Unassociated Document


     

    
      July
        10,
        2006

      


      Marc
        Belzberg

      


      Dear
        Sir,

      


      Re:
        Debt
        Priority Agreement

      

        Whereas,
          e-SIM Ltd. (the “Company”) has entered into an Agreement with Sky MobileMedia,
          Inc. (“Sky”) pursuant to which the Company shall receive a loan in the aggregate
          amount of $700,000 (seven hundred thousand US dollars) (the “Loan”)
          convertible into Ordinary Shares of the Company comprising 16.9% of the
          share
          capital of the Company (currently reflecting an estimated price per share
          of
          $0.15, the “Conversion Price”). The Loan shall bear compound interest at a rate
of
          15.0%
          per annum plus any value added tax, if applicable.

        


        1.    In
          order
          to facilitate the receipt by the Company of the Loan, and notwithstanding
          any
          sureties of Mr. Marc Belzberg (“Mr.
          Belzberg”)
          in and
          from the Company, Mr. Belzberg hereby agrees that the Loan shall have priority
          over all the indebtedness of the Company to Mr. Belzberg and that no amounts
          shall be payable to Mr. Belzberg until the repayment of the Loan to Sky
          or the
          conversion of the Loan into ordinary shares of the Company. 

         

        2.    In
          the
          event that prior to the due date of the Loan (or any earlier date upon
          which the
          Loan must be repaid) Sky and the Company shall enter into an agreement
          for the
          purchase and sale of all or substantially all of the business
          operations, assets, and intellectual property of the Company (the “Asset Sale”),
in
          consideration for a purchase price of not less than $11,000,000 (eleven
          million
          US dollars), payable in cash and securities, Mr. Belzberg will agree, concurrent
          with the consummation of the Asset Sale and conditional thereon, to (a)
          write-off and release the Company from all debts owed to him, both principal
          and
          interest and including amounts in arrears (the total of which is currently
          estimated at $810K), as of the closing of the Asset Sale, except for an
          amount
          of $600K (the “Remaining Amount”). $250,000 of the Remaining Amount, will be
          repaid by the Company after the Closing of the Asset Sale. The remaining
          $350,000 of the Remaining Amount shall be repaid either in cash in the
          event
          that the full consideration from Sky is paid in cash, or otherwise in Sky
          securities immediately upon distribution of the Sky securities to the Company
          shareholders. (b) cause Yozma Chofsheet to write-off and release the Company
          from all debts owed to it, both principal and interest (the total of which
          is
          currently estimated at $2.2M), as of the closing of the Asset Sale.

         

        6.    Mr.
          Belzberg will vote, and will cause any corporation under his control to
          vote, in
          favor of all resolutions which will be brought up in the coming Annual
          General
          Meeting regarding the ratification of the appointment of the incumbent
          members
          of the Company’s Board of Directors, effective as of the date of their
          appointment, and all actions taken by them since in connection with the
          Loan
          Agreement and the Asset Sale and its implementation.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Please
        confirm your agreement to the above
        terms.

       

                                            Yours
        sincerely,

      
         

        
          
            	 	
                     

                  	e-SIM
                    Ltd.
	 	 	 
	 	
                    By:

                  	 
	 	 	 
	 	
                    Title:

                  	 


          

        

         

      

      


      I
        confirm
        my agreement to the above.

       

      


      
        
          

        

      

      Mr.
        Marc
        Belzberg