EXHIBIT E
FORM OF BT TAX OPINION
REPRESENTATION LETTER
, 1997
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Ladies and Gentlemen:
On behalf of Boston Technology, Inc. ("BT") and in connection
with the opinions to be delivered by your firms pursuant to Sections
6.02(c) and 6.03(c) of the Agreement and Plan of Merger (the "Merger
Agreement") dated as of August 20, 1997, between Comverse Technology, Inc.
("CT") and BT,[1] the undersigned hereby certifies that, to the extent the
facts relate to BT to his knowledge and after due diligence, and to the
extent otherwise without knowledge to the contrary, the following facts are
now true and will continue to be true as of the Effective Time:
1. The consideration received by each BT stockholder pursuant to
the Merger Agreement is the result of arm's-length negotiations
between the parties to the Merger Agreement.
2. There is no plan or intention by the stockholders of BT who
own 5 percent or more of BT stock, and to the best of the knowledge of
the management of BT, there is no plan or intention on the part of the
remaining stockholders of BT to sell, exchange, or otherwise dispose
of, reduce the risk of loss (by short sale or otherwise) of the
holding of, enter into any contract or other arrangement with respect
to the sale, exchange or other disposition of (each of the foregoing,
a "disposition"), any interest in the shares of CT Common Stock
received in the Merger in exchange for such BT stock that would reduce
the ownership of CT Common Stock by former holders of BT stock to a
number of shares having a value, as of
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[1] For purposes of this certificate, capitalized terms used and not
otherwise defined herein shall have the meaning ascribed thereto in the
Merger Agreement.
immediately prior to the Merger, of less than 50% of the value of all
of the outstanding shares of BT stock as of the Closing Date. For
purposes of this representation, any "disposition" (as defined above)
of CT Common Stock will be treated as a reduction in ownership
thereof. In addition, for purposes of this representation, shares of
BT stock exchanged for cash or other property, surrendered by
dissenters or exchanged for cash in lieu of fractional shares of CT
stock will be treated as outstanding BT stock on the date of the
Merger. Moreover, shares of BT stock and shares of CT stock held by BT
stockholders and otherwise sold, redeemed, or disposed of prior or
subsequent to the Merger will be considered in making this
representation. Except as set forth on Annex I to this letter, to the
knowledge of the management of BT there are no stockholders who own 5
percent or more of the BT stock on the date hereof. For purposes of
this representation we have assumed that each person listed on Annex I
as a 5% or greater stockholder of BT has a plan or intention to sell
for cash all the CT stock that it will receive in the Merger unless we
have received from such person a letter substantially in the form of
Exhibit D to the Merger Agreement with respect to such CT Stock.
3. Following the Merger, CT will continue the historic business
of BT or use a significant portion of the historic business assets of
BT in a business.
4. Subject to Section 5.09 of the Merger Agreement, CT, BT and
its stockholders will pay their respective expenses, if any, incurred
in connection with the Merger.
5. There is no intercorporate indebtedness existing between CT
and BT that was issued, acquired, or will be settled at a discount.
6. BT is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
7. On the date of the Merger, the fair market value of the assets
of BT will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which the assets are subject.
8. BT is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the
Internal Revenue Code.
9. The payment of cash in lieu of fractional shares of CT stock
is solely for the purpose of avoiding the expense and inconvenience to
CT of issuing fractional shares and does not represent separately
bargained for consideration. The total cash consideration that will be
paid in the Merger to BT stockholders instead of issuing fractional
shares of CT stock will not exceed one percent of the total
consideration that will be issued in the Merger to BT stockholders in
exchange for their shares of BT stock. The fractional share interests
of each BT stockholder will be aggregated, and no BT stockholder will
receive cash in an amount equal to or greater than the value of one
full share of CT stock.
10. None of the compensation received by any
stockholder-employees of BT will be separate consideration for, or
allocable to, any of their shares of BT stock; none of the shares of
CT stock received by any stockholder-employees will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any stockholder-employees will be for services
actually rendered and will be commensurate with amounts paid to third
parties bargaining at arm's length for similar services.
11. The facts relating to the Merger of Sub with and into BT
pursuant to the Merger Agreement, as described in the Merger
Agreement, the documents described in Section 5.01 of the Merger
Agreement and the joint proxy statement/prospectus prepared by CT and
BT, are, insofar as such facts pertain to BT, true, correct and
complete in all material respects.
12. BT will not take, and BT is not aware of any plan or
intention of BT stockholders to take, any position on any Federal,
state or local income or franchise tax return, or take any other tax
reporting position, that is inconsistent with the treatment of the
Merger as a reorganization within the meaning of Sections 368(a) of
the Code, unless otherwise required by a "determination" (as defined
in Section 1313(a)(1) of the Code) or by applicable state or local
income or franchise tax law.
13. The Merger Agreement and the documents described in Sections
5.01 and 8.06 of the Merger Agreement represent the entire
understanding of BT and CT with respect to the Merger.
14. Other than in the ordinary course of business pursuant to its
obligations under the Merger Agreement, BT has made no transfer of any
of its assets (including any distribution of assets with respect to,
or in redemption of, stock) in contemplation of the Merger (or any
other corporate acquisition) or during the period ending at the
Effective Time and beginning with the commencement of negotiations
(whether formal or informal) with CT regarding the Merger (the
"Pre-Merger Period").
15. CT has no plan or intention to reacquire any of its stock
issued pursuant to the Merger.
16. During the past five (5) years, and at present, none of the
outstanding shares of BT stock, including the right to acquire or vote
any such shares have, directly or indirectly, been owned by CT or CT's
affiliates.
17. Other than shares of BT stock or options to acquire BT stock
issued as compensation to present or former service providers
(including, without limitation, employees and directors) of BT in the
ordinary course of business, if any, no issuances of BT stock or
rights to acquire BT stock have occurred or will occur during the
Pre-Merger Period other than pursuant to options, warrants, or
agreements outstanding prior to the Pre-Merger Period.
18. The total fair market value of all consideration other than
CT stock received by BT shareholders in the Merger (including, without
limitation, cash paid to BT shareholders perfecting dissenters' rights
or in lieu of fractional shares of CT stock) will be less than fifty
percent (50%) of the aggregate fair market value of the BT stock
outstanding immediately prior to the Merger.
I have read the drafts of your opinion letters attached to this
letter and understand that Cravath, Swaine & Moore, as counsel for CT, and
Hale and Dorr, as counsel for BT, will rely on this certificate in
rendering their respective opinions concerning certain of the Federal
income tax consequences of the Merger and hereby commit to
inform them if, for any reason, any of the foregoing representations ceases
to be true prior to the Effective Time. I understand that your opinions
will not address any tax consequences of the Merger or any action taken in
connection therewith except as expressly set forth in such opinions.
BOSTON TECHNOLOGY, INC.,
by
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Name:
Title:
ANNEX I
Beneficially Percent
Beneficial Owner Owned Shares of Class
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