BOTTOMLINE TECHNOLOGIES (DE), INC.
155 FLEET STREET
PORTSMOUTH, NEW HAMPSHIRE 03801
April 26, 2001
Re: Bottomline Technologies (de), Inc. Loan Notes
Dear ____________:
In accordance with Section 8 of the Bottomline Technologies (de), Inc.
("Bottomline") Loan Notes (the "Notes") dated August 28, 2000 held by
_______________ (the "Holders"), the parties to the Notes have agreed to enter
into two variations to the Notes that provide that the date of payment of the
Notes and the related rights of Bottomline to tender shares of common stock of
Bottomline, $.001 par value per share (the "Common Stock") in redemption of
these Notes shall be April 6, 2001, rather than August 28, 2001 and that, for
the purposes of determining the number of shares of Common Stock issuable to the
Holders in redemption of the Notes, the Common Stock shall be valued at $29.25
per share. Pursuant to these agreed variations, Bottomline shall deliver
______________ shares of Common Stock in redemption of the Notes, covering
principal and interest accrued as of April 5, 2001. This letter evidences these
agreed variations and related arrangements.
Registration of Common Stock
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Within sixty (60) days following the date of this letter, Bottomline shall
file a Registration Statement on Form S-3 covering the resale to the public by
the Holders of the Common Stock. The registration rights of the Holders shall
be subject to Subsections 3, 4 and 6 of Clause 12 of the Share Purchase
Agreement dated as of August 28, 2000 between Checkpoint (Holdings) Limited and
the persons set forth in Column A of Schedule 1 thereto (the "Share Purchase
Agreement"). The registration rights of the Holders shall also be subject to
Subsection 2 of Clause 12 of the Share Purchase Agreement, but only in respect
to the suspension of the registration statement (rather than the delay of filing
of the registration statement) and only during the period ended one year from
the date of the filing of such registration statement.
Lock-Up
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Notwithstanding whether the Registration Statement on Form S-3 has been
declared effective by the Securities and Exchange Commission, prior to October
28, 2001, no Holder shall, directly or indirectly, sell, offer to sell, contract
to sell, grant any option or warrant for the sale or purchase of, pledge, or
otherwise dispose of, any shares of the Common Stock issued in redemption of the
Notes (other than to Affiliates of such Holder, as such term is defined in the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder); nor may any Holder engage in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a sale or
disposition of any shares of the Common Stock issued in redemption of the Notes,
even if such shares would be disposed of by someone other than the
Holder. Such prohibited hedging or other transactions includes without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any of such shares.
Notwithstanding the foregoing, the lock-up shall terminate upon the execution by
Bottomline of a definitive agreement providing for the transfer of 50% or more
of its outstanding Common Stock, whether by way of merger, exchange offer or
otherwise.
Securities Law Compliance
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No Holder may resell the shares of Common Stock in the United States unless
such resale is in accordance with (i) the provisions of Regulation S promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), (ii)
pursuant to an effective registration statement under the Securities Act, or
(iii) pursuant to an available exemption from registration under the Securities
Act or in the United Kingdom pursuant to an available prospectus exemption under
applicable securities legislation.
Contingent Payment
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If (i) at any time on or before June 30, 2001, Bottomline signs a
definitive agreement providing for the transfer of 50% or more of its
outstanding Common Stock, whether by way of merger, exchange offer or otherwise,
or (ii) at any time on or before August 28, 2001, Bottomline completes a
transaction involving the transfer of 50% or more of its outstanding Common
Stock, whether by way of merger, exchange offer or otherwise, then Bottomline
irrevocably agrees to pay to all holders of Bottomline loan notes dated August
28, 2000 (the "Bottomline Notes") that have redeemed their loan notes for Common
Stock (the "Qualifying Holders"), simultaneously with closing of the transaction
contemplated by such definitive agreement and pro rata in accordance with the
principal amount of their respective loan notes, an amount calculated on the
following basis:
. If the price per share, on a fully-diluted basis, of the contemplated
transaction is $10.00 or less, Bottomline shall pay the Qualifying
Holders $10 million dollars in cash, adjusted as provided below.
. If the price per share is greater than $10.00 and less than $15.00,
Bottomline shall pay the Qualifying Holders in cash an amount equal to
the product of (a) $10 million dollars multiplied by (b) a fraction,
(i) the numerator of which shall be 20.00 less the applicable price
per share, and (ii) the denominator of which shall be 10.00, adjusted
as provided below.
. If the price per share is $15.00, Bottomline shall pay the Qualifying
Holders $5 million dollars in cash, adjusted as provided below.
. If the price per share is greater than $15.00 and less than $30.00,
Bottomline shall pay the Qualifying Holders in cash an amount equal to
the product of (a) $5 million dollars multiplied by (b) a fraction,
(i) the numerator of which shall be 30.00 less the applicable price
per share, and (ii) the denominator of which shall be 15.00, adjusted
as provided below.
. If the price per share is equal to or greater than $30.00 per share,
then Bottomline shall have no payment obligation of any nature
hereunder.
The aggregate payment set forth above shall be adjusted to the extent
that certain holders of the Bottomline Notes do not elect to redeem their
Bottomline Notes for shares of Common Stock by multiplying the amount otherwise
due hereunder by a fraction, the numerator of which shall be the aggregate
principal amount of the Bottomline Notes exchanged for Common Stock and the
denominator of which shall be the aggregate principal amount of all Bottomline
Notes.
For the purposes of calculating the price per share hereunder, the price
per share shall be based upon the exchange ratio or other pricing arrangement
contemplated by the definitive agreement, rounded upwards to the nearest whole
cent and the price per share shall be calculated after reversing the effect of
any share split or division or other issue of new shares of Common Stock
occurring after the date of this letter.
Delivery Procedure
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Upon the execution of this letter by both parties hereto:
(i) Bottomline shall promptly deliver to the Holders stock
certificate(s) representing the prepayment in full of the principal
and interest accrued on the Notes; and
(ii) the Notes shall be cancelled.
Escrow
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Bottomline hereby agrees to release to the Holders, within ten (10)
business days of the date of this letter, all loan notes, cash and shares of
Common Stock of the Holders held in escrow pursuant to the Retention and Escrow
Agreement entered into as of August 28, 2000 by and among Bottomline, the
Indemnifying Shareholders, __________________ and State Street Bank and Trust
Company (the "Escrow Agreement"). Bottomline hereby waives its rights under
Subsection 6 of Clause 5 of the Share Purchase Agreement. In the absence of
fraud, dishonesty or willful concealment on the part of the Holders or their
agents, the liability of the Holders in respect of all claims under the
Warranties (as defined in the Share Purchase Agreement), under the Tax Deed (as
defined in the Share Purchase Agreement) and under Section 3(b) of the Escrow
Agreement shall terminate herewith.
Please sign below to indicate your agreement with the foregoing.
BOTTOMLINE TECHNOLOGIES (de), INC.
By:
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Robert A. Eberle
Executive Vice President, Chief Financial
Officer and Treasurer
AGREED effective as of April 6, 2001:
By: ______________________________
Name:
By: ______________________________
Name: