EX-4.125 118 u46311exv4w125.txt EXHIBIT 4.125 EXHIBIT 4.125 CONFORMED COPY [Marconi LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: www.marconi.com 14 February, 2003 Banca Monte dei Paschi di Siena SpA Agenzia 3 Via Trari 23/25 15125 Genova Italy Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Euro Equivalents for each of those Bonds is E5,631,771 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of E2,815,885.50 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. D.A. ROUSE C.D. HARBOUR D.A. ROUSE C.D. HARBOUR DEP. GENERAL MANAGER SENIOR MANAGER For and behalf of BANCA MONTE DEI PASCHI DI SIENA SPA 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 2 to this letter. "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means HSBC Bank plc. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK REFERENCE BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY CURRENCY RATE E1 12 FEB 03 ------------ ----------- -------------- ------------------------------- ------------- -------- ------------ 1 2 3 4 5 6 7 MCSpA MCSpA 203/2360/001 TELECOM ITALIA S.P.A. 6,500,000,000 ITL 1,936.27 MCSpA MCSpA 7155701 TELENOR NETT AS 5,000,000 NOK 7.4738 MCSpA MCSpA 7150201 TELENOR NETT AS 1,134,993 DKK 7.4336 MCSpA MCSpA 7137801 BELTELECOM 199,005,100 ITL 1,936.27 MCSpA MCSpA 7019301 RICEVITORE CAPO DOGANA 175,000,000 ITL 1,936.27 MCSpA MCSpA 7019501 THE EMIRATES TLC 289,498 AED 3.9430 MCSpA MCSpA 7019601 THE EMIRATES TLC 111,756 AED 3.9430 MCSpA MCSpA 779/5/88 MIN. PPTT-ASST-ROMA 24,712,000 ITL 1,936.27 MSud MSud 7007701 SPI 1,700,000,000 ITL 1,936.27 MSud MSud 7019101 RICEV. CAPO DOGANA GENOVA 300,000,000 ITL 1,936.27 MSud MSud 7018801 DHL INTERNATIONAL 100,000,000 ITL 1,936.27 MSud MSud 7009401 REGIONE CAMPANIA 79,200,000 ITL 1,936.27 MSud MSud 7017601 MIN. INDUSTRIA COM. ARTIGIANATO 17,270,000 ITL 1,936.27 MSud MSud 7009201 RICEV. CAPO DOGANA NAPOLI 8,000,000 ITL 1,936.27 MSud MSud 7017801 PRESIDENTE PRO-TEMPORE PROV.CA 6,240,000 ITL 1,936.27 MSud MSud 7019201 MINISTERO COMUNICAZIONI 2,150,000 ITL 1,936.27 MSud MSud 7003201 AMM. PROVINCIALE DI CASERTA 2,000,000 ITL 1,936.27 MSud MSud 7004601 AMM. PROVINCIALE DI CASERTA 2,000,000 ITL 1,936.27 MSud MSud 203.2360.1.92 COMUNE DI MARCIANISE 1,000,000 ITL 1,936.27
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INDEMNIFYING CONTRACTING EURO LATEST EXPIRY COMPANY COMPANY EQUIVALENT DATE ------------ ----------- ----------- ------------- 1 2 8 9 MCSpA MCSpA 3,356,970 31-Dec-06 MCSpA MCSpA 669,004 15-Jul-03 MCSpA MCSpA 152,684 16-Feb-15 MCSpA MCSpA 102,778 15-Jul-01 MCSpA MCSpA 90,380 31-Dec-02 MCSpA MCSpA 73,421 16-Feb-02 MCSpA MCSpA 28,343 6-Feb-02 MCSpA MCSpA 12,763 U/L MSud MSud 877,977 U/L MSud MSud 154,937 31-Dec-02 MSud MSud 51,646 U/L MSud MSud 40,903 31-Dec-99 MSud MSud 8,919 29-Sep-03 MSud MSud 4,132 8-Apr-99 MSud MSud 3,223 19-Oct-04 MSud MSud 1,110 10-Apr-02 MSud MSud 1,033 U/L MSud MSud 1,033 U/L MSud MSud 516 U/L
COMPANY KEY MCSpA Marconi Communications SpA MSud Marconi Sud 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF HSBC BANK PLC] To: Banca Monte dei Paschi di Siena SpA (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), HSBC Bank plc (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 14 February 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 1 to this Letter of Credit. "EXPIRY DATE" means the earlier of: (i) 14 February 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means E5,631,771. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means E2,815,885.50, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Euro Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than E100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 6 3. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 4. PAYMENTS All payments under this Letter of Credit shall be made in Euro and for value on the due date to the account of the Beneficiary specified in the Demand. 5. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: HSBC Bank plc [Canada Place Canary Wharf London E14 5AH] Fax: [ ] Telex: [ ] Attention: [Trade Services Department] 6. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 7. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No.500. 8. GOVERNING LAW This Letter of Credit is governed by English law. 7 9. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of HSBC BANK PLC By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING BANK REFERENCE BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY CURRENCY RATE E1 12 FEB 03 ------------ ----------- -------------- ------------------------------- ------------- -------- ------------ 1 2 3 4 5 6 7 MCSpA MCSpA 203/2360/001 TELECOM ITALIA S.P.A. 6,500,000,000 ITL 1,936.27 MCSpA MCSpA 7155701 TELENOR NETT AS 5,000,000 NOK 7.4738 MCSpA MCSpA 7150201 TELENOR NETT AS 1,134,993 DKK 7.4336 MCSpA MCSpA 7137801 BELTELECOM 199,005,100 ITL 1,936.27 MCSpA MCSpA 7019301 RICEVITORE CAPO DOGANA 175,000,000 ITL 1,936.27 MCSpA MCSpA 7019501 THE EMIRATES TLC 289,498 AED 3.9430 MCSpA MCSpA 7019601 THE EMIRATES TLC 111,756 AED 3.9430 MCSpA MCSpA 779/5/88 MIN.PPTT-ASST-ROMA 24,712,000 ITL 1,936.27 MSud MSud 7007701 SPI 1,700,000,000 ITL 1,936.27 MSud MSud 7019101 RICEV.CAPO DOGANA GENOVA 300,000,000 ITL 1,936.27 MSud MSud 7018801 DHL INTERNATIONAL 100,000,000 ITL 1,936.27 MSud MSud 7009401 REGIONE CAMPANIA 79,200,000 ITL 1,936.27 MSud MSud 7017601 MIN.INDUSTRIA COM.ARTIGIANATO 17,270,000 ITL 1,936.27 MSud MSud 7009201 RICEV.CAPO DOGANA NAPOLI 8,000,000 ITL 1,936.27 MSud MSud 7017801 PRESIDENTE PRO-TEMPORE PROV.CA 6,240,000 ITL 1,936.27 MSud MSud 7019201 MINISTERO COMUNICAZIONI 2,150,000 ITL 1,936.27 MSud MSud 7003201 AMM.PROVINCIALE DI CASERTA 2,000,000 ITL 1,936.27 MSud MSud 7004601 AMM.PROVINCIALE DI CASERTA 2,000,000 ITL 1,936.27 MSud MSud 203.2360.1.92 COMUNE DI MARCIANISE 1,000,000 ITL 1,936.27
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INDEMNIFYING CONTRACTING EURO LATEST EXPIRY COMPANY COMPANY EQUIVALENT DATE ------------ ----------- -------------- ------------- 1 2 8 9 MCSpA MCSpA 3,356,970 31-Dec-06 MCSpA MCSpA 669,004 15-Jul-03 MCSpA MCSpA 152,684 16-Feb-15 MCSpA MCSpA 102,778 15-Jul-01 MCSpA MCSpA 90,380 31-Dec-02 MCSpA MCSpA 73,421 16-Feb-02 MCSpA MCSpA 28,343 6-Feb-02 MCSpA MCSpA 12,763 U/L MSud MSud 877,977 U/L MSud MSud 154,937 31-Dec-02 MSud MSud 51,646 U/L MSud MSud 40,903 31-Dec-99 MSud MSud 8,919 29-Sep-03 MSud MSud 4,132 8-Apr-99 MSud MSud 3,223 19-Oct-04 MSud MSud 1,110 10-Apr-02 MSud MSud 1,033 U/L MSud MSud 1,033 U/L MSud MSud 516 U/L
COMPANY KEY MCSpA Marconi Communications SpA MSud Marconi Sud 9 SCHEDULE 2 FORM OF DEMAND To: HSBC Bank plc [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCA MONTE DEI PASCHI DI SIENA SPA DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing E[____________] under HSBC Bank plc Letter of Credit No. [ ] represents funds due to us as we have received notice from HSBC Bank plc of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of E[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR BANCA MONTE DEI PASCHI DI SIENA SPA 10 CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 18 February, 2003 National Westminster Bank plc 135 Bishopsgate London EC2M 3UR Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the US Dollar Equivalents for each of those Bonds is US$1,527,151 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of US$763,575.50 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the US Dollar Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. [AUTHORISED SIGNATORY] For and behalf of NATIONAL WESTMINSTER BANK PLC 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means JPMorgan Chase Bank. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of that Bond set out in the column headed "US Dollar Equivalent" in schedule 2 to this letter. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE CURRENCY RATE US$1 12 FEB 03 ------------ ----------- ------------- ---------------------------------------- ----------- -------- --------- 1 2 3 4 5 6 7 MCplc (MSIL) MSIplc TFPCYG 205868 China Resources (Hldg) Co Ltd 11,000,000 HKD 7.7993 MCplc (MML) MM(I)L 59707 Emirates Holdings Electronics 33,920 GBP 0.6187 MCplc (MSIL) MSIL TFPCYG 252273 Tunisia Telecom 35,105 USD 1.0000 MCplc (MML) MM(I)L 261190 International Aeradio (Emirates) L Dubai 25,001 EUR 0.9315
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INDEMNIFYING CONTRACTING US DOLLAR LATEST COMPANY COMPANY EQUIVALENT EXPIRY DATE ------------ ----------- ---------- --------- 1 2 8 9 MCplc (MSIL) MSIplc 1,410,383 2-Feb-01 MCplc (MML) MM(I)L 54,825 20-Jan-03 MCplc (MSIL) MSIL 35,105 31-Dec-01 MCplc (MML) MM(I)L 26,838 7-Nov-03 1,527,151
COMPANY KEY MCplc Marconi Corporation plc MSIplc Mobile Systems International plc MSIL Metapath Software International Ltd MM(I)L Marconi Mobile (International) Ltd 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK] To: National Westminster Bank plc (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the US Dollar Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 18 February 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EXPIRY DATE" means the earlier of: (i) 18 February 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means US$1,527,151. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means US$763,575.50, as reduced in accordance with paragraph 3 of this Letter of Credit. "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of that Bond set out in the column headed "US Dollar Equivalent" in schedule 1 to this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the US Dollar Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than US$100,000; or 6 (ii) if as a result of such reduction the Total L/C Amount would be zero. 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in US Dollars and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: JPMorgan Chase Bank [1 Chaseside Bournemouth Dorset BH7 7DA] Fax: [01202 34 37 30] Telex: [ ] Attention: [ ] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 7 9. GOVERNING LAW This Letter of Credit is governed by English law. 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of JPMORGAN CHASE BANK By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE CURRENCY RATE US$1 12 FEB 03 ------------ ----------- ------------- ---------------------------------------- ----------- -------- --------- 1 2 3 4 5 6 7 MCplc (MSIL) MSIplc TFPCYG 205868 China Resources (Hldg) Co Ltd 11,000,000 HKD 7.7993 MCplc (MML) MM(I)L 59707 Emirates Holdings Electronics 33,920 GBP 0.6187 MCplc (MSIL) MSIL TFPCYG 252273 Tunisia Telecom 35,105 USD 1.0000 MCplc (MML) MM(I)L 261190 International Aeradio (Emirates) L Dubai 25,001 EUR 0.9315
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INDEMNIFYING CONTRACTING US DOLLAR LATEST COMPANY COMPANY EQUIVALENT EXPIRY DATE ------------ ----------- ----------- --------- 1 2 8 9 MCplc (MSIL) MSIplc 1,410,383 2-Feb-01 MCplc (MML) MM(I)L 54,825 20-Jan-03 MCplc (MSIL) MSIL 35,105 31-Dec-01 MCplc (MML) MM(I)L 26,838 7-Nov-03 1,527,151
COMPANY KEY MCplc Marconi Corporation plc MSIplc Mobile Systems International plc MSIL Metapath Software International Ltd MM(I)L Marconi Mobile (International) Ltd 9 SCHEDULE 2 FORM OF DEMAND To: JPMorgan Chase Bank [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF NATIONAL WESTMINSTER BANK PLC DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing US$[____________] under JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us as we have received notice from JPMorgan Chase Bank of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of US$[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR NATIONAL WESTMINSTER BANK PLC 10 CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 19 February, 2003 The HongKong and Shanghai Banking Corporation Limited Lending Services Division APH CRM L10 HSBC Main Building 1 Queen's Road Central Hong Kong Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the US Dollar Equivalents for each of those Bonds is US$3,359,294 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of US$1,679,647 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the US Dollar Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. LEWIS WILSON For and behalf of THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means Barclays Bank PLC. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of that Bond set out in the column headed "US Dollar Equivalent" in schedule 2 to this letter. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE 4 5 CURRENCY RATE US$1 1 2 3 6 12 FEB 03 7 ------------ ----------- ------------ --------------------------------------------- ---------- -------- --------- MCIL MCIL PEBTKY210078 SpeedNet Incorporated 1,201,448 USD 1.0000 GEC(HK)L GEC(HK)L HKH037096 Dragages - Zen Pacific Joint Venture 7,415,000 HKD 7.7993 MCAL MCAL 38434 MTR Corporation Limited 5,043,833 HKD 7.7993 MCAL MCAL 39905 ERG Transit Systems (HK) Limited 2,672,850 HKD 7.7993 MCIL MCIL 39825 Loxley business Information Technology Co Ltd. 44,599 GBP 0.6187 MCIL MCIL 40156 Loxley business Information Technology Co Ltd. 40,583 GBP 0.6187 MCIL MCIL 40220 Korea Telecom 61,555 EUR 0.9315 GECSingPL GECSingPL PEBSGH931199 Housing & Development Board 24,541 SGD 1.7586
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INDEMNIFYING CONTRACTING US DOLLAR LATEST COMPANY COMPANY EQUIVALENT EXPIRY 1 2 8 DATE 9 ------------ ----------- ---------- --------- MCIL MCIL 1,201,448 06-Jan-03 GEC(HK)L GEC(HK)L 950,726 U/L MCAL MCAL 646,703 30-Nov-03 MCAL MCAL 342,704 01-Sep-03 MCIL MCIL 72,085 02-Jan-03 MCIL MCIL 65,594 26-Mar-03 MCIL MCIL 66,079 10-Jan-04 GECSingPL GECSingPL 13,955 26-Mar-03 3,359,294
COMPANY KEY ----------- MCIL Marconi Communications International Ltd MCCL Marconi Communications China Ltd MCAL Marconi Communications Asia Ltd GEC(HK)L GEC (Hong Kong) Ltd GECSingPL GEC Singapore Pty Ltd 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC] To: The HongKong and Shanghai Banking Corporation Limited (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank PLC (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the US Dollar Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 19 February 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EXPIRY DATE" means the earlier of: (i) 19 February 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means US$3,359,294. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means US$1,679,647, as reduced in accordance with paragraph 3 of this Letter of Credit. "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of that Bond set out in the column headed "US Dollar Equivalent" in schedule 1 to this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the US Dollar Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than US$100,000; or 6 (ii) if as a result of such reduction the Total L/C Amount would be zero. 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in US Dollars and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: Barclays Bank PLC [Guarantees Department UK International Operations Centre - Manchester P O Box 84 6th Floor 4 Exchange Quay Salford M5 3PL] Fax: [0161 911 6402] Telex: [ ] Attention: [Guarantees Department] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 7 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 9. GOVERNING LAW This Letter of Credit is governed by English law. 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of BARCLAYS BANK PLC By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE 4 5 CURRENCY RATE US$1 1 2 3 6 12 FEB 03 7 ------------ ----------- ------------ --------------------------------------------- ----------- -------- --------- MCIL MCIL PEBTKY210078 SpeedNet Incorporated 1,201,448 USD 1.0000 GEC(HK)L GEC(HK)L HKH037096 Dragages - Zen Pacific Joint Venture 7,415,000 HKD 7.7993 MCAL MCAL 38434 MTR Corporation Limited 5,043,833 HKD 7.7993 MCAL MCAL 39905 ERG Transit Systems (HK) Limited 2,672,850 HKD 7.7993 MCIL MCIL 39825 Loxley business Information Technology Co Ltd. 44,599 GBP 0.6187 MCIL MCIL 40156 Loxley business Information Technology Co Ltd. 40,583 GBP 0.6187 MCIL MCIL 40220 Korea Telecom 61,555 EUR 0.9315 GECSingPL GECSingPL PEBSGH931199 Housing & Development Board 24,541 SGD 1.7586
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INDEMNIFYING CONTRACTING US DOLLAR LATEST COMPANY COMPANY EQUIVALENT EXPIRY 1 2 8 DATE 9 ------------ ----------- ---------- --------- MCIL MCIL 1,201,448 06-Jan-03 GEC(HK)L GEC(HK)L 950,726 U/L MCAL MCAL 646,703 30-Nov-03 MCAL MCAL 342,704 01-Sep-03 MCIL MCIL 72,085 02-Jan-03 MCIL MCIL 65,594 26-Mar-03 MCIL MCIL 66,079 10-Jan-04 GECSingPL GECSingPL 13,955 26-Mar-03 3,359,294
COMPANY KEY ----------- MCIL Marconi Communications International Ltd MCCL Marconi Communications China Ltd MCAL Marconi Communications Asia Ltd GEC(HK)L GEC (Hong Kong) Ltd GECSingPL GEC Singapore Pty Ltd 9 SCHEDULE 2 FORM OF DEMAND To: Barclays Bank PLC [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing US$[____________] under Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as we have received notice from Barclays Bank PLC of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of US$[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED 10 CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 26 February, 2003 BNP Paribas 10 Harewood Avenue London NW1 6AA Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Euro Equivalents for each of those Bonds is E3,778,202 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of E1,889,101 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). 1 On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. PAUL TUMIM TARIQ KAZI PAUL TUMIM TARIQ KAZI For and behalf of BNP PARIBAS 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 2 to this letter. "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means JPMorgan Chase Bank. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE CURRENCY RATE (E)1 12 FEB 03 1 2 3 4 5 6 7 ------------ ----------- ------------- ---------------------------------------- ------------- -------- ---------- MCL (MCCL) MCCL GTE/2000.0607 Foundasia (HK) Limited 5,961,337 HKD 8.3727 MCL (MCAL) MCAL GTE/2000.0632 Hongkong Electric Co., Ltd. 762,405 USD 1.0735 MMSpA MMSpA 4808 A.T.M. 1,230,000,000 ITL 1,936.27 MCSEAL MCSEAL 970678 Singapore Telecommunications Ltd 1,255,000 SGD 1.8878 MCSA MCSA Cardimmo 3,660,000 FFR 6.5596 MMSpA MMSpA 4505/99 A.T.M. 402,000,000 ITL 1,936.27 MCL (MCAL) MCAL GTE/990747 China Electric Power Technology Import & 139,359 USD 1.0735 Export Corp. MCL (GEC(HK)L) GEC(HK)L GTE/990036 Hong Kong Government - 1041/EM/97 1,000,000 HKD 8.3727 MCL GECSingPL 970519 Power Supply Ltd 50,000 SGD 1.8878 MCL GECSingPL 968288 Housing & Development Board 17,050 SGD 1.8878 MCL GECSingPL 969965 Kian Hiap Construction Pte Ltd 9,100 SGD 1.8878 MCL GECSingPL 970174 PWD EMS Pte Ltd 1,500 SGD 1.8878
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INDEMNIFYING CONTRACTING EURO LATEST COMPANY COMPANY EQUIVALENT EXPIRY DATE 1 2 8 9 ------------ ----------- ---------- --------- MCL (MCCL) MCCL 711,997 31-Oct-05 MCL (MCAL) MCAL 710,205 31-Jan-05 MMSpA MMSpA 635,242 18-Jan-04 MCSEAL MCSEAL 664,795 31-Dec-04 MCSA MCSA 557,961 U/L MMSpA MMSpA 207,616 25-Jul-03 MCL (MCAL) MCAL 129,818 04-Aug-03 MCL (GEC(HK)L) GEC(HK)L 119,436 U/L MCL GECSingPL 26,486 U/L MCL GECSingPL 9,032 U/L MCL GECSingPL 4,820 U/L MCL GECSingPL 795 02-Aug-03 3,778,202
COMPANY KEY ----------- MCL Marconi Communications Ltd MCIL Marconi Communications International Ltd MCCL Marconi Communications China Ltd MCAL Marconi Communications Asia Ltd GEC(HK)L GEC (Hong Kong) Ltd GECSingPL GEC Singapore Pty Ltd MMSpA Marconi Mobile SpA 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK] To: BNP Paribas (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 26 February 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 1 to this Letter of Credit. "EXPIRY DATE" means the earlier of: (i) 26 February 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means E3,778,202. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means E1,889,101, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Euro Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than E100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 6 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in Euro and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: JPMorgan Chase Bank [1 Chaseside Bournemouth Dorset BH7 7DA] Fax: [01202 34 37 30] Telex: [ ] Attention: [ ] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 9. GOVERNING LAW This Letter of Credit is governed by English law. 7 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of JP MORGAN CHASE BANK By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE CURRENCY RATE (E)1 12 FEB 03 1 2 3 4 5 6 7 -------------- ----------- ------------- ----------------------------------------- ------------- -------- ---------- MCL (MCCL) MCCL GTE/2000.0607 Foundasia (HK) Limited 5,961,337 HKD 8.3727 MCL (MCAL) MCAL GTE/2000.0632 Hongkong Electric Co., Ltd. 762,405 USD 1.0735 MMSpA MMSpA 4808 A.T.M. 1,230,000,000 ITL 1,936.27 MCSEAL MCSEAL 970678 Singapore Telecommunications Ltd 1,255,000 SGD 1.8878 MCSA MCSA Cardimmo 3,660,000 FFR 6.5596 MMSpA MMSpA 4505/99 A.T.M. 402,000,000 ITL 1,936.27 MCL (MCAL) MCAL GTE/990747 China Electric Power Technology Import & 139,359 USD 1.0735 Export Corp. MCL (GEC(HK)L) GEC(HK)L GTE/990036 Hong Kong Government - 1041/EM/97 1,000,000 HKD 8.3727 MCL GECSingPL 970519 Power Supply Ltd 50,000 SGD 1.8878 MCL GECSingPL 968288 Housing & Development Board 17,050 SGD 1.8878 MCL GECSingPL 969965 Kian Hiap Construction Pte Ltd 9,100 SGD 1.8878 MCL GECSingPL 970174 PWD EMS Pte Ltd 1,500 SGD 1.8878
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INDEMNIFYING CONTRACTING EURO LATEST COMPANY COMPANY EQUIVALENT EXPIRY DATE 1 2 8 9 ------------- ----------- ---------- --------- MCL (MCCL) MCCL 711,997 31-Oct-05 MCL (MCAL) MCAL 710,205 31-Jan-05 MMSpA MMSpA 635,242 18-Jan-04 MCSEAL MCSEAL 664,795 31-Dec-04 MCSA MCSA 557,961 U/L MMSpA MMSpA 207,616 25-Jul-03 MCL (MCAL) MCAL 129,818 04-Aug-03 MCL (GEC(HK)L) GEC(HK)L 119,436 U/L MCL GECSingPL 26,486 U/L MCL GECSingPL 9,032 U/L MCL GECSingPL 4,820 U/L MCL GECSingPL 795 02-Aug-03 3,778,202
COMPANY KEY ----------- MCL Marconi Communications Ltd MCIL Marconi Communications International Ltd MCCL Marconi Communications China Ltd MCAL Marconi Communications Asia Ltd GEC(HK)L GEC (Hong Kong) Ltd GECSingPL GEC Singapore Pty Ltd MMSpA Marconi Mobile SpA 9 SCHEDULE 2 FORM OF DEMAND To: JPMorgan Chase Bank [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BNP PARIBAS DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing E[____________] under JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us as we have received notice from JPMorgan Chase Bank of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of E[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR BNP PARIBAS 10 CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: www.marconi.com 28 February, 2003 HSBC Bank plc 8 Canada Square London E14 5HQ Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Sterling Equivalents for each of those Bonds is (pound)2,965,295 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of (pound)1,482,647.50 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). 1 On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Sterling Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. [AUTHORISED SIGNATORY] For and behalf of HSBC BANK PLC 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means Barclays Bank PLC. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "STERLING EQUIVALENT" means, for a Bond, the Sterling amount in respect of that Bond set out in the column headed "Sterling Equivalent" in schedule 2 to this letter. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE 4 5 CURRENCY RATE(POUND)1 1 2 3 6 12 FEB 03 7 ------------ ----------- ------------- --------------------------------------- ----------- -------- ------------ MCplc (MCL) MCL 140099 TETREL LOAN NOTES 1,017,787 GBP 1.0000 MCplc (MCL) MCAL 167126 CLP Power Hong Kong Ltd. 5,000,000 HKD 12.6063 MCplc (MCL) MCGmbH 102/167214 Deutsche Auto-Leasing GmbH, Bad Homburg 400,000 EUR 1.5057 MCplc (MCL) MCL 11942496 HM Customs 500,000 GBP 1.0000 MCIL MCIL 152833 Birmingham CoC - US Customs 75,000 GBP 1.0000 MCplc (MCL) MCIL 102/165022B PT Comunicacoes SA 61,565 EUR 1.5057 MCplc (MCL) MCGmbH 102/167191 Nordwest Leasing, Bremen 57,342 EUR 1.5057 MCL MCL 144686 Heather Trust for the Arts 34,455 GBP 1.0000 MCplc (MCL) MCL 102/094218/94 S.A.G.R.O. 134,067 SAR 6.0612 MCplc (MCL) MCL 167427 Fincantieri CNI SpA 748,000 EUR 1.5057 MCplc (MCL) MCL 167426 Fincantieri CNI SpA 136,700 EUR 1.5057
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INDEMNIFYING CONTRACTING STERLING LATEST COMPANY COMPANY EQUIVALENT EXPIRY 1 2 8 DATE 9 ------------ ----------- ---------- --------- MCplc (MCL) MCL 1,017,787 29-Jun-04 MCplc (MCL) MCAL 396,826 28-Nov-06 MCplc (MCL) MCGmbH 265,657 31-Dec-04 MCplc (MCL) MCL 500,000 U/L MCIL MCIL 75,000 4-Jul-03 MCplc (MCL) MCIL 40,888 31-Oct-03 MCplc (MCL) MCGmbH 38,083 17-Dec-02 MCL MCL 34,455 U/L MCplc (MCL) MCL 22,119 24-Jan-04 MCplc (MCL) MCL 485,714 06-Jan-05 MCplc (MCL) MCL 88,766 30-Jun-08 2,965,295
COMPANY KEY MCL Marconi Communications Ltd MCIL Marconi Communications International Ltd MCplc Marconi Corporation plc MCAL Marconi Communications Asia Ltd MCGmbH Marconi Communications GmbH 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC] To: HSBC Bank plc (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank PLC (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Sterling Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 28 February 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EXPIRY DATE" means the earlier of: (i) 28 February 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means(pound)2,965,295. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "STERLING EQUIVALENT" means, for a Bond, the Sterling amount in respect of that Bond set out in the column headed "Sterling Equivalent" in schedule 1 to this Letter of Credit. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means (pound)1,482,647.50, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Sterling Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than(pound)100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 6 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in Sterling and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: Barclays Bank PLC [Guarantees Department UK International Operations Centre - Manchester P O Box 84 6th Floor 4 Exchange Quay Salford M5 3PL] Fax: [0161 911 6402] Telex: [ ] Attention: [Guarantees Department] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 7 9. GOVERNING LAW This Letter of Credit is governed by English law. 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of BARCLAYS BANK PLC By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING BANK BENEFICIARY LOCAL VALUE PAYMENT EXCHANGE COMPANY COMPANY REFERENCE 4 5 CURRENCY RATE(POUND)1 1 2 3 6 12 FEB 03 7 ------------ ----------- ------------- --------------------------------------- ----------- -------- ------------ MCplc (MCL) MCL 140099 TETREL LOAN NOTES 1,017,787 GBP 1.0000 MCplc (MCL) MCAL 167126 CLP Power Hong Kong Ltd. 5,000,000 HKD 12.6063 MCplc (MCL) MCGmbH 102/167214 Deutsche Auto-Leasing GmbH, Bad Homburg 400,000 EUR 1.5057 MCplc (MCL) MCL 11942496 HM Customs 500,000 GBP 1.0000 MCIL MCIL 152833 Birmingham CoC - US Customs 75,000 GBP 1.0000 MCplc (MCL) MCIL 102/165022B PT Comunicacoes SA 61,565 EUR 1.5057 MCplc (MCL) MCGmbH 102/167191 Nordwest Leasing, Bremen 57,342 EUR 1.5057 MCL MCL 144686 Heather Trust for the Arts 34,455 GBP 1.0000 MCplc (MCL) MCL 102/094218/94 S.A.G.R.O. 134,067 SAR 6.0612 MCplc (MCL) MCL 167427 Fincantieri CNI SpA 748,000 EUR 1.5057 MCplc (MCL) MCL 167426 Fincantieri CNI SpA 136,700 EUR 1.5057
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INDEMNIFYING CONTRACTING STERLING LATEST COMPANY COMPANY EQUIVALENT EXPIRY 1 2 8 DATE 9 ------------ ----------- ---------- --------- MCplc (MCL) MCL 1,017,787 29-Jun-04 MCplc (MCL) MCAL 396,826 28-Nov-06 MCplc (MCL) MCGmbH 265,657 31-Dec-04 MCplc (MCL) MCL 500,000 U/L MCIL MCIL 75,000 4-Jul-03 MCplc (MCL) MCIL 40,888 31-Oct-03 MCplc (MCL) MCGmbH 38,083 17-Dec-02 MCL MCL 34,455 U/L MCplc (MCL) MCL 22,119 24-Jan-04 MCplc (MCL) MCL 485,714 06-Jan-05 MCplc (MCL) MCL 88,766 30-Jun-08 2,965,295
COMPANY KEY MCL Marconi Communications Ltd MCIL Marconi Communications International Ltd MCplc Marconi Corporation plc MCAL Marconi Communications Asia Ltd MCGmbH Marconi Communications GmbH 9 SCHEDULE 2 FORM OF DEMAND To: Barclays Bank PLC [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF HSBC BANK PLC DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing (pound)[____________] under Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as we have received notice from Barclays Bank PLC of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of(pound)[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR HSBC BANK PLC Registered in England & Wales No.3846429 Registered Office New Century Park, PO Box 53, Coventry CV3 1HJ CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 14 March, 2003 Australia and New Zealand Banking Group Limited Minerva House Montague Close London SE1 9DH For the attention of: Nigel Marks - Asset Management Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Euro Equivalents for each of those Bonds is euro 1,995,828 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of euro 997,914 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. [AUTHORISED SIGNATORY] For and behalf of AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 2 to this letter. "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means JPMorgan Chase Bank. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY ------------ ----------- --------- ----------- 1 2 3 4 MCL MCIL 01/245 Onitelecom-Infocomunicacoes S.A. MCL MCIL 01/247 PT Comunicacoes S.A. MCL MCIL 00/517 Portugal Telecom S.A. MCL MCIL 01/080 PT Comunicacoes S.A. M Aus M Aus 55800 Abbey Capital Real Estate Pty Ltd MCL MCIL 00/518 Portugal Telecom S.A. MCL MCIL 00/044 China National Machinery I/E Co. COMPANY KEY MCL Marconi Communications Ltd MCIL Marconi Communications International Ltd MCCL Marconi Communications China Ltd M Aus Marconi Australia Pty Ltd
EXCHANGE EURO INDEMNIFYING CONTRACTING PAYMENT RATE euro1 EQUIVALENT LATEST COMPANY COMPANY LOCAL VALUE CURRENCY 12 FEB 03 DATE EXPIRY ------------ ----------- ----------- -------- ------------ ---------- ------ 1 2 5 6 7 8 9 MCL MCIL 1,302,775 EUR 1.0000 1,302,775 31-Mar-03 MCL MCIL 366,406 EUR 1.0000 366,406 31-Jan-04 MCL MCIL 118,078 EUR 1.0000 118,078 13-May-03 MCL MCIL 103,851 EUR 1.0000 103,851 27-Apr-03 M Aus M Aus 154,506 AUD 1.8166 85,052 14-Jun-06 --------- MCL MCIL 12,916 EUR 1.0000 12,916 8-Feb-03 --------- MCL MCIL 7,246 USD 1.0735 6,750 30-Nov-01 --------- 1,995,828 ---------
4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK] To: Australia and New Zealand Banking Group Limited (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 14 March, 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 1 to this Letter of Credit. "EXPIRY DATE" means the earlier of: (i) 14 March, 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means euro 1,995,828. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means euro 997,914, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Euro Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than euro 100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 6 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in Euro and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: JPMorgan Chase Bank [1 Chaseside Bournemouth Dorset BH7 7DA] Fax: [01202 343730] Telex: [ ] Attention: [ ] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 9. GOVERNING LAW This Letter of Credit is governed by English law. 7 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of JPMORGAN CHASE BANK By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY ------------ ----------- --------- ----------- 1 2 3 4 MCL MCIL 01/245 Onitelecom-Infocomunicacoes S.A. MCL MCIL 01/247 PT Comunicacoes S.A. MCL MCIL 00/517 Portugal Telecom S.A. MCL MCIL 01/080 PT Comunicacoes S.A. M Aus M Aus 55800 Abbey Capital Real Estate Pty Ltd MCL MCIL 00/518 Portugal Telecom S.A. MCL MCIL 00/044 China National Machinery I/E Co.
EXCHANGE LATEST INDEMNIFYING CONTRACTING PAYMENT RATE euro 1 EURO EXPIRY COMPANY COMPANY LOCAL VALUE CURRENCY 12 FEB 03 EQUIVALENT DATE ------------ ----------- ----------- -------- ------------ ---------- ------ 1 2 5 6 7 8 9 MCL MCIL 1,302,775 EUR 1.0000 1,302,775 31-Mar-03 MCL MCIL 366,406 EUR 1.0000 366,406 31-Jan-04 MCL MCIL 118,078 EUR 1.0000 118,078 13-May-03 MCL MCIL 103,851 EUR 1.0000 103,851 27-Apr-03 M Aus M Aus 154,506 AUD 1.8166 85,052 14-Jun-06 --------- MCL MCIL 12,916 EUR 1.0000 12,916 8-Feb-03 --------- MCL MCIL 7,246 USD 1.0735 6,750 30-Nov-01 --------- 1,995,828 --------- COMPANY KEY MCL Marconi Communications Ltd MCIL Marconi Communications International Ltd MCCL Marconi Communications China Ltd M Aus Marconi Australia Pty Ltd
9 SCHEDULE 2 FORM OF DEMAND To: JPMorgan Chase Bank [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED DATED [ ], 2003 (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing euro[____________] under JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us as we have received notice from JPMorgan Chase Bank of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of euro[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 18 March 2003 Unicredit Banca D'Impresa SpA Filiale Genova Centro Via Petrarca 2-16121 Genova Att. neg Sigg. Romeo/Stellino Swift Address: UNICRIT2V Italy Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Euro Equivalents for each of those Bonds is euro 11,410,137 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of euro7,000,000 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. BURCHI ANDREA ROMEO GIOVANNI BURCHI ANDREA ROMEO GIOVANNI BRANCH CHIEF MANAGER SENIOR ACCOUNT MANAGER For and behalf of UNICREDIT BANCA D'IMPRESA SPA 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "outstanding" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 2 to this letter. "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means HSBC Bank plc. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY ------------ ----------- --------- ----------- 1 2 3 4 MCSpA MCSpA 460010778854 BASICTEL S.P.A. MCSpA MCSpA 28744 TIM-TELECOM ITALIA MOBILE SPA MSud MSud 6232/08 UFFICIO IVA MCSpA MCSpA 460010880150 9 TELECOM RESEAU MCSpA MCSpA 460010880221 TELECOM ITALIA S.P.A. DIR. GEN. MCSpA MCSpA 460010260990 TELECOM ITALIA MCSpA MCSpA 460010765846 FERROVIE DELLO STATO MCSpA MCSpA 460010765852 FERROVIE DELLO STATO MCSpA MCSpA 59970 UNIVERSITA' DEGLI STUDI MCSpA MCSpA 460011081716 MAROC TELECOM S.A. MCSpA MCSpA 59985 SINELEC MCSpA MCSpA 59983 SINELEC MCSpA MCSpA 4310/26 IRITEL S.p.A ROMA MCSpA MCSpA 4863-94 FERROVIE DELLO STATO S.P.A. MCSpA MCSpA 460011081719 MAROC TELECOM S.A. MCSpA MCSpA 460010766259 FERROVIE DELLO STATO MMSpA MMSpA 460010879941 LEBANESE INTERIOR SECURITY FORCE MMSpA MMSpA 4600105077165 COMANDO GENERALE ARMA CC MMSpA MMSpA 460011271307 MINISTERO INTERNO P.S. MCSpA MCSpA 460010172082 TELECOM ITALIA MMSpA MMSpA 3894-31 COMANDO ARMA CC MMSpA MMSpA 460010779601 CHINA AVIATION SUPPLIES IMP. & EXP.
EXCHANGE PAYMENT RATE euro1 EURO LATEST LOCAL VALUE CURRENCY 12 FEB 03 EQUIVALENT EXPIRY DATE ----------- -------- ------------ ---------- ----------- 5 6 7 8 9 3,172,568 EUR 1.0000 3,172,568 31-Mar-03 4,800,000,000 ITL 1,936.27 2,478,993 U/L 2,966,896,000 ITL 1,936.27 1,532,274 31-Dec-02 1,250,000 EUR 1.0000 1,250,000 6-Aug-06 1,700,000,000 ITL 1,936.27 877,977 31-Jan -03 400,000,000 ITL 1,936.27 206,583 U/L 348,323,328 ITL 1,936.27 179,894 U/L 328,972,032 ITL 1,936.27 169,900 U/L 162,400,000 ITL 1,936.27 83,873 U/L 750,000 MAD 10.7050 70,061 16-Feb-02 129,177,524 ITL 1,936.27 66,715 31-Mar-01 112,553,098 ITL 1,936.27 58,129 14-Apr-01 76,667,914 ITL 1,936.27 39,596 U/L 69,911,251 ITL 1,936.27 36,106 U/L 150,000 MAD 10.7050 14,012 16-Feb-02 10,920,000 ITL 1,936.27 5,640 U/L 456,910 EUR 1.0000 456,910 15-Aug-03 835,322,800 ITL 1,936.27 431,408 U/L 371,493,000 ITL 1,936.27 191,860 U/L 80,000,000 ITL 1,936.27 41,317 U/L 68,050,000 ITL 1,936.27 35,145 U/L 12,000 USD 1.0735 11,178 30-Nov-01 ---------- 11,410,137 ----------
COMPANY KEY MCSpA Marconi Communications SpA MMSpA Marconi Mobile SpA MSud Marconi Sud SpA 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF HSBC BANK PLC] To: Unicredit Banca D'Impresa SpA (the "BENEFICIARY") Through: UniCredito Italiano S.p.A. Via San Protaso 3 20121 Milano (Italy) Attn: Mr D'Elia (+39 02 8862 3571) [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), HSBC Bank plc (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 18 March, 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 1 to this Letter of Credit. "EXPIRY DATE" means the earlier of: (i) 18 March, 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and 5 (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means euro11,410,137. "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means euro7,000,000, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Euro Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than euro100,000; or 6 (ii) if as a result of such reduction the Total L/C Amount would be zero. 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in Euro and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by courier or SWIFT message and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: HSBC Bank plc [Canada Place Canary Wharf London E14 5AH] Fax: [ ] SWIFT: [ ] Attention: [Trade Services Department] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 7 9. GOVERNING LAW Except to the extent it is inconsistent with the express terms of this Letter of Credit or the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, this Letter of Credit is governed by English law. 10. JURISDICTION The English courts have non-exclusive jurisdiction to settle any dispute in connection with this Letter of Credit. CONFIRMING BANK We hereby authorize UniCredito Italiano S.p.A. to add its confirmation to this letter of credit and upon agreement by UniCredito Italiano S.p.A. to add its confirmation to this letter of credit by way of an exchange of letters, UniCredito Italiano S.p.A. shall be designated as the "Confirming Bank" (within the meaning of the UCP) of this letter of credit. Subject to UniCredito Italiano S.p.A. agreeing to add its confirmation to this letter of credit, on presentation by you to UniCredito Italiano S.p.A. of a demand for payment together with a certification that (i) you have made a demand for the amount set forth in such demand for payment to us in accordance with the letter of credit; and (ii) the amount demanded in such demand for payment is due and unpaid by us under this letter of credit for a period of ten business days of receipt by us of such demand UniCredito Italiano S.p.A will pay to you the amount demanded in such demand for payment. Any and all fees, costs and expenses claimed by UniCredito Italiano S.p.A. in connection with this letter of credit will be borne by you Yours faithfully, For and on behalf of HSBC BANK PLC By: 8 SCHEDULE 1 THE BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY ------------ ----------- --------- ----------- 1 2 3 4 MCSpA MCSpA 460010778854 BASICTEL S.P.A. MCSpA MCSpA 28744 TIM-TELECOM ITALIA MOBILE SPA MSud MSud 6232/08 UFFICIO IVA MCSpA MCSpA 460010880150 9 TELECOM RESEAU MCSpA MCSpA 460010880221 TELECOM ITALIA S.P.A. DIR. GEN. MCSpA MCSpA 460010260990 TELECOM ITALIA MCSpA MCSpA 460010765846 FERROVIE DELLO STATO MCSpA MCSpA 460010765852 FERROVIE DELLO STATO MCSpA MCSpA 59970 UNIVERSITA' DEGLI STUDI MCSpA MCSpA 460011081716 MAROC TELECOM S.A. MCSpA MCSpA 59985 SINELEC MCSpA MCSpA 59983 SINELEC MCSpA MCSpA 4310/26 IRITEL S.p.A ROMA MCSpA MCSpA 4863-94 FERROVIE DELLO STATO S.P.A. MCSpA MCSpA 460011081719 MAROC TELECOM S.A. MCSpA MCSpA 460010766259 FERROVIE DELLO STATO MMSpA MMSpA 460010879941 LEBANESE INTERIOR SECURITY FORCE MMSpA MMSpA 4600105077165 COMANDO GENERALE ARMA CC MMSpA MMSpA 460011271307 MINISTERO INTERNO P.S. MCSpA MCSpA 460010172082 TELECOM ITALIA MMSpA MMSpA 3894-31 COMANDO ARMA CC MMSpA MMSpA 460010779601 CHINA AVIATION SUPPLIES IMP. & EXP.
EXCHANGE INDEMNIFYING CONTRACTING PAYMENT RATE euro1 EURO LATEST COMPANY COMPANY LOCAL VALUE CURRENCY 12 FEB 03 EQUIVALENT EXPIRY DATE ------------ ----------- ----------- -------- ------------ ---------- ----------- 1 2 5 6 7 8 9 MCSpA MCSpA 3,172,568 EUR 1.0000 3,172,568 31-Mar-03 MCSpA MCSpA 4,800,000,000 ITL 1,936.27 2,478,993 U/L MSud MSud 2,966,896,000 ITL 1,936.27 1,532,274 31-Dec-02 MCSpA MCSpA 1,250,000 EUR 1.0000 1,250,000 6-Aug-06 MCSpA MCSpA 1,700,000,000 ITL 1,936.27 877,977 31-Jan -03 MCSpA MCSpA 400,000,000 ITL 1,936.27 206,583 U/L MCSpA MCSpA 348,323,328 ITL 1,936.27 179,894 U/L MCSpA MCSpA 328,972,032 ITL 1,936.27 169,900 U/L MCSpA MCSpA 162,400,000 ITL 1,936.27 83,873 U/L MCSpA MCSpA 750,000 MAD 10.7050 70,061 16-Feb-02 MCSpA MCSpA 129,177,524 ITL 1,936.27 66,715 31-Mar-01 MCSpA MCSpA 112,553,098 ITL 1,936.27 58,129 14-Apr-01 MCSpA MCSpA 76,667,914 ITL 1,936.27 39,596 U/L MCSpA MCSpA 69,911,251 ITL 1,936.27 36,106 U/L MCSpA MCSpA 150,000 MAD 10.7050 14,012 16-Feb-02 MCSpA MCSpA 10,920,000 ITL 1,936.27 5,640 U/L MMSpA MMSpA 456,910 EUR 1.0000 456,910 15-Aug-03 MMSpA MMSpA 835,322,800 ITL 1,936.27 431,408 U/L MMSpA MMSpA 371,493,000 ITL 1,936.27 191,860 U/L MCSpA MCSpA 80,000,000 ITL 1,936.27 41,317 U/L MMSpA MMSpA 68,050,000 ITL 1,936.27 35,145 U/L MMSpA MMSpA 12,000 USD 1.0735 11,178 30-Nov-01 ---------- 11,410,137 ----------
COMPANY KEY MCSpA Marconi Communications SpA MMSpA Marconi Mobile SpA MSud Marconi Sud SpA 9 SCHEDULE 2 FORM OF DEMAND To: HSBC Bank plc [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF UNICREDIT BANCA D'IMPRESA SPA DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing euro[____________] under HSBC Bank plc Letter of Credit No. [ ] represents funds due to us as we have received notice from HSBC Bank plc of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of euro[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR UNICREDIT BANCA D'IMPRESA SPA CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 25 March 2003 Banco Santander Central Hispano, S.A., London Branch Santander House 100 Ludgate Hill London EC4M 7NJ Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Euro Equivalents for each of those Bonds is euro 6,010,121 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of euro 3,005,060.50 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. [AUTHORISED SIGNATORY] [AUTHORISED SIGNATORY] For and behalf of BANCO SANTANDER CENTRAL HISPANO, S.A., LONDON BRANCH 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 2 to this letter. "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means Barclays Bank PLC. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE ------------ ----------- --------- ----------- ----------- 1 2 3 4 5 MCL MCESA RETEVISION 1,000,000,000
EXCHANGE INDEMNIFYING CONTRACTING PAYMENT RATE euro 1 EURO LATEST COMPANY COMPANY CURRENCY 12 FEB 03 EQUIVALENT EXPIRY DATE ------------ ----------- -------- ------------ ---------- ----------- 1 2 6 7 8 9 MCL MCESA ESP 166.3860 6,010,121 30-Jun-09 6,010,121
COMPANY KEY ----------- MCL Marconi Communications Ltd MCESA Marconi Communications Espana, SA 4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC] To: Banco Santander Central Hispano, S.A., London Branch (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank PLC (the "ISSUING Bank") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 25 March, 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 1 to this Letter of Credit. "EXPIRY DATE" means the earlier of: (i) 10 July 2009 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. 5 "ORIGINAL BONDS OUTSTANDING" means euro 6,010,121. "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means euro 3,005,060.50, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Euro Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than euro 100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 6 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in Euro and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: Barclays Bank PLC [Guarantees Department UK International Operations Centre - Manchester P O Box 84 6th Floor 4 Exchange Quay Salford M5 3PL] Fax: [0161 911 6402] Telex: [ ] Attention: [Guarantees Department] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 7 9. GOVERNING LAW This Letter of Credit is governed by English law. 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of BARCLAYS BANK PLC By: 8 SCHEDULE 1 THE BONDS
EXCHANGE INDEMNIFYING CONTRACTING BANK PAYMENT RATE euro 1 EURO LATEST COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE CURRENCY 12 FEB 03 EQUIVALENT EXPIRY DATE ------------ ----------- --------- ----------- ------------- -------- ------------ ---------- ----------- 1 2 3 4 5 6 7 8 9 MCL MCESA RETEVISION 1,000,000,000 ESP 166.3860 6,010,121 30-Jun-09 6,010,121
COMPANY KEY ----------- MCL Marconi Communications Ltd MCESA Marconi Communications Espana, SA 9 SCHEDULE 2 FORM OF DEMAND To: Barclays Bank PLC [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCO SANTANDER CENTRAL HISPANO, S.A., LONDON BRANCH DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing euro [____________] under Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as we have received notice from Barclays Bank PLC of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of euro [ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR BANCO SANTANDER CENTRAL HISPANO, S.A., LONDON BRANCH CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 3 April 2003 Banco Santander Central Hispano, S.A., New York Branch 45 East 53rd Street New York, NY 10022 Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the US Dollar Equivalents for each of those Bonds is US$100,000 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of US$50,000 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the US Dollar Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully CHRIS HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. [AUTHORISED SIGNATORY] LUIS PASTOR LUIS PASTOR For and behalf of BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary (including, for the avoidance of doubt, any such bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary to support a Bond issued by such beneficiary on behalf of us and/or any Subsidiary). A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means Barclays Bank PLC. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of that Bond set out in the column headed "US Dollar Equivalent" in schedule 2 to this letter. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING COMPANY COMPANY TYPE OF BOND ISSUER OF BOND BENEFICIARY ------------ ----------- ------------ -------------- ----------- 1 2 3 4 5 MInc., c/o MCInc Standby Letter Banco Santander Central Hispano, Banco Santander - Chile in MDSInc of Credit Miami Agency (whose obligations respect of the performance bond in respect of the Bond have issued by Banco Santander - been transferred to Banco Chile in respect of sales Santatander Hispano, S.A., contract number DR 012001 New York Branch) between MCInc and ENTEL.
LATEST INDEMNIFYING CONTRACTING PAYMENT US DOLLAR EXPIRY COMPANY COMPANY LOCAL VALUE CURRENCY EQUIVALENT DATE ------------ ----------- ----------- -------- ---------- ------ 1 2 6 7 8 9 100,000 USD 100,000 25-Apr-04 MInc., c/o MCInc MDSInc ------- 100,000 ------- COMPANY KEY ----------- MInc Marconi Inc. MDSInc Marconi Data Systems Inc. MCInc Marconi Communications Inc
4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF BARCLAYS BANK PLC] To: Banco Santander Central Hispano, S.A., New York Branch (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), Barclays Bank PLC (the "ISSUING Bank") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the US Dollar Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities reimbursement arrangements or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 3 April 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EXPIRY DATE" means the earlier of: (i) 3 April 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means US$100,000. 5 "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means US$50,000, as reduced in accordance with paragraph 3 of this Letter of Credit. "US DOLLAR EQUIVALENT" means, for a Bond, the US Dollar amount in respect of that Bond set out in the column headed "US Dollar Equivalent" in schedule 1 to this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the US Dollar Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than US$100,000; or 6 (ii) if as a result of such reduction the Total L/C Amount would be zero. 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in US Dollars and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: Barclays Bank PLC [Guarantees Department UK International Operations Centre - Manchester P O Box 84 6th Floor 4 Exchange Quay Salford M5 3PL] Fax: [0161 911 6402] Telex: [ ] Attention: [Guarantees Department] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 7 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 9. GOVERNING LAW This Letter of Credit is governed by English law. 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of BARCLAYS BANK PLC By: 8 SCHEDULE 1 BONDS
INDEMNIFYING CONTRACTING COMPANY COMPANY TYPE OF BOND ISSUER OF BOND BENEFICIARY ------------ ----------- ------------ -------------- ----------- 1 2 3 4 5 MInc., c/o MCInc Standby Letter Banco Santander Central Hispano, Banco Santander - Chile in MDSInc of Credit Miami Agency (whose obligations respect of the performance bond in respect of the Bond have issued by Banco Santander - been transferred to Banco Chile in respect of sales Santander Central Hispano, S.A., contract number DR 012001 New York Branch) between MCInc and ENTEL.
LATEST INDEMNIFYING CONTRACTING PAYMENT US DOLLAR EXPIRY COMPANY COMPANY LOCAL VALUE CURRENCY EQUIVALENT DATE ------------ ----------- ----------- -------- ---------- ------ 1 2 6 7 8 9 MInc., c/o MCInc 100,000 USD 100,000 25-Apr-04 MDSInc ------- 100,000 -------
COMPANY KEY ----------- MInc Marconi Inc. MDSInc Marconi Data Systems Inc. MCInc Marconi Communications Inc 9 SCHEDULE 2 FORM OF DEMAND To: Barclays Bank PLC [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing US$[____________] under Barclays Bank PLC Letter of Credit No. [ ] represents funds due to us as we have received notice from Barclays Bank PLC of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of US$[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH 10 CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 17 April 2003 Banca Nazionale del Lavoro SpA Area Territoriale Nord Ovest Attn.: Mr. F. Sperduti Largo Eros Lanfranco, 2 16121 - Genova Italy Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. This letter sets out our agreement in relation to the Bonds. The Bonds set out in schedule 2 to this letter are the only Bonds currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate of the Euro Equivalents for each of those Bonds is Euro135,167 ("ORIGINAL BONDS OUTSTANDING"), as set out in column 8 of schedule 2 to this letter. In consideration for our procuring the issue of the Letter of Credit in your favour in an aggregate amount of Euro67,583.50 you hereby agree to waive unconditionally and irrevocably (with effect from the date on which the Letter of Credit is delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds. This waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: 1 (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the above waiver). On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank) the aggregate amount of the Euro Equivalents of those of the Bonds listed in schedule 2 to this letter that remain outstanding (the "ADJUSTED BONDS OUTSTANDING") on that Certification Date. In accordance with the terms of the Letter of Credit, if the Total L/C Amount (as defined in the Letter of Credit) of the Letter of Credit exceeds the Adjusted Bonds Outstanding on a Certification Date, the Total L/C Amount of the Letter of Credit shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of the Letter of Credit on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the Letter of Credit contains a mechanism for reducing the Adjusted Bonds Outstanding and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully C.C. HOLDEN For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. [AUTHORISED SIGNATORY] F. PAOLETTI F. PAOLETTI For and behalf of BANCA NAZIONALE DEL LAVORO SPA 2 SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 2 to this letter. "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means JPMorgan Chase Bank. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "PAYMENT CURRENCY" means, in respect of any Bond, the currency of denomination of such Bond. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. 3 SCHEDULE 2 - BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY ------- ------- --------- ----------- 1 2 3 4 ----- ----- ----------- -------------- MCSpA MCSpA 26687-L MINISTERO POSTE ALGERI ----- ----- ----------- -------------- MCSpA MCSpA 26686-K MINISTERO POSTE ALGERI ----- ----- ----------- -------------- MCSpA MCSpA 43/626309/H TELECOM ITALIA ----- ----- ----------- -------------- MCSpA MCSpA 23374/N AMM.POSTE TELEC. ----- ----- ----------- --------------
EXCHANGE LATEST INDEMNIFYING CONTRACTING PAYMENT RATE EURO EURO EXPIRY COMPANY COMPANY LOCAL VALUE CURRENCY 27 JAN 03 EQUIVALENT DATE ------- ------- ----------- --- -------- ---------- --------- 1 2 5 6 7 8 9 ----- ----- ---------- --- -------- ------ --------- MCSpA MCSpA 119,307,000 ITL 1,936.27 61,617 U/L ----- ----- ---------- --- -------- ------ --------- MCSpA MCSpA 79,538,300 ITL 1,936.27 41,078 U/L ----- ----- ---------- --- -------- ------ --------- MCSpA MCSpA 60,375,000 ITL 1,936.27 31,181 21-Apr-03 ----- ----- ---------- --- -------- ------ --------- MCSpA MCSpA 2,500,000 ITL 1,936.27 1,291 U/L ----- ----- ---------- --- -------- ------ --------- 135,167 ------- COMPANY KEY ----------- MCSpA Marconi Communications SpA ----- --------------------------
4 SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF JPMORGAN CHASE BANK] To: Banca Nazionale del Lavoro SpA (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), JPMorgan Chase Bank (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate of the Euro Equivalents for each of the Bonds that remain outstanding at that time. "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means 17 April 2004 and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EURO EQUIVALENT" means, for a Bond, the Euro amount in respect of that Bond set out in the column headed "Euro Equivalent" in schedule 1 to this Letter of Credit. "EXPIRY DATE" means the earlier of: (i) 17 April 2008 (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. 5 "ORIGINAL BONDS OUTSTANDING" means Euro135,167. "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means Euro67,583.50, as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the Euro Equivalent for each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than Euro100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 6 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. If the Issuing Bank elects not to extend this Letter of Credit for such additional period the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in Euro and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: JPMorgan Chase Bank [1 Chaseside Bournemouth Dorset BH7 7DA] Fax: [01202 34 37 30] Telex: [ ] Attention: [ ] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 9. GOVERNING LAW This Letter of Credit is governed by English law. 7 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of JPMORGAN CHASE BANK By: 8 SCHEDULE 1 THE BONDS
INDEMNIFYING CONTRACTING BANK COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE ------- ------- --------- ----------- ----------- 1 2 3 4 5 ----- ----- ----------- -------------- ---------- MCSpA MCSpA 26687-L MINISTERO POSTE ALGERI 119,307,000 ----- ----- ----------- -------------- ---------- MCSpA MCSpA 26686-K MINISTERO POSTE ALGERI 79,538,300 ----- ----- ----------- -------------- --------- MCSpA MCSpA 43/626309/H TELECOM ITALIA 60,375,000 ----- ----- ----------- -------------- --------- MCSpA MCSpA 23374/N AMM.POSTE TELEC. 2,500,000 ----- ----- ----------- -------------- ---------
EXCHANGE LATEST INDEMNIFYING CONTRACTING PAYMENT RATE EURO EURO EXPIRY COMPANY COMPANY CURRENCY 27 JAN 03 EQUIVALENT DATE ------------ ----------- -------- --------- ---------- --------- 1 2 6 7 8 9 ----- ----- --- -------- ------ --------- MCSpA MCSpA ITL 1,936.27 61,617 U/L ----- ----- --- -------- ------ --------- MCSpA MCSpA ITL 1,936.27 41,078 U/L ----- ----- --- -------- ------ --------- MCSpA MCSpA ITL 1,936.27 31,181 21-Apr-03 ----- ----- --- -------- ------ --------- MCSpA MCSpA ITL 1,936.27 1,291 U/L ----- ----- --- -------- ------ --------- 135,167 -------
COMPANY KEY ----------- MCSpA Marconi Communications SpA 9 SCHEDULE 2 FORM OF DEMAND To: JPMorgan Chase Bank [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCA NAZIONALE DEL LAVORO SPA DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five business days prior to the date of this demand. However, we have not received payment of the sum of [ ] (being the amount due but unpaid under the Bonds).] [OR] [We certify that the amount of this drawing Euro[____________] under JPMorgan Chase Bank Letter of Credit No. [ ] represents funds due to us as we have received notice from JPMorgan Chase Bank of their decision not to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of Euro[ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR BANCA NAZIONALE DEL LAVORO SPA CONFORMED COPY [MARCONI LOGO] MARCONI CORPORATION PLC 338 EUSTON ROAD, LONDON NW1 3BT TELEPHONE: 020 7543 6913 FAX: 020 7409 7748 WEBSITE: WWW.MARCONI.COM 13th May, 2003 Banca Intesa SpA Filiale Grandi Clienti, Via XXV Aprile, 5, 16123 Genova, Italy. For the attention of: Dott. Nino Bertacchi. Dear Sirs, MARCONI CORPORATION PLC (THE "COMPANY") SECURITY FOR BONDING EXPOSURE We refer to: (a) the Bonds which have been issued by you on behalf of us and/or any Subsidiaries; (b) any counter indemnity that we and/or any Subsidiary may have given to you (or which may arise at law) in respect of any liability which you incur under those Bonds; and (c) any rights you may have in relation to those Bonds to require cash collateral (or the equivalent) from us and/or any Subsidiary. We also refer to the standby letter of credit number DCSLDI711169 issued by HSBC Bank plc in favour of IntesaBci "Grandi Clienti", Genoa Branch dated 3 July 2002 with a face value of Euro 10,226,894 (the "VAT FACILITY LC"). This letter sets out our agreement in relation to the Bonds and the VAT Facility LC. The Bonds set out in part A of schedule 2 to this letter are the only Bonds denominated in euro (the "EURO BONDS") currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. The Bonds set out in part B of schedule 2 to this letter are the only Bonds denominated in US dollars (the "US BONDS") currently outstanding in respect of which you may have certain rights to call for cash collateral from us and/or any Subsidiary. As at the date of this letter the aggregate outstanding amount of the Euro Bonds is Euro 8,867,287 (the "ORIGINAL EURO OUTSTANDING") and the aggregate outstanding amount of the US Bonds is US$41,158 (the "ORIGINAL US OUTSTANDING"), based on the amounts set out in column 5 of parts A and B respectively of schedule 2 to this letter. In consideration for our procuring the issue of a Letter of Credit in your favour in an aggregate amount of Euro 8,867,287 (the "EURO LC") and a Letter of Credit in your favour in an aggregate amount of US$41,158 (the "US LC") you hereby agree: (i) to waive unconditionally and irrevocably (with effect from the date on which both the Euro LC and the US LC are delivered to you) all of your rights to call for cash collateral (or the equivalent) in respect of the Bonds (the "WAIVER"); (ii) that (with effect from the date on which both the Euro LC and the US LC are delivered to you) the VAT Facility LC shall be deemed to be cancelled and HSBC Bank plc shall have no further obligation or liability (actual or contingent) under or in respect of the VAT Facility LC; and (iii) immediately after receipt by you of both the Euro LC and the US LC , to return the VAT Facility LC to HSBC Bank plc and to provide written confirm to HSBC Bank plc (copied to us) that the VAT Facility LC has been cancelled. The Waiver shall not apply to the extent of any rights you may have against us and/or any Subsidiary: (a) upon an Insolvency of us or of the relevant Subsidiary; (b) to call for cash collateral, reimbursement or otherwise in respect of a Bond in the event a call is made, or a valid notice to call for payment is issued, by a beneficiary under that Bond; or (c) upon an acceleration under the Notes, (but in each case only to the extent that you would have had such rights except for the Waiver). The rights and remedies of the parties in relation to, and the terms and conditions of, the Bonds continue in full force and effect, save as expressly varied or waived by this letter. On each anniversary of this letter (each a "CERTIFICATION DATE") you will certify to us (with a copy to the Issuing Bank): (i) the aggregate amount of the Euro Bonds listed in part A of schedule 2 to this letter that remain outstanding (the "ADJUSTED EURO OUTSTANDING"); and (ii) the aggregate amount of the US Bond listed in part B of schedule 2 to this letter that remain outstanding (the "ADJUSTED US OUTSTANDING"), on that Certification Date. In accordance with the terms of the Euro LC, if the Total L/C Amount (as defined in the Euro LC) of the Euro LC exceeds the Adjusted Euro Outstanding on a Certification Date, the Total L/C Amount of the Euro LC shall be reduced accordingly. In accordance with the terms of the US LC, if the Total L/C Amount (as defined in the US LC) of the US LC exceeds the Adjusted US Outstanding on a Certification Date, the Total L/C Amount of the US LC shall be reduced accordingly. In addition to any adjustments made to the Total L/C Amount of either or both of the Euro LC and the US LC on a Certification Date, if and to the extent that you confirm to us or any Subsidiary that any of the Bonds listed in schedule 2 to this letter have expired or been cancelled, the relevant Letter of Credit contains a mechanism for reducing the Adjusted Euro Outstanding or Adjusted US Outstanding as appropriate, and the Total L/C Amount accordingly. This letter shall be governed by the laws of England and Wales. Each party to this letter agrees that the Courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter. This letter may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument. Please confirm your agreement to the terms of this letter by signing below. Yours faithfully SALIM ALAM For and behalf of MARCONI CORPORATION PLC We hereby agree to the above. LAWRENCE WYBRANIEC FRANCESCO MOGLIA LAWRENCE WYBRANIEC FRANCESCO MOGLIA For and behalf of BANCA INTESA SPA SCHEDULE 1: DEFINITIONS In this letter: "BOND" means any bond, guarantee, letter of credit, indemnity or other like instrument issued by you in favour of a named third party beneficiary on behalf of us and/or any Subsidiary to secure the performance of any obligation owed by us or any Subsidiary to such beneficiary. A Bond is "OUTSTANDING" until you (acting reasonably) are satisfied that you have no further liability under that Bond (and, for the avoidance of doubt, you shall be satisfied that you have no further liability under a Bond once you have received a form of release from the beneficiary of the Bond in a form and substance satisfactory to you or once the original Bond has been returned to you). "INSOLVENCY" means, in relation to any person, any of the following: (a) the commencement of a voluntary winding up, within the meaning of section 84 of the Insolvency Act 1986 (save where such winding up is for the purposes of a reconstruction or amalgamation while solvent); (b) the appointment of an administrator or liquidator under the Insolvency Act 1986 or the appointment of an administrative receiver or receiver, or proposals are made or issued for a voluntary arrangement within the meaning of Part I of that Act (save where such occurrence is for the purposes of a solvent reconstruction or amalgamation); or (c) the occurrence of any event in a jurisdiction outside the United Kingdom of Great Britain and Northern Ireland which is analogous to any of the events referred to in paragraphs (a) or (b) above. "ISSUING BANK" means HSBC Bank plc. "LETTER OF CREDIT" means a letter of credit issued by the Issuing Bank in the form set out in schedule 3 to this letter. "NOTES" means the notes to be issued by the Company in connection with a scheme of arrangement under section 425 of the Companies Act 1985. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. PART A SCHEDULE 2 - EURO BONDS
LATEST INDEMNIFYING CONTRACTING BANK EXPIRY COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE DATE ------- ------- --------- ----------- ----------- ---- 1 2 3 4 5 6 ------- ------- --------- ----------- ----------- ---- MCSpA MCSpA 38881 TELECOM ITALIA SPA 3,976,718 30-Jun-06 ----- ----- ----- ------------------ --------- --------- MCSpA MCSpA 38710 EDISONTEL SPA 1,291,142 15-Aug-04 ----- ----- ----- ------------- --------- --------- MCSpA MCSpA 38680 TELECOM ITALIA SPA 981,268 31-Dec-04 ----- ----- ----- ------------------ ------- --------- MCSpA MCSpA 47/3303 TELECOM ITALIA MOBILE 725,105 31-Dec-04 ----- ----- ------- --------------------- ------- --------- MCSpA MCSpA 47/3517 TELECOM ITALIA 697,217 U/L ----- ----- ------- -------------- ------- --- MCSpA MCSpA 38939 TELECOM ITALIA SPA 364,541 31-Dec-03 ----- ----- ----- ------------------ ------- --------- MCSpA MCSpA 38713 COMUNE DI REGGIO CALABRIA 150,950 31-Mar-05 ----- ----- ----- ------------------------- ------- --------- MCSpA MCSpA 38794 FERROVIE DELLO STATO 121,367 30-Jun-03 ----- ----- ----- -------------------- ------- --------- MCSpA MCSpA 38580 MAROC TELECOM SA 105,903 U/L ----- ----- ----- ---------------- ------- --- MCSpA MCSpA 38764 TELECOM ITALIA S.P.A. 103,291 31-Mar-05 ----- ----- ----- --------------------- ------- --------- MCSpA MCSpA 38600 AUTOSTRADA DEL BRENNERO SPA 55,467 31-Dec-03 ----- ----- ----- --------------------------- ------ --------- MCSpA MCSpA 38813 BRISSAGO SRL 54,228 15-May-07 ----- ----- ----- ------------ ------ --------- MCSpA MCSpA 38643 DHL INTERNATIONAL SRL 51,646 U/L ----- ----- ----- --------------------- ------ --- MCSpA MCSpA 38635 AZIENDE INDUSTRIALI MUNICIPALI 45,747 U/L ----- ----- ----- ------------------------------ ------ --- MCSpA MCSpA 38793 FERROVIE DELLO STATO 36,152 U/L ----- ----- ----- -------------------- ------ --- MCSpA MCSpA 66/9740 UFFICIO IVA MILANO 28,602 31-Jan-04 ----- ----- ------- ------------------ ------ --------- MCSpA MCSpA 4/99 WIND TELECOMUNICAZIONI 25,823 U/L ----- ----- ---- ---------------------- ------ --- MCSpA MCSpA 5/99 WIND TELECOMUNICAZIONI 25,823 U/L ----- ----- ---- ---------------------- ------ --- MCSpA MCSpA 328506095 SIRTI SPA MILANO 12,753 6-Feb-87 ----- ----- --------- ---------------- ------ -------- MCSpA MCSpA 328200372 SIRTI SPA MILANO 7,863 U/L ----- ----- --------- ---------------- ----- --- MCSpA MCSpA 328907347 SELENIA SPA ROMA 5,681 31-Jan-90 ----- ----- --------- ---------------- ----- --------- COMPANY KEY ----------- MMSpA Marconi Mobile SpA ----- ------------------ MCSpA Marconi Communications SpA ----- --------------------------
PART B SCHEDULE 2 - US BONDS
LATEST INDEMNIFYING CONTRACTING BANK EXPIRY COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE DATE ------- ------- --------- ----------- ----------- ---- 1 2 3 4 5 6 ------- ------- --------- ----------- ----------- ---- MCSpA MCSpA 38448 ITALTEL S.P.A. 41,158 31-May-03 ----- ----- ----- -------------- ------ --------- COMPANY KEY ----------- MMSpA Marconi Mobile SpA ----- ------------------ MCSpA Marconi Communications SpA ----- --------------------------
SCHEDULE 3: LETTER OF CREDIT [FORM OF LETTER OF CREDIT - ON LETTERHEAD OF HSBC BANK PLC] To: [Banca Intesa SpA] (the "BENEFICIARY") [DATE] IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] At the request of Marconi Bonding Limited (the "ACCOUNT PARTY"), HSBC Bank plc (the "ISSUING BANK") issues this irrevocable standby letter of credit ("LETTER OF CREDIT") in your favour on the following terms and conditions: 1. DEFINITIONS (a) In this Letter of Credit: "ADJUSTED BONDS OUTSTANDING" means, at any time, the aggregate amount of the Bonds that remain outstanding at that time. A Bond is "outstanding" until the Beneficiary (acting reasonably) is satisfied that it has no further liability under that Bond (and, for the avoidance of doubt, the Beneficiary shall be satisfied that it has no further liability under a Bond once it has received a form of release from the beneficiary of the Bond in a form and substance satisfactory to the Beneficiary or once the original Bond has been returned to the Beneficiary). "BONDS" means those bonds, guarantees or letters of credit, indemnities or like instruments listed in schedule 1 to this Letter of Credit issued by the Beneficiary on behalf of the Company and/or its Subsidiary/ies. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London. "CERTIFICATION DATE" means [o] May 2004(1) and each anniversary thereof, being the date on which the Beneficiary must certify to the Company (with a copy to the Issuing Bank) the Adjusted Bonds Outstanding on that date. "COMPANY" means Marconi Corporation plc. "DEMAND" means a demand for a payment under this Letter of Credit in the form of schedule 2 to this Letter of Credit together with, where relevant, a copy of the written request to the Company or the relevant Subsidiary demanding payment pursuant to the terms of the relevant Bond. "EXPIRY DATE" means the earlier of: (i) [o] May 2008(2) (or such later expiry date applicable as a result of an extension pursuant to paragraph 4(c)); and -------- (1) Date to be 12 months from the date of the letter agreement Registered at London N 67307 REGISTERED OFFICE: New Century Park, PO Box 43, Coventry CV3 1HJ (ii) the date on which the Total L/C Amount is reduced to zero pursuant to a reduction under paragraph 3. "ORIGINAL BONDS OUTSTANDING" means [Euro ][US$][o]. "NOTIFICATION" means a notification from the Beneficiary to the Account Party, the Company or any Subsidiary that certain Bonds have expired or been cancelled (and are therefore no longer outstanding). "PRESENTATION DATE" means each date on which the Account Party presents to the Issuing Bank a copy of one or more Notifications. "SUBSIDIARY" means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989. "TOTAL L/C AMOUNT" means [Euro ][US$][o](3), as reduced in accordance with paragraph 3 of this Letter of Credit. 2. ISSUING BANK'S AGREEMENT (a) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the Issuing Bank a duly completed Demand. In order to constitute a valid Demand, a Demand must be received by the Issuing Bank by 11 a.m. (London time) on or before the Expiry Date. (b) Subject to the terms of this Letter of Credit, the Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within ten Business Days of receipt by it of a Demand, it will pay to the Beneficiary the amount demanded in that Demand. (c) The Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount. 3. REDUCTION IN TOTAL L/C AMOUNT (a) If: (i) on a Certification Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding (as certified by the Beneficiary) on that date; or (ii) on a Presentation Date the Total L/C Amount exceeds the Adjusted Bonds Outstanding on that date (after deducting the amount of each Bond that is the subject of each relevant Notification), the Total L/C Amount shall, subject to paragraph (b) below, automatically reduce accordingly. (b) Any reduction in the Total L/C Amount under sub-paragraph (a) above shall only be applied if: --------- (2) Date to be 5 years after the date of the letter agreement Registered at London N 67307 REGISTERED OFFICE: New Century Park, PO Box 43, Coventry CV3 1HJ (i) the Total L/C Amount exceeds the Adjusted Bonds Outstanding on the relevant Certification Date or Presentation Date (as applicable) by more than Euro 100,000; or (ii) if as a result of such reduction the Total L/C Amount would be zero. 4. EXPIRY (a) The Issuing Bank will be released from its obligations under this Letter of Credit on the Expiry Date with no further liability on the part of the Issuing Bank except for any Demand validly presented in accordance with paragraph 2(a) of this Letter of Credit that remains unpaid. (b) When the Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must, on request, return the original of this Letter of Credit to the Issuing Bank. (c) It is a condition of this irrevocable Letter of Credit that, not more than 30 days and no less than 20 days before the present or each future Expiry Date, the Beneficiary may (unless the relevant Expiry Date occurs as a result of the value of this Letter of Credit being reduced to zero) request it to be extended for an additional period of one year from the present or each future Expiry Date. Within 10 days of the receipt by the Issuing Bank of any such request and prior to the Expiry Date, the Issuing Bank will inform the Beneficiary whether that request has been accepted. If the Issuing Bank elects not to extend this Letter of Credit for such additional period or makes no election the Beneficiary may, on or prior to the applicable Expiry Date, make a Demand for an amount not to exceed the remaining balance of the Total L/C Amount. 5. PAYMENTS All payments under this Letter of Credit shall be made in [Euro][US dollars] and for value on the due date to the account of the Beneficiary specified in the Demand. 6. DELIVERY OF DEMAND Each Demand shall be in writing, and, unless otherwise stated, may be made by letter or fax and must be received in legible form by the Issuing Bank at its address and by the particular department or officer (if any) as follows: HSBC Bank plc [Address] Fax: [ ] Telex: [ ] Attention: [ ] 7. ASSIGNMENT The Beneficiary's rights under this Letter of Credit may not be assigned or transferred. -------- (3) To be the same as the Original Bonds Outstanding Registered at London N 67307 REGISTERED OFFICE: New Century Park, PO Box 43, Coventry CV3 1HJ 8. UCP Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. 9. GOVERNING LAW This Letter of Credit is governed by English law. 10. JURISDICTION The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit. Yours faithfully, For and on behalf of HSBC BANK PLC By: Registered at London N 67307 REGISTERED OFFICE: New Century Park, PO Box 43, Coventry CV3 1HJ SCHEDULE 1 BONDS [ATTACH SCHEDULE OF EURO BONDS OR US BONDS AS APPROPRIATE]
LATEST INDEMNIFYING CONTRACTING BANK EXPIRY COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE DATE ------- ------- --------- ----------- ----------- ---- 1 2 3 4 5 6 ------- ------- --------- ----------- ----------- ---- MCSpA MCSpA 38881 TELECOM ITALIA SPA 3,976,718 30-Jun-06 ----- ----- ----- ------------------ --------- --------- MCSpA MCSpA 38710 EDISONTEL SPA 1,291,142 15-Aug-04 ----- ----- ----- ------------- --------- --------- MCSpA MCSpA 38680 TELECOM ITALIA SPA 981,268 31-Dec-04 ----- ----- ----- ------------------ ------- --------- MCSpA MCSpA 47/3303 TELECOM ITALIA MOBILE 725,105 31-Dec-04 ----- ----- ------- --------------------- ------- --------- MCSpA MCSpA 47/3517 TELECOM ITALIA 697,217 U/L ----- ----- ------- -------------- ------- --- MCSpA MCSpA 38939 TELECOM ITALIA SPA 364,541 31-Dec-03 ----- ----- ----- ------------------ ------- --------- MCSpA MCSpA 38713 COMUNE DI REGGIO CALABRIA 150,950 31-Mar-05 ----- ----- ----- ------------------------- ------- --------- MCSpA MCSpA 38794 FERROVIE DELLO STATO 121,367 30-Jun-03 ----- ----- ----- -------------------- ------- --------- MCSpA MCSpA 38580 MAROC TELECOM SA 105,903 U/L ----- ----- ----- ---------------- ------- --- MCSpA MCSpA 38764 TELECOM ITALIA S.P.A. 103,291 31-Mar-05 ----- ----- ----- --------------------- ------- --------- MCSpA MCSpA 38600 AUTOSTRADA DEL BRENNERO SPA 55,467 31-Dec-03 ----- ----- ----- --------------------------- ------ --------- MCSpA MCSpA 38813 BRISSAGO SRL 54,228 15-May-07 ----- ----- ----- ------------ ------ --------- MCSpA MCSpA 38643 DHL INTERNATIONAL SRL 51,646 U/L ----- ----- ----- --------------------- ------ --- MCSpA MCSpA 38635 AZIENDE INDUSTRIALI MUNICIPALI 45,747 U/L ----- ----- ----- ------------------------------ ------ --- MCSpA MCSpA 38793 FERROVIE DELLO STATO 36,152 U/L ----- ----- ----- -------------------- ------ --- MCSpA MCSpA 66/9740 UFFICIO IVA MILANO 28,602 31-Jan-04 ----- ----- ------- ------------------ ------ --------- MCSpA MCSpA 4/99 WIND TELECOMUNICAZIONI 25,823 U/L ----- ----- ---- ---------------------- ------ --- MCSpA MCSpA 5/99 WIND TELECOMUNICAZIONI 25,823 U/L ----- ----- ---- ---------------------- ------ --- MCSpA MCSpA 328506095 SIRTI SPA MILANO 12,753 6-Feb-87 ----- ----- --------- ---------------- ------ -------- MCSpA MCSpA 328200372 SIRTI SPA MILANO 7,863 U/L ----- ----- --------- ---------------- ----- --- MCSpA MCSpA 328907347 SELENIA SPA ROMA 5,681 31-Jan-90 ----- ----- --------- ---------------- ----- --------- COMPANY KEY ----------- MMSpA Marconi Mobile SpA ----- ------------------ MCSpA Marconi Communications SpA ----- --------------------------
Registered at London N 67307 REGISTERED OFFICE: New Century Park, PO Box 43, Coventry CV3 1HJ US BONDS
LATEST INDEMNIFYING CONTRACTING BANK EXPIRY COMPANY COMPANY REFERENCE BENEFICIARY LOCAL VALUE DATE ------- ------- --------- ----------- ----------- ---- 1 2 3 4 5 6 ------- ------- --------- ----------- ----------- ---- MCSpA MCSpA 38448 ITALTEL S.P.A. 41,158 31-May-03 ----- ----- ----- -------------- ------ --------- COMPANY KEY ----------- MMSpA Marconi Mobile SpA ----- ------------------ MCSpA Marconi Communications SpA ----- --------------------------
Registered at London N 67307 REGISTERED OFFICE: New Century Park, PO Box 43, Coventry CV3 1HJ SCHEDULE 2 FORM OF DEMAND To: HBSC Bank plc [DATE] Dear Sirs STANDBY LETTER OF CREDIT NO. [ ] ISSUED IN FAVOUR OF BANCA INTESA SPA DATED [ ] (THE "LETTER OF CREDIT") We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand. 1. [We certify that [ ] became due and payable on [ ] to [ ] pursuant to the terms of our guarantee number [ ] issued in favour of [ ] on behalf of [MARCONI COMPANY NAME]. We have notified [MARCONI COMPANY NAME] of such in writing (copy enclosed) not less than five Business Days prior to the date of this demand. However, we have not received payment of such sum (being the amount due but unpaid in respect of the Bonds).] [OR] [We certify that the amount of this drawing [Euro ][US$][____________] under [Issuing Bank] Letter of Credit No. [ ] represents funds due to us as we have not received notice from [Issuing Bank] of their decision to extend this Letter of Credit for an additional period and the following Bonds in schedule 1 to this Letter of Credit remain outstanding: [INDICATE BOND NUMBERS]] 2. We therefore demand payment of the sum of [Euro ][$][ ]. 3. Payment should be made to the following account: Name: Account Number: Bank: 4. The date of this Demand is not later than the Expiry Date. Yours faithfully (Authorised Signatory) FOR BANCA INTESA SPA 13