AMENDED AND RESTATED RED BROOK CONDITIONS PRECEDENT
This Amended and Restated Red Brook Conditions Precedent Agreement
(this "Agreement"), dated as of August 13, 2003, sets forth the
conditions precedent (the "Red Brook Conditions Precedent") and
other terms with respect to the participation by Red Brook
Developments Limited ("Red Brook") and the Red Brook Related Parties
(as defined in the Term Sheet) in the B Unit Offering as described
by the Visual Bible International, Inc. ("VBI") Term Sheet dated
August 13, 2003 (attached hereto as Exhibit A, the "Term Sheet") and
amends and restates that certain Conditions Precedent document dated
as of July 10, 2003 and executed on July 11, 2003 (the "Original
Conditions Precedent Document"); provided however, that the Original
Conditions Precedent Document shall survive and remain in full force
and effect with respect to the obligations of Xxxxxx Xxxxx and
Capital Partners Corporation thereunder. Any capitalized term used
but not otherwise defined herein shall have the meaning ascribed to
such term in the Term Sheet.
1. The Red Brook Conditions Precedent:
The following are the Red Brook Conditions Precedent:
(a) On July 11, 2003, the VBI board of directors (the "Board")
unanimously approved the terms of the Original Conditions
Precedent Document and a term sheet related to the B Unit
Offering dated as of July 10, 2003 and subsequently approved a
revised term sheet, dated July 22, 2003, related to the B Unit
Offering. By August 13, 2003, the Board must consent to and
approve this Agreement, the Term Sheet, the B Unit Offering,
and the transactions contemplated by the foregoing, and an
increase in the A Unit Debentures, as necessary, related to the
conversion of the Bridge Loans (defined below) and the Xxxxxx
Advance (defined below) as described in the Fifth Addendum
(defined below) and the board or similar governing body of each
of Visual Bible and BOJ (each as defined in the Term Sheet)
must consent to and approve the foregoing other than the
issuance of the B Unit Shares, the B Unit Warrants and the B
Unit Warrant Shares.
(b) Xxxxxx Xxxxx and Capital Partners Corporation must:
(i) further extend their Standstill Agreement until a
date (the "Forbearance Date") which is the earlier of:
(i) receipt by VBI of net proceeds of US$5,000,000 from
the sale of the B Units; or (ii) December 31, 2003;
(ii) agree to forebear from collection of amounts due from
VBI in order to allow for minimum payments to JBM
Entertainment, Inc., pursuant to the JBM Agreement, of an
aggregate of US$30,000/month for the services of Xxxxx X.
Xxxxxxxxx and Xxxxx X. Xxxxxxxx (US$15,000/month each); and
(iii) agree to defer any action for any outstanding
rent arrearage and/or any consulting/directors fees until
the Forbearance Date.
(c) Prior to August 27,
2003, the JBM Agreement must
be satisfactorily
renegotiated and accepted by
JBM Entertainment, Inc.,
Xxxxxx Xxxxx, Capital
Partners Corporation, the
Board and Red Brook.
(d) [Intentionally Omitted].
(e) A meeting of the Board
must be called on or before
July 23, 2003 pursuant to
which the Board must approve
the right of Red Brook to
appoint in the future one
additional qualified
director (resulting in Red
Brook having the right to
appoint a total of three
directors to the Board)
acceptable to Red Brook to
fill the vacancy existing on
the Board as of the date
hereof and the Board shall
have a maximum of seven
members.
(f) [Intentionally Omitted].
(g) There must be no
material default under the
Term Sheet, this Agreement
or any documentation related
to the A Unit Debentures or
any other secured debt
existing on the date hereof
(including, without
limitation, the collateral
security documents related
to the A Unit Debentures or
any other secured debt
existing on the date hereof).
(h) The terms of the B
Units and the B Unit
Offering must be as set
forth in the Term Sheet.
(i) VBI must reserve a
sufficient number of B Units
for purchase by Red Brook or
the Red Brook Related
Parties so that Red Brook
may fulfill the Minimum
Commitment (as defined below).
(j) All documents
necessary to memorialize the
satisfaction or waiver of
the Red Brook Conditions
Precedent must be in form
and substance satisfactory
to Red Brook.
(k) The completion of the
Xxxxxx Conversion and the
Xxxxxx Purchase must be
effected as described below.
2. Xxxxxx
Agreements. Xxxxxxx Xxxxxx
("Xxxxxx") hereby commits to
convert, and shall convert
on or before August 28,
2003, or as soon as possible
thereafter, an advance (the
"Xxxxxx Advance") made by
Xxxxxx to VBI during May
2003, in the amount of
$150,000, into a number of
Units (as such term was
defined as a part of the A
Unit Debenture subscription
concluded by VBI during
December 2002, as the same
was amended from time to
time, the "A Units") equal
to one A Unit for each
US$1.00 (or Canadian
equivalent thereof) of
outstanding principal and
accrued but unpaid interest
under the Xxxxxx Advance
(the "Xxxxxx Conversion").
Additionally, Xxxxxx agrees
to purchase 100,000 B Units
by August 28, 2003 (the
"Xxxxxx Purchase").
3. Red Brook
Commitment, Option and
Payment Schedule:
(a) Minimum Commitment.
Subject to the satisfaction
or waiver of the Red Brook
Conditions Precedent, Red
Brook hereby commits to
purchase 1,900,000 B Units
(the "Minimum Commitment").
Red Brook may fulfill its
obligation with respect to
the Minimum Commitment by,
in addition to direct
participation by Red Brook
in the B Unit Offering,
causing the Red Brook
Related Parties to
participate in the B Unit
Offering. The conversion of
the B Unit Advances (as
defined below), which in the
aggregate total US$830,000
as of August 8, 2003, shall
be deemed to be part of the
Minimum Commitment. The
funding of B Unit Advances
shall not be an indication
that any of the Red Brook
Conditions Precedent have
been satisfied or waived.
(b) Overallotment. Red
Brook (or at Red Brook's
direction, Red Brook Related
Parties) shall have the sole
right and option (the
"Option"), but not the
obligation, to purchase an
aggregate of up to an
additional 500,000 B Units
(the "Overallotment"). Red
Brook may exercise all or a
portion of the Option from
time to time on or before
September 30, 2003 by
delivery of one or more
written notices to VBI
indicating the number of B
Units with respect to which
the Option is being exercised.
(c) Payment Schedule. Red
Brook funded to VBI
US$350,000 on July 11, 2003,
US$25,000 on July 24, 2003,
US$325,000 on July 31, 2003
and US$130,000 on August 8,
2003, in exchange for
promissory notes, with terms
similar to previous
promissory notes issued by
VBI to Red Brook, but which
are convertible by Red Brook
into B Units, and in its
sole discretion, Red Brook
may choose to make similar
advances in the future (the
"B Unit Advances"). Subject
to the satisfaction or
waiver of the Red Brook
Conditions Precedent, the
Minimum Commitment shall be
funded as follows: (i) the
aforementioned B Unit
Advances consisting of
US$830,000 in the aggregate
as of August 8, 2003; (ii)
an additional US$170,000 on
or before August 15, 2003;
(iii) an additional
US$300,000 on or before
August 28, 2003; (iv) an
additional US$300,000 on or
before September 15, 2003;
(v) an additional US$300,000
on or before September 30,
2003; and (vi) the amount
due with respect to Red
Brook's exercise of the
Option for the
Overallotment, if any, on or
before October 15, 2003.
Any B Unit Advances funded
after August 8, 2003 shall
decrease the next scheduled
funding commitment amount by
the amount of such B Unit
Advance.
4. Existing Bridge
Loans:
(a) Red Brook has advanced
the amounts to VBI reflected
on Schedule A hereto (the
"Bridge Loans").
(b) Provided that all of
the Red Brook Conditions
Precedent have been
satisfied or waived, the
maturity date of the Bridge
Loans outstanding as of July
1, 2003, including all
principal, interest and fees
due thereunder, shall be
extended to a date (the
"Extension Date") which is
the earlier of:
(i)
October 1, 2003;
and
(ii) the
date (the
"Default Date")
of the
occurrence of
any material
default under
any of this
Agreement, the B
Unit Offering,
the A Unit
Debentures, any
guarantees or
security granted
by VBI or its
affiliates in
favor of Red
Brook or the
holders of the A
Unit Debentures
or any other
collateral
documentation in
connection with
the foregoing
(collectively, a
"Default").
(c) If on or before
October 1, 2003, VBI
receives the sum of
US$6,000,000, net of costs,
from the sale of B Units is,
and provided that no Default
then exists, then Red Brook
shall have the obligation to
convert the Bridge Loans
into a number of A Units
equal to one Unit for each
US$1.00 (or Canadian
equivalent thereof) of
outstanding principal and
accrued but unpaid interest
and fees under the Bridge
Loans forthwith upon receipt
of all applicable
documentation verifying the
same, which documentation
shall be provided by VBI.
(d) Subject to the
foregoing, at the sole
option of Red Brook,
exercisable at any time on
or before November 30, 2004,
the Bridge Loans may be
converted into a number of A
Units equal to one A Unit
for each US$1.00 (or
Canadian equivalent thereof)
of outstanding principal and
accrued but unpaid interest
and fees under the Bridge
Loans.
5. Red Brook's
Professional Costs:
Notwithstanding the
provision of the Term Sheet
entitled "Investor Legal
Fees", VBI agrees to
reimburse to Red Brook or to
pay directly on behalf of
Red Brook, no later than
July 31, 2003, all of the
professional fees paid by or
committed to be paid by Red
Brook in connection with the
A Unit Debentures, the costs
incurred in amending the A
Unit Debentures and all
other professional costs
incurred by Red Brook in
connection with the
transactions contemplated by
this Agreement, including
but not limited to the B
Unit Offering. After July
31, 2003, VBI shall
reimburse to Red Brook or
pay directly on behalf of
Red Brook, on demand of Red
Brook, all legal and other
professional costs and fees
incurred by Red Brook in
connection with the
transactions contemplated by
this Agreement and not paid
pursuant to the preceding
sentence.
6. Consent and
Amendments from the A Unit
Holders:
Subject to the satisfaction
or waiver of the Red Brook
Conditions Precedent, the A
Unit Holders by a majority
approval (based upon the
principal amount then
outstanding under the A Unit
Debentures) shall agree to
changes affecting the A Unit
Debentures which shall be
set forth in a documents
substantially in the form as
attached hereto as Exhibit B
(the "Fifth Addendum").
7. JBM Payments:
VBI hereby agrees to make
the VBI Payments (as defined
above).
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement effective
as of August 13, 2003:
Red Brook Developments Limited
By: /s/Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: President
Visual Bible International, Inc.
By: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Executive Vice President
/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
SCHEDULE A
BRIDGE LOANS
EXHIBIT A
TERM SHEET
EXHIBIT B
FIFTH ADDENDUM
