FUTUREMEDIA
ANNOUNCES FUNDING FROM YORKVILLE ADVISORS
Brighton,
England – January 22, 2008 – Futuremedia plc (NasdaqCM: FMDA),
a
leading
e-learning provider and design, exhibition and events agency, today announced
that it has received a funding payment which includes $2 million from Yorkville
Advisors and $71,000 from National Air Cargo – Middle East (NACME).
Additionally, there were five million ADS warrants issued as part of the
funding
agreement. These warrants are priced at $2 per share, which potentially provides
the Company with up to $10 million of future funding. The Yorkville portion
of
the funding included the final $980,000 payment associated with the $6 million
funding agreement announced on August 23, 2007, along with an additional
$1
million funding for cash flow needs over the next six months.
“This
funding is indicative of our investors’ continued commitment to Futuremedia and
we intend to reward that commitment. The additional $1 million in funding
will
primarily be used by Futuremedia Learning to implement its revised business
plan
and meet cash flow needs. Our Button Group division is exceeding its 2008
financial plan, making progress towards profitability and continuing to expand
its global client base,” stated George O’Leary, CEO of Futuremedia.
About
Futuremedia
Futuremedia
plc is a global media company providing online learning, design, exhibition
and
event services to public and private sector organizations. Established in
1982
and listed on the Nasdaq in 1993, Futuremedia helps its clients to communicate
their values, product and brand information to employees, customers and
industry, and believes that learning is a key component in the communication
mix. Futuremedia divisions are Futuremedia Learning and Button Group plc.
The
Button Group has been providing design, exhibition and event services in
Cannes,
France and elsewhere around the world for more than 30 years. For more
information, visit
www.futuremedia.co.uk
.
"Safe
Harbor" Statement under Section 21E of the Securities Exchange Act of 1934:
This
press release contains forward-looking statements related to future results
and
speaks only of Futuremedia's expectations as of the date hereof. Such statements
include expectations regarding: the Company’s ability to maintain its listing on
the Nasdaq-CM; the expected benefits from new sales, contracts or products;
the
expected benefits and success of operations in new markets; the expected
benefits of expanding the sales operations of group companies into new
geographical markets; the expected benefits of acquisitions; the expected
benefits of financing arrangements; and the Company's future financial condition
and performance. Such statements involve known and unknown risks and
uncertainties that may cause actual results to differ materially from
expectations. The risks and uncertainties include: risks associated with
the
Company’s ability to maintain its listing on the Nasdaq C-M; risks associated
with the Company's ability to develop and successfully market new services
and
products (including the risk that such products may not be accepted in the
market), risks relating to operations in new markets (including the risk
that
such operations may not deliver anticipated revenue or profits); risks
associated with acquisitions (including the risk that such acquisitions may
not
deliver the benefits expected by management and risks associated with
integration of acquisitions generally); risks that financing arrangements
could
result in substantial dilution to shareholders because of subscription prices
below the current market value of the Company's ADSs or other factors; risks
relating to the Company's ability to operate profitably in the future; risks
associated with rapid growth; the Company's ability to successfully develop
its
business in new geographic markets; the early stage of the e-learning market;
rapid technological change and competition; and other factors detailed in
the
Company's filings with the US Securities and Exchange Commission. The Company
expressly disclaims any obligation to release publicly any updates or revisions
to any such statement to reflect any change in expectations or in information
on
which any such statement is based. All product names and trademarks mentioned
herein are trademarks of Futuremedia or their respective owners.
Contact
Information:
US
- Mike
Smargiassi/Dianne Pascarella
Brainerd
Communicators, Inc.
+1
212-986-6667
ir@futuremedia.co.uk
AMENDMENT
NO. 1 TO
SECURITIES
PURCHASE AGREEMENT
THIS
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
(this
“
Amendment
”),
is
entered into by and between
FUTUREMEDIA
PLC,
a Public
Limited Company organized and existing under the laws of England and
Wales (the “
Company
”),
and
YA
GLOBAL INVESTMENTS, L.P. (f/k/a CORNELL CAPITAL PARTNERS,
L.P.)
(the
“
Buyers
”).
WHEREAS:
A.
The
parties hereto previously entered into that certain Securities Purchase
Agreement dated as of August 20, 2007 (the "
Agreement
").
B.
The
parties to the Agreement now desire to amend certain provisions set forth
in the
Agreement as more fully described herein.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Buyers hereby agree as
follows:
1.
AMENDMENT
OF 2
nd
‘WHEREAS’
CLAUSE.
The 2
nd
‘Whereas’
clause of the Agreement is hereby amended and replaced in its entirety
with the
following:
“
WHEREAS
,
the
parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Buyer(s), as provided herein,
and the Buyer(s) shall purchase Six Million Fifty Thousand Dollars ($6,050,000)
of secured convertible debentures in the form attached hereto as “
Exhibit
A
”
(the
“
Convertible
Debentures
”),
which
shall be convertible into shares of the Company’s American Depository Shares (as
evidenced by American Depository Receipts) (“
ADS
”
and
as
converted, the “
Conversion
Shares
”);
each
ADS representing the right to receive one of the Company’s Ordinary Shares of
0.01 pence each (the “
Ordinary
Shares
”
as
converted, the “
Conversion
Shares
”)
of
which Three Million Two Hundred Thousand Dollars ($3,200,000) shall be purchased
within five (5) business day following the date hereof (the “
First
Closing
”),
Four
Hundred Thirty Five Thousand Dollars ($435,000) minus any amounts raised
by the
company either due to cash exercise of any warrants including any warrants
held
by the Buyer or the issuance and/or sale by the Company, or any person entity
or
agent in their behalf, of any shares of Ordinary Shares, common stock, preferred
shares, ADS, warrants, or convertible debentures, shall be purchased on October
15, 2007, subject to the conditions set forth herein (the “
Second
Closing
”),
One
Million Four Hundred Thirty-Five Thousand Dollars ($1,435,000) shall be
purchased on November 5, 2007, subject to the conditions set forth herein
(the
“
Third
Closing
”),
Five
Hundred Sixty Thousand Dollars ($560,000) shall be purchased on April 15,
2008,
subject to the conditions set forth herein (the “
Fourth
Closing
”),
and
Four Hundred Twenty Thousand Dollars ($420,000) shall be purchased on June
15,
2008, subject to the conditions set forth herein (the “
Fifth
Closing
”),
for a
total purchase price of up to Six Million Fifty Thousand Dollars ($6,050,000),
(the “
Purchase
Price
”)
in the
respective amounts set forth opposite each Buyer(s) name on Schedule I (the
“
Subscription
Amount
”);”
2.
AMENDMENT
OF SECTION 1(b)
.
Section
1(b) of the Agreement is hereby amended and replaced in its entirety with
the
following:
“(b)
Closing
Dates
.
The
First Closing of the purchase and sale of the Convertible Debentures shall
take
place at 10:00 a.m. Eastern Standard Time on the fifth (5
th
)
business day following the date hereof, subject to notification of satisfaction
of the conditions to the First Closing set forth herein and in Sections 6
and 7
below (or such later date as is mutually agreed to by the Company and the
Buyer(s)) (the “
First
Closing Date
”),
the
Second Closing of the purchase and sale of the Convertible Debentures shall
take
place at 10:00 a.m. Eastern Standard Time on October 15, 2007, subject to
notification of satisfaction of the conditions to the Second Closing set
forth
herein and in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyer(s)) (the “
Second
Closing Date
”),
the
Third Closing of the purchase and sale of the Convertible Debentures shall
take
place at 10:00 a.m. Eastern Standard Time on November 5, 2007, subject to
notification of satisfaction of the conditions to the Third Closing set forth
herein and in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyer(s)) (the “
Third
Closing Date
”),
the
Fourth Closing of the purchase and sale of the Convertible Debentures shall
take
place at 10:00 a.m. Eastern Standard Time on April 15, 2008, subject to
notification of satisfaction of the conditions to the Sixth Closing set forth
herein and in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyer(s)) (the “
Fourth
Closing Date
”)
and
the Fifth Closing of the purchase and sale of the Convertible Debentures
shall
take place at 10:00 a.m. Eastern Standard Time on June 15, 2008, subject
to
notification of satisfaction of the conditions to the Seventh Closing set
forth
herein and in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyer(s)) (the “
Fifth
Closing Date
”)
(collectively referred to as the “
Closing
Dates
”)
The
Closings shall occur on the respective Closing Dates at the offices of Yorkville
Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
(or
such other place as is mutually agreed to by the Company and the
Buyer(s)).”
3.
AMENDMENT
OF SECTION 7(d)
.
Section
7(d) of the Agreement is hereby amended and replaced in its entirety with
the
following:
(d)
The
obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
at
the Fourth Closing is subject to the satisfaction, at or before the Fourth
Closing Date, of each of the following conditions:
(i)
The
Company shall have executed the Transaction Documents and delivered the same
to
the Buyers.
(ii)
The
ADSs
representing Ordinary Shares shall be authorized for quotation on the NASDAQ-CM,
and trading in the ADSs shall not have been suspended for any reason.
(iii)
The
representations and warranties of the Company shall be true and correct in
all
material respects (except to the extent that any of such representations
and
warranties is already qualified as to materiality in Section 3 above, in
which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Fourth Closing
Date as though made at that time (except for representations and warranties
that
speak as of a specific date) and the Company shall have performed, satisfied
and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
the
Company at or prior to the Fourth Closing Date
(iv)
The
Company shall have executed and delivered to the Buyer(s) the Convertible
Debentures in the respective amounts set forth opposite each Buyer’s name on
Schedule I attached hereto.
(v)
The
Company shall have delivered to the Buyers a certificate, executed by the
Secretary of the Company and dated as of the Fourth Closing Date, as to (i)
the
resolutions consistent with Section 3(c) as adopted by the Company's Board
of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
of
Incorporation and (iii) the Bylaws, each as in effect at the Fourth
Closing.
(vi)
The
Company shall have achieved total revenue of $3,000,000 for the fiscal quarter
ended September 30, 2007(1
st
Q 2007)
and provided proof to the Buyer which proof shall be to the sole satisfaction
of
the Buyer.
(vii)
The
Company shall have generated a minimum of $200,000 of positive cash flow
for the
fiscal quarter ended March 31, 2008) (3
rd
Q 2008)
and provided and certified by the Buyers a cash flow statement prepared in
accordance with GAAP and prepared by the Company’s accountants as proof of such
cash flow.
4.
AMENDMENT
OF SECTION 7(e)
.
Section
7(e) of the Agreement is hereby amended and replaced in its entirety with
the
following:
(e)
The
obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
at
the Fifth Closing is subject to the satisfaction, at or before the Fifth
Closing
Date, of each of the following conditions:
(i)
The
Company shall have executed the Transaction Documents and delivered the same
to
the Buyers.
(ii)
The
ADSs
representing Ordinary Shares shall be authorized for quotation on the NASDAQ-CM,
and trading in the ADSs shall not have been suspended for any reason.
(iii)
The
representations and warranties of the Company shall be true and correct in
all
material respects (except to the extent that any of such representations
and
warranties is already qualified as to materiality in Section 3 above, in
which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Fifth Closing
Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied
and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
the
Company at or prior to the Fifth Closing Date
(iv)
The
Company shall have executed and delivered to the Buyer(s) the Convertible
Debentures in the respective amounts set forth opposite each Buyer’s name on
Schedule I attached hereto.
(v)
The
Company shall have delivered to the Buyers a certificate, executed by the
Secretary of the Company and dated as of the Fifth Closing Date, as to (i)
the
resolutions consistent with Section 3(c) as adopted by the Company's Board
of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
of
Incorporation and (iii) the Bylaws, each as in effect at the Fifth
Closing.
(vi)
The
Company shall have achieved total revenue of $3,000,000 for the fiscal quarter
ended September 30, 2007(1
st
Q 2007)
and provided proof to the Buyer which proof shall be to the sole satisfaction
of
the Buyer.
(vii)
The
Company shall have generated a minimum of $200,000 of positive cash flow
for the
fiscal quarter ended March 31, 2008) (3
rd
Q 2008)
and provided and certified by the Buyers a cash flow statement prepared in
accordance with GAAP and prepared by the Company’s accountants as proof of such
cash flow.
5.
AMENDMENT
OF SECTION 7(f)
.
Section
7(f) of the Agreement is hereby deleted in its entirety.
6.
EFFECT
ON OTHER TERMS
.
This
Amendment shall be deemed effective as of August 20, 2007, as if entered
into on
such date. All other terms set forth in the Agreement shall remain unchanged
and
this Amendment and the Agreement shall be deemed a single integrated agreement
for all purposes.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
the
parties have caused this Amendment No. 1 to Securities Purchase Agreement
to be
duly executed as of day and year first above written.
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COMPANY:
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FUTUREMEDIA
PLC
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By:
________________________________
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Name:
George O’Leary
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Title:
Chief
Executive Officer
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BUTTON
GROUP PLC*
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By:
________________________________
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Name:
George O’Leary
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Title:
Managing Director
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BUYER:
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YA
GLOBAL INVESTMENTS, L.P.
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By:
Yorkville Advisors, LLC
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its Investment Manager
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By:
_________________________________
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Name:
Mark A. Angelo
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Title:
President & Portfolio Manager
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*Executed
solely for the representation made in Section 3(ff) and (gg), and the covenant
in Section 4(s) of the Agreement.
AMENDMENT
NO. 2 TO
SECURITIES
PURCHASE AGREEMENT
THIS
AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT
(this
“
Amendment
”),
dated
January 9, 2008 is entered into by and between
FUTUREMEDIA
PLC,
a Public
Limited Company organized and existing under the laws of England and
Wales (the “
Company
”),
and
YA
GLOBAL INVESTMENTS, L.P. (f/k/a CORNELL CAPITAL PARTNERS,
L.P.)
(the
“
Buyer
”).
All
capitalized terms not defined herein shall have the meaning ascribed to them
in
the Securities Purchase Agreement.
WHEREAS:
A.
The
parties hereto previously entered into that certain Securities Purchase
Agreement dated as of August 20, 2007 as amended by Amendment No. 1 to
Securities Purchase Agreement on, or about November 5, 2007 (the "
Securities
Purchase Agreement
").
B.
Pursuant
to the Securities Purchase Agreement, the Company has issued and shall issue,
and the Buyer has purchased and shall purchase, secured convertible debentures
(collectively, the “
Convertible
Debentures
”)
on a
number of separate Closings.
C.
The
First
Closing, the Second Closing, and the Third Closing have all been completed
and
funded, and the Fourth Closing in the amount of $560,000 and Fifth Closing
in
the amount of $420,000 were to take place on April 15, 2008 and June 15,
2008,
respectively, in accordance with the Agreement.
C.
The
parties desire to amend the Securities Purchase Agreement to combine the
Fourth
and Fifth Closings into one Closing, increase the amount of such Closing
to
$2,000,000, and move the date of such Closing to the date hereof.
The
parties to the Agreement now desire to amend certain provisions set forth
in the
Agreement as more fully described herein.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Buyer hereby agree as
follows:
1.
Amendment
to the Fourth and Fifth Closing
.
(a)
The
Fourth Closing and the Fifth Closing shall be combined into one Closing,
which
shall hereinafter be referred to as the “
Final
Closing
.”
The
amount of the Final Closing shall be $2,000,000, which includes the $560,000
originally designated as the Fourth Closing, plus the $420,000 originally
designated as the Fifth Closing, and an additional amount of $1,200,000,
for a
total of $2,000,000.
(b)
The
“Purchase Price” and the “Subscription Amount” as referenced in the Securities
Purchase Agreement shall hereinafter mean $7,250,000, which amount includes
the
additional amount added to the Final Closing.
(c)
Section
1(b) of the Securities Purchase Agreement shall be amended such that the
Final
Closing of the purchase and sale of the Convertible Debentures shall take
place
at 10:00 a.m. Eastern Standard Time within 3 days of the date hereof, subject
to
notification of satisfaction of the conditions to the Final Closing set forth
herein and in Sections 6 and 7 of the Securities Purchase Agreement (or such
later date as is mutually agreed to by the Company and the Buyer(s)) (the
“
Final
Closing Date
”),
Furthermore, all references to the Fourth Closing and the Fifth Closing shall
be
changed to refer to the Final Closing.
2.
Covenants
of the Company and Agreements
.
(a)
The
Company shall increase its authorized capital stock to at least 20 billion
Ordinary Shares within 60 days of the date hereof.
(b)
The
Fixed
Conversion Price (as set forth in Section 4(a)(ii) of the Convertible Debentures
shall be adjusted to equal $1.00 (after taking into account the Company’s change
in the number of the Company’s Ordinary Shares represented by one American
Depository Share (“
ADS
”)
from
one ADS representing fifty Ordinary Shares to one ADS representing One Thousand
Ordinary Shares (the “
Ratio
Change
”).
(c)
The
Company shall issue amendments in the form of Exhibit A attached hereto to
each
of the prior Convertible Debentures already issued to reflect the adjustment
to
the Fixed Conversion Price. The Convertible Debenture issued pursuant to
the
Final Closing shall initially have a Fixed Conversion Price set at $1.00,
which
shall be on a post Ration Change basis.
(d)
The
Company shall file its Form 20-F for the period ended June 30, 2007, in full
compliance with the rules and regulations of the SEC for filing thereof,
on or
before January 14 2008, or on or before the appeal hearing date established
by
Nasdaq (estimated at 45 days after January 14, 2008), but in no event later
than
March 15, 2008.
(e)
The
Company shall, upon the receipt of any proceeds from either (i) any exercises
of
warrants of the Company, or (ii) any sale of a material business of the Company
(including FM Learning or Button Group, Plc.) use all such proceeds to repay
amounts outstanding under the Convertible Debentures. The Buyer shall have
the
right to decide how to apply such proceeds among the Convertible Debentures
and
shall promptly notify the Company of the application.
3.
Amendment
Of Section 7(d)
.
Section
7(d) of the Agreement is hereby amended and replaced in its entirety with
the
following:
(d)
The
obligation of the Buyer hereunder to purchase the Convertible Debentures
at the
Final Closing is subject to the satisfaction, at or before the Final Closing
Date, of each of the following conditions:
(i)
The
Company shall have executed the Transaction Documents and delivered the same
to
the Buyers.
(ii)
The
ADSs
representing Ordinary Shares shall be authorized for quotation on the NASDAQ-CM,
and trading in the ADSs shall not have been suspended for any reason.
(iii)
The
representations and warranties of the Company shall be true and correct in
all
material respects (except to the extent that any of such representations
and
warranties is already qualified as to materiality in Section 3 above, in
which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Final Closing
Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied
and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
the
Company at or prior to the Final Closing Date.
(iv)
The
Company shall have executed and delivered to the Buyer the Convertible Debenture
in the original principal amount of $2,000,000.
(v)
The
Company shall have delivered to the Buyers a certificate, executed by the
Secretary of the Company and dated as of the Final Closing Date, as to (i)
the
resolutions consistent with Section 3(c) of the Securities Purchase Agreement
and Section 8 hereof as adopted by the Company's Board of Directors in a
form
reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation,
(iii) the Bylaws, each as in effect at the Final Closing, and (iv) the
satisfaction by the Company (or waiver by the Buyer) of each of the conditions
to the Final Closing.
(vi)
The
Company shall have achieved total revenue of $3,000,000 for the fiscal quarter
ended September 30, 2007(1
st
Q 2007)
and provided proof to the Buyer which proof shall be to the sole satisfaction
of
the Buyer.
(vii)
The
Company shall have obtained the HSBC Consent and the Barclays Consent.
4.
Security
Interest and Guarantee Granted Pursuant to Button Debenture
.
Button
Group PLC (
“Button
”)
acknowledges and agrees that all of the monies, obligations, and liabilities
due
from, or owing or incurred by the Company to the Buyer pursuant to this
Agreement or the Convertible Debenture issued at the Final Closing, and any
other additional obligations of the Company created hereunder form a part
of the
“Secured Obligations” referred to in the Button Debenture and as such are
subject to the provisions of the Button Debenture.
5.
Security
Interest and Guarantee Granted Pursuant to Future Debenture
.
The
Company acknowledges and agrees that all of the monies, obligations, and
liabilities due from, or owing or incurred by the Company to the Buyer pursuant
to this Agreement or the Convertible Debenture issued at the Final Closing,
and
any other additional obligations of the Company created hereunder form a
part of
the “Secured Obligations” referred to in the Future Debenture and as such are
subject to the provisions of the Future Debenture.
6.
Barclays
and HSBC Consents
.
The
Company and Button acknowledge that they have received written consent from
HSBC
PLC (the “
HSBC
Consent
”)
for
the Company to enter into the transactions contemplated hereunder and that
all
of the monies, obligations, and liabilities due from, or owing or incurred
by
the Company to the Buyer pursuant to this Agreement or the Convertible Debenture
issued at the Final Closing, and any other additional obligations of the
Company
created hereunder form a part of the “Senior Lenders’ Debt” referred to in the
HSBC Deed of Priorities.
7.
The
Company and Button acknowledge that they have received written consent from
Barclays PLC (the “
Barclays
Consent
”)
for
the Company to enter into the transactions contemplated hereunder and that
all
of the monies, obligations, and liabilities due from, or owing or incurred
by
the Company to the Buyer pursuant to this Agreement or the Convertible Debenture
issued at the Final Closing, and any other additional obligations of the
Company
created hereunder form a part of the “Cornell Debt” referred to in the Barclays
Deed of Priorities.
8.
The
Company represents and warrants that it has the requisite corporate power
and
authority to enter into and perform its obligations under this Agreement
and to
issue the Convertible Debenture at the Final Closing (collectively, the
“
Final
Closing Documents
”)
in
accordance with the terms hereof and thereof, (ii) the execution and delivery
of
the Final Closing Documents by the Company and the consummation by it of
the
transactions contemplated hereby and thereby, including, without limitation,
the
issuance of the Convertible Debenture at the Final Closing has been duly
authorized by the Company’s Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders, (iii) the Final Closing Documents constitute the valid and
binding
obligations of the Company enforceable against the Company in accordance
with
their terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies, (iv) the issuance of the Final Closing
Debenture will not conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration
or
cancellation of, any agreement, indenture or instrument to which the Company
or
any of its subsidiaries is a party and will not cause a ratchet or adjustment
to
any conversion price or exercise price, or the number of shares obtainable
upon
conversion or exercise or any of the forgoing.
9.
Effect
on Other Terms
.
Except
as specifically set forth herein, all terms set forth in the Securities Purchase
Agreement or the Convertible Debentures shall remain unchanged.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
the
parties have caused this Amendment No. 2 to Securities Purchase Agreement
to be
duly executed as of day and year first above written.
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COMPANY:
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FUTUREMEDIA
PLC
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By:
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Name:
George O’Leary
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Title:
Chief
Executive Officer
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BUTTON
GROUP PLC*
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By:
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Name:
George O’Leary
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Title:
Managing Director
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BUYER:
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YA
GLOBAL INVESTMENTS, L.P.
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By:
Yorkville Advisors, LLC
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its Investment Manager
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By:
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Name:
Mark A. Angelo
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Title:
President & Portfolio Manager
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*Executed
solely for the representation made in Sections 4 and 7.
Exhibit
A
Amendment
to Convertible Debentures
FUTUREMEDIA
PLC.
AMENDMENT
NO. 1
TO
AMENDED AND RESTATED
SECURED
CONVERTIBLE DEBENTURE
NO.FMDAD-1-7
(“ORIGINAL DEBENTURE”)
THIS
AMENDMENT SHOULD BE ATTACHED TO THE
ORIGINAL
DEBENTURE
This
Amendment No. 1 to the Original Debenture (this “Amendment”) is issued in
connection with that certain Original Debenture referenced above issued
by
Futuremedia Plc. (the “Company”) to
YA
Global Investments, L.P.
(the
“Holder”), on August 20, 2007 in the original amount of $3,200,000.
THIS
CERTIFIES THAT,
the
following amendments are hereby made to the Debenture:
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1.
|
The
Fixed Conversion Price (as set forth in Section 4(a)(ii) of the
Original
Debenture shall hereinafter be equal to
$1.00
(after taking into account the Company’s change in the number of the
Company’s Ordinary Shares represented by one American Depository Share
(“
ADS
”)
from one ADS representing fifty Ordinary Shares to one ADS representing
One Thousand Ordinary Shares, subject to adjustment as provided
in the
Original Debenture.
|
IN
WITNESS WHEREOF,
the
Company has caused this Amendment to be signed by its duly authorized
officer.
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FUTUREMEDIA
PLC.
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By:
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Name:
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Title:
|
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Dated:
January ___, 2008
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FUTUREMEDIA
PLC.
AMENDMENT
NO. 1
TO
AMENDED AND RESTATED
SECURED
CONVERTIBLE DEBENTURE
NO.FMDAD-2-7
(“ORIGINAL DEBENTURE”)
THIS
AMENDMENT SHOULD BE ATTACHED TO THE
ORIGINAL
DEBENTURE
This
Amendment No. 1 to the Original Debenture (this “Amendment”) is issued in
connection with that certain Original Debenture referenced above issued
by
Futuremedia Plc. (the “Company”) to
YA
Global Investments, L.P.
(the
“Holder”), on October 25, 2007 in the original amount of $435,000.
THIS
CERTIFIES THAT,
the
following amendments are hereby made to the Debenture:
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1.
|
The
Fixed Conversion Price (as set forth in Section 4(a)(ii) of the
Original
Debenture shall hereinafter be equal to
$1.00
(after taking into account the Company’s change in the number of the
Company’s Ordinary Shares represented by one American Depository Share
(“
ADS
”)
from one ADS representing fifty Ordinary Shares to one ADS representing
One Thousand Ordinary Shares, subject to adjustment as provided
in the
Original Debenture.
|
IN
WITNESS WHEREOF,
the
Company has caused this Amendment to be signed by its duly authorized
officer.
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FUTUREMEDIA
PLC.
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By:
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Name:
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Title:
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Dated:
January ___, 2008
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FUTUREMEDIA
PLC.
AMENDMENT
NO. 1
TO
AMENDED AND RESTATED
SECURED
CONVERTIBLE DEBENTURE
NO.FMDAD-3-5
(“ORIGINAL DEBENTURE”)
THIS
AMENDMENT SHOULD BE ATTACHED TO THE
ORIGINAL
DEBENTURE
This
Amendment No. 1 to the Original Debenture (this “Amendment”) is issued in
connection with that certain Original Debenture referenced above issued
by
Futuremedia Plc. (the “Company”) to
YA
Global Investments, L.P.
(the
“Holder”), on November 8, 2007 in the original amount of $1,435,000.
THIS
CERTIFIES THAT,
the
following amendments are hereby made to the Debenture:
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1.
|
The
Fixed Conversion Price (as set forth in Section 4(a)(ii) of the
Original
Debenture shall hereinafter be equal to
$1.00
(after taking into account the Company’s change in the number of the
Company’s Ordinary Shares represented by one American Depository Share
(“
ADS
”)
from one ADS representing fifty Ordinary Shares to one ADS representing
One Thousand Ordinary Shares, subject to adjustment as provided
in the
Original Debenture.
|
IN
WITNESS WHEREOF,
the
Company has caused this Amendment to be signed by its duly authorized
officer.
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FUTUREMEDIA
PLC.
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By:
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Name:
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Title:
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Dated:
January ___, 2008
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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 STATE. THESE SECURITIES HAVE BEEN SOLD 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 APPLICABLE STATE
SECURITIES LAWS.
FUTUREMEDIA
PLC
Secured
Convertible Debenture
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Issuance
Date: January __, 2008
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Original
Principal Amount:
$
2,000,000
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No.
FMDAD-4-5
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FOR
VALUE RECEIVED,
FUTUREMEDIA PLC, a Public Limited Company organized under the laws of England
and Wales (the "
Company
"),
hereby promises to pay to the order of YA GLOBAL INVESTMENTS, L.P. (f/k/a
CORNELL CAPITAL PARTNERS, L.P.) or registered assigns (the "
Holder
")
the
amount set out above as the Original Principal Amount (as reduced pursuant
to
the terms hereof pursuant to redemption, conversion or otherwise, the
"
Principal
")
when
due, whether upon the Maturity Date (as defined below), acceleration, redemption
or otherwise (in each case in accordance with the terms hereof) and to pay
interest ("
Interest
")
on any
outstanding Principal at the applicable Interest Rate from the date set out
above as the Issuance Date (the "
Issuance
Date
")
until
the same becomes due and payable, on the Maturity Date or acceleration,
conversion, redemption or otherwise (in each case in accordance with the
terms
hereof). This Secured Convertible Debenture (including all Secured Convertible
Debentures issued in exchange, transfer or replacement hereof, this
"
Debenture
")
is one
of an issue of Secured Convertible Debentures issued pursuant to the Securities
Purchase Agreement between the Company and the Holder dated August 20, 2007,
as
amended (collectively, the "
Debentures
"
and
such other Senior Convertible Debentures, the "
Other
Debentures
").
Certain capitalized terms used herein are defined in Section 17.
(1)
GENERAL
TERMS
(a)
Payment
of Principal
.
On
the
Maturity Date, the Company shall pay to the Holder an amount in cash
representing all outstanding Principal, accrued and unpaid Interest.
The
"
Maturity
Date
"
shall
be January
,
2011,
as may be extended at the option of the Holder (i) in the event that, and
for so
long as, an Event of Default (as defined below) shall have occurred and be
continuing on the Maturity Date (as may be extended pursuant to this Section
1)
or any event shall have occurred and be continuing on the Maturity Date (as
may
be extended pursuant to this Section 1) that with the passage of time and
the
failure to cure would result in an Event of Default. Other than as specifically
permitted by this Debenture or the Securities Purchase Agreement, the Company
may not prepay or redeem any portion of the outstanding Principal without
the
prior written consent of the Holder.
(b)
Interest
.
Interest shall accrue on the outstanding principal balance hereof at an annual
rate equal to the greater of twelve percent (12%) or The Wall Street Journal
Prime Rate, as quoted by the print edition of the United States version of
The
Wall Street Journal, plus two percent (2.00%) (“
Interest
Rate
”).
Interest shall be calculated on the basis of a 365-day year and the actual
number of days elapsed, to the extent permitted by applicable law. Interest
hereunder shall be paid on the Maturity Date (or sooner as provided herein)
to
the Holder or its assignee in whose name this Debenture is registered on
the
records of the Company regarding registration and transfers of Debentures
at the
option of the Company in cash, or, provided that the Equity Conditions are
then
satisfied converted into Ordinary Shares at the Closing Bid Price on the
Trading
Day immediately prior to the date paid.
(c)
Security
.
The
Debenture
is
secured by (i) the Future Debenture dated August 20, 2007 and (ii) the Button
Debenture (collectively referred to as
the
“
Security
Documents
”)
.
(2)
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)
the
Company's failure to pay to the Holder any amount of Principal, Interest,
or
other amounts when and as due under this Debenture (including, without
limitation, the Company's failure to pay any redemption payments or amounts
hereunder) or any other Transaction Document;
(ii)
The
Company or any subsidiary of the Company shall commence, or there shall be
commenced against the Company or any subsidiary of the Company under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or
any
successor thereto, or the Company or any subsidiary of 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
any
subsidiary of the Company or there is commenced against the Company or any
subsidiary of the Company any such bankruptcy, insolvency or other proceeding
which remains undismissed for a period of sixty one (61) days; or the Company
or
any subsidiary of 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 or any subsidiary of the Company suffers any appointment of any
custodian, private or court appointed receiver or the like for it or any
substantial part of its property which continues undischarged or unstayed
for a
period of
sixty
one
(61)
days;
or
the Company or any subsidiary of the Company makes a general assignment for
the
benefit of creditors; or the Company or any subsidiary of 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 or any subsidiary of 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 or
any
subsidiary of 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 or any subsidiary of the
Company for the purpose of effecting any of the foregoing;
(iii)
The
Company or any subsidiary of the Company shall default in any of its obligations
under any other debenture or any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which
there
may be issued, or by which there may be secured or evidenced any indebtedness
for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount
exceeding $100,000, whether such indebtedness now exists or shall hereafter
be
created and such default shall result in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable;
(iv)
If
the
Ordinary Shares are quoted or listed for trading on any of the following
and it
ceases to be so quoted or listed for trading and shall not again be quoted
or
listed for trading on any Primary Market within fifteen (15) Trading Days
of
such delisting: (a) the New York Stock Exchange (b) the American Stock Exchange,
(c) (d) the Nasdaq Global Select Market, (e) the Nasdaq Global Market (f)
the
Nasdaq Capital Market, or (g) the Nasdaq OTC Bulletin Board (“
OTCBB
”)
(each,
a “
Primary
Market
”);
(v)
The
Company or any subsidiary of the Company shall be a party to any Change of
Control Transaction (as defined in Section 6) unless in connection with such
Change of Control Transaction this Debenture is retired;
(vi)
The
Company shall fail to file the Underlying Shares Registration Statement with
the
Commission, or the Underlying Shares Registration Statement shall not have
been
declared effective by the Commission, in each case within thirty (30) days
of
the periods set forth in the Registration Rights Agreement (“
Registration
Rights Agreement
”)
dated
August 20, 2007 among the Company and each Buyer listed on Schedule I attached
thereto, or, while the Underlying Shares Registration Statement is required
to
be maintained effective pursuant to the terms of the Investor Registration
Rights Agreement, the effectiveness of the Underlying Shares Registration
Statement lapses for any reason (including, without limitation, the issuance
of
a stop order) or is unavailable to the Holder for sale of all of the Holder’s
Registrable Securities (as defined in the Investor Registration Rights
Agreement) in accordance with the terms of the Investor Registration Rights
Agreement, and such lapse or unavailability continues for a period of more
than
ten (10) consecutive Trading Days or for more than an aggregate of twenty
(20)
days in any 365-day period (which need not be consecutive);
(vii)
the
Company's (A) failure to cure a Conversion Failure by delivery of the required
number of shares of Ordinary Shares within five (5) Business Days after the
applicable Conversion Failure or (B) notice, written or oral, to any holder
of
the Debentures, including by way of public announcement, at any time, of
its
intention not to comply with a request for conversion of any Debentures into
shares of Ordinary Shares that is tendered in accordance with the provisions
of
the Debentures, other than pursuant to Section 4(c);
(viii)
The
Company shall fail for any reason to deliver the payment in cash pursuant
to a
Buy-In (as defined herein) within three (3) Business Days after such payment
is
due;
(ix)
The
Company shall fail to observe or perform any other covenant, agreement or
warranty contained in, or otherwise commit any breach or default of any
provision of this Debenture (except as may be covered by Section 2(a)(i)
through
2(a)(vii) hereof) or any Transaction Document (as defined in Section 16)
which
is not cured within the time prescribed.
(x)
any
Event
of Default (as defined in the Other Debentures) occurs with respect to any
Other
Debentures
(xi)
The
Company shall fail to meet the requirements of Section 4 and specifically
Sections 4(r)-(ee) of the Securities Purchase Agreement which is/are not
cured
within the time prescribed.
(b)
During
the time that any portion of this Debenture is outstanding, if any Event
of
Default has occurred, the full unpaid Principal amount of this Debenture,
together with interest and other amounts owing in respect thereof, to the
date
of acceleration shall become at the Holder's election, immediately due and
payable in cash; provided however, the Holder may request (but shall have
no
obligation to request) payment of such amounts in Ordinary Shares of the
Company. Furthermore, in addition to any other remedies, the Holder shall
have
the right (but not the obligation) to convert this Debenture at any time
after
(x) an Event of Default or (y) the Maturity Date at the lower of the Conversion
Price or the Company Conversion Price. The Holder need not provide and the
Company hereby waives any presentment, demand, protest or other notice of
any
kind, (other than required notice of conversion) 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.
(3)
REDEMPTION
.
(a)
Company’s
Cash Redemption
.
The
Company at its option shall have the right to redeem (“
Optional
Redemption
”)
a
portion or all amounts outstanding under this Debenture prior to the Maturity
Date provided that as of the date of the Holder’s receipt of a Redemption Notice
(as defined herein) (i) the Closing Bid Price is less than the Fixed
Conversion
Price, (ii) the Underlying Shares Registration Statement is effective, and
(iii)
no Event of Default has occurred. The Company shall pay an amount equal to
the
principal amount being redeemed plus a redemption premium (“
Redemption
Premium
”)
equal
to fifteen percent (15%) of the Principal amount being redeemed, and accrued
Interest, (collectively referred to as the “
Company
Redemption Amount
”).
In
order to make a redemption pursuant to this Section, the Company shall first
provide written notice to the Holder of its intention to make a redemption
(the
“
Redemption
Notice
”)
setting forth the amount of Principal it desires to redeem. After receipt
of the
Redemption Notice the Holder shall have three (3) Business Days to elect
to
convert all or any portion of this Debenture, subject to the limitations
set
forth in Section 4(b). On the fourth (4th) Business Day after the Redemption
Notice, the Company shall deliver to the Holder the Company Additional
Redemption Amount with respect to the Principal amount redeemed after giving
effect to conversions effected during the three (3) Business Day
period.
(4)
CONVERSION
OF DEBENTURE
.
This
Debenture shall be convertible into shares of the Company's Ordinary Shares,
on
the terms and conditions set forth in this Section 4.
(a)
Conversion
Right
.
Subject
to the provisions of Section 4(c), at any time or times on or after the Issuance
Date, the Holder shall be entitled to convert any portion of the outstanding
and
unpaid Conversion Amount (as defined below) into fully paid and nonassessable
shares of Ordinary Shares in accordance with Section 4(b), at the Conversion
Rate (as defined below). The number of shares of Ordinary Shares issuable
upon
conversion of any Conversion Amount pursuant to this Section 4(a) shall be
determined by dividing (x) such Conversion Amount by (y) the Conversion Price
(the "
Conversion
Rate
").
The
Company shall not issue any fraction of a share of Ordinary Shares upon any
conversion. If the issuance would result in the issuance of a fraction of
a
share of Ordinary Shares, the Company shall round such fraction of a share
of
Ordinary Shares up to the nearest whole share. The Company shall pay any
and all
transfer, stamp and similar taxes that may be payable with respect to the
issuance and delivery of Ordinary Shares upon conversion of any Conversion
Amount.
(i)
"
Conversion
Amount
"
means
the portion of the Principal to be converted, redeemed or otherwise with
respect
to which this determination is being made.
(ii)
"
Conversion
Price
"
means,
as of any Conversion Date (as defined below) or other date of determination,
the
lesser of (a) $1.00 (the “
Fixed
Conversion Price
”),
subject to adjustment as provided herein, or (b) eighty percent (80%) of
the lowest Volume Weighted Average Price during the thirty (30) Trading Days
immediately preceding the Conversion Date (the “
Market
Conversion Price
”).
(b)
Mechanics
of Conversion
.
(i)
Optional
Conversion
.
To
convert any Conversion Amount into shares of Ordinary Shares on any date
(a
"
Conversion
Date
"),
the
Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt
on or
prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice
of conversion in the form attached hereto as
Exhibit
I
(the
"
Conversion
Notice
")
to the
Company and (B) if required by Section 4(b)(iv), surrender this Debenture
to a
nationally recognized overnight delivery service for delivery to the Company
(or
an indemnification undertaking reasonably satisfactory to the Company with
respect to this Debenture in the case of its loss, theft or destruction).
On or
before the fifth (5
th
)
Business Day following the date of receipt of a Conversion Notice (the
"
Share
Delivery Date
"),
the
Company shall (X) if legends are not required to be placed on certificates
of
Ordinary Shares pursuant to the Securities Purchase Agreement and provided
that
the Transfer Agent is participating in the Depository Trust Company's
("
DTC
")
Fast
Automated Securities Transfer Program, credit such aggregate number of shares
of
Ordinary Shares to which the Holder shall be entitled to the Holder's or
its
designee's balance account with DTC through its Deposit Withdrawal Agent
Commission system or (Y) if the Transfer Agent is not participating in the
DTC
Fast Automated Securities Transfer Program, issue and deliver to the address
as
specified in the Conversion Notice, a certificate, registered in the name
of the
Holder or its designee, for the number of shares of Ordinary Shares to which
the
Holder shall be entitled which certificates shall not bear any restrictive
legends unless required pursuant to Section 2(g) of the Securities Purchase
Agreement. If this Debenture is physically surrendered for conversion and
the
outstanding Principal of this Debenture is greater than the Principal portion
of
the Conversion Amount being converted, then the Company shall as soon as
practicable and in no event later than three (3) Business Days after receipt
of
this Debenture and at its own expense, issue and deliver to the holder a
new
Debenture representing the outstanding Principal not converted. The Person
or
Persons entitled to receive the shares of Ordinary Shares issuable upon a
conversion of this Debenture shall be treated for all purposes as the record
holder or holders of such shares of Ordinary Shares upon the transmission
of a
Conversion Notice.
(ii)
Company's
Failure to Timely Convert
.
If
within five (5) Trading Days after the Company's receipt of the facsimile
copy
of a Conversion Notice the Company shall fail to issue and deliver a certificate
to the Holder or credit the Holder's balance account with DTC for the number
of
shares of Ordinary Shares to which the Holder is entitled upon such holder's
conversion of any Conversion Amount (a "
Conversion
Failure
"),
and
if on or after such Trading Day the Holder purchases (in an open market
transaction or otherwise) Ordinary Shares to deliver in satisfaction of a
sale
by the Holder of Ordinary Shares issuable upon such conversion that the Holder
anticipated receiving from the Company (a "
Buy-In
"),
then
the Company shall, within three (3) Business Days after the Holder's request
and
in the Holder's discretion, either (i) pay cash to the Holder in an amount
equal
to the Holder's total purchase price (including brokerage commissions and
other
out of pocket expenses, if any) for the shares of Ordinary Shares so purchased
(the
"
Buy-In
Price
"
),
at
which point the Company's obligation to deliver such certificate (and to
issue
such Ordinary Shares) shall terminate, or (ii) promptly honor its obligation
to
deliver to the Holder a certificate or certificates representing such Ordinary
Shares and pay cash to the Holder in an amount equal to the excess (if any)
of
the Buy-In Price over the product of (A) such number of shares of Ordinary
Shares, times (B) the Closing Bid Price on the Conversion Date.
(iii)
Book-Entry
.
Notwithstanding anything to the contrary set forth herein, upon conversion
of
any portion of this Debenture in accordance with the terms hereof, the Holder
shall not be required to physically surrender this Debenture to the Company
unless (A) the full Conversion Amount represented by this Debenture is being
converted or (B) the Holder has provided the Company with prior written notice
(which notice may be included in a Conversion Notice) requesting reissuance
of
this Debenture upon physical surrender of this Debenture. The Holder and
the
Company shall maintain records showing the Principal and Interest converted
and
the dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical
surrender of this Debenture upon conversion.
(c)
Limitations
on Conversions
.
(i)
Beneficial
Ownership
.
The
Company shall not effect any conversions of this Debenture and the Holder
shall
not have the right to convert any portion of this Debenture or receive shares
of
Ordinary Shares as payment of interest hereunder to the extent that after
giving
effect to such conversion or receipt of such interest payment, the Holder,
together with any affiliate thereof, would beneficially own (as determined
in
accordance with Section 13(d) of the Exchange Act and the rules promulgated
thereunder) in excess of 4.99% of the number of shares of Ordinary Shares
outstanding immediately after giving effect to such conversion or receipt
of
shares as payment of interest. Since the Holder will not be obligated to
report
to the Company the number of shares of Ordinary Shares it may hold at the
time
of a conversion hereunder, unless the conversion at issue would result in
the
issuance of shares of Ordinary Shares in excess of 4.99% of the then outstanding
shares of 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 this
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 this 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 Section 4(a) and, any
principal amount tendered for conversion in excess of the permitted amount
hereunder shall remain outstanding under this Debenture. The provisions of
this
Section may be waived by a Holder (but only as to itself and not to any other
Holder) upon not less than 65 days prior notice to the Company. Other Holders
shall be unaffected by any such waiver.
(d)
Other
Provisions
.
(i)
The
Company shall at all times reserve and keep available out of its authorized
Ordinary Shares the full number of shares of Ordinary Shares issuable upon
conversion of all outstanding amounts under this Debenture; and within three
(3)
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
promptly reserve a sufficient number of shares of Ordinary Shares to comply
with
such requirement.
(ii)
All
calculations under this Section 4 shall be rounded to the nearest $0.0001
or
whole share.
(iii)
The
Company covenants that it will at all times reserve and keep available out
of
its authorized and unissued shares of Ordinary Shares solely for the purpose
of
issuance upon conversion of this Debenture and payment of interest on this
Debenture, each as herein provided, free from preemptive rights or any other
actual contingent purchase rights of persons other than the Holder, not less
than such number of shares of the Ordinary Shares as shall (subject to any
additional requirements of the Company as to reservation of such shares set
forth in this Debenture or in the Transaction Documents) be issuable (taking
into account the adjustments and restrictions set forth herein) upon the
conversion of the outstanding principal amount of this Debenture and payment
of
interest hereunder. The Company covenants that all shares of Ordinary Shares
that shall be so issuable shall, upon issue, be duly and validly authorized,
issued and fully paid, nonassessable and, if the Underlying Shares Registration
Statement has been declared effective under the Securities Act, registered
for
public sale in accordance with such Underlying Shares Registration
Statement.
(iv)
Nothing
herein shall limit a Holder's right to pursue actual damages or declare an
Event
of Default pursuant to Section 2 herein for the Company 's failure to deliver
certificates representing shares of 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 or in equity including, without limitation,
a
decree of specific performance and/or injunctive relief, in each case without
the need to post a bond or provide other security. 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.
(v)
In
the
event that the par value of the Ordinary Shares has not been lowered as required
pursuant to the Securities Purchase Agreement and the Holder has effectuated
a
conversion of this Debenture the Company shall pay to the Holder an amount
in
cash within three business days of such conversion equal to the difference
between the amount which the Holder has paid for the conversion in the previous
month and the amount which the Holder would have paid if the par value of
the
ADSs had been reduced as contemplated in the Securities Purchase
Agreement.
(vi)
In
the
event that the par value of the Ordinary Shares has not been lowered as required
pursuant to the Securities Purchase Agreement then in addition to any other
rights the Holders may have hereunder or under applicable law, on such event
date and on each monthly anniversary such par value has not been lowered
(if the
applicable event shall not have been cured by such date) until the par value
is
lowered, the Company shall pay to the Holder within three (3) business days
of
written demand by the Holder, an amount in cash, as partial liquidated damages
and not as a penalty, equal to 2.0% of the outstanding principal amount
hereunder. The parties agree that the maximum aggregate payable hereunder
to the
Holder shall be twenty-four percent (24%). The partial liquidated damages
pursuant to the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of such event.
(5)
Adjustments
to Conversion Price
(a)
Adjustment
of Conversion Price upon Issuance of Ordinary Shares
.
If the
Company, at any time while this Debenture is outstanding, issues or sells,
or in
accordance with this Section 5(a) is deemed to have issued or sold, any shares
of Ordinary Shares, excluding shares of Ordinary Shares deemed to have been
issued or sold by the Company in connection with any Excluded Securities,
for a
consideration per share (the “
New
Issuance Price
”)
less
than a price equal to the Conversion Price in effect immediately prior to
such
issue or sale (such price the "
Applicable
Price
")
(the
foregoing a "
Dilutive
Issuance
"),
then
immediately after such Dilutive Issuance the Conversion Price then in effect
shall be reduced to an amount equal to the New Issuance Price For purposes
of
determining the adjusted Conversion Price under this Section 5(a), the following
shall be applicable:
(i)
Issuance
of Options
.
If the
Company in any manner grants or sells any Options and the lowest price per
share
for which one share of Ordinary Shares is issuable upon the exercise of any
such
Option or upon conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of such Option is less than the Applicable Price,
then
such share of Ordinary Shares shall be deemed to be outstanding and to have
been
issued and sold by the Company at the time of the granting or sale of such
Option for such price per share. For purposes of this Section, the "lowest
price
per share for which one share of Ordinary Shares is issuable upon the exercise
of any such Option or upon conversion or exchange or exercise of any Convertible
Securities issuable upon exercise of such Option" shall be equal to the sum
of
the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Ordinary Shares upon granting or
sale
of the Option, upon exercise of the Option and upon conversion or exchange
or
exercise of any Convertible Security issuable upon exercise of such Option.
No
further adjustment of the Conversion Price shall be made upon the actual
issuance of such share of Ordinary Shares or of such Convertible Securities
upon
the exercise of such Options or upon the actual issuance of such Ordinary
Shares
upon conversion or exchange or exercise of such Convertible
Securities.
(ii)
Issuance
of Convertible Securities
.
If the
Company in any manner issues or sells any Convertible Securities and the
lowest
price per share for which one share of Ordinary Shares is issuable upon such
conversion or exchange or exercise thereof is less than the Applicable Price,
then such share of Ordinary Shares shall be deemed to be outstanding and
to have
been issued and sold by the Company at the time of the issuance or sale of
such
Convertible Securities for such price per share. For the purposes of this
Section, the "lowest price per share for which one share of Ordinary Shares
is
issuable upon such conversion or exchange or exercise" shall be equal to
the sum
of the lowest amounts of consideration (if any) received or receivable by
the
Company with respect to any one share of Ordinary Shares upon the issuance
or
sale of the Convertible Security and upon the conversion or exchange or exercise
of such Convertible Security. No further adjustment of the Conversion Price
shall be made upon the actual issuance of such share of Ordinary Shares upon
conversion or exchange or exercise of such Convertible Securities, and if
any
such issue or sale of such Convertible Securities is made upon exercise of
any
Options for which adjustment of the Conversion Price had been or are to be
made
pursuant to other provisions of this Section, no further adjustment of the
Conversion Price shall be made by reason of such issue or sale.
(iii)
Change
in Option Price or Rate of Conversion
.
If the
purchase price provided for in any Options, the additional consideration,
if
any, payable upon the issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are convertible
into
or exchangeable or exercisable for Ordinary Shares changes at any time, the
Conversion Price in effect at the time of such change shall be adjusted to
the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this Section, if the terms
of
any Option or Convertible Security that was outstanding as of the Issuance
Date
are changed in the manner described in the immediately preceding sentence,
then
such Option or Convertible Security and the Ordinary Shares deemed issuable
upon
exercise, conversion or exchange thereof shall be deemed to have been issued
as
of the date of such change. No adjustment shall be made if such adjustment
would
result in an increase of the Conversion Price then in effect.
(iv)
Calculation
of Consideration Received
.
In case
any Option is issued in connection with the issue or sale of other securities
of
the Company, together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for the difference of (x) the aggregate
fair
market value of such Options and other securities issued or sold in such
integrated transaction, less (y) the fair market value of the securities
other
than such Option, issued or sold in such transaction and the other securities
issued or sold in such integrated transaction will be deemed to have been
issued
or sold for the balance of the consideration received by the Company. If
any
Ordinary Shares, Options or Convertible Securities are issued or sold or
deemed
to have been issued or sold for cash, the consideration received therefor
will
be deemed to be the gross amount raised by the Company; provided, however,
that
such gross amount is not greater than 110% of the net amount received by
the
Company therefor. If any Ordinary Shares, Options or Convertible Securities
are
issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company will be the fair value
of
such consideration, except where such consideration consists of securities,
in
which case the amount of consideration received by the Company will be the
Closing Bid Price of such securities on the date of receipt. If any Ordinary
Shares, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is
the
surviving entity, the amount of consideration therefor will be deemed to
be the
fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such Ordinary Shares, Options or Convertible
Securities, as the case may be. The fair value of any consideration other
than
cash or securities will be determined jointly by the Company and the Holder.
If
such parties are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the "
Valuation
Event
"),
the
fair value of such consideration will be determined within five (5) Business
Days after the tenth (10
th
)
day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser
shall be deemed binding upon all parties absent manifest error and the fees
and
expenses of such appraiser shall be borne by the Company.
(v)
Record
Date
.
If the
Company takes a record of the holders of Ordinary Shares for the purpose
of
entitling them (A) to receive a dividend or other distribution payable in
Ordinary Shares, Options or in Convertible Securities or (B) to subscribe
for or
purchase Ordinary Shares, Options or Convertible Securities, then such record
date will be deemed to be the date of the issue or sale of the Ordinary Shares
deemed to have been issued or sold upon the declaration of such dividend
or the
making of such other distribution or the date of the granting of such right
of
subscription or purchase, as the case may be.
(b)
Adjustment
of Conversion Price upon Subdivision or Combination of Ordinary
Shares
.
If the
Company, at any time while this 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 shares of Ordinary Shares, (b) subdivide outstanding shares of Ordinary
Shares into a larger number of shares, (c) combine (including by way of reverse
stock split) outstanding shares of 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 shares
of
Ordinary Shares (excluding treasury shares, if any) outstanding before such
event and of which the denominator shall be the number of shares 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.
(c)
Purchase
Rights
.
If at
any time the Company grants, issues or sells any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property pro rata
to
the record holders of any class of Ordinary Shares (the "
Purchase
Rights
"),
then
the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Ordinary Shares
acquirable upon complete conversion of this Debenture (without taking into
account any limitations or restrictions on the convertibility of this Debenture)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date
as of
which the record holders of Ordinary Shares are to be determined for the
grant,
issue or sale of such Purchase Rights.
(d)
Other
Events
.
If any
event occurs of the type contemplated by the provisions of this Section 4
but
not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other
rights
with equity features), then the Company's Board of Directors will make an
appropriate adjustment in the Conversion Price so as to protect the rights
of
the Holder under this Debenture; provided that no such adjustment will increase
the Conversion Price as otherwise determined pursuant to this Section
5.
(e)
Other
Corporate Events
.
In
addition to and not in substitution for any other rights hereunder, prior
to the
consummation of any Fundamental Transaction pursuant to which holders of
shares
of Ordinary Shares are entitled to receive securities or other assets with
respect to or in exchange for shares of Ordinary Shares (a "
Corporate
Event
"),
the
Company shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon a conversion of this Debenture,
at the
Holder's option, (i) in addition to the shares of Ordinary Shares receivable
upon such conversion, such securities or other assets to which the Holder
would
have been entitled with respect to such shares of Ordinary Shares had such
shares of Ordinary Shares been held by the Holder upon the consummation of
such
Corporate Event (without taking into account any limitations or restrictions
on
the convertibility of this Debenture) or (ii) in lieu of the shares of Ordinary
Shares otherwise receivable upon such conversion, such securities or other
assets received by the holders of shares of Ordinary Shares in connection
with
the consummation of such Corporate Event in such amounts as the Holder would
have been entitled to receive had this Debenture initially been issued with
conversion rights for the form of such consideration (as opposed to shares
of
Ordinary Shares) at a conversion rate for such consideration commensurate
with
the Conversion Rate. Provision made pursuant to the preceding sentence shall
be
in a form and substance satisfactory to the Required Holders. The provisions
of
this Section shall apply similarly and equally to successive Corporate Events
and shall be applied without regard to any limitations on the conversion
or
redemption of this Debenture.
(f)
Whenever
the Conversion Price is adjusted pursuant to Section 5 hereof, 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.
(g)
In
case
of any (1) merger or consolidation of the Company or any subsidiary of the
Company with or into another Person, or (2) sale by the Company or any
subsidiary of the Company of more than one-half of the assets of the Company
in
one or a series of related transactions, a Holder shall have the right to
(A)
exercise any rights under Section 2(b), (B) convert the aggregate amount
of this
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 shares of Ordinary Shares into which
such
aggregate principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would have been
entitled, or (C) 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 this 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 this Debenture
set forth herein and the agreements pursuant to which this Debentures were
issued. In the case of clause (C), 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.
(6)
REISSUANCE
OF THIS DEBENTURE
.
(a)
Transfer
.
If this
Debenture is to be transferred, the Holder shall surrender this Debenture
to the
Company, whereupon the Company will, subject to the satisfaction of the transfer
provisions of the Securities Purchase Agreement, forthwith issue and deliver
upon the order of the Holder a new Debenture (in accordance with Section
5(d)),
registered in the name of the registered transferee or assignee, representing
the outstanding Principal being transferred by the Holder and, if less then
the
entire outstanding Principal is being transferred, a new Debenture (in
accordance with Section 5(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance
of
this Debenture, acknowledge and agree that, by reason of the provisions of
Section 4(b)(iii) following conversion or redemption of any portion of this
Debenture, the outstanding Principal represented by this Debenture may be
less
than the Principal stated on the face of this Debenture.
(b)
Lost,
Stolen or Mutilated Debenture
.
Upon
receipt by the Company of evidence reasonably satisfactory to the Company
of the
loss, theft, destruction or mutilation of this Debenture, and, in the case
of
loss, theft or destruction, of any indemnification undertaking by the Holder
to
the Company in customary form and, in the case of mutilation, upon surrender
and
cancellation of this Debenture, the Company shall execute and deliver to
the
Holder a new Debenture (in accordance with Section 5(d)) representing the
outstanding Principal.
(c)
Debenture
Exchangeable for Different Denominations
.
This
Debenture is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Debenture or Debentures (in
accordance with Section 5(d)) representing in the aggregate the outstanding
Principal of this Debenture, and each such new Debenture will represent such
portion of such outstanding Principal as is designated by the Holder at the
time
of such surrender.
(d)
Issuance
of New Debentures
.
Whenever the Company is required to issue a new Debenture pursuant to the
terms
of this Debenture, such new Debenture (i) shall be of like tenor with this
Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
the Principal remaining outstanding (or in the case of a new Debenture being
issued pursuant to Section 5(a) or Section 5(c), the Principal designated
by the
Holder which, when added to the principal represented by the other new
Debentures issued in connection with such issuance, does not exceed the
Principal remaining outstanding under this Debenture immediately prior to
such
issuance of new Debentures), (iii) shall have an issuance date, as indicated
on
the face of such new Debenture, which is the same as the Issuance Date of
this
Debenture, (iv) shall have the same rights and conditions as this Debenture,
and
(v) shall represent accrued and unpaid Interest from the Issuance
Date.
(7)
NOTICES
.
Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms hereof must be in writing and will be deemed to have
been
delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when
sent by facsimile (provided confirmation of transmission is mechanically
or
electronically generated and kept on file by the sending party); or (iii)
one
(1) Trading Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same.
The
addresses and facsimile numbers for such communications shall
be:
|
If
to the Company, to:
|
Futuremedia
PLC
|
|
|
Nile
House, Nile Street
|
|
|
Brighton,
East Sussex BN1 1HW, United Kingdom
|
|
|
Attention:
Company
Secretary
|
|
|
Telephone:
+44
1273 829700
|
|
|
Facsimile:
+44
1273 829702
|
|
|
|
|
With
a copy to:
|
Sichenzia
Ross Friedman Ference LLP
|
|
|
61
Broadway – 32
nd
Floor
|
|
|
New
York, New York 10006
|
|
|
Attention:
Gregory
Sichenzia, Esq.
|
|
|
Telephone:
(212)
930-9700
|
|
|
Facsimile:
(212) 930-9725
|
|
|
|
|
If
to the Holder:
|
YA
Global Investments, L.P.
|
|
|
101
Hudson Street, Suite 3700
|
|
|
Jersey
City, NJ 07303
|
|
|
Attention:
Mark
Angelo
|
|
|
Telephone:
(201)
985-8300
|
|
|
|
|
With
a copy to:
|
David
Gonzalez, Esq.
|
|
|
101
Hudson Street - Suite 3700
|
|
|
Jersey
City, NJ 07302
|
|
|
Telephone:
(201)
985-8300
|
|
|
Facsimile:
(201)
985-8266
|
or
at
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party three (3) Business Days prior to the effectiveness of such change.
Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (iii)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt
from a
nationally recognized overnight delivery service in accordance with clause
(i),
(ii) or (iii) above, respectively.
(8)
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, interest and other charges (if any) 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. As long as this Debenture
is
outstanding, the Company shall not and shall cause their subsidiaries not
to,
without the consent of the Holder, (i) amend its certificate of incorporation,
bylaws 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 other than
as
to the Underlying Shares to the extent permitted or required under the
Transaction Documents; or (iii) enter into any agreement with respect to
any of
the foregoing.
(9)
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 shares of Ordinary Shares in accordance with the
terms
hereof.
(10)
No
indebtedness of the Company is senior to this Debenture in right of payment
except for the Barclays line of credit, whether with respect to interest,
damages or upon liquidation or dissolution or otherwise. Without the Holder’s
consent, the Company will not and will not permit any of their subsidiaries
to,
directly or indirectly, enter into, create, incur, assume or suffer to exist
any
indebtedness of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or
profits
there from that is senior in any respect to the obligations of the Company
under
this Debenture.
(11)
This
Debenture shall be governed by and construed in accordance with the laws
of the
State of New Jersey, without giving effect to conflicts of laws thereof.
Each of
the parties consents to the jurisdiction of the Superior Courts of the State
of
New Jersey sitting in Hudson County, New Jersey and the U.S. District Court
for the District of New Jersey sitting in Newark, New Jersey in connection
with
any dispute arising under this Debenture and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on
forum
non conveniens to the bringing of any such proceeding in such jurisdictions.
(12)
If
the
Company fails to strictly comply with the terms of this Debenture, then the
Company shall reimburse the Holder promptly for all fees, costs and expenses,
including, without limitation, attorneys’ fees and expenses incurred by the
Holder in any action in connection with this Debenture, including, without
limitation, those incurred: (i) during any workout, attempted workout, and/or
in
connection with the rendering of legal advice as to the Holder’s rights,
remedies and obligations, (ii) collecting any sums which become due to the
Holder, (iii) defending or prosecuting any proceeding or any counterclaim
to any
proceeding or appeal; or (iv) the protection, preservation or enforcement
of any
rights or remedies of the Holder.
(13)
Any
waiver by 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
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.
(14)
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 it 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 this 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.
(15)
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.
(16)
THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL
OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR
THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.
(17)
CERTAIN
DEFINITIONS
For
purposes of this Debenture, the following terms shall have the following
meanings:
(a)
“
ADS
”
means
(i) shares of the Company’s American Depository Shares (as evidenced by
American Depository Receipts) also referred to as “
ADS
”;
each
ADS representing the right to receive one of the Company’s Ordinary Shares of
0.01 pence each (the “
Ordinary
Shares
”
as
converted, the “
Conversion
Shares
”)
and
(ii) any capital stock into which such Ordinary Shares shall have been
changed or any capital stock resulting from a reclassification of such Ordinary
Shares.
(b)
“
Approved
Stock Plan
”
means
a
stock option plan that has been approved by the Board of Directors of the
Company, pursuant to which the Company’s securities may be issued only to any
employee, officer, or director for services provided to the
Company.
(c)
"
Bloomberg
"
means
Bloomberg Financial Markets.
(d)
“
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 Kingdom or
a day
on which banking institutions are authorized or required by law or other
government action to close in the U.S. or UK.
(e)
“
Change
of Control Transaction
”
means
the occurrence of (a) an acquisition after the date hereof by an individual
or
legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the
Exchange Act) of effective control (whether through legal or beneficial
ownership of capital stock of the Company, by contract or otherwise) of in
excess of fifty percent (50%) of the voting securities of the Company (except
that the acquisition of voting securities by the Holder or any other current
holder of convertible securities of the Company shall not constitute a Change
of
Control Transaction for purposes hereof), (b) a replacement at one time or
over
time of more than one-half of the members of the board of directors of the
Company which is not approved by a majority of those individuals who are
members
of the board of directors on the date hereof (or by those individuals who
are
serving as members of the board of directors on any date whose nomination
to the
board of directors was approved by a majority of the members of the board
of
directors who are members on the date hereof), (c) the merger, consolidation
or
sale of fifty percent (50%) or more of the assets of the Company or any
subsidiary of the Company in one or a series of related transactions with
or
into another entity, or (d) the execution by the Company of an agreement
to
which the Company is a party or by which it is bound, providing for any of
the
events set forth above in (a), (b) or (c).
(f)
“
Closing
Bid Price
”
means
the price per share in the last reported trade of the Ordinary Shares on
a
Primary Market or on the exchange which the Ordinary Shares is then listed
as
quoted by Bloomberg.
(g)
“
Convertible
Securities
”
means
any
stock
or securities (other than Options) directly or indirectly convertible into
or
exercisable or exchangeable for Ordinary Shares.
(h)
“
Commission
”
means
the Securities and Exchange Commission.
(i)
"
Equity
Conditions
"
means
that each of the following conditions is satisfied: (i) on each day during
the
period beginning two (2) weeks prior to the applicable date of determination
and
ending on and including the applicable date of determination (the "Equity
Conditions Measuring Period"), either (x) the Underlying Shares Registration
Statement filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all applicable shares of Ordinary Shares
to be
issued in connection with the event requiring determination or (y) all
applicable shares of Ordinary Shares to be issued in connection with the
event
requiring determination shall be eligible for sale without restriction and
without the need for registration under any applicable federal or state
securities laws; (ii) on each day during the Equity Conditions Measuring
Period,
the Ordinary Shares is designated for quotation on the Principal Market and
shall not have been suspended from trading on such exchange or market nor
shall
delisting or suspension by such exchange or market been threatened or pending
either (A) in writing by such exchange or market or (B) by falling below
the
then effective minimum listing maintenance requirements of such exchange
or
market; (iii) during the Equity Conditions Measuring Period, the Company
shall
have delivered Conversion Shares upon conversion of the Debentures to the
Holder
on a timely basis as set forth in Section 4(b)(ii) hereof; (iv) any applicable
shares of Ordinary Shares to be issued in connection with the event requiring
determination may be issued in full without violating Section 4(c) hereof
and
the rules or regulations of the Primary Market; (v) during the Equity Conditions
Measuring Period, there shall not have occurred either (A) an Event of Default
or (B) an event that with the passage of time or giving of notice would
constitute an Event of Default; and (vii) the Company shall have no knowledge
of
any fact that would cause (x) the Registration Statements required pursuant
to
the Registration Rights Agreement not to be effective and available for the
resale of all applicable shares of Ordinary Shares to be issued in connection
with the event requiring determination or (y) any applicable shares of Ordinary
Shares to be issued in connection with the event requiring determination
not to
be eligible for sale without restriction and without the need for registration
under any applicable federal or state securities laws.
(j)
"
Equity
Conditions Failure
"
means
that on any applicable date the Equity Conditions have not been satisfied
(or
waived in writing by the Holder).
(k)
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended.
(l)
“
Excluded
Securities
”
means,
(a) shares issued or deemed to have been issued by the Company pursuant to
an
Approved Stock Plan (b) shares of Ordinary Shares issued or deemed to be
issued
by the Company upon the conversion, exchange or exercise of any right, option,
obligation or security outstanding on the date prior to date of the Securities
Purchase Agreement, provided that the terms of such right, option, obligation
or
security are not amended or otherwise modified on or after the date of the
Securities Purchase Agreement, and provided that the conversion price, exchange
price, exercise price or other purchase price is not reduced, adjusted or
otherwise modified and the number of shares of Ordinary Shares issued or
issuable is not increased (whether by operation of, or in accordance with,
the
relevant governing documents or otherwise) on or after the date of the
Securities Purchase Agreement, (c) shares issued in connection with any
acquisition by the Company, whether through an acquisition of stock or a
merger
of any business, assets or technologies, leasing arrangement or any other
transaction the primary purpose of which is not to raise equity capital,
and
(d) the shares of Ordinary Shares issued or deemed to be issued by the
Company upon conversion of this Debenture.
(m)
“
Options
”
means
any
rights, warrants or options to subscribe for or purchase shares of Ordinary
Shares or Convertible Securities.
(n)
“
Ordinary
Shares
”
means
the Ordinary Shares (as evidenced by American Depositary Shares, as evidenced
by
American Depositary Receipts) of the Obligor and stock of any other class
into
which such shares may hereafter be changed or reclassified.
(o)
“
Original
Issue Date
”
means
the date of the first issuance of this Debenture regardless of the number
of
transfers and regardless of the number of instruments, which may be issued
to
evidence such Debenture.
(p)
“
Person
”
means
a
corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency.
(q)
“
Securities
Act
”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
(r)
“
Securities
Purchase Agreement
”
means
the Securities Purchase Agreement dated August 20, 2007, as amended, by and
among the Company and the Buyers listed on Schedule I attached thereto.
(s)
“
Trading
Day
”
means
a
day on which the shares of Ordinary Shares are quoted on the OTCBB or quoted
or
traded on such Primary Market on which the shares of Ordinary Shares are
then
quoted or listed; provided, that in the event that the shares of Ordinary
Shares
are not listed or quoted, then Trading Day shall mean a Business
Day.
(t)
“
Transaction
Documents
”
means
the Securities Purchase Agreement or any other agreement delivered in connection
with the Securities Purchase Agreement, including, without limitation, the
Security Documents, and the Registration Rights Agreement.
(u)
“
Underlying
Shares
”
means
the shares of Ordinary Shares issuable upon conversion of this Debenture
or as
payment of interest in accordance with the terms hereof.
(v)
“
Underlying
Shares Registration Statement
”
means
a
registration statement meeting the requirements set forth in the Registration
Rights Agreement, covering among other things the resale of the Underlying
Shares and naming the Holder as a “selling stockholder” thereunder.
(w)
"
Volume
Weighted Average Price
"
means,
for any security as of any date, the daily dollar volume-weighted average
price
for such security on the Primary Market as reported by Bloomberg through
its
“Historical Prices - Px Table with Average Daily Volume” functions, or, if no
dollar volume-weighted average price is reported for such security by Bloomberg,
the average of the highest closing bid price and the lowest closing ask price
of
any of the market makers for such security as reported in the "pink sheets"
by
Pink Sheets LLC.
[Signature
Page Follows]
IN
WITNESS WHEREOF
,
the
Company has caused this Secured Convertible Debenture to be duly executed
by a
duly authorized officer as of the date set forth above.
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COMPANY:
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FUTUREMEDIA
PLC
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By:
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Name:
George O’Leary
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Title:
Chief
Executive Officer
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EXHIBIT
I
CONVERSION
NOTICE
(To
be executed by the Holder in order to Convert the
Debenture)
The
undersigned hereby irrevocably elects to convert $
of the
principal amount of Debenture No.FMDAD-4-5 into Shares of Ordinary Shares
of
FUTUREMEDIA
PLC
,
according to the conditions stated therein, as of the Conversion Date written
below.
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Conversion
Date:
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Conversion
Amount to be converted:
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$
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Conversion
Price:
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$
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Number
of shares of Ordinary
Shares
to be issued:
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Amount
of Debenture Unconverted:
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$
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Please
issue the shares of Ordinary Shares in the following name and to the following
address:
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Issue
to:
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Authorized
Signature:
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Name:
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Title:
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Broker
DTC Participant Code:
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Account
Number:
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