SOLACE SYSTEMS SECURES SERIES C INVESTMENT AND EXPANDS BOARD OF DIRECTORS

Ottawa, Canada - 4 December 2006

Funding to Accelerate Leadership in Value-Added Services Routing Market

Solace Systems, the leader in value-added services (VAS) routing systems, today announced its latest round of funding and the appointment of new members to its Board of Directors. Genuity Capital Partners led the infusion of capital, with Teachers’ Private Capital (the private investment arm of Ontario Teachers’ Pension Plan) and international state, hedge, and private equity investment funds adding to the round. The investment will help Solace Systems to continue its global sales momentum and develop the next generation of its VAS routing solutions. The amount of the investment was not disclosed.

Solace Systems has also expanded its Board of Directors with the appointment of Christopher Payne, Managing Partner, Genuity Capital Partners, and Rosemary Zigrossi, Vice President, Venture Capital, Teachers’ Private Capital. They join existing board members Sir Terence Matthews, Jose Medeiros, Samuel Duboc, Derek Smyth, Ian McLaren, and Craig Betts.

"Solace is uniquely positioned to capitalize on the continued evolution and growth of global networks," said Christopher Payne, from Genuity. "Our investment in this company reflects the fact that it has the technology, the team and the vision in place to make a significant impact on the market."

Solace Systems' VAS routing system provides intelligent routing of application traffic and enables improved sharing of high-value information. For service providers, Solace Systems products and solutions act as a new service delivery platform for generating value-added services revenue. For enterprises, Solace Systems products and solutions also provide a high-performance application backbone that features lower costs and improved operational reliability.

"We are very pleased with the continued support of our existing investors and are particularly excited to have Canada’s premier technology investment bank leading this round as a new investor," said Craig Betts, President and CEO of Solace Systems. “This capital infusion will enable us to continue moving forward with our vision and expand our services and partnerships with international organizations.”

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