As filed with the Securities and Exchange Commission on April 28, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMVERSE TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
NEW YORK 13-3238402
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
170 CROSSWAYS PARK DRIVE
WOODBURY, NEW YORK 11797
(516) 677-7200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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KOBI ALEXANDER
PRESIDENT, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
C/O COMVERSE TECHNOLOGY, INC.
170 CROSSWAYS PARK DRIVE
WOODBURY, NEW YORK 11797
(516) 677-7200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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Copies to:
WILLIAM F. SORIN, ESQ. STEPHEN M. BESEN, ESQ.
823 PARK AVENUE WEIL, GOTSHAL & MANGES LLP
NEW YORK, NEW YORK 10021 767 FIFTH AVENUE
(212) 249-0732 NEW YORK, NEW YORK 10153
(212) 310-8000
------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time or times after the Registration Statement becomes effective as the Selling
Holders may determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNTS TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE(2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.10 per share 133,333(2) $ 61.50 $ 8,199,979.50 $ 2,279.59
=================================================================================================================
</TABLE>
(1) Plus such indeterminate number of shares pursuant to Rule 416 as may be
issued in respect of stock splits, stock dividends and similar
transactions.
(2) Pursuant to Rule 457 under the Securities Act of 1933, the proposed maximum
aggregate offering price and the registration fee are based upon the
average of the high and low prices per share of the Registrant's Common
Stock reported on the Nasdaq National Market on April 22, 1999.
------------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
NYFS11...:\94\37994\0003\2450\FRM3119P.55G
<PAGE>
The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell nor is it seeking an offer to buy these securities in any state where
the offer or sale is not permitted.
- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED APRIL 28, 1999
PROSPECTUS
133,333 SHARES
COMVERSE TECHNOLOGY, INC.
COMMON STOCK
The shareholders identified in this Prospectus are offering to sell up to
133,333 shares of Common Stock of Comverse Technology, Inc. Comverse will not
receive any of the proceeds from such sales.
The selling shareholders propose to sell the shares from time to time in
private or public transactions occurring either on or off the Nasdaq National
Market at prevailing market prices or at negotiated prices. Sales may be made
directly to purchasers or through brokers or to dealers, who are expected to
receive customary commissions or discounts.
The selling shareholders and participating brokers and dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended, in which event any profit on the sale of shares by those selling
shareholders and any commissions or discounts received by those brokers or
dealers may be deemed to be underwriting compensation under the Securities Act.
Comverse's Common Stock is traded on the Nasdaq National Market under the
symbol "CMVT". On April 22, 1999, the closing price of the Common Stock was
$63.25 per share.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 5 BEFORE
MAKING A DECISION TO PURCHASE OUR STOCK.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
PROSPECTUS DATED APRIL 28, 1999
<PAGE>
YOU SHOULD ONLY RELY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THE COMMON STOCK IS NOT BEING
OFFERED IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME
THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT OF SUCH DOCUMENT.
TABLE OF CONTENTS
PAGE
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
The Company................................................................ 4
Risk Factors............................................................... 5
Recent Developments........................................................ 12
Use of Proceeds............................................................ 12
Selling Shareholders....................................................... 12
Description of Capital Stock............................................... 14
Plan of Distribution....................................................... 15
Legal Matters.............................................................. 16
Experts.................................................................... 16
ABOUT THIS PROSPECTUS
This Prospectus is a part of a registration statement (the "Registration
Statement") that we have filed with the Securities and Exchange Commission (the
"SEC") utilizing a "shelf registration" process. You should read both this
Prospectus and any supplement together with additional information described
under "Where You Can Find More Information."
All references in this Prospectus to "Comverse," the "Company," "we,"
"us," or "our" mean Comverse Technology, Inc., including the entities acquired
by the Company and its other directly and indirectly owned subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
Comverse files annual, quarterly and special reports, proxy statements and
other information required by the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with the SEC. You may read and copy any document we file
at the SEC's public reference rooms located at 450 5th Street, N.W., Washington,
D.C. 20549, at Seven World Trade Center 13th Floor, New York, New York 10048 and
at Northwest Atrium Center, 5000 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from the SEC's web site at: http://www.sec.gov.
Comverse has filed with the SEC a registration statement on Form S-3 under
the Securities Act, as amended (the "Securities Act"), with respect to the
Common Stock. This Prospectus, which constitutes a part of the Registration
Statement, does not include all the information contained in the Registration
Statement and its exhibits. For further information with respect to Comverse and
the Common Stock, you should consult the Registration Statement and its
exhibits. Statements contained in this Prospectus concerning the provisions of
any documents are necessarily summaries of those documents, and each statement
is qualified in its entirety by reference to the copy of the document filed with
the SEC. The Registration Statement and any of its amendments, including
exhibits filed as a part of the Registration Statement or an amendment to the
Registration Statement, are available for inspection and copying through the
entities listed above.
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The SEC allows us to "incorporate by reference" the documents that we file
with the SEC. This means that we can disclose important information to you by
referring you to those documents. Any information we incorporate in this manner
is considered part of this Prospectus. Any information we file with the SEC
after the date of this Prospectus and until this offering is completed will
automatically update and supersede the information contained in this Prospectus.
We incorporate by reference the following documents that we have filed
with the SEC and any filings that we will make with the SEC in the future under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is
terminated:
o Annual Report on Form 10-K for the year ended January 31, 1999; and
o Description of Comverse's Common Stock contained in its registration
statement on Form 8-A filed with the SEC on March 17, 1987, as
amended.
We will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the documents which are incorporated by reference into this Prospectus except
the exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Requests for copies should be
directed to: Comverse Technology, Inc., Attention: Vice President, Corporate and
Marketing Communications, 170 Crossways Park Drive, Woodbury, NY 11797,
telephone number (516) 677-7200.
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THE COMPANY
Because this is a summary, it does not contain all the information about
Comverse that may be important to you. You should read the more detailed
information and the financial statements and related notes which are
incorporated by reference in this Prospectus.
Comverse manufactures and markets special-purpose computer and
telecommunications systems and software for multimedia communications and
information processing applications. Our products are used in a broad range of
applications by wireline and wireless telephone network operators, government
agencies, call centers, financial institutions and other public and commercial
organizations worldwide.
Our products include multimedia messaging and information processing
systems and software that support enhanced services offerings by telephone
companies and other providers of telecommunications services. Our products
enable these organizations to provide their customers with a variety of
integrated, revenue-generating services, such as personalized call answering,
voice mail, fax mail, unified multimedia messaging, Internet messaging, pre-paid
calling, short text messaging, interactive voice response and audiotext services
that are typically offered by service provider organizations to their customers,
often on a subscription or pay-per-call basis.
We also manufacture multiple channel, multimedia digital monitoring
systems for recording, surveillance and information gathering and analysis
activities of law enforcement and intelligence agencies, and digital recording
systems used by financial services companies, emergency services providers and
call center operations, among others, for transaction verification and training
purposes.
Comverse offers a variety of telecommunications software products,
including products that are integrated with our systems and products that work
in combination with other systems to support "intelligent network" and "advanced
intelligent network" applications, such as 800 number translation, Internet
routing, short text messaging, local number portability, cellular roaming and
emergency "911" services, as well as "interactive voice response" based enhanced
services, such as virtual private network, network announcement, customer
service/customer care, operator-free collect calling, call forwarding and
directory services.
Comverse was incorporated in New York in October 1984. Our principal
executive offices are located at 170 Crossways Park Drive, Woodbury, New York
11797, and our telephone number is (516) 677-7200.
For additional information relating to our business, operations,
properties, certain acquisitions and other matters, see the documents referred
to above under "Where You Can Find More Information."
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RISK FACTORS
Before purchasing any shares, you should carefully consider the following
risk factors in addition to the other information contained and incorporated by
reference in this Prospectus. Certain statements in this Prospectus and in
documents incorporated by reference in this Prospectus are forward-looking and
are identified by the use of forward-looking words or phrases such as "plan,"
"planned," "intend," "intended," "will be positioned," "expect," is or are
"expected," "anticipate" and "anticipated." These forward-looking statements
reflect only our current expectations. To the extent any of the information
contained or incorporated by reference in this Prospectus constitutes a
"forward-looking statement" as defined in Section 27A(i)(1) of the Securities
Act, the following risk factors are cautionary statements identifying important
factors that could cause actual results to differ materially from those in the
forward-looking statement.
MANAGEMENT OF GROWTH AND ACQUISITIONS
Comverse has grown rapidly over the past decade and continues to
experience rapid growth in its operations, both through internal expansion and
acquisitions of other companies. Our future success will depend in part on our
ability to manage growth effectively. As the Company's operations expand
worldwide, management issues are likely to become more complex and challenging.
We also regularly examine opportunities to acquire other companies or lines of
business. Acquisitions present a number of significant financial, operational
and legal risks. It can also be difficult to combine the operations of an
acquired business with our own, without suffering the loss of key personnel,
customers or distributors. During 1998, we merged with Boston Technology, Inc.
("Boston Technology"). As a result of its significantly greater concentration on
a small number of telephone company customers, Boston Technology's business has
historically been considerably more volatile than ours, and the operations of
Comverse following the merger may be less predictable and subject to greater
risks from actions of individual customers than our operations prior to the
merger. If Comverse fails to manage its growth effectively, future operations
and financial results will be adversely affected.
EMPHASIS ON LARGE SYSTEMS
Our business has, to a significant extent, been based on contracts for
large, high capacity systems, and we continue to emphasize these systems in our
product development and marketing plans. Users of high-capacity systems, such as
telephone companies, require systems that provide an exceptionally high level of
reliability. Such systems are typically more costly to design, build and
support. Contracts for large installations typically involve a lengthy and
complex bidding and selection process, and our ability to obtain particular
contracts is difficult to predict. In addition, the timing and scope of these
opportunities and the pricing and margins associated with any eventual contract
award are difficult to forecast, and may vary substantially from transaction to
transaction. Comverse's traditional dependence on large orders, and the
investment required to enable us to perform such orders, without assurance of
continuing order flow from the same customers and predictability of gross
margins on any future orders, increase the risk associated with our business.
TECHNOLOGICAL CHANGE AND COMPETITION
The telecommunications industry is undergoing rapid technological changes,
and our continued success will depend on our ability to enhance our existing
products and to introduce new products on a timely and cost-effective basis.
Comverse's products utilize complex hardware and software technology that
performs critical functions to highly demanding standards. The greater the
complexity of our products, the greater is the risk of future performance
problems or delays in product introductions, which could damage our business and
financial results.
We sell a majority of our products to telephone companies and other
telecommunication services providers. The telecommunications services industry
is undergoing significant change as a
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result of deregulation and privatization worldwide. Our business can be
seriously affected by unforeseen changes in the competitive or regulatory
environment in our various markets. Our business is extremely competitive, and
we expect competition to continue to intensify. Our existing competitors will
continue to present substantial competition, and other companies, many with
considerably greater financial, marketing and sales and other resources, may
enter our markets in the future.
The telecommunications industry has experienced a continuing evolution of
product offerings and alternatives for delivery of services. These trends have
affected and may be expected to have a significant continuing influence on
conditions in our markets. Rapid and significant change makes planning decisions
more difficult and increases the risk inherent in the planning process.
RISKS OF GOVERNMENT BUSINESS
Many of our sales are made to customers that are owned or controlled by
governments or government instrumentalities. Government business is, in general,
subject to special risks, such as delays in funding; termination of contracts or
subcontracts for the convenience of the government; termination, reduction or
modification of contracts or subcontracts in the event of changes in the
government's policies or as a result of budgetary constraints; obligations of
performance guarantees and restrictions on the draw-down of funds subject to
achievement of performance milestones; requirements to obtain and maintain
security clearances for operating subsidiaries and key personnel; and increased
or unexpected costs resulting in losses or reduced profits under fixed price
contracts. The special risks associated with government contracts could have a
material adverse effect on our future business and financial performance.
The market for telecommunications monitoring systems, which are primarily
sold to government customers, is in a period of significant transition.
Budgetary constraints, uncertainties resulting from the introduction of new
technologies in the telecommunications industry and shifts in the pattern of
government expenditures resulting from geopolitical events have increased
uncertainties in this industry, resulting in certain instances in the
attenuation of government procurement programs beyond their originally expected
performance periods and an increased incidence of delay, cancellation or
reduction of planned projects. The delay and uncertainties surrounding the
Communications Assistance for Law Enforcement Act have had a significant
negative impact on purchasing plans of law enforcement agencies in North America
engaged in monitoring activities. Our ability to obtain government orders in
particular instances may also be affected by decisions of potential government
customers to develop their own products or technical solutions internally,
rather than through the use of outside suppliers, and by decisions of government
contractors and systems integrators to bid on individual government procurement
opportunities. The lack of predictability in the timing and scope of government
procurements has made planning decisions more difficult and has increased the
associated risks.
INTERNATIONAL OPERATIONS
A significant portion of our sales are made to customers outside of the
United States. International transactions involve particular risks, including
political decisions affecting tariffs and trade conditions, rapid and unforeseen
changes in economic conditions in individual countries, turbulence in foreign
currency and credit markets, and increased costs resulting from lack of
proximity to the customer. Our products must be designed to meet the regulatory
standards of foreign markets, and any inability to obtain foreign regulatory
approvals can cause us to lose sales opportunities. In addition, international
sales frequently require special features and customization to satisfy local
market conditions, and certain international customers may require longer
payment terms than we typically provide.
Volatility in international currency exchange rates may have an impact on
our operating results. Comverse has significant contracts payable in foreign
(primarily Western European and
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Japanese) currencies. As a result of the unpredictable timing of purchase orders
and payments under such contracts and other factors, it is often not practicable
for us to effectively hedge the risk of significant changes in currency rates
during the contract period. Since Comverse engages in currency hedging only to a
limited extent, our financial results can be affected by the impact of currency
fluctuations in any particular period, as well as the cost of such hedging
activities that we do perform.
In the past few years, we have made significant sales to customers in
Japan, China, Taiwan and other countries in the Far East and Southeast Asia. The
economic downturn in this region has significantly reduced the demand for our
systems in certain countries. If regional economic conditions fail to improve,
our operating results could be more seriously affected in the future. Moreover,
our future operating results will be adversely affected should current economic
instability result in more widespread slowdown or recessionary conditions in
other major world markets, or in severe trade or currency disruptions.
SUBSTANTIAL LEVERAGE
Comverse has a significant amount of indebtedness outstanding. As of
January 31, 1999, our total consolidated long-term liabilities were
approximately $424.4 million. The amount of debt carried by Comverse can affect
our business in a variety of ways, such as (i) limiting our ability to obtain
any necessary additional financing in the future on reasonable terms, or at all;
(ii) requiring the dedication of a substantial portion of our cash flow from
operations to debt service payments, making it unavailable for other purposes;
(iii) limiting our flexibility in operating, or reacting to changes in, our
business; (iv) placing us at a competitive disadvantage to certain of our
competitors; and (v) making us more vulnerable to downturns in our business.
CASH MANAGEMENT AND INVESTMENT ACTIVITIES
Comverse holds a significant portion of its assets in a variety of
financial instruments, including government obligations, commercial paper,
medium-term notes, bank time deposits, money-market accounts, common and
preferred stocks and convertible debt obligations. Decisions as to our financial
holdings are made both for purposes of cash management and, to some extent, as
strategic and portfolio investments. These activities subject Comverse to risks
inherent in the capital markets generally, and to the performance of other
businesses over which we have no direct control. Through ComSor Investment Fund
N.V., a company we formed in partnership with Quantum Industrial Holdings Ltd.,
an investment company managed by Soros Fund Management LLC, we engage in
investment activities including venture capital investments in high technology
firms, primarily located in Israel. Comverse also engages in direct strategic
and capital management investment activities for its own account.
We believe that Comverse's investments will enable it to participate in
technology innovation opportunities in areas of interest to it without having to
dedicate the capital and management resources that would be necessary for such
participation through its own internal research and development efforts. Our
objectives are also to initiate relationships that may result in eventual
expansion of Comverse's product and marketing positions and potential
acquisition opportunities, and to leverage Comverse's technological expertise
and established relationships in the technology, business and financial
communities to identify and participate in special opportunities. Investments in
early-stage technology ventures, however, are subject to a number of risks
associated with the limited operating history of such ventures and the frequent
illiquidity of their securities. While we do not regard Comverse's portfolio and
strategic investment activities as a primary element of its overall business
plan, we expect to continue to allocate some of Comverse's liquid assets for
these purposes and, in particular, to increase our holdings in technology
companies as part of Comverse's long-term growth strategy. Since Comverse
maintains a significant amount of liquid assets relative to our overall size,
our financial results in the future may, to a greater degree than in the past,
be affected by the results of our capital management and investment activities
and the risks associated with those activities.
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SUBSIDIARY OPERATIONS
Substantially all of Comverse's operations are conducted through
subsidiaries. We are limited by contract in the amount of dividends Comverse can
receive from one of its subsidiaries in Israel to 75% of their net income. In
addition, because Comverse's Israeli subsidiaries have received certain benefits
under the laws relating to "Approved Enterprises" (described in the following
paragraph), the payment of dividends to Comverse may subject those subsidiaries
to certain Israeli taxes to which they would otherwise not be subject. Our
Israeli subsidiaries are required under Israeli law to withhold for tax
purposes, at a rate of up to 25%, cash dividends paid to foreign residents.
Under the United States-Israel Tax Treaty, a 12.5% Israeli dividend withholding
tax would apply to dividends paid to a U.S. corporation (such as Comverse) that
owns 10% or more of an Israeli company's voting stock for, in general, the
current and preceding tax years of the Israeli company. Dividends on income
derived from an "Approved Enterprise" are subject to a 15% dividend withholding
tax. Comverse has also granted options to certain of its officers and employees
to purchase equity in certain of its subsidiaries; if such options are
exercised, Comverse's participation in any earnings and future distributions by
such subsidiaries will be reduced.
OPERATIONS IN ISRAEL; REDUCED GOVERNMENT SUBSIDIES
A significant portion of our research and development and manufacturing
operations are located in Israel and may be affected by regulatory, political,
military and economic conditions in that country. Comverse's historical
operating results reflect substantial benefits from programs sponsored by the
Israeli government for the support of research and development, as well as tax
moratoriums and favorable tax rates associated with investments in approved
projects ("Approved Enterprises") in Israel. The Israeli government has
indicated its intention to re-examine certain of its policies in these areas.
Recently, the Israeli government acted to increase, from between 2% and 3%
of associated product sales to 3% of associated product revenues (including
service and other related revenues), the annual rate of royalties to be applied
to repayment of benefits under a conditional grant program administered by the
Office of the Chief Scientist of the Ministry of Industry and Trade, a program
in which we have regularly participated and under which we continue to receive
significant benefits through reimbursement of up to 50% of qualified research
and development expenditures. The repayment of amounts received under the
program will be accelerated through these higher royalty rates until repayment
is completed. Repayment of any amount received under programs which have been,
or will be, approved by the Office of the Chief Scientist after January 1, 1999
will entail repayment of the amount received (calculated in U.S. dollars), plus
interest on such amount at a rate equal to the 12-month LIBOR rate in effect at
the time of the approval of the program. In addition, permission from the
government of Israel is required for us to manufacture outside of Israel
products resulting from research and development activities funded under these
programs, or to transfer outside of Israel related technology rights. In order
to obtain such permission, we may be required to increase the royalties to the
applicable funding agencies and/or repay certain amounts received as
reimbursement of research and development costs. The Israeli authorities have
also indicated that this funding program will be further reduced significantly
or eliminated in the future, particularly for larger companies such as Comverse.
The Israeli government has also shortened the period of the tax moratorium
applicable to Approved Enterprises from four years to two years. Although this
change has not affected the tax status of our projects that were eligible for
the moratorium prior to 1997, it applies to the subsequent "Approved Enterprise"
projects.
If further changes in the law or government policies regarding those
programs were to result in their termination or adverse modification, or if
Comverse were to become unable to participate in or take advantage of those
programs, the cost of our operations in Israel would increase and there could be
a material adverse effect on our operations and financial results. To the extent
that Comverse
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increases its activities outside Israel, which could result from, among other
things, future acquisitions, such increased activities will not be eligible for
programs sponsored by Israel.
Although Comverse's operations have not been adversely affected to date by
political or military conditions in Israel, a disruption of our operations in
Israel due to political, military or other conditions could have a material
adverse effect on our operations and financial results.
General inflation in Israel and increases in the cost of attracting and
retaining qualified scientific, engineering and technical personnel in Israel,
where the demand for such personnel is growing rapidly with the expansion of
high technology industries, have increased our cost of operations in Israel.
These increases have not been offset in all periods by proportional devaluations
of the Israeli shekel relative to the U.S. dollar and, as a result, have had a
negative impact on Comverse's results of operations. Continued increases in our
shekel-denominated costs without corresponding devaluation could have a material
adverse effect on our future operating results.
DEPENDENCE ON KEY PERSONNEL; STOCK OPTIONS
Our future success will depend, to a considerable extent, on the
contributions of senior management and key employees, many of whom would be
difficult to replace, and on our Company's ability to attract and retain
qualified employees in all areas of our business. Competition for such personnel
is intense, particularly in the computer and telecommunications industries. In
order to attract and retain talented and qualified personnel, and to provide
incentives for their performance, Comverse has emphasized the award of stock
options as an important element of its compensation program, including, in the
case of certain personnel, options to purchase shares in certain of our
subsidiaries. If such options are exercised, Comverse's participation in any
future earnings or distributions by these subsidiaries will be reduced.
INCREASED EXPENDITURES ON OPERATIONS
We have significantly increased expenditures in all areas of our
operations during recent years, and we plan to continue to make significant
investment in the growth of our operations during future periods. The
competitiveness of our products and our ability to take advantage of future
growth opportunities will depend upon our ability to enhance the range of
features and capabilities of our existing product lines, develop new generations
of products and expand our marketing, sales and product support capabilities. In
many instances, we will have to make large expenditures for research and
development and product marketing in anticipation of future market requirements
that are uncertain and may undergo significant change prior to product
introduction. The success of our efforts will depend, to a considerable extent,
on our ability to anticipate future market requirements and successfully
implement corresponding research and development and marketing programs on a
timely basis.
PATENTS AND PROPRIETARY RIGHTS
Although we use what we believe to be customary and appropriate measures
to protect Comverse's technology, these measures may not prove to be successful,
and our competitors may be able to develop similar technology independently.
Comverse currently holds eighteen United States patents and a number of foreign
patents and periodically files additional applications for patents on various
features of its products. No assurance can be given that claims allowed with
respect to any current or future patents will prove to be sufficiently broad to
protect our technology. In addition, no assurance can be given that our patents
will not be challenged, invalidated or circumvented, or that the rights granted
under the patents will provide significant benefits.
Comverse and its customers from time to time receive communications from
third parties, including some of our competitors, alleging infringement by our
products of certain of such parties'
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patent rights. Although such communications are common in the computer and
telecommunications industries, and we have in the past been able to obtain any
necessary licenses on commercially reasonable terms, there can be no assurance
that we would prevail in any litigation to enjoin our sale of any products on
the basis of such alleged infringement, or that we would be able to license any
valid patents on reasonable terms.
VOLATILITY OF SHARE PRICE
The trading price of Comverse's shares may be affected by the risk factors
described in this Prospectus as well as prevailing economic and financial trends
and conditions in the public securities markets. Share prices of companies in
technology businesses tend to exhibit a high degree of volatility. Shortfalls in
revenues or earnings from the levels anticipated by the public markets could
have an immediate and significant adverse effect on the trading price of our
shares in any given period. Such shortfalls may result from events that are
beyond our immediate control, can be unpredictable and, since a significant
proportion of our sales during each fiscal quarter often occurs in the latter
stages of the quarter, may not be discernible until the end of a financial
reporting period. These factors can contribute to the volatility of the trading
value of our shares regardless of our long-term prospects. Comverse's revenues
and earnings may be less predictable and more volatile than they have
historically been as a result of the concentration of Boston Technology's
business on a limited number of large customers. The trading price of our shares
may also be affected by developments, including reported financial results and
fluctuations in trading prices of the shares of other publicly-held companies in
the computer and telecommunications industries generally, and in our industry in
particular, which may not have any direct relationship with Comverse's business
or prospects.
YEAR 2000 READINESS
Comverse has undertaken a comprehensive program to evaluate "Year 2000
compliance" of its products and systems. We consider a product to be "Year 2000
compliant" if the product, when used properly and in conformity with the product
information supplied, will accurately store, display, process, provide and/or
receive data from, into and between the twentieth and twenty-first centuries,
including leap year calculations, provided that all other products used in
combination with the product properly exchange date data with it.
Although we believe that our current products generally either are, or
upon the completion of current modification programs will be, Year 2000
compliant, no assurance can be given that our Year 2000 compliance efforts will
prove to be fully successful or that unanticipated costs and problems will not
be encountered in such efforts. In addition, we have determined that older
generations of certain of our products are not and cannot, without unreasonable
effort and expense, be made Year 2000 compliant. The costs incurred to date
related to the Year 2000 compliance program have been less than $5 million. The
program is expected to continue through fiscal 1999, but is not anticipated to
have a material adverse effect on our business or financial results.
It is possible that widespread litigation may be brought in the future
against vendors of products that are unable to properly manage data related to
the Year 2000. Our customer agreements typically contain provisions designed to
limit generally our liability for customer claims. It is possible, however, that
these measures will not provide protection from Year 2000 liability claims, as a
result of existing or future laws or unfavorable judicial decisions. Any such
claims could affect our business, financial condition and results of operations,
and result in increased warranty costs, customer satisfaction issues and
potential legal damages.
We have also undertaken a comprehensive program to address Year 2000
readiness in our internal systems. This program has been designed to address our
most critical internal systems first and to gather information regarding the
Year 2000 compliance of products supplied to us and with which our products are
integrated. We intend to have our critical internal systems in Year 2000
10
<PAGE>
compliance by the end of the third quarter of 1999. These activities are
intended to encompass all major categories of systems in use by Comverse,
including manufacturing, engineering, sales, finance and human resources. We
have communicated with our significant suppliers and financial institutions to
determine the extent to which Comverse may be vulnerable to those third parties'
failure to remedy their own Year 2000 concerns, and have received assurances of
Year 2000 compliance from a number of those contacted. Most of the suppliers
under existing contracts with Comverse have no contractual obligation to provide
such information.
We currently expect that the total cost of our Year 2000 readiness
programs during the current fiscal year will not exceed $5,000,000. This cost
estimate does not include potential costs related to any legal claims or the
costs of internal software or hardware replaced in the normal course of
business. The total cost estimate is based on the current assessment of
Comverse's Year 2000 readiness needs and is subject to change as the projects
proceed.
While we currently expect that the Year 2000 issue will not pose
significant operational problems, failure to fully identify all Year 2000
dependencies in our systems and in the systems of our suppliers, customers and
financial institutions could have material adverse consequences, including
delays in the delivery or sale of products. We have under consideration various
contingency plans which will be developed as needed to assure continuing
operations in the event such problems arise.
11
<PAGE>
RECENT DEVELOPMENTS
On April 15, 1999, Comverse completed a three-for-two split of its Common
Stock which was effected by way of a 50% stock dividend paid on the Comverse
shares to record holders of such shares on March 31, 1999. All numbers of
Comverse shares contained in this Prospectus have been adjusted to reflect the
stock split.
On February 26, 1999, Comverse acquired Amarex Technology, Inc.
("Amarex"). This acquisition was effected through the merger of a wholly-owned
subsidiary of Comverse with and into Amarex (the "Merger") and has been
accounted for as a pooling of interests. In connection with the Merger, former
stockholders of Amarex received an aggregate of 346,007 shares of the Company's
Common Stock, which shares represent approximately 0.5% of the outstanding
Common Stock of the Company as of April 22, 1999. In addition, upon consummation
of the Merger, Comverse assumed the obligations of Amarex under two warrants
(the "Warrants") issued by Amarex to MCI Telecommunications Corporation ("MCI").
The Warrants are exercisable for, in aggregate, 46,825 shares of Comverse Common
Stock. Amarex provides intelligent networks, advanced intelligent networks and
customer service call center solutions for large, mission critical systems of
its clients, which include established companies in the telecommunications
industry and the financial industry.
USE OF PROCEEDS
The shares are being offered by this Prospectus only for the accounts of
the selling shareholders identified in this Prospectus or any supplement or
amendment hereto (the "Selling Shareholders"). We will not receive any proceeds
from the sale of the shares. See "Selling Shareholders" below.
SELLING SHAREHOLDERS
The Selling Shareholders (except for MCI) obtained their Comverse shares
when we acquired Amarex upon completion of the Merger on February 26, 1999. MCI
will acquire its Comverse shares upon exercise of the Warrants. In connection
with the Merger, we entered into a registration rights agreement (the
"Registration Rights Agreement") with the former stockholders of Amarex, under
which we agreed to register for sale up to one-quarter of the shares of Common
Stock issued by Comverse to the former stockholders of Amarex in each of the
Registration Statement of which this Prospectus forms a part and, upon demand,
three separate and sequential registration statements. Under the Registration
Rights Agreement, we agreed to keep the Registration Statement effective
(subject to our right to require the Selling Shareholders to suspend their use
of this Prospectus under certain circumstances), for as long as reasonably
specified in the plan of distribution contained in this Prospectus. We have also
agreed to bear certain related expenses and to indemnify each Selling
Shareholder against certain liabilities, including liabilities arising under the
federal securities laws. We have filed with the SEC the Registration Statement
of which this Prospectus forms a part to enable the sale by the Selling
Shareholders of their Comverse shares from time to time on the Nasdaq National
Market, in privately negotiated transactions or otherwise, as more fully
described under "Plan of Distribution" below.
The following table sets forth information with respect to the Selling
Shareholders and the respective number of shares of Common Stock beneficially
owned by each Selling Shareholder. Such information has been obtained from the
Selling Shareholders. Because the Selling Shareholders may sell all or some
portion of the shares of Common Stock covered under this Prospectus, no estimate
can be given as to the amount of shares of Common Stock that will be held by the
Selling Shareholders upon termination of any such sales. In addition, the
Selling Shareholders identified below may have sold, transferred or otherwise
disposed of all or a portion of their shares of Common Stock since the
12
<PAGE>
date on which they provided the information regarding their shares in
transactions exempt from the registration requirements of the Securities Act.
<TABLE>
<CAPTION>
Shares
Beneficially
Shares Shares Offered Owned Following
Beneficially Owned Under this Completion of this
Selling Shareholder as of April 28, 1999 Prospectus Offering(1)(2)
- ------------------- -------------------- -------------- -------------------
<S> <C> <C> <C>
Steven Silberstang.......... 131,250 32,813 98,437
Charles G. Cooper........... 118,125 29,532 88,593
Bruce Macfarlane............ 65,625 16,407 49,218
John W. Downey.............. 8,859 1,969 6,890
Moshe Halfon................ 6,233 328 5,905
Lea Waldman................. 4,265 328 3,937
Gordon Flayter.............. 1,410 328 1,082
Bo Elfving.................. 3,281 657 2,624
Gertrud Levy................ 3,391 848 2,543
Diana Levy.................. 1,695 424 1,271
Susan Levy.................. 1,695 424 1,271
Donald H. Rivkin............ 979 245 734
Saul Sherman................ 979 245 734
Milton Andrews.............. 979 245 734
Donald M. Schwentker........ 979 245 734
Richard Penna............... 979 245 734
John D. Miller.............. 979 245 734
Thomas A. Greene............ 979 245 734
Isaac E. Druker............. 979 245 734
Mark Orenstein.............. 979 245 734
Gregory A. Lunt............. 979 245 734
MCI(3)...................... 46,825 46,825 nil
Any other holders of shares(4)(5) -- -- --
------- ------- -------
402,444 133,333 269,111
======= ======= =======
</TABLE>
(1) Assumes that the Selling Shareholders sell all the shares of Common Stock
offered hereby.
(2) The number of shares of Common Stock held by each Selling Shareholder named
herein is less than 1% of the Company's outstanding Common Stock as of
April 22, 1999.
(3) MCI is entitled to purchase these shares upon the exercise of the Warrants.
(4) Information concerning other Selling Shareholders will be set forth in
supplements to this Prospectus from time to time, if required.
(5) Assumes that any other holders of Common Stock do not beneficially own any
Common Stock other than the shares of Common Stock issued to such holders
by the Company from time to time.
Prior to the Merger, Steven Silberstang, Charles G. Cooper and Bruce
Macfarlane were directors and officers of Amarex. After the Merger, Steven
Silberstang continues to serve as a director and the President and Chief
Technology Officer of Amarex. In addition, for a period of six months following
completion of the Merger, Charles G. Cooper and Bruce Macfarlane continue to
provide transitional services to Amarex to support the orderly transition of
Amarex to a subsidiary of the Company. MCI and/or its affiliates are customers
of Amarex and of another subsidiary of Comverse. Except as disclosed above, none
of the Selling Shareholders has, or within the past three years has had, any
position, office or other material relationship with the Company or any of its
predecessors or affiliates.
13
<PAGE>
Generally, only Selling Shareholders identified in the foregoing table who
beneficially own the shares of Common Stock set forth opposite their respective
names may sell such shares pursuant to the Registration Statement of which this
Prospectus forms a part. The Company may from time to time include additional
Selling Shareholders in supplements or amendments to this Prospectus.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, par value $.10 per share, and 2,500,000 shares of preferred
stock, par value $.01 per share ("Preferred Stock"). As of April 22, 1999, there
were issued and outstanding 69,730,005 shares of Common Stock. As of January 31,
1999, 12,303,164 shares were reserved for issuance pursuant to outstanding
options and warrants, 3,770,492 shares were reserved for issuance pursuant to
the Company's 5 3/4% Convertible Subordinated Debentures due 2006 and 6,976,744
shares were reserved for issuance pursuant to the Company's 4 1/2% Convertible
Subordinated Debentures due 2005. No shares of Preferred Stock have been issued
to date.
All outstanding shares of Common Stock are fully paid and nonassessable.
Holders of Common Stock have no preemptive, redemption or conversion rights, and
are entitled to one vote for each share held on each matter submitted to a vote
of shareholders. Cumulative voting for the election of directors is not
permitted. Holders of the Common Stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors out of funds legally
available therefor, subject to the rights and preferences of the holders of any
Preferred Stock. On liquidation of the Company, after payment of all
indebtedness and the liquidation preference to holders of any Preferred Stock,
the assets of the Company will be distributed pro-rata to the holders of the
Common Stock.
The Company may issue the Preferred Stock in one or more series. The Board
of Directors is authorized, without approval of shareholders, to determine, with
respect to each series of Preferred Stock which may be issued, the powers,
designations, preferences, and rights of the shares of such series and the
qualifications, limitations, or restrictions thereof, including any dividend
rate, redemption rights, liquidation preferences, sinking fund terms, conversion
rights, voting rights and any other preferences or special rights and
qualifications. The effects of any issuance of the Preferred Stock upon the
rights of holders of the Common Stock depends upon the respective powers,
designations, preferences, rights, qualifications, limitations and restrictions
of the shares of one or more series of Preferred Stock as determined by the
Board of Directors. Such effects might include dilution of the voting power of
the Common Stock, the subordination of the rights of holders of Common Stock to
share in the Corporation's assets upon liquidation, and reduction of the amount
otherwise available for payment of dividends on Common Stock.
American Stock Transfer & Trust Company, New York, New York, serves as the
transfer agent and registrar for the Common Stock.
14
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Comverse shares covered by this
Prospectus from time to time at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Shareholders may offer their shares for sale in one or more of the
following transactions:
o on the Nasdaq National Market
o through the facilities of any national securities exchange or
U.S. automated inter-dealer quotation system of a registered
national securities association on which any of the Comverse
shares are then listed, admitted to unlisted trading privileges
or included for quotation
o in privately negotiated transactions, or
o in a combination of such methods of sale.
The Selling Shareholders may sell their shares directly, or indirectly
through underwriters, broker-dealers or agents acting on their behalf, and in
connection with such sales, the broker-dealers or agents may receive
compensation in the form of commissions, concessions, allowances or discounts
from the Selling Shareholders and/or the purchasers of the shares for whom they
may act as agent or to whom they sell the shares as principal or both (which
commissions, concessions, allowances or discounts might be in excess of
customary amounts thereof). Sales will be made only through broker-dealers
registered as such in a subject jurisdiction or in transactions exempt from such
registration. We have not been advised of any definitive selling arrangement at
the date of this Prospectus between any Selling Shareholder and any
broker-dealer or agent. We will not receive any of the proceeds from the sale of
the shares by the Selling Shareholders.
In connection with the distribution of the Comverse shares, certain of the
Selling Shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Comverse shares in the course of hedging the positions they assume with the
Selling Shareholders. The Selling Shareholders may also sell the Comverse shares
short and redeliver such shares to close out the short positions. The Selling
Shareholders may also enter into option or other transactions with
broker-dealers which require the delivery of the Comverse shares to the
broker-dealer. The Selling Shareholders may also loan or pledge the Comverse
shares to a broker-dealer and the broker-dealer may sell the shares so loaned,
or upon a default, the broker-dealer may effect sales of the pledged shares.
The Selling Shareholders and any dealer acting in connection with the
offering or any broker executing a sell order on behalf of a Selling Shareholder
may be deemed to be "underwriters" within the meaning of the Securities Act, in
which event any profit on the sale of shares by a Selling Shareholder and any
commissions or discounts received by any such broker or dealer may be deemed to
be underwriting compensation under the Securities Act. In addition, any such
broker or dealer may be required to deliver a copy of this Prospectus to any
person who purchases any of the shares from or through such broker or dealer.
Under the Registration Rights Agreement, Comverse is required to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and to take such further action as any holder of securities
covered by the Registration Rights Agreements may reasonably request to enable
such holder to sell his or her securities without registration, including making
publicly available the information necessary to permit sales of the securities
pursuant to Rules 144 and 144A under the Securities Act.
Under the Registration Rights Agreement and a registration agreement
between MCI WORLDCOM, Inc. and Comverse, Comverse is required to bear all fees
and expenses incurred in connection with the registration of the Comverse
shares, except fees and expenses of the Selling Shareholders' counsel. Each of
Comverse and the Selling Shareholders has agreed to indemnify the other against
certain civil liabilities, including certain liabilities arising under the
Securities Act and Exchange Act, or, in the case of the former stockholders of
Amarex, to the extent such indemnification is unavailable or insufficient, to
contribute to the amount paid or payable in connection therewith.
15
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the validity of the securities
offered hereby will be passed upon for the Company by William F. Sorin,
attorney-at-law, 823 Park Avenue, New York, New York 10021. Mr. Sorin is an
officer and director of the Company and the beneficial owner of 41,247 shares of
Common Stock issuable upon the exercise of options granted by the Company.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
as of January 31, 1998 and 1999 and for the years ended December 31, 1996 and
1997, and January 31, 1999, except for Boston Technology, Inc. and its
subsidiaries for the year ended January 31, 1997, incorporated by reference
herein from the Company's Annual Report on Form 10-K for the year ended January
31, 1999, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report which is incorporated by reference herein. The
consolidated financial statements of Boston Technology, Inc. and its
subsidiaries (consolidated with those of the Company) for the year ended January
31, 1997 have been audited by PricewaterhouseCoopers LLP, independent public
accountants, as stated in their report which is incorporated by reference herein
from the Company's Annual Report on Form 10-K for the year ended January 31,
1999. The consolidated financial statements of the Company and its subsidiaries
referred to above have been incorporated by reference herein in reliance upon
the respective reports of such firms given their authority as experts in
accounting and auditing.
16
<PAGE>
- -------------------------------------- ---------------------------------------
YOU SHOULD RELY ONLY ON THE
INFORMATION PROVIDED OR
INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR ANY SUPPLEMENT. WE
HAVE NOT AUTHORIZED ANYONE ELSE TO
PROVIDE YOU WITH ADDITIONAL OR 133,333 SHARES
DIFFERENT INFORMATION. THE COMMON
STOCK IS NOT BEING OFFERED IN ANY
STATE WHERE THE OFFER IS NOT COMVERSE
PERMITTED. YOU SHOULD NOT ASSUME TECHNOLOGY, INC.
THAT THE INFORMATION IN THIS
PROSPECTUS OR ANY SUPPLEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF SUCH
DOCUMENT. COMMON STOCK
----------------
-------------
TABLE OF CONTENTS PROSPECTUS
April 28, 1999
Page
-------------
About This Prospectus............. 2
Where You Can Find More
Information...................... 2
The Company....................... 4
Risk Factors...................... 5
Recent Developments............... 12
Use of Proceeds................... 12
Selling Shareholders.............. 12
Description of Capital Stock...... 14
Plan of Distribution.............. 15
Legal Matters..................... 16
Experts........................... 16
- -------------------------------------- ---------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated amounts of the expenses of and related to the offering are
as follows:
Registration Fee -- Securities and Exchange Commission $2,279.59
Accounting fees and expenses......................... $3,000.00
Legal fees and expenses.............................. $5,000.00
Miscellaneous........................................ $0.00
---------
Total................................................ $10,279.59
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has included in its Certificate of Incorporation, pursuant to
Section 402(b) of the Business Corporation Law of the State of New York (the
"Business Corporation Law"), a provision that no director of the Company shall
be personally liable to the Company or its shareholders in damages for any
breach of duty as a director, provided that such provision shall not be
construed to eliminate or limit the liability of any director if a judgment or
other final adjudication adverse to him establishes that his acts or omissions
were in bad faith or involved intentional misconduct or a knowing violation of
law, that he personally gained in fact a financial profit or other advantage to
which he was not legally entitled or that his acts violated Section 719 of the
Business Corporation Law.
The By-Laws of the Company further provide that the Company shall indemnify
its directors and officers, and shall advance their expenses in the defense of
any action for which indemnification is sought, to the full extent permitted by
the Business Corporation Law and when authorized by resolution of the
shareholders or directors of the Company or any agreement providing for such
indemnification or advancement of expenses, provided that no indemnification may
be made to or on behalf of any director or officer if a judgment or other final
adjudication adverse to him established that his acts were committed in bad
faith or were the result of active and deliberate dishonesty material to the
cause of action so adjudicated, or that he personally gained in fact a financial
profit or other advantage to which he was not legally entitled. The Company has
entered into indemnity agreements with each of its directors and officers
pursuant to the foregoing provisions of its By-Laws. The Company maintains
insurance policies insuring each of its directors and officers against certain
civil liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS.
Exhibit No. Description of Exhibit
- ----------- ----------------------
3.1 Certificate of Incorporation of Registrant (incorporated by
reference to Exhibit 4(A) to the Registrant's Registration Statement
on Form S-1, Registration No. 33-9147).
3.2 Certificate of Amendment of Certificate of Incorporation of
Registrant effective February 26, 1993 (incorporated by reference to
Exhibit 4(A)(1) to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, File No. 0-15502).
3.3 Certificate of Amendment of Certificate of Incorporation of
Registrant effective January 12, 1995 (incorporated by reference to
Exhibit 4(A)(2) to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 0-15502).
3.4 By-laws of Registrant, as amended (incorporated by reference to
Exhibit 4(B) to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992, File No. 0-15502).
II-1
<PAGE>
4.1 Specimen Common Stock certificate (incorporated by reference to
Exhibit 4(C)(1) to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, File No. 0-15502).
5 Opinion of William F. Sorin.
10.1 Registration Rights Agreement, dated as of February 26, 1999,
between the Registrant and Steven Silberstang, Charles G. Cooper,
Bruce Macfarlane and the other persons referred to therein.
10.2 Registration Agreement, dated as of April 27, 1999, between MCI
WORLDCOM, Inc. and the Registrant.
23.1 Consent of William F. Sorin (included as part of Exhibit 5 hereto).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
24 Power of Attorney (included on signature pages).
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made hereunder, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment hereto) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) will not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-2
<PAGE>
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment hereto to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of New York, State of New York, on April
28, 1999.
COMVERSE TECHNOLOGY, INC.
By: /s/ Kobi Alexander
---------------------------------------
Kobi Alexander
President, Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes
and appoints each of KOBI ALEXANDER, WILLIAM F. SORIN and DAVID KREINBERG or any
of them, each acting alone, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his or her
name, place and stead, in any and all capacities, to sign this Registration
Statement (including all pre-effective and post-effective amendments), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming that any such
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Kobi Alexander President, Chairman of the Board April 28, 1999
- ------------------------ and Chief Executive Officer
Kobi Alexander
/s/ Igal Nissim Chief Financial Officer April 28, 1999
- ------------------------ (principal financing and
Igal Nissim accounting officer)
/s/ Zvi Alexander Director April 28, 1999
- ------------------------
Zvi Alexander
/s/ Itsik Danziger Director April 28, 1999
- ------------------------
Itsik Danziger
/s/ John H. Friedman Director April 28, 1999
- ------------------------
John H. Friedman
/s/ Francis E. Girard Director April 28, 1999
- ------------------------
Francis E. Girard
II-4
<PAGE>
/s/ Sam Oolie Director April 28, 1999
- ------------------------
Sam Oolie
/s/ William F. Sorin Secretary and Director April 28, 1999
- ------------------------
William F. Sorin
/s/ Carmel Vernia Director April 28, 1999
- ------------------------
Carmel Vernia
/s/ Shaula A. Yemini Director April 28, 1999
- ------------------------
Shaula A. Yemini
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ----------- ----------------------
3.1 Certificate of Incorporation of Registrant (incorporated by
reference to Exhibit 4(A) to the Registrant's Registration Statement
on Form S-1, Registration No. 33-9147).
3.2 Certificate of Amendment of Certificate of Incorporation of
Registrant effective February 26, 1993 (incorporated by reference to
Exhibit 4(A)(1) to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, File No. 0-15502).
3.3 Certificate of Amendment of Certificate of Incorporation of
Registrant effective January 12, 1995 (incorporated by reference to
Exhibit 4(A)(2) to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 0-15502).
3.4 By-laws of Registrant, as amended (incorporated by reference to
Exhibit 4(B) to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992, File No. 0-15502).
4.1 Specimen Common Stock certificate (incorporated by reference to
Exhibit 4(C)(1) to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, File No. 0-15502).
5 Opinion of William F. Sorin.
10.1 Registration Rights Agreement, dated as of February 26, 1999,
between the Registrant and Steven Silberstang, Charles G. Cooper,
Bruce Macfarlane and the other persons referred to therein.
10.2 Registration Agreement, dated as of April 27, 1999, between MCI
WORLDCOM, Inc. and the Registrant.
23.1 Consent of William F. Sorin (included as part of Exhibit 5 hereto).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
24 Power of Attorney (included on signature pages).
EXHIBIT 5
WILLIAM F. SORIN
ATTORNEY-AT-LAW
823 PARK AVENUE
NEW YORK, NEW YORK 10021
TELEPHONE: (212) 249-0732
FACSIMILE: (212) 249-5364
April 28, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Re: COMVERSE TECHNOLOGY, INC.
-------------------------
Ladies and Gentlemen:
I have acted as legal counsel to Comverse Technology, Inc., a New York
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company with the Securities
and Exchange Commission on the date hereof and relating to an offering of
133,333 shares of the Company's Common Stock, par value $.10 per share, to be
offered for resale by the Selling Shareholders identified therein, compromising
86,508 issued and outstanding shares (the "Outstanding Shares") and 46,825
shares (the "Warrant Shares") issuable upon the exercise of common stock
purchase warrants (the "Warrants").
In my capacity as legal counsel to the Company, I have examined originals
or copies, certified or otherwise identified to my satisfactions of such
documents, corporate records and other instruments as I have deemed necessary
for the purpose of rendering this opinion. In the course of such examinations, I
have assumed the genuineness of all documents submitted to me as originals and
the conformity to originals and certified documents of all copies submitted to
me as conformed copies.
Based upon and subject to the foregoing, I am of the opinion that the
Outstanding Shares are, and the Warrant Shares, upon the exercise of the
Warrants and payment of the exercise price thereunder, will be, validly issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and the reference to me under the caption "Legal Matters"
in the Prospectus contained therein. In giving the foregoing consent, I do not
thereby admit that I am within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulation of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ William F. Sorin
William F. Sorin
NYFS11...:\94\37994\0003\2450\FRM3119P.55G
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of February 26, 1999 (this
"Agreement"), between Comverse Technology, Inc., a New York corporation (the
"Company"), and Steven Silberstang, Charles G. Cooper, Bruce Macfarlane and any
other Person listed on Schedule A hereto who from time to time agrees to become
a party to this Agreement in accordance with the provisions hereof (Steven
Silberstang, Charles G. Cooper, Bruce Macfarlane and each such other Person who
becomes a party hereto is referred to herein as a "Stockholder" and
collectively, the "Stockholders").
W I T N E S S E T H:
WHEREAS, the Stockholders were holders of shares of capital stock ("Amarex
Stock") of Amarex Technology, Inc., a Delaware corporation ("Amarex"); and
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of February
26, 1999, among the Company, Comverse Acquisition Inc., a Delaware corporation
and a wholly-owned subsidiary of the Company ("Sub"), Amarex and the
Stockholders, Sub will be merged with and into Amarex, with Amarex being the
corporation surviving from the merger (the "Merger"); and
WHEREAS, pursuant to the Merger, each share of Amarex Stock will be
converted into the right to receive 1.75 shares of common stock, par value $.10
per share, of the Company ("Common Stock"); and
WHEREAS, upon consummation of the Merger, the Stockholders will receive
shares of Common Stock in respect of the Amarex Shares theretofore owned by the
Stockholders which will be subject to the provisions of Rule 145 under the
Securities Act of 1933, as amended; and
WHEREAS, the Stockholders and the Company desire to set forth herein their
agreement with respect to the registration rights, and certain other related
covenants, applicable to the shares of Common Stock to be issued by the Company
to the Stockholders upon consummation of the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
obligations, covenants and agreements herein contained, the parties hereto agree
as follows:
NYFS11...:\94\37994\0004\2179\AGR1209Y.37E
<PAGE>
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"Commission" means the Securities and Exchange Commission or any other
similar or successor agency of the United States government administering the
Securities Act.
"Effective Date" means the effective date of the Merger.
"Exchange Act" means the Securities Exchange Act of 1934, and any similar
or successor federal statute, and the rules and regulations of the Commission
thereunder, as in effect at the time.
"Offering" means the registration of the Company's securities under the
Securities Act for sale to the public.
"Person" means a corporation, an association, a trust, a partnership, a
limited liability company, a joint venture, an organization, a business, an
individual, a government or political subdivision thereof, or a governmental
body.
"Prospectus" means the prospectus included in any Registration Statement,
together with and including any amendment or supplement to such prospectus,
covering the Offering of any portion of the Registrable Securities covered by a
Registration Statement, and all material incorporated by reference in such
Prospectus.
"Registering Stockholder" means any Stockholder whose Registrable
Securities are included in a Registration Statement filed pursuant to this
Agreement.
"Registrable Securities" means the Shares except that a security will
cease to be a Registrable Security when it (a) has been effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering it, (b) becomes saleable under, or is distributed to the
public pursuant to, Rule 144 (or any similar rule then in force) under the
Securities Act or (c) has otherwise been transferred by the Stockholder.
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"Registration Statement" means a registration statement filed by the
Company with the Commission covering Registrable Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, together with the rules and regulations of the
Commission promulgated thereunder, as in effect at the time.
"Shares" means the shares of Common Stock issued by the Company to the
Stockholders upon consummation of the Merger, any shares of stock or other
securities into which or for which such shares of Common Stock may be changed,
converted or exchanged after the Effective Date, and any other shares or
securities issued to the Stockholders after the Effective Date in respect of
such shares of Common Stock (or such shares of stock or other securities into
which or for which such shares are so changed, converted or exchanged) upon any
reclassification, stock combination, stock subdivision, stock dividend, share
exchange, merger, consolidation or similar transaction. The number of shares of
Common Stock issued by the Company to each Stockholder upon consummation of the
Merger is set forth on Schedule A annexed hereto.
"Stockholders Representative" has the meaning set forth in Section 5.3
hereof.
ARTICLE II
REGISTRATION RIGHTS
2.1 Initial Registration. The Company shall, as soon as reasonably
practicable after the Effective Date, but in any event no later than 60 days
after the Effective Date, prepare and file a Registration Statement on Form S-3
(or other appropriate form) (the "Initial Registration Statement") for an
Offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act covering an Offering of such number of Registrable Securities, if
any, then owned by the Stockholders not exceeding, in the aggregate, one-quarter
(1/4) of the Shares. The number of Registrable Securities to be registered under
the Initial Registration Statement shall be apportioned among the Stockholders
in proportion to the number of Registrable Securities then held by each such
Stockholder. The Company will use its best efforts to cause the Initial
Registration Statement to be declared effective as soon as reasonably
practicable after filing thereof with the Commission. Subject to Section 2.5
hereof, the Company will use its best efforts to keep the Initial Registration
Statement effective for as long as reasonably specified in the plan of
distribution contained therein.
2.2 Demand Registration. The Stockholders may, by the Stockholder
Representative giving at least 60 days' prior written notice to the Company (the
"Demand Notice"), make one demand during each of (i) the one year period
commencing on the
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first anniversary of the Effective Date, (ii) the one year period commencing on
the second anniversary of the Effective Date and (iii) the one year period
commencing on the third anniversary of the Effective Date (each, a "Demand
Registration Period") that the Company prepare and file with the Commission
during the Demand Registration Period in which the Demand Notice is given, and
subject to Section 2.4 below, the Company shall prepare and file during such
Demand Registration Period, a Registration Statement on Form S-3 (or other
appropriate form) (a "Demand Registration Statement") for an Offering to be made
on a continuous basis pursuant to Rule 415 under the Securities Act. covering
such number of Registrable Securities, if any, then owned by the Stockholders
not exceeding, in the aggregate, one-quarter (1/4) of the Shares. The
Stockholders shall not be entitled to make more than one demand during any
Demand Registration Period, unless the Company and the Stockholder
Representative agree otherwise; provided, however, that written notice of such
demand may be given no earlier than 60 days prior to the commencement of the
Demand Registration Period to which such demand relates. The number of
Registrable Securities to be registered under any Demand Registration Statement
shall be apportioned among the Stockholders in proportion to the number of
Registrable Securities then held by each such Stockholder. Subject to Section
2.4 below, the Company shall use its best efforts to file such Demand
Registration Statement as soon as reasonably practicable after the Company
receives the Demand Notice, but in any event such Demand Registration Statement
shall be filed no later than 60 days after the Company receives the Demand
Notice. The Company will use its best efforts to cause any Demand Registration
Statement to be declared effective as soon as reasonably practicable after the
filing thereof with the Commission. Subject to Section 2.5 hereof, the Company
will keep such Demand Registration Statement effective for as long as reasonably
specified in the plan of distribution contained therein.
2.3 Company Participation. The Company may elect to register equity
securities of the Company in any Registration Statement prepared hereunder or to
participate in the Offering, by including any of its equity securities in such
Registration Statement, by giving written notice of such election to the
Stockholder Representative stating the number of equity securities proposed to
be sold by the Company in the Offering (the "Other Securities").
2.4 Delay. The Company may delay the filing of any Demand Registration
Statement if upon receipt of the Demand Notice (a) the Company notifies the
Stockholders that it is contemplating filing a registration statement for a
primary offering within 90 days of such demand, (b) the Company notifies the
Stockholders that a material event has occurred or is likely to occur that has
not been publicly disclosed that, if disclosed, would have a material adverse
effect on the Company, or (c) the Company decides that the registration and
offering could interfere with, or would require the Company to accelerate public
disclosure of, any material financing, acquisition, disposition, corporate
reorganization or other material transaction involving the Company or its
subsidiaries. In the case of clause (a) of this subsection, the Company will use
its best efforts, as soon as
4
<PAGE>
practicable, upon the earlier of the Company's abandonment of its contemplated
registration statement or the expiration of 60 days after the consummation of
the contemplated Offering, to file such Registration Statement unless such
Demand Notice is withdrawn by the Stockholders. In the case of clause (b) or
clause (c), the Company may not delay the filing of the Registration Statement
for more than 90 days from the date of the Demand Notice unless such Demand
Notice is withdrawn by the Stockholders. If there is a postponement under any
clause above, the Demand Notice may be withdrawn by the Stockholders by notice
to the Company. In such case, no Demand Notice will have been delivered for the
purposes of Section 2.2.
2.5 Certain Notices; Suspension of Sales. The Company may, upon written
notice to the Registering Stockholders, suspend such Registering Stockholder's
use of any Prospectus (which is a part of any Registration Statement) for a
reasonable period not to exceed sixty (60) days if the Company in its reasonable
judgment believes it may possess material non-public information the disclosure
of which in its reasonable judgment would have a material adverse effect on the
Company and its subsidiaries taken as a whole. Each Registering Stockholder of
Registrable Securities agrees by its acquisition of such Registrable Securities
to hold any communication by the Company pursuant to this Section 2.5 in
confidence.
ARTICLE III
REGISTRATION PROCEDURES
3.1 Registration Procedures. Subject to the terms of this Agreement, the
Company will use its best efforts to effect any registration under Sections 2.1
or 2.2 in a manner that permits the sale of the Registrable Securities covered
thereby in accordance with the intended method or methods of disposition.
3.2 Copies; Review. At least five (5) Business Days before filing a
Registration Statement or Prospectus or any amendment or supplement thereto
(whether before or after effectiveness), the Company will furnish to the
Stockholder Representative copies of all such documents proposed to be filed.
Such documents will be subject to the review of the Stockholder Representative.
The Company will not file any Registration Statement or any Prospectus or any
amendment or supplement thereto (whether before or after effectiveness) to which
the Stockholder Representative may reasonably object.
3.3 Amendments. Subject to Section 2.5 hereof, the Company will (a)
prepare and file with the Commission such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable time period required herein,
(b) cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and (c) comply with the provisions of the
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<PAGE>
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Registering Stockholders set forth in
such Registration Statement or Prospectus supplement.
3.4 Notification. The Company will promptly notify the Registering
Stockholders and (if requested by any such Person) confirm such notification in
writing, (a) when the Prospectus has been filed, and, with respect to the
Registration Statement, when it has become effective, (b) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (c) of the issuance of any stop order
suspending the effectiveness of the Registration Statement, or the refusal or
suspension of qualification of registration of Registrable Securities, or the
initiation of any proceedings for that purpose, (d) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose, and (e) of any event that makes any material statement made in the
Registration Statement, the Prospectus or any document incorporated therein by
reference untrue or that requires the making of any changes in the Registration
Statement, the Prospectus or any document incorporated therein by reference in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading in any material respect. Subject to Section 2.5
hereof, the Company will make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the Registration Statement at the
earliest possible moment. If any event contemplated by clause (e) occurs, the
Company will promptly prepare a supplement or post-effective amendment to the
Registration Statement or the Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, the Prospectus will not contain
an untrue statement 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. Upon receipt of any notice from the
Company that any event of the kind described in clause (b), (c), (d) or (e) has
happened, each Registering Stockholder will discontinue offering the Registrable
Securities until the Registering Stockholder receives the copies of the
supplemented or amended Prospectus contemplated by the previous sentence, or
until it is advised in writing by the Company that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus.
3.5 Information Included. The Company may require each Registering
Stockholder to furnish to the Company such information regarding the Registering
Stockholder and the distribution of the Registrable Securities as the Company
may from time to time reasonably require for inclusion in the Registration
Statement, and the Company may exclude from such registration the Registrable
Securities of any Registering Stockholder that fails to furnish such information
within a reasonable time after receiving
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<PAGE>
such request. Each Registering Stockholder agrees to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Registering Stockholder not misleading. If
requested by the Registering Stockholders, the Company will as soon as
practicable incorporate in a Prospectus supplement or post-effective amendment
such information that the Registering Stockholders reasonably request be
included therein relating to the sale of the Registrable Securities, including,
but not limited to, information with respect to the number of Registrable
Securities being sold and any other terms of the distribution of the Registrable
Securities to be sold in such Offering. Subject to Section 2.5 hereof, the
Company will make all required filings of such Prospectus supplement or
post-effective amendment as promptly as practicable after being notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment.
3.6 Copies. The Company will (a) promptly furnish to the Registering
Stockholders without charge, at least one signed copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference), and (b) promptly
deliver to the Registering Stockholders without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request. The Company consents
to the use of the Prospectus or any amendment or supplement thereto by the
Registering Stockholders in connection with the Offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto.
3.7 Blue Sky Registration. Prior to any Offering of Registrable Securities
covered by a Registration Statement under Sections 2.1 or 2.2, the Company will
register or qualify or cooperate with the Registering Stockholders and their
respective counsel in connection with the registration or qualification of such
Registrable Securities under the securities or blue sky laws of any such
jurisdictions in the United States as the Registering Stockholders reasonably
request in writing, and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of such Registrable
Securities. The Company will not be required to take any actions under this
Section 3.7 if such actions would require the Company to submit to the general
taxation of any jurisdiction where it is not then so subject or to file in any
jurisdiction any general consent to service of process.
3.8 Certificates. The Company will cooperate with the Registering
Stockholders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold that do not bear any restrictive
legends. Such certificates will be in such denominations and registered in such
names as the Registering Stockholders request at least two Business Days prior
to any sale of Registrable Securities.
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3.9 Section 11(a) Notice. The Company will make generally available to its
stockholders earnings statements satisfying the provisions of Section 11(a) of
the Securities Act.
3.10 Expenses. Except as provided below, all expenses incident to the
Company's performance of or compliance with this Agreement, including, but not
limited to, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger expenses,
telephone and delivery expenses, and fees and disbursements of counsel to the
Company and of independent certified public accountants of the Company, will be
borne by the Company. The Company will also pay its internal expenses, the
expense of any annual audit and the fees and expenses of any Person retained by
the Company. All such expenses are referred to as "Registration Expenses." The
Registering Stockholders shall pay all fees and disbursements of counsel to the
Registering Stockholders, all fees, commission and discounts with respect to the
sale of any Registrable Securities and any transfer taxes incurred in respect of
such sale.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnification By The Company. The Company will indemnify and hold
harmless each of the Registering Stockholders from and against any and all
losses, claims, damages and liabilities ("Losses") reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted to which the Registering Stockholder may become
subject under the Securities Act, the Exchange Act or other federal or state
securities law or regulation, at common law or otherwise, insofar as such Losses
arise out of or are based upon (a) any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or any amendment or supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (b) any violation
by the Company of the Securities Act or the Exchange Act, or other federal or
state securities law applicable to the Company and relating to any action or
inaction required of the Company in connection with such registration. In
addition, the Company will reimburse the Registering Stockholder for any
reasonable investigation, legal or other expenses incurred by such Registering
Stockholder in connection with investigating or defending any such Loss.
Notwithstanding anything herein to the contrary, the Company will not be liable
with respect to the portion of any such Loss that (i) arises out of or is based
upon any alleged untrue statement or alleged omission made in such Registration
Statement, preliminary Prospectus, Prospectus, or amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Registering Stockholders specifically for use therein or
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(ii) attributable to a Registering Stockholder's (A) use of a Prospectus after
being notified by the Company to suspend use thereof pursuant to Section 3.3
above or (B) failure to deliver a final Prospectus to the Person asserting any
losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in an amended or
supplemented Prospectus prepared by the Company and delivered to the Registering
Stockholder at or prior to the time written confirmation of sale to such Person
was required to be made. The foregoing indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of the Registering
Stockholder, and will survive the transfer of such securities by the Registering
Stockholder.
4.2 Indemnification By Registering Stockholders. If a Registering
Stockholder sells Registrable Securities under a Prospectus that is part of a
Registration Statement, the Registering Stockholder will indemnify and hold
harmless the Company, its directors and each officer who signed such
Registration Statement and each Person who controls the Company (within the
meaning of Section 15 of the Securities Act) (each, a "Controlling Person")
under the same circumstances as the foregoing indemnity from the Company to the
Registering Stockholders but only to the extent that such Losses arise out of or
are based upon any untrue or allegedly untrue statement of a material fact or
omission or alleged omission of a material fact that was made in the Prospectus,
the Registration Statement, or any amendment or supplement thereto, in reliance
upon and in conformity with written information relating to a Registering
Stockholder furnished to the Company by a Registering Stockholder expressly for
use therein. In no event will the aggregate liability of a Registering
Stockholder exceed the amount of the net proceeds received by the Registering
Stockholder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. Such indemnity will remain in full force and effect
regardless of any investigation made by or on behalf of the Company or such
officer, director, employee or Controlling Person, and will survive the transfer
of such securities by the Registering Stockholder.
4.3 Contribution. If the indemnification provided for in Sections 4.1 or
4.2 is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which any such Section
would otherwise apply by its terms (other than by reason of exceptions provided
therein), then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, will have a joint and several obligation to contribute to the
amount paid or payable by such indemnified party as a result of such Losses.
Such contribution will be in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses, as well as any other relevant equitable
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considerations. The relative fault of such indemnifying party, on the one hand,
and indemnified party, on the other hand, will be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been taken or made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent any such action, statement or omission. The amount paid or payable by a
party as a result of any such Losses will be deemed to include any
investigation, legal or other fees or expenses incurred by such party in
connection with any investigation or proceeding, to the extent such party would
have been indemnified for such expenses if the indemnification provided for in
Sections 4.1 or 4.2 was available to such party.
4.4 Conduct Of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (a) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification, and (b) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that the failure to give such
notice shall not relieve an indemnifying party of liability except to the extent
it has been prejudiced as a result. Any Person entitled to indemnification
hereunder will have the right to employ separate counsel and to participate in
(but not control) the defense of such claim, but the fees and expenses of such
counsel will be at the expense of such Person and not of the indemnifying party
unless (x) the indemnifying party has agreed to pay such fees or expenses, (y)
the indemnifying party has failed to assume the defense of such claim and employ
counsel reasonably satisfactory to such Person within a reasonable period of
time pursuant to this Agreement, or (z) a conflict of interest exists between
such Person and the indemnifying party with respect to such claims that would
make such separate representation required under applicable ethical rules. In
the case of clause (z) above if the Person notifies the indemnifying party in
writing that such Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party will not have the right to assume the
defense of such claim on behalf of such Person. If such defense is not assumed
by the indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent will not
be unreasonably withheld). No indemnified party will be required to consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term the giving of a release, by all claimants or plaintiffs, to
such indemnified party from all liability with respect to such claim or
litigation. Any indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel (other than required local counsel) for all parties
indemnified by such indemnifying party with respect to such claim.
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ARTICLE V
OTHER AGREEMENTS
5.1 Restrictions On Public Sale By The Stockholders. If requested by the
managing underwriter of an underwritten Offering, the Stockholders will not
effect any public sale or distribution of securities of the same class (or
securities exchangeable or exercisable for or convertible into securities of the
same class) as the securities included in the Offering (including, but not
limited to, a sale pursuant to Rule 144 of the Securities Act) during the 10-day
period prior to and the 90-day period (or shorter period requested by the
underwriter) beginning on the effective date of, such Offering.
5.2 Rule 144. The Company shall file, on a timely basis, all reports
required to be filed by it under the Securities Act and the Exchange Act, and
will take such further action and provide such documents as the Stockholders may
reasonably request, all to the extent required from time to time to enable the
Stockholders to sell Registrable Securities without registration under the
Securities Act within the limitation of the conditions provided by (i) Rule 144
under the Securities Act, as such rule may be amended from time to time, or (ii)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of a Stockholder, the Company will deliver to the Stockholder a
statement verifying that it has complied with such information and requirements.
5.3 Stockholder Representative. (a) The Stockholders agree to appoint one
Stockholder to act as their representative, attorney in fact and proxy with
respect to certain matters specified in this Agreement (the "Stockholder
Representative"). The parties have designated Charles G. Cooper as the initial
Stockholder Representative. The Stockholder Representative may resign at any
time, and a Stockholder Representative may be removed at any time by the vote of
Stockholders who collectively own more than 50% of the Registrable Securities at
such time ("Majority Holders"). In the event of the death, resignation or
removal of the Stockholder Representative, a new Stockholder Representative
shall be appointed by a vote of Majority Holders, such appointment to become
effective upon the written acceptance thereof by the new Stockholder
Representative. Any failure by the Majority Holders to appoint a new Stockholder
Representative upon the death, resignation or removal of the Stockholder
Representative shall not have the effect of releasing the Stockholders from any
liability under this Agreement.
(b) The Stockholder Representative shall have such powers and
authority as are necessary to carry out the functions assigned to the
Stockholder Representative under this Agreement; provided, however, that the
Stockholder Representative will have no obligation to act on behalf of the
Stockholders, except as expressly provided herein. The Stockholder
Representative will at all times be entitled to rely on any directions received
from the Majority Holders. The Stockholder Representative shall, at the expense
11
<PAGE>
of the Stockholders, be entitled to engage such counsel, experts and other
agents and consultants as they shall deem necessary in connection with
exercising their powers and performing their function hereunder and (in the
absence of bad faith on the part of the Stockholder Representative) shall be
entitled to conclusively rely on the opinions and advice of such Persons.
(c) The Stockholder Representative shall not be entitled to any fee,
commission or other compensation for the performance of its services hereunder,
but shall be entitled to the payment of all his or her expenses incurred as the
Stockholder Representative. In connection with this Agreement, and any
instrument, agreement or document relating hereto or thereto, and in exercising
or failing to exercise all or any of the powers conferred upon the Stockholder
Representative hereunder, the Stockholder Representative shall incur no
responsibility whatsoever to any Stockholder by reason of any error in judgment
or other act or omission performed or omitted hereunder or any such other
agreement, instrument or document, excepting only responsibility for any act or
failure to act which represents willful misconduct. Each Stockholder shall
indemnify, pro rata based upon such holder's percentage interest, the
Stockholder Representative against all losses, damages, liabilities, claims,
obligations, costs and expenses, including reasonable attorneys', accountants'
and other experts' or consultant's fees and the amount of any judgment against
the Stockholder Representative, of any nature whatsoever, arising out of or in
connection with any claim, investigation, challenge, action or proceeding or in
connection with any appeal thereof, relating to the acts or omissions of the
Stockholder Representative hereunder. The foregoing indemnification shall not
apply in the event of any action or proceeding which finally adjudicates the
liability of the Stockholder Representative hereunder for his or her gross
negligence or willful misconduct. In the event of any indemnification hereunder,
upon written notice from Stockholder Representative to the Stockholders as to
the existence of a deficiency toward the payment of any such indemnification
amount, each such holder shall promptly deliver to the Stockholder
Representative full payment of his or her ratable share of the amount of such
deficiency, in accordance with such Stockholder's percentage interest. In no
event shall the Company be responsible for any reimbursement or indemnification
of the Stockholder Representative.
(d) All of the indemnities, immunities and powers granted to the
Stockholder Representative under this Agreement shall survive the termination of
this Agreement.
(e) Notwithstanding anything herein to the contrary, each
Stockholder hereby acknowledges that the Company shall not have any
responsibility or obligation whatsoever to any such Stockholder or to any other
party with respect to or arising out of any actions taken or any inaction by the
Stockholder Representative.
12
<PAGE>
(f) The Company shall have the right to rely conclusively upon all
actions taken or omitted to be taken by the Stockholder Representative pursuant
to this Agreement and any instrument, agreement or document relating hereto, all
of which actions or omissions shall be legally binding upon all the
Stockholders.
ARTICLE VI
MISCELLANEOUS
6.1 Amendments; Waivers. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the Company and the
Stockholder Representative, on the written instruction of the Majority Holders.
6.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to its subject matter, and supersedes and
replaces all prior agreements and understandings of the parties in connection
with such subject matter.
6.3 Notices. All notices and other communications hereunder shall be given
in writing and delivered personally, by registered or certified mail (postage
prepaid, return receipt requested), by overnight courier (postage prepaid),
facsimile transmission or similar means, to the party to receive such notices or
communications at the address set forth below (or such other address as shall
from time to time be designated by such party to the other parties in accordance
with this Section 6.3):
If to the Company: Comverse Technology, Inc.
170 Crossways Park Drive
Woodbury, NY 11797
Attention: Secretary
Telecopy: (516) 677-7323
If to the Stockholder
Representative: Charles G. Cooper
10 Ferrin Court
Middletown, NJ 07748
Telecopy: (732) 671-6277
13
<PAGE>
If to a Stockholder: As set forth in Schedule A
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the signed acknowledgment of receipt of the person to
whom such notice or communication shall have been personally delivered, the
acknowledgment of receipt returned to the sender by the applicable postal
authorities, the confirmation of delivery rendered by the applicable overnight
courier service, or the confirmation of a successful facsimile transmission of
such notice or communication. A copy of any notice or other communication given
by any party to any other party hereto, with reference to this Agreement, shall
be given at the same time to the other parties to this Agreement.
6.4 GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT, AND THE
RESPECTIVE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREUNDER.
6.5 Assignment. No Stockholder may assign any of its rights or obligations
hereunder by operation of law or otherwise without the prior written consent of
the Company.
6.6 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law. If any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
6.7 No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
6.8 No Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of, and shall not be enforceable by, any Person (whether or not
listed on Schedule A hereto) who or which is not a party hereto. Any Person
(whether or not listed on Schedule A hereto) who or which is not a party hereto
shall not be entitled to any benefit hereunder except, in the case of any Person
listed on Schedule A hereto, such
14
<PAGE>
Person shall be entitled to become a party hereto by executing a counterpart to
this Agreement. If any Person listed on Schedule A hereto executes a counterpart
to this Agreement, such Person shall thereafter be deemed to have agreed to be
bound by the provisions hereof, as if such Person was an original party hereto
and such Person shall thereafter be entitled to any benefit accorded to the
Stockholders hereunder.
6.9 Headings. The Section headings in this Agreement are for convenience
of reference only and are not intended to be a part of this Agreement or to
affect the meaning or interpretation of this Agreement.
6.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one agreement.
[The remainder of this page has been intentionally left blank.]
15
<PAGE>
[This page has been intentionally left blank.]
16
<PAGE>
[SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first set forth above.
COMVERSE TECHNOLOGY, INC.
By: /s/ William F. Sorin
---------------------------------------
Name: William F. Sorin
Title: Secretary
/s/ David Kreinberg
---------------------------------------
Name: David Kreinberg
Title: Vice President of Finance and
Treasurer
STOCKHOLDERS:
/s/ Steven Silberstang
-------------------------------------------
Steven Silberstang
/s/ Charles G. Cooper
-------------------------------------------
Charles G. Cooper
/s/ Bruce Macfarlane
-------------------------------------------
Bruce Macfarlane
17
<PAGE>
SCHEDULE A
======================================================================
Number of Shares
issued pursuant to the
Name and Address Merger
- ----------------------------------------------------------------------
Mr. Steven Silberstang 87,500
20 Sherwood Road
Pound Ridge, NY 10576
- ----------------------------------------------------------------------
Mr. Charles G. Cooper 78,750
10 Ferrin Court
Middletown, NJ 07748
- ----------------------------------------------------------------------
Mr. Bruce Macfarlane 43,750
45 Stuyvesant Avenue
Larchmont, NY 10538
- ----------------------------------------------------------------------
Mr. John W. Downey 5,250
31 Red Oak Place
Massapequa, NY 11758
- ----------------------------------------------------------------------
Mr. Moshe Halfon 875
300 East 93rd Street
Apartment #19A
New York, NY 10128
- ----------------------------------------------------------------------
Mrs. Lea Waldman 875
11 Ridgeview Avenue
White Plains, NY 10606
- ----------------------------------------------------------------------
Mr. Gordon Flayter 875
78 Wheaton Avenue
Fishkill, NY 12524
- ----------------------------------------------------------------------
Mr. Bo Elfving 1,750
37 West 72nd Street
Apartment #5B
New York, NY 10023
- ----------------------------------------------------------------------
Ms. Gertrud Levy 2,261
c/o Mr. Joseph Levy
254 University Way
Paramus, NJ 07652
18
<PAGE>
- ----------------------------------------------------------------------
Ms. Diane Levy 1,130
c/o Mr. Joseph Levy
254 University Way
Paramus, NJ 07652
- ----------------------------------------------------------------------
Ms. Susan Levy 1,130
c/o Mr. Joseph Levy
254 University Way
Paramus, NJ 07652
- ----------------------------------------------------------------------
Mr. Donald H. Rivkin 653
16 West 77th Street
New York, NY 10024
- ----------------------------------------------------------------------
Mr. Saul Sherman 653
Mecox Road, Corner Montrose Lane
Water Mill, NY 11976
- ----------------------------------------------------------------------
Mr. Milton Andrews 653
3117 Chain Bridge Road, N.W.
Washington, DC 20016
- ----------------------------------------------------------------------
Mr. Donald H. Schwentker 653
2615 Culpeper Road
Alexandria, VA 22308
- ----------------------------------------------------------------------
Mr. Richard Penna 653
925 Highland Drive
Silver Spring, MD 20910
- ----------------------------------------------------------------------
Mr. John D. Miller 653
38 Purdy Ct.
Briarcliff Manor, NY 10510
- ----------------------------------------------------------------------
Mr. Thomas A. Greene 653
c/o Dailey & Dailey
3855 Main Street
Manchester Village, VT 05254
- ----------------------------------------------------------------------
Mr. Isaac E. Druker 653
133 Pacific Street
Brooklyn, NY 11201
- ----------------------------------------------------------------------
Mr. Mark Orenstein 653
114 Grace Street
Plainview, NY 11803
- ----------------------------------------------------------------------
Mr. Gregory A. Lunt 653
calle Juan Roman 7; 1
07800 Ibiza
Baleares, Spain
- ----------------------------------------------------------------------
Total 230,676
======================================================================
19
EXHIBIT 10.2
COMVERSE TECHNOLOGY, INC.
170 CROSSWAYS PARK DRIVE
WOODBURY, NY 11979
April 26, 1999
VIA FACSIMILE
- -------------
MCI WORLDCOM, Inc.
1801 Pennsylvania Avenue, N.W.
Washington, DC 20006
Attention: Mr. Stephen Mooney
Dear Mr. Mooney:
REGISTRATION AGREEMENT
----------------------
On December 19, 1997, Amarex Technology, Inc ("Amarex") granted to MCI
Telecommunications Corporation, a wholly owned subsidiary of MCI WORLDCOM, Inc.
("MCI"), two warrants to purchase shares of Amarex's capital stock (the
"Warrants"). Upon consummation of a merger on February 26, 1999, Amarex became a
wholly owned subsidiary of Comverse Technology, Inc. ("Comverse") and Comverse
assumed Amarex's obligations under the Warrants. Currently, the Warrants are
exercisable for an aggregate of 46,825 shares of common stock, par value $.10
per share, of Comverse, as adjusted to reflect a three-for-two-stock split of
the Comverse shares effected on April 15, 1999.
This letter will confirm our agreement (this "Agreement") pursuant to
which Comverse will include in the registration statement on Form S-3, a draft
of which is attached hereto (the "Registration Statement"), and in the
prospectus included therein (such prospectus, together with any amendment or
supplement thereto and all documents incorporated by reference therein, the
"Prospectus"), to be filed by Comverse with the Securities and Exchange
Commission (the "SEC") for the purpose of registering for resale, the 46,825
Comverse shares issuable to MCI upon the exercise of the Warrants (the "MCI
Shares" and, together with any other Comverse shares registered under the
Registration Statement, the "Registered Securities"). In consideration of
Comverse registering the MCI Shares, MCI and Comverse agree as follows:
1. No later than Tuesday, April 27, 1999, MCI shall advise Comverse in writing
of (i) the number of Comverse shares beneficially owned by MCI (as defined in
Appendix A annexed hereto) other than the MCI Shares and (ii) any comments MCI
may have on the draft Registration Statement or the Prospectus. MCI shall
furnish to Comverse such additional information regarding MCI and the
distribution of the MCI Shares as Comverse may from time to time reasonably
require for inclusion in the Registration Statement or the Prospectus, failing
which the MCI Shares may be excluded from the Registration Statement. MCI shall
notify Comverse in writing of any information required to be disclosed in the
NY2:\421754\02\91F#02!.DOC\37994.0003
<PAGE>
Registration Statement or the Prospectus in order to make the information
previously furnished by MCI to Comverse not misleading including, without
limitation, any change in the number of Comverse shares beneficially owned by
MCI. MCI agrees to indemnify Comverse to the fullest extent permitted under
applicable law if Comverse suffers any loss in connection with the information
furnished in writing hereunder or required to be furnished hereunder by MCI.
Comverse agrees to indemnify MCI to the fullest extent permitted under
applicable law if MCI or MCI WorldCom suffers any loss in connection with the
information contained in the Registration Statement or Prospectus other than
with respect to information furnished hereunder in writing by MCI or required to
be furnished hereunder by MCI to Comverse.
2. Comverse will notify MCI when the Registration Statement is declared
effective. Comverse will furnish to MCI (i) one copy of the Registration
Statement, any post-effective amendment thereto and all documents incorporated
therein by reference, and (ii) as many copies of the Prospectus (including each
preliminary prospectus) as MCI may reasonably request.
3. Comverse may, upon written notice to MCI, suspend MCI's use of the Prospectus
for a reasonable period not to exceed sixty (60) days if Comverse believes it
may possess material non-public information the disclosure of which in its
reasonable judgement would have a material adverse effect on Comverse and its
subsidiaries taken as a whole. MCI shall hold any communication by Comverse to
MCI pursuant to this Paragraph 3 in strictest confidence.
4. Comverse will promptly notify MCI in writing if : (i) the SEC requests
amendments or supplements to the Registration Statement or the Prospectus, or
requests additional information; (ii) a stop order suspending the effectiveness
of the Registration Statement is issued, or there is a refusal, suspension of
qualification of registration of the Registered Securities, or there is an
initiation of any proceedings for that purpose; (iii) Comverse receives any
notification with respect to the suspension of qualification or exemption from
qualification of any of the Registered Securities for sales in any jurisdiction,
or the initiation or threatening of any proceedings for that purpose; or (iv)
there has been any event that makes any material statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading in any material respect. If MCI receives any such notice from
Comverse, MCI will discontinue offering the MCI Shares until it is advised in
writing by Comverse that the use of the Prospectus may be resumed and, if
applicable, MCI has received copies of the supplemented or amended Registration
Statement or Prospectus or any additional or supplemental filings that are
incorporated by reference in the Prospectus.
5. Comverse will pay its internal expenses, the expense of any annual audit and
the fees and expenses of any person retained by it in connection with the
preparation of the Registration Statement. MCI will pay all fees and
disbursements of its internal and external counsel, if any, and all fees,
commissions and discounts with respect to the sale of any MCI Shares and any
transfer taxes incurred in respect of such sale.
2
<PAGE>
6. If requested by the managing underwriter of an underwritten registration of
Comverse's securities under the Securities Act of 1933, as amended (the
"Securities Act") for sale to the public (an "Offering"), MCI will not effect
any public sale or distribution of securities of the same class (or securities
exchangeable or exercisable for or convertible into securities of the same
class) as the securities included in the Offering (including, but not limited
to, a sale pursuant to Rule 144 of the Securities Act) during the 10-day period
prior to and the 90-day period (or shorter period requested by the underwriter)
beginning the effective date of, such Offering.
This Agreement shall governed by and construed in accordance with the
laws of the State of New York, without giving effect to the principles of
conflicts of law thereunder. This Agreement may not be amended, waived or
terminated, except upon the execution and delivery of a written agreement
executed by Comverse and MCI. This Agreement constitutes the entire agreement
between the parties hereto pertaining to its subject matter, and supersedes and
replaces all prior agreements and understandings of the parties in connection
with such subject matter. MCI may not assign any of its rights or obligations
hereunder by operation of law or otherwise without the prior written consent of
Comverse. This Agreement shall not be enforceable by any person not a party
hereto. If any provision of this Agreement is held to be invalid, illegal or
unenforceable, such invalidity, illegality or unenforceability will not affect
any other provision or portion thereof. The failure of any party hereto to
exercise any right or remedy available hereunder or at law or in equity shall
not constitute a waiver by such party of its right to exercise any such right or
remedy.
All notices and other communications hereunder shall be given in
writing and delivered personally, by registered or certified mail (postage
prepaid, return receipt requested), by overnight courier (postage prepaid) or
facsimile transmission, to (i) Comverse at the address set forth above
(facsimile 516-677-7355), Attention: William F. Sorin, Secretary, (ii) MCI at
the address set forth above (facsimile 202-887-2128), Attention: Stephen Mooney.
3
<PAGE>
If you are in agreement with the foregoing, please sign and return a
copy of this letter to Comverse, whereupon this letter will become a binding
agreement between us.
Yours very truly,
COMVERSE TECHNOLOGY INC.
By: /s/ William F. Sorin
-------------------------------
William F. Sorin
Secretary
ACCEPTED AND AGREED
to this 27th day of April, 1999
MCI WORLDCOM
By: /s/ Stephen R. Mooney
-------------------------------------
Name: Stephen R. Mooney
Title: Director
4
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Comverse Technology, Inc. on Form S-3 of our report dated March 8, 1999 (April
15, 1999 as to Note 12), appearing in the Annual Report on Form 10-K of Comverse
Technology, Inc. for the year ended January 31, 1999, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
New York, New York
April 22, 1999
NYFS11...:\94\37994\0003\2450\FRM3119P.55G
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Comverse Technology, Inc., of our report dated April 24, 1997 on our
audit of the consolidated financial statements of Boston Technology, Inc. as of
January 31, 1997 and for the year ended January 31, 1997, which is included in
the Annual Report on Form 10-K of Comverse Technology, Inc. for the year ended
January 31, 1999. We also consent to the reference to our firm under the caption
"Experts."
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
April 22, 1999
NYFS11...:\94\37994\0003\2450\FRM3119P.55G
