May 28, 2009 (FinancialWire) — BVR Systems (1998) Ltd., (OTCBB: BVRSF) (Current Market Cap: US$21.05 Mil.) said it has entered into an agreement with Yuval Golan Investments Ltd. and Michael Golan Securities Holdings Ltd. under which the company will receive $3.5 million through the sale of a debenture.

Of the debenture amount, $2 million will be provided to the company no later than May 31, with the balance of $1.5 million provided on June 21.

BVR said has agreed repay the debenture twelve months from the date of its issuance for $3.85 million. In the event of an M&A transaction during the 12 months period the company will immediately repay the debenture with $4.55 million.

The company will also grant to the investors an option to purchase three million ordinary shares of BVR, at an exercise price per share of $0.18, exercisable for a period of five years.

Israel-based BVR Systems produces defense training and simulation systems. The company offers solutions to the simulation, training and debriefing needs of modern air, sea and ground forces.

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