Re: Debt Priority Agreement
July
10,
2006
Xxxx
Xxxxxxxx
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 Xx. Xxxx Xxxxxxxx (“Xx.
Xxxxxxxx”)
in and
from the Company, Xx. Xxxxxxxx hereby agrees that the Loan shall have priority
over all the indebtedness of the Company to Xx. Xxxxxxxx and that no amounts
shall be payable to Xx. Xxxxxxxx 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, Xx. Xxxxxxxx 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. Xx.
Xxxxxxxx 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.
Xx.
Xxxx
Xxxxxxxx
