EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Between
COMVERSE TECHNOLOGY, INC.
and
BOSTON TECHNOLOGY, INC.
Dated as of August 20, 1997
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TABLE OF CONTENTSTABLE OF CONTENTS
ARTICLE I
The Merger
Page
SECTION 1.01. The Merger............................................. 1
SECTION 1.02. Closing................................................ 2
SECTION 1.03. Effective Time......................................... 2
SECTION 1.04. Effects of the Merger.................................. 2
SECTION 1.05. Certificate of Incorporation and
By-laws of Surviving Corporation..................... 2
SECTION 1.06. Certain Corporate Governance Matters................... 3
ARTICLE II
Effect of the Merger on the Capital Stock
of the Constituent Corporations;
Exchange of Certificates
SECTION 2.01. Effect on Capital Stock................................ 3
SECTION 2.02. Exchange of Certificates............................... 4
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of BT................... 9
SECTION 3.02. Representations and Warranties
of CT.................................. 25
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business.................................... 39
SECTION 4.02. No Solicitation by BT.................................. 45
SECTION 4.03. No Solicitation by CT.................................. 47
i
ARTICLE V
Additional Agreements
Page
SECTION 5.01. Preparation of the Form S-4 and
the Joint Proxy Statement;
Stockholders Meetings................................ 50
SECTION 5.02. Letters of BT's Accountants............................ 52
SECTION 5.03. Letters of CT's Accountants............................ 52
SECTION 5.04. Access to Information;
Confidentiality...................................... 52
SECTION 5.05. Best Efforts........................................... 53
SECTION 5.06. Stock Options, etc..................................... 54
SECTION 5.07. Indemnification, Exculpation and
Insurance............................................ 57
SECTION 5.08. Fees and Expenses...................................... 58
SECTION 5.09. Public Announcements................................... 60
SECTION 5.10. Affiliates............................................. 60
SECTION 5.11. Stock Exchange Listing................................. 61
SECTION 5.12. Stockholder Litigation................................. 61
SECTION 5.13. Tax Treatment.......................................... 61
SECTION 5.14. Pooling of Interests................................... 61
SECTION 5.15. BT Rights Agreement.................................... 61
SECTION 5.16. Standstill Agreements; Confidentiality
Agreements........................................... 62
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation
to Effect the Merger................................. 62
SECTION 6.02. Conditions to Obligations
of CT.................................. 64
SECTION 6.03. Conditions to Obligations of BT........................ 64
SECTION 6.04. Frustration of Closing Conditions...................... 65
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination............................................ 65
SECTION 7.02. Effect of Termination.................................. 67
SECTION 7.03. Amendment.............................................. 67
ii
Page
SECTION 7.04. Extension; Waiver...................................... 67
SECTION 7.05. Procedure for Termination, Amendment
Extension or Waiver.................................. 68
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations
and Warranties....................................... 68
SECTION 8.02. Notices................................................ 68
SECTION 8.03. Definitions............................................ 69
SECTION 8.04. Interpretation......................................... 70
SECTION 8.05. Counterparts........................................... 71
SECTION 8.06. Entire Agreement; No Third-Party
Beneficiaries........................................ 71
SECTION 8.07. Governing Law.......................................... 71
SECTION 8.08. Assignment............................................. 71
SECTION 8.09. Enforcement............................................ 71
SECTION 8.10. WAIVER OF JURY TRIAL................................... 72
SECTION 8.11. Severability........................................... 72
EXHIBIT A Form of BT Rights Agreement
EXHIBIT B Form of BT Indemnification Agreement
EXHIBIT C Form of Affiliate Letter
EXHIBIT D Form of CT Tax Opinion Representation Letter
EXHIBIT E Form of BT Tax Opinion Representation Letter
EXHIBIT F Form of BT Stockholder Representation Letter
iii
AGREEMENT AND PLAN OF MERGER dated as of August 20,
1997, between COMVERSE TECHNOLOGY, INC., a New York
corporation ("CT"), and BOSTON TECHNOLOGY, INC., a Delaware
corporation ("BT").
WHEREAS the respective Boards of Directors of CT and BT have
approved the merger of BT with and into CT (the "Merger"), upon the terms
and subject to the conditions set forth in this Agreement, whereby each
issued and outstanding share of common stock, $.001 par value, of BT
(together with the associated Rights (as defined in Section 3.01(c)), "BT
Common Stock"), other than shares owned directly or indirectly by CT or BT,
will be converted into the right to receive the Merger Consideration (as
defined in Section 2.01(b));
WHEREAS the respective Boards of Directors of CT and BT have each
determined that the Merger and the other transactions contemplated hereby
are consistent with, and in furtherance of, their respective business
strategies and goals;
WHEREAS CT and BT desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to prescribe various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger will qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for financial accounting purposes, it is intended that
the Merger will be accounted for as a pooling of interests transaction.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and
in accordance with the New York Business Corporation Law ("NYBCL") and the
Delaware General Corporation Law (the "DGCL"), BT shall be merged with and
into CT at the Effective Time (as defined in Section 1.03). Following the
Effective Time, CT shall be the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and
obligations of BT in accordance with the NYBCL and the DGCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VI, unless
another time or date is agreed to by the parties hereto. The Closing will
be held at such location in the City of New York as is agreed to by the
parties hereto.
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any
such case, the "Certificate of Merger") executed in accordance with the
relevant provisions of the NYBCL and the DGCL and shall make all other
filings or recordings required under the NYBCL and the DGCL. The Merger
shall become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State of the State of New York and the State of
Delaware, or at such subsequent date or time as CT and BT shall agree and
specify in the Certificate of Merger (the time the Merger becomes effective
being hereinafter referred to as the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 907(i) of the NYBCL and Section 259 of the
DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws of
Surviving Corporation. (a) The certificate of incorporation of CT, as in
effect immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
(b) The by-laws of CT, as in effect immediately prior to the
Effective Time, shall become the by-laws of the Surviving Corporation and
such by-laws shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Certain Corporate Governance Matters. (a) Subject
to Section 1.06(b), the directors and officers of CT immediately prior to
the Effective Time shall be the directors and officers of the Surviving
Corporation, until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be.
(b) As of the Effective Time, the Board of Directors of CT will
be expanded to consist of nine members, two of whom shall be the current
Chairman of the Board of BT (who shall also be appointed to the
Remuneration and Stock Option Committee of the CT Board of Directors) and
the current President and Chief Executive Officer of BT, in each case,
provided that such person has retained such position with BT for the period
from the date hereof until the Effective Time. As of the Effective Time,
the current President and Chief Executive Officer of BT shall be named the
President and Chief Executive Officer of the CT Network Systems Division,
provided that such person has remained a full-time employee of BT for the
period from the date hereof until the Effective Time. It is the intention
of the parties that the headquarters for the CT Network Systems Division
shall be located in Wakefield, Massachusetts.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holder of
any shares of BT Common Stock or shares of common stock, par value $.10 per
share, of CT ("CT Common Stock"):
(a) Cancelation of Treasury Stock and CT-Owned Stock. Each share
of BT Common Stock that is owned by BT or by any subsidiary (as
defined in Section 8.03) of BT, if any, and each share of BT Common
Stock that is owned by CT or any subsidiary of CT, if any, shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(b) Conversion of BT Common Stock. Subject to Section 2.02(e),
each issued and outstanding share of BT Common Stock (other than
shares to be canceled in
accordance with Section 2.01(a)) shall be converted into the right to
receive 0.65 (the "Exchange Ratio") of a fully paid and nonassessable
share of CT Common Stock (the "Merger Consideration"). As of the
Effective Time, all such shares of BT Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such
shares of BT Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration and any
cash in lieu of fractional shares of CT Common Stock to be issued or
paid in consideration therefor upon surrender of such certificate in
accordance with Section 2.02, without interest. Notwithstanding the
foregoing, if between the date of this Agreement and the Effective
Time the outstanding shares of CT Common Stock shall have been changed
into a different number of shares or a different class, by reason of
the occurrence or record date of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares or if CT pays or declares an extraordinary dividend with a
record date prior to the Effective Date, the Exchange Ratio shall be
appropriately adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange or
extraordinary dividend.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. As of
the Effective Time, CT shall enter into an agreement with American Stock
Transfer & Trust Company, or such other bank or trust company as may be
designated by CT and reasonably satisfactory to BT (the "Exchange Agent"),
which shall provide that CT shall deposit with the Exchange Agent as of the
Effective Time, for the benefit of the holders of shares of BT Common
Stock, for exchange in accordance with this Article II, through the
Exchange Agent, certificates representing the shares of CT Common Stock
(such shares of CT Common Stock, together with any dividends or
distributions with respect thereto with a record date after the Effective
Time, any Excess Shares (as defined in Section 2.02(e)) and any cash
(including cash proceeds from the sale of the Excess Shares) payable in
lieu of any fractional shares of CT Common Stock being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.01 in exchange
for outstanding shares of BT Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time (but in any event
within five business days), the Exchange Agent shall mail to each holder of
record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of BT Common Stock (the
"Certificates") whose shares were converted into the right to receive the
Merger Consideration pursuant to Section 2.01, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as CT and BT may reasonably specify) and (ii) instructions
for use in surrendering the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancelation to the
Exchange Agent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
CT Common Stock which such holder has the right to receive pursuant to the
provisions of this Article II, certain dividends or other distributions in
accordance with Section 2.02(c) and cash in lieu of any fractional share of
CT Common Stock in accordance with Section 2.02(e), and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of
ownership of BT Common Stock which is not registered in the transfer
records of BT, a certificate representing the proper number of shares of CT
Common Stock may be issued to a person (as defined in Section 8.03) other
than the person in whose name the Certificate so surrendered is registered
if such Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the person requesting such issuance shall pay any
transfer or other taxes required by reason of the issuance of shares of CT
Common Stock to a person other than the registered holder of such
Certificate or establish to the satisfaction of CT that such tax has been
paid or is not applicable. Until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
the Merger Consideration which the holder thereof has the right to receive
in respect of such Certificate pursuant to the provisions of this Article
II, certain dividends or other distributions in accordance with Sec tion
2.02(c) and cash in lieu of any fractional share of CT Common Stock in
accordance with Section 2.02(e). No interest shall be paid or will accrue
on any cash payable to holders of Certificates pursuant to the provisions
of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to CT Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of CT Common Stock
represented thereby, and, in the case of Certificates representing BT
Common Stock, no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 2.02(e), and all such dividends, other
distributions and cash in lieu of fractional shares of CT Common Stock
shall be paid by CT to the Exchange Agent and shall be included in the
Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article II. Subject to the effect of applicable
escheat or similar laws, following surrender of any such Certificate there
shall be paid to the holder of the certificate representing whole shares of
CT Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions with
a record date after the Effective Time theretofore paid with respect to
such whole shares of CT Common Stock and the amount of any cash payable in
lieu of a fractional share of CT Common Stock to which such holder is
entitled pursuant to Section 2.02(e) and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and with a payment
date subsequent to such surrender payable with respect to such whole shares
of CT Common Stock.
(d) No Further Ownership Rights in BT Common Stock. All shares of
CT Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any cash paid
pursuant to this Article II) shall be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the shares of BT Common
Stock theretofore represented by such Certificates, subject, however, to
the Surviving Corporation's obligation to pay any dividends or make any
other distributions with a record date prior to the Effective Time which
may have been declared or made by BT on such shares of BT Common Stock
which remain unpaid at the Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of BT Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange
Agent for any reason, they shall be canceled and exchanged as provided in
this Article II, except as otherwise provided by law.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of CT Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution of CT
shall relate to such fractional share interests and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
shareholder of CT.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (A) the number of whole shares
of CT Common Stock delivered to the Exchange Agent by CT pursuant to Sec
tion 2.02(a) over (B) the aggregate number of whole shares of CT Common
Stock to be distributed to former holders of BT Common Stock pursuant to
Section 2.02(b) (such excess being herein called the "Excess Shares").
Following the Effective Time, the Exchange Agent shall, on behalf of former
stockholders of BT, sell the Excess Shares at then-prevailing prices on the
Nasdaq National Market System ("Nasdaq"), all in the manner provided in Sec
tion 2.02(e)(iii).
(iii) The sale of the Excess Shares by the Exchange Agent shall
be executed on Nasdaq and shall be executed in round lots to the extent
practicable. The Exchange Agent shall use reasonable efforts to complete
the sale of the Excess Shares as promptly following the Effective Time as,
in the Exchange Agent's sole judgment, is practicable consistent with
obtaining the best execution of such sales in light of prevailing market
conditions. Until the net proceeds of such sale or sales have been
distributed to the holders of Certificates formerly representing BT Common
Stock, the Exchange Agent shall hold such proceeds in trust for such
holders (the "Common Shares Trust"). The Surviving Corporation shall pay
all commissions, transfer taxes and other out of pocket transaction costs,
including the expenses and compensation of the Exchange Agent incurred in
connection with such sale of the Excess Shares. The Exchange Agent shall
determine the portion of the Common Shares Trust to which each former
holder of BT Common Stock is entitled, if any, by multiplying the amount of
the aggregate net proceeds comprising the Common Shares Trust by a
fraction, the numerator of which is the amount of the fractional share
interest to which such former holder of BT Common Stock is entitled (after
taking into account all shares of BT Common Stock held at the Effective
Time by such holder) and the denominator of which is the aggregate amount
of fractional share interests to which all former holders of BT Common
Stock are entitled.
(iv) Notwithstanding the provisions of Sec tion 2.02(e)(ii) and
(iii), the Surviving Corporation may elect at its option, exercised prior
to the Effective Time, in lieu of the issuance and sale of Excess Shares
and the making of the payments hereinabove contemplated, to pay each former
holder of BT Common Stock an amount in cash equal to the product obtained
by multiplying (A) the fractional share interest to which such former
holder (after taking into account all shares of BT Common Stock held at the
Effective Time by such holder) would otherwise be entitled by (B) the
closing price for a share of CT Common Stock as reported on Nasdaq (as
reported in The Wall Street Journal, or, if not reported thereby, any other
authoritative source) on the Closing Date, and, in such case, all
references herein to the cash proceeds of the sale of the Excess Shares and
similar references shall be deemed to mean and refer to the payments
calculated as set forth in this Sec tion 2.02(e)(iv).
(v) As soon as reasonably practicable after the determination of
the amount of cash, if any, to be paid to holders of Certificates formerly
representing BT Common Stock with respect to any fractional share
interests, the Exchange Agent shall make available such amounts to such
holders of Certificates formerly representing BT Common Stock subject to
and in accordance with the terms of Section 2.02(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to CT, upon demand, and
any holders of the Certificates who have not theretofore complied with this
Article II shall thereafter look only to CT for payment of their claim for
Merger Consideration, any dividends or distributions with respect to CT
Common Stock and any cash in lieu of fractional shares of CT Common Stock.
(g) No Liability. None of CT, BT or the Exchange Agent shall be
liable to any person in respect of any shares of CT Common Stock, any
dividends or distributions with respect thereto, any cash in lieu of
fractional shares of CT Common Stock or any cash from the Exchange Fund, in
each case delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificate shall not
have been surrendered prior to two years after the Effective Time (or
immediately prior to such earlier date on which any Merger Consideration,
any dividends or distributions payable to the holder of such Certificate or
any cash payable to the holder of such
Certificate pursuant to this Article II, would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section
3.01(d))), any such Merger Consideration, dividends or distributions in
respect of such Certificate or cash shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund, as directed by CT, on a daily
basis. Any interest and other income resulting from such investments shall
be paid to CT.
(i) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond
in such reasonable and customary amount as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent shall issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration and, if
applicable, any unpaid dividends and distributions on shares of CT Common
Stock deliverable in respect thereof and any cash in lieu of fractional
shares, in each case pursuant to this Agreement.
(j) BT Stock Options, Warrants and BT Stock Purchase Plan. At the
Effective Time, all then outstanding BT Stock Options and the Warrants
(each as defined in Section 3.01(c)) will be assumed by CT in accordance
with Section 5.06. Following the expiration of the current offering under
the BT Stock Purchase Plan (as defined in Section 3.01(c)), BT shall cause
no further offerings to be made thereunder and no further payroll
deductions to be accepted thereunder, in each case in accordance with
Section 5.06, and, as of the Effective Time, the BT Stock Purchase Plan
will be terminated.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of BT. Except as
disclosed in the BT Filed SEC Documents (as defined in Section 3.01(g)),
and except as set forth on the Disclosure Schedule delivered by BT to CT
prior to the
execution of this Agreement (the "BT Disclosure Schedule") and making
reference to the particular subsection of this Agreement to which exception
is being taken, BT represents and warrants to CT as follows:
(a) Organization, Standing and Corporate Power. Each of BT and
its Significant Subsidiaries (as defined in Section 3.01(b)) is a
corporation or other legal entity duly organized, validly existing and
in good standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is organized
and has the requisite corporate or other power, as the case may be,
and authority to carry on its businesses as now being conducted. Each
of BT and its Significant Subsidiaries is duly qualified or licensed
to do business and is in good standing (with respect to jurisdictions
which recognize such concept) in each jurisdiction in which the nature
of its businesses or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except for
those jurisdictions where the failure to be so qualified or licensed
or to be in good standing individually or in the aggregate would not
have a material adverse effect (as defined in Section 8.03) on BT. BT
has made available to CT prior to the execution of this Agreement
complete and correct copies of its certificate of incorporation and
by-laws, as amended to the date hereof.
(b) Subsidiaries. Section 3.01(b) of the BT Disclosure Schedule
lists all the subsidiaries of BT which as of the date of this
Agreement are "Significant Subsidiaries" (as defined in Rule 1-02 of
Regulation S-X of the Securities and Exchange Commission (the "SEC")).
All the outstanding shares of capital stock of, or other equity
interests in, each such Significant Subsidiary have been validly
issued and are fully paid and nonassessable and are owned directly or
indirectly by BT, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens") and free of any other restriction
on the right to vote, sell or otherwise dispose of such capital stock
or other ownership interests.
(c) Capital Structure. The authorized capital stock of BT
consists of 60,000,000 shares of BT Common Stock. At the close of
business on August 14, 1997, (i) 27,298,611 shares of BT Common Stock
were issued and outstanding, (ii) no shares of BT Common Stock were
held by BT in its treasury, (iii) 4,412,364 shares of BT Common Stock
were reserved for issuance pursuant to the BT 1989 Incentive Stock
Option Plan, the BT 1992 Director Stock Option Plan, the BT 1994 Stock
Incentive Plan, the BT 1995 Director Stock Option Plan, the BT 1996
Stock Incentive Plan and the Nonstatutory Stock Option Agreement dated
as of December 1991 between BT and Xxxxxx X. Xxxxxxx (such plans or
agreements, as amended to the date hereof, collectively, the "BT Stock
Plans", true and correct copies of which have been provided to CT),
(iv) 287,953 shares of BT Common Stock were reserved for issuance
pursuant to the BT 1995 Employee Stock Purchase Plan (the "BT Stock
Purchase Plan"), and (v) 3,927,040 shares of BT Common Stock were
reserved for issuance upon the exercise of BT's Common Stock Purchase
Warrants issued November 22, 1995 pursuant to the Memorandum of
Agreement dated November 22, 1995 between BT and AT&T Corp. (the
"Warrants"). Section 3.01(c) of the BT Disclosure Schedule sets forth
a complete and correct list, (I) as of August 14, 1997, of the number
of shares of BT Common Stock subject to employee stock options or
other rights to purchase or receive BT Common Stock granted under the
BT Stock Plans (collectively, "BT Stock Options"), listing, for the 20
persons holding the largest number of BT Stock Options, the name of
the recipient, the date of grant, the number of options granted, the
applicable vesting periods and the exercise prices thereof and (II) as
of July 31, 1997, of the aggregate number of shares of BT Common Stock
subject to outstanding BT Stock Options. All outstanding shares of
capital stock of BT are, and all shares which may be issued will be,
when issued on the terms and conditions specified in the instruments
pursuant to which they are issued, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
Except (1) as set forth in this Section 3.01(c), (2) for changes since
August 14, 1997, resulting from the issuance of shares of BT Common
Stock pursuant to BT Stock Options or upon exercise of any of the
Warrants or (3) for the issuance of BT Rights (as defined below) or BT
Common Stock in respect of BT Rights pursuant to the BT Rights
Agreement (as defined below), (x) there are not issued, reserved for
issuance or outstanding (A) any shares of capital stock or other
voting securities of BT, (B) any securities of BT convertible into or
exchangeable or exercisable for shares of capital stock or other
voting securities of BT, (C) any warrants, calls, options or other
rights to acquire from BT or any subsidiary of
BT, and no obligation of BT or any subsidiary of BT to issue, any
capital stock, other voting securities or securities convertible into
or exchangeable or exercisable for capital stock or other voting
securities of BT and (y) there are not any outstanding obligations of
BT or any subsidiary of BT to repurchase, redeem or otherwise acquire
any such securities or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. BT is not a party to
any voting agreement with respect to the voting of any such
securities. As of the close of business on August 14, 1997, there are
no outstanding (A) securities of BT or any subsidiary of BT
convertible into or exchangeable or exercisable for shares of capital
stock or other voting securities or ownership interests in any
subsidiary of BT, (B) warrants, calls, options or other rights to
acquire from BT or any subsidiary of BT, and no obligation of BT or
any subsidiary of BT to issue, any capital stock, other voting
securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock,
other voting securities or ownership interests in, any subsidiary of
BT or (C) obligations of BT or any subsidiary of BT to repurchase,
redeem or otherwise acquire any such outstanding securities of
subsidiaries of BT or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. Other than the
subsidiaries of BT listed in Exhibit 21 to BT's Annual Report on Form
10-K for the fiscal year ended January 31, 1997, or in Section 3.01(c)
of the BT Disclosure Schedule, BT does not own, directly or
indirectly, any securities or other beneficial ownership interests in
any entity. There are no material outstanding contractual obligations
of BT or any subsidiary of BT to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise)
in, any subsidiary of BT or any other person, other than guarantees by
BT of any indebtedness of any subsidiary of BT. BT has made available
to CT a complete and correct copy of the Rights Agreement (the "BT
Rights Agreement"), between BT and State Street Bank and Trust
Company, relating to rights ("BT Rights") to purchase BT Common Stock.
(d) Authority; Noncontravention. BT has all requisite corporate
power and authority to enter into this Agreement and, subject to the
BT Stockholder Approval (as defined in Section 3.01(l)), to consummate
the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by BT and the consummation by
BT of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of BT,
subject to the BT Stockholder Approval. This Agreement has been duly
executed and delivered by BT and, assuming the due authorization,
execution and delivery by each of the other parties thereto,
constitutes the legal, valid and binding obligation of BT, enforceable
against BT in accordance with its terms. The execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancelation or acceleration of
any obligation or loss of a benefit under, or result in the creation
of any Lien upon any of the properties or assets of BT or any of its
subsidiaries under, (i) the certificate of incorporation or by-laws of
BT or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instru ment, permit, concession,
franchise, license or similar authorization applicable to BT or any of
its subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to BT or any of its
subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses or Liens that individually or in the
aggregate would not (x) have a material adverse effect on BT or (y)
reasonably be expected to materially impair the ability of BT to
perform its obligations under this Agreement. No consent, approval,
order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Federal, state, local or
foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any nongovernmental
self-regulatory agency, commission or authority (a "Governmental
Entity") is required by or with respect to BT or any of its
subsidiaries in connection with the execution and delivery of this
Agreement by BT or the consummation by BT of the transactions
contemplated by this Agreement, except for (1) the filing of a
premerger notification and report form by BT under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and filings under similar laws of certain foreign
jurisdictions as may be required (the "Foreign Filings"); (2) the
filing with the SEC of (A) a proxy statement relating to the BT
Stockholders Meeting (as defined in Section 5.01(b)) (such proxy
statement, together with the proxy statement relating to the CT
Shareholders Meeting (as defined in Section 5.01(c)), in each case as
amended or supplemented from time to time, the "Joint Proxy
Statement"), and (B) such reports under Section 13(a), 13(d), 15(d) or
16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this Agreement
and the transactions contemplated by this Agreement; (3) the filing of
the Certificate of Merger with the Secretary of State of the State of
New York and the State of Delaware and appropriate documents with the
relevant authorities of other states in which BT is qualified to do
business and such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; and
(4) such consents, approvals, orders or authorizations the failure of
which to be made or obtained individually or in the aggregate would
not have a material adverse effect on BT.
(e) SEC Documents; Undisclosed Liabilities. BT has filed all
required reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein)
with the SEC since February 1, 1996 (the "BT SEC Documents"). As of
their respective dates, the BT SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder
applicable to such BT SEC Documents, and none of the BT SEC Documents
when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to
the extent that information contained in any BT SEC Document has been
revised or superseded by a later filed BT SEC Document, none of the BT
SEC Documents contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of BT included in the BT SEC Documents comply as
to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with United States generally accepted
accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the consolidated
financial position of BT and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal recurring year-end audit adjustments).
Except (i) as reflected in such financial statements or in the notes
thereto or (ii) for liabilities incurred in connection with this
Agreement or the transactions contemplated hereby, neither BT nor any
of its subsidiaries has any liabilities or obligations of any nature
which individually or in the aggregate would have a material adverse
effect on BT.
(f) Information Supplied. None of the information supplied or to
be supplied by BT specifically for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed
with the SEC by CT in connection with the issuance of CT Common Stock
in the Merger (the "Form S-4") will, at the time the Form S-4 becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
(ii) the Joint Proxy Statement will, at the date it is first mailed to
BT's stockholders or at the time of the BT Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Joint Proxy Statement will comply
as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation
or warranty is made by BT with respect to statements made or
incorporated by reference therein based on information supplied by CT
specifically for inclusion or incorporation by reference in the Joint
Proxy Statement.
(g) Absence of Certain Changes or Events. Except (1) as disclosed
in the BT SEC Documents filed and publicly available prior to the date
of this Agreement (as amended to the date of this Agreement, the "BT
Filed SEC Documents") or (2) for liabilities incurred in connection
with this Agreement or the transactions contemplated hereby, since
January 31, 1997, BT and its subsidiaries have conducted their
businesses only in the ordinary course, and there has not been (i) any
material adverse change in BT, (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of BT's capital stock, (iii) any
split, combination or reclassification of any of BT's capital stock or
any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of
BT's capital stock, (iv) (A) any granting by BT or any of its
subsidiaries to any current or former director, executive officer or
other key employee of BT or its subsidiaries of any increase in
compensation, bonus or other benefits, except for normal increases in
the ordinary course of business consistent with past practice or as
was required under any employment agreements in effect as of the date
of the most recent audited financial statements included in the BT
Filed SEC Documents, (B) any granting by BT or any of its subsidiaries
to any such current or former director, executive officer or other key
employee of any increase in severance or termination pay, except as
was required under any employment, severance or termination agreements
in effect as of the date of the most recent audited financial
statements included in the BT Filed SEC Documents, or (C) any entry by
BT or any of its subsidiaries into, or any amendment of, any
employment, deferred compensation, consulting, severance, termination
or indemnification agreement with any such current or former director,
executive officer or other key employee, (v) except insofar as may
have been required by a change in United States generally accepted
accounting principles, any change in accounting methods, principles or
practices by BT materially affecting its assets, liabilities or
businesses, (vi) any tax election that individually or
in the aggregate would have a material adverse effect on BT or any of
its tax attributes or any settlement or compromise of any material
income tax liability, (vii) any waiver, settlement, assignment,
release or compromise of any material claims or litigation or (viii)
any revaluation in any material respect of any of BT's or its
subsidiaries' assets, including writing down of inventory or
writing-off of notes or accounts receivable other than in the ordinary
course of business.
(h) Compliance with Applicable Laws. BT and its subsidiaries hold
all permits, licenses, variances, exemptions, orders, registrations
and approvals of all Governmental Entities which are required for the
operation of the businesses of BT and its subsidiaries (the "BT
Permits"), except where the failure to have any such BT Permits
individually or in the aggregate would not have a material adverse
effect on BT. BT and its subsidiaries are in compliance with the terms
of the BT Permits and all applicable statutes, laws, ordinances, rules
and regulations, except where the failure so to comply individually or
in the aggregate would not have a material adverse effect on BT. As of
the date of this Agreement, except as disclosed in the BT Filed SEC
Documents, no action, demand, requirement or investigation by any
Governmental Entity with respect to BT or any of its subsidiaries or
any of their respective properties is pending or, to the knowledge (as
defined in Section 8.03) of BT, threatened, other than, in each case,
those the outcome of which individually or in the aggregate would not
(i) have a material adverse effect on BT or (ii) reasonably be
expected to impair the ability of BT to perform its obligations under
this Agreement or prevent or materially delay the consummation of any
of the transactions contemplated by this Agreement. This paragraph
does not relate to environmental matters which are exclusively the
subject of Section 3.01(s).
(i) Absence of Changes in Benefit Plans; Certain Modifications.
Since the date of the most recent audited financial statements
included in the BT Filed SEC Documents, there has not been any
adoption of, amendment of or agreement to amend in any material
respect by BT or any of its subsidiaries any collective bargaining
agreement or any material bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding providing benefits to any current or
former director, officer or employee of BT or any subsidiary that,
together with BT, would be considered a single employer under Section
414(b), (c) or (m) of the Code (collectively, the "BT Benefit Plans"),
or any material change in any actuarial or other assumption used to
calculate funding obligations with respect to any BT pension plans, or
any change in the manner in which contributions to any BT pension
plans are made or the basis on which such contributions are
determined.
(j) ERISA Compliance. (i) With respect to the BT Benefit Plans,
no event has occurred and, to the knowledge of BT, there exists no
condition or set of circumstances (excluding benefits paid in the
ordinary course), in connection with which BT or any of its
subsidiaries could be subject to any liability that individually or in
the aggregate would have a material adverse effect on BT under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
the Code or any other applicable law.
(ii) Each BT Benefit Plan has been administered in accordance
with its terms, except for any failures so to administer any BT
Benefit Plan that individually or in the aggregate would not have a
material adverse effect on BT. BT, its subsidiaries and all the BT
Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code and all other applicable laws and the terms of all
applicable collective bargaining agreements, except for any failures
to be in such compliance that individually or in the aggregate would
not have a material adverse effect on BT. Each BT Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has received
a favorable determination letter from the IRS that it is so qualified
and each trust established in connection with any BT Benefit Plan that
is intended to be exempt from Federal income taxation under Section
501(a) of the Code has received a determination letter from the IRS
that such trust is so exempt. To the knowledge of BT, no fact or event
has occurred since that date of any determination letter from the IRS
which is reasonably likely to affect adversely the qualified status of
any such BT Benefit Plan or the exempt status of any such trust.
(iii) Neither BT, any of its subsidiaries nor any entity required
to be treated with BT as a single employer under Section 414 of the
Code has incurred any liability under Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation
arising in the ordinary course). No BT Benefit Plan has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA or Section 412 of the Code) whether or not waived. To the
knowledge of BT, there are not any facts or circumstances that would
materially change the funded status of any BT Benefit Plan that is a
"defined benefit" plan (as defined in Section 3(35) of ERISA) since
the date of the most recent actuarial report for such plan. No BT
Benefit Plan is a "multiemployer plan" within the meaning of Section
3(37) of ERISA.
(iv) Neither BT nor any of its subsidiaries is a party to any
collective bargaining or other labor union contract applicable to
persons employed by BT or any of its subsidiaries and no collective
bargaining agreement is being negotiated by BT or any of its
subsidiaries. As of the date of this Agreement, there is no labor
dispute, strike or work stoppage against BT or any of its subsidiaries
pending or, to the knowledge of BT, threatened which may interfere
with the respective business activities of BT or any of its
subsidiaries, except where such dispute, strike or work stoppage
individually or in the aggregate would not have a material adverse
effect on BT. As of the date of this Agreement, to the knowledge of
BT, none of BT, any of its subsidiaries or any of their respective
representatives or employees has committed any unfair labor practice
in connection with the operation of the respective businesses of BT or
any of its subsidiaries, and there is no charge or complaint against
BT or any of its subsidiaries by the National Labor Relations Board or
any comparable governmental agency pending or threatened in writing.
(v) Except as set forth in the BT Employee Severance Benefit
Plan, no employee of BT will be entitled to any additional benefits or
any acceleration of the time of payment or vesting of any benefits
under any BT Benefit Plan as a result of the transactions contemplated
by this Agreement. The deduction of any amount payable pursuant to any
BT Benefit Plan or employment contract in connection with the
transactions contemplated by this Agreement will not be subject to
disallowance under Section 280(G) of the Code.
(k) Taxes. (i) Each of BT and its subsidiaries has filed all
material tax returns and reports required to be filed by it and all
such returns and reports are complete and correct in all material
respects, or requests for extensions to file such returns or reports
have been timely filed, granted and have not expired, except to the
extent that such failures to file, to be complete or correct or to
have extensions granted that remain in effect individually or in the
aggregate would not have a material adverse effect on BT. BT and each
of its subsidiaries has paid (or BT has paid on its behalf) all taxes
(as defined in Section 3.01(k)(iv)) shown as due on such returns, and
the most recent financial statements contained in the BT Filed SEC
Documents reflect an adequate reserve for all taxes payable by BT and
its subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have been proposed, asserted
or assessed against BT or any of its subsidiaries that are not
adequately reserved for in the most recent financial statements
contained in the BT Filed SEC Documents, except for deficiencies that
individually or in the aggregate would not have a material adverse
effect on BT. The Federal income tax returns of BT and each of its
subsidiaries consolidated in such returns have been examined by and
settled with the U.S. Internal Revenue Service for all fiscal years
through January 31, 1993. The statute of limitations on assessment or
collection of any Federal income taxes due from BT or any of its
subsidiaries has expired for all fiscal years of BT or any of its
subsidiaries through January 31, 1993.
(iii) Neither BT nor any of its subsidiaries has taken any action
or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(iv) As used in this Agreement, "taxes" shall include all (x)
Federal, state, local or foreign income, property, sales, excise and
other taxes or similar governmental charges, including any interest,
penalties or additions with respect thereto, (y) liability for the
payment of any amounts of the type described in (x) as a result of
being a member of an affiliated, consolidated, combined or unitary
group, and (z) liability for the payment of any amounts as a
result of being party to any tax sharing agreement or as a result of
any express or implied obligation to indemnify any other person with
respect to the payment of any amounts of the type described in clause
(x) or (y).
(l) Voting Requirements. The affirmative vote of the holders of a
majority of the voting power of all outstanding shares of BT Common
Stock, voting as a single class (with each share of BT Common Stock
having one vote per share), at the BT Stockholders Meeting to adopt
this Agreement (the "BT Stockholder Approval") is the only vote of the
holders of any class or series of BT's capital stock necessary to
approve and adopt this Agreement and the transactions contemplated
hereby.
(m) State Takeover Statutes. The Board of Directors of BT has
taken all actions so that the restrictions contained in Section 203 of
the DGCL applicable to a "business combination" (as defined in such
Section 203) will not apply to the execution, delivery or performance
of this Agreement or consummation of the Merger or the other
transactions contemplated by this Agreement. To BT's knowledge,
assuming the accuracy of Section 3.02(m), no other state takeover
statute or similar statute or regulation is applicable to the Merger
or the other transactions contemplated by this Agreement.
(n) Accounting Matters. Neither BT nor, to BT's knowledge, any of
its affiliates (as defined in Section 8.03) has taken or agreed to
take any action that would prevent the business combination to be
effected by the Merger to be accounted for as a pooling of interests.
(o) Brokers. No broker, investment banker, financial advisor or
other person, other xxxx Xxxxxxx Xxxxx & Co. ("Xxxxxxx Xxxxx"), the
fees and expenses of which will be paid by BT, is entitled to any
broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of BT. BT has
furnished to CT true and complete copies of all agreements under which
any such fees or expenses are payable and all indemnification and
other agreements related to the engagement of the persons to whom such
fees are payable.
(p) Opinion of Financial Advisor. BT has received the opinion of
Xxxxxxx Xxxxx, dated the date of this Agreement, to the effect that,
as of such date, the Exchange Ratio is fair from a financial point of
view to holders of shares of BT Common Stock (other than CT and its
affiliates), a signed copy of which opinion has been delivered to CT.
(q) Ownership of CT Common Stock. Except for shares owned by BT
Benefit Plans, as of the date hereof, neither BT nor, to its
knowledge, any of its affiliates, (i) beneficially owns (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, or (ii) is
party to any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of, in each case, shares of
capital stock of CT.
(r) Litigation. Except as disclosed in the BT Filed SEC
Documents, there is no suit, claim, action, proceeding or
investigation pending or threatened in writing against BT or any
subsidiary of BT before any Governmental Entity which individually or
in the aggregate would have a material adverse effect on BT. Except as
disclosed in the BT Filed SEC Documents, neither BT nor any subsidiary
of BT is subject to any outstanding order, writ, injunction or decree
which individually or in the aggregate would have a material adverse
effect on BT.
(s) Environmental Matters. Except as disclosed in the BT Filed
SEC Documents:
(i) each of BT and its subsidiaries (A) is in compliance with all
applicable Environmental Laws (as defined below), (B) holds all
Environmental Permits (as defined below) required for the operation of
the businesses of BT and its subsidiaries as currently conducted and
(C) is in compliance with such Environmental Permits, except in each
case as would not individually or in the aggregate have a material
adverse effect on BT;
(ii) neither BT nor any subsidiary of BT has received any written
request for information, or been notified that it is a potentially
responsible party, under CERCLA (as defined below) or any similar
state, local or foreign Environmental Law;
(iii) neither BT nor any subsidiary of BT has entered into or
agreed to any consent decree or order or is subject to any pending
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of
Hazardous Materials (as defined below), and, to the best knowledge of
BT, no investigation, litigation or other proceeding is pending or
threatened in writing with respect thereto;
(iv) to the best knowledge of BT, none of the real property
owned, leased or operated by BT or any subsidiary of BT is listed or
formally proposed for listing on the "National Priorities List" under
CERCLA, as updated through the date hereof, or any similar state or
foreign list of sites requiring investigation or cleanup; and
(v) no Hazardous Material has been released by BT or, to BT's
knowledge, by any other person at, or transported to or from, any real
property currently or, to the best knowledge of BT, formerly owned or
operated by BT or any subsidiary of BT, except as would not
individually or in the aggregate have a material adverse effect on BT.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended as of the date
hereof.
"Environmental Laws" means any Federal, state, local or foreign
statute, law, ordinance, regulation, rule or code, any enforceable
judicial or administrative interpretation thereof, including any
judicial or administrative order, decree or judgment, relating to
pollution or protection of the environment or natural resources,
including those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of, or exposure to,
Hazardous Materials, as in effect as of the date hereof.
"Environmental Permits" means any permit, approval,
identification number, license and other authorization required under
applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (b) any
chemical, material or substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any
applicable Environmental Law.
(t) BT Rights Agreement. The BT Rights Agreement has been amended
(the "BT Rights Plan Amendment") as set forth on Exhibit A hereto. The
BT Rights Agreement may not be further amended by BT during the term
of this Agreement without the prior consent of CT in its sole
discretion.
(u) Material Contracts. Except as disclosed in the BT Filed SEC
Documents, as of the date hereof, there are no contracts or agreements
that are of a nature required to be filed as an exhibit under the
Exchange Act and the rules and regulations promulgated thereunder.
Neither BT nor any of its subsidiaries is in violation of nor in
default under (nor does there exist any condition which upon the
giving of notice or the passage of time or both would cause such a
violation of or default under) any such material lease, permit,
concession, franchise, license or any other material contract,
agreement, arrangement or understanding to which it is a party or by
which it is bound. BT is not aware of any facts or conditions with
respect to any material contracts or agreements that would reasonably
be expected to make BT or its subsidiaries liable for any material
penalties or liquidated damages pursuant to the terms of such material
contracts or agreements.
(v) Intellectual Property. BT and its subsidiaries own, or are
validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trademark rights, trade secrets, trade
names, trade name rights, service marks, service xxxx rights,
copyrights and other proprietary intellectual property rights and
computer programs which are material to the conduct of the business of
BT and its subsidiaries taken as a whole (including any registrations
or applications for registration of any of the foregoing,
collectively, the "BT Intellectual Property"). Consummation of the
Merger will not give rise to any termination rights or material
damages or other penalties with respect to any BT Intellectual
Property. Neither BT nor any such subsidiary has
received any notice of infringement of or conflict with, and, to BT's
knowledge, there are no infringements of or conflicts with, the rights
of others with respect to the use of any BT Intellectual Property that
individually or in the aggregate, in either such case, would have a
material adverse effect on BT. To the knowledge of BT, no person is
infringing the rights of BT or any subsidiary with respect to any BT
Intellectual Property that individually or in the aggregate would have
a material adverse effect on BT. Neither BT nor any subsidiary has
licensed, or otherwise granted, to any third party any material rights
in or to any BT Intellectual Property (other than pursuant to customer
agreements).
(w) Customers. To the knowledge of BT, there are no facts,
circumstances or conditions which exist that would reasonably be
expected to result in the loss of any significant customer (as defined
below). Section 3.01(w) of the BT Disclosure Schedule sets forth a
true and complete list as of the date hereof of all the significant
customers who have been delivered equipment by BT and its subsidiaries
but which equipment has not yet been installed and which will not be
installed within 60 days after the date hereof. For purposes of this
Section 3.01(w), "significant customer" means any customer that has
entered into one or more contracts, agreements, arrangements or
understandings with BT or its subsidiaries, the aggregate anticipated
benefits of which to BT and its subsidiaries equals or exceeds $10
million.
SECTION 3.02. Representations and Warranties of CT. Except as
disclosed in the CT Filed SEC Documents (as defined in Section 3.02(g)),
and except as set forth on the Disclosure Schedule delivered by CT to BT
prior to the execution of this Agreement (the "CT Disclosure Schedule") and
making reference to the particular subsection of this Agreement to which
exception is being taken, CT represents and warrants to BT as follows:
(a) Organization, Standing and Corporate Power. Each of CT and
its Significant Subsidiaries is a corporation or other legal entity
duly organized, validly existing and in good standing (with respect to
jurisdictions which recognize such concept) under the laws of the
jurisdiction in which it is organized and has the requisite corporate
or other power, as the case may be, and authority to carry on its
businesses as now being conducted. Each of CT and its Significant
Subsidiaries is duly qualified or licensed to do business and is in
good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of its businesses or
the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not have a material
adverse effect on CT. CT has made available to BT prior to the
execution of this Agreement complete and correct copies of its
certificate of incorporation and by-laws as amended to the date
hereof.
(b) Subsidiaries. Exhibit 21 to CT's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 (the "CT Form 10-K")
includes all the subsidiaries of CT which as of the date of this
Agreement are Significant Subsidiaries. All the outstanding shares of
capital stock of, or other equity interests in, each such Significant
Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by CT, free and
clear of all Liens and free of any other restriction on the right to
vote, sell or otherwise dispose of such capital stock or other
ownership interests.
(c) Capital Structure. The authorized capital stock of CT
consists of 100,000,000 shares of CT Common Stock and 2,500,000 shares
of preferred stock, par value $.01 per share, of CT ("CT Preferred
Stock"). At the close of business on August 14, 1997, (i) 25,162,907
shares of CT Common Stock were issued and outstanding, (ii) no shares
of CT Common Stock were held by CT in its treasury, (iii) 4,018,880
shares of CT Common Stock were reserved for issuance pursuant to the
CT 1984 Incentive Stock Option Plan, the CT 1987 Stock Option Plan,
the CT 1994 Stock Option Plan, the CT 1995 Stock Option Plan and the
CT 1996 Stock Option Plan (such plans, collectively, the "CT Stock
Plans", true and correct copies of which have been provided to BT),
(iv) 2,513,661 shares of CT Common Stock were reserved for issuance
upon conversion of CT's outstanding 5-3/4% Convertible Subordinated
Debentures Due 2006 (the "Convertible Debentures") and (v) no shares
of CT Preferred Stock have been designated or issued. Section 3.02(c)
of the CT Disclosure Schedule sets forth a complete and correct list,
as of August 14, 1997, of (I) the number of shares of CT
Common Stock subject to employee stock options or other rights to
purchase or receive CT Common Stock granted under the CT Stock Plans
(collectively, "CT Stock Options"), listing, for the 20 persons
holding the largest number of CT Stock Options, the name of the
recipient, the date of grant, the number of options granted, the
applicable vesting periods and the exercise prices thereof and (II)
the aggregate number of shares of CT Common Stock subject to
outstanding CT Stock Options. All outstanding shares of capital stock
of CT are, and all shares which may be issued (including shares to be
issued pursuant to the Merger or the BT Stock Options following the
Merger) will be, when issued on the terms and conditions specified in
the instruments pursuant to which they are issued, duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except (1) as set forth in this Section 3.02(c),
(2) for changes since August 14, 1997, resulting from the issuance of
shares of CT Common Stock pursuant to CT Stock Options or upon
conversion of any of the Convertible Debentures or (3) for the
issuance of CT capital stock in respect of any rights that may be
granted to the extent CT adopts a shareholder rights agreement (any
such agreement that may be adopted, the "CT Rights Agreement"), (x)
there are not issued, reserved for issuance or outstanding (A) any
shares of capital stock or other voting securities of CT, (B) any
securities of CT convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities of CT, (C) any
warrants, calls, options or other rights to acquire from CT, or any
subsidiary of CT, and no obligation of CT or any subsidiary of CT, to
issue, any capital stock, other voting securities or securities
convertible into or exchangeable or exercisable for capital stock or
other voting securities of CT and (y) there are not any outstanding
obligations of CT or any subsidiary of CT to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities. CT is not
a party to any voting agreement with respect to the voting of any such
securities. As of the close of business on August 14, 1997, there are
no outstanding (A) securities of CT or any subsidiary of CT
convertible into or exchangeable or exercisable for shares of capital
stock or other voting securities or ownership interests in any
subsidiary of CT, (B) warrants, calls, options or other rights to
acquire from CT or any subsidiary of CT, and no obligation of
CT or any subsidiary of CT to issue, any capital stock, other voting
securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock,
other voting securities or ownership interests in, any subsidiary of
CT or (C) obligations of CT or any subsidiary of CT to repurchase,
redeem or otherwise acquire any such outstanding securities of
subsidiaries of CT or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. Other than the
subsidiaries of CT listed in Exhibit 21 to the CT Form 10-K or in
Section 3.02(c) of the CT Disclosure Schedule, CT does not own,
directly or indirectly, any securities or other beneficial ownership
interests in any entity. There are no material outstanding contractual
obligations of CT or any subsidiary of CT to provide funds to, or make
any investment (in the form of a loan, capital contribution or
otherwise) in, any subsidiary of CT or any other person, other than
guarantees by CT of any indebtedness of any subsidiary of CT.
(d) Authority; Noncontravention. CT has all requisite corporate
power and authority to enter into this Agreement and, subject to the
CT Shareholder Approval (as defined in Section 3.02(l)), to consummate
the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by CT and the consummation by CT of the
transactions contemplated by this Agreement have been duly authorized
by all necessary corporate action on the part of CT subject, in the
case of this Agreement, to the CT Shareholder Approval. This Agreement
has been duly executed and delivered by CT and, assuming the due
authorization, execution and delivery by each of the other parties
thereto, constitutes the legal, valid and binding obligation of CT,
enforceable against CT in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancelation or
acceleration of any obligation or loss of a benefit under, or result
in the creation of any Lien upon any of the properties or assets of CT
or any of its subsidiaries under, (i) the certificate of incorporation
or by-laws of CT or the comparable organizational documents of any of
its subsidiaries,
(ii) any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to CT or any of its
subsidiaries or any of their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to CT or any of its
subsidiaries or any of their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in
the aggregate would not (x) have a material adverse effect on CT or
(y) reasonably be expected to materially impair the ability of CT to
perform its obligations under this Agreement. No consent, approval,
order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to CT or any of its subsidiaries in
connection with the execution and delivery of this Agreement by CT or
the consummation by CT of the transactions contemplated by this
Agreement, except for (1) the filing of a premerger notification and
report form by CT under the HSR Act and the Foreign Filings; (2) the
filing with the SEC of (A) the Joint Proxy Statement relating to the
CT Shareholders Meeting, (B) the Form S-4 and (C) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement; (3) the filing of the Certificate of
Merger with the Secretary of State of the State of New York and the
State of Delaware and appropriate documents with the relevant
authorities of other states in which CT is qualified to do business
and such filings with Governmental Entities to satisfy the applicable
requirements of state securities or "blue sky" laws; (4) such filings
with and approvals of Nasdaq to permit the shares of CT Common Stock
that are to be issued in the Merger to be approved for trading on
Nasdaq; and (5) such consents, approvals, orders or authorizations the
failure of which to be made or obtained individually or in the
aggregate would not have a material adverse effect on CT.
(e) SEC Documents; Undisclosed Liabilities. CT has filed all
required reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein)
with the
SEC since January 1, 1996 (the "CT SEC Documents"). As of their
respective dates, the CT SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such CT SEC Documents, and none
of the CT SEC Documents when filed contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any CT
SEC Document has been revised or superseded by a later filed CT SEC
Document, none of the CT SEC Documents contains any untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. The financial statements of CT included in the CT SEC
Documents comply as to form, as of their respective dates of filing
with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with United States
generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on
a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of CT and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal recurring
year-end audit adjustments). Except (i) as reflected in such financial
statements or in the notes thereto or (ii) for liabilities incurred in
connection with this Agreement or the transactions contemplated
hereby, neither CT nor any of its subsidiaries has any liabilities or
obligations of any nature which individually or in the aggregate would
have a material adverse effect on CT.
(f) Information Supplied. None of the information supplied or to
be supplied by CT specifically for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 becomes
effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Joint Proxy Statement
will, at the date it is first mailed to CT's shareholders or at the
time of the CT Shareholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The
Form S-4 and the Joint Proxy Statement will comply as to form in all
material respects with the requirements of the Securities Act and the
Exchange Act, respectively, and the rules and regulations thereunder,
except that no representation or warranty is made by CT with respect
to statements made or incorporated by reference therein based on
information supplied by BT specifically for inclusion or incorporation
by reference in the Form S-4 or the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except (1) as disclosed
in the CT SEC Documents filed and publicly available prior to the date
of this Agreement (as amended to the date of this Agreement, the "CT
Filed SEC Documents") or (2) for liabilities incurred in connection
with this Agreement or the transactions contemplated hereby, since
December 31, 1996, CT and its subsidiaries have conducted their
businesses only in the ordinary course, and there has not been (i) any
material adverse change in CT, (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of CT's capital stock, (iii) any
split, combination or reclassification of any of CT's capital stock or
any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of
CT's capital stock, (iv) (A) any granting by CT or any of its
subsidiaries to any current or former director, executive officer or
other key employee of CT or its subsidiaries of any increase in
compensation, bonus or other benefits, except for normal increases in
the ordinary course of business consistent with past practice or as
was required under any employment agreements in effect as of the date
of the most recent audited financial statements included in the CT
Filed SEC Documents, (B) any granting by CT or any of its subsidiaries
to any such current or former director, executive officer or other key
employee of any increase in severance or
termination pay, except as was required under any employment,
severance or termination agreements in effect as of the date of the
most recent audited financial statements included in the CT Filed SEC
Documents, or (C) any entry by CT or any of its subsidiaries into, or
any amendment of, any employment, deferred compensation, consulting,
severance, termination or indemnification agreement with any such
current or former director, executive officer or other key employee,
(v) except insofar as may have been required by a change in United
States generally accepted accounting principles, any change in
accounting methods, principles or practices by CT materially affecting
its assets, liabilities or businesses, (vi) any tax election that
individually or in the aggregate would have a material adverse effect
on CT or any of its tax attributes or any settlement or compromise of
any material income tax liability, (vii) any waiver, settlement,
assignment, release or compromise of any material claims or litigation
or (viii) any revaluation in any material respect of any of CT's or
its subsidiaries' assets, including writing down of inventory or
writing-off of notes or accounts receivable other than in the ordinary
course of business.
(h) Compliance with Applicable Laws. CT and its subsidiaries hold
all permits, licenses, variances, exemptions, orders, registrations
and approvals of all Governmental Entities which are required for the
operation of the businesses of CT and its subsidiaries (the "CT
Permits"), except where the failure to have any such CT Permits
individually or in the aggregate would not have a material adverse
effect on CT. CT and its subsidiaries are in compliance with the terms
of the CT Permits and all applicable statutes, laws, ordinances, rules
and regulations, except where the failure so to comply individually or
in the aggregate would not have a material adverse effect on CT. As of
the date of this Agreement, except as disclosed in the CT Filed SEC
Documents, no action, demand, requirement or investigation by any
Governmental Entity with respect to CT or any of its subsidiaries or
any of their respective properties is pending or, to the knowledge of
CT, threatened, other than, in each case, those the outcome of which
individually or in the aggregate would not (i) have a material adverse
effect on CT or (ii) reasonably be expected to impair the ability of
CT to perform its obligations under this Agreement or prevent or
materially delay the
consummation of any of the transactions contemplated by this
Agreement. This paragraph does not relate to environmental matters
which are exclusively the subject of Section 3.02(s).
(i) Absence of Changes in Benefit Plans. Since the date of the
most recent audited financial statements included in the CT Filed SEC
Documents, there has not been any adoption of, amendment of or
agreement to amend in any material respect by CT or any of its
subsidiaries any collective bargaining agreement or any material
bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former director, officer or
employee of CT or any subsidiary that, together with CT, would be
considered a single employer under Section 414(b), (c) or (m) of the
Code (collectively, the "CT Benefit Plans"), or any material change in
any actuarial or other assumption used to calculate funding
obligations with respect to any CT pension plans, or any change in the
manner in which contributions to any CT pension plans are made or the
basis on which such contributions are determined.
(j) ERISA Compliance. (i) With respect to the CT Benefit Plans,
no event has occurred and, to the knowledge of CT, there exists no
condition or set of circumstances (excluding benefits paid in the
ordinary course), in connection with which CT or any of its
subsidiaries could be subject to any liability that individually or in
the aggregate would have a material adverse effect on CT under ERISA,
the Code or any other applicable law.
(ii) Each CT Benefit Plan has been administered in accordance
with its terms, except for any failures so to administer any CT
Benefit Plan that individually or in the aggregate would not have a
material adverse effect on CT. CT, its subsidiaries and all the CT
Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code and all other applicable laws and the terms of all
applicable collective bargaining agreements, except for any failures
to be in such compliance that individually or in the aggregate would
not have a material adverse effect on CT. Each CT Benefit Plan that is
intended to be qualified under
Section 401(a) of the Code has received a favorable determination
letter from the IRS that it is so qualified and each trust established
in connection with any CT Benefit Plan that is intended to be exempt
from Federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that such trust is so
exempt. To the knowledge of CT, no fact or event has occurred since
that date of any determination letter from the IRS which is reasonably
likely to affect adversely the qualified status of any such CT Benefit
Plan or the exempt status of any such trust.
(iii) Neither CT, any of its subsidiaries nor any entity required
to be treated with CT as a single employer under Section 414 of the
Code has incurred any liability under Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation
arising in the ordinary course). No CT Benefit Plan has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA or Section 412 of the Code) whether or not waived. To the
knowledge of CT, there are not any facts or circumstances that would
materially change the funded status of any CT Benefit Plan that is a
"defined benefit" plan (as defined in Section 3(35) of ERISA) since
the date of the most recent actuarial report for such plan. No CT
Benefit Plan is a "multiemployer plan" within the meaning of Section
3(37) of ERISA.
(iv) Neither CT nor any of its subsidiaries is a party to any
collective bargaining or other labor union contract applicable to
persons employed by CT or any of its subsidiaries and no collective
bargaining agreement is being negotiated by CT or any of its
subsidiaries. As of the date of this Agreement, there is no labor
dispute, strike or work stoppage against CT or any of its subsidiaries
pending or, to the knowledge of CT, threatened which may interfere
with the respective business activities of CT or any of its
subsidiaries, except where such dispute, strike or work stoppage
individually or in the aggregate would not have a material adverse
effect on CT. As of the date of this Agreement, to the knowledge of
CT, none of CT, any of its subsidiaries or any of their respective
representatives or employees has committed any unfair labor practice
in connection with the operation of the respective businesses of CT or
any of its subsidiaries, and there is no charge or complaint against
CT or any of its subsidiaries by the National Labor Relations
Board or any comparable governmental agency pending or threatened in
writing.
(v) No employee of CT will be entitled to any additional benefits
or any acceleration of the time of payment or vesting of any benefits
under any CT Benefit Plan as a result of the transactions contemplated
by this Agreement. The deduction of any amount payable pursuant to any
CT Benefit Plan will not be subject to disallowance under Section
280(G) of the Code.
(k) Taxes. (i) Each of CT and its subsidiaries has filed all
material tax returns and reports required to be filed by it and all
such returns and reports are complete and correct in all material
respects, or requests for extensions to file such returns or reports
have been timely filed, granted and have not expired, except to the
extent that such failures to file, to be complete or correct or to
have extensions granted that remain in effect individually or in the
aggregate would not have a material adverse effect on CT. CT and each
of its subsidiaries has paid (or CT has paid on its behalf) all taxes
shown as due on such returns, and the most recent financial statements
contained in the CT Filed SEC Documents reflect an adequate reserve
for all taxes payable by CT and its subsidiaries for all taxable
periods and portions thereof accrued through the date of such
financial statements.
(ii) No deficiencies for any taxes have been proposed, asserted
or assessed against CT or any of its subsidiaries that are not
adequately reserved for in the most recent financial statements
contained in the CT Filed SEC Documents, except for deficiencies that
individually or in the aggregate would not have a material adverse
effect on CT.
(iii) Neither CT nor any of its subsidiaries has taken any action
or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(l) Voting Requirements. The affirmative vote of the holders of
two-thirds of the voting power of all outstanding shares of CT Common
Stock, voting as a single class (with each share of CT Common Stock
having one vote per share), at the CT Shareholders Meeting to adopt
this Agreement (the "CT Shareholder Approval") is the only vote of the
holders of any class or series of
CT's capital stock necessary to approve and adopt this Agreement and
the transactions contemplated hereby.
(m) State Takeover Statutes. The Board of Directors of CT has
taken all actions so that the restrictions contained in Section 912 of
the NYBCL applicable to a "business combination" (as defined in such
Section 912) will not apply to the execution, delivery or performance
of this Agreement or consummation of the Merger or the other
transactions contemplated by this Agreement. To CT's knowledge,
assuming the accuracy of Section 3.01(m), no other state takeover
statute or similar statute or regulation is applicable to the Merger
or the other transactions contemplated by this Agreement.
(n) Accounting Matters. Neither CT nor, to CT's knowledge, any of
its affiliates has taken or agreed to take any action that would
prevent the business combination to be effected by the Merger to be
accounted for as a pooling of interests.
(o) Brokers. No broker, investment banker, financial advisor or
other person, other than Salomon Brothers Inc ("Salomon Brothers"),
the fees and expenses of which will be paid by CT, is entitled to any
broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of CT. CT has
furnished to BT true and complete copies of all agreements under which
any such fees or expenses are payable and all indemnification and
other agreements related to the engagement of the persons to whom such
fees are payable.
(p) Opinion of Financial Advisor. CT has received the opinion of
Salomon Brothers, dated the date of this Agreement, to the effect
that, as of such date, the Exchange Ratio is fair, from a financial
point of view, to CT, a signed copy of which opinion has been
delivered to BT.
(q) Ownership of BT Common Stock. Except for shares owned by CT
Benefit Plans, as of the date hereof, neither CT nor, to its
knowledge, any of its affiliates, (i) beneficially owns (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, or (ii) is
party to any agreement, arrangement or understanding for the purpose
of
acquiring, holding, voting or disposing of, in each case, shares of
capital stock of BT.
(r) Litigation. Except as disclosed in the CT Filed SEC
Documents, there is no suit, claim, action, proceeding or
investigation pending or threatened in writing against CT or any
subsidiary of CT before any Governmental Entity which individually or
in the aggregate would have a material adverse effect on CT. Except as
disclosed in the CT Filed SEC Documents, neither CT nor any subsidiary
of CT is subject to any outstanding order, writ, injunction or decree
which individually or in the aggregate would have a material adverse
effect on CT.
(s) Environmental Matters. Except as disclosed in the CT Filed
SEC Documents:
(i) each of CT and its subsidiaries (A) is in compliance with all
applicable Environmental Laws, (B) holds all Environmental Permits
required for the operation of the businesses of CT and its
subsidiaries as currently conducted and (C) is in compliance with such
Environmental Permits, except in each case as would not individually
or in the aggregate have a material adverse effect on CT;
(ii) neither CT nor any subsidiary of CT has received any written
request for information, or been notified that it is a potentially
responsible party, under CERCLA or any similar state, local or foreign
Environmental Law;
(iii) neither CT nor any subsidiary of CT has entered into or
agreed to any consent decree or order or is subject to any pending
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of
Hazardous Materials, and, to the best knowledge of CT, no
investigation, litigation or other proceeding is pending or threatened
in writing with respect thereto;
(iv) to the best knowledge of CT, none of the real property
owned, leased or operated by CT or any subsidiary of CT is listed or
formally proposed for listing on the "National Priorities List" under
CERCLA, as updated through the date hereof, or any similar
state or foreign list of sites requiring investigation or cleanup; and
(v) no Hazardous Material has been released by CT or, to CT's
knowledge, by any other person at, or transported to or from, any real
property currently or, to the best knowledge of CT, formerly owned or
operated by CT or any subsidiary of CT, except as would not
individually or in the aggregate have a material adverse effect on CT.
(t) Material Contracts. Except as disclosed in the CT Filed SEC
Documents, as of the date hereof, there are no contracts or agreements
that are of a nature required to be filed as an exhibit under the
Exchange Act and the rules and regulations promulgated thereunder.
Neither CT nor any of its subsidiaries is in violation of nor in
default under (nor does there exist any condition which upon the
giving of notice or the passage of time or both would cause such a
violation of or default under) any such material lease, permit,
concession, franchise, license or any other material contract,
agreement, arrangement or understanding to which it is a party or by
which it is bound. CT is not aware of any facts or conditions with
respect to any material contracts or agreements that would reasonably
be expected to make CT or its subsidiaries liable for any material
penalties or liquidated damages pursuant to the terms of such material
contracts or agreements.
(u) Intellectual Property. CT and its subsidiaries own, or are
validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trademark rights, trade secrets, trade
names, trade name rights, service marks, service xxxx rights,
copyrights and other proprietary intellectual property rights and
computer programs which are material to the conduct of the business of
CT and its subsidiaries taken as a whole (including any registrations
or applications for registration of any of the foregoing,
collectively, the "CT Intellectual Property"). Consummation of the
Merger will not give rise to any termination rights or material
damages or other penalties with respect to any CT Intellectual
Property. Neither CT nor any such subsidiary has received any notice
of infringement of or conflict with, and, to CT's knowledge, there are
no infringements of or conflicts with, the rights of others with
respect to the use of any CT Intellectual
Property that individually or in the aggregate, in either such case,
would have a material adverse effect on CT. To the knowledge of CT, no
person is infringing the rights of CT or any subsidiary with respect
to any CT Intellectual Property that individually or in the aggregate
would have a material adverse effect on CT. Neither CT nor any
subsidiary has licensed, or otherwise granted, to any third party any
material rights in or to any CT Intellectual Property (other than
pursuant to customer agreements).
(v) Customers. To the knowledge of CT, there are no facts,
circumstances or conditions which exist that would reasonably be
expected to result in the loss of any significant customer (as defined
below). Section 3.02(v) of the CT Disclosure Schedule sets forth a
true and complete list as of the date hereof of all the significant
customers who have been delivered equipment by CT and its subsidiaries
but which equipment has not yet been installed and which will not be
installed within 60 days after the date hereof. For purposes of this
Section 3.02(v), "significant customer" means any customer that has
entered into one or more contracts, agreements, arrangements or
understandings with CT or its subsidiaries, the aggregate anticipated
benefits of which to CT and its subsidiaries equals or exceeds $10
million.
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business. (a) Conduct of Business by BT.
Except as set forth in Section 4.01(a) of the BT Disclosure Schedule, as
otherwise expressly contemplated by this Agreement or as consented to by
CT, such consent not to be unreasonably withheld or delayed, during the
period from the date of this Agreement to the Effective Time, BT shall, and
shall cause its subsidiaries to, carry on their respective businesses in
the ordinary course consistent with past practice and in compliance in all
material respects with all applicable material laws and regulations and, to
the extent consistent therewith, use all reasonable efforts to preserve
intact their current business organizations, use reasonable efforts to keep
available the services of their current officers and other key employees
and use reasonable efforts to preserve their relationships with those
persons having business dealings and their goodwill and ongoing businesses.
Without limiting the
generality of the foregoing (but subject to the above exceptions), during
the period from the date of this Agreement to the Effective Time, BT shall
not, and shall not permit any of its subsidiaries to:
(i) other than dividends and distributions (including liquidating
distributions) by a direct or indirect wholly owned subsidiary of BT
to its parent, or by a subsidiary that is partially owned by BT or any
of its subsidiaries, provided that BT or any such subsidiary receives
or is to receive its proportionate share thereof, (x) declare, set
aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (z) purchase, redeem or otherwise
acquire any shares of capital stock of BT or any of its subsidiaries
or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, other voting securities or
convertible securities (other than the issuance of BT Common Stock (x)
upon the exercise of BT Stock Options outstanding as of the date
hereof in accordance with their present terms, (y) upon the exercise
of the Warrants in accordance with their present terms or (z) in
accordance with the BT Rights Agreement);
(iii) except as contemplated hereby, amend its certificate of
incorporation, by-laws or other comparable organizational documents;
(iv) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets (including securitization), other than in the ordinary course
of business consistent with past practice;
(v) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any corporation, limited liability
company,
partnership, joint venture, association or other business organization
or division thereof, except for purchases of inventory, supplies and
other similar items in the ordinary course of business consistent with
past practice;
(vi) (y) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities
of BT or any of its subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter
into any arrangement having the economic effect of any of the
foregoing, except for borrowings incurred in the ordinary course of
business consistent with past practice and not in excess of $25
million at any one time outstanding, or (z) make any loans, advances
or capital contributions to, or investments in, any other person,
other than to BT or any direct or indirect subsidiary of BT or to
officers and employees of BT or any of its subsidiaries for travel,
business or relocation expenses in the ordinary course of business;
(vii) make or agree to make any capital expenditure or capital
expenditures in excess of $7 million in the aggregate in any 90-day
period after the date hereof;
(viii) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto)
of BT included in the BT Filed SEC Documents, incurred since the date
of such financial statements in the ordinary course of business
consistent with past practice or which do not individually or in the
aggregate have a material adverse effect on BT;
(ix) except in the ordinary course of business or except as would
not individually or in the aggregate have a material adverse effect on
BT, modify, amend or terminate any material contract or agreement to
which
BT or any subsidiary of BT is a party or waive, release or assign any
material rights or claims thereunder; or
(x) authorize, or commit or agree to take, any of the foregoing
actions (except for the execution of indemnification agreements
contemplated by Section 5.07(2)).
(b) Conduct of Business by CT. Except as set forth in Section
4.01(b) of the CT Disclosure Schedule, as otherwise expressly contemplated
by this Agreement or as consented to by BT, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, CT shall, and shall cause its subsidiaries
to, carry on their respective businesses in the ordinary course consistent
with past practice and in compliance in all material respects with all
applicable material laws and regulations and, to the extent consistent
therewith, use all reasonable efforts to preserve intact their current
business organizations, use reasonable efforts to keep available the
services of their current officers and other key employees and use
reasonable efforts to preserve their relationships with those persons
having business dealings and their goodwill and ongoing businesses. Without
limiting the generality of the foregoing (but subject to the above
exceptions), during the period from the date of this Agreement to the
Effective Time, CT shall not, and shall not permit any of its subsidiaries
to:
(i) other than dividends and distributions (including liquidating
distributions) by a direct or indirect wholly owned subsidiary of CT
to its parent, or by a subsidiary that is partially owned by CT or any
of its subsidiaries, provided that CT or any such subsidiary receives
or is to receive its proportionate share thereof, (x) declare, set
aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (z) purchase, redeem or otherwise
acquire any shares of capital stock of CT or any of its subsidiaries
or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, other voting securities or convertible
securities (other than the issuance of CT Common Stock (x) upon the
exercise of CT Stock Options outstanding as of the date hereof in
accordance with their present terms, (y) upon the conversion of the
Convertible Debentures in accordance with their present terms or (z)
in accordance with the CT Rights Agreement, if any);
(iii) except as contemplated hereby, amend its certificate of
incorporation, by-laws or other comparable organizational documents;
(iv) (A) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets (including securitization), other than in the ordinary course
of business consistent with past practice, or (B) acquire or agree to
acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any
business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division
thereof, except for purchases of inventory, supplies and other similar
items in the ordinary course of business consistent with past
practice, in either case only to the extent such transaction referred
to in clause (A) or (B) above would (x) be within the business
operations of the CT Network Systems Division or (y) (1) be in excess
of $70 million per transaction (or series of related transactions) or
$100 million in the aggregate or (2) materially delay the consummation
of the Merger;
(v) (y) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities
of CT or any of its subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter
into any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the ordinary
course of business consistent with past practice and not in excess of
$25 million at any one time outstanding, or (z) make any loans,
advances or capital contributions to, or investments in, any other
person, other than to CT or any direct or indirect subsidiary of CT or
to
officers and employees of CT or any of its subsidiaries for travel,
business or relocation expenses in the ordinary course of business;
(vi) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto)
of CT included in the CT Filed SEC Documents, incurred since the date
of such financial statements in the ordinary course of business
consistent with past practice or which do not individually or in the
aggregate have a material adverse effect on CT;
(vii) except in the ordinary course of business or except as
would not individually or in the aggregate have a material adverse
effect on CT, modify, amend or terminate any material contract or
agreement to which CT or any subsidiary of CT is a party or waive,
release or assign any material rights or claims thereunder; or
(viii) authorize, or commit or agree to take, any of the
foregoing actions.
(c) Other Actions. Except as required by law, BT and CT shall
not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of
such party set forth in this Agreement that are qualified as to materiality
becoming untrue at the Effective Time, (ii) any of such representations and
warranties that are not so qualified becoming untrue in any material
respect at the Effective Time or (iii) any of the conditions to the Merger
set forth in Article VI not being satisfied.
(d) Advice of Changes. BT and CT shall promptly advise the other
orally and in writing to the extent it has knowledge of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or
any such representation or warranty that is not so qualified becoming
untrue or inaccurate in any material respect, (ii) the failure by it to
comply in any material respect with or satisfy in any material respect any
covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement and (iii) any change or event having, or which, insofar as can
reasonably be foreseen, would have, individually or in the aggregate a
material adverse effect on such party or on the truth of their respective
representations and warranties or the ability of the conditions set forth
in Article VI to be satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of
the parties (or remedies with respect thereto) or the conditions to the
obligations of the parties under this Agreement.
SECTION 4.02. No Solicitation by BT. (a) BT shall not, nor shall
it permit any of its subsidiaries to, nor shall it authorize or permit any
of its directors, officers or employees or any investment banker, financial
advisor, attorney, accountant or other representative retained by it or any
of its subsidiaries to, directly or indirectly through another person, (i)
solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate, any
inquiries or the making of any proposal which constitutes any BT Takeover
Proposal (as defined below) or (ii) participate in any discussions or
negotiations regarding any BT Takeover Proposal; provided, however, that
if, at any time prior to -------- ------- the date of the BT Stockholders
Meeting (the "BT Applicable Period"), the Board of Directors of BT
determines in good faith, after consultation with outside counsel, that it
is necessary to do so in order to comply with its fiduciary duties to BT's
stockholders under applicable law, BT may, in response to a BT Superior
Proposal (as defined in Section 4.02(b)) which was not solicited by it or
which did not otherwise result from a breach of this Section 4.02(a), and
subject to providing prior written notice of its decision to take such
action to CT (the "BT Notice") and compliance with Section 4.02(c), (x)
furnish information with respect to BT and its subsidiaries to any person
making a BT Superior Proposal pursuant to a customary confidentiality
agreement (as determined by BT after consultation with its outside counsel)
and (y) participate in discussions or negotiations regarding such BT
Superior Proposal. For purposes of this Agreement, "BT Takeover Proposal"
means any inquiry, proposal or offer from any person relating to any direct
or indirect acquisition or purchase of a business that constitutes 15% or
more of the net revenues, net income or the assets of BT and its
subsidiaries, taken as a whole, or 15% or more of any class of equity
securities of BT or any of its subsidiaries, any tender offer or exchange
offer that if consummated would
result in any person beneficially owning 15% or more of any class of equity
securities of BT or any of its subsidiaries, or any merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving BT or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.02, neither
the Board of Directors of BT nor any committee thereof shall (i) withdraw
or modify, or propose publicly to withdraw or modify, in a manner adverse
to CT, the approval or recommendation by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any BT Takeover Proposal, or
(iii) cause BT to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "BT Acquisition
Agreement") related to any BT Takeover Proposal. Notwithstanding the
foregoing, in the event that during the BT Applicable Period the Board of
Directors of BT determines in good faith, after consultation with outside
counsel, that it is necessary to do so in order to comply with its
fiduciary duties to BT's stockholders under applicable law, the Board of
Directors of BT may (subject to this and the following sentences) terminate
this Agreement (and concurrently with or after such termination, if it so
chooses, cause BT to enter into any BT Acquisition Agreement with respect
to any BT Superior Proposal), but only at a time that is during the BT
Applicable Period and is after the later of (x) the third business day
following CT's receipt of written notice advising CT that the Board of
Directors of BT is prepared to accept a BT Superior Proposal, specifying
the material terms and conditions of such BT Superior Proposal and
identifying the person making such BT Superior Proposal and (y) in the
event of any amendment to the price or any material term of a BT Superior
Proposal, one business day following CT's receipt of written notice
containing the material terms of such amendment, including any change in
price (it being understood that each further amendment to the price or any
material terms of the BT Superior Proposal shall require an additional one
business day period prior to which BT can take such action). For purposes
of this Agreement, a "BT Superior Proposal" means any proposal made by a
third party (i) to acquire, directly or indirectly, including pursuant to a
tender offer, exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of BT Common Stock then outstanding or
all or substantially all the assets of BT, (ii) that is otherwise on terms
which the Board of Directors of BT determines in its good faith judgment
(based on the advice of a financial advisor of nationally recognized
reputation) to be more favorable to BT's stockholders than the Merger,
(iii) for which financing, to the extent required, is then committed or
which, in the good faith judgment of the Board of Directors of BT, is
reasonably capable of being obtained by such third party and (iv) for
which, in the good faith judgment of the Board of Directors of BT, no
regulatory approvals are required, including antitrust approvals, that
could not reasonably be expected to be obtained.
(c) In addition to the obligations of BT set forth in paragraphs
(a) and (b) of this Section 4.02, BT shall immediately advise CT orally and
in writing of any request for information or of any BT Takeover Proposal,
the material terms and conditions of such request or BT Takeover Proposal
and the identity of the person making such request or BT Takeover Proposal.
BT will keep CT reasonably informed of the status and details (including
amendments or proposed amendments) of any such request or BT Takeover
Proposal.
(d) Nothing contained in this Section 4.02 shall prohibit BT from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure
to BT's stockholders if, in the good faith judgment of the Board of
Directors of BT, after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under applicable law;
provided, however, that neither BT nor its Board of Directors nor any
committee thereof shall withdraw or modify, or propose publicly to withdraw
or modify, its position with respect to this Agreement or the Merger or
approve or recommend, or propose publicly to approve or recommend, a BT
Takeover Proposal.
SECTION 4.03. No Solicitation by CT. (a) CT shall not, nor shall
it permit any of its subsidiaries to, nor shall it authorize or permit any
of its directors, officers or employees or any investment banker, financial
advisor, attorney, accountant or other representative retained by it or any
of its subsidiaries to, directly or indirectly through another person, (i)
solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate, any
inquiries or the making of any proposal which constitutes any CT Takeover
Proposal (as defined below) or (ii) participate in any discussions or
negotiations regarding any CT Takeover
Proposal; provided, however, that if, at any time prior to the date of the
CT Shareholders Meeting (the "CT Applicable Period"), the Board of
Directors of CT determines in good faith, after consultation with outside
counsel, that it is necessary to do so in order to comply with its
fiduciary duties to CT's shareholders under applicable law, CT may, in
response to a CT Superior Proposal (as defined in Section 4.03(b)) which
was not solicited by it or which did not otherwise result from a breach of
this Section 4.03(a), and subject to providing prior written notice of its
decision to take such action to BT (the "CT Notice") and compliance with
Section 4.03(c), (x) furnish information with respect to CT and its
subsidiaries to any person making a CT Superior Proposal pursuant to a
customary confidentiality agreement (as determined by CT after consultation
with its outside counsel) and (y) participate in discussions or
negotiations regarding such CT Superior Proposal. For purposes of this
Agreement, "CT Takeover Proposal" means any inquiry, proposal or offer from
any person relating to any direct or indirect acquisition or purchase of a
business that constitutes 15% or more of the net revenues, net income or
the assets of CT and its subsidiaries, taken as a whole, or 15% or more of
any class of equity securities of CT or any of its subsidiaries, any tender
offer or exchange offer that if consummated would result in any person
beneficially owning 15% or more of any class of equity securities of CT or
any of its subsidiaries, or any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving CT or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.03, neither
the Board of Directors of CT nor any committee thereof shall (i) withdraw
or modify, or propose publicly to withdraw or modify, in a manner adverse
to BT, the approval or recommendation by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any CT Takeover Proposal, or
(iii) cause CT to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "CT Acquisition
Agreement") related to any CT Takeover Proposal. Notwithstanding the
foregoing, in the event that during the CT Applicable Period the Board of
Directors of CT determines in good faith , after consultation with outside
counsel, that it is necessary to do so in order to comply with its
fiduciary duties to CT's shareholders under applicable law, the Board of
Directors of CT may (subject to this and the following sentences) terminate
this Agreement (and
concurrently with or after such termination, if it so chooses, cause CT to
enter into any CT Acquisition Agreement with respect to any CT Superior
Proposal), but only at a time that is during the CT Applicable Period and
is after the later of (x) the third business day following BT's receipt of
written notice advising BT that the Board of Directors of CT is prepared to
accept a CT Superior Proposal, specifying the material terms and conditions
of such CT Superior Proposal and identifying the person making such CT
Superior Proposal and (y) in the event of any amendment to the price or any
material term of a CT Superior Proposal, one business day following CT's
receipt of written notice containing the material terms of such amendment,
including any change in price (it being understood that each further
amendment to the price or any material terms of the CT Superior Proposal
shall require an additional one business day period prior to which CT can
take such action). For purposes of this Agreement, a "CT Superior Proposal"
means any proposal made by a third party (i) to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash
and/or securities, more than 50% of the combined voting power of the shares
of CT Common Stock then outstanding or all or substantially all the assets
of CT, (ii) that is otherwise on terms which the Board of Directors of CT
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to CT's
shareholders than the Merger, (iii) for which financing, to the extent
required, is then committed or which, in the good faith judgment of the
Board of Directors of CT, is reasonably capable of being obtained by such
third party and (iv) for which, in the good faith judgment of the Board of
Directors of CT, no regulatory approvals are required, including antitrust
approvals, that could not reasonably be expected to be obtained.
(c) In addition to the obligations of CT set forth in paragraphs
(a) and (b) of this Section 4.03, CT shall immediately advise BT orally and
in writing of any request for information or of any CT Takeover Proposal,
the material terms and conditions of such request or CT Takeover Proposal
and the identity of the person making such request or CT Takeover Proposal.
CT will keep BT reasonably informed of the status and details (including
amendments or proposed amendments) of any such request or CT Takeover
Proposal.
(d) Nothing contained in this Section 4.03 shall prohibit CT from
taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure
to CT's shareholders if, in the good faith judgment of the Board of
Directors of CT, after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under applicable law;
provided, however, that neither CT nor its Board of Directors nor any
committee thereof shall withdraw or modify, or propose publicly to withdraw
or modify, its position with respect to this Agreement or the Merger or
approve or recommend, or propose publicly to approve or recommend, a CT
Takeover Proposal.
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the Joint Proxy
Statement; Stockholders Meetings. (a) As soon as practicable following the
date of this Agreement, BT and CT shall prepare and file with the SEC the
Joint Proxy Statement and CT shall prepare and file with the SEC the Form
S-4, in which the Joint Proxy Statement will be included as a prospectus.
Each of BT and CT shall use best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such
filing. BT will use all best efforts to cause the Joint Proxy Statement to
be mailed to BT's stockholders, and CT will use all best efforts to cause
the Joint Proxy Statement to be mailed to CT's shareholders, in each case
as promptly as practicable after the Form S-4 is declared effective under
the Securities Act. CT shall also take any action (other than qualifying to
do business in any jurisdiction in which it is not now so qualified or to
file a general consent to service of process) required to be taken under
any applicable state securities laws in connection with the issuance of CT
Common Stock in the Merger and BT shall furnish all information concerning
BT and the holders of BT Common Stock as may be reasonably requested in
connection with any such action. No filing of, or amendment or supplement
to, the Form S-4 or the Joint Proxy Statement will be made by CT without
providing BT the opportunity to review and comment thereon. CT will advise
BT, promptly after it receives notice thereof, of the time when the Form
S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the CT
Common Stock issuable in connection with the Merger for offering or sale
in any jurisdiction, or any request by the SEC for amendment of the Joint
Proxy Statement or the Form S-4 or comments thereon and responses thereto
or requests by the SEC for additional information. If at any time prior to
the Effective Time any information relating to BT or CT, or any of their
respective affiliates, officers or directors, should be discovered by BT or
CT which should be set forth in an amendment or supplement to the Form S-4
or the Joint Proxy Statement, so that either of such documents would not
include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto
and an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of BT and CT.
(b) BT shall, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "BT Stockholders Meeting") for the purpose of obtaining
the BT Stockholder Approval and shall, through its Board of Directors,
recommend to its stockholders the approval and adoption of this Agreement,
the Merger and the other transactions contemplated hereby. Without limiting
the generality of the foregoing but subject to its rights to terminate this
Agreement pursuant to Section 4.02(b), BT agrees that its obligations
pursuant to the first sentence of this Section 5.01(b) shall not be
affected by the commencement, public proposal, public disclosure or
communication to BT of any BT Takeover Proposal.
(c) CT shall, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
shareholders (the "CT Shareholders Meeting") for the purpose of obtaining
the CT Shareholder Approval and shall, through its Board of Directors,
recommend to its shareholders the approval of the issuance of CT Common
Stock pursuant to the Merger. Without limiting the generality of the
foregoing but subject to its rights to terminate this Agreement pursuant to
Section 4.03(b), CT agrees that its obligations pursuant to the first
sentence of this Section 5.01(c) shall not be affected by the commencement,
public proposal, public disclosure or commencement to CT of any CT Takeover
Proposal.
(d) CT and BT will use best efforts to hold the BT Stockholders
Meeting and the CT Shareholders Meeting on the same date and as soon as
practicable after the date hereof. Each of BT and CT has hired or will hire
a proxy solicitation firm to assist it in obtaining the BT Stockholder
Approval and the CT Shareholder Approval, respectively.
SECTION 5.02. Letters of BT's Accountants. (a) BT shall use best
efforts to cause to be delivered to CT two letters from Coopers & Xxxxxxx
L.L.P., BT's independent accountants, one dated a date within two business
days before the date on which the Form S-4 shall become effective and one
dated a date within two business days before the Closing Date, each
addressed to CT, in form and substance reasonably satisfactory to CT and
customary in scope and substance for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
(b) BT shall use best efforts to cause to be delivered to CT a
letter from Coopers & Xxxxxxx L.L.P., BT's independent accountants,
addressed to CT and BT, dated as of the Closing Date, stating that the
Merger will qualify as a pooling of interests transaction under Opinion 16
of the Accounting Principles Board and applicable SEC rules and
regulations.
SECTION 5.03. Letters of CT's Accountants. (a) CT shall use best
efforts to cause to be delivered to BT two letters from Deloitte & Touche
LLP, CT's independent accountants, one dated a date within two business
days before the date on which the Form S-4 shall become effective and one
dated a date within two business days before the Closing Date, each
addressed to BT, in form and substance reasonably satisfactory to BT and
customary in scope and substance for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
(b) CT shall use best efforts to cause to be delivered to BT a
letter from Deloitte & Touche LLP, CT's independent accountants, addressed
to BT and CT, dated as of the Closing Date, stating that the Merger will
qualify as a pooling of interests transaction under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations.
SECTION 5.04. Access to Information; Confidentiality. Subject to
the Confidentiality Agreement
dated June 3, 1997, between CT and BT (the "Confidentiality Agreement"),
each of BT and CT shall, and shall cause each of its respective
subsidiaries to, afford to the other party and to the officers, employees,
accountants, counsel, financial advisors and other representatives of such
other party, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties,
books, contracts, commitments, personnel and records and, during such
period, each of BT and CT shall, and shall cause each of its respective
subsidiaries to, furnish promptly to the other party (a) a copy of each
report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its businesses,
properties and personnel as such other party may reasonably request. No
review pursuant to this Section 5.04 shall have an effect for the purpose
of determining the accuracy of any representation or warranty given by
either party hereto to the other party hereto. Each of BT and CT will hold,
and will cause its respective officers, employees, accountants, counsel,
financial advisors and other representatives and affiliates to hold, any
nonpublic information in accordance with the terms of the Confidentiality
Agreement.
SECTION 5.05. Best Efforts. (a) Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use
best efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding
by, any Governmental Entity, (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated by this Agreement, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental
Entity vacated or reversed, (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and
(v) the responding to any request for additional information or
documentation under 12 C.F.R. ss.803.20. Nothing set forth in this Section
5.05(a) shall require BT or CT to agree to anything prohibiting or limiting
the ownership or operation by BT or CT and their respective subsidiaries of
any material portion of the businesses or assets of BT and CT and their
respective subsidiaries taken as a whole, or compelling BT or CT and their
respective subsidiaries to dispose of or hold separate any material portion
of the businesses or assets of BT or CT taken as a whole.
(b) In connection with and without limiting the foregoing, BT and
CT shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the
Merger, this Agreement or any of the other transactions contemplated by
this Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to the Merger, this Agreement or any other
transaction contemplated by this Agreement, take all action necessary to
ensure that the Merger and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger and the other transactions contemplated
by this Agreement.
SECTION 5.06. Stock Options, etc. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of BT (or, if
appropriate, any committee administering the BT Stock Plans) shall adopt
such resolutions or take such other actions as may be required to effect
the following:
(i) adjust the terms of all outstanding BT Stock Options granted
under BT Stock Plans and the Warrants, in each case whether vested or
unvested, as necessary to provide that, at the Effective Time, each BT
Stock Option and each Warrant outstanding immediately prior to the
Effective Time shall be amended and converted into an option to
acquire, on the same terms and conditions as were applicable under
such BT Stock Option or such Warrant the same number of shares of CT
Common Stock as the holder of such BT Stock Option or such Warrant
would have been entitled to receive pursuant to the Merger had such
holder exercised such BT Stock Option or such Warrant in full
immediately prior to the Effective Time (rounding down to the nearest
whole share), at a price per share of CT Common Stock equal to (A) the
aggregate exercise price for the
shares of BT Common Stock otherwise purchasable pursuant to such BT
Stock Option or such Warrant divided by (B) the aggregate number of
shares of CT Common Stock deemed purchasable pursuant to such BT Stock
Option (each, as so adjusted, an "Adjusted Option") or such Warrant;
provided that such exercise price shall be rounded up to the nearest
whole cent; and
(ii) make such other changes to the BT Stock Plans as BT and CT
may agree are appropriate to give effect to the Merger.
(b) The adjustments provided herein with respect to any BT Stock
Options which are "incentive stock options" as defined in Section 422 of
the Code shall be and are intended to be effected in a manner which is
consistent with Section 424(a) of the Code.
(c) At the Effective Time, by virtue of the Merger and without
the need of any further corporate action, CT shall assume the BT Stock
Plans and the Warrants, with the result that all obligations of BT under
the BT Stock Plans and the Warrants, including with respect to BT Stock
Options outstanding at the Effective Time under each BT Stock Plan, shall
be obligations of CT following the Effective Time. CT shall take all
corporate action necessary to reserve for issuance a sufficient number of
shares of CT Common Stock for delivery under the Adjusted Options and the
Warrants.
(d) No later than the Effective Time, CT shall prepare and file
with the SEC a registration statement on Form S-8 (or another appropriate
form) registering a number of shares of CT Common Stock equal to the number
of shares subject to the Adjusted Options. Such registration statement
shall be kept effective (and the current status of the prospectus or
prospectuses required thereby shall be maintained) at least for so long as
any Adjusted Options may remain outstanding.
(e) As soon as practicable after the Effective Time, CT shall
deliver to the holders of BT Stock Options and Warrants and to participants
in the BT Stock Purchase Plan appropriate notices setting forth such
holders' rights pursuant to the respective BT Stock Plans, the Warrants and
the BT Stock Purchase Plan and the agreements, if any, evidencing the
grants of such BT Stock Options or Warrants, and that, in the case of such
BT Stock Options and Warrants, that such BT Stock Options and Warrants and
agreements shall
be assumed by CT and shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 5.06 after
giving effect to the Merger).
(f) A holder of an Adjusted Option may exercise such Adjusted
Option in whole or in part in accordance with its terms by delivering a
properly executed notice of exercise to CT, together with the consideration
therefor and the Federal withholding tax information, if any, required in
accordance with the related BT Stock Plan.
(g) At the Effective Time, by virtue of the Merger and without
the need of any further corporate action, the Surviving Corporation shall
assume the XX Xxxxxxxxx Plan in accordance with Section 6 thereof, with the
result that all obligations of BT under the XX Xxxxxxxxx Plan shall be
obligations of the Surviving Corporation following the Effective Time.
(h) The Board of Directors of BT (or, if appropriate, any
committee administering the BT Stock Purchase Plan) shall adopt such
resolutions or take such other actions as may be required to, following the
expiration of the current offering under the BT Stock Purchase Plan, cause
no further offerings to be made thereunder and no further payroll
deductions to be accepted thereunder. At the Effective Time, by virtue of
the Merger and without the need of any further corporate action but subject
to Section 2.02(j), the BT Stock Purchase Plan will be terminated. All
employees of BT shall be eligible to participate in any broad-based
employee stock purchase plan of CT in effect at any time within three years
following the Merger, on the same terms as employees of CT.
(i) CT shall administer each Adjusted Option and each BT Stock
Plan in a manner that (i) complies with Rule 16b-3 under the Exchange Act,
with respect to Adjusted Options held by any person who will be subject to
the reporting requirements under Section 16(a) of the Exchange Act with
respect to the Surviving Corporation after the Merger and (ii) ensures that
Adjusted Options that are intended to qualify as "incentive stock options"
as defined in Section 422 of the Code will continue to qualify as such
following the Merger.
(j) After the Effective Time, former executive officers of BT who
become officers or employees of the Surviving Corporation shall be treated
as senior managerial personnel of CT in determining their eligibility to
receive CT Stock Options under the CT Stock Plans.
(k) After the Effective Time, former employees of BT and its
subsidiaries shall receive credit (solely for eligibility, vesting and
similar purposes) under all current and future CT Benefit Plans for all
service with BT and its subsidiaries prior to the Effective Time.
SECTION 5.07. Indemnification, Exculpation and Insurance. (a) CT
agrees that all rights to indemnification and exculpation from liabilities
for acts or omissions occurring at or prior to the Effective Time now
existing in favor of the current or former directors or officers of BT and
its subsidiaries as provided in their respective certificates of
incorporation or by-laws (or comparable organizational documents) shall
survive the Merger and shall continue in full force and effect in
accordance with their terms. As soon as practicable following the date
hereof, BT shall enter into indemnification agreements substantially in the
form of Exhibit B hereto with each officer and director of BT, and as of
the Effective Time, CT shall assume the obligations under each such
indemnification agreement. In addition, from and after the Effective Time,
directors and officers of BT who become directors or officers of CT will be
entitled to the same indemnity and exculpation rights and protections, and
directors and officers liability insurance, as are afforded to other
directors and officers of CT.
(b) In the event that CT or any of its successors or assigns (i)
consolidates with or merges into any other person and is not the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision will be made
so that the successors and assigns of CT assume the obligations set forth
in this Section 5.07.
(c) For five years after the Effective Time, CT shall maintain in
effect BT's current directors' and officers' liability insurance covering
acts or omissions occurring prior to the Effective Time with respect to
those persons who are currently covered by BT's directors' and officers'
liability insurance policy on terms with respect to such coverage and
amount no less favorable than those of such policy in effect on the date
hereof; provided, that in satisfying its obligation under this Section
5.07(c) CT shall not be obligated to pay premiums in excess of 150% of the
amount per annum BT paid in its last full fiscal year (which 150% premium
BT represents to be $617,500), but shall in such case be obligated to
provide such coverage as may be obtained for such 150% premium.
(d) The provisions of this Section 5.07 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his
or her heirs and his or her representatives, (ii) are in addition to, and
not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise and
(iii) may not be amended or repealed without the written consent of any
affected indemnified party.
SECTION 5.08. Fees and Expenses. (a) Except as provided in this
Section 5.08, all fees and expenses incurred in connection with the Merger,
this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring such fees or expenses, whether or not the
Merger is consummated, except that each of CT and BT shall bear and pay
one-half of the costs and expenses (other than attorney's fees) incurred in
connection with (i) the filing, printing and mailing of the Form S-4 and
the Joint Proxy Statement (including SEC filing fees) and (ii) the filings
of the premerger notification and report forms under the HSR Act (including
filing fees). CT shall file any return with respect to, and shall pay, any
state or local taxes (including any penalties or interest with respect
thereto), if any, which are attributable to the transfer of the beneficial
ownership of BT's real property (collectively, the "Real Estate Transfer
Taxes") as a result of the Merger. Upon the reasonable request of CT, BT
shall cooperate with CT in the filing of such returns including, in the
case of BT, supplying in a timely manner a complete list of all real
property interests held by BT and any information with respect to such
property that is reasonably necessary to complete such returns. The fair
market value of any real property of BT subject to the Real Estate Transfer
Taxes shall be as agreed to between CT and BT.
(b) In the event that (i) a BT Takeover Proposal has been made
directly to the stockholders of BT generally or shall have otherwise become
publicly known or any person shall have publicly announced an intention
(whether or not conditional) to make a BT Takeover Proposal and thereafter
this Agreement is terminated by either CT or BT pursuant to Section
7.01(b)(i) or Section 7.01(b)(ii) or (ii) this Agreement is terminated by
BT pursuant to Section 7.01(f), then BT shall promptly, but in no event
later than two days after the date of such termination, pay CT a fee equal
to the sum of $50 million (the "Termination Fee") and the CT Out of Pocket
Expenses, payable by wire transfer of same day funds; provided, however,
that no Termination Fee or CT Out of Pocket Expenses shall be payable to CT
pursuant to clause (i) of this paragraph (b) unless and until within 12
months
of such termination BT or any of its subsidiaries enters into any BT
Acquisition Agreement or consummates any BT Takeover Proposal (for the
purposes of the foregoing proviso the terms "BT Acquisition Agreement" and
"BT Takeover Proposal" shall have the meanings assigned to such terms in
Section 4.02 except that the references to 15% in the definition of "BT
Takeover Proposal" in Section 4.02(a) shall be deemed to be references to
35% and "BT Takeover Proposal" shall only be deemed to refer to a
transaction involving BT, or with respect to assets (including the shares
of any subsidiary), BT and its subsidiaries, taken as a whole, and not any
of its subsidiaries alone), in which event the Termination Fee and CT Out
of Pocket Expenses shall be payable upon the first to occur of such events.
"CT Out of Pocket Expenses" means the lesser of (A) all documented out of
pocket expenses and fees incurred by CT (including fees and expenses
payable to all legal, accounting, financial, public relations and other
professional advisers) arising out of, in connection with or related to
this Agreement and the transactions contemplated hereby and (B) $5 million.
BT acknowledges that the agreements contained in this Section 5.08(b) are
an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, CT would not enter into this Agreement;
accordingly, if BT fails promptly to pay the amount due pursuant to this
Section 5.08(b), and, in order to obtain such payment, CT commences a suit
which results in a judgment against BT for the fee set forth in this
Section 5.08(b), BT shall pay to CT its costs and expenses (including
attorneys' fees and expenses) in connection with such suit, together with
interest on the amount of the fee at the prime rate of Citibank N.A. in
effect on the date such payment was required to be made.
(c) In the event that (i) a CT Takeover Proposal has been made
directly to the shareholders of CT generally or shall have otherwise become
publicly known or any person shall have publicly announced an intention
(whether or not conditional) to make a CT Takeover Proposal and thereafter
this Agreement is terminated by either CT or BT pursuant to Section
7.01(b)(i) or Section 7.01(b)(iii) or (ii) this Agreement is terminated by
CT pursuant to Section 7.01(d), then CT shall promptly, but in no event
later than two days after the date of such termination, pay BT a fee equal
to the sum of the Termination Fee and the BT Out of Pocket Expenses,
payable by wire transfer of same day funds; provided, however, that no
Termination Fee or BT Out-of- Pocket Expenses shall be payable to BT
pursuant to clause (i) of this paragraph (c) unless and until within 12
months of such termination CT or any of its subsidiaries
enters into any CT Acquisition Agreement or consummates any CT Takeover
Proposal (for the purposes of the foregoing proviso the terms "CT
Acquisition Agreement" and "CT Takeover Proposal" shall have the meanings
assigned to such terms in Section 4.03 except that the references to 15% in
the definition of "CT Takeover Proposal" in Section 4.03(a) shall be deemed
to be references to 35% and "CT Takeover Proposal" shall only be deemed to
refer to a transaction involving CT, or with respect to assets (including
the shares of any subsidiary), CT and its subsidiaries, taken as a whole,
and not any of its subsidiaries alone), in which event the Termination Fee
and BT out of pocket Expenses shall be payable upon the first to occur of
such events. "BT out of pocket Expenses" means the lesser of (A) all
documented out of pocket expenses and fees incurred by BT (including fees
and expenses payable to all legal, accounting, financial, public relations
and other professional advisers) arising out of, in connection with or
related to this Agreement and the transactions contemplated hereby and (B)
$5 million. CT acknowledges that the agreements contained in this Section
5.08(c) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, BT would not enter into this
Agreement; accordingly, if CT fails promptly to pay the amount due pursuant
to this Section 5.08(c), and, in order to obtain such payment, BT commences
a suit which results in a judgment against CT for the fee set forth in this
Section 5.08(c), CT shall pay to BT its costs and expenses (including
attorneys' fees and expenses) in connection with such suit, together with
interest on the amount of the fee at the prime rate of Citibank N.A. in
effect on the date such payment was required to be made.
SECTION 5.09. Public Announcements. CT, on the one hand, and BT,
on the other hand, will consult with each other before issuing, and provide
each other the opportunity to review, comment upon and concur with, any
press release or other public statements, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as either party may determine is required by applicable law, court
process or by obligations pursuant to any listing agreement with any
national securities exchange or quotation system. The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by
the parties.
SECTION 5.10. Affiliates. As soon as practicable after the date
hereof, BT shall deliver to CT a letter identifying all persons who are, at
the time this Agreement
is submitted for adoption by the stockholders of BT, "affiliates" of BT for
purposes of Rule 145 under the Securities Act or for purposes of qualifying
the Merger for pooling of interests accounting treatment under Opinion 16
of the Accounting Principles Board and applicable SEC rules and
regulations. BT shall use best efforts to cause each such person to deliver
to CT as of the Closing Date, a written agreement substantially in the form
attached as Exhibit C. CT shall use best efforts to cause all persons who
are "affiliates" of CT for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations to comply with
the fourth paragraph of Exhibit C.
SECTION 5.11. Stock Exchange Listing. CT shall use best efforts
to cause the shares of CT Common Stock to be issued in the Merger to be
approved for trading on Nasdaq, subject to official notice of issuance, as
promptly as practicable after the date hereof, and in any event prior to
the Closing Date.
SECTION 5.12. Stockholder Litigation. Each of BT and CT shall
give the other the reasonable opportunity to participate in the defense of
any stockholder litigation against BT or CT, as applicable, and its
directors relating to the transactions contemplated by this Agreement.
SECTION 5.13. Tax Treatment. Each of CT and BT shall use best
efforts to cause the Merger to qualify as a reorganization under the
provisions of Section 368 of the Code and to obtain the opinions of counsel
referred to in Sections 6.02(c) and 6.03(c).
SECTION 5.14. Pooling of Interests. Each of BT and CT shall use
best efforts to cause the transactions contemplated by this Agreement,
including the Merger, to be accounted for as a pooling of interests under
Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations, and such accounting treatment to be accepted by each of BT's
and CT's independent certified public accountants, and by the SEC,
respectively, and each of BT and CT agrees that it shall voluntarily take
no action that would cause such accounting treatment not to be obtained.
SECTION 5.15. BT Rights Agreement. The Board of Directors of BT
shall take all further action (in addition to that referred to in Section
3.01(t)) reasonably requested in writing by CT in order to render the BT
Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement to the extent provided herein and in the BT
Rights Plan Amendment. Except as provided above with respect to the Merger
and the other transactions contemplated by this Agreement, during the term
of this Agreement the Board of Directors of BT shall not, without the
consent of CT (a) amend the BT Rights Agreement or (b) take any action with
respect to, or make any determination under, the BT Rights Agreement,
including a redemption of the BT Rights or any action to facilitate a BT
Takeover Proposal.
SECTION 5.16. Standstill Agreements; Confidentiality Agreements.
During the period from the date of this Agreement through the Effective
Time, neither BT nor CT shall terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement to which it or any
of its respective subsidiaries is a party other than confidentiality
agreements entered into in the ordinary course of business in connection
with customer, licensing or other technology transfer arrangements. During
such period, BT or CT, as the case may be, shall enforce, to the fullest
extent permitted under applicable law, the provisions of any such
agreement, including by obtaining injunctions to prevent any breaches of
such agreements and to enforce specifically the terms and provisions
thereof in any court of the United States of America or of any state having
jurisdiction.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Stockholder Approvals. Each of the BT Stockholder Approval
and the CT Shareholder Approval shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated
or shall have expired.
(c) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by any
court or other Governmental Entity of competent jurisdiction or other
legal restraint or prohibition (collectively, "Restraints") shall be
in effect (i) preventing the consummation of the Merger, (ii)
prohibiting or limiting the ownership or operation by BT or CT and
their respective subsidiaries of any material portion of the
businesses or assets of BT or CT and their respective subsidiaries
taken as a whole, or compelling BT or CT and their respective
subsidiaries to dispose of or hold separate any material portion of
the businesses or assets of BT or CT and their respective subsidiaries
taken as a whole, as a result of the Merger or any of the other
transactions contemplated by this Agreement or (iii) which otherwise
is reasonably likely to have a material adverse effect on BT or CT, as
applicable; provided, however, that each of the parties shall have
used its best efforts to prevent the entry of any such Restraints and
to appeal as promptly as possible any such Restraints that may be
entered.
(d) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
(e) Nasdaq Listing. The shares of CT Common Stock issuable to
BT's stockholders pursuant to this Agreement shall have been approved
for trading on Nasdaq, subject to official notice of issuance.
(f) Pooling Letters. CT and BT shall have received letters from
each of Deloitte & Touche LLP and Coopers & Xxxxxxx L.L.P., dated as
of the Closing Date, in each case addressed to CT and BT, stating in
substance that they know of no reason why the Merger will not qualify
as a pooling of interests transaction under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations.
SECTION 6.02. Conditions to Obligations of CT. The obligation of
CT to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of BT set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and
warranties of BT set forth in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case as of such date).
(b) Performance of Obligations of BT. BT shall have performed in
all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date.
(c) Tax Opinions. CT shall have received from Cravath, Swaine &
Xxxxx, counsel to CT, on the Closing Date, an opinion dated as of such
date and stating that the Merger will be treated for Federal income
tax purposes as a reorganization within the meaning of Section 368(a)
of the Code and that CT and BT will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, counsel for CT shall be entitled to rely upon
representations of officers of CT and BT and stockholders of BT
substantially in the form of Exhibits D, E and F.
(d) No Material Adverse Change. At any time after the date of
this Agreement, there shall not have occurred any material adverse
change relating to BT.
SECTION 6.03. Conditions to Obligations of BT. The obligation of
BT to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of CT set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and
warranties of CT set forth in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date as though made
on
and as of the Closing Date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case as
of such date).
(b) Performance of Obligations of CT. CT shall have performed in
all material respects all obligations required to be performed by them
under this Agreement at or prior to the Closing Date.
(c) Tax Opinions. BT shall have received from Xxxx and Xxxx LLP,
counsel to BT, on the Closing Date, an opinion dated as of such date
and stating that the Merger will be treated for Federal income tax
purposes as a reorganization within the meaning of Section 368(a) of
the Code and that CT and BT will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, counsel for BT shall be entitled to rely upon
representations of officers of CT and BT and stockholders of BT
substantially in the form of Exhibits D, E and F.
(d) No Material Adverse Change. At any time after the date of
this Agreement, there shall not have occurred any material adverse
change relating to CT.
SECTION 6.04. Frustration of Closing Conditions. Neither CT nor
BT may rely on the failure of any condition set forth in Section 6.01, 6.02
or 6.03, as the case may be, to be satisfied if such failure was caused by
such party's failure to use best efforts to consummate the Merger and the
other transactions contemplated by this Agreement, as required by and
subject to Section 5.05.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time (by written notice by the terminating
party to the other party), whether before or after the BT Stockholder
Approval or the CT Shareholder Approval have been obtained:
(a) by mutual written consent of CT and BT;
(b) by either CT or BT:
(i) if the Merger shall not have been consummated by
February 28, 1998; provided, however, that the right to terminate
this Agreement pursuant to this Section 7.01(b)(i) shall not be
available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of the
Merger to be consummated by such time;
(ii) if the BT Stockholder Approval shall not have been
obtained at a BT Stockholders Meeting duly convened therefor or
at any adjournment or postponement thereof;
(iii) if the CT Shareholder Approval shall not have been
obtained at a CT Shareholders Meeting duly convened therefor or
at any adjournment or postponement thereof; or
(iv) if any Restraint having any of the effects set forth in
Section 6.01(c) shall be in effect and shall have become final
and nonappealable; provided that the party seeking to terminate
this Agreement pursuant to this Section 7.01(b)(iv) shall have
used best efforts to prevent the entry of and to remove such
Restraint;
(c) by CT, if BT shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a condition set forth
in Section 6.02(a) or (b), and (B) is incapable of being cured by BT
or is not cured within 30 days of notice of such breach or failure;
(d) by CT in accordance with Section 4.03(b); provided that, in
order for the termination of this Agreement pursuant to this paragraph
(d) to be deemed effective, CT shall have complied with all provisions
contained in Section 4.03, including the notice provisions therein,
and with applicable requirements, including the payment of the
Termination Fee and BT out of pocket Expenses, of Section 5.08;
(e) by BT, if CT shall have breached or failed to perform in any
material respect any of its
representations, warranties, covenants or other agreements contained
in this Agreement, which breach or failure to perform (A) would give
rise to the failure of a condition set forth in Section 6.03(a) or
(b), and (B) is incapable of being cured by CT or is not cured within
30 days of notice of such breach or failure; or
(f) by BT in accordance with Section 4.02(b); provided that, in
order for the termination of this Agreement pursuant to this paragraph
(f) to be deemed effective, BT shall have complied with all provisions
of Section 4.02, including the notice provisions therein, and with
applicable requirements, including the payment of the Termination Fee
and CT out of pocket Expenses, of Section 5.08.
SECTION 7.02. Effect of Termination. In the event of termination
of this Agreement by either BT or CT as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of CT or BT, other than the provisions
of Section 3.01(o), Section 3.02(o), the last sentence of Section 5.04,
Section 5.08, this Section 7.02 and Article VIII, which provisions will
survive such termination, and except to the extent that such termination
results from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties at any time before or after the BT Stockholder Approval or the CT
Shareholder Approval have been obtained; provided, however, that after any
such approval has been obtained, there shall not be made any amendment that
by law requires further approval by the stockholders of BT or CT without
the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any
of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties of the other parties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 7.03, waive compliance
by the other party with any of the agreements or conditions contained in
this Agreement. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01, an
amendment of this Agreement pursuant to Section 7.03 or an extension or
waiver pursuant to Section 7.04 shall, in order to be effective, require,
in the case of CT or BT, action by its Board of Directors or, with respect
to any amendment to this Agreement, the duly authorized committee of its
Board of Directors to the extent permitted by law.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective
Time.
SECTION 8.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or
sent by overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to CT, to
Comverse Technology, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Mr. Xxxx Xxxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx; and
(b) if to BT, to
Boston Technology, Inc.
000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
SECTION 8.03. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person,
where "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise;
(b) "material adverse change" or "material adverse effect"
means, when used in connection with BT or CT, any change, effect,
event, occurrence or state of facts that is, or would reasonably be
expected to be, materially adverse to the business, financial
condition or results of operations of such party and its subsidiaries
taken as a whole other than any change, effect, event or occurrence
relating to (i) the economy or securities markets in general, (ii) any
outbreak or escalation of hostilities in the Middle East, (iii) this
Agreement or the transactions contemplated hereby or the announcement
thereof (including any impact on employees, vendors or customers
resulting therefrom) or (iv) the telecommunications systems and
equipment industry in general, and not specifically relating to BT or
CT or their respective subsidiaries, and the terms "material" and
"materially" have correlative meanings;
(c) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(d) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if
there are no such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first
person; and
(e) "knowledge" of any person which is not an individual
means the knowledge of such person's executive officers after
reasonable inquiry.
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a
person are also to its permitted successors and assigns.
SECTION 8.05. Counterparts. This Agreement and any amendment or
waiver hereto may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
SECTION 8.06. Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to herein)
and the Confidentiality Agreement (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement and
(b) except for the provisions of Article II, Section 5.06 and Section 5.07,
are not intended to confer upon any person other than the parties any
rights or remedies.
SECTION 8.07. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflict of laws thereof.
SECTION 8.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party. Any assignment
in violation of the preceding sentence shall be void. Subject to the
preceding two sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 8.09. Enforcement. The parties agree that irreparable
damage would occur and that the parties would not have any adequate remedy
at law in the event that
any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any Federal court located in the State
of Delaware or in Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of
the parties hereto (a) consents to submit itself to the personal
jurisdiction of any Federal court located in the State of Delaware or any
Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will
not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal court
sitting in the State of Delaware or a Delaware state court.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH OF BT AND CT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.11. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to the extent
possible.
IN WITNESS WHEREOF, CT and BT have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of
the date first written above.
COMVERSE TECHNOLOGY, INC.,
by /s/ Xxxx Xxxxxxxxx
------------------
Name: Xxxx Xxxxxxxxx
Title: President, Chief
Executive Officer
and Chairman of the
Board of Directors
BOSTON TECHNOLOGY, INC.,
by /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
