Press Releases

BREEZECOM AND FLOWARE TO MERGE

Creating the World's Leader in Point-to-Multipoint Broadband Wireless Access Solutions  
 
TEL AVIV, Israel & OR YEHUDA, Israel, April 5, 2001 - BreezeCOM Ltd. (Nasdaq: BRZE) and Floware Wireless Systems Ltd. (Nasdaq: FLRE), both leading providers of Broadband Wireless Access (BWA) equipment, today announced that the two companies have agreed to combine in a merger of equals.

The stock-for-stock transaction will create the leading global provider of Point-to-Multipoint Broadband Wireless Access equipment. The new company expects to generate growth and provide an enhanced product offering to a complementary worldwide customer and channel base.

Under the terms of the merger agreement, which has been unanimously approved by both Boards of Directors, each ordinary share of Floware will be converted into 0.767 ordinary shares of BreezeCOM in a tax-free transaction. The new combined company will subsequently be renamed. The Merger is expected to be accounted for as a purchase transaction.

The new company will have approximately 53.3 million shares outstanding, with the current BreezeCOM shareholders owning 55% of the combined company and current Floware shareholders owning 45% of the combined company, on a fully diluted basis. Based on closing prices on April 4, 2001, the new company will have a pro forma market capitalization of approximately $330 million and over $220 million of cash.

The transaction is expected to close during the third quarter of 2001, and is subject to approval by shareholders of BreezeCOM and Floware, regulators and other customary closing conditions.

Strategic Rationale "Bringing together BreezeCOM and Floware makes great sense strategically, financially and culturally. Our two companies have significant complementary strengths that will allow us to deliver the most comprehensive point-to-multipoint broadband wireless access solutions in the industry," said Zvi Slonimski, President and CEO of BreezeCOM, who will become Co-CEO of the new company, focusing on sales, R&D, and operations. "As a new leader in the BWA industry, we will be in a much stronger position to expand our business portfolio and strengthen our global presence."

BreezeCOM and Floware complement each other well in terms of product offering, geographical presence, customers and distribution channels. Both companies supply point-to-multipoint broadband wireless access solutions. BreezeCOM targets the residential and small office home office (SOHO) markets selling to both ISPs and carriers and Floware targets small-to-medium enterprises (SME) and the multi-tenant unit market (MTU) via telecom carriers. The combined company will have a point-to-multipoint product offering with transmission frequencies ranging from 2.4GHz in the unlicensed band up to 26GHz in the licensed band.

Both BreezeCOM and Floware are headquartered in Israel, and operate globally. BreezeCOM has a strong sales operation located in the US, which has enabled BreezeCOM to establish a strong presence in North America and penetrate Latin America. BreezeCOM also has particular strength in Scandinavia and Eastern Europe and has begun making major strides in Asia. Floware's primary sales channel is through telecom system integrators. Floware's strategic relationship with Siemens, which will hold over 10% of the combined company after the merger, has enabled Floware to penetrate many of the emerging telecom service providers in Germany, Spain, Portugal and numerous other European countries. Floware has also penetrated Latin America and Asia.

"Our combined financial strength, strong product portfolio and diversified sales base will be very appealing to service providers when they choose equipment on which to base their infrastructure rollout and future, and will offer them a one-stop shop for their broadband wireless access infrastructure needs," said Amnon Yacoby, CEO of Floware, who will also become Co-CEO of the new company, focusing mainly on business development, strategy, marketing and financial markets issues.

"In addition, the combined R&D team will comprise over 250 engineers with expertise across all aspects of broadband access wireless equipment. This will provide us with the strongest R&D team focused on broadband wireless solutions in the world. The combined company will now have the opportunity to leverage both companies' technology and expertise, and will allow duplicate resources to be re-deployed to faster facilitate the introduction of next generation technologies and additional feature developments of products."

Gaining critical mass in order to maintain a leadership position in the point-to-multipoint broadband wireless equipment industry is consistent with management's view that significant consolidation will occur in the industry.

Management The merger combines two very strong management teams. Following the close of the transaction, Aharon Dovrat, BreezeCOM Chairman, will become the Chairman of the Board of the combined company and Dr. Meir Barel, current Chairman of Floware will act as Vice-Chairman. As mentioned, Zvi Slonimski and Amnon Yacoby will act as Co-CEOs. Floware President and COO Zvika Friedman will become the combined company's President and COO. Dafna Gruber, CFO of BreezeCOM will be the Vice President of Finance, while Tali Idan, Floware CFO will take the position of CFO for the combined company.

Salomon Smith Barney acted as financial advisor and provided a fairness opinion to BreezeCOM. Credit Suisse First Boston acted as financial advisor and provided a fairness opinion to Floware.

Conference Call A conference call to discuss the merger, hosted by Amnon Yacoby and Zvi Slonimski, will be held today Thursday April 5, 2001 at 9:00 a.m. EDT. Dial in numbers for the call are: Domestic - 1-800-370-0906; and International - 1-973-633-1010.

The call will be available as a replay for 48 hours and will be web cast www.streetevents.com with a 90-day archive available. For those unable to participate in the call, there will be a replay available from April 5, 2001 at 11:00 a.m. EDT, through April 9, 2001 11:59 p.m. Please call: Domestic - 1-877-519-4471; and International - 1-973-341-3080. ID for Replay is 2528081.

About BreezeCOM
BreezeCOM is the leading provider of Broadband Wireless Access (BWA) solutions used by service providers and enterprises. Its products provide a wireless alternative to wired access solutions, such as DSL and cable modems, and facilitate indoor and outdoor, as well as fixed and mobile wireless LAN connectivity. BreezeCOM products are based on a packet switching point-to-multipoint wireless platform, optimized for high-speed Internet and intranet access. Core technologies include spread spectrum radio, digital signal processing, modems, networking protocols and VLSI. For more information on BreezeCOM, visit www.breezecom.com.

About Floware
Floware Wireless Systems Ltd. is a leading provider of point-to-multipoint fixed broadband wireless access (BWA) systems. These systems are used mainly by new carriers (CLECs) which connect business customers in the ``last mile.'' Floware's WALKair system enables carriers to provide high-speed Internet access, as well as a wide range of voice and data services, on the 3.5, 10.5 and 26 GHz radio frequency bands. Floware currently has more than 60 deployments worldwide. For more information, visit Floware's website at www.floware.com.

In connection with the proposed transaction, Salomon Smith Barney will file a Registration Statement on Form F-4 with the United States Securities and Exchange Commission. Investors and security holders are advised to read the Registration Statement on Form F-4 when it becomes available, because it will contain important information. Free copies of the Registration Statement on Form F-4, once available, and BreezeCOM'S or Floware's other filings with the SEC may also be obtained from BreezeCOM or Floware, respectively. A copy of both companies filings with the SEC may be inspected without charge at the Public Reference Room of the United States Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part of the such filings may be obtained from the Public Reference Section of the United States Securities and Exchange Commission upon the payment of the fees prescribed by the United States Securities and Exchange Commission.

Forward-Looking Information This press release may contain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of BreezeCOM's and Floware's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this release address the strategic business combination of BreezeCOM and Floware. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the risk that the BreezeCOM and Floware businesses will not be integrated successfully; costs related to the business combination; failure of the BreezeCOM or Floware shareholders to approve the business combination; inability to obtain or meet conditions imposed for governmental approvals for the merger, inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to establish and maintain relationships with commerce, advertising, marketing, and technology providers.

For other factors that could cause BreezeCOM's or Floware's results to vary from expectations, please see the "Risk Factors" section of BreezeCOM's Form F-1 relating to BreezeCOM's secondary offering filed with the SEC on July 26, 2000, and Floware's Form F-1 filed with the SEC relating to Floware's initial public offering on August 1, 2000 

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