BOS Secures a Second Financing Round.

TERADYON, Israel -- B.O.S. Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ:BOSC) (TASE:BOSC), announced today that it has entered into and closed an additional financing transaction with Laurus Master Fund ("Laurus"), a US based fund making investments in public companies. Laurus had previously granted the Company a $2 million convertible loan in June 2004. The second financing consists of a $1.5 million Secured Convertible Term Note with a term of three years. In addition, BOS granted to Laurus a warrant to purchase up to 73,052 Ordinary Shares, which is exercisable, in whole or in part, at an exercise price of 4.04 per share until September 29, 2012.

The Note bears interest at a fluctuating interest rate which begins at the Prime rate plus 1.5%.

The conversion rate under the Note is $3.08 per share (subject to adjustment). The principal amount of the Note is repayable in monthly installments commencing as of January 1, 2006, and may be paid in cash or, subject to certain conditions, in Ordinary Shares. Interest on the Note is payable monthly and may be paid in cash or, subject to certain conditions, in Ordinary Shares. The Note is secured by a security interest in certain assets of the Company.

The proceeds from the private placement will be used for general working capital purposes and/or mergers and acquisitions. Laurus also granted the Company an option, subject to certain conditions, to call for an additional financing of $1.5 million after April 1, 2006, on substantially similar terms, except that the note conversion price shall be $4.08 per share and the warrant exercise price shall be $5.30 per share.

The Company also entered into a Registration Rights agreement with Laurus pursuant to which the Company agreed to prepare and file with the Securities and Exchange Commission a registration statement covering the resale of Ordinary Shares that are issuable upon conversion of the Note and/or exercise of the Warrants, and/or issuable in payment of principal and interest on the Note.

Adiv Baruch, President and CEO of BOS commented: "We're very pleased that a leading financial group such as Laurus believes in BOS and chose to continue its cooperation with us. This vote of confidence enables BOS to move forward with its business strategy."

About BOS

B.O.S. Better Online Solutions Ltd. (the "Company" or "BOS") (NASDAQ:BOSC)(TASE:BOSC) was established in 1990. BOS develops and markets innovative products that improve enterprise communications and operations. Its activities are focused on two domains:

--Communications products- providing easy to install and affordable VoIP and cellular gateways solutions for businesses. BOS communications products leverage existing infrastructure, radically reduce costs and facilitate operations.

--Connectivity products marketed under the BOSaNOVA brand name. These products deliver instant and transparent connectivity from IBM iSeries computers to personal computers, thin clients and browsers.

In addition BOS supplies electronic and RFID components and technology design services through the ODEM Division, based on Odem Electronic Technologies 1992 Ltd., in which a controlling stake was acquired in November 2004.

BOS, www.boscorporate.com is traded on NASDAQ (NASDAQ:BOSC) and on the Tel-Aviv stock exchange (TASE:BOSC).

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. BOS undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.