In Re Comverse Technology, Inc. Securities Litigation 06-CV-01825

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 1 of 56

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK x

IN RE COMVERSE TECHNOLOGY, INC Master File No. CV 06-1825 (NGG)(RER) SECURITIES LITIGATION

STIPULATION OF SETTLEMENT

This Stipulation of Settlement (the "Stipulation"), dated December 16, 2009, is made and entered into by and among the Court-appointed Lead Plaintiff, The Menorah Group — Menorah

Insurance Co., Ltd. and Mivtachim Pension Funds Ltd. ("Lead Plaintiff'), and Defendants

Comverse Technology, Inc. ("Comverse" or the "Company"), Jacob "Kobi" Alexander

("Alexander"), William F. Sorin ("Sorin"), David Kreinberg ("Kreinberg"), John H. Friedman

("Friedman"), Ron Hiram ("Hiram"), and Sam Oolie ("Oolie") (collectively the "Defendants"), by and through their respective counsel of record in the Litigation. The parties to this Stipulation

(including the Lead Plaintiff and the Defendants) shall collectively be referred to as the

"Parties." This Stipulation is intended by the Parties to fully, finally and forever resolve,

discharge and settle the Released Plaintiffs' Claims (as the term is defined below) for $225

million, upon the terms and subject to the-conditions hereof, and subject to the approval of the

Court.

I. THE LITIGATION

A. Procedural History of the Litigation

On April 16, 2006, the first of five individual actions was filed against Comverse and

certain officers of the Company alleging violations of Sections 10(b) and 20(a) of the Securities

Exchange Act of 1934. The Court consolidated all five of the actions on August 24, 2006, and Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 2 of 56

appointed the Menora Group as Lead Plaintiff for the consolidated Actions. A Consolidated

Amended Complaint was filed on March 23, 2007.

Named as defendants were Comverse, certain of its former senior officers and directors: Alexander, Kreinberg, and Sorin; and members of the Company's Audit Committee and Stock Option and Remuneration Committee: Oolie, Friedman and Hiram ("Compensation

Committee Defendants").

Defendants moved to dismiss the Consolidated Amended Complaint on July 30, 2007, and on October 31, 2007, Magistrate Judge Reyes issued a Report and Recommendation recommending that the Court deny Defendants Comverse, Alexander, Kreinberg and Sorin's motions to dismiss the Sections 10(b) and 20(a) claims ("Report and Recommendation) (Docket

# 135), but recommended that all claims against the Compensation Committee Defendants be dismissed, as well as dismissal of all other claims against all Defendants.

On January 9, 2008, Lead Plaintiff filed an Objection to the portion of the Report and Recommendation regarding dismissal of certain claims against the Compensation Committee

Defendants, and on February 20, 2008, the Court reinstated those claims against the

Compensation Committee Defendants.

On July 15, 2008, Lead Plaintiff filed its Motion for Class Certification of a class of all purchasers of the common stock of Comverse Technology, Inc. during the period from April 30,

2001 through November 14, 2006, both dates inclusive. Defendants opposed Lead Plaintiff's

Motion for Class Certification. Discovery was conducted by way of depositions of Menora

Group personnel and the production of relevant Menora Group documents. At the time the

Settling Parties reached an agreement in principle, the Court had yet to render a decision on this

motion.

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Through the course of this Litigation, the Parties have engaged in extensive discovery.

Defendants and their independent auditors, Deloitte & Touche LLP ("Deloitte"), have produced

over 7 million pages of documents and Lead Counsel has, among other things, reviewed such

documents and conducted numerous depositions.

In an effort to resolve this Litigation through good-faith settlement negotiations, the

Parties have engaged in extensive discussions and negotiations beginning in the summer of 2008.

Starting in December 2008, the Parties-engaged in mediation sessions, including conferences before Honorable Daniel Weinstein, a retired state judge with extensive experience in mediating complex litigation and securities actions. Prior to the first mediation conference, Lead Counsel and Comverse's counsel prepared and submitted comprehensive mediation statements to Judge

Weinstein. The mediation statements presented their respective Parties' views about the strengths and weaknesses of the claims, offered their differing views as to the damages suffered by the Class, and highlighted the critical issues that would determine whether a settlement was possible.

After the initial mediation session on December 1, 2008, numerous subsequent sessions took place in person and telephonically with Judge Weinstein. In-person sessions with Judge

Weinstein were attended by Plaintiffs' banking consultants and Converse's Chief Financial

Officer and General Counsel. These sessions were marked by extensive arm's length negotiations and give and take on multiple issues

B. Plaintiffs' Claims and the Benefits of Settlement

Lead Plaintiff believes that the claims asserted in the Action have merit and that the

evidence of the underlying events and transactions alleged in the Complaint, developed through

its discovery to date, supports the claims. Additionally, Lead Counsel has researched the

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applicable law with respect to the Class's claims and believes they could successfully refute any defenses to their claims raised by Defendants. Nonetheless Lead Plaintiff and its counsel recognize and acknowledge the expense and length of continued prosecution of the Action against Defendants through trial and any subsequent appeals. Lead Plaintiff and its counsel also have taken into account the uncertain outcome and risks of any litigation, especially in complex actions, as well as the difficulties and delays inherent in such litigation. Lead Plaintiff and its counsel are mindful of the inherent problems of proof of, and possible defenses to, the federal securities law violations asserted in the Action, including, but not limited to, proof of damages, proof of causation of damages, and proof of Defendants' requisite state of mind. Lead Plaintiff believes that it is desirable that the Released Plaintiffs' Claims be settled. Therefore, Lead

Plaintiff believes that the Settlement set forth in this Stipulation confers substantial benefits upon the Class. Based on their evaluation, Lead Plaintiff and its counsel have concluded that the terms and conditions of this Stipulation are fair, reasonable and adequate to the Class, and that it is in the best interests of the Class to settle the claims raised in the Action pursuant to the terms and provisions of this Stipulation.

C. Defendants' Denials of Wrongdoing and Liability

Defendants have denied and continue to deny, inter alia, that Lead Plaintiff and the Class have suffered all damages alleged in the Consolidated Amended Complaint; that the price of

Converse's securities was artificially inflated by reason of the alleged misrepresentations, omissions, or otherwise; and that the alleged harm suffered by Lead Plaintiff and the Class, if

any, were causally linked to the alleged misrepresentations or omissions in the Action. In

addition Defendants maintain that the Yhave meritorious defenses to all claims allegedg in the

Action.

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Nonetheless, taking into account the uncertainty and risks inherent in any litigation, especially in complex cases such as this one, Defendants have concluded that further litigation of the Action would be protracted, burdensome, and expensive, and that it is desirable and beneficial to them that they secure releases to the fullest extent permitted by law and that the

Action be fully and finally settled and terminated in the manner and upon the terms and conditions set forth in this Stipulation.

This Stipulation, and all related documents, shall not be construed as or deemed to be evidence of or an admission or concession on the part of any Defendant, or any of Defendants'

Released Parties (as defined in 11.38), with respect to any claim of any fault or liability or wrongdoing or damage whatsoever. The Parties, and each of them, shall not assert or pursue any action, claim or rights that any party hereto violated any provision of Rule 11 of the Federal

Rules of Civil Procedure. Further, the Parties, and each of them, will not deny in any statement made to any media representative that the Action is being settled voluntarily after consultation with competent counsel. The Parties, and each of them, and their respective counsel agree that the Action was resolved in good faith, following arm's length bargaining, confers substantial benefits upon the Class and, based upon their evaluation, is in the best interests of the Defendants

as well as Lead Plaintiff and the Class.

II. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

A. Introduction

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among

Lead Plaintiff, the Class and each of them and Defendants and each of them bY and throughg

their respective undersigned counsel or attorneys of record that, subject to approval of the Court

pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration of the benefits

flowing to the Parties from the Settlement set forth herein, the Litigation and the Released

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Plaintiffs' Claims shall be finally and fully compromised, settled and released, and the Action shall be dismissed with prejudice, as to all Parties, upon and subject to the terms and conditions of this Stipulation.

B. Definitions

As used in this Stipulation, the following terms have the meanings specified below:

1.1 "Authorized Claimant" means any member of the Class who is a Claimant (as defined in 1 1.6) and whose claim for recovery has been allowed pursuant to the terms of this

Stipulation.

1.2 "Additional Alexander Payment" means the payment to be made by Alexander to Comverse pursuant to 12.3(c).

1.3 "Alexander Insurance and Pension Proceeds" means (i) the cash surrender value of Alexander's split dollar life insurance policies; (ii) the amount of Alexander's Israeli education fund Account(s); and (iii) the total amount of Alexander's Israeli Manager's Insurance policies (both pension and severance components).

1.4 "Approval Triggering Events" refers to the failure of any of the events detailed in

9C 2.23 to occur.

1.5 "Business Day" means any day except a Saturday or Sunday or other day on which national banks are authorized by law or executive order to close in the State of New York.

1.6 "Claimant" means any Class Member (as defined in 11.9) who files a Proof of

Claim in such form and manner, and within such time, as the Court shall prescribe.

1.7 "Claims Administrator" means the firm of Berdon Claims Administration LLC, which shall administer the Settlement.

1.8 "Class" means all purchasers of the common stock of Comverse Technology, Inc.

during the period from April 30, 2001 through January 29, 2008, both dates inclusive. Excluded

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from the Class are Defendants, all current and former directors and officers of Comverse, and all

employees of Comverse and/or its Subsidiaries during the Class Period, and any family member,

trust, company, entity or affiliate controlled or owned by any of the excluded persons and entities r referenced above.

1.9 "Class Member" means a person or entity that falls within the definition of the

Class as set forth in 11.8.

1.10 "Class Notice and Administration Escrow Fund" means the funds deposited into

the Class Notice and Administration Fund Escrow Account and any interest or income earned

thereon.

1.11 "Class Notice and Administration Fund Escrow Account" means an interest

bearing escrow account established by the Claims Administrator to receive funds pursuant to q[

2.2(a).

1.12 "Class Period" means the period from April 30, 2001 through January 29, 2008,

both dates inclusive.

1.13 "Common Stock" means the shares of common stock, par value $0.10 per share,

of Comverse.

1.14 "Comprehensive Form 10-K" means an Annual Report on Form 10-K covering

Comverse's four fiscal years ended January 31, 2009 that Comverse intends to file with the SEC.

1.15 "Comverse Settlement Fund Escrow Account" means an interest bearin g escrow

account established bY the Escrow Agentg to receive the amounts of funds PYa able b Y9^9I 2.2()b-

(d) and 2.3(a)-(c).

1.16 "Court" means the United States District Court for the Eastern District of New

York.

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1.17 "Defendants" means Comverse, Alexander, Sorin, Kreinberg, Friedman, Oolie and Hiram.

1.18 "Defendants' Counsel" means the law firms: Weil, Gotshal & Manges LLP;

Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.; Dechert, LLP; Law Offices of

Solomon N. Klein; Kramer Levin Naftalis & Frankel LLP; and Baker Botts, LLP.

1.19 "Effective Date of Settlement" or "Effective Date" means the first date by which the following two events have occurred:

(i) Entry of the Judgment and Order of Dismissal with Prejudice has become

Final; and

(ii) The Court has issued an order finding that any issuances of Settlement

Shares pursuant to 12.7 are exempt from registration under the Securities Act pursuant to the exemption contained in Section 3(a)(10) thereof.

1.20 "Escrow Accounts" mean, collectively, the Class Notice and Administration Fund

Escrow Account and the Comverse Settlement Fund Escrow Account.

1.21 ' "Escrow Agent" means a federally chartered bank or banks designated by Lead

Counsel.

1.22 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

1.23 "Fair Market Value" means, with respect to the Settlement Shares on a per share basis, the average of the closing price per share of Common Stock for each of the ten (10)

consecutive trading days ending immediately prior to the time that Comverse serves notice on

Lead Plaintiff and Lead Counsel of its election to issue Common Stock pursuant to 12.8.

1.24 "Final" means that an order or judgment is no longer subject to further appeal or

review, whether by exhaustion of any possible appeal, lapse of time or otherwise;

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1.25 "Judgment and Order of Dismissal With Prejudice" means the proposed final order and judgment to be entered by the Court approving the Settlement, substantially in the form attached hereto as Exhibit B or in such other form as may be approved in writing by all of the Parties acting by and through their respective counsel of record in the Litigation.

1.26 "Lead Counsel" or "Plaintiffs' Counsel" means the Court-appointed Lead

Counsel: Pomerantz Haudek Grossman & Gross LLP.

1.27 "National Securities Exchange" means a securities exchange that has registered with the United States Securities and Exchange Commission under Section 6 of the Securities

Exchange Act of 1934.

1.28 "Non-UBS Auction Rate Securities" means the securities listed on an exhibit to the form of Security and Account Control Agreement referenced in 12.5.

1.29 "Notice" means the Notice of Pendency and Proposed Settlement of Class Action and Settlement Hearing Thereon, which is to be sent to members of the Class substantially in the form attached hereto as Exhibit 1 to Exhibit A.

1.30 "Order of Attachment" means the order dated June 3, 2008, attaching certain real properties owned by Alexander, in Comverse Technology, Inc. v. Jacob "Kobi" Alexander, No.

600142/08 (N.Y. Sup.).

1.31 "Order for Notice and Hearing" means the proposed order preliminarily

approving the Settlement and directing notice thereof to the Class substantially in the form

attached hereto as Exhibit A.

1.32 "Person" means an individual, corporation, partnership, limited partnership,

association, joint stock company, estate, legal representative, trust, unincorporated association,

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government or any political subdivision or agency thereof, and any business or legal entity and their spouses, heirs, predecessors, successors, representatives, or assigns.

1.33 "Plaintiffs" mean all Class Members.

1.34 "Plan of Allocation" means a plan or formula for allocating the Net Settlement

Fund to Authorized Claimants. Any Plan of Allocation is not part of this Stipulation and

Defendants shall have no responsibility or liability with respect thereto.

1.35 "Private Equity Securities" shall mean Alexander's investments in SSB Masters

Fund, L.P., Private Selection Fund I LLC, Private Selection Fund 2 L.P. and SSB Greenwich

Street II, LP, held in Morgan Stanley Smith Barney account number 600-00338 (one of the

Seized Alexander Accounts), and valued at $2,329,306 as of October 31, 2009.

1.36 "Proof of Claim" means the Proof of Claim and Release to be submitted by

Claimants, substantially in the form attached as Exhibit 2 to Exhibit A.

1.37 "Publication Notice" means the Summary Notice of Pendency and Proposed

Settlement of Action and Settlement Hearing Thereon to be published in The Wall Street Journal

(National Edition), Globes, and a national business internet newswire, substantially in the form

attached as Exhibit 3 to Exhibit A.

1.38 "Released Parties" means the Plaintiffs, Defendants, and each of Lead Plaintiff's

and Defendants' respective Released Parties. "Defendants' Released Parties" shall mean each

and every past and current Defendant and, whether or not identified in any complaint filed in the

Action, each Defendant's past or present directors, officers, employees, partners, member firms

or affiliates, principals, agents, predecessors, successors, parents, subsidiaries, divisions, joint

ventures, attorneys, accountants, insurers, reinsurers, assigns, spouses, heirs, associates, related

or affiliated entities, or any members of their immediate families, or any trusts for which any of

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them are trustees, settlers or beneficiaries. "Lead Plaintiff's Released Parties" shall mean any and all of Lead Plaintiff's respective present, past or future officers, directors, and employees, and/or their respective families, parent entities, associates, affiliates or subsidiaries, and each and all of their respective past, present or future officers, directors, stockholders, agents, representatives, employees, attorneys, accountants, insurers, co-insurers and reinsurers, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members, personal or legal representatives, estates, administrators, predecessors, successors and assigns or other individuals or entities in which Lead Plaintiff has a controlling interest or which is related to or affiliated with Plaintiffs and any other representatives of any of these Persons or entities whether or not any such Released Parties were named, served with process or appeared in the Action.

1.39 "Released Plaintiffs' Claims" means all claims (including "Unknown Claims" as defined in 11.52), rights, demands, suits, matters, issues, or causes of action under federal, state, local, foreign law, or any other law, rule, or regulation, whether known or unknown, that were, could have been, or could in the future be asserted against the Released Parties by Plaintiffs in any court of competent jurisdiction or any other adjudicatory tribunal, in connection with, arising out of, related to, based upon, in whole or in part, directly or indirectly, in any way, to the facts, transactions, events, occurrences, acts, disclosures, oral or written statements, representations, filings, publications, disseminations, press releases, presentations, accounting practices or procedures, compensation practices or procedures, omissions or failures to act which were or which could have been alleged or described in this Class Action by Plaintiffs. The "Released

Plaintiffs' Claims" include> but are not limited to an Yand all claims related to or arisingg out of

the matters reported in the Company's Current Reports on Form 8-K filed with the SEC on

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November 5, 2007, and January 29, 2008, the Report of the Special Committee of Comverse's

Board of Directors summarized in the Company's Current Report on Form 8-K filed with the

SEC on January 29, 2008, the Federal Bureau of Investigation affidavit in support of arrest

warrants issued against defendants Alexander, Kreinberg and Sorin, or the SEC's complaints

against defendants Alexander, Kreinberg and Sorin, compensation practices, options backdating,

the administration of a secret options reserve fund, the recycling of unexercised options from

departed employees to other employees, or any other options dating or grant practice, procedure

II' or policy, the issuance and administration of employee stock options of Comverse, earnings

manipulation, finances, accounting practices or procedures, public filings, press releases or other

public statements or disseminations, revenue recognition issues, audits or reviews of Comverse's

consolidated financial statements for the fiscal year ended January 31, 2005, the first three

quarters of the fiscal year ended January 31, 2006, or any prior period, and claims for breach of

fiduciary duty, insider trading, misappropriation of information, failure to disclose, omissions or

failures to act, abuse of control, breach of Comverse's policies or procedures, waste,

mismanagement, gross mismanagement, unjust enrichment, misrepresentation, fraud, breach of

contract, negligence, breach of duty of care or other duty, violations of law, money damages,

injunctive relief, corrective disclosure, damages penalties, disgorgement, restitution, interest,

attorneys' fees, expert or consulting fees, and any and all other costs, expenses or liability

whatsoever, whether based on federal, state, local, foreign, statutory, common law, or any other

law, rule, or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or un-

liquidated, at law or in equity, matured or un-matured, including both known claims and

Unknown Claims that were or that could have been alleged in the Consolidated Amended

Complaint in this Action. Notwithstanding any of the foregoing, neither this Stipulation nor the

12 i 9 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 13 of 56 i Judgment and Order of Dismissal with Prejudice to be entered in this Litigation operates as a

release of any claims by the plaintiffs in the derivative actions in In re Comverse Technology,

Inc. Derivative Litigation, No. 601272/06, pending in the Supreme Court for the State of New

York, County of New York, or In re Comverse Technology, Inc. Derivative Litigation, CV 06-

1849 (NGG)(RER), pending in the United States District Court, Eastern District of New York.

1.40 "Released Defendants' Claims" means all claims, demands, rights, liabilities or

causes of action, in law or in equity, accrued or unaccrued, fixed or contingent, direct, individual

or representative, of every nature and description whatsoever, whether known or unknown, or

based on federal, state, local, statutory or common law or any other law, rule or regulation,

including the law of any jurisdiction outside the United States, that could have been brought

heretofore or in the future against Plaintiffs, Lead Plaintiff, Lead Counsel and their Released

Parties, arising out of the instituting, prosecution, settlement or resolution of the Action,

provided however, that Defendants and Defendants' Released Parties shall retain the right to

enforce in the Court the terms of the Stipulation.

1.41 "Securities Act" means the Securities Act of 1933, as amended.

1.42 "SEC" means the Securities and Exchange Commission.

1.43 "Settlement Agreement Date" means December 16, 2009.

1.44 "Settled Claims" means all of the Released Plaintiffs' Claims, and/or Released

Defendants Claims. i 1.45 "Settlement" means the settlement contemplated by this Stipulation.

1.46 "Settlement Fund" means the monies deposited into the Comverse Settlement

Fund Escrow Account and any residual monies held in the ClassC ss Notice and Administration Fund

Escrow Account, and any interest or income earned thereon.

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1.47 "Settlement Shares" means shares of Common Stock issued by Comverse pursuant to 12.7 in lieu of paying in cash a portion of the amounts otherwise required to be paid in cash to the Settlement Fund Escrow Account pursuant to 12.2(c) or 2.2(d).

1.48 "Seized Alexander Accounts" means the assets (including cash and securities in

Ulticom, Inc. ("Ulticom") and Verint Systems, Inc. ("Verint"), and the Private Equity Securities) in Wells Fargo Advisors, LLC account number 2837-2882, Wells Fargo Advisors, LLC account number 3852-3499, Morgan Stanley Smith Barney LLC account number 600-00338, and

Morgan Stanley Smith Barney LLC account number 600-27694, held in the name of Jacob

"Kobi" Alexander, which were seized by the United States Marshalls Service pursuant to Court order dated July 31, 2006 in United States of America v. All Funds on Deposit at Citigroup Smith

Barney Account No. 600-00338, et. al., Civil Action No. CV 06-03730 (NGG) (RER), pending in the United States District Court for the Eastern District of New York, as set forth in the account statement annexed hereto as Exhibit C.

1.49 "Subsidiary" means, with respect to Comverse, Ulticom, Verint, and any. corporation, partnership, limited liability company, joint stock company, business trust or an unincorporated organization controlled by Comverse directly or indirectly through one or more

intermediaries.

1.50 "Transfer Agent" means American Stock Transfer and Trust Company, LLC or

anY successor stock transfer or registrarg that Comverse mayY appoint pp in respectp to its Common

Stock.

1.51 "UBS Auction Rate Securities" means auction rate securities owned by Comverse

with a face value of $51,550,000 (Fifty-One Million Five Hundred and Fifty Thousand Dollars)

14 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 15 of 56 i i i that Comverse, at its election, has the right to require UBS to purchase from Comverse at such

face value at any time between June 30, 2010 and July 2, 2012.

1.52 "Unknown Claims" shall collectively mean all claims, demands, rights, liabilities,

and causes of action of every nature and description which Lead Plaintiff or any Class Member

does not know or suspect to exist in his, her or its favor at the time of the release of the Released

Parties which, if known by him, her or it, might have affected his, her or its settlement with and

release of the Released Parties, or might have affected his, her or its decision not to object to this

Settlement. With respect to any and all Released Plaintiffs' Claims, the Parties stipulate and

agree that, upon the Effective Date, Lead Plaintiff shall expressly waive, and each of the Class

Members shall be deemed to have waived, and by operation of the Judgment and Order of

Dismissal With Prejudice shall have waived, the provisions, rights and benefits of California

Civil Code §1542, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Lead Plaintiff shall expressly and each of the Class Members shall be deemed to have, and by

operation of the Judgment and Order of Dismissal With Prejudice shall have, expressly waived

any and all provisions, rights and benefits conferred by any law of any state or territory of the

United States, or principle of common law, which is similar, comparable or equivalent to

California Civil Code § 1542. Lead Plaintiff and Class members may hereafter discover facts in

addition to or different from those which he, she or it now knows or believes to be true with

respect to the subject matter of the Released Plaintiffs' Claims, but Lead Plaintiff shall expressly,

fully, finally and forever settle and release, and each Class member, upon the Effective Date,

shall be deemed to have, and by operation of the Judgment and Order of Dismissal With

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Prejudice shall have, fully, finally, and forever settled and released, any and all Released

Plaintiffs' Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Lead Plaintiff acknowledges, and the Class Members shall be deemed by operation of the Judgment and Order of Dismissal with Prejudice to have acknowledged, that the foregoingg g waiver was separatelyP Y bargained g for and a keyY element of the Settlement of which thiss release is a part.

1.53 "Unpaid Comverse Amount" means, the aggregate amount that, as of any date, has not been paid under 12.2(c) and 12.2(d).

C. The Settlement

The Settlement Consideration

2.1 In consideration of the full and final settlement of all claims asserted or which

could have been asserted in the Action, Comverse and Alexander shall pay, or cause to be paid,

the respective amounts indicated in 9112.2 and 2.3, which payment obligations of Comverse and

Alexander shall be several and not joint.

Cash Payments To Be Wired To The Escrow Accounts by Comverse

2.2 Subject to 112.5 through 2. 11, the following amounts, in cash, shall be wired and

deposited as follows:

(a) On the Settlement Agreement Date, Comverse shall wire $1,000,000 (One

Million Dollars) to the Class Notice and Administrative Fund Escrow Account for costs

associated with the notice of pendency of the Settlement to the Class;

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(b) No later than August 15, 2010, Comverse shall wire the sum of

$51,500,000 to the Comverse Settlement Fund Escrow Account. Notwithstanding the above,

Comverse shall exercise its right to require UBS to purchase the UBS Auction Rate Securities on

June 30, 2010, and shall wire the proceeds received therefrom to the Comverse Settlement Fund

Escrow Account within forty eight (48) hours of receipt (which payment would reduce the amount payable on August 15, 2010);

$30,000,000 (Thirty Million Dollars) to the Comverse Settlement Fund Escrow Account; and

(d) On or before the August 15, 2011, Comverse shall wire the sum of

$82,500,000 (Eighty-Two Million Five Hundred Thousand Dollars) to the Comverse Settlement

Fund Escrow Account.

Contribution by Alexander

2.3 Alexander shall cause to be paid $60,000,000 to the Class as follows:

(a) Upon the entry of the Judgment and Order of Dismissal With Prejudice,

Alexander and his wife, Hana Alexander (collectively the "Alexanders"), will use best efforts to

comply with all reasonable requests by the Office of the United States Attorney for the Eastern

District of New York (the "USAO") to facilitate the forfeiture of the assets in the accounts seized by the U.S. Marshalls in United States of America v. All Funds on Deposit at Citigroup Smith

Barney Account No. 600-00338, et. al., Civil Action No. CV 06-03730 (NGG) (RER). The

Alexanders will also cooperate with all reasonable requests by the USAO and Comverse

regarding the transfer of the assets in the Seized Alexander Accounts to Comverse. The

Alexanders will execute such documents as are necessaryY o withdraw and relinquishq their claims

to the cash and securities in the Seized Alexander Accounts, and will deliver said documents to

the USAO, subject to its agreement to hold these documents in escrow until the later of the date

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on which appeals from a final order and judgment approving the Federal and State Derivative

Action settlements and this Settlement has expired, or appeals therefrom have been exhausted, at which time the parties anticipate the USAO will file the documents as necessary to effectuate the forfeiture of the assets in the Seized Alexander Accounts and will transfer those assets in the

accounts to Comverse pursuant to the order of restitution previously entered in United States v.

William F. Sorin, CR 06-0723(NGG)(RER). Within forty-eight (48) hours after the receipt of the assets in the Seized Alexander Accounts, Comverse shall wire or cause to be wired the cash portion of such assets and transmit or cause to be transmitted the securities portion thereof to the

Comverse Settlement Fund Escrow Account.

(b) Comverse shall wire or cause to be wired any monies received from the

Alexander Insurance and Pension Proceeds to the Comverse Settlement Fund Escrow Account

within forty-eight (48) hours after receipt. Alternatively, if any of the assets referred to in the

definition of Alexander Insurance and Pension Proceeds are transferred to Alexander in

exchange for a cash payment to Comverse equal to the value thereof, Comverse shall wire or

cause to be wired the payment received to the Comverse Settlement Fund Escrow Account

within forty-eight (48) hours after receipt.

by which $60 million exceeds the sum of (i) the Alexander Insurance and Pension Proceeds (or

any cash received from Alexander in exchange for the transfer of any assets referred to in the

definition of the Alexander Insurance and Pension Proceeds) transferred by Comverse to the

Comverse Settlement Fund Escrow Account pursuant to 12.3(b); and (ii) the value of the Seized

Alexander Accounts as of December 31, 2009, as set forth in the account statements provided by

Wells Fargo Advisors, LLC and Morgan Stanley Smith Barney ("Additional Alexander

18 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 19 of 56

Payment"). Within forty eight (48) hours after receipt of the Additional Alexander Payment,

Comverse shall wire or cause to be wired such funds to the Comverse Settlement Fund Escrow

Account.

(d) Within forty-eight (48) hours of the receipt by the Comverse Settlement

Fund Escrow Account of payment by Alexander (or his designee) of an amount equal to the value of the Private Equity Securities as set out in the brokerage account statements as of

December 31, 2009, less any cash that has been generated by the Private Equity Securities between December 31, 2009 and the date on which the Private Equity Securities are transferred to Alexander (or his designee) (the "Private Equity Purchase Price"), the Comverse Settlement

Fund Escrow Account shall transfer the Private Equity Securities (including any securities distributed from the Private Equity Securities in kind) to Alexander's designee, or, if the USAO does not object, to Alexander.

(e) In the event that cash proceeds realized through the liquidation of the

Verint Systems, Inc. ("Verint") and Ulticom, Inc. ("Ulticom") stock portion in the Seized

Alexander Accounts exceed the value of the Verint and Ulticom stock as set forth in the account

statements on December 31, 2009, Lead Plaintiff shall cause an amount in cash equal to twenty

five percent (25%) of such excess value to be wired from the Settlement Fund to Comverse

within forty-eight (48) hours after receipt of such cash proceeds.

(f) Comverse shall have no obligations or liabilities with respect to the

payments to be made by Alexander except for the transfer thereof following receipt as provided

for in this paragraph 2.3 to the Comverse Settlement Fund Escrow Account. By causing the

funds to be paid to Comverse, Alexander will have satisfied his obligations under 12.3.

19 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 20 of 56 i (g) Comverse shall use its reasonable best efforts to issue or cause to be

issued such legal opinions as shall be necessary to cause any legends on the certificates

representing the shares of common stock of Ulticom and Verint held in the Seized Alexander

Accounts that restrict transferability under the federal securities laws to be removed as soon as

practicable after the Settlement Agreement Date.

(h) Comverse and Alexander agree that they shall not seek dismissal of

Comverse Technology, Inc. v. Jacob "Kobi" Alexander, No. 600142/08 (N.Y. Sup.) (hereinafter

"Comverse v. Alexander") or seek to vacate the Order of Attachment until such time as the

payment obligations referenced in this 12.3 have been satisfied. Nothing in this section shall

limit the ability of Comverse to release properties subject to the Order of Attachment, to the

extent necessary, (i) to allow him to mortgage and/or sell suchroP p ert Y to generateg proceedsP net

of mortgages, taxes, and brokerage fees and other closing costs ("Net Proceeds") sufficient to

fund the amounts due under this 12.3 and any penalty to be paid in settlement of Securities and

Exchange Commission v. Alexander et al., 06 Civ. 3844 (NGG) (RER) (E.D.N.Y.); and (ii) to

allow him to sell such property, provided that the Net Proceeds from such sales (the "Additional

Apartment Proceeds) are deposited into an escrow account pursuant to an escrow agreement

between Alexander and Comverse, and subject to the Order of Attachment previously entered in

Comverse v. Alexander. The Additional Apartment Proceeds may be used to satisfy any of the

obligations of Alexander or his designee under this 12.3. Comverse and Alexander shall give

Lead Plaintiff ten (10) days notice of actions to lift or modify the Order of Attachment and shall

serve upon Lead Plaintiff any papers in furtherance of such proceeding. This 12.3(h) shall cease

to be effective upon Alexander satisfying his payment obligations referenced in y[ 2.3.

20 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 21 of 56

2.4 Within (48) hours of receipt of any of the assets or cash of the Seized Alexander

Accounts pursuant to 112.3(a)-(e), or otherwise, Comverse shall wire or cause to be wired the

cash portion of such assets and transmit or cause to be transmitted the securities portion thereof

to the Comverse Settlement Fund Escrow Account.

Payments to Settlement Fund of Proceeds from Sale of Non-UBS Auction Rate Securities

2.5 Comverse represents and warrants that, as of the Settlement Agreement Date,

Comverse or a Subsidiary of Comverse is the owner of the Non-UBS Auction Rate Securities

free and clear of all liens or encumbrances. On or prior to the entry of the Judgment and Order

of Dismissal with Prejudice, Lead Plaintiff, on behalf of the Class, Comverse and the applicable

broker or bank at which an account containing Non-UBS Auction Rate Securities is held shall

execute and deliver to each other Security and Account Control Agreements substantially in the

form of Exhibit D hereto with respect to such account, pursuant to which, among other things,

the Class will be granted a security interest in the Non-UBS Auction Rate Securities and any

proceeds from the sale or other disposition thereof, and Lead Plaintiff will receive copies of

monthly statements with respect to the accounts in which such securities are held and

confirmation statements of each transaction effected in the Non-UBS Auction Rate Securities.

(a) In the event that Comverse or any of its Subsidiaries shall receive net cash

proceeds (after broker-dealer fees or commissions) from the sale or other disposition of Non-

UBS Auction Rate Securities in an aggregate amount in excess of $50,000,000 (Fifty Million

Dollars), Comverse shall, within ninety (90) days after receipt of such net proceeds, pay into the

Settlement Fund Escrow Account:

(i) $50,000,000 (Fifty Million Dollars) in satisfaction or partial

satisfaction of the Unpaid Comverse Amount, or

1 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 22 of 56 i

(ii) If the remaining Unpaid Comverse Amount is less than

$50,000,000 (Fifty Million Dollars), the remaining Unpaid Comverse Amount in satisfaction

thereof.

(b) In the event that Comverse or any of its Subsidiaries shall receive net cash

proceeds (after broker-dealer fees or commissions) from the sale or other disposition of Non-

UBS Auction Rate Securities in an aggregate amount in excess of $100,000,000 (One Hundred

Million Dollars), Comverse shall, within ninety (90) days after receipt of such net proceeds, pay

into the Settlement Fund Escrow Account:

(i) an additional $50,000,000 (Fifty Million Dollars) in satisfaction or

partial satisfaction of any remaining Unpaid Comverse Amount, or

(ii) If the remaining Unpaid Comverse Amount is less than

$50,000,000 (Fifty Million Dollars), the remaining Unpaid Comverse Amount in satisfaction

thereof.

2.6 Notwithstanding the number of days referenced for payment in 12.5, above, in no

event shall any payment for any Unpaid Comverse Amount specified in 12.2(c) be paid later

than February 15, 2011, and in no event shall any payment for any Unpaid Comverse Amount

specified in 12.2(d) be paid later than August 15, 2011.

Use of Settlement Shares as Payment Consideration

2.7 Subject to 112.8 and 2.9 (infra), in lieu of paying in cash for any or all of the

amounts specified in 12.2(c) or 12.2(d), Comverse may elect to satisfy its payment obligations

in respect of all or any portion of the amounts in 12.2(c) and 12.2 (d) by: (i) issuing Common

Stock having an aggregate Fair Market Value equal to all or any Unpaid Comverse Amount

specified in 12.2(c) on or before February 15, 2011; and/or (ii) issuing Common Stock having

an aggregate Fair Market Value equal to all or any Unpaid Comverse Amount specified in 9[

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 23 of 56

2.2(d) on or before August 15, 2011; provided, however, that Comverse may not issue shares of

Common Stock in lieu of any such cash payment unless the aggregate Fair Market Value of

Shares of Common Stock to be issued in lieu thereof on any one date shall be equal to or greater

than $27,500,000 (Twenty-Seven Million Five Hundred Thousand Dollars).

2.8 If Comverse elects to issue Common Stock in lieu of cash pursuant to 12.7, it

shall serve written notice on Lead Plaintiff and Lead Counsel, provided that such notice shall not

be served (a) during customary trading hours on the principal national securities exchange on

which the Common Stock is listed, or (b) no later than (i) fifteen (15) trading days prior to

February 15, 2011 for any Unpaid Comverse Amount specified in 12.2(c); and/or (ii) fifteen

(15) trading days prior to August 15, 2011 for any Unpaid Comverse Amount specified in y[

2.2(d).

2.9 As soon as practicable after Comverse serves notice on Lead Plaintiff and Lead

Counsel of its election to issue Settlement Share pursuant to 12.8, (a) the portion of the

Settlement Shares allocable to Lead Counsel under any award of fees by the Court shall be

issued directly to Lead Counsel; and (b) the balance of such Settlement Shares to which

Authorized Claimants shall be entitled shall be issued directly to:

(i) each Authorized Claimant, provided that, prior to such issuance,

the Claims Administrator has provided to the Company's Transfer Agent all information with

respect to such Authorized Claimant requested by the Company's Transfer Agent in accordance

with its customary procedures and instructions with respect to the issuance of securities, and

(ii) the Comverse Technology Securities Litigation Settlement Fund in

respect of all Authorized Claimants for which the information referred to in clause (i) above has

not been provided by the Claims Administrator to the Transfer Agent, provided that Settlement

23 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 24 of 56

Shares issued to the Comverse Technology Securities Litigation Settlement Fund pursuant to this

clause (ii) in respect of an Authorized Claimant shall be reissued directly to such Authorized

Claimant upon the Transfer Agent's receipt of all requested information with respect to such

Authorized Claimant as contemplated by clause (i) above.

2.10 The Transfer Agent shall issue certificates evidencing Settlement Shares

registered in the respective names of the Authorized Claimants or, if acceptable to Comverse and

Lead Counsel (with such acceptance not to be unreasonably withheld), through "book-entry"

registration, provided that all Settlement Shares issued directly to the Comverse Technology

Securities Litigation Settlement Fund shall be registered only in "book-entry" form. The Claims

Administrator shall use such format as the Transfer Agent may reasonably prescribes to delivery

to the Transfer Agent the information contemplated by clause 12.9 (i), above. The Transfer i Agent, at its sole discretion, may request additional information from the Claims Administrator

or any Authorized Claimant to effectuate the issuance of, and as a condition to issuing,

Settlement Shares. Each of Comverse and the Transfer Agent has the right to rely on the

accuracy and completeness of the information provided by the Claims Administrator or

Authorized Claimants with respect to the issuance of Settlement Shares. Neither Comverse nor

the Transfer Agent shall have any responsibility for, interest in, or liability whatsoever with

respect to the accuracy or completeness of the information provided by the Claims Administrator

or any Authorized Claimant in respect of the issuance of Settlement Shares pursuant to 9C 2.9 and

this 12.10, or any losses incurred in connection therewith. All Settlement Shares issued

pursuant to 12.9 and this 12.10 shall be rounded to the nearest whole number of shares of

Common Stock and no fractional shares shall be issued. Any Settlement Shares issued pursuant

to 12.9 and 12.10 shall be listed on a national securities exchange and shall not bear any legend

24 !a Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 25 of 56 j i restricting the transferability thereof. The reasonable costs and expenses of the Transfer Agent

with respect to the issuance and delivery of Settlement Shares as contemplated by 12.9 and this

9[ 2.10 shall be paid by Comverse.

2.11 In the event that sufficient net proceeds from the sale of Non-UBS Auction Rate

Securities are received by Comverse or any of its Subsidiaries so as to require a $50,000,000

(Fifty Million Dollars) cash payment in respect any Unpaid Comverse Amount as provided in 9C

2.5, Comverse may not elect to issue and deliver Settlement Shares in lieu of such cash payment.

Preservation of Consideration

2.12 The terms of this Settlement are binding upon Comverse and any successor to

Comverse.

Return of Funds in Certain Circumstances

2.13 Lead Plaintiff agrees that, prior to the Effective Date, the sum deposited into the

Class Notice and Administration Fund Escrow Account shall be used solely to fund reasonable

out-of-pocket costs and expenses relating to the printing, mailing and publication of notices to

Class Members as described in 1 2.19, below. In the event that this Settlement Agreement is

terminated prior to the occurrence of the Effective Date, the Escrow Agent shall refund to

Comverse the balance remaining in the Class Notice and Administration Fund Escrow Account.

In no event shall the Lead Plaintiff, Lead Counsel, or the Class be liable to Comverse for any

sums used to fund such properly incurred out-of-pocket costs and expenses.

Handling and Disbursement of Funds by the Escrow Agent

2.14 No monies will be disbursed from the Settlement Fund until after the Effective

Date except:

(a) As provided in 11 2.13, 2.17, and 7.2; and

25 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 26 of 56

(b) To pay Taxes and Tax Expenses (as defined in 12.20) on the income

earned by the Settlement Fund. Taxes and Tax Expenses shall be paid out of the Settlement

Fund, shall be considered to be a cost of administration of the Settlement, and shall be timely

paid by the Escrow Agent without prior Order of Court.

2.15 The Escrow Agent shall invest any funds deposited in any Escrow Account in

excess of $1,000,000 (One Million Dollars) in short term United States Treasury Securities

backed by the full faith and credit of the United States Government or fully insured by the

United States Government, FDIC insured Certificate of Deposit Account Registry Service

("CDARS"), or accounts that invest solely in short term United States Treasury Securities, and

shall reinvest the proceeds of these instruments as they mature in similar instruments at their

then-current market rates. Any funds held in an Escrow Account in an amount of $1,000,000

(One Million Dollars) or less may be held in a interest-bearing accounts insured by the FDIC.

2.16 The Escrow Agent shall not disburse the Settlement Fund except as provided in

this Stipulation, by an order of the Court, or with the written agreement of Defendants' Counsel

and Lead Counsel.

2.17 Subject to further order and/or direction as may be made by the Court, the Escrow i Agents are authorized to execute such transactions on behalf of the Class as are consistent with

the terms of this Stipulation.

2.18 All funds held by the Escrow Agents shall be deemed and considered to be in

custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such

time as such funds shall be distributed or returned to the parties who deposited such funds

pursuant to this Stipulation and/or further order(s) of the Court.

26 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 27 of 56

2.19 From and after the date the Court enters its order preliminarily approving the

Settlement, funds held in the Class Notice and Administration Fund Escrow Account may be used to pay the reasonable fees and expenses incurred by, and the reasonable fees charged by, the

Claims Administrator in connection with the administration and notice of the settlement upon presentation of customary invoices therefor, which invoices have been approved by Lead

Counsel, including, without limitation: the cost of identifying and locating members of the

Class; mailing Notice and Proof of Claim and publishing the Publication Notice (such amounts shall include, without limitation, the actual costs of publication in American and Israeli national business publications and newswires, printing and mailing the Notice in both English and

Hebrew, and reimbursement to nominee owners for forwarding notice to their beneficial owners); soliciting Class claims; assisting with the filing of claims, administering and distributing the Net Settlement Fund (as defined below) to Authorized Claimants, processing

Proof of Claim and Release forms, and paying escrow fees and costs, if any; and the administrative expenses incurred and fees charged by the Claims Administrator in connection with providing notice and processing the submitted claims. Defendants shall have no responsibility or liability for the allocation of the Settlement Fund among the Class Members or the allocation of any awards of Plaintiffs' attorneys' fees, costs and expenses. Any such awards

shall be paid solely by the Settlement Fund. Any residual monies held in the Class Notice and

Administration Fund Escrow Account upon the completion of notice and claims administration

for the Settlement shall be included in the Settlement Fund.

Taxes

2.20 (a) The Parties and the Escrow Agents agree to treat the Settlement Fund as

being at all times a "qualified settlement fund" within the meaning of Treasury Regulation

27 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 28 of 56 i

§1.468B-1. In addition, the Escrow Agents shall timely make such elections as necessary or

advisable to carry out the provisions of this 12.20, including the "relation-back election" (as

defined in Treasury Regulation § 1.468B-1) back to the earliest permitted date. Such elections

shall be made in compliance with the procedures and requirements contained in such regulations.

It shall be the responsibility of the Escrow Agents to timely and properly prepare and deliver the

necessary documentation for signature by all necessary parties, and thereafter to cause the

appropriate filing to occur.

(b) For purposes of §468B of the Internal Revenue Code of 1986, as amended,

and Treasury Regulation §1.468B-2(k)(3) promulgated thereunder, the "administrator" shall be

the Escrow Agents. The Escrow Agents shall timely and properly file all informational and other

tax returns necessary or advisable with respect to the Settlement Fund (including without

limitation the returns described in Treasury Regulation §1.468B-2(k)). Such returns (as well as

the election described in 12.20(a)) shall be consistent with this 12.20 and in all events shall

reflect that all Taxes (including any estimated Taxes, interest or penalties) on the income earned

by the Settlement Fund shall be paid out of the Settlement Fund as provided in 12.20(c) hereof.

with respect to the income earned by the Settlement Fund, and expenses and costs incurred in

connection with the operation and implementation of this 12.20 (including, without limitation,

expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses or

penalties relating to filing (or failing to file) the returns described in this 12.20) ("Tax

Expenses"), shall be paid out of the Settlement Fund. Defendants, Defendants' Counsel, Lead

Plaintiff, and Lead Counsel shall have no liability or responsibility for the Taxes or the Tax

Expenses. Taxes and Tax Expenses shall be treated as, and considered to be a cost of

28 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 29 of 56

administration of the Settlement and shall be timely paid by the Escrow Agents out of the

Settlement Fund without prior order from the Court. The Escrow Agents shall indemnify and i hold each of the Defendants and Defendants' Counsel harmless for Taxes and Tax Expenses

(including, without limitation, Taxes payable by reason of any such indemnification). The

Escrow Agents shall be obligated (notwithstanding anything herein to the contrary) to withhold

from distribution to Authorized Claimants any funds necessary to pay such amounts, including

the establishment of adequate reserves for any Taxes and Tax Expenses (as well as any amounts

that may be required to be withheld under Treasury Regulation §1.468B-2(1)(2)). Neither

Defendants, Defendants' Counsel, Lead Plaintiff, nor Lead Counsel are responsible therefor, nor

shall they have any liability with respect thereto. The parties hereto agree to cooperate with the

Escrow Agents, each other, and their tax attorneys and accountants to the extent reasonably

necessary to carry out the provisions of this 12.20. Defendants' Counsel agree to promptly

provide the Escrow Agents with the statement described in Treasury Regulation §1.468B-3(e).

(d) For the purpose of this 12.20, references to the Settlement Fund shall

include both the Settlement Fund and Class Notice and Administration Fund, and shall also

include any earnings thereon.

Termination of Settlement

2.21 Lead Plaintiff, on behalf of the Class, or Defendants, and any of them, shall have

the right to terminate the Settlement and this Stipulation as to themselves by providing written

notice of their election to do so ("Termination Notice") to all other Parties hereto within five (5)

business days of: (i) the Court's declining to enter the Order for Notice and Hearing

substantially in the form attached as Exhibit A, hereto; (ii) the Court's refusal to approve this

Stipulation or any material part of it; (iii) the Court's declining to enter the Judgment and Order

29 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 30 of 56

of Dismissal with Prejudice in any material respect; or (iv) the date upon which the Judgment and Order of Dismissal with Prejudice is modified or reversed in any material respect by the

Court of Appeals or the Supreme Court.

2.22 If prior to the Settlement Hearing any persons who otherwise would be members of the Class have timely filed exclusion from the Class in accordance with the provisions of the

Order for Notice and Hearing and the notice given pursuant thereto, and such persons in the aggregate purchased a number of shares of Common Stock during the Class Period in an amount greater than the sum specified in a separate "Supplemental Agreement" between the Parties, or

should certain other events occur, Comverse and Alexander shall have, in their sole discretion, the option to terminate this Stipulation in accordance with the procedures set forth in the

Supplemental Agreement. The Supplemental Agreement will not be filed with the Court unless

and until a dispute among the Parties concerning its interpretation or application arises.

2.23 Alexander shall have the right to terminate the Settlement and this Stipulation if

any of the following conditions fail to occur either before or after final approval (collectively referred to as the "Approval Triggering Events"):

(a) The United States District Court for the Eastern District of New York and

the Supreme Court of the State of New York, New York County, each enter an Order and Final

Judgment approving in all material respects the Stipulation of Compromise and Settlement in In

re Comverse Technology, Inc. Derivative Litigation, No. 601272/06, pending in the Supreme

Court of the State of New York, New York County, and In re Comverse Technology, Inc.

Derivative Litigation, 06 Civ. 1849 (NGG) (RER), pending in the United States District Court

for the Eastern District of New York (collectively, the "Derivative Actions"); and the orders

dismissing and discontinuing with prejudice the claims against Alexander in the Derivative

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 31 of 56

Actions become Final;

(b) In the action titled Securities and Exchange Commission v. Alexander et

al., 06 Civ. 3844 (NGG) (RER) (E.D.N.Y.), (a) the SEC will grant approval of a settlement on

terms agreed^' to b Y Mr. Alexander and the SEC staff, and ()b a consent Jjudgment g entered bY the

United States District Court for the Eastern District of New York will become Final;

at Citigroup Smith Barney Account No. 600-00338, Held in the Name of Kobi Alexander and

Citigroup Smith Barney Account No. 600-27694 Held in the Name of Kobi J. Alexander, 06 Civ.

3730 (NGG) (RER), (a) the United States District Court for the Eastern District of New .York (i)

grants final approval of a settlement on terms agreed to by Mr. Alexander, and (ii) issues an

order dismissing the action with prejudice, which becomes Final; and (b) the government

promptly disburses to Comverse the Seized Alexander Accounts; and

(d) An order of the Supreme Court of the State of New York, New York

County discontinuing with prejudice the action titled Comverse Technology, Inc. v. Alexander,

No. 08/600142, becomes Final.

2.24 Notice of the right to terminate and withdraw from the Stipulation must be sent by

email and overnight delivery to Class Counsel Patrick V. Dahlstrom of the law firm Pomerantz

Haudek Grossman & Gross LLP, Ten South La Salle Street, Suite 3505, Chicago, Illinois 60603,

[email protected] , no later than ten (10) business days after counsel for Mr. Alexander

receives notice or believes that an Approval Triggering Event has failed to occur. If not served

within that period, the option to terminate and withdraw as to that Approval Triggering Event

shall lapse and be of no further force and effect.

2.25 Notwithstanding Alexander's timely notice of withdrawal and termination from

1 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 32 of 56

the Stipulation, (a) the Settlement and Stipulation between the Class and all Defendants other than Alexander shall continue in full force and effect on the terms described herein; (b)

Comverse shall only owe to the Class the total consideration of $165 million as set forth above; and (c) Comverse shall not take any steps to withdraw, dismiss or discontinue its action titled

Comverse Technology, Inc. v. Alexander, No. 08/600142, or the Order of Attachment, except as necessary to permit the Class to execute any judgment against, or settlement with, Alexander up to the amount of $60 million. Further, the net proceeds (after out of pocket expenses) recovered by either Comverse or the Class from Mr. Alexander shall be shared as follows (irrespective of whether Comverse or the Class obtains the recovery): the first $60 million of recovery will be for the benefit of the Class and any recovery in excess of $60 million will be shared equally by the

Class and Comverse. Within ten (10) business days of receiving notice that Alexander has exercised his right to terminate the Settlement under 12.23, the Escrow Agent shall return the payments set forth in 112.3(b), (c) and (d) to an escrow account jointly established by counsel for Comverse and counsel for Alexander at a mutually agreeable federally chartered bank.

2.26 The Final Hearing shall be scheduled no earlier than February 22, 2010, and may be postponed without further notice to the Class in the event that Comverse postpones the filing of the Comprehensive Form 10-K (unless Comverse and Alexander otherwise waive their rights to terminate the Settlement and this Stipulation under 12.23).

D. Class Certification

3.1 The Parties hereby stipulate to certification of the Class, pursuant to Rule 23(b)(3)

of the Federal Rules of Civil Procedure, solely for purposes of this Settlement. The certification

of the Class shall be binding only with respect to the Settlement and only if the Judgment becomes Final.

32 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 33 of 56 aI E. Order for Notice of Settlement Hearing,

4.1 Promptly after execution of this Stipulation, Lead Counsel and Defendants'

Counsel shall jointly submit this Stipulation together with its Exhibits to the Court and shall

apply for preliminary approval of the Settlement set forth in this Stipulation, entry of an Order

for Notice and Hearing, approval for the mailing and publication of the Notice and Publication

Notice, substantially in the form of Exhibits A-1 and A-3 hereto, which shall include the general

terms of the Settlement set forth in this Stipulation, the proposed Plan of Allocation, the general

terms of the "Fee and Expense Application" (as defined in 17.1) and the date of the Settlement

Hearing as defined below.

4.2 At the time of the joint submission described in 14. 1, Lead Counsel and

Defendants' Counsel shall also jointly request that, after Notice is given, the Court hold a

hearing (the "Settlement Hearing"), certify the Class, and approve the Settlement of the Action

as set forth herein. At or after the Settlement Hearing, Lead Counsel also will request that the

Court approve the proposed Plan of Allocation, the Fee and Expense Application, and the

Compensatory Award.

4.3 Any Class Member who wishes to object to the fairness, reasonableness or

adequacy of this Stipulation, to the Plan of Allocation, to any term(s) of this Stipulation, to the

Fee and Expense Application, or to the Compensatory Award must both effect service on Lead

Counsel and Defendants' Counsel and file with the Court by no later than twenty-one (21) days

before the Settlement Hearing, or as the Court may otherwise direct, a statement of his, her or its

objection(s); provided however, that a potential Class Member who submits a Request for

Exclusion, as defined below, from the Class shall not be able to submit an objection. If a Class

Member timely and properly serves and files written objections, as set forth in this paragraph,

33 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 34 of 56

Lead Counsel and Defendants' Counsel may, as they deem appropriate, submit papers in support

of the Stipulation, the Plan of Allocation, any term(s) of this Stipulation, to the Fee and Expense

Application, or to the Compensatory Award no later than ten (10) days before the Settlement

Hearing.

4.4 The statement of objection of the Class Member shall state (i) whether the Class

Member is a Class Member, (ii) which part of this Stipulation the Class Member objects to and

(iii) the specific reason(s), if any, for each such objection made by the Class Member, including

any legal support the Class Member wishes to bring to the Court's attention and any evidence the

Class Member wishes to introduce in support of such objection. Such Class Member shall also

provide documentation sufficient to establish the amount of publicly traded Comverse securities

purchased and sold, and the prices and dates of each transaction. Failure to provide such I information and documentation shall be grounds to void the objection.

4.5 Any Class Member who fails to comply with any of the provisions of Section E

shall waive and forfeit any and all rights he, she or it may otherwise have to appear separately at

the Settlement Hearing and/or to object to this Stipulation, and shall be bound by all the terms of

this Stipulation, and by all proceedings, orders and judgments in the Action.

F. Releases

5.1 The obligations incurred pursuant to this Stipulation shall be a full and final

disposition of the Action, any and all Released Plaintiffs' Claims, and any and all Released

Defendants' Claims, as against all Released Parties.

5.2 Upon the Effective Date, Lead Plaintiff, on behalf of itself, its Released Parties

and the Class, shall be deemed to have, and by operation of the Judgment and Order of Dismissal

with Prejudice shall have, fully, finally, and forever released, relinquished and discharged all

34 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 35 of 56

Released Plaintiffs' Claims against Defendants, and each of them, and any and all of their

Released Parties, whether or not any individual Class Member executes and delivers the Proof of

Claim. Delivery of a Proof of Claim executed by a Class Member shall release all Released

Plaintiffs' Claims against the Defendants and their Released Parties.

5.3 Upon the Effective Date, Defendants, and each of them, on behalf of themselves

and their Released Parties shall be deemed to have, and by operation of the Judgment and Order

of Dismissal with Prejudice shall have, fully, finally, and forever released, relinquished and

discharged all Released Defendants' Claims against Lead Plaintiff and any and all of its Released

Parties including, but not limited to, Plaintiffs' Counsel.

5.4 Only those Class Members filing valid and timely Proof of Claim and Release

forms shall be entitled to participate in the Settlement and receive a distribution from the

Settlement Fund. The Proof of Claim and Release to be executed by Class Members shall

release all Released Plaintiffs' Claims against the Released Persons, and shall be substantially in

the form contained in Exhibit A-2 attached hereto. All Class Members not submitting valid and

timely requests for exclusion shall be bound by the releases set forth in this Section F, whether or

not they submit a valid and timely Proof of Claim and Release.

G. Administration and Calculation of Claims, Final Awards, And Supervision and Distribution of the Settlement Fund

6.1 The Claims Administrator shall administer and calculate the claims submitted by

Class Members and shall oversee distribution of the Net Settlement Fund (defined below) to

Authorized Claimants. The distribution checks will be drawn uponp the accounts invested bY the

Escrow Agent.

6.2 The Settlement Fund shall be applied as follows:

(i) To pay the Taxes and Tax Expenses described in 9C 2.20 above;

I Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 36 of 56

(ii) To pay all the costs and expenses reasonably and actually incurred in connection with settlement administration, including, but not limited to, locating members of the

Class, providing Notice, soliciting Class claims, assisting with the filing of claims, processing

Proof of Claim forms, making administrative determinations concerning the acceptance or rejection of submitted claims, administering and distributing the Settlement Fund to Authorized

Claimants, paying escrow fees and costs, if any, and paying the fees and expenses of the Claims

Administrator;

(iii) To pay Lead Counsel's attorneys' fees, and expenses with interest thereon, as provided in 17.2 (the "Fee and Expense Award"), to the extent allowed by the Court;

(iv) To pay a Compensatory Award to Lead Plaintiff as provided in 9C 7.6, to the extent allowed by the Court;

(v) To pay the Claims Administrator's fees and expenses reasonably incurred in the claims administration of the Settlement; and

(vi) To distribute the balance of the Settlement Fund, that is, the total

Settlement Fund less the items set forth in 116.2(i), (ii), (iii), (iv) and (v) (the "Net Settlement

Fund"), and, thereafter, to the Authorized Claimants as allowed by this Stipulation, the Plan of

Allocation, or the Court.

6.3 Upon the entry of the Judgment and Order of Dismissal with Prejudice and thereafter, subject to 12.14 and in accordance with the terms of the Plan of Allocation, or such further approval and further order(s) of the Court as may be necessary or as circumstances may require, the Net Settlement Fund shall be distributed to Authorized Claimants subject to and in

accordance with the following:

36 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 37 of 56

(i) Any Person falling within the definition of the Class may be excluded from the Class by submitting to the Claims Administrator a request for exclusion ("Request for

Exclusion"), which complies with the requirements set forth in the Order for Notice and Hearing,

Exhibit A hereto, and is postmarked no later than twenty-one (21) days prior to the date of the

Settlement Hearing. All Persons who submit valid and timely Requests for Exclusion shall have no rights under the Stipulation, shall not share in the distribution of the Net Settlement Fund, and shall not be bound by the Stipulation or the Judgment and Order of Dismissal with Prejudice.

However, a Class Member may submit a written revocation of a Request for Exclusion up until the Bar Date (defined below) and receive payments pursuant to this Stipulation and Settlement provided the Class Member also submits a valid Proof of Claim, as set forth in 16.3(ii), below, prior to the Bar Date;

(ii) By forty-five (45) days after the Settlement Hearing, or such other time as may be set by the Court (the "Bar Date"), each Class Member claiming to be an Authorized

Claimant shall be required to submit to the Claims Administrator a completed Proof of Claim, substantially in the form of Exhibit A-2 hereto, signed under penalty of perjury and supported by such documents as specified in the Proof of Claim or such other documents or proof, as are reasonably available to the Authorized Claimant, as Lead Counsel, in their discretion, may deem

acceptable;

(iii) Except as otherwise ordered by the Court, all Class Members who fail to

timely submit a Proof of Claim and Release by the Bar Date, or such other period as may be

ordered by the Court, or otherwise allowed, or who file a Proof of Claim that is rejected, shall be

forever barred from receiving any payments pursuant to this Stipulation and Settlement, but will

in all other respects be subject to and bound by the provisions of this Stipulation, the releases

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 38 of 56

contained herein, and the Judgment and Order of Dismissal with Prejudice and will be barred and

enjoined from bringing any action against the Released Parties concerning the Settled Claims.

6.4 No Person shall have any claim against Lead Plaintiff, Lead Counsel, Defendants'

Counsel, the Claims Administrator or any other agent designated by Lead Counsel based on

distribution determinations or claim rejections made substantially in accordance with this

Stipulation and the Settlement contained therein, the Plan of Allocation, or further orders of the

Court. The Net Settlement Fund shall be distributed to the Authorized Claimants substantially in

accordance with a Plan of Allocation to be described in the Notice and approved by the Court.

However, any balance remaining in the Net Settlement Fund after six (6) months from the date

of distribution of the Net Settlement Fund (whether by reason of tax refunds, uncashed checks or

otherwise) the Claims Administrator under the supervision of Lead Counsel shall, if feasible,

reallocate such balance among Authorized Claimants in an equitable and economic fashion.

Thereafter, any balance that still remains in the Net Settlement Fund shall be donated to such

not-for-profit as the Court may direct and approve. This is not a claims-made settlement and, if

all conditions of the Stipulation are satisfied and the Settlement becomes final, no portion of the

Settlement Fund will be returned to the Defendants or their insurance carriers. Defendants and

their Corresponding Related Parties shall have no responsibility for, interest in, or liability

whatsoever with respect to the distribution of the Net Settlement Fund, the Plan of Allocation,

the determination, administration, or calculation of claims, the payment or withholding of Taxes

or Tax Expenses or any losses incurred in connection therewith.

6.5 It is understood and agreed by the Parties that any proposed Plan of Allocation of

the Net Settlement Fund including, but not limited to, any adjustments to an Authorized

Claimant's claim set forth therein, is not a part of this Stipulation and is to be considered by the

38 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 39 of 56

Court separately from the Court's consideration of the fairness, reasonableness and adequacy of the Settlement set forth in this Stipulation, and any order or proceedings relating to the Plan of

Allocation shall not operate to terminate or cancel this Stipulation or affect the finality of the

Court's Judgment and Order of Dismissal with Prejudice approving this Stipulation and the

Settlement set forth therein, or any other orders entered pursuant to this Stipulation.

6.6 After notice is given, Lead Counsel will request that the Court approve the proposed Plan of Allocation, the Fee and Expense Application, and the Compensatory Award, and the Parties shall request and obtain from the Court a Judgment and Order of Dismissal with

Prejudice substantially in the form attached to this Agreement as Exhibit B.

H. Attorneys' Fees and Expenses, and Lead Plaintiff's Compensatory Award

7.1 Lead Counsel may submit an application or applications (the "Fee and Expense

Application") for distributions to Lead Counsel from the Settlement Fund and the Settlement

Shares (if any) for: (a) an award of attorneys' fees; plus (b) reimbursement of actual costs and

expenses, including experts or consultants, incurred in connection with prosecuting the Action plus any interest on such attorneys' fees, costs and expenses at the same rate and for the same periods as earned by the Gross Settlement Fund (until paid) as may be awarded by the Court.

Lead Counsel reserves the right to make additional applications for fees and expenses incurred, if

necessary.

7.2 The attorneys' fees and expenses, including the fees and expenses of experts and

consultants, as awarded by the Court, shall be payable to Lead Counsel from the Settlement Fund

and the Settlement Shares (if any), as ordered, upon the entry of the Court's order awarding such

fees and expenses. Subject to the terms of payment in 112.2-2.4, (i) payments for attorneys' fees

and expenses in cash shall be paid to Lead Counsel five (5) Business Days after either receipt of

39 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 40 of 56

the proceeds into the Settlement Fund and; (ii) payments for attorneys' fees and expenses in

Settlement Shares shall be delivered to Lead Counsel five (5) Business Days after the designation of Common Stock in lieu of a cash payment pursuant to 12.7 is made by Comverse, for which Comverse shall provide such assistance to arrange for the transfer to Lead Counsel of its proportionate share of the Settlement Shares as Comverse is required to provide (and bear such expenses as it is required to bear) in respect of the transfer of Settlement Shares pursuant to

9[ 2.7. Lead Counsel agrees to refund to the Settlement Fund any award of attorney's fees and expenses by the Court paid to Lead Counsel in the event the Court's award of attorney's fees and expenses is reduced or reversed on appeal (the "Fee Award"); payment of some or all of the Fee

Award shall be made by Lead Counsel into the Settlement Fund within five (5) Business Days of a Final order by the Court of Appeals or the Supreme Court directing such reduction or reversal, and shall be distributed by the Escrow Agent to the Class pursuant to the manner directed in the

Final order.

7.3 The procedure for and allowance or disallowance by the Court of any application by Lead Counsel for attorneys' fees and expenses, including the fees and expenses of experts and consultants, to be paid out of the Settlement Fund or the Settlement Shares, are not part of the

Settlement set forth in this Stipulation and are to be considered by the Court separately from the

Court's consideration of the fairness, reasonableness and adequacy of the Settlement set forth in

this Stipulation,P and anY order or proceedingsP g relatingg to the Fee and ExpenseP Application,PP or

any appeal from any order relating thereto or reversal or modification thereof, shall not operate

to modify, terminate or cancel this Stipulation, or affect or delay the finality of the Judgment and

Order of Dismissal with Prejudice approving this Stipulation and the Settlement of the Litigation.

40 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 41 of 56

7.4 Except as provided in 17.2, Defendants and their Released Parties shall have no responsibility for, and no liability whatsoever with respect to, any payment to Lead Counsel or any other Plaintiffs' Counsel and/or any other Person who receives payment from the Settlement

Fund.

7.5 Defendants and their Released Parties shall have no responsibility for, and no liabilityY hatsoever with respectP to, the allocation amongg Lead Counsel and/or anY other Person who may assert some claim thereto, of any Fee and Expense Award that the Court may make in the Action.

7.6 Lead Counsel may submit an application to the Court to authorize the payment of a Compensatory Award for the time and expenses expended by Lead Plaintiff in assisting Lead

Counsel in the litigation of this Action. Subject to the payment terms in 112.2(b)-(d) and 112.3

(a)-(b), payment for any Compensatory Award payable in cash shall be payable to Lead Plaintiff five (5) days after the Effective Date.

I. Effect of Disapproval, Cancellation or Termination

8.1 Any appeal or delay in (a) the approval of the Plan of Allocation, (b) the determination of any award of attorneys' fees and expenses, or (c) the granting of a

Compensatory Award to Lead Plaintiff shall not affect, alter, or delay the occurrence of.the

Effective Date.

8.2 Upon the occurrence of the Effective Date, any and all interest or right of

Defendants in or to the Settlement Fund, if any, shall be absolutely and forever extinguished, except as set forth in this Stipulation. The Settlement Fund shall be distributed in accordance with 16.2 hereof.

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 42 of 56

8.3 In the event that this Stipulation is not approved by the Court, or the Effective

Date does not occur, then this Stipulation shall be canceled and terminated subject to 18.4 unless

Lead Counsel and Defendants' Counsel mutually agree in writing to proceed with this

Stipulation. None of the Parties, or any of them, shall have any obligation whatsoever to proceed

under any terms other than provided for and agreed herein. Without limitation of any Party's

other rights or remedies at law or in equity to enforce its rights against any other Party that

breaches its obligations under this Stipulation, no breach by any Party of its obligations under

this Stipulation shall permit any other Party to terminate this Stipulation or, after the Effective

Date, affect or impair the disposition of the Action or release of claims contemplated by 15.1.

8.4 If this Stipulation is terminated or fails to become effective for the reasons set

forth in 18.3, this Settlement Agreement shall be void ab initio, provided that unless otherwise

ordered by the Court within ten Business Days after the occurrence of such event,- any amount

then remaining in the Class Notice and Administration Fund (including accrued interest) and/or

the Comverse Settlement Fund Escrow Account (including accrued interest), less taxes, expenses

and any costs which have either been therefrom in accordance with this Stipulation or are

determined to be chargeable to the Class Notice and Administration Fund pursuant to this

Stipulation (but in no event exceeding the sum of $1,000,000) or the Comverse Settlement Fund

Escrow Account, shall be refunded by the Escrow Agent, pursuant to written instructions from

Comverse or its successor-in-interest. If this Stipulation is terminated for reasons set forth in 9C

2.23, it shall be void ab initio as to Alexander, provided that any amount deposited into the

Comverse Settlement Fund Escrow Account pursuant to 112.3 (b), (c) and/or (d) shall be

refunded by the Escrow Agent to an escrow account jointly established by counsel for Comverse

and counsel for Alexander at a mutually agreeable federally chartered bank, pursuant to written

42 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 43 of 56

instructions from Comverse or its successor-in-interest and Alexander. Such termination shall

have no affect upon Comverse's agreement. In the event that the Stipulation is not approved by

the Court or the Settlement set forth thisin t sStipulation tiS ulati on is terminatedrminated or fails to become effective

in accordance with its terms, the terms and provisions of this Stipulation, with the exception of

q[9[ 1.1-1.53, 2.2(a), 2.19, 2.20 and 8.3-8.5 hereof, shall have no further force and effect with I respect to the settling Parties and shall not be used in this Action or in any other proceeding for

any purpose, and any judgment or order entered by the Court in accordance with the terms of this

Stipulation shall be treated as vacated, nunc pro tunc. No order of the Court or modification or

reversal on appeal of any order of the Court concerning the Plan of Allocation or the amount of

any attorneys' fees, costs, expenses and interest awarded by the Court to Lead Counsel shall

constitute grounds for cancellation or termination of the Stipulation.

8.5 If the Effective Date does not occur, neither Lead Plaintiff nor Lead Counsel shall

have any obligation to repay any amounts actually and properly disbursed from the Class Notice

and Administration Fund. In addition, any expenses already incurred and properly chargeable to

the Class Notice and Administration Fund pursuant to this Stipulation at the time of such

termination or cancellation, but which have not been paid, shall be paid by the Escrow Agents in

accordance with the terms of the Stipulation prior to the balance being refunded in accordance

with 18.4.

J. Miscellaneous Provisions

9.1 The Parties (a) acknowledge that it is their intent to consummate this agreement;

and (b) agree, subject to their fiduciary and other legal obligations, to cooperate to the extent

reasonably necessary to effectuate and implement all terms and conditions of this Stipulation and

to exercise their reasonable best efforts to accomplish the foregoing terms and conditions of this

43 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 44 of 56

Stipulation. Lead Counsel and Defendants' Counsel agree to cooperate with one another in

seeking Court approval of the Order for Notice of Hearing, the Stipulation, and the Settlement,

and to promptly agree upon and execute all such other documentation as may be reasonably

required to obtain final approval of the Settlement.

9.2 The Parties intend this Stipulation to be a final and complete resolution of all

disputes between them with respect to the Action as well as any disputes which could have been

raised in the Action by Lead Plaintiff, the Class, and their Released Parties, and each or any of

them, against Defendants and their Released Parties, Defendants' Counsel, and each or any of

them, on the one hand, and by Defendants and their Released Parties, and each or any of them,

against Lead Plaintiff, the Class, their Released Parties, Lead Counsel, and each or any of them,

on the other hand. Additionally, as among and between Defendants and their Released Parties,

and each or any of them, Defendants intend this Stipulation to be a final and complete resolution

of all disputes between them with respect to the Action. Notwithstanding the foregoing,

Comverse and Alexander have entered into a separate agreement and releases which apply to

disputes between them. Accordingly, the Parties agree not to assert in any forum that the Action

was brought by Lead Plaintiff or defended by any the Defendants, or each or any of them, in bad

faith or without a reasonable basis. The Judgmentg and Order of Dismissal with PrejudiceJ will

contain a statement that during the course of the Action, the parties and their respective counsel

at all times complied with the requirements of Rule 11 of the Federal Rules of Civil Procedure.

The Parties further agree that the amount paid to the Settlement Fund and the other terms of the

Settlement were negotiated at arm's length and in good faith by the Parties, and reflect a

settlement that was reached voluntarily after consultation with competent legal counsel. i

I 1

44 i Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 45 of 56

9.3 Whether or not the Effective Date occurs or this Stipulation is terminated, neither this Stipulation nor the Settlement contained herein, nor any act performed or document executed pursuant to or in furtherance of this Stipulation or the Settlement:

(i) may be deemed, or shall be used, offered or received against Defendants or Defendants' Released Parties, or each or any of them, as an admission, concession or evidence of, the validity of any Released Plaintiffs' Claims, the truth of any fact alleged by Plaintiffs, the deficiency of any defense that has been or could have been asserted in the litigation, or of any alleged wrongdoing, liability, negligence, or fault of the Defendants and their Released Parties, or any of them;

(ii) may be deemed, or shall be used, offered or received against Defendants, or each or any of them, as an admission, concession or evidence of, any fault, misrepresentation or omission with respect to any statement or written document approved or made by any

Defendant and their Released Parties, or any of them;

(iii) may be deemed, or shall be used, offered or received against Lead

Plaintiff, the Class, Lead Plaintiff's Released Parties, or each or any of them, as an admission, concession or evidence of, the validity or invalidity of any of Released Defendants' Claims, the infirmity or strength of any claims raised in the Action, the truth or falsity of any fact alleged by

Defendants, or the availability or lack of availability of meritorious defenses to the claims raised in the Action;

(iv) may be deemed, or shall be used, offered or received against Lead

Plaintiff, the Class, and Lead Plaintiff's Released Parties, or each or any of them, or against

Defendants, Defendants' Released Parties, or each or any of them, as an admission or concession

with respect to any liability, fault or wrongdoing as against any Parties to the Stipulation, in any

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 46 of 56

civil, criminal or administrative proceeding in any court, administrative agency or other tribunal.

However, the Settlement, this Stipulation, and any acts performed and/or documents executed in

furtherance of or pursuant to this Stipulation and/or Settlement may be used in any proceedings

as may be necessary to effectuate the provisions of this Stipulation. However, if this Stipulation

is approved by the Court, any party or any of the Released Parties may file this Stipulation and/or

the Final Order and Judgment in any action that may be brought against such party or parties in

order to support a defense or counterclaim based on principles of res judicata, collateral

estoppel, release, good faith settlement, judgment bar or reduction or any other theory of claim

preclusion or issue preclusion or similar defense or counterclaim;

(v) may be deemed, or shall be construed against Lead Plaintiff, the Class,

and Lead Plaintiff's Released Parties, or each or any of them, or against Defendants, Defendants'

Released Parties, or each or any of them, as an admission or concession that the consideration to

be given hereunder represents an amount equal to, less than or greater than that amount which

could have or would have been recovered after trial; and

(vi ) mayY be deemed or shall be construed as or received in evidence a s an

admission or concession against Lead Plaintiff, the Class, and Lead Plaintiff's Released Parties,

or each and anY of them or against Defendants g Defendants Released s Y Parties, or each or an of

them, that any of their claims are with or without merit or that damages recoverable under the

Complaint would have exceeded or would have been less than the Settlement Fund.

9.4 The headings used herein are used for the purpose of convenience only and are

not meant to have legal effect.

9.5 The waiver by one party of any breach of this Stipulation by any other party shall

not be deemed as a waiver of any other prior or subsequent breaches of this Stipulation.

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 47 of 56

9.6 All of the Exhibits to this Stipulation are material and integral parts hereof and are

fully incorporated herein by this reference.

9.7 This Stipulation may be amended or modified only by a written instrument signed

by or on behalf of all Parties or their respective successors-in-interest.

9.8 This Stipulation and the Exhibits attached hereto constitute the entire agreement

among the parties hereto and no representations, warranties or inducements have been made to

any party concerning this Stipulation or its Exhibits other than the representations, warranties

and covenants contained and memorialized in such documents. Except as otherwise provided

herein, each Party shall bear its own costs.

9.9 Each counsel or other Person executing this Stipulation, any of its Exhibits, or any

related settlement documents on behalf of any party hereto hereby warrants and represents that

such Person has the full authority to do so and that they have the authority to take appropriate

action required or permitted to be taken pursuant to the Stipulation to effectuate its terms.

9.10 This Stipulation may be executed in one or more counterparts. All executed

counterparts and each of them shall be deemed to be one and the same instrument provided that

counsel for the Parties to this Stipulation all exchange original signed counterparts.

9.11 This Stipulation shall be binding upon, and inure to the benefit of, the successors

and assigns of the parties hereto and their Released Parties.

9.12 The Court shall retain jurisdiction with respect to implementation and

enforcement of the terms of this Stipulation, and all parties hereto submit to the jurisdiction of

the Court for purposes of implementing and enforcing the Settlement embodied in this

Stipulation.

47 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 48 of 56 i I 9.13 This Stipulation and the Exhibits thereto shall be considered to have been

negotiated, executed and delivered, and to be wholly performed, in the State of New York and

the rights and obligations of the parties to this Stipulation shall be construed and enforced in

accordance with, and governed by, the internal, substantive laws of the State of New York

without giving effect to that State's choice of law principles.

9.14 This Stipulation is deemed to have been prepared by counsel for all parties, as a

result of arm's length negotiations among the parties. Whereas all parties have contributed

substantially and materially to the preparation of this Stipulation, it shall not be construed more

strictly against one party than another.

9.15 Whenever this Stipulation requires or contemplates that a Party shall or may give

notice to the other, notice shall be provided by facsimile, electronic mail, or next-day (excluding

Saturday and Sunday) express delivery service as follows and shall be deemed effective upon

such transmission or delivery, to the facsimile number or address, as the case may be, set forth

below:

If to Comverse, then to:

Joseph S. Allerhand, Esq. Matthew L. Mustokoff, Esq. WEIL, GOTSHAL & MANGES, LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007

48 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 49 of 56

If to Alexander, then to:

Edward M. Spiro, Esq. Jeremy H. Temkin, Esq. MORVILLO, ABRAMOWITZ, GRAND, IASON ANELLO & BOHRER, P.C. 565 Fifth Avenue New York, New York 10017 Telephone: (212) 856-9600 Facsimile- (212) 856-9494

If to Lead Plaintiff, then to:

Patrick V. Dahlstrom, Esq. POMERANTZ HAUDEK GROSSMAN & GROSS LLP Ten South La Salle Street Suite 3505 Chicago, Illinois 60603 Telephone: (312) 377-1181 Facsimile: (312) 377-1184

Marc I. Gross, Esq. POMERANTZ HAUDEK GROSSMAN & GROSS LLP 100 Park Avenue New York, New York 10017 Telephone: (212) 661-1100 Facsimile- (212) 661-8665

9.16 All time periods set forth herein shall be computed in calendar days unless otherwise expressly provided. In computing any period of time prescribed or allowed by this

Stipulation or by order of court, the day of the act, event, or default from which the designated period of time begins to run shall not be included.

9.17 The Parties reserve the right, subject to the Court's approval, to make any reasonable extensions of time that might be necessary to carry out any of the provisions of this

Stipulation.

49 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 50 of 56

Dated: December 16, 2009

POMERANTZ HAUDEK GROSSMAN & GROSS LLP

P4 V. Dahlstrom, Esy. 1^— Ten South La Salle Street Suite 3505 Chicago, Illinois 60603 Telephone: (312) 377-1181 Facsimile: (312) 377-1184

Stanley M. Grossman, Esq. Marc I. Gross, Esq. Daniel L. Berger, Esq. Jeremy A. Lieberman, Esq. Fei-Lu Qian, Esq. Tamar A. Weinrib, Esq.

POMERANTZ HAUDEK GROSSMAN & GROSS LLP 100 Park Avenue New York, New York 10017 Telephone: (212) 661-1100 Facsimile: (212) 661-8665

Attorneys for the Lead Plaintiff Menorah Group and The Class

50 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 51 of 56

WEIL, GOTSHAL & MANGES, LLP

oseph S. Allerhand, Esq, David E. Z.,eltner, Esq. Matthew L. Mustokoff, Esq. 767 Fifth Avenue New York, New York 10153 Telephone: (212) 31.0-8000 Facsimile: (212) 310-8007

Attorneys for Defendant Coinverse Technology, Inc.

MORVILLO, ABRAMOWITZ, GRAND, IASON ANELLO & BOHRER, P.C.

Robert G. Morvillo, Esq. Edward M. Spiro, Esq. Jeremy H. Temkin, Esq. Erica Sparkler, Esq. 565 Fifth Avenue New York, New York 10017 Telephone: (212) 856-9600 Facsimile: (212) 856-9494

Attorneys for Dcfencl(mt Jacob "Kobi " Alexcinder

DECHERT,LLP

David S. Hoffner, Esq. Scott Smedley, Esq. 1095 Avenue of the Americas New York, New York 10036 Telephone: (212) 698-3500 Facsimile: (212) 698-3599

Attorneys for Defendant David Kreinberg

51 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 52 of 56

WEIL, GOTSHAL & MANGE, S, LLP

Joseph S. Allerhand, Esq, David E, Zeltner, Esq, Matthew L. Mustokoff, Esq, 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007

Attorneys for Defendant Comverse Technology, Inc.

MORVILLO, ABRAMOWITZ, GRAND, IASON ANELLO & BOHRER, P.C.

V^ Robert G. Morvillo, Esq. Edward M. Spiro, Esq. Jeremy H. Temkin, Esq. Erica Sparkler, Esq. 565 Fifth Avenue New York, New York 10017 Telephone: (212) 856-9600 Facsimile: (212) 856-9494

Attorneys for Defendant Jacob "Kobi "Alexander

DECHERT,LLP

David S. Hoffner, Esq. Scott Smedley, Esq. 1095 Avenue of the Americas New York, New York 10036 Telephone: (212) 698-3500 Facsimile: (212) 698-3599

Attorneys for Defendant David Kreinberg

51 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 53 of 56

WEIL, GOTSHAL & MANGES, LLP

Joseph S. Allerhand, Esq. David E. Zeltner, Esq. Matthew L. Mustokoff, Esq. + 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007

Attorneys for Defendant Comverse Technology, Inc.

MORVILLO, ABRAMOWITZ, GRAND, IASON ANELLO & BOHRER, P.C.

Robert G. Morvillo, Esq. Edward M. Spiro, Esq. Jeremy H. Temkin, Esq. Erica Sparkler, Esq. 565 Fifth Avenue New York, New York 10017 Telephone: (212) 856-9600 Facsimile: (212) 856-9494

Attorneys for Defendant Jacob "Kobi" Alexander

DECHERT,LLP

David S. Hoffn -r, ' sq. Scott Smedley, Esq. 1095 Avenue of the Americas New York, New York 10036 Telephone: (212) 698-3500 Facsimile: (212) 698-3599

Attorneys for Defendant David Kreinberg

51 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 54 of 56

LAW QFFICE OF SOLOMON N. KLEIN

So omon N. Klein, Esq. 1410 Broadway, Suite. 1802 New York, New York 10018 Telephone: (212) 575-0202 Facsimile: (212) 575-0233

Thomas Philip Puccio, Esq. LAW OFFICES OFXHOMAS P. PUCCIO 230 Park Avenue, Suite 301 New York, NY 10169 Telephone: 212-883-6383 Facsimile: 212-883-6388

Attorneys for Defendant William F. Sorin

KRAMER LEVIN NAFTALIS & FRANKEL LLP

Yehudis Shalva Lewis, Esq. Arthur H. Aufses, III, Esq. Guilaine Senecal, Esq. 1177 Avenue of the Americas New York, New York 10036 Telephone: (212) 715-7538 Facsimile: (212) 715-8000

Attorneys for Defendants John H. Friedman and Sam Oolie

BAKER BOTTS, LLP

Seth T. Taube, Esq. 30 Rockefeller Plaza 44th Floor New York, New York 10112 Telephone: (212) 408-2655 Facsimile: (212) 408-2501

Attorneys for Defendant Ron Hiram

52 Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 55 of 56

LAW OFFICES OF SOLOMON N. KLEIN

Solomon N. Klein, Esq. 1410 Broadway, Suite. 1802 New York, New York 10018 Telephone: (212) 575-0202 Facsimile: (212) 575-0233

Thomas Philip Puccio, Esq. LAW OFFICES OF THOMAS P. PUCCIO 230 Park Avenue, Suite 301 New York, NY 10169 Telephone: 212-883-6383 Facsimile: 212-883-6388

Attorneys for Defendant. William F. Sorin

KRAMER LEVIN NAFTALIS & FRANKEL LLP

i Yehudis Shalva Le is, Esq. Arthur H. Aufses, III, Esq. Guilaine Senecal, Esq. 1177 Avenue of the Americas New York, New York 10036 Telephone: (212) 715-7538 Facsimile: (212) 715-8000

Attorneys for Defendants John H. Friedman and Sam. Oolie

BAKER BOTTS, LLP

Seth T. Taube Esq.q 30 Rockefeller Plaza - 44`h Floor New York, New York 10112 Telephone: (212) 408-2655 Facsimile: (212) 408-2501

Attorneys for Defendant Ron Hiram

Case 1:06-cv-01825-NGG-RER Document 323 Filed 12/18/09 Page 56 of 56

LAW OFFICES OF SOLOMON N. KLEIN

Solomon N. Klein, Esq. 1410 Broadway, Suite. 1802 New York, New York 10018 Telephone: (212) 575-0202 Facsimile: (212) 575-0233

Thomas Philip Puccio, Esq. LAW OFFICES OF THOMAS P. PUCCIO 230 Park Avenue , Suite 301 New York, NY 10169 Telephone: 212-883-6383 Facsimile: 212-883-6388

Attorneys for Defendant William F. Sorin

KRAMER LEVIN NAFTALIS & FRANKEL LLP

Yehudis Shalva Lewis, Esq. Arthur H. Aufses, IIl, Esq. Guilaine Senecal, Esq. 1177 Avenue of the Americas New York, New York 10036 Telephone: (212) 715-7538 Facsimile: (212) 715-8000

Attorneysdendants John H rzan and Sam Oolie

BA : LLP

Seth T. Taube7 Esq.q 30 Rockefeller Plaza - 44 `" Floor New York, New York 10112 Telephone: (212)408-2655 Facsimile: (212) 408-2501

Attorneys for Defendant Ron Hiram

52 Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 1 of 9

EXHIBIT A Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 2 of 9

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ) IN RE COMVERSE TECHNOLOGY, ) Civil Action No. CV 06 1825 (NGG) (RER) INC. SECURITIES LITIGATION ) ) )

ORDER PRELIMINARILY APPROVING SETTLEMENT AND SCHEDULING FAIRNESS HEARING

The Court has received the Stipulation of Settlement, dated as of

December 16, 2009 (the “Stipulation”), that has been entered into by Lead Plaintiff and

Defendants. The Court has reviewed the Stipulation and its attached exhibits, and, good cause appearing,

IT IS HEREBY FOUND, CONCLUDED AND ORDERED as follows:

1. The Court, for purposes of this Preliminary Order, adopts all defined terms as set forth in the Stipulation, and incorporates them herein by reference as if fully set forth.

2. The Court preliminarily approves: (a) the settlement of the Action as set forth in the Stipulation; and (b) the proposed Plan of Allocation described in the Notice.

3. The Court hereby certifies the Class for settlement purposes. The Class is defined as:

a. all purchasers of the common stock of Comverse Technology, Inc. during the period from April 30, 2001 through January 29, 2008 (the “Class Period”), both dates inclusive. The term Class or Class Members does not include: Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 3 of 9

(1) such persons or entities who are or were: Defendants, current and former directors of Comverse, and employees of Comverse and/or its

Subsidiaries during the Class Period;

(2) any family member, trust, company, entity or affiliate controlled or owned by any of the excluded persons and entities referenced above, and

(3) such persons or entities who submit valid and timely requests for exclusion from the Class.

4. The Court finds that each element for certification of the Class pursuant to

Rule 23 of the Federal Rules of Civil Procedure is met: (i) members of the Class are so numerous as to make joinder impracticable; (ii) the claims of the Lead Plaintiff are typical of the claims of the Class it seeks to represent; (iii) the interests of the members of the Class will be, and have been, fairly and adequately represented by the Lead Plaintiff and Lead Counsel in this litigation; (iv) a class action is superior to other available methods for the fair and efficient adjudication of this litigation; (v) common questions of law and fact exist as to all members of the Class; and (vi) such common questions predominate over any questions solely affecting individual members of the Class.

5. The Court approves as to form and content, and for distribution to Class

Members, the Notice of Pendency and Proposed Settlement of Class Action (the

“Notice”), substantially in the form of Exhibit A attached hereto, a Proof of Claim and

Release, substantially in the form of Exhibit B attached hereto; and for publication of a

Summary Notice of Pendency and Proposed Settlement of Class Action, substantially in the form of Exhibit C attached hereto.

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6. Lead Counsel are authorized to act on behalf of the Class with respect to all acts required by, or which may be given pursuant to, the Stipulation or such other acts which are reasonably necessary to consummate the proposed settlement set forth in the

Stipulation.

7. Lead Counsel are hereby authorized to retain the firm of Berdon Claims

Administration LLC as Claims Administrator of the Settlement, to supervise and administer the notice and claim procedures.

8. The Court will hold the Fairness Hearing on , 2010 at .m. in Courtroom , United States Courthouse, 225 Cadman Plaza

East, Brooklyn, New York 11201 to: (i) determine whether the Settlement should be finally approved as fair, reasonable, adequate and in the best interests of the Class, (ii) determine whether a Judgment substantially in the form attached as Exhibit D, hereto, should be entered dismissing all claims in the Action against the Released Parties, with prejudice, (iii) rule upon an application by Lead Counsel for an award of attorneys' fees and reimbursement of expenses, and a Lead Plaintiff Compensatory Award, and (iv) consider any other matters that may properly be brought before the Court in connection with the

Settlement.

9. Notice of the Settlement and the Fairness Hearing shall be given by the

Claims Administrator to members of the Class who can be identified through reasonable effort (i) by mailing a copy of the Notice via first class postage pre-paid mail no later than 75 days before the Fairness Hearing, and (ii) by publishing a copy of the Summary

Notice (a) in the national edition of The Wall Street Journal and posting on a national

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business wire in the United States and (b) in a national business publication in Israel and posting on an Israeli national business wire no later than 60 days before the Fairness

Hearing. Brokerage firms and other nominees for beneficial owners of Comverse who receive the Notice are ordered to forward promptly a copy of the Notice to the beneficial owners of those securities.

10. The costs of such Notice will be paid out of the one million dollar

($1,000,000) Class Notice and Administrative Fund as set forth in Section 2.2(a) of the

Stipulation, and supplemented to the extent necessary pursuant to Section 6.2 (ii).

11. The Court finds and concludes, with respect to both the form of the Notice given and the procedure used to give notice, that the Notice provided for in this Order is the best notice reasonably practicable under the circumstances, fully satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure, Section 21D(a)(7) of the

Securities Exchange Act, as amended by the Private Securities Litigation Reform Act of

1995, 15 U.S.C. § 78u-4(a)(7), the Constitution of the United States, and any other applicable law, and constitutes due and sufficient notice to all persons entitled to receive notice.

12. The Fairness Hearing may be adjourned by the Court without notice to the members of the Class. The Court may consider modifications of the Settlement (with the consent of the Lead Plaintiff and the Defendants) without further notice to the members of the Class.

13. Lead Counsel shall file papers in support of the Settlement, Plan of

Allocation, and requests for award of Attorneys Fees, reimbursement of expenses, and

4 Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 6 of 9

Lead Plaintiff Compensatory Award no later than 45 days prior to the Settlement

Hearing. Such papers, along with a copy of the Stipulation of Settlement, shall be posted at www.pomlaw.com.

14. Any member of the Class may request to be excluded from the Settlement.

The request for exclusion from the Class must be received by the Claims Administrator no later than 30 days prior to the date set in this Order for the Fairness Hearing, must be in writing, and must include the following information: (i) the person's name, address, telephone number, (ii) the dates, number of shares, and prices at which the person requesting exclusion purchased and sold Comverse Common Stock during the Class

Period and documentation thereof. The request to be excluded must be mailed by first class postage pre-paid mail (or delivered by hand or overnight delivery service) as specified in the Notice. Any person who requests exclusion from the Settlement in accordance with the terms stated in this Order shall not be a member of the Class, shall not be bound by the terms of the Settlement, and shall have no right to participate in the distribution of the Settlement proceeds.

15. Any member of the Class who does not request exclusion from the

Settlement in the manner required by this Order may object to the Settlement, Plan of

Allocation, the request by Lead Counsel for attorneys' fees and reimbursement of expenses, and/or to the Lead Plaintiff Compensatory Award or otherwise request to be heard in person or by counsel concerning any matter properly before the Court at the

Settlement Hearing. The objection, statement or request to be heard at the Fairness

Hearing must be received no later than 30 days prior to the date set in this Order for the

Fairness Hearing, must be in writing, and must include the following information: (i) the

5 Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 7 of 9

person's name, address and telephone number, (ii) the dates, number of shares and prices at which the person purchased and sold Comverse common stock during the Class Period, and documentation thereof, (iii) a detailed statement of the basis for the person's objections to or comments upon the Settlement, the request for attorneys' fees and reimbursement of expenses, or any other matter before the Court, and (iv) any supporting papers, including all documents and writings that the person desires the Court to consider. The objection, statement or request to be heard at the Fairness Hearing must be filed with the Clerk of the Court and must be delivered by hand, overnight delivery, or first class mail to the counsel for the parties identified in the Notice at the same time that the objection, statement or request to be heard is filed with the Clerk of the Court.

16. Any member of the Class who does not submit a request to be excluded from the Settlement in the manner stated in this Order shall be deemed to have waived his, her or its right to be excluded from the Settlement, and shall forever be barred from requesting exclusion from the Settlement in this or any other proceeding.

17. Any member of the Class who does not object to the Settlement, Plan of

Allocation, the request for attorneys' fees and reimbursement of expenses, and/or the

Lead Plaintiff Compensatory Award, or otherwise request to be heard concerning the

Settlement in the manner stated in this Order shall be deemed to have waived his, her or its right to object to the Settlement, Plan of Allocation, the request for attorneys' fees and reimbursement of expenses and/ or the Lead Plaintiff Compensation Award, or otherwise be heard concerning such matters, and shall forever be barred from objecting to such matters, or otherwise being heard concerning such matters in this or any other proceeding.

6 Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 8 of 9

18. Any member of the Class who does not submit a request to be excluded, and who wants to participate in the Settlement, shall complete and submit a Proof of

Claim and Release in accordance with the instructions contained therein. Unless the

Court orders otherwise, all Proofs of Claim and Releases must be submitted no later than forty-five (45) days after the Fairness Hearing. Any Member for whom timely and valid

Proof of Claim and Release has not been submitted within the time provided for shall, unless otherwise ordered by the Court, be barred from sharing in the distribution of the proceeds of the Settlement, but shall nonetheless be bound by the terms of the Judgment.

19. Lead Plaintiff may alter the Plan of Allocation (subject to Court approval) without any further notice to Class Members, unless such Class Members expressly request notice of alteration of the plan by submitting such request to the Claims

Administrator no later than 30 days prior to the Fairness Hearing

20. Pending the Fairness Hearing, the Court stays all proceedings in the Action, other than proceedings necessary to carry out or enforce the terms and conditions of the

Stipulation.

21. This Order, the Settlement, and any of their terms, and all negotiations, discussions and proceedings in connection with this Order and the Settlement, shall not constitute any evidence, or an admission by any of the Defendants or Released Parties (as that term is defined in the Stipulation), that any acts of wrongdoing have been committed and shall not be deemed to create any inference that there is any liability on the part of any of the Defendants or Releasees. This Order, the Settlement, and any of their terms, and all negotiations, discussions and proceedings in connection with this Order and the Settlement,

7 Case 1:06-cv-01825-NGG-RER Document 323-1 Filed 12/18/09 Page 9 of 9

shall not be offered or received in evidence or used for any other purpose in this or any other proceeding in any court, administrative agency, arbitration forum, or other tribunal other than as may be necessary to enforce the terms of this Order and/or the Settlement.

22. In the event that the Settlement fails to become effective in accordance with its terms, or if the Judgment is not entered or is reversed, vacated, or materially modified on appeal, this Order (except for this Paragraph) shall be null and void, the

Settlement shall be deemed terminated pursuant to the terms of the Settlement, and the parties shall return to their positions as provided for in the Settlement.

SO ORDERED.

Dated: December , 2009 Brooklyn, New York

Honorable Nicholas G. Garaufis United States District Judge Eastern District of New York

8 Case 1:06-cv-01825-NGG-RER Document 323-2 Filed 12/18/09 Page 1 of 23

EXHIBIT A- 1 Case 1:06-cv-01825-NGG-RER Document 323-2 Filed 12/18/09 Page 2 of 23

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK X IN RE COMVERSE TECHNOLOGY, INC No. 06 CV 1825 (NGG) (RER) SECURITIES LITIGATION X

NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION

TO: ALL PERSONS AND ENTITIES THAT PURCHASED COMVERSE TECHNOLOGY, INC. COMMON STOCK DURING THE PERIOD OF APRIL 20, 2001 THROUGH JANUARY 29, 2008 (THE “CLASS”). Excluded from the Class are the Defendants, all current and former officers and directors of Comverse, all employees of Comverse and/or its Subsidiaries during the Class Period, and any family member, trust, company, entity or affiliate controlled or owned by any of the excluded persons and entities referenced above.

YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”) and an Order of the United States District Court for Eastern District of New York (the “Court”) of the pendency of a class action lawsuit on behalf of the Class.

YOU ARE ALSO HEREBY NOTIFIED, pursuant to Rule 23 and an Order of the Court, that there is a proposed settlement of claims in the lawsuit against all defendants. This settlement is on behalf of Members of the Class. You could get a payment from the proposed settlement described below.

A Federal Court authorized this Notice. This is not a solicitation from a lawyer.

This Notice explains important rights you may have. Your legal rights are affected whether or not you act. Please read this notice carefully!

COVER PAGE REQUIRED BY FEDERAL LAW

1. Statement of Class Member’s Recovery: This Notice has been sent to you pursuant to an Order of the United States District Court, Eastern District of New York (the “Court”) in the class action bearing the caption In re Comverse Technology, Inc. Securities Litigation, No. 06-CV- 1825-(NGG) (RER) (the “Action”). One of the purposes of this Notice is to inform you of the proposed Settlement of the Action for $225 million. This Notice describes the rights you may have in connection with the Settlement, what steps you may take in relation to the Settlement, and provides information about the hearing that will be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement. In order to receive financial proceeds from the Settlement, you will need to obtain and file a Proof of Claim and Release form.

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2. Reasons for the Settlement with Defendants: The Settlement resolves claims against Comverse and certain of its former Officers and Directors (“Defendants”) regarding alleged violations of the federal securities laws. By entering into the Settlement, the Defendants do not admit any allegations of wrongdoing. In light of the amount of the Settlement and the immediacy of recovery to the members of the Class, Lead Plaintiff believes that the proposed Settlement is fair, reasonable and adequate, and in the best interests of the Class. The Settlement provides a substantial benefit, namely $225,000,000, less the various deductions described in this Notice, as compared to the risk that a similar, smaller, or no recovery would be achieved after a trial and appeals, possibly years in the future, in which the Defendants would have the opportunity to assert substantial defenses to the claims brought against them.

3. Statement of Average Amount of Damage Per Share: Lead Plaintiff and the Defendants do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiff were to have prevailed on each claim alleged. The issues on which the parties disagree include: (1) the appropriate economic model for determining the amount by which Comverse’ s common stock was allegedly artificially inflated (if at all); (2) the amount by which Comverse common stock was allegedly artificially inflated (if at all); (3) the various market forces influencing the trading price of Comverse common stock; (4) the extent to which external factors, such as general market conditions, influenced the trading price of Comverse common stock; and (5) the extent to which the various matters that Lead Plaintiff alleged were false or misleading influenced (if at all) the trading price of Comverse common stock.

4. In the opinion of Lead Counsel, the Settlement represents a significant part of damages that would likely be awarded by a jury. More importantly, the Settlement represents a very significant portion of the damages that would likely be collected from Defendants, given the Company’s limited resources to satisfy any potential judgment and limited insurance coverage.

5. Lead Plaintiff’s damages expert estimates that approximately 188.4 million shares of Comverse common stock traded, and were damaged, during the Class Period. Assuming that the owners of all affected Comverse shares elect to participate in the Settlement, the average recovery per share could be $1.19, before deduction of any fees, expenses, costs, and awards described herein. The actual amount disbursed to members of the Class who participate in the Settlement may be more or less than this figure.

6. Statement of Attorney Fees and Expenses: Counsel has not received any payment for its services in conducting this litigation on behalf of Lead Plaintiff and the members of the Class, nor has it been reimbursed for its out-of-pocket expenditures. If the Settlement is approved by the Court, such counsel will apply to the Court for attorneys’ fees not to exceed ___% of the Settlement Amount, and reimbursement of expenses not to exceed $ . Such fees and expenses shall be paid from the Settlement Amount. If the amount requested by counsel is approved by the Court, the average cost would be $ ____ per share. In addition, a Compensatory Award for the time and expenses incurred by Lead Plaintiff will be sought, not to exceed $ .

7. Identification of Lead Plaintiffs’ Counsel: For further information regarding this Settlement you may contact Patrick V. Dahlstrom, Esq., Pomerantz Haudek Block Grossman & Gross

2 Case 1:06-cv-01825-NGG-RER Document 323-2 Filed 12/18/09 Page 4 of 23

LLP, 10 South La Salle Street, Suite 3505, Chicago, IL 60603 www.pomlaw.com .

DO NOT CONTACT THE COURT. [END OF COVER PAGE]

WHAT THIS NOTICE CONTAINS

Why did I get this Notice? Page 3 What is this case about? What has happened so far? Page 5 How do I know if I am part of the Class or if I can participate in the Settlement? Page 8 What rights do I have as a Member of the Class? Page 9 Excluding yourself from the Settlement Page 9 What recovery does the Settlement provide? Page 10 Why is there a Settlement? Page 11 What might happen if there was no Settlement? Page 11 How much will my payment be? What is the Plan of Allocation? Page 14 How do I participate in the Settlement? What do I need to do? Page 19 What rights am I giving up by agreeing to Settlement? Page 20 What payments are the attorneys for the Class and the Lead Plaintiff seeking for their work in this case? Page 21 When and where will the Court decide whether to approve the Settlement and related matters? Do I have to come to the Hearing? May I speak at the Hearing if I don’t like the Settlement or the other matters referenced in this Notice? Page 21 What if I am a broker, bank or other nominee which bought shares, on someone else’s behalf? Page 22 Can I see the Court file? Who should I contact if I have questions? Page 23

WHY DID I GET THIS NOTICE?

8. A class action is a lawsuit in which one or more persons sue on behalf of all other persons who have similar claims.

9. On March 23, 2007, a complaint was filed in the United States District Court for the Eastern District of New York (the “Court”) against defendants Comverse Technology, Inc. (“Comverse” or the “Company”), Jacob “Kobi” Alexander (“Alexander”), David Kreinberg (“Kreinberg”), William F. Sorin (“Sorin”), John H. Friedman (“Friedman”), Sam Oolie (“Oolie”), and

3 Case 1:06-cv-01825-NGG-RER Document 323-2 Filed 12/18/09 Page 5 of 23

Ron Hiram (“Hiram”), collectively referred to herein as the “Defendants”. This complaint alleged that Defendants issued false and misleading statements, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

10. On December 16, 2009, the Lead Plaintiff in this case entered into a proposed settlement (“Settlement”) with the Defendants.

11. On , the Court granted preliminary approval of the proposed Settlement.

12. You received this Notice because you have a right to know that a Class Action has been certified and that, if you fit within the definition of the Class, you will be deemed part of the Class unless you expressly excluded yourself from it in writing pursuant to the instructions below. This Notice is also to inform you of the nature of the Action and of your rights in connection with the Settlement.

13. You also received this Notice because, if you are a Class Member, you have a right to know about the proposed Settlement with the Defendants before the Court decides whether to approve it.

14. In that regard, the Notice explains your legal rights as a member of the Class, what benefits are available, who is eligible for them, and how to get them. This Notice also provides information about a hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the proposed Settlement and to consider the application for attorney fees and reimbursement of litigation expenses.

15. If the Court approves the proposed Settlement, and after any objections and appeals are resolved, a claims administrator approved by the Court will make payments from the fund created by the Settlement to eligible claimants pursuant to a plan of allocation (“Plan of Allocation”).

16. The Settlement Hearing will be held on , at __, before the Honorable Nicholas G. Garaufis, United States District Judge, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, NY, 11201 (the “Settlement Hearing”). The purpose of the Settlement Hearing will be to determine:

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a. Whether the Settlement should be approved as fair, just, reasonable and adequate to each of the Settling Parties;

b. Whether the Plan of Allocation is fair, just, reasonable, and adequate;

c. Whether the application by Lead Plaintiffs’ Counsel for an award of attorneys’ fees and expenses should be approved;

d. Whether Lead Plaintiff should be granted a Compensatory Award; and

e. Whether the Action should be dismissed with prejudice against the Defendants.

The Court may adjourn or continue the Settlement Hearing without further notice to members of the Class. The issuance of this Notice is not an expression of the Court’s opinion on the merits of any claim in the lawsuit, and the Court must still decide whether to approve the Settlement. If the Court approves the Settlement, payments will be made after the completion of the claims processing. Please be patient.

WHAT IS THIS CASE ABOUT? WHAT HAS HAPPENED THUS FAR?

Background

17.Defendant Comverse Technology, Inc. (“Comverse” or the “Company”) is a New York corporation which maintains its principle executive office at 909 Third Avenue, New York, N.Y. 10022. The Company is the world’s leading provider of software and systems enabling network- based multimedia enhanced communication and billing services.

18. On March 14, 2006, the Company issued a press release announcing the creation of a Special Committee of the Board of Directors to “review matters relating to the [C]ompany’s stock option grants....” On that day, Comverse’s stock fell $4.30 per share.

19.On April 17, 2006, the Company announced it needed to restate financial results for fiscal years 2001-2005, as well as the first three quarters of fiscal year 2006.

20. Beginning in April 2006, a number of putative class actions were filed against Comverse and certain of its former officers and directors in United States District Courts for the Southern and Eastern Districts. These actions included: Caifa v. Comverse Technology, Inc., 06-CV-1825 (E.D.N.Y.); Gorman v. Comverse Technology, Inc., 06-CV-2738 (E.D.N.Y.); Nadel v. Comverse Technology, Inc., 06-cv-3190-RPP (S.D.N.Y.); Thomas v. Comverse Technology, Inc., 06-cv-3445- RPP (S.D.N.Y.); and Moore v. Comverse Technology, Inc., 06-cv-04418-RPP (S.D.N.Y.).

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21. By Order dated August 24, 2006, the cases pending in the Southern District of New York were transferred to the Eastern District of New York, and were consolidated into a single action captioned In re Comverse Technology, Inc. Securities Litigation, 06-1825 (NGG) (RER).

22. On March 2, 2007, the Court appointed Menorah Insurance Co. Ltd. and Mivtachim Pension Funds, Ltd. (the “Menora Group”) as Lead Plaintiff in the consolidated class action, and Pomerantz Haudek Grossman & Gross LLP (“PHGG”) as Lead Counsel.

23. On November 14, 2006, Comverse disclosed that an internal investigation had uncovered additional accounting irregularities.

24. On November 5, 2007, Comverse issued a press release disclosing that it would miss its target for filing restated financials as it reviewed further issues with its revenue recognition.

25. On January 29, 2008, Comverse filed a Form 8-K with the United States Securities and Exchange Commission, which included a Report of a Special Committee to Comverse’s Board of Director detailing the results of its investigation into options backdating and other accounting irregularities.

26. Following the Menora Group’s appointment as Lead Plaintiff, Lead Counsel commenced an exhaustive investigation, including numerous interviews of former Comverse employees, both in the United States and Israel, and other witnesses; review of the civil and criminal complaints filed against certain Defendants by the Securities and Exchange Commission and the United States Department of Justice; review of public filings with the United States Securities and Exchange Commission; and analysis of publicly available trading information.

27. A Consolidated Amended Complaint was filed on March 23, 2007, alleging violations of the federal securities laws. With respect to these claims, Lead Plaintiff asserted that Defendants issued false and misleading statements in violation of Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934.

28. The named defendants were Comverse, certain of its former senior officers and directors, Alexander, Kreinberg, and Sorin; and members of the Company’s Audit Committee and Stock Option and Remuneration Committee, Friedman, Oolie and Hiram (the “Compensation Committee Defendants”).

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29. On July 30, 2007, defendants moved to dismiss the Amended Consolidated Complaint, and on October 31, 2007, Magistrate Judge Reyes issued a Report and Recommendation recommending that the Court deny Defendants Comverse, Alexander, Kreinberg and Sorin’s motions to dismiss the Sections 10(b) and 20(a) claims. Magistrate Judge Reyes further recommended that all claims against the Compensation Committee Defendants be dismissed, as well as dismissal of all other claims against all Defendants.

30. On January 9, 2008, Lead Plaintiff filed an Objection to the portion of the Report and Recommendation regarding dismissal of the Section 10(b) and 20(a) claims against the Compensation Committee Defendants. On February 20, 2008, the Court reinstated those claims against the Compensation Committee Defendants.

31. On July 15, 2008, Lead Plaintiff filed its Motion for Class Certification on behalf of a class of all purchasers of the common stock of Comverse Technology, Inc., during the period of April 30, 2001 through November 14, 2006, both dates inclusive. In connection therewith, depositions of Menora Group personnel were taken. Lead Plaintiff also produced documents establishing their standing to bring suit and support their claimed losses. At the time the parties had reached an agreement in principle, the Court had yet to render a decision on this motion. Merits Discovery and Research Conducted by Lead Counsel

32. Upon sustaining the Consolidated Amended Complaint, Lead Counsel served document requests upon the Defendants, which resulted in the production of over seven (7) million pages of documents. Lead Counsel began a review and analysis of these documents along with Comverse’s public filings, annual reports and other public statements.

33. Lead Counsel interviewed various individuals, including former Comverse employees in the United States and Israel, and engaged in extensive consultations with experts knowledgeable about the accounting issues in this Action.

34. Beginning in late 2008, Lead Counsel conducted depositions of certain Defendants and former Comverse employees. Lead Counsel also propounded interrogatories and responded to interrogatories from the Defendants.

35. Throughout the Action, Lead Counsel consulted with damages experts to ascertain the amount of losses suffered by the Class, and to analyze the efficiency of the market for Comverse common stock and the confidence level in the disclosures that establish the basis for loss causation in the Consolidated Amended Complaint. Lead Counsel also researched the applicable law with respect to the claims asserted in the Action and the potential defenses thereto.

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Settlement Negotiations and Mediation

36. Beginning in mid-2008, Lead Counsel and counsel for Comverse engaged in initial discussion concerning the possibility of settlement. After an initial exchange of information, Lead Plaintiff and Comverse agreed to enter into a process of mediation. Hon. Daniel Weinstein (ret.), who is widely recognized as one of the nation’s leading mediators, was selected to facilitate the negotiations during the mediation.

37. Prior to the first mediation session, Lead Counsel and counsel for Comverse prepared and submitted comprehensive mediation statements to the Mediator. These statements provided comprehensive overviews of the factual and legal issues implicated by the litigation, presented their respective views about the strengths and weaknesses of the claims, offered their differing views as to the damages suffered by the Class, and highlighted the critical issues that would determine whether a settlement was possible.

38. The first mediation conference occurred on December 1, 2008. At the conference, Counsel for both Comverse and Lead Plaintiff made oral presentations. Thereafter, the Mediator facilitated arms-length negotiations. Numerous telephonic and in person conferences, as well as multiple additional mediation sessions, were necessary before an agreement on certain economic terms of a potential settlement was reached in late November 2009. Settlement negotiations continued after that date until the signing of the Stipulation of Settlement on December 16, 2009.

HOW DO I KNOW IF I AM PART OF THE CLASS OR IF I CAN PARTICIPATE IN THE SETTLEMENT?

RECEIPT OF THIS NOTICE DOES NOT NECESSARILY MEAN THAT YOU ARE A MEMBER OF THE CLASS OR THAT YOU CAN PARTICIPATE IN THE SETTLEMENT.

39. By Order dated , 2009, the Court has decided that all persons and entities that purchased Comverse common stock during the period of April 30, 2001 through and including January 29, 2008, are eligible to participate in the Settlement, with the exception of the Defendants and their corporate affiliates; any officers or directors of Comverse, members of their immediate families, and their heirs, successors and assigns; and any employees of Comverse during the Class Period. Also excluded from the Settlement is any person or entity that files a request for exclusion in accordance with the requirements set forth in this Notice.

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WHAT RIGHTS DO I HAVE AS A MEMBER OF THE CLASS?

40. If you take no action in response to this Notice, you will automatically be considered to be a member of the Class, to the extent you fit within the definitions outlined above.

41. As a member of the Class, however, you are entitled to share in any recovery obtained in this Action, whether from a final judgment after trial or a settlement among the parties based upon a plan of allocation that will be approved by the Court. Thus, by remaining in the Class, you are entitled to share in the recovery from the Settlement as described in this Notice.

42. As a member of the Class, you are also entitled to notice and the opportunity to file an objection with the Court if you do not agree with all or part of a proposed settlement. Thus, this Notice describes the way in which you can object to the proposed Settlement.

43. By remaining in the Class, you will not be able to sue, continue to sue, or be part of any other lawsuit against the Defendants relating to the issues arising in the Action. It also means that any judgment that is subsequently entered in the Action, or orders of the Court, will be applicable to you and will, therefore, be legally binding.

44. Thus, by remaining in the Class, you will be subject to the Final Judgment contemplated by the Settlement and you will be bound by the release of Released Plaintiffs’ Claims contained therein.

EXCLUDING YOURSELF FROM THE CLASS

IF YOU DO NOT WISH TO PARTICIPATE IN THE CLASS, THEN YOU MUST IMMEDIATELY TAKE SPECIFIC STEPS TO EXCLUDE YOURSELF.

45. If you are currently prosecuting your own action arising out of the claims asserted herein and you wish to continue to do so, or if you have not yet filed an individual action but intend to do so, then you must also take specific steps to exclude yourself from the Class. This process is also commonly referred to as “opting out.” If you ask to be excluded, you will not receive any payment that may arise from this Action, whether by judgment or settlement, and you cannot file objections. However, you will not be legally bound by anything that happens in this Action, and you may be able to sue (or continue to sue) the Defendants at your own expense at a future time.

46. For example, if the Settlement is approved, members of the Class who have not requested exclusion will be allowed to participate in the Settlement, but they will have to release all Released Plaintiffs’ Claims, even if they bring, or have a pending, litigation, arbitration or other proceeding against the Released Parties relating to the Released Plaintiffs’ Claims.

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47. In order to be excluded from the Class, you must mail a written request to the Claims Administrator: Berdon Claims Administration LLC. The request for exclusion must: (1) state your name, address, and telephone number; (2) provide documentation reflecting all purchases and sales of Comverse common stock during the Class Period, including the dates, the number of shares of Comverse common stock, and price paid or received per share for each such purchase or sale; and (3) state that you wish to be excluded from the Class.

48. To be valid, a request for exclusion must state all of the foregoing information. Your exclusion must be received on or before .

WHAT RECOVERY DOES THE SETTLEMENT PROVIDE?

49. The Settlement requires the Defendants to provide the Class with $225,000,000 (“Settlement Amount”). Attorney fees and expenses, notification costs, a compensatory award to the Lead Plaintiff, and claims administration costs will be deducted from the Settlement Amount. The Settlement Amount minus these fees, costs, expenses, and awards shall be distributed to the Class.

50. The Settlement Amount shall consist of the following payments by the Defendants to the Settlement Fund:

a. $1 million payable by Comverse on the date of signing the Stipulation of Settlement for Notice costs;

b. $60 million payable by Comverse and Defendant Alexander, with $12 million on or before June 30, 2010 and $48 million after the Judgment is Final;

c. $51.5 million payable by Comverse on or before August 15, 2010;

d. $30 million payable by Comverse on or before February 15, 2011; and

e. $82.5 million payable by Comverse on or before August 15, 2011.

Use of Shares as Pavment Consideration

51. In lieu of paying in cash any or all of the amounts specified in Paragraph 50 (d) or (e), Comverse may elect to satisfy its payment obligations with respect to all or any portion of the unpaid amount by the issuance and delivery to the Settlement Fund shares of Comverse Common Stock (“Settlement Shares”) having an aggregate Fair Market Value equal to all or such portion of the unpaid amount. “Fair Market Value” means with respect to the Settlement Shares on a per share basis, the average of the closing price per share of Common Stock for each of the ten (10) consecutive trading days ending immediately prior to the time that Comverse serves notice on Lead

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Plaintiff and Lead Counsel of its election to issue Common Stock. WHY IS THERE A SETTLEMENT?

52. Under the proposed Settlement, the Court will not decide in favor of either the Lead Plaintiff or the Defendants. By agreeing to a Settlement, both the Lead Plaintiff and the Defendants avoid the costs and risk of a trial, and the Class Members are compensated.

53. In light of the amount of the Settlement and the immediacy of recovery to the Class, Lead Plaintiff believes that the proposed Settlement is fair, reasonable and adequate, and in the best interests of the Class Members. The Settlement provides a substantial benefit, namely $225,000,000, as compared to the risk that a smaller or no recovery would be achieved after a trial and appeals, possibly years in the future, in which the Defendants would have the opportunity to assert substantial defenses to the claims asserted against them.

WHAT MIGHT HAPPEN IF THERE WERE NO SETTLEMENT?

54. If there were no Settlement and Lead Plaintiff failed to establish any essential legal or factual element of its claims, neither Lead Plaintiff nor the Class would recover anything. Also, if the Defendants were successful in proving any of their defenses, the Class likely would recover substantially less than the amount provided in the Settlement, or nothing at all.

Lead Plaintiff’s Assessment of the Settlement

55. Lead Plaintiff believes that the claims against the Defendants have merit and that the evidence developed to date supports those claims. Lead Plaintiff believes it could demonstrate at trial that the Defendants caused the price of Comverse common stock to be artificially inflated during the Class Period by the issuance of materially false statements and by omitting to state material information concerning Comverse. Lead Counsel also believes that it could prove that, as a result of this misconduct, members of the Class were injured.

56. However, Lead Plaintiff recognizes and acknowledges the expense and length of continued proceedings, trial, and appeals. Lead Plaintiff also has taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as this one. Lead Plaintiff is also mindful of the inherent problems of proof under, and possible defenses to, the federal securities law violations asserted, including the defenses asserted by the Defendants during the litigation, in motions on the pleadings, in settlement negotiations, and in the mediation proceedings.

57. Perhaps most importantly, Lead Plaintiff understands that Comverse has limited resources to satisfy any potential judgment; has limited insurance coverage, which has been and will continue to be significantly diminished by continuation of this Action; and has had its common stock de-listed from the NASDAQ for over three years.

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58. In light of the foregoing, Lead Plaintiff believes that the Settlement confers substantial benefits upon the Class. Based on its evaluation, Lead Plaintiff and Lead Counsel have determined that the Settlement is in the best interests of the Lead Plaintiff and the Class.

Defendants’ Assessment of the Claims and Settlement 59. Defendants dispute that Lead Plaintiff would prevail at trial in this Action on the claims it asserted. Defendants dispute, among other things, that Lead Plaintiff would succeed in proving the allegations in the amended complaint that the prices of Comverse stock were artificially inflated by reasons of alleged misrepresentations, non-disclosures or otherwise, and that the Lead Plaintiff or the Class were harmed by the conduct alleged.

60. Nonetheless, the Defendants have concluded that further conduct of the Action would be protracted and expensive, and that it is desirable that the Action be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation in order to limit further expense, inconvenience and distraction, to dispose of the burden of protracted litigation, and to permit the operation of the Company’s business without further distraction and diversion of the Company’s executive personnel with respect to matters at issue in the Action. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like this litigation.

61. Defendants have, therefore, determined that it is desirable and beneficial to them that the Action be settled in the manner and upon the terms and conditions set forth in the Stipulation.

62. Neither this Settlement nor Stipulation, nor any of its terms or provisions, nor any of the negotiations or proceedings connected with it, shall be construed as an admission or concession by any of the Defendants of the merit or truth of any of the allegations or wrongdoing of any kind on the part of any of the Defendants, or of any infirmity in the defenses that the Defendants have or could have asserted in this Action.

Defendants’ Right to Terminate Under Certain Conditions 63. There is the possibility that should certain events occur or not occur, Comverse and/or Alexander may be able to terminate the Settlement before the final hearing. If prior to the Settlement Hearing any person who otherwise would be members of the Class have timely filed exclusion from the Class in accordance with the provisions of the Preliminary Order this Court, and such persons in the aggregate purchased a number of shares of Comverse common stock during the Class Period in an amount greater than the sum specified in a separate supplemental agreement between the Parties, or should certain other events occur, Comverse and Alexander shall have, in their sole discretion, the option to terminate this Stipulation. Alexander also has the right to terminate the Settlement and this Stipulation, either before or after final approval, if certain events relating to proceedings against him by the Department of Justice, the Securities and Exchange Commission, and others do not occur.

64. Should Alexander terminate his settlement, however, the Settlement with Comverse and the other individual defendants other than Alexander shall continue in full force and effect on the

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terms described herein, and Comverse shall owe the Class the total consideration of $165 million. The Class would still be able to pursue its claims in the Litigation against Alexander.

HOW MUCH WILL MY PAYMENT BE? WHAT IS THE PLAN OF ALLOCATION?

65. Your share of the recovery (if any) will depend on the number of valid Claim Forms that Class Members send in, how many shares of Comverse common stock you bought, and when you bought and sold your shares.

66. The Defendants have agreed to pay $225 million in cash and/or stock, as described above. Attorney fees and expenses, notification costs, any compensatory award to the Lead Plaintiff, and claims administration costs will be deducted from the Settlement Amount. The Settlement Amount minus these fees, costs, expenses and awards shall be distributed to the Class (the “Net Settlement Fund”).

67. To receive monies from the Net Settlement Fund, Class Members must complete a Claim Form and Release, and mail it and all required documentation to the Claims Administrator postmarked on or before . Class Members who do not submit a Claim Form and Release will not share in the Net Settlement Fund. Class Members who do not submit either a request for exclusion or a Claim Form and Release will nevertheless be bound by the terms of the Settlement and the Judgment of the Court dismissing the claims with prejudice against the Defendants.

Allocation to Class Members

68. The Claims Administrator shall determine each Authorized Claimant’s pro rata share of the Net Settlement Fund based upon each Authorized Claimant’s Recognized Loss. The Recognized Loss formula set forth below is not intended to be an estimate of the amount that a Class Member might have been able to recover after a trial; nor is it an estimate of the amount that will be paid to Authorized Claimants pursuant to the Settlement. The Net Recognized Loss formula is simply the basis upon which the Net Settlement Fund will be proportionately distributed to Authorized Claimants.

69. Lead Plaintiff’s damages expert analyzed the market price reaction to certain disclosures that occurred during the Class Period, which corrected for Defendants’ alleged misrepresentations. Recognized Losses are based on the price declines following those disclosures. No loss amount is recognized when both the purchase and sale of Comverse stock occurred without intervening public disclosure of adverse information (“In & Out Transactions”). Therefore, Class Members who had only “In & Out Transactions” between disclosures will not receive any payments from the Net Settlement Fund, but will give up their right to pursue the Released Plaintiffs’ Claims against the Defendants.

70. In determining the Recognized Loss per share, Lead Counsel considered the respective net declines in the price of Comverse stock on each of the dates of disclosure, the ability

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to prove loss causation, the likelihood of success on the merits and risk associated with the disclosures. Based on that analysis, as well as Lead Plaintiff’s damages expert’s analysis regarding the statistical significance of the declines associated with the partial disclosures, the following amounts shall be used for calculation of Recognized Loss: (a) $4.30 per share for the decline on March 14, 2006; (b) $1.14 per share for the declines on April 17 and 18, 2006; (c) $0.79 per share for the decline on May 5, 2006; (d) $3.09 per share for the decline on June 12, 2006; (e) $2.95 per share for the decline on November 15, 2006; (f) $0.15 per share for the decline on November 5, 2007; and (g) $0.05 per share for the decline on January 29, 2008.

Formula for Calculating Recognized Losses

71. For Comverse shares purchased from April 30, 2001 through March 13, 2006:

a. For shares sold on or before March 13, 2006, the Recognized Loss is $0.00 per share. b. For shares sold between March 14 and April 16, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $4.30 per share. c. For shares sold between April 17, 2006 and May 4, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $5.44 per share. d. For shares sold between May 5, 2006 and June 11, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $6.23 per share. e. For shares sold between June 12, 2006 and November 14, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $9.32 per share. f. For shares sold between November 15, 2006 and November 5, 2007, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $12.27 per share. g. For shares sold between November 5, 2007 and January 29, 2008, both dates inclusive, the Recognized Loss per share is the difference of the purchases price less the sales price with a cap on recognized loss of $12.42 per share. h. For shares held through January 29, 2008, the Recognized Loss is $12.47 per share. 72. For Comverse shares purchased from March 14, 2006 through April 16, 2006:

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a. For shares sold before April 16, 2006, the Recognized Loss per share is $0.00 per share. b. For shares sold between April 17, 2006 and May 4, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $1.14 per share. c. For shares sold between May 5, 2006 and June 11, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $1.93 per share. d. For shares sold between June 12, 2006 and November 14, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $5.02 per share. e. For shares sold between November 15, 2006 and November 5, 2007, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $7.97 per share. f. For shares sold between November 5, 2007 and January 29, 2008, both dates inclusive, the Recognized Loss per share is the difference of the purchases price less the sales price with a cap on recognized loss of $8.12 per share. g. For shares held through January 29, 2008, the Recognized Loss is $8.17 per share. 73. For Comverse shares purchased from April 17, 2006 through May 4, 2006:

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a. For shares sold before May 5, 2006, the Recognized Loss per share is $0.00 per share. b. For shares sold between May 5, 2006 and June 11, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $0.79 per share. c. For shares sold between June 12, 2006 and November 14, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $3.88 per share. d. For shares sold between November 15, 2006 and November 5, 2007, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $6.83 per share. e. For shares sold between November 5, 2007 and January 29, 2008, both dates inclusive, the Recognized Loss per share is the difference of the purchases price less the sales price with a cap on recognized loss of $6.98 per share. f. For shares held through January 29, 2008, the Recognized Loss is $7.03 per share. 74. For Comverse shares purchased from May 5, 2006 through June 12, 2006: a. For shares sold before June 12, 2006, the Recognized Loss per share is $0.00 per share. b. For shares sold between June 12, 2006 and November 14, 2006, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $3.09 per share. c. For shares sold between November 15, 2006 and November 5, 2007, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $6.04 per share. d. For shares sold between November 5, 2007 and January 29, 2008, both dates inclusive, the Recognized Loss per share is the difference of the purchases price less the sales price with a cap on recognized loss of $6.19 per share. e. For shares held through January 29, 2008, the Recognized Loss is $6.24 per share.

75. For shares of common stock purchased from June 12, 2006 through November 14, 2006:

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a. For shares sold before November 15, 2006, the Recognized Loss per share is $0.00 per share. b. For shares sold between November 15, 2006 and November 5, 2007, both dates inclusive, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $2.95 per share. c. For shares sold between November 5, 2007 and January 29, 2008, both dates inclusive, the Recognized Loss per share is the difference of between the purchase price less the sales price with a cap on recognized loss of $3.10 per share. d. For shares held through January 29, 2008, the Recognized Loss is $3.15 per share. 76. For shares of common stock purchased from November 15, 2006 through November 5, 2007: a. For shares sold before November 5, 2007, the Recognized Loss per share is $0.00 per share. b. For shares sold between November 5, 2007 and January 29, 2008, both dates inclusive, the Recognized Loss per share is the difference of the purchases price less the sales price with a cap on recognized loss of $0.15 per share c. For shares held through January 29, 2008, the Recognized Loss is $0.20 per share. 77. For shares of common stock purchased from November 5, 2007 through January 29, 2008: a. For shares sold before January 29, 2008, the Recognized Loss per share is $0.00 per share. b. For shares held through January 29, 2008, the Recognized Loss per share is the difference of the purchase price less the sales price with a cap on recognized loss of $0.05 per share. 78. To the extent that the Net Settlement Fund is sufficient, each Authorized Claimant will receive an amount equal to the Authorized Claimant’s Recognized Loss, as defined above. If, however, the Net Settlement Fund is not sufficient to permit such payment, then each Authorized Claimant shall be paid their pro rata share of the Net Settlement Fund based on the percentage of the Net Settlement Fund that each Authorized Claimant=s Recognized Loss bears to the entire Net Settlement Fund. Payment in this manner shall be deemed conclusive against all Authorized Claimants.

79. No distribution will be made on a claim where the Authorized Claimant’s pro rata share of the Net Settlement Fund is less than $15.00.

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80. Class Members will receive monies and/or stock only if they file a timely and valid Proof of Claim form and Release.

81. The proportion of cash and stock received pursuant to this Settlement will be the same as the proportion of cash and stock included in the Settlement Amount. As discussed infra in Paragraph 50, Comverse has the option to pay $110 million, or 48.8% of the Settlement Amount in stock.

General Provisions for Plan of Allocation:

82. In processing claims, the first-in, first-out basis (“FIFO”) will be applied to purchases and sales.

83. The date of purchase or sale is the “contract” or “trade” date, and not the “settlement” date.

84. Brokerage commissions, fees and taxes should be excluded from the purchase or sale price of Comverse common stock.

85. Members of the Class who do not file acceptable Proofs of Claim will not share in the Net Settlement Fund, yet will nevertheless be bound by the Court’s Judgment and the Settlement.

86. Shares of Comverse common stock acquired during the Class Period by means of a gift, inheritance or operation of law, do not qualify as the purchase of such shares on the date of such acquisition. If, however, such stock was purchased by the donor, descendent or transferor, then, unless the donor, descendent or transferor submits a Claim Form with respect to the shares, the recipient=s Recognized Losses will be computed by using the closing price of such stock on the original date of purchase and not the date of transfer.

87. Payments pursuant to the Plan of Allocation, as approved by the Court, will be conclusive against all Authorized Claimants. No person shall have any claim against Lead Plaintiff, Lead Counsel, the Settlement Administrator, or any other agent designated by Lead Counsel, based on a distribution made substantially in accordance with the Stipulation and the Plan of Allocation or further Orders of the Court. Defendants, and their counsel, shall have no responsibility for, interest in, or liability whatsoever with respect to any allocation, management, disposition, computation, or distribution of the Settlement Amount.

88. The Court has reserved jurisdiction to allow, disallow or adjust the claim of any Class Member on equitable grounds.

Alteration of the Plan of Allocation

89. Subject to the Court’s approval, the Plan of Allocation may be altered by Lead Plaintiff without any further notice to Class Members, unless such Class Members expressly request notice of any alteration of the Plan of Allocation. Therefore, in order to receive such notice, you

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must send a request no later than to the Claims Administrator at the address set forth below.

90. The Court also may modify the Plan of Allocation without further notice to the Settlement Class.

HOW DO I PARTICIPATE IN THE SETTLEMENT? WHAT DO I NEED TO DO?

91. If you fall within the definition of the Class as defined above, you will remain a Class Member unless you elect to be excluded. If you do not request to be excluded, you will be bound by any judgment entered in the Action whether or not you file a Proof of Claim, including the dismissal with prejudice of any Released Plaintiffs’ Claims against the Defendants you may possess under Federal law, or the law of any state.

92. If you wish to remain a Member of the Class you need do nothing (other than timely file a Proof of Claim and Release if you wish to participate in the distribution of funds from the Settlement). Your interests will be represented by Lead Plaintiffs’ Counsel. If you choose, you may enter an appearance individually or through your own counsel at your own expense.

93. TO PARTICIPATE IN THE DISTRIBUTION FROM THE SETTLEMENT YOU MUST TIMELY REQUEST, COMPLETE AND RETURN THE PROOF OF CLAIM AND RELEASE FORM.

94. Unless the Court orders otherwise, if you do not timely submit a valid Proof of Claim and Release, you will be barred from receiving any payments from the Settlement, but will in all other respects be bound by the provisions of the Stipulation and the Judgment

95. Copies of the Notice of Pendency and the Proof of Claim and Release in Hebrew may be obtained by accessing the website of the Claims Administrator at www.berdonclaims.com , or by mail or fax to the Claims Administrator.

WHAT RIGHTS AM I GIVING UP BY AGREEING TO THE SETTLEMENT?

96. If the Settlement is approved, the Court will enter a Judgment and Order of Dismissal (the “Judgment”). The Judgment will dismiss the claims against the Defendants, with prejudice, and provide that Lead Plaintiff and all other Class Members, except those who validly and timely request to be excluded, shall upon the entry of the Judgment be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished and discharged the Released Plaintiffs’ Claims. The full extent of the Released Plaintiffs’ Claims can be found in the Proof of Claim and Release annexed hereto.

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WHAT PAYMENTS ARE THE ATTORNEYS FOR THE CLASS AND THE LEAD PLAINTIFF SEEKING FOR THEIR WORK IN THIS CASE?

97. Lead Counsel have not received any payment for its services in pursuing this lawsuit on behalf of the Class, nor have they been reimbursed for their considerable out-of-pocket expenses. Lead Counsel intends to apply to the Court for an award of attorney fees on behalf of all plaintiffs’ counsel not to exceed ___% of the Settlement Amount. This represents a multiple of its incurred billable time to date of approximately . Any fees awarded by the Court will be paid to Lead Counsel in the same form as the consideration received by the Class i.e., cash or stock.

98. In addition, Lead Counsel intends to apply for reimbursement of litigation expenses advanced in connection with the Action in an amount not to exceed $ million. Any expenses awarded to Lead Counsel shall be paid in cash from the Settlement Amount. If the application for attorney fees and reimbursement of litigation expenses is approved by the Court, the average cost per share would be approximately $____.

99. Representatives of Lead Plaintiff and its investment advisors have incurred costs and expenses associated with their service as Class Representative including the provision of deposition testimony, production of documents and telephonic attendance at mediation sessions. Lead Plaintiff have not received any compensation for such services which benefited the Class, nor has it been reimbursed for its out-of-pocket expenses. As a result, Lead Counsel intends to apply to the Court for a $ Compensatory Award for Lead Plaintiff. If this application is approved by the Court, the average cost per share would be approximately $ . Such a Compensatory Award for Lead Plaintiff will be paid out of the Settlement Amount.

WHEN AND WHERE WILL THE COURT DECIDE WHETHER TO APPROVE THE SETTLEMENT AND RELATED MATTERS?

DO I HAVE TO COME TO THE HEARING?

MAY I SPEAK AT THE HEARING IF I DON’T LIKE THE SETTLEMENT OR OTHER MATTERS REFERENCED IN THIS NOTICE?

If you do not wish to object to the proposed Settlement, the Plan of Allocation, or the application for attorney fees and reimbursement of litigation expenses, or the proposed Compensatory Award to the Lead Plaintiff, you need not attend the Settlement Hearing scheduled for .

100. Any Class Member who has not validly and timely requested to be excluded, and who objects to any aspect of the Settlement, the Plan of Allocation, the application for attorneys’ fees, costs and expenses, or the request for a Compensatory Award to Lead Plaintiff, may appear and be heard at the Settlement Hearing.

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101. Any such Person must submit a written notice of objection, which must be received on or before , to each of the following: CLERK OF THE COURT, EASTERN DISTRICT OF NEW YORK, ; POMERANTZ HAUDEK BLOCK GROSSMAN & GROSS LLP, Patrick V. Dahlstrom, Esq., 10 South LaSalle Street, Suite 3505 Chicago, IL 60603 (Lead Counsel); WEIL GOTSHALL, Joseph S. Allerhand, Esq., 767 Fifth Avenue, New York, New York 10153 (Counsel for Comverse); MORVILLO, ABRAMOWITZ, GRAND, IASON ANELLO & BOHRER, P.C., Edward M. Spiro, Esq., 565 Fifth Avenue, New York, New York 10017 (Counsel for Alexander).

102. The notice of objection must demonstrate the objecting person’s membership in the Class, including documentation reflecting the dates of purchase and sales and number of Comverse shares purchased and sold during the relevant period, and also contain a statement of the reasons for objection. Only members who have submitted written notices of objection and related documentation in this manner will be entitled to be heard at the Settlement Hearing, unless the Court orders otherwise. By filing an objection, the objector consents to being deposed in his or her district of residence prior to the Settlement Hearing.

103. The Settlement Hearing may be delayed from time to time by the Court without further written notice to the Class. If you intend to attend the Settlement Hearing, you should confirm the date and time with Lead Counsel.

104. Unless otherwise ordered by the Court, any Class Member who does not object in the manner described herein will be deemed to have waived any objection and shall be forever foreclosed from making any objection to the proposed Settlement, the application for attorney fees and reimbursement of litigation expenses, and/or the proposed Plan of Allocation and/or the Compensatory Award to Lead Plaintiff. Class Members do not need to appear at the hearing or take any other action to indicate their approval.

WHAT IF I AM A BROKER, BANK OR OTHER NOMINEE WHICH BOUGHT SHARES ON SOMEONE ELSE’S BEHALF?

105. If you hold any Comverse common stock purchased during the Class Period as nominee for a beneficial owner, then, within ten (10) days after you receive this Notice, you must either: (1) provide a list of the names and addresses of such beneficial owners to the Claims Administrator, preferably on computer-generated mailing labels or, electronically in MS Word (label size Avery 5162), or in an MS Excel data table, setting forth (a) title/registration, (b) street address, (c) city/state/zip; or (2) send a copy of this Notice and the Proof of Claim and Release by first class mail to all such beneficial owners, providing written confirmation to the Claims Administrator of having done so. If you choose to mail the Notice yourself, you may obtain (without cost to you) as many additional copies of these documents as you will need to complete the mailing by either downloading a copy from the Claims Administrator’s website at www.berdonclaims.com ; by calling the Claims Administrator at ; or by sending a letter requesting a copy to the address set forth in Paragraph ___.

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106. Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you, you may obtain reimbursement of reasonable administrative costs actually incurred in connection with forwarding the Notice and which would not have been incurred but for the obligation to forward the Notice, after submission of appropriate documentation.

CAN I SEE THE COURT FILE? WHO SHOULD I CONTACT IF I HAVE QUESTIONS?

107. This Notice is a summary and does not describe all of the details of the Action or the proposed settlement. For full details of the matters discussed in this Notice, you may desire to review all of the documents that have been filed with the Court, the Consolidated Amended Class Action Complaint, the Stipulation, the Notice, the Proof of Claim and Release, and Preliminary Order of Approval, the papers filed in support of the Settlement, the applications for an award of attorney fees and expenses for Lead Plaintiffs’ Counsel, and the application for a compensatory award for Lead Plaintiff. These documents may be inspected during business hours, at the office of the Clerk of the Court, United States Courthouse, Eastern District of New York, 225 Cadman Plaza East, Brooklyn , New York.

108. You may review and obtain copies of the Stipulation of Settlement and other relevant documents at www.pomlaw.com and www.berdonclaims.com .

109. If you have any questions about the Settlement or claims procedure, you may contact Lead Counsel by writing: POMERANTZ HAUDEK GROSSMAN & GROSS LLP, Attn: Carolyn Moskowitz, 100 Park Avenue, New York, New York 10017-5517.

110. If you need additional copies of this Notice, or if you have a question about filing a claim, you may contact the Claims Administrator, as set forth in Paragraph __ above.

DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.

DATED:

BY ORDER OF THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

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EXHIBIT A-2 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 2 of 12

PROOF OF CLAIM AND RELEASE FORM

A. GENERAL INSTRUCTIONS & INFORMATION

1. You are urged to read carefully the accompanying Notice of Proposed Settlement Of Class Action (the "Notice").

2. To file a claim and recover under the Settlement of this Litigation, you must submit this Proof of Claim Form and Release. However, such filing is not a guarantee that you will share in the proceeds of the Settlement in the Litigation.

3. You Must Mail Your Completed And Signed Proof Of Claim And Release Form Postmarked On Or Before , 2010, addressed To:

Comverse Technology, Inc. Securities Litigation c/o Berdon claims Administration LLC P.O. Box 9014 Jericho, New York 11753-8914

4. If you are a Class Member and you do not timely request exclusion, you will be bound by the terms of any judgment entered in the Litigation.

5. If you are not a Class Member, do not submit a Proof of Claim Form and Release.

6. All capitalized terms used in this Proof of Claim Form and Release are the same as used in the Notice.

7. If you need assistance filling out this Proof of Claim Form, please contact the Claims Administrator.

B. INSTRUCTIONS FOR FILLING OUT THE PROOF OF CLAIM FORM

Important additional information regarding the Settlement and this Proof of Claim is contained in the Accompanying Notice. Please refer to the Plan of Allocation set forth in the accompanying Notice for a detailed explanation of how a Claimant’s Recognized Loss will be calculated.

1. In order to be eligible to participate in the distribution of the Settlement Fund, a claimant ("Claimant") must have purchased or otherwise acquired the common stock of Comverse Technology, Inc. (“Comverse”) during the period from April 30, 2001 through January 29, 2008.

2. The submission of a Proof of Claim does not ensure that your claim will be upheld or that you will share in any recovery. All claims are subject to verification and investigation. You may be requested to provide further information. Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 3 of 12

3. All claims must be made by persons or entities who were beneficial owners (as opposed to record holders or nominees) of shares of Comverse common stock. (Brokerage firms, banks and other nominees are requested to transmit copies of the Notice and Proof of Claim to their present or former customers who were such beneficial owners). If shares of Comverse common stock were owned jointly, all joint owners must complete and sign the Proof of Claim.

4. Executors, administrators, guardians, conservators and trustees may complete and sign the Proof of Claim on behalf of persons or entities represented by them, but they must identify such persons or entities and provide proof of their authority ( e.g., powers of attorney or currently effective letters testamentary or letters of administration) to do so.

5. You must file a separate Proof of Claim for each differently named account or ownership, such as an individual account, an IRA account, a joint account, a custodial account, etc. Joint tenants, co-owners or custodians UGMA should file a single claim. Claimants who file one or more claims (e.g., one in Claimant’s name and one for an IRA or joint ownership) must identify the other claims filed.

6. There should be no Recognized Loss attributed to any Comverse securities other than common stock.

7. The date of purchase and/or sale of shares of Comverse common stock is the "trade" date and not the "settlement" date.

8. The first-in, first-out basis (“FIFO”) will be applied to both purchases and sales.

9. Exercise of option contracts will be considered to be purchases or sales of common stock.

10. The date of covering a “short sale” is deemed to be the date of purchase of Comverse common stock; and the date of a “share sale” is deemed to be the date of sale of Comverse common stock.

11. No cash payment will be made on a claim where the potential distribution is less than $15.00.

12. You must attach to your claim form copies of brokerage confirmations, monthly statements or other documentation of your transactions in Comverse common stock in order for your claim to be valid. If such documents are not available, a complete list of acceptable supporting documentation can be found on the Claims Administrator’s website: www.berdonclaims.com (click on “Supporting Documentation” under Questions and Procedures). Failure to provide this documentation could delay verification of your claim or could result in rejection of your claim.

2 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 4 of 12

13. If your trading activity during the Class Period exceeds 50 transactions, you must provide all purchase and sale information required in the Schedule of Transactions in an electronic file. For a copy of instructions and the parameters concerning an electronic submission, contact the Claims Administrator by phone: (800) 766-3330; by fax: (516) 931- 0810; or via the website: www.berdonclaims.com .

14. If you have any questions or need additional Proof of Claim Forms, contact the Claims Administrator by phone: (800) 766-3330; by fax: (516) 931-0810; or via the website: www.berdonclaims.com. You may make photocopies of this form.

3 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 5 of 12

COMVERSE Comverse Technology, Inc. Securities Litigation

PROOF OF CLAIM

Must be received by the Claims Administrator postmarked no later than 2010

C. CLAIMANT IDENTIFICATION

Please Type or Print

Beneficial Owner’s Name (as it appears on your brokerage statement)

Joint Beneficial Owner’s Name (as it appears on your brokerage statement)

Street Address

City State Zip Code

Foreign Province Foreign Country

or Social Security Number Taxpayer Identification Number

Specify one of the following: Individual(s) Corporation UGMA Custodian IRA

Partnership Estate Trust Other:

(Day) (Evening) Area Code Telephone Number Area Code Telephone Number

Facsimile Number E-Mail Address

Record Owner's Name and Address (if different from beneficial owner listed above)

4 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 6 of 12

D. SCHEDULE OF TRANSACTIONS

1. State the total number of shares of Comverse common stock owned at the close of trading on April 29, 2001: .

2. Separately list each and every purchase of Comverse common stock during the period April 30, 2001 through January 29, 2008, and provide the following information:

Number of Shares of Comverse Common Stock Documentation Enclosed Date of Purchase Purchased Yes/No Month/Day/Year

3. If you sold any shares of Comverse common stock, you must separately list each and every sale during the period April 30, 2001 through January 29, 2008.

Date Of Sale Number of Shares of Documentation Enclosed Month/Day/Year Comverse Common Stock Yes/No Sold

5 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 7 of 12

4. State the total number of shares of Comverse common stock owned at the close of trading on January 29, 2008: .

If you need additional space, attach the required information on separate, num- bered sheets in the same format as above, and print your name and Social Security or Taxpayer Identification number at the top of each additional sheet.

YOU MUST ALSO READ THE RELEASE AND SIGN THE CERTIFICATION ON PAGE __.

E. SUBMISSION TO JURISDICTION OF THE COURT

By submitting this Proof of Claim Form and Release, I/we, and every Class member I/we represent, submit to the jurisdiction of the United States District Court for the Eastern District of New York for purposes of this Action and the Settlement of the Action, as reflected in the Stipulation of Settlement (the "Settlement"). I/We further agree to be bound by the orders of the Court, agree that this Proof of Claim Form, my/our status or the status of the Class member I/we represent as a Claimant and the allowable amount of this claim will be subject to review and further inquiry, and that I/we will furnish such additional documentation with respect to this Proof of Claim as may be required.

F. RELEASE

By signing this Proof of Claim Form and Release, and in consideration of the establishment of the Settlement Fund, as of the Effective Date thereof, the undersigned claimant (“Claimant”), on behalf of Claimant and Claimant’s predecessors, successors, parents, subsidiaries, affiliates, custodians, agents, assigns, representatives, heirs, executors, trustees, and administrators, hereby releases and forever discharges Comverse Technology, Inc., Jacob “Kobi” Alexander, William F. Sorin, David Kreinberg, John H. Friedman, Ron Hiram, and Sam Oolie, each and every past and current Defendant and, whether or not identified in any complaint filed in the Action, each Defendant’s past or present directors, officers, employees, partners, member firms or affiliates, principals, agents, predecessors, successors, parents, subsidiaries, divisions, joint ventures, attorneys, accountants, insurers, reinsurers, assigns, spouses, heirs, associates, related or affiliated entities, or any members of their immediate families, or any trusts for which any of them are trustees, settlers or beneficiaries (the “Released Parties”), for all claims (including “Unknown Claims” as defined below), rights, demands, suits, matters, issues, or causes of action under federal, state, local, foreign law, or any other law, rule, or regulation, whether known or unknown, that were, could have been, or could in the future be asserted against the Released Parties by Plaintiffs in any court of competent jurisdiction or any other adjudicatory tribunal, in connection with, arising out of, related to, based upon, in whole or in part, directly or indirectly, in any way, to the facts, transactions, events, occurrences, acts, disclosures, oral or written statements, representations, filings, publications, disseminations,

6 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 8 of 12

press releases, presentations, accounting practices or procedures, compensation practices or procedures, omissions or failures to act which were or which could have been alleged or described in this Class Action by Plaintiffs, including but not limited to, any and all claims related to or arising out of the matters reported in the Comverse’s Current Reports on Form 8-K filed with the SEC on November 5, 2007, and January 29, 2008, the Report of the Special Committee of Comverse’s Board of Directors summarized in the Comverse’s Current Report on Form 8-K filed with the SEC on January 29, 2008, the Federal Bureau of Investigation affidavit in support of arrest warrants issued against defendants Alexander, Kreinberg and Sorin, or the SEC’s complaints against defendants Alexander, Kreinberg and Sorin, compensation practices, options backdating, the administration of a secret options reserve fund, the recycling of unexercised options from departed employees to other employees, or any other options dating or grant practice, procedure or policy, the issuance and administration of employee stock options of Comverse, earnings manipulation, finances, accounting practices or procedures, public filings, press releases or other public statements or disseminations, revenue recognition issues, audits or reviews of Comverse’s consolidated financial statements for the fiscal year ended January 31, 2005, the first three quarters of the fiscal year ended January 31, 2006, or any prior period, and claims for breach of fiduciary duty, insider trading, misappropriation of information, failure to disclose, omissions or failures to act, abuse of control, breach of Comverse’s policies or procedures, waste, mismanagement, gross mismanagement, unjust enrichment, misrepresentation, fraud, breach of contract, negligence, breach of duty of care or other duty, violations of law, money damages, injunctive relief, corrective disclosure, damages penalties, disgorgement, restitution, interest, attorneys’ fees, expert or consulting fees, and any and all other costs, expenses or liability whatsoever, whether based on federal, state, local, foreign, statutory, common law, or any other law, rule, or regulation, whether fixed or contingent, accrued or un- accrued, liquidated or un-liquidated, at law or in equity, matured or un-matured, including both known claims and Unknown Claims that were or that could have been alleged in the Consoli- dated Amended Complaint in this Action.

“Unknown Claims” shall collectively mean all claims, demands, rights, liabilities, and causes of action of every nature and description which any Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Parties which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Parties, or might have affected his, her or its decision not to object to this Settlement. With respect to any and all Released Plaintiffs’ Claims, the Parties stipulate and agree that, upon the Effective Date, Lead Plaintiff shall expressly waive, and each of the Class Members shall be deemed to have waived, and by operation of the Judgment and Order of Dismissal With Prejudice shall have waived, the provisions, rights and benefits of California Civil Code § 1542, which provides:

7 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 9 of 12

and each of the Class Members shall be deemed to have, and by operation of the Judgment and Order of Dismissal With Prejudice shall have, expressly waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code § 1542. Lead Plaintiff and Class members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of the Released Plaintiffs’ Claims, but Lead Plaintiff shall expressly, fully, finally and forever settle and release, and each Class member, upon the Effective Date, shall be deemed to have, and by operation of the Judgment and Order of Dismissal With Prejudice shall have, fully, finally, and forever settled and released, any and all Released Plaintiffs’ Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Lead Plaintiff acknowledges, and the Class Members shall be deemed by operation of the Judgment and Order of Dismissal with Prejudice to have acknowledged, that the foregoing waiver was separately bargained for and a key element of the Settlement of which this release is a part.

Notwithstanding any of the foregoing, this Release does not operate as a release of any claims by the plaintiffs in the derivative actions in In re Comverse Technology, Inc. Derivative Litigation, No. 601272/06, pending in the Supreme Court for the State of New York, County of New York, or In re Comverse Technology, Inc. Derivative Litigation, CV 06-1849 (NGG)(RER), pending in the United States District Court, Eastern District of New York.

G. REPRESENTATIONS

I/We acknowledge that I/we have read the Notice of Proposed Settlement of Class, and that pursuant thereto I/we file this claim to participate in the Settlement.

I/We hereby warrant and represent that neither I/we, nor any person I/we represent, is a Defendant (as defined in the Notice) with respect to any of the claims asserted in the Litigation, a member of the immediate family of any of the Individual Defendants, or a person or entity who has requested exclusion from the Class.

I/We hereby warrant and represent that I am/we are authorized to execute and deliver this Proof of Claim Form and Release.

8 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 10 of 12

H. CERTIFICATION

I/We certify that I am/we are not subject to backup withholding. (If you have been notified by the IRS that you are subject to backup withholding, strike out the previous sentence.)

I/We declare and affirm under penalties of perjury that the foregoing information and the documents attached hereto, including the Social Security or Taxpayer Identification Number shown on this Proof of Claim, are true, correct and complete to the best of my/our knowledge, information and belief, and that this Proof of Claim Form and Release was executed this day of , 2009 in , . (City) (State/Country)

Signature of Claimant

(Print your name here)

Signature of Joint Claimant, if any

(Print your name here)

Signature of person signing on behalf of Claimant

(Print your name here)

Capacity of person signing on behalf of Claimant, if other than an individual, (e.g., Executor, President, Custodian, etc.)

9 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 11 of 12

SUBSTITUTE FORM W-8: IF YOU ARE NOT A RESIDENT OR CITIZEN OF THE UNITED STATES, COMPLETE THE FOLLOWING:

Permanent residence (principal office if a corporation)

If your claim is connected with a trade or business conducted in the U.S., please provide the name and address of your U.S. business, the type of business, and the Federal Tax Identification Number of the U.S. business.

Tax Identification Number

W-8 Certification: Under the penalties of perjury, I certify that the information provided above is true, correct and complete.

SIGNATURE(S) / /

10 Case 1:06-cv-01825-NGG-RER Document 323-3 Filed 12/18/09 Page 12 of 12

ACCURATE CLAIMS PROCESSING TAKES A SIGNIFICANT AMOUNT OF TIME. THANK YOU FOR YOUR PATIENCE.

Reminder Checklist:

1. Remember to sign the above Release and Certification (or W-8 Certification).

2. Remember to attach only copies of acceptable supporting documentation, a complete list of which can be found on the Claims Administrator’s website.

3. Do not send originals of securities certificates.

4. Keep copies of the completed claim form and documentation for your own records.

5. If you desire an acknowledgment of receipt of your claim form, please send it Certified Mail, Return Receipt Requested, or its equivalent. You will bear all risks of delay or non-delivery of your claim.

6. If your address changes in the future, or if these documents were sent to an old or incorrect address, please send us written notification of your new address.

7. If you have any questions or concerns regarding your claim, please contact the Claims Administrator at:

Comverse Technology Inc., Shareholders Securities Litigation c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY 11753-8914 Telephone: (800) 766-3330 Fax: (516) 931-0810 Website: www.berdonclaims.com

11 Case 1:06-cv-01825-NGG-RER Document 323-4 Filed 12/18/09 Page 1 of 3

EXHIBIT A-3 Case 1:06-cv-01825-NGG-RER Document 323-4 Filed 12/18/09 Page 2 of 3

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK x IN RE COMVERSE TECHNOLOGY, INC. Civil Action No. SECURITIES LITIGATION CV 09-1825 (NGG)(RER) x

SUMMARY NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION

TO: ALL PERSONS AND ENTITIES THAT PURCHASED COMVERSE TECHNOLOGY, INC. COMMON STOCK DURING THE PERIOD OF APRIL 20, 2001 THROUGH JANUARY 29, 2008 (THE “CLASS”).

Excluded from the Class are the Defendants, all current and former officers and directors of Comverse, all employees of Comverse and/or its Subsidiaries during the Class Period, and any family member, trust, company, entity or affiliate controlled or owned by any of the excluded persons and entities referenced above.

YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Eastern District of New York, that a hearing will be held on , 2010, at ______.m., before the Honorable Nicholas G. Garaufis of the United States District Court for the Eastern District of New York, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York 11201, to determine: (1) whether the settlement of the Class’s claims against the Defendants for $225,000,000, should be approved as fair, just, reasonable and adequate; (2) whether the proposed Plan of Allocation is fair, just, reasonable, and adequate; (3) whether the application of Lead Counsel for an award of attorneys’ fees and expenses should be approved; (4) whether the Lead Plaintiff should be granted a compensatory award; and (5) whether the Litigation should be dismissed with prejudice as set forth in the Stipulation filed with the Court.

If you are a member of the Class, your rights are affected by this action and you may have the right to participate in any recovery. You also have the right to exclude yourself from the Class in accordance with the directions set forth in a more detailed Notice of Pendency of Class Action, which was mailed to persons and entities identified from the records of defendant Comverse Technology, Inc. as members of the Class. That Notice of Pendency of Class Action describes the Class Action and your rights with respect thereto.

If you have not received a more detailed Notice by mail, please contact:

Claims Administrator Comverse Technology, Inc. Securities Litigation c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, New York 11753-8914 Case 1:06-cv-01825-NGG-RER Document 323-4 Filed 12/18/09 Page 3 of 3

Telephone: (800) 766-3330 Fax: (516) 931-0810 Website: www.berdonclaims.com

Inquiries, other than requests for the Notice, may be made to Lead Counsel for the Class:

Patrick V. Dahlstrom Marc I. Gross Pomerantz Haudek Pomerantz Haudek Grossman & Gross LLP Grossman & Gross LLP Ten South La Salle Street 100 Park Avenue Suite 3505 New York, New York Chicago, Illinois 60603 Telephone: (212) 661-1100 Telephone: (312) 377-1181 toll free (888) 773-9224 [email protected] [email protected]

INQUIRIES SHOULD NOT BE DIRECTED TO THE COURT, THE CLERK’S OFFICE, THE DEFENDANTS, OR DEFENDANTS’ COUNSEL

Dated: Brooklyn, New York , 2009 By Order of the Court United States District Court Eastern District of New York Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 1 of 13

EXHIBIT B Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 2 of 13

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

) IN RE COMVERSE TECHNOLOGY, ) Civil Action No. CV 06 1825 (NGG) (RER) INC. SECURITIES LITIGATION ) ) )

JUDGMENT AND ORDER OF DISMISSAL

This matter came on for hearing on __ and upon the application of

Lead Plaintiff and all Defendants (the “Settling Parties”) for approval of the Settlement set forth in the Stipulation of Settlement (the “Stipulation”) dated December 16, 2009. Due and adequate notice having been given to the Class, and the Court having considered the Stipulation, all papers filed and proceedings held herein and all oral and written comments received regarding the proposed Settlement, and having reviewed the entire record in the action, and good cause appearing therefore;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:

1. The Court, for purposes of this Judgment and Order of Dismissal, with prejudice (the “Judgment”), adopts all defined terms as set forth in the Stipulation, and incorporates them herein by reference as if fully set forth.

2. The Court has jurisdiction over the subject matter of this Action, Lead

Plaintiff, Class Members, and Defendants.

3. The Court finds that the distribution of the Notice of Pendency and

Proposed Settlement of Class Action (the “Notice”) and publication of the Summary Notice of

Pendency and Proposed Settlement of Class Action (“Summary Notice”) were effected in Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 3 of 13

accordance with the Order Preliminarily Approving Settlement, dated (the “Preliminary

Order of Approval”), and (i) constituted the best notice practicable under the circumstances to all persons within the definition of the Class; (ii) that this notice was reasonably calculated, under the circumstances, to apprise Class Members of the pendency of the Action, the effect of the

Stipulation, the release of rights contained in the Stipulation, the right to obtain exclusion from the

Class, and the right to appear at the Settlement Hearing; and (iii) that this notice fully met the requirements of Rule 23 of the Federal Rules of Civil Procedure, due process, the United States

Constitution, the Private Securities Litigation Reform Act of 1995, and any other applicable law.

4. The Court has certified, for settlement purposes only, a Class of all purchasers of the common stock of Comverse Technology, Inc. (“Comverse”) during the period from April 30, 2001 through January 29, 2008 (the “Class Period”), both dates inclusive. Excluded from the Class are the Defendants, all current and former officers and directors of Comverse, all employees of Comverse and/or its Subsidiaries during the Class Period, and any family member, trust, company, entity or affiliate controlled or owned by any of the excluded persons and entities referenced above.

5. With respect to the Class, this Court finds and concludes that: (a) the members of the Class are so numerous that joinder of all Class Members in the Class Action is impracticable; b) there are questions of law and fact common to the Class which predominate over any individual questions; c) the claims of Lead Plaintiff are typical of the claims of the

Class; d) Lead Plaintiff and Lead Plaintiff’s Counsel have, at all times, fairly and adequately represented and protected the interests of the Class members; e) a class action is superior to other available methods for the fair and efficient adjudication of the controversy, considering: (i) the interests of the members of the Class in individually controlling the prosecution of the separate

2 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 4 of 13

actions; (ii) the extent and nature of any litigation concerning the controversy already commenced by members of the Class; (iii) the desirability or undesirability of continuing the litigation of these claims in this particular forum; and (iv) the difficulties likely to be encountered in the management of the Class Action.

6. Pursuant to and in accordance with the requirements of Rules 23 of the

Federal Rules of Civil Procedure, the Court approves the Settlement set forth in the Stipulation, including specifically, without limitation, the amount of the Settlement, which totals

$225,000,000 in cash, with an option to substitute $110,000,000 of that sum with Settlement

Shares, as subject to the adjustments and protections set forth in the Stipulation; the Releases set forth therein; and the dismissal, with prejudice, of all the Released Claims against the Released

Parties set forth herein as fair, just, reasonable and adequate. The Settling Parties are directed to perform in accordance with the terms set forth in the Stipulation.

7. Pursuant to Section 3(a)(10) of the Securities Act of 1933, any Settlement

Shares issued pursuant to the Settlement do not constitute “restricted securities.”

8. Lead Counsel is authorized to sell any Comverse Technology, Inc., Verint

Systems, Inc., or Ulticom, Inc. common stock upon transmittal of the shares to the Comverse

Settlement Fund Escrow Account, and upon consultation with an independent investment firm

(which will have no role in the disposition of the shares), the reasonable cost of which will be paid for out of the Settlement Fund Escrow Account.

9. Except as to any claim of those persons (identified in Exhibit A hereto) who have validly and timely requested exclusion from the Class, all of the Released Claims are hereby dismissed, with prejudice. The Settling Parties shall bear their own costs and expenses, except as otherwise expressly provided in the Settlement Agreement. Regardless of whether or

3 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 5 of 13

not a member of the Class receives any distributions from the Settlement, or executes and

delivers the Proof of Claim and Release provided for in the Stipulation, each and all Class

Members who have not validly and timely requested exclusion, on behalf of themselves and their

respective predecessors, successors and assigns, are hereby deemed to have fully, finally, and

forever released, relinquished and discharged all of the Released Parties from the Released

Claims.

a. For purposes of this Order, the term “Released Claims” shall mean

all “Released Plaintiffs’ Claims” and all “Released Defendants’ Claims,” as those terms are

defined in the Stipulation, and include all claims (including “Unknown Claims”), rights,

demands, suits, matters, issues, or causes of action under federal, state, local, foreign law, or any

other law, rule, or regulation, whether known or unknown, that were, could have been, or could

in the future be asserted against the Released Parties by Plaintiffs in any court of competent jurisdiction or any other adjudicatory tribunal, in connection with, arising out of, related to,

based upon, in whole or in part, directly or indirectly, in any way, to the facts, transactions,

events, occurrences, acts, disclosures, oral or written statements, representations, filings,

publications, disseminations, press releases, presentations, accounting practices or procedures,

compensation practices or procedures, omissions or failures to act which were or which could

have been alleged or described in this Class Action by Plaintiffs. The “Released Plaintiffs’

Claims” include, but are not limited to, any and all claims related to or arising out of the matters

reported in the Company’s Current Reports on Form 8-K filed with the SEC on November 5,

2007, and January 29, 2008, the Report of the Special Committee of Comverse’s Board of

Directors summarized in the Company’s Current Report on Form 8-K filed with the SEC on

January 29, 2008, the Federal Bureau of Investigation affidavit in support of arrest warrants

4 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 6 of 13

issued against defendants Alexander, Kreinberg and Sorin, or the SEC’s complaints against defendants Alexander, Kreinberg and Sorin, compensation practices, options backdating, the administration of a secret options reserve fund, the recycling of unexercised options from departed employees to other employees, or any other options dating or grant practice, procedure or policy, the issuance and administration of employee stock options of Comverse, earnings manipulation, finances, accounting practices or procedures, public filings, press releases or other public statements or disseminations, revenue recognition issues, audits or reviews of Comverse’s consolidated financial statements for the fiscal year ended January 31, 2005, the first three quarters of the fiscal year ended January 31, 2006, or any prior period, and claims for breach of fiduciary duty, insider trading, misappropriation of information, failure to disclose, omissions or failures to act, abuse of control, breach of Comverse’s policies or procedures, waste, mismanagement, gross mismanagement, unjust enrichment, misrepresentation, fraud, breach of contract, negligence, breach of duty of care or other duty, violations of law, money damages, injunctive relief, corrective disclosure, damages penalties, disgorgement, restitution, interest, attorneys’ fees, expert or consulting fees, and any and all other costs, expenses or liability whatsoever, whether based on federal, state, local, foreign, statutory, common law, or any other law, rule, or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or un- liquidated, at law or in equity, matured or un-matured, including both known claims and

Unknown Claims that were or that could have been alleged in the Consolidated Amended

Complaint in this Action. Notwithstanding any of the foregoing, neither this Stipulation nor the

Judgment and Order of Dismissal with Prejudice to be entered in this Litigation operate as a release of any claims by the plaintiffs in the federal or state derivative actions.

5 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 7 of 13

b. For purposes of this Order, and as defined in the Stipulation, the term “Released Parties” shall mean the Plaintiffs, Defendants, and each of Lead Plaintiff’s and

Defendants’ respective Released Parties. “Defendants’ Released Parties” shall mean each and every past and current Defendant and, whether or not identified in any complaint filed in the

Action, each Defendant’s past or present directors, officers, employees, partners, member firms or affiliates, principals, agents, predecessors, successors, parents, subsidiaries, divisions, joint ventures, attorneys, accountants, insurers, reinsurers, assigns, spouses, heirs, associates, related or affiliated entities, or any members of their immediate families, or any trusts for which any of them are trustees, settlers or beneficiaries. “Lead Plaintiff’s Released Parties” shall mean any and all of Lead Plaintiff’s respective present, past or future officers, directors, and employees, and/or their respective families, parent entities, associates, affiliates or subsidiaries, and each and all of their respective past, present or future officers, directors, stockholders, agents, representatives, employees, attorneys, accountants, insurers, co-insurers and reinsurers, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members, personal or legal representatives, estates, administrators, predecessors, successors and assigns or other individuals or entities in which Lead Plaintiff has a controlling interest or which is related to or affiliated with Plaintiffs and any other representatives of any of these Persons or entities whether or not any such Released Parties were named, served with process or appeared in the Action.

10. By operation of this Judgment, Lead Plaintiff, Class Members, and Lead

Counsel are fully, finally and forever released and discharged from all claims, including

Unknown Claims, that any of the Released Parties have, had or may have that arise out of, relate

6 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 8 of 13

to or are based in any way upon the institution, prosecution, assertion or resolution of this Action or the Released Claims.

11. In accordance with 15 U.S.C. § 78u-(f)(7)(A) and (B), the Court finds that the Stipulation represents a good faith settlement of all Released Claims of all Class Members sufficient to discharge Defendants and the Released Parties of all Released Claims.

12. Only those Class Members filing valid and timely Proofs of Claim and

Release shall be entitled to receive any distributions from the Settlement. The Proofs of Claim and Release to be executed by the Class Members shall contain a release whereby all Released

Parties will be released from all Released Claims. The Proof of Claim and Release shall be substantially in the form and content of Exhibit B to the Preliminary Order of Approval. All

Class Members, who have not validly and timely requested exclusion, shall be bound by the releases whether or not they submit a valid and timely Proof of Claim and Release.

13. Neither the Defendants, nor their counsel, shall have any responsibility for, interest in, or liability whatsoever with respect to: (a) the provisions of the Notice, locating

Class Members, soliciting Settlement claims or claims administration; (b) the investment, management or distribution of the Settlement Fund; (c) the design, administration or implementation of the Plan of Allocation; (d) the determination or administration of taxes; or (e) any expenses, costs, or losses incurred in connection with (a), (b), (c), or (d). No person shall have any claim of any kind against Defendants, or their counsel, with respect to the matters set forth in this paragraph.

14. The Court finds and concludes that during the course of this Action, the

Defendants, Lead Plaintiff, and their respective counsel complied with the requirements of Rule

11 of the Federal Rules of Civil Procedure. No such party or their respective counsel violated

7 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 9 of 13

any of the requirements of Rule 11 of the Federal Rules of Civil Procedure with respect to any of the complaints filed in this Action, any responsive pleadings to any of the above complaints or any motion with respect to any of the above complaints. The Court further finds that Lead

Plaintiff and Lead Counsel adequately represented the Class Members for purposes of entering into and implementing the Settlement.

15. All Class Members who have not validly and timely requested exclusion are hereby permanently barred and enjoined from filing, commencing, prosecuting, intervening in, participating in, or receiving any benefits or other relief from, any other lawsuit, arbitration or other proceeding or order in any jurisdiction that is based upon any Released Claims, including, but not limited to, any claim all claims, including Unknown Claims, rights, demands, suits, matters, issues, or causes of action under federal, state, local, foreign law, or any other law, rule, or regulation, whether known or unknown, that were, could have been, or could in the future be asserted against the Released Parties by Plaintiffs in any court of competent jurisdiction or any other adjudicatory tribunal, in connection with, arising out of, related to, based upon, in whole or in part, directly or indirectly, in any way, to the facts, transactions, events, occurrences, acts, disclosures, oral or written statements, representations, filings, publications, disseminations, press releases, presentations, accounting practices or procedures, compensation practices or procedures, omissions or failures to act which were or which could have been alleged or described in this Class Action by Plaintiffs, including, but not limited to, any and all claims related to or arising out of the matters reported in the Company’s Current Reports on Form 8-K filed with the SEC on November 5, 2007, and January 29, 2008, the Report of the Special

Committee of Comverse’s Board of Directors summarized in the Company’s Current Report on

Form 8-K filed with the SEC on January 29, 2008, the Federal Bureau of Investigation affidavit

8 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 10 of 13

in support of arrest warrants issued against defendants Alexander, Kreinberg and Sorin, or the

SEC’s complaints against defendants Alexander, Kreinberg and Sorin, compensation practices, options backdating, the administration of a secret options reserve fund, the recycling of unexercised options from departed employees to other employees, or any other options dating or grant practice, procedure or policy, the issuance and administration of employee stock options of

Comverse, earnings manipulation, finances, accounting practices or procedures, public filings, press releases or other public statements or disseminations, revenue recognition issues, audits or reviews of Comverse’s consolidated financial statements for the fiscal year ended January 31,

2005, the first three quarters of the fiscal year ended January 31, 2006, or any prior period, and claims for breach of fiduciary duty, insider trading, misappropriation of information, failure to disclose, omissions or failures to act, abuse of control, breach of Comverse’s policies or procedures, waste, mismanagement, gross mismanagement, unjust enrichment, misrepresentation, fraud, breach of contract, negligence, breach of duty of care or other duty, violations of law, money damages, injunctive relief, corrective disclosure, damages penalties, disgorgement, restitution, interest, attorneys’ fees, expert or consulting fees, and any and all other costs, expenses or liability whatsoever, whether based on federal, state, local, foreign, statutory, common law, or any other law, rule, or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or un-liquidated, at law or in equity, matured or un-matured, including both known claims and Unknown Claims that were or that could have been alleged in the Consolidated Amended Complaint in this Action.

16. The Plan of Allocation set forth in the Notice is hereby approved as fair, reasonable and equitable.

9 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 1 1 of 13

17. The Claims Administrator and Lead Counsel shall take all necessary steps and employ their best efforts to ensure that the proposed Order of Distribution is filed with the

Court as quickly as possible, but in no event later than 180 days after the deadline for the submission of claims, unless a reasonable and documented request for an extension is granted by the Court.

18. Lead Counsel is hereby awarded ____% of the Settlement Fund in fees for services rendered in connection with prosecution of this litigation, and $ from the

Settlement Fund as reimbursement for expenses, to be paid consistent with Paragraphs 7.1-7.6 of the Stipulation.

19. Lead Plaintiff is hereby granted a Compensatory Award of $ from the Settlement Fund, to be paid consistent with Paragraphs 7.1-7.6 of the Stipulation.

20. The Court reserves exclusive and continuing jurisdiction over this Action,

Lead Plaintiff, the Class, and the Released Parties for the purposes of: (1) supervising the implementation, enforcement, construction, and interpretation of the Stipulation, the Plan of

Allocation, and this Judgment; and (2) supervising the distribution of the Net Settlement Fund.

21. The Court authorizes the Settling Parties, without further approval from the Court, to agree to and adopt such amendments, modifications and expansions of the

Stipulation and all exhibits attached thereto as (i) are not materially inconsistent with this

Judgment and (ii) do not materially limit the rights of Class Members under the Stipulation.

22. Neither the Stipulation nor the Settlement contained therein, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the

Settlement: (i) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of the Released Parties; or (ii) is

10 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 12 of 13

or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of any Released Party in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal. Released Parties may file the Stipulation and/or the

Judgment from this action in any other action that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith Settlement, judgment bar or reduction or any theory of claim preclusion or issue preclusion or similar defense or counterclaim

23. Alexander shall be severed from this Judgment if he terminates his

Settlement with the Class pursuant to the terms of the Stipulation. In the event that Alexander terminates the Settlement as to himself, the Judgment shall remain binding on Lead Plaintiff and the

Class on the one hand, and Comverse and all Defendants other than Alexander on the other hand. In accordance with 15 U.S.C. § 78u-4(f)(7)(A) and (B), the Court finds that the Stipulation represents a good faith settlement of all Released Claims sufficient to discharge the Defendants.

In order to effectuate such Settlement, should Alexander terminate the Settlement as to himself, he shall be permanently barred, enjoined and restrained from commencing, prosecuting, or asserting any claim for indemnity or contribution against any of the Released Parties arising out of the claims or allegations in the Action, whether arising under state, federal or foreign law as claims, cross-claims, counterclaims, or third-party claims, in the Action, in this Court, in any federal or state court, or in any other court, arbitration proceeding, administrative agency, or other forum in the United States or elsewhere. In such circumstance, any judgment subsequently obtained against Alexander will be subject to reduction under 15 U.S.C. § 78u-4(f)(7)(B).

11 Case 1:06-cv-01825-NGG-RER Document 323-5 Filed 12/18/09 Page 13 of 13

24. Nothing in this Judgment shall preclude any action to enforce the terms of the Stipulation.

25. There is no just reason for delay in the entry of this Order and immediate entry by the Clerk of the Court is expressly directed pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.

SO ORDERED. Dated: Brooklyn, New York

Hon. Nicholas G. Garaufis United States District Judge Eastern District of New York Case 1:06-cv-01825-NGG-RER Document 323-6 Filed 12/18/09 Page 1 of 27

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0 Case 1:06-cv-01825-NGG-RER Document 323-7 Filed 12/18/09 Page 1 of 18

EXHIBIT D Case 1:06-cv-01825-NGG-RER Document 323-7 Filed 12/18/09 Page 2 of 18

SECURITY AND ACCOUNT CONTROL AGREEMENT

THIS SECURITY AND ACCOUNT CONTROL AGREEMENT (this “Agreement”), dated as of [ ], 2009, is made by and among COMVERSE TECHNOLOGY, INC. (the “Company”), THE MENORAH GROUP – MENORAH INSURANCE CO., LTD. AND MIVTACHIM PENSION FUNDS LTD. (the “Lead Plaintiff”), and [ ], as securities intermediary (the “Securities Intermediary”).

RECITALS

A. The Settlement Agreement. Pursuant to that certain Stipulation of Settlement, dated as of [ ], 2009, by and among Lead Plaintiff and defendants the Company, Jacob “Kobi” Alexander, William F. Sorin, David Kreinberg, John H. Friedman, Ron Hiram, and Sam Oolie (the “Settlement Agreement”), the Company has on deposit the securities listed on Schedule 1 hereto (the “Securities”) in a segregated securities account with the Securities Intermediary at its office at [ ], Account No. [ ], in the name of the Company (the “Securities Account”). The Securities Account and all Collateral (as defined below) therein shall be under the “control” of the Lead Plaintiff, within the meaning of Section 8-106 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “UCC” ), by virtue of the Securities Intermediary’s acknowledgment herein that it has control of the Collateral on behalf of the Lead Plaintiff. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Settlement Agreement.

B. Purpose. The parties hereto desire to set forth their agreement with regard to (1) the administration and investment of the Securities Account, (2) the creation and perfection of a security interest in favor of the Lead Plaintiff for the benefit of itself and the other Class Members (as defined in the Settlement Agreement) in the Collateral, and (3) the conditions upon which the Collateral will be released from the Securities Account and the persons to whom such funds shall be released.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Security Interest.

1.1 Grant of Security Interests. As collateral security for the prompt and complete payment when due of the Company’s obligations under Paragraphs 2.2(b), (c) and (d) of the Settlement Agreement (such obligations being herein collectively referred to as, the “Obligations”), the Company hereby irrevocably pledges, assigns and grants to the Lead Plaintiff, for the ratable benefit of itself and the other Class Members, a first priority continuing security interest in all of the Company’s right, title and interest in and to all of the following (regardless of how classified under the UCC), whether now owned or existing or hereafter acquired or created (collectively, the “Collateral”):

(i) this Agreement and the Securities Account;

(ii) all funds, investment securities, book-entry securities or other securities, security entitlements, financial assets or other investment property from time to time held or deposited in, or credited to, the Securities Account, including, without limitation, the

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Securities and all certificates and instruments, if any, from time to time, representing or evidencing the Securities Account, the Securities or the Collateral;

(iii) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; and

(iv) to the extent not otherwise included, all Proceeds (as such term is defined in the UCC) in respect of the foregoing.

1.2 Establishing the Securities Account.

(a) The Securities Intermediary shall establish and maintain the Securities Account on its books as an account segregated from all other custodial or collateral accounts in the name of the Company at its office at [Address].

(b) The Securities Account is and shall be maintained as a “securities account” within the meaning of Article 8 of the UCC, and the Securities Intermediary, as securities intermediary, shall treat all Collateral (whether investment property, financial asset, security, instrument, cash or otherwise) credited to the Securities as Financial Assets (as defined in Section 8-102(a) of the UCC) and as Financial Assets credited to a “securities account” within the meaning of Article 8 of the UCC. Subject to the other terms and conditions of this Agreement, all funds or other property accepted by the Securities Intermediary pursuant to this Agreement, including the Collateral, shall be held in the Securities Account subject to the security interest of the Lead Plaintiff for the ratable benefit of itself and the other Class Members.

(c) All Collateral shall be retained in the Securities Account pending disbursement pursuant to the terms hereof. All Proceeds of, interest earned on, and other dividends, distributions or amounts paid with respect to, any Collateral shall be credited to and retained in the Securities Account, and the Securities Intermediary shall invest and reinvest the same in accordance with Section 2.1 hereof. In all events, any monies or property so invested or reinvested and any securities, investment property and financial assets acquired thereby shall be (i) held as Collateral in the Securities Account, (ii) subject in all respects to the security interest created hereby and shall be and remain under the control (within the meaning of Section 8-106 of the UCC) of the Lead Plaintiff, and (iii) otherwise subject to the terms hereof.

1.3 Procedures Governing Securities Account. Except as expressly permitted by this Agreement, the Company shall have no right to remove or withdraw from the Securities Account or the Collateral, any financial asset, cash or other property now or hereafter credited to the Securities Account or the Collateral without the prior written consent of the Lead Plaintiff. If at any time the Securities Intermediary shall receive any Entitlement Order (as defined in Section 8-102(a)(8) of the UCC) or other instructions from the Lead Plaintiff (including, without limitation, any order directing the sale, transfer or redemption of any financial asset, or cash or other item credited, directly or indirectly, to, the Securities Account), the Securities Intermediary shall comply with such Entitlement Order or other instructions without further consent of the Company or any other person. The Lead Plaintiff hereby agrees with the Company not to give any Entitlement Orders or instructions in any circumstances that are not permitted by this Agreement. The preceding sentence is intended to benefit the Company and shall not be construed to limit the Securities Intermediary’s obligations to follow any Entitlement Orders or instructions from the Lead Plaintiff.

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(b) By its signature below, the Securities Intermediary acknowledges that it has control of the Collateral, including all Security Entitlements constituting Collateral, on behalf of the Lead Plaintiff, for the ratable benefit of itself and the other Class Members.

1.4 Tax Reporting.

(a) The Company and the Lead Plaintiff agree that, for all purposes, including tax reporting purposes, the earnings on the assets in the Securities Account shall be allocated to the Company and shall be reported in the year of disbursement on a Form 1099 INT for interest earned or on a Form 1099 DIV for dividends earned in the case of money market investments. The Lead Plaintiff will provide the Company with the necessary reporting forms consistent with the foregoing.

(b) The Company and the Lead Plaintiff shall promptly provide the Securities Intermediary with a duly completed and properly executed IRS Form W-9 (or Form W- 8 BEN, in case of non-U.S. entity) certifying, in the case of the Company, its status as a beneficial owner of the assets in the Securities Account and in the case of the Lead Plaintiff, its status as secured party of the assets in the Securities Account, for federal income tax purposes. The parties understand that, in the event tax identification numbers are not certified to the Securities Intermediary, the Internal Revenue Code, as amended from time to time, may require withholding of a portion of any interest or other income earned on the investment of the Securities Account.

1.5 Maintaining the Securities Account. So long as this Agreement is in full force and effect:

(a) The Company shall establish and maintain the Securities Account with the Securities Intermediary in accordance with this Agreement, and the Securities Account shall at all times remain under the control (within the meaning of Section 8-106 of the UCC) of the Lead Plaintiff;

(b) It shall be a term and condition of the Securities Account that the Collateral shall only be disbursed in accordance with this Agreement;

(c) The Securities Intermediary shall maintain the Securities Account and all Securities Entitlements and other Collateral carried in the Securities Account solely in its capacity as Securities Intermediary on behalf of the Lead Plaintiff and shall not assert any claim to or interest in the Securities Account or any such Securities Entitlement or other positions except in such capacity; and

(d) The Securities Intermediary shall maintain a record of all securities, instruments, checks and other remittance items received in or distributed from the Securities Account and provide a monthly statement of account and a confirmation statement of each transaction effected in the Securities Account after such transaction is effected to the Lead Plaintiff and the Company. The Securities Intermediary shall send additional statements of account upon reasonable request by the Company or the Lead Plaintiff.

1.6 Liens. The Company agrees that it shall not create or suffer to exist any lien upon or with respect to any of the Collateral, except for the security interest granted to the Lead Plaintiff pursuant to this Agreement and non-consensual liens arising by operation of law. The

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Lead Plaintiff agrees that it shall not cause or permit the Securities Account or any other Security Entitlements or other positions carried in the Securities Account to become subject to any lien created or arising through the Lead Plaintiff, except for the security interest granted to the Lead Plaintiff pursuant to this Agreement and non-consensual liens arising by operation of law. The Company shall pay the fees and expenses of the Securities Intermediary as provided in Section 8.3 below, and the Securities Intermediary shall have no right to lien, or attach the funds held in, the Securities Account for any fees, expenses, costs or other amounts that may be due to the Securities Intermediary. For so long as the pledge, assignment and security interest pursuant to this Agreement remains in effect, the Securities Intermediary hereby waives any right of setoff, banker’s lien, deduction, counterclaim, defense, recoupment or similar lien that it may have with respect to any or all of the Collateral.

1.7 Company’s Rights. Until such time as the Lead Plaintiff gives a written notice in the form of Exhibit A hereto to the Securities Intermediary (a “Notice of Control”), the Company shall have the right to exercise all voting, consensual and other powers of ownership pertaining to the Collateral and the Lead Plaintiff shall execute and deliver to the Company or cause to be executed and delivered to the Company all such proxies, powers of attorney, dividend and other orders, and all such instruments, without recourse, as the Company may reasonably request for the purpose of enabling the Company to exercise the rights and powers that it is entitled to exercise pursuant to this Section 1.7.

1.8 Further Assurances. Prior to, contemporaneously herewith, and at any time and from time to time hereafter, the Company shall, at its sole expense, execute and deliver to the Lead Plaintiff such other instruments and documents, and take all further action as may be required by applicable law or as the Lead Plaintiff reasonably deems necessary to confirm, perfect or maintain the perfection and priority of the security interest of the Lead Plaintiff granted or purported to be granted hereby or to enable the Lead Plaintiff to exercise and enforce its rights and remedies hereunder with respect to any Collateral, and the Company shall take all necessary action to preserve and protect the security interest created hereby as a first priority, perfected security interest upon the Collateral.

2. Investment and Liquidation of Collateral. The Collateral shall be invested and reinvested by the Securities Intermediary on the following terms and conditions:

2.1 Investments. Until such time as the Lead Plaintiff gives a Notice of Control, the Company may at any time provide written instructions to the Securities Intermediary directing the Securities Intermediary to purchase, sell or liquidate any of the Collateral held by the Securities Intermediary in the Securities Account The Securities Intermediary shall have no liability for any loss sustained as a result of any investment made pursuant to the terms of this Section 2.1 or as a result of any liquidation of any investment prior to its maturity or for the failure of the Company to give the Securities Intermediary instructions to invest or reinvest the Collateral, except to the extent such loss results solely from the gross negligence or willful misconduct of the Securities Intermediary.

2.2 Interest. All interest and other amounts earned on the Collateral shall be invested in accordance with the terms of Section 2.1 and shall constitute Collateral.

3. Disposition of Collateral.

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3.1 Company’s Right of Withdrawal. Until such time as the Lead Plaintiff gives a Notice of Control, the Company may instruct the Securities Intermediary to withdraw and transfer to the Comverse Settlement Fund Escrow Account (as defined in the Settlement Agreement) such amounts held in the Securities Account as the Company shall instruct. The Lead Plaintiff hereby authorizes the release of such amounts referred to in the foregoing sentence.

3.2 Company’s and Lead Plaintiff’s Joint Right of Withdrawal. Except with respect to the Company withdrawal described in Section 3.1 or in the event that the Lead Plaintiff provides the Securities Intermediary with a Notice of Control, all other withdrawals from the Securities Account shall be made only by the Company and the Lead Plaintiff jointly executing a disbursement notice in the form attached hereto as Exhibit B (the “Disbursement Notice”). The Lead Plaintiff hereby authorizes the release of such amounts referred to in the foregoing sentence.

4. Remedies Upon Default. If any Event of Default (as defined below) shall have occurred and be continuing under this Agreement:

(a) The Lead Plaintiff may, but shall not be obligated to, without notice to the Company except as required by law and at any time or from time to time, direct the Securities Intermediary to liquidate any Collateral in a commercially reasonable manner and transfer all funds in the Securities Account to the Lead Plaintiff or its nominee to apply such funds in accordance with the terms of the Settlement Agreement, and subject to the terms of this Agreement, for the benefit of itself and the other Class Members.

(b) The Lead Plaintiff, and the Securities Intermediary if so directed by the Lead Plaintiff, may also exercise in respect of the Collateral, in addition to the other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral), and may also, without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sales, at any of the Lead Plaintiff’s or the Securities Intermediary’s offices or elsewhere, for cash, on credit or for future delivery, and upon commercially reasonable terms. The Company agrees that, to the extent notice of sale shall be required by applicable law, at least ten days’ notice to the Company of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Lead Plaintiff and the Securities Intermediary shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Lead Plaintiff or the Securities Intermediary may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

(c) Subject to any applicable law, any cash held by the Securities Intermediary as Collateral and all Proceeds received by the Lead Plaintiff or the Securities Intermediary in respect of any sale or liquidation of, collection from, or other realization upon, all or any part of the Collateral may, in the sole discretion of the Lead Plaintiff, be held by the Lead Plaintiff or the Securities Intermediary as collateral for, and/or then or at any time thereafter be applied (after payment of any costs and expenses incurred in connection with any sale, liquidation or disposition of or realization upon the Collateral, including reasonable attorney's fees and expenses, and the payment of any amounts payable to the Lead Plaintiff or the Securities Intermediary) in whole or in part by the Lead Plaintiff or the Securities Intermediary for the ratable benefit of themselves and the Class Members against all or any part of the Obligations.

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Any surplus Collateral held by the Lead Plaintiff or the Securities Intermediary remaining after payment in full of all the Obligations shall be paid over to the Company.

(d) For purposes of this Agreement, “Event of Default” shall mean the Company’s failure to pay any of the Obligations when due or the Company seeks relief under the U.S. bankruptcy laws.

5. Representations and Warranties.

5.1 Representation and Warranties of the Company. The Company hereby represents and warrants that:

(a) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

(b) This Agreement has been duly authorized, executed and delivered by the Company and (assuming due authorization, execution and delivery by the Lead Plaintiff and the Securities Intermediary) constitutes a valid and legally binding agreement, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and except as the enforcement of indemnification and contribution provisions may be limited by applicable law.

(c) The execution, delivery and performance of this Agreement by the Company will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in an acceleration or any rights or benefits under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) result in any violation of the provisions of the Certificate of Incorporation or By-laws of the Company or (iii) result in any violation of any statute or any order, rule or regulation of any court or governmental or regulatory agency, body or authority (a “Governmental Agency”) having jurisdiction over the Company or any of its properties, except, with respect to clauses (i) and (iii), conflicts or violations that would not reasonably be expected to have a material adverse effect on the Company or its ability to consummate the transactions contemplated hereby.

(d) Except as has been granted and is in full force and effect, no consent, approval, authorization, order, registration or qualification of or with any Governmental Agency is required for the execution, delivery and performance of this Agreement, other than filings of UCC financing statements that will be made by the Lead Plaintiff or its legal counsel or agents on or promptly following the date hereof.

(e) Upon the delivery to the Securities Intermediary of the applicable Collateral and the filing of a Uniform Commercial Code financing statement with the Secretary of State of the State of New York, the Lead Plaintiff will have a valid, duly perfected first priority security interest in the Collateral to the extent the security interest granted hereunder can be perfected in the Collateral by filing a Uniform Commercial Code financing statement, as security for the payment and performance of the Obligations for the benefit of the Lead Plaintiff and the other Class Members, and enforceable in accordance with the terms hereof.

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(f) The execution and delivery by the Company of this Agreement creates in favor of the Lead Plaintiff a valid security interest in the Securities Account and all Security Entitlements with respect to the financial assets credited to the Securities Account. Upon the execution and delivery of this Agreement by the Company, the Lead Plaintiff and the Securities Intermediary maintaining the Securities Account, the security interest granted to the Lead Plaintiff in the Securities Account and such Security Entitlements will be perfected.

5.2 Representation and Warranties of the Securities Intermediary. The Securities Intermediary hereby represents and warrants that:

(a) The Securities Intermediary is a “securities intermediary” as defined in Section 8-102(a)(14) of the UCC and (b) the Securities Intermediary’s jurisdiction (within the meaning of Section 8-110(e) of the UCC) is the State of New York.

(b) There are no other agreements entered into between the Securities Intermediary and the Company with respect to the Securities Account or any Collateral deposited therein or credited thereto, and other than this Agreement the Securities Intermediary has not entered into any agreement with any other person relating to the Securities Account or any Collateral deposited therein or credited thereto pursuant to which it has agreed or will agree to comply with instructions originated by such other person as to the disposition of such Collateral in or from the Securities Account or with respect to any other dealings with any of the Collateral.

6. Indemnity and Waiver of Consequential Damages.

(a) The Company shall indemnify and hold harmless the Securities Intermediary and its respective directors, officers, agents and employees (each, an “Indemnitee”), from and against any and all claims, actions, obligations, damages, losses, liabilities and expenses, including, without limitation, defense costs, investigative fees and costs, reasonable legal fees and claims for damages incurred in any action or proceeding between the parties hereto or in disputes with third parties or otherwise, arising from or in connection with the Securities Intermediary’s acceptance of, or performance under, this Agreement, except to the extent that such liability, expense or claim is attributable to the gross negligence or willful misconduct of any Indemnitee.

(b) Anything in this Agreement to the contrary notwithstanding, to the fullest extent permitted by applicable law, each of the parties hereto agrees that it will not assert, and hereby waives, any claim against any other party hereto, on any theory of liability for special, indirect, consequential or punitive damage of any kind whatsoever (including but not limited to lost profits) arising out of, in connection with, this Agreement.

7. Termination. This Agreement shall automatically terminate upon the first to occur of (a) the disposition and release of all of the Collateral pursuant to Sections 3.1 and/or 3.2 hereof, or (b) payment in full in immediately available funds of the Obligations. Thereupon the lien and security interest of the Lead Plaintiff on the Securities Account and the Collateral shall be released. The Lead Plaintiff and the Securities Intermediary shall promptly execute and deliver to the Company such documents as the Company shall reasonably request to evidence such termination and release.

8. Securities Intermediary.

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8.1 Limitation of the Securities Intermediary’s Liability; Responsibilities of the Securities Intermediary.

(a) The Securities Intermediary may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. The Securities Intermediary shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Securities Intermediary shall have no duty to solicit any payments which may be due it or the Collateral, other than payments due on investments of the Collateral. The Securities Intermediary shall not be liable for any action taken or omitted by it in good faith except to the extent that the Securities Intermediary’s bad faith, gross negligence or willful misconduct caused any loss to any of the parties hereto. In the event that the Securities Intermediary shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all Collateral until it shall be directed otherwise in writing by all of the other parties hereto or by a final order or judgment of a court of competent jurisdiction. In the event that any Collateral shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court or any order, judgment or decree shall be made or entered by any court order affecting the property deposited under this Agreement, the Securities Intermediary is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing in good faith is binding upon it, whether with or without jurisdiction, and in the event that the Securities Intermediary obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance notwithstanding that such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated, provided that the Securities Intermediary will notify the other parties hereto of any such writ, order, judgment or decree prior to taking any such action.

(b) No implied covenants or obligations shall be inferred from this Agreement against the Securities Intermediary, nor shall the Securities Intermediary be bound by the provisions of the Settlement Agreement or of any agreement beyond the specific terms hereof. Specifically and without limiting the foregoing, the Securities Intermediary shall in no event have any liability in connection with its investment, reinvestment or liquidation, in good faith and in accordance with the terms hereof, of any funds held by it hereunder, including without any limitation any liability for any delay, not resulting from its bad faith, gross negligence or willful misconduct in such investment, reinvestment or liquidation, or any loss of principal or income incident to any such delay.

(c) The Securities Intermediary shall not be called upon to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any Collateral hereunder.

8.2 Substitution of the Securities Intermediary. The Securities Intermediary may resign by giving no less than 30 calendar days’ prior written notice to the Company and the Lead Plaintiff. The Securities Intermediary may be removed at any time with or without cause by the Company (after consultation with the Lead Plaintiff) or the Lead Plaintiff (after consultation with the Company). Such resignation or removal shall take effect upon the later to occur of (i) delivery of all funds and any other Collateral or other property maintained by the Securities Intermediary

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hereunder and copies of any books, records, plans and other documents in the Securities Intermediary’s possession relating to such funds or other Collateral or other property or this Agreement to the successor agent approved by the Company (which approval shall not be unreasonably withheld or delayed) and (ii) the Company, the Lead Plaintiff and such successor agent entering into this Agreement or any written successor agreement and the taking of such other steps as may be necessary to give the Lead Plaintiff a first priority security interest in the Securities Account and the other Collateral, and the Securities Intermediary shall thereupon be discharged of any obligations arising under this Agreement after the effective date of such resignation or removal. After such resignation or removal, the resigning Securities Intermediary shall continue to have the benefit of Section 6 of this Agreement with respect to any actions taken or omitted to be taken by it when it was Securities Intermediary under this Agreement. Any corporation or association into which the Securities Intermediary may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the Securities Intermediary’s corporate trust line of business may be transferred, shall be the Securities Intermediary under this Agreement without further act.

8.3 Compensation and Reimbursement of Expenses. The Company will upon demand pay to the Securities Intermediary the amount of any and all reasonable expenses, including, without limitation, the reasonable documented fees, expenses and disbursements of its legal counsel, experts and agents retained by the Securities Intermediary that the Securities Intermediary may incur in connection with (a) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (b) the exercise or enforcement of any of the rights of the Lead Plaintiff hereunder or (c) the failure by the Company to perform or observe any of the provisions hereof. The Company agrees to pay the Securities Intermediary upon execution of this Agreement and from time to time thereafter reasonable compensation for the services to be rendered hereunder in accordance Schedule 8.3.

9. Miscellaneous.

9.1 Waiver. The Company and the Lead Plaintiff may specifically waive any breach of this Agreement by the other party, but no such waiver shall be deemed to have been given unless such waiver is in writing, signed by the waiving party, and specifically designates the breach waived, nor shall any such waiver constitute a continuing waiver of similar or other breaches.

9.2 Invalidity. If, for any reason whatsoever, any one or more of the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid in a particular case or in all cases, such circumstances shall not have the effect of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid, and the inoperative, unenforceable or invalid provision shall be construed as if it were written so as to effectuate, to the maximum extent possible, the parties’ intent.

9.3 Assignment. This Agreement shall inure to and be binding upon the parties and their respective successors and permitted assigns. Any such purported assignment in violation of this Section 9.3 shall be null and void.

9.4 Governing Law. The existence, validity, construction, operation and effect of any and all terms and provisions of this Agreement shall be determined in accordance with and governed by the laws of the State of New York, without regard to the principles of choice of law thereof (other than Section 5-1401 and Section 5-1402 of the New York General Obligations

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Law). Regardless of any provision in any other agreement, the State of New York shall be the “securities intermediary’s jurisdiction” for purposes of Section 9-305(a)(3) and Section 8-110 of the UCC.

9.5 Entire Agreement; Amendments. This Agreement and the Settlement Agreement contain the entire agreement among the parties with respect to the subject matter hereof and supersede any and all prior agreements, understandings and commitments with respect thereto, whether oral or written. This Agreement may be amended only by a writing signed by duly authorized representatives of all parties.

9.6 Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, or sent by telecopy or electronic mail. Unless otherwise changed by notice to the other parties hereto, all notices, requests and other communications to each party hereto shall be sent to the address for notices of such party set forth below. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given in accordance with the provisions of this Agreement shall be deemed to have been given (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified below and telephonic confirmation of receipt is obtained, (ii) if given by electronic communication, upon sender’s receipt of an acknowledgment from the intended recipient (such as return receipt request, as available, return email or other written acknowledgement), or (iii) if given by mail, prepaid overnight courier or any other means, when received at the address specified in this Section 9.6.

To the Company:

Comverse Technology, Inc. 810 Seventh Avenue New York, New York 10019 Attention: General Counsel Fax: E-mail:

To Lead Plaintiff:

[_____]

To the Securities Intermediary:

[ ]

9.7 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

9.8 Security Procedures. In the event instructions are given with respect to the release or transfer of funds in the Securities Account, whether in writing, by telecopier or otherwise, the Securities Intermediary is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 9.8 hereto, and the Securities

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Intermediary may rely upon the confirmation of anyone purporting to be the person or persons so designated at such call-back number. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Securities Intermediary. The Securities Intermediary and the recipient’s bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Company to identify (i) the recipient; (ii) the recipient’s bank; or (iii) an intermediary bank. The Securities Intermediary may apply any of the Collateral for any payment order it executes using any such identifying number, even when its use may result in a person other than the Lead Plaintiff being paid, or the transfer of funds to a bank other than the Lead Plaintiff’s bank or an intermediary bank designated. The parties to this Agreement acknowledge that these security procedures are commercially reasonable.

(Signature Page Follows)

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day first written above.

THE COMPANY:

COMVERSE TECHNOLOGY, INC.

By: Name: Title:

LEAD PLAINTIFF:

THE MENORAH GROUP – MENORAH INSURANCE CO., LTD. AND MIVTACHIM PENSION FUNDS LTD

By: Name: Title:

SECURITIES INTERMEDIARY:

[ ]

By: Name: Title:

[Security and Account Control Agreement Signature Page]

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EXHIBIT A

[Form of Notice of Control]

[Securities Intermediary] [Address]

Re: Account No. (the “Account”)

Ladies and Gentlemen:

Reference is made to the Security and Account Control Agreement dated [ ], 2009 (such agreement, the “Agreement”) among COMVERSE TECHNOLOGY, INC. (the “Company”), THE MENORAH GROUP – MENORAH INSURANCE CO., LTD. AND MIVTACHIM PENSION FUNDS LTD. (the “Lead Plaintiff”), and [ ], as securities intermediary (the “Securities Intermediary”). Capitalized terms used herein shall have the meanings given to them in the Agreement.

The Lead Plaintiff hereby certifies to you that an Event of Default has occurred and is continuing under the Agreement. Consequently, from and after the date of this notice, the Company’s rights to give Entitlement Orders with respect to the Securities Account and the other rights afforded to the Company under Sections 1.7, 2.1, 3.1 and 3.2 of the Agreement are terminated. From and after the delivery of this notice to you, you shall honor only the Entitlement Orders in regard to or in connection with the Securities Account and/or the financial assets contained therein given by an authorized officer of the Lead Plaintiff.

Very truly yours,

THE MENORAH GROUP – MENORAH INSURANCE CO., LTD. AND MIVTACHIM PENSION FUNDS LTD.

By: Name: Title:

Case 1:06-cv-01825-NGG-RER Document 323-7 Filed 12/18/09 Page 15 of 18

EXHIBIT B

[Form of Disbursement Notice]

[Securities Intermediary] [Address]

Re: Account No. (the “Account”)

Ladies and Gentlemen:

Reference is made to the Security and Account Control Agreement dated [ ], 2009 (such agreement, the “Agreement”) among COMVERSE TECHNOLOGY, INC. (the “Company”), THE MENORAH GROUP – MENORAH INSURANCE CO., LTD. AND MIVTACHIM PENSION FUNDS LTD. (the “Lead Plaintiff”) and [ ], as securities intermediary (the “Securities Intermediary”). Capitalized terms used herein shall have the meanings given to them in the Agreement.

The Company and the Lead Plaintiff hereby instruct the Securities Intermediary to transfer funds on deposit in the Securities Account in immediately available funds as follows:

Amount to be Payee Transferred Wire Instructions

, in each case effective as of , 20__.

COMVERSE TECHNOLOGY, INC.

By: Name: Title:

THE MENORAH GROUP – MENORAH INSURANCE CO., LTD. AND MIVTACHIM PENSION FUNDS LTD.

By: Name: Title: Case 1:06-cv-01825-NGG-RER Document 323-7 Filed 12/18/09 Page 16 of 18

Schedule 1

Securities Case 1:06-cv-01825-NGG-RER Document 323-7 Filed 12/18/09 Page 17 of 18

Schedule 8.3

[Schedule of Fees for Securities Intermediary Services] Case 1:06-cv-01825-NGG-RER Document 323-7 Filed 12/18/09 Page 18 of 18

Schedule 9.8

Telephone Number(s) for Call-Backs and Persons Designated to Confirm Funds Transfer Instructions

COMPANY Specimen Signature Name Title Phone E-mail Address

Name Title Phone E-mail Address

LEAD PLAINTIFF Specimen Signature Name Title Phone E-mail Address

Name Title Phone E-mail Address