June 30, 2003

TERADYON, ISRAEL – June 30, 2003 – B.O.S. Better On-Line Solutions Ltd. (“BOS” or the “Company”) (NASDAQ:BOSC, TASE:BOSC) announced today that Mr. Edouard Cukierman has been appointed as Chairman of the Board of Directors in place of Mr. Zvi Greengold. Mr. Greengold shall remain a director of the Company and serve as Chairman of the Israeli subsidiary, BOScom Ltd.

The Company’s Board of Directors has also approved the implementation of a cost reduction plan in order to improve its operational results in the second half of 2003. According to the plan, the Company will cut its R&D and marketing expenses, by closing non profitable sales offices around the world, renegotiating its supplier agreements and undergo salary cuts. The Company expects that these cuts will reduce the expenses by over $600K per quarter.

In addition, the Company announced that it received notice from the Nasdaq Listing Qualifications Panel that it has complied with all requirements set forth in the Panel’s decision dated April 30, 2003, for the continued listing on the Nasdaq National Market.

The new Chairman, Mr. Edouard Cukierman, commented: “We have resolved to turn the Company profitable by the end of 2003, by focusing on the marketing of our connectivity and IP products on the one hand, and reducing costs on the other hand. We believe in BOScom’s technology and intend to develop the activities of BOScom through a number of strategies, including via new financing.”

Mr. Edouard Cukierman, 38, is the Chairman of Cukierman & Co. Investment House and CEO of the Catalyst Fund, the Company’s largest shareholder. He served until March 2000 as General Manager of Astra Technological Investment Ltd., the first Israeli firm listed in Paris. Edouard Cukierman is on the board of numerous High-Tech companies including VCON and MTI. He is also a board member of Lamina Technologies in Switzerland, of Compagnie Financiere Otto in Paris, a French investment house and the Vice Chairman of Citec Environnement in France. In addition, Mr. Cukierman is on the board of Sar-El, an Israeli Defense Forces volunteer organization. Mr. Cukierman holds an M.B.A. from INSEAD, Fontainebleau, France and a B.Sc. from the Technion – Israel Institute of Technology.

About BOS
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability.

The IP Telephony line offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure.

The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent.

B.O.S. was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC).

For further information, please contact:
Nehemia Kaufman
B.O.S. Better On-Line Solutions [nk] Ltd.
Email: IR@boscom.com

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.

June 9, 2003

TERADYON, ISRAEL – June 9, 2003 – B.O.S. – Better On-line Solutions’ (Nasdaq: BOSCD) affiliate Surf Communication Solutions (Surf) announced on 4 June that Toshiba has chosen to integrate the Surf Multi-access PoolTM (SMP) Packet Telephony solution in its VoIP-enabled Wireless Infrastructure equipment. SMP is running on Motorola’s MSC8101 DSP.
“Toshiba is pleased with the easy-to-use and prompt integration that is made possible through Surf’s comprehensive architecture. The Packet Telephony solution offered by Motorola and Surf enabled us to shorten time-to-market,” said Masakazu Shirakawa, Chief Specialist at Toshiba. “Our strong confidence in the Surf/Motorola offering was intensified by their professional expertise that is a mandatory requirement for a technological leader such as Toshiba.”


“We greatly appreciate the confidence that Toshiba has expressed in our combined DSP and software solution. Surf’s widely deployed Packet Telephony solution complements our family of StarCore®-based DSPs and offers a carrier-grade solution to rival any on the market,” said Tim Summers, Packet Telephony Operations Manager of Motorola.


“Surf is honored by the trust put in us by a top vendor, such as Toshiba.” said Eyal Zagagi, CEO Surf. “The quick and straightforward integration of SMP is achieved through extensive training and support that we offer our customers. SMP is part of a tailored array of services that facilitate VoIP integration into the OEM’s host-controller and is supplemented with remote control and administration applications.”

About B.O.S.
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability.
The IP Telephony line offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure.
The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent.
B.O.S. was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSCD), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC).

About Surf
Founded in 1996, SURF Communication Solutions is a leading developer and supplier of software and hardware, developed for embedded network convergence systems, which enables flexibility, scalability, and high density to products processing dial-up Modem, Fax, and Voice services over Packet Telephony networks. Surf’s products are integrated into embedded data communication equipment, developed by original equipment manufacturers in the telecommunications, telephony, data communications and wireless industries. Surf is a privately held company, headquartered in Yokne’am, Israel, with offices in the United States and Europe. To learn more about Surf, visit www.surf-com.com.

For Further Information
Nehemia Kaufman
B.O.S. Better On-Line Solutions [nk] Ltd.
Email: IR@boscom.com

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission

May 22, 2003

TERADYON, ISRAEL – May 22, 2003 – B.O.S. Better On-Line Solutions Ltd. (“BOS” or the “Company”) (NASDAQ:BOSC, TASE:BOSC) announced today that at the Company’s Annual General Meeting of Shareholders held today, all proposed resolutions were passed (with the exception of the reduction of the maximum number of directors to 9, and the amendment of the Articles of Association accordingly), including a reverse stock split with a ratio of 1:4. The record date for the reverse split is May 28, 2003 and the reverse split will become effective upon the opening of the market on May 29, 2003. No fractional shares will be issued as a result of the reverse-split. Instead, all fractional shares which are one-half share or more will be increased to the next higher whole number of shares and all fractional shares which are which are less than one-half share will be decreased to the next lower whole number of shares.

As of May 22, 2003, there were 15,238,156 Ordinary Shares outstanding and after the reverse split there will be approximately 3,809,539 Ordinary Shares outstanding. The exchange agent for the reverse split is American Stock Transfer & Trust Company, 59 Maiden Lane, New York, NY 10038 (tel: (800) 937-5449). Once effective, the post-split shares will trade on the Nasdaq National Market under the symbol “BOSCD” for twenty (20) trading days, at which time the trading symbol will revert to “BOSC”.

Additionally, at the meeting, in addition to the directors listed in the Company’s proxy statement, two additional directors were elected to the Company’s Board of Directors, Messrs. Ronen Zavlik and Jacob Tenenboem. Therefore, in addition to the reelection of three incumbent directors to the Board (Mr. Zvi Greengold, Mr. Israel Gal and Mr. Eli Ben-Mayor), five new directors were appointed – Mr. Yair Shamir, Mr. Edouard Cukierman, Mr. Boaz Harel, Mr. Ronen Zavlik and Mr. Jacob Tenenboem.

Mr. Yair Shamir, 58, is the Chairman of the Catalyst Fund since 1999. He served as VCON Communication Chief Executive Officer and Director since 1997. From 1995 to 1997, Mr. Shamir served as Executive Vice President of the Challenge Fund-Etgar L.P., an Israeli venture capital firm. From 1993 to 1995, he served as Chief Executive Officer of Elite Food Industries Ltd., one of Israel’s largest branded food product companies. From 1988 to 1993, he served as Executive Vice President and General Manager of Scitex Corporation Ltd., a leading supplier of computer graphic systems. From 1963 to 1988, Mr. Shamir served in the Israeli Air Force as a pilot and commander. During his term in the Air Force, he attained the rank of colonel and the served as head of the Electronics Department, the highest professional electronics position within the Air Force. Mr. Shamir currently serves as a director of several public companies listed on the NASDAQ including, Orckit Communications Ltd, Mercury Interactive Corporation and DSP Group Corporation as well as serving as a director of several private companies. Mr. Shamir is the Chairman of The Catalyst Fund, an Israel-based venture capital fund investing in late-stage companies mainly in the high technology sector. Mr Shamir holds a B.Sc. in Electronic Engineering from the Technion – Israel Institute of Technology.\

Mr. Edouard Cukierman, 38, is the Chairman of Cukierman & Co. Investment House and CEO of the Catalyst Fund. He served until March 2000 as General Manager of Astra Technological Investment Ltd., the first Israeli firm listed in Paris. Edouard Cukierman is on the board of numerous High-Tech companies including VCON and MTI. He is also a board member of Lamina Technologies in Switzerland, of Compagnie Financiere Otto in Paris, a French investment house and the Vice Chairman of Citec Environnement in France. In addition, Mr. Cukierman is on the board of Sar-El, an Israeli Defense Forces volunteer organization. Mr. Cukierman holds an M.B.A. from INSEAD, Fontainebleau, France and a B.Sc. from the Technion – Israel Institute of Technology.

Mr. Boaz Harel, 39, serves as the managing partner in Catalyst, bringing 14 years of management experience in various industries including hi-tech to the Catalyst management team. From January 1993 until June 1997, Boaz served as President and CEO of Leedan Holdings, a holding company with major stakes in approximately 25 companies. From June 1996 until January 2001, he worked in Leedan’s NY office in order to develop the business activities of the group in the U.S.. Mr. Harel oversaw acquisitions and new investments, and developed a reputation as a company turn-around specialist. In January 1990, he established Mashik- Research & Systems for Business Development Ltd., a consulting firm consisting of 40 management consultants and industrial engineers. Mr. Harel holds a B.Sc. in Industrial and Management Engineering from the Technion – Israel Institute of Technology.

Mr. Ronen Zavlik, 42, is a partner in the CPA firm of Greenberg-Zavlik, which he founded in 1987. His firm provides a wide range of audit, tax consultancy and CFO services, mainly to technology-focused companies. He holds a B.A. in Accountancy and Business Management from the College of Management in Tel-Aviv.

Mr. Jacob Tenenboem, 45, is the founder and CEO of I.T. Net Investments, a privately held investment company with 10 investments in Israeli and US high tech companies. He has over twenty years of experience in the IT arena worldwide, which includes extensive experience in M&A activities in approximately 20 companies. Tenenboem has served in various management positions in several private and public companies, among them Formula Systems (1985) Ltd., Sintec Advanced Technologies, Aman Computers, Malal Group, Mainsoft Inc., Noyotec Ltd., Sabratech Ltd. And Magic Software Ltd.. He has and continues to serve on the board of directors of several companies. Tenenboem holds a B.Sc. in Management and Industrial Engineering from Tel-Aviv University.

Two of our directors, Messrs. Yoav Navon and Elon Littwitz, have ceased serving on the Company’s Board.

About BOS
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability.

The IP Telephony line offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure.

The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent.

B.O.S. was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC).

For further information, please contact:
Nehemia Kaufman
B.O.S. Better On-Line Solutions [nk] Ltd.
EmailIR@boscom.com

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.

May 5, 2003

New CEO and Chairman to Expand and Support Surf’s Business

TERADYON, ISRAEL – May 5, 2003 B.O.S. – Better On-Line Solutions’ affiliate SURF Communication Solutions® recently announced the election of Eyal Zagagi as President and CEO of the company. Surf also announced that Hezi Lapid has been appointed as the chairman of Surf’s Board of Directors. Surf’s co-founder and exiting CEO, Dr. Amnon Gavish, remains in the company as Senior Vice-President of Business Development.

“I am pleased to have such an experienced management team take the leading role within Surf. These new appointments will enable me to focus on bringing Surf’s products to the North-American market that holds Surf’s largest potential customer base,” said Amnon Gavish. “The Surf Multi-access Pool™ (SMP) product has earned a formidable array of customers from telecom’s tier-one OEMs who are integrating our product world-wide. With Eyal and Hezi taking managerial responsibility, Surf is well-positioned to increase its share of the Packet Telephony market.”

Eyal Zagagi’s previous positions include President and CEO of Virtue3D and Managing Director of Microdent Ventures. Earlier, he spent 10 years in various marketing and operations managerial positions with the Elbit group, including the role of Chief Operating Officer of HyNEX. Eyal Zagagi holds an MBA from the University of Dallas and an undergraduate degree in Computer Science from the Technion-Israel Institute of Technology.

Hezi Lapid held several senior management positions in the telecommunications industry throughout his career. Among these roles he headed InnoWave – ECI Wireless Systems as President and CEO and held the positions of General Manager of the Network Systems Division and Corporate Vice President at ECI. Prior to managing InnoWave, Hezi Lapid was CEO of C. Mer Industries. Hezi Lapid holds a bachelor’s degree in Electrical Engineering from the Ben Gurion University and is a master’s degree in Management and Information Sciences from Tel Aviv University.

About B.O.S.
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets technologically complex, multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability. The IP Telephony line offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure. The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent. B.O.S. was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC).

About Surf
Founded in 1996, SURF Communication Solutions is a leading developer and supplier of software and hardware, developed for embedded network convergence systems, which enables flexibility, scalability, and high density to products processing dial-up Modem, Fax, and Voice services over Packet Telephony networks. Surf’s products are integrated into embedded data communication equipment, developed by original equipment manufacturers in the telecommunications, telephony, data communications and wireless industries. Surf is a privately held company (headquartered in Yokne’am, Israel) with offices in the United States and Europe. To learn more about Surf, visit www.surf-com.com.

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.

April 2, 2003

TERADYON , ISRAEL – April 2, 2003 – B.O.S. Better On-Line Solutions Ltd. (“BOS” or the “Company”) (NASDAQ:BOSC, TASE:BOSC) announced today that the Nasdaq Listing Qualifications Panel has granted it a temporary exception from compliance with certain Nasdaq National Market requirements.

BOS had previously announced that it had received notice from the Nasdaq Stock Market that its ordinary shares were subject to delisting from the Nasdaq National Market for failure to meet Nasdaq’s minimum bid price and shareholders’ equity requirements for continued listing on the National Market. BOS requested a hearing, which was held on February 13, 2003.

As a result of the hearing and supplemental information presented to the Panel by BOS, the Panel, in a letter dated March 31, 2003, advised BOS that the Panel was of the opinion that the Company had presented a definitive plan that will enable it to evidence compliance with all requirements for continued listing on The Nasdaq National Market within a reasonable period of time and to sustain compliance with those requirements over the long term. Accordingly, the Panel determined to continue the listing of the Company’s securities on the Nasdaq National Market pursuant to the following exception:

  1. On or before April 11, 2003, the Company must file a proxy statement with the SEC and Nasdaq evidencing its intent to seek shareholder approval for a reverse stock split sufficient to satisfy the $1.00 bid price requirement;
  2. In addition, on or before April 11, 2003, the Company must make a public filing with the SEC and Nasdaq evidencing shareholders’ equity of at least $10,000,000. The filing must contain a balance sheet no older than 45 days including pro forma adjustments for any significant events or transactions occurring on or before the filing date;
  3. On or before May 15, 2003, the Company must file a Form 6-K for the quarter ending March 31, 2003 with the SEC and Nasdaq evidencing shareholders’ equity of at least $10,000,000; and
  4. On or before June 2, 2003, the Company must demonstrate a closing bid price of at least $1.00 per share; immediately thereafter, the Company must evidence a closing bid price of at least $1.00 per share for a minimum of ten consecutive trading days.

About BOS
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability.

The IP Telephony line (www.boscom.com) offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure.

The legacy line (www.bosweb.com) provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent.

B.O.S. (www.boscorporate.com) was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC).

For further information, please contact:
Nehemia Kaufman
B.O.S. Better On-Line Solutions [nk] Ltd.
Email:IR@boscom.com

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission

February 11, 2003

TERADYON, ISRAEL – February 11, 2003 B.O.S. – Better On-line Solutions’ (Nasdaq: BOSC) affiliate Surf Communication Solutions (Surf) yesterday announced that Telrad Connegy, an international leader in the field of converged telecommunication systems for small to medium business enterprises, has selected Surf’s SB-600MTM board and SMP software for its UNITe and Kochav VoIP-enabled PBX. Connegy chose the SB-600M for interfacing between its classical PBX systems and IP Networks. This enables scalable addition of IP-based handsets and connection of PBXs over IP networks.

“After evaluating options of various vendors, we have concluded that Surf’s Voice and Fax over IP board provides the clearest migration path to enhanced VoIP services. The SB-600M board enables the addition of those IP-based services, while preserving the broad set of features and voice quality that our 40,000-PBX strong customer base is currently enjoying.” said Dr. Opher Yaron, VP of R&D at Telrad Connegy. “Surf’s DSP software expertise enabled it to design a scalable and robust board that best suits Telrad Connegy’s UNITe and Kochav systems equipment. Through TL9000-certified manufacturing and adherence to the latest standards, the SB-600M perfectly fits with Connegy’s stringent quality criteria.

“We have been leveraging on our carrier-grade expertise and history of Universal Port deployments to add value to enterprise-based OEM applications. The SB-600M is part of a family of single DSP and DSP-farm boards that utilize a uniform API.TM, Surf’s proven host API, greatly lessens the integration pains for new customers who run diverse operating systems on varying processors,” said Giora Snipper, V.P Sales at Surf. “We are proud that Surf’s SB?60x family of DSP boards was chosen by Telrad Connegy as a scalable solution for the diverse needs of their enterprise customers.”

About B.O.S.
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets technologically complex, multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability. The IP Telephony line offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure. The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent. B.O.S. was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC).

About Surf
Founded in 1996, SURF Communication Solutions is a leading developer and supplier of software and hardware, developed for embedded network convergence systems, which enables flexibility, scalability, and high density to products processing dial-up Modem, Fax, and Voice services over Packet Telephony networks. Surf’s products are integrated into embedded data communication equipment, developed by original equipment manufacturers in the telecommunications, telephony, data communications and wireless industries. Surf is a privately held company, headquartered in Yokne’am, Israel, with offices in the United States and Europe. To learn more about Surf, visit www.surf-com.com.

About Telrad
Telrad Connegy, formed by the merger of Telrad Tenecs and Congruency, is a telecommunications corporation with a business history extending more than 50 years. Telrad Connegy is a key provider of converged enterprise telephony and hosted applications platforms in the United States, Europe, Africa, Asia and Israel offering comprehensive communications solutions for businesses of all sizes. Telrad Connegy develops and markets advanced Next Generation Enterprise and Service Provider Communications Systems including Voice over IP (VoIP), IT Convergence, Enterprise Wireless Solutions, CTI Applications, Messaging and PDA connected capabilities. Telrad Connegy’s product line includes the UNITe system, a family of sophisticated enterprise communications solutions designed to fulfil the telecommunication needs of modern business organizations, and the CNS 3200e, an award-winning software solution that enables the delivery of advanced VoIP telecommunications (i.e., IP Centrex) and enhanced services (i.e., personalized Web content delivered to IP phones) for distributed and hosted LAN telephony. To learn more about Telrad Connegy, visit www.telradconnegy.com.

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.

February 11, 2003

Teradyon , Israel – February 11, 2003 – B.O.S. Better On-Line Solutions Ltd. (“BOS” or the “Company”) (NASDAQ:BOSC, TASE:BOS) announced today the execution of a settlement agreement, paving the way for the transaction with Catalyst Investments, L.P. (the “Transaction”), to be completed.

On January 9, 2003, the Company’s Board of Directors approved the Transaction, the details of which were previously disclosed in the Company’s press release of January 12, 2003 and the Company’s recently published proxy statement. Pursuant to the Transaction agreements, Catalyst will be issued BOS shares, in exchange for the sale of most of its Surf shares to BOS, and will thus hold 16.6% of the outstanding BOS shares, after the issuance. Upon completion of the transaction, the Company will become the largest shareholder in Surf.

On January 14, 2003, certain shareholders filed suit against the Company demanding that a shareholders meeting be convened and requesting a declaratory judgement that the transaction is subject to shareholder approval. The court issued a temporary restraining order, ex parte, prohibiting the Company from signing the transaction agreements and closing the deal, and scheduled a hearing in the presence of all parties. The Company’s position was and remains that the shareholders lack voting authority with regard to the Transaction.

The settlement agreement reached between the parties provides for the dismissal of the lawsuit, so that the Transaction will be executed without the need for shareholder approval. Under the settlement agreement, Catalyst shall be prohibited, until February 1, 2005, from entering into a voting agreement of any kind, with other shareholders of the Company, unless some of the plaintiff shareholders enter into voting agreements of their own. Catalyst has also represented that it is purchasing the BOS shares for investment purposes and will be prohibited from selling its shares until February 1, 2006, subject to certain agreed-upon exceptions. The settlement agreement also provides Catalyst with the same registration rights with regard to the purchased shares, as some of the plaintiff shareholders received when they invested in the Company in May 2000. Furthermore, all parties have waived claims against each other and against the directors of the Company, with regard to the Transaction, as well as any claims against Orwer Ltd. and/or Mr. Aviram Wertheim, with relation to the private placement between the Company and Orwer Ltd., which did not take place despite the authorization given by the shareholders at the last annual meeting.

“We strongly believe that the Transaction is beneficial to the Company, and our investment in Surf reflects the Company’s policy to focus on its core business in the field of IP Telephony. We also anticipate a productive business relationship with our new shareholder, Catalyst Investments, L.P., who has much to contribute to our Company”, said Mr. Israel Gal, the CEO of BOS.

About B.O.S.
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets multi-functional, cross-enterprise communication and networking products. BOScom’s IP Telephony division provides innovative, telephony solutions that leverage a corporation’s existing equipment infrastructure. BOScom’s legacy division offers solutions for IBM midrange-to-PC and LAN connectivity, and printing solutions that are operating system independent. B.O.S. was established in 1990 and became a public company traded on the Nasdaq Stock Exchange in 1996 (Nasdaq:BOSC). A new analyst report was recently published on Bloomberg, the highlights of which can be viewed on Bloomberg under BOSC.

Surf Communications Ltd., an affiliated company, develops and supplies software-based access solutions that are integrated into manufacturers’ original equipment in the telecommunications, data communications, telephony, and consumer electronics industries. Surf has some high-profile strategic investors which include: Intel, Motorola and Texas Instruments, and the Israeli venture funds Pitango, Giza, Sadot and Catalyst.

About Catalyst
Catalyst, an Israeli Venture Capital Fund that invests in mature companies, private or public, was founded by Cukierman & Co. Investment House Ltd., leading in European investments in Israel. The Investment House has raised for Israeli companies approximately 300 Million Euro from European investors.

The Fund commenced its operation in mid 2000 and it is jointly managed by Edouard Cukierman and Boaz Harel. Its Chairman is Yair Shamir. Catalyst’s investors include: HSBC, ABN AMRO Bank, the OTTO Group as well as Israel’s Union bank. The Fund raised US$40 Million and has invested in 9 portfolio companies. Most of its funds are liquid and are intended to be invested within the next 2 years.

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.

January 2, 2003

TERADYON, ISRAEL – January 2, 2003 – B.O.S. Better On-Line Solutions Ltd. (the “Company”) (NASDAQ: BOSC, TASE: BOS) announced today that it has received a Nasdaq Staff Determination indicating that the Company fails to comply with the $1.00 (US) minimum bid price requirement for continued listing on the Nasdaq National Market set forth in Nasdaq Marketplace Rules 4450(a)(5). Accordingly, the Company’s ordinary shares are subject to delisting from the Nasdaq National Market.

The Company will be requesting a hearing before the Nasdaq Listing Qualifications Panel to review the Staff Determination. While there can be no assurance that the Panel will grant the Company’s request for continued listing, the Company is exploring all possible avenues to preserve the Nasdaq listing.

Pending a final ruling, delisting will be stayed and the Company’s ordinary shares will continue to be listed on the Nasdaq National Market.

About B.O.S.
B.O.S.’ activities include the continuing business operations described below:
BOScom, a wholly owned subsidiary, develops, produces and markets value-enhancing communication and networking products for enterprises. The Company’s IP Telephony division provides innovative, telephony solutions that leverage a corporation’s existing equipment infrastructure. The Company’s legacy division offers solutions for IBM mid-range-to-PC and LAN connectivity, and printing solutions that are operating system independent.

Surf Communication Solutions, an affiliated company, develops and supplies software-based access solutions that are integrated into manufacturers’ original equipment in the telecommunications, data communications, telephony, and consumer electronics industries.

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.