Document:

LETTER BETWEEN VIRYANET AND BANK HAPOALIM LTD

 Exhibit 4(A)(23) 
 Written Amendment of the Covenant Letter from 14/03/2005. 
 Which was held and signed on
December 22, 2005. 
  

	Between:	Bank HaPoalim Ltd. 

	    	(Hereinafter – “the Bank”)
                        on the one hand;  

  

	And:	ViryaNet Ltd. P.C. 511281354 

	    	(Hereinafter – “the Company”)                 on the other hand;

  

	WHEREAS	on the 14/03/2005 the Company signed a covenant letter in the favor of the Bank regarding credit and other bank services which the Company has received and/or shall receive
from the bank (hereinafter – “covenant letter”); 

  

	WHEREAS	the parties wish to partially amend the covenant letter, as provided in this amendment letter as follows; 

  

	THEREFORE	the parties hereby agree to amend the covenant letter as follows: 

  

	1.	Section 1b of the covenant letter shall be removed. 

  

	2.	This new Section 2 shall be added in the following wording: 

 “ We undertake that the balance of cash as of 1/1/06 as well as the balance of the cash as reported in our quarterly and yearly (consolidated) financial reports beginning 1/7/06 which are audited or reviewed by an external certified
public accountant at all times and from time to time, shall not be less from the amount in NIS equal to $1,000,000 (One Million U.S Dollars).” 
 This amendment letter constitutes an inseparable part of the covenant letter; and all the remainder of the details and conditions of the covenant letter shall remain in full force. 
 In witness whereof, the undersigned partied have caused this Agreement to be executed on the date aforementioned: 
  

					
	  	 		 	  
	Bank HaPolaim Ltd.	 		 	ViryaNet Ltd.

 LAWYERS CERTIFICATION: 
 I, the undersigned, Raanan Lerner, Adv, act as Legal Counsel of ViryaNet Ltd (hereinafter: the “Company”), hereby certify that this letter, was signed
in accordance with applicable law by authorized signatories of the Company in accordance with a resolution which was received by organs of the Company, in accordance with applicable law, who are authorized to do so, and in accordance with the
Company’s incorporation documents, binds the Company for all intents and purposes. 
 In addition, I hereby certify that all the resolutions and
approvals required for the actions raised in this letter were obtained, including in accordance with Chapters 3 and 5 of the sixth section of the Company Law Act – 1999, to the extent required. 
  

					
	22/12/05	 		 	Raanan Lerner
	Date	 		 	Stamp and Signature.CONVERSION AGREEMENT

 Exhibit 4(A)(24) 
 Date: May 5, 2006 
 This letter sets forth the mutual agreement between ViryaNet Limited (“Company”) and
LibertyView Special Opportunities Fund, LP (“LibertyView”) in connection with the partial conversion of an Amended and Restated 7 1/2% Convertible Note in the amount of US$2,500,000 (the “Note Amount”) dated August 5, 2005 (the “Note”). 
 In connection with such Note, the parties agree than an amount of $2,000,000 out of the Note Amount shall be converted into Preferred A Shares of the Company (each, a “Preferred Share”), at a conversion
price equal to $1.53 per each Preferred Share. The Preferred Shares shall have all rights and privileges as the Company’s Ordinary Shares (including voting rights, rights to participate in divided distribution (if any) and all other rights
which may be attached to the Ordinary Shares), provided that the Preferred Shares shall have preference to the Ordinary Shares in any distribution upon the liquidation or deemed liquidation of the Company. The Preferred Shares may be converted at
any time, at the discretion of LibertyView, into Ordinary Shares on 1 to 1 ratio. Upon the consummation of an M&A or similar transaction involving the Company, the Preferred Shares shall be entitled to the same benefits provided to the Ordinary
Shares. 
 Upon the above partial conversion of the Note, the Note Amount shall be decreased to $980,000 (the “Remaining Loan”) and all terms and
condition of the Note in connection with the Remaining Loan shall continue to be in full force and effect. 
 The Company shall file with the SEC a
registration statement covering the Ordinary Shares which may be issued upon conversion of the Preferred Shares by no later than 60 days from the date hereof. 
 As this transaction requires the consent of the Company’s shareholders, the Company shall file as soon as possible a proxy statement and request that its shareholders approve such conversion and the required changes to the
Company’s Articles of Association. The Company shall use reasonable efforts to file such proxy statement, together with the new Articles of Association, within 10 days from the date hereof. If the shareholders do not approve the conversion
contemplated hereunder within 45 days from the date hereof, this transaction shall be canceled. Otherwise, this transaction shall be binding on the Company and LibertyView. 
 In witness hereof, the parties have duly signed this letter as of the date mentioned above: 
  

			
	ViryaNet Limited	 	LibertyView Special Opportunities Fund, LP
	By: ____________________	 	By: ____________________
	Its:_____________________	 	Its:_____________________SHARE PURCHASE AGREEMENT

 Exhibit 4(A)(25) 
 SHARE PURCHASE AGREEMENT 
 THIS SHARE PURCHASE AGREEMENT (this “Agreement”) is made as of
May 5, 2006 (the “Effective Date”), by and among ViryaNet Ltd., a company organized under the laws of the State of Israel (the “Company”), C.E. Unterberg, Towbin, LLC Telvent Investments SL, FBR Infinity II Ventures (Israel)
LP, FBR Infinity II Ventures LP, and FBR Infinity II Ventures (Erisa) LP (each, a “Purchaser”, and collectively, the “Purchasers”). 
 W I T N E S S E T H: 
  

	WHEREAS,	The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company to raise additional capital by means of
the issuance of Ordinary Shares of the Company, nominal value NIS 1.0 per share (each, an “Ordinary Share” and collectively, the “Ordinary Shares”; all Ordinary Shares purchased by the Purchasers under this
Agreement shall be referred to as the “Purchased Shares” and the Ordinary Shares purchased by a Purchaser shall be referred to as the “Respective Purchased Shares”), at a price per Purchased Share of US$0.939 (the
“Purchase Price Per Share”) (unless otherwise explicitly indicated, all monetary amounts herein designated by the symbol “$” are in United States dollars) as set forth below. 

  

	WHEREAS,	The Purchasers wishes to invest in the Company an amount as set forth in Exhibit 1 hereto (such aggregate amount, the “Purchase Price”) by the
purchase of Purchased Shares from the Company pursuant to the terms and conditions more fully set forth in this Agreement. 

 NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereby agree as follows: 
  

	1.	Issuance and Purchase of Ordinary Shares. Subject to the terms and conditions hereof and the payment of the Purchase Price by the Purchaser, the Company shall, as of the
Closing, issue and allot to the Purchasers an aggregate of 1,171,459 Ordinary Shares of the Company, in accordance with the table attached as Exhibit 1 setting forth the respective Purchase Price and number of Purchased Shares per each of the
Purchasers. 

  

	2.	Closing. 

  

	 	2.1.	Closing. The sale and purchase hereunder shall take place on the Effective Date or as soon as indicated by the Company (the “Closing”) at the offices of the
Company. 

	 	2.2.	Transactions at Closings. At the Closing, the following transactions shall occur, which transactions shall be deemed to take place simultaneously, and no transactions shall
be deemed to have been completed or any document delivered until all such transactions have been completed and all required documents delivered: 

  

	 	2.2.1.	The Company shall deliver to the Purchasers true and correct copies of resolutions of the Company’s Board of Directors (the “Board Resolutions”)
(i) authorizing the execution of the Agreement, the Registration Rights Agreement and the Warrant (collectively, the “Transaction Documents”) and the consummation of the transactions set forth in such Transaction Documents, and
(ii) issuing and allotting to the Purchasers the Ordinary Shares, in form to be mutually agreed upon; 

  

	 	2.2.2.	The Company shall deliver to the Purchasers the following documents at the Closing (with respect to subsection (a) only, as soon as practicable after the Closing):

  

	 	(a)	Validly executed share certificate representing the Respective Purchased Shares, issued in the name of each Purchaser; 

  

	 	(b)	A certificate duly executed by the Chairman of the Board of the Company, dated as of the Closing, in a form to be mutually agreed upon; 

  

	 	(c)	A legal opinion of Meitar, Liquornik Geva & Leshem Brandwein, Israeli counsel to the Company, in a form to be mutually agreed upon; and 

  

	 	(d)	Validly executed warrants (each, the “Warrant”) in a form attached as Exhibit 2.2.2(d)(i), Exhibit 2.2.2(d)(ii) and Exhibit 2.2.2(d)(iii) 

 

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	 	2.2.3.	Each Purchaser shall deliver to the Company an undertaking to the Chief Scientist of the Ministry of Trade and Commerce of the State of Israel, duly executed by the Purchaser.

  

	 	2.2.4.	Each Purchaser shall cause the transfer to the Company of the applicable Purchase Price for its Respective Purchased Shares in immediately available funds, by wire transfer to the
following bank account of the Company Bank Name: Silicon Valley Bank; Account Name: ViryaNet Inc., 2 Willow Street, Southborough, MA 01745; Account Number: 3300041451; Bank ABA Number: 121140399; The payment of the Purchase Price at the Closing
shall be in US dollars. 

  

	 	2.2.5.	At the Closing, the Company and the Purchasers shall enter into the Registration Rights Agreement, in the form attached hereto as Exhibit 2.2.5 hereto.

  

	3.	Representations, Warranties and Covenants of the Company. The Company hereby represents and warrants to, and, where appropriate, covenants with the Purchasers at the
Closings, except as set forth in the Company Disclosure Schedule attached as Exhibit 3 hereto, which exceptions shall be deemed to be representations and warranties as if made hereunder, as follows: 

  

	 	3.1.	Organization. The Company is duly organized and validly existing under the laws of the State of Israel, and has full corporate power and authority to own, lease and operate
its properties and assets and to conduct its business as now being conducted and as proposed to be conducted. The Company has all requisite power and authority to execute and deliver this Agreement and other agreements contemplated hereby or which
are ancillary hereto, including the Transaction Documents, and to consummate the transactions contemplated hereby and thereby. The Company has not taken any action or failed to take any action, which action or failure would preclude or prevent the
Company from conducting its business after the Closing in the manner heretofore conducted. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted and as proposed
to be conducted, the lack of which could materially adversely affect the business, properties, prospects or financial condition of the Company. 

  

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	 	3.2.	Share Capital. Immediately after the Closing, the authorized share capital of the Company shall be NIS 16,000,000 divided into 16,000,000 Ordinary Shares, of which 8,643,117
are issued and outstanding, all as specified in the capitalization table set forth in Section 3.2 of the Company Disclosure Schedule (the “Capitalization Table”). Except as set forth in the Capitalization Table, the
transactions contemplated by this Agreement, the Transaction Documents and in the Articles of Association, there are no other share or equity capital, preemptive rights, convertible securities, outstanding warrants, options or other rights to
subscribe for, purchase or acquire from the Company any share or equity capital of the Company and there are not any contracts or binding commitments providing for the issuance of, or the granting of rights to acquire, any share or equity capital of
the Company or under which the Company is, or may become, obligated to issue any of its securities. All issued and outstanding share capital of the Company is duly authorized, validly issued and outstanding and fully paid and non-assessable.

  

	 	3.3.	The Purchased Shares. The Purchased Shares, when and if issued and allotted in accordance with this Agreement, will be duly authorized, validly issued, fully paid,
non-assessable and free of any preemptive rights, and will have the rights, preferences, privileges and restrictions set forth in the Articles of Association and will be free and clear of any liens, claims, encumbrances or third party rights of any
kind and duly registered in the name of the Purchasers in the Company’s share transfer register. 

  

	 	3.4.	 Subsidiaries. Other than the subsidiaries set forth in Section 3.4 of the Company Disclosure Schedule (the “Subsidiaries”), the
Company has no subsidiaries or affiliated companies and does not otherwise own or control, directly or indirectly, any equity interest in any corporation, association or business entity. ViryaNet, Inc. is duly organized and validly existing under
the laws of the State of 

  

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Delaware, and has full corporate power and authority to own, lease and operate its properties and assets and to conduct its business as now being conducted
and as proposed to be conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business and its ownership or leasing of property require it to be so qualified. The Company holds title to
all shares of the Subsidiaries free of any preemptive rights and free and clear of any liens, claims, encumbrances or third party rights of any kind. 

  

	 	3.5.	SEC Filings; Financial Statements. 

  

	 	3.5.1.	The Company has timely or within the extensions granted by the U.S. Securities and Exchange Commission (“SEC”), filed all required forms, reports and documents with the
SEC since becoming a SEC reporting company on September 19, 2000, and (except as set forth in Section 3.5.1 of Company Disclosure Schedule) has complied with all applicable requirements of the Securities Act of 1933, as amended (the
“Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder, each as in effect on the dates such forms, reports, and documents were
filed. The Company has made available to the Purchaser accurate and complete copies (excluding copies of exhibits) of each report, registration statement and definitive proxy statement filed by the Company with the SEC between such date and the date
of this Agreement (the “Company SEC Documents”). As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) each of the Company SEC
Documents, including any financial statements or schedules included or incorporated by reference therein, complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act and the rules and regulations
promulgated thereunder (as the case may be). 

  

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	 	3.5.2.	The consolidated financial statements contained in the Company SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the
SEC applicable thereto; (ii) were prepared in accordance with US generally accepted accounting principles applied on a consistent basis throughout the periods covered; and (iii) fairly present the consolidated financial position of Company
and its subsidiaries as of the respective dates thereof and the consolidated results of operations of Company and its subsidiaries for the periods covered thereby. 

  

	 	3.6.	Authority; Binding Nature of the Transaction Documents. The Company has the rights, power and authority to perform its obligations under the Transaction Documents. The
execution, delivery and performance by Company of each of the Transaction Documents have been duly authorized by all necessary action on the part of the Company. Each of the Transaction Documents constitutes the legal, valid and binding obligation
of the Company, enforceable against it in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive
relief and other equitable remedies. 

  

	 	3.7.	Consents and Approvals. Except as set forth on Section 3.7 of the Company Disclosure Schedule, no filing or registration with, no notice to and no permit,
authorization, consent or approval of any third party or any governmental body is necessary for the consummation by the Company of the transactions contemplated by the Transaction Documents. 

  

	 	3.8.	 No Violation. Neither the execution and delivery of the Transaction Documents by the Company, the performance by it of its obligations hereunder nor the
consummation by the Company of the transactions contemplated hereby will (a) violate, conflict with or result in any breach of any provision of the Articles of Association or Memorandum of Association of the Company, or (b) violate any
order, writ, judgment, injunction, decree, statute, 

  

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rule or regulation of any court or domestic or foreign governmental body applicable to the Company, or (c) constitute a default under any material
contract to which the Company is party. 

  

	 	3.9.	Additional Representations. Until the expiration of the Survival Period (defined below), any additional representations which may be made by the Company in the next financing
round after the Closing hereunder shall be deemed to be, for all intents and purposes, incorporated by reference into this Agreement and apply to the investment of Purchaser under this Agreement. 

  

	 	3.10.	No Brokers. Except as set forth on Section 3.10 of the Company Disclosure Schedule, No broker’s or finder’s or placement fee or commission will be
payable by the Company in connection with the transactions under the Transaction Documents and the Company will hold the Purchaser harmless from any claim, demand or liability for broker’s or finder’s or placement fees or commissions
alleged to have been incurred by such Purchaser in connection with the issuance of such securities. 

  

	4.	Representations and Warranties of the Purchasers. Each of the Purchasers hereby represents and warrants to the Company, severally but not jointly, as follows:

  

	 	4.1.	Authorization. The execution, delivery and performance of the Transaction Documents by the Purchaser have been duly authorized by all necessary corporate or other action.

  

	 	4.2.	The Purchaser (i) is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, (ii) is acquiring the
Purchased Shares for its own account and not with a present view to the distribution of any part thereof, and (iii) the Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer, or grant
participations to such person or to any third person, with respect to any of the Purchased Shares. 

  

	 	4.3.	 No broker’s or finder’s or placement fee or commission will be payable by the Purchaser in connection with the transactions under the Transaction
Documents and the Purchaser will hold 

  

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the Company harmless from any claim, demand or liability for broker’s or finder’s or placement fees or commissions alleged to have been incurred by
the Company in connection with the issuance of such securities. 

  

	 	4.4.	The Purchaser has been furnished by the Company with, and reviewed, the Company’s Form 20-F for the fiscal years ended December 31, 2003 and December 31, 2004, and
the Forms 6-K for the fiscal quarter ended March 31, 2006. 

  

	 	4.5.	The Purchaser has been furnished access to the business records of the Company and such additional information and documents as such Purchaser has requested and has been afforded an
opportunity to ask questions of and receive answers from representatives of the Company concerning the terms and conditions of this Agreement and the Transaction Documents, the purchase of Purchased Shares, the Company’s business, operations,
market potential, capitalization, financial condition and prospects, and all other matters deemed relevant by such purchase. 

  

	 	4.6.	The Purchaser has sought independent legal, investment and tax advice to the extent that it has deemed necessary and appropriate in connection with such Purchaser’s decision to
purchase the Purchased Shares and the transactions set forth in the Transaction Documents, and has not relied on the representations of any party other than the Company. 

  

	 	4.7.	The Purchaser understands that the Purchased Shares, shall bear legends in the form set forth in this Agreement. 

  

	 	4.8.	The Purchaser understands that the Purchased Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of the Purchaser thereunder. 

  

 8 

	 	4.9.	The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of
the Purchased Shares. 

  

	5.	Conditions of Closing of the Purchasers. The obligations of the Purchasers to consummate the Closing and transfer funds at the Closing are subject to the fulfillment at or
before each Closing of the following conditions precedent, any one or more of which may be waived in whole or in part by the Purchasers, which waiver shall be at the sole discretion of such Purchasers: 

  

	 	5.1.	Representations and Warranties. The representations and warranties made by the Company in this Agreement shall have been true and correct when made, and shall be true and
correct as of the Closing as if made on the date of the Closing. 

  

	 	5.2.	Covenants. All covenants, agreements, and conditions contained in this Agreement to be performed or complied with by the Company prior to the Closing shall have been
performed or complied with by the Company prior to or at the Closing. 

  

	 	5.3.	Consents, etc. The Company shall have secured all permits, consents, authorizations and approvals that shall be necessary or required lawfully to consummate the transactions
to be consummated prior to the Closing pursuant to the Transaction Documents and to issue the Purchased Shares to be purchased by the Purchasers at the Closing. 

  

	 	5.4.	Delivery of Documents. All of the documents to be delivered by the Company pursuant to Section 2.2 shall have been delivered to the Purchasers. 

 

	 	5.5.	Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident
to such transactions shall be satisfactory in substance and form to the Purchasers and their counsel, and the Purchasers and their counsel shall have received all such counterpart originals or certified or other copies of such documents as the
Purchasers or their counsel may request 

  

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	 	5.6.	Conversion of debt. The “Alpha Capital” funds have converted a total of $500,000 of debt into Company’s equity and NASDAQ has confirmed that such conversion is
considered as equity for the purpose of NASDAQ’s stockholders’ equity rule. 

  

	6.	Conditions of Closing of the Company. The Company’s obligations to sell and issue the Purchased Shares at the Closing are subject to the fulfillment at or before such
Closing of the following conditions, which may be waived in whole or in part by the Company, and which waiver shall be at the sole discretion of the Company: 

  

	 	6.1.	Representations and Warranties. The representations and warranties made by the Purchasers in this Agreement shall have been true and correct when made, and shall be true and
correct as of the date of the Closing. 

  

	 	6.2.	Covenants. All covenants, agreements and conditions contained in this Agreement to be performed, or complied with, by the Purchasers prior to the Closing shall have been
performed or complied with by the Purchasers prior to the Closing. 

  

	 	6.3.	Consents, etc. The Company shall have secured all permits, consents, authorizations and approvals that shall be necessary or required lawfully to consummate the transactions
contemplated by the Transaction Documents and to issue the Purchased Shares to be purchased by the Purchasers at the Closing. 

  

	 	6.4.	Purchase Price. The Purchasers shall have transferred to the Company the applicable Purchase Price. 

  

	7.	Affirmative Covenants. 

  

	 	7.1.	Use of Proceeds. The Company shall use the proceeds of the issuance and sale of the Purchased Shares in accordance with the Company’s budget as approved by the
Company’s Board. 

  

	 	7.2.	Stamp Tax. The Company shall pay all stamp duty applicable in connection with this Agreement and the Transaction Documents and the issuance of the Purchased Shares, if and
when applicable. 

  

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	 	7.3.	Legends. Any stock certificate representing Purchased Shares, if and when issued, shall bear a legend reading substantially as follows: 

 THE SHARES REPRESENTED BY THIS STOCK CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSE ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. NEITHER SECURITY MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 
  

	8.	Miscellaneous. 

  

	 	8.1.	Further Assurances. Each of the parties hereto shall perform such further acts and execute such further documents as may reasonably be necessary to carry out and give full
effect to the provisions of the Transaction Documents and the intentions of the parties as reflected thereby. 

  

	 	8.2.	Survival of Representations. All representations and warranties made by any party to this Agreement or pursuant hereto shall survive the Closing and shall remain in full
force and effect for a period of one (1) year following the date of the Closing (the “Survival Period”). The representations of the Company set forth in Section 3.1. of this Agreement shall survive the Closing
indefinitely. 

  

	 	8.3.	 Governing Law; Jurisdiction. The transactions contemplated under the Transaction Documents shall be governed by the laws of the state of Israel; all disputes
arising of the transactions contemplated 

  

 11 

	 	 
under the Transaction Documents or any interpretation controversies regarding the Transaction Documents or the transactions contemplated thereto shall be
brought before the International Chamber of Commerce in Geneva, Switzerland. 

  

	 	8.4.	Successors and Assigns; Assignment. Except as otherwise expressly limited herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto. None of the rights, privileges or obligations set forth in, arising under or created by this Agreement may be assigned or transferred by Purchasers without the consent of the
Company, except for any transfers or assignments to any Affiliate of Purchasers. For purposes of this Agreement, the term “Affiliate” shall mean (a) any general, special or limited partner, member, shareholder or any other person or
entity that holds a beneficial interest in Purchasers, or (b) an “affiliate” as defined in Rule 144 promulgated under the U.S. Securities Act of 1933. 

  

	 	8.5.	Entire Agreement; Amendment and Waiver. This Agreement, the recitals hereto, the Schedules and the Exhibits attached hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matters hereof and thereof. Any term of this Agreement may be amended and the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a
particular instance) only by written agreement specifically referring to this Agreement and signed by the Company and the Purchasers. 

  

	 	8.6.	 Notices. All notices and other communications required or permitted hereunder to be given to a party to this Agreement and any of the Transaction Documents
shall be in writing and shall be delivered by hand or by messenger, addressed to such party’s address as set forth on Exhibit 8.6, or such other address with respect to a party as such party shall notify each other party in writing as
provided herein and on Exhibit 8.6. Any notice sent in accordance with this Section 8.6 shall be effective (i) if sent by messenger, upon delivery, and (ii) if sent via 

  

 12 

	 	 
overnight courier, upon delivery of such internationally recognized overnight courier service, including, but not limited to, DHL or Federal Express.

  

	 	8.7.	Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party upon any breach or default under this Agreement, shall be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any
party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any of the
parties, shall be cumulative and not alternative. 

  

	 	8.8.	Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded
from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; provided, however, that in such event this Agreement shall be interpreted so as
to give effect, to the greatest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. 

  

	 	8.9.	Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and enforceable against the parties actually executing
such counterpart, and all of which together shall constitute one and the same instrument. 

  

	 	8.10.	Further Actions. Each of the parties hereto shall, from time to time after the Closing, upon the request of the other party hereto and at the expense of such requesting
party, duly execute, acknowledge and deliver or cause to be duly executed, acknowledged and delivered, all such further instruments and documents reasonably requested by the other party to further effectuate the intents and purposes of this
Agreement. 

  

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	 	8.11.	 Confidentiality. Each Purchaser agrees that any information obtained by such Purchaser from or on behalf of the Company which has been marked as confidential
(including the contents of all of the Transaction Documents) will not be disclosed to any person other than such Purchaser’s officers, directors, and employees, professional advisors, consultants, or agents, each on a need-to-know basis only,
without the prior written consent of the Company and will not be used by such Purchaser other than in connection with the transactions contemplated by this Agreement (including all reporting obligations that such Purchaser may be obligated to
undertake as a result of such transactions); provided, however, that such Purchaser may disclose such information in connection with periodic reports to their shareholders, partners, members, professional advisors and potential acquirer(s) and such
acquirer’s professional advisors, subject to such third parties being under confidentiality obligations to such Purchaser that cover the disclosed confidential information. The Company agrees that the contents of this Agreement and the
Transaction Documents shall be treated by it as confidential information, and shall not be disclosed to any person except as required by law. Confidential information as referred to in this Section 8.11 shall not include information, with
respect to the Purchaser, (i) which is or becomes public knowledge through no fault of the Purchaser; (ii) which was or is known by the Purchaser prior or at the time of disclosure by the disclosing party as can be evidenced by the
Purchaser; (iii) is or has become lawfully available to the Purchaser from a source (other than the Company) which the Purchaser does not know or reasonably believe to be under an obligation of confidentiality; (iv) is disclosed with the
prior written consent of the Company; or (v) is legally required to be disclosed by judicial as other governmental action, provided, however, that prompt notice of such judicial or other governmental action shall have been given to the Company,
provided that if Purchaser receives a 

  

 14 

	 	 
subpoena or similar document requiring it to disclose the Confidential information, the Purchaser shall notify the Company so that the Company can take
appropriate action to suppress the disclosure of its Confidential Information or else insure that its Confidential information is disclosed under confidentiality provisions only. 

  

	 	8.12.	Indemnification by Company. During the Survival Period and subject to Section 8.14 below, the Company shall and hereby does indemnify and hold the Purchasers harmless
from and against and in respect of any and all actual loss, damage and expense incurred (other than losses that the Purchasers may incur as a stockholder of the Company) by the Purchasers resulting from, arising out of, attributable to, or in any
manner connected with: 

  

	 	(a)	Any misrepresentation or breach of any representation or warranty made by the Company pursuant to this Agreement or failure to fulfill any covenant or agreement on the part of the
Company contained in this Agreement or in any certificate or other document delivered, or to be delivered, by the Company to the Purchasers in connection with this Agreement; and 

  

	 	(b)	Any and all actions, suits, proceedings, demands, assessments or judgments, costs and expenses (including reasonable legal and accounting fees and investigation costs) incident to
the foregoing and the enforcement thereof. 

 If any event shall occur or any circumstance arise which might give rise to a
claim in respect of any matter against which the Company has indemnified the Purchasers hereunder, the Purchasers promptly shall give notice thereof to the Company. Such notice shall be given within fifteen (15) days after said claim shall have
been presented to the Purchasers. Unless the parties otherwise agree in writing, the Company shall defend against all such 

  

 15 

 
third-party claims or otherwise satisfy said claims, at its sole cost and expense, through counsel and accountants designated by it, which approval shall not
be delayed or withheld unreasonably. The Purchasers shall have the right to participate with the Company in the defense of any such matter. The Company shall not be liable for any settlement of a claim by the Purchasers without the Company’s
consent. Notwithstanding anything to the contrary herein, the Purchasers shall not lay claim and the Company shall not be liable under this Section for any action, proceeding or investigation in respect of which indemnity may be sought as provided
above, amounting to less than $50,000 in the aggregate, provided that such persons shall be liable from the first dollar for any claim or claims exceeding such amount. 
  

	 	8.13.	Indemnification by Purchasers. During the Survival Period and subject to Section 18.14 below, each Purchaser shall and hereby does indemnify and hold the Company
harmless from and against and in respect of any and all actual loss, damage and expense incurred by the Company resulting from, arising out of, attributable to, or in any manner connected with: 

  

	 	(a)	Any misrepresentation or breach of any representation or warranty made by the Purchaser pursuant to this Agreement or failure to fulfill any covenant or agreement on the part of the
Purchaser contained in this Agreement or in any certificate or other document delivered, or to be delivered, by the Purchaser to the Company in connection with this Agreement; and 

  

	 	(b)	Any and all actions, suits, proceedings, demands, assessments or judgments, costs and expenses (including reasonable legal and accounting fees and investigation costs) incident to
the foregoing and the enforcement thereof. 

  

 16 

 If any event shall occur or any circumstance arise which might give rise to a claim in respect of any
matter against which the Purchaser has indemnified the Company hereunder, the Company promptly shall give notice thereof to the Purchaser. Such notice shall be given within fifteen (15) days after said claim shall have been presented to the
Company. Unless the parties otherwise agree in writing, the Purchaser shall defend against all such third-party claims or otherwise satisfy said claims, at its sole cost and expense, through counsel and accountants designated by it, which approval
shall not be delayed or withheld unreasonably. The Company shall have the right to participate with the Purchaser in the defense of any such matter. The Purchaser shall not be liable for any settlement of a claim by the Company without the
Purchaser’s consent. Notwithstanding anything to the contrary herein, the Company shall not lay claim and the Purchaser shall not be liable under this Section for any action, proceeding or investigation in respect of which indemnity may be
sought as provided above, amounting to less than $50,000 in the aggregate, provided that such persons shall be liable from the first dollar for any claim or claims exceeding such amount. 
  

	 	8.14.	Limitation of Liability. In no event shall either the Company or the Purchasers be liable to the other party for any consequential, indirect, special or incidental costs,
damages or loss (including, without limitation, lost profits, loss of business), regardless of the nature, arising out of or relating in any way to this Agreement. 

  

 17 

 IN WITNESS WHEREOF the parties hereto have signed this Share Purchase Agreement as of the date
first set forth above. 
  

									
	 VIRYANET LIMITED
	 		 	 TELVENT INVESTMENTS SL

					
	 By:
	 	  	 		 	 By:
	 	  
			
	 FBR INFINITY II VENTURES (ISRAEL) LP
	 		 	 C.E. UNTERBERG, TOWBIN, LLC

					
	 By:
	 	  	 		 	 By:
	 	  
			
	 FBR INFINITY II VENTURES LP
	 		 	 FBR INFINITY II VENTURES (ERISA) LP

					
	 By:
	 	  	 		 	 By:
	 	  

  

 18 

 Exhibit 1 
  

						
	 Purchaser
	  	Number of Purchased
Share	  	Purchaser’s Purchase
Price
	 C.E. Unterberg, Towbin, LLC
	  	532,481	  	$	500,000
	 FBR Infinity II Ventures (Israel) LP
	  	137,412	  	$	129,030
	 FBR Infinity II Ventures LP
	  	131,757	  	$	123,720
	 FBR Infinity II Ventures (Erisa) LP
	  	50,320	  	$	47,250
	 Telvent Investments SL
	  	319,489	  	$	300,000

  

 19 

 AGREEMENT 
 THIS AGREEMENT (this “Agreement”) is made as of May 9, 2006 (the “Effective Date”), by and among ViryaNet Ltd., a company organized under the laws of the State of Israel (the
“Company”) and LibertyView Special Opportunities Fund, LP and the Vertex funds identified in the signature block below (each, the “New Purchaser”) 
 W I T N E S S E T H: 
  

	WHEREAS,	The Company has entered as of May 5, 2006, into a Share Purchase Agreement (the “SPA”), in the form attached as Exhibit A hereto, with a group of
purchasers (the “Previous Purchasers”), under which the Company has raised an amount of $1,100,000; and 

  

	WHEREAS,	The Company and the Previous Purchasers had also entered, as of the date of the SPA, into a Registration Rights Agreement (the “RRA”) and Warrants (each, the
“Warrant”), in the form attached as Exhibit B and Exhibit C hereto, respectively; and 

  

	WHEREAS,	The Company wishes to raise, subject to the approval of its shareholders, an additional amount of up to $650,000, for similar terms as those set forth in the SPA, and the New
Purchaser wishes to participate in such investment, all as set forth below. 

 NOW, THEREFORE, in consideration of the mutual
promises and covenants set forth herein, the parties hereby agree as follows: 
  

	1.	Definitions. Capitalized terms used herein but otherwise not defined herein shall have the meanings ascribed to such terms in the SPA, the RRA or the Warrant, as applicable.

  

	2.	Issuance and Purchase of Ordinary Shares. Subject to the terms and conditions hereof, and the closing conditions set forth in Section 3 below, the Company shall, as of
the Closing, issue and allot to each New Purchaser such number of Ordinary Shares of the Company as set forth in Exhibit 1 (the “New Purchased Shares”), for a purchase price per Ordinary Share of $0.939 (the “New
Investment”). At the Closing hereof, the Company shall issue to each New Purchaser Warrants under same terms and conditions as the warrants issued as part SPA. 

  

	3.	Closing. The transactions set forth in Section 2 above shall be subject to the closing conditions set forth in the SPA, provided that the Closing hereunder shall be also
subject to the approval of the shareholders of the Company, and that neither the Company nor any New Purchaser shall be obligated to close this New Investment in the absence of such shareholders’ approval. The Closing shall occur as soon as
instructed by the Company subject to the satisfaction of the above closing conditions and by signing this Agreement both the Company and each New Purchaser commit to complete the New Investment subject to such closing conditions. The parties agree
that if the closing conditions are not met within 60 days from the Effective Date, the parties’ obligations with respect to the New Investment hereunder shall terminate and be of no further force and effect. 

	4.	Incorporation by reference of the terms of the SPA. The parties agree to the incorporation by reference of the terms of the SPA to the New Investment hereunder, and such
terms and conditions shall apply, mutatis mutandis (and with the changes set forth in this Agreement), to the New Investment under this Agreement. For the purpose hereof, including for the purpose of any representations and warranties, each New
Purchaser shall be deemed to be “Purchaser” under the SPA and shall have all rights and obligations as if the New Purchased Shares were purchased under the SPA. 

  

	5.	Incorporation by reference of the terms of the RRA. The parties agree to the incorporation by reference of the terms of the RRA to the New Investment, and that each New
Purchaser shall have equal rights and obligations as the Shareholders under the RRA. Thus, the New Purchased Shares purchased by the New Purchaser hereunder shall be deemed to be “Registrable Securities” under the RRA and the New
Purchasers shall be deemed to be “Shareholders” for the purpose of the RRA. 

  

	6.	Miscellaneous. The general terms of the SPA, RRA and the Warrant, as applicable, shall also apply to the New Investment hereunder. The New Purchaser’s address shall be
as set forth in Exhibit D hereto. 

 IN WITNESS WHEREOF the parties hereto have signed this Agreement as of the
date first set forth above. 
  

									
	 VIRYANET LIMITED
	 		 	 LibertyView Special Opportunities Fund, LP

				
	 By:
	 	  	 		 	  
		 		 		 		 	

  

	[Vertex	Funds] 

  

 2 

 Exhibit I 
 Amounts invested and number of shares issued 
  

						
	 Investor
	  	Amount Invested	  	Number of shares
issued
	 LibertyView Special Opportunities Fund, LP
	  	$	250,000	  	266,241
	 The Vertex Funds
	  	$	400,000	  	425,985

  

 3 

 Exhibit A 
 Share Purchase Agreement 
  

 4 

 Exhibit B 
 Registration Rights Agreement 
  

 5 

 Exhibit C 
 Warrant 
  

 6 

 Exhibit D 
 Addresses 
  

 7 

 REGISTRATION RIGHTS AGREEMENT 
 THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made as of the 5th day of May 2006, by and among ViryaNet Ltd., a company organized under the laws of the State of Israel (the
“Company”), C.E. Unterberg, Towbin, LLC Telvent Investments SL, FBR Infinity II Ventures (Israel) LP, FBR Infinity II Ventures LP, and FBR Infinity II Ventures (Erisa) LP (each, a “Shareholder”, and collectively,
the “Shareholders”) 
 W I T N E S S E T H: 
 WHEREAS, the Company and the Shareholders have entered into a Share Purchase Agreement (the “Purchase Agreement”), pursuant to
which the Shareholders will become a holder of an aggregate of 1,171,459 Ordinary Shares par value NIS 1.0 of the Company; and 
 WHEREAS, a condition to the closing of the Purchase Agreement (the “Closing”) is that the parties hereto enter into this Agreement. 
 NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereby agree as follows: 
  

	1.	Definitions 

 Terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed to them in the Agreement. As used in this Agreement, the following terms have the following meanings: 
  

	 	1.1.	The term “Companies Law” shall mean the Israeli Companies Law of 1999, as amended. 

  

	 	1.2.	The term “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

  

	 	1.3.	The term “Form F-3” shall mean such form under the Securities Act, as in effect on the date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. 

  

	 	1.4.	The term “Holders” shall mean the holders of registration rights under registration rights agreements to which the Company is party to, except for the Shareholders.

  

	 	1.5.	The term “Israeli Securities Law” shall mean the Israeli Securities Law - 1968, as amended. 

	 	1.6.	The terms “register”, “registered” and “registration” refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document or the equivalent actions under the laws of another jurisdiction.

  

	 	1.7.	The term “Registrable Securities” shall mean Ordinary Shares issued to the Shareholders under the Purchase Agreement, including any Ordinary Shares covered under
warrants issued under the Purchase Agreement. For the purpose of Sections 2.5 and 4.3, the Registrable Securities shall include in addition, securities granted to other holders of registration rights under other agreement with the Company.

  

	 	1.8.	The term “SEC” shall mean the U.S. Securities and Exchange Commission. 

  

	 	1.9.	The term “Securities Act” shall mean the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

  

	2.	Required Registration 

  

	 	2.1.	The Company shall use best efforts to file a Registration Statement on Form F-3 covering the resale of the Registrable Securities within six months from the Closing.

  

	 	2.2.	In the case of any registration effected pursuant to this Section 2, the Company shall have the right to designate the managing underwriter(s), if any, in any underwritten
offering, subject to the reasonable prior approval of the Shareholders. 

  

	 	2.3.	The Company, the Shareholders and all Holders participating in such underwritten registration shall enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. 

  

	 	2.4.	If the underwriter of a registration being made pursuant to Section 2 advises the Shareholders or the Holders in writing that marketing factors require a limitation of the
number of Registrable Securities to be included in such underwritten registration, then the Shareholders and the Holders wishing to participate in such underwritten registration shall be cut back on a pro-rata basis. 

  

	 	2.5.	 The Company shall not be required to effect more than one (1) registration pursuant to Section 2. If the Company shall be eligible to use a registration
statement on Form F-3 in connection with the 

  

 - 2 - 

 
any registration under this Section 2, such registration may be effected by the Company on Form F-3. 
  

	 	2.6.	The Company may not cause any other registration of securities for sale for its own account (other than a registration effected solely to implement an employee benefit plan) to be
initiated after the registration requested pursuant to this Section 2 and to become effective less than one hundred and twenty (120) days after the effective date of a registration made pursuant to this Section 2.

  

	 	2.7.	The Shareholders may request to withdraw the registration under this Section 2, at any time and shall not be deemed to have exhausted any rights to make a registration under
this Section 2 in the future, provided that he reimburses the Company for all of its costs and expenses incurred in connection with such withdrawn demand registration (collectively, “Company Expenses”), if such registration has
in fact been cancelled. 

  

	3.	Shelf Registration 

  

	 	3.1.	From such time as the Company becomes eligible to file registration statements on Form F-3, at the request of the holders following 6 month from the Closing to file a shelf
registration statement pursuant to Rule 415 under the Securities Act with the SEC, the Company shall: 

  

	 	3.1.1.	within twenty (20) days after receipt of any such request, give written notice of the proposed registration to all other holders; and 

  

	 	3.1.2.	use its best efforts to effect as soon as practicable the registration under the Securities Act of all Registrable Securities which are specified in such written request together
with the registrable securities of other holders joining in such request pursuant to written requests received by the Company. 

  

	 	3.2.	The Company undertakes that it will, once having qualified for registration on Form F-3, use its best efforts to comply with all necessary filings and other requirements so as to
maintain such qualification. 

  

	 	3.3.	After a registration requested pursuant to Section 3, the Company may not cause any other registration of securities for sale for its own account (other than a registration
effected solely to implement an employee benefit plan) to be initiated and to become effective less than one hundred and twenty (120) days after the effective date of any registration requested pursuant to Section 3.1.

  

 - 3 - 

	 	3.4.	Notwithstanding the above, the Company shall not be required to effect a registration pursuant to Section 3 if: 

  

	 	3.4.1.	the reasonably-anticipated aggregate market price of the Registrable Securities to be registered thereunder is less than $750,000; 

  

	 	3.4.2.	if the Company has, within the six (6) month period preceding the date of such request, already effected one registration under Section 3, or two registrations under
Section 3 in the previous twelve month period; or 

  

	 	3.4.3.	if Form F-3 is not available for such offering by the Shareholders; 

  

	 	3.4.4.	if the Company shall furnish to the Shareholders a certificate signed by the Chief Executive Officer or Chairman of the Board of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such Form F-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the
Form F-3 registration statement for a period of not more than one hundred and twenty (120) days after receipt of the request of the Shareholders under this Section 3; provided, however, that the Company shall not utilize this
right more than once in any twelve (12) month period. 

  

	4.	Piggyback Registrations 

  

	 	4.1.	Whenever the Company proposes to register for its own account or for any other person other than in a registration pursuant to Section 2 or 3 any of its securities under either
the Securities Act (other than a registration in connection with a merger or acquisition on Form F-4 or S-4 or one relating solely to employee benefit plans under Form S-8 or any similar form) or the Israeli Securities Laws, it will promptly, and at
least thirty (30) days prior to the initial filing of a registration statement with the SEC or Israeli equivalent, give written notice to the Shareholders of its intention to effect such a registration and will include in such registration all
the Registrable Securities not previously registered held by the Shareholders (subject to the provisions of Section 4.3 hereto) with respect to which the Company receives written requests for inclusion therein within twenty (20) days after
receipt of such notice by the Shareholders (a “Piggyback Registration”). 

  

	 	4.2.	 In the case of any registration initiated by the Company, the Company shall have the right to designate the managing underwriter in any underwritten offering and
any Shareholders 

  

 - 4 - 

	 	 
participating in such underwritten registration shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected
for such underwriting. 

  

	 	4.3.	If a Piggyback Registration is an underwritten offering of the Company’s securities and the underwriter advises the Company in writing that marketing factors require a
limitation of the number of Registrable Securities to be underwritten, the Company will include its securities in such registration in the following order: 

  

	 	(a)	if the Piggyback Registration is initiated by the Company: 

  

	 	(i)	first, all Registrable Securities proposed to be included by the Company. 

  

	 	(ii)	second, the Registrable Securities held by the Shareholders and the Holders on a pro rata basis. 

  

	 	(b)	if the Piggyback Registration is not initiated by the Company: 

  

	 	(i)	first, all Registrable Securities proposed to be included by the Shareholders and the Holders; provided that if such securities cannot be included, the Company shall include
the Registrable Securities pro rata. 

  

	 	(ii)	second, all other securities of the Company or any other shareholders proposed to be included in such registration. 

  

	5.	Obligations of the Company. Whenever required hereunder to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

  

	 	5.1.	 Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable efforts to cause such registration
statement to become effective in accordance with the time periods indicated above, and, upon the request of the Shareholders, registered thereunder, keep such registration statement effective for a period of up to nine months or 

  

 - 5 - 

	 	 
until the distribution contemplated in the registration statement has been completed; 

  

	 	5.2.	Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement; 

  

	 	5.3.	Furnish to the Shareholders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by him; 

  

	 	5.4.	Register and qualify the securities covered by such registration statement under such other securities laws of such jurisdictions as shall be reasonably requested by the
Shareholders, as the case may be; provided, however, that in no event shall the Company be required to qualify to do business in any state or other jurisdiction or to take any action which would subject it to general or unlimited
service of process in any jurisdiction where it is not now so subject; 

  

	 	5.5.	In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with terms generally
satisfactory to the managing underwriter of such offering. The Shareholders or other shareholders participating in such underwriting shall also enter into and perform its obligations under such an agreement; 

  

	 	5.6.	Notify the Shareholders at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; 

  

	 	5.7.	Cause all Registrable Securities registered pursuant hereto to be listed on each securities exchange on which similar securities issued by the Company are then listed;

  

	 	5.8.	 Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereto and a CUSIP number for all such 

  

 - 6 - 

	 	 
Registrable Securities not later than the effective date of such registration; and 

  

	 	5.9.	Furnish, at the request of Shareholders requesting registration of Registrable Securities pursuant to Section 2 hereof, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes
effective, (a) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Shareholders requesting registration of Registrable Securities, and (b) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Shareholders requesting registration of Registrable Securities. 

  

	6.	Expenses of Registration. The Company shall bear and pay the expenses incurred in connection with any registration, filing or qualification of Registrable Securities for the
Shareholders, including (without limitation) all registration, filing, and qualification fees, printers and accounting fees and the reasonable fees and disbursements of one counsel (plus local counsel, if appropriate) for the Shareholders, excluding
underwriting discounts and commissions relating to the sale of Registrable Securities. 

  

	7.	Furnishing of Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the securities of
the Shareholders that the Shareholders shall furnish to the Company such information as may be required to be included in the registration statement under the Securities Act regarding the Shareholders, the Registrable Securities held by him and the
intended method of disposition of such securities as shall be required to effect the registration of such Registrable Securities. 

  

	8.	Indemnification and Contribution 

  

	 	8.1.	 The Company shall indemnify and hold harmless, to the fullest extent permitted by law, the Shareholders, any underwriter for the Shareholders, each person, if any,
who controls the Shareholders or such underwriter, and each of the Shareholders’ partners, shareholders, officers, directors, employees, legal counsel and accountants, from and against any and all losses, claims, damages, 

  

 - 7 - 

	 	 
liabilities, and charges, joint or several (“Claims”), to which any of them may be subject under the Securities Act, the Exchange Act, the
Israeli Securities Law, the Companies Law, or any other statute (whether U.S. or Israeli) or at common law, insofar as such Claims arise out of, are based upon, or are in connection with (a) any untrue statement of any material fact contained
in any registration statement or prospectus, in each case, as amended or supplemented, under which such securities were sold, or (b) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (c) any other violation by the Company of the Securities Act, the Exchange Act, the Israeli Securities Law, the Companies Law or any state or foreign jurisdiction securities laws in connection with
each such registration, and shall reimburse each such person entitled to indemnification for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such Claim, as and when such expenses are
incurred; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such claim arises out of or is based upon any untrue statement or omission made in such registration statement or
prospectus in reliance upon and in conformity with written information furnished to the Company by such person and/or any person acting on its behalf specifically for use in such registration statement or prospectus and provided further, that this
indemnity shall not apply to amounts paid pursuant to any settlement effected without the consent of the party entitled to indemnification hereunder, which consent shall not be unreasonably withheld. 

  

	 	8.2.	 The Shareholders shall indemnify and hold harmless, to the fullest extent permitted by law the Company, any underwriter for the Company, and each person, if any,
who controls the Company or such underwriter and each of the Company’s or underwriter’s officers, directors, employees, legal counsel and accountants, from and against any and all Claims to which any of them may be subject under the
Securities Act, the Exchange Act, the Israeli Securities Law, the Companies Law, or any other statute (whether U.S. or Israeli) or at common law, insofar as such Claims arise out of, are based upon, or are in connection with (a) any untrue
statement made by the Shareholders of any material fact contained in any registration statement or prospectus, in each case, as amended or supplemented, under which such securities were sold, or (b) any omission or alleged omission made by the
Shareholders to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse the Company or each such person entitled to indemnification for any legal or other expenses
reasonably 

  

 - 8 - 

	 	 
incurred by the Company or such person in connection with investigating or defending any such Claim, as and when such expenses are incurred; provided,
however, that the Shareholders shall be liable to the Company or any such person in any such case only to the extent that any such claim arises out of or is based upon any untrue statement or omission made in such registration statement or
prospectus in reliance upon and in conformity with written information furnished to the Company by the Shareholders and/or any person acting on the Shareholders’ behalf specifically for use in such registration statement or prospectus and
provided further, that this indemnity shall not apply to amounts paid pursuant to any settlement effected without the consent of the party entitled to indemnification hereunder, which consent shall not be unreasonably withheld. The indemnification
provided by the Shareholders shall be limited to the amount of the net proceeds received by the Shareholders from the sale of the Registrable Securities registered in such registration. 

  

	 	8.3.	Promptly after receipt by any person entitled to indemnification under Section 8.1 or Section 8.2, as the case may be, of notice of the commencement of any action,
proceeding, or investigation in respect of which indemnity may be sought as provided above, such party (the “Indemnitee”) shall notify the party from whom indemnification is claimed (the “Indemnitor”). The
Indemnitor shall promptly assume the defense of the Indemnitee with counsel reasonably satisfactory to such Indemnitee, and the fees and expenses of such counsel shall be at the sole cost and expense of the Indemnitor. The Indemnitee will cooperate
with the Indemnitor in the defense of any action, proceeding, or investigation for which the Indemnitor assumes the defense, provided, however, that if the defendants in any action include both the Indemnitee and the Indemnitor and there is a
conflict of interests which would prevent counsel for the Indemnitor from also representing the Indemnitee, the Indemnitee shall have the right to select one separate counsel to participate in the defense of such action on behalf of such indemnified
party or parties. The Indemnitor shall not be liable for the settlement by the Indemnitee of any action, proceeding, or investigation effected without its consent, which consent shall not be unreasonably withheld. The Indemnitor shall not enter into
any settlement in any action, suit, or proceeding to which the Indemnitee is a party, unless such settlement includes a general release of the Indemnitee with no payment by the Indemnitee of consideration and without an admission of liability.

  

	 	8.4.	 The parties agree to notify promptly each other of the commencement of any litigation or proceedings against the Company or any of its officers or directors in
connection with the 

  

 - 9 - 

	 	 
sale of any Registrable Securities held by the Shareholders, or any preliminary prospectus or registration statement relating to any sale of any Registrable
Securities, or of any other litigation or proceedings to which this Section 8 is applicable of which they became aware. 

  

	 	8.5.	Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall prevail. 

  

	 	8.6.	The obligations of the Company and the Shareholders under this Section 8 shall survive the completion of any offering of Registrable Securities in a registration statement
under this Agreement. 

  

	 	8.7.	If for any reason the foregoing indemnity is unavailable, or is insufficient to hold harmless an Indemnitee (except as specifically provided therein), then the Indemnitor shall
contribute to the amount paid or payable by the Indemnitee as a result of such losses, claims, damages, liabilities or expenses (a) in such proportion as is appropriate to reflect the relative benefits received by the Indemnitor on the one hand
and the Indemnitee on the other from the registration, or (b) if the allocation provided by clause (a) above is not permitted by applicable law, or provides a lesser sum to the Indemnitee than the amount hereinafter calculated, in such
proportion as is appropriate to reflect the relative fault of the Indemnitor and the Indemnitee as well as any other relevant equitable considerations; provided that in no event shall any contribution by the Shareholders hereunder exceed the net
proceeds from the offering received from the Shareholders. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. 

  

	9.	Reports Under the Exchange Act 

 With a view to
making available to the Shareholders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit the Shareholders to sell securities of the Company to the public without
registration or pursuant to a registration on Form F-3, the Company agrees to: 
  

	 	9.1.	make and keep public information available, as those terms are understood and defined in Rule 144, at all times; 

  

 - 10 - 

	 	9.2.	take such action as is necessary to enable the Shareholders to utilize Form F-3 for the sale of his Registrable Securities; 

  

	 	9.3.	file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; 

  

	 	9.4.	furnish to the Shareholders, so long as the Shareholders owns any Registrable Securities, forthwith upon being so requested (a) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form F-3 (at any time after it so qualifies), (b) a copy of the most
recent annual or, to the extent applicable, quarterly report of the Company and such other reports and documents so filed by the Company, and (c) such other information as may be reasonably requested in availing the Shareholders of any rule or
regulation of the SEC which permits the selling of any Registrable Securities without registration or pursuant to such form; 

  

	 	9.5.	comply with all other necessary filings and other requirements so as to enable the Shareholders and any transferee thereof to sell Registrable Securities under Rule 144 under the
Securities Act (or any similar rule then in effect); and 

  

	 	9.6.	use its best efforts to maintain the listing of its Ordinary Shares on the Nasdaq SmallCap Market (“Nasdaq”), and should its Ordinary Shares be delisted from Nasdaq, to
cause the reinstatement of the Ordinary Shares to listing on Nasdaq, including through the pursuit of the formal appeal process established by Nasdaq. 

  

	10.	Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned (but only with all related
obligations) by the Shareholders to a transferee or assignee of such securities and such transferee or assignee shall be deemed the “Shareholder” hereunder; provided, however, (a) the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address of such transferee or assignee the securities with respect to which such registration rights are being assigned; and (b) such transferee or assignee agrees in writing to
be bound by and subject to all the terms and conditions of this Agreement. 

  

	11.	Additional Registration Rights. Following the first anniversary of the Closing Date, the Company shall use reasonable efforts to negotiate additional registration rights for
the Shareholder if he is not then entitled to sell its shares under Rule 144. 

  

 - 11 - 

	12.	Expiration of Registration Rights. The registration rights contained herein shall expire five (5) years after the Closing Date 

  

	13.	Miscellaneous. 

  

	 	13.1.	Each of the parties hereto shall perform such further acts and execute such further documents as may reasonably be necessary to carry out and give full effect to the provisions of
this Agreement and the intentions of the parties as reflected thereby. 

  

	 	13.2.	This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State of New York (without giving effect to principles of conflicts
of laws). Each party to this Agreement consents to the exclusive jurisdiction and venue of the courts of the State of New York. 

  

	 	13.3.	Except as otherwise expressly limited herein and subject to the provisions of Section 10 above, the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto. 

  

	 	13.4.	This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matters hereof and thereof. Any term of this Agreement may
be amended and the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance) only with the written consent of the Shareholders. For the avoidance of doubt, the Company may
execute any other registration rights agreement and such agreement, if and when executed, shall not be deemed to be an amendment of this Agreement or require the consent of the Shareholders. 

  

	 	13.5.	All article and section headings are inserted for convenience only and shall not modify or affect the construction or interpretation of any provision of this Agreement.

  

	 	13.6.	All notices and other communications required or permitted hereunder are to be given pursuant to the provisions of the Agreement. 

  

	 	13.7.	 If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded from
this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance 

  

 - 12 - 

	 	 
with its terms; provided, however, that in such event this Agreement shall be interpreted so as to give effect, to the greatest extent consistent with and
permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. 

  

	 	13.8.	This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and enforceable against the parties actually executing such counterpart, and
all of which together shall constitute one and the same instrument. 

  

	 	13.9.	In no event shall either the Company or the Shareholders be liable to the other party for any consequential, indirect, special or incidental costs, damages or loss (including,
without limitation, lost profits, loss of business), regardless of the nature, arising out of or relating in any way to this Agreement. 

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 - 13 - 

 IN WITNESS WHEREOF, the undersigned have executed this Registration Rights Agreement as of the date set
forth above. 
  

									
	 VIRYANET LIMITED
	 		 	 TELVENT INVESTMENTS SL

					
	 By:
	 	  	 		 	 By:
	 	  
			
	 FBR INFINITY II VENTURES (ISRAEL) LP
	 		 	 C.E. UNTERBERG, TOWBIN, LLC

					
	 By:
	 	  	 		 	 By:
	 	  
			
	 FBR INFINITY II VENTURES LP
	 		 	 FBR INFINITY II VENTURES (ERISA) LP

					
	 By:
	 	  	 		 	 By:
	 	  

 [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT] 

 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
COVERING THIS WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW. 
 WARRANT TO PURCHASE ORDINARY SHARES 
 ViryaNet Ltd., an Israeli Company whose shares are currently publicly
traded on The Nasdaq SmallCap Market (the “Company”), hereby grants to FBR Infinity II Ventures LP (the “Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value
NIS 1.0 each (the “Ordinary Shares”), set forth below, subject to the terms and conditions set forth below, effective as of June 5, 2006 (the “Effective Date”). 
  

	1.	Number of Ordinary Shares Available for Purchase and Exercise Price 

 This Warrant may be exercised to purchase up to 26,351 Ordinary Shares. The exercise price for each Ordinary Share shall be $1.1268 (the “Warrant Price”), subject to adjustments under Section 7
of this Warrant (the “Warrant Shares”). 
  

	2.	Term 

 This Warrant may be exercised, in
whole, or in part (subject to Section 4 below), during the period beginning on the Effective Date and ending on the date which is the 2 years following the Effective Date. 
  

	3.	Exercise of Warrant 

 This Warrant may be
exercised in whole or in part on any number of occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. This Warrant may be exercised for cash only. To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased
upon such exercise in immediately available funds, in U.S. Dollars or NIS equivalent thereof, based on the representative rate of exchange published by the Bank of Israel and known at the time of payment. 

 The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable
thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above. In the event of a
partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise. 
  

	4.	Fractional Interest 

 No fractional shares
will be issued in connection with any exercise hereunder, and the number of Warrant Shares issued shall be rounded down to the nearest whole number. 
  

	5.	Warrant Confers No Rights of Shareholder 

 Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares. 
  

	6.	Investment Representation 

 Neither this
Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws. The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant
for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to
protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act. The Holder agrees that any Warrant Shares issuable upon
exercise of this Warrant will be acquired for investment and not with a view to distribution and such Warrant Shares will not be registered under the Securities Act and applicable state securities laws and that such Warrant Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and
qualification is available. The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 
  

 - 2 - 

	7.	Adjustment of Warrant Price and Number of Shares 

 The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  

	 	a.	Adjustment for Shares Splits and Combinations. If the Company at any time or from time to time during the term of this Warrant effects a subdivision of the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased. Any adjustment under this Section 7(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. 

  

	 	b.	Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time, during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event the number of Ordinary Shares issuable upon exercise of this
Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a
fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in
payment of such dividend or distribution, and (ii) the denominator of which is the total number of shares of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be
recomputed accordingly as of the close of business on such record date and thereafter the number of shares of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of actual
payment of such dividends or distributions. 

  

	 	c.	Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall
receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately
prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder. 

  

 - 3 - 

	 	d.	Adjustment for Reclassification, Exchange and Substitution. If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different
number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification
or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and
under the Company’s Articles of Association. 

  

	 	e.	Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time during the term of this Warrant there is a capital reorganization of
the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Subsection) or a merger or consolidation of the Company with or into another corporation, or the sale
of all or substantially all of the Company’s shares or properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon
conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application
of the provisions of this Subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Subsection and the
Company’s Articles of Association (including adjustment of the number of shares of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be
practicable. 

  

	 	f.	Adjustment of Warrant Price. Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted. 

  

	8.	Transfer of This Warrant or Securities Issuable on Exercise Hereof 

  

	 	a.	 With respect to any offer, sale or other disposition of this Warrant or securities into which such Warrant may be exercised, the Holder will give written notice

  

 - 4 - 

	 	 
to the Company prior thereto, describing briefly the manner thereof, together with, if requested by the Company, a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Such opinion letter and all such transferees must warrant and represent that
each such transferee is an “accredited” investor as that term is defined under Regulation D of the Securities Act. Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so
requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees. Each Warrant thus transferred and each
certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Any provision of this Warrant to the contrary notwithstanding, the
Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than to any transferee approved by the Company in writing in its sole discretion. In addition to the above, any transfer of this Warrant or the Warrant Shares
shall be subject to the provisions of the Company’s Articles of Association. 

  

	 	b.	In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition, or sale
of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer. 

  

	9.	Representations and Warranties. 

 The Company
represents and warrants to the Holder as follows: 
  

	 	a.	This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.

  

	 	b.	The Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. 

  

	 	c.	The execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s Articles of Association. 

  

	10.	Loss, Theft, Destruction or Mutilation of Warrant 

 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably
satisfactory to it, and 

  

 - 5 - 

 
upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate,
if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate. 
  

	11.	Notices 

 Any notice or other communication
hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

  

					
	 If to Holder:
	  	____________	  	
		
	If to Company:	  	ViryaNet Ltd.
		  	 2 Willow Street, Southborough, Massachusetts
 attn.: Samuel HaCohen
 fax: 508-490-8666

 Each of the above addressees may change its address for purposes of this paragraph by giving to the
other addressees notice of such new address in conformance with this paragraph. 
  

	12.	Applicable Law; Jurisdiction 

 This Warrant
shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel. Any dispute arising
under or in relation to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such court. 
  

	13.	Entire Agreement 

 This Warrant constitutes
the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof. 
 Dated: June 5, 2006 
  

					
		 	 VIRYANET LTD.

			
		 	By:	 	  
			
		 	 Title:
	 	  

  

 - 6 - 

 NOTICE OF EXERCISE 
 To: ViryaNet Limited 
  

	1.	The undersigned hereby elects to purchase                     shares of
Ordinary Shares of                     , pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for
such shares in full. 

  

	2.	In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Ordinary Shares are being acquired solely for the account of the undersigned and not
as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. 

  

	3.	Please issue a certificate representing said shares of Ordinary Shares in the name of the undersigned. 

  

	4.	Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

  

									
					
		 	  	 		 		 	  
		 	(Date)	 		 		 	(Print Name)
					
		 		 		 		 	  
		 		 		 		 	 (Signature)

  

 - 7 - 

 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
COVERING THIS WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW. 
 WARRANT TO PURCHASE ORDINARY SHARES 
 ViryaNet Ltd., an Israeli Company whose shares are currently publicly
traded on The Nasdaq SmallCap Market (the “Company”), hereby grants to FBR Infinity II Ventures (Erisa) LP (the “Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal
value NIS 1.0 each (the “Ordinary Shares”), set forth below, subject to the terms and conditions set forth below, effective as of June 5, 2006 (the “Effective Date”). 
  

	1.	Number of Ordinary Shares Available for Purchase and Exercise Price 

 This Warrant may be exercised to purchase up to 10,064 Ordinary Shares. The exercise price for each Ordinary Share shall be $1.1268 (the “Warrant Price”), subject to adjustments under Section 7
of this Warrant (the “Warrant Shares”). 
  

	2.	Term 

 This Warrant may be exercised, in
whole, or in part (subject to Section 4 below), during the period beginning on the Effective Date and ending on the date which is the 2 years following the Effective Date. 
  

	3.	Exercise of Warrant 

 This Warrant may be
exercised in whole or in part on any number of occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. This Warrant may be exercised for cash only. To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased
upon such exercise in immediately available funds, in U.S. Dollars or NIS equivalent thereof, based on the representative rate of exchange published by the Bank of Israel and known at the time of payment. 

 The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable
thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above. In the event of a
partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise. 
  

	4.	Fractional Interest 

 No fractional shares
will be issued in connection with any exercise hereunder, and the number of Warrant Shares issued shall be rounded down to the nearest whole number. 
  

	5.	Warrant Confers No Rights of Shareholder 

 Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares. 
  

	6.	Investment Representation 

 Neither this
Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws. The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant
for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to
protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act. The Holder agrees that any Warrant Shares issuable upon
exercise of this Warrant will be acquired for investment and not with a view to distribution and such Warrant Shares will not be registered under the Securities Act and applicable state securities laws and that such Warrant Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and
qualification is available. The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 
  

 - 2 - 

	7.	Adjustment of Warrant Price and Number of Shares 

 The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  

	 	a.	Adjustment for Shares Splits and Combinations. If the Company at any time or from time to time during the term of this Warrant effects a subdivision of the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased. Any adjustment under this Section 7(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. 

  

	 	b.	Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time, during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event the number of Ordinary Shares issuable upon exercise of this
Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a
fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in
payment of such dividend or distribution, and (ii) the denominator of which is the total number of shares of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be
recomputed accordingly as of the close of business on such record date and thereafter the number of shares of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of actual
payment of such dividends or distributions. 

  

	 	c.	Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall
receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately
prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder. 

  

 - 3 - 

	 	d.	Adjustment for Reclassification, Exchange and Substitution. If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different
number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification
or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and
under the Company’s Articles of Association. 

  

	 	e.	Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time during the term of this Warrant there is a capital reorganization of
the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Subsection) or a merger or consolidation of the Company with or into another corporation, or the sale
of all or substantially all of the Company’s shares or properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon
conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application
of the provisions of this Subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Subsection and the
Company’s Articles of Association (including adjustment of the number of shares of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be
practicable. 

  

	 	f.	Adjustment of Warrant Price. Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted. 

  

	8.	Transfer of This Warrant or Securities Issuable on Exercise Hereof 

  

	 	a.	 With respect to any offer, sale or other disposition of this Warrant or securities into which such Warrant may be exercised, the Holder will give written notice

  

 - 4 - 

	 	 
to the Company prior thereto, describing briefly the manner thereof, together with, if requested by the Company, a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Such opinion letter and all such transferees must warrant and represent that
each such transferee is an “accredited” investor as that term is defined under Regulation D of the Securities Act. Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so
requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees. Each Warrant thus transferred and each
certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Any provision of this Warrant to the contrary notwithstanding, the
Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than to any transferee approved by the Company in writing in its sole discretion. In addition to the above, any transfer of this Warrant or the Warrant Shares
shall be subject to the provisions of the Company’s Articles of Association. 

  

	 	b.	In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition, or sale
of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer. 

  

	9.	Representations and Warranties 

 The Company
represents and warrants to the Holder as follows: 
  

	 	a.	This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.

  

	 	b.	The Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. 

  

	 	c.	The execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s Articles of Association. 

  

	10.	Loss, Theft, Destruction or Mutilation of Warrant 

 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably
satisfactory to it, and 

  

 - 5 - 

 
upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate,
if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate. 
  

	11.	Notices 

 Any notice or other communication
hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

  

			
	 If to Holder:
	  	___________
		
	 If to Company:
	  	ViryaNet Ltd.
		  	2 Willow Street, Southborough, Massachusetts
		  	attn.: Samuel HaCohen
		  	fax: 508-490-8666

 Each of the above addressees may change its address for purposes of this paragraph by giving to the
other addressees notice of such new address in conformance with this paragraph. 
  

	12.	Applicable Law; Jurisdiction 

 This Warrant
shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel. Any dispute arising
under or in relation to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such court. 
  

	13.	Entire Agreement 

 This Warrant constitutes
the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof. 
 Dated: June 5, 2006 
  

					
		 	 VIRYANET LTD.

			
		 	 By:
	 	  
			
		 	 Title: 
	 	  

  

 - 6 - 

 NOTICE OF EXERCISE 
 To: ViryaNet Limited 
  

	1.	The undersigned hereby elects to purchase              shares of Ordinary Shares of
            , pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full. 

  

	2.	In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Ordinary Shares are being acquired solely for the account of the undersigned and not
as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. 

  

	3.	Please issue a certificate representing said shares of Ordinary Shares in the name of the undersigned. 

  

	4.	Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

  

					
			
	   	 		 	   
	 (Date)
	 		 	(Print Name)
			
	 	 		 	   
		 		 	(Signature)

  

 - 7 - 

 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
COVERING THIS WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW. 
 WARRANT TO PURCHASE ORDINARY SHARES 
 ViryaNet Ltd., an Israeli Company whose shares are currently publicly
traded on The Nasdaq SmallCap Market (the “Company”), hereby grants to LibertyView Special Opportunities Fund LP (the “Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company,
nominal value NIS 1.0 each (the “Ordinary Shares”), set forth below, subject to the terms and conditions set forth below, effective as of June 2, 2006 (the “Effective Date”). 
  

	1.	Number of Ordinary Shares Available for Purchase and Exercise Price 

 This Warrant may be exercised to purchase up to 53,248 Ordinary Shares. The exercise price for each Ordinary Share shall be $1.1268 (the “Warrant Price”), subject to adjustments under Section 7
of this Warrant (the “Warrant Shares”). 
  

	2.	Term 

 This Warrant may be exercised, in
whole, or in part (subject to Section 4 below), during the period beginning on the Effective Date and ending on the date which is the 2 years following the Effective Date. 
  

	3.	Exercise of Warrant 

 This Warrant may be
exercised in whole or in part on any number of occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. This Warrant may be exercised for cash only. To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased
upon such exercise in immediately available funds, in U.S. Dollars or NIS equivalent thereof, based on the representative rate of exchange published by the Bank of Israel and known at the time of payment. 

 The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable
thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above. In the event of a
partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise. 
  

	4.	Fractional Interest 

 No fractional shares
will be issued in connection with any exercise hereunder, and the number of Warrant Shares issued shall be rounded down to the nearest whole number. 
  

	5.	Warrant Confers No Rights of Shareholder 

 Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares. 
  

	6.	Investment Representation 

 Neither this
Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws. The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant
for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to
protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act. The Holder agrees that any Warrant Shares issuable upon
exercise of this Warrant will be acquired for investment and not with a view to distribution and such Warrant Shares will not be registered under the Securities Act and applicable state securities laws and that such Warrant Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and
qualification is available. The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 
  

 - 2 - 

	7.	Adjustment of Warrant Price and Number of Shares 

 The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  

	 	a.	Adjustment for Shares Splits and Combinations. If the Company at any time or from time to time during the term of this Warrant effects a subdivision of the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased. Any adjustment under this Section 7(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. 

  

	 	b.	Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time, during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event the number of Ordinary Shares issuable upon exercise of this
Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a
fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in
payment of such dividend or distribution, and (ii) the denominator of which is the total number of shares of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be
recomputed accordingly as of the close of business on such record date and thereafter the number of shares of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of actual
payment of such dividends or distributions. 

  

	 	c.	Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall
receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately
prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder. 

  

 - 3 - 

	 	d.	Adjustment for Reclassification, Exchange and Substitution. If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different
number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification
or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and
under the Company’s Articles of Association. 

  

	 	e.	Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time during the term of this Warrant there is a capital reorganization of
the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Subsection) or a merger or consolidation of the Company with or into another corporation, or the sale
of all or substantially all of the Company’s shares or properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon
conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application
of the provisions of this Subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Subsection and the
Company’s Articles of Association (including adjustment of the number of shares of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be
practicable. 

  

	 	f.	Adjustment of Warrant Price. Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted. 

  

	8.	Transfer of This Warrant or Securities Issuable on Exercise Hereof 

  

	 	a.	 With respect to any offer, sale or other disposition of this Warrant or securities into which such Warrant may be exercised, the Holder will give written notice

  

 - 4 - 

	 	 
to the Company prior thereto, describing briefly the manner thereof, together with, if requested by the Company, a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Such opinion letter and all such transferees must warrant and represent that
each such transferee is an “accredited” investor as that term is defined under Regulation D of the Securities Act. Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so
requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees. Each Warrant thus transferred and each
certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Any provision of this Warrant to the contrary notwithstanding, the
Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than to any transferee approved by the Company in writing in its sole discretion. In addition to the above, any transfer of this Warrant or the Warrant Shares
shall be subject to the provisions of the Company’s Articles of Association. 

  

	 	b.	In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition, or sale
of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer. 

  

	9.	Representations and Warranties 

 The Company
represents and warrants to the Holder as follows: 
  

	 	a.	This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.

  

	 	b.	The Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. 

  

	 	c.	The execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s Articles of Association. 

  

	10.	Loss, Theft, Destruction or Mutilation of Warrant 

 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably
satisfactory to it, and 

  

 - 5 - 

 
upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate,
if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate. 
  

	11.	Notices 

 Any notice or other communication
hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

  

			
	 If to Holder:
	  	___________
		
	 If to Company:
	  	ViryaNet Ltd.
		  	2 Willow Street, Southborough, Massachusetts
		  	attn.: Samuel HaCohen
		  	fax: 508-490-8666

 Each of the above addressees may change its address for purposes of this paragraph by giving to the
other addressees notice of such new address in conformance with this paragraph. 
  

	12.	Applicable Law; Jurisdiction 

 This Warrant
shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel. Any dispute arising
under or in relation to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such court. 
  

	13.	Entire Agreement 

 This Warrant constitutes
the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof. 
 Dated: June 2, 2006 
  

					
		 	 VIRYANET LTD.

			
		 	 By:
	 	  
			
		 	 Title: 
	 	  

  

 - 6 - 

 NOTICE OF EXERCISE 
 To: ViryaNet Limited 
  

	1.	The undersigned hereby elects to purchase                      shares of
Ordinary Shares of                     , pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for
such shares in full. 

  

	2.	In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Ordinary Shares are being acquired solely for the account of the undersigned and not
as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. 

  

	3.	Please issue a certificate representing said shares of Ordinary Shares in the name of the undersigned. 

  

	4.	Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

  

					
			
	   	 		 	   
	 (Date)
	 		 	 (Print Name)

			
	 	 		 	   
		 		 	 (Signature)

  

 - 7 - 

 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
COVERING THIS WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW. 
 WARRANT TO PURCHASE ORDINARY SHARES 
 ViryaNet Ltd., an Israeli Company whose shares are currently publicly
traded on The Nasdaq SmallCap Market (the “Company”), hereby grants to Telvent Investments SL (the “Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value NIS
1.0 each (the “Ordinary Shares”), set forth below, subject to the terms and conditions set forth below, effective as of May 19, 2006 (the “Effective Date”). 
  

	1.	Number of Ordinary Shares Available for Purchase and Exercise Price 

 This Warrant may be exercised to purchase up to 63,898 Ordinary Shares. The exercise price for each Ordinary Share shall be $1.1268 (the “Warrant Price”), subject to adjustments under Section 7
of this Warrant (the “Warrant Shares”). 
  

	2.	Term 

 This Warrant may be exercised, in
whole, or in part (subject to Section 4 below), during the period beginning on the Effective Date and ending on the date which is the 2 years following the Effective Date. 
  

	3.	Exercise of Warrant 

 This Warrant may be
exercised in whole or in part on any number of occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. This Warrant may be exercised for cash only. To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased
upon such exercise in immediately available funds, in U.S. Dollars or NIS equivalent thereof, based on the representative rate of exchange published by the Bank of Israel and known at the time of payment. 

 The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable
thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above. In the event of a
partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise. 
  

	4.	Fractional Interest 

 No fractional shares
will be issued in connection with any exercise hereunder, and the number of Warrant Shares issued shall be rounded down to the nearest whole number. 
  

	5.	Warrant Confers No Rights of Shareholder 

 Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares. 
  

	6.	Investment Representation 

 Neither this
Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws. The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant
for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to
protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act. The Holder agrees that any Warrant Shares issuable upon
exercise of this Warrant will be acquired for investment and not with a view to distribution and such Warrant Shares will not be registered under the Securities Act and applicable state securities laws and that such Warrant Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and
qualification is available. The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 
  

 - 2 - 

	7.	Adjustment of Warrant Price and Number of Shares 

 The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  

	 	a.	Adjustment for Shares Splits and Combinations. If the Company at any time or from time to time during the term of this Warrant effects a subdivision of the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased. Any adjustment under this Section 7(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. 

  

	 	b.	Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time, during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event the number of Ordinary Shares issuable upon exercise of this
Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a
fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in
payment of such dividend or distribution, and (ii) the denominator of which is the total number of shares of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be
recomputed accordingly as of the close of business on such record date and thereafter the number of shares of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of actual
payment of such dividends or distributions. 

  

	 	c.	Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall
receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately
prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder. 

  

 - 3 - 

	 	d.	Adjustment for Reclassification, Exchange and Substitution. If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different
number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification
or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and
under the Company’s Articles of Association. 

  

	 	e.	Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time during the term of this Warrant there is a capital reorganization of
the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Subsection) or a merger or consolidation of the Company with or into another corporation, or the sale
of all or substantially all of the Company’s shares or properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon
conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application
of the provisions of this Subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Subsection and the
Company’s Articles of Association (including adjustment of the number of shares of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be
practicable. 

  

	 	f.	Adjustment of Warrant Price. Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted. 

  

	8.	Transfer of This Warrant or Securities Issuable on Exercise Hereof 

  

	 	a.	 With respect to any offer, sale or other disposition of this Warrant or securities into which such Warrant may be exercised, the Holder will give written notice

  

 - 4 - 

	 	 
to the Company prior thereto, describing briefly the manner thereof, together with, if requested by the Company, a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Such opinion letter and all such transferees must warrant and represent that
each such transferee is an “accredited” investor as that term is defined under Regulation D of the Securities Act. Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so
requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees. Each Warrant thus transferred and each
certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Any provision of this Warrant to the contrary notwithstanding, the
Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than to any transferee approved by the Company in writing in its sole discretion. In addition to the above, any transfer of this Warrant or the Warrant Shares
shall be subject to the provisions of the Company’s Articles of Association. 

  

	 	b.	In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition, or sale
of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer. 

  

	9.	Representations and Warranties 

 The Company
represents and warrants to the Holder as follows: 
  

	 	a.	This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.

  

	 	b.	The Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. 

  

	 	c.	The execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s Articles of Association. 

  

	10.	Loss, Theft, Destruction or Mutilation of Warrant 

 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably
satisfactory to it, and 

  

 - 5 - 

 
upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate,
if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate. 
  

	11.	Notices 

 Any notice or other communication
hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

  

			
	If to Holder:	  	___________
		
	If to Company:	  	ViryaNet Ltd.
		  	2 Willow Street, Southborough, Massachusetts
		  	attn.: Samuel HaCohen
		  	fax: 508-490-8666

 Each of the above addressees may change its address for purposes of this paragraph by giving to the
other addressees notice of such new address in conformance with this paragraph. 
  

	12.	Applicable Law; Jurisdiction 

 This Warrant
shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel. Any dispute arising
under or in relation to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such court. 
  

	13.	Entire Agreement 

 This Warrant constitutes
the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof. 
 Dated: May 19, 2006 
  

					
		 	 VIRYANET LTD.

			
		 	 By:
	 	  
			
		 	 Title:
	 	  

  

 - 6 - 

 NOTICE OF EXERCISE 
 To: ViryaNet Limited 
  

	1.	The undersigned hereby elects to purchase                      shares of
Ordinary Shares of                     , pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for
such shares in full. 

  

	2.	In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Ordinary Shares are being acquired solely for the account of the undersigned and not
as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. 

  

	3.	Please issue a certificate representing said shares of Ordinary Shares in the name of the undersigned. 

  

	4.	Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

  

					
			
	   	 		 	   
	 (Date)
	 		 	 (Print Name)

			
	 	 		 	   
		 		 	 (Signature)

  

 - 7 - 

 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
COVERING THIS WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW. 
 WARRANT TO PURCHASE ORDINARY SHARES 
 ViryaNet Ltd., an Israeli Company whose shares are currently publicly
traded on The Nasdaq SmallCap Market (the “Company”), hereby grants to C.E. Unterberg, Towbin, LLC (the “Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value
NIS 1.0 each (the “Ordinary Shares”), set forth below, subject to the terms and conditions set forth below, effective as of May 8, 2006 (the “Effective Date”). 
  

	1.	Number of Ordinary Shares Available for Purchase and Exercise Price 

 This Warrant may be exercised to purchase up to 106,496 Ordinary Shares. The exercise price for each Ordinary Share shall be $1.1268 (the “Warrant Price”), subject to adjustments under Section 7
of this Warrant (the “Warrant Shares”). 
  

	2.	Term 

 This Warrant may be exercised, in
whole, or in part (subject to Section 4 below), during the period beginning on the Effective Date and ending on the date which is the 2 years following the Effective Date. 
  

	3.	Exercise of Warrant 

 This Warrant may be
exercised in whole or in part on any number of occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. This Warrant may be exercised for cash only. To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased
upon such exercise in immediately available funds, in U.S. Dollars or NIS equivalent thereof, based on the representative rate of exchange published by the Bank of Israel and known at the time of payment. 

 The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable
thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above. In the event of a
partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise. 
  

	4.	Fractional Interest 

 No fractional shares
will be issued in connection with any exercise hereunder, and the number of Warrant Shares issued shall be rounded down to the nearest whole number. 
  

	5.	Warrant Confers No Rights of Shareholder 

 Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares. 
  

	6.	Investment Representation 

 Neither this
Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws. The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant
for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to
protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act. The Holder agrees that any Warrant Shares issuable upon
exercise of this Warrant will be acquired for investment and not with a view to distribution and such Warrant Shares will not be registered under the Securities Act and applicable state securities laws and that such Warrant Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and
qualification is available. The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 
  

 - 2 - 

	7.	Adjustment of Warrant Price and Number of Shares 

 The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  

	 	a.	Adjustment for Shares Splits and Combinations. If the Company at any time or from time to time during the term of this Warrant effects a subdivision of the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased. Any adjustment under this Section 7(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. 

  

	 	b.	Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time, during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event the number of Ordinary Shares issuable upon exercise of this
Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a
fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in
payment of such dividend or distribution, and (ii) the denominator of which is the total number of shares of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be
recomputed accordingly as of the close of business on such record date and thereafter the number of shares of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of actual
payment of such dividends or distributions. 

  

	 	c.	Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall
receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately
prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder. 

  

 - 3 - 

	 	d.	Adjustment for Reclassification, Exchange and Substitution. If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different
number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification
or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and
under the Company’s Articles of Association. 

  

	 	e.	Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time during the term of this Warrant there is a capital reorganization of
the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Subsection) or a merger or consolidation of the Company with or into another corporation, or the sale
of all or substantially all of the Company’s shares or properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon
conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application
of the provisions of this Subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Subsection and the
Company’s Articles of Association (including adjustment of the number of shares of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be
practicable. 

  

	 	f.	Adjustment of Warrant Price. Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted. 

  

	8.	Transfer of This Warrant or Securities Issuable on Exercise Hereof 

  

	 	a.	 With respect to any offer, sale or other disposition of this Warrant or securities into which such Warrant may be exercised, the Holder will give written notice

  

 - 4 - 

	 	 
to the Company prior thereto, describing briefly the manner thereof, together with, if requested by the Company, a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Such opinion letter and all such transferees must warrant and represent that
each such transferee is an “accredited” investor as that term is defined under Regulation D of the Securities Act. Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so
requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees. Each Warrant thus transferred and each
certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Any provision of this Warrant to the contrary notwithstanding, the
Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than to any transferee approved by the Company in writing in its sole discretion. In addition to the above, any transfer of this Warrant or the Warrant Shares
shall be subject to the provisions of the Company’s Articles of Association. 

  

	 	b.	In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition, or sale
of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer. 

  

	9.	Representations and Warranties 

 The Company
represents and warrants to the Holder as follows: 
  

	 	a.	This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.

  

	 	b.	The Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. 

  

	 	c.	The execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s Articles of Association. 

  

	10.	Loss, Theft, Destruction or Mutilation of Warrant 

 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably
satisfactory to it, and 

  

 - 5 - 

 
upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate,
if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate. 
  

	11.	Notices 

 Any notice or other communication
hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

  

							
	If to Holder:	 		 	___________	  	
			
	If to Company:	 		 	ViryaNet Ltd.
		 		 	 2 Willow Street, Southborough, Massachusetts
 attn.: Samuel HaCohen
 fax: 508-490-8666

 Each of the above addressees may change its address for purposes of this paragraph by giving to the
other addressees notice of such new address in conformance with this paragraph. 
  

	12.	Applicable Law; Jurisdiction 

 This Warrant
shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel. Any dispute arising
under or in relation to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such court. 
  

	13.	Entire Agreement 

 This Warrant constitutes
the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof. 
 Dated: May 8, 2006 
  

					
		 	 VIRYANET LTD.

			
		 	By:	 	  
			
		 	 Title:
	 	  

  

 - 6 - 

 NOTICE OF EXERCISE 
 To: ViryaNet Limited 
  

	1.	The undersigned hereby elects to purchase                     shares of
Ordinary Shares of                     , pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for
such shares in full. 

  

	2.	In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Ordinary Shares are being acquired solely for the account of the undersigned and not
as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. 

  

	3.	Please issue a certificate representing said shares of Ordinary Shares in the name of the undersigned. 

  

	4.	Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

  

							
				
	  	 		 		 	  
	(Date)	 		 		 	(Print Name)
				
		 		 		 	  
		 		 		 	 (Signature)

  

 - 7 - 

 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
COVERING THIS WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW. 
 WARRANT TO PURCHASE ORDINARY SHARES 
 ViryaNet Ltd., an Israeli Company whose shares are currently publicly
traded on The Nasdaq SmallCap Market (the “Company”), hereby grants to C.E. Unterberg, Towbin, LLC (the “Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value
NIS 1.0 each (the “Ordinary Shares”), set forth below, subject to the terms and conditions set forth below, effective as of May 8, 2006 (the “Effective Date”). 
  

	1.	Number of Ordinary Shares Available for Purchase and Exercise Price 

 This Warrant may be exercised to purchase up to 106,496 Ordinary Shares. The exercise price for each Ordinary Share shall be $1.1268 (the “Warrant Price”), subject to adjustments under Section 7
of this Warrant (the “Warrant Shares”). 
  

	2.	Term 

 This Warrant may be exercised, in
whole, or in part (subject to Section 4 below), during the period beginning on the Effective Date and ending on the date which is the 2 years following the Effective Date. 
  

	3.	Exercise of Warrant 

 This Warrant may be
exercised in whole or in part on any number of occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. This Warrant may be exercised for cash only. To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased
upon such exercise in immediately available funds, in U.S. Dollars or NIS equivalent thereof, based on the representative rate of exchange published by the Bank of Israel and known at the time of payment. 

 The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable
thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above. In the event of a
partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise. 
  

	4.	Fractional Interest 

 No fractional shares
will be issued in connection with any exercise hereunder, and the number of Warrant Shares issued shall be rounded down to the nearest whole number. 
  

	5.	Warrant Confers No Rights of Shareholder 

 Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares. 
  

	6.	Investment Representation 

 Neither this
Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws. The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant
for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to
protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act. The Holder agrees that any Warrant Shares issuable upon
exercise of this Warrant will be acquired for investment and not with a view to distribution and such Warrant Shares will not be registered under the Securities Act and applicable state securities laws and that such Warrant Shares may have to be
held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and
qualification is available. The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 
  

 - 2 - 

	7.	Adjustment of Warrant Price and Number of Shares 

 The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  

	 	a.	Adjustment for Shares Splits and Combinations. If the Company at any time or from time to time during the term of this Warrant effects a subdivision of the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased. Any adjustment under this Section 7(a) shall become effective at the close of business
on the date the subdivision or combination becomes effective. 

  

	 	b.	Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time, during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event the number of Ordinary Shares issuable upon exercise of this
Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a
fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in
payment of such dividend or distribution, and (ii) the denominator of which is the total number of shares of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be
recomputed accordingly as of the close of business on such record date and thereafter the number of shares of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of actual
payment of such dividends or distributions. 

  

	 	c.	Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time during the term of this Warrant makes, or fixes a record
date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall
receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately
prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period,
subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder. 

  

 - 3 - 

	 	d.	Adjustment for Reclassification, Exchange and Substitution. If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different
number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification
or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and
under the Company’s Articles of Association. 

  

	 	e.	Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time during the term of this Warrant there is a capital reorganization of
the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Subsection) or a merger or consolidation of the Company with or into another corporation, or the sale
of all or substantially all of the Company’s shares or properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon
conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application
of the provisions of this Subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Subsection and the
Company’s Articles of Association (including adjustment of the number of shares of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be
practicable. 

  

	 	f.	Adjustment of Warrant Price. Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted. 

  

	8.	Transfer of This Warrant or Securities Issuable on Exercise Hereof 

  

	 	a.	 With respect to any offer, sale or other disposition of this Warrant or securities into which such Warrant may be exercised, the Holder will give written notice

  

 - 4 - 

	 	 
to the Company prior thereto, describing briefly the manner thereof, together with, if requested by the Company, a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Such opinion letter and all such transferees must warrant and represent that
each such transferee is an “accredited” investor as that term is defined under Regulation D of the Securities Act. Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so
requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees. Each Warrant thus transferred and each
certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is
not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Any provision of this Warrant to the contrary notwithstanding, the
Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than to any transferee approved by the Company in writing in its sole discretion. In addition to the above, any transfer of this Warrant or the Warrant Shares
shall be subject to the provisions of the Company’s Articles of Association. 

  

	 	b.	In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition, or sale
of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer. 

  

	9.	Representations and Warranties 

 The Company
represents and warrants to the Holder as follows: 
  

	 	a.	This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.

  

	 	b.	The Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights. 

  

	 	c.	The execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s Articles of Association. 

  

	10.	Loss, Theft, Destruction or Mutilation of Warrant 

 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably
satisfactory to it, and 

  

 - 5 - 

 
upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate,
if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate. 
  

	11.	Notices 

 Any notice or other communication
hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

  

							
	If to Holder:	 		 	___________	  	
			
	If to Company:	 		 	ViryaNet Ltd.
		 		 	 2 Willow Street, Southborough, Massachusetts
 attn.: Samuel HaCohen
 fax: 508-490-8666

 Each of the above addressees may change its address for purposes of this paragraph by giving to the
other addressees notice of such new address in conformance with this paragraph. 
  

	12.	Applicable Law; Jurisdiction 

 This Warrant
shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel. Any dispute arising
under or in relation to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such court. 
  

	13.	Entire Agreement 

 This Warrant constitutes
the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof. 
 Dated: May 8, 2006 
  

					
		 	 VIRYANET LTD.

			
		 	By:	 	  
			
		 	 Title:
	 	  

  

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 NOTICE OF EXERCISE 
 To: ViryaNet Limited 
  

	1.	The undersigned hereby elects to purchase                     shares of
Ordinary Shares of                     , pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for
such shares in full. 

  

	2.	In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Ordinary Shares are being acquired solely for the account of the undersigned and not
as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. 

  

	3.	Please issue a certificate representing said shares of Ordinary Shares in the name of the undersigned. 

  

	4.	Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

  

							
				
	  	 		 		 	  
	(Date)	 		 		 	(Print Name)
				
		 		 		 	  
		 		 		 	 (Signature)

  

 - 7 -

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