FIFTH ADDENDUM TO THE DEBENTURES
AND
FIRST AMENDMENT TO SUBSCRIPTION AGREEMENTS
THIS Fifth Addendum to the Debentures AND FIRST
AMENDMENT TO SUBSCRIPTION AGREEMENTS (this "Fifth Addendum"), dated
as of August __, 2003 (the "Fifth Modification Date"), is made by
and among Visual Bible International, Inc., a Florida corporation
(the "Corporation") and each Lender (as defined below) signatory
hereto. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Debentures
and/or in the First Addendum, the Second Addendum, the Third
Addendum or the Fourth Addendum (each as defined below).
RECITALS:
A. The Corporation has executed and delivered a Debenture
to each of Augusta Holding, Inc., Xxxxxx Xxxxxxxxxx, Xxxxxxx Maznic,
Xxxxxx Xxxxxxxxxx, Red Brook Developments Limited ("Red Brook"),
Xxxxxxx Xxxxxxx, Xxxx Xxxxxxx Limited and Xxxxxx X. Steels,
(collectively, the "Group A Lenders") and AGF Growth Equity Fund,
GWL Growth Equity Fund, London Life Growth Equity Fund, IG AGF
Diversified Growth Fund, AGF Diversified Growth Class, Xxxxxxx
XxXxxxxxx and Xxxxxxx Xxxxxx (collectively, the "Group B Lenders").
Hereinafter, the Group A Lenders and the Group B Lenders are
collectively referred to as the "Lenders".
B. The Corporation and the Lenders have executed and
delivered an Addendum to the Debentures (the "First Addendum") dated
as of February 17, 2003.
C. The Corporation and the Lenders have executed and
delivered a Second Addendum to the Debentures (the "Second
Addendum") dated as of March 4, 2003.
D. The Corporation and the Lenders have executed and
delivered a Third Addendum to the Debentures (the "Third Addendum")
dated as of March 6, 2003.
E. The Corporation and the Lenders have
executed and delivered a Fourth Addendum to the Debentures (the
"Fourth Addendum") dated as of March 20, 2003.
F. The Corporation and each Lender have
executed and delivered a Subscription Agreement pursuant to which
the Lenders purchased the Debentures (the "A Unit Subscription
Agreements").
G. In order to fund certain capital requirements associated
with the Production, the Corporation is currently offering up to
8,500,000 Units (the "B Units") at US$1.00 per Unit (the "B Unit
Offering") to "accredited investors" (as defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as
amended), including certain of the Lenders. Each B Unit includes a
%15 US$1.00 principal amount debenture (each a "B Unit Debenture"
and together, the "B Unit Debentures") and the right to certain
royalty payments. The holders of the B Unit Debentures are the "B
Unit Debenture Holders".
H. In order to facilitate the purchase of B Units offered
by the Corporation as part of the B Unit Offering, the Corporation
and the Lenders have agreed to modify the Debentures and the A Unit
Subscription Agreements in accordance with the terms of this Fifth
Addendum.
AGREEMENTS:
In consideration of the premises and the mutual covenants set forth
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Deletion of Certain Paragraphs in the First Addendum,
the Second Addendum, the Third Addendum and the Fourth Addendum.
Paragraph 5 (Modification of Paragraph 6.(j)) of the First Addendum;
Paragraph 3 (Second Royalty Payments), Paragraph 6 (Modification of
Paragraph 4), Paragraph 7 (Modification of Paragraph 6.(j)) and
Paragraph 8 (Modification of Paragraph 7.(b)) of the Second
Addendum; Paragraph 4 of the Third Addendum (Repayment of Interim
Advances to the Group A Lenders); and Paragraph 3 of the Fourth
Addendum (Modification to the Third Addendum) are hereby deleted in
their entirety.
2. Modification of the First
Addendum. Paragraph 3 of the First Addendum (Royalty Payments)
shall be deleted in its entirety and shall be replaced with the
following:
"3. Royalty
Payments.
(a) In consideration
for the agreement by the
Lenders to modify the
Debentures, the Corporation
shall cause a royalty per
DVD Unit sold to United
States or Canadian
purchasers (the "Royalty")
to be paid to each Lender in
the manner set forth herein
and calculated as follows:
(1) For
the first
120,000 DVD
Units sold
through direct
market sales to
United States or
Canadian
purchasers, no
Royalty shall be
payable;
(2) For
direct market
sales of DVD
Units to United
States or
Canadian
purchasers in
excess of
120,000 DVD
Units up to a
maximum of
200,000 DVD
Units, the
Royalty shall be
12.5% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
resulting from
each such DVD
Unit sale; and
(3) For
all direct
market sales of
DVD Units to
United States or
Canadian
purchasers in
excess of
200,000 DVD
Units, the
Royalty shall
perpetually be
5.0% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
resulting from
each such DVD
Unit sale.
(b) The Corporation
shall cause payment of the
Royalty as follows:
(1) The
Royalty shall
not be paid to
the Lenders, but
shall instead
accrue (the
"Accrued
Royalties")
until the date
on which each B
Unit Debenture
Holder receives
payments from
the Corporation,
whether in the
form of payments
of principal,
interest or
royalties, which
in the aggregate
equal the
original
principal amount
of such holder's
B Unit Debenture
(the "B Unit
Principal
Repayment
Date"). From
and after the B
Unit Principal
Repayment Date,
the Royalty
shall be paid to
the Lenders as
described below.
The Accrued
Royalties shall
be paid to the
Lenders as
described in
Paragraph 7 of
the Debentures
(as amended by
the Fifth
Addendum).
(2) The
Corporation
agrees that it
will promptly
cause the
Fulfillment
Corporation
utilized by the
Corporation in
connection with
the direct
market sales of
the DVD Units to
United States
and Canadian
purchasers to
execute an
irrevocable
instruction in
the form
attached hereto
as Exhibit
3.(b)(2) (the
"Royalty
Instruction
Letter").
(3) As
soon as
practicable, but
in no event
later than two
days following
the B Unit
Principal
Repayment Date,
the Corporation
shall deliver to
the Fulfillment
Corporation (i)
the Schedule A
(certified by
the Chief
Executive
Officer or the
Chief Financial
Officer of the
Corporation
(each, a
"Responsible
Officer")) to
the Royalty
Instruction
Letter and (y) a
written notice
(the "Royalty
Notice")
directing the
Fulfillment
Corporation to
segregate a
portion of the
proceeds derived
from the sale of
each DVD Unit to
United States or
Canadian
purchasers in an
amount equal to
5.0% (the "5.0%
Retained
Portion") of the
gross proceeds
(net of returns
and sales or
other similar
taxes payable
thereon)
resulting from
each such DVD
Unit sale. In
the event that
proceeds of any
such sale are in
Canadian
Dollars, such
proceeds shall
be converted by
the Fulfillment
Corporation into
United States
Dollars. The
5.0% Retained
Portion is not
related to the
Unit Retained
Portion which is
separately
required to be
segregated
pursuant to
Paragraph 7 of
the Debenture.
(4) The
Schedule A to
the Royalty
Instruction
Letter shall set
forth (i) each
Lender's name
and address and
(ii) each
Lender's Pro
Rata Percentage.
Each Lender's
"Pro Rata
Percentage"
shall equal the
quotient
resulting from
the division of
(i) the Maximum
Principal Amount
under a
particular
Lender's
Debenture by
(ii) the
Facility
Proceeds. The
Corporation
shall deliver to
the Fulfillment
Corporation a
revised Schedule
A (certified by
a Responsible
Officer) to the
Royalty
Instruction
Letter as soon
as possible
following any
and all changes
in ownership of
the Debentures
or changes in
the number of
Debentures
outstanding.
(5) Each
Lender shall be
paid an amount
equal to the 5%
Retained Portion
multiplied by
such Lender's
Pro Rata
Percentage not
later than the
tenth day of
each month
following the
immediately
preceding month
if the
Fulfillment
Corporation
received any
proceeds derived
from the sale of
any DVD Unit to
United States or
Canadian
purchasers in
such immediately
preceding month.
(7) The
Corporation and
the Lenders
acknowledge and
agree that the
Royalty shall
continue to be
paid by or on
behalf of the
Corporation for
so long as DVD
Units are sold
to Unites States
or Canadian
purchasers, and
if the
Corporation
sells all or
substantially
all of its
assets or merges
or otherwise
combines with
another entity
(an "Acquiring
Entity"), as a
condition to the
closing of such
transaction, the
Corporation will
cause such
Acquiring Entity
to acknowledge
and agree to be
bound by all of
the
Corporation's
obligations
hereunder. The
Corporation
acknowledges
that
notwithstanding
the fact that
the Existing
Principal Amount
and any and all
amounts of
accrued and
unpaid Interest
shall be paid in
full in United
States dollars
in accordance
with the
Debentures, the
Debentures shall
remain in full
force and effect
solely to
evidence the
obligation upon
the Corporation
(or any
successor to the
Corporation by
merger or
otherwise) to
pay or cause the
Royalty to be
paid and to set
forth the terms
and conditions
of the
Corporation's
Royalty payment
obligations.
(8) The
Corporation and
the Lenders
acknowledge and
agree that any
change in the
business plan
(the "Business
Plan") of the
Corporation or
any successor
Corporation
(which Business
Plan currently
anticipates
direct market
sales of the DVD
Units following
completion of
the Production)
or any sale of
material assets
of the
Corporation or
any merger or
other
combination
involving the
Corporation
shall require
the consent of a
majority (based
upon the Maximum
Principal
Amounts advanced
under the
Debentures in
relation to the
Facility
Proceeds) of the
Debentures."
3. Modification of Paragraph 4
of the Debentures. Paragraph 4 of the
Debentures is deleted in its entirety
and replaced by the following:
"This Debenture is one of a
series of debentures to be
issued by the Corporation in
connection with a bridge
production financing
facility (the "Production
Facility") in an aggregate
principal amount of up to
Five Million Five Hundred
Thousand United States
Dollars (US$5,500,000.00)
plus an amount as necessary
to convert (the
"Conversion") the Bridge
Loans and the Xxxxxx Advance
(each as defined in that
certain Amended and Restated
Red Book Conditions
Precedent Agreement, dated
as of August 13, 2003 (the
"CP Agreement")) into Units
as described in the CP
Agreement. The Corporation
has concluded debentures for
a portion of the Production
Facility in an amount of
Four Million United States
Dollars (US$4,000,000.00)
(the "Initial Funding") and
additional debentures (the
"Subsequent Funding
Debentures") on terms
substantially the same as
the terms of the Initial
Funding Debentures for Xxx
Xxxxxxx Xxxx Xxxxxxx
Xxxxxxxx Xxxxxx Xxxxxx
Dollars (US$1,500,000.00)
(the "Subsequent Funding").
The Corporation shall be
entitled to execute
debentures (the "Conversion
Debentures") on terms
substantially the same as
the terms of the Initial
Funding Debentures in an
amount necessary to satisfy
the Conversion. The
aggregate of the Maximum
Principal Amount under the
Initial Funding Debentures,
Subsequent Funding
Debentures and Conversion
Debentures shall be
collectively referred to
herein as the "Facility
Proceeds")." Each
Conversion Debenture shall
be a "Debenture" as defined
herein."
4. Modification of Paragraph
6.(b) of the Debentures. Paragraph
6.(b) of the Debentures is deleted in
its entirety and is replaced with the
following:
"As to the first
US$5,500,000 of the Facility
Proceeds (the "Production
Portion"), such Production
Portion will only be
utilized by the Corporation
to pay for costs and
expenses incurred by the
Corporation ("Production
Expenses") in connection
with the Production. "DVD
Units" shall mean the double
video/DVD units and/or any
other audio visual medium,
whether currently existing
or developed in the future,
containing the Production."
5. Modification of Paragraph
6.(d) of the Debentures. The fourth
sentence of Paragraph 6.(d) of the
Debentures is deleted in its entirety
and is replaced with the following:
"The Corporation shall
engage, and at all times
while the Existing Principal
Amount, accrued but unpaid
Interest or Accrued
Royalties remain unpaid,
shall utilize the service of
one fulfillment corporation
(the "Fulfillment
Corporation") to handle,
process, account for and
collect all proceeds from
all direct market orders
received for the DVD Units
from United States and
Canadian Sources. In the
event that the Corporation
engages the services of more
than one fulfillment
corporation, the Corporation
will negotiate in good faith
with the Lenders regarding
the implementation of a
trust or other suitable
arrangement pursuant to
which the payments due
hereunder will be
administered."
6. Modification of Paragraph
6.(i) of the Debentures. Paragraph
6.(i) of the Debentures is hereby
modified by deleting "US$40.00" and
inserting "US$39.95" in its place and by
adding the following sentence at the end
of such paragraph:
"In the event that the
Corporation produces a
product containing the
Production on a medium other
than a DVD Unit and such
product is sold through
direct market sales in the
United States and Canada,
such product shall not be
sold for less that US$39.95
without the consent of the
holders of a majority (based
upon the Maximum Principal
Amounts advanced under the
Debentures in relation to
the Facility Proceeds) of
the Debentures".
7. Modification of Paragraph
6.(j) of the Debentures. Paragraph
6.(j) of the Debentures is deleted in
its entirety and replaced with the
following:
"Other than contracts and
agreements necessary for the
completion of the B Unit
Offering, the Corporation
shall not execute any future
contract or agreement that
would obligate the
Corporation to pay any
amount from the proceeds of
the direct market sales of
the DVD Units to United
States or Canadian
purchasers unless such
obligation is approved by
the holders of a majority
(based upon the Maximum
Principal Amounts advanced
under the Debentures in
relation to the Facility
Proceeds) of the Debentures.
In that regard and
notwithstanding any
provision included as a part
of any agreement executed by
the Corporation in
connection with the
Debentures (including but
not limited to the A Unit
Subscription Agreements),
the holders of a majority
(based upon the then
Existing Principal Amount
under the Debentures which
gave rise to the Facility
Proceeds) of the Debentures
hereby authorize, on behalf
of all of the holders of
Debentures, the execution by
the Corporation of the
Subject Security Agreements
(as such term is defined in
the B Unit Subscription
Agreement)."
8. Modification of Paragraph 7
of the Debentures.
Paragraph 7. of the Debentures is
deleted in its entirety and replaced by
the following:
"(a) The Corporation agrees
that all sales of DVD Units
to United States and
Canadian purchasers will be
undertaken by the
Corporation on a direct
market basis through one
Fulfillment Corporation at
all times when any Existing
Principal Amount, accrued
but unpaid Interest or
Accrued Royalties remain
outstanding. The
Corporation agrees that it
will promptly cause the
Fulfillment Corporation to
execute an irrevocable
instruction in the form
attached hereto as Exhibit
7.(a) (the "Debenture
Instruction Letter"). The
Corporation shall deliver to
the Fulfillment Corporation
the Schedule A (certified by
the Chief Executive Officer
or the Chief Financial
Officer of the Corporation
(each, a "Responsible
Officer")) to the Debenture
Instruction Letter no later
than two days after the
receipt of notice from the
Fulfillment Corporation that
a DVD Unit was sold by the
Fulfillment Corporation.
Schedule A to the Debenture
Instruction Letter shall set
forth (i) the name and
address of each Lender, (ii)
the Maximum Principal Amount
of each Lender's Debenture
and (iii) each Lender's Pro
Rata Percentage. As soon as
practicable, but in no event
later than two days
following the date on which
each B Unit Debenture Holder
receives payments from the
Corporation, whether in the
form of payments of
principal, interest or
royalties, which in the
aggregate equal the original
principal amount of such
holder's B Unit Debenture
(the "B Unit Principal
Repayment Date"), the
Corporation shall deliver to
the Fulfillment Corporation
(i) the Schedule B
(certified by a Responsible
Officer) to the Debenture
Instruction Letter and (ii)
a notice that the B Unit
Principal Repayment Date has
occurred (the "B Unit
Debenture Repayment
Notice"). The Schedule B to
the Debenture Instruction
Letter shall set forth each
Lender's (i) Existing
Principal Amount, (ii)
accrued but unpaid Interest
and (iii) Pro Rata Accrued
Royalty. Each Lender's "Pro
Rata Accrued Royalty" shall
equal the aggregate amount
of the Accrued Royalties
multiplied by such Lender's
Pro Rata Percentage (defined
below). The Corporation
shall deliver to the
Fulfillment Corporation a
revised Schedule A
(certified by a Responsible
Officer) and a revised
Schedule B (certified by a
Responsible Officer) to the
Debenture Instruction Letter
as soon as possible
following any and all
changes in ownership of the
Debentures or changes in the
number of Debentures
outstanding following the
initial delivery of the
applicable schedule.
(b) Repayments of the
Existing Principal Amount
and payments of Interest and
Accrued Royalties (as
defined in the First
Addendum) will be made by
the Corporation from the
Unit Retained Portion (as
defined in paragraph 7.(d),
below) to the Lender and
will be made pro rata to
(each a "Payment") Lender
from such Unit Retained
Portion in an amount
determined by multiplying
the Unit Retained Portion by
the Lender's Pro Rata
Percentage. Each Lender's
"Pro Rata Percentage" shall
equal the quotient resulting
from the division of (i) the
Maximum Principal Amount
under a particular Lender's
Debenture by (ii) the
Facility Proceeds. The
Payments shall be applied in
the following order of
priority:
(i) first,
toward the
Existing
Principal Amount;
(ii) second,
toward the
accrued but
unpaid Interest
due hereunder; and
(iii) third toward Lender's
Pro Rata Accrued Royalty.
(c) Pursuant to the
Debenture Instruction Letter
the Corporation agrees to
cause the Fulfillment
Corporation utilized by the
Corporation in connection
with direct market sales of
the DVD Units to United
States or Canadian
purchasers to segregate the
Unit Retained Portion (as
defined below) from the
direct market sales of DVD
Units to United States or
Canadian purchasers through
the Repayment Date (defined
below). In the event that
the segregated proceeds are
in Canadian Dollars, such
proceeds shall be converted
by the Fulfillment
Corporation into United
States Dollars.
(d) The "Unit
Retained
Portion" shall
be defined as
follows:
(i) With respect
to the first
120,000 DVD
Units sold to a
United States or
Canadian
purchaser, the
"Unit Retained
Portion" shall
equal 26% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
received by the
Fulfillment
Corporation from
each such sale.
(i)With respect
to the 120,001st
through the
200,000th DVD
Unit sold to a
United States or
Canadian
purchaser, the
"Unit Retained
Portion" shall
equal 36% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
received by the
Fulfillment
Corporation from
each such sale.
(iii) With
respect to the
200,001st
through the
250,000th DVD
Unit sold to a
United States or
Canadian
purchaser, the
"Unit Retained
Portion" shall
equal 28% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
received by the
Fulfillment
Corporation from
each such sale.
(iv) From and
after the sale
of the 250,001st
DVD Unit sold to
a United States
or Canadian
purchaser until
each Lender
receives
Payments and
Additional
Proceeds
Payments
(defined below)
pursuant to such
Lender's
Debenture in an
aggregate amount
equal to the
Maximum
Principal Amount
of such Lender's
Debenture (the
"A Unit
Principal
Repayment
Date"), the
"Unit Retained
Portion" shall
equal 27% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
received by the
Fulfillment
Corporation from
each such sale
of a DVD Unit to
a United States
or Canadian
purchaser.
(v) From and
after the A Unit
Principal
Repayment Date
until the
receipt of the
Fulfillment
Corporation of
the B Unit
Debenture
Repayment
Notice, the
"Unit Retained
Portion" shall
be 0%.
(vi) From and
after the
receipt by the
Fulfillment
Corporation of
the B Unit
Debenture
Repayment
Notice, until
payment in full
in United States
dollars of all
Existing
Principal
Amounts, accrued
Interest and the
Accrued
Royalties (the
"Repayment
Date"), the
"Unit Retained
Portion" shall
equal 30% of the
gross proceeds,
net of returns
and sales or
other similar
taxes payable
thereon,
received by the
Fulfillment
Corporation from
each such sale
of a DVD Unit to
a United States
or Canadian
purchaser (the
"30% Portion").
The 30% Portion
is unrelated to
the 5% Portion
which is
separately
required to be
segregated
pursuant to
Paragraph 3. of
the First
Addendum, as
amended by the
Fifth Addendum.
(e) Pursuant to the
Debenture Instruction Letter
the Corporation shall cause
the Fulfillment Corporation
to make the Payments not
later than the tenth day of
each month following the
immediately preceding month
if the Fulfillment
Corporation received any
proceeds derived from the
direct market sale of any
DVD Unit to United States or
Canadian purchasers in such
immediately preceding month
and the Payments shall
continue to be made until
the Repayment Date.
(f) If not sooner paid
pursuant to the terms
hereof, this Debenture shall
be due and payable in full
in United States dollars two
(2) years after the
Effective Date (the
"Maturity Date").
(g) Notwithstanding anything
contained or inferred in
this Debenture to the
contrary, the Existing
Principal Amount may be
prepaid by the Corporation,
in whole or in part, at any
time and from time to time
without premium or penalty.
(h) In addition to and not
in lieu of the Payments,
until the Repayment Date, in
the event that the
Corporation is not
prohibited from doing so
under any documents existing
as of July 31, 2003 (the
"Existing Security
Documents"), as well as any
supplements thereto executed
by the Corporation and the
secured creditors under the
Existing Security Documents
(the "Existing Secured
Creditors"), the Corporation
shall segregate (in a
separate account established
by the Corporation for this
purpose) an amount (the
"Additional Repayment
Proceeds") equal to 12.5%
of: (i) the gross proceeds,
net of returns and any sales
or similar taxes payable on
account thereof, received by
the Corporation from the
exploitation of the
Production from all sources
other than in the United
States and Canada, provided
that such Additional
Repayment Proceeds shall not
include any proceeds derived
from theatrical releases;
and (ii) the gross proceeds,
net of returns and any sales
or similar taxes payable on
account thereof received by
the Corporation, or any
intermediary acting on
directions from the
Corporation, from any and
all commercial exploitation
of the Production in the
United States or Canada
other than the direct market
sale of DVD Units, provided
that such Additional
Repayment Proceeds shall not
include any proceeds derived
from theatrical releases.
The Corporation shall, not
later than the tenth day of
each month following the
immediately preceding month
if the Corporation received
any Additional Repayment
Proceeds in such immediately
preceding month, pay Lender
therefrom an amount equal to
the Additional Repayment
Proceeds multiplied by
Lender's Pro Rata Percentage
(each such payment to Lender
being an "Additional
Proceeds Payment"). The
Corporation shall provide
the Fulfillment Corporation
prompt notice of all
Additional Proceeds
Payments. The Corporation
shall cease segregating the
Additional Repayment
Proceeds on the Repayment
Date. The Additional
Proceeds Payments shall be
applied in the following
order of priority:
(i) first,
toward the
Existing
Principal Amount;
(ii) second,
toward the
accrued but
unpaid Interest
due hereunder; and
(iii) third toward Lender's
Pro Rata Accrued Royalty.
(i) The Corporation and the
Lenders acknowledge and
agree that the Royalty (as
defined in the First
Addendum) shall continue to
be paid by or on behalf of
the Corporation for so long
as DVD Units are sold to
Unites States or Canadian
purchasers, and if the
Corporation sells all or
substantially all of its
assets or merges or
otherwise combines with
another entity (an
"Acquiring Entity"), as a
condition to the closing of
such transaction, the
Corporation will cause such
Acquiring Entity to
acknowledge and agree to be
bound by all of the
Corporation's obligations
hereunder. The Corporation
acknowledges that
notwithstanding the fact
that the Existing Principal
Amount and any and all
amounts of accrued and
unpaid Interest shall be
paid in full in United
States dollars in accordance
with the Debentures, the
Debentures shall remain in
full force and effect solely
to evidence the obligation
upon the Corporation (or any
successor to the Corporation
by merger or otherwise) to
pay or cause the Royalty to
be paid and to set forth the
terms and conditions of the
Corporation's Royalty
payment obligations."
9. Modification of Paragraph 10
of the Debentures. The first sentence
of Paragraph 10. of the Debentures is
hereby deleted and replaced with the
following:
"ANY ACTION TO BE TAKEN UNDER THIS
DEBENTURE OR ANY OF THE DOCUMENTS
RELATED HERETO SHALL BE DETERMINED BY
THE HOLDERS OF A MAJORITY (BASED UPON
THE MAXIMUM PRINCIPAL AMOUNTS ADVANCED
UNDER THE DEBENTURES IN RELATION TO THE
FACILITY PROCEEDS) OF THE DEBENTURES."
10. Modification of Paragraph
3.(d) of the A Unit Subscription
Agreements. The fifth sentence of
Paragraph 3.(d) of the A Unit
Subscription Agreements is hereby
modified by deleting "2.5 million" and
inserting "up to 5.0 million" in its place.
11. Modification of Paragraph
8.(j) of the A Unit Subscription
Agreements. The second sentence of
Paragraph 8.(j) is hereby deleted and
replaced by the following:
"NOTWITHSTANDING THE FOREGOING,
PURCHASER HEREBY AGREES THAT THIS
SUBSCRIPTION AGREEMENT AND EACH AND
EVERY OF THE RIGHTS AND OBLIGATIONS OF
THE PURCHASER HEREUNDER MAY BE CHANGED,
MODIFIED OR AMENDED IN SUCH MANNER AS
MAY BE DETERMINED BY THE HOLDERS OF A
MAJORITY (based upon the Maximum
Principal Amounts advanced under the
Debentures in relation to the Facility
Proceeds) OF THE DEBENTURES."
12. Consent to Conversion of
certain Bridge Loans.
Reference is made to the CP Agreement
and that certain Investor Rights
Agreement (the "Rights Agreement"),
dated as of December 24, 2002, between
the Corporation and the individuals and
entities signatory thereto who are
holders of the Debentures, issued by the
Corporation to such individuals and
entities (each an "Existing Debenture
Holder", and together, the "Existing
Debenture Holders").
The Existing Debenture Holders signatory
hereto hereby consent to the conversion
of the Xxxxxx Advance (as defined in the
CP Agreement) and the Bridge Loans (as
defined in the CP Agreement) into Units
as described in the CP Agreement
(together, the "Conversions") and waive
on behalf of all of the Existing
Debenture Holders the Financing Rights
(as defined in the Rights Agreement) of
each Existing Debenture Holder solely
with respect to the Conversions (the
"Waiver").
The Waiver shall not be deemed a waiver
or consent with respect to any matter
other than as specifically described
herein and each right set forth in the
Rights Agreement shall be an ongoing
right that may be asserted at any time
and from time to time in accordance with
the Rights Agreement.
13. Representations and
Warranties. The representations and
warranties of the Corporation as set
forth in: (i) Section 3 of the A Unit
Subscription Agreements, dated as of
December 24, 2002, between the
Corporation and the Group A Lenders and
(ii) Section 6 of the Debentures, shall
be true and correct in all material
respects as of the date hereof as if
made herein to the Lenders with such
changes to such representations and
warranties as reflected in the
corresponding representations and
warranties in the B Unit Subscription
Agreement and the B Unit Debentures.
14. Acknowledgments of the
Corporation and the Lenders. The
Corporation and the Lenders acknowledge
and agree that no further Advances are
due, now or in the future, from any of
the Lenders under the Debentures.
15. Conflict; Ratification.
The Corporation and the Lenders
acknowledge and agree that the
Debentures are in full force and effect
and binding upon the Corporation and the
Lenders according to the terms thereof
without modification, except as
specifically modified by the First
Addendum, the Second Addendum, the Third
Addendum, the Fourth Addendum or this
Fifth Addendum. Except as specifically
modified hereby or thereby, all
covenants, terms, obligations and
conditions of the Debentures are hereby
ratified and confirmed. In the event of
a conflict between this Fifth Addendum,
the Debentures or any of the First
Addendum, the Second Addendum, the Third
Addendum or the Fourth Addendum, then
this Fifth Addendum shall control.
16. Execution. This Fifth
Addendum may be executed in two or more
counterparts and shall be deemed to be
fully executed when the Corporation and
the holders of a majority (based upon
the then Existing Principal Amount under
the Debentures which gave rise to the
Facility Proceeds) of the Debentures
have signed at least one copy hereof. A
faxed copy of this Fifth Addendum
bearing the signature of a party shall
be deemed acceptable for purposes of
execution hereof; provided, however,
that each party shall promptly provide
each other party with an originally
executed copy.
(Signatures Appear On Next Pages)
IN WITNESS WHEREOF, the parties hereto
have executed this Fifth Addendum
effective on and as of the Fifth
Modification Date.
Visual Bible International, Inc.
By: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Executive Vice President
Counterpart Lender Signature Page
IN WITNESS WHEREOF, the parties hereto
have executed this Fifth Addendum
effective on and as of the Fifth
Modification Date.
Lender:
______________________________
(Name of Lender)
______________________________
(Signature)
______________________________
(Title, if applicable)
Exhibit 3.(b)(2) to the First Addendum
FORM OF IRREVOCABLE INSTRUCTION LETTER
Exhibit 7.(a) to the Debentures
FORM OF IRREVOCABLE ROYALTY INSTRUCTION
LETTER
