MAIN CHARACTERISTICS OF THE NETMOUNT AND REMOTEABILITY AGREEMENTS AND OF THE PRIVATE PLACEMENT WITH INDEX VENTURES, PITANGO, GENESIS, CATALYST ET SFK(AcT)

[26] July 2004 - V CON Telecommunications Ltd. 22, Maskit Street, Herzliya 46733, Israel, is a company limited by shares under Israeli law with an issued share capital of 17,135,695 ordinary shares of a nominal value of 0.03 new Israeli shekels.

ISIN Code: IL 00 108 30540 - Mnemonic: V CON - Footsie activity sector: 17.

The number of securities admitted to listing is 14,909,700 ordinary shares to which will be added 17,106,948 new ordinary shares following their admission to listing on the Nouveau Marché of Euronext Paris SA. as of July 26, 2004. These new V CON ordinary shares will be fungible with the ordinary shares of V CON currently admitted to listing on the Nouveau Marché of Euronext Paris SA. V CON is listed only on the Nouveau Marché of Euronext Paris SA.

The issue of the securities described below took place in the framework of specific transactions: the agreements relating to NetMount and RemoteAbility as well as a private placement with Index Ventures, Pitango, Genesis, Catalyst and SFK.

THE NETMOUNT AGREEMENT

NetMount Inc. ("NetMount") is a Delaware company engaged in the development and production of technology solutions, which provides a secure multipoint LAN connection over IP based Wide Area Networks and/or LAN and provide peer-to-peer communication between its user end points.

On November 6, 2003, V CON and NetMount entered into an agreement (the "NetMount Agreement") pursuant to which NetMount agreed to sell to V CON all of its assets and V CON agreed to hire certain of NetMount's founders to provide research and development services to V CON, in consideration for the issue to NetMount of 967,824 ordinary shares. The acquisition was for fair value.

The Pitango group (a current shareholder of the Company) and the Shrem Fudim Kelner group ("SFK group" or "SFK") (of which group the Canada Israel Opportunity Fund II LP, the Canada Israel Opportunity Fund III LP and the Canada Israel Opportunity Fund IV LP are members - such funds being current shareholders of the Company) are major shareholders of NetMount. Other than this relationship, to the knowledge of the Company there are no commercial relations between V CON and NetMount.

THE REMOTEABILITY AGREEMENT

RemoteAbility, Inc. ("RemoteAbility") is a Delaware company engaged in the development and production of audio-conferencing bridge solutions, which provide systems and methods for participant-controlled conference calling.

On September 15, 2003, V CON and RemoteAbility entered into an agreement (the "RemoteAbility Agreement") pursuant to which RemoteAbility agreed to sell to V CON certain of its assets and V CON hired certain founders of RemoteAbility (directly and/or through RemoteAbility) to provide research and development and marketing services to V CON in consideration for the issue to RemoteAbility of 1,258,171 ordinary shares and the grant of warrants for the purchase of 1,258,171 ordinary shares in V CON at an exercise price per share of USD 0.60 (subject to adjustment), exercisable over a period of three (3) years as of the closing date of the RemoteAbility transaction, April 19, 2004.

The Pitango group (a current shareholder of the Company) and the SFK group (of which latter group the Canada Israel Opportunity Fund II LP, the Canada Israel Opportunity Fund III LP and the Canada Israel Opportunity Fund IV LP are members - such funds being current shareholders of the Company) are major shareholders of RemoteAbility. Other than this relationship and the fact that RemoteAbility, via certain of its founders, provides certain research and development and marketing services to V CON, to the knowledge of the Company there are no commercial relations between V CON and RemoteAbility

THE PRIVATE PLACEMENT

On January 21, 2004, V CON entered into an agreement with new investors, being certain entities of Index Ventures (Index Ventures II (Jersey) L.P., Index Ventures II (Delaware) L.P., Index Ventures II GmbH & Co. KG, Index Ventures II Parallel Entrepreneur Fund (Jersey-A) L.P., Index Ventures II Parallel Entrepreneur Fund (Jersey-B) L.P., Index Ventures Management SA (on behalf of Index Employee Investment Plan) – together – "Index"), and certain additional investors who are current shareholders of V CON or are related to current shareholders of V CON, namely entities of the Pitango group (Pitango Venture Capital Fund III (Israeli Sub) L.P., Pitango Venture Capital Fund III (Israeli Sub) Non-Q L.P., Pitango Venture Capital Fund III (Israeli Investors) L.P., Pitango Venture Capital Fund III (Israel) L.P. and Pitango Venture Capital Fund III Trusts 2000 Ltd. – together "Pitango"), Genesis Partners I L.P. Addendum, Genesis Partners I (Cayman) L.P. Addendum (together – "Genesis"), Catalyst Investments L.P. ("Catalyst") and entities of the SFK group (Canada Israel Opportunity Fund II L.P., Canada Israel Opportunity Fund III L.P. and Canada Israel Opportunity Fund IV L.P. – together "SFK") (all together, the "Private Placement Investors") in relation to a private placement of ordinary shares for USD 10 million (the "Private Placement"). The Private Placement closed on April 21, 2004, on which date V CON issued to the Private Placement Investors an aggregate of 14,880,953 ordinary shares at a price per share of USD 0.672 (approximately EUR 0.564).

In terms of commercial relations between the Private Placement Investors and V CON:
Mr. Thomas Langer, a director of V CON and Mr. Rami Kalish (a former external independent director of V CON) are engaged in a managerial capacity by Pitango;

Mr. Eyal Kishon, a director of V CON is engaged in a managerial capacity by Genesis;

Mr. Edward Cukierman, a director of V CON is engaged in a managerial capacity by Catalyst; and

Mr. Yair Shamir, Chairman and CEO of V CON, serves as the chairman of Catalyst.

In addition, according to the shareholders register of V CON, entities of Pitango, Genesis and Catalyst currently hold the following additional number of ordinary shares in V CON (not taking into consideration the ordinary shares issued to such shareholders pursuant to the Private Placement):

Pitango - 767,766 ordinary shares by record;

Genesis - 547,370 ordinary shares by record;

Catalyst - 384,615 ordinary shares by record.

It should be noted that Index, Pitango, Genesis and Catalyst or related entities thereof might hold additional Ordinary Shares through Euroclear France S.A.

Other than these relationships, to the knowledge of the Company, V CON does not have any commercial relations with Pitango, Genesis and Catalyst.

Upon the closing of the Private Placement, Mr. Bernard Dalle of Index was appointed as a director of V CON. Other than this appointment, to the knowledge of the Company, V CON does not have any commercial relations with Index with the exception of the relations linked to interests which Index holds in V CON being the ordinary shares issued to it pursuant to the Private Placement.

The paying agent is Natexis Banques Populaires, 10-12 avenue Winston Churchill, 94670 Charenton le Pont - Tel: 01.58.32.30.40.

The three transactions described above were the subject of a Note d'Opération which received the visa of the Autorité des marchés financiers N°04-684 dated July 21, 2004 and which is available without charge from Natexis Banques Populaires, 10-12 avenue Winston Churchill, 94670 Charenton le Pont - Tel: 01.58.32.30.40, as well as at the registered office of V CON, 22 Maskit Street, Herzliya, Israel.

Investors contact: Mr Jack Wakileh, vice-president Finance
Telephone (972-9) 959-0000 - E-mail: jackw@vcon.co.il

For More Information :
Company (International):
Jack Wakileh
VP Finance, VCON
+(972) 9 959-0032
JackW@vcon.co.il

Source : Actusnews