<PAGE>
                                                                  Exhibit 10.118


Private & Confidential


                    DATED  4th July 2003





                    MARCONI CORPORATION PLC           (1)



                                       AND



                    HOARE GOVETT LIMITED              (2)


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

                               PLACING AGREEMENT
                   RELATING TO THE PLACING OF ORDINARY SHARES
                              OF EASYNET GROUP PLC
                           BY MARCONI CORPORATION PLC

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



                                                              (NORTON ROSE LOGO)
<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>

CLAUSE                                                                    PAGE
<S>    <C>                                                                <C>


1      Definitions.......................................................   3

2      Conditions........................................................   6

3      Specific obligations..............................................   6

4      The Placing.......................................................   7

5      Settlement........................................................   7

6      Commissions and fees..............................................   8

7      Warranties, representations and undertakings......................   9

8      Hoare Govett's indemnity..........................................   9

9      Warranties and indemnities - supplemental provisions..............  12

10     Non US Representations............................................  13

11     United States Selling Restrictions................................  13

12     General...........................................................  14

13     Time of the essence...............................................  15

14     Notices...........................................................  15

15     Effects of this Agreement.........................................  15

16     Counterparts......................................................  15

17     Governing law and jurisdiction....................................  15

Schedule  Warranties.....................................................  17
</TABLE>


AGREED FORM DOCUMENTS

Announcement
Placing Press Release

<PAGE>

THIS AGREEMENT is dated                      2003 and made BETWEEN:

(1)  MARCONI CORPORATION PLC (registered in England and Wales No. 67307) whose
     registered office is at New Century Park, PO Box 53, Coventry CV3 1HJ
     ("MARCONI"); and

(2)  HOARE GOVETT LIMITED (registered in England and Wales No. 2026375) whose
     registered office is at 250 Bishopsgate, London EC2N 4AA ("HOARE GOVETT").

WHEREAS:

(A)  Marconi intends to place up to 36,135,948 Ordinary Shares of the Company
     with institutional investors.

(B)  On and subject to the terms and conditions of this Agreement, Hoare Govett
     has agreed, as agent for and on behalf of Marconi, to use its reasonable
     endeavours to procure placees for the Placing Shares at the Placing Price.

(C)  Marconi currently legally and beneficially owns, save as disclosed in Part
     II of the Schedule, 30,111,162 Ordinary Shares and 50,707,150 Convertible
     Shares. The Placing involves the delivery to placees of up to a maximum of
     36,135,948 Placing Shares (comprising Existing Ordinary Shares and New
     Ordinary Shares). The maximum number of Placing Shares will be comprised of
     the Existing Ordinary Shares and up to 6,024,786 New Ordinary Shares. The
     New Ordinary Shares will result from the conversion of an equivalent number
     of Convertible Shares currently owned by Marconi in accordance with Article
     17 of the Articles of Association of the Company. Application will be made
     for Admission of the New Ordinary Shares.

(D)  The Placing is to be made outside the United States to non-US persons
     within the meaning of and pursuant to Regulation S under the Securities Act
     ("REGULATION S") and may, subject to demand, be made within the United
     States to a limited number of institutional investors, who are qualified
     institutional buyers ("QIBS") within the meaning of and in reliance on Rule
     144A under the Securities Act ("RULE 144A").

NOW IT IS HEREBY AGREED as follows:

1    DEFINITIONS

1.1  In this Agreement (including the recitals and the schedules to this
     Agreement) unless the context otherwise requires the following expressions
     have the following meanings:

     "ADDITIONAL CONDITION" means the condition applicable to the Additional
     Placing set out in clause 2.2;

     "ADDITIONAL PLACING" means the conditional placing by Hoare Govett of New
     Ordinary Shares on the terms of this Agreement and the Placing Press
     Release;

     "ADDITIONAL PLACING PROCEEDS" means the Placing Price multiplied by the
     number of New Ordinary Shares that are placed with Placees pursuant to
     clause 4;

     "ADMISSION" means the admission of such number of the New Ordinary Shares
     as are placed with Placees pursuant to clause 4 to the Official List of the
     UK Listing Authority becoming effective in accordance with the Listing
     Rules and the admission of such New Ordinary Shares to trading by the
     London Stock Exchange on its market for listed securities becoming
     effective in accordance with the Standards;

     "ANNOUNCEMENT" means the announcement in the agreed form as amended to give
     details of the outcome of the Placing;

     "BOOKBUILD" means the process of building demand for the Placing;

                                       3
<PAGE>
     "BUSINESS DAY" means a day not being a Saturday or a Sunday on which banks
     are open for business in the City of London;

     "CA 1985" means the Companies Act 1985, as amended;

     "COMPANY" means Easynet Group plc (registered number 3137522) whose
     registered office is at 44-46 Whitfield Street, London W1P 5RF;

     "CONDITION" means the condition applicable to the Placing set out in clause
     2.1;

     "CONVERSION" means the conversion of up to 6,024,786 of the Convertible
     Shares into an equivalent number of New Ordinary Shares in accordance with
     Article 17 of the Articles of Association of the Company;

     "CONVERTIBLE SHARES" means the 50,707,150 non-voting unlisted Ordinary
     Shares of 4p each in the capital of the Company held by Marconi;

     "CREST" means the relevant system of which CRESTCo is the Operator;

     "CRESTCO" means CRESTCo Limited, a company incorporated in England and
     Wales, being the Operator of CREST;

     "EXISTING ORDINARY SHARES" means the 30,111,162 Ordinary Shares currently
     owned by Marconi;

     "FSA" means The Financial Services Authority Limited;

     "FSMA 2000" means the Financial Services and Markets Act 2000;

     "HOARE GOVETT GROUP" means Hoare Govett, any parent company of Hoare Govett
     and any subsidiary or subsidiary undertaking of Hoare Govett or of such
     parent company and any body corporate in which any of those entities is a
     controller (within the meaning of section 422 FSMA 2000);

     "INDEMNIFIED PERSONS" means Hoare Govett, each other member of the Hoare
     Govett Group and all their respective directors, officers or employees each
     of whom shall be an "INDEMNIFIED PERSON" for the purposes of this
     Agreement;

     "LISTING RULES" means the listing rules made under section 74 FSMA 2000 (as
     amended from time to time);

     "LONDON STOCK EXCHANGE" means London Stock Exchange plc;

     "MAIN PLACING" means the proposed placing by Hoare Govett of some or all of
     the Existing Ordinary Shares on the terms of this Agreement and the Placing
     Press Release;

     "MAIN PLACING PROCEEDS" means the Placing Price multiplied by the number of
     Existing Ordinary Shares that are placed with Placees pursuant to clause 4;

     "NEW ORDINARY SHARES" means up to 6,024,786 Ordinary Shares which will
     result from the conversion of an equivalent number of Convertible Shares
     currently owned by Marconi automatically in accordance with Article 17 of
     the Articles of Association of the Company following their transfer by
     Marconi;

     "OPERATOR" has the meaning ascribed thereto in the Regulations;

     "ORDINARY SHARES" means ordinary shares of 4p each in the capital of the
     Company;

                                       4
<PAGE>

     "PLACEES" means persons with whom the Placing Shares are to be placed
     pursuant to the Placing;

     "PLACING" means the Main Placing and the Additional Placing;

     "PLACING PRESS RELEASE" means the press release in the agreed form to be
     released for and on behalf of Marconi on the date hereof announcing
     Marconi's intention to carry out the Placing;

     "PLACING PRICE" means the price agreed by Marconi and Hoare Govett
     determined as a result of the Bookbuild in accordance with clause 4.4,
     being the price at which the Placing Shares are to be sold pursuant to the
     Placing;

     "PLACING PROCEEDS" means the Main Placing Proceeds and the Additional
     Placing Proceeds;

     "PLACING SHARES" means the number of Ordinary Shares to be sold in the
     Placing determined pursuant to clause 4;

     "PTM LEVY" means the aggregate of all levies payable to the Panel on
     Takeovers and Mergers pursuant to rule 2.19 of the Rules of the London
     Stock Exchange in relation to the Placing;

     "REGISTRARS" means Capita IRG Plc of The Registry, 34 Beckenham Road,
     Beckenham, Kent BR3 4TH;

     "REGULATIONS" means the Uncertificated Securities Regulations 2001;

     "RELEVANT SYSTEM" has the meaning ascribed thereto in the Regulations;

     "RELIEF" means any allowance, credit, exemption, deductions or relief
     available, in computing, or available for offset against or in respect of
     tax;

     "SECURITIES ACT" means the United States Securities Act of 1933, as
     amended;

     "STANDARDS" means the current edition of the Admission and Disclosure
     Standards produced by the London Stock Exchange;

     "SUBSIDIARY" has the meaning ascribed thereto by section 736 CA 1985 and
     includes subsidiary undertakings as defined in section 258 CA 1985 and
     "SUBSIDIARIES" shall mean more than one subsidiary;

     "TAX" or "TAXATION" means any form of taxation whenever created or imposed
     and whether of the United Kingdom or elsewhere and, without prejudice to
     the generality of the foregoing, includes income tax, corporation tax,
     advance corporation tax, capital gains tax, value added tax, inheritance
     tax, withholding tax, rates, customs and excise duties, National Insurance
     and any other taxes, levies, duties or imposts similar to, replaced by or
     replacing any of them and all penalties, fines and interest included in or
     relating to any tax assessment therefor;

     "TAXATION AUTHORITY" means the Inland Revenue, HM Customs & Excise or any
     other revenue, customs, fiscal, governmental, statutory, provincial, local
     government or municipal authority, body or person whether of the United
     Kingdom or elsewhere competent to impose, administer or collect any
     taxation;

     "UK LISTING AUTHORITY" means the Financial Services Authority acting in its
     capacity as competent authority for the purposes of Part VI of the FSMA
     2000; and

     "WARRANTIES" means the warranties, representations and undertakings given
     pursuant to clause 7 and the Schedule and "WARRANTY" shall mean any one of
     them.

                                       5
<PAGE>


1.2  References to clauses and schedules are unless otherwise stated to clauses
     of and schedules to this Agreement and references to this Agreement include
     recitals and schedules to this Agreement.

1.3  A reference to any document "IN THE AGREED FORM" means in the form of the
     draft or proof of the document agreed by the parties and signed by them or
     on their behalf for the purposes of identification with such alterations
     (if any) as may subsequently be agreed between the parties. References to
     such documents in this Agreement shall, where the context so admits, be
     references to such documents as so amended.

1.4  References to statutory provisions shall be construed as references to
     those provisions as respectively replaced, amended or re-enacted (whether
     before or after the date hereof) and shall include any provisions of which
     they are re-enactments (whether with or without modification) and any
     subordinate legislation made under such provisions.

1.5  Words importing the singular include the plural and vice versa, words
     importing any gender include every gender and references to persons include
     bodies corporate or unincorporate, unincorporated associations and
     partnerships.

1.6  The headings to the clauses are for convenience only and have no legal
     effect.

2    CONDITIONS

2.1  The Placing is conditional upon the Placing Press Release being released by
     no later than 10.00 am on the date hereof.

2.2  In addition to the satisfaction of the Condition, the Additional Placing is
     also conditional upon Admission becoming effective by announcement in
     accordance with the Listing Rules not later than 9.00 am on 11 July 2003.

2.3  If the Condition shall not have been fulfilled by the specified time and
     date or if Hoare Govett and Marconi shall have failed to determine and
     agree the Placing Price and the number of Placing Shares pursuant to clause
     4.4 by 4.30 p.m. on the date hereof then the obligations of Hoare Govett
     under this Agreement shall ipso facto cease and determine and neither party
     shall have any claim against the other for costs, damages, charges,
     compensation or otherwise save that the provisions of clauses 8, 9, 12.4,
     12.5, 14, 15, 16 and 17 shall remain in full force and effect.

2.4  If the Additional Condition shall not have been fulfilled by its specified
     time and date but the Condition shall have been fulfilled by its specified
     time and date then the obligations of Hoare Govett under this Agreement in
     respect of the Additional Placing shall ipso facto cease and determine and
     neither party shall have any claim against the other for costs, damages,
     charges, compensation or otherwise in respect of the Additional Placing,
     save that Marconi shall pay Hoare Govett the costs and expenses payable by
     it in accordance with clause 6.3. For the avoidance of doubt the provisions
     of clauses 8, 9, 12.4, 12.5, 14, 15, 16 and 17 shall remain in full force
     and effect notwithstanding the failure to complete the Additional Placing.

2.5  Marconi undertakes to use its reasonable endeavours to procure that the
     Condition is fulfilled by the specified time and date.

2.6  Hoare Govett undertakes to use its reasonable endeavours to procure that
     the Additional Condition is fulfilled by the specified time and date.

3    SPECIFIC OBLIGATIONS

3.1  Marconi hereby undertakes to Hoare Govett to provide all such information
     known to it to execute all such documents, pay such fees and do or procure
     to be done all such things as may reasonably be required by Hoare Govett
     for the purpose of complying with the requirements of law, the UK Listing
     Authority or of the London Stock Exchange in connection with the Placing.

                                       6
<PAGE>
4      THE PLACING

4.1    Marconi:

4.1.1  hereby irrevocably appoints Hoare Govett as its agent for the purpose of
       carrying out the Placing on the terms and subject to the conditions set
       out in this Agreement and the Placing Press Release; and

4.1.2  hereby confirms that the foregoing appointment confers on Hoare Govett
       all powers, authorities and discretions on behalf of Marconi which are
       necessary for, or reasonably incidental to, the procuring of purchasers
       for the Placing Shares on the terms and conditions contained in this
       Agreement and hereby agrees to ratify and confirm everything which Hoare
       Govett shall lawfully and properly do in the exercise of such powers,
       authorities and discretions in accordance with the terms of this
       Agreement.

4.2    Relying on the indemnities, representations, undertakings and warranties
       contained in this Agreement and upon the terms and conditions contained
       in this Agreement Hoare Govett undertakes to use reasonable endeavours to
       procure Placees to purchase the Placing Shares on the terms and
       conditions of this Agreement.

4.3    Hoare Govett shall have absolute discretion, prior to the release of the
       Announcement, to accept or reject any application for Placing Shares
       either in whole or in part.

4.4    As soon as practicable after release of the Placing Press Release and in
       any event no later than 4.30pm on the date hereof, Hoare Govett and
       Marconi shall determine the number of Placing Shares to be sold in the
       Placing and the Placing Price. To the extent that the number of Placing
       Shares agreed pursuant to this clause are equal to or less than the
       number of Existing Ordinary Shares, then the Placing Shares shall
       comprise such Existing Ordinary Shares. To the extent that the number of
       Placing Shares agreed pursuant to this clause exceed the number of
       Existing Ordinary Shares, then the Placing Shares shall comprise the
       Existing Ordinary Shares and a number of New Ordinary Shares equal to
       such excess.

4.5    As soon as practicable after the Placing Price and the number of Placing
       Shares has been determined and agreed pursuant to clause 4.4 Marconi
       shall arrange for the release of the Announcement.


5      SETTLEMENT

5.1    Subject to satisfaction of the Condition and the determination and
       agreement of the Placing Price and the number of Placing Shares pursuant
       to clause 4.4:

5.1.1  (a) Hoare Govett will pay or procure to be paid to Marconi the Main
           Placing Proceeds; and

       (b) subject also to satisfaction of the Additional Condition, Hoare
           Govett will pay or procure to be paid to Marconi the Additional
           Placing Proceeds (if any),

       (less in each case, any sums due to Hoare Govett as provided for by
       clause 6) on the fifth Business Day after the date of this Agreement but
       only to the extent that such proceeds are received from Placees.

5.1.2  by no later than the first Business Day after the date of this Agreement
       Marconi shall deliver to Hoare Govett (free of payment) a CREST transfer
       form or a stamped stock transfer form (as Hoare Govett may request) in
       respect of such number of Convertible Shares as are subject to the
       Additional Placing, in favour of such nominee company as Hoare Govett may
       specify, to be transferred to such nominee as nominee for Marconi,
       together with the relevant definitive certificate(s); and

5.1.3  by no later than the first Business Day after the date of this Agreement,
       Marconi shall deliver to Hoare Govett (free of payment) a CREST transfer
       form in respect of such number of

                                       7
<PAGE>
       Existing Ordinary Shares as are subject to the Main Placing, in favour of
       such nominee company as Hoare Govett may specify, to be transferred to
       such nominee as nominee for Marconi, together with the relevant
       definitive certificate(s).

5.2    Hoare Govett shall deliver, or procure delivery of, all documents
       referred to in clauses 5.1.2 and 5.1.3 to the Registrars.

5.3    The payments referred to in clause 5.1.1 shall be made in cleared funds
       available on the same day to the following bank account:

                  Account Number:     42074451
                  Account Name:       Marconi Corporation plc
                  Sort Code:          40-05-30
                  Bank:               HSBC Bank plc, Princes Street, London  EC2
                  Swift Code:         MIDLGB22

5.4    Payments by Hoare Govett in accordance with clause 5.1.1 shall constitute
       a complete discharge for Hoare Govett of its obligations under this
       clause 5.

5.5    Marconi shall transfer the Placing Shares to the Placees free and clear
       of any lien, charge, claim or other encumbrance or any right of any third
       party whatsoever attaching thereto and subject thereto with full title
       guarantee.

5.6    In the event of any difficulties or delays in the use of CREST in
       relation to the transfer of Placing Shares pursuant to this clause 5,
       including but not limited to any delay in the admission of the Placing
       Shares to CREST, Hoare Govett and Marconi agree that all of the Placing
       Shares shall be transferred in certificated form and the provisions in
       this Agreement relating to the Placing arrangements will then be deemed
       to be modified accordingly.

5.7    Marconi undertakes to issue the Confirmation Certificate (as defined in
       the Schedule hereto) to the Security Trustee (as defined in the Schedule
       hereto) as soon as reasonably practicable following the determination of
       the number of Placing Shares to be sold pursuant to clause 4.4 of this
       Agreement and to take such other steps as may be required to procure the
       release of any security interests over the Existing Ordinary Shares and
       Convertible Shares that are to be the subject of the Placing.

5.8    If Hoare Govett does not pay or procure payment of any of the Placing
       Proceeds payable to Marconi pursuant to clause 5.1, Hoare Govett shall,
       as soon as practicable, transfer or procure transfer of such number of
       Ordinary Shares in respect of which payment has not been received to
       Marconi.


6      COMMISSIONS AND FEES

6.1    Marconi shall pay Hoare Govett an initial commission of 2 per cent on the
       gross amount of the Main Placing Proceeds and the Additional Placing
       Proceeds (if any) (the "INITIAL COMMISSION") and, if the Placing Price
       exceeds:

6.1.1  105 pence then, in addition to the Initial Commission, Marconi shall pay
       Hoare Govett an additional commission of 8 per cent on an amount equal to
       the number of Placing Shares multiplied by the difference between the
       Placing Price and 105 pence (the "FIRST ADDITIONAL COMMISSION")

6.1.2  110 pence then, in addition to the Initial Commission and the First
       Additional Commission, Marconi shall pay Hoare Govett an additional
       commission of 5 per cent on an amount equal to the number of Placing
       Shares multiplied by the difference between the Placing Price and 110
       pence (the "SECOND ADDITIONAL COMMISSION").

6.1.3  115 pence then, in addition to the Initial Commission, the First
       Additional Commission and the Second Additional Commission, an additional
       commission of 5 per cent will be payable

                                       8
<PAGE>
       on an amount equal to the number of Placing Shares multiplied by the
       difference between the Placing Price and 115 pence.

       Such commission will be deducted from the Placing Proceeds paid to
       Marconi pursuant to clause 5.1.1 (together with any other amount payable
       to Hoare Govett pursuant to this clause 6).

6.2    In addition to the commission referred to above, Marconi shall pay all
       the other costs, charges and expenses properly and reasonably incurred in
       connection with, or incidental to, the Placing, including (but not
       limited to) the PTM Levy, the UK Listing Authority and London Stock
       Exchange listing fees, printing and advertising costs, postage,
       Registrars' fees and Hoare Govett's legal and other professional
       expenses.

6.3    If the Condition is not satisfied, Marconi shall not be obliged to pay to
       Hoare Govett the commission on the Main Placing Proceeds referred to in
       clause 6.1 and if the Additional Condition is not satisfied Marconi shall
       not be obliged to pay to Hoare Govett the commission on the Additional
       Placing Proceeds referred to in clause 6.1, but if the provisions of
       clause 2.4 apply, on receipt of the appropriate VAT invoice Marconi shall
       pay, or reimburse, to Hoare Govett the costs, charges and expenses
       (together with VAT chargeable thereon) referred to in clause 6.2.

6.4    In the event that any stamp duty or stamp duty reserve tax (as
       applicable) is payable by Hoare Govett or any Placee in connection with
       their purchase of any of the Placing Shares pursuant to the arrangements
       contemplated hereby, Marconi agrees with Hoare Govett that such stamp
       duty or stamp duty reserve tax (up to 0.5 per cent of the consideration
       and if stamp duty rounded up to the nearest Pound Sterling5 for each
       share transfer) shall be borne by Marconi and Marconi shall indemnify
       Hoare Govett in connection with enforcing its liability under this
       clause 6.4.

6.5    Where Marconi reimburses Hoare Govett in respect of any expenses, it
       shall in addition pay to Hoare Govett in respect of value added tax:

6.5.1  if any reimbursement in respect of expenses constitutes part of the
       consideration for any supply of services to Marconi by Hoare Govett and
       Hoare Govett does not charge value added tax on it under clause 6.6, such
       amount as equals any value added tax charged to Hoare Govett in respect
       of the said expenses which is not recoverable by Hoare Govett by
       repayment or set-off; and

6.5.2  if any such expenses constitute disbursements incurred by Hoare Govett as
       agent on behalf of Marconi, any value added tax charged thereon to Hoare
       Govett.

6.6    Any value added tax properly chargeable in respect of any amount payable
       to Hoare Govett pursuant to this clause 6 or clause 5.1 shall be paid in
       addition to and together with such amount on production of an appropriate
       value added tax invoice and in respect of a payment under clause 6.5.2,
       Hoare Govett shall issue, or use reasonable endeavours to procure that
       the relevant third party issue, a valid value added tax invoice to
       Marconi.


7      WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS

7.1    Marconi hereby warrants, represents and undertakes to Hoare Govett as an
       inducement to Hoare Govett to enter into this Agreement, as at the date
       hereof in the terms set out in the Schedule.

7.2    Marconi undertakes to Hoare Govett not to cause and to use all reasonable
       endeavours not to permit any event to occur after the date hereof and
       prior to Admission which if it had occurred or arisen before the date
       hereof would have rendered any of the Warranties untrue or incorrect.


8      HOARE GOVETT'S INDEMNITY

8.1    No claim shall be made against any Indemnified Person by Marconi to
       recover any damage, loss, liability, cost, charge or expense which
       Marconi may suffer or incur or claim to have suffered or incurred by
       reason of or arising out of the carrying out or performance by Hoare

                                       9
<PAGE>
       Govett (or by an Indemnified Person on its behalf) of its obligations and
       services hereunder or otherwise in connection with the Placing unless and
       to the extent that such damage, loss, liability, cost, charge or expense
       arises from the material breach of contract, negligence or wilful default
       of an Indemnified Person, or the material breach by Hoare Govett of any
       of its duties or obligations under the FSMA 2000 or the regulatory system
       as defined in the definitions section of the FSA handbook.

8.2    Marconi undertakes to and with Hoare Govett (for itself and as trustee
       for each and every Indemnified Person) that it will (to the extent
       permitted by the CA 1985) indemnify each Indemnified Person and at all
       times keep each Indemnified Person fully and effectively indemnified
       against all claims, costs, charges, expenses, liabilities, actions,
       demands, proceedings and judgements whatsoever which any Indemnified
       Person may wheresoever suffer or incur or which may be brought or
       threatened to be brought against or incurred by any of them in any
       jurisdiction whatsoever (and in the case of a claim whether or not such
       claim is successful, compromised or settled) by any Placee of the Placing
       Shares or any subsequent purchaser or transferee thereof or of any other
       shares in the Company or by any other person, government, governmental
       agency or regulatory body whatsoever and against all reasonably and
       properly incurred costs, charges and expenses (including legal fees) and
       taxes (excluding taxes on its remuneration under or in connection with
       the Placing or any stamp duty or stamp duty reserve tax) which it may
       reasonably and properly pay, suffer or incur as a result thereof
       (including but without limitation all such reasonable costs, charges and
       expenses (including legal fees) and taxes as it may reasonably and
       properly pay or incur in responding to, disputing or considering any such
       actual or potential actions, claims, demands or proceedings aforesaid
       and/or in establishing its rights to be indemnified pursuant to this
       clause 8 and/or in seeking advice as to any claim, action, liability,
       demand or proceedings aforesaid or in any way related to or in connection
       with this indemnity or the Placing) and which in any such case arises out
       of or in connection with or results from or is attributable to:

8.2.1  any breach or alleged breach by Marconi of its obligations or
       undertakings in this Agreement or any breach or alleged breach of any of
       the representations and warranties contained in this Agreement; or

8.2.2  the performance by Hoare Govett or any Indemnified Pension of its
       obligations and services hereunder or otherwise in connection with the
       Placing and the preparation and distribution of the Placing Press Release
       and any financial promotion or written material issued, caused to be
       issued and used, in each case by Marconi, in connection with the Placing;
       or

8.2.3  the Placing; or

8.2.4  the content, publication and distribution of the Placing Press Release,
       any financial promotion or written material issued caused to be issued or
       used by Marconi or with their consent in connection with the Placing, or
       the Placing Press Release not containing, or being alleged not to
       contain, all the information required to be stated therein by any law or
       regulation, or any statement therein being, or being alleged to be,
       untrue, inaccurate, incomplete or misleading or defamatory or not based
       on reasonable grounds or as having been made negligently or otherwise
       without the required standard of skill and care or reasonableness; or

8.2.5  any misrepresentation or alleged misrepresentation (by whomsoever made)
       being contained, or being alleged to be contained, in the Placing Press
       Release or any financial promotion or written material issued or caused
       to be issued by Marconi or with their consent in connection with the
       Placing; or

8.2.6  any breach or alleged breach of the laws or regulations of any country or
       the regulations of any stock exchange or the rules or requirements of
       CREST in connection with the Placing or the distribution of the Placing
       Press Release; or

8.2.7  any material issued or caused to be issued by Hoare Govett at the request
       of Marconi, or by or at the request of Marconi but which is approved by
       Hoare Govett, before, on or after the date hereof in relation to the
       Placing and which in any such case contains a rubric to that effect or
       would but for an exemption pursuant to any statute, statutory instrument
       or the rules of the FSA contain such a rubric,

                                       10
<PAGE>
       and which do not in any case arise from the material breach of contract,
       negligence or wilful default of Hoare Govett and/or an Indemnified
       Person, or material breach by Hoare Govett of any of its duties or
       obligations under the FSMA 2000 or regulatory system as defined in the
       definitions section of the FSA handbook. This clause 8.2 shall not
       preclude Hoare Govett or any Indemnified Person from exercising any
       rights it may have at common law including, without prejudice to the
       generality of the foregoing, any right of contribution. Such rights shall
       be in addition to any liability in respect of Hoare Govett's services to
       Marconi which Marconi might otherwise have to Hoare Govett or any
       Indemnified Person and shall survive completion of all matters and
       arrangements referred to or contemplated by this Agreement.

8.3    If any claim is made by a third party against any Indemnified Person the
       relevant Indemnified person shall promptly notify Marconi and Marconi may
       assume conduct of the defence of any claim or action against such
       Indemnified Person (other than any regulatory or governmental
       investigation or proceedings) (an "Action") with counsel approved by such
       Indemnified Person (such approval not to be unreasonably withheld)
       provided that:

8.3.1  it does so within 21 days of receiving notice from the relevant
       Indemnified Person of a potential claim under this indemnity;

8.3.2  the Indemnified Person has the right to full information, consultation
       and representation concerning the development and defence of any
       litigation or threatened litigation;

8.3.3  no admission of liability or compromise whatsoever in connection with the
       Action may take place without Hoare Govett's prior written consent
       unless, following consultation with Hoare Govett, such admission or
       compromise acknowledges that no Indemnified Person had any responsibility
       for the matters giving rise to such Action, such admission or compromise
       contains an unconditional release of such Indemnified Person from any and
       all liabilities under such Action and the terms of such settlement or
       compromise are final, confidential, documented and in writing; and

8.3.4  Hoare Govett or the appropriate Indemnified Person has the right at any
       time to re-assume the defence of any claim or action assumed by Marconi,
       with the full benefit of the indemnification constituted by the terms of
       this indemnity.

       In the event that Hoare Govett or any other Indemnified Person assumes or
       re-assumes the defence of any Action against an Indemnified Person it
       will keep Marconi informed about the conduct of the proceedings and will
       consult with Marconi and take account of the views of Marconi so far as
       reasonably possible (and only to the extent that its insurance policies
       are not prejudiced thereby), but will have sole conduct of any
       proceedings or dispute that may arise and absolute discretion with regard
       to the progress, negotiations and settlement thereof. Notwithstanding the
       foregoing, Marconi shall not be entitled to assume or continue with the
       defence of any Action if (i) in the opinion of counsel to the Indemnified
       Person, to do so would be inappropriate due to any actual or potential
       differing interests between Marconi and such Indemnified Person; or (ii)
       the Indemnified Person's insurers do not consent to Marconi assuming
       control of the defence of any such Action and/or, in the reasonable
       opinion of the Indemnified Person, to do so would conflict with the terms
       of the Indemnified Person's relevant insurance policy. In either case the
       relevant Indemnified Person shall be entitled to retain or resume the
       defence of the Action with the full benefit of the indemnification
       constituted by the terms of this Indemnity.

8.4    Each Indemnified Person shall have the right under the Contracts (Rights
       of Third Parties) Act 1999 to enforce its rights against Marconi under
       this clause 8 provided that:

8.4.1  Hoare Govett may, by agreement in writing with Marconi, vary any of the
       rights conferred on any Indemnified Person under this clause 8 (without
       requiring the consent of any Indemnified Person) and Hoare Govett shall
       not be liable to any such Indemnified Person for any of its acts or
       omissions under this clause 8; and

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<PAGE>
8.4.2  Hoare Govett shall have sole discretion in deciding whether or not to
       enforce an Indemnified Person's rights under this clause 8, and in
       determining the terms and conditions of such enforcement.

8.5    Except as expressly agreed by Hoare Govett in writing or in respect of
       documents issued by Hoare Govett without Marconi's knowledge or in
       respect of any comfort letter issued by Hoare Govett to Marconi, neither
       Hoare Govett nor any Indemnified Person or any of its advisers will be
       responsible to Marconi, any of its Directors from time to time, or to any
       other person responsible for the Placing for verifying the accuracy or
       fairness of the information published in the Placing Press Release or any
       document issued in connection with the Placing.

8.6    All sums payable to Hoare Govett or any Indemnified Person pursuant to
       this clause 8 shall be paid free and clear of all deductions or
       withholdings unless the deduction or withholding is required by law, in
       which event the payer shall pay such additional amount (referred to
       herein as a "gross-up amount") as will be required to ensure that the net
       amount received by the relevant person will equal the full amount which
       would have been received by it had not such deduction or withholding been
       made.

8.7    If the United Kingdom Inland Revenue or any other Taxation Authority in
       any jurisdiction brings into any charge to taxation (or into any
       computation of income, profits or gains for the purpose of any charge for
       taxation) any sum payable to an Indemnified Person under this clause 8,
       the amount so payable shall be increased by such amount (referred to
       herein as a "gross-up amount") as will ensure that after deduction of the
       amount equal to taxation so chargeable (or which would have been
       chargeable but for the availability of relief to Hoare Govett or any
       Indemnified Person) there shall remain a sum equal to the amount that
       would otherwise be payable under the terms of this Agreement (additional
       payments being made on demand as may be necessary).

8.8    To the extent that an Indemnified Person subsequently obtains any tax
       credit, allowance, repayment or relief as a result of Marconi paying to
       the Indemnified Person the gross-up amount under clause 8.6 or 8.7, the
       Indemnified Person shall pay to Marconi so much of the economic benefit
       from that tax credit, allowance, repayment or relief which the
       Indemnified Person has received as does not exceed the gross-up amount
       (any question as to the accrual or amount of any such economic benefit,
       the order and manner of making any claim for any tax credit, allowance,
       repayment or relief, and the timing of any payment, being determined by
       the Indemnified Person's auditors, or by Hoare Govett's auditors if the
       relevant Indemnified Person does not have auditors).


9      WARRANTIES AND INDEMNITIES - SUPPLEMENTAL PROVISIONS

9.1    Subject as otherwise provided in this Agreement, all indemnities,
       representations, undertakings and warranties contained in this Agreement
       shall remain in full force and effect notwithstanding completion of this
       Agreement.

9.2    The indemnities, representations, undertakings and warranties contained
       in this Agreement shall be in addition to and shall not be construed to
       limit, affect or prejudice any other right or remedy available to any
       Indemnified Person.

9.3    No neglect, delay or indulgence on the part of any Indemnified Person in
       enforcing the indemnities, representations, undertakings and warranties
       contained in this Agreement or any other terms or conditions hereof shall
       be construed as a waiver thereof and no single or partial exercise of any
       rights or remedy under this Agreement will preclude or restrict the
       further exercise or enforcement of any such right or remedy.

9.4    Any release, waiver or compromise or any other arrangement of any kind
       whatsoever which any Indemnified Person may agree to or effect as regards
       Marconi in connection with the indemnities, representations, undertakings
       and warranties contained in this Agreement shall not affect the rights of
       any Indemnified Person as regards any other person liable thereunder.

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<PAGE>
10     NON US REPRESENTATIONS

10.1   Hoare Govett represents, warrants and undertakes to Marconi that:

10.1.1 to the best of its knowledge and belief, acting as a reasonable broker in
       the UK market, it has not offered and sold, and will not offer and sell,
       any Placing Shares to persons in the United Kingdom except to persons
       whose ordinary activities involve them in acquiring, holding, managing or
       disposing of investments (as principal or agent) for the purposes of
       their businesses, or otherwise in circumstances which have not resulted
       in or will not result in an offer to the public in the United Kingdom for
       the purposes of the Public Offers of Securities Regulations 1995, as
       amended;

10.1.2 it has complied with and will comply in all material respects with all
       applicable provisions of FSMA 2000 with respect to anything done by it in
       relation to the Placing Shares in, from or otherwise involving the United
       Kingdom;

10.1.3 to the best of its knowledge and belief, acting as a reasonable broker in
       the UK market, neither Hoare Govett nor any of its affiliates nor any
       person acting on any of their behalf has offered or sold nor will it or
       they offer to sell any Placing Shares in any jurisdiction in which such
       offer, sale or distribution would be in breach of any legal or regulatory
       requirement or otherwise unlawful;

10.1.4 it has full power and authority to enter into this Agreement; and

10.1.5 it has full power under its constitutional documents and applicable law,
       and all authorisations, approvals, consents and licenses required by it
       have been unconditionally obtained and are in full force and effect, to
       permit it to enter into and perform this Agreement; and this Agreement
       has been duly authorised, executed and delivered by it and is a valid and
       binding agreement of it enforceable in accordance with its terms.


11     UNITED STATES SELLING RESTRICTIONS

11.1   Hoare Govett and Marconi acknowledge and agree that the Placing Shares
       have not been and will not be registered under the Securities Act and may
       not be offered or sold within the United States or to, or for the account
       or benefit of, U.S. persons except in accordance with Regulation S, to
       QIBs in accordance with Rule 144A, or pursuant to another exemption from
       the registration requirements of the Securities Act.

11.2   Marconi undertakes to Hoare Govett as follows:

11.2.1 neither Marconi, nor any of its affiliates (as defined in Rule 405 under
       the Securities Act), nor any person acting on its or their behalf (other
       than Hoare Govett, as to whom no representation, warranty or undertaking
       is made) has engaged or will engage in any "directed selling efforts" (as
       defined in Regulation S) with respect to the Placing Shares;

11.2.2 neither Marconi, nor any of its affiliates (as defined in Rule 501(b)
       under the Securities Act), nor any person acting on its or their behalf
       (other than Hoare Govett, as to whom no representation, warranty or
       undertaking is made) has engaged or will engage in any form of general
       solicitation or general advertising in connection with any offer or sale
       of the Placing Shares, including but not limited to the methods described
       in Rule 502(c) under the Securities Act; and

11.2.3 neither Marconi, nor any of its affiliates (as defined in Rule 501(b)
       under the Securities Act), nor any person acting on its or their own
       behalf (other than Hoare Govett, as to whom no representation, warranty
       or undertaking is made) has taken or will take, directly or indirectly,
       any action that would require the registration of the Placing Shares
       under the Securities Act.

11.3   Hoare Govett represents, warrants and undertakes to Marconi that it has
       not offered or sold, and will not offer or sell, any Placing Shares
       constituting part of its allocation except (i) in accordance with Rule
       903 of Regulation S, in which connection Hoare Govett represents and
       agrees that

                                       13
<PAGE>
       neither it, nor any of its affiliates (as defined in Rule 501(b) under
       the Securities Act), nor any person acting on its or their behalf has
       engaged or will engage in any directed selling efforts (as such term is
       defined in Regulation S) with respect to the Placing Shares, (ii) to
       those persons it reasonably believes to be QIBs, in which connection
       Hoare Govett represents and agrees that (a) it has taken or will take
       reasonable steps to ensure that the purchaser of such Placing Shares is
       aware that such sale is being made in reliance on Rule 144A or pursuant
       to another exemption from the registration requirements of the Securities
       Act and (b) neither it nor any of its affiliates (as defined in Rule
       501(b) under the Securities Act) nor any person acting on its or their
       behalf has made or will make offers or sales of the Placing Shares in the
       United States by means of any form of general solicitation or general
       advertising in connection with any offer or sale of the Placing Shares,
       including but not limited to the methods described in Rule 502(c) under
       the Securities Act.

11.4   Hoare Govett represents, warrants and undertakes to Marconi that it has
       not entered and will not enter into any contractual arrangement with
       respect to the distribution or delivery of the Placing Shares, except
       with or through its affiliates (who will be bound by these selling
       restrictions) or with the prior written consent of Marconi.

11.5   Hoare Govett represents, warrants and undertakes to Marconi that it has
       not taken, and will not take, directly or indirectly, any action which is
       designed to or which has constituted or which might reasonably have been
       expected to cause or result in stabilisation or manipulation of the price
       of the Placing Shares, except for stabilisation activities conducted in
       accordance with all applicable legal, regulatory and stock exchange
       requirements.

11.6   Hoare Govett represents that all offers and sales of the Placing Shares
       in the United States shall be made through the its U.S. registered
       broker-dealer affiliate in compliance with all applicable U.S.
       broker-dealer requirements.


12     GENERAL

12.1   Marconi will give all such assistance and provide all such information as
       Hoare Govett shall reasonably require for the purposes of this Agreement
       and will execute all such documents and do all such acts and things as
       Hoare Govett may reasonably require in order to give effect to the terms
       of this Agreement.

12.2   Any of the documents in the agreed form may be amended with the prior
       approval of Hoare Govett and Marconi and references to such documents in
       this Agreement shall, where appropriate, be construed as references to
       such documents as so amended.

12.3   All payments provided for in this Agreement shall be made in pounds
       sterling currency.

12.4   If Marconi has entered into or enters into any agreement or arrangement
       with any adviser for the purpose of, or in connection with, the Placing
       and the terms of which provide that the liability of the adviser to
       Marconi or any other person is excluded or limited in any manner and
       Hoare Govett may have joint and/or several liability with such adviser to
       Marconi or to any other person arising out of the performance of its
       duties under this Agreement then Marconi shall:

12.4.1 not be entitled to recover any amounts from Hoare Govett in excess of
       what would have been the net amount of Hoare Govett's liability in the
       absence of such exclusion or limitation;

12.4.2 indemnify Hoare Govett in respect of any increased liability to any third
       party which would not have arisen in the absence of such exclusion or
       limitation; and

12.4.3 take such other action as Hoare Govett may require to ensure that Hoare
       Govett is not prejudiced as a consequence of such agreement or
       arrangement.

12.5   Save as provided in clause 8, no term of this Agreement is enforceable
       under the Contracts (Rights of Third Parties) Act 1999 by a person who is
       not a party to this Agreement.

                                       14
<PAGE>
12.6   Hoare Govett shall not be required to place or to procure that there are
       placed on deposit any sums received by them or any of their agents by way
       of purchase moneys for the Placing Shares (or any of them). Marconi
       agrees that all moneys payable to it under the Placing or hereunder shall
       not be treated as client money subject to any regulations made under or
       pursuant to the FSMA 2000.


13     TIME OF THE ESSENCE

       Any time, date or period mentioned in this Agreement may be extended by
       mutual agreement between the parties hereto or otherwise as provided
       herein, but as regards any time, date or period originally fixed or so
       extended as aforesaid time shall be of the essence. All references in
       this Agreement to a time of day are to London time.


14     NOTICES

14.1   Any notice or other document to be served under this Agreement may be
       delivered or sent by first class recorded delivery post or facsimile
       process:

14.1.1 if to Hoare Govett, to 250 Bishopsgate, London EC2M 4AA (present fax no.
       020 7678 7635) marked for the attention of Charles Lytle/Company
       Secretary;

14.1.2 if to Marconi, to 338 Euston Road, London NW1 3BT (present fax no. 020
       7409 7748) marked for the attention of the Company Secretary;

       or as otherwise notified by the relevant party in accordance with the
       provisions of this clause 14.

14.2   Any notice or document shall be deemed to have been served:

14.2.1 if delivered, at the time of delivery; or

14.2.2 if posted, at 10.00 a.m. on the second Business Day, or the fourth
       Business Day if posted by air mail, after it was put in the post; or

14.2.3 if sent by facsimile process, upon receipt by the sender of the correct
       answerback or transmission report.

14.3   In proving service of a notice or document it shall be sufficient to
       prove that delivery was made or that the envelope containing the notice
       or document was properly addressed and posted as a prepaid first class
       recorded delivery letter, or full rate air mail if the address is
       overseas or that the facsimile message was properly addressed and
       despatched as the case may be.


15     EFFECTS OF THIS AGREEMENT

       This Agreement shall be binding on each party's successors.


16     COUNTERPARTS

       This Agreement may be entered into in any number of counterparts and by
       the parties to it on separate counterparts, each of which when executed
       and delivered shall be an original, but all the counterparts shall
       together constitute one and the same instrument.


17     GOVERNING LAW AND JURISDICTION

17.1   This Agreement shall be governed by and construed in accordance with
       English law.

17.2   The parties hereby submit for all purposes connected herewith to the
       exclusive jurisdiction of the High Court of Justice in England in
       relation to any matter arising out of this Agreement. All parties
       expressly waive any objections on the grounds of venue.

                                       15
<PAGE>
     IN WITNESS whereof this Agreement has been entered into the day and year
first above written.

                                       16
<PAGE>
                                    SCHEDULE
                                   WARRANTIES

                                     PART I


1    THE PLACING SHARES

     Save as disclosed in Part II of this Schedule, Marconi is the legal and
     beneficial owner of 30,111,162 Ordinary Shares and 50,707,150 Convertible
     Shares free and clear of any lien, charge, claim or other encumbrance or
     any right of any third party whatsoever and will remain so entitled up
     until completion of the sale and purchase of the Placing Shares pursuant to
     the Placing and that, save as disclosed in Part II of the Schedule, it has
     full power and authority to enter into this Agreement and to sell, transfer
     and deliver the Placing Shares as contemplated herein free and clear of any
     lien, charge, claim or other encumbrance or any right of any third party
     whatsoever now or hereafter attaching thereto.


2    CORPORATE POWER AND AUTHORITY

     Save as disclosed in Part II of this Schedule, Marconi has full power under
     its constitutional documents and applicable law, and all authorisations,
     approvals, consents and licenses required by it have been unconditionally
     obtained and are in full force and effect, to permit it to enter into and
     perform this Agreement; and this Agreement has been duly authorised,
     executed and delivered by it and is a valid and binding agreement of it
     enforceable in accordance with its terms.


3    REGULATORY COMPLIANCE

     To the best of its knowledge and belief, Marconi has complied with and will
     comply with all applicable provisions of FSMA with respect to anything done
     by it in relation to the Placing Shares in, from or otherwise involving the
     United Kingdom.


4    NO INSIDE INFORMATION

     The sale of the Placing Shares to be sold by Marconi under this Agreement
     will not constitute a breach by it of the Criminal Justice Act 1993 or
     other applicable law or regulations prohibiting "insider dealing" in
     securities.


5    UNITED STATES REPRESENTATIONS

5.1  Neither Marconi, nor any of its affiliates (as defined in Rule 501(b) under
     the US Securities Act of 1933, as amended (the "SECURITIES ACT")), nor any
     person acting on its or their behalf (excluding Hoare Govett, as to whom no
     representation, warranty or undertaking is made) (a) has taken or will take
     any action that would require the registration of the Placing Shares under
     the Securities Act; or (b) has engaged or will engaged or will engage in
     any form of general solicitation or general advertising (within the meaning
     of Rule 502(c) under the Securities Act) in connection with any offer or
     sale of the Placing Shares in the United States.

5.2  The Placing Shares are not of the same class (within the meaning of Rule
     144A) as securities listed on a national securities exchange registered
     under Section 6 of the US Securities Exchange Act of 1934, as amended (the
     "EXCHANGE ACT"), or quoted in a US automated inter-dealer quotation system.

5.3  Neither Marconi nor any of its affiliates (as defined in Rule 405 under the
     Securities Act), nor any person acting on its or their behalf (excluding
     Hoare Govett, as to whom no representation is made) has taken or will take,
     directly or indirectly, any action designed to cause or result in, or that
     has constituted or which might reasonably be expected to cause or result
     in, the stabilisation in violation of applicable laws or manipulation of
     the price of any security of the Company to facilitate the sale or resale
     of the Placing Shares.

                                       17
<PAGE>
5.4  Neither Marconi, nor any of its affiliates (as defined in Rule 405 under
     the Securities Act) nor any person acting on its or their behalf (excluding
     Hoare Govett, as to whom no representation is made) have engaged or will
     engage in any "directed selling efforts" (as defined in Regulation S) with
     respect to the Placing Shares.

5.5  The Company is not, and following the offer and sale of the Placing Shares
     pursuant to this Agreement will not be, an "investment company" under, and
     as such term is defined in, the US Investment Company Act of 1940, as
     amended.

5.6  The Company is a "FOREIGN ISSUER" (as such term is defined in Regulation S)
     and Marconi reasonably believes that there is no "substantial US market
     interest" (as such term is defined in Regulation S) in the Placing Shares
     or in any securities of the same class as the Placing Shares.

                                       18
<PAGE>
                                     PART II

Pursuant to a composite debenture between Marconi and certain of its
subsidiaries and The Law Debenture Trust Corporation p.l.c. ("SECURITY TRUSTEE")
dated 19 May 2003 (the "UK DEBENTURE"), security was granted by Marconi over
certain of its assets, including, but not limited to, the Placing Shares.

The Security Trustee has agreed, pursuant to a deed poll dated 3 July 2003 in
favour of Marconi (the "DEED POLL"):

(a)  to irrevocably and unconditionally release and discharge the Placing Shares
     from all security and trusts constituted by the UK Debenture; and

(b)  to re-assign to Marconi all right, title and interest in and to the Placing
     Shares assigned to it under the UK Debenture,

to the intent that the Placing Shares shall henceforth be held freed and
discharged from such security and from all claims under the UK Debenture.

The release of security over the Placing Shares is expressed under the Deed Poll
to take effect upon the determination and agreement of the Placing Price and the
number of Placing Shares pursuant to clause 4.4. The Deed Poll and the share
certificates evidencing the Existing Ordinary Shares and the Convertible Shares
will be held in escrow until the Security Trustee confirms that it has received
a certificate from Marconi notifying the Security Trustee of the description and
number of Existing Ordinary Shares and Convertible Shares to be placed under the
Placing (the "CONFIRMATION CERTIFICATE"), at which time the Deed Poll and such
share certificates will be released to Marconi.

                                       19
<PAGE>
SIGNED by                                           )
for and on behalf of                                )
HOARE GOVETT LIMITED                                ) /s/ Charles Lytle
                                                     ...........................
                                                     Duly authorised











SIGNED by                                           )
for and on behalf of                                )
MARCONI CORPORATION PLC                             ) /s/ Richard McPhail
                                                     ...........................
                                                     Duly authorised

                                       20