Exhibit 2.7

                                    EXHIBIT A
                        to Securities Purchase Agreement
                        --------------------------------

                                                           Dated:  July 21, 2005

      NEITHER THIS  DEBENTURE NOR THE  SECURITIES  INTO WHICH THIS  DEBENTURE IS
      CONVERTIBLE   HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE
      COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  U.S.  STATE  OR  OTHER
      JURISIDICTION  IN RELIANCE UPON AN EXEMPTION FROM  REGISTRATION  UNDER THE
      SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE  "SECURITIES   ACT"),   AND,
      ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD EXCEPT  PURSUANT TO AN  EFFECTIVE
      REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT  OR  PURSUANT  TO  AN
      AVAILABLE  EXEMPTION  FROM,  OR  IN A  TRANSACTION  NOT  SUBJECT  TO,  THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ALL
      APPLICABLE  SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
      THE TRANSFEROR TO SUCH EFFECT,  THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY.

No.                                                                 $
   --                                                                 ---------

                                 FUTUREMEDIA PLC

                              CONVERTIBLE DEBENTURE
                              DUE OCTOBER 31, 2006

THIS DEBENTURE is issued by Futuremedia  PLC a Corporation  organized  under the
laws of England and Wales (the  "Company").  This Debenture is designated as the
Company's 2005  Convertible  Debenture,  due on the date set forth above, in the
aggregate principal amount of                 ($            ) (the "Debenture").

FOR VALUE RECEIVED, the Company promises to pay  to                            ,
or its registered  assigns (the "Holder"),  the principal sum of $             ,
on or before the due date,  or such earlier date as the Debenture is required to
be repaid as provided hereunder (the "Maturity Date") and to pay interest to the
Holder on the aggregate  unconverted and then  outstanding  principal  amount of
this Debenture as provided herein.

      Commencing  on the  Original  Issue  Date (as  defined in Section 5) until
payment in full of the  principal  sum,  together  with all  accrued  and unpaid
interest  and other  amounts,  which may  become due  hereunder,  has been made,
interest  shall  accrue daily at the annual rate equal to the higher of (a) Wall
Street  Journal  Prime Rate plus three  percent  (3%),  or 8.5%,  adjusted  on a
monthly  basis,  but in no event  higher than 10% per annum.  Interest  shall be
payable monthly in arrears on the last day of each month, in cash,  prorated for
any partial month periods.  The interest shall be calculated  based on a 360 day
year. Interest hereunder will be paid to the Person (as defined in Section 5) in
whose name this Debenture is registered on the records of the Company  regarding
registration and transfers of Debentures (the "Debenture Register").

<PAGE>

      Commencing on October 1, 2005 and  continuing  through the Maturity  Date,
Company  shall  make  monthly  principal  payments  to Holder  in the  amount of
$      .  (the "Monthly  Principal  Payments").  The Monthly Principal  Payments
shall  be due and  payable  on the  last  trading  day of each  calendar  month.
Notwithstanding the foregoing, the principal amount of any Debentures which have
been  converted  into  Ordinary  Shares  shall be  credited  against the Monthly
Principal  Payments.  The Monthly Principal Payments shall be made in cash only.
Notwithstanding any other provision in this Debenture, the amount of any Monthly
Principal  Payments  may be reduced in  accordance  with the  partial  mandatory
conversion provisions of Section 4(a)(ii)(B) below.

      This Debenture is subject to the following additional provisions:

      Section 1. This Debenture is exchangeable for an equal aggregate principal
amount of Debentures of different authorized denominations,  as requested by the
Holder  surrendering  the  same.  No  service  charge  will  be  made  for  such
registration of transfer or exchange.

      Section 2. This  Debenture has been issued  subject to certain  investment
representations  of the original Holder set forth in the Purchase  Agreement (as
defined in Section 5) and may be  transferred  or exchanged  only in  compliance
with  the  Purchase  Agreement.  Prior to due  presentment  to the  Company  for
transfer of this  Debenture,  the Company and any agent of the Company may treat
the Person (as  defined  in  Section  5) in whose  name this  Debenture  is duly
registered  on the  Debenture  Register  as the owner  hereof for the purpose of
receiving payment as herein provided and for all other purposes,  whether or not
this  Debenture is overdue,  and neither the Company nor any such agent shall be
affected by notice to the contrary.

      Section 3. Events of Default.

      (a) An "Event of  Default",  wherever  used  herein,  means any one of the
following  events  (whatever  the reason and  whether it shall be  voluntary  or
involuntary or effected by operation of law or pursuant to any judgment,  decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) any default in the payment of the principal of,  interest on, or
damages in respect of the Debenture, free of any claim of subordination,  as and
when the same shall become due and payable  (whether on a Conversion Date or the
Maturity Date or by  acceleration  or otherwise)  which is not cured within five
(5) days after the date the payment became due and payable;

            (ii)  the  failure  to  file  a  Registration   Statement  with  the
Commission on or before 45 days after the date of this Debenture registering the
resale of the Underlying Shares;

            (iii)  the  failure  to  observe  or  perform  any  other  covenant,
agreement  or  warranty  contained  in, or  otherwise  commit any breach of this
Debenture, the Purchase Agreement or the Registration Rights Agreement, and such
failure or breach shall not have been remedied  within 10 Trading Days after the
date on which notice of such failure or breach shall have been given;

                                      -2-
<PAGE>

            (iv) any of the following  which is not dismissed or otherwise cured
within 60 days, the Company shall commence,  or there shall be commenced against
the Company a case under any applicable  bankruptcy or insolvency laws as now or
hereafter in effect or any successor thereto, or the Company commences any other
proceeding under any reorganization,  arrangement, adjustment of debt, relief of
debtors,   dissolution,   insolvency  or  liquidation  or  similar  law  of  any
jurisdiction whether now or hereafter in effect relating to the Company or there
is commenced against the Company,  and any such bankruptcy,  insolvency or other
proceeding which remains  undismissed for a period of 60 days; or the Company is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving  any such case or proceeding  is entered;  or the Company  suffers any
appointment of any custodian or the like for it or any  substantial  part of its
property which  continues  undischarged  or unstayed for a period of 60 days; or
the Company  makes a general  assignment  for the benefit of  creditors;  or the
Company  shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or the Company shall call
a meeting of its creditors with a view to arranging a composition, adjustment or
restructuring  of its debts;  or the Company  shall by any act or failure to act
expressly  indicate its consent to,  approval of or  acquiescence  in any of the
foregoing;  or any  corporate  or other  action is taken by the  Company for the
purpose of effecting any of the foregoing;

            (v) the  Ordinary  Shares  shall  cease to be quoted for  trading or
listed for trading on the Nasdaq  SmallCap  Market  ("NASDAQ"),  or the National
Association of Securities  Dealers OTC Bulletin Board,  New York Stock Exchange,
American  Stock  Exchange or the Nasdaq  National  Market  (each,  a "Subsequent
Market") and shall not again be quoted or listed for trading thereon within five
(5) Trading Days;

            (vi) the  Company  shall  fail for any  reason to  deliver  Ordinary
Shares  certificates to a Holder no later than the fifth (5th) Trading Day after
a Conversion Date pursuant to and in accordance with Section 4(b) or the Company
shall provide notice to the Holder, including by way of public announcement,  at
any time, of its intention  not to comply with requests for  conversions  of the
Debenture in accordance with the terms hereof.  If the Company's  transfer agent
is not open for  business  during a Trading  Day,  such Trading Day shall not be
counted  for  purposes  of  determining  the  number of days for  delivery  of a
Ordinary Shares certificate;

            (vii) the  Company  shall fail for any reason to deliver the payment
in cash pursuant to a Buy-In (as defined  herein) within ten Business Days after
notice is deemed delivered hereunder;

            (viii) the Company  shall fail for any reason to cause the number of
authorized  but  unissued  shares of its  Ordinary  Shares to be increased to an
amount  sufficient to enable the Company to comply with the reserve  requirement
of Section  4(c)(v)  within a period of sixty (60) days following its receipt of
any  Holder's  notice  under  Section  4(c)(v)  that such  reserve  is not being
satisfied if, at the time of the notice,  the number of authorized shares of the
Company's Ordinary Shares is insufficient for this purpose; or

                                      -3-
<PAGE>

            (ix) the  Company  shall  fail to cause the  Commission  to deem the
Registration Statement effective within one hundred (100) days after the date on
which it is filed with the  Commission or to maintain the  effectiveness  of the
Registration  Statement  until  the  earlier  of (a) the  date  that  all of the
Ordinary  Shares issued upon  conversion of the Debenture have been sold, or (b)
the date that all of the Ordinary Shares issued upon conversion of the Debenture
may be freely traded without  registration  under the Securities Act, under Rule
144  promulgated  under the  Securities  Act or  otherwise  (provided  that such
failure is not cause by Holder).

      (b) During the time that any portion of this Debenture is outstanding,  if
any Event of Default pursuant to Section 3(a) occurs and following expiry of any
applicable  grace or cure period,  then the Conversion Price shall be reduced by
10%. In addition,  if an Event of Default under Section 3(a)(ii) or (ix) occurs,
the Company  shall pay  liquidated  damages to Holder equal to $___ for each day
during which such Event of Default  remains  uncured.  Any amounts to be paid as
liquidated  damages  shall be paid in cash  monthly  in arrears on or before the
30th day following the end of the month or partial month to which they relate.

      The Holder need not provide and the Company hereby waives any presentment,
demand,  protest or other notice of any kind, and the Holder may immediately and
without  expiration  of any grace  period  enforce any and all of its rights and
remedies  hereunder and all other remedies available to it under applicable law.
Such  declaration  may be rescinded  and annulled by Holder at any time prior to
payment  hereunder.  No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon.

      Section 4. Conversion.

      (a)    (i) Conversion at Option of Holder.

                  (A) This Debenture  shall be convertible  into Ordinary Shares
at the  option of the  Holder,  in whole or in part at any time and from time to
time,  after the Original  Issue Date (subject to the  limitations on conversion
set forth in Section  4(a)(ii)  hereof).  The number of Ordinary Shares issuable
upon a conversion  hereunder  equals the  quotient  obtained by dividing (x) the
outstanding  principal  amount  of this  Debenture  to be  converted  by (y) the
Conversion Price (as defined in Section 4(c)(i)).

                  (B) Reserved.

                  (C) The Holder  shall  effect  conversions  by  simultaneously
delivering  to the Company a  completed  notice in the form  attached  hereto as
Exhibit A (a "Conversion Notice"),  including a completed Conversion Schedule in
the form of Schedule I to the Conversion  Notice (on each  Conversion  Date, the
"Conversion  Schedule").  The Conversion  Schedule shall set forth the remaining
principal  amount of this Debenture and all accrued and unpaid interest  thereon
subsequent to the conversion at issue. The date on which a Conversion  Notice is
delivered is the  "Conversion  Date." Unless the Holder is converting the entire
principal amount outstanding under this Debenture, the Holder is not required to
physically   surrender  this  Debenture  to  the  Company  in  order  to  effect
conversions.  Subject to Section 4(b), each Conversion Notice, once given, shall
be  irrevocable.  Conversions  hereunder  shall have the effect of lowering  the
outstanding  principal  amount of this  Debenture  plus all  accrued  and unpaid
interest thereon in an amount equal to the applicable conversion, which shall be
evidenced by entries set forth in the  Conversion  Schedule.  The Holder and the
Company shall maintain  records showing the principal  amount  converted and the
date of such  conversions.  In the  event of any  dispute  or  discrepancy,  the
records of the Holder shall be controlling and  determinative  in the absence of
manifest error.

                                      -4-
<PAGE>

            (ii) Mandatory Conversion.

                  (A) Full  Mandatory  Conversion.  Upon 20 days  prior  written
notice from Company to Holder (a "Mandatory  Conversion Notice"),  provided that
the closing price of the Company's  ADS's on the NASDAQ Small Cap Market exceeds
$.65  per  share  for at  least  the 20  consecutive  trading  days  immediately
preceding  delivery  of the  Mandatory  Conversion  Notice and the  Registration
Statement is effective,  Company may require  Holder to convert all or a portion
of the then outstanding Debentures.  The Mandatory Conversion Notice shall state
the number of Ordinary Shares  outstanding and principal amount to be converted.
Any conversion shall be subject to limitation such that the beneficial ownership
of Holder and its  affiliates  shall remain in the aggregate  below 9.99% of the
total Ordinary Shares outstanding at all times.  Notwithstanding  the foregoing,
in the event that Holder  acquires  Ordinary  Shares or ADSs through open market
purchases (or in any other  transaction other than pursuant to this Debenture or
the transactions contemplated by the Purchase Agreement) and such acquisition of
Ordinary  Shares  or ADSs (or any  portion  thereof)  precludes  or  limits  the
Debentures which may be converted pursuant to a Mandatory Conversion Notice as a
result of the foregoing 9.99%  limitation,  then Holder shall sell such Ordinary
Shares or ADSs within 20 days after receipt of such Mandatory  Conversion Notice
so as to ensure that there is no delay in the  conversion  of any portion of the
Debentures as a result thereof.

                  (B)  Partial  Mandatory  Conversion.  Provided  that  (i)  the
Registration  Statement is  effective,  (ii) the average  daily  dollar  trading
volume of the  Company's  ADSs (as defined in Section 5) for the 22 trading days
preceding the due date for a Monthly  Principal Payment is greater than or equal
to $325,000,  and (iii) the  Ordinary  Shares to be issued upon  conversion  are
saleable  pursuant  to the  Registration  Statement,  then  Company may elect to
reduce  such  Monthly  Principal  Payment  by  converting  a portion of the then
outstanding  Debentures  equal to an  amount up to the  amount  of such  Monthly
Principal  Payment.  The number of Ordinary  Shares  issuable  upon a conversion
hereunder  shall equal the  quotient  obtained by dividing  (x) the  outstanding
principal  amount of this Debenture to be converted (not to exceed the amount of
such Monthly Principal  Payment) by (y) 88% of the volume weighted average price
of the  Company's  ADSs for the ten trading days  preceding  such payment  date.
Partial  conversion  hereunder  shall be  subject  to  limitation  such that the
beneficial ownership of Purchaser and its affiliates shall remain below 9.99% of
the total  Ordinary  Shares  outstanding  on a converted  basis at all times and
shall  not be  permitted  if  issuance  of the  Ordinary  Shares  would  require
shareholder  approval.  Notwithstanding the foregoing,  in the event that Holder
acquires  Ordinary Shares or ADSs through open market purchases (or in any other
transaction   other  than  pursuant  to  this  Debenture  or  the   transactions
contemplated by the Purchase  Agreement) and such acquisition of Ordinary Shares
or ADSs (or any portion thereof) precludes or limits the Debentures which may be
converted  pursuant to this  Section  4(a)(ii)(B)  as a result of the  foregoing
9.99%  limitation,  then  Holder  shall  sell  such  Ordinary  Shares as soon as
reasonably  practicable so as to ensure that there is no delay in the conversion
of any portion of the Debentures as a result thereof.

                                      -5-
<PAGE>

            (iii) Certain Conversion Restrictions.

                  (A) A Holder may not convert the Debenture or receive Ordinary
Shares as payment of interest hereunder to the extent such conversion or receipt
of such interest payment would result in the Holder, together with any affiliate
thereof,  beneficially owning (as determined in accordance with Section 13(d) of
the Exchange Act and the rules  promulgated  thereunder)  in excess of 9.999% of
the then issued and outstanding Ordinary Shares,  including shares issuable upon
conversion  of, and payment of interest  on, the  Debenture  held by such Holder
after  application  of this  Section.  Since the Holder will not be obligated to
report to the Company the number of Ordinary Shares it may hold at the time of a
conversion  hereunder,  unless  the  conversion  at issue  would  result  in the
issuance of Ordinary Shares in excess of 9.999% of the then outstanding Ordinary
Shares without regard to any other shares which may be beneficially owned by the
Holder  or an  affiliate  thereof,  the  Holder  shall  have the  authority  and
obligation to determine  whether the restriction  contained in this Section will
limit any  particular  conversion  hereunder  and to the extent  that the Holder
determines  that  the  limitation   contained  in  this  Section  applies,   the
determination  of which  portion of the  principal  amount of the  Debenture  is
convertible  shall be the  responsibility  and obligation of the Holder.  If the
Holder has delivered a Conversion Notice for a principal amount of the Debenture
that,  without  regard to any other shares that the Holder or its affiliates may
beneficially own, would result in the issuance in excess of the permitted amount
hereunder,  the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum  principal  amount  permitted to be converted on such
Conversion Date in accordance with the periods described in Section 4(b) and, at
the option of the  Holder,  either  retain any  principal  amount  tendered  for
conversion in excess of the permitted amount hereunder for future conversions or
return such excess principal amount to the Holder.

                  (B) In accordance with the shareholder  approval  requirements
under the rules of the Nasdaq Stock Market,  notwithstanding any other provision
contained  in the  Debenture,  in no event  shall the  Company be  obligated  in
connection with the  transactions  contemplated  by the Debenture  and/or by the
Purchase  Agreement  to  issue  shares  representing  more  than  19.99%  of its
outstanding capital stock as of the date hereof (and before giving effect to the
transactions  contemplated hereby) without prior approval of its shareholders at
a general meeting called for that purpose.

      (b)   (i) Nothing  herein  shall limit a Holder's  right to pursue  actual
damages  or declare  an Event of  Default  pursuant  to Section 3 herein for the
Company's  failure to deliver  certificates  representing  Ordinary  Shares upon
conversion  within the period  specified  herein and such Holder  shall have the
right to pursue all  remedies  available  to it at law. The exercise of any such
rights shall not prohibit the Holder from seeking to enforce damages pursuant to
any other Section hereof or under applicable law.

            (ii) In addition to any other rights available to the Holder, if the
Company  fails  to  deliver  to  the  Holder  any  certificate  or  certificates
representing  Ordinary Shares upon conversion within the period specified herein
no later than the fifth (5th) after the Conversion Date, and if after such fifth
(5th)  Trading  Day the  Holder  purchases  (in an open  market  transaction  or
otherwise)  Ordinary  Shares to deliver in satisfaction of a sale by such Holder
of the  Underlying  Shares  which the  Holder  anticipated  receiving  upon such
conversion  (a  "Buy-In"),  then the Company shall (A) pay in cash to the Holder
(in addition to any  remedies  available to or elected by the Holder) the amount
by which (x) the Holder's total purchase price (including brokerage commissions,
if any) for the Ordinary Shares so purchased  exceeds (y) the product of (1) the
aggregate number of Ordinary Shares that such Holder anticipated receiving from

                                      -6-
<PAGE>

the  conversion  at issue  multiplied  by (2) the market  price of the  Ordinary
Shares  at the  Conversion  Date and (B) at the  option  of the  Holder,  either
reissue a Debenture in the principal amount equal to the principal amount of the
attempted conversion or deliver to the Holder the number of Ordinary Shares that
would  have been  issued  had the  Company  timely  complied  with its  delivery
requirements.  For example,  if the Holder  purchases  Ordinary  Shares having a
total  purchase  price of $11,000 to cover a Buy-In with respect to an attempted
conversion  of  Debentures  with  respect  to  which  the  market  price  of the
Underlying  Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence,  the Company shall be required to pay
the  Holder  $1,000.  The  Holder  shall  provide  the  Company  written  notice
indicating  the  amounts  payable  to the  Holder  in  respect  of  the  Buy-In.
[Notwithstanding anything contained herein to the contrary, if a Holder requires
the  Company to make  payment  in respect of a Buy-In for the  failure to timely
deliver certificates hereunder and the Company timely pays in full such payment,
the Company  shall not be required to pay such Holder any damages  under Section
4(b)(ii) in respect of the  certificates  resulting  in such Buy-In  which would
represent  a double  recovery  for harm for which the  payments  made under this
Section 4(b)(iii) compensated the Holder .

            (iii) If the  Company's  transfer  agent  is not  open for  business
during a Trading  Day,  such  Trading Day shall not be counted  for  purposes of
determining the number of days for delivery of a Ordinary Shares  certificate or
similar obligation hereunder.

      (c)   (i) The "Conversion Price" shall be equal to $0.4858.

            (ii) If the Company,  at any time while the Debenture is outstanding
shall (a) pay a stock dividend or otherwise make a distribution or distributions
on  shares of its  Ordinary  Shares  or any  other  equity or equity  equivalent
securities payable in Ordinary Shares, (b) subdivide outstanding Ordinary Shares
into a larger number of shares,  (c) combine  (including by way of reverse stock
split) outstanding Ordinary Shares into a smaller number of shares, or (d) issue
by reclassification of shares of the Ordinary Shares any shares of capital stock
of the Company,  then the Conversion  Price shall be multiplied by a fraction of
which the numerator shall be the number of Ordinary Shares  (excluding  treasury
shares, if any) outstanding before such event and of which the denominator shall
be the number of Ordinary Shares  outstanding  after such event.  Any adjustment
made  pursuant to this Section  shall  become  effective  immediately  after the
record date for the  determination  of  stockholders  entitled  to receive  such
dividend  or  distribution  and shall  become  effective  immediately  after the
effective date in the case of a subdivision, combination or re-classification.

            (iii)  If  the  Company,   at  any  time  while  the   Debenture  is
outstanding,  shall distribute to all holders of Ordinary Shares (and not to the
Holder)  evidences  of its  indebtedness  or assets or  rights  or  warrants  to
subscribe  for or purchase any security,  then in each such case the  Conversion
Price at which the Debenture shall thereafter be convertible shall be determined
by multiplying the Conversion  Price in effect  immediately  prior to the record
date  fixed  for   determination  of  stockholders   entitled  to  receive  such
distribution  by a  fraction  of which  the  denominator  shall be the Per Share
Market Value determined as of the record date mentioned above, and of which the


                                      -7-
<PAGE>

numerator shall be such Per Share Market Value on such record date less the then
fair market  value at such record date of the portion of such assets or evidence
of  indebtedness  so  distributed  applicable  to one  outstanding  share of the
Ordinary Shares as determined by the Board of Directors in good faith. In either
case the adjustments shall be described in a statement provided to the Holder of
the  portion of assets or  evidences  of  indebtedness  so  distributed  or such
subscription  rights applicable to one share of Ordinary Shares. Such adjustment
shall be made whenever any such  distribution is made and shall become effective
immediately after the record date mentioned above.

            (iv) In case of any  reclassification  of the Ordinary Shares or any
compulsory  share exchange  pursuant to which the Ordinary  Shares are converted
into  other  securities,  cash or  property,  the  Holder  shall  have the right
thereafter to convert the then outstanding  principal amount,  together with all
accrued  but unpaid  interest  and any other  amounts  then owing  hereunder  in
respect of this  Debenture  only into the shares of stock and other  securities,
cash  and  property  receivable  upon or  deemed  to be held by  holders  of the
Ordinary  Shares  following such  reclassification  or share  exchange,  and the
Holder of the Debenture shall be entitled upon such event to receive such amount
of  securities,  cash or  property as the shares of the  Ordinary  Shares of the
Company into which the then  outstanding  principal  amount,  together  with all
accrued  but unpaid  interest  and any other  amounts  then owing  hereunder  in
respect of this Debenture  could have been converted  immediately  prior to such
reclassification or share exchange would have been entitled.

            (v) The Company shall maintain a share reserve of not less than 100%
of the Ordinary  Shares  issuable upon  conversion of the Debenture;  and within
five (5) Business Days following the receipt by the Company of a Holder's notice
that such minimum  number of Underlying  Shares is not so reserved,  the Company
shall if there are sufficient  authorized but unissued shares promptly reserve a
sufficient number of Ordinary Shares to comply with such  requirement.  If there
are not  sufficient  authorized but unissued  shares,  the Company shall use its
commercially  reasonable  best efforts to call a special  shareholders'  meeting
within 90 days of such  notice to  increase  the number of  authorized  Ordinary
Shares.

            (vi) All  calculations  under  this  Section  4 shall be made to the
nearest ten thousandth.  No adjustments in either the Conversion  Price shall be
required if such adjustment is less than $0.0001,  provided,  however,  that any
adjustments which by reason of this Section are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.

            (vii)  Whenever the  Conversion  Price is adjusted  pursuant to this
Section  4(c),  the Company shall  promptly mail to the Holder a notice  setting
forth the  Conversion  Price after such  adjustment  and  setting  forth a brief
statement of the facts requiring such adjustment.

            (viii) If (A) the  Company  shall  declare a dividend  (or any other
distribution)  on the Ordinary  Shares;  (B) the Company shall declare a special
nonrecurring  cash dividend on or a redemption of the Ordinary  Shares;  (C) the
Company  shall  authorize  the  granting to all holders of the  Ordinary  Shares
rights or warrants to subscribe  for or purchase any shares of capital  stock of
any class or of any rights;  (D) the approval of any stockholders of the Company
shall be  required  in  connection  with any  reclassification  of the  Ordinary
Shares, any consolidation or merger to which the Company is a party, any sale or
transfer  of all or  substantially  all of the  assets  of the  Company,  of any
compulsory  share exchange  whereby the Ordinary  Shares is converted into other
securities,  cash or property;  (E) the Company shall authorize the voluntary or


                                      -8-
<PAGE>

involuntary  dissolution,  liquidation  or  winding  up of  the  affairs  of the
Company;  then, in each case, the Company shall cause to be filed at each office
or agency  maintained for the purpose of conversion of the Debenture,  and shall
cause to be mailed to the Holder at its last address as it shall appear upon the
stock  books of the  Company,  at  least  ten (10)  calendar  days  prior to the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Ordinary Shares of record to be entitled
to such  dividend,  distributions,  redemption,  rights  or  warrants  are to be
determined  or (y)  the  date on  which  such  reclassification,  consolidation,
merger,  sale,  transfer or share  exchange is expected to become  effective  or
close,  and the date as of which it is  expected  that  holders of the  Ordinary
Shares of record  shall be  entitled to exchange  their  shares of the  Ordinary
Shares  for   securities,   cash  or  other  property   deliverable   upon  such
reclassification,  consolidation,  merger,  sale,  transfer  or share  exchange,
provided,  that the failure to mail such notice or any defect  therein or in the
mailing  thereof shall not affect the validity of the corporate  action required
to be specified in such notice.

            (ix) In case of any (1) merger or  consolidation of the Company with
or into another  Person,  or (2) sale by the Company of more than one-half (1/2)
of its assets in one or a series of related  transactions,  a Holder  shall have
the right to (A) convert the aggregate  principal  amount of the Debenture  then
outstanding  into the shares of stock and other  securities,  cash and  property
receivable  upon or deemed to be held by holders of  Ordinary  Shares  following
such merger,  consolidation or sale, and such Holder shall be entitled upon such
event or series of related events to receive such amount of securities, cash and
property as the Ordinary  Shares into which such aggregate  principal  amount of
the  Debenture  could  have been  converted  immediately  prior to such  merger,
consolidation or sales would have been entitled,  or (B) in the case of a merger
or  consolidation,  require  the  surviving  entity  to  issue  to the  Holder a
convertible  debenture with a principal amount equal to the aggregate  principal
amount of the  Debenture  then held by such Holder,  plus all accrued and unpaid
interest and other amounts owing  thereon,  which such newly issued  convertible
debenture shall have terms  identical  (including with respect to conversion) to
the terms of this  Debenture,  and shall be  entitled  to all of the  rights and
privileges of the Holder of the  Debenture  set forth herein and the  agreements
pursuant to which the  Debentures  were  issued.  In the case of clause (B), the
conversion price applicable for the newly issued shares of convertible preferred
stock or  convertible  debentures  shall be based upon the amount of securities,
cash and  property  that each share of  Ordinary  Shares  would  receive in such
transaction  and  the  Conversion  Price  in  effect  immediately  prior  to the
effectiveness  or  closing  date for  such  transaction.  The  terms of any such
merger, sale or consolidation shall include such terms so as to continue to give
the Holder the right to receive the  securities,  cash and property set forth in
this  Section upon any  conversion  or  redemption  following  such event.  This
provision shall similarly apply to successive such events.

                                      -9-
<PAGE>

      (d) Reserved.

      (e) Upon a conversion hereunder the Company shall not be required to issue
stock certificates  representing fractions of shares of the Ordinary Shares, but
may if otherwise permitted, make a cash payment in respect of any final fraction
of a share  based on the Per Share  Market  Value at such time.  If the  Company
elects  not,  or is unable,  to make such a cash  payment,  the Holder  shall be
entitled to receive,  in lieu of the final fraction of a share,  one whole share
of Ordinary Shares.

      (f) The  issuance of  certificates  for shares of the  Ordinary  Shares on
conversion of the Debenture  shall be made without  charge to the Holder thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such  certificate,  provided  that the Company shall not be
required to pay any tax that may be payable in respect of any transfer  involved
in the issuance and delivery of any such  certificate  upon conversion in a name
other than that of the Holder of such  Debenture  so  converted  and the Company
shall not be required to issue or deliver such certificates  unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the  amount of such tax or shall have  established  to the  satisfaction  of the
Company that such tax has been paid.

      (g) Any notices  required or permitted to be given under the terms of this
Agreement  shall  be  sent by  certified  or  registered  mail  (return  receipt
requested) or delivered  personally or by courier or by confirmed telecopy , and
shall be effective five days after being placed in the mail, if mailed,  or upon
receipt  or  refusal  of  receipt,  if  delivered  personally  or by  courier or
confirmed  telecopy,  in each case addressed to a party.  The addresses for such
communications shall be:

If to the Company:

Futuremedia Plc
Nile House
Nile Street
Brighton
BN1 1HW

Tel: +44 (0) 1273 829700
Fax: +44 (0) 1273 829702

with a copy to:

Mark A. Dorff, Esq.
Brown Rudnick / 8 Clifford Street / London W1S 2LQ
Tel: +44-20-7851-6005 (Direct)
Fax: +44-20-7851-6100

                                      -10-
<PAGE>

If to a Fund or M.A.G.

M.A.G. Capital, LLC
         555 South Flower Street
         Suite 4200
         Los Angeles, CA 90071
         Telephone No.: (213) 533-8288
         Facsimile No.:  (213) 533-8285
         Attention:        David Firestone

With a copy to

Sheppard Mullin Richter & Hampton LLP
         333 South Hope Street
         48th Floor
         Los Angeles, CA 90071-1448
         Telephone No.: (213) 620-1780
         Facsimile No.:  (213) 620-1398
         Attention:        David C. Ulich

Each party hereto may from time to time change its address or  facsimile  number
for notices under this Section 8 by giving at least ten (10) days' prior written
notice of such changed address or facsimile  number, in the case of the Funds to
the Company, and in the case of the Company to all of the Funds and M.A.G.

      Section 5. Definitions. For the purposes hereof, the following terms shall
have the following meanings:

      "ADSs" means the Company's  American  Depositary Shares which trade on the
Nasdaq SmallCap Market under the symbol FMDAY.  Each ADS represents the right to
receive  one  Ordinary  Share of the  Company.  ADSs are  evidenced  by American
Depositary  Receipts ("ADRs").  ADSs evidenced by ADRs are issued by the Bank of
New York as  Depositary  (the  "Depositary")  of the  Company's  ADR facility in
accordance  with the terms of a deposit  agreement  between  the Company and the
Depositary.

      "Business  Day"  means any day except  Saturday,  Sunday and any day which
shall be a federal  legal holiday in the United States or a legal holiday in the
United  Kindgom or a day on which banking  institutions  in the United States or
United Kingdom are authorized or required by law or other  government  action to
close.

      "Commission" means the Securities and Exchange Commission.

      "Ordinary  Shares" means the Ordinary Shares,  of the Company and stock of
any other class into which such shares may hereafter be changed or reclassified.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                                      -11-
<PAGE>

      "Market Price" on any given date shall equal the volume  weighted  average
price of the Company's Ordinary Shares during the five (5) immediately preceding
trading days (which may include  trading days prior to the Original Issue Date),
provided,  that such 5 trading  day period  shall be  extended  by the number of
trading days during such period on which (i) trading in the  Ordinary  Shares is
suspended  by, or not traded on, the NASDAQ or a subsequent  market on which the
Ordinary  Shares  is then  traded,  or (ii)  after  the  date  the  Registration
Statement  is declared  effective  by the SEC,  the  prospectus  included in the
Registration  Statement for the underlying  shares may not be used by the Holder
for the resale of underlying Ordinary Shares (provided such inability to use the
prospectus  is not (a) caused by the Holder or (b) as a result of the  Company's
filing of post-effective amendments to the Registration Statement).

      "Original  Issue  Date"  shall mean the date of the first  issuance of the
Debenture  regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Debenture.

      "Per Share Market  Value"  means the price per share in the last  reported
trade of the ADSs on the NASDAQ or on a Subsequent on which the Ordinary  Shares
is then listed.

      "Person" means a corporation, an association, a partnership, organization,
a business,  an individual,  a government or political  subdivision thereof or a
governmental agency.

      "Purchase  Agreement" means that Securities  Purchase  Agreement,  of even
date  herewith to which the  Company and the  original  Holder are  parties,  as
amended,  modified  or  supplemented  from time to time in  accordance  with its
terms.

      "Registration  Rights Agreement" means the Registration  Rights Agreement,
of even date herewith, to which the Company and the original Holder are parties,
as amended,  modified or  supplemented  from time to time in accordance with its
terms.

      "Registration  Statement" means the registration  statement to be filed by
the Company with the SEC pursuant to the Registration Rights Agreement.

      "Securities  Act" means the  Securities  Act of 1933, as amended,  and the
rules and regulations promulgated thereunder.

      "Trading  Day" means a day on which the Ordinary  Shares are quoted on the
NASDAQ  or quoted or  traded  on such  Subsequent  Market on which the  Ordinary
Shares are then quoted or listed;  provided, that in the event that the Ordinary
Shares are not listed or quoted, then Trading Day shall mean a Business Day.

      "Underlying  Shares" means the Ordinary Shares issuable upon conversion of
the Debenture or as payment of interest in accordance with the terms hereof.

      Section 6. Except as  expressly  provided  herein,  no  provision  of this
Debenture  shall  alter or impair  the  obligations  of the  Company,  which are
absolute  and  unconditional,  to pay the  principal  of, and  interest on, this
Debenture at the time,  place,  and rate,  and in the coin or  currency,  herein
prescribed. This Debenture is a direct obligation of the Company. This Debenture
ranks  pari  passu  with  all  other  Debentures  previously  issued  or  issued


                                      -12-
<PAGE>

concurrently herewith and shall be senior to Debentures issued in the future. As
long as the  Debenture  is  outstanding,  the Company  shall not and shall cause
their  subsidiaries  not to,  without the  consent of the Holder,  (i) amend its
articles of association or other charter documents so as to adversely affect any
rights of the Holder;  (ii) repay,  repurchase or offer to repay,  repurchase or
otherwise acquire shares of its Ordinary Shares or other equity  securities;  or
(iii) enter into any agreement with respect to any of the foregoing.

      Section  7. This  Debenture  shall not  entitle  the  Holder to any of the
rights of a stockholder of the Company,  including without limitation, the right
to vote, to receive dividends and other distributions,  or to receive any notice
of, or to attend,  meetings  of  stockholders  or any other  proceedings  of the
Company,  unless and to the extent  converted into Ordinary Shares in accordance
with the terms hereof.

      Section 8. If this Debenture is mutilated,  lost, stolen or destroyed, the
Company shall  execute and deliver,  in exchange and  substitution  for and upon
cancellation of the mutilated Debenture,  or in lieu of or in substitution for a
lost, stolen or destroyed debenture, a new Debenture for the principal amount of
this Debenture so mutilated,  lost, stolen or destroyed but only upon receipt of
evidence  of such  loss,  theft or  destruction  of such  Debenture,  and of the
ownership hereof, and indemnity,  if requested,  all reasonably  satisfactory to
the Company.

      Section 9. THE  VALIDITY AND  INTERPRETATION  OF THIS  AGREEMENT,  AND THE
TERMS AND  CONDITIONS  SET FORTH  HEREIN  SHALL BE GOVERNED BY AND  CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  GIVING  EFFECT TO
PROVISIONS  RELATING TO  CONFLICTS OF LAW TO THE EXTENT THE  APPLICATION  OF THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

      Section  10.  Any  waiver by the  Company or the Holder of a breach of any
provision of this Debenture  shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this  Debenture.  The failure of the Company or the Holder to insist upon strict
adherence to any term of this  Debenture on one or more  occasions  shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict  adherence to that term or any other term of this  Debenture.  Any waiver
must be in writing.

      Section 11. If any  provision  of this  Debenture  is invalid,  illegal or
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance,  it shall  nevertheless
remain applicable to all other persons and  circumstances.  If it shall be found
that any interest or other amount deemed  interest due  hereunder  shall violate
applicable laws governing  usury,  the applicable rate of interest due hereunder
shall  automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that they shall
not at any time insist upon,  plead, or in any manner  whatsoever  claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would  prohibit  or forgive  the  Company  from paying all or any portion of the
principal  of or interest on the  Debenture  as  contemplated  herein,  wherever
enacted,  now or at any time  hereafter  in  force,  or  which  may  affect  the
covenants or the performance of this  indenture,  and the Company (to the extent
it may lawfully do so) hereby  expressly waives all benefits or advantage of any
such law,  and  covenants  that it will not, by resort to any such law,  hinder,
delay or impeded the  execution of any power herein  granted to the Holder,  but
will  suffer and permit  the  execution  of every such as though no such law has
been enacted.

                                      -13-
<PAGE>

      Section 12.  Whenever any payment or other  obligation  hereunder shall be
due on a day other than a Business  Day,  such payment shall be made on the next
succeeding Business Day.

      Section  13.  Company  may not  assign  this  Agreement  or any  rights or
obligations  hereunder  without the prior written consent of Holder.  Holder may
assign  this  Agreement,  in whole or in party,  and any  rights  or  obligation
hereunder  without the prior  written  consent of Company by delivery of written
notice  to  Company  of such  assignment.  Holder  will not  assign  its  rights
hereunder except in compliance with federal and state securities laws.

      Section  14.   Commencing  90  days  after  the  effective   date  of  the
Registration Statement,  the Company may at its option, pre-pay all or a portion
of the Debentures at a price equal to 125% of the original principal amount plus
any accrued interest thereon.

      Section 15.  Commencing on the date hereof and continuing  until such time
as the Debentures are no longer outstanding, Holder, on behalf of itself and its
affiliates, hereby covenants and agrees not to, directly or indirectly, offer to
"short sell",  contract to "short sell" or otherwise "short sell" the securities
of the Company,  including,  without  limitation,  Ordinary  Shares that will be
received as a result of the conversion of the Debentures.

      IN WITNESS WHEREOF, the Company has caused this 2005 Convertible Debenture
to be duly  executed  by a duly  authorized  officer as of the date first  above
indicated.

Futuremedia PLC



By:
     ---------------------------
Name:
     ---------------------------
Title:
     ---------------------------

                                      -14-
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert the Debenture)

The  undersigned  hereby elects to convert the attached  Debenture into Ordinary
Shares,   $0.         par  value  per  share   (the   "Ordinary   Shares"),   of
                   .  (the "Company")  according to the conditions hereof, as of
the date written below. If shares are to be issued in the name of a person other
than the  undersigned,  the undersigned will pay all transfer taxes payable with
respect  thereto and is delivering  herewith such  certificates  and opinions as
reasonably  requested  by the Company in  accordance  therewith.  No fee will be
charged to the holder for any  conversion,  except for such transfer  taxes,  if
any.

Conversion calculations:
                              ------------------------------------
                              Date to Effect Conversion

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

                              Principal Amount of Debentures to be Converted


                              $                         of Interest Accrued on
                                                        Account of Conversion
                                                        at Issue


                              Payment of Interest in Kind            |_| Yes
                                                                     |_| No

                                       If yes, $         of Interest Accrued on
                                                         Account of Conversion
                                                         at Issue


                              ------------------------------------
                              Number of Ordinary Shares to be Issued

                              ------------------------------------
                              Applicable Conversion Price

                              ------------------------------------
                              Signature

                              ------------------------------------
                              Name
                              ------------------------------------


                              ------------------------------------
                              Address


                                      -15-
<PAGE>

                                   Schedule 1

                               CONVERSION SCHEDULE

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

      %  Convertible  Debenture due                    , 20  _, in the aggregate
principal amount of $             _  issued by                           .  This
Conversion Schedule reflects conversions made under Section 4(a)(i) of the above
referenced Debenture.

                                     Dated:


<TABLE>
<CAPTION>
====================================================================================================================
                                                 Aggregate Principal
                                                  Amount Remaining
  Date of Conversion                                Subsequent to
 (or for first entry,                                Conversion
 Original Issue Date)    Amount of Conversion       (or original          Company Attest
                                                  Principal Amount)
<S>                       <C>                    <C>                   <C>                      <C>
======================== ====================== ====================== ====================== ======================

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

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

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

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

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

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

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

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

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

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

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

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

====================================================================================================================
</TABLE>




                                      -16-