Document:

Unassociated Document

    
       

      June
        14,
        2006

       

      Industrial
        Development Bank Ltd

       

      Dear
        Sirs, 

       

      Re:
        Amendment
        of Additional Conditions for Granting Credits

       

      Pursuant
        to Section 11.2 of the Additional Conditions for Granting Credits dated November
        30, 2000, as amended (the “Additional Conditions”) and the Convertible Debenture
        Agreement dated November 30, 2000, as amended (the “CD”; the Additional
        Conditions and the CD, the “Loan Documents”), we hereby confirm our agreement to
        the amendment of the Loan Documents as follows: 

       

      All
        capitalized terms used herein not otherwise defined shall have the meaning
        ascribed to them in the Loan Documents.

       

      
        	
                1.

              	
                e-SIM
                  LTD (The “Borrower” ) shall sell to Sky Mobilemedia Inc. (“Buyer”), by not
                  later than August 31, 2006 (the “Final Sale Date” (or such later date
                  requested by Buyer and approved by Borrower but in any event not
                  later
                  than October 31, 2006, such date, the “The Extended Final Sale Date”) all
                  or substantially all of its assets (“Assets”) and (“Asset Sale”) in
                  consideration for an aggregate amount of not less than $11,000,000
                  (eleven
                  million US dollars) (“The Purchase Consideration”). From said amount of
                  $11,000,000 (eleven million US dollars),no more than $6,000,000
                  (six
                  million US dollars) will be paid in cash and the remaining amount
                  of the
                  Purchase Consideration will be paid in securities of the Buyer.
                  Against
                  the closing of the Asset Sale as stated above, fifty five percent
                  (55%) of
                  the Utilized Credit shall be repaid to the bank, within 7 (seven)
                  days of
                  the receipt of the cash component of the purchase price by the
                  Borrower,
                  as described above. From the remaining forty five percent (45%)
                  of the
                  Utilized Credit, the Bank shall purchase 495,833 Ordinary Shares
                  of the
                  Borrower, the payment whereof will be effected by a set-off against
                  the
                  Utilized Credit. The remaining amount of the Utilized Credit not
                  deferred
                  or repaid as per the foregoing, the Bank shall waive and forgive,
                  and such
                  amount shall be deemed repaid in full by the
                  Borrower.

              

      

       

      
        	
                2.

              	
                In
                  order to facilitate the receipt by the Borrower from the Buyer
                  of a bridge
                  loan prior to the Asset Sale, and notwithstanding any indebtedness
                  of the
                  Borrower to the Bank and any obligation to make payments to the
                  Bank, the
                  Bank hereby agrees and permits the Borrower to receive from the
                  Buyer a
                  bridge loan and to use the funds solely in the ordinary course
                  of
                  business. The Borrower may not use the funds received from the
                  Borrower as
                  a bridge loan, to repay the Bank any amount.

              

      

       

      
        	
                3.

              	
                All
                  the remaining terms of the Additional Conditions and the CD shall
                  remain
                  operative and in effect without any
                  change.

              

      

       

      
        	
                4.

              	
                The
                  letter agreement signed by the Borrower and the Bank dated May
                  22, 2006,
                  is hereby canceled, revoked and declared null and void and of no
                  force and
                  effect.

              

      

       

      
        	
                5.

              	
                Should
                  Buyer fail to provide and make available to Borrower a bridge loan
                  in an
                  amount not less than $500,000 (five hundred US dollars) by no later
                  than
                  July 31, 2006, then, and in that event, this document shall automatically
                  and immediately thereafter be canceled, revoked and be regarded
                  as of no
                  force and effect. 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                6.

              	
                In
                  the event that the bridge loan was granted and made available to
                  the
                  Borrower by no later than July 31, 2006, but the Assets of the
                  Borrower
                  described in Section 1 above were not purchased by Buyer by the
                  Final Sale
                  Date or by the Extended Final Sale Date if operative, then this
                  document
                  shall automatically and immediately thereafter be canceled, revoked
                  and be
                  regarded as of no force and effect.

              

      

       

      
        	
                7.

              	
                The
                  Bank hereby gives its consent (i) to the performance of the Asset
                  Sale
                  (ii) contingent on and concurrent with the sale of the Assets to
                  the Buyer
                  and conditional upon the payment of 55% of the Utilized Credit
                  to the bank
                  in accordance with Section 1 above, to cancel and remove all liens,
                  pledges, charges and other encumbrances from the Borrower and its
                  assets
                  and (ii) to terminate and cancel, the CD, as amended from time
                  to time,
                  which shall then be of no further force and effect , except for
                  the right
                  to purchase shares of the Borrower.

              

      

       

      Please
        confirm your agreement to the above amendments to the Loan
        Documents.

       

                                  Yours
        sincerely,

      
         

        
          
            	 	
                     

                  	e-SIM
                    Ltd.
	 	 	 
	 	
                    By:

                  	 
	 	 	 
	 	
                    Title:

                  	 

          

        

         

      

       

      We
        confirm our agreement to the above amendments to the Loan
        Documents.

      
        
           

          
            
              	Industrial Development
                      Bank
                      Ltd.	
                       

                    	 

            

             

            
              	
                      By:

                    	
                       

                    	 
	 	 	 
	
                      Title:

                    	
                       

                    	 

            

          

        

      

       

      We
        the
        Lenders hereby agree to the aboveUnassociated 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

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