PAGE>

1.2      INTERPRETATION

         1.2.1    Unless a contrary indication appears a reference in this Deed
                  to:

                  (a)      any "SECURITY TRUSTEE", "JUNIOR NOTE TRUSTEE",
                           "SENIOR NOTE TRUSTEE", "NEW BONDING FACILITY AGENT",
                           "NEW BONDING FACILITY BANK", "DEPOSITARY", "PAYING
                           AGENT", "REGISTRAR", "ESCROW BANK", "GUARANTOR", "US
                           GUARANTORS", "INTRA-GROUP CREDITOR" or "INTRA-GROUP
                           BORROWER" shall be construed so as to include its
                           successors in title, permitted assignees and
                           permitted transferees and, in the case of the
                           Security Trustee and the Note Trustees, any person
                           for the time being appointed as security trustee,
                           trustee or co-trustee in accordance with this Deed or
                           the Relevant Document (as the case may be);

                  (b)      "ASSETS" includes present and future properties,
                           revenues and rights of every description;

                  (c)      "REPAY", "REDEEM", "PREPAY" and "PAY" shall each
                           include all others and "REPAID", "REPAYABLE" and
                           "REPAYMENT", "REDEEMED", "REDEEMABLE" and
                           "REDEMPTION", "PREPAID", "PREPAYABLE", "PREPAYMENT"
                           and "PAID", "PAYABLE" and "PAYMENT" shall be
                           construed accordingly;

                  (d)      a "RELEVANT DOCUMENT" or any other agreement or
                           instrument is a reference to that Relevant Document
                           or other agreement or instrument, as the same may
                           have been amended or novated as permitted by this
                           Deed;

                  (e)      "INDEBTEDNESS" includes any obligation (whether
                           incurred as principal or as surety) for the payment
                           or repayment of money, whether present or future,
                           actual or contingent;

                  (f)      a "MANIFEST ERROR" means an error which is readily
                           apparent on the face of the particular document
                           without any reference to any other document;

                  (g)      a "PERSON" means any individual, corporation,
                           partnership, joint venture, association, joint-stock
                           company, trust, unincorporated organisation, limited
                           liability company, state or agency of a state or
                           government or other entity;

                  (h)      a "REGULATION" includes any regulation, rule,
                           official directive, request or guideline (whether or
                           not having the force of law) of any governmental,
                           intergovernmental or supranational body, agency,
                           department or regulatory, self-regulatory or other
                           authority or organisation; and

                  (i)      a provision of law is a reference to that provision
                           as the same may be amended or re-enacted from time to
                           time.

         1.2.2    Section, Clause and Schedule headings are for ease of
                  reference only.

         1.2.3    An Event of Default is "CONTINUING" if it has not been
                  remedied or waived.

                                     - 15 -

<PAGE>

1.3      THIS DEED

         References herein to "this Deed" mean this deed and include any
         accession letter and any deed or other document executed in accordance
         with the provisions hereof (as from time to time modified in accordance
         herewith) and expressed to be supplemental hereto.

1.4      APPLICATION OF AMOUNTS PAID

         If the Security Trustee (on the basis of legal advice received by it
         for this purpose) considers that an amount paid to the Security Trustee
         or any Secured Creditor for application in or towards repayment of the
         Secured Obligations is (having regard to circumstances then existing)
         capable of being avoided or otherwise set aside on the liquidation or
         administration of any Obligor or otherwise, then such amount shall not
         be considered to have been irrevocably paid and such Secured
         Obligations shall not be considered to have been discharged in full for
         the purposes of this Deed and the other Relevant Documents PROVIDED
         THAT the Security Trustee shall be entitled but not obliged,
         independently and in the absence of a request by a Secured Creditor, to
         investigate, enquire or consider whether a payment can be avoided or
         set aside on the liquidation or administration of an Obligor or
         otherwise.

1.5      CERTIFICATE OF AMOUNTS OWING

         A certificate of the Security Trustee setting forth the amount of any
         Secured Obligation (based on information provided to it pursuant to
         Clause 5.9 (Information)) owed by an Obligor shall, in the absence of
         manifest error, be prima facie evidence that such amount is due from
         such Obligor.

1.6      RESERVATION OF RIGHTS

         Notwithstanding any other provision of this Deed, the right of any
         Holder (as such term is defined in the applicable Indenture) of Notes
         to receive payment of principal and interest on, and any premium and
         Additional Amounts (if any) on such Notes held by such Holder, on or
         after the respective due dates expressed in such Notes, or to institute
         suit for the enforcement of any such payment on or after such
         respective dates, shall not be impaired or affected without the consent
         of such Holder.

1.7      THIRD PARTY RIGHTS

         1.7.1    Unless expressly provided to the contrary in this Deed, a
                  person who is not a Party has no right under the Contracts
                  (Rights of Third Parties) Act 1999 to enforce or to enjoy the
                  benefit of any term of this Deed.

         1.7.2    Notwithstanding any term of this Deed, the consent of any
                  person who is not a Party is not required to rescind or vary
                  this Deed at any time.

2.       ADDITIONAL PARTIES

2.1      ADDITIONAL INTRA-GROUP PARTIES

         If: (i) a member of the Group is obliged under any Relevant Document to
         become; or (ii) the Issuer wishes a member of the Group to become, a
         Party as an Intra-Group Creditor or an Intra-Group Borrower, the Issuer
         shall notify the Security Trustee in writing of the same PROVIDED THAT
         in the case where the Issuer wishes a member of the Group to become a
         Party as an Intra-Group Creditor or an Intra-Group Borrower (but such
         member of the Group is not obliged under any Relevant Document to
         become such a

                                     - 16 -

<PAGE>

         Party) the prior written consent of the Security Trustee (acting on the
         instructions of the Instructing Trustee) shall be required before such
         member of the Group may become a Party.

2.2      ACCESSION OF INTRA-GROUP PARTIES

         The Issuer and the member of the Group that proposes to become an
         Intra-Group Party shall deliver to the Security Trustee an Intra-Group
         Accession Letter executed by the Issuer and the proposed Intra-Group
         Party. If requested by any Debt Representative, the Security Trustee
         shall request from the Issuer and/or the proposed Intra-Group Party
         details of the Intra-Group Liabilities and/or a copy of the relevant
         Intra-Group Documents (if any) to which the proposed Intra-Group Party
         is a party and the Issuer shall, or shall procure that the proposed
         Intra-Group Party shall, promptly provide the same to the Security
         Trustee. The Security Trustee shall promptly deliver such details
         and/or a copy of any such Intra-Group Document to the Debt
         Representative who made the original request. The Security Trustee
         shall be under no obligation to keep copies or records of any such
         Intra-Group Liabilities or Intra-Group Documents.

2.3      ADDITIONAL GUARANTORS

         If a member of the Group is to become an Additional Guarantor, either
         in accordance with the Indentures or at the request of the Issuer, the
         Issuer shall notify the Security Trustee of the same in writing and
         shall deliver to the Security Trustee:

         2.3.1    a duly executed Guarantor Accession Letter in respect of such
                  member of the Group;

         2.3.2    an accession letter to the Guarantees (substantially in the
                  form set out in such Guarantees) duly executed by the Issuer
                  and the Additional Guarantor;

         2.3.3    an Opinion of Counsel (as defined in the Indentures)
                  reasonably satisfactory to the Security Trustee as to the
                  existence of such Additional Guarantor and the validity and
                  binding effect of this Deed and the Guarantees on such
                  Additional Guarantor; and

         2.3.4    a certificate certifying that the covenants in the Indentures
                  relating to a member of the Group becoming an Additional
                  Guarantor and the creation of valid, binding and perfected
                  Security by such member of the Group have been complied with.

2.4      NOTICE OF ACCESSIONS

         Upon receipt by the Security Trustee of a duly completed Intra-Group
         Accession Letter in respect of an Intra-Group Party or a Guarantor
         Accession Letter in respect of an Additional Guarantor, the Security
         Trustee shall give notice thereof to the Secured Creditors and the
         Issuer.

2.5      EFFECTIVENESS OF ACCESSION

         Any Intra-Group Accession Letter delivered pursuant to Clause 2.2
         (Accession of Intra-Group Parties) shall take effect, and the relevant
         member of the Group shall become an Intra-Group Party, on the date upon
         which the Intra-Group Accession Letter is delivered to the Security
         Trustee. Any Guarantor Accession Letter delivered pursuant to Clause
         2.3 (Additional Guarantors) shall take effect and the relevant member
         of the Group shall

                                     - 17 -

<PAGE>

         become a Party as a Guarantor, on the date upon which all of the
         conditions set out in sub-clauses 2.3.1 to 2.3.4 of Clause 2.3
         (Additional Guarantors) are satisfied.

3.       PARALLEL DEBT OBLIGATION

3.1      Each Obligor hereby agrees and covenants with the Security Trustee by
         way of an abstract acknowledgement of debt that it shall pay to the
         Security Trustee sums equal to, and in the currency of, the Secured
         Obligations owing by it under the Relevant Documents (the "PRINCIPAL
         OBLIGATIONS") as and when the same fall due for payment under the
         Relevant Documents (the "PARALLEL OBLIGATIONS").

3.2      The Security Trustee shall have its own independent right to demand
         payment of the Parallel Obligations by the Obligors (such demand to be
         made in accordance with, and only in the circumstances permitted under,
         the Relevant Documents and only if permitted by this Deed). The rights
         of the Secured Creditors (other than the Security Trustee) or any
         person which a Secured Creditor represents to receive payment of the
         Principal Obligations are several from the rights of the Security
         Trustee to receive payment of the Parallel Obligations PROVIDED THAT
         the payment by an Obligor of its Parallel Obligations to the Security
         Trustee in accordance with this Clause 3 shall be a good discharge of
         the corresponding Principal Obligations and the payment by an Obligor
         of its Principal Obligations in accordance with the provisions of the
         Relevant Documents shall be a good discharge of the corresponding
         Parallel Obligations. In the event of a good discharge of any Principal
         Obligations the Security Trustee shall not be entitled to demand
         payment of the corresponding Parallel Obligations and such Parallel
         Obligations shall be discharged to the same extent. In the event of a
         good discharge of any Parallel Obligations the Secured Creditors or any
         person which a Secured Creditor represents shall not be entitled to
         demand payment of the corresponding Principal Obligations and such
         Principal Obligations shall be discharged to the same extent.

4.       CONSENT TO RELEVANT DOCUMENTS

4.1      Each of the Secured Creditors (other than the Security Trustee) hereby
         consents, for all purposes, to the entry into and performance of the
         Relevant Documents (including this Deed) by the parties thereto and to
         the giving by the Obligors of the Transaction Security so that such
         actions shall not constitute a Default or an Event of Default under any
         of the Relevant Documents or with respect to any of the Secured
         Obligations.

4.2      The Intra-Group Parties agree that the governing law of the Security
         Documents creating the Transaction Security in respect of the
         Intra-Group Liabilities shall apply to the relevant Intra-Group
         Document pursuant to which the relevant Intra-Group Liabilities arise
         and, if the relevant Intra-Group Liabilities are not evidenced or
         outstanding under an Intra-Group Document, shall apply to the relevant
         Intra-Group Liabilities themselves. Such governing law shall override
         any express choice of law in the relevant Intra-Group Documents or
         otherwise agreed between the relevant Intra-Group Parties.

5.       THE SECURITY AND THE GUARANTEES

5.1      THE ORIGINAL TRANSACTION SECURITY

         5.1.1    The Parties acknowledge and agree that the Original
                  Transaction Security to be held by, or to the order of, the
                  Security Trustee upon the trusts contained in this

                                     - 18 -

<PAGE>

                  Deed shall be comprised by the benefit of the Original
                  Transaction Security arising in favour of the Security Trustee
                  for itself and/or each of the Secured Creditors under each of
                  the Security Documents and/or all notices of assignment or
                  charge given pursuant to any of the Security Documents and all
                  acknowledgements given in respect of such notices.

         5.1.2    Each Intra-Group Party hereby consents to the creation of
                  Security pursuant to the terms of the Security Documents by
                  the relevant Intra-Group Creditor to whom it owes Intra-Group
                  Liabilities (such Security being in relation to all of the
                  Intra-Group Creditor's right, title and interest from time to
                  time in and to each of the relevant Intra-Group Liabilities
                  and the relevant Intra-Group Documents (if any)).

5.2      ADDITIONAL SECURITY

         Subject to the provisions of this Deed, the Security Trustee may from
         time to time accept the benefit of additional Security (additional to
         the Original Transaction Security) granted to it as security for the
         Secured Obligations and such additional Security shall be held by, or
         to the order of, the Security Trustee upon the trust contained in this
         Deed. The Security Trustee shall not be obliged to accept the benefit
         of any such Security if in its absolute discretion (such discretion to
         be exercised reasonably and in a timely fashion) it considers the
         taking of such Security to be prejudicial to it in its capacity as
         Security Trustee under the Relevant Documents.

5.3      RELEASE OF TRANSACTION SECURITY ON DISCHARGE OF SECURED OBLIGATIONS

         At the written request and cost of the Issuer and having received prior
         written instructions from all Debt Representatives (upon which the
         Security Trustee may rely without further enquiry) confirming that:

         5.3.1    all of the Secured Obligations have been paid and discharged
                  in full; and

         5.3.2    none of the Secured Creditors, nor any person which a Debt
                  Representative represents, is under any further actual or
                  contingent obligation to make advances or provide other
                  financial accommodation to the Issuer or any other Obligor
                  under any of the Relevant Documents,

         the Security Trustee shall release the Transaction Security and where
         applicable reassign or transfer any relevant assets, rights or
         properties that are subject to the Transaction Security and in doing so
         shall take such steps as are specifically and expressly required under
         the relevant Security Documents or, as the case may be, required under
         the law of the relevant jurisdiction for such purpose as soon as
         reasonably practicable. For the avoidance of doubt, it is agreed that
         if any Debt Representative (on the basis of legal advice received by it
         for this purpose) considers that an amount paid to the Security Trustee
         or any Secured Creditor that it represents for application in or
         towards repayment of the relevant Secured Obligations is (having regard
         to the circumstances then existing) capable of being avoided or
         otherwise set aside on the liquidation or administration of any Obligor
         or otherwise, such Debt Representative shall not be obliged to provide
         the Security Trustee with any confirmation pursuant to this Clause 5.3,
         such amount shall not be considered to have been paid and such Secured
         Obligations shall not be

                                     - 19 -

<PAGE>

         considered to have been discharged in full and the Security Trustee
         shall not be obliged to release the relevant Transaction Security.

5.4      RELEASE OF TRANSACTION SECURITY IN CONNECTION WITH PERMITTED DISPOSALS

         5.4.1    The Security Trustee shall (and is hereby instructed by each
                  Secured Creditor and every other Party), upon the receipt of a
                  written request (such request to be delivered to the Security
                  Trustee at least 5 Business Days before the date of a proposed
                  disposal) from the Issuer (in which the Issuer certifies
                  either that the disposal is not an Asset Sale or is not
                  prohibited by the Indentures) and at the cost of the Issuer,
                  execute, at or immediately prior to the time of disposal, on
                  behalf of itself and each other Secured Creditor and every
                  other Party where required and without the need for any
                  further referral, instruction or authority from any person,
                  all releases of or, where applicable, reassignments or
                  transfers in connection with, any of the Transaction Security
                  which relates to an asset which is the subject of such a
                  disposal by any Obligor (PROVIDED THAT in so doing the
                  Security Trustee shall only take such steps as are
                  specifically and expressly required under the relevant
                  Security Documents or, as the case may be, required under the
                  law of the relevant jurisdiction for the purpose of releasing,
                  reassigning or transferring the asset subject to the relevant
                  Transaction Security). For the avoidance of doubt, the
                  requirements of this sub-clause 5.4.1 shall not apply to any
                  disposal (not being an Asset Sale or a disposal prohibited by
                  the Indentures) of an asset where as a matter of law such
                  asset may be disposed of free of the Security created by the
                  Security Documents without the need for any action by the
                  Security Trustee or, as the case may be, the Secured
                  Creditors. If requested by the Issuer, any other Obligor or
                  any person, the Security Trustee will issue a certificate of
                  non-crystallisation (or its equivalent under any applicable
                  law) in relation to any Security which is, or is the
                  equivalent of a floating charge, only upon receipt from the
                  Obligor making the disposal, of a certificate certifying that
                  there has been no event resulting in a crystallisation of the
                  floating charge (or its equivalent) in relation to such
                  Security.

         5.4.2    If an asset which is being disposed of by an Obligor consists
                  of all of the shares in the share capital of a Guarantor or,
                  as the case may be, an Intra-Group Party or any holding
                  company of a Guarantor or, as the case may be, any holding
                  company of an Intra-Group Party, the Security Trustee shall be
                  (upon receipt of a certificate from such Guarantor (or if such
                  Intra-Group Party is not a Guarantor, from the Intra-Group
                  Party) certifying that it is neither owed nor does it owe any
                  Intra-Group Liabilities) (other than liabilities which are
                  certified in such certificate as being liabilities owed to
                  such Guarantor or, as the case may be, such Intra-Group Party
                  or by such Guarantor or, as the case may be, such Intra-Group
                  Party which (i) were not in existence as at the date hereof
                  and (ii) would have been permitted by the definitions of
                  "PERMITTED DEBT" and/or "PERMITTED INVESTMENTS" contained in
                  the Indentures or pursuant to the covenants contained in
                  Section 4.04 of the Senior Indenture and Section 4.03 of the
                  Junior Note Indenture titled "Restricted Payments" had such
                  liability been incurred immediately following such disposal)
                  and is hereby instructed by each

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                  other Secured Creditor and each Obligor, to execute (at or
                  immediately before the time of the relevant disposal) on
                  behalf of each Secured Creditor and each Obligor:

                  (a)      a release of the relevant Guarantor or Intra-Group
                           Party (as the case may be), and any Subsidiary
                           thereof which is a Guarantor or Intra-Group Party (as
                           the case may be), from all liabilities it may have,
                           both actual and contingent, in its capacity as a
                           Guarantor or Intra-Group Party (as the case may be)
                           including, for the avoidance of doubt, all such
                           liabilities under this Deed (and any liability to any
                           other Obligor by way of guarantee, contribution or
                           indemnity in connection with any Transaction Security
                           provided by such other Obligor); and

                  (b)      a release of or, where applicable, a reassignment or
                           transfer of the assets in connection with any
                           Transaction Security granted by that Guarantor or
                           Subsidiary over any of its assets, rights or
                           properties under any of the Security Documents
                           (PROVIDED THAT in so doing the Security Trustee shall
                           only take such steps as are specifically and
                           expressly required under the relevant Security
                           Documents or, as the case may be, required under the
                           law of the relevant jurisdiction for the purpose of
                           releasing or reassigning the relevant Transaction
                           Security).

         5.4.3    If any disposal contemplated under sub-clauses 5.4.1 or 5.4.2
                  of this Clause 5.4 is certified by the Issuer as being an
                  Asset Sale, the Security Trustee will only take the actions
                  set out in sub-clause 5.4.1 and sub-clause 5.4.2 of this
                  Clause 5.4 if the Issuer has provided the Security Trustee,
                  with a copy to each Debt Representative, with a certificate:
                  (i) stating that such disposal is permitted under the
                  Indentures; (ii) stating that no Event of Default has occurred
                  and is continuing under the Indentures; (iii) detailing the
                  assets which are subject to the disposal; and (iv) certifying
                  that the proceeds of such disposal are to be applied in
                  accordance with the Indentures and the Escrow Agreement,
                  PROVIDED ALWAYS THAT in the absence of manifest error the
                  Security Trustee may rely on any such certificate without
                  further investigation.

5.5      RELEASE OF GERMAN SECURITY

         In the event that the Security Trustee is legally obliged to do so
         under the laws of the Federal Republic of Germany or by an order of a
         German court with jurisdiction, the Security Trustee shall, at the cost
         of the relevant Obligor, release the German Security without the need
         for any further instruction or authority from any person and where
         applicable reassign or transfer any relevant assets, rights or
         properties that are subject to the German Security and in doing so
         shall take such steps as are specifically and expressly required under
         German law for such purpose as soon as reasonably practicable PROVIDED
         THAT without prejudice to the foregoing, the Security Trustee shall
         promptly provide the Secured Creditors with a copy of any court
         documents or orders received by it.

                                     - 21 -

<PAGE>

5.6      AGREEMENT NOT TO SET ASIDE

         Save for in relation to a breach by the Security Trustee of its
         obligations under Clause 5.3 (Release of Transaction Security on
         Discharge of Secured Obligations), Clause 5.4 (Release Transaction
         Security in Connection with Permitted Disposals) and Clause 5.5
         (Release of German Security), no Obligor shall (and the Issuer shall
         ensure that no Obligor will), without the prior written consent of all
         Debt Representatives, take any step in connection with any court
         proceeding or apply to or petition any court for an order requiring the
         Security Trustee to release, reassign or transfer, all or any part of
         the Security constituted by the Security Documents.

5.7      RELEASE OF GUARANTEES

         At the written request and cost of the Issuer and having received prior
         written instructions from the relevant Note Trustee (upon which the
         Security Trustee may rely without further inquiry) confirming that the
         conditions set out in Section 9.01 (Satisfaction and Discharge) of the
         applicable Indenture have been satisfied, the Security Trustee shall
         execute on behalf of the relevant Note Trustee a release of each
         Guarantor from all liabilities it may have, under the Guarantee to
         which it is a party provided that such release shall only be made in
         respect of the Guaranteed Obligations arising under the Senior Note and
         the Senior Note Indenture or, as the case may be, the Junior Notes and
         the Junior Note Indenture.

5.8      RELEASE OF MCHI

         At the written request and cost of the Issuer and having received a
         certificate from the Issuer addressed to the Security Trustee and the
         other Secured Creditors (upon which the Security Trustee may rely
         without further inquiry) confirming that, subject to the releases
         referred to in paragraphs (a) and/or (b) below MCHI has completed all
         distributions to the stockholders of MCHI pursuant to and in accordance
         with the MCHI Plan of Liquidation and Dissolution, the Security Trustee
         shall (and is hereby instructed by each Secured Creditor and every
         other party) execute on behalf of itself and each other Secured
         Creditor:

         (a)      a release of MCHI from all liabilities it may have, both
                  actual and contingent, in its capacity as a Guarantor
                  guaranteeing the Secured Obligations and all such obligations
                  under this Deed; and

         (b)      a release of any Transaction Security granted by MCHI over any
                  of its assets, rights or properties under any of the Security
                  Documents and shall, where applicable, reassign or transfer
                  any relevant assets, rights or properties of MCHI that are
                  subject to the Transaction Security (provided that in so doing
                  the Security Trustee shall only take such steps as are
                  specifically and expressly required under the relevant
                  Security Documents or, as the case may be, required under the
                  law of the relevant jurisdiction for the purpose of releasing
                  or reassigning the relevant Transaction Security).

5.9      INFORMATION

         5.9.1    Each Secured Creditor shall, if requested by the Security
                  Trustee, provide to the Security Trustee accurate and
                  up-to-date information (certified by the relevant Secured
                  Creditor as being accurate and up to date) as to the Secured
                  Obligations owing to it or to any person whom such Secured
                  Creditor represents so as to

                                     - 22 -

<PAGE>

                  enable the Security Trustee to perform its functions and
                  duties under this Deed. Each such certificate shall be in a
                  form reasonably required by the Security Trustee. The Security
                  Trustee shall not take into account for the purpose of the
                  application of moneys in accordance with this Deed, any
                  amounts of which it has not been notified by the relevant
                  Secured Creditor.

         5.9.2    Upon becoming aware of any Default or Event of Default under
                  any Relevant Document, the Issuer shall immediately deliver to
                  the Security Trustee and the Debt Representatives a notice
                  specifying such Default or Event of Default.

         5.9.3    The Senior Note Trustee shall promptly notify the Security
                  Trustee in writing (with a copy of such notice to be provided
                  to the other Debt Representatives and the Issuer) upon the
                  occurrence of Payment Stop Event and/or Standstill Event (a
                  notice of a Standstill Event shall be contained in a
                  Standstill Notice).

6.       TRUST FOR SECURED CREDITORS

6.1      DECLARATION OF TRUST

         To the extent the Transaction Security is not transferred, charged or
         granted to the Security Trustee on trust and subject to the provisions
         of Clause 6.4 (Declaration of Trust and Appointment as Administrator
         (Germany)), Clause 6.5 (Declaration of Trust and Appointment as
         Administrator (Italy)), Clause 6.6 (Declaration of Trust and
         Appointment as Administrator (Mexico)), and Clause 6.7 (Appointment of
         Security Trustee as Attorney-in-Fact (Brazil)) the Security Trustee
         declares itself trustee of the Transaction Security to hold the same on
         trust for the Secured Creditors on terms and subject to the conditions
         set out in this Deed. The following provisions are supplementary to the
         provisions of the Trustee Act 1925.

6.2      TRUST

         6.2.1    The Security Trustee shall have only those duties, obligations
                  and responsibilities expressly specified in the Security
                  Documents, the Escrow Agreement and this Deed and no duties,
                  obligations and responsibilities shall be inferred or implied.

         6.2.2    In performing or carrying out its duties, obligations and
                  responsibilities, the Security Trustee shall be considered to
                  be acting only in a mechanical and administrative capacity
                  (save as expressly provided in the Security Documents, the
                  Escrow Agreement or this Deed) and shall not have or be deemed
                  to have any duty, obligation or responsibility to, or
                  relationship of trust or agency with, any Obligor (save in
                  respect of certain notification requirements as expressly
                  provided in the Security Documents and those obligations
                  referred to in sub-clause 14.4.5 of Clause 14.4 (Excluded
                  Obligations) of this Deed).

6.3      COVENANT TO PAY

         Subject to Clause 24.5 (Guarantee Limitations), each Obligor hereby
         covenants with the Security Trustee as trustee for the Secured
         Creditors that such Obligor shall on demand of the Security Trustee
         discharge all obligations which such Obligor may at any time have to
         the Security Trustee (whether for its own account or as

                                     - 23 -

<PAGE>

         trustee for the Secured Creditors) or any of the other Secured
         Creditors (whether for their own account or as trustee or agent of the
         persons who such Secured Creditors represent or for whom they act)
         under or pursuant to the Relevant Documents (including this Deed)
         including any liability in respect of any further advances made under
         the Relevant Documents, whether present or future, actual or contingent
         (and whether incurred solely or jointly and whether as principal or as
         surety or in some other capacity) and each Obligor shall pay to the
         Security Trustee when due and payable every sum at any time owing, due
         or incurred by such Obligor to the Security Trustee (whether for its
         own account or as trustee for the Secured Creditors) or any of the
         other Secured Creditors (whether for their own account or as trustee or
         agent of the persons who such Secured Creditors represent or for whom
         they act) in respect of any such liabilities.

6.4      DECLARATION OF TRUST AND APPOINTMENT AS ADMINISTRATOR (GERMANY)

         6.4.1    The Security Trustee shall:

                  (a)      hold and administer any German Security which is
                           security assigned
                           (Sicherungseigentum/Sicherungsabtretung) or otherwise
                           transferred under a non-accessory security right
                           (nicht akzessorische Sicherheit) to it as a trustee
                           (Treuhander) for the benefit of the Secured
                           Creditors; and

                  (b)      hold and administer any German Security which is
                           pledged (Verpfandung) or otherwise transferred to it
                           under an accessory security right (akzessorische
                           Sicherheit) for the benefit of the Secured Creditors.

         6.4.2    Each Secured Creditor (other than the Security Trustee) hereby
                  authorises the Security Trustee:

                  (a)      to exercise such rights, remedies, powers and
                           discretions as are specifically delegated to or
                           conferred upon the Security Trustee by the German
                           Security Documents together with such powers and
                           discretions as are reasonably incidental thereto; and

                  (b)      to take such action on its behalf as may from time to
                           time be authorised under or in accordance with the
                           German Security Documents.

         6.4.3    The Security Trustee shall be exempted from the restrictions
                  of Section 181 of the German Civil Code.

         6.4.4    Each Secured Creditor (other than the Security Trustee) hereby
                  ratifies and approves all acts previously done by the Security
                  Trustee on such Secured Creditor's behalf in relation to the
                  German Security Documents.

6.5      DECLARATION OF TRUST AND APPOINTMENT AS ADMINISTRATOR (ITALY)

         Each Secured Creditor (other than the Security Trustee):

         6.5.1    appoints the Security Trustee to be its "mandatario con
                  rappresentanza" (common representative) for the purpose of
                  executing the Italian Security Documents in the name and on
                  behalf of the Secured Creditors, with the power to determine
                  and agree any term and condition of such Italian Security
                  Documents, execute any other agreement or instrument, give or
                  receive any notice and take any other action and exercise any
                  right, remedy, power and

                                     - 24 -

<PAGE>

                  discretion in relation to the creation, perfection,
                  maintenance, enforcement and release of the security created
                  under the Italian Security Documents;

         6.5.2    undertakes to ratify and approve such action in the name of
                  and on behalf of the Secured Creditors by the Security Trustee
                  acting in such capacity in relation to the Italian Security
                  Documents; and

         6.5.3    agrees that the provisions of this Deed which apply to the
                  Security Trustee in its capacity as trustee shall apply to it
                  in its capacity as the Secured Creditors' common
                  representative.

6.6      DECLARATION OF TRUST AND APPOINTMENT AS ADMINISTRATOR (MEXICO)

         Each Secured Creditor (other than the Security Trustee):

         6.6.1    hereby authorises the Security Trustee to take such action as
                  agent on its behalf and for its benefit and to exercise such
                  powers under this Deed and the other Relevant Documents as are
                  delegated to the Security Trustee by the terms hereof and
                  thereof, together with such powers as are reasonably
                  incidental thereto. Without prejudice to the foregoing, each
                  Secured Creditor hereby grants in favour of the Security
                  Trustee a mandate (comision mercantil), as referred to in
                  Article 273 of the Mexican Code of Commerce (Codigo de
                  Comercio) pursuant to which the Security Trustee is granted
                  full authority to carry out, on behalf and for the benefit of
                  the Secured Creditors, any and all actions necessary to: (a)
                  comply with and perform its obligations and duties under the
                  Mexican Security Documents and those arising under this Deed;
                  and (b) execute and deliver the Mexican Security Documents and
                  to perform each and every obligation and duty set forth
                  therein; and

         6.6.2    if required by applicable law or reasonably requested by the
                  Security Trustee, agrees to execute and deliver to the
                  Security Trustee, and register in every public registry in
                  Mexico in which such registration is necessary, a notarised
                  Mexican public deed appointing the Security Trustee and any
                  officer or agent thereof, as the case may be, its
                  attorney-in-fact for the purposes of exercising the rights and
                  remedies of such party referred to in sub-clause 6.6.1 of this
                  Clause 6.6.

6.7      APPOINTMENT OF SECURITY TRUSTEE AS ATTORNEY-IN-FACT (BRAZIL)

         6.7.1    Each of the Secured Creditors (other than the Security
                  Trustee) irrevocably appoints the Security Trustee to be its
                  attorney-in-fact for the purposes set out in this Clause 6.7.

         6.7.2    The Security Trustee may in the name and on behalf of each
                  Secured Creditor sign, execute and deliver the Brazilian
                  Security Documents and any amendments thereto and execute,
                  deliver and perfect all deeds, instruments and do all acts and
                  things which may be required (or which a Secured Creditor
                  considers expedient or desirable) for carrying out any action
                  specifically designated in the Brazilian Security Documents as
                  an action to be carried out by the Security Trustee.

                                     - 25 -

<PAGE>

         6.7.3    The Security Trustee has full power to delegate the powers
                  conferred on it by this Clause 6.7 but no such delegation will
                  preclude the subsequent exercise of such power by the Security
                  Trustee itself or preclude the Security Trustee from making a
                  subsequent delegation thereof to some other person and any
                  such delegation may be revoked by the Security Trustee at any
                  time.

         6.7.4    Each Secured Creditor will ratify and confirm all transactions
                  entered into by the Security Trustee or any delegate of the
                  Security Trustee in the exercise or purported exercise of the
                  Security Trustee's or, as the case may be, Delegate of the
                  Security Trustee's powers.

         6.7.5    Each Secured Creditor will at the request from time to time of
                  the Security Trustee enter into and duly execute such further
                  power or powers of attorney in a form and substance acceptable
                  to the Security Trustee.

         6.7.6    The Parties acknowledge and agree that any and all actions
                  which the Security Trustee is entitled or required to perform
                  under or in connection with the Brazilian Security Documents
                  (or any amendments thereto) shall be carried out by the
                  Security Trustee only in its capacity as attorney-in-fact of
                  the Secured Creditors.

6.8      NO INDEPENDENT POWER

         6.8.1    The Secured Creditors (other than the Security Trustee, a
                  Receiver or a Delegate) shall have no independent power to
                  enforce, or have recourse to, any of the Transaction Security
                  or to exercise any rights or powers arising under the Security
                  Documents unless the Security Trustee, Receiver or, as the
                  case may be, Delegate, having been obligated to do so, fails
                  to do so within a reasonable time and such failure is
                  continuing or, in the case of the Italian Security Documents,
                  as otherwise provided for by mandatory provision of Italian
                  law.

         6.8.2    Any money recovered by a Secured Creditor in accordance with
                  the provisions of this Clause 6.8 shall be immediately turned
                  over to the Security Trustee in accordance with Clause 11
                  (Turnover by the Secured Creditors) and the Security Trustee
                  is hereby irrevocably instructed by the Secured Creditors to
                  apply such monies in accordance with this Deed.

7.       AMENDMENTS, CONSENTS AND WAIVERS

7.1      PROCEDURE FOR AMENDMENTS, CONSENTS AND WAIVERS

         7.1.1    The Security Trustee may, if requested by any other Secured
                  Creditor or the Issuer, without the need to obtain
                  instructions from the Debt Representatives, agree to any
                  amendment that has been requested by such Secured Creditor or
                  the Issuer to be made to this Deed or any other Relevant
                  Document to which it is a party where in the sole opinion of
                  the Security Trustee such amendment is to be made to correct a
                  manifest error or is of a formal, minor, administrative or
                  technical nature.

         7.1.2    Without prejudice to sub-clause 7.1.1 of this Clause 7.1 and
                  subject to Clause 7.2 (Entrenched Rights) and Clause 7.3
                  (Entrenched Rights of the Security Trustee), in respect of any
                  proposed amendment to be made to, and any

                                     - 26 -

<PAGE>

                  proposed consent or waiver to be made or given in relation to,
                  any provision of any Relevant Document (other than this Deed)
                  to which the Security Trustee is a party, the Security Trustee
                  shall not agree to any such amendment or grant any such waiver
                  or consent without the prior written instructions of:

                  (a)      prior to the discharge in full of the Secured
                           Obligations arising under the Senior Notes and the
                           Senior Note Indenture, the Senior Note Trustee (with
                           the Senior Note Trustee confirming to the Security
                           Trustee that it is acting on the instructions of the
                           Required Holders of the Senior Notes); and

                  (b)      following the discharge in full of the Secured
                           Obligations arising under the Senior Notes and the
                           Senior Note Indenture but prior to the payment in
                           full of the Secured Obligations arising under the
                           Junior Notes and the Junior Note Indenture, the
                           Junior Note Trustee (with the Junior Note Trustee
                           confirming to the Security Trustee that it is acting
                           on the instructions of the Required Holders of the
                           Junior Notes).

         7.1.3    Without prejudice to sub-clause 7.1.1 of this Clause 7.1 and
                  subject to Clause 7.2 (Entrenched Rights) and Clause 7.3
                  (Entrenched Rights of the Security Trustee), the Parties
                  acknowledge and agree that any amendment to, and any consent
                  or waiver in relation to any provision of this Deed shall
                  require the prior written consent of each Debt Representative
                  and the Issuer.

         7.1.4    Except for amendments:

                  (a)      made to correct a manifest error or which relate to
                           formal, minor, administrative or technical matters;
                           or

                  (b)      which are required by sub-clause 7.1.7 of this Clause
                           7.1; or

                  (c)      which are permitted under clauses (2), (3), (4), (5)
                           and (6) of Section 10.02 (Supplemental Indentures
                           without Consent of Holders) of the Junior Note
                           Indenture; or

                  (d)      which are made with the prior written consent of the
                           Senior Note Trustee,

                  the Issuer and the Junior Note Trustee hereby acknowledge and
                  agree that until all Secured Obligations arising under the
                  Senior Notes and the Senior Note Indenture have been
                  discharged in full, no amendments to the Junior Notes or the
                  Junior Note Indenture are permitted and no such amendment will
                  be made.

         7.1.5    Each Secured Creditor acknowledges and agrees that the Senior
                  Note Trustee (without the need for the consent of the other
                  Secured Creditors or the Obligors (other than the consent of
                  the Issuer)) acting on the instructions of the Required
                  Holders under the Senior Note Indenture, may waive and/or
                  amend the provisions of the Senior Notes and/or the Senior
                  Note Indenture PROVIDED THAT the Senior Note Trustee and the
                  Issuer hereby agree that they will not waive and/or amend the
                  provisions of the Senior Notes and/or the Senior Note
                  Indenture:

                                     - 27 -

<PAGE>

                  (a)      without the prior consent of the Required Holders (as
                           defined in the Junior Note Indenture) of at least a
                           majority of the principal amount of the then
                           outstanding Junior Notes, if such amendment or waiver
                           would constitute a Material Amendment; and

                  (b)      without the relevant consents required and/or set out
                           in the Senior Note Indenture.

         7.1.6    Each Secured Creditor acknowledges and agrees that the New
                  Bonding Facility Agent may (subject to the terms of the New
                  Bonding Facility Agreement) with the consent of the Issuer
                  waive or amend the provisions of the New Bonding Facility
                  Agreement PROVIDED THAT the New Bonding Facility Agent, the
                  New Bonding Facility Banks and the Issuer hereby agree that
                  they will not waive or amend the provisions of the New Bonding
                  Facility Agreement if such waiver or amendment would:

                  (a)      constitute a Material Amendment;

                  (b)      (without prejudice to the provisions of clause 2.3
                           (Extension of the Facility) of the New Bonding
                           Facility Agreement), extend the Availability Period
                           (as defined in the New Bonding Facility Agreement) of
                           the New Bonding Facility Agreement;

                  (c)      have the effect of incorporating new covenants and/or
                           Events of Default into the New Bonding Facility
                           Agreement; or

                  (d)      have the effect of rendering the existing covenants
                           and/or Events of Default contained in the New Bonding
                           Facility Agreement more onerous for the obligors
                           under the New Bonding Facility Agreement.

         7.1.7    Each Secured Creditor acknowledges, and the Junior Note
                  Trustee and the Issuer hereby undertakes, that if the Senior
                  Note Trustee confirms to the Junior Note Trustee and the
                  Issuer that the holders of the Senior Notes have agreed to
                  waive a Default or Event of Default arising in respect of the
                  Senior Notes or the Senior Note Indenture and/or have agreed
                  to amend the terms of any covenant in the Senior Notes and/or
                  the Senior Note Indenture during any Standstill Period to
                  address the circumstances which resulted in a Default or Event
                  of Default, the Issuer and the Junior Note Trustee (without
                  the need for obtaining the consent of the holders of the
                  Junior Notes PROVIDED THAT, in the case of any amendment, such
                  amendment is not a Material Amendment) will enter into a
                  supplemental indenture and/or any other documents that may be
                  required to provide a waiver to the same effect and/or amend
                  the Junior Notes and the Junior Note Indenture to the same
                  effect.

         7.1.8    Each Secured Creditor acknowledges and agrees that the Escrow
                  Agreement may be amended only with the consent of each party
                  thereto and each Note Trustee.

         7.1.9    Each Obligor, each Intra-Group Creditor and each Intra-Group
                  Borrower (in each case other than the Issuer) agrees that its
                  consent will not be required to

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<PAGE>

                  implement any amendments, consents or waivers effected
                  pursuant to this Clause 7.1 and that it will be bound by any
                  such amendments, consents or waivers once implemented in
                  accordance with this Clause 7.1.

7.2      ENTRENCHED RIGHTS

         Notwithstanding the provisions of Clause 7.1 (Procedure for Amendments,
         Consents and Waivers):

         7.2.1    No amendment to or consent or waiver in respect of this Deed
                  or any other Relevant Document shall be effective if the
                  proposed amendment, consent or waiver:

                  (a)      changes the ranking or priority of a Secured Creditor
                           set out in Schedule 4 (Pre-Acceleration Payment
                           Priorities) or Schedule 5 (Post-Acceleration Payment
                           Priorities);

                  (b)      has the effect of changing a date on which payment of
                           principal, interest or any other sum due to a Secured
                           Creditor is to be made, or has the effect of reducing
                           the amount of principal, interest or any other sum
                           due to a Secured Creditor on any date, or altering
                           the method of calculating the amount of any payment
                           of any amount or the date for payment to a Secured
                           Creditor;

                  (c)      has the effect of changing the currency of payment of
                           any amount due to a Secured Creditor;

                  (d)      has the effect of requiring from a Secured Creditor
                           additional undertakings or indemnities or has the
                           effect of increasing the scope of any existing
                           undertakings or indemnities provided by a Secured
                           Creditor; or

                  (e)      has the effect of changing any provision of any
                           Relevant Document that expressly requires the consent
                           of a Secured Creditor,

                  unless the Security Trustee, further to a written request from
                  the Issuer or a Secured Creditor, has requested and has
                  received from each of the Debt Representatives who are, or who
                  represent persons who are, affected in a manner set out in
                  paragraphs (a) to (e) above, such Debt Representative's prior
                  written approval to such amendment, consent or waiver PROVIDED
                  THAT an amendment or waiver pursuant to sub-clause 7.1.7 of
                  Clause 7.1 (Procedure for Amendments, Consents and Waivers)
                  which falls within paragraph (e) above shall not require the
                  approvals or consents set out in this sub-clause 7.2.1 of
                  Clause 7.2 (Entrenched Rights).

         7.2.2    No amendment, consent or waiver relating to this Deed or any
                  other Relevant Document to which the Security Trustee is a
                  party shall be effective if the proposed amendment, consent or
                  waiver has the effect of substituting another entity as
                  principal obligor for any Obligor or:

                  (a)      amends the provisions of this Clause 7.2;

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                  (b)      amends the definition of "Security Documents",
                           "Obligors", "Relevant Document" or "Secured
                           Obligations";

                  (c)      releases any of the Transaction Security otherwise
                           than as envisaged in Clause 5 (The Security); or

                  (d)      amends Clause 12.4 (Preservation of Liabilities) or
                           Clause 10 (Action and Enforcement Action),

                  unless the Security Trustee, further to a written request from
                  the Issuer or a Secured Creditor has requested and has
                  received the written approval of each Debt Representative to
                  such amendment, consent or waiver.

7.3      ENTRENCHED RIGHTS OF THE SECURITY TRUSTEE

         Notwithstanding the provisions of sub-clause 7.1.2 and 7.1.3 of Clause
         7.1 (Procedure for Amendments, Consents and Waivers) and Clause 7.2
         (Entrenched Rights), no amendment, consent or waiver with respect to
         this Deed or any other Relevant Document to which the Security Trustee
         is a party shall, without the Security Trustee's prior written consent,
         be made or effected if the Security Trustee, in its sole and absolute
         opinion, notifies the Debt Representatives that such amendment, consent
         or waiver relates to or would or may have the effect of changing the
         Security Trustee Reserved Matters or any of the Security Trustee's
         obligations under this Deed or any other Relevant Document to which it
         is a party.

8.       RANKING OF SECURED OBLIGATIONS AND PRIORITIES

8.1      PERMITTED ACTIONS

         8.1.1    Each of the Parties agrees and acknowledges that:

                  (a)      the Obligors may pay, prepay, repay, redeem or
                           purchase:

                           (i)      the Secured Obligations owing under the
                                    Senior Notes and/or the Senior Note
                                    Indenture on each relevant Payment Date in
                                    accordance with the Senior Notes, the Senior
                                    Note Indenture and this Deed; and

                           (ii)     any Secured Obligations owing under the New
                                    Bonding Facility Agreement (including
                                    payments or repayments by way of cash
                                    collateralisation or the provision of
                                    letters of credit, guarantees or similar
                                    instruments) on each relevant Payment Date
                                    in accordance with the terms thereof and
                                    this Deed;

                  (b)      the Obligors may pay all fees, costs and expenses
                           owed to, and incurred by, the Security Trustee, the
                           Depositary, the Note Trustees, the Escrow Bank and
                           the New Bonding Facility Agent pursuant to the terms
                           and conditions of the Relevant Documents and this
                           Deed;

                  (c)      the Obligors may pay, prepay, repay, redeem or
                           purchase the Secured Obligations owing under the
                           Junior Notes and/or the Junior Note Indenture
                           PROVIDED THAT such payments constitute Permitted
                           Payments and are made in accordance with the Junior
                           Notes, the Junior Note Indenture and this Deed; and

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<PAGE>

                  (d)      the Note Trustees, as trustees for the holders of the
                           relevant Notes, and the New Bonding Facility Agent,
                           as trustee for the New Bonding Facility Banks, may,
                           with the Security Trustee's prior written consent
                           (not to be unreasonably withheld or delayed) take,
                           accept or receive the benefit of any Security
                           (additional to the Original Transaction Security)
                           only if the same Security is at the same time granted
                           to and held by the Security Trustee as trustee for
                           the Secured Creditors under the terms of this Deed.

         8.1.2    The Intra-Group Creditors acknowledge and agree that any
                  rights they may have against the Intra-Group Borrowers in
                  relation to Intra-Group Liabilities are hereby subordinated to
                  the rights of the Secured Creditors against the Obligors and
                  the Intra-Group Borrowers in accordance with the terms of this
                  Deed.

8.2      PRE-ACCELERATION PAYMENT PRIORITIES

         8.2.1    Unless the Senior Note Trustee has notified the other Secured
                  Creditors (other than the Escrow Bank) in writing that a
                  Payment Stop Event has occurred and is continuing, all monies
                  credited to the Mandatory Redemption Escrow Account shall be
                  applied in accordance with the Pre-Acceleration Payment
                  Priorities and all monies credited to the Existing Performance
                  Bond Escrow Account shall be applied in accordance with the
                  terms of the Escrow Agreement.

         8.2.2    Upon the occurrence of an Event of Default under clause 24.1
                  (Non-Payment) of the New Bonding Facility Agreement and at any
                  time thereafter whilst the same is continuing, but prior to
                  the New Bonding Facility Agent being notified by the Senior
                  Note Trustee of the occurrence of a Payment Stop Event, the
                  New Bonding Facility Agent shall (on its own behalf and on
                  behalf of the New Bonding Facility Banks), having notified the
                  other Debt Representatives of the occurrence of such Event of
                  Default, be entitled to demand, in accordance with the terms
                  of the New Bonding Facility Agreement, from the Indemnifying
                  Companies under the New Bonding Facility Agreement an amount
                  sufficient to ensure that the Secured Obligations arising
                  under the New Bonding Facility Agreement are fully
                  cash-collateralised.

8.3      POST-ACCELERATION PAYMENT PRIORITIES

         8.3.1    Upon being notified in writing by the Senior Note Trustee that
                  a Payment Stop Event has occurred and is continuing the
                  Security Trustee will promptly instruct the Escrow Bank:

                  (a)      to act in accordance with sub-clause 9.8.1 of Clause
                           9.8 (Standstill Period and Payments from Escrow
                           Accounts); and

                  (b)      following the date of such notification and whilst
                           the relevant Payment Stop Event is continuing and
                           after giving effect to any payment required by
                           sub-clause 9.8.1, to pay all monies credited to the
                           Mandatory Redemption Escrow Account to the Security
                           Trustee and the Security Trustee is hereby
                           irrevocably instructed by the Secured Creditors to
                           pay such monies, together with the proceeds of all
                           recoveries actually received by it in its capacity as
                           Security Trustee pursuant to any Enforcement Action,
                           in accordance with the Post-Acceleration Payment
                           Priorities

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<PAGE>

                           PROVIDED THAT the Security Trustee shall only
                           instruct the Escrow Bank to make a payment out of the
                           Mandatory Redemption Escrow Account under this
                           paragraph (b) if the amounts standing to the credit
                           of the Mandatory Redemption Escrow Account (as
                           confirmed by the Escrow Bank) is equal to or greater
                           than US$4,000,000 (or the Dollar Equivalent). For the
                           avoidance of doubt, if a Payment Stop Event has
                           ceased to be continuing and PROVIDED THAT no
                           Standstill Period is in effect, monies credited to
                           the Mandatory Redemption Escrow Account shall be
                           applied in accordance with Clause 8.2
                           (Pre-Acceleration Payment Priorities).

                  8.3.2    Upon being notified by the Senior Note Trustee of the
                           occurrence of (a) an Enforcement Event or (b) a
                           payment Event of Default under the Senior Notes
                           and/or the Senior Note Indenture, the Security
                           Trustee will promptly instruct the Escrow Bank to pay
                           all monies credited to the Existing Performance Bond
                           Escrow Account in accordance with the Escrow
                           Agreement.

8.4      PERMITTED DEDUCTIONS

         The Security Trustee shall be entitled to make, pay and set aside by
         way of reserve from any money it receives in its capacity as Security
         Trustee amounts sufficient to enable it to make and pay:

                  8.4.1    any liabilities, costs, fees and expenses it or any
                           of its Delegates may suffer or incur in or as a
                           consequence of the performance of its obligations
                           under this Deed or any other Relevant Document to
                           which the Security Trustee is a party or any
                           deductions and/or withholdings (on account of Taxes
                           or otherwise) which it is or may be required by any
                           applicable law to make from any distribution or
                           payment made by it under this Deed or any other
                           Relevant Document to which the Security Trustee is a
                           party; and

                  8.4.2    any Taxes (other than in connection with its
                           remuneration or income for performing its duties
                           under the Relevant Documents) which may be assessed
                           against it in respect of any of the Transaction
                           Security in or as a consequence of its performing its
                           obligations, or by virtue of its capacity as Security
                           Trustee, under any of the Relevant Documents.

8.5      GOOD DISCHARGE

                  8.5.1    Any payment to be made in respect of the Secured
                           Obligations by the Security Trustee may be made to a
                           Debt Representative for the benefit of the persons
                           for which it is a Debt Representative and any such
                           payment made shall provide a good discharge, to the
                           extent of that payment, to the Security Trustee.

                  8.5.2    The Security Trustee shall make payments to the
                           Secured Creditors in the same currency as that in
                           which the Secured Obligations owed to the relevant
                           Secured Creditor or the persons which it represents
                           are denominated. The Security Trustee shall procure
                           that any sums it receives from an Obligor which is in
                           a currency other than that in which the relevant
                           Secured Obligations are denominated are converted at
                           such rate of exchange as is offered in the ordinary
                           course of business by the Escrow Bank to effect such
                           conversion (subject to any reasonable deduction
                           applied by such bank for commissions and other
                           charges)

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<PAGE>

                           and shall, if reasonably requested, provide evidence
                           of the rate used for such conversion. Any shortfall
                           arising as a result of such conversion shall be for
                           the account of the relevant Obligor.

9.       UNDERTAKINGS

9.1      UNDERTAKINGS OF SECURED CREDITORS

         Each Secured Creditor hereby undertakes that it will not, and the
         Issuer hereby acknowledges that no Secured Creditor will, except as
         expressly permitted by this Deed:

                  9.1.1    permit or require the Issuer or any other Obligor to
                           discharge any of the Secured Obligations owed to such
                           Secured Creditor or any person which it represents
                           save to the extent permitted by, and only as provided
                           in, Clause 8.1 (Permitted Actions), Clause 8.2
                           (Pre-Acceleration Payment Priorities), Clause 8.3
                           (Post-Acceleration Payment Priorities), Clause 8.4
                           (Permitted Deductions) or Clause 9.5 (Permitted
                           Payments);

                  9.1.2    permit or require the Issuer or any other Obligor to
                           pay, prepay, repay, redeem, purchase, voluntarily
                           terminate or otherwise acquire any of the Secured
                           Obligations owed to such Secured Creditor or any
                           person which it represents save to the extent
                           permitted by Clause 8.1 (Permitted Actions), Clause
                           8.2 (Pre-Acceleration Payment Priorities), Clause 8.3
                           (Post-Acceleration Payment Priorities), Clause 8.4
                           (Permitted Deductions) or Clause 9.5 (Permitted
                           Payments);

                  9.1.3    take, accept or receive the benefit of any Security
                           for, or in respect of any of the Secured Obligations
                           owed to such Secured Creditor or any person which it
                           represents other than (a) the Original Transaction
                           Security, (b) pursuant to the terms of the Relevant
                           Documents, or (c) to the extent permitted by Clause
                           8.1 (Permitted Actions);

                  9.1.4    take or receive from the Issuer or any other Obligor
                           by cash receipt, set off, any right of combination of
                           accounts or in any other manner whatsoever, the whole
                           or any part of the Secured Obligations owed to such
                           Secured Creditor or any person which it represents
                           save to the extent permitted by Clause 8.1 (Permitted
                           Actions), Clause 8.2 (Pre-Acceleration Payment
                           Priorities), Clause 8.3 (Post-Acceleration Payment
                           Priorities), Clause 8.4 (Permitted Deductions) or
                           Clause 9.5 (Permitted Payments);

                  9.1.5    except as permitted by Clause 7 (Amendments, Consents
                           and Waivers), agree to any amendment of the Relevant
                           Documents to which such Secured Creditor is a party;
                           or

                  9.1.6    take or omit to take any other action in relation to
                           the Relevant Documents, the Secured Obligations or
                           the Transaction Security whereby any ranking and/or
                           subordination contemplated by this Deed may be
                           impaired.

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<PAGE>

9.2      UNDERTAKINGS OF THE OBLIGORS

         Each Obligor hereby undertakes that it will not, and each Secured
         Creditor hereby acknowledges that no Obligor will, unless expressly
         permitted or required by this Deed:

         9.2.1    discharge any of the Secured Obligations save to the extent
                  permitted by Clause 8.1 (Permitted Actions), Clause 8.2
                  (Pre-Acceleration Payment Priorities), Clause 8.3
                  (Post-Acceleration Payment Priorities), Clause 8.4 (Permitted
                  Deductions) or Clause 9.5 (Permitted Payments);

         9.2.2    pay, prepay, repay, redeem, purchase, voluntarily terminate or
                  otherwise acquire any of the Secured Obligations save to the
                  extent permitted by Clause 8.1 (Permitted Actions), Clause 8.2
                  (Pre-Acceleration Payment Priorities), Clause 8.3
                  (Post-Acceleration Payment Priorities), Clause 8.4 (Permitted
                  Deductions) or Clause 9.5 (Permitted Payments);

         9.2.3    create or permit to subsist any Security for, or in respect
                  of, any of the Secured Obligations other than (a) the Original
                  Transaction Security, (b) pursuant to the terms of the
                  Relevant Documents, or (c) to the extent permitted by Clause
                  8.1 (Permitted Actions);

         9.2.4    discharge the whole or any part of the Secured Obligations by
                  cash payment, set-off, any right of combination of accounts or
                  in any other manner whatsoever save to the extent permitted by
                  Clause 8.1 (Permitted Actions), Clause 8.2 (Pre-Acceleration
                  Payment Priorities), Clause 8.3 (Post-Acceleration Payment
                  Priorities), Clause 8.4 (Permitted Deductions) or Clause 9.5
                  (Permitted Payments);

         9.2.5    except as permitted by Clause 7 (Amendments, Consents and
                  Waivers), agree to any amendment of the Relevant Documents to
                  which such Obligor is a party; or

         9.2.6    take or omit to take any other action in relation to the
                  Relevant Documents, the Secured Obligations or the Transaction
                  Security whereby any ranking and/or subordination contemplated
                  by this Deed may be impaired.

9.3      UNDERTAKINGS OF THE INTRA-GROUP BORROWERS

         Each Intra-Group Borrower hereby undertakes that it will not, and the
         Intra-Group Creditors and the Issuer hereby acknowledge that the
         Intra-Group Borrowers which owe Intra-Group Liabilities to them will
         not, except with the prior written consent of the Security Trustee
         (acting in accordance with the instructions of the Instructing Trustee)
         or as expressly permitted or required by this Deed:

         9.3.1    pay, prepay, repay, redeem, make any distribution in respect
                  of, purchase or acquire, any Intra-Group Liabilities in cash
                  or in kind or apply any money or property in or towards
                  discharge of any Intra-Group Liabilities;

         9.3.2    discharge any Intra-Group Liabilities by set off, cash
                  payment, any right of combination of accounts or in any other
                  manner whatsoever;

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<PAGE>

         9.3.3    create or permit to subsist any Security for, or in respect
                  of, any Intra-Group Liabilities unless permitted or required
                  to do so pursuant to the terms of the Indentures; or

         9.3.4    take or omit to take any other action in relation to the
                  Intra-Group Liabilities, the Intra-Group Documents, the
                  Relevant Documents, the Secured Obligations or the Transaction
                  Security whereby the ranking and/or subordination contemplated
                  by this Deed may be impaired.

9.4      UNDERTAKINGS OF THE INTRA-GROUP CREDITORS

         Each Intra-Group Creditor hereby undertakes that it will not and the
         Issuer and Intra-Group Borrowers which owe Intra-Group Liabilities to
         them hereby acknowledge that the Intra-Group Creditors will not, except
         with the prior written consent of the Security Trustee (acting in
         accordance with the instructions of the Instructing Trustee) or as
         expressly permitted or required by this Deed:

         9.4.1    demand or receive payment, prepayment, repayment, redemption
                  or any distribution in respect of any Intra-Group Liabilities
                  owed to such Intra-Group Creditor in cash or in kind or apply
                  any money or property in or towards discharge of any such
                  Intra-Group Liabilities;

         9.4.2    take or receive from the Issuer or other Intra-Group Borrower,
                  by cash receipt, set-off or any right of combination of
                  accounts or in any other manner whatsoever, the whole or any
                  part of Intra-Group Liabilities owed to such Intra-Group
                  Creditor;

         9.4.3    take, accept, permit to subsist or receive the benefit of any
                  Security for, or in respect of, any Intra-Group Liabilities
                  owed to such Intra-Group Creditor unless required or permitted
                  to do so pursuant to the terms of the Indentures; or

         9.4.4    take or omit to take any other action in relation to the
                  Intra-Group Liabilities, the Intra-Group Documents, the
                  Relevant Documents, the Secured Obligations or the Transaction
                  Security whereby the ranking and/or subordination contemplated
                  by this Deed may be impaired.

9.5      PERMITTED PAYMENTS

         9.5.1    Unless a Payment Stop Event is continuing or a Standstill
                  Period is in effect, the Obligors may make Permitted Payments
                  to the Secured Creditors (whether for their own account or for
                  the account of the persons they represent) on the relevant
                  Payment Dates under the Relevant Documents and may, in respect
                  of the Junior Notes, issue Junior PIK Notes (in accordance
                  with the provisions of the Junior Notes and/or the Junior Note
                  Indenture) to the holders of the Junior Notes on the relevant
                  Payment Dates under the Junior Note Indenture. Notwithstanding
                  the foregoing or any other provision of this Deed, the New
                  Bonding Facility Agent, the New Bonding Facility Banks and the
                  Senior Note Trustee may at all times receive payments on the
                  applicable Payment Dates. This sub-clause 9.5.1 shall not
                  prevent (i) the payment of amounts in the Mandatory Redemption
                  Escrow Account in accordance with sub-clause 8.3.1(a) of
                  Clause 8.3 (Post-Acceleration Payment Priorities) or
                  sub-clause 9.8.1 of

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<PAGE>

                  Clause 9.8 (Standstill Period and Payments from Escrow
                  Accounts) or (ii) the issue of Junior PIK Notes in accordance
                  with the provisions of Clause 9.9 (Effect of Payment Stop
                  Event and Standstill Period).

         9.5.2    The Intra-Group Borrowers may make, and the Intra-Group
                  Creditors may accept, any Permitted Payments in respect of
                  Intra-Group Documents or, as the case may be, Intra-Group
                  Liabilities PROVIDED THAT:

                  (a)      following the occurrence of an Event of Default which
                           is continuing under the Senior Notes, the Senior Note
                           Indenture, the Junior Notes or the Junior Note
                           Indenture, unless otherwise requested by the Security
                           Trustee in accordance with Clause 10.6 (Intra-Group
                           Creditors: No Action), the Intra-Group Borrowers
                           which are also Guarantors shall only be permitted to
                           make, and the Intra-Group Creditors shall only be
                           permitted to accept, such payments to the extent they
                           are made in order to fund the working capital or for
                           the cash management requirements of the Group in the
                           ordinary course of business; and

                  (b)      unless requested by the Security Trustee in
                           accordance with Clause 10.6 (Intra-Group Creditors:
                           No Action), such Permitted Payments shall in any
                           event not be permitted to be made following (i) the
                           occurrence of an Insolvency Event in relation to the
                           Intra-Group Creditor owed the relevant Intra-Group
                           Liabilities, or (ii) the taking of any Action or
                           Enforcement Action by any Secured Creditor (other
                           than by any of the New Bonding Facility Finance
                           Parties).

9.6      PAYMENT OBLIGATIONS CONTINUE

         No Obligor shall be released from the obligation to make any payment
         (including any payment of default interest) under any Relevant Document
         or any Intra-Group Document or in respect of any Intra-Group
         Liabilities which are not evidenced by an Intra-Group Document, by the
         operation of Clause 9.1 (Undertakings of Secured Creditors), Clause 9.2
         (Undertakings of the Obligors), Clause 9.3 (Undertakings of the
         Intra-Group Borrowers), Clause 9.4 (Undertakings of the Intra-Group
         Creditors), Clause 9.5 (Permitted Payments) or Clause 9.9 (Effect of
         Payment Stop Event and Standstill Period) even if its ability to make
         that payment is restricted or prohibited at any time by the terms of
         Clause 9.1 (Undertakings of Secured Creditors), Clause 9.2
         (Undertakings of the Obligors), Clause 9.3 (Undertakings of the
         Intra-Group Borrowers), 9.4 (Undertakings of the Intra-Group
         Creditors), Clause 9.5 (Permitted Payments) or Clause 9.9 (Effect of
         Payment Stop Event and Standstill Period).

9.7      ISSUE OF STANDSTILL NOTICE

         9.7.1    If the Senior Note Trustee becomes aware that a Standstill
                  Event has occurred, it shall deliver to the Security Trustee
                  (with a copy to the Issuer and the other Debt Representatives)
                  a Standstill Notice and promptly on receipt of such notice the
                  Security Trustee shall notify the other Secured Creditors of
                  such Standstill Event. Each Obligor hereby expressly consents
                  to each such notification. A Standstill Period shall commence
                  on the date of the issuance of the Standstill Notice by the
                  Senior Note Trustee. If the relevant Standstill Event is a
                  Payment

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<PAGE>

                  Stop Event the Standstill Notice delivered to the Security
                  Trustee shall state that to be the case.

         9.7.2    No Default with respect to the Senior Notes that existed or
                  was continuing on the date a Standstill Notice was issued
                  shall be, or be made, the basis of the issuance or an
                  instruction for the issuance of another Standstill Notice,
                  unless such Default shall have been cured or waived for a
                  period of not less than 90 consecutive days.

9.8      STANDSTILL PERIOD AND PAYMENTS FROM ESCROW ACCOUNTS

         Upon receipt of a Standstill Notice by the Security Trustee, the
         Security Trustee will promptly instruct the Escrow Bank:

         9.8.1    on the date of such instruction to pay all monies credited to
                  the Mandatory Redemption Escrow Account as of the date of such
                  Standstill Notice, and PROVIDED THAT on the day preceding the
                  date of such Standstill Notice no Standstill Period was in
                  effect, to the Security Trustee and the Security Trustee is
                  hereby irrevocably instructed by the Secured Creditors to pay
                  such monies in accordance with the Pre-Acceleration Payment
                  Priorities; and

         9.8.2    following such date and whilst a Standstill Period is
                  continuing, to hold any amounts credited to the Mandatory
                  Redemption Escrow Account in such account and the Security
                  Trustee shall not apply such amounts until the earlier of
                  cessation of such Standstill Period (in accordance with the
                  definition thereof) and the occurrence of a Payment Stop
                  Event. Following the cessation of the Standstill Period:

                  (a)      provided no Payment Stop Event is continuing and no
                           other Standstill Period is in effect, monies standing
                           to the credit of the Mandatory Redemption Escrow
                           Account shall be applied in accordance with Clause
                           8.2 (Pre-Acceleration Payment Priorities); and

                  (b)      if a Payment Stop Event is continuing, monies
                           standing to the credit of the Mandatory Redemption
                           Escrow Account shall be applied in accordance with
                           sub-clause 8.3.1(b) of Clause 8.3 (Post-Acceleration
                           Payment Priorities).

9.9      EFFECT OF PAYMENT STOP EVENT AND STANDSTILL PERIOD

         Whilst a Payment Stop Event is continuing or a Standstill Period is in
         effect, the Issuer shall not make and the Junior Note Trustee shall not
         accept any payments in respect of the Junior Notes (other than, to the
         extent permitted by this Deed, payments out of the Escrow Accounts in
         accordance with the priorities set out in this Deed) PROVIDED THAT
         nothing contained in this Deed shall prohibit the Issuer from issuing,
         and the Issuer shall be permitted to issue, and the Junior Note Trustee
         and the holders of the Junior Notes shall be entitled to receive,
         Junior PIK Notes in accordance with the terms of the Junior Notes and
         the Junior Note Indenture.

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<PAGE>

9.10     IMPACT OF PAYMENT STOP EVENT AND STANDSTILL NOTICES

         A failure to make a payment due as a result of a Payment Stop Event or
         a Standstill Notice shall not prevent the occurrence of a Default or an
         Event of Default as a consequence of that non-payment in relation to a
         Relevant Document.

9.11     PAYMENTS FOR ACCOUNT OF SECURITY TRUSTEE AND THE DEBT REPRESENTATIVES

         The provisions of this Clause 9 shall not prevent any of the Security
         Trustee, each Note Trustee and the New Bonding Facility Agent from
         receiving payments for its own account.

10.      ACTION AND ENFORCEMENT ACTION

10.1     GENERAL RESTRICTION

         10.1.1   Except as permitted by this Clause 10 (Action and Enforcement
                  Action), no Secured Creditor or Intra-Group Party shall take
                  any Action, and no Debt Representative shall instruct the
                  Security Trustee to take any Enforcement Action, at any time.

         10.1.2   Except as permitted by this Clause 10 (Action and Enforcement
                  Action), the Secured Creditors who are the beneficiaries under
                  the Italian Mortgages shall not take any Enforcement Action in
                  relation to the Italian Mortgages.

         10.1.3   The Secured Creditors hereby agree that no Secured Creditor
                  shall instruct, or purport to instruct, the Security Trustee
                  to take any Enforcement Action in relation to the Transaction
                  Security constituted by the Applicable Security Documents, if
                  the event giving rise to an Enforcement Event (as defined in
                  the relevant Applicable Security Document) does not also
                  constitute an Enforcement Event as defined in this Deed.

10.2     THE HOLDERS OF THE JUNIOR NOTES: PERMITTED ACTION

         10.2.1   If an Event of Default has occurred and is continuing under
                  the Junior Notes and/or the Junior Note Indenture and all
                  Secured Obligations arising under the Senior Notes and/or the
                  Senior Note Indenture have not been discharged in full, the
                  Junior Note Trustee (acting on the instructions of the
                  Required Holders of the Junior Notes) may on the earlier of:

                  (a)      the date on which the Secured Obligations arising
                           under the Senior Notes and the Senior Note Indenture
                           have been declared to be immediately due and payable;
                           or

                  (b)      the termination of any Standstill Period,

                  take any Action and, if the Senior Note Trustee has given its
                  prior written consent to the Junior Note Trustee and the
                  Security Trustee and if an Enforcement Event has occurred in
                  relation to the Secured Obligations under the Junior Notes
                  and/or the Junior Note Indenture, instruct the Security
                  Trustee to take Enforcement Action; PROVIDED, HOWEVER, THAT no
                  such Enforcement Event is required to have occurred in order
                  for the Junior Note Trustee to be entitled to instruct the
                  Security Trustee to take any action and/or give any notice
                  (including without limitation notices of charge) otherwise
                  permitted under the

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<PAGE>

                  applicable Security Documents (but subject to any requirements
                  therein) and relating to (i) the crystallisation of any
                  floating charge or security interest of a similar nature
                  and/or (ii) the perfection, preservation or protection of
                  security.

         10.2.2   Following the satisfaction in full of all Secured Obligations
                  arising under the Senior Notes and the Senior Note Indenture
                  and PROVIDED THAT an Event of Default has occurred and is
                  continuing under the Junior Notes and/or the Junior Note
                  Indenture, the Junior Note Trustee may (acting on the
                  instructions of the Required Holders of the Junior Notes) take
                  any Action in relation to the Secured Obligations owing under
                  the Junior Notes and/or the Junior Note Indenture and, if an
                  Enforcement Event has occurred in relation to the Secured
                  Obligations under the Junior Notes or the Junior Note
                  Indenture, instruct the Security Trustee to take Enforcement
                  Action; PROVIDED, HOWEVER, THAT no such Enforcement Event is
                  required to have occurred in order for the Junior Note Trustee
                  to be entitled to instruct the Security Trustee to take any
                  action and/or give any notice (including without limitation
                  notices of charge) otherwise permitted under the applicable
                  Security Documents (but subject to any requirements therein)
                  and relating to (i) the crystallisation of any floating charge
                  or security interest of a similar nature and/or (ii) the
                  perfection, preservation or protection of security.

10.3     THE HOLDERS OF THE SENIOR NOTES: PERMITTED ACTION

         If an Event of Default has occurred and is continuing under the Senior
         Notes and/or the Senior Note Indenture, the Senior Note Trustee may
         (acting on the instructions of the Required Holders of the Senior
         Notes) take any Action in relation to the Secured Obligations owing
         under the Senior Notes and/or the Senior Note Indenture and, if an
         Enforcement Event has occurred in relation to the Secured Obligations
         under the Senior Notes and/or the Senior Note Indentures, instruct the
         Security Trustee to take Enforcement Action; PROVIDED, HOWEVER, THAT no
         such Enforcement Event is required to have occurred in order for the
         Senior Note Trustee to be entitled to instruct the Security Trustee to
         take any action and/or give any notice (including without limitation
         notices of charge) otherwise permitted under the applicable Security
         Documents (but subject to any requirements therein) and relating to (i)
         the crystallisation of any floating charge or security interest of a
         similar nature and/or (ii) the perfection, preservation or protection
         of security.

10.4     NEW BONDING FACILITY AGENT: PERMITTED ACTION

         Upon the occurrence of an Event of Default under clause 24.1
         (Non-Payment) of the New Bonding Facility Agreement and at all times
         thereafter whilst the same is continuing, the New Bonding Facility
         Agent may (on its own behalf and on behalf of the New Bonding Facility
         Banks):

         10.4.1   having notified the other Debt Representatives of the
                  occurrence of such Event of Default, take the action set out
                  in sub-clause 8.2.2 of Clause 8.2 (Pre-Acceleration Payment
                  Priorities) (subject to the restrictions set out in sub-clause
                  8.2.2); and

         10.4.2   on the earlier of:

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<PAGE>

                  (a)      the date falling 180 days or more after notice to the
                           Security Trustee of the occurrence of such Event of
                           Default under the New Bonding Facility Agreement; and

                  (b)      the date on which the Secured Obligations arising
                           under the Senior Notes and the Senior Note Indenture
                           have been accelerated,

                  take any Action in relation to the Secured Obligations arising
                  under the New Bonding Facility Agreement.

10.5     THE DEBT REPRESENTATIVES: PERMITTED ACTION ON AN INSOLVENCY EVENT

         Notwithstanding the provisions of Clause 10.2 (The Holders of the
         Junior Notes: Permitted Action) and Clause 10.4 (New Bonding Facility
         Agent: Permitted Action), the Security Trustee (if so instructed by
         each Note Trustee and to the extent instructed to do so) shall and the
         New Bonding Facility Agent (on behalf of the New Bonding Facility
         Finance Parties) may, following the occurrence of an Insolvency Event,
         demand payment of and/or sue for the recovery of the Secured
         Obligations, commence any insolvency proceedings and/or prove in the
         liquidation of the Obligors (or any of them) for any and all of the
         Secured Obligations.

10.6     INTRA-GROUP CREDITORS: NO ACTION

         10.6.1   Subject to sub-clause 10.6.2 below, no Intra-Group Creditor
                  shall (without the prior written consent of the Security
                  Trustee acting in accordance with the instructions of the
                  Instructing Trustee) take or be entitled to take any Action in
                  relation to any Intra-Group Liabilities.

         10.6.2   Following the occurrence of a Payment Stop Event which is
                  continuing each Intra-Group Creditor shall, at the request of
                  the Security Trustee (acting on the instructions of the
                  Instructing Trustee):

                  (a)      release each Intra-Group Borrower from all or part of
                           the Intra-Group Liabilities owed to it; and/or

                  (b)      request that each Intra-Group Borrower provide cash
                           collateral in favour of the Security Trustee up to an
                           amount equal to the Intra-Group Liabilities owed by
                           such Intra-Group Borrower and each Intra-Group
                           Borrower agrees to provide the same; and/or

                  (c)      subject to Clause 5.2 (Additional Security), assign
                           the benefit of its claims under all Intra-Group
                           Documents to which it is a party to the Security
                           Trustee or, if any Intra-Group Liabilities are not
                           evidenced by Intra-Group Documents, assign all of its
                           rights in respect of such Intra-Group Liabilities to
                           the Security Trustee; and/or

                  (d)      make a claim against the relevant Intra-Group
                           Borrower for the recovery of all or part of the
                           Intra-Group Liabilities owed to it and promptly pay
                           the proceeds of such recovery to the Security
                           Trustee.

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10.7     PAYMENT OF DISTRIBUTIONS

         After the occurrence of an Insolvency Event in relation to any Obligor,
         the person responsible for the distribution of the assets of that
         Obligor shall be directed by each Debt Representative to pay any
         distributions in respect of the Secured Obligations to the Security
         Trustee until the Secured Obligations have been paid in full.

11.      TURNOVER BY THE SECURED CREDITORS

11.1     TURNOVER

         If at any time prior to the discharge in full of the Secured
         Obligations, any Secured Creditor (other than the Security Trustee)
         receives or recovers:

         11.1.1   any payment or distribution in respect of, or any payment on
                  account of or in relation to, the whole or any part of the
                  Secured Obligations which is not permitted by Clause 8.1
                  (Permitted Actions), Clause 8.2 (Pre-Acceleration Payment
                  Priorities), Clause 8.3 (Post-Acceleration Payment
                  Priorities), Clause 9.5 (Permitted Payments), or Clause 10
                  (Action and Enforcement Action);

         11.1.2   any amount by way of cash receipt, set-off, any right of
                  combination of accounts or in any other manner whatsoever in
                  respect of the whole or any part of the Secured Obligations
                  which is not permitted by Clause 8.1 (Permitted Actions),
                  Clause 8.2 (Pre-Acceleration Payment Priorities), Clause 8.3
                  (Post-Acceleration Payment Priorities) or Clause 9.5
                  (Permitted Payments);

         11.1.3   the proceeds of any enforcement of, or recourse to, any
                  Transaction Security other than as permitted by this Deed;

         11.1.4   any distribution in cash or in kind made as a result of the
                  occurrence of an Insolvency Event in respect of any Obligor
                  other than as permitted by this Deed; or

         11.1.5   any amount as a result of the enforcement of, or recourse to,
                  any Transaction Security or the exercise of any rights or
                  powers under the Security Documents under the circumstances
                  specified in Clause 6.8 (No Independent Power),

         that Secured Creditor will pay an amount equal to that receipt or
         recovery to the Security Trustee, to be held on trust by the Security
         Trustee for application in accordance with the terms of this Deed
         PROVIDED THAT each Note Trustee need only comply with this Clause 11 to
         the extent it still holds such amount and is able to pay such amount to
         the Security Trustee and any amount which is not so held and not so
         capable of being so paid by the relevant Note Trustee shall be notified
         (in writing) by the relevant Note Trustee to the Issuer and the
         Security Trustee and shall constitute a "TRUE UP AMOUNT" for the
         purpose of Clause 8 (Ranking of Secured Obligations and Priorities),
         Schedule 4 (Pre-Acceleration Payment Priorities) and Schedule 5
         (Post-Acceleration Payment Priorities).

11.2     SUMS RECEIVED BY OBLIGORS

         If any Intra-Group Creditor receives any sum in relation to any
         Intra-Group Liability other than pursuant to Clause 9.5 (Permitted
         Payments), that sum shall be promptly paid to the Security Trustee for
         application in accordance with the terms of this Deed, and pending such
         payment it shall be held on trust for the Security Trustee.

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<PAGE>

12.      SHARING

12.1     RECOVERING SECURED CREDITOR'S RIGHTS

         12.1.1   Any amount (the "SHARED AMOUNT") paid by a Secured Creditor (a
                  "RECOVERING SECURED CREDITOR") to the Security Trustee under
                  Clause 10 (Action and Enforcement Action) or Clause 11
                  (Turnover by the Secured Creditors) shall be deemed to have
                  been paid by the relevant Obligor and shall be distributed in
                  accordance with the terms of this Deed.

         12.1.2   On a distribution of a Shared Amount by the Security Trustee,
                  the Recovering Secured Creditor will be subrogated to the
                  rights of the Secured Creditors which have shared in the
                  distribution of the Shared Amount.

         12.1.3   If and to the extent that the Recovering Secured Creditor is
                  not able to rely on its rights under sub-clause 12.1.2 of this
                  Clause 12.1 the relevant Obligor shall be liable to the
                  Recovering Secured Creditor for a debt equal to the Shared
                  Amount received or recovered by the Recovering Secured
                  Creditor and paid to the Security Trustee which is immediately
                  due and payable.

12.2     REVERSAL OF REDISTRIBUTION

         If any part of the Shared Amount received or recovered by a Recovering
         Secured Creditor becomes repayable and is repaid by that Recovering
         Secured Creditor, then:

         12.2.1   each Secured Creditor which has received a share of the
                  relevant Shared Amount shall, upon request of the Security
                  Trustee, pay to the Security Trustee for account of that
                  Recovering Secured Creditor an amount equal to the appropriate
                  part of its share of the Shared Amount (together with an
                  amount as is necessary to reimburse that Recovering Secured
                  Creditor for its proportion of any interest on the Shared
                  Amount which that Recovering Secured Creditor is required to
                  pay); and

         12.2.2   that Recovering Secured Creditor's rights of subrogation in
                  respect of any reimbursement shall be cancelled and the
                  relevant Obligor will be liable to the reimbursing Secured
                  Creditors for the amount so reimbursed.

12.3     DEFERRAL OF SUBROGATION

         No Secured Creditor or Obligor will exercise any rights which it may
         have by reason of the performance by it of its obligations under the
         Relevant Documents to take the benefit (in whole or in part and whether
         by way of subrogation or otherwise) of any rights under the Relevant
         Documents (in this clause the "SUBROGATED RIGHTS") of any Secured
         Creditor which ranks ahead of it in accordance with the priorities set
         out in Clause 8 (Ranking of Secured Obligations and Priorities) until
         such time as all of the Secured Obligations of each Secured Creditor
         which rank ahead of it in accordance with the priorities set out in
         Clause 8 (Ranking of Secured Obligations and Priorities) have been
         discharged in full.

12.4     PRESERVATION OF LIABILITIES

         12.4.1   Except where expressly provided by this Deed and subject to
                  Clause 24.1 (Control Provisions), nothing contained in this
                  Deed is intended to or shall impair, as between any Obligor
                  and any Secured Creditor or, as the case may be, between any
                  Intra-Group Creditor and any Intra-Group Borrower:

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<PAGE>

                  (a)      the obligations of any Obligor under the Relevant
                           Documents to which such Obligor is party; or

                  (b)      the obligations of any Intra-Group Borrower under the
                           Intra-Group Documents (if any) to which it is a party
                           and in respect of all of the relevant Intra-Group
                           Liabilities.

         12.4.2   Each Obligor and each Intra-Group Borrower expressly
                  acknowledges that no failure or delay by a Secured Creditor,
                  or as the case may be, an Intra-Group Creditor in exercising
                  any of its respective rights in relation to a default or an
                  Event of Default as a result of the provisions of this Deed,
                  shall operate as a waiver or variation of its rights with
                  respect thereto.

13.      SECURITY TRUSTEE AS PARTY TO ESCROW AGREEMENT

13.1     ESTABLISHMENT OF ESCROW ACCOUNTS

         The Escrow Bank confirms that as at the date of this Deed each of the
         Escrow Accounts has been established and is in operation in accordance
         with the terms of the Escrow Agreement.

13.2     SECURITY TRUSTEE TO MAINTAIN MANDATES

         The Issuer undertakes that it will ensure that the Escrow Accounts and
         any mandates in respect of the Escrow Accounts will continue to be
         operative and that the terms of such mandates will not be amended
         without the prior written consent of the Debt Representatives and the
         Security Trustee.

13.3     FUNDS INVESTED TO CARRY INTEREST

         The Escrow Bank will procure that all amounts standing to the credit of
         the Escrow Accounts from time to time will carry interest at such rate
         as may be agreed from time to time between the Escrow Bank and the
         Issuer.

13.4     RECONCILIATIONS

         On or before the fifth Business Day of each calendar month, the
         Security Trustee shall carry out a reconciliation of the balances of
         each Escrow Account for the immediately preceding month against its
         record of the directions given by it to the Escrow Bank and shall
         promptly contact the Escrow Bank in order to resolve any discrepancy
         which may be identified.

14.      SECURITY TRUSTEE'S ACTIONS

14.1     SECURITY TRUSTEE'S INSTRUCTIONS

         14.1.1   Except as otherwise expressly provided herein or in the other
                  Relevant Documents to which the Security Trustee is a party,
                  the Security Trustee shall for the purposes of this Deed and
                  the other Relevant Documents to which it is a party act solely
                  in accordance with any written instructions given to it by (or
                  on behalf of) a Debt Representative and shall assume without
                  enquiry:

                  (a)      that any instructions received by it from a Note
                           Trustee are duly given by such Note Trustee as
                           trustee for the holders of the relevant Notes;

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<PAGE>

                  (b)      that any instructions received by it from the New
                           Bonding Facility Agent are duly given by the New
                           Bonding Facility Agent as agent and trustee for the
                           New Bonding Facility Banks; and

                  (c)      unless it has received actual written notice of
                           revocation, that any instructions or directions given
                           by a Debt Representative have not been revoked and no
                           revocation of any such instructions by a Debt
                           Representative shall affect any action of the
                           Security Trustee in reliance upon such instruction or
                           direction prior to actual receipt of the notice of
                           revocation.

         14.1.2   The Security Trustee shall be entitled to request
                  clarification of any instruction or direction received by it
                  from (or on behalf of) a Debt Representative, and pending
                  receipt of such clarification to its satisfaction may refrain
                  from acting and shall have no liability for the consequences
                  of its refraining from acting.

         14.1.3   The Security Trustee shall be entitled to carry out all
                  dealings (including the giving of any notice under the
                  Relevant Documents) with the holders of any Notes and the
                  lenders under the New Bonding Facility Agreement through the
                  relevant Debt Representatives.

         14.1.4   If in issuing any instruction a Debt Representative breaches
                  any rights or restrictions set out in the applicable Relevant
                  Documents or otherwise, this shall not invalidate the
                  instruction unless the Security Trustee has been informed (in
                  writing) by the relevant Debt Representative before it
                  commences to act on such instruction that such instruction was
                  invalid and should not be acted on. If the Security Trustee is
                  so informed after it has commenced to act on an instruction
                  the validity of any action taken shall not be affected but the
                  Security Trustee shall take no further action in accordance
                  with such instruction, except to the extent that it has become
                  legally obliged to do so.

         14.1.5   For the purposes of this Deed and any other Relevant Documents
                  to which it is a party the Security Trustee shall, in the
                  absence of manifest error, be entitled to rely conclusively
                  upon any certificates, written notices, written requests or
                  written instructions received by it pursuant hereto or thereto
                  without making any further enquiries or incurring any
                  liability and, in the absence of any such certificates,
                  written notices, written requests or written instructions,
                  shall not be bound to take any action or refrain from taking
                  any action under this Deed or any other Relevant Document to
                  which it is a party or apply any amounts received or recovered
                  in connection with the realisation or enforcement of all or
                  any part of the Transaction Security.

         14.1.6   For the purposes of this Deed and any other Relevant Document
                  to which it is a party, the Security Trustee may carry out
                  what in its discretion it determines to be administrative acts
                  (any such determination being, in the absence of manifest
                  error, binding on all Parties), or acts which are incidental
                  to any instruction, without any written instructions (though
                  not contrary to any such written instruction), but so that no
                  such instruction shall have any effect in relation to

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<PAGE>

                  any administrative or incidental act performed prior to actual
                  receipt of such instruction by the Security Trustee.

         14.1.7   Except as otherwise provided in sub-clause 19.2.3 of Clause
                  19.2 (Security Trustee's Lien) the Security Trustee is
                  entitled at all times to act without having been instructed by
                  a Debt Representative in order to protect its own position and
                  interests in its personal capacity as Security Trustee
                  (including its own personal financial interest).

         14.1.8   The Security Trustee shall, in the absence of manifest error,
                  be entitled to assume that all written information, written
                  notices, written instructions or certifications received from
                  a Secured Creditor or an Obligor under or in connection with
                  this Deed and any other Relevant Document to which it is a
                  party are authentic, true, complete and accurate and have been
                  issued by a duly authorised representative of such Secured
                  Creditor or Obligor and shall not be required to make further
                  enquiries or incur any liabilities in respect thereof.

         14.1.9   The Security Trustee shall take such action (including,
                  without limitation, the exercise of all rights, discretions or
                  powers and the granting of consents or releases) or, as the
                  case may be, refrain from taking such action under or pursuant
                  to this Deed or any other Relevant Document to which it is a
                  party as the relevant Debt Representative shall specifically
                  direct the Security Trustee in writing from time to time.
                  Unless and until the Security Trustee shall have received such
                  directions, the Security Trustee shall not take any action
                  under this Deed or any other Relevant Document to which it is
                  a party PROVIDED THAT it may unless required not to do so (but
                  shall not be obliged to) take such action permitted under the
                  terms of this Deed or any other Relevant Document to which it
                  is a party as it believes necessary or appropriate to protect
                  the interests of the Secured Creditors thereunder but the
                  entities granting any Security shall not be concerned with
                  whether the Security Trustee is acting in accordance with
                  these provisions and shall be conclusively entitled to assume
                  that the Security Trustee has all the necessary right, title
                  and authority.

14.2     SECURITY TRUSTEE'S DISCRETIONS

         The Security Trustee may:

         14.2.1   assume, unless it has, in its capacity as Security Trustee for
                  the Secured Creditors, received actual notice to the contrary
                  from the relevant Debt Representative, that (a) any
                  representation made or deemed to be made by any party to the
                  Relevant Documents is true; (b) no Standstill Notice has been
                  served and (c) no Event of Default, Insolvency Event or
                  Enforcement Event has occurred;

         14.2.2   if it receives any instructions or directions from a Debt
                  Representative to take any action in relation to this Deed or
                  any other Relevant Document to which it is a party or to the
                  Transaction Security, assume that all applicable conditions
                  for taking that action have been satisfied;

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<PAGE>

         14.2.3   engage, pay for and rely on the opinion or advice of or a
                  certificate or any information obtained from any lawyer,
                  accountant, surveyor or other expert (whether obtained by the
                  Security Trustee, by any other Secured Creditor or by any
                  other person) and shall not be responsible for any loss
                  occasioned by so acting and any such opinion, advice,
                  certificate or information may be sent or obtained by letter,
                  facsimile or e-mail transmission and the Security Trustee
                  shall not be liable for acting on any opinion, advice,
                  certificate or information purporting to be so conveyed
                  although the same shall contain some error or shall not be
                  authentic;

         14.2.4   in the absence of manifest error, accept and rely upon:

                  (a)      any written notice, written information, written
                           communication, certificate, written legal opinion or
                           other document believed by it to be genuine and
                           correct;

                  (b)      as to any matters of fact which might reasonably be
                           expected to be within the knowledge of a Secured
                           Creditor or an Obligor or any other person or any of
                           their respective directors, officers, partners or
                           employees or authorised representatives, any
                           certificate signed by or on behalf of that person as
                           sufficient evidence thereof;

                  (c)      any certificate purporting to be duly signed by the
                           persons giving such notice or certificate as having
                           been duly signed by or on behalf of such person; and

                  (d)      any certificate to the effect that any particular
                           dealing or transaction or step or thing is, in the
                           opinion of the persons so certifying, expedient as
                           sufficient evidence that it is expedient,

                  without incurring any liability to such Secured Creditor,
                  Obligor or other person or any of their respective directors,
                  officers, partners or employees or authorised representatives
                  for so accepting and relying, without having any duty to
                  enquire as to the accuracy thereof and without being bound to
                  ask for further evidence or authority or otherwise;

         14.2.5   without being liable to any person for any delay or loss
                  caused thereby, refrain from acting in accordance with the
                  instructions of any Debt Representative (including any
                  instructions to take any legal action or proceeding arising
                  out of or in connection with this Deed or any other Relevant
                  Document to which it is a party) or from taking any other
                  action pursuant to this Deed and/or any other Relevant
                  Document to which it is a party unless and until it has been
                  indemnified and/or provided with such security as it may in
                  its absolute discretion require (whether by way of payment in
                  advance or otherwise) against all actions, proceedings, claims
                  and demands to which it may render itself liable and against
                  all charges, damages, losses, expenses (including, without
                  limitation, legal fees and other disbursements), claims and
                  liabilities (including, without limitation, Tax liabilities)
                  which it may incur or expend or to which it may be exposed by
                  so doing;

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<PAGE>

         14.2.6   in the exercise of any of its rights or performance of any of
                  its duties, obligations and responsibilities under this Deed
                  and/or any other Relevant Document to which it is a party, act
                  through its agents selected by it which may be corporations,
                  partnerships or individuals, whether or not lawyers or other
                  professional persons, to transact or conduct, or concur in
                  transacting or conducting, any business and to do or concur in
                  doing all acts required to be done by the Security Trustee
                  (including the receipt and payment of money) and the Security
                  Trustee shall not be responsible for any misconduct or
                  omission on the part of, or be bound to supervise the
                  proceedings or acts of, any such agent PROVIDED THAT the
                  Security Trustee has exercised reasonable care in appointing
                  such person. Any such agent shall be entitled to charge and be
                  paid all usual and properly incurred fees, expenses and other
                  charges for its services;

         14.2.7   retain for its own benefit, without liability to account to
                  any other person, any fee or other sum properly received by it
                  for its own account;

         14.2.8   provide advisory or other services to or engage in any kind of
                  business with any person party to or affected by the
                  arrangements the subject of any Relevant Document and may do
                  so without any obligation to account to or disclose any such
                  arrangement to any person; and

         14.2.9   assume that all the Obligors are in compliance with their
                  obligations under the Relevant Documents to which they are a
                  party until it has actual notice to the contrary.

14.3     SECURITY TRUSTEE'S OBLIGATIONS

         The Security Trustee shall promptly send copies to the relevant Debt
         Representatives and, to the extent required under the Relevant
         Documents, the Issuer of any notice or document received by it in its
         capacity as Security Trustee under any Relevant Document to which it is
         a party.

14.4     EXCLUDED OBLIGATIONS

         Notwithstanding anything to the contrary expressed or implied in this
         Deed or any Relevant Document to which it is a party, the Security
         Trustee shall not:

         14.4.1   be bound to enquire as to (a) the occurrence of any Event of
                  Default, Insolvency Event or Enforcement Event or any facts or
                  circumstances leading to the occurrence of any such event; or
                  (b) the occurrence of any event or otherwise leading to the
                  issuance of a Standstill Notice or (c) the performance,
                  default or any breach by any Obligor of its respective
                  obligations under any of the Relevant Documents to which it is
                  a party and, for the avoidance of doubt, shall not be under
                  any obligation to monitor or supervise the actions of any
                  person under any Relevant Document or any Intra-Group
                  Document;

         14.4.2   be bound to account to any other Secured Creditor or any other
                  party for any sum or the profit element of any sum properly
                  received by it for its own account;

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<PAGE>

         14.4.3   unless ordered to do so by a court of competent jurisdiction,
                  be bound to disclose to any other person (including any
                  Secured Creditor or Obligor) any confidential information and
                  each Secured Creditor and Obligor agrees that it shall not
                  take any action to obtain from the Security Trustee any such
                  confidential information;

         14.4.4   be under any obligations other than those which are expressly
                  and specifically provided for in this Deed, the Escrow
                  Agreement or any Security Documents;

         14.4.5   have or be deemed to have any duty, obligation or
                  responsibility to, or relationship of trust or agency with the
                  Issuer or any other Obligor (save for the duties, obligations
                  or responsibilities pursuant to Clause 5.3 (Release of
                  Transaction Security on Discharge of Secured Obligations),
                  Clause 5.4 (Release of Transaction Security in Connection with
                  Permitted Disposals), Clause 8.2 (Pre-Acceleration Payment
                  Priorities) and Clause 8.3 (Post-Acceleration Payment
                  Priorities));

         14.4.6   have or be deemed to have any duty, obligation or
                  responsibility whatsoever in respect of the Relevant Documents
                  (other than as expressly and specifically provided under this
                  Deed, the Escrow Agreement or any Security Documents) or any
                  of the terms and conditions relating thereto, or any of the
                  acts or omissions of any of the parties thereunder;

         14.4.7   have any obligation to marshal any Transaction Security;

         14.4.8   be required by anything contained in this Deed or any other
                  Relevant Document to which it is a party to expend or risk its
                  own funds or otherwise incur any financial liability in the
                  performance of any of its duties or to exercise any of its
                  rights thereunder;

         14.4.9   in any circumstances be obliged to give its own indemnity to
                  any Delegate or to become a mortgagee in possession (or the
                  equivalent under the local law of any of the Security
                  Documents);

         14.4.10  have any obligation to effect or consider the adequacy of any
                  insurance;

         14.4.11  be bound to obtain, request or maintain any foreign exchange
                  approval necessary for the conversion of any sum received by
                  the Security Trustee in a currency other than that in which
                  the Secured Obligations of the relevant Secured Creditors are
                  denominated; or

         14.4.12  have or be deemed to have any duty, obligation or
                  responsibility whatsoever in respect of monitoring compliance
                  by any Obligors or any Debt Representative with their
                  respective obligations under any of the Relevant Documents to
                  which they are a party.

14.5     EXCLUSION OF SECURITY TRUSTEE'S LIABILITY

         Unless caused directly by its negligence or wilful misconduct the
         Security Trustee shall not accept responsibility or be liable to any
         Obligor or Secured Creditor or any other person:

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<PAGE>

         14.5.1   for the adequacy, accuracy and/or completeness of any
                  information supplied by the Security Trustee or any other
                  person in connection with this Deed and/or the other Relevant
                  Documents to which it is a party or the transactions
                  contemplated hereunder or thereunder, or any other agreement,
                  arrangement or document entered into, made or executed in
                  anticipation of, pursuant to or in connection with this Deed
                  and/or the other Relevant Documents to which it is a party;

         14.5.2   for the legality, validity, effectiveness, adequacy or
                  enforceability of the Relevant Documents to which it is a
                  party or the Transaction Security or any other agreement,
                  arrangement or document entered into, made or executed in
                  anticipation of, pursuant to or in connection with the
                  Relevant Documents to which it is a party or the Transaction
                  Security;

         14.5.3   for any losses to any person or any liability arising as a
                  result of taking or refraining from taking any action in
                  relation to any of the Relevant Documents to which it is a
                  party or the Transaction Security or otherwise, whether in
                  accordance with an instruction received or otherwise;

         14.5.4   for the exercise of, or the failure to exercise, any
                  judgement, discretion or power given to it by or in connection
                  with any of the Relevant Documents to which it is a party, the
                  Transaction Security or any other agreement, arrangement or
                  document entered into, made or executed in anticipation of,
                  pursuant to or in connection with the Relevant Documents to
                  which it is a party or the Transaction Security;

         14.5.5   for any shortfall which arises on the enforcement of the
                  Transaction Security, or for any deficiency or additional
                  payment, as the case may be, which might arise because the
                  Security Trustee is subject to any Tax in respect of the
                  Transaction Security or any part thereof or any income
                  therefrom or any proceeds thereof;

         14.5.6   for any Obligor or any other person acting or failing to act
                  in accordance with any of the Relevant Documents to which it
                  is a party, or in respect of any moneys which are received or
                  for any acts or omissions on the part of any Obligor or any
                  other person (including any bank, Depositary, manager,
                  custodian, manager, administrator, servicer or other
                  intermediary);

         14.5.7   for any decline in value due to currency conversions made
                  pursuant to the Relevant Documents;

         14.5.8   for any moneys other than sums actually received by the
                  Security Trustee which have not been distributed or paid to
                  the Secured Creditor or the persons entitled or at the time of
                  payment believed by the Security Trustee to be entitled
                  thereto; or

         14.5.9   for any costs, charges, losses, damages, liabilities or
                  expenses arising from or connected with any realisation of the
                  Transaction Security or from any act, default, omission or
                  misconduct of the Security Trustee or its officers,

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<PAGE>

                  employees or agents in relation to the Transaction Security or
                  in connection with the Relevant Documents.

14.6     NO PROCEEDINGS

         Each Party (other than the Security Trustee) agrees for the benefit of
         the Security Trustee and its officers, employees and agents that it
         will not assert any claim or take proceedings against any of its
         officers, employees and agents in respect of any claim it might have
         against the Security Trustee or in respect of any act or omission of
         any kind by that officer, employee or agent in relation to the Relevant
         Documents and, subject to sub-clause 1.7.2 of Clause 1.7 (Third-Party
         Rights) and the provisions of Contracts (Rights of Third Parties) Act
         1999, any officer, employee or agent of the Security Trustee may rely
         on this Clause 14.6.

14.7     OWN RESPONSIBILITY

         The Security Trustee is entering into this Deed on the understanding
         that at all times each Secured Creditor has itself been, and will
         continue to be, solely responsible for making its own independent
         appraisal of and investigation into all risks arising under or in
         connection with the Relevant Documents including but not limited to:

         14.7.1   the financial condition, creditworthiness, condition, affairs,
                  status and nature of the Obligors or any other person;

         14.7.2   the legality, validity, effectiveness, adequacy and
                  enforceability of each of the Security Documents, the
                  Transaction Security and any other Relevant Documents,
                  agreement, arrangement or document entered into, made or
                  executed in anticipation of, pursuant to or in connection with
                  the Security Documents, the Transaction Security or the other
                  Relevant Documents;

         14.7.3   whether that Secured Creditor has recourse, and the nature and
                  extent of that recourse, against any Obligor or any other
                  person or any of their respective assets under or in
                  connection with the Relevant Documents, the transactions
                  contemplated in the Relevant Documents or any other agreement,
                  arrangement or document entered into, made or executed in
                  anticipation of, pursuant to or in connection with the
                  Relevant Documents;

         14.7.4   the adequacy, accuracy and/or completeness of any information
                  provided by any person in connection with the Relevant
                  Documents, the transactions contemplated in the Relevant
                  Documents or any other agreement, arrangement or document
                  entered into, made or executed in anticipation of, pursuant to
                  or in connection with the Relevant Documents; and

         14.7.5   the right or title of any person in or to, or the value or
                  sufficiency of any part of the Transaction Security, the
                  priority of any of the Transaction Security or the existence
                  of any encumbrance affecting the Transaction Security,

         and each Secured Creditor warrants to the Security Trustee that it has
         not relied on and will not at any time rely on the Security Trustee in
         respect of any of these matters.

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14.8     NO RESPONSIBILITY TO PERFECT SECURITY

         The Security Trustee shall not be liable for any failure, omission or
         defect in perfecting or protecting its rights under the Transaction
         Security or the priority of such Transaction Security, including,
         without limitation, any failure to:

         14.8.1   require the deposit with it of any deed or document
                  certifying, representing or constituting the title of any
                  Obligor to any of the Transaction Security;

         14.8.2   obtain any licence, consent, approval or other authority from
                  any person required or necessary for the execution, delivery,
                  legality, validity, enforceability or admissibility in
                  evidence of any of the Security Documents or the Transaction
                  Security or any part thereof;

         14.8.3   register, file or record or otherwise protect any of the
                  Transaction Security (or the priority of any of the Security)
                  or any Security Documents (or any amendments thereto) under
                  any applicable laws in any jurisdiction or to give notice to
                  any person of the execution of any of the Security Documents
                  (or any amendments thereto) or of the Transaction Security;

         14.8.4   take, or require any of the Obligors to take, any steps which
                  are or might be required to perfect its title to any of the
                  assets subject to the Transaction Security or to render the
                  Transaction Security effective or to secure the creation of
                  any ancillary security interest under the laws of any
                  jurisdiction;

         14.8.5   take, or require any Party to take, any steps which are or
                  might be required to render (a) the Security Documents, (b)
                  any amendment to the Security Documents, (c) any assignment
                  and/or transfer by a Party of all of its rights and
                  obligations under any of the Relevant Documents, or (d) the
                  appointment of a successor pursuant to Clause 21.4 (Other
                  Parties), effective, valid and enforceable under the laws of
                  any jurisdiction;

         14.8.6   require any further assurances in relation to any of the
                  Security Documents; or

         14.8.7   ensure that any sums are received into any account of any
                  Obligor or any other person or in respect of the receipt of
                  the same.

14.9     CUSTODIANS AND NOMINEES

         The Security Trustee may appoint and pay any person to act as a
         custodian or nominee on any terms in relation to any assets of the
         trust constituted by this Deed as the Security Trustee may reasonably
         determine, including for the purpose of depositing with a custodian any
         of the Security Documents and the Security Trustee shall not be
         responsible for any loss, liability, expense, demand, cost, claim or
         proceedings incurred by reason of the misconduct, omission or default
         on the part of any such person appointed by it under this Deed
         (PROVIDED THAT the Security Trustee has exercised reasonable care in
         appointing such person) or be bound to supervise the proceedings or
         acts of any such person.

14.10    ACCEPTANCE OF TITLE

         The Security Trustee shall be entitled to accept without enquiry, and
         shall not be obliged to investigate, such right and title as any
         Obligor may have to any of the assets subject to

                                     - 51 -

<PAGE>

         the Transaction Security and shall not be bound to examine or enquire
         into or be liable for any defect or failure in the right or title of
         any Obligor to any of the assets subject to the Transaction Security or
         any part thereof whether such defect or failure was known to the
         Security Trustee or might have been discovered upon examination or
         enquiry and whether capable of remedy or not.

14.11    REFRAIN FROM ILLEGALITY

         The Security Trustee may refrain from doing anything which in its
         opinion would or might be contrary to any relevant law, directive or
         regulation of any jurisdiction or which would or might otherwise render
         it liable to any person, and the Security Trustee may do anything which
         is, in its absolute discretion, necessary to comply with any such law,
         directive or regulation of any such jurisdiction.

14.12    POWERS SUPPLEMENTAL

         The rights, powers and discretions conferred upon the Security Trustee
         by this Deed shall be supplemental to those conferred on it by the
         Trustee Acts and in addition to any which may be vested in the Security
         Trustee by general law or otherwise.

14.13    MERGER, ETC.

         Any corporation into which the Security Trustee may be merged or
         converted or with which it may be consolidated, or any corporation
         resulting from any merger, conversion or consolidation to which the
         Security Trustee shall be a party, or any corporation succeeding to all
         or substantially all the corporate trust business of the Security
         Trustee, shall be the successor of the Security Trustee hereunder
         without the execution or filing of any paper or any further act on the
         part of any Party.

14.14    DISAPPLICATION

         Section 1 of the Trustee Act 2000 shall not apply to the duties of the
         Security Trustee in relation to the trusts constituted by this Deed.
         Where there are any inconsistencies between the Trustee Acts and the
         provisions of this Deed, the provisions of this Deed shall, to the
         extent allowed by law, prevail and, in the case of any such
         inconsistency with the Trustee Act 2000, the provisions of this Deed
         shall constitute a restriction or exclusion for the purposes of that
         Act.

15.      RESIGNATION OF SECURITY TRUSTEE

15.1     RESIGNATION OF SECURITY TRUSTEE

         Subject to the provisions of this Clause 15, the Security Trustee may
         resign at any time without assigning any reason and without being
         responsible for any costs, charges or expenses occasioned by such
         resignation.

15.2     RESIGNATION OF SECURITY TRUSTEE AND APPOINTMENT OF SUCCESSOR

         The Security Trustee may:

         15.2.1   resign and appoint one of its affiliates as successor by
                  giving not less than 15 Business Days notice in writing to the
                  other Secured Creditors, the Escrow Bank and the Issuer; or

         15.2.2   resign, without appointing a successor, by giving not less
                  than 15 Business Days notice in writing to the other Secured
                  Creditors, the Escrow Bank and the

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<PAGE>

                  Issuer and requesting the Debt Representatives to appoint a
                  financial institution of recognised standing in the London
                  banking market, and acceptable to the Issuer (acting
                  reasonably), as a successor Security Trustee. If the Debt
                  Representatives have not appointed a successor Security
                  Trustee in accordance with this sub-clause 15.2.2 within
                  fifteen Business Days of the Security Trustee having given
                  notice in writing of its resignation to the other Secured
                  Creditors, the Escrow Bank and the Issuer, the Security
                  Trustee (after consultation with the Debt Representatives) may
                  appoint a financial institution of recognised standing in the
                  London banking market as a successor Security Trustee.

15.3     ACTIONS BY OUTGOING SECURITY TRUSTEE

         The retiring Security Trustee shall, at the cost of the Issuer, make
         available to its successor such documents and records and provide such
         assistance as the successor Security Trustee may reasonably request for
         the purposes of performing its functions as Security Trustee under the
         Relevant Documents to which it is a party.

15.4     EFFECTIVENESS OF SECURITY TRUSTEE'S RESIGNATION

         The Security Trustee's resignation notice shall only take effect upon:

         15.4.1   the appointment of its successor;

         15.4.2   the transfer of all of the Transaction Security (other than
                  the Transaction Security created pursuant to the Italian
                  Mortgages) to that successor and, if required by any
                  applicable laws of any jurisdiction, the re-execution of any
                  relevant Security Documents in favour of such successor
                  PROVIDED THAT the benefit of any Transaction Security which
                  cannot be so transferred within a reasonable time shall be
                  held on trust for such successor;

         15.4.3   the accession of its successor to this Deed by the execution
                  and delivery of an Agent/Trustee/New Bonding Facility Bank
                  Accession Letter; and

         15.4.4   to the extent that it is required by, necessary or desirable
                  under the laws of the relevant jurisdiction, the parties to
                  the other Relevant Documents (to which the Security Trustee is
                  a party) receiving from the successor Security Trustee a deed
                  of novation in such form as the parties to such Relevant
                  Documents may require whereby such successor Security Trustee
                  undertakes to become a party to and be bound by the terms and
                  conditions of those Relevant Document.

15.5     FURTHER ASSURANCE ON APPOINTMENT OF SUCCESSOR SECURITY TRUSTEE

         Each Obligor, Intra-Group Creditor and Intra-Group Borrower hereby
         covenants that following the resignation of the Security Trustee
         pursuant to this Clause 15 and, to the extent required by any
         applicable laws of any jurisdiction, it will re-execute any Relevant
         Documents to which the retiring Security Trustee is a party in favour
         of the newly appointed Security Trustee.

15.6     RELEASE OF OUTGOING SECURITY TRUSTEE

         Upon the appointment of a successor and the satisfaction of the other
         conditions set forth in Clause 15.4 (Effectiveness of Security
         Trustee's Resignation), the retiring Security Trustee shall be
         discharged from any further obligation under this Deed and any of the
         other Relevant Documents to which it is a party but shall remain
         entitled (i) to the benefit

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<PAGE>

         of Clause 14 (Security Trustee's Actions), Clause 18 (Fees, Expenses
         and Stamp Taxes) and Clause 19 (Indemnities) and (ii) to enforce any of
         its rights under such clauses as if it was still a party to this Deed.
         A successor Security Trustee and each of the other Parties shall have
         the same rights and obligations amongst themselves as they would have
         had if such successor Security Trustee had been an original Party
         hereto.

15.7     REMOVAL OF SECURITY TRUSTEE

         Either Note Trustee may, by notice to the Security Trustee, require the
         Security Trustee to resign in accordance with Clause 15.2 (Resignation
         of Security Trustee and Appointment of Successor). Upon receipt of any
         such notice from such Note Trustee the Security Trustee shall resign in
         accordance with Clause 15.2 (Resignation of Security Trustee and
         Appointment of Successor) and, for the avoidance of doubt, the
         provisions of Clauses 15.3 (Actions by Outgoing Security Trustee) to
         15.6 (Release of Outgoing Security Trustee) shall apply accordingly.

16.      DELEGATION AND ADDITIONAL SECURITY TRUSTEE

16.1     DELEGATION

         16.1.1   The Security Trustee may, at any time, to the extent permitted
                  by any applicable laws of any jurisdiction, delegate by power
                  of attorney or otherwise to any person or persons for any
                  period, all or any of the rights, powers and discretions
                  vested in it by any of the Relevant Documents.

         16.1.2   A delegation referred to in sub-clause 16.1.1 of this Clause
                  16.1 may, subject to sub-clause 16.2.2 of Clause 16.2
                  (Additional Security Trustees), be made upon any terms and
                  conditions (including the power to sub-delegate) and subject
                  to any restrictions as the Security Trustee may think fit in
                  the interests of the Secured Creditors and the Security
                  Trustee shall not be bound to supervise, or in any way be
                  responsible for any loss incurred by reason of any misconduct
                  or default on the part of, any Delegate or sub-Delegate or any
                  person it appoints as an additional Security Trustee pursuant
                  to sub-clause 16.2.1 of Clause 16.2 (Additional Security
                  Trustees) PROVIDED THAT the Security Trustee has exercised all
                  reasonable care in appointing such Delegate or sub-Delegate or
                  any person it appoints as an additional Security Trustee.

16.2     ADDITIONAL SECURITY TRUSTEES

         16.2.1   The Security Trustee may at any time appoint any person to act
                  as an additional security trustee or as a co-trustee jointly
                  with it if it considers;

                  (a)      that appointment to be in the interests of the
                           Secured Creditors; or

                  (b)      such appointment necessary for the purposes of
                           conforming to any legal requirements, restrictions or
                           conditions which the Security Trustee reasonably
                           deems to be relevant; or

                  (c)      such appointment necessary or desirable with regard
                           to any Transaction Security located in a particular
                           jurisdiction; or

                  (d)      such appointment necessary or desirable for obtaining
                           or enforcing any judgment in any jurisdiction,

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<PAGE>

                  and the Security Trustee shall give prior written notice to
                  each Debt Representative and the Issuer of any such
                  appointment.

         16.2.2   Any person appointed to act as an additional security trustee
                  or as a co-trustee pursuant to sub-clause 16.2.1 of this
                  Clause 16.2 shall (subject to the terms of this Deed) have the
                  rights, powers and discretions (not exceeding those conferred
                  on the Security Trustee by this Deed) and the duties and
                  obligations as are conferred or imposed by the instrument of
                  appointment and this Deed and may be appointed for a fixed or
                  indefinite period or on terms that its appointment may be
                  terminated by notice.

         16.2.3   The appointment of a person to act as an additional security
                  trustee or as co-trustee pursuant to the provisions of
                  sub-clause 16.2.1 of this Clause 16.2 (but not where such
                  appointment is for a specific purpose or a limited period)
                  shall take effect upon the accession of such person to this
                  Deed by the execution and delivery of an Agent/Trustee/New
                  Bonding Facility Bank Accession Letter.

16.3     REMUNERATION OF SEPARATE SECURITY TRUSTEE AND DELEGATES

         The remuneration the Security Trustee may pay to any person to whom it
         delegates any or all of its rights, powers and discretions pursuant to
         Clause 16.1 (Delegation) and to any person it appoints as an additional
         security trustee or a co-trustee pursuant to Clause 16.2 (Additional
         Security Trustees), together with any reasonable costs and expenses
         incurred by that person in performing its functions pursuant to its
         appointment as a Delegate, additional security trustee or, as the case
         may be, co-trustee shall, for the purposes of this Deed, be treated as
         costs and expenses incurred by the Security Trustee.

17.      POWER OF ATTORNEY

17.1     APPOINTMENT

         Each Debt Representative irrevocably appoints:

         17.1.1   the Security Trustee; and

         17.1.2   each and every person to whom the Security Trustee has from
                  time to time delegated the exercise of the power of attorney
                  conferred by this Clause 17 (for the purposes of this Clause
                  17 together with the Security Trustee, the "ATTORNEYS"),

         to be its attorney or attorneys for the purposes set out in this Clause
         17.

17.2     POWER

         Each Attorney may in the name and on behalf of each Debt Representative
         sign, seal, execute, deliver, perfect and do all deeds, instruments,
         acts and things which may be required (or which a Debt Representative
         considers expedient or desirable) for carrying out any action
         specifically designated in this Deed as an action to be carried out by
         the Security Trustee in the name and on the instructions of the Debt
         Representatives (including entry into a US intercreditor agreement
         between the Security Trustee and Liberty Funding, L.L.C. on or about
         the date of this Deed).

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<PAGE>

17.3     POWER TO DELEGATE

         Each Attorney has full power to delegate the power conferred on it by
         this Clause 17 but no such delegation will preclude the subsequent
         exercise of such power by the Attorney itself or preclude the Attorney
         from making a subsequent delegation thereof to some other person and
         any such delegation may be revoked by the Attorney at any time.

17.4     RATIFICATION

         Each Debt Representative will ratify and confirm all transactions
         properly entered into by an Attorney or any delegate of the Attorney in
         the exercise or purported exercise of the Attorney's or, as the case
         may be, delegate of the Attorney's powers.

17.5     FURTHER POWERS OF ATTORNEY

         Each Debt Representative will at the reasonable request from time to
         time of an Attorney enter into and duly execute such further power or
         powers of attorney in a form and substance reasonably acceptable to the
         Attorney.

18.      FEES, EXPENSES AND STAMP TAXES

18.1     SECURITY TRUSTEE FEE

         18.1.1   The Issuer shall pay or procure the payment of, to the
                  Security Trustee, for its own account, remuneration (together
                  with any applicable VAT or similar tax chargeable in respect
                  of such remuneration other than any tax on its income)
                  specified in the letter agreement dated on or about the date
                  of this Deed (the "FEE LETTER") between the Security Trustee
                  and the Issuer, at the times and in the amounts specified in
                  the Fee Letter and otherwise due under the terms of this Deed.

         18.1.2   Without prejudice to the remuneration to be paid by the Issuer
                  pursuant to sub-clause 18.1.1 of this Clause 18.1, if:

                  (a)      an Event of Default or Default occurs;

                  (b)      the Security Trustee is instructed to take
                           Enforcement Action; or

                  (c)      the Security Trustee considers it expedient or
                           necessary or is requested by any Debt Representatives
                           to undertake duties which the Security Trustee
                           considers to be of an exceptional nature or otherwise
                           outside the scope of the normal duties of the
                           Security Trustee under this Deed or any other
                           Relevant Document to which it is a party,

                  the Issuer shall pay to the Security Trustee an additional
                  remuneration (the "ADDITIONAL REMUNERATION") on an hourly
                  basis (or on such other basis as the Security Trustee may in
                  its discretion deem appropriate) at the rates charged by and
                  in accordance with the usual practice for the time being of
                  the Security Trustee. Such Additional Remuneration shall be
                  payable by the Issuer at the times from time to time specified
                  by the Security Trustee in a letter agreement between the
                  Security Trustee and the Issuer (the "ADDITIONAL REMUNERATION
                  FEE LETTER") together with any applicable VAT or similar tax
                  chargeable in respect of such Additional Remuneration other
                  than any tax on its income.

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18.2     TRANSACTION AND ENFORCEMENT EXPENSES

         Subject to Clause 18.6 (Taxes and Expenses in connection with Italian
         Mortgages), the Issuer shall, from time to time and promptly on demand
         by the Security Trustee, reimburse or procure the reimbursement of the
         Security Trustee for all costs and expenses (including legal fees and
         travelling expenses) on a full indemnity basis together with any
         applicable VAT incurred by the Security Trustee and any Delegate
         (PROVIDED THAT in relation to sub-clause 18.2.1 of this Clause 18.2,
         such costs and expenses must be properly incurred) in connection with:

         18.2.1   the negotiation, preparation, execution, release and discharge
                  of this Deed, the Security Documents, any other Relevant
                  Document to which the Security Trustee is a party and the
                  Transaction Security and the completion of the transactions
                  and perfection of the Security contemplated in this Deed or in
                  any such documents or forming part of the Transaction
                  Security;

         18.2.2   the exercise, preservation and/or enforcement of any of the
                  rights, powers and remedies of, or the performance of the
                  duties and obligations of, the Security Trustee or any
                  Delegate, or any amendment or waiver in respect of this Deed
                  or any other Relevant Document to which the Security Trustee
                  is a party;

         18.2.3   the preservation and/or enforcement of the Transaction
                  Security; and

         18.2.4   any proceedings instituted by or against the Security Trustee
                  and/or any Delegate as a consequence of the Security Trustee
                  taking or holding all or any of the Transaction Security or
                  exercising or enforcing its rights, powers and remedies under
                  any Relevant Document unless it is finally determined in such
                  proceedings that the Security Trustee's actions or any failure
                  to act was negligent or the result of wilful misconduct.

18.3     STAMP TAXES

         Subject to Clause 18.6 (Taxes and Expenses in connection with Italian
         Mortgages), the Issuer shall pay or procure the payment of, promptly on
         demand of the Security Trustee, all stamp, registration, notarial and
         other similar Taxes or fees paid or payable by the Security Trustee in
         connection with any action taken or contemplated by or on behalf of the
         Security Trustee for enforcing, amending, releasing, cancelling,
         reassigning or resolving any doubt concerning, or for any other purpose
         in relation to, the Security Documents or the Transaction Security or
         any other Relevant Documents and shall, from time to time, indemnify
         the Security Trustee promptly on demand against any liabilities, costs,
         claims and expenses resulting from any failure to pay by the Issuer or
         any Obligors or any delay by the Issuer or any Obligors in paying any
         such Taxes or fees.

18.4     INTEREST ON DEMANDS

         18.4.1   Except as otherwise specified in this Clause 18 and Clause 19
                  (Indemnities) all amounts due and payable pursuant to this
                  Clause 18 and Clause 19 (Indemnities) shall be payable by the
                  Issuer on the date specified in any demand made by the
                  Security Trustee. The rate of interest applicable to such
                  payments shall be 2 per cent. per annum above the base rate
                  from time to time of HSBC Bank plc.

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<PAGE>

         18.4.2   All amounts payable to the Security Trustee under this Clause
                  18 and Clause 19 (Indemnities) shall carry interest at the
                  rate specified in sub-clause 18.4.1 of this Clause 18.4 from
                  the due date thereof.

18.5     DISCHARGE

         Unless otherwise specifically stated in any discharge of this Deed, the
         provisions of Clause 14 (Security Trustee's Actions), this Clause 18
         and Clause 19 (Indemnities) shall continue in full force and effect
         notwithstanding such discharge.

18.6     TAXES AND EXPENSES IN CONNECTION WITH ITALIAN MORTGAGES

         Notwithstanding anything to the contrary in any of the Relevant
         Documents neither the Issuer nor any Subsidiary of the Issuer shall
         have any obligation to pay or procure the payment of (i) any stamp,
         registration, mortgage, notarial and other direct or indirect taxes in
         connection with the registration of or annotation of any assignment,
         transfer or succession of the Security under the Italian Mortgages or
         of the Italian Mortgages under applicable law and (ii) any cost or
         expenses or claim or loss incurred, paid or payable by the Security
         Trustee or any of the Secured Creditors in connection with the
         registration of or annotation of any assignment, transfer or succession
         of the Security under the Italian Mortgages or of the Italian Mortgages
         under applicable law, other than the payment by the Issuer of the
         imposta ipotecaria, imposta di bollo and imposta di registro and
         notarial expenses due in relation to the registration of or annotation
         of any assignment or transfer of the Italian Mortgages under Article
         2843 of the Italian Civil Code in favour of the successor of Bank of
         New York as Depositary and of the successor of HSBC plc as Bonding
         Facility Agent following their respective removal by the Issuer
         pursuant to the Deposit Agreement or the New Bonding Facility
         Agreement, as the case may be.

19.      INDEMNITIES

19.1     INDEMNITY

         Subject to Clause 18.6 (Taxes and Expenses in connection with Italian
         Mortgages), the Issuer shall from time to time, as a separate and
         independent obligation and notwithstanding any release or discharge of
         all or any part of the Transaction Security or this Deed, promptly on
         demand of the Security Trustee indemnify the Security Trustee and every
         Delegate or any person appointed by any Delegate under this Deed or any
         other Relevant Document (and their respective officers and employees)
         against all and any costs, claims, losses, expenses (including Taxes
         but not including Tax on its actual profits) and legal fees properly
         incurred) and liabilities (together with any applicable VAT), whether
         or not reasonably foreseeable (hereinafter referred to as the
         "INDEMNIFIED COSTS") incurred or suffered by any of them as a result of
         entering into this Deed and the other Relevant Documents unless and to
         the extent that, and without prejudice to sub-clause 14.2.6 of Clause
         14.2 (Security Trustee's Discretions) and Clause 14.9 (Custodians and
         Nominees), such costs, claims, losses, expenses or liabilities arise as
         a result of the negligence or wilful misconduct of the Security
         Trustee, such Delegate or the person appointed by a Delegate. Without
         prejudice to the generality of the foregoing and to Clause 18.6 (Taxes
         and Expenses in relation to the Italian Mortgages), the indemnity
         contained in this Clause 19.1 shall extend to cover any Indemnified
         Costs suffered in relation to or arising out of:

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         19.1.1   any failure by any Obligor to comply with its obligations
                  under Clause 18 (Fees, Expenses and Stamp Taxes);

         19.1.2   the taking, holding, protection, release, cancellation,
                  re-assignment or enforcement of the Transaction Security;

         19.1.3   any default by any Obligor in the performance of any of the
                  obligations expressed to be assumed by it in this Deed and/or
                  any other Relevant Document;

         19.1.4   any deduction for, or withholding on account of, Tax which the
                  Security Trustee or any Delegate or any person appointed by
                  the Security Trustee or any Delegate may make or any other Tax
                  liability which the Security Trustee or any Delegate or any
                  person appointed by the Security Trustee or any Delegate may
                  suffer, in relation to any action undertaken pursuant to this
                  Deed and/or the other Relevant Documents or in relation to the
                  Transaction Security; or

         19.1.5   the performance of the terms of this Deed or the exercise of
                  any of the rights, powers, discretions and remedies conferred
                  on such parties by any of the Relevant Documents or by law.

19.2     SECURITY TRUSTEE'S LIEN

         19.2.1   Without prejudice to Clause 8.4 (Permitted Deductions) the
                  Security Trustee:

                  (a)      may, in priority to any payment to any other Secured
                           Creditors, reimburse itself from, have recourse to or
                           make payments out of the assets subject to the
                           Transaction Security and any payment or proceeds
                           received from any Obligor or as a result of an
                           Enforcement Action so as to meet, discharge or
                           otherwise provide for all fees, costs (including its
                           time charges at its usual hourly rate), claims,
                           losses, expenses (including Taxes (but not including
                           Tax on its actual profits)) and all other expenses or
                           liabilities (including legal fees properly incurred)
                           incurred or suffered by the Security Trustee in or as
                           a consequence of the proper exercise of its rights or
                           performance of its duties and obligations in relation
                           to this Deed and any other Relevant Document to which
                           it is a party; and

                  (b)      shall have a lien on the Transaction Security and the
                           proceeds of the enforcement of the Transaction
                           Security for all moneys payable to it under Clause 18
                           (Fees, Expenses and Stamp Taxes) and this Clause 19.

         19.2.2   To the extent that the Security Trustee is so indemnified
                  itself out of the assets subject to the Transaction Security,
                  the Issuer shall be liable for such amount to the Debt
                  Representatives and, for the avoidance of doubt, such
                  liability to the Debt Representatives shall constitute part of
                  the Secured Obligations.

         19.2.3   The Security Trustee agrees that it will not take any
                  Enforcement Action in relation to the Transaction Security in
                  connection with the Secured Obligations owed to the Security
                  Trustee or any additional Security Trustee, co-trustee,
                  Receiver, Delegate, Debt Representative, the New Bonding
                  Facility Agent, the Depositary, the Paying Agent, the Escrow
                  Bank or the Registrar, in each case

                                     - 59 -

<PAGE>

                  for their own respective accounts, unless (i) the Security
                  Trustee has been instructed to take Enforcement Action in
                  respect of all other Secured Obligations; or (ii) all other
                  Secured Obligations have been irrevocably paid in full or
                  (iii) the Enforcement Action (excluding paragraphs (a) and (c)
                  of the definition of Enforcement Action) consists of demands
                  made by the Security Trustee for its own claims pursuant to
                  the Composite Guarantee (as defined in the Indentures). Each
                  of the Debt Representatives, the New Bonding Facility Agent,
                  the Depositary, the Paying Agent, the Escrow Bank and the
                  Registrar agrees that it will not request or instruct the
                  Security Trustee to take any Enforcement Action in relation to
                  the Transaction Security in connection with the Secured
                  Obligations owed to such Debt Representative, the New Bonding
                  Facility Agent, the Depositary, the Paying Agent or the
                  Registrar, in each case for their own respective accounts,
                  unless the Security Trustee has been instructed to take
                  Enforcement Action in respect of all other Secured Obligations
                  or all other Secured Obligations have been irrevocably paid in
                  full.

20.      NOTICES

20.1     COMMUNICATIONS IN WRITING

         Unless otherwise expressly provided in any other Relevant Document, any
         communication to be made under or in connection with any Relevant
         Document shall be made in writing and, unless otherwise stated, may be
         made by fax or letter.

20.2     ADDRESSES

         Unless otherwise expressly provided in any other Relevant Document, the
         address and fax number (and the department or officer, if any, for
         whose attention any communication is to be made) of each Party for any
         communication or document to be made or delivered under or in
         connection with the Relevant Documents is:

         20.2.1   identified with its name below; or

         20.2.2   if not originally a Party on the date hereof, specified in the
                  Agent/Trustee/New Bonding Facility Bank Accession Letter,
                  Intra-Group Accession Letter or Guarantor Accession Letter to
                  which it is a party,

         or any substitute details which a Party may notify to the Security
         Trustee (or the Security Trustee may notify to the other Parties, if a
         change is made by the Security Trustee) by not less than five Business
         Days' notice and promptly upon receipt of any notification of any new
         or changed details, the Security Trustee shall notify the other
         Parties.

20.3     DELIVERY

         20.3.1   Unless otherwise expressly provided in any other Relevant
                  Document, any communication or document made or delivered by
                  one person to another under or in connection with the Relevant
                  Documents will only be effective:

                  (a)      if by way of fax, when received in legible form; or

                  (b)      if by way of letter, when it has been left at the
                           address specified in Clause 20.2 (Addresses) above or
                           five Business Days after being deposited in the

                                     - 60 -

<PAGE>

                           post postage prepaid in an envelope addressed to the
                           addressee at that address,

                  and, if a particular department or officer is specified as
                  part of that address, if addressed to that department or
                  officer.

         20.3.2   Notwithstanding the provisions of sub-clause 20.3.1(b) above,
                  any communication or document to be made or delivered to the
                  Security Trustee or any Debt Representative will be effective
                  only when actually received by the Security Trustee or such
                  Debt Representative, as the case may be, and then only if it
                  is expressly marked for the attention of the department or
                  officer identified with such person's signature below (or any
                  substitute department or officer as such person shall specify
                  for this purpose).

         20.3.3   All notices under or in connection with this Deed from or to
                  an Obligor shall be contemporaneously copied to the Security
                  Trustee.

         20.3.4   Unless expressly contemplated otherwise in the Relevant
                  Documents, any communication or document made or delivered to
                  the Issuer in accordance with this Clause 20.3 will be deemed
                  to have been made or delivered to each of the Obligors.

20.4     ELECTRONIC COMMUNICATION

         20.4.1   Unless otherwise expressly provided in any other Relevant
                  Document, any communication to be made between the Security
                  Trustee and another Secured Creditor (other than the Escrow
                  Bank) under or in connection with the Relevant Documents may
                  be made by electronic mail or other electronic means unless
                  and until notified to the contrary, if the Security Trustee
                  and any other relevant Secured Creditor:

                  (a)      notify each other in writing of their electronic mail
                           address and/or any other information required to
                           enable the sending and receipt of information by that
                           means; and

                  (b)      notify each other of any change to their address or
                           any other such information supplied by them.

         20.4.2   Unless otherwise expressly provided in any other Relevant
                  Document, any electronic communication made between the
                  Security Trustee and another Secured Creditor will be
                  effective only when actually received in readable form and in
                  the case of any electronic communication made by another
                  Secured Creditor to the Security Trustee only if it is
                  addressed in such a manner as the Security Trustee shall
                  specify for this purpose.

20.5     ENGLISH LANGUAGE

         20.5.1   Unless otherwise expressly provided in any other Relevant
                  Document, any notice given under or in connection with any
                  Relevant Document must be in English.

                                     - 61 -

<PAGE>

         20.5.2   Unless otherwise expressly provided in any other Relevant
                  Document, all other documents provided under or in connection
                  with any Relevant Document to which the Security Trustee is a
                  party to must be:

                  (a)      in English; or

                  (b)      if not in English, accompanied by an English
                           translation, which, if reasonably requested by the
                           Security Trustee, shall be a certified translation
                           and any such English translation will prevail unless
                           the document is a constitutional, statutory or other
                           official document.

21.      BENEFIT OF DEED

21.1     SUCCESSORS

         This Deed shall be binding on and enure to the benefit of each Party
         and its successors in title.

21.2     ASSIGNMENT AND TRANSFER

         No Party may assign all or any of its rights or transfer all or any of
         its rights and obligations under this Deed save as expressly provided
         by this Deed or as may be required by law.

21.3     OBLIGORS AND INTRA-GROUP PARTIES

         No Obligor and no Intra-Group Party may assign any of its rights or
         transfer any of its rights and obligations under this Deed other than
         pursuant to mergers, reorganisations, amalgamations or corporate
         reconstructions which are expressly permitted by the provisions of
         Section 5.01 (Merger, Consolidation or Sale of Assets) of the
         Indentures.

21.4     OTHER PARTIES

         21.4.1   Each of the Note Trustees, the New Bonding Facility Agent, the
                  Depositary, the Paying Agent and the Registrar may with the
                  prior written consent of the Debt Representatives (such
                  consent not to be unreasonably withheld or delayed) cause a
                  duly appointed successor to such role to become a party to
                  this Deed in its place by causing the new Note Trustee, New
                  Bonding Facility Agent, Paying Agent, Depositary or, as the
                  case may be, Registrar, to accede to this Deed by executing
                  and delivering to the Security Trustee an Agent/Trustee/New
                  Bonding Facility Bank Accession Letter.

         21.4.2   The New Bonding Facility Agent shall require any person that
                  is to become a New Bank (as defined in and in accordance with
                  the New Bonding Facility Agreement), to become a party to this
                  Deed by executing and delivering to the Security Trustee an
                  Agent/Trustee/New Bonding Facility Bank Accession Letter.

         21.4.3   With effect from the date of receipt by the Security Trustee
                  of an Agent/Trustee/New Bonding Facility Bank Accession Letter
                  or, if later, the date specified in an Agent/Trustee/New
                  Bonding Facility Bank Accession Letter, the acceding Note
                  Trustee, New Bonding Facility Agent, New Bonding Facility
                  Bank, Paying Agent, Depositary or, as the case may be,
                  Registrar shall assume

                                     - 62 -

<PAGE>

                  the same obligations and become entitled to the same rights it
                  would have had if such person had been an original Party in
                  such capacity.

22.      PRESERVATION

22.1     PARTIAL INVALIDITY

         If, at any time, any provision of this Deed is or becomes illegal,
         invalid or unenforceable in any respect under any law of any
         jurisdiction, neither the legality, validity or enforceability of the
         remaining provisions nor the legality, validity or enforceability of
         that provision under the law of any other jurisdiction will in any way
         be affected or impaired.

22.2     REMEDIES AND WAIVERS

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

22.3     WAIVER OF DEFENCES

         The provisions of this Deed will not be affected by any act, omission,
         matter or thing which, but for this Clause 22.3, would reduce, release
         or prejudice the subordination and/or priorities established by this
         Deed including:

         22.3.1   any time, waiver or consent granted to, or composition with
                  any person (being the purpose of which is to alter such
                  subordination and/or priority arrangements);

         22.3.2   the taking, variation, compromise, exchange, renewal or
                  release of, or refusal or neglect to perfect, take up or
                  enforce, any rights against, or Security over assets of, any
                  Obligor or any Intra-Group Party or any non-presentation or
                  non-observance of any formality or other requirement in
                  respect of any instrument or any failure to realise the full
                  value of any Transaction Security;

         22.3.3   any incapacity or lack of power, authority or legal
                  personality of or dissolution or change in the members or
                  status of any person;

         22.3.4   any amendment (however fundamental) or replacement of a
                  Relevant Document or any other document or any Security;

         22.3.5   any unenforceability, illegality or invalidity of any
                  obligation of any person under any Relevant Document or any
                  other document or of any Security; and

         22.3.6   any intermediate payment or discharge of any of the Secured
                  Obligations in whole or in part.

23.      PRIORITIES NOT AFFECTED

         Except as otherwise provided in this Deed, the ranking and priorities
         referred to in Clause 8 (Ranking of Secured Obligations and Priorities)
         will:

                                     - 63 -

<PAGE>

23.1     not be affected by any reduction or increase in the principal amount
         secured by the Transaction Security or by any amendment or variation to
         any of the Relevant Documents or by any variation or satisfaction of
         any of the Secured Obligations or any other circumstances whatsoever;
         apply regardless of the order in which or dates upon which the Relevant
         Documents are executed or registered or notice of them is given to any
         person; and

23.2     apply regardless of the date upon which any of the Secured Obligations
         arise or of any fluctuations in the amount of any of the Secured
         Obligations outstanding.

24.      MISCELLANEOUS

24.1     CONTROL PROVISIONS

         24.1.1   To the extent that any provision of any other Relevant
                  Document contradicts or conflicts with this Deed, the
                  provisions of this Deed shall prevail.

         24.1.2   Pursuant to certain agreements governed by Italian law for the
                  creation of pledges over bank accounts (dated on or about the
                  date of this Deed and made between the Security Trustee and
                  the relevant pledgors incorporated under the laws of Italy)
                  which form part of the Transaction Security, the Secured
                  Creditors acting through the Security Trustee have consented
                  that the relevant pledgors are permitted to deal with the
                  accounts subject to such Transaction Security. The Secured
                  Creditors hereby confirm that they will not revoke such
                  consent unless the Security Trustee has notified such pledgors
                  (in writing) that (a) an Insolvency Event of Default has
                  occurred and is continuing, (b) it has been so instructed
                  pursuant to this Deed upon or at anytime after an Event of
                  Default has occurred and is continuing or (c) an Enforcement
                  Event has occurred.

24.2     DISCLOSURE

         Save:

         24.2.1   where required by the Relevant Documents; and

         24.2.2   in the case of the Security Trustee, where permitted or
                  required by the Relevant Documents to which it is a party,

         prior to the occurrence of an Event of Default no Secured Creditor (the
         "DISCLOSING SECURED CREDITOR") shall disclose to another Secured
         Creditor who is a Secured Creditor in a different capacity to the
         Disclosing Secured Creditor, any non-public information concerning the
         Obligors and/or the Issuer which it receives pursuant to the Relevant
         Documents. Each of the Issuer and the Obligors hereby consents, so long
         as any of the Transaction Security constituted by the Security
         Documents shall remain subsisting and an Event of Default has occurred
         and is continuing, to the disclosure by any of the Secured Creditors to
         each other of information concerning the Obligors and/or the Issuer to
         such extent as any Secured Creditor shall see fit.

24.3     OBLIGATIONS BINDING

         The obligations of the Parties who have executed this Deed shall not be
         affected by the fact that not all of the Parties have validly executed
         this Deed and such obligations shall be binding inter se.

                                     - 64 -

<PAGE>

24.4     NOTIFICATION

         As soon as practicable after the Security Trustee has been notified in
         writing by any Secured Creditor that the Secured Obligations owed to it
         or to any person which it represents have been irrevocably paid in
         full, the Security Trustee shall confirm this fact in writing to the
         other Secured Creditors.

24.5     GUARANTEE LIMITATIONS

         24.5.1   The Parties acknowledge that the obligations of the German
                  Guarantors, the Dutch Guarantors, the Hong Kong Guarantors,
                  the Australian Guarantors, the Italian Guarantors, the English
                  Guarantors, the Brazilian Guarantor, the American Guarantors,
                  the Irish Guarantor and the Swiss Guarantors under the
                  Guarantees, the Indentures, the Agency Agreement, Clause 3
                  (Parallel Debt Obligation), Clause 6.3 (Covenant to Pay) and
                  Clause 8.4 (Permitted Deductions) of this Deed and in relation
                  to the German Guarantors only, under Clause 8.2 (Claims under
                  a Letter of Credit) and Clause 8.3 (Indemnities) of the New
                  Bonding Facility Agreement shall be limited by the relevant
                  Guarantee Limitations.

         24.5.2   Notwithstanding the provision of sub-clause 24.5.1 of this
                  Clause 24.5 (Guarantee Limitations), the Parties acknowledge
                  that the obligations of the Guarantors (other than those
                  companies that are Guarantors as of the Issue Date) shall be
                  limited under the relevant laws and regulations applicable to
                  such Guarantor and the granting of any Guarantee (including
                  laws and regulations relating to corporate benefit, capital
                  preservation, financial assistance, fraudulent conveyances and
                  transfers or transactions at an under value, which include,
                  but are not limited to, those provisions set out in Schedule 9
                  (Guarantee Limitations) of this Deed), or otherwise to the
                  maximum amount payable such that no Guarantee will constitute
                  a fraudulent conveyance, fraudulent transfer or a transaction
                  at an under value, or otherwise cause the Guarantor to be
                  insolvent under relevant law or such Guarantee to be void or
                  unenforceable.

25.      WINDING UP OF TRUST

         If each Secured Creditor (other than the Security Trustee) has
         confirmed in writing to the Security Trustee that the Secured
         Obligations owed to it and to all persons which it represents have been
         irrevocably discharged in full and that neither it nor any person which
         it represents is under any further actual or contingent obligation to
         make advances or provide other financial accommodation to the Issuer or
         any Obligor under any of the Relevant Documents, the trusts herein
         created shall be wound up. Each Secured Creditor (other than the
         Security Trustee) shall provide such written confirmation as soon as
         reasonably practicable after the Secured Obligations owed to it and to
         all persons which it represents have been irrevocably discharged in
         full and neither it nor any person which it represents is under any
         such further actual or contingent obligation.

26.      PERPETUITY PERIOD

         The perpetuity period under the rule against perpetuities, if
         applicable to this Deed, shall be the period of eighty years from the
         date of this Deed.

                                     - 65 -

<PAGE>

27.      COUNTERPARTS

        This Deed may be executed in any number of counterparts and the result
        shall be the same as it would be if the signatures on the counterparts
        were on a single copy of this Deed.

28.      GOVERNING LAW AND JURISDICTION

28.1     GOVERNING LAW

         This Deed is governed by English law.

28.2     JURISDICTION

         28.2.1   The courts of England shall have exclusive jurisdiction to
                  settle any dispute arising out of or in connection with this
                  Deed (including a dispute regarding the existence, validity or
                  termination of this Deed) (a "DISPUTE").

         28.2.2   The Obligors and the Intra-Group Parties agree that the courts
                  of England are the most appropriate and convenient courts to
                  settle Disputes and accordingly no Obligor or Intra-Group
                  Party will argue to the contrary.

         28.2.3   This Clause 28.2 is for the benefit of the Secured Creditors
                  only. As a result, the Secured Creditors shall not be
                  prevented from taking proceedings relating to a Dispute in any
                  other courts with jurisdiction. To the extent allowed by law,
                  the Secured Creditors may take concurrent proceedings in any
                  number of jurisdictions.

28.3     SERVICE OF PROCESS

         Without prejudice to any other mode of service allowed under any
         relevant law, each Obligor and each Intra-Group Party (other than an
         Obligor and an Intra-Group Party incorporated in England and Wales):

         28.3.1   irrevocably appoints the Issuer as its agent for service of
                  process in relation to any proceedings before the English
                  courts in connection with any Relevant Document; and

         28.3.2   agrees that failure by a process agent to notify the relevant
                  Obligor or, as the case may be, Intra-Group Party of the
                  process will not invalidate the proceedings concerned.

IN WITNESS whereof this Deed has been executed and delivered as a deed by the
Parties the day and year first above written.

                                     - 66 -

<PAGE>

                                   SCHEDULE 1
                                   GUARANTORS

Metapath Software International Limited
Mobile Systems International Holdings Limited
GPT Special Project Management Limited
Marconi Communications Limited
Marconi Communications International Limited
Marconi Communications China Limited
Marconi Communications International Investments Limited
Marconi Communications International Holdings Limited
Marconi Communications Investments Limited
Marconi Communications Holdings Limited
Marconi (Bruton Street) Limited
Marconi (DGP1) Limited
Marconi (DGP2) Limited
Marconi Bonding Limited
Marconi Optical Components Limited
Associated Electrical Industries Limited
Marconi (Elliot Automation) Limited
Elliot Automation Holdings Limited
English Electric Company Limited
Marconi Aerospace Unlimited
Marconi UK Intellectual Property Limited
Marconi (NCP) Limited
Highrose Limited
Bruton Street Overseas Investments Limited
Marconi Inc.
Marconi Holdings, LLC
Marconi Communications North America Inc.
FS Holdings Corp
FS Finance Corp
Marconi Software International, Inc.
Metapath Software International (US), Inc.
Metapath Software International, Inc.
Marconi Intellectual Property (US) Inc.
Marconi Communications Holdings GmbH
Marconi Communications GmbH
Marconi Communications Real Estate GmbH
Marconi Holdings SpA
Marconi Communications SpA
Marconi Sud SpA
Marconi Communications Telemulti Ltda
Marconi Australia Holdings Pty Limited
Marconi Australia Pty Limited

                                     - 67 -

<PAGE>

Marconi Communications Asia Limited
G.E.C. (Hong Kong) Limited
Marconi Communications, Inc.
Marconi Networks Worldwide, Inc.
Marconi Communications Technology, Inc.
Marconi Communications Federal, Inc.
Marconi Acquisition Corp.
Marconi Intellectual Property (Ringfence) Inc.
Marconi Communications Limited (Ireland)
Marconi Communications Optical Networks Limited
Marconi Communications, S.A. de C.V.
Marconi Communications de Mexico, S.A. de C.V.
Marconi Communications Exportel, S.A. de C.V.
Administrativa Marconi Communications, S.A. de C.V.
Marconi Communications B.V.
Marconi Communications GmbH (Switzerland)
Regents Place, Inc.

                                     - 68 -

<PAGE>

                                   SCHEDULE 2
                               INTRA-GROUP PARTIES

                                     PART A
                              INTRA-GROUP CREDITORS

Marconi Corporation plc
Metapath Software International Limited
Mobile Systems International Holdings Limited
GPT Special Project Management Limited
Marconi Communications Limited
Marconi Communications International Limited
Marconi Communications China Limited
Marconi Communications International Investments Limited
Marconi Communications International Holdings Limited
Marconi Communications Investments Limited
Marconi Communications Holdings Limited
Marconi (Bruton Street) Limited
Marconi (DGP1) Limited
Marconi (DGP2) Limited
Marconi Bonding Limited
Marconi Optical Components Limited
Associated Electrical Industries Limited
Marconi (Elliot Automation) Limited
Elliot Automation Holdings Limited
English Electric Company Limited
Marconi Aerospace Unlimited
Marconi UK Intellectual Property Limited
Marconi (NCP) Limited Highrose Limited
Bruton Street Overseas Investments Limited
Marconi Inc.
Marconi Holdings, LLC
Marconi Communications North America Inc.
FS Holdings Corp
FS Finance Corp
Marconi Software International, Inc.
Metapath Software International (US), Inc.
Metapath Software International, Inc.
Marconi Intellectual Property (US) Inc.
Marconi Communications Holdings GmbH
Marconi Communications GmbH
Marconi Communications Real Estate GmbH
Marconi Holdings SpA
Marconi Communications SpA
Marconi Sud SpA

                                     - 69 -

<PAGE>

Marconi Communications Telemulti Ltda
Marconi Australia Holdings Pty Limited
Marconi Australia Pty Limited
Marconi Communications Asia Limited
G.E.C. (Hong Kong) Limited
Marconi Communications, Inc.
Marconi Networks Worldwide, Inc.
Marconi Communications Technology, Inc.
Marconi Communications Federal, Inc.
Marconi Acquisition Corp.
Marconi Intellectual Property (Ringfence) Inc.
Marconi Communications Limited (Ireland)
Marconi Communications Optical Networks Limited
Marconi Communications, S.A. de C.V.
Marconi Communications de Mexico, S.A. de C.V.
Marconi Communications Exportel, S.A. de C.V.
Administrativa Marconi Communications, S.A. de C.V.
Marconi Communications B.V.
Marconi Communications GmbH (Switzerland)
Marconi Software Solutions Limited
Regents Place, Inc.
Marconi Communications Limited (Bermuda)

                                     PART B
                              INTRA-GROUP BORROWERS

Marconi Corporation plc
Metapath Software International Limited
Mobile Systems International Holdings Limited
GPT Special Project Management Limited
Marconi Communications Limited
Marconi Communications International Limited
Marconi Communications China Limited
Marconi Communications International Investments Limited
Marconi Communications International Holdings Limited
Marconi Communications Investments Limited
Marconi Communications Holdings Limited
Marconi (Bruton Street) Limited
Marconi (DGP1) Limited
Marconi (DGP2) Limited
Marconi Bonding Limited
Marconi Optical Components Limited
Associated Electrical Industries Limited
Marconi (Elliot Automation) Limited
Elliot Automation Holdings Limited
English Electric Company Limited

                                     - 70 -

<PAGE>

Marconi Aerospace Unlimited
Marconi UK Intellectual Property Limited
Marconi (NCP) Limited
Highrose Limited
Bruton Street Overseas Investments Limited
Marconi Inc.
Marconi Holdings, LLC
Marconi Communications North America Inc.
FS Holdings Corp
FS Finance Corp
Marconi Software International, Inc.
Metapath Software International (US), Inc.
Metapath Software International, Inc.
Marconi Intellectual Property (US) Inc.
Marconi Communications Holdings GmbH
Marconi Communications GmbH
Marconi Communications Real Estate GmbH
Marconi Holdings SpA
Marconi Communications SpA
Marconi Sud SpA
Marconi Communications Telemulti Ltda
Marconi Australia Holdings Pty Limited
Marconi Australia Pty Limited
Marconi Communications Asia Limited
G.E.C. (Hong Kong) Limited
Marconi Communications, Inc.
Marconi Networks Worldwide, Inc.
Marconi Communications Technology, Inc.
Marconi Communications Federal, Inc.
Marconi Acquisition Corp.
Marconi Intellectual Property (Ringfence) Inc.
Marconi Communications Limited (Ireland)
Marconi Communications Optical Networks Limited
Marconi Communications, S.A. de C.V.
Marconi Communications de Mexico, S.A. de C.V.
Marconi Communications Exportel, S.A. de C.V.
Administrativa Marconi Communications, S.A. de C.V.
Marconi Communications B.V.
Marconi Communications GmbH (Switzerland)
Regents Place, Inc.

                                     - 71 -

<PAGE>

                                   SCHEDULE 3
                           NEW BONDING FACILITY BANKS

HSBC Bank PLC

JP Morgan Chase Bank

Barclays Bank PLC

                                     - 72 -

<PAGE>

                                   SCHEDULE 4
                       PRE-ACCELERATION PAYMENT PRIORITIES

1.       All monies credited to the Existing Performance Bond Escrow Account
         will be applied in accordance with the terms and conditions of the
         Escrow Agreement and this Deed.

2.       All monies credited to the Mandatory Redemption Escrow Account in
         accordance with the Junior Note Indenture, the Senior Note Indenture,
         this Deed and the Escrow Agreement, will be applied on any Payment Date
         strictly in accordance with the following order of priority:

         (a)      FIRST, in or towards satisfaction of all liabilities (secured
                  or unsecured) owing to the Senior Note Trustee as Note Trustee
                  for holders of the Senior Notes, to the extent of any True Up
                  Amount paid to the Junior Note Trustee and not previously
                  applied pursuant to this paragraph (a);

         (b)      SECOND, in or towards satisfaction of all liabilities (secured
                  or unsecured) owing to the Junior Note Trustee as Note Trustee
                  for the holders of the Junior Notes;

         (c)      THIRD, in or towards satisfaction of all liabilities (secured
                  or unsecured) owing to the Senior Note Trustee as Note Trustee
                  for the holders of the Senior Notes;

         (d)      FOURTH, any other person (other than the Issuer) so entitled
                  to the proceeds (including any persons entitled to such
                  proceeds pursuant to mandatory rules of law of any
                  jurisdiction); and

         (e)      FIFTH, the Issuer.

                                     - 73 -

<PAGE>

                                   SCHEDULE 5
                      POST-ACCELERATION PAYMENT PRIORITIES

1.       FIRST, pro rata according to the respective amounts thereof, in or
         towards satisfaction of the liabilities (secured or unsecured) and any
         unpaid fees, costs and expenses in each case owing to, and for the
         account of, the Security Trustee, any Receiver or Delegate, the Senior
         Note Trustee, the Junior Note Trustee, the New Bonding Facility Agent,
         the Depositary, the Paying Agent, the Escrow Bank and the Registrar.

2.       SECOND, to the New Bonding Facility Agent for application in or towards
         satisfaction of all liabilities (secured or unsecured) owing to the New
         Bonding Facility Banks under the New Bonding Facility Agreement.

3.       THIRD, in or towards satisfaction of all liabilities (secured or
         unsecured) owing to the Junior Note Trustee as Note Trustee for holders
         of the Junior Notes, to the extent of any True Up Amount paid to the
         Senior Note Trustee and not previously applied pursuant to this
         paragraph 3.

4.       FOURTH, in or towards satisfaction of all liabilities (secured or
         unsecured) owing to the Senior Note Trustee as Note Trustee for the
         holders of the Senior Notes.

5.       FIFTH, in or towards satisfaction of all liabilities (secured or
         unsecured) owing to the Junior Note Trustee as Note Trustee for the
         holders of the Junior Notes.

6.       SIXTH, any other person (other than the Issuer) so entitled to the
         proceeds (including any persons entitled to such proceeds pursuant to
         mandatory rules of law of any jurisdiction).

7.       SEVENTH, the Issuer.

                                     - 74 -

<PAGE>

                                   SCHEDULE 6
                        SECURITY TRUSTEE RESERVED MATTERS

The "SECURITY TRUSTEE RESERVED MATTERS" means each and every right, power,
authority and discretion of, or exercisable by, the Security Trustee (whether
expressed as a right, power, authority or discretion of the Security Trustee or
an obligation of any other party):

1.       pursuant to this Deed;

2.       to receive any sums owing to it for its own account or the account of
         an agent, expert or representative engaged by it in respect of fees,
         costs, charges, liabilities, damages, proceedings, claims and demands
         in performing its powers and exercising its discretions under this Deed
         or any Relevant Document to which the Security Trustee is a party;

3.       which is provided for the purpose of enabling the Security Trustee to
         protect its own position and interests in its personal capacity
         (including its own personal financial interest) or which the Security
         Trustee determines to be necessary or appropriate to exercise for the
         protection of its own position and interests in its personal capacity;

4.       except as otherwise specifically provided herein, to apply any of the
         sums as provided for in the payment priorities set out in Schedule 4
         (Pre-Acceleration Payment Priorities) and Schedule 5 (Post-Acceleration
         Payment Priorities) in accordance with such Schedules and Clauses 8.2
         (Pre-Acceleration Payment Priorities) and 8.3 (Post-Acceleration
         Payment Priorities);

5.       to receive notices, certificates, communications or other documents or
         information, to direct that such notices, certificates, communications
         or other documents or information shall be provided (or shall not be
         provided) to it or any other Party, or, where applicable, to determine
         the form and content of any notice, certificate or communication;

6.       which relieves or exempts the Security Trustee from liability or
         responsibility or the need to take actions or exculpates or exonerates
         it (including any right of the Security Trustee under any of the
         Relevant Documents to make assumptions as to, or rely on any notice,
         certificate or other communication confirming, the existence or
         non-existence of any act, circumstance or event);

7.       to agree to any amendment to this Schedule 6 or to Clause 7
         (Amendments, Consents and Waivers) with the Parties; and

8.       to determine amounts due in relation to and to claim under indemnities
         in favour of the Security Trustee under the Relevant Documents.

                                     - 75 -

<PAGE>

                                   SCHEDULE 7
                                ACCESSION LETTERS

                                     PART A
                          INTRA-GROUP ACCESSION LETTER

To:      The Law Debenture Trust Corporation p.l.c. as Security Trustee and each
         other Party to the Security Trust and Intercreditor Deed referred to
         below.

From:    [Name of: Intra-Group Creditor/Intra-Group Borrower]

Dated:

Dear Sirs

1.       We refer you to a Security Trust and Intercreditor Deed dated [      ]
         and entered into, inter alios, by the Security Trustee, the Obligors,
         the Senior Note Trustee, the Junior Note Trustee, the New Bonding
         Facility Agent, the New Bonding Facility Banks, the Intra-Group
         Creditors, the Intra-Group Borrowers, the Paying Agent, the Registrar
         and the Depositary (the "INTERCREDITOR DEED"). This is an Intra-Group
         Accession Letter. Terms defined in the Intercreditor Deed have the same
         meaning in this Intra-Group Accession Letter.

2.       [INSERT NAME] agrees to accede to the Intercreditor Deed as an [Intra
         Group Creditor/Intra-Group Borrower] and to be bound by the terms of
         the Intercreditor Deed and undertakes to perform all the obligations
         expressed in the Intercreditor Deed to be assumed by an [Intra-Group
         Creditor/Intra-Group Borrower] and agrees to be bound by all the
         provisions of the Intercreditor Deed, as if it were an original party
         to the Intercreditor Deed and that all the obligations assumed by it
         under the Intercreditor Deed are legal, valid and binding.

3.       This Intra-Group Accession Letter is governed by English law.

4.       This Intra-Group Accession Letter is entered into by deed.

5.       We hereby:

5.1      irrevocably appoint the Issuer as our agent for service of process in
         relation to any proceedings before the English courts in connection
         with any Relevant Documents; and

5.2      agree that failure by a process agent to notify us of the process will
         not invalidate the proceedings concerned.

EXECUTED as a DEED                            EXECUTED as a DEED

by [Intra-Group Creditor/Intra-Group          by Marconi Corporation plc
Borrower]

                                     - 76 -

<PAGE>

Address:

Fax:

Accepted by the Security Trustee

by THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                                     - 77 -

<PAGE>

                                     PART B
                           GUARANTOR ACCESSION LETTER

To:      The Law Debenture Trust Corporation p.l.c. as Security Trustee and each
         other Party to the Intercreditor Deed referred to below.

From:    [Name of Guarantor]

Dated:

Dear Sirs

1.       We refer you to a Security Trust and Intercreditor Deed dated [ ] and
         entered into, inter alios, by the Security Trustee, the Obligors, the
         Senior Note Trustee, the Junior Note Trustee, the New Bonding Facility
         Agent, the New Bonding Facility Banks, the Intra-Group Creditors, the
         Intra-Group Borrowers, the Paying Agent, the Registrar and the
         Depositary (the "INTERCREDITOR DEED"). This is a Guarantor Accession
         Letter. Terms defined in the Intercreditor Deed have the same meaning
         in this Guarantor Accession Letter.

2.       [INSERT NAME] agrees to accede to the Intercreditor Deed as a Guarantor
         and to be bound by the terms of the Intercreditor Deed and undertakes
         to perform all the obligations expressed in the Intercreditor Deed to
         be assumed by a Guarantor and agrees to be bound by all the provisions
         of the Intercreditor Deed, as if it were an original party to the
         Intercreditor Deed.

3.       This Guarantor Accession Letter shall take effect and the relevant
         member of the Group shall become a party to the Intercreditor Deed on
         the date on which the Security Trustee confirms that all the conditions
         set out in sub-clauses 2.3.1 to 2.3.4 of Clause 2.3 (Additional
         Guarantors) of the Intercreditor Deed have been satisfied.

4.       This Guarantor Accession Letter is governed by English law.

5.       This Guarantor Accession Letter is entered into by deed.

6.       We hereby:

6.1      irrevocably appoint the Issuer as our agent for service of process in
         relation to any proceedings before the English courts in connection
         with any Relevant Documents; and

6.2      agree that failure by a process agent to notify us of the process will
         not invalidate the proceedings concerned.

EXECUTED as a DEED

by [Guarantor]

Address:

Fax:

                                     - 78 -

<PAGE>

Accepted by the Security Trustee

by THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                                     - 79 -

<PAGE>

                                   SCHEDULE 8
            AGENT/TRUSTEE/NEW BONDING FACILITY BANK ACCESSION LETTER

To:      The Law Debenture Trust Corporation p.l.c. as Security Trustee and each
         other Party to the Intercreditor Deed referred to below.

From:    [Name of new Security Trustee/Senior Note Trustee/Junior Note Trustee/
         Depositary/Paying Agent/Registrar/New Bonding Facility Agent/New
         Bonding Facility Bank]

Dated:

Dear Sirs

1.       We refer you to a Security Trust and Intercreditor Deed dated [       ]
         and entered into, inter alios, by the Security Trustee, the Obligors,
         the Senior Note Trustee, the Junior Note Trustee, the New Bonding
         Facility Agent, the New Bonding Facility Banks, the Intra-Group
         Creditors, the Intra-Group Borrowers, the Paying Agent, the Registrar
         and the Depositary (the "INTERCREDITOR DEED"). This is an
         Agent/Trustee/New Bonding Facility Bank Accession Letter. Terms
         defined in the Intercreditor Deed have the same meaning in this
         Agent/Trustee/ New Bonding Facility Bank Accession Letter.

2.       [INSERT NAME] agrees to accede to the Intercreditor Deed as a [Security
         Trustee/Senior Note Trustee/Junior Note Trustee/New Bonding Facility
         Agent/New Bonding Facility Bank/the Depositary] and to be bound by the
         terms of the Intercreditor Deed and undertakes to perform all the
         obligations expressed in the Intercreditor Deed to be assumed by a
         [Security Trustee/Senior Note Trustee/Junior Note Trustee/ New Bonding
         Facility Agent/New Bonding Facility Bank/the Depositary/the Paying
         Agent/the Registrar] and agrees to be bound by all the provisions of
         the Intercreditor Deed, as if it were an original party to the
         Intercreditor Deed - in such capacity.

3.       This Agent/Trustee/New Bonding Facility Bank Accession Letter is
         governed by English law.

4.       This Agent/Trustee/New Bonding Facility Bank Accession Letter is
         entered into by deed.

EXECUTED as a DEED

by [Security Trustee/Senior Note Trustee/Junior Note Trustee/New Bonding
Facility Agent/New Bonding Facility Bank/the Depositary/the Paying Agent/the
Registrar]

Address:

Fax:

Accepted by the Security Trustee

                  by THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                                     - 80 -

<PAGE>

                                   SCHEDULE 9
                              GUARANTEE LIMITATIONS

1.       U.S. LIMITATION ON GUARANTEED OBLIGATIONS

1.1      Notwithstanding any provision herein contained to the contrary, each
         American Guarantor's liability under the Guarantees shall be limited to
         an amount not to exceed as of any date of determination the greater of:

1.2      the net amount of all the Notes, advances and other extensions of
         credit advanced under the Relevant Documents and directly or indirectly
         issued or otherwise transferred to, or incurred for the benefit of,
         such American Guarantor, plus interest thereon at the applicable rate
         specified in the Relevant Document; or

1.3      the amount that could be claimed by the Security Trustee from such
         American Guarantor under the Guarantees without rendering such claim
         voidable or avoidable under Section 548 of Title 11 of the United
         States Code or under any applicable state Uniform Fraudulent Transfer
         Act, Uniform Fraudulent Conveyance Act or similar statute or common law
         after taking into account, among other things, such American
         Guarantor's right of contribution and indemnification from each other
         Guarantor under paragraph 2 below.

2.       U.S. CONTRIBUTION WITH RESPECT TO GUARANTEED OBLIGATIONS

2.1      To the extent that any American Guarantor shall make a payment under
         any Guarantee of all or any of the Guaranteed Obligations (a "GUARANTOR
         PAYMENT") that, taking into account all other Guarantor Payments then
         previously or concurrently made by the other Guarantors, exceeds the
         amount that such American Guarantor would otherwise have paid if each
         Guarantor had paid the aggregate Guaranteed Obligations satisfied by
         such Guarantor Payment in the same proportion that such American
         Guarantor's Allocable Amount (as defined below) (in effect immediately
         prior to such Guarantor Payment) bore to the aggregate Allocable
         Amounts of all of the Guarantors in effect immediately prior to the
         making of such Guarantor Payment, then, following indefeasible payment
         in full in cash of the Guaranteed Obligations, such American Guarantor
         shall be entitled to receive contribution and indemnification payments
         from, and be reimbursed by, each of the other Guarantors for the amount
         of such excess, pro rata based upon their respective Allocable Amounts
         in effect immediately prior to such Guarantor Payment.

2.2      As of any date of determination, the "ALLOCABLE AMOUNT" of any American
         Guarantor shall be equal to the maximum amount of the claim that could
         then be recovered from such American Guarantor under the Guarantees
         without rendering such claim voidable or avoidable under Section 548 of
         Title 11 of the United States Code or under any applicable state
         Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
         similar statute or common law.

2.3      This paragraph 2 is intended only to define the relative rights of
         American Guarantors and nothing set forth in this paragraph 2 is
         intended to or shall impair the obligations of American Guarantors,
         jointly and severally, to pay any amounts as and when the same shall
         become due and payable in accordance with the terms of the Guarantees.

                                     - 81 -

<PAGE>

2.4      The rights of the parties under this paragraph 2 shall be exercisable
         upon the full and indefeasible payment of the Guaranteed Obligations
         and the termination of the Relevant Documents.

2.5      The Parties acknowledge that the rights of contribution and
         indemnification under the Guarantees shall constitute assets of any
         American Guarantor to which such contribution and indemnification is
         owed.

3.       SWISS LIMITATION LANGUAGE

         With respect to the Guarantees of each Swiss Guarantor (other than the
         Guaranteed Obligations of one of its Subsidiaries) the amount of such
         Guarantees shall be limited to the extent and maximum amount of such
         Swiss Guarantor's profits available for distribution as dividends at
         any given time (being the balance sheet profits and any reserves made
         for this purpose, in each case in accordance with article 805 in
         conjunction with articles 675 and 671, paragraphs 1-3 of the Swiss Code
         of Obligations).

4.       ITALIAN LIMITATION LANGUAGE

         The Guaranteed Obligations of each Italian Guarantor shall at no time
         require such Italian Guarantor to pay any amount which exceeds the
         higher of:

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

4.2      an amount corresponding to the Net Worth (as defined below) of such
         Italian Guarantor, as resulting from its most recent approved financial
         statements at that time the Guarantees are enforced;

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

5.       DUTCH GUARANTEE LIMITATION

         The Guaranteed Obligations and any other obligations and/or liabilities
         under the Relevant Documents of each Dutch Guarantor shall be limited
         so that no obligation or liability in respect of any Relevant Document
         or any other obligation or liability, shall be secured and/or
         guaranteed by such Dutch Guarantor to the extent that the granting of
         security and/or a guarantee for such obligations or liabilities would
         constitute (i) an "ultra vires" transaction under Dutch law and/or (ii)
         the providing of unlawful financial assistance within the meaning of
         Section 2:98c and Section 2:207c of the Dutch Civil Code and the
         provisions of the Relevant Documents shall be construed accordingly.

6.       GERMAN GUARANTEE LIMITATION

         The right to enforce the Guarantees against any German Guarantor shall,
         to the extent that the Guaranteed Obligations represent those of an
         affiliated company (verbundenes Unternehmen) within the meaning of
         Section 15 et seq. of the German Stock Corporation Act (Aktiengesetz)
         of a German Guarantor (other than any of such German Guarantor's

                                     - 82 -

<PAGE>

         subsidiaries), at all times be limited to an amount equal to such
         German Guarantor's assets (the calculation of which shall take into
         account the captions reflected in Section 266 sub-section (2) A, B and
         C of the German Commercial Code (Handelsgesetzbuch)) less the sum of
         (A) the German Guarantor's liabilities (the calculation of which shall
         take into account the captions reflected in Section 266 sub-section (3)
         B, C and D of the German Commercial Code), and (B) the stated share
         capital (Stammkapital) of such German Guarantor (the "NET ASSETS").

         Each German Guarantor shall realise, to the extent legally permitted
         and, in respect of such German Guarantor, commercially justifiable, in
         a situation where such German Guarantor does not have sufficient Net
         Assets to maintain its registered share capital, any and all of its
         assets that are shown in the balance sheet with a book value (Buchwert)
         that is significantly lower than the market value of the assets if the
         asset is not necessary for such German Guarantor's business
         (betriebsnotwendig).

         The Security Trustee shall enforce the Guarantees against a German
         Guarantor in accordance with the following further procedure:

         (i)      The German Guarantor shall, following a notification by the
                  Security Trustee to such German Guarantor that the Security
                  Trustee intends to enforce the Guarantees, deliver to the
                  Security Trustee within sixty days of such notification an
                  auditors' determination from a firm of auditors of
                  international standard and reputation (the "AUDITORS'
                  DETERMINATION") stating the value of the Net Assets, i.e., the
                  amounts which may be claimed against such German Guarantor
                  under the Guarantees having regard to Sections 30 and 31 of
                  the German Limited Liability Companies Act.

         (ii)     The Auditors' Determination, i.e., the amounts which may be
                  claimed against such German Guarantor under the Guarantees,
                  having regard to Sections 30 and 31 of the German Limited
                  Liability Companies Act, shall take into account the generally
                  accepted accounting principles applicable from time to time in
                  Germany (GAAP) and be based on the same principles that were
                  applied when establishing the previous year's balance sheet.

         (iii)    The amount specified in the relevant Auditors' Determination
                  pertaining to such German Guarantor shall be up-to-date and in
                  any event such Auditors' Determination shall have been
                  prepared as of a date no earlier than 15 business days prior
                  to the date of notification by the Security Trustee to the
                  German Guarantor that it intends to enforce the Guarantees.

         (iv)     If the German Guarantor fails to deliver the Auditors'
                  Determination to the Security Trustee within the sixty day
                  period stated in (ii) above, the Security Trustee shall be
                  entitled to enforce the Guarantees against such German
                  Guarantor without limitation.

7.       AUSTRALIAN LIMITATION LANGUAGE

7.1      The Guaranteed Obligations of Marconi Australia Holdings Pty Limited
         under the Guarantees shall at no time require Marconi Australia
         Holdings Pty Limited to pay an

                                     - 83 -

<PAGE>

         amount which exceeds the value of the assets of Marconi Australia
         Holdings Pty Limited.

7.2      The Guaranteed Obligations of Marconi Australia Pty Limited under the
         Guarantees shall at no time require Marconi Australia Pty Limited to
         pay an amount which exceeds the value of the assets of Marconi
         Australia Pty Limited.

8.       HONG KONG LIMITATION LANGUAGE

         Any Guarantee to which any Hong Kong Guarantor is a party shall not
         extend to secure or guarantee any liability or sum which would, but for
         this proviso, cause such Guarantee to be unlawful or prohibited by, or
         otherwise contravene, any applicable law (including, without
         limitation, Section 47A of the Companies Ordinance (Cap .32)).

9.       ENGLISH LIMITATION LANGUAGE

         The Guaranteed Obligations of each English Guarantor shall not include
         any obligations which, if they were included, would result in the
         Guarantee to which such English Guarantor is a party being unlawful or
         prohibited by any applicable law (including, for the avoidable of doubt
         Section 151 of the Companies Act 1985).

10.      IRISH LIMITATION LANGUAGE

         The Security Documents executed by the Irish Guarantors shall not
         extend to secure or guarantee any liabilities or obligations where, if
         they did so extend, would cause an infringement of Section 60 of the
         Irish Companies Act 1963 (as amended).

11.      BRAZILIAN LIMITATION LANGUAGE

11.1     Marconi Communications Telemulti Ltda. (a Brazilian company) shall
         neither provide a Guarantee nor provide any Security (but the quotas
         (equity interest) in which shall be pledged as Security by its parent
         company) without prior express authorisation of the Central Bank of
         Brazil and which shall be deemed to be a Guarantor for purposes of the
         covenants in the Indentures and this Deed.

11.2     Any guarantees that represent a potential remittance of funds out of
         Brazil are currently regulated by Brazilian Central Bank's Circular No.
         1504 dated 30 June 1989. As determined by such Circular, prior to
         giving a security and/or undertaking any obligation which could
         eventually result in the remittance of foreign currency out of Brazil,
         favourable manifestation from the Central Bank of Brazil should be
         obtained, and thereafter, if payment ever be demanded by a creditor due
         to a default, another authorisation of the Central Bank to purchase and
         remit funds would be necessary. As an alternative, the parties agree to
         negotiate a pledge on the quotas of Marconi Communications Telemulti
         Ltda., the Brazilian subsidiary of Marconi International Holdings
         Limited, given the fact that the quotaholder, i.e., Marconi
         International Holdings Limited, is already offshore company thus no
         previous authorisations from the Brazilian Central Bank were then
         necessary.

                                     - 84 -

<PAGE>

11.3     To the extent that it does not violate and it is permitted under
         Brazilian law, the Guaranteed Obligations under the Brazilian Security
         Package shall at no time require Marconi International Holdings Limited
         to pay an amount which exceeds the greater of:

         (a)      the capital stock so subscribed by Marconi International
                  Holdings Limited in the Marconi Communications Telemulti
                  Ltda's equity, plus any dividends related thereto; and

         (b)      the amount which the Security Trustee may at any time notify
                  Marconi International Holdings Limited by written notice,
                  which amount shall not exceed the value of the quotas of
                  Marconi Communications Telemulti Ltda.

                                     - 85 -

<PAGE>

                                   SIGNATURES

THE ISSUER

EXECUTED as a DEED                  )
by Mary Skelly                      )            MSkelly
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI CORPORATION PLC             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

THE COMPANIES EXECUTING THIS DEED AS GUARANTORS, INTRA-GROUP CREDITORS AND
INTRA-GROUP BORROWERS (SAVE FOR MARCONI CORPORATION PLC EXECUTING THIS DEED AS
AN INTRA-GROUP CREDITOR AND INTRA GROUP BORROWER)

<PAGE>

EXECUTED as a DEED                  )
by Mary Skelly                      )            MSkelly
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI CORPORATION PLC             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )

by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
METAPATH SOFTWARE                   )
INTERNATIONAL LIMITED               )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MOBILE SYSTEMS                      )
INTERNATIONAL HOLDINGS              )
LIMITED                             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
GPT SPECIAL PROJECT                 )
MANAGEMENT LIMITED                  )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
LIMITED                             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
INTERNATIONAL LIMITED               )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
CHINA LIMITED                       )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
INTERNATIONAL                       )
INVESTMENTS LIMITED                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
INTERNATIONAL HOLDINGS              )
LIMITED                             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
INVESTMENTS LIMITED                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
HOLDINGS LIMITED                    )
in the presence of:                 )
Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI (BRUTON STREET)             )
LIMITED                             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI (DGP1) LIMITED              )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI (DGP2) LIMITED              )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI BONDING LIMITED             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI OPTICAL                     )
COMPONENTS LIMITED                  )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
ASSOCIATED ELECTRICAL               )
INDUSTRIES LIMITED                  )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI (ELLIOT                     )
AUTOMATION) LIMITED                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
ELLIOT-AUTOMATION                   )
HOLDINGS LIMITED                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by T. C. R. Shepherd                )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
THE ENGLISH ELECTRIC                )
COMPANY, LIMITED                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI AEROSPACE                   )
UNLIMITED                           )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI UK INTELLECTUAL             )
PROPERTY LIMITED                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI (NCP) LIMITED               )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
HIGHROSE LIMITED                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
BRUTON STREET OVERSEAS              )
INVESTMENTS LIMITED                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI INC.                        )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI HOLDINGS, LLC               )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
NORTH AMERICA INC.                  )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
FS HOLDINGS CORP.                   )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
FS FINANCE CORP.                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI SOFTWARE                    )
INTERNATIONAL, INC.                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
METAPATH SOFTWARE                   )
INTERNATIONAL (US), INC.            )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
METAPATH SOFTWARE                   )
INTERNATIONAL INC.                  )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI INTELLECTUAL                )
PROPERTY (US) INC.                  )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
HOLDINGS GMBH                       )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
GMBH                                )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
REAL ESTATE GMBH                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI HOLDINGS SPA                )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
SPA                                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI SUD SPA                     )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
TELEMULTI LTDA                      )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED by MARCONI                      )

AUSTRALIA HOLDINGS PTY                   )
LIMITED in accordance with section       )
127(1) of the Corporations Act 2001      )
(Cwlth) by authority of its directors:   )   JEAN-PAUL RABIN
                                         )   Signature of director/
                                         )
P R Butcher                              )   *delete whichever is not applicable
Signature of director                    )
                                         )   JEAN-PAUL RABIN
PAUL RUSSELL BUTCHER                     )   Name of director/
Name of director (block letters)         )   (block letters)
                                             *delete whichever is not applicable

Attention:        The Directors

Fax:              +61 29455 3520

Address:          Level 7
                  90 Arthur Street
                  North Sydney, NSW 2060
                  Australia

EXECUTED by MARCONI                      )

AUSTRALIA PTY LIMITED in                 )
accordance with section 127(1) of the    )
Corporations Act 2001 (Cwlth) by         )   JEAN-PAUL RABIN
Authority of its directors:              )   Signature of director/
                                         )
P R Butcher                              )   *delete whichever is not applicable
Signature of director                    )
                                         )   JEAN-PAUL RABIN
PAUL RUSSELL BUTCHER                     )   Name of director/
Name of director (block letters)         )   (block letters)
                                             *delete whichever is not applicable

Attention:        The Directors

Fax:              +61 29455 3520

Address:          Level 7
                  90 Arthur Street
                  North Sydney, NSW 2060
                  Australia

<PAGE>

THE COMMON SEAL of

MARCONI COMMUNICATIONS ASIA LIMITED

was hereunto affixed

in the presence of:

John Shum         Director

K F Wong          Director/

Attention: John Shum                                      John Shum

Address: 29/F, 1063 King's Road, Quarry Bay, Hong Kong

Fax: (852) 22 50 70 08                                    K F Wong

SIGNED SEALED AND DELIVERED by               )
Thomas Charles Ryley Shepherd                )   T. C. R. SHEPHERD
As lawful attorney for and in the name of    )
G.E.C. (HONG KONG) LIMITED                   )
in the presence of:                          )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS,             )
INC.                                )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )

by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI NETWORKS                    )
WORLDWIDE, INC.                     )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )            T. C. R. SHEPHERD
TECHNOLOGY, INC.                    )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
FEDERAL, INC.                       )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI ACQUISITION CORP.           )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI INTELLECTUAL                )
PROPERTY (RINGFENCE) INC.           )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

SIGNED, SEALED AND DELIVERED
by Thomas Charles Ryley Shepherd                        T. C. R. SHEPHERD
the duly authorised attorney of
MARCONI COMMUNICATIONS LIMITED
in the presence of:

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

SIGNED, SEALED AND DELIVERED
by Thomas Charles Ryley Shepherd                        T. C. R. SHEPHERD
the duly authorised attorney of

<PAGE>

MARCONI COMMUNICATIONS OPTICAL NETWORKS LIMITED
in the presence of:

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS,             )
S.A. DE C.V.                        )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
DE MEXICO, S.A. DE C.V.             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS.             )
EXPORTEL, S.A. DE C.V.              )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
ADMINISTRATIVA MARCONI              )
COMMUNICATIONS, S.A. DE C.V.        )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS.             )
B.V.                                )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
GMBH                                )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
REGENTS PLACE, INC.                 )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

THE COMPANIES EXECUTING THIS DEED ONLY AS INTRA-GROUP CREDITORS

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI SOFTWARE                    )
SOLUTIONS LTD                       )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI INTERNATIONAL               )
LIMITED                             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

EXECUTED as a DEED                  )
by Thomas Charles Ryley Shepherd    )            T. C. R. SHEPHERD
acting as attorney-in-fact          )
for and on behalf of                )
MARCONI COMMUNICATIONS              )
LIMITED                             )
in the presence of:                 )

Signature of witness:      S J Knight

Name of witness:           S J Knight

Address:                   Allen & Overy

                           One New Change, London EC4M 9QQ

Occupation:                Trainee Solicitor

<PAGE>

THE SECURITY TRUSTEE

EXECUTED as a DEED
by THE LAW DEBENTURE TRUST CORPORATION p.l.c.

Julian Mason-Jebbs                  Director

Representing Law Debenture Corporate Services Limited

R. D. Rance                         Secretary
Attention:        Trust Management Department

Address:          The Law Debenture Trust Corporation p.l.c.
                  Fifth Floor
                  100 Wood Street
                  London EC2V 7EX
Fax:

THE SENIOR NOTE TRUSTEE

EXECUTED as a DEED
by LAW DEBENTURE TRUST COMPANY OF NEW YORK

acting by two authorised signatories:    Daniel R. Fisher     Nancy Jo Kuenstner

                                         DANIEL R. FISHER     NANCY JO KUENSTNER

Attention:        Daniel R. Fisher

Address:          767 Third Avenue - 31st Floor
                  New York
                  New York 10017
                  United States of America

Fax:              001 212 750 1361

<PAGE>

THE JUNIOR NOTE TRUSTEE

EXECUTED as a DEED                  )
by Ian McMillan                     )            Ian McMillan
acting as attorney-in-fact          )
for and on behalf of                )
JPMORGAN CHASE BANK                 )
in the presence of:                 )

Signature of witness:      C Walters

Name of witness:           Chelsea Walters

Address:                   Clifford Chance

                           200 Aldersgate Street, London EC1A 4JJ

Occupation:                Trainee Solicitor

<PAGE>

THE NEW BONDING FACILITY AGENT

EXECUTED as a DEED                  )
by Ian McMillan                     )            Ian McMillan
acting as attorney-in-fact          )
for and on behalf of                )
HSBC BANK PLC                       )
in the presence of:                 )

Signature of witness:      C Walters

Name of witness:           Chelsea Walters

Address:                   Clifford Chance

                           200 Aldersgate Street, London EC1A 4JJ

Occupation:                Trainee Solicitor

THE NOTICE DETAILS REFERRED TO IN
CLAUSE 20 (NOTICES) OF THIS DEED FOR
THE NEW BONDING FACILITY AGENT ARE:

Attention:        Chris Merrett

Address:          8 Canada Square
                  London E14 5HQ

Fax:              020 7991 4346

<PAGE>

THE ESCROW BANK

EXECUTED as a DEED                  )
by Mark Brown                       )            M Brown
acting as attorney-in-fact          )
for and on behalf of                )
HSBC BANK PLC                       )
in the presence of:                 )

Signature of witness:      Trevor Saunders

Name of witness:           Trevor Saunders

Address:                   HSBC Bank PLC

                           Poultry

Occupation:                Bank Official

THE NOTICE DETAILS REFERRED TO IN
CLAUSE 20 (NOTICES) OF THIS DEED FOR
THE ESCROW BANK ARE:

Attention:        Chris Merrett

Address:          8 Canada E14 5HQ

Fax:              020 7991 4346

<PAGE>

THE REGISTRAR

EXECUTED as a DEED
by THE BANK OF NEW YORK

acting by two authorised signatories:    Trevor Blewer

                                         Trevor Blewer, Vice President

                                         Rashna Ahmed

                                         Rashna Ahmed, AVP

Attention:        Corporate Trust Administration

Address:          101 Barclay Street
                  Floor 21 W
                  New York NY 10286
                  United States of America

Fax:              001 212 815 5802

THE PAYING AGENT

EXECUTED as a DEED
by THE BANK OF NEW YORK

acting by two authorised signatories:    Trevor Blewer

                                         TREVOR BLEWER, VICE PRESIDENT

                                         Rashna Ahmed

                                         RASHNA AHMED, AVP

Attention:        Corporate Trust Administration

Address:          101 Barclay Street
                  Floor 21 W
                  New York NY 10286
                  United States of America

Fax:              001 212 815 5802

<PAGE>

THE DEPOSITARY

EXECUTED as a DEED
by THE BANK OF NEW YORK

acting by two authorised signatories:    Trevor Blewer

                                         Trevor Blewer, Vice President

                                         Rashna Ahmed

                                         Rashna Ahmed, AVP

Attention:        Corporate Trust Administration

Address:          101 Barclay Street
                  Floor 21 W
                  New York NY 10286
                  United States of America

Fax:              001 212 815 5802

<PAGE>

THE NEW BONDING FACILITY BANK

EXECUTED as a DEED                  )
by Mike Wharrad                     )            M Wharrad
acting as attorney-in-fact          )
for and on behalf of                )
JPMORGAN CHASE BANK                 )
in the presence of:                 )

Signature of witness:      Y Wharrad

Name of witness:           Yvonne Wharrad

Address:                   Rivendell, Bockhanger Lane, Kennington, Ashford, Kent

Occupation:                Housewife

THE NOTICE DETAILS REFERRED
TO IN CLAUSE 20 (NOTICES) OF THIS
DEED FOR JPMORGAN CHASE BANK
IN ITS CAPACITY AS A
NEW BONDING FACILITY BANK ARE:

Attention:        Mike Wharrad

Address:          125 London Wall
                  London EC2Y 5AJ

Fax:              +44 20 7777 3459

<PAGE>

THE NEW BONDING FACILITY BANK

EXECUTED as a DEED                  )
by Ian McMillan                     )            Ian McMillan
acting as attorney-in-fact          )
for and on behalf of                )
HSBC BANK PLC                       )
In the presence of:                 )

Signature of witness:      C Walters

Name of witness:           Chelsea Walters

Address:                   Clifford Chance

                           200 Aldersgate Street, London EC1A 4JJ

Occupation:                Trainee Solicitor

THE NOTICE DETAILS REFERRED TO IN
CLAUSE 20 (NOTICES) OF THIS DEED FOR
HSBC BANK PLC IN ITS CAPACITY AS A
NEW BONDING FACILITY BANK ARE:

Attention:        Gary Lee

Address:          8 Canada Square
                  London E14 5HQ

Fax:              020 7991 4346

<PAGE>

EXECUTED as a DEED                  )
by Barry William Cole               )            Barry Cole
acting as attorney-in-fact          )
for and on behalf of                )
BARCLAYS BANK PLC                   )
in the presence of:                 )

Signature of witness:      C Walters

Name of witness:           Chelsea Walters

Address:                   Clifford Chance

                           200 Aldersgate Street, London EC1A 4JJ

Occupation:                Trainee Solicitor

THE NOTICE DETAILS REFERRED
TO IN CLAUSE 20 (NOTICES) OF THIS
DEED FOR BARCLAYS BANK PLC
IN ITS CAPACITY AS A
NEW BONDING FACILITY BANK ARE:

Attention:        Barry Cole

Address:          5 The North Colonnade
                  Canary Wharf
                  London E14 4BB

Fax:              020 7773 1961

<PAGE>

THE JUNIOR NOTE TRUSTEE

EXECUTED as a DEED                  )
by Mike Wharrad                     )            M Wharrad
acting as attorney-in-fact          )
for and on behalf of                )
JPMORGAN CHASE BANK                 )
in the presence of:                 )

Signature of witness:      D. F. Pleasance

Name of witness:           David Pleasance

Address:                   21 Richmond Crescent

                           London E49R

Occupation:                Taxi Driver<PAGE>

                                                                    EXHIBIT 4.39

                                                                  CONFORMED COPY

                AUSTRALIAN FIXED AND FLOATING CHARGE

                (JURISDICTIONS OTHER THAN NEW SOUTH WALES, VICTORIA,
                TASMANIA, SOUTH AUSTRALIA, QUEENSLAND AND WESTERN
                AUSTRALIA)

                THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                and

                MARCONI AUSTRALIA PTY LIMITED

                [FREEHILLS LOGO]

                MLC Centre Martin Place Sydney New South Wales 2000 Australia
                Telephone 61 2 9225 5000 Facsimile 61 2 9322 4000
                www.freehills.com DX 361 Sydney

                SYDNEY MELBOURNE PERTH BRISBANE HANOI HO CHI MINH CITY SINGAPORE
                Correspondent Offices JAKARTA KUALA LUMPUR

                Liability limited by the Solicitors' Limitation of
                Liability Scheme, approved under the
                Professional Standards Act 1994 (NSW)

                Reference PSJ:AT:36E

<PAGE>

                                                       Fixed and floating charge

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Clause                                                                           Page
<S>                                                                              <C>
1        DEFINITIONS AND INTERPRETATION                                            1

         1.1      Definitions                                                      1
         1.2      Interpretation                                                   6
         1.3      Incorporated definitions                                         8
         1.4      Business Day                                                     8
         1.5      Security Trustee                                                 8
         1.6      Security Trust and Intercreditor Deed                            8
         1.7      Conflict                                                         8

2        CHARGE                                                                    9

         2.1      Charge                                                           9
         2.2      Priority                                                         9
         2.3      Nature of Charge                                                 9
         2.4      Designated Account, Insurance Policy proceeds and book debts     9
         2.5      Crystallisation                                                 10
         2.6      De-crystallisation                                              11
         2.7      Assignment of Intra-Group Loan Contracts                        11
         2.8      Notices of Charge - Accounts and Monetary Claims                12
         2.9      Cash collateral                                                 12
         2.10     Prospective liability                                           13
         2.11     Limit                                                           13

3        UNDERTAKINGS                                                             13

         3.1      Performance under the Relevant Documents, negative pledge       13
         3.2      Payment of Secured Obligations                                  14
         3.3      Notices to the Security Trustee                                 14
         3.4      Further security                                                15
         3.5      Title documents                                                 16
         3.6      Registration and protection of security                         16
         3.7      Term of undertakings                                            17
         3.8      Interest on demands                                             17
         3.9      Shares                                                          17
         3.10     Accounts                                                        18
         3.11     Monetary Claims                                                 18
         3.12     Intra-Group Loan Contracts                                      19
         3.13     Investments: Delivery of Documents of Title                     19
         3.14     Excluded Contracts                                              19

4        ENFORCEMENT                                                              19

         4.1      When enforceable                                                19
         4.2      Assistance in realisation                                       20

5        RECEIVER                                                                 20

         5.1      Appointment of Receiver                                         20
         5.2      Agency of Receiver                                              21
</TABLE>

                                                                          PAGE 1
<PAGE>

                                                       Fixed and floating charge

<TABLE>
<S>                                                                               <C>
         5.3      Powers of Receiver                                              21
         5.4      Nature of Receiver's Powers                                     23
         5.5      Status of Receiver after commencement of winding-up             23
         5.6      Powers exercisable by the Security Trustee                      24
         5.7      Set-off                                                         24
         5.8      Notice of exercise of rights                                    24
         5.9      Termination of receivership and possession                      24

6        APPLICATION AND RECEIPTS OF MONEY                                        25

         6.1      Order of application                                            25
         6.2      Money actually received                                         25
         6.3      Notice of a subsequent Encumbrance                              25
         6.4      Security Trustee's receipts                                     25
         6.5      Conversion of currencies on application                         26
         6.6      Amounts payable on demand                                       26

7        POWER OF ATTORNEY                                                        26

         7.1      Appointment of Attorney                                         26
         7.2      Delegation and substitution                                     26
         7.3      Ratification                                                    26
         7.4      Indemnity                                                       27

8        PROTECTION                                                               27

         8.1      Protection of third parties                                     27
         8.2      Protection of the Security Trustee, Receiver and Attorney       27

9        TAX, COSTS, EXPENSES, INDEMNITY AND RELEASE                              28

         9.1      Tax                                                             28
         9.2      GST                                                             28
         9.3      Expenses                                                        28
         9.4      Currency indemnity                                              29
         9.5      Gross up                                                        29
         9.6      Release of Security                                             29

10       SAVING PROVISIONS                                                        30

         10.1     Statutory powers                                                30
         10.2     Continuing security                                             30
         10.3     No merger of security                                           30
         10.4     Exclusion of moratorium                                         30
         10.5     Conflict                                                        31
         10.6     Discretion                                                      31
         10.7     Delegation                                                      31
         10.8     Completion of blank securities                                  31
         10.9     Principal obligations                                           31
         10.10    No obligation to marshal                                        31
         10.11    Non-avoidance                                                   32
         10.12    Increase in financial accommodation                             32
</TABLE>

                                                                          PAGE 2
<PAGE>

                                                       Fixed and floating charge

<TABLE>
<S>                                                                               <C>
11       THIRD PARTY PROVISIONS                                                   32

         11.1     Independent obligations                                         32
         11.2     Unconditional nature of obligations                             32
         11.3     No competition                                                  34

12       GENERAL                                                                  35

         12.1     Confidential information                                        35
         12.2     Performance by Security Trustee of the Chargor's obligations    35
         12.3     Chargor to bear cost                                            36
         12.4     Notices                                                         36
         12.5     Governing law and jurisdiction                                  36
         12.6     Prohibition and enforceability                                  36
         12.7     Waivers                                                         36
         12.8     Variation                                                       37
         12.9     Cumulative rights                                               37
         12.10    Assignment                                                      37
         12.11    Attorneys                                                       37
         12.12    Counterparts                                                    37

SCHEDULE 1 - FORM OF NOTICE OF ASSIGNMENT OF INTRA-GROUP LOAN CONTRACTS           38

SCHEDULE 2 - FORM OF NOTICE OF CHARGE                                             41
</TABLE>

                                                                          PAGE 3
<PAGE>

THIS DEED OF CHARGE

                  is made on                 2003 between the following parties:

                  1.       MARCONI AUSTRALIA PTY LIMITED
                           ACN 091 247 746
                           of 90 Arthur Street, North Sydney, NSW, Australia
                           2066
                           (CHARGOR)

                  2.       THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                           of 5th floor, 100 Wood Street, London, EC2V 7EX,
                           United Kingdom, as security trustee for the Secured
                           Creditors on the terms and conditions set out in the
                           Security Trust and Intercreditor Deed
                           (SECURITY TRUSTEE)

RECITALS

                  A.       The Chargor is or will be the legal and beneficial
                           owner of the Charged Property.

                  B.       The Chargor has agreed to charge the Charged Property
                           to secure the payment and performance of the Secured
                           Obligations.

THIS DEED WITNESSES

                  that in consideration of, among other things, the mutual
                  promises contained in this deed, the parties agree:

1        DEFINITIONS AND INTERPRETATION

         1.1      DEFINITIONS

                  In this deed (unless the context otherwise requires):

                  ACCOUNTS means any credit balance from time to time on any
                  account opened or maintained by the Chargor with any financial
                  institution other than the Designated Account and all Related
                  Rights;

                  ATTORNEY means an attorney appointed under this deed;

                  AUTHORISATION includes:

                  (a)      any consent, registration, filing, agreement, notice
                           of non-objection, notarisation, certificate, licence,
                           approval, permit, authority or exemption from, by or
                           with a Government Agency; and

                  (b)      in relation to anything which a Government Agency may
                           prohibit or restrict within a specific period, the
                           expiry of that period without intervention or action
                           or notice of intended intervention or action;

                  BUSINESS DAY means:

                  (a)      for the purposes of clause 12.4, a day on which banks
                           are open for business in the city where the notice or
                           other communication is received excluding a Saturday,
                           Sunday or public holiday; and

                                                                          PAGE 1
<PAGE>

                                                       Fixed and floating charge

                  (b)      for all other purposes, a day on which banks are open
                           for business in London and Sydney excluding a
                           Saturday, Sunday or public holiday;

                  CHARGE means the security created by this deed;

                  CHARGED PROPERTY means all of the present and future
                  undertaking, assets and rights of the Chargor including, but
                  not limited to, all real and personal property, choses in
                  action, goodwill, uncalled and called but unpaid capital, but
                  excluding:

                  (a)      any undertaking, assets and rights of the Chargor
                           which, as at the date of this deed or at any time
                           after that date, are located, or taken for the
                           purposes of any Australian State or Territory stamp
                           duty law to be located, in New South Wales, Victoria,
                           Tasmania, South Australia, Queensland and Western
                           Australia; and

                  (b)      any Excluded Contract until such time as that
                           relevant document or agreement ceases to be an
                           Excluded Contract;

                  COLLATERAL SECURITY means any present or future Encumbrance,
                  Guarantee or other document or agreement created or entered
                  into by the Chargor, an Obligor or any other person as
                  security for the payment and performance of the Secured
                  Obligations;

                  CORPORATIONS ACT means the Corporations Act 2001;

                  DEBTOR means Marconi Corporation plc (registered in England
                  and Wales with company number 00067307);

                  DESIGNATED ACCOUNT means the bank account opened by the
                  Chargor in accordance with clause 2.4;

                  DOLLARS, A$ and $ means the lawful currency of the
                  Commonwealth of Australia;

                  ENCUMBRANCE means an interest or power:

                  (a)      reserved in or over an interest in any asset
                           including, but not limited to, any retention of
                           title; or

                  (b)      created or otherwise arising in or over any interest
                           in any asset under a bill of sale, mortgage, charge,
                           lien, pledge, trust or power,

                  by way of, or having similar commercial effect to, security
                  for the payment of a debt, any other monetary obligation or
                  the performance of any other obligation, and includes, but is
                  not limited to, any agreement to grant or create any of the
                  above;

                  EXCLUDED CONTRACT means, in respect of the Chargor, the
                  interest of the Chargor under a document or agreement which:

                  (a)      requires the consent of a party to that document or
                           agreement to grant or create an Encumbrance over or
                           in respect of the Chargor's interest under that
                           document;

                  (b)      provides that a default will be taken to have
                           occurred under that document or agreement if such
                           consent is not obtained; or

                  (c)      requires the fulfilment of any requirement, step or
                           condition to enable or permit an Encumbrance over or
                           in respect of the Chargor's interest under that
                           document or agreement,

                                                                          PAGE 2
<PAGE>

                                                       Fixed and floating charge

                  but only until such time as that consent or fulfilment of any
                  such requirement, step or condition is obtained;

                  GOVERNMENT AGENCY means any government or any governmental,
                  semi-governmental, administrative, fiscal or judicial body,
                  department, commission, authority, tribunal, agency or entity;

                  GST means the goods and services tax levied under A New Tax
                  System (Goods and Services Tax) Act 1999 (GST ACT);

                  GUARANTEE means any guarantee, suretyship, letter of credit,
                  letter of comfort or any other obligation (whatever called and
                  of whatever nature):

                  (a)      to provide funds (whether by the advance or payment
                           of money, the purchase of or subscription for shares
                           or other securities, the purchase of assets or
                           services, or otherwise) for the payment or discharge
                           of;

                  (b)      to indemnify any person against the consequences of
                           default in the payment of; or

                  (c)      to be responsible for,

                  any debt or monetary liability of another person or the
                  assumption of any responsibility or obligation in respect of
                  the insolvency or the financial condition of any other person;

                  GUARANTOR SHARES means, in respect of the Marketable
                  Securities held by the Chargor, the Marketable Securities in
                  any of the Subsidiaries referred to in clause 2.3(a)(6)
                  provided that the relevant Subsidiary is a Guarantor;

                  INSOLVENCY EVENT OF DEFAULT means any Insolvency Event which
                  is also an Event of Default;

                  INSURANCE POLICY means any policy of insurance in which the
                  Chargor may from time to time have an interest and all Related
                  Rights;

                  INTELLECTUAL PROPERTY means all industrial and intellectual
                  property rights whether registered or not including pending
                  applications for registration of such rights and the right to
                  apply for registration of such rights including but not
                  limited to Patents (as defined in the Indentures), utility
                  models, design patents, registered designs, design rights,
                  trade and service marks, copyrights (including copyright and
                  equivalent rights in computer software), rights in inventions,
                  technical information, rights in know-how, business names,
                  database rights, processes, models, formulae and experiments
                  and all rights of equivalent or similar effect to any of those
                  which may subsist anywhere in the world and all Related
                  Rights;

                  INTERIM BONDING FACILITY DOCUMENTS means the Bonding Documents
                  referred to in the Interim Bonding Facility Letter;

                  INTERIM BONDING FACILITY LETTER means the facility letter
                  dated 10 May 2002, as amended on 24 October 2002, between HSBC
                  Bank plc, Barclays Bank PLC, JPMorgan Chase Bank and Marconi
                  Bonding Limited in an amount up to (pound)150,000,000 (or the
                  equivalent in other currencies) for the issuance of bonds,
                  guarantees, letters of credit indemnities and similar
                  instruments;

                                                                          PAGE 3
<PAGE>

                                                       Fixed and floating charge

                  INTRA-GROUP LOAN CONTRACTS means any contracts between the
                  Chargor and any member of the Group pursuant to which the
                  Chargor makes available intra-Group loans to such member of
                  the Group and all Related Rights;

                  INVESTMENTS means:

                  (a)      any stocks, shares, debentures, securities and
                           certificates of deposit (but not including the
                           Marketable Securities referred to in clause
                           2.3(a)(6));

                  (b)      all interests in collective investment schemes; and

                  (c)      all warrants, options and other rights to subscribe
                           or acquire any of the investments described in (a)
                           and (b),

                  in each case whether held directly by or to the order of the
                  Chargor or by any trustee, nominee, fiduciary or clearance
                  system on its behalf and all Related Rights (including all
                  rights against any such trustee, nominee, fiduciary or
                  clearance system);

                  MARKETABLE SECURITIES has the following meaning:

                  (a)      the meaning given to that expression in the
                           Corporations Act; and

                  (b)      any units (whatever called) in a trust estate which
                           represent a legal or beneficial interest in any of
                           the income or assets of that trust estate and
                           includes, but is not limited to, any options to
                           acquire any units as described;

                  MONETARY CLAIMS means any book and other debts and monetary
                  claims owing to the Chargor and any proceeds thereof
                  including, without limitation, any claims or sums of money
                  deriving from or in relating to any Intellectual Property, the
                  proceeds of any Insurance Policy, any court order or judgment,
                  any contract or agreement to which the Chargor is a party and
                  any other assets, property, rights or undertaking of the
                  Chargor and all Related Rights;

                  NEW BONDING FACILITY AGREEMENT means the L50,000,000 committed
                  revolving bonding facility agreement dated 27 March 2003 among
                  the Debtor, Marconi Bonding Limited, HSBC Bank plc as agent
                  and security trustee, the lenders described thereunder and
                  certain other Subsidiaries of the Debtor providing for the
                  issuance of surety bonds, appeal bonds, bid bonds, performance
                  bonds, letters of credit, bank guarantees or other obligations
                  of a like nature on behalf of the Debtor and/or any Subsidiary
                  of the Debtor, as such agreement may be amended, extended,
                  supplemented or otherwise modified from time to time
                  (including, without limitation, any successive amendments,
                  extensions, supplements or other modifications of the
                  foregoing);

                  NOTICE OF ASSIGNMENT means a notice of assignment in
                  substantially the form set out in Schedule 1;

                  NOTICE OF CHARGE means a notice of charge in substantially the
                  form set out in Schedule 2;

                  OFFICER means:

                  (a)      in relation to the Chargor, a director or a secretary
                           of the Chargor;

                  (b)      in relation to the Security Trustee, any officer, as
                           that expression is defined in section 9 of the
                           Corporations Act, of the Security Trustee; and

                                                                          PAGE 4
<PAGE>

                                                       Fixed and floating charge

                  (c)      in relation to a Receiver, any Delegate or an
                           Attorney which is a corporation, any officer, as that
                           expression is defined in section 9 of the
                           Corporations Act, of that Receiver, Delegate or
                           Attorney;

                  POWER means any right, power, authority, discretion or remedy
                  conferred on the Security Trustee, any Delegate, Receiver or
                  Attorney by any Relevant Document or any applicable law;

                  RECEIVER means a receiver or receiver and manager appointed
                  under this deed;

                  RELATED RIGHTS means, in relation to any asset:

                  (a)      the proceeds of sale or assignment of all or any part
                           of that asset;

                  (b)      all rights under any licence, agreement for sale or
                           agreement for lease in respect of that asset;

                  (c)      all rights, benefits, claims, contracts, warranties,
                           remedies, security, indemnities or covenants for
                           title in respect of that asset; and

                                                       Fixed and floating charge

                  (d)      any moneys and proceeds paid or payable in respect of
                           that asset including, but not limited to royalties,
                           licence payments, awards of damages and payments made
                           pursuant to settlement agreements in respect of that
                           asset;

                  RELEVANT DOCUMENTS has the meaning given to it in the Security
                  Trust and Intercreditor Deed;

                  SECURED CREDITORS has the meaning given to it in the Security
                  Trust and Intercreditor Deed;

                  SECURED OBLIGATIONS means all present and future indebtedness,
                  liabilities and obligations (for the avoidance of doubt,
                  including any liabilities and obligations which have been
                  cash-collateralised by the Chargor) at any time of the Chargor
                  under the Relevant Documents, both actual and contingent and
                  whether incurred solely or jointly or in any other capacity
                  together with any of the following matters relating to or
                  arising in respect of those liabilities and obligations:

                  (a)      any refinancing, novation, deferral or extension;

                  (b)      any obligation relating to any increase in the amount
                           of such obligations;

                  (c)      any claim for damages or restitution; and

                  (d)      any claim as a result of any recovery by the Chargor
                           of a payment or discharge, non-allowability, on the
                           grounds of preference,

                  and any amounts which would be included in any of the above
                  but for any discharge, non-provability or unenforceability of
                  those amounts in any insolvency or other proceedings
                  (including interest accruing after the commencement of any
                  insolvency or other proceedings);

                  SECURITY TRUST means the trust established under clause 6 of
                  the Security Trust and Intercreditor Deed;

                  SECURITY TRUST AND INTERCREDITOR DEED means the document so
                  entitled dated on or about the date of this deed between,
                  inter alia, the Debtor, the Security Trustee and the Chargor;

                  SECURITY TRUST FUND means:

                                                                          PAGE 5
<PAGE>

                                                       Fixed and floating charge

                  (a)      all right, title and interest vested in the Security
                           Trustee (in its capacity as trustee of the Security
                           Trust) under the Transaction Security and the other
                           Relevant Documents including all moneys recovered
                           under them (whether upon enforcement or otherwise);

                  (b)      all money paid to the Security Trustee under this
                           deed; and

                  (c)      all other property acquired by the Security Trustee
                           and intended to be held for the benefit of the
                           Secured Creditors upon the trusts of this deed;

                  SHARES means, in respect of the Marketable Securities held by
                  the Chargor, the Marketable Securities in any of the
                  Subsidiaries referred to in clause 2.3(a)(6);

                  SUBSIDIARY in relation to a corporation means:

                  (a)      a subsidiary of the corporation for the purposes of
                           the Corporations Act;

                  (b)      if the corporation has appointed or is in a position
                           to appoint one or more directors of another
                           corporation and that director or those directors are
                           in a position to cast, or control the casting of,
                           more than one-half of the maximum number of votes
                           that might be cast at a meeting of directors of that
                           other corporation - that other corporation; and

                  (c)      any other corporation that was at any time after the
                           date of this deed a subsidiary under paragraphs (a)
                           or (b) of this definition but ceased to be a
                           subsidiary because of an amendment to, or a
                           consolidation or replacement of, the Corporations
                           Act;

                  TAX means:

                  (a)      any tax (including the GST), levy, charge, impost,
                           duty, fee, deduction, compulsory loan or withholding;
                           or

                  (b)      any income, stamp or transaction duty, tax or charge,

                  which is assessed, levied, imposed or collected by any
                  Government Agency and includes, but is not limited to, any
                  interest, fine, penalty, charge, fee or other amount imposed
                  on or in respect of any of the above;

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

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

                  TITLE DOCUMENT means any original, duplicate or counterpart
                  certificate or document of title including any real property
                  certificate of title or any share certificate.

         1.2      INTERPRETATION

                  In this deed, headings and boldings are for convenience only
                  and do not affect the interpretation of this deed and, unless
                  the context otherwise requires:

                  (a)      words importing the singular include the plural and
                           vice versa;

                                                                          PAGE 6
<PAGE>

                                                       Fixed and floating charge

                  (b)      words importing a gender include any gender;

                  (c)      other parts of speech and grammatical forms of a word
                           or phrase defined in this deed have a corresponding
                           meaning;

                  (d)      an expression importing a natural person includes any
                           company, partnership, joint venture, association,
                           corporation or other body corporate and any
                           Government Agency;

                  (e)      a reference to any thing (including, but not limited
                           to, any right) includes a part of that thing but
                           nothing in this clause 1.2(e) implies that
                           performance of part of an obligation constitutes
                           performance of the obligation;

                  (f)      a reference to a clause, party, annexure, exhibit or
                           schedule is a reference to a clause of, and a party,
                           annexure, exhibit and schedule to, this deed and a
                           reference to this deed includes any annexure, exhibit
                           and schedule;

                  (g)      a reference to a statute, regulation, proclamation,
                           ordinance or by-law includes all statutes,
                           regulations, proclamations, ordinances or by-laws
                           amending, consolidating or replacing it, whether
                           passed by the same or another Government Agency with
                           legal power to do so, and a reference to a statute
                           includes all regulations, proclamations, ordinances
                           and by-laws issued under that statute;

                  (h)      a reference to a document includes all amendments or
                           supplements to, or replacements or novations of, that
                           document;

                  (i)      a reference to a party to a document includes that
                           party's successors and permitted assigns;

                  (j)      a reference to an agreement other than this deed
                           includes an undertaking, deed, agreement or legally
                           enforceable arrangement or understanding whether or
                           not in writing;

                  (k)      a reference to an asset includes all property of any
                           nature, including, but not limited to, a business,
                           and all rights, revenues and benefits;

                  (l)      a reference to debt includes debts owing by a bank or
                           other financial institution including, but not
                           limited to, in relation to a current trading account;

                  (m)      a reference to a document includes any agreement in
                           writing, or any certificate, notice, deed, instrument
                           or other document of any kind;

                  (n)      a reference to a body, other than a party to this
                           deed (including, without limitation, an institute,
                           association or authority), whether statutory or not:

                           (1)      which ceases to exist; or

                           (2)      whose powers or functions are transferred to
                                    another body,

                           is a reference to the body which replaces it or which
                           substantially succeeds to its powers or functions;

                  (o)      a reference to liquidation includes official
                           management, appointment of an administrator,
                           compromise, arrangement, merger, amalgamation,
                           reconstruction, winding-up, dissolution,
                           deregistration, assignment for the benefit of
                           creditors, scheme, composition or arrangement with
                           creditors,

                                                                          PAGE 7
<PAGE>

                                                       Fixed and floating charge

                           insolvency, bankruptcy, or any similar procedure or,
                           where applicable, changes in the constitution of any
                           partnership or person, or death;

                  (p)      no provision of this deed will be construed adversely
                           to a party solely on the ground that the party was
                           responsible for the preparation of this deed or that
                           provision; and

                  (q)      "continuing" in relation to an Enforcement Event,
                           shall be construed as a reference to an acceleration
                           of any Secured Obligation (other than Secured
                           Obligations arising under the New Bonding Facility
                           Agreement) where such acceleration has not been
                           rescinded in writing or a declaration that the
                           Secured Obligations (other than Secured Obligations
                           arising under the New Bonding Facility Agreement) are
                           prematurely due and payable (other than solely as a
                           result of it becoming unlawful for a Secured Creditor
                           to perform its obligations under the Relevant
                           Documents) where such declaration has not been
                           revoked in writing or any failure by an Obligor to
                           pay any principal amount in respect of any Secured
                           Obligations (other than Secured Obligations arising
                           under the New Bonding Facility Agreement) whether on
                           maturity or otherwise which has not been remedied or
                           waived in writing. For the purposes of this clause
                           1.2(q), the definition of "Secured Obligations" shall
                           have the same meaning as in the Security Trust and
                           Intercreditor Deed.

         1.3      INCORPORATED DEFINITIONS

                  A word or phrase (other than one defined in clause 1.1)
                  defined in the Security Trust and Intercreditor Deed has the
                  same meaning when used in this deed.

         1.4      BUSINESS DAY

                  Where the day on or by which any thing is to be done is not a
                  Business Day, that thing must be done on or by the preceding
                  Business Day.

         1.5      SECURITY TRUSTEE

                  The Chargor acknowledges and agrees that the Security Trustee
                  has entered into this deed and has undertaken or will
                  undertake all covenants, terms and conditions on its part to
                  be observed and performed in its capacity as trustee of the
                  Security Trust only. Clause 14.5 of the Security Trust and
                  Intercreditor Deed applies to this deed as if that clause was
                  set out in full in this deed.

         1.6      SECURITY TRUST AND INTERCREDITOR DEED

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

         1.7      CONFLICT

                  Notwithstanding any provision to the contrary contained
                  herein, the parties agree that this deed is subject in all
                  respects to the terms of the Security Trust and Intercreditor
                  Deed and for the avoidance of doubt, in the event of any

                                                                          PAGE 8
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                                                       Fixed and floating charge

                  inconsistency, the provisions of the Security Trust and
                  Intercreditor Deed shall prevail.

2        CHARGE

         2.1      CHARGE

                  The Chargor as beneficial owner charges all of its interest in
                  the Charged Property to the Security Trustee as security for
                  the due and punctual payment and performance of the Secured
                  Obligations.

         2.2      PRIORITY

                  The parties intend that the Charge take priority over all
                  other Encumbrances of the Chargor.

         2.3      NATURE OF CHARGE

                  The Charge is:

                  (a)      a fixed charge over all the Chargor's present and
                           future interests under:

                           (1)      any freehold or leasehold property or any
                                    other interest in real property, fixtures,
                                    plant, equipment and other chattels (other
                                    than stock in trade) and all Related Rights;

                           (2)      any goodwill;

                           (3)      all rights in relation to the uncalled
                                    capital of the Chargor;

                           (4)      any Title Document and any other documents
                                    evidencing a right to the possession of any
                                    real or personal property;

                           (5)      all Monetary Claims deriving from or in
                                    relation to any Intellectual Property or the
                                    proceeds of any Insurance Policy relating to
                                    real property;

                           (6)      any Marketable Securities in any Subsidiary
                                    of the Chargor, all dividends, interest and
                                    other monies payable in respect of such
                                    Marketable Securities and all Related Rights
                                    (whether derived by way of redemption,
                                    bonus, preference, option, substitution,
                                    conversion or otherwise);

                           (7)      the Designated Account and any chose in
                                    action in respect of the Designated Account;
                                    and

                  (b)      a floating charge over all other Charged Property
                           (other than Intra-Group Loan Contracts which are
                           assigned by way of security under clause 2.7).

         2.4      DESIGNATED ACCOUNT, INSURANCE POLICY PROCEEDS AND BOOK DEBTS

                  (a)      The Security Trustee may require the Chargor to open
                           and maintain a Designated Account at a bank and
                           branch approved by the Security Trustee on terms
                           that:

                                                                          PAGE 9
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                                                       Fixed and floating charge

                           (1)      nominated Officers of the Security Trustee
                                    or its Delegate must be signatories to the
                                    Designated Account; and

                           (2)      no withdrawals can be made from the
                                    Designated Account without the signature of
                                    one of those Officers.

                  (b)      If the floating charge created under clauses 2.1 and
                           2.3(b) crystallises under either clause 2.5(a) or
                           clause 2.5(b) in respect of any proceeds (other than
                           the proceeds referred to in clause 2.3(a)(5)), the
                           Chargor must immediately and until notified otherwise
                           by the Security Trustee deposit in the Designated
                           Account any proceeds (other than the proceeds
                           referred to in clause 2.3(a)(5)) the Chargor receives
                           under any Insurance Policy in relation to the Charged
                           Property or any Monetary Claim in respect of which
                           the floating charge has crystallised.

                  (c)      Clause 2.4(b) does not apply to proceeds received
                           from any workers' compensation or public liability
                           policy or reinstatement policy to the extent that the
                           proceeds are paid to a person:

                           (1)      entitled to be compensated under the
                                    workers' compensation or public liability
                                    policy; or

                           (2)      under a contract for the reinstatement of
                                    the Charged Property.

                  (d)      The Chargor must give all notices and directions and
                           execute all necessary documents as requested by the
                           Security Trustee to ensure clauses 2.4(a) and (b) are
                           complied with.

                  (e)      A Power created under this clause 2.4 is not waived
                           by any failure or delay in exercise, or by the
                           partial exercise, of that Power.

                  (f)      If a Power arising under this clause 2.4 is waived,
                           the fixed charge created by this deed in respect of
                           the relevant Monetary Claim or other relevant asset
                           continues to operate as a fixed charge.

         2.5      CRYSTALLISATION

                  (a)      By notice in writing to the Debtor with a copy to the
                           Chargor, the Security Trustee may and shall, if so
                           instructed pursuant to the Security Trust and
                           Intercreditor Deed, crystallise the floating charge
                           created by clauses 2.1 and 2.3(b) with immediate
                           effect into a fixed charge as regards any property or
                           assets specified in the notice if:

                           (1)      an Event of Default has occurred and is
                                    continuing; or

                           (2)      any person attempts to levy any distress,
                                    execution, diligence or other similar
                                    process against or to appoint a Receiver
                                    over any of the Charged Property; or

                           (3)      the Security Trustee considers that any of
                                    the Charged Property may be in jeopardy or
                                    in danger of being seized or sold pursuant
                                    to any form of legal process, other than a
                                    voluntary sale of Charged Property entered
                                    into by the Chargor and permitted by the
                                    Indentures provided that the Security
                                    Trustee shall not be under any duty to
                                    monitor the Charged Property.

                                                                         PAGE 10
<PAGE>

                                                       Fixed and floating charge

                  (b)      Notwithstanding clause 2.5(a) and without prejudice
                           to any law which may have a similar effect, the
                           floating charge created in clauses 2.1 and 2.3(b)
                           automatically and immediately crystallises and
                           becomes fixed:

                           (1)      without the Security Trustee giving any
                                    notice to the Chargor, in respect of all of
                                    the Charged Property:

                                          (A)    if any person levies any
                                                 distress, execution, diligence
                                                 similar process against, or
                                                 appoints a Receiver over, any
                                                 of the Charged Property;

                                          (B)    if a notice under Subdivision
                                                 260-A of Schedule 1 of the
                                                 Taxation Administration Act
                                                 1953 in respect of the Chargor
                                                 is signed or given by, or on
                                                 behalf of, the Commissioner of
                                                 Taxation or the Deputy
                                                 Commissioner or Taxation;

                                          (C)    if a resolution is passed or an
                                                 order is made for the
                                                 winding-up, dissolution,
                                                 administration or
                                                 re-organisation of the Chargor
                                                 or an administrator is
                                                 appointed to the Chargor other
                                                 than in connection with a
                                                 solvent reconstruction of the
                                                 Chargor permitted under the
                                                 Indentures; or

                           (2)      in respect of the proceeds of any book debt
                                    or other debt or other moneys now or in the
                                    future payable to the Chargor, when notice
                                    in respect of those proceeds or moneys is
                                    given to the Chargor by the Security
                                    Trustee.

         2.6      DE-CRYSTALLISATION

                  (a)      Where an asset has become subject to a fixed charge
                           under clause 2.5, the Security Trustee shall, if so
                           requested by the Chargor and if instructed to do so
                           in accordance with the Security Trust and
                           Intercreditor Deed, release the asset from that fixed
                           charge by notice in writing to the Debtor with a copy
                           to the Chargor.

                  (b)      When an asset is released from the fixed charge under
                           clause 2.6(a), the asset will again be subject to:

                           (1)      the floating charge under clauses 2.1 and
                                    2.3(b); and

                           (2)      the further operation of clause 2.5.

         2.7      ASSIGNMENT OF INTRA-GROUP LOAN CONTRACTS

                  (a)      The Chargor hereby assigns to the Security Trustee as
                           trustee for the Secured Creditors as security for the
                           payment and discharge of the Secured Obligations all
                           its right, title and interest from time to time in
                           and to each of the Intra-Group Loan Contracts (having
                           already obtained any necessary consent to such
                           assignment from any third party).

                  (b)      Pursuant to clause 7, the Security Trustee may, upon
                           the occurrence of an Insolvency Event of Default and
                           shall, if so instructed pursuant to the Security
                           Trust and Intercreditor Deed upon or at any time
                           after the occurrence of any Event of Default which is
                           continuing, deliver to relevant

                                                                         PAGE 11
<PAGE>

                                                       Fixed and floating charge

                           persons Notices of Assignment duly executed by the
                           Security Trustee on behalf of the Chargor in respect
                           of the Intra-Group Loan Contracts.

                  (c)      Prior to the delivery of a Notice of Assignment
                           pursuant to clause 2.7(b) or the occurrence of an
                           Enforcement Event, the Chargor shall be entitled to
                           deal with the Intra-Group Loan Contracts except as
                           expressly prohibited under the Indentures or the
                           Security Trust and Intercreditor Deed.

         2.8      NOTICES OF CHARGE - ACCOUNTS AND MONETARY CLAIMS

                  (a)      The Chargor shall, within 10 Business Days after the
                           date of this deed, provide the Security Trustee with
                           details of all Accounts and Monetary Claims arising
                           from any Insurance Policy relating to real property
                           and deriving from or relating to any Intellectual
                           Property and in relation to all other Accounts and
                           Monetary Claims, immediately upon the occurrence of
                           an Insolvency Event of Default or upon request by the
                           Security Trustee if instructed pursuant to the
                           Security Trust and Intercreditor Deed upon or after
                           the occurrence of any Event of Default which is
                           continuing, to enable the Security Trustee to deliver
                           a Notice of Charge in accordance with clauses 2.8(b)
                           and/or 2.8(c) below.

                  (b)      Pursuant to clause 7, the Security Trustee may, upon
                           the occurrence of an Insolvency Event of Default and
                           shall, if so instructed pursuant to the Security
                           Trust and Intercreditor Deed upon or at any time
                           after the occurrence of any Event of Default which is
                           continuing, deliver to relevant persons, Notices of
                           Charge duly executed by the Security Trustee on
                           behalf of the Chargor in respect of any Monetary
                           Claims.

                  (c)      Pursuant to clause 7, the Security Trustee may, upon
                           the occurrence of an Insolvency Event of Default and
                           shall, if so instructed pursuant to the Security
                           Trust and Intercreditor Deed upon or at any time
                           after the occurrence of any Event of Default which is
                           continuing, deliver to relevant persons, Notices of
                           Charge duly executed by the Security Trustee on
                           behalf of the Chargor in respect of any Accounts.

         2.9      CASH COLLATERAL

                  The security created by clause 2.1 and 2.3(b) over the
                  Accounts (other than the Mandatory Redemption Escrow Account)
                  shall take effect subject to, and shall not restrict the
                  ability of the Chargor to create, any (a) security or (b)
                  other arrangement under which money or claims to, or the
                  benefit of, a bank or other account may be applied, set-off,
                  made subject to a combination of accounts or otherwise subject
                  to time deposit arrangements or other flawed asset rights
                  (whether or not such security is or is to be created on,
                  before or after the date of this deed) which secures
                  obligations under and/or in respect of:

                  (a)      the Interim Bonding Facility Documents;

                  (b)      the Temporary Bonding Facility Documents;

                  (c)      the New Bonding Facility Agreement;

                  (d)      the Existing Performance Bonds; and

                                                                         PAGE 12
<PAGE>

                                                       Fixed and floating charge

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

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

         2.10     PROSPECTIVE LIABILITY

                  (a)      The parties acknowledge that the maximum amount of
                           the prospective liability, secured by this deed, for
                           the purposes of establishing priority under section
                           282(3) of the Corporations Act, is A$120,000,000.

                  (b)      The Security Trustee may from time to time lodge a
                           notice under section 268(2) of the Corporations Act
                           on behalf of the Chargor specifying an increase in
                           the maximum amount of the prospective liability
                           referred to in clause 2.10(a) and from the date of
                           lodgement the amount specified in clause 2.10(a) is
                           to be regarded as varied to the amount specified in
                           that notice.

                  (c)      Neither clause 2.10(a) nor clause 2.10(b) in any way
                           affects or limits the actual amount of Secured
                           Obligations which may in fact be secured by the
                           Charge.

                  (d)      Clauses 2.10(a), (b) and (c) are to be construed
                           independently of each other.

         2.11     LIMIT

                  (a)      Despite any other provision in this deed other than
                           clause 2.11(b) and despite the fact that this Charge
                           is security for the whole of the Secured Obligations,
                           the amount ultimately recoverable by the Security
                           Trustee under this deed is limited to A$45,667,000.

                  (b)      Despite clause 2.11(a), the Security Trustee may at
                           any time by written notice to the Chargor increase
                           the amount to such an amount specified in that notice
                           as to reflect the value of the assets of the Chargor
                           or as agreed between the Security Trustee and the
                           Chargor .

                  (c)      Upon the giving of a notice by the Security Trustee
                           under clause 2.11(b), and as often as that occurs,
                           the amount set out in clause 2.11(a) is increased to
                           the amount specified in that notice.

                  (d)      Nothing in this clause 2.11 restricts or limits any
                           Power or the exercise of any Power.

3        UNDERTAKINGS

         3.1      PERFORMANCE UNDER THE RELEVANT DOCUMENTS, NEGATIVE PLEDGE

                  (a)      The Chargor must fully and punctually perform its
                           obligations under the Relevant Documents.

                                                                         PAGE 13
<PAGE>

                                                       Fixed and floating charge

                  (b)      The Chargor undertakes that it shall not, at any time
                           during the subsistence of this deed, create or permit
                           to subsist any Encumbrance over all or any part of
                           the Charged Property except as not expressly
                           prohibited under the terms of the Indentures.

                  (c)      The Chargor must not (and shall not agree to) at any
                           time during the subsistence of this deed, except as
                           not expressly prohibited under the terms of the
                           Indentures:

                           (1)      execute any conveyance, disposition,
                                    transfer, lease, assignment or assignation
                                    of, or other right to use or occupy, all or
                                    any part of the Charged Property;

                           (2)      create any legal or equitable estate or
                                    heritable interest or other interest in, or
                                    over, or otherwise relating to, all or any
                                    part of the Charged Property;

                           (3)      grant or vary, or accept any surrender, or
                                    cancellation or renunciation or disposal of,
                                    any lease, tenancy, licence, consent or
                                    other right to use or occupy in relation to
                                    any of the Charged Property; or

                           (4)      allow any person any right to use or occupy
                                    or to become entitled to assert any
                                    proprietary interest in, or right over, the
                                    Charged Property, which may, in each case,
                                    adversely affect the ability of the Security
                                    Trustee to exercise any Power.

         3.2      PAYMENT OF SECURED OBLIGATIONS

                  The Chargor hereby covenants with the Security Trustee as
                  trustee for the Secured Creditors that it shall on demand of
                  the Security Trustee discharge all Secured Obligations and the
                  Chargor shall pay to the Security Trustee when due and payable
                  every sum at any time owing, due or incurred by the Chargor to
                  the Security Trustee (whether for its own account or as
                  trustee for the Secured Creditors) or any of the other Secured
                  Creditors in respect of any such liabilities provided that,
                  notwithstanding any provision to the contrary contained
                  herein, neither such covenant nor the security constituted by
                  this Charge nor any other provisions of this Charge shall
                  extend to or include or be taken as creating security for nor
                  shall the security constituted by this Charge extend to secure
                  any liability or sum which would, but for this proviso, cause
                  such covenant, security or provision to be unlawful or
                  prohibited by or otherwise to contravene any applicable law.

         3.3      NOTICES TO THE SECURITY TRUSTEE

                  The Chargor must promptly give notice to the Security Trustee
                  of any of the following:

                  (a)      any acquisition of any interest in real property; and

                  (b)      any proposal of, or notice to the Chargor by any
                           Government Agency of, the compulsory acquisition of
                           any of the Charged Property or any asset of the
                           Chargor or any Subsidiary of the Chargor.

                                                                         PAGE 14
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                                                       Fixed and floating charge

         3.4      FURTHER SECURITY

                  (a)      The Chargor must, whenever requested by the Security
                           Trustee, do or cause to be done anything:

                           (1)      to perfect the security created or intended
                                    to be created in respect of the Charged
                                    Property subject to the Charge (which may
                                    include the execution by the Chargor of a
                                    mortgage, charge or assignment over all or
                                    any of the assets constituting, or intended
                                    to constitute, Charged Property subject to
                                    the Charge) or for the exercise of any
                                    Powers of the Security Trustee;

                           (2)      to confer on the Security Trustee security
                                    over any property and assets of the Chargor
                                    located in any jurisdiction expressly
                                    referred to in the definition of "Charged
                                    Property" equivalent or similar to the
                                    security intended to be conferred by or
                                    pursuant to this deed;

                           (3)      to confer on the Security Trustee an
                                    Encumbrance and to create, perfect, protect
                                    or maintain an Encumbrance (which in so far
                                    as it relates to real property shall be a
                                    charge by way of legal mortgage) over all
                                    its rights, title and interest from time to
                                    time in any real property (including using
                                    all reasonable endeavours to obtain any
                                    requisite third party consent); and/or

                           (4)      to facilitate the realisation of the Charged
                                    Property subject to the Charge,

                  including, but not limited to, the execution of any document
                  (in such form as the Security Trustee may require in favour of
                  the Security Trustee or its nominee(s)), the delivery of Title
                  Documents or the execution and delivery of blank transfers.

                  (b)      Without limiting the generality of clause 3.4(a), at
                           the request of the Security Trustee, the Chargor must
                           execute a legal or statutory mortgage over any real
                           property now held or acquired on or after the date of
                           this deed.

                  (c)      The Chargor must register any mortgage executed under
                           clause 3.4(b).

                  (d)      Any mortgage executed under clause 3.4(b) must:

                           (1)      be in favour of the Security Trustee; and

                           (2)      be in the form and substance reasonably
                                    required by the Security Trustee, but the
                                    Security Trustee cannot require an
                                    obligation which is more onerous than any
                                    obligation contained in any Relevant
                                    Document.

                  (e)      If so requested by the Security Trustee the Chargor
                           shall take all such action as available to it
                           (including making all filings and registrations) as
                           may be necessary for the purpose of the creation,
                           perfection, protection or maintenance of any
                           Encumbrance conferred or intended to be conferred on
                           the Security Trustee by or pursuant to this Charge or
                           any Collateral Security.

                                                                         PAGE 15
<PAGE>

                                                       Fixed and floating charge

         3.5      TITLE DOCUMENTS

                  (a)      The Chargor must deposit with the Security Trustee,
                           or as the Security Trustee directs, all the Title
                           Documents in respect of any of the Charged Property
                           which is subject to the fixed charge created in
                           clauses 2.1 and 2.3(a) and any relevant share
                           transfer forms in respect thereof (executed in blank
                           by or on behalf of the Chargor):

                           (1)      within 10 Business Days of the execution of
                                    this deed;

                           (2)      within 10 Business Days of the acquisition
                                    of any asset which forms part of the Charged
                                    Property and is subject to the fixed charge
                                    created in clauses 2.1 and 2.3(a); and

                           (3)      immediately on the crystallisation and
                                    fixing for any reason of the floating charge
                                    created in clauses 2.1 and 2.3(a).

                  (b)      Subject to clause 3.5(c), the Security Trustee or its
                           nominee may retain the Title Documents until the
                           Charge in respect of all the Charged Property is
                           discharged in accordance with the Relevant Documents.

                  (c)      If the Charge is enforced by the Security Trustee,
                           the Security Trustee, Receiver or Attorney is
                           entitled:

                           (1)      to deal with the Title Documents as if it
                                    was the absolute and unencumbered owner of
                                    the Charged Property to which the Title
                                    Documents relate; and

                           (2)      in exercising a power of sale, to deliver
                                    any Title Document to a purchaser of the
                                    Charged Property to which it relates.

         3.6      REGISTRATION AND PROTECTION OF SECURITY

                  (a)      The Chargor must ensure that this deed and each
                           Collateral Security is registered and filed in all
                           registers in all jurisdictions in which it must be
                           registered and filed to ensure enforceability and
                           validity against all persons and to be effective as a
                           security.

                  (b)      Whenever any part of the Charged Property is
                           transferred to or retained in a place where this deed
                           or any Collateral Security, because of an increase in
                           the Secured Obligations or otherwise, bears
                           insufficient stamp duty or is not registered or
                           recorded, or for any other reason is of limited or of
                           no force or effect, unenforceable, inadmissible in
                           evidence or of reduced priority, the Chargor must
                           within 14 days after that transfer or retention
                           ensure that:

                           (1)      this deed and each Collateral Security is
                                    stamped to the satisfaction of the Security
                                    Trustee;

                           (2)      this deed and each Collateral Security is in
                                    full force and effect, enforceable,
                                    admissible in evidence and not of reduced
                                    priority; and

                           (3)      this deed and each Collateral Security is
                                    registered in that place, or that part of
                                    the Charged Property is removed from that
                                    place.

                                                                         PAGE 16
<PAGE>

                                                       Fixed and floating charge

         3.7      TERM OF UNDERTAKINGS

                  Each of the Chargor's undertakings in this clause 3 continue
                  in full force and effect from the date of this deed until the
                  Charge in respect of all the Charged Property is discharged in
                  accordance with the Relevant Documents.

         3.8      INTEREST ON DEMANDS

                  If the Chargor fails to pay any sum on the due date for
                  payment of that sum the Chargor shall pay interest on such sum
                  (before and after any judgment and to the extent interest at a
                  default rate is not otherwise being paid on such sum) from the
                  date of demand until the date of payment calculated on a daily
                  basis at the rate determined in accordance with the provisions
                  of clause 18.4 (Interest on Demands) of the Security Trust and
                  Intercreditor Deed.

         3.9      SHARES

                  (a)      The Chargor represents and warrants to the Security
                           Trustee that:

                           (1)      it is the sole legal and beneficial owner of
                                    the Guarantor Shares free from any Security
                                    (as such term is defined in the Security
                                    Trust and Intercreditor Deed) except as
                                    created by this deed; and

                           (2)      the Guarantor Shares are fully paid up.

                  (b)      Prior to the occurrence of an Enforcement Event and
                           at any time when no Enforcement Event is continuing,
                           the Chargor shall:

                           (1)      be entitled to retain all dividends,
                                    interest and other monies arising from the
                                    Shares; and

                           (2)      exercise all voting rights in relation to
                                    its Shares provided that the Chargor shall
                                    not exercise such voting rights in any
                                    manner which would constitute a Default or
                                    an Event of Default under the Indentures (as
                                    such terms are defined in the Indentures).

                  (c)      The Security Trustee may, upon the occurrence of an
                           Enforcement Event and at any time thereafter while
                           such Enforcement Event is continuing (in the name of
                           the Chargor or otherwise and without any further
                           consent or authority from the Chargor):

                           (1)      exercise (or refrain from exercising) any
                                    voting rights in respect of any of the
                                    Shares;

                           (2)      apply all dividends, interest and other
                                    monies arising from any of the Shares in
                                    accordance with clause 6.1;

                           (3)      transfer any of the Shares into the name of
                                    such nominee(s) of the Security Trustee as
                                    it shall require; and

                           (4)      exercise (or refrain from exercising) the
                                    powers and rights conferred on or
                                    exercisable by the legal or beneficial owner
                                    of any of the Shares, including the right,
                                    in relation to any company whose shares or
                                    other securities are included in the Charged
                                    Property, to concur or participate in:

                                    (A)      the reconstruction, amalgamation,
                                             sale or other disposal of such
                                             company or any of its assets or
                                             undertaking (including

                                                                         PAGE 17
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                                                       Fixed and floating charge

                                              the exchange, conversion or
                                              reissue of any shares or
                                              securities as a consequence
                                              thereof),

                                    (B)      the release, modification or
                                             variation of any rights or
                                             liabilities attaching to such
                                             shares or securities, and

                                    (C)      the exercise, renunciation or
                                             assignment of any right to
                                             subscribe for any shares or
                                             securities,

                                    in each case in such manner and on such
                                    terms as the Security Trustee may think fit,
                                    and the proceeds of any such action shall
                                    form part of the Charged Property.

         3.10     ACCOUNTS

                  (a)      The Chargor shall, prior to the delivery of a Notice
                           of Charge pursuant to clause 2.8 or the occurrence of
                           an Enforcement Event and at any time thereafter when
                           no Enforcement Event is continuing (provided that at
                           such time no Notice of Charge has been delivered
                           pursuant to clause 2.8) , be entitled to receive,
                           withdraw or otherwise transfer any credit balance
                           from time to time on any Account.

                  (b)      After the delivery of a Notice of Charge pursuant to
                           clause 2.8 or the occurrence of an Enforcement Event
                           and at any time thereafter while such Enforcement
                           Event is continuing, the Chargor shall not be
                           entitled to receive, withdraw or otherwise transfer
                           any credit balance from time to time on any Account
                           except with the prior consent of the Security
                           Trustee.

                  (c)      The Security Trustee shall, upon the occurrence of an
                           Enforcement Event and at any time thereafter while
                           such Enforcement Event is continuing, be entitled
                           without notice to apply, transfer or set-off any or
                           all of the credit balances from time to time on any
                           Account in or towards the payment or other
                           satisfaction of all or part of the Secured
                           Obligations in accordance with clause 6.1.

         3.11     MONETARY CLAIMS

                  (a)      The Chargor shall not at any time during the
                           subsistence of the Charge, without the prior written
                           consent of the Security Trustee or except as not
                           expressly prohibited under the terms of the
                           Indentures:

                           (1)      deal with the Monetary Claims referred to in
                                    clause 2.3(a)(5) except by getting in and
                                    realising them in a prudent manner (on
                                    behalf of the Security Trustee) and paying
                                    the proceeds of those Monetary Claims
                                    referred to in clause 2.3(a)(5) into the
                                    Accounts or as the Security Trustee may
                                    require (and such proceeds shall be held
                                    upon trust by Chargor for the Security
                                    Trustee on behalf of the Secured Creditors
                                    prior to such payment in);

                           (2)      factor or discount any of the Monetary
                                    Claims referred to in clause 2.3(a)(5) or
                                    enter into any agreement for such factoring
                                    or discounting; or

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                                                       Fixed and floating charge

                           (3)      other than as provided in clause 3.11(b) be
                                    entitled to withdraw or otherwise transfer
                                    the proceeds of the realisation of any
                                    Monetary Claims standing to the credit or
                                    any Account.

                  (b)      Prior to the delivery of a Notice of Charge pursuant
                           to clause 2.8 or the occurrence of an Enforcement
                           Event and at any time when no Enforcement Event is
                           continuing (provided that at such time no Notice of
                           Charge has been delivered pursuant to clause 2.8),
                           the proceeds of the realisation of any Monetary
                           Claims deriving from or in relation to any
                           Intellectual Property or the proceeds of any
                           Insurance Policy relating to real property shall
                           (subject to any restriction on the application of
                           such proceeds contained in this Charge, the
                           Indentures or in the Security Trust and Intercreditor
                           Deed), upon such proceeds being credited to an
                           Account, be released from the fixed charge created
                           pursuant to clause 2.3(a) and the Chargor shall be
                           entitled to withdraw such proceeds from such Account
                           provided that such proceeds shall continue to be
                           subject to the floating charge created pursuant to
                           clause 2.3(b) and the terms of the Charge.

         3.12     INTRA-GROUP LOAN CONTRACTS

                  Prior to the delivery of a Notice of Assignment pursuant to
                  clause 2.7(b) or the occurrence of an Enforcement Event, the
                  Chargor shall be entitled to deal with the Intra-Group Loan
                  Contracts except as expressly prohibited under the Indentures
                  or the Security Trust and Intercreditor Deed.

         3.13     INVESTMENTS: DELIVERY OF DOCUMENTS OF TITLE

                  After the occurrence of an Enforcement Event, the Chargor
                  shall promptly deliver (or procure the delivery) to or to the
                  order of the Security Trustee (or its nominee), and the
                  Security Trustee shall be entitled to retain, all of the
                  Investments and any certificates and other documents of title
                  representing the Investments to which the Chargor (or its
                  nominee(s)) is or becomes entitled together with any other
                  document which the Security Trustee may request (in such form
                  and executed as the Security Trustee may require) with a view
                  to perfecting or improving its security over the Investments
                  or to registering any Investment in its name or the name of
                  any nominee(s).

         3.14     EXCLUDED CONTRACTS

                  The Chargor undertakes to use commercially reasonable efforts
                  to ensure that any document, instrument or agreement which
                  comes into being on or after the date of this Charge shall be
                  capable of being the subject of the Encumbrance created in
                  favour of the Security Trustee in accordance with this deed.

4        ENFORCEMENT

         4.1      WHEN ENFORCEABLE

                  (a)      At any time after the occurrence of an Enforcement
                           Event and the Security Trustee (acting on the
                           instructions received pursuant to the terms of the
                           Security Trust and Intercreditor Deed) giving notice
                           to the Chargor and a

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                                                       Fixed and floating charge

                           copy to the Debtor thereof, the Charge and each
                           Collateral Security are immediately enforceable
                           without the need for any other demand or notice to be
                           given to the Chargor or any other person and the
                           Security Trustee may, in its absolute discretion,
                           enforce all or any part of this Charge or any
                           Collateral Security (at times, in the manner and on
                           the terms it thinks fit) and take possession of and
                           hold or dispose of all or any part of any asset which
                           is the subject of this Charge or any Collateral
                           Security.

                  (b)      Upon the occurrence of an Enforcement Event, the
                           Secured Obligations owing by the Chargor to the
                           Security Trustee under this deed are immediately due
                           and payable by the Chargor without the need for any
                           demand or notice to be given to the Chargor or any
                           other person.

                  (c)      The right of the Chargor to deal, for any purpose,
                           with all of the Charged Property, other than by or
                           through a Receiver appointed under this deed,
                           immediately ceases on the crystallisation of the
                           Charge in respect of all of the Charged Property.

                  (d)      The right of the Chargor to deal, for any purpose,
                           with any asset which forms part of the Charged
                           Property, other than by or through a Receiver
                           appointed under this deed, immediately ceases on the
                           crystallisation of the Charge in respect of that
                           asset.

         4.2      ASSISTANCE IN REALISATION

                  After the Charge has become enforceable, the Chargor must take
                  all action required by the Security Trustee, Receiver, any
                  Delegate or Attorney to assist any of them to realise the
                  Charged Property and exercise any Power including, but not
                  limited to:

                  (a)      executing all transfers, conveyances, assignments and
                           assurances of any of the Charged Property;

                  (b)      doing anything necessary or desirable under the law
                           in force in any place where the Charged Property is
                           situated;

                  (c)      giving all notices, orders, directions and consents
                           which the Security Trustee, Receiver, Delegate or
                           Attorney thinks expedient; and

                  (d)      doing anything necessary:

                           (1)      for a call to be made on the uncalled
                                    capital of the Chargor; or

                           (2)      to collect all called but unpaid capital of
                                    the Chargor.

5        RECEIVER

         5.1      APPOINTMENT OF RECEIVER

                  After the occurrence of an Enforcement Event or if a petition
                  or application is presented for the making of an
                  administration order in relation to the Chargor or if the
                  Chargor or any other person gives written notice of its
                  intention to appoint an administrator to the Chargor or if
                  requested to do so by the Chargor, the Security

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                                                       Fixed and floating charge

                  Trustee may by deed or otherwise (acting through an authorised
                  officer of the Security Trustee) (without prior notice to the
                  Chargor):

                  (a)      appoint any person or any 2 or more persons jointly,
                           or severally, or jointly and severally to be a
                           Receiver of the Charged Property;

                  (b)      remove any Receiver and on the removal, retirement or
                           death of any Receiver, appoint another Receiver;

                  (c)      appoint another person(s) as an additional or
                           replacement Receiver(s); and

                  (d)      fix the remuneration and direct payment of that
                           remuneration and any costs, charges and expenses of
                           the Receiver out of the proceeds of any realisation
                           of the Charged Property.

         5.2      AGENCY OF RECEIVER

                  (a)      Subject to clauses 5.5 and 1.5, each Receiver is the
                           agent of the Chargor.

                  (b)      The Chargor is responsible for the acts, defaults and
                           remuneration of the Receiver.

         5.3      POWERS OF RECEIVER

                  Subject to any express exclusion by the terms of the
                  Receiver's appointment, the Receiver has, in addition to any
                  powers conferred on the Receiver by applicable law, power to
                  do any of the following whether or not in possession of the
                  Charged Property or any part of it:

                  (a)      MANAGE, POSSESSION OR CONTROL: to manage, enter into
                           possession or assume control of any of the Charged
                           Property;

                  (b)      LEASE OR LICENCE: to accept the surrender of,
                           determine, grant or renew any lease or licence in
                           respect of the use or occupation of any of the
                           Charged Property:

                           (1)      on any terms or special conditions that the
                                    Security Trustee or Receiver thinks fit; and

                           (2)      in conjunction with the sale, lease or
                                    licence of any other property by any person;

                  (c)      SALE: to sell or concur in selling any of the Charged
                           Property to any person:

                           (1)      by auction, private treaty or tender;

                           (2)      on such terms and special conditions as the
                                    Security Trustee or the Receiver thinks fit;

                           (3)      for cash or for a deferred payment of the
                                    purchase price, in whole or in part, with or
                                    without interest or security;

                           (4)      in conjunction with the sale of any property
                                    by any other person; and

                           (5)      in one lot or in separate parcels;

                  (d)      GRANT OPTIONS TO PURCHASE: to grant to any person an
                           option to purchase any of the Charged Property;

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                                                       Fixed and floating charge

                  (e)      ACQUIRE PROPERTY: to acquire any interest in any
                           property, in the name or on behalf of the Chargor,
                           which on acquisition forms part of the Charged
                           Property;

                  (f)      CARRY ON BUSINESS: to carry on or concur in carrying
                           on any business of the Chargor in respect of the
                           Charged Property;

                  (g)      BORROWINGS AND SECURITY:

                           (1)      to raise or borrow any money, in its name or
                                    the name or on behalf of the Chargor, from
                                    the Security Trustee or any person approved
                                    by the Security Trustee in writing; and

                           (2)      to secure money raised or borrowed under
                                    clause 5.3(g)(1) by an Encumbrance over any
                                    of the Charged Property, ranking in priority
                                    to, equal with, or after, the Charge or any
                                    Collateral Security;

                  (h)      MAINTAIN OR IMPROVE CHARGED PROPERTY: to do anything
                           to maintain, protect or improve any of the Charged
                           Property including, but not limited to, completing,
                           repairing, erecting a new improvement on, demolishing
                           or altering any of the Charged Property;

                  (i)      INCOME AND BANK ACCOUNTS: to do anything to manage or
                           obtain income or revenue from any of the Charged
                           Property including, but not limited to, operating any
                           bank account which forms part of the Charged Property
                           or opening and operating a new bank account;

                  (j)      ACCESS TO CHARGED PROPERTY: to have access to any of
                           the Charged Property, the premises at which the
                           business of the Chargor is conducted and any of the
                           administrative services of the business of the
                           Chargor;

                  (k)      INSURE CHARGED PROPERTY: to insure any of the Charged
                           Property;

                  (l)      SEVER FIXTURES: to sever fixtures in respect of any
                           of the Charged Property;

                  (m)      COMPROMISE: to make or accept any compromise or
                           arrangement;

                  (n)      SURRENDER CHARGED PROPERTY: to surrender or transfer
                           any of the Charged Property to any person;

                  (o)      EXCHANGE CHARGED PROPERTY: to exchange with any
                           person any of the Charged Property for any other
                           property whether of equal value or not;

                  (p)      EMPLOY OR DISCHARGE: to employ or discharge any
                           person as an employee, contractor, agent,
                           professional advisor or auctioneer for any of the
                           purposes of this deed;

                  (q)      DELEGATE: to delegate to any person any Power of the
                           Receiver;

                  (r)      PERFORM OR ENFORCE DOCUMENTS: to observe, perform,
                           enforce, exercise or refrain from exercising any
                           right, power, authority, discretion or remedy of the
                           Chargor under, or otherwise obtain the benefit of:

                           (1)      any document, agreement or right which
                                    attaches to or forms part of the Charged
                                    Property; and

                           (2)      any document or agreement entered into in
                                    exercise of any Power by the Receiver;

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                                                       Fixed and floating charge

                  (s)      RECEIPTS: to give effectual receipts for all moneys
                           and other assets which may come into the hands of the
                           Receiver;

                  (t)      TAKE PROCEEDINGS: to commence, discontinue,
                           prosecute, defend, settle or compromise in its name
                           or the name or on behalf of the Chargor, any
                           proceedings including, but not limited to,
                           proceedings in relation to any insurance in respect
                           of any of the Charged Property;

                  (u)      INSOLVENCY PROCEEDINGS: to make any debtor bankrupt,
                           wind-up any company, corporation or other entity and
                           do all things in relation to any bankruptcy or
                           winding-up which the Receiver thinks necessary or
                           desirable including, but not limited to, attending
                           and voting at creditors' meetings and appointing
                           proxies for those meetings;

                  (v)      EXECUTE DOCUMENTS: to enter into and execute any
                           document or agreement in the name of the Receiver or
                           the name or on behalf of the Chargor including, but
                           not limited to, bills of exchange, cheques or
                           promissory notes for any of the purposes of this
                           deed;

                  (w)      MAKE CALLS: to make calls on any member of the
                           Chargor in respect of uncalled capital of the
                           Chargor;

                  (x)      VOTE: to exercise any voting rights or powers in
                           respect of any part of the Charged Property;

                  (y)      COLLECT CALLED CAPITAL: to collect or enforce payment
                           of any called but unpaid capital of the Chargor
                           whether or not the calls were made by the Receiver;

                  (z)      ABILITY OF CHARGOR: to do anything the Chargor could
                           do in respect of the Charged Property; and

                  (aa)     INCIDENTAL POWER: to do anything necessary or
                           incidental to the exercise of any Power of the
                           Receiver.

         5.4      NATURE OF RECEIVER'S POWERS

                  The Powers of the Receiver must be construed independently and
                  no one Power limits the generality of any other Power. Any
                  dealing under any Power of the Receiver will be on the terms
                  and conditions the Receiver thinks fit.

         5.5      STATUS OF RECEIVER AFTER COMMENCEMENT OF WINDING-UP

                  (a)      The power to appoint a Receiver under clause 5.1 may
                           be exercised even if at the time an Enforcement Event
                           occurs or if at the time a Receiver is appointed, an
                           order has been made or a resolution has been passed
                           for the winding-up of the Chargor.

                  (b)      If for any reason, including, but not limited to
                           operation of law, a Receiver:

                           (1)      appointed in the circumstances described in
                                    clause 5.5(a); or

                           (2)      appointed at any other time,

                           ceases to be the agent of the Chargor upon or by
                           virtue of, or as a result of, an order or a
                           resolution being passed for the winding-up of the
                           Chargor, then the Receiver immediately becomes the
                           agent of the Security Trustee.

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                                                       Fixed and floating charge

                           In such case, the Receiver will be the agent of the
                           Security Trustee in its capacity as Security Trustee
                           only, and despite anything else in this deed or at
                           law, the Security Trustee in its personal capacity is
                           not responsible for any negligent act or omission of
                           the Receiver.

         5.6      POWERS EXERCISABLE BY THE SECURITY TRUSTEE

                  (a)      Whether or not a Receiver is appointed under clause
                           5.1, the Security Trustee may, on or after the
                           occurrence of an Enforcement Event and without giving
                           notice to any person, exercise any Power of the
                           Receiver in addition to any Power of the Security
                           Trustee.

                  (b)      The exercise of any Power by the Security Trustee,
                           Delegate, Receiver or Attorney does not cause or deem
                           the Security Trustee, Delegate, Receiver or Attorney:

                           (1)      to be a mortgagee in possession;

                           (2)      to account as mortgagee in possession; or

                           (3)      to be answerable for any act or omission for
                                    which a mortgagee in possession is liable.

         5.7      SET-OFF

                  The Chargor authorises the Security Trustee (but the Security
                  Trustee shall not be obliged to exercise such right), after
                  the occurrence of an Enforcement Event which is continuing, to
                  set off against the Secured Obligations any amount or other
                  obligation (contingent or otherwise) owing by the Security
                  Trustee to the Chargor.

         5.8      NOTICE OF EXERCISE OF RIGHTS

                  The Security Trustee, Receiver or Attorney is not required:

                  (a)      to give notice of the Charge or any Collateral
                           Security to any debtor or creditor of the Chargor or
                           to any other person;

                  (b)      to enforce payment of any money payable to the
                           Chargor including, but not limited to, any of the
                           debts or monetary liabilities charged by this deed or
                           by any Collateral Security; or

                  (c)      to obtain the consent of the Chargor to any exercise
                           of a Power.

         5.9      TERMINATION OF RECEIVERSHIP AND POSSESSION

                  The Security Trustee may, at any time, terminate the
                  appointment of a Receiver and may, at any time, give up
                  possession of the Charged Property, without incurring any
                  liability to the Chargor.

                                                                         PAGE 24
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                                                       Fixed and floating charge

6        APPLICATION AND RECEIPTS OF MONEY

         6.1      ORDER OF APPLICATION

                  At any time after the Charge is enforceable, all money
                  received by the Security Trustee, any Delegate, Receiver,
                  Attorney or any other person acting on their behalf under this
                  deed or any Collateral Security will be applied in accordance
                  with the terms of the Security Trust and Intercreditor Deed.

         6.2      MONEY ACTUALLY RECEIVED

                  In applying any money towards satisfaction of the Secured
                  Obligations the Chargor is to be credited only with so much of
                  the money which is available for that purpose (after deducting
                  any GST imposed) and which is actually received by the
                  Security Trustee, Delegate, Receiver or Attorney. The credit
                  dates from the time of receipt.

         6.3      NOTICE OF A SUBSEQUENT ENCUMBRANCE

                  (a)      If the Security Trustee receives actual or
                           constructive notice of a subsequent Encumbrance, the
                           Security Trustee:

                           (1)      may open a new account in the name of the
                                    Chargor in its books; or

                           (2)      is regarded as having opened a new account
                                    in the name of the Chargor in its books,

                           on the date it received or was regarded as having
                           received notice of the subsequent Encumbrance.

                  (b)      From the date on which that new account is opened or
                           regarded as opened:

                           (1)      all payments made by the Chargor to the
                                    Security Trustee; and

                           (2)      all financial accommodation and advances to
                                    the Chargor,

                           are or are regarded as credited and debited, as the
                           case may be, to the new account.

                  (c)      The payments by the Chargor under clause 6.3(b) must
                           be applied:

                           (1)      first, in reduction of the debit balance, if
                                    any, in the new account; and

                           (2)      second, if there is no debit balance in the
                                    new account, in satisfaction of the Secured
                                    Obligations which have not been debited or
                                    regarded as debited to the new account.

         6.4      SECURITY TRUSTEE'S RECEIPTS

                  (a)      The receipt of any Officer of the Security Trustee or
                           any Delegate for any money payable to or received by
                           the Security Trustee under this deed exonerates the
                           payer from all liability to enquire whether any of
                           the Secured Obligations have become payable.

                  (b)      Every receipt of an Officer of the Security Trustee
                           effectually discharges the payer from:

                                                                         PAGE 25
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                                                       Fixed and floating charge

                           (1)      any future liability to pay the amount
                                    specified in the receipt; and

                           (2)      being concerned to see to the application
                                    of, or being answerable or accountable for
                                    any loss or misapplication of, the amount
                                    specified in the receipt.

         6.5      CONVERSION OF CURRENCIES ON APPLICATION

                  In making an application under clause 6.1, the Security
                  Trustee, Receiver or Attorney may itself or through its
                  bankers purchase one currency with another in the manner and
                  amounts and at the times it thinks fit, whether or not the
                  purchase is through an intermediate currency, or spot or
                  forward.

         6.6      AMOUNTS PAYABLE ON DEMAND

                  If an amount payable under a Relevant Document is not
                  expressed to be payable on a specified date, that amount is
                  payable by the Chargor on demand by the Security Trustee.

7        POWER OF ATTORNEY

         7.1      APPOINTMENT OF ATTORNEY

                  In consideration of the Security Trustee entering into the
                  Relevant Documents, the Chargor irrevocably appoints the
                  Security Trustee, each Delegate, each Receiver and each
                  Officer of the Security Trustee and the Delegate severally its
                  attorney and in its name, on its behalf and as its acts and
                  deed to execute, deliver and perfect all documents and do all
                  things which the Attorney may consider to be required or
                  desirable for:

                  (a)      carrying out any obligation imposed on the Chargor by
                           this deed (including the execution and delivery of
                           any notices, deeds, charges, assignments or other
                           security and any transfers of the Charged Property);

                  (b)      enabling the Security Trustee, each Delegate and any
                           Receiver to exercise, or delegate the exercise of,
                           any of the rights, powers and authorities conferred
                           on them by or pursuant to this deed or any Collateral
                           Security or by law (including, after the occurrence
                           of an Enforcement Event, the exercise of any right of
                           a legal or beneficial owner of the Charged Property.

         7.2      DELEGATION AND SUBSTITUTION

                  The Attorney may, at any time, for any of the purposes in
                  clause 7.1, appoint or remove any substitute or delegate or
                  sub-attorney.

         7.3      RATIFICATION

                  The Chargor shall ratify and confirm all things done and all
                  documents executed by any Attorney in the exercise or
                  purported exercise of all or any of his powers.

                                                                         PAGE 26
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                                                       Fixed and floating charge

         7.4      INDEMNITY

                  The Chargor shall indemnify the Attorney and keep the Attorney
                  indemnified against any and all costs, claims and liabilities
                  which the Attorney may incur as a result of anything done by
                  the Attorney in the exercise of any of the powers conferred,
                  or purported to be conferred, on him or her by this deed
                  unless such cost, claim or liability arises as a result of the
                  negligence or wilful misconduct of the Attorney.

8        PROTECTION

         8.1      PROTECTION OF THIRD PARTIES

                  (a)      No person dealing with the Security Trustee,
                           Receiver, any Delegate or Attorney is:

                           (1)      bound to enquire whether:

                                          (A)    the Charge has become
                                                 enforceable;

                                          (B)     the Receiver or Attorney is
                                                  duly appointed; or

                                          (C)     any Power has been properly or
                                                  regularly exercised; or

                           (2)      affected by express notice that the exercise
                                    of any Power was unnecessary or improper.

                  (b)      The irregular or improper exercise of any Power is,
                           as regards the protection of any person, regarded as
                           authorised by the Chargor and this deed, and is
                           valid.

         8.2      PROTECTION OF THE SECURITY TRUSTEE, RECEIVER AND ATTORNEY

                  (a)      The Security Trustee, Receiver, any Delegate or
                           Attorney is not liable for any loss or damage
                           including, but not limited to, consequential loss or
                           damage arising directly or indirectly from:

                           (1)      any omission or delay in the exercise or
                                    non-exercise of any Power; or

                           (2)      the neglect, default or dishonesty of any
                                    manager, Officer, employee, agent,
                                    accountant, auctioneer or solicitor of the
                                    Chargor, the Security Trustee, Receiver, any
                                    Delegate or Attorney.

                  (b)      Clause 8.2(a) does not apply:

                           (1)      in respect of the Security Trustee, to any
                                    loss or damage which arises from the wilful
                                    default, fraud or gross negligence of the
                                    Security Trustee; and

                           (2)      in respect of a Receiver or Attorney, to any
                                    loss or damage which arises from the wilful
                                    default, fraud or gross negligence of the
                                    Receiver or Attorney.

                                                                         PAGE 27
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                                                       Fixed and floating charge

9        TAX, COSTS, EXPENSES, INDEMNITY AND RELEASE

         9.1      TAX

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

         9.2      GST

                  (a)      To the extent that any supply made under or in
                           connection with this deed is a taxable supply, the
                           recipient must pay, in addition to the consideration
                           to be provided under this deed for that supply
                           (unless it expressly includes GST) an amount
                           (ADDITIONAL AMOUNT) equal to the amount of that
                           consideration (or its GST exclusive market value)
                           multiplied by the rate at which GST is imposed in
                           respect of the supply.

                  (b)      Terms used in this clause which are defined in the
                           GST Act have the same meaning in this clause.

                  (c)      If either party is entitled under this deed to be
                           reimbursed or indemnified by the other party for a
                           cost or expense incurred in connection with this
                           deed, the reimbursement or indemnity payment must not
                           include any GST component of the cost or expense for
                           which an input tax credit may be claimed by the party
                           being reimbursed or indemnified, or by its
                           representative member.

         9.3      EXPENSES

                  The Chargor shall, from time to time and promptly on demand by
                  the Security Trustee reimburse to the Security Trustee all
                  costs and expenses (including legal fees) on a full indemnity
                  basis together with any applicable GST incurred by the
                  Security Trustee and any Delegate (provided that in relation
                  to paragraph (a) of this clause 9.3, such costs and expenses
                  must be properly incurred) in connection with:

                  (a)      the execution, release and discharge of this deed and
                           each Encumbrance created or intended to be created in
                           respect of the Charged Property and the perfection of
                           an Encumbrance contemplated in this deed or in any
                           such documents or forming part of an Encumbrance
                           created or intended to be created in respect of the
                           Charged Property;

                  (b)      the actual or contemplated exercise, preservation
                           and/or enforcement of any of the rights, powers and
                           remedies of, or the performance of the duties

                                                                         PAGE 28
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                                                       Fixed and floating charge

                           and obligations of, the Security Trustee or any
                           Delegate, or any amendment or waiver in respect of
                           this deed;

                  (c)      the foreclosure of the Charge or any Collateral
                           Security in relation to any Charged Property; and

                  (d)      the preservation and/or enforcement of an Encumbrance
                           created or intended to be created in respect of the
                           Charged Property,

                  which shall carry interest from the date of such demand until
                  so reimbursed at the rate and on the basis as mentioned in
                  clause 3.8.

         9.4      CURRENCY INDEMNITY

                  If any sum (a "SUM") owing by the Chargor under this deed or
                  any order or judgment given or made in relation to this deed
                  has to be converted from the currency (the "FIRST CURRENCY")
                  in which such Sum is payable into another currency (the
                  "SECOND CURRENCY") for the purpose of:

                  (a)      making or filing a claim or proof against the
                           Chargor;

                  (b)      obtaining an order or judgment in any court or other
                           tribunal;

                  (c)      enforcing any order or judgment given or made in
                           relation to this deed; or

                  (d)      applying the Sum in satisfaction of any of the
                           Secured Obligations,

                  the Chargor shall indemnify the Security Trustee from and
                  against any loss suffered or incurred as a result of any
                  discrepancy between the rate of exchange used for such purpose
                  to convert such Sum from the First Currency into the Second
                  Currency and the rate or rates of exchange available to the
                  Security Trustee at the time of such receipt of such Sum.

         9.5      GROSS UP

                  All payments to be made to the Security Trustee, any Delegate
                  and/or Receiver under this deed or any Collateral Security
                  shall be made free and clear of and without set-off or
                  deduction for or on account of Tax unless the Chargor is
                  required to make such payment subject to the deduction or
                  withholding of Tax, in which case the sum payable by the
                  Chargor in respect of which such deduction or withholding is
                  required to be made shall be increased to the extent necessary
                  to ensure that, after the making of such deduction or
                  withholding, the person on account of whose liability to Tax
                  such deduction or withholding has been made receives and
                  retains (free from any liability in respect of any such
                  deduction or withholding) a net sum equal to the sum which it
                  would have received and so retained had no such deduction or
                  withholding been made or required to be made.

         9.6      RELEASE OF SECURITY

                  The Security Trustee shall, at the cost and request of the
                  Chargor, release and cancel the security constituted by this
                  deed and procure the reassignment to the Chargor of the
                  property and assets assigned to the Security Trustee pursuant
                  to this deed in accordance with the terms and subject to the
                  conditions and circumstances set out in the Security Trust and
                  Intercreditor Deed and without recourse to, or any
                  representation or warranty by, the Security Trustee or any of
                  its nominees.

                                                                         PAGE 29
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                                                       Fixed and floating charge

10       SAVING PROVISIONS

         10.1     STATUTORY POWERS

                  (a)      The powers of the Security Trustee under this deed or
                           any Collateral Security are in addition to any powers
                           the Security Trustee has under applicable law.

                  (b)      To the extent not prohibited by law, before enforcing
                           this deed or any Collateral Security, or exercising
                           any Power, the Security Trustee is not required to
                           give any notice or allow the expiration of any time
                           to any person.

         10.2     CONTINUING SECURITY

                  The Charge is a continuing security despite any settlement of
                  account or any other thing until the Security Trustee has
                  given a discharge of the Charge in respect of all the Charged
                  Property in accordance with the Relevant Documents.

         10.3     NO MERGER OF SECURITY

                  (a)      Nothing in this deed merges, extinguishes, postpones,
                           lessens or otherwise prejudicially affects:

                           (1)      any Encumbrance in favour of the Security
                                    Trustee at any time;

                           (2)      any indemnity in favour of the Security
                                    Trustee contained in any Relevant Document;
                                    or

                           (3)      any right, power, authority, discretion or
                                    remedy which the Security Trustee may have
                                    against the Chargor or any other person at
                                    any time.

                  (b)      No other Encumbrance including, but not limited to,
                           any Collateral Security, held by the Security Trustee
                           in any way prejudicially affects any right, Power,
                           authority, discretion or remedy of the Security
                           Trustee under this deed.

         10.4     EXCLUSION OF MORATORIUM

                  To the extent not excluded by law, a provision of any
                  legislation which at any time directly or indirectly:

                  (a)      lessens or otherwise varies or affects in favour of
                           the Chargor any obligations under this deed or any
                           Collateral Security; or

                  (b)      stays, postpones or otherwise prevents or
                           prejudicially affects the exercise by the Security
                           Trustee, Receiver or Attorney of any Power,

                  is negatived and excluded from this deed and any Collateral
                  Security and all relief and protection conferred on the
                  Chargor by or under that legislation is also negatived and
                  excluded.

                                                                         PAGE 30
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                                                       Fixed and floating charge

         10.5     CONFLICT

                  Where any right, power, authority, discretion or remedy of the
                  Security Trustee, any Delegate, Receiver or Attorney under
                  this deed or any Collateral Security is inconsistent with the
                  powers conferred by applicable law then, to the extent not
                  prohibited by that law, the powers conferred by applicable law
                  are regarded as negatived or varied to the extent of the
                  inconsistency.

         10.6     DISCRETION

                  Any Power which may be exercised or any determination which
                  may be made hereunder or under any Collateral Security by the
                  Security Trustee or any Receiver may, subject to the terms and
                  conditions of this deed and the Security Trust and
                  Intercreditor Deed, be exercised or made in its absolute and
                  unfettered discretion without any obligation to give reasons.

         10.7     DELEGATION

                  Each of the Security Trustee and any Receiver shall have full
                  power to delegate (either generally or specifically) the
                  Powers conferred on it by this deed (including the power of
                  attorney) or any Collateral Security on such terms and
                  conditions as it shall see fit which delegation shall not
                  preclude either the subsequent exercise of such Power by the
                  Security Trustee or the Receiver itself or any subsequent
                  delegation or revocation thereof.

         10.8     COMPLETION OF BLANK SECURITIES

                  At any time after the Charge has become enforceable, the
                  Security Trustee, any Delegate, Receiver, Attorney or any
                  Officer of the Security Trustee may complete, in favour of the
                  Security Trustee, any appointee of the Security Trustee or any
                  purchaser, any instrument executed in blank by or on behalf of
                  the Chargor and deposited with the Security Trustee as
                  security under this deed or under any Collateral Security.

         10.9     PRINCIPAL OBLIGATIONS

                  The Charge and each Collateral Security is:

                  (a)      a principal obligation and is not ancillary or
                           collateral to any other Encumbrance (other than
                           another Collateral Security) or other obligation
                           however created; and

                  (b)      independent of, and unaffected by, any other
                           Encumbrance or other obligation however created which
                           the Security Trustee may hold at any time in respect
                           of the Secured Obligations.

         10.10    NO OBLIGATION TO MARSHAL

                  Before the Security Trustee enforces the Charge, it is not
                  required to marshal or to enforce or apply under, or
                  appropriate, recover or exercise:

                  (a)      any Encumbrance or Collateral Security held, at any
                           time, by the Security Trustee; or

                                                                         PAGE 31
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                                                       Fixed and floating charge

                  (b)      any moneys or assets which the Security Trustee, at
                           any time, holds or is entitled to receive.

         10.11    NON-AVOIDANCE

                  If any payment by the Chargor to the Security Trustee is at
                  any time avoided for any reason including, but not limited to,
                  any legal limitation, disability or incapacity of or affecting
                  the Chargor or any other thing, and whether or not:

                  (a)      any transaction relating to the Secured Obligations
                           was illegal, void or substantially avoided; or

                  (b)      any thing was or ought to have been within the
                           knowledge of the Security Trustee,

                  the Chargor:

                  (c)      as an additional and independent obligation,
                           indemnifies the Security Trustee against that avoided
                           payment; and

                  (d)      acknowledges that any liability of the Chargor under
                           this deed and any Power is the same as if that
                           payment had not been made.

         10.12    INCREASE IN FINANCIAL ACCOMMODATION

                  Any Secured Creditor may at any time increase the financial
                  accommodation provided under any Relevant Document or
                  otherwise provide further financial accommodation.

11       THIRD PARTY PROVISIONS

         11.1     INDEPENDENT OBLIGATIONS

                  This deed is enforceable against the Chargor:

                  (a)      without first enforcing any Collateral Security;

                  (b)      whether or not the Security Trustee has:

                           (1)      made demand upon any Obligor other than the
                                    Chargor;

                           (2)      given notice to any Obligor (other than the
                                    Chargor) or any other person in respect of
                                    any thing; or

                           (3)      taken any other steps against any Obligor
                                    (other than the Chargor) or any other
                                    person;

                  (c)      whether or not the payment or performance of any
                           Secured Obligations are due; and

                  (d)      despite the occurrence of any event described in
                           clause 11.2.

         11.2     UNCONDITIONAL NATURE OF OBLIGATIONS

                  (a)      The Charge and the obligations of the Chargor under
                           the Relevant Documents are absolute, binding and
                           unconditional in all circumstances.

                                                                         PAGE 32
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                                                       Fixed and floating charge

                  (b)      The Charge and the obligations of the Chargor under
                           the Relevant Documents are not released or discharged
                           or otherwise affected by anything which but for this
                           provision might have that effect, including, but not
                           limited to:

                           (1)      the grant to any Obligor or any other person
                                    of any time, waiver, covenant not to sue or
                                    other indulgence;

                           (2)      the release (including without limitation a
                                    release as part of any novation) or
                                    discharge of any Obligor or any other
                                    person;

                           (3)      the cessation of the obligations, in whole
                                    or in part, of any Obligor or any other
                                    person under any Relevant Document or any
                                    other document or agreement;

                           (4)      the liquidation of any Obligor or any other
                                    person;

                           (5)      any arrangement, composition or compromise
                                    entered into by the Security Trustee, any
                                    Obligor or any other person;

                           (6)      any Relevant Document or any other document
                                    or agreement being in whole or in part
                                    illegal, void, voidable, avoided,
                                    unenforceable or otherwise of limited force
                                    or effect;

                           (7)      any extinguishment, failure, loss, release,
                                    discharge, abandonment, impairment,
                                    compound, composition or compromise, in
                                    whole or in part of any Relevant Document or
                                    any other document or agreement;

                           (8)      any Collateral Security being given to the
                                    Security Trustee by any Obligor or any other
                                    person;

                           (9)      any alteration, amendment, variation,
                                    supplement, renewal or replacement of any
                                    Relevant Document or any other document or
                                    agreement;

                           (10)     any moratorium or other suspension of any
                                    Power;

                           (11)     the Security Trustee, any Delegate, Receiver
                                    or Attorney exercising or enforcing,
                                    delaying or refraining from exercising or
                                    enforcing, or being not entitled or unable
                                    to exercise or enforce any Power;

                           (12)     the Security Trustee obtaining a judgment
                                    against any Obligor or any other person for
                                    the payment of any of the Secured
                                    Obligations;

                           (13)     any transaction, agreement or arrangement
                                    that may take place with the Security
                                    Trustee, any Obligor or any other person;

                           (14)     any payment to the Security Trustee, any
                                    Delegate, Receiver or Attorney, including
                                    any payment which at the payment date or at
                                    any time after the payment date is, in whole
                                    or in part, illegal, void, voidable, avoided
                                    or unenforceable;

                           (15)     any failure to give effective notice to any
                                    Obligor or any other person of any default
                                    under any Relevant Document or any other
                                    document or agreement;

                           (16)     any legal limitation, disability or
                                    incapacity of any Obligor or of any other
                                    person;

                                                                         PAGE 33
<PAGE>

                                                       Fixed and floating charge

                           (17)     any breach of any Relevant Document or any
                                    other document or agreement;

                           (18)     the acceptance of the repudiation of, or
                                    termination of, any Relevant Document or any
                                    other document or agreement;

                           (19)     any Secured Obligations being irrecoverable
                                    for any reason;

                           (20)     any disclaimer by any Obligor or any other
                                    person of any Relevant Document or any other
                                    document or agreement;

                           (21)     any assignment, novation, assumption or
                                    transfer of, or other dealing with, any
                                    Powers or any other rights or obligations
                                    under any Relevant Document or any other
                                    document or agreement;

                           (22)     the opening of a new account of any Obligor
                                    with the Security Trustee or any transaction
                                    on or relating to the new account;

                           (23)     any prejudice (including, but not limited
                                    to, material prejudice) to any person as a
                                    result of:

                                    (A)      any thing done, or omitted by the
                                             Security Trustee, any Obligor or
                                             any other person;

                                    (B)      the Security Trustee, a Delegate,
                                             Receiver, Attorney or any other
                                             person selling or realising any
                                             property the subject of a
                                             Collateral Security at less than
                                             the best price;

                                    (C)      any failure or neglect by the
                                             Security Trustee, a Delegate,
                                             Receiver, Attorney or any other
                                             person to recover the Secured
                                             Obligations from any Obligor or by
                                             the realisation of any property the
                                             subject of a Collateral Security;
                                             or

                                    (D)      any other thing;

                           (24)     the receipt by the Security Trustee of any
                                    dividend, distribution or other payment in
                                    respect of any liquidation; or

                           (25)     any other act, omission, matter or thing
                                    whatsoever whether negligent or not.

                  (c)      Clauses 11.2(a) and (b) apply irrespective of:

                           (1)      the consent or knowledge or lack of consent
                                    or knowledge, of the Security Trustee, any
                                    Obligor or any other person of any event
                                    described in clause 11.2(b); or

                           (2)      any rule of law or equity to the contrary.

         11.3     NO COMPETITION

                  (a)      Subject to the terms and conditions of the Security
                           Trust and Intercreditor Deed, until the Secured
                           Obligations have been fully and irrevocably paid and
                           satisfied and the Charge has been finally discharged
                           in accordance with the terms of the Security Trust
                           and Intercreditor Deed, the Chargor is not entitled
                           to, except (with respect only to sub-paragraphs (3)
                           to (7) below) as not expressly prohibited under the
                           Indentures:

                           (1)      be subrogated to the Security Trustee;

                                                                         PAGE 34
<PAGE>

                                                       Fixed and floating charge

                           (2)      claim or receive the benefit of:

                                          (A)     any Encumbrance, Guarantee
                                                  (including, but not limited
                                                  to, any Relevant Document) or
                                                  other document or agreement of
                                                  which the Security Trustee has
                                                  the benefit;

                                          (B)     any moneys held by the
                                                  Security Trustee; or

                                          (C)     any Power;

                           (3)      subject to clause 11.3(b), either directly
                                    or indirectly prove in, claim or receive the
                                    benefit of any distribution, dividend or
                                    payment arising out of or relating to the
                                    liquidation of any Obligor;

                           (4)      make a claim or exercise or enforce any
                                    right, power or remedy (including, but not
                                    limited to, under an Encumbrance or
                                    Guarantee or by way of contribution) against
                                    any Obligor;

                           (5)      accept, procure the grant of, or allow to
                                    exist any Encumbrance in favour of the
                                    Chargor from any Obligor;

                           (6)      exercise or attempt to exercise any right of
                                    set-off against, nor realise any Encumbrance
                                    taken from, any Obligor; or

                           (7)      raise any defence or counterclaim in
                                    reduction or discharge of its obligations
                                    under the Relevant Documents.

                  (b)      If required by the Security Trustee, the Chargor must
                           prove in any liquidation of an Obligor for all moneys
                           owed to the Chargor.

                  (c)      All moneys recovered by the Chargor from any
                           liquidation or under any Encumbrance from an Obligor
                           must be received and held in trust by the Chargor for
                           the Security Trustee to the extent of the unsatisfied
                           liability of the Chargor under the Relevant
                           Documents.

                  (d)      The Chargor must not do or seek, attempt or purport
                           to do anything referred to in clause 11.3(a).

12       GENERAL

         12.1     CONFIDENTIAL INFORMATION

                  The Security Trustee may, for the purpose of exercising any
                  Power, disclose to any person any documents or records of, or
                  information about, the Chargor, the Charged Property or the
                  Chargor's business or affairs, whether or not confidential and
                  whether or not the disclosure would be in breach of any law or
                  of any duty owed to the Chargor.

         12.2     PERFORMANCE BY SECURITY TRUSTEE OF THE CHARGOR'S OBLIGATIONS

                  If the Chargor defaults in fully and punctually performing any
                  obligation contained or implied in any Relevant Document, the
                  Security Trustee may, without prejudice to any Power do all
                  things necessary or desirable, in the opinion of the Security
                  Trustee, to make good or attempt to make good that default to
                  the satisfaction of the Security Trustee.

                                                                         PAGE 35
<PAGE>

                                                       Fixed and floating charge

         12.3     CHARGOR TO BEAR COST

                  Any thing which must be done by the Chargor under this deed,
                  whether or not at the request of the Security Trustee or any
                  of its Delegates, is to be done at the cost of the Chargor.

         12.4     NOTICES

                  Each communication to be made under this deed shall be made
                  and delivered in accordance with the provisions of the
                  Security Trust and Intercreditor Deed.

         12.5     GOVERNING LAW AND JURISDICTION

                  (a)      This deed is governed by the laws of New South Wales.

                  (b)      The Chargor irrevocably submits to the non-exclusive
                           jurisdiction of the courts of New South Wales.

         12.6     PROHIBITION AND ENFORCEABILITY

                  (a)      Any provision of, or the application of any provision
                           of, any Relevant Document or any Power which is
                           prohibited in any jurisdiction is, in that
                           jurisdiction, ineffective only to the extent of that
                           prohibition.

                  (b)      Any provision of, or the application of any provision
                           of, any Relevant Document which is void, illegal or
                           unenforceable in any jurisdiction does not affect the
                           validity, legality or enforceability of that
                           provision in any other jurisdiction or of the
                           remaining provisions in that or any other
                           jurisdiction.

         12.7     WAIVERS

                  (a)      Waiver of any right arising from a breach of this
                           deed or of any Power arising upon default under this
                           deed or upon the occurrence of an Enforcement Event
                           must be in writing and signed by the party granting
                           the waiver.

                  (b)      A failure or delay in exercise, or partial exercise,
                           of:

                           (1)      a right arising from a breach of this deed
                                    or the occurrence of an Enforcement Event;
                                    or

                           (2)      a Power created or arising upon default
                                    under this deed or upon the occurrence of an
                                    Enforcement Event,

                           does not result in a waiver of that right or Power.

                  (c)      A party is not entitled to rely on a delay in the
                           exercise or non-exercise of a right or Power arising
                           from a breach of this deed or on a default under this
                           deed or on the occurrence of an Enforcement Event as
                           constituting a waiver of that right or Power.

                  (d)      A party may not rely on any conduct of another party
                           as a defence to exercise of a right or Power by that
                           other party.

                  (e)      This clause may not itself be waived except by
                           writing.

                                                                         PAGE 36
<PAGE>

                                                       Fixed and floating charge

         12.8     VARIATION

                  A variation of any term of this deed must be in writing and
                  signed by the parties.

         12.9     CUMULATIVE RIGHTS

                  The Powers are cumulative and do not exclude any other right,
                  power, authority, discretion or remedy of the Security
                  Trustee, Receiver or Attorney.

         12.10    ASSIGNMENT

                  (a)      The Security Trustee may assign and transfer all or
                           any of its rights and obligations under this deed and
                           each Collateral Security, without the consent of the
                           Chargor, to any successor or replacement security
                           trustee under, and in accordance with, the Security
                           Trust and Intercreditor Deed. The Security Trustee
                           shall be entitled to disclose such information
                           concerning the Chargor and this deed as the Security
                           Trustee considers appropriate to any actual or
                           proposed direct or indirect successor or to any
                           person to whom information may be required to be
                           disclosed by any applicable law.

                  (b)      The Chargor must not assign any of its rights under
                           this deed or any Collateral Security without the
                           prior written consent of the Security Trustee.

         12.11    ATTORNEYS

                  Each of the attorneys executing this deed states that the
                  attorney has no notice of the revocation of the power of
                  attorney appointing that attorney.

         12.12    COUNTERPARTS

                  This deed may be executed in any number of counterparts and
                  the result shall be the same as it would be if the signatures
                  on the counterparts were on a single copy of this deed. Any
                  party may enter this deed by signing any such counterpart.

                                                                         PAGE 37
<PAGE>

                                                       Fixed and floating charge

SCHEDULE 1 - FORM OF NOTICE OF ASSIGNMENT OF INTRA-GROUP LOAN CONTRACTS

                  To:      [            ]

                                                            Date: [            ]

                  Dear Sirs,

                  DEED OF FIXED AND FLOATING CHARGE DATED [      ] BY [      ]
                  (THE "COMPANY") AND THE LAW DEBENTURE TRUST CORPORATION p.l.c.
                  (THE "SECURITY TRUSTEE") (THE "CHARGE")

                  We hereby give you notice, as attorney for and on behalf of
                  the Company, that the Company has, pursuant to the Charge,
                  assigned to us as Security Trustee all their right, title and
                  interest in and to [details of contract] (the "CONTRACT")
                  including all moneys which may be payable in respect of the
                  Contract.

                  With effect from your receipt of this notice:

                  1.       all payments by you to the Company under or arising
                           from the Contract should be made to us or to our
                           order as we may specify in writing from time to time
                           [details of the account into which sums are to be
                           paid may be included];

                  2.       all remedies provided for in the Contract or
                           available at law or in equity are exercisable by us;

                  3.       all rights to compel performance of the Contract are
                           exercisable by us although the Company shall remain
                           liable to perform all the obligations assumed by it
                           under the Contract;

                  4.       all rights, interests and benefits whatsoever
                           accruing to or for the benefit of the Company arising
                           from the Contract belong to us and no changes may be
                           made to the terms of the Contract nor may the
                           Contract be terminated without our consent; and

                  5.       you are authorised and instructed, without requiring
                           further approval from the Company, to provide us with
                           such information relating to the Contract as we may
                           from time to time request and to send us copies of
                           all notices issued by you under the Contract to us as
                           well as to the Company.

                  These instructions may not be revoked, nor may the terms of
                  the Contract be amended, varied or waived without our prior
                  written consent.

                                                                         PAGE 38
<PAGE>

                                                       Fixed and floating charge

                  We confirm that pursuant to clause 2.7(b) and clause 7 of the
                  Charge, we are empowered and authorised to deliver this Notice
                  of Assignment for and on behalf of the Company.

                  This letter is governed by the law of the State of New South
                  Wales.

                  Please acknowledge receipt of this notice by signing the
                  acknowledgement on the enclosed copy letter and returning it
                  to us at Fifth Floor, 100 Wood Street, London EC2V 7EX marked
                  for the attention of Manager Trust Administration.

                  Yours faithfully,

                  _____________________

                  THE LAW DEBENTURE TRUST CORPORATION p.l.c.
                  as attorney for and on behalf
                  [     ] (the "COMPANY")

                                                                         PAGE 39
<PAGE>

                                                       Fixed and floating charge

                  [On copy only:

                  To:    THE LAW DEBENTURE TRUST CORPORATION p.l.c. AS SECURITY
                  TRUSTEE

                  We acknowledge receipt of a notice in the terms set out above
                  and confirm that we have not received notice of any previous
                  assignments or charges of or over any of the rights, interests
                  and benefits in and to the Contract and that we will comply
                  with the terms of that notice.

                  We further confirm that:

                  (a)      no amendment, waiver or release of any of such
                           rights, interests and benefits shall be effective
                           without your prior written consent;

                  (b)      no termination of such rights, interests or benefits
                           shall be effective unless we have given you thirty
                           days written notice of the proposed termination,
                           specifying the action necessary to avoid such
                           termination; and

                  (c)      no breach or default on the part of the Company of
                           any of the terms of the Contract shall be deemed to
                           have occurred unless we have given you notice of such
                           breach specifying how to make good such breach.

                  For and on behalf of [   ]

                  By: ____________________

                  Dated:

                                                                         PAGE 40

<PAGE>

                                                       Fixed and floating charge

SCHEDULE 2 - FORM OF NOTICE OF CHARGE

                                     PART A

                      FORM OF NOTICE OF CHARGE OVER ACCOUNT

                  To:  [Account Bank]

                  Dear Sirs,

                  DEED OF FIXED AND FLOATING CHARGE DATED [      ] BY [      ]
                  (THE "COMPANY") AND THE LAW DEBENTURE TRUST CORPORATION p.l.c.
                  (THE "SECURITY TRUSTEE") (THE "CHARGE")

                  We hereby give you notice, as attorney for and on behalf of
                  the Company, that the Company has, pursuant to the Charge,
                  charged to us as Security Trustee for and on behalf of the
                  Secured Creditors referred to therein, all their rights, title
                  and interest in and to all sums of money which may now or in
                  the future be held by the Company with you in any accounts at
                  any of your branches (the "ACCOUNTS"), together with all
                  interest from time to time earned thereon and the debts
                  represented by such sums and interest, as well as all book and
                  other debts owed to the Company.

                  We hereby irrevocably authorise and instruct you:

                  (a)      to disclose to us without any reference to or further
                           authority from the Company and without any enquiry by
                           you as to the justification of such disclosure, such
                           information relating to the Accounts and the sums
                           therein as we may at any time and from time to time
                           request;

                  (b)      to hold all sums from time to time standing to the
                           credit of the Accounts to our order;

                  (c)      to pay or release all or any part of the sums from
                           time to time standing to the credit of the Accounts
                           in accordance with our written instructions at any
                           time or times;

                  (d)      to comply with the terms of any written notice or
                           instructions in any way relating to, or purporting to
                           relate to, the Charge, the sums standing to the
                           credit of the Accounts from time to time or the debts
                           represented thereby which you receive at any time
                           from us without any reference to or further authority
                           from the Company and without any enquiry by you as to
                           the justification for or validity of such notice or
                           instruction; and

                  (e)      to pay all monies received by you for the Accounts to
                           (and only to) the credit of those Accounts.

                  Please note that the Company is not permitted to withdraw any
                  amount from any of the Accounts without our prior written
                  consent.

                                                                         PAGE 41

<PAGE>

                                                       Fixed and floating charge

                  Please also note that these instructions are not to be revoked
                  or varied without our prior written consent.

                  We confirm that pursuant to clause 2.8 and clause 7 of the
                  Charge, we are empowered and authorised to deliver this Notice
                  of Charge for and on behalf of the Company.

                  This letter is governed by law of the State of New South
                  Wales.

                  Please acknowledge receipt of this notice by sending the
                  attached acknowledgement to us with a copy to the Company.

                  Yours faithfully,

                  _________________________________________

                  by The Law Debenture Trust Corporation p.l.c
                  as attorney for and on behalf of [    ] (the "COMPANY")

                                                                         PAGE 42

<PAGE>

                                                       Fixed and floating charge

                             FORM OF ACKNOWLEDGEMENT

                  To: The Law Debenture Trust Corporation p.l.c.

                  Dear Sirs,

                  We confirm receipt from the Law Debenture Trust Corporation
                  p.l.c. as attorney for and on behalf of [      ] (the
                  "COMPANY") of a notice dated [     ] relating to certain
                  accounts (the "ACCOUNTS") of the Company with the Bank.

                  We confirm that:

                  (i)      we accept the instructions and authorisations
                           contained in that notice and we undertake to act in
                           accordance with the terms of that notice;

                  (ii)     we have not received notice of the interest of any
                           third party in the Accounts;

                  (iii)    we have neither claimed or exercised nor will claim
                           or exercise any security interest, set-off,
                           counter-claim or other rights in respect of the
                           Accounts, the sums therein or the debts represented
                           thereby without your prior written consent;

                  (iv)     we shall pay all monies received by us for the
                           account of the Company to (and only to) the credit of
                           the Account(s) in the name of the Company unless
                           otherwise consented to by you; and

                  (v)      we shall not permit any amount to be withdrawn from
                           any of the Accounts without your prior written
                           consent.

                  Nothing contained in any of our arrangements with you shall
                  commit us to providing any facilities or making advances
                  available to the Company.

                  This letter is governed by law of the State of New South
                  Wales.

                  Yours faithfully,

                  ____________________________________

                  On behalf of [Bank]

                                                                         PAGE 43

<PAGE>

                                                       Fixed and floating charge

                                     PART B

                  FORM OF NOTICE OF CHARGE OVER MONETARY CLAIMS

                  To: [            ]

                                                                Date: [        ]

                  Dear Sirs,

                  DEED OF FIXED AND FLOATING CHARGE DATED [     ] BY [     ]
                  (THE "COMPANY") AND THE LAW DEBENTURE TRUST CORPORATION p.l.c.
                  (THE "SECURITY TRUSTEE") (THE "CHARGE")

                  We hereby give you notice, as attorney for and on behalf of
                  the Company, that the Company has, pursuant to the Charge,
                  charged to us as Security Trustee for and on behalf of the
                  Secured Creditors referred to therein all their right, title
                  and interest in and to [details of Monetary Claim] (the
                  "MONETARY CLAIM") including all moneys which may be payable in
                  respect of the Monetary Claim.

                  With effect from your receipt of this notice:

                  1.       all payments by you to the Company under or arising
                           from the Monetary Claim should be made to us or to
                           our order as we may specify in writing from time to
                           time [details of the account into which sums are to
                           be paid may be included];

                  2.       all remedies available at law or in equity in
                           relation to the Monetary Claim are exercisable by us;

                  3.       all rights to compel performance of the underlying
                           contract in respect of the Monetary Claim (the
                           "UNDERLYING CONTRACT") between you and the Company
                           are exercisable by us although the Company shall
                           remain liable to perform all the obligations assumed
                           by it thereunder;

                  4.       all rights, interests and benefits whatsoever
                           accruing to or for the benefit of the Company arising
                           from the Monetary Claim belong to us and no changes
                           may be made to the terms of the Underlying Contract
                           nor may the Underlying Contract be terminated without
                           our consent; and

                  5.       you are authorised and instructed, without requiring
                           further approval from the Company, to provide us with
                           such information relating to the Monetary Claim as we
                           may from time to time request and to send copies of
                           all notices issued by you under the Underlying
                           Contract to us as well as to the Company.

                                                                         PAGE 44

<PAGE>

                                                       Fixed and floating charge

                  These instructions may not be revoked, nor amended, varied or
                  waived without our prior written consent.

                  We confirm that pursuant to clause 2.8 and clause 7 of the
                  Charge, we are empowered and authorised to deliver this Notice
                  of Charge for and on behalf of the Company.

                  This letter is governed by the law of the State of New South
                  Wales.

                  Please acknowledge receipt of this notice by signing the
                  acknowledgement on the enclosed copy letter and returning it
                  to us at Fifth Floor, 100 Wood Street, London EC2V 7EX marked
                  for the attention of Manager Trust Administration.

                  Yours faithfully,

                  _________________________________________

                  by
                  THE LAW DEBENTURE TRUST CORPORATION p.l.c.
                  as attorney for and on behalf of
                  [     ] (the "COMPANY")

                                                                         PAGE 45

<PAGE>

                                                       Fixed and floating charge

                  [On copy only:

                  To: THE LAW DEBENTURE TRUST CORPORATION p.l.c. AS SECURITY
                      TRUSTEE

                  We acknowledge receipt of a notice in the terms set out above
                  and confirm that we have not received notice of any previous
                  charges of or over any of the rights, interests and benefits
                  in and to the Monetary Claim and that we will comply with the
                  terms of that notice.

                  We further confirm that:

                  (a)      no amendment, waiver or release of any of such
                           rights, interests and benefits shall be effective
                           without your prior written consent;

                  (b)      no termination of such rights, interests or benefits
                           shall be effective unless we have given you thirty
                           days written notice of the proposed termination,
                           specifying the action necessary to avoid such
                           termination.

                  For and on behalf of [     ]

                  By: _____________________________

                  Dated:

                                                                         PAGE 46

<PAGE>

                                                       Fixed and floating charge

EXECUTED AS A DEED:

SIGNED SEALED AND DELIVERED by

MARCONI AUSTRALIA PTY LIMITED by:

J. P RABIN                                         P. R. BUTCHER

Director                                           Director

JEAN-PAUL RABIN                                    PAUL RUSSELL BUTCHER

Name (please print)                                Name (please print)

SIGNED SEALED AND DELIVERED for

THE LAW DEBENTURE TRUST CORPORATION p.l.c. by:

J. M. JEBB                                        R. D. RANCE

Director                                          Director

JULIAN MASON JEBB                                 RICHARD DAVID RANCE

Name (please print)                               Name (please print)

                                                                         PAGE 47

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