Re: Amendment of Additional Conditions for Granting Credits
June
14,
2006
Industrial
Development Bank Ltd
Dear
Sirs,
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.
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1.
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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 Xxxxx 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.
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2.
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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.
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3.
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All
the remaining terms of the Additional Conditions and the CD shall
remain
operative and in effect without any
change.
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4.
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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.
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5.
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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.
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6.
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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.
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7.
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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.
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Please
confirm your agreement to the above amendments to the Loan
Documents.
Yours
sincerely,
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e-SIM Ltd. | |
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By:
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Title:
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We
confirm our agreement to the above amendments to the Loan
Documents.
| Industrial Development Bank Ltd. |
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By:
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Title:
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We
the
Lenders hereby agree to the above
