Southborough, Mass. - December 13, 2006 - ViryaNet Limited (Nasdaq: VRYA), a leading provider of solutions that automate business processes for mobile workforce management and field service delivery, today announced that it has signed an agreement with Jerusalem High-tech Founders Ltd. to convert its $0.5 7.5% convertible note with a face value of $0.5 million to Preferred A Shares of the Company, at a conversion price of $1.53 per Preferred A Share. Consummation of the
conversion will reduce the Company's debt and increase its equity by approximately $0.5 million. This conversion is subject to the Company's shareholders' approval at the Company's annual general meeting scheduled for December 29, 2006.
Under the terms of the agreement, ViryaNet will issue 326,797 Preferred A Shares to Jerusalem High-tech Founders Ltd. in exchange for the conversion of $0.5 million of Jerusalem High-tech Founder's debt with ViryaNet. Jerusalem High-tech Founders Ltd. assumed this convertible debt in an arrangement with LibertyView Special Opportunities Fund, L.P. Mr. Samuel HaCohen, the Company's Chairman of the
Board of Directors, is also a director and shareholder of Jerusalem High-tech Founders Ltd.
The Preferred A Shares shall have all rights and privileges as the Company's Ordinary Shares, including, without limitation, voting rights on an as-converted basis, and will have preference over the Ordinary Shares in any distribution to the Company's shareholders. The Preferred A Shares may be converted into Ordinary Shares by the holder at any time on a 1 to 1 basis.
The Preferred A Shares will not be registered under the Securities Act of 1933. ViryaNet has agreed to use reasonable efforts to file with the SEC a registration statement covering the resale of the Ordinary Shares, which may be issued in connection with the conversion of the Preferred A Shares as soon as practicable.
About ViryaNet
ViryaNet is a provider of software applications that improve the quality and efficiency of an organization's service operations. ViryaNet's products enable companies in the utilities, telecommunications, retail and general service sectors to manage and optimize mission-critical business processes, resulting in increased service revenues, decreased service costs, and maximized customer satisfaction.
The robust set of applications automate workforce scheduling, dispatching, and activity reporting; customer contract and entitlement automation; and asset, logistics, and depot repair management. Visit ViryaNet at
www.viryanet.com.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, including statements regarding ViryaNet's expectations, beliefs, intentions, or strategies regarding the capabilities of its
products, its relationships with its customers, its customer purchases, its future operational plans and objectives including integration of other businesses, its future business prospects, its future financial performance, its future cash position, and its future prospects for profitability. All forward-looking statements included in this document are based upon information available to ViryaNet Ltd. as of the date hereof, and ViryaNet Ltd. assumes no obligation to update any such
forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to ViryaNet's business include market acceptance of and demand for the Company's products, risks associated with a slow-down in the economy, risks associated with the financial condition of the company's customers, risks associated with competition and competitive pricing pressures, risks
associated with increases in costs and operating expenses, risks in technology development and commercialization, the risk of operating losses, risks in product development, risks associated with international sales, and other risks that are set forth in ViryaNet's reports filed from time to time with the Securities and Exchange Commission. Reported results should not be considered an indication of future performance. You should not place undue reliance on these forward-looking statements,
which speak only as the date hereof. ViryaNet disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.