<PAGE>   1
EXHIBIT 4.2


THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAW AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION STATEMENT IS NOT REQUIRED UNDER THE
SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER OR UNDER
APPLICABLE STATE SECURITIES LAWS.

                                                                      $1,000,000

                            ITC LEARNING CORPORATION

                5.5% CONVERTIBLE SUBORDINATED SECURED DEBENTURE
                 DUE OCTOBER 31, 2000 (ONE YEAR FROM ISSUANCE)


         ITC LEARNING CORPORATION, a Maryland corporation (the "Company"),
promises to pay to New River Capital Partners, L.P. or its assigns (the
"Holder"), the principal sum of One Million Dollars and No/100 ($1,000,000), or
so much thereof as is funded to the Company by the Holder pursuant to the terms
of this debenture (this "Debenture"), on October 31, 2000 (the "Maturity
Date"), together with accrued interest thereon.

         Pursuant to this Debenture, the Holder shall fund Two Hundred Fifty
Thousand Dollars ($250,000.00) in cash or other immediately available funds to
the Company on November 2, 1999.  Pursuant to this Debenture, the Holder shall
fund Seven Hundred Fifty Thousand Dollars ($750,000.00) in cash or other
immediately available funds to the Company on or before November 8, 1999,
subject to the Holder's discretion not to fund this second installment if the
results of Holder's due diligence investigation of the Company are not
satisfactory to Holder in its sole and absolute discretion, in which event this
Debenture will be for the principal amount of $250,000.00.

           Interest on the principal amount of this Debenture shall accrue at
the rate of five and one-half percent (5.5%) per annum from the original date
of issuance of this Debenture. Interest accrued on the outstanding principal
balance of this Debenture shall be payable in cash or other immediately
available funds to the Holder upon the earlier of (i) the Maturity Date, (ii)
upon acceleration of all amounts due and owing hereunder in accordance with the
terms hereinafter set forth, or (iii) the date on which Holder elects to
convert the principal amount of this Debenture into shares in accordance with
the terms hereinafter set forth.  Interest will be computed on the basis of a
365-day year.

         This Debenture is being issued pursuant to an exemption from
registration under the Securities Act and the rules and regulations promulgated
thereunder.
<PAGE>   2
         1.      CONVERSION.

                 (a)      The Holder may convert all or any part of the
principal amount of this Debenture, but not any accrued interest, into shares
of the Company's common stock, $.10 par value per share (the "Common Stock"),
at any time after February 28, 2000 and prior to the Maturity Date (the
"Conversion Period"), at a conversion price of $2.00 per share (the "Conversion
Price").  The shares of Common Stock issuable upon conversion of this Debenture
are referred to herein as the "Shares."

                 (b)      The Company shall at all times reserve for issuance
such number of authorized and unissued shares of Common Stock as shall be
sufficient for conversion of this Debenture.

                 (c)      The Company shall deliver a certificate or
certificates for the Shares as soon as practicable after surrender of this
Debenture for conversion, but the person or persons to whom such certificates
are issuable shall be considered the holder of record of such shares from the
time this Debenture is surrendered.  Except as described herein, this Debenture
is not otherwise convertible into any other shares of the Company's capital
stock.

                 (d)      The certificates representing the Common Stock issued
upon conversion of this Debenture shall bear a legend substantially similar to
the following:

                 "The securities represented by this certificate have not been
                 registered under the Securities Act of 1933, as amended (the
                 "Act"), and may not be offered or sold except (1) pursuant to
                 an effective registration statement under the Act or (2) upon
                 the delivery by the holder to the Company of an opinion of
                 counsel, reasonably satisfactory to the issuer stating that an
                 exemption from registration under such Act is available."

         2.      ANTI-DILUTION.

                 (a)      Stock Splits and Combinations.  If the Company shall
combine all of its outstanding shares of Common Stock into a smaller number of
shares, the number of Shares shall be proportionately decreased and the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased, as of the effective date of such combination, as
follows: (i) the number of Shares purchasable immediately prior to the
effective date of such combination shall be adjusted so that the Holder of this
Debenture, if converted on or after that date, shall be entitled to receive the
number and kind of Shares which the Holder of this Debenture would have owned
and been entitled to receive as a result of the combination had the Debenture
been converted immediately prior to that date, and (ii) the Conversion Price in
effect immediately prior to





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<PAGE>   3
such adjustment shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which is the aggregate number of Shares purchasable
upon conversion of this Debenture immediately prior to such adjustment, and the
denominator of which is the aggregate number of Shares purchasable upon
conversion of this Debenture immediately thereafter.  If the Company shall
subdivide all of its outstanding shares of Common Stock, the number of Shares
shall be proportionally increased and the Conversion Price in effect prior to
such subdivision shall be proportionately decreased, as of the effective date
of such subdivision, as follows: (i) the number of Shares purchasable upon the
conversion of this Debenture immediately prior to the effective date of such
subdivision, shall be adjusted so that the Holder of this Debenture, if
converted on or after that date, shall be entitled to receive the number and
kind of Shares which the Holder of this Debenture would have owned and been
entitled to receive as a result of the subdivision had the Debenture been
converted immediately prior to that date, and (ii) the Conversion Price in
effect immediately prior to such adjustment shall be adjusted by multiplying
the Conversion Price by a fraction, the numerator of which is the aggregate
number of Shares purchasable upon conversion of this Debenture immediately
prior to such adjustment, and the denominator of which is the aggregate number
of Shares purchasable upon conversion of this Debenture immediately thereafter.

                 (b)      Stock Dividends and Distributions.  If the Company
shall fix a record date for the holders of its Common Stock entitled to receive
a dividend or other distribution payable in additional shares of Common Stock,
then the number of Shares shall be proportionately increased and the Conversion
Price in effect prior to the time of such issuance or the close of business on
such record date shall be proportionately decreased, as of the time of such
issuance, or in the event such record date is fixed, as of the close of
business on such record date, as follows: (i) the number of Shares purchasable
immediately prior to the time of such issuance or the close of business on such
record date shall be adjusted so that the Holder of this Debenture, if
converted after that date, shall be entitled to receive the number and kind of
Shares which the Holder of this Debenture would have owned and been entitled to
receive as a result of the dividend or distribution had the Debenture been
converted immediately prior to that date, and (ii) the Conversion Price in
effect immediately prior to such adjustment shall be adjusted by multiplying
such Conversion Price by a fraction, the numerator of which is the aggregate
number of shares of Common Stock purchasable upon conversion of this Debenture
immediately prior to such adjustment, and the denominator of which is the
aggregate number of shares of Common Stock purchasable upon conversion of this
Debenture immediately thereafter.

                 (c)      Other Dividends and Distributions.  If the Company
shall fix a record date for the holders of Common Stock entitled to receive a
dividend or other distribution payable in securities of the Company other than
shares of Common Stock, then lawful and adequate provision shall be made so
that the Holder of this Debenture shall be entitled to receive upon conversion
of this Debenture, for the Conversion Price in effect prior thereto, in
addition to the number of Shares immediately theretofore issuable upon
conversion of this Debenture, the kind and number of securities of the Company
which the Holder would have owned and been entitled to receive had the
Debenture been converted immediately prior to that date.

                 (d)      Reclassification, Exchange and Substitution.  If the
Common Stock is changed into the same or a different number of shares of any
class or classes of stock, whether by recapitalization, reclassification or
otherwise (other than by a subdivision or combination of shares or stock





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<PAGE>   4
dividend or a reorganization, merger, consolidation or sale of assets, provided
for elsewhere in this Section 2), then the Holder of this Debenture shall be
entitled to receive upon conversion of this Debenture, in lieu of the Shares
immediately theretofore issuable upon conversion of this Debenture, for the
aggregate Conversion Price in effect prior thereto, the kind and amount of
stock and other securities and property receivable upon such recapitalization,
reclassification or other change, by the holders of the number of Shares for
which the Debenture could have been converted immediately prior to such
recapitalization, reclassification or other change.

                 (e)      Reorganizations, Mergers, Consolidations or Sales of
Assets.  If any of the following transactions (each, a "Special Transaction")
shall become effective:  (i) a capital reorganization (other than a
recapitalization, subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 2), (ii) a consolidation or
merger of the Company with and into another entity, or (iii) a sale or
conveyance of all or substantially all of the Company's assets, then as a
condition of any Special Transaction, lawful and adequate provision shall be
made so that the Holder of the Debenture shall thereafter have the right to
purchase and receive upon conversion of this Debenture, in lieu of the Shares
immediately theretofore issuable upon conversion of this Debenture, for the
Conversion Price in effect immediately prior to such conversion, such shares of
stock, other securities, cash or other assets as may be issued or payable in
and pursuant to the terms of such Special Transaction to the holders of shares
of Common Stock for which this Debenture could have been converted immediately
prior to such Special Transaction.  In connection with any Special Transaction,
appropriate provision shall be made with respect to the rights and interests of
the Holder of this Debenture to the end that the provisions of this Debenture
(including, without limitation, provisions for adjustment of the Conversion
Price and the number of Shares issuable upon the conversion of this Debenture)
shall thereafter be applicable, as nearly as may be practicable, to any shares
of stock, other securities, cash or other assets thereafter deliverable upon
the conversion of this Debenture.  The Company shall not effect any Special
Transaction unless prior to, or simultaneously with the closing thereof, the
successor entity (if other than the Company), if any, resulting from such
Special Transaction shall assume by a written instrument executed and mailed by
certified mail or delivered to the Holder of this Debenture at the address of
the Holder appearing on the books of the Company, the obligation of the Company
or such successor corporation to deliver to the Holder such shares of stock,
securities, cash or other assets, as in accordance with the foregoing
provisions, which the Holder shall have the right to purchase.

                 (f)      Other Issuances.  In the event that the Company shall
at any time after the date of original issuance of this Debenture issue any
shares of Common Stock, including shares of Common Stock issued or issuable
upon the conversion or exercise of Convertible Securities, without
consideration or at a price per share less than the Conversion Price, then, in
each and any such event (an "Adjustment Event"), the number of Shares
purchasable immediately prior thereto (the "Initial Number") shall be adjusted
so that the Holder shall be entitled, upon conversion of this Debenture, to
receive the number of shares of Common Stock determined by multiplying the
Initial Number by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such Adjustment Event
plus the number of additional shares of Common Stock issued in such Adjustment
Event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such Adjustment Event plus the number of
shares





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<PAGE>   5
of Common Stock which the aggregate issuance price of the total number of
shares of Common Stock issued in such Adjustment Event would purchase at the
Conversion Price; provided, however, that no adjustment shall be made for the
issuance of shares of Common Stock in connection with a Special Transaction, as
described in Section 2(e).

                 (g)      Liquidation.  If the Company shall, at any time prior
to the end of the Conversion Period, dissolve, liquidate or wind up its
affairs, the Holder shall have the right, but not the obligation, to convert
this Debenture.  Upon such conversion, the Holder shall have the right to
receive, in lieu of the Shares that the Holder otherwise would have been
entitled to receive upon such conversion, the same kind and amount of assets as
would have been issued, distributed or paid to the Holder upon any such
dissolution, liquidation or winding up with respect to such Shares had the
Holder been the holder of record of such Shares on the date for determining
those entitled to receive any such distribution.  If any such dissolution,
liquidation or winding up results in any cash distribution in excess of the
applicable Conversion Price, the Holder may, at the Holder's option, convert
this Debenture without making payment of the applicable Conversion Price and,
in such case, the Company shall, upon distribution to the Holder, consider the
applicable Conversion Price, to have been paid in full, and in making
settlement to the Holder shall deduct an amount equal to the applicable
Conversion Price, from the amount payable to the Holder.

                 (h)      Notice.  Whenever this Debenture or the number of
Shares is to be adjusted as provided herein, the Company shall forthwith as
soon as practicable cause to be sent to the Holder a notice stating in
reasonable detail the relevant facts and any resulting adjustments and the
calculation thereof.

                 (i)      Fractional Interests.  The Company shall not be
required to issue fractions of shares of Common Stock upon the conversion of
this Debenture.  If any fraction of a share of Common Stock would be issuable
upon the conversion of this Debenture, the Company shall, upon such issuance,
purchase such fraction for an amount in cash equal to the current value of such
fraction, computed on the basis of the last reported closing price of the
Common Stock on the securities exchange or quotation system on which the shares
of Common Stock are then listed or traded, as the case may be, if any, on the
last business day prior to the date of conversion upon which such a sale shall
have been effected, or, if the Common Stock is not so listed or traded on an
exchange or quotation system, as the Board of Directors of the Company may in
good faith determine.

                 (j)      Effect of Alternate Securities.  If at any time, as a
result of an adjustment made pursuant to this Section 2, the Holder of this
Debenture shall thereafter become entitled to receive any securities of the
Company other than shares of Common Stock, then the number of such other
securities receivable upon conversion of this Debenture shall be subject to
adjustment from time to time on terms as nearly equivalent as practicable to
the provisions with respect to shares of Common Stock contained in this Section
2.

                 (k)      Successive Application.  The provisions of this
Section 2 shall apply from time to time to successive events covered by this
Section 2.





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<PAGE>   6
         3.      REDEMPTION. This Debenture is redeemable at the option of the
Holder, on at least ten (10) days prior written notice to the Company, at the
principal amount of this Debenture, plus accrued interest through the date of
redemption, if at any time after the original issuance of this Debenture the
Company (i) accepts a commitment for at least Two Million Dollars ($2,000,000)
of debt or equity financing other than pursuant to any loan agreement in effect
as of the date of original issuance of this Debenture or (ii) enters into one
or more agreements for the sale of assets that either (A) is for an aggregate
purchase price of at least Two Million Dollars ($2,000,000) or (B) consists of
assets which generate in the aggregate at least 15% of the Company's annual
revenue.  The Company shall give the Holder immediate written notice of its
acceptance of any commitment for debt or equity financing or its entering into
any agreement(s) for the sale of its assets.  The Company may not prepay the
outstanding principal amount or accrued interest of this Debenture without the
prior written approval of the Holder.  Any prepayment approved by Holder shall
first be applied to any accrued interest then owing.

         4.      SUBORDINATION. Payment of principal, interest and all other
amounts due under this Debenture is subordinated to up to Two Million Dollars
($2,000,000) in principal amount of all Institutional Debt.  "Institutional
Debt" is the principal of and premium, if any, interest, costs, expenses and
attorney's fees, and any other payment due pursuant to the terms of instruments
creating or evidencing indebtedness of the Company outstanding as of the date
hereof and all renewals, extensions, modifications and refundings thereof,
which is payable to banks or other traditional long-term institutional lenders
such as insurance companies and pension funds.  "Indebtedness," as applied to
any entity, means any indebtedness, contingent or otherwise, in respect of
borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such entity or only to a portion thereof), as evidenced by bonds,
notes, debentures or similar instruments or letters of credit, or representing
the balance deferred and unpaid of the purchase price of any property or
interest thereon, of and to the extent such indebtedness would appear as a
liability upon a balance sheet of such entity prepared on a consolidated basis
in accordance with generally accepted accounting principles.  Without the prior
written consent of the holder of the Institutional Debt, the Holder agrees not
to accept payment of principal, interest or any other amount due under this
Debenture until the Institutional Debt has been paid in full.  This limitation
shall not prevent Holder from converting all or a part of the principal amount
of this Debenture pursuant to Section 1 hereof.  The Company agrees, and the
Holder agrees by accepting this Debenture, to the subordination described in
this Section 4.  As of the date hereof, the Company's only Institutional Debt
is with Wachovia Bank, N.A., ("Wachovia") pursuant to a Loan and Security
Agreement and related documents dated as of August 11, 1999 and amended
September 13, 1999 pursuant to which Wachovia agreed to provide a line of
credit to the Company in the principal amount of $4,000,000, and the Company
represents that less than $2,000,000 in principal amount is outstanding
thereunder.  Pursuant to that certain Forbearance Agreement effective as of
October 18, 1999 with Wachovia, the Company is not and will not be in default
in any of its agreements with Wachovia.  The Company agrees not to further
extend or otherwise modify its agreements with Wachovia without the prior
written consent of the Holder.





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<PAGE>   7
         5.      SECURITY. The outstanding principal and accrued interest, if
any, on this Debenture will be secured to the extent thereof, by all of the
assets of the Company, including the Company's library and technology, in
accordance with the terms of that certain Security Agreement, dated as of even
date herewith between the Company and the Holder.  Holder acknowledges that
Wachovia is the beneficiary of a properly perfected first and prior lien and
security interest in all assets of the Company, including without limitation,
the Company's library and technology.  Following an Event of Default under the
Debenture, the Holder agrees not to exercise against the Company any right or
remedy available to the Holder (other than conversion under Section 1 hereof)
until Wachovia has been given ten (10) days prior written notice of the
occurrence of such Event of Default.  If Wachovia elects to exercise any right
or remedy available to it, unless Wachovia shall otherwise agree in writing,
the Holder agrees to stand-by and defer action against the Company until
Wachovia has been paid in full or has completed the exercise of all rights and
remedies available to it.

         6.      DEFAULT.  An Event of Default occurs when:

                 (a)      the Company fails to make a payment of principal and
accrued interest under this Debenture, when the same becomes due and payable at
maturity or upon redemption;

                 (b)      the Company, pursuant to the U.S. Bankruptcy Code (i)
commences a voluntary proceeding or (ii) consents to an entry of an order for
relief against it in an involuntary proceeding;

                 (c)      the Company consents to the appointment of a
custodian or similar party of it or for all or substantially all of its
property;

                 (d)      the Company makes a general assignment for the
benefit of creditors;

                 (e)      a court of competent jurisdiction enters an order or
decree under any bankruptcy or similar law (i) against the Company in an
involuntary case, (ii) appoints a custodian or similar party of the Company or
for all or substantially all of its property, or (iii) orders the liquidation
of the Company, and the order or decree remains unstayed and in effect for 90
days; or

                 (f)      the Company defaults with respect to any
Institutional Debt, which default could result in the acceleration of such
Institutional Debt.

                 If an Event of Default occurs then the Holder may declare this
Debenture to be due and payable immediately and the rate of interest shall
increase to the maximum lawful rate.

         7.      REGISTRATION RIGHTS.

                 (a)      Demand Registration.  Within twenty (20) days
following written demand of the Holder, the Company shall prepare and file with
the Securities and Exchange Commission (the "Commission"), and use its best
efforts to cause to become effective no later than sixty (60) days





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<PAGE>   8
after the date of filing, a registration statement on Form S-3 (if such form is
then available for use by the Company, or such other available registration
statement form) (the "Registration Statement") and such other documents,  as
may be necessary in the opinion of counsel for both the Company and the Holder,
so as to permit a public offering and sale of the Shares under the Securities
Act.  All expenses incurred in connection with the registration of the Shares,
including without limitation, all blue sky registration and filing fees, legal
fees, accounting fees, printing expenses, other expenses and fees of experts
used in connection with such registration and any fees and expenses incidental
to any post-effective amendment to the Registration Statement, shall be borne
and paid by the Company.  The Company shall keep such registration effective
for a period of not less than two (2) years after becoming effective.

                 (b)      Piggy-back Registration.  If, at any time, the
Company shall propose the registration under the Securities Act of an offering
of any of its capital stock to be sold for its own account and/or for the
account of other persons, the Company, on each such occasion, shall as promptly
as practicable, but in no event later than thirty (30) days prior to the
proposed filing date of the Registration Statement, give written notice to the
Holder of its intention to effect such registration (which notice shall state
an estimated selling price for Common Stock in such offering) and the Holder
shall be entitled, on each such occasion, to request to have all or a portion
of the Shares included in such Registration Statement.  Upon the written
request of the Holder that the Company include the Shares in such Registration
Statement (which request shall state the number of Shares for which
registration is sought and the intended method of disposition thereof), the
Company shall cause such Shares to be so included in the offering covered by
such Registration Statement.

                 (c)      Prospectus; Blue Sky Matters.  Whenever the Company
is required pursuant to the provisions of this Section 7 to include the Shares
in a Registration Statement, the Company shall (I) furnish the Holder and any
underwriter with respect to the registration of such Shares with  copies of the
prospectus, including the preliminary prospectus, conforming to the Securities
Act (and such other documents as the Holder or any underwriter may reasonably
request) in order to facilitate the sale or distribution of the Shares, (ii)
use its best efforts to register or qualify the Shares under the blue sky laws
(to the extent applicable ) of such jurisdiction or laws (to the extent
applicable) of such jurisdiction or jurisdictions as the Holder and any
underwriter of the Shares being sold by the Holder shall reasonably request and
(iii) take such other actions as may be reasonably necessary or advisable to
enable the Holder and any underwriters to consummate the sale or distribution
in such jurisdiction or jurisdictions in which the Holder shall have reasonably
requested that the Shares be sold.

                 (d)      Opinion of Counsel; Comfort Letters.  In connection
with any registration under this Section 7, the Company shall furnish to the
Holder and to any underwriter a signed counterpart, addressed to the Holder or
underwriter, of (I) an opinion of counsel to the Company, dated the effective
date of the Registration Statement (and, if such registration includes an
underwritten public offering, an opinion dated the date of the closing under
the underwriting agreement), and (ii) a "comfort" letter dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, a "comfort" letter dated the date of the closing
under the underwriting agreement) signed by the independent public accountants
who have issued a report on the Company's financial statements included in such
Registration Statement, in





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<PAGE>   9
each case covering substantially the same matters with respect to such
Registration Statement (and the prospectus included therein) and, in the case
of such accountant's "comfort" letter with respect to events subsequent to the
date of such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountant's "comfort" letters delivered to
underwriters in underwritten public offerings of securities.

                 (e)      Underwriting Agreement.  In the event of an
underwritten public offering, the Company shall enter into an underwriting
agreement with the managing underwriter selected by the Holder. Such
underwriting agreement shall be reasonably satisfactory in form and substance
to the Company, the Holder and such managing underwriter,  and shall contain
such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the
managing underwriter.

                 (f)      Cutback.  In connection with any underwritten public
offering by the Company of its securities as described in Section 7(b), the
Company shall not be required to include in such offering any Shares held by
the Holder unless the Holder agrees to the terms of the underwriting agreement
between the Company and the managing underwriter of such offering, which
agreement may require that the Shares be withheld from the market by the Holder
for a period of up to ninety (90) days after the effective date of the
Registration Statement by which such public offering is being effected.
Furthermore, the Company shall be obligated to include in such offering only
the quantity of the Shares, if any, as will not, in the opinion of the managing
underwriter, jeopardize the success of the offering by the Company.  If the
managing underwriter for the offering advises the Company in writing that the
total amount of securities sought to be registered by the Holder and other
shareholders of the Company having similar registration rights as of the date
hereof (collectively, the "Shareholders") exceeds the amount of securities that
can be offered without adversely affecting the offering by the Company, then
the Company may reduce the number of shares to be registered by the Company for
the Shareholders, including the Shares, to a number satisfactory to such
managing underwriter.  Any such reduction shall be pro rata, based upon the
total number of shares held by each Shareholder, provided, however, that in
such event, the Holder shall have the right to withdraw its request to
participate in the offering and shall preserve its right to piggy-back
registration as provided in Section 7(b).

                 (g)      Company Indemnity.  The Company will indemnify and
hold harmless the Holder, all directors, officers, partners, agents and
employees of the Holder, and any person or entity engaged by the Holder to sell
the Shares, and each person, if any, who controls such persons or entities
within the meaning of the Securities Act or the Securities Exchange Act of
1934, as amended (the "1934 Act") (collectively, a "Holder Indemnitee"),
against any losses, claims, damages, liabilities, or expenses (including, but
not limited to, reasonable attorneys' fees), or actions, proceedings, or
settlements in respect thereof, whether joint or several, to which a Holder
Indemnitee may become subject under the Securities Act, the 1934 Act, or other
federal or state law, insofar as such losses, claims, damages, liabilities or
expenses (including, but not limited to, reasonable attorneys' fees), or
actions, proceedings or settlements in respect thereof, whether joint or
several, arise out of or are based upon any of the following statements,
omissions or violations (a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in a





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<PAGE>   10
Registration Statement covering the Shares, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto; (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading;
or (iii) the employment by the Company of any device, scheme or artifice to
defraud or the engagement by the Company in any act, practice or course of
business which operates or would operate as a fraud or deceit upon the
purchasers of its securities pursuant to such Registration Statement.  The
Company will also reimburse each Holder Indemnitee for any legal or other
expenses reasonably incurred by such Holder Indemnitee in connection with
investigating, defending, and settling any such loss, claim, damage, liability,
or action.

         The indemnity agreement contained in this Section 7(g) shall not apply
to amounts paid in settlement of any loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the Company be liable to
any Holder Indemnitee for any loss, claim, damage, liability or action to the
extent that it arises solely out of or is based solely upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by or on behalf of the
Holder or any agent of the Holder, or controlling person of either.

                 (h)      Holder Indemnity.  The Holder will indemnify and hold
harmless the Company, and all directors, officers, partners, agents and
employees of the Company and all persons who control the Company within the
meaning of the Securities Act or the 1934 Act, and each agent or underwriter
for the Company or any other person or entity engaged by the Company to sell
the Company's securities offered in the Registration Statement, or any of their
respective directors, officers, partners, agents, employees or control persons
(collectively, a "Company Indemnitee"), against any losses, claims, damages,
liabilities, or expenses (including, but not limited to reasonable attorneys'
fees), or actions, proceedings, or settlements in respect thereof, whether
joint or several, to which the Company or any such Company Indemnitee may
become subject under the Securities Act, the 1934 Act, or other federal or
state law, insofar as such losses, claims, damages, liabilities, or expenses
(including, but not limited to reasonable attorneys' fees), or actions,
proceedings, or settlements in respect thereof, whether joint or several, arise
solely out of or are based solely upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by or on behalf of the Holder
expressly for use in connection with such registration; and the Holder will
reimburse any legal or other expenses reasonably incurred by a Company
Indemnitee in connection with investigating or defending any such loss, claim,
damage, liability, or action.  Notwithstanding the above, the amount of any
losses, claims, damages, liabilities, legal fees and expenses to be paid by the
Holder shall not exceed the amount of the proceeds received by the Holder from
the sale of the Shares.

         The indemnity agreement contained in this Section 7(h) shall not apply
to amounts paid in settlement of any loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld.

                 (i)      Procedure for Indemnification.





                                       10
<PAGE>   11
                          (i)     Promptly after receipt by an indemnified
party under Sections 7(g) and 7(h) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying part so desires, jointly with any other indemnifying party
similarly noticed, to assume and control the defense thereof with counsel
mutually satisfactory to the indemnified party and indemnifying parties,
provided that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests (as reasonably determined by either party) between such indemnified
party and any other party represented by such counsel in such proceeding.  The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 7(i), to the extent of such prejudice,
but the failure to so deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 7(i).

                          (ii)    The obligations of the Company and the
Holders under Sections 7(g) and 7 (h), respectively, shall survive the
completion of any offering of the Shares made pursuant to a registration under
this Section 7.

                          (iii)   The amount paid or payable by a party as a
result of the losses, claims, damages, or liabilities (or actions or
proceedings in respect thereof) referred to in Sections 7(g) and 7(h) shall
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.

                 (j)      Limitations of Indemnification.  If the
indemnification provided for in Sections 7(g) and 7(h) is unavailable to an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall be required to provide contribution
on behalf of the indemnified party, except to the extent that contribution is
not permitted under Section 11(f) of the Securities Act.  In determining the
amount of contribution to which the respective parties are entitled, there
shall be considered the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances.  Notwithstanding
the provisions of this paragraph, the Holder shall not be required to
contribute any amount in excess of the net proceeds received by the Holder from
the sale of the Shares.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.





                                       11
<PAGE>   12
                 (k)      Specific Performance.  The Holder, in addition to
being entitled to exercise all rights provided in this Section 7, including
recovery of damages, will be entitled to specific performance of its rights
hereunder.  The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Section 7 and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

                 (l)      Certain Obligations of the Company.  In connection
with the Company's obligations to effect a registration under the Section 7,
the Company will:

                          (i)     cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc., and
before filing a Registration Statement or prospectus or any amendments or
supplements thereto, the Company will furnish to counsel selected by Holder
copies of all such documents proposed to be filed, which documents will be
subject to such counsel's review and comments;

                          (ii)    cause the prospectus relating to such
registration to be supplemented by any required prospectus supplement, and as
so supplemented, to be filed pursuant to Rule 424 under the Securities Act;

                          (iii)   notify the Holder promptly (1) when the
prospectus or any prospectus supplement or post-effective amendment relating to
such registration has been filed, and with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(2) of any comment letter or request by the Securities and Exchange Commission
(the "Commission") for any amendments or supplements to the registration
statement or the prospectus or for additional information; (3) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or the initiation of any proceedings for that purpose;
(4) if, at any time prior to the closing contemplated by an underwriting
agreement, if any, entered into in connection with such Registration Statement,
that the representations and warranties of the Company contained in such
agreement cease to be true and correct in any material respect; (5) of the
receipt by the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction, or the initiation
or threatening of any proceeding for such purpose; and (6) of the happening of
any event which makes any statement made in the Registration Statement, the
prospectus or any document incorporated therein by reference, untrue in any
material respect and which requires the making of any changes in the
Registration Statement, the prospectus or any document incorporated therein by
reference in order to make the statement therein not materially misleading;

                          (iv)    make commercially reasonable efforts to
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement;

                          (v)     if required, based on the advice of the
Company's counsel, prepare a supplement or post-effective amendment to the
Registration Statement, the related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter





                                       12
<PAGE>   13
delivered to the purchasers of the Shares, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;

                          (vi)    cause all Shares covered by the Registration
Statement to be listed on each securities exchange on which the Common Stock is
then listed if requested by the Holder or any managing underwriters;

                          (vii)   provide and cause to be maintained a transfer
agent and registrar for all Shares covered by such Registration Statement from
an after a date not later than the effective date of such registration
statement;

                          (viii)  use its best efforts to provide a CUSIP
number for the Shares, not later than the effective date of the registration
statement;

                          (ix)    make available for inspection, in connection
with the preparation of a Registration Statement pursuant to this Agreement, by
the Holder, and any attorney or accountant retained by the Holder, all
financial and other records and pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such representative,
attorney or accountant in connection with such registration; provided, however,
that any records, information or documents that are designated by the Company
in writing as confidential shall be kept confidential by such persons unless
disclosure of such records, information or documents is required by court or
administrative order;

                          (x)     if so required by the managing underwriter,
not sell, make any short sale of, loan, grant any option for the purpose of,
effect any public sale or distribution of or otherwise dispose of its equity
securities or securities convertible into or exchangeable or exercisable for
any of such securities during the ten (10) days prior to and the ninety (90)
days after any underwritten registration pursuant to this Section 7 has become
effective, except as part of such underwritten registration and except pursuant
to registrations on Form S-4 or S-8 or any successor or similar forms thereto,
except that the Company may make grants of options under its stock option plans
and may issue securities issuable upon the exercise or conversion of
outstanding convertible securities, stock options and other options, warrants
and rights of the Company; and
                          (xi)    otherwise use its best effort to comply with
all applicable rules and regulations of the Commission and make available to
its security holders as soon as reasonably practicable, an earnings statement
which satisfies the provision of Section 11(a) of the Securities Act.

                 (m)      The Company shall not be obligated to register any
Shares pursuant to this Section 7 at any time when the resale provisions of
Rule 144 promulgated under the Securities Act are available to the Holder
without limitation as to volume.





                                       13
<PAGE>   14
         8.      EXCHANGE PRIVILEGE AND TRANSFERABILITY.  Subject to the
provisions of the last paragraph of this Section, the Holder at its option may
surrender this Debenture for exchange at the principal office of the Company
and, without expense (except for any stamp tax or other governmental charge
with respect to any transfer involved therein), receive in exchange therefor
notes, in denominations designated by the Holder and payable to such person or
persons as may be designated by such Holder and for the same aggregate
principal amount as the then unpaid principal balance of this Debenture.  Every
instrument made and delivered in exchange for this Debenture shall in all other
respects be in the same form and have the same terms, on a pro rata basis, as
this Debenture.

         The Holder, by acceptance hereof, agrees that the rights represented
by this Debenture are not transferable, in whole or in part, whether by sale,
transfer, gift, or other hypothecation unless and until (a) a Registration
Statement relating to such sale, transfer, gift or hypothecation shall have
become effective under the Securities Act or (b) a legal opinion satisfactory
to the Company is furnished with respect to such sale, transfer, gift or other
hypothecation to the effect that  registration under the Securities Act is not
required with respect thereto.

         9.      BOARD OF DIRECTORS; INSPECTION.  The Holder shall be entitled
to send a representative (the "Holder Representative") to attend all meetings
of the Board of Directors of the Company, but such Holder Representative shall
not be considered an elected member of the Board of Directors of the Company.
The Company will ensure that meetings of the Board of Directors of the Company
are held at least once each calendar quarter and provide the Holder
Representative with written notice of all Board of Director meetings as such
notice is provided for in the Bylaws of the Company, as well as copies of all
materials provided to the directors.  The Company will reimburse the Holder
Representative for his reasonable travel expenses, including the cost of air
fare and any necessary meals and lodging, incurred in connection with attending
such meetings or performing such other business on behalf of the Company as may
be approved by the Company in advance.  The Company will notify the Holder in
writing five (5) business days prior to the effectiveness of any action to be
taken by written consent of directors or stockholders, and will provide
reasonable opportunity for consultation with the Holder with regard to the
matters covered thereby during such five-day period prior to the effectiveness
of such consents.

         The Company will, upon reasonable prior notice to the Company, permit
authorized representatives of the Holder to visit and inspect any of the
properties of the Company, including its books of account, and to discuss its
affairs, finances and accounts with its agents, officers and independent
accountants, all at such reasonable times and as often as may be reasonably
requested, in all cases so as not to interfere with the Company's operations or
personnel.

         Upon conversion of this Debenture and for so long as the Holder and
its affiliates hold Convertible Securities, Shares or other capital stock
representing ten percent (10%) of the common equity in the Company on a
fully-diluted basis, the Holder may designate one (1) representative (the
"Holder's Director") to be appointed as a member of the Board of Directors of
the Company.  The Holder's Director shall be entitled to reimbursement of all
reasonable travel expenses incurred in connection with his attendance at all
Board meetings and the Holder's Director shall be entitled to





                                       14
<PAGE>   15
receive the same board fees and other compensation, if any, paid to any outside
directors.  Upon the appointment of the Holder's Director, the Holder shall no
longer have the right to have a Holder Representative.

         10.     USE OF PROCEEDS. The Company shall use the proceeds obtained
from the sale of this Debenture solely for research and development expenses
and expenses incurred in the ordinary course of its business, except that up to
Two Hundred Fifty Thousand Dollars ($250,000) of such proceeds shall be used to
repay debt obligations of the Company to Wachovia under loan agreements to
which the Company is a party on the date of original issuance of this
Debenture.

         11.     ENTIRE AGREEMENT; AMENDMENT; WAIVER.  This Debenture, together
with any attached schedules, exhibits and other documents delivered pursuant
hereto, constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof.  This Debenture may
not be modified, amended, supplemented, canceled or discharged, except by
written instrument executed by the Company and the Holder.  No failure to
exercise, and no delay in exercising, any right, power or privilege under this
Debenture shall operate as a waiver, nor shall any single or partial exercise
of any right, power or privilege hereunder preclude the exercise of any other
right, power or privilege.  No waiver of any breach of any provision shall be
deemed to be a waiver of any preceding or succeeding breach of the same or any
other provision, nor shall any waiver be impled from any course of dealing
between the Company and the Holder.  No extension of time for performance of
any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts.

         12.      REPRESENTATIONS.  The Company represents and warrants to
Holder as follows:
                 (a)      The execution and delivery of this Debenture and the
performance by the Company of its obligations hereunder have been duly
authorized by all necessary corporate action on part of the Company in
accordance with its Bylaws and Articles of Incorporation.

                 (b)      This Debenture has been duly executed and delivered
by the Company and constitutes the legal, valid, binding and enforceable
obligation of the Company, enforceable in  accordance with its terms.

                 (c)      As of the date hereof, the Company has 12,000,000
shares of Common Stock authorized and no other shares of any class of capital
stock authorized.  As of September 30, 1999, the Company had 3,964,078 shares
of Common Stock issued and outstanding.  All of the issued and outstanding
shares of Common Stock of the Company (x) have been duly authorized and validly
issued and are fully paid and non-assessable, (y) were issued in compliance
with all applicable state and federal securities laws, and (z) were not issued
in violation of any preemptive rights or rights of first refusal.  No
preemptive rights or rights of first refusal exist with respect to the Common
Stock or any capital stock of the Company and no such rights arise by virtue of
or in connection with the transactions contemplated hereby.  There are no
outstanding or authorized rights, options, warrants, convertible securities,
subscription rights, conversion rights, exchange rights or other agreements or
commitments of any kind that could require the Company to issue or sell any
shares of its capital





                                       15
<PAGE>   16
stock (or securities convertible into or exchangeable for shares of its capital
stock), other than outstanding option grants for an aggregate of 540,416
shares.  There are no outstanding stock appreciation, phantom stock, profit
participation or other similar rights with respect to the Company or its
capital stock.  There are no proxies, voting rights or other agreements or
understandings with respect to the voting or transfer of the capital stock of
the Company.  The Company is not obligated to redeem or otherwise acquire any
of its outstanding shares of capital stock.

                 (d)      All of the Shares will, upon issuance, be duly
authorized, validly issued and outstanding, fully paid and non-assessable, and
free from all taxes, liens and charges with respect to the issuance thereof.

                 (e)      The Company has obtained all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
hereunder.

                 (f)      There are no state statutes or other "anti-takeover"
laws applicable to the Company, to the issuance of this Debenture by the
Company, or to the issuance of the Shares upon conversion of this Debenture,
which would have, among other things, the effect of nullifying the transactions
contemplated by this Debenture, or affecting the Holder's voting rights or
other rights as a shareholder following such conversion, or, to the extent
there are such applicable state statutes or other "anti-takeover" laws, the
Company and its Board of Directors have taken all steps necessary under such
statutes or laws to render them inapplicable to the Company, the issuance of
this Debenture, and the issuance of the Shares upon conversion of this
Debenture.

                 (g)      There is no material litigation pending, or, to the
knowledge of the Company, threatened, against the Company.

         13.     RIGHT OF REFUSAL.  The Holder shall have the right of first
offer and first refusal until April 30, 2000 to purchase any and all assets to
be sold by the Company outside the ordinary course of business, as set forth in
this Section 13.  If the Company desires to sell any assets outside the
ordinary course of business, the Company (i) shall first provide the Holder
with notice of the proposed sale and a description of the assets to be sold,
(ii) shall negotiate exclusively with the Holder for a period of not less than
five (5) business days, during which period it will provide the Holder with all
reasonably requested due diligence information, (iii) may after such five day
period negotiate with any other parties to sell the assets provided that the
Company shall not accept any offer from a third party that has a purchase price
that is less than the purchase price set forth in any offer made by the Holder
with respect to those assets, and (iv) shall provide Holder with at least two
business days notice prior to accepting any third party's offer for any assets
so that the Holder may make the purchase on the same price and terms as
proposed by the third party in lieu of such other party.  If Holder purchases
any assets from the Company, the Holder may elect to pay the purchase price
therefor either in cash or by an offset against any amounts outstanding under
this  Debenture.

         14.     MISCELLANEOUS.





                                       16
<PAGE>   17
                 (a)      Usury.   Nothing herein contained, nor any
transaction related hereto, shall be construed or so operate as to require the
Company to pay interest at a greater rate than is now lawful in such case to
contract for, or to make any payment, or to do any act contrary to law.  Should
any interest or other charges paid by the Company, or parties liable for the
payment of this Debenture, in connection with the loan evidenced by this
Debenture, or any document delivered in connection with said loan, result in
the computation or earning of interest in excess of the maximum legal rate of
interest which is legally permitted by law, then any and all such excess of the
maximum legal rate of interest which is legally permitted by law, then any and
all such excess shall be and the same is hereby waived by the Holder hereof,
and any and all such excess shall be automatically credited against and in
reduction of the balance due under this Debenture, and the portion of said
excess which exceeds the balance due under this Debenture shall be paid by the
Holder to the Company.

                 (b)      Ownership.   The Holder shall be deemed to be the
owner of this Debenture for all purposes, and the full payment of interest and
principal under this Debenture to the Holder shall constitute the full and
complete discharge of the Company for such purposes.

                 (c)      Severability.  The invalidity of any portion of this
Debenture shall not affect the enforceability of the remaining portions of this
Debenture or any part thereof, all of which are inserted herein conditionally
on their being valid in law. In the event that any portion or portions
contained herein shall be invalid, this Debenture shall be construed so as to
make such portion or portions valid or, if such construction is not legally
possible, as if such invalid portion or portions had not been inserted.

                 (d)      Binding Nature of Debenture.  Except as otherwise
herein provided, this Debenture shall be binding upon and inure to the benefit
of the parties hereto, their legal representatives, successors and assigns.

                 (e)      Notices.  All notices, requests, demands, claims, and
other communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), or guaranteed
overnight delivery, to the Company at the address at which its principal
business office is located from time to time, and the Holder at One Financial
Plaza, Suite 1101, Fort Lauderdale, FL 33394, or such other address specified
by Holder.

                 (f)      Attorneys' Fees.  Should it become necessary for any
party to institute legal action to enforce the terms and conditions of this
Debenture, the successful party will be awarded reasonable attorneys' fees, at
all trial and appellate levels, expenses and costs.

                 (g)       Headings.  The headings contained in this Debenture
are for convenience of reference only and are not to be given any legal effect
and shall not affect the meaning or interpretation of this Debenture.





                                       17
<PAGE>   18

                 IN WITNESS WHEREOF, the Company has signed and sealed this
Debenture due October 31, 2000 on this 1st day of November, 1999.


                             ITC LEARNING CORPORATION


                             By: /s/ CHRISTOPHER E. MACK
                                ---------------------------
                             Name: Christopher E. Mack
                             Title: President






                                       18
<PAGE>   19
                            ITC LEARNING CORPORATION

                                  AMENDMENT TO
                5.5% CONVERTIBLE SUBORDINATED SECURED DEBENTURE
                              DUE OCTOBER 31, 2000


         FOR VALUE RECEIVED, and in accordance with Section 11 of that certain
debenture dated November 1, 1999 (the "Debenture") made by ITC Learning
Corporation, a Maryland corporation (the "Company") and payable to New River
Capital Partners L.P. (the "Holder"), the Company hereby amends the Debenture
as follows:

         1.      The first paragraph of the preamble of the Debenture is
amended to change the "Maturity Date" from October 31, 2000 to April 2, 2001,
and to read in its entirety as follows:

         "ITC LEARNING CORPORATION, a Maryland corporation (the "Company"),
         promises to pay to New River Capital Partners, L.P. or its assigns
         (the "Holder"), the principal sum of One Million Dollars and No/100
         ($1,000,000), or so much thereof as is funded to the Company by the
         Holder pursuant to the terms of this debenture (this "Debenture"), on
         April 2, 2001 (the "Maturity Date"), together with accrued interest
         thereon."

         2.      Except as expressly set forth above, the Debenture shall
remain in full force and effect.

         The Company and Holder acknowledge and agree that the outstanding
principal balance, plus all accrued but unpaid interest, under the Debenture as
of the date hereof is $1,013,411.

         IN WITNESS WHEREOF, this Amendment to the Debenture was executed and
delivered as of March 27, 2000.

                       ITC LEARNING CORPORATION,
                            a Maryland corporation

                                By: /s/ CHRISTOPHER E. MACK
                                   --------------------------------
                                Name: Christopher E. Mack
                                     ------------------------------
                                Title: President
                                      -----------------------------


                       NEW RIVER CAPITAL PARTNERS, L.P.



                                By: /s/ THOMAS C. BYRNE
                                   --------------------------------
                                Name: Thomas C. Byrne
                                     ------------------------------
                                Title: President
                                      -----------------------------









                                       19