Comverse Technology, Inc. Signs Agreement To Acquire Exalink Ltd.

Exalink's Router-Based WAP Gateway And Applications Software Allows Mobile Network Operators To Deliver Internet-Based Information, Content And Services To Wireless Devices

Comverse Technology, Inc. (NASDAQ:CMVT), the world's leading supplier of software and systems enabling network-based enhanced services, announced today that it has signed a definitive agreement to acquire Exalink Ltd., a privately-held, Herzelia, Israel-based firm specializing in router-based WAP (Wireless Application Protocol) gateways and applications software for the delivery of Internet-based services to all types of wireless devices.

Comverse Technology's acquisition of Exalink is expected to be effectuated as a tax-free, stock-for-stock transaction, which will be accounted for as a pooling-of-interests. Comverse will issue approximately 5,261,000 new shares to Exalink shareholders, and will assume Exalink's outstanding options and warrants. One-time charges for acquisition-related costs are expected not to exceed $15 million. Excluding the one-time charge and amortization of stock-based compensation expenses, Comverse expects the acquisition to be approximately $0.04 dilutive to earnings per share for the remainder of fiscal 2000, $0.08 dilutive to earnings per share in fiscal 2001, and accretive thereafter. The closing of the transaction is subject to certain customary conditions.

Exalink offers a carrier-grade mobile Internet platform, featuring patent-pending technology, including a unique router-based WAP gateway that supports the delivery of Web content to all types of wireless devices, over both WAP and IP protocols. Unlike a conventional WAP proxy server, Exalink's WAP gateway, eXa.Flow, performs protocol conversion on the network layer, enabling enhanced performance and quality of service as well as real-time security. The router-based approach also enables interoperability with other vendors' WAP gateways, giving carriers a path to superior mobile Internet service performance without having to immediately abandon their legacy proxy server-based WAP gateways. The expected growth of subscribers and usage is supported by Exalink's high capacity WAP gateway, Mega.Flow, which scales up to accommodate millions of subscribers.

The unique distributed architecture of Exalink's products, Mega.Flow and eXa.Flow, allows them to be deployed along side remotely located gateways, to allow for distributed WAP deployment and roaming. This capability provides clear advantages to operators looking at multi-national (e.g., Pan-European) services. Such an architecture can be implemented, for example, with a Mega.Flow in the cellular network working in cooperation with an eXa.Flow installed in the corporate environment, thus providing end-to-end security and quality of service.

In addition to its WAP gateway product, Exalink provides eXa.Rule, a policy-driven database management system for subscriber and platform management, containing information concerning subscriber priorities and device properties and security management, and eXa.Application, an integrated application platform consisting of an application core engine, ready-to-deploy personal information management applications, and an open API (Application Program Interface) software development kit, eXa.Dev, for content providers and third-party developers. Personal information management applications include wireless email, web-based address book, and calendar and to-do list capabilities.

Kobi Alexander, Chairman, President and CEO of Comverse, stated, "Wireless Internet services are poised for outstanding growth over the next several years. Exalink's unique router-based WAP gateway architecture promises significant performance advantages over today's proxy server schemes, with a superior ability to provide and manage quality of service and security. We are excited by the opportunities presented to us through Exalink's technology, and welcome the addition of Exalink's talented employees and management to the Comverse team."

Rony Zarom, President and Chief Executive Officer of Exalink, said, "Comverse is the perfect partner for Exalink. Comverse's base of nearly 250 wireless network operators, along with its strong management team and reputation for excellence in developing a broad portfolio of reliable, scalable, customizable value-added communication services, gives Exalink the best possible opportunity to become the world's leading provider of systems which enable wireless Internet services."

Exalink will continue to operate from its existing facilities. Rony Zarom will continue to head-up its operations.

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