EXHIBIT 4.10

                             DATED: 5 NOVEMBER 2003

                               (1) FUTUREMEDIA PLC

                                       AND

                            (2) ROYAL MAIL GROUP PLC

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

                                    AGREEMENT

                                 IN RELATION TO

                            LEARNING FOR ALL SERVICES

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

                                  THOMAS EGGAR
                                   Solicitors

                                The Corn Exchange
                                  Baffins Lane
                                   Chichester
                              West Sussex PO19 1GE
                                Tel: 01243 786111
                                Fax: 01243 536787

                                   Re: COM/NJR

                               ww.thomaseggar.com
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                                    CONTENTS
CLAUSE                                                                      PAGE
NUMBER

1.  DEFINITIONS................................................................1

2.  THE SERVICES...............................................................6

3.  PACKAGES AND PRICING.......................................................6

4.  MASTER RENTAL AGREEMENT....................................................7

5.  TIMING.....................................................................8

6.  PROJECT MANAGEMENT SERVICES................................................9

7.  DELIVERY LIST AND PAYMENT PROCEDURES......................................11

8.  ROYAL MAIL'S RESPONSIBILITIES.............................................12

9.  THE CONTRACTOR'S RESPONSIBILITIES.........................................13

10. PERSONAL DATA.............................................................13

11. SUB-CONTRACTING...........................................................15

12. EXPIRY DATE...............................................................16

13. STEP-IN RIGHTS............................................................18

14. WARRANTIES................................................................20

15. CONTRACTOR PERSONNEL......................................................21

16. COMPLIANCE................................................................21

17. VARIATIONS................................................................21

18. SERVICES PERFORMED AT THE CONTRACTOR'S PREMISES...........................21

19. CONTRACTOR'S OBLIGATIONS..................................................22

20. ROYAL MAIL PROPERTY.......................................................22

21. CONTRACTOR PERSONNEL AT THE PREMISES......................................23

22. INTELLECTUAL PROPERTY RIGHTS..............................................24

23. CONFIDENTIALITY...........................................................25

24. INTELLECTUAL PROPERTY INDEMNITY...........................................26
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25. LIMITATION OF LIABILITY...................................................27

26. INSURANCE.................................................................28

27. FORCE MAJEURE.............................................................28

28. WAIVER....................................................................28

29. NO AGENCY.................................................................29

30. NOTICES...................................................................29

31. ROYAL MAIL TRADE MARKS....................................................30

32. ENTIRE AGREEMENT..........................................................30

33. RECOVERY OF SUMS DUE......................................................30

34. PUBLICITY.................................................................30

35. GOVERNING LAW DISPUTE RESOLUTION..........................................31

36. CORRUPTION AND BRIBERY....................................................32

37. LANGUAGE..................................................................32

38. RECORDS...................................................................32

39. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999..............................33

Schedule 1 .................................................................. 35

Schedule 2 .................................................................. 40

Schedule 3 .................................................................. 42
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THIS AGREEMENT is made the          day of          2003

BETWEEN

1.       FUTUREMEDIA  PLC  (registered in England under number  01616681)  whose
         registered office is at Nile House, Nile Street,  Brighton, East Sussex
         BN11HW (the "Contractor" or "Futuremedia"); and

2.       ROYAL MAIL GROUP PLC  (registered  in England  under  number  04138203)
         whose registered office is at 148 Old Street, London EC 1 V 9HQ ("Royal
         Mail").

WHEREAS:

(A)      The parties have agreed that the Contractor should provide Learning for
         All services to employees of Royal Mail on the terms of this Agreement.

(B)      The Contractor will take full operational, administrative and (save for
         payments under the Master Rental  Agreement)  financial  responsibility
         for running the Learning for All services.

IT IS AGREED as follows:

1.       DEFINITIONS

1.1      In this  Agreement the following  definitions  apply unless the context
         requires otherwise:

         "Acceptance Certificate"   means  a  certificate   to  confirm  that  a
                                    Package  has  been  properly  installed  and
                                    accepted  by  the  relevant  Employee,   and
                                    signed  by the  installer  and the  Employee
                                    with  all  the  boxes  ticked  in  the  form
                                    attached at Appendix A;

         "Business Day"             means any day of the week excluding Saturday
                                    or   Sunday,   save  where  such  day  is  a
                                    statutory,  public or bank holiday  observed
                                    in the country where  performance under this
                                    Agreement is to take place;


                                      -1-
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         "Confidential Information" means information that is clearly identified
                                    as confidential at the time of disclosure or
                                    is by its nature confidential;

         "Contractor's Premises"    means the premises of the Contractor or such
                                    other  premises at which the  Contractor may
                                    perform the Services;

         "Corporate Learning"       means  the  Contractor's   Solstra  learning
                                    Management System" management system and any
                                    subsequent     revisions,     upgrades    or
                                    replacements thereof;

         "Customer Satisfaction     means the  Employee  satisfaction  survey in
         Survey"                    the form  attached at Appendix I carried out
                                    by the Contractor;

         "Data"                     means personal data of Employees;

         "Delivery List"            means a schedule of confirmed  deliveries of
                                    Packages,  in the form  attached at Appendix
                                    B,  stating,  inter  alia,  the model and PC
                                    serial  number of each  Package and the name
                                    and employee  number of the Employee to whom
                                    it was delivered;

         "DP Legislation"           means (i) Data Protection Act 1998,  related
                                    statutory instruments,  regulations or codes
                                    of  practice;   and  (ii)  the  Privacy  and
                                    Electronic   Communications  (EC  Directive)
                                    Regulations  2003  as  amended  extended  or
                                    re-enacted from time to time;

         "Employee Request"         means  a  request  from  an  Employee  for a
                                    Package  under the  Programmeme  in the form
                                    attached at Appendix C;

         "Employees"                means employees in the UK of Royal Mail;


                                      -2-
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         "Expiry Date"              means the date of  expiry of this  Agreement
                                    being the date set out in Clause 12.1;

         "Finance Company"          means  Commonwealth  Bank of Australia of 85
                                    Queen  Victoria  Street,  London EC4V 4HA or
                                    such other  financial  institution  as Royal
                                    Mail shall select from time to time;

         "Installation Services"    means   the   services   provided   by   the
                                    Contractor  relating to the  installation of
                                    Packages,  further  details of which are set
                                    out in Part 3 of the Process Model;

         "IT System Policy"         means Royal Mail policy  governing access by
                                    a third party to its information  technology
                                    systems,  details  of  which  are set out in
                                    Appendix E;

         "Master Rental Agreement"  means  an   agreement  to  be  entered  into
                                    between Royal Mail and the Finance  Company,
                                    as amended,  supplemented  or replaced  from
                                    time to time;

         "Operations Team"          means   the  team  of  four   persons,   two
                                    appointed by the Contractor and two by Royal
                                    Mail,  comprising  the  Representatives  and
                                    assistants  who shall  perform the functions
                                    set out in Clause 6.3 and 6.4;

         "Packages"                 means the bundles of learning  products  and
                                    services,  computers  and related  equipment
                                    and internet access at home, initial details
                                    include those set out in Schedule 1;

         "Personnel"                means  the   personnel   designated  by  the
                                    Contractor to perform the Services;

         "Premises"                 means any premises of Royal Mail;


                                      -3-
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         "Process Model"            means the Process Model for the  Programmeme
                                    forming   part  of  and   appended  to  this
                                    Agreement  at Appendix D and  initialled  by
                                    the    parties    for   the    purpose    of
                                    identification;

         "Processing Services"      means   the   services   relating   to   the
                                    processing  of  Employee  Requests,  further
                                    details  of  which  are set out in Part 2 of
                                    the Process Model;

         "Programmeme"              means the Learning for All Programmeme to be
                                    offered to Employees operated and managed by
                                    the  Contractor  in  accordance   with  this
                                    Agreement;

         "Project Management        means   the   services   provided   by   the
         Services"                  Contractor  in relation  to the  management,
                                    administration  and  implementation  of  the
                                    Programmeme,  further  details  of which are
                                    set out in Clause 6;

         "Promotion Services"       means the services relating to the promotion
                                    only  of  the   Programmeme   to  Employees,
                                    further details of which are set out in Part
                                    1 of the Process Model;

         "Representative"           means the key  contact  person or persons of
                                    each  party  who  shall  be  members  of the
                                    Operations Team as set out in Clause 6.2;

         "Royal Mail Property"      means any  property  or  equipment  owned by
                                    Royal  Mail,   its   employees,   agents  or
                                    customers or which Royal Mail is entitled to
                                    possess or use for any purpose;

         "Royal Mail Trade Marks"   means the Royal Mail trade  marks set out in
                                    the  Schedule  to the  Royal  Mail  Branding
                                    Licence Agreement set out in Appendix G;


                                      -4-
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         "Salary Sacrifice          means an agreement between Royal Mail and an
         Agreement"                 Employee in the form attached at Appendix F;

         "Services"                 means all and any  services,  as  defined in
                                    Clause 2.1, to be provided by the Contractor
                                    pursuant to this Agreement;

         "Service Levels"           means  the  levels at which  those  specific
                                    services (and their  corresponding  specific
                                    remedies for any breach) set out at Schedule
                                    2 are to be performed;

         "Software"                 means all computer software and such related
                                    tools   and   technical   user   and   other
                                    documentation necessary for the provision of
                                    the Services; and

         "Support Services"         means   the   services   provided   by   the
                                    Contractor  relating  to the  support of the
                                    Packages,  further  details of which are set
                                    out in Part 4 of the Process Model.

1.2      In this Agreement (except where the context otherwise requires):

         1.2.1    any  reference  to a Clause,  Schedule  or  Appendix is to the
                  relevant clause of or schedule or appendix to this Agreement;

         1.2.2    the clause  headings  are included  for  convenience  only and
                  shall not affect the interpretation of this Agreement;

         1.2.3    use of the singular includes the plural and vice versa;

         1.2.4    use of any gender includes the other genders;


                                      -5-
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         1.2.5    any reference to a statute, statutory provision or subordinate
                  legislation  ("legislation")  shall  (except where the context
                  otherwise requires) be construed as referring to:

                  (a)      such legislation as amended and in force from time to
                           time and to any  legislation  which  (either  with or
                           without  modification)   reenacts,   consolidates  or
                           enacts in rewritten form any such legislation; and

                  (b)      any   former    legislation   which   it   re-enacts,
                           consolidates or enacts in rewritten form; and

         1.2.6    any phrase introduced by the terms "including", "include", "in
                  particular"  or any similar  expression  shall be construed as
                  illustrative  and  shall  not  limit  the  sense of the  words
                  preceding those terms.

2.       THE SERVICES

2.1      The Services shall consist of

         2.1.1    the Promotion Services;

         2.1.2    the Processing Services;

         2.1.3    the Installation Services;

         2.1.4    the Support Services;

         2.1.5    the Project Management Services; and

         2.1.6    the procurement of the Packages.

2.2      The  Contractor  shall  provide  the  Services in  accordance  with the
         provisions of this Agreement and shall meet the Service Levels.

2.3      The Contractor shall be fully  responsible for the  administration  and
         operation of this  Programmeme and will provide  guidance to Royal Mail
         in the  performance  of Royal Mail's tasks and  obligations  under this
         Agreement.

2.4      The Contractor  shall advise Royal Mail where necessary with any inputs
         or services  required from it under the provisions of the Process Model
         in accordance with those  provisions and Royal Mail will use reasonable
         endeavours to perform such inputs or services.

3.       PACKAGES AND PRICING

3.1      The minimum specification of the contents of Packages,  and the options
         offered to Employees under the Programmeme, and the payments to be made
         by Employees shall be as set out in Schedule 1.


                                      -6-
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3.2      The initial prices payable by the Finance  Company to the Contractor in
         respect of each  Package  shall not exceed the sums set out in Schedule
         1.

3.3      The  Contractor  shall  acquire the  hardware  components  comprised in
         Packages from the suppliers named in Schedule 1 or such other suppliers
         as the Operations  Team may approve.  The Contractor  shall ensure that
         manufacturer's  warranties  for a period  of not less  than 3 years are
         provided with the hardware components of Packages other than printers.

         The  warranties in respect of desktops shall include repair on site and
         those in respect of laptops shall include  collection and return to the
         supplier.

3.4      The Contractor may from time to time update the Packages,  subject,  in
         the case of any material  change,  to the prior written  consent of the
         Operations Team. The Contractor shall give the Operations Team not less
         than 30 days' prior written notice of any proposed material change, or,
         if less than 30 days' notice is given to the  Contractor by a supplier,
         such notice as is reasonably practicable in the circumstances.

4.       MASTER RENTAL AGREEMENT

4.1      This Agreement shall be subject to and conditional  upon the signing of
         a binding  Master Rental  Agreement  between Royal Mail and the Finance
         Company ("Condition").

4.2      If the  Condition  shall not have been  fulfilled by 12 November  2003,
         this  Agreement  shall  automatically  cease and  terminate and neither
         party shall have any claim of any nature  whatsoever  against the other
         party.

4.3      Royal Mail shall use  reasonable  endeavours  to sign the Master Rental
         Agreement  in a form  acceptable  to Royal Mail by the dates set out in
         clause 4.2.

4.4      It is agreed that, under the terms of the Master Rental Agreement:

         4.4.1    the Contractor shall sell to the Finance Company such Packages
                  as are the subject of Employee Requests in accordance with the
                  procedures contained in the Processing Services;


                                      -7-
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         4.4.2    the  Contractor  shall  invoice  the  Finance  Company and the
                  Finance  Company  shall pay the  Contractor  for  Packages  in
                  accordance with the procedures  contained in the  Installation
                  Services; and

         4.4.3    the salaries of Employees who  participate in the  Programmeme
                  shall  be  reduced  in   accordance   with  Salary   Sacrifice
                  Agreements under a salary sacrifice scheme to be circulated by
                  the Contractor and implemented by Royal Mail.

4.5      Royal Mail shall  confirm  in writing to the  Contractor  that a Master
         Rental  Agreement  is in  force  for  each  relevant  promotion  period
         established in accordance with Clause 5.3 and the rate for the relevant
         promotion period.

5.       TIMING

5.1      Subject to clauses 4.1, 4.2 and 4.3, the  provisions of this  Agreement
         shall become effective upon signature.

5.2      Participation  in the Programmeme  shall be offered to Employees for an
         initial period commencing on 6 November 2003and ending on 23rd December
         2003.

5.3      The Programmeme  shall,  unless the parties otherwise agree in writing,
         subsequently  be offered to Employees for periods of 2 calendar  months
         in  March/April  and  October/November  in each year during the term of
         this Agreement.

5.4      The parties agree that Employees  shall only be entitled to participate
         in the  Programmeme if they have completed at least 12 calendar  months
         in employment with Royal Mail by the date of commencement of each offer
         period specified in clauses 5.2 and 5.3.

5.5      The Contractor  shall not be obliged to provide the Promotion  Services
         outside the promotion  periods  established  in accordance  with Clause
         5.3,  except to the extent that such services are reasonably  necessary
         for the proper  provision of the Promotion  Services during the periods
         set out above.

5.6      The  Contractor  shall  provide the Project  Management  Services,  the
         Promotion Services,  the Processing Services, the Installation Services
         and the Support  Services  and procure  the  Packages  until the Expiry
         Date,  and,  in  the  case  of  the  Support  Services,  thereafter  in
         accordance with Clause 12.9.


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6.       PROJECT MANAGEMENT SERVICES

6.1      The  Contractor   shall  be  responsible  for  the  management  of  the
         Programmeme.

6.2      Each  party has  appointed  or shall  appoint  two  Representatives  as
         members of the Operations  Team. One nominated  Representative  of each
         party  will  be the  primary  contact  for  the  other  party  and  all
         communications,  documentation and materials  relating to the Agreement
         and   sent  by  the   parties   shall   be  sent  to  the   appropriate
         Representative. Each Representative is entitled to appoint an assistant
         who may attend at meetings  of the  Operations  Team.  Each party shall
         notify the other in writing  promptly in the event of any change in its
         Representative or Representative's assistant.

6.3      The Contractor shall convene regular meetings of the Operations Team to
         review the performance of the Programmeme. Unless agreed otherwise, the
         performance  review meetings shall take place quarterly.  These reviews
         will  take  into  account,   inter  alia,   the   following:   employee
         satisfaction/complaints,   service  levels,  documentation,  management
         information,  after  sales  service and  administrative  support by the
         Contractor,  suitability  of Packages,  number of Packages  supplied to
         Employees  and  progress  of  the   Programmeme   and  results  of  any
         audit/inspection on the Services carried out by Royal Mail.

6.4      The Operations  Team shall be  responsible  for reviewing and approving
         any proposed changes to any of the following:

         6.4.1    the content, quality, or minimum specification of Packages and
                  the price to be charged to the Finance Company and payments to
                  be made by the Employee; and

         6.4.2    the  identity  of  any  suppliers  of  any  material  hardware
                  components of Packages.

         Any decision of the Operations  Team in relation to the matters set out
         in this  Clause  6.4 shall  require  the  consent of Royal  Mail,  such
         consent not to be unreasonably withheld or delayed.


                                      -9-
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6.5      The Contractor shall:

         6.5.1    provide  Royal  Mail,  at no  charge,  access to  information,
                  documents,  systems and equipment  used in or for the Packages
                  in  order  for  Royal  Mail to  carry  out  such  study  as it
                  reasonably  thinks desirable to measure and compare any of the
                  costs of the Packages against similar computer  components and
                  equipment   available  in  the  market  from  other   computer
                  components and equipment  providers  (provided that nothing in
                  this clause  shall  require  the  Contractor  to disclose  any
                  information  which would endanger the protection of any of the
                  Contractor's  intellectual  property or which is  commercially
                  confidential); and

         6.5.2    notify Royal Mail if the  Contractor or any of its  affiliates
                  becomes aware that computer  components and equipment  similar
                  to the Packages  are provided by any person to another  person
                  under terms which are materially more favourable or beneficial
                  (taken as a whole) than those given to  Employees  (taken as a
                  whole),  provided  that,  for the  purpose of this  Clause 6.5
                  "materially  more  favourable  or  beneficial"  shall mean, in
                  relation  to any  costs,  that such  costs are in excess of at
                  least ten (10) per cent  compared to the costs  applicable  to
                  the Packages.

6.6      Upon Royal Mail becoming  aware that computer  components and equipment
         similar  to  the  Packages  are  being  provided  on  materially   more
         favourable or  beneficial  terms,  Royal Mail shall have the right,  by
         notifying  the  Contractor,  to  require  the  Contractor  to take  the
         necessary  measure to provide  the  Packages  on terms  similar to such
         better terms.

6.7      The  Contractor  shall at no charge  provide  Royal Mail access to such
         information as may be required for audit and inspection  purposes under
         this Agreement.

6.8      For the purpose of this Clause 6 the  Representatives,  assistants  and
         address of each party shall, until amended by notice in writing, be:

         for Royal Mail:                       for the Contractor:

         Jackie Lawlor (Primary Contact)       Stuart Pembery (Primary contact)
         (assisted by such person as is        (no assistant)
         notified to the parties from
         time to time)

         Jim Reed                              David Bailey
         (assisted by Adrian Brear)            (no assistant)

         Address: Coton House, Management      Address: Nile House, Nile Street
                  Centre, Rugby, Warwickshire           Brighton, East Sussex
                  CV23 0AA                              BN1 1HW


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7.       DELIVERY LIST AND PAYMENT PROCEDURES

7.1      For the avoidance of doubt,  the  procedures  relating to the issue and
         acceptance  of  Delivery   Lists  and  invoicing  and  payment  by  the
         Contractor are set out in this Clause 7.

7.2      The Contractor shall issue to Royal Mail a weekly Delivery List, and an
         Acceptance  Certificate  to confirm that each  Package  itemised in the
         Delivery List has been accepted by the relevant Employee.

7.3      As soon as  practicable  (and in any event  within 5  Business  Days of
         receipt) Royal Mail will:

         7.3.1    confirm in writing  their  receipt  and  confirmation  of each
                  Delivery List and associated  Acceptance  Certificates  to the
                  Contractor and to the Finance Company; or

         7.3.2    request the  Contractor  to issue a revised  Delivery List and
                  Acceptance  Certificate  with any  queried  items  removed  or
                  corrected or properly completed.

         Royal Mail shall query items only if it believes details of those items
         are  inconsistent  with  Packages  listed  at  Schedule  I and  validly
         accepted by Employees  or if any  Acceptance  Certificate  has not been
         properly  completed  or  unsigned.  The  deadline  for  approval of any
         re-issued Delivery List or Acceptance Certificate shall remain the same
         as the deadline for the original document.

7.4      After  confirmation by Royal Mail in accordance with Clause 7.3.1,  the
         Contractor  shall  issue to the Finance  Company a weekly  consolidated
         invoice  of all  amounts  due to the  Contractor  in  respect  of items
         contained in each Delivery List confirmed in writing by Royal Mail. The
         Contractor  and the  Finance  Company  shall  enter  into an  agreement
         regarding  terms of payment by the Finance  Company to the  Contractor.
         Royal Mail shall be responsible  for payments to the Finance Company in
         accordance with the terms of the Master Rental Agreement.


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8.       ROYAL MAIL'S RESPONSIBILITIES

8.1      Royal Mail's responsibilities under this Agreement are as follows:

         8.1.1    Royal Mail shall provide the Contractor  reasonable  access to
                  Employees to enable the  Contractor  to perform the  Promotion
                  Services in accordance  with Clause 5 and the  provisions  set
                  out in Part 1 of the Process Model;

         8.1.2    Royal  Mail  shall  review   Delivery   Lists  and  Acceptance
                  Certificates in accordance with the provisions of Clause 7;

         8.1.3    Royal Mail shall appoint  Representatives  in accordance  with
                  Clause 6; and

         8.1.4    procure  that a Master  Rental  Agreement is in force not less
                  than 14 days before the  commencement of the promotion  period
                  as  contemplated  by Clause 4.5 or, if later, by the date when
                  the Packages in respect of that promotion period are agreed.

8.2      For the  purpose of Clause  8.1.1,  Royal  Mail  shall,  where  lawful,
         possible  and  with  the  agreement  of the  local  or  other  relevant
         managers,  give the Contractor  access to Royal Mail's  premises and/or
         allow  the  Contractor  to invite  Employees  to  suitable  alternative
         locations,  having regard to local industrial relations issues, for the
         purpose of carrying out  roadshows,  and shall allow the  Contractor to
         invite  Employees  via poster sites and team  briefings to roadshows at
         locations appropriate to their places of work.

8.3      Royal Mail shall not  promote,  or procure or permit any third party to
         promote,  any scheme  competing  with the  Programmeme  in any material
         respect to its employees during the period to the Expiry Date.

8.4      Royal Mail  shall send  introductory  e-mails  to the  managers  at the
         premises chosen for the roadshows.


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8.5      The  Contractor  shall attend and carry out the  roadshows  arranged in
         accordance with clause 8.2.

8.6      The Contractor  acknowledges  that Royal Mail has no obligations  under
         this  Agreement  other than the  obligations  set out in Clauses 8.1 to
         8.4.

9.       THE CONTRACTOR'S RESPONSIBILITIES

9.1      The  Contractor  shall  perform  the  Services in  accordance  with the
         Service Levels and the provisions of this Agreement.  In the event that
         the Contractor  fails to meet any Service Levels,  the Contractor shall
         forthwith  notify Royal Mail in writing,  and the provisions set out in
         Schedule 2 shall apply.

9.2      The Contractor expressly  acknowledges that Royal Mail has not made any
         representation  or  warranty  as to the  number  of  Employees  who may
         participate  in the  Programmeme  or any  level of  turnover  which may
         result from the Programmeme.

9.3      The  Contractor  shall  use  all  reasonable  endeavours  to  implement
         measures agreed between the parties to seek to ensure that Employees do
         not  contact  Royal  Mail or any  associated  company  for  any  reason
         relating to the Programmeme or the Services. The initial measures to be
         implemented are set out in Appendix H.

9.4      The Contractor shall use all reasonable endeavours that all obligations
         of and warranties  from any supplier of any element of the Packages are
         directly enforceable by Royal Mail and by the relevant Employee.

9.5      The  Contractor  shall  ensure  that the  software  installed  with any
         Package  shall be supplied  with  licences  for use by the Employee and
         Employee's household.

9.6      In the event the Customer  Satisfaction  Surveys indicate to Royal Mail
         dissatisfaction  by 20 or more  Employees for any  promotion  period as
         defined in clauses 5.2 and 5.3 in respect of any  particular  matter in
         the  Customer  Satisfaction  Survey then the  Contractor  shall use all
         reasonable   endeavours  to  remedy  or  improve  such  matter  to  the
         satisfaction of Royal Mail.


                                      -13-
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10.      PERSONAL DATA

10.1     The Contractor hereby undertakes and warrants:

         10.1.1   to use Data only for the purpose of providing the Services and
                  in accordance with  instructions  given to the Contractor from
                  time to time by Royal Mail;

         10.1.2   not to use the Data for the  benefit of the  Contractor  or of
                  any third  party  other than  pursuant  to a further  separate
                  written agreement with Royal Mail;

         10.1.3   not to copy,  reproduce  or reduce to writing  any part of the
                  Data except as may be  reasonably  necessary for the provision
                  of the Services.  Any such copies  reproductions or reductions
                  to writing shall be the property of Royal Mail.

10.2     The  Contractor  warrants  that  it  will  at  all  times  observe  its
         obligations  as  set  out in the DP  Legislation.  In  particular,  the
         Contractor undertakes to:

         10.2.1   apply to the Data no lesser  security  measures  and degree of
                  care  than  those  which  Royal  Mail  applies  to the Data as
                  notified in writing by Royal Mail to the Contractor  from time
                  to time;

         10.2.2   take appropriate technical and organisational measures against
                  unauthorised  or  unlawful  processing  of  Data  and  against
                  accidental loss or destruction of, or damage to, Data;

         10.2.3   not  transfer  the Data or any part of it outside the European
                  Economic Area without the prior  written  consent of the Royal
                  Mail.

10.3     The   Contractor   shall  permit  Royal  Mail  and/or  its   authorised
         representatives  to have access to its  premises and to the Data in its
         possession or control,  at reasonable  times and on reasonable  notice,
         for the  purposes of verifying  the  Contractor's  compliance  with its
         obligations under this Agreement.

10.4     The  Contractor  warrants  shall  provide  any  reasonable   assistance
         necessary to Royal Mail to enable the Royal Mail to:

         10.4.1   respond to enquiries from or  information/enforcement  notices
                  served by the Information Commissioner's Office;

         10.4.2   respond to complaints from data subjects; and

         10.4.3   investigate   any   breach  or   alleged   breach  of  the  DP
                  Legislation.


                                      -14-
<PAGE>

10.5     The  Contractor  hereby  indemnifies  Royal  Mail and holds  Royal Mail
         harmless in respect of any loss, damage,  costs or expenses incurred by
         Royal  Mail as a result  of any  breach  of the DP  Legislation  by the
         Contractor.

10.6     Within  one  month  of  completion  of the  Services  or  receipt  of a
         reasonable written request from Royal Mail, the Contractor shall return
         to Royal Mail or destroy (as the  parties  shall agree at the time) all
         documents and materials  (and all copies  thereof)  containing the Data
         and  certify in writing  to Royal  Mail that it has  complied  with the
         requirements  of this clause.  Notwithstanding  the  completion  of the
         Services or the return of the Data, the Contractor shall continue to be
         bound by the undertakings set out in this Clause 10.

10.7     Royal Mail reserves all rights in the Data. Other than as expressly set
         out in this  Agreement no right or licence is granted to the Contractor
         and none shall be implied from this Agreement.

10.8     The Contractor  hereby  warrants that it holds a valid  notification as
         required  under  the DP  Legislation  and  that  this  notification  is
         relevant for the purpose of the Services.

11.      SUB-CONTRACTING

11.1     Futuremedia may not  sub-contract  the provision of any of the Services
         without the prior written consent of Royal Mail, such consent not to be
         unreasonably withheld or delayed. Any request for consent shall be made
         to Royal Mail's nominated Representative.

11.2     For the purpose of Clause 11.1, Royal Mail hereby consents:

         11.2.1   to the  sub-contracting of the provision of the telephone help
                  line forming part of the Services; and

         11.2.2   to the  sub-contracting  of the Installation  Services,in each
                  case in accordance with the provisions of the Process Model.

11.3     Notwithstanding  any  sub-contracting  of  any  of  the  Services,  the
         Contractor shall remain responsible for the provision of those Services
         and any act or omission of its sub-contractors.


                                      -15-
<PAGE>

12.      EXPIRY DATE

12.1     The Expiry Date in respect of the Services  shall be 36 months from the
         date of this Agreement,  unless  terminated  earlier in accordance with
         the provisions set out below.

12.2     Either party may terminate this Agreement  immediately by giving notice
         in writing to the other party if the other party is in material  breach
         of any of its  obligations  under the Agreement and fails to remedy the
         breach (if capable of remedy) within thirty days of a written notice so
         to do.

12.3     Either party may terminate this Agreement  immediately by giving notice
         in writing to the other party if

         12.3.1   the other  party has a  receiver  or  administrative  receiver
                  appointed  over the  whole or any part of its  undertaking  or
                  assets;

         12.3.2   the other party passes a resolution  for winding up other than
                  for  the  purpose  of  bona  fide  solvent   amalgamation   or
                  reconstruction;

         12.3.3   an order is made for the  appointment of an  administrator  to
                  manage the  affairs,  business and property of the other party
                  or documents are filed with a court of competent  jurisdiction
                  for the appointment of an  administrator of the other party or
                  notice of  intention to appoint an  administrator  is given by
                  the other party or its  directors  or by a qualified  floating
                  charge  holder (as defined in  paragraph 14 of Schedule B 1 to
                  the Insolvency Act 1986);

         12.3.4   the other party enters into any voluntary arrangement with its
                  creditors;

         12.3.5   the  other  party  ceases  or  threatens  to cease to carry on
                  business; or

         12.3.6   the other party is unable to pay its debts as they fall due.

12.4     Royal Mail may terminate this Agreement immediately by giving notice in
         writing to the Contractor if

         12.4.1   the reputation of Royal Mail is damaged as a result of any act
                  or  omission  of the  Contractor  other  than  in  the  proper
                  performance of its obligations under this Agreement;

         12.4.2   not  less  than  10%  of  the  issued  share  capital  of  the
                  Contractor  is  acquired  by a person  or  persons  acting  in
                  concert (as defined in The City Code on Takeovers and Mergers)
                  who are,. in Royal Mail's reasonable  opinion,  competitors of
                  Royal  Mail in any of its core  businesses  of  mail,  postal,
                  parcel and courier services involving the delivery of physical
                  items;


                                      -16-
<PAGE>

         12.4.3   in the event that breaches of the Service Levels in any period
                  reach the termination threshold specified in Schedule 2;

         12.4.4   the tax  treatment  of the  Programmeme  is  changed  in a way
                  materially less advantageous to Royal Mail or Employees; or

         12.4.5   if Royal Mail exercises its rights under Clause 13.

12.5     Any  termination  of this  Agreement  will not  prejudice the rights or
         remedies of either party,  whether  under this  Agreement or otherwise,
         and will not affect any accrued  rights or  liabilities of either party
         at the date of termination.

12.6     Any termination of this Agreement however caused,  shall not affect the
         coming into force or the  continuance in force of any provision of this
         Agreement which is expressly or by implication intended to come into or
         continue in force on or after such termination.

12.7     Upon  termination  of this  Agreement,  both  parties  shall  forthwith
         destroy or (at either party's  option) return all copies and records of
         Confidential Information (including,  without limitation, all ideas and
         inventions) disclosed by the other party.

12.8     TUPE

         12.8.1   Request for Information.

         The Contractor will provide Royal Mail with such  information as it may
         reasonably request about the Contractor's employees engaged on the work
         covered by this Agreement including their length of service, age, terms
         and conditions of employment, any claims they may have made against the
         Contractor and any liabilities of whatsoever  nature the Contractor may
         have towards them.

         Confidentiality Undertaking.

         Royal  Mail  will take all  necessary  precautions  to ensure  that the
         information  referred to above is given only to service  providers  who
         have  qualified  to tender for the future  provision  of the  services.
         Royal Mail will  require that such  service  providers  shall treat the
         information in confidence; that they shall not communicate it except to
         such  persons  within their  organization  and to such extent as may be
         necessary  for the purpose of preparing a response to an  invitation to
         tender  issued by Royal  Mail;  and that they  shall not use it for any
         other purpose.


                                      -17-
<PAGE>

         12.8.2   The Contractor will not:

         (a)      at any time during the contract  period,  or any  extension of
                  the original contract period, move into the undertaking or the
                  relevant part of the undertaking  which provides the Services,
                  any persons in its employment who do not meet the standards of
                  skill and  experience  or who are in  excess of the  number of
                  persons required to perform this Agreement; or

         (b)      during the period of notice,  make any  substantial  change in
                  the terms and conditions of employment of persons  employed to
                  perform  this  Agreement  which  is   inconsistent   with  the
                  Contractor's established employment and remuneration policies.

         12.8.3   Indemnity.

                  Royal Mail will not be responsible for any redundancy payments
                  for the duration of this Agreement  and/or that the Contractor
                  may incur as a result of termination of the Agreement.

                  Should   there  be  held  to  be  a  transfer  to  which  TUPE
                  legislation  applies,   Royal  Mail  will  not  indemnify  the
                  Contractor   against  any  claims  arising  from   transferred
                  employees.

12.9     Notwithstanding  the  termination  or  expiry  of this  Agreement,  the
         Contractor  shall  continue  to  provide  the  Support  Service to each
         Employee  who has  received a Package  until the expiry of 3 years from
         the date of the Acceptance Certificate of that Package.


                                      -18-
<PAGE>

13.      STEP-IN RIGHTS

13.1     If the  Contractor  is  unable  to  meet  its  obligations  under  this
         Agreement,  or the  provisions  of Clause  12.3 apply in respect of the
         Contractor then it shall notify Royal Mail forthwith. Upon notification
         by  the  Contractor,  or if  the  Contractor  is  unable  to  meet  its
         obligations  or the  provisions of Clause 12.3 (as the case may be) but
         the Contractor fails to give such notification, Royal Mail shall:

         13.1.1   have the right to perform all or part of the relevant Services
                  in  place of the  Contractor  or to  secure  the  services  of
                  another  supplier,  by notice to the Contractor  (the "Step-in
                  Rights"); and/or

         13.1.2   require the  Contractor  to use all  reasonable  endeavours to
                  find,  by a date set by Royal Mail at its own  discretion,  an
                  alternative  supplier to perform  all or part of the  relevant
                  Services  in  place  of  the  Contractor   (the   "Alternative
                  Supplier").

13.2     In the event that Royal Mail  exercises its Step-In Right in respect of
         any Services in accordance with Clause 13.1.1:

         13.2.1   Royal Mail shall not be obliged to accept any further Delivery
                  Lists (except in respect of those Packages properly  installed
                  and accepted prior to the time of exercise); and

         13.2.2   the Contractor shall be liable for and shall pay to Royal Mail
                  all costs,  charges  and  expenses  incurred  by Royal Mail in
                  performing such Services.

13.3     In the event that Royal Mail  requires  the Services to be performed by
         an Alternative Supplier in accordance with Clause 13.1.2:

         13.3.1   the Alternative  Supplier and arrangements will be notified to
                  Royal Mail for approval;

         13.3.2   the   Contractor   shall  procure  that   performance  by  the
                  Alternative   Supplier   shall  in  all   respects   meet  the
                  requirements of this Agreement; and

         13.3.3   the Contractor shall be responsible for paying the Alternative
                  Supplier  any such sums  payable  to the  Contractor  from the
                  Finance  Company  (including any  difference  between any such
                  amount  payable to the  Contractor  and any amount  payable by
                  Royal  Mail  to  the  Alternative  Supplier)  so far as it may
                  lawfully do so.

13.4     The  arrangements  set out in this  Clause 13 shall not  prejudice  any
         other  right or remedy of Royal Mail in respect of any  breaches by the
         Contractor of its obligations under this Agreement.


                                      -19-
<PAGE>

13.5     The Contractor shall use all reasonable  endeavours to procure that all
         contracts and  sub-contracts  entered into by it for the purpose of the
         provision of the Services  contain such  provisions  as are  reasonably
         necessary  to permit Royal Mail to exercise  the rights  granted  under
         Clause 13.

13.6     If Royal Mail  exercises  its rights  under  Clause 13, the  Contractor
         shall provide Royal Mail with such  information  and such access to its
         books and records and its employees,  and do all such other things,  as
         may  reasonably be required to enable Royal Mail to continue to provide
         the Programmeme.

14.      WARRANTIES

14.1     With regard to the provision of the Services,  the Contractor  warrants
         that in performing the Services the  Contractor  shall use (and procure
         that the Personnel use) and exercise all  reasonable  skill and care in
         accordance  with  good  industry  practice  in the  performance  of its
         obligations under this Agreement.

14.2     The Contractor warrants that the Packages shall be free from defects in
         materials and workmanship as far as reasonably possible.

14.3     The Contractor shall, without prejudice to Royal Mail's other remedies,
         forthwith  remedy any breach of the  warranties  set out in this Clause
         and Clause 10 at its own expense and to the reasonable  satisfaction of
         Royal Mail. The Contractor shall repair, replace or otherwise provide a
         fully functioning alternative whilst any breach is being remedied, such
         alternative to be approved in advance by Royal Mail.

14.4     The Contractor  warrants that it has the rights to grant the rights set
         out in this Agreement.

14.5     Except  as  expressly  stated in this  Agreement,  all  warranties  and
         conditions,  whether  express  or  implied  by  statute,  common law or
         otherwise  (including  but not  limited  to  fitness  for  purpose  and
         suitability) are hereby excluded to the extent permitted by law.


                                      -20-
<PAGE>

15.      CONTRACTOR PERSONNEL

15.1     The Contractor shall:

         15.1.1   make reasonable efforts to maintain  continuity in relation to
                  the Personnel; and

         15.1.2   ensure that all of the Personnel have all the requisite skill,
                  experience,  qualifications and knowledge necessary to perform
                  the tasks  assigned  to them and in doing so adopt  reasonable
                  and proper standards of behaviour,  and in the event of breach
                  of this sub-clause the Contractor  shall, upon written request
                  of Royal Mail,  rectify the breach by promptly  replacing  the
                  Personnel concerned.

16.      COMPLIANCE

16.1     The  Contractor  and all  Personnel  shall  at all  times  perform  the
         Services in  compliance  with all  statutory  requirements  for health,
         safety,  welfare and environmental  protection and shall conform to all
         relevant laws including  statutes,  regulations and by-laws of local or
         other authorities.

17.      VARIATIONS

17.1     All  variations  to the Services  and/or any changes to this  Agreement
         shall be mutually  agreed in writing and signed by the parties prior to
         implementation.

18.      SERVICES PERFORMED AT THE CONTRACTOR'S PREMISES

18.1     Subject to not less than 2 Business Days' prior written  notice,  where
         the  Services  or part  thereof  are  carried  out at the  Contractor's
         Premises or any other relevant  premises,  the Contractor  shall ensure
         that Royal Mail or any person  authorised  by it shall be  entitled  to
         full and free access to the Contractor's Premises or any other relevant
         premises  during  normal  business  hours to carry out any  inspection,
         examination  or testing or other  quality  assurance  as is  reasonably
         deemed  necessary.  Such  inspection,  examination or testing shall not
         release the Contractor from any obligation under this Agreement.


                                      -21-
<PAGE>

19.      CONTRACTOR'S OBLIGATIONS

19.1     The  Contractor  shall  take all  reasonable  steps to  ensure  that in
         carrying out the Services no computer viruses, worms, software bombs or
         similar items are  introduced  into any Royal Mail  Property,  computer
         systems or networks operated by Royal Mail.

19.2     The  Contractor  shall  only  obtain  access  to  any of  Royal  Mail's
         information  systems if  expressly  authorised  in writing to do so and
         shall at all times comply with the IT System Policy.

20.      ROYAL MAIL PROPERTY

20.1     All Royal Mail Property shall at all times remain the property of Royal
         Mail  and the  Contractor  shall  have  no  rights  in and to the  said
         equipment  other than as bailee in relation to any Royal Mail  Property
         held at the Contractor's Premises.

20.2     The Contractor undertakes that it shall:

         20.2.1   not use Royal Mail  Property  other than for the  provision of
                  the Services;

         20.2.2   promptly  give  notice to Royal Mail of the  happening  of any
                  material loss or damage to Royal Mail Property;

         20.2.3   co-operate  with Royal Mail so as to afford  Royal Mail or its
                  authorised   representatives  access  to  inspect  Royal  Mail
                  Property;

         20.2.4   at all times keep Royal Mail  Property in its sole  possession
                  at the Contractor's  Premises and not sell, assign,  mortgage,
                  charge,  let or hire that Royal Mail Property nor, without the
                  prior  written  consent  of Royal  Mail,  remove or replace or
                  permit the removal or  replacement  of Royal Mail  Property or
                  any part thereof from the Contractor's Premises;

         20.2.5   operate  Royal Mail Property  properly and in accordance  with
                  the manufacturer's or supplier's instructions (as the case may
                  be) or other instructions supplied by Royal Mail;

         20.2.6   not modify or alter Royal Mail Property; and

         20.2.7   clearly  identify  Royal  Mail  Property  as such  and keep it
                  separate from other equipment.


                                      -22-
<PAGE>

20.3     Upon termination or expiry of this Agreement, the bailment contained in
         this  Clause 20 shall  terminate  forthwith  and the  Contractor  shall
         return all such Royal Mail  Property to the  possession  of Royal Mail.
         The Contractor  shall be responsible for all loss of or damage to Royal
         Mail Property at the  Contractor's  Premises  (except for any condition
         properly  attributable  to fair wear and tear)  during  the term of the
         bailment under this Clause 20.

20.4     Unless  otherwise  specified,  any Royal Mail  Property  removed by the
         Personnel  from the  Premises(s)  shall  be  collected  there  from and
         re-delivered  thereto  at the  expense  of  the  Contractor,  and  from
         collection  until  delivery  shall  be at the  risk of the  Contractor.
         Delivery  shall be deemed to take place on signature for the items by a
         responsible Royal Mail employee or authorised agent.

20.5     The Contractor  acknowledges  that Royal Mail makes Royal Mail Property
         available  to  the  Contractor  on an  as is  basis  and  no  warranty,
         condition,  undertaking  or term,  express  or  implied,  statutory  or
         otherwise,  is given or assumed by Royal Mail in relation to Royal Mail
         Property and all such  warranties,  conditions,  undertakings and terms
         are hereby excluded.

20.6     Unless  otherwise  agreed  between the  parties in writing,  Royal Mail
         shall not charge the Contractor for use of any Royal Mail Property when
         it is required to enable the Contractor to deliver the Services.

21.      CONTRACTOR PERSONNEL AT THE PREMISES

21.1     Royal Mail shall afford to the  Contractor  such access to the Premises
         as is necessary for the  performance of the Services,  subject to prior
         agreement as to date and time.

21.2     Royal Mail may  request and obtain  from the  Contractor  a list of the
         Personnel attending the Premises.

21.3     Royal Mail may refuse  admission  to the  Premises to any member of the
         Personnel,  or require any such member to leave such  Premises,  at any
         time and for any  reason.  If Royal  Mail  requires  any  member of the
         Personnel to leave the Premises, the Contractor shall ensure that he or
         she promptly does so. The  Contractor  may claim for  reasonable  costs
         incurred as a result of Personnel  not being  allowed  admission to the
         Premises or being  required to leave the Premises  where the Contractor
         has followed all prior agreed  instructions  and access was refused due
         to an act or omission of Royal Mail.


                                      -23-
<PAGE>

21.4     While the Personnel  attend the Premises,  the Contractor shall use its
         reasonable endeavours to ensure that they conform to Royal Mail's codes
         and regulations,  adopt proper  standards of behaviour,  and co-operate
         with  Royal  Mail   employees   or  agents  with   designate   security
         responsibilities.

21.5     If  requested  to do so by Royal Mail,  the  Contractor  shall  provide
         reasonable   cooperation  to  Royal  Mail  in  the  preparation  of  an
         appropriate  health  and  safety  plan  and  shall  use its  reasonable
         endeavours to ensure that the  Personnel  adhere to such a plan once it
         has been  prepared and agreed.  However,  the  Contractor  reserves the
         right to charge for this on a time and materials basis.

21.6     The Contractor  shall use all  reasonable  endeavours to ensure that in
         the  provision  of the  Consultancy  Services the  Contractor  does not
         interfere with the operations of Royal Mail, its employees or agents or
         any  other  contractor  engaged  at the  Premises  whether  or not  the
         Contractor is provided with sole access to the Premises.

21.7     The Contractor shall be responsible at its own risk and expense for the
         delivery  to,  unloading at and removal from the Premises of all plant,
         equipment  and things of all kinds  necessary  for the provision of the
         Services.  Unless otherwise agreed between the parties in writing,  all
         such items shall remain the  responsibility of the Contractor who shall
         be liable for the care,  safety and storage  thereof  and shall  remove
         them at the end of each visit or  collection  of visits  relating  to a
         single  project  and  leave  the  Premises  in a  clean,  tidy and safe
         condition.

21.8     The Contractor shall notify Royal Mail immediately of any damage,  loss
         or injury to property or persons occurring at the Premises of which the
         Contractor and/or the Personnel are or ought reasonably to be aware.

22.      INTELLECTUAL PROPERTY RIGHTS

22.1     Where  Software  is  required  to enable  Royal Mail to obtain the full
         benefit of the Services the Contractor  hereby agrees to grant to Royal
         Mail a non-exclusive,  nontransferable  licence to use the Software for
         that purpose.

22.2     Royal Mail will not,  without the  Contractor's  prior written consent,
         copy or (except as permitted by law)  decompile or modify the Software,
         nor copy the manuals or documentation.


                                      -24-
<PAGE>

22.3     Should Royal Mail choose to receive  specific  content from third party
         suppliers,  then Royal Mail will sign the  content  related  agreements
         reasonably  required by the owner of the  copyright  in the Software to
         protect the owner's interest in that Software.

22.4     All  intellectual  property and other rights in the Corporate  Learning
         Management  System  shall  at all  times  remain  the  property  of the
         Contractor.

23.      CONFIDENTIALITY

23.1     Each party (the receiving party) shall keep  confidential and shall not
         disclose to any third party any  Confidential  Information of the other
         party  which  has  been  disclosed  to it  under  or  pursuant  to this
         Agreement,  nor use the same for any purpose other than the performance
         of this Agreement. The receiving party may disclose such information to
         its employees,  officers,  advisers and permitted subcontractors to the
         extent necessary for the performance of this Agreement.  The Contractor
         shall use all reasonable endeavours to ensure that all such persons are
         aware of and comply with these  obligations as to  confidentiality  and
         that  they  shall,  if so  required,  give  a  written  confidentiality
         undertaking to Royal Mail in a form prescribed by Royal Mail.

23.2     The  provisions  of  this  Clause  shall  not  apply  to   Confidential
         Information which:

         23.2.1   is or becomes  publicly known  otherwise than as a result of a
                  breach of the terms of this Agreement; or

         23.2.2   is  known  to the  receiving  party  under  no  obligation  of
                  confidence, at the time of disclosure by the other party; or

         23.2.3   is  lawfully  obtained  by the  receiving  party  without  any
                  obligation  of  confidence  from a third  party who is free to
                  divulge the same; or

         23.2.4   is  independently  developed by the  receiving  party  without
                  reference to any Confidential Information.

23.3     The receiving  party may disclose any  Confidential  Information of the
         other party to the extent that it is  required to be  disclosed  to any
         governmental  or other  authority or  regulatory  body or to the extent
         required by law.


                                      -25-
<PAGE>

23.4     Upon  request,  and in any event  upon  expiry or  termination  of this
         Agreement for whatever reason, the Contractor shall return forthwith to
         Royal Mail any confidential  Information provided under this Agreement.
         For the avoidance of doubt, this requirement shall apply to material or
         information in whatever form including,  but not limited to, electronic
         form and shall include all notes, copies or extracts of the information
         or material, whether stored or recorded separately by the Contractor or
         otherwise. The Contractor shall use all reasonable endeavours to ensure
         that any such  information  or material which has been disclosed to any
         person  employed  or  engaged  by  the  Contractor  shall  be  returned
         forthwith.  The Contractor shall certify in writing that the provisions
         of this Clause have been complied with, if so required by Royal Mail.

23.5     The  obligations  in this Clause shall cease to have effect three years
         after the Expiry Date.

24.      INTELLECTUAL PROPERTY INDEMNITY

24.1     Subject  to the  limitation  on  liability  set  out in  Clause  25 the
         Contractor  indemnifies and shall keep  indemnified  Royal Mail against
         all  damages,  costs,  expenses  and  losses  awarded  by the  court of
         competent  jurisdiction  presiding  over any third party claim that the
         possession,  use or exploitation by Royal Mail of any product  provided
         by the Contractor  under this Agreement or any part of it in accordance
         with the  terms  of this  Agreement,  infringe(s)  that  third  party's
         intellectual  property  rights,  as well as any  damages  agreed by the
         Contractor  in  settlement  of said claim and any  reasonable  expenses
         incurred by Royal Mail in defense of said claim,  provided  that unless
         otherwise agreed with Royal Mail:

         24.1.1   Royal Mail shall  promptly  notify the  Contractor of any such
                  claim;

         24.1.2   Royal Mail shall lend the Contractor all reasonable assistance
                  in the defense of such claim, at the Contractor's cost;

         24.1.3   the Contractor shall be exclusively  authorised to conduct the
                  defence and/or settlement of such claim;

         24.1.4   Royal  Mail  shall  not  make  any  admission   which  may  be
                  prejudicial to the defence or settlement of such claim without
                  the  prior  written  approval  of  the  Contractor  not  to be
                  unreasonably withheld or delayed.


                                      -26-
<PAGE>

24.2     Should Royal Mail undertake to conduct  independently  a defence and/or
         settlement  of any third party claim arising from the  infringement  or
         alleged  infringement of that party's  intellectual  property rights in
         breach of the  procedures  set out in Clause  24.1 it will do so at its
         own risk and expense and will not be able to recover any such  damages,
         costs and expenses as it may incur from the Contractor.

24.3     Subject to the  provisions of Clause 24.2 in the event of a claim under
         Clause  24.1 which  prevents  Royal Mail from using any  product or any
         part of it or them in accordance  with this  Agreement,  the Contractor
         shall make all reasonable efforts, as soon as reasonably possible to:

         24.3.1   provide Royal Mail with an alternative  non-infringing product
                  of equivalent or increased functionality and performance,  for
                  use in accordance with this Agreement; or

         24.3.2   obtain for Royal Mail the right to use the  product  concerned
                  in accordance with this Agreement  without the infringement of
                  any third party intellectual property right; or

         24.3.3   promptly   modify  the  product  without  any  degradation  in
                  functionality  or  performance,  so that its use in accordance
                  with  this   Agreement  does  not  infringe  any  third  party
                  intellectual property right.

24.4     This Clause 24 states the entire  liability of the  Contractor to Royal
         Mail in relation to infringement of intellectual property rights.

25.      LIMITATION OF LIABILITY

25.1     Neither  party  excludes or limits  liability to the other for death or
         personal injury as a result of its negligence.

25.2     Subject to Clause 25.1, each party's total liability in contract,  tort
         (including negligence or breach of statutory duty),  misrepresentation,
         restitution or otherwise, arising in connection with the performance or
         contemplated  performance  of this  Agreement  shall be  limited to the
         aggregate sum of GBP10,000,000 (ten million pounds).


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<PAGE>

25.3     The parties  expressly  agree that should any  limitation  or provision
         contained  in this  Clause be held to be invalid  under any  applicable
         statute or rule of law it shall to that extent be deemed omitted but if
         any  party  thereby  becomes  liable  for loss or  damage  which  would
         otherwise  have been  excluded such  liability  shall be subject to the
         other limitations and provisions set out herein.

26.      INSURANCE

26.1     The Contractor  shall take out and maintain the insurance cover set out
         in  Schedule  3, or  such  other  levels  as may  from  time to time be
         approved by the Operations Team.

26.2     The  Contractor  shall provide Royal Mail with a copy of such insurance
         policies or any insurance  certificate  giving details of the insurance
         cover at any time on request by Royal Mail.

26.3     If the Contractor fails to take out and maintain  insurance pursuant to
         this Clause and,  after seven Business Days of having been requested to
         comply with its  obligations to do so, has not so complied,  Royal Mail
         shall be entitled to effect such insurance on the  Contractor's  behalf
         and the Contractor shall on demand reimburse Royal Mail for the premium
         paid by Royal Mail.

27.      FORCE MAJEURE

27.1     Neither  party shall be liable to the other for any failure or delay in
         performing  its  obligations  hereunder  where such failure or delay is
         caused by  circumstances  beyond  the  reasonable  control of the party
         concerned.

28.      WAIVER

28.1     In no event  shall any  delay,  neglect or  forbearance  on the part of
         either party in enforcing  (in whole or in part) any  provision of this
         Agreement  be or be  deemed to be a waiver  thereof  or a waiver of any
         other  provision or shall in any way  prejudice any right of that party
         under this Agreement.


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<PAGE>

29.      NO AGENCY

29.1     No provision of this Agreement creates a partnership between Royal Mail
         and the  Contractor or makes one party the agent of the other party for
         any purpose.  Neither  Royal Mail nor the  Contractor  has authority or
         power to bind,  to agree in the name of, or to create a  liability  for
         the other in any way or for any purpose.

30.      NOTICES

30.1     All notices  required or permitted  under this Agreement or required by
         statute,  law or regulation  shall be in writing and shall be deemed to
         be sufficiently given if delivered by hand, sent by first class prepaid
         post (or prepaid  airmail where the address of the recipient is outside
         the  United   Kingdom)  or   facsimile   transmission   or   electronic
         communication  to the  address or the  facsimile  number or  electronic
         communication  address  of the  Contractor's  Representative  or  Royal
         Mail's  Representative  as appropriate  given in Clause 6 (with, in the
         case of Royal Mail, in relation to any dispute or breach, a copy to The
         Company  Secretary at the  registered  office) or such other address or
         facsimile  number  or  electronic   communication  address  as  may  be
         subsequently  notified to the other party in writing in accordance with
         this Clause.

30.2     Any notice shall be deemed to have been served as follows:

         30.2.1   if  delivered  by  hand  on a  Business  Day,  at the  time of
                  delivery to the address of the recipient;

         30.2.2   if sent by first class prepaid  post,  two Business Days after
                  the date of posting;

         30.2.3   if sent by prepaid  airmail,  six Business Days after the date
                  of posting;

         30.2.4   if  sent  on a  Business  Day  by  facsimile  transmission  or
                  electronic  communication,  on successful  transmission by the
                  sender.

30.3     In the event that any address  appearing  in this  Agreement  is, or is
         subsequently  changed  to, an address  outside  the United  Kingdom the
         party whose address is outside the United  Kingdom shall appoint a firm
         of solicitors resident in England to be its agent and accept service of
         all legal process in England in respect of any matter arising out of or
         in connection with this Agreement. The service of legal process on such
         firm will be deemed to be service on the recipient.


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31.      ROYAL MAIL TRADE MARKS

31.1     Royal Mail licences the Contractor to use the Royal Mail Trade Marks on
         the terms of the  Branding  Licence  Agreement  set out in  Appendix G,
         which the parties  will be deemed to have  entered  into on the date of
         this Agreement.

32.      ENTIRE AGREEMENT

32.1     This Agreement sets out the entire agreement and understanding  between
         the parties relating to the subject matter of this Agreement. The terms
         and  conditions  set out in this  Agreement or implied by statute or by
         judicial   decision  take   priority   over  any  other   arrangements,
         communications (whether verbal or written), representations, warranties
         whether contained in the Contractor's  documents or elsewhere and which
         relate to the subject matter herein.

33.      RECOVERY OF SUMS DUE

33.1     Where the Contractor owes any sum of the money to Royal Mail under this
         Agreement or any damages as a result of the breach thereof,  the amount
         may be  deducted  from any sum now due or which may  become  due to the
         Contractor  under this  Agreement  or any other  contract or  agreement
         between Royal Mail and the Contractor.

34.      PUBLICITY

34.1     The Contractor shall not, without the written permission of Royal Mail,
         advertise or disclose to third  parties that it is  undertaking  or has
         undertaken  work for  Royal  Mail nor  disclose  the  contents  of this
         Agreement, provided that nothing herein shall prevent:

         34.1.1   any  announcement or disclosure  required under any applicable
                  law or regulation,  or any rule of any  applicable  investment
                  exchange; or

         34.1.2   the disclosure of any matter which is in the public domain.


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35.      GOVERNING LAW DISPUTE RESOLUTION

35.1     In the event of any dispute,  difference or question of  interpretation
         arising  between  the  parties,  the parties  will make all  reasonable
         attempts to settle by discussion, referring to management if necessary.

35.2     Subject to the  procedure  described in Clause 35.1 being  exhausted if
         any dispute arises out of this  Agreement,  the parties will attempt to
         settle  by  mediation  in  accordance   with  the  Centre  for  Dispute
         Resolution Model Mediation  Procedure.  To initiate a mediation a party
         must give notice in writing to the other party(ies) to the dispute.

35.3     If the mediation in accordance with Clause 35.2 fails or is terminated,
         then the  parties may agree to refer the dispute to an expert for final
         resolution  pursuant to Clause  35.54 or any party may  commence  court
         proceedings.

35.4     Subject  to  Clause  35.3,  the  dispute  may  be  referred  for  final
         determination  to an expert (the  "Expert")  who shall act as an expert
         and not as arbitrator, such referral and determination to take place as
         follows:

         35.4.1   the Expert shall be selected by mutual  agreement or,  failing
                  agreement, within ten (10) working days after a request by one
                  party to the other,  shall be chosen at the  request of either
                  party  by the  President  for the time  being of the  Computer
                  Services  and Software  Association  who shall be requested to
                  choose a suitably  qualified  and  experienced  expert for the
                  dispute in  question.  In  connection  with the conduct of the
                  dispute,  the Expert shall have the widest discretion  allowed
                  under  English  Law to  ensure a just,  expeditious  and final
                  determination of the dispute.

         35.4.2   Within  forty (40)  working days after the Expert has accepted
                  the appointment,  the parties shall submit a written report on
                  the  dispute to the  Expert and to each other and twenty  (20)
                  working days thereafter  shall submit any written replies they
                  wish to make to the Expert and to each other.

         35.4.3   Both  parties  will  then  afford  the  Expert  all  necessary
                  assistance  which the Expert  requires to consider the dispute
                  including  but not limited to full access to the  Services and
                  Products and any documentation or  correspondence  relating to
                  the Services and Products.


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<PAGE>

         35.4.4   The  decision of the Expert shall be final and binding and not
                  subject to appeal.

         35.4.5   The Expert  shall have the same powers to require any party to
                  produce  any  documents  or  information  to him and the other
                  party as an  arbitrator  and  each  party  shall in any  event
                  supply to him such information which it has and is material to
                  the matter to be  resolved  and which it could be  required to
                  produce on discovery.

         35.4.6   The fees of the  Expert  shall be born by the  parties  in the
                  proportion  as shall be determined by the Expert having regard
                  (amongst other things) to the conduct of the parties.

35.5     Subject  to  Clauses  35.2,  35.3 and  35.4,  this  Agreement  shall be
         governed  by  English  law  and the  parties  submit  to the  exclusive
         jurisdiction of the English Courts.

36.      CORRUPTION AND BRIBERY

36.1     Neither party shall give or offer to give anyone  employed by the other
         party an  inducement of any kind or any gift that could be perceived by
         others to be a bribe.

36.2     Any  breach of the  provisions  of this  Clause 36 shall be a breach of
         this Agreement which is incapable of remedy.

37.      LANGUAGE

37.1     English  shall  be the  language  of this  Agreement  and all  notices,
         documents and communications relating to this Agreement must be made in
         the English  language.  In the event that this Agreement or any part of
         it is translated  from, or into, any other  language,  the English text
         shall in any event prevail.

38.      RECORDS

38.1     The  Contractor  shall  promptly  create and, for a period of six years
         after the Expiry Date, retain,  adequate paper or electronic records of
         all matters reasonably  relevant to this Agreement and the Contractor's
         performance   hereunder.   The  Contractor  shall  use  all  reasonable
         endeavours  to ensure that said records are accurate and  comprehensive
         and are created and stored in such a way that their authenticity can be
         subsequently  easily  verified.  Upon written  request,  the Contractor
         shall allow  representatives  of Royal Mail access to the said  records
         and  shall   allow  the  said   records   to  be  copied  by  the  said
         representatives  at Royal  Mail's  reasonable  cost using  Contractor's
         onsite  copying  facilities.  The  Contractor  shall  ensure  that  any
         subcontractors  engaged  by the  Contractor  for the  purposes  of this
         Agreement  shall grant the same rights to Royal Mail as those contained
         in this Clause.


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39.      CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

39.1     This Agreement does not create any right  enforceable by any person who
         is not a party, except that the terms of this Agreement may be enforced
         by  Employees  subject  to and in  accordance  with  the  terms of this
         Agreement and the Contracts (Rights of Third Parties) Act 1999.

39.2     Notwithstanding  that  any  term of  this  Agreement  may be or  become
         enforceable  by a person  who is not a party to it,  the  terms of this
         Agreement  or any of them may be varied,  amended or  modified  or this
         Agreement  may be  suspended,  cancelled or  terminated by agreement in
         writing between the parties or this Agreement may be rescinded (in each
         case), without the consent of any such third party.

IN WITNESS WHEREOF THIS AGREEMENT was signed on the date set out in page 1.


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<PAGE>


SIGNED for and on behalf of            ) /s/ Mats Johansson
FUTUREMEDIA PLC                        ) Mats Johansson, CEO


SIGNED for and on behalf of            ) /s/ Jim Reed
ROYAL MAIL GROUP PLC                   ) Jim Reed, Head of Technology Purchasing


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