ViryaNet letterhead] Mr. Meiri Alterman Bank Hapoalim Limited

Exhibit 4.6

[ViryaNet letterhead]

Xx. Xxxxx Xxxxxxxx

Bank Hapoalim Limited

00 Xxxxxx Xxxxxx Xxxxxx

Tel Aviv, Israel

Dear Xxxxx,

This letter is to acknowledge our understanding and agreement that ViryaNet Limited (the “Company”) shall issue to you, on the date of this letter, 30,000 Ordinary Shares of the Company, of NIS 1.0 par value per share (the “Shares”) in consideration for the payment by you of the par value of the Shares.

The issuance of the Shares is done as consideration for the restructuring of the Company’s debts to you, effective as of January 1, 2006.

The Company also confirms that it agrees to include the Shares in the next registration statement on Form F-3 to be filed by the Company with the SEC on or after the date hereof.

Sincerely yours,

ViryaNet Limited

By: /s/ Xxxxxx XxXxxxx

Name: Xxxxxx XxXxxxx

Title: Executive Chairman of the Board

Date: December 22, 2005