Exhibit 10.6
SECOND STOCK RIGHTS AGREEMENT OF
BOTTOMLINE TECHNOLOGIES, INC.
THIS SECOND STOCK RIGHTS AGREEMENT OF BOTTOMLINE TECHNOLOGIES, INC. (this
"Agreement") made as of March 4, 1994 (the "Effective Date"), by and between
BOTTOMLINE TECHNOLOGIES, INC., a New Hampshire corporation (the "Corporation"),
the shareholders of the Corporation listed on Exhibit A attached hereto (the
"Existing Shareholders") and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Company ("▇▇▇▇▇▇▇"). ▇▇▇▇▇▇▇ and
the Existing Shareholders are collectively referred to as the "Shareholders" or
"Holders".
Recitals:
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The Corporation and certain shareholders, including ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ ("▇'▇▇▇▇▇")
(▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇'▇▇▇▇▇ are hereinafter collectively referred to as the
"Principal Shareholders"), entered into the First Amendment and Restatement of
Bottomline Technologies, Inc. Stock Rights and Voting Agreement dated as of
March 31, 1992 (the "First Stock Rights and Voting Agreement") which superceded
and replaced that certain Stock Rights and Voting Agreement dated June 29, 1990.
This Agreement shall operate independently of, and shall not affect the parties
to, the First Stock Rights and Voting Agreement with respect to any rights or
obligations any such party may have or be bound by under such agreement. The
Existing Shareholders and ▇▇▇▇▇▇▇ are parties to a certain Stock Purchase
Agreement of even date (the "Stock Purchase Agreement"), pursuant to which
▇▇▇▇▇▇▇ has agreed to purchase common stock, $0.001 par value per share, of the
Corporation (the "Common Stock"). Of the Common Stock purchased from the
Existing Shareholders, an aggregate of 175,000 shares were purchased from the
Principal Shareholders (the "Principal Shares"). The purpose of this Agreement
is to provide ▇▇▇▇▇▇▇ and the Principal Shareholders (collectively the
"Rightsholders") with certain stock rights, all as more particularly set forth
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants and representations set forth in this Agreement, the parties hereby
agree as follows:
1. Preemptive Rights.
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(a) Subject to the exclusions set forth in subsection (f) below, if the
Corporation proposes to issue (a "Proposed Issuance") any unissued or treasury
shares of Common Stock or any bonds, certificates of indebtedness, debentures,
warrants, options, or other securities, rights, or obligations convertible into
any shares of Common Stock or carrying any right to subscribe to or acquire any
shares of
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Common Stock, then the Corporation shall give ▇▇▇▇▇▇▇ a written notice (the
"Notice") describing the Proposed Issuance (including the identification of the
securities to be issued, the price payable for such securities, and any other
terms and conditions applicable to the Proposed Issuance).
(b) ▇▇▇▇▇▇▇ shall have the right (the "Preemptive Right") to subscribe to
or acquire all or a portion of Harland's respective Proportionate Share (as
defined below) of the Proposed Issuance. ▇▇▇▇▇▇▇ shall be entitled to exercise
its Preemptive Right in the manner set forth in the Notice and on terms and
conditions that are no less favorable than the terms and conditions established
by the Corporation to govern the Proposed Issuance.
(c) If ▇▇▇▇▇▇▇ fails to exercise its Preemptive Right within thirty (30)
days following receipt of the Notice, then Harland's Preemptive Right shall be
deemed to have been waived with respect to the Proposed Issuance, and, for a
period of ninety (90) days thereafter, the Corporation shall be entitled to
effect the Proposed Issuance, in whole or in part, free and clear of Harland's
Preemptive Right, at the price specified in the Notice and upon other terms and
conditions no more favorable to the acquiror(s) of the Proposed Issuance than
the terms and conditions specified in the Notice.
(d) ▇▇▇▇▇▇▇ may waive its Preemptive Right with respect to any Proposed
Issuance by a writing filed with the Board of Directors or the Secretary of the
Corporation.
(e) For purposes of this Section, Harland's "Proportionate Share" shall
mean, as of the date on which a Notice is given, a fraction:
(i) the numerator of which is equal to the number of shares of Common
Stock owned by ▇▇▇▇▇▇▇ as of the Effective Date, including all shares of
Common Stock being purchased as of the Effective Date by ▇▇▇▇▇▇▇ pursuant
to the Stock Purchase Agreement; and
(ii) the denominator of which is equal to the sum of such number of
shares of Common Stock as are outstanding as of the Effective Date plus
such number of shares of Common Stock as are subject to then-outstanding
(on the date of Notice) stock options which have been granted under the
Corporation's 1989 Stock Option Plan (the "Stock Option Plan").
Notwithstanding the above, if the outstanding shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Corporation shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or if ▇▇▇▇▇▇▇ shall transfer any Common Stock (other
than to a Related Transferee, as defined in subsection (g) below, then the
numbers set
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forth in subsection (i), and, in the case of a subdivision, combination, or
stock dividend, in subsection (ii) above shall be proportionately increased or
decreased (as the case may be).
(f) Notwithstanding the foregoing provisions of this Section, Harland's
Preemptive Rights shall not apply to:
(i) any Proposed Issuance of stock options under the Stock Option
Plan, as amended, (or of any shares of Common Stock pursuant to the
exercise of any such stock option) to an employee of the Corporation
(excluding ▇▇▇▇▇▇ and ▇▇▇▇▇▇ and their respective Affiliates as defined in
subsection (g) below); provided, that any Proposed Issuance to ▇▇▇▇▇▇ or to
▇▇▇▇▇▇, or to the respective Affiliates of either of them, shall be subject
to Harland's Preemptive Rights;
(ii) any stock dividend or subdivision of shares of Stock, provided
that the securities issued pursuant to such stock dividend or subdivision
are limited to additional shares of Common Stock;
(iii) any securities issued solely in consideration for the
acquisition (whether by merger of otherwise) by the Corporation or any of
its subsidiaries of all or substantially all of the stock or assets of any
other entity;
(iv) any securities issued pursuant to an underwritten public
offering; or
(v) any Common Stock issued pursuant to warrants held by those
persons defined in the First Stock Rights and Voting Agreement or any of
the Affiliate Purchasers or their Related Transferees.
(g) As used in this Agreement:
(i) an "Affiliate" shall mean a third party which either (A) is
owned by the Corporation or is under common control with the Corporation,
(B) is owned by ▇▇▇▇▇▇▇ or is under common control with ▇▇▇▇▇▇▇, (C) is a
trust or other entity in which ▇▇▇▇▇▇ or ▇▇▇▇▇▇ has a beneficial interest,
or (D) is (or is owned or controlled by) a person who is the spouse, child,
or parent of ▇▇▇▇▇▇ or ▇▇▇▇▇▇; and
(ii) a "Related Transferee" of a Shareholder shall mean a parent,
spouse, or child of such Shareholder, or a trust for the exclusive benefit
of such Shareholder and/or the parents, spouse, children or Affiliate of
such Shareholder, to whom shares of Common Stock owned by such Shareholder
have been transferred.
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(h) The provisions of this Section 1 are personal to ▇▇▇▇▇▇▇ and may only
be exercised by ▇▇▇▇▇▇▇ while ▇▇▇▇▇▇▇, or a Related Transferee of ▇▇▇▇▇▇▇ (such
Related Transferee being deemed to be ▇▇▇▇▇▇▇ for purposes of this Section 1),
owns Common Stock of the Corporation which was purchased pursuant to the Stock
Purchase Agreement.
2. Piggyback Rights.
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(a) If the Corporation proposes to register for its own account, under the
Securities Act of 1933, as amended, (the "Securities Act") any shares of Stock
for sale for cash or other consideration to the public (other than a
registration relating solely to either a transaction under Rule 145 of the
Securities and Exchange Commission or an employee benefit plan) (a
"Registration"), the Corporation shall notify ▇▇▇▇▇▇▇ in writing and shall
afford ▇▇▇▇▇▇▇ the opportunity to include in the Registration all or any portion
of the shares of Common Stock owned by ▇▇▇▇▇▇▇; provided, that the inclusion of
such shares of Common Stock in the Registration shall be subject to:
(i) the rights of the Shareholders, as defined in the First Stock
Rights and Voting Agreement, other than certain rights., as described
herein, of the Principal Shareholders;
(ii) compliance with the terms and conditions of any underwriting
agreement covering the Registration;
(iii) if and to the extent that the managing underwriter determines
that marketing factors require a limitation of the number of shares of
Common Stock to be underwritten, then, with respect to the total number of
shares of Common Stock of shareholders so determined as being available for
inclusion in the Registration, ▇▇▇▇▇▇▇ (subject to clause (a)(i) of this
Section 2 and the provisions of subsection (g) below governing Related
Transferees) shall be entitled to include Harland's Inclusion Amount (as
defined in subsection (h) below) in the Registration by shareholders.
(iv) prohibition from inclusion if, in the judgment of the managing
underwriter, such prohibition is required.
(b) In connection with the inclusion of any shares of Common Stock of
▇▇▇▇▇▇▇ in a Registration, the Corporation will use its best efforts to register
or qualify the shares of Common Stock covered by such registration statement
under the securities or "blue sky" laws of such jurisdictions as ▇▇▇▇▇▇▇ or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall request; provided, however, that the Corporation shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such
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jurisdiction.
(c) The Corporation and not ▇▇▇▇▇▇▇, shall be responsible for the payment
of all fees and expenses (including, without limitation, registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Corporation, fees and expenses (including counsel
fees) incurred in connection with complying with state securities or "blue sky"
laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, and costs of insurance) incurred
by the Corporation in connection with the Registration and the inclusion of any
shares of Common Stock by ▇▇▇▇▇▇▇ therein; provided, that ▇▇▇▇▇▇▇, and not the
Corporation, shall be responsible for all underwriting discounts and selling
commissions applicable to the sale of any of Harland's shares of Common Stock.
(d) In connection with any Registration where shares of Common Stock of
▇▇▇▇▇▇▇ are registered pursuant to the provisions of this Section:
(i) the Corporation will indemnify and hold harmless ▇▇▇▇▇▇▇
against any losses, claims, damages, or liabilities, joint or several,
to which ▇▇▇▇▇▇▇ may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof):
(A) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact relating to the
Corporation and contained in (1) the registration statement under
which such shares were registered under the Securities Act, (2)
the final prospectus therefor, or (3) any amendment or supplement
thereof, or
(B) arise out of or are based upon the omission or alleged
omission to state therein a material fact relating to the
Corporation that is (1) required to be stated therein, or (2)
necessary to make the statements therein not misleading;
(ii) the Corporation will reimburse ▇▇▇▇▇▇▇ for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability, or action covered by the provisions of
subparagraph (i) above; provided, however, that the Corporation will not be
liable in any such case if and to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by ▇▇▇▇▇▇▇ in writing specifically
for use in such registration statement, prospectus, or amendment thereof;
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(iii) ▇▇▇▇▇▇▇ will indemnify and hold harmless the Corporation, each
other shareholder participating in the Registration, each officer of
the Corporation who signs the registration statement, and each
director of the Corporation against all losses, claims, damages, or
liabilities, joint or several, to which the Corporation or such other
shareholder, officer, or director may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof):
(A) arise our of or are based upon any untrue statement or
alleged untrue statement of any material fact relating to
▇▇▇▇▇▇▇ and contained in (1) the registration statement under
which such Common Stock was registered under the Securities
Act, (2) the final prospectus therefor, or (3) any amendment or
supplement thereof, or
(B) arise out of or are based upon the omission or alleged
omission to state therein a material fact relating to ▇▇▇▇▇▇▇
that is (1) required to be stated therein, or (2) necessary to
make the statements therein not misleading; and
(iv) ▇▇▇▇▇▇▇ will reimburse the Corporation and each other shareholder,
officer, and director for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that ▇▇▇▇▇▇▇ will not be
liable in any such case if and to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made
notwithstanding the Corporation's prior receipt of a written notice from
▇▇▇▇▇▇▇ of the error in the statement or of the omission.
(e) In connection with any Registration where shares of Common Stock of
▇▇▇▇▇▇▇ are registered pursuant to the provisions of this Section, ▇▇▇▇▇▇▇ will
cooperate with the Corporation and each underwriter (if the method of
disposition shall be an underwritten public offering) and will take all such
actions and execute and deliver all such instruments, agreements, and documents
as the Corporation or any such underwriter reasonably may request, including,
but not limited to:
(i) furnishing to the Corporation in writing such information with
respect to ▇▇▇▇▇▇▇ and the proposed distribution by it as reasonably
shall be necessary in order to assure compliance with federal and
applicable state securities laws, and
(ii) immediately notifying the Corporation, each other shareholder
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participating in the Registration, and the managing underwriter (if
the method of disposition shall be an underwritten public offering),
at any time when a prospectus relating to such Registration is
required to be delivered under the Securities Act, of the happening of
any event of which ▇▇▇▇▇▇▇ has knowledge as a result of which the
prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing.
(f) The rights set forth in this Section 2 are personal to ▇▇▇▇▇▇▇ and may
be exercised by ▇▇▇▇▇▇▇ only while ▇▇▇▇▇▇▇ or an affiliate of ▇▇▇▇▇▇▇ owns
Common Stock.
(g) For purposes of effecting the rights granted to ▇▇▇▇▇▇▇ pursuant to
this Section 2, a Related Transferee of ▇▇▇▇▇▇▇ shall, to the extent of the
shares of Common Stock transferred by ▇▇▇▇▇▇▇ to such Related Transferee (the
"Previously Transferred Shares"), be deemed to be ▇▇▇▇▇▇▇. In particular, with
respect to the limitation on the number of shares of Common Stock which ▇▇▇▇▇▇▇
and such Related Transferee may include in the Registration under this Section
2, the Previously Transferred Shares shall be considered to be owned by ▇▇▇▇▇▇▇.
Unless otherwise agreed between ▇▇▇▇▇▇▇ and such Related Transferee, any
permitted inclusion in the Registration of some, but not all, of the shares of
Common Stock owned by ▇▇▇▇▇▇▇ and of the Previously Transferred Shares shall be
allocated between ▇▇▇▇▇▇▇ and such Related Transferee pro rata based on the
respective number of such shares of Common Stock owned by ▇▇▇▇▇▇▇ and of such
Previously Transferred Shares.
(h) To the extent that Harland's rights are limited pursuant to clause
(a)(i) of this Section 2, each of the Principal Shareholders agree to allocate
to ▇▇▇▇▇▇▇ for inclusion in the Registration the right to include in such
Registration that number of shares, out of the allotment of shares which the
Principal Shareholders would be entitled to include in the Registration pursuant
to Section 2(a)(ii) of the First Stock Rights and Voting Agreement, which
▇▇▇▇▇▇▇ would be entitled to include in such Registration if ▇▇▇▇▇▇▇ were a
Shareholder under the First Stock Rights and Voting Agreement and its
Percentage, as defined therein, was equal to 10.368193% ("Harland's Inclusion
Amount"). The percentage of Harland's Inclusion Amount to be allocated by each
of the Principal Shareholders shall be as follows:
(A) ▇▇▇▇▇▇, 42.857143%
(B) ▇▇▇▇▇▇, 42.857143%
(C) ▇'▇▇▇▇▇ 14.285714%
3. Take-Along Rights. The rights set forth in this Section 3 are given
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to
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each of the Rightsholders:
(a) If any Rightsholder (the "Selling Shareholder") shall propose to
transfer (a "Proposed Transfer") to any person (the "Proposed Transferee"),
other than (1) another Rightsholder, (2) with respect to a Proposed Transfer by
any of the Principal Shareholders, a Shareholder, as defined in the First Stock
Rights and Voting Agreement, (3) a Related Transferee, or (4) the Corporation,
any shares of Common Stock (the "Transfer Shares"), then ▇▇▇▇▇▇▇, with respect
to Proposed Transfers by each of the Principal Shareholders and each of the
Principal Shareholders with respect to Proposed Transfers by ▇▇▇▇▇▇▇ of any of
the Principal Shares (subject to the provisions of subsection (f) below
governing Related Transferees) shall have:
(i) the right to transfer, in place of certain of the Transfer
Shares, such number of such shares of Common Stock as is equal to the
following percentage ("Percentage") of the number of Transfer Shares:
(A) for ▇▇▇▇▇▇, 38.759690%,
(B) for ▇▇▇▇▇▇, 38.759690%,
(C) for ▇'▇▇▇▇▇, 11.627907%, and
(D) for ▇▇▇▇▇▇▇, 10.852713%,
(ii) if the Proposed Transferee is unwilling to purchase shares of any
eligible Rightsholder(s) as part of the Proposed Transfer, then the
right to have the Selling Shareholder purchase, out of the proceeds of
the sale of the Transfer Shares to the Proposed Transferee, such
number of such eligible Rightsholder(s)' shares of Common Stock as is
equal to his Percentage of the number of Transfer Shares;
all upon and subject to the additional terms and conditions set forth in this
Section. Transfers of shares of Common Stock between Rightsholders shall not be
subject to the provisions of this Section.
(b) In the event of a Proposed Transfer, the Selling Shareholder shall
give written notice (the "Transfer Notice") to (A) in the case of a Proposed
Transfer by ▇▇▇▇▇▇▇, each of the Principal Shareholders, (B) in the case of a
Proposed Transfer by a Principal Shareholder, ▇▇▇▇▇▇▇ of the Proposed Transfer,
including the number of shares of Common Stock proposed to be transferred, the
price and general terms and conditions governing the Proposed Transfer, and the
identity of the Proposed Transferee.
(c) Upon receipt of the Transfer Notice, each eligible Rightsholder shall
be
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entitled to exercise his rights under subsection (a) above by giving the Selling
Shareholder written notice (the "Participation Notice") thereof within thirty
(30) days following his receipt of the Transfer Notice. If no such Participation
Notice is given by such eligible Rightsholder(s), then his rights under
subsection (a) above shall automatically terminate with respect to the Proposed
Transfer.
(d) In the event that any eligible Rightsholder exercises his rights under
subsection (a) above, then any transfer of shares of Common Stock by such
remaining Rightsholder(s) shall be subject to the same terms and conditions that
govern the Selling Shareholder under the Proposed Transfer.
(e) The rights of any Rightsholder under' this Section may be waived as to
any Proposed Transfer by delivery of a writing to that effect to the Corporation
and the Selling Shareholder.
(f) For purposes of effecting the rights granted to the Rightsholders
pursuant to this Section 3, a shareholder who is a Related Transferee of a
Rightsholder shall, to the extent of the shares of Common Stock transferred by a
Rightsholder to such Related Transferee (the "Previously Transferred Shares"),
be deemed to be-the Rightsholder. In particular, with respect to the limitation
on the number of shares of Common Stock which the Rightsholder and such Related
Transferee may include in the Proposed Transfer under this Section 3, the
Previously Transferred Shares shall be considered to be owned by the
Rightsholder. Unless otherwise agreed between the Rightsholder and such Related
Transferee, any permitted inclusion in the Proposed Transfer of some, but not
all, of the shares of Common Stock owned by the Rightsholder and of the
Previously Transferred Shares shall be allocated between the Rightsholder and
such Related Transferee pro rata based on the respective number of such shares
of Common Stock owned by the Rightsholder and of such Previously Transferred
Shares.
4. Demand Registration Rights.
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4.1 Definitions. As used in this Section, the following terms shall have
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the following meanings:
(a) "Registrable Securities" shall mean Registrable Securities as defined
in Section 5 of the First Stock Rights and Voting Agreement and shares of Common
Stock owned by ▇▇▇▇▇▇▇.
(b) "Registration Expenses" shall mean all expenses incurred by the
Corporation in registering any Registrable Securities under applicable federal
and state securities laws in accordance with the provisions of this Section 4
(including all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Corporation,
fees and expenses (including
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counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, and costs of insurance),
but excluding any Selling Expenses.
(c) "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to any sale of Registrable Securities.
(d) "Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
(e) "Securities Act" shall mean the United States Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder.
4.2. Request for Registration.
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(a) At any time after six (6) months following any registration statement
covering a public offering of securities of the Corporation under the Securities
Act, ▇▇▇▇▇▇▇ may request the Corporation to register under the Securities Act (a
"Demand Registration") all of the shares of Common Stock held by it (or such
lesser portion of such shares of Common Stock as ▇▇▇▇▇▇▇ may request to register
if the reasonably anticipated aggregate price to the public of such public
offering would be at least Two Million Dollars ($2,000,000.00)).
(b) The request described in subsection (a) above shall be set forth in a
written notice (the "Demand Registration Notice") given by ▇▇▇▇▇▇▇ to the
Corporation. The Demand Registration Notice shall specify the number of shares
of Common Stock requested to be registered (the "Requested Shares") and the
manner in which the Requested Shares are to be sold.
(c) Following its receipt of any Demand Registration Notice, the
Corporation shall immediately notify (the "Participation Notice") other holders
of Registrable Securities that the Corporation has received the Demand
Registration Notice, and a copy of the Demand Registration Notice shall be
included with the Participation Notice. Each other holder shall be entitled to
include in the Demand Registration, for sale in accordance with the method of
disposition specified in the Demand Registration Notice, all or any lesser
portion of the shares of Registrable Securities of such holder by giving the
Corporation, within fifteen (15) days following the giving of the Participation
Notice, written notice of such holder's election to participate in the Demand
Registration (including a statement of the number of Registrable Securities of
such holder which should be included in the Demand Registration).
(d) The Corporation shall use its best efforts to register under the
Securities
10
Act, and to qualify under such state securities laws as ▇▇▇▇▇▇▇ may
reasonably request, for public sale in accordance with the method of disposition
specified in the Demand Registration Notice, the number of Requested Shares
specified in the Demand Registration Notice; provided, however, that the
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Corporation shall not be obligated to take any action to effect any such
registration pursuant to this Section 4.2 in any particular jurisdiction in
which the Corporation would be required to (a) qualify generally to transact
business as a foreign corporation in such jurisdiction if it is not so
qualified, or (b) execute a general consent to service of process in effecting
such registration unless the Corporation is already subject to service in such
jurisdiction and except as may be required by the Securities Act.
(e) The following provisions shall be applicable if the requested method
of disposition shall be an underwritten public offering:
(i) The Corporation shall designate the managing underwriter for the
offering, subject to the approval of ▇▇▇▇▇▇▇ to be registered in the
Demand Registration (which approval shall not be unreasonably withheld
or delayed). In the event such managing underwriter is not so
approved, the Corporation shall designate another managing underwriter
as soon as practicable.
(ii) The right of any holder to registration pursuant to this Section
4.2 shall be conditioned upon such holder's participation in such
underwriting and the inclusion of such holder's Registrable Securities
in the underwriting to the extent requested (unless otherwise mutually
agreed by a majority in interest of the holders, to the extent
provided herein). The Corporation shall (together with all holders
proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the
managing underwriter.
(iii) Notwithstanding any other provision of this Section 4.2 to the
contrary, if the managing underwriter advises the Corporation in
writing that marketing factors require a limitation of the number of
shares to be underwritten, then the number of shares that may be
included in the registration and underwriting shall be allocated first
to the Requested Shares, second to shares to be sold pursuant to
subsection (f) and then among all other holders requesting inclusion
in the registration in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such holders at
the time of the filing of the registration statement. No Requested
Shares or Registrable Securities excluded from the underwriting by
reason of the managing underwriter's marketing limitation shall be
included in such registration.
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(iv) If ▇▇▇▇▇▇▇ or any holder of Registrable Securities disapproves of
the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Corporation, the managing
underwriter, and the other holders. The Requested Shares or
Registrable Securities so withdrawn shall also be withdrawn from
registration; provided, however, that if by the withdrawal of such
Requested Shares or Registrable Securities a greater number of
Registrable Securities held by other holders may be included in such
Registration (up to the maximum of any limitation imposed by the
managing underwriter), then the Corporation shall offer to all holders
who have included Registrable Securities in the registration the right
to include additional Registrable Securities in the same proportion
used in determining the underwriter limitation in this Section 4.2(e).
If the registration does not become effective due to the withdrawal of
Requested Shares, then either (A) ▇▇▇▇▇▇▇ shall reimburse the
Corporation for expenses incurred in complying with the request, or
(B) the aborted registration shall be treated as effected for purposes
of Section 4.2(h) below.
(f) The Corporation shall be entitled to include in the Demand
Registration, for sale in accordance with the method of disposition specified in
the Demand Registration Notice, both:
(i) shares of Common Stock to be sold by the Corporation for its own
account, and
(ii) shares of Common Stock owned by any other stockholder or
stockholders of the Corporation, except that the number of shares of
Common Stock to be included by any such other stockholder shall not
exceed two percent (2%) of the then outstanding shares of Common
Stock;
provided, however, that, if in the opinion of the managing underwriter (if such
-----------------
method of disposition involves, in whole or in part, an underwritten public
offering), the inclusion of such shares of Common Stock in the underwriting
would have a material adverse affect on the marketing of the Requested Shares to
be sold thereby, then the number of such shares of Common Stock of the
Corporation to be included in the underwriting shall be reduced to such extent
(including the possible exclusion of all of such shares) as the managing
underwriter determines will no longer have a material adverse affect on the
marketing of the Requested Shares to be sold thereby.
(g) In the case of each registration effected by the Corporation pursuant
to this Section 4.2, the Corporation will keep each holder advised in writing as
to the initiation of each registration and as to the completion thereof. At its
expense the Corporation will:
12
(i) keep such registration effective for a period of one hundred
twenty (120) days or until the holder or holders have completed the
distribution described in the registration statement relating thereto,
whichever first occurs; and
(ii) furnish such number of prospectuses and other documents incident
thereto as a holder from time to time may reasonably request.
(h) Notwithstanding anything to the contrary contained in this Section
4.2:
(i) no Demand Registration Notice may be given within one (1) year
after the effective date of a registration statement filed by the
Corporation covering an underwritten public offering in which ▇▇▇▇▇▇▇
shall have been entitled to join pursuant to Section 2 above and in
which there shall have been effectively registered all shares of
Common Stock as to which registration shall have been requested by
▇▇▇▇▇▇▇; and
(ii) the Corporation shall be obligated to register Registrable
Securities pursuant to this Section 4.2 on one occasion only;
provided, however, that such obligation shall be deemed satisfied only
-----------------
when a registration statement covering all Requested Shares shall have
become effective.
4.3. Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration pursuant to Section 4.2 above shall be borne by
the Corporation. All Selling Expenses relating to the shares of Stock so
registered by the holders shall be borne by the holders of such shares pro rata
based on the number of shares so registered.
4.4. Registration on Form S-3.
------------------------
(a) In addition to the rights set forth in Section 4.2 above, if ▇▇▇▇▇▇▇
requests by written notice to the Corporation that the Corporation file a
registration statement on Form S-3 (or any successor thereto) for a public
offering of its shares the reasonably anticipated aggregate price to the public
of which would exceed One Million Dollars ($1,000,000.00), and the Corporation
is a registrant entitled to use Form S-3 to register securities for such an
offering, the Corporation shall use its best efforts to cause such shares to be
registered for the offering on such form (or any successor thereto).
(b) All Registration and Selling Expenses incurred in connection with a
registration pursuant to this Section 4.4 shall be borne by the holder or
holders participating in the registration on Form S-3 pro rata according to the
number of
13
Registrable Securities so registered.
(c) Notwithstanding anything to the contrary set forth in this Section
4.4, the Corporation shall be obligated to register Registrable Securities
pursuant to this Section 4.4 on one occasion only; provided, however, that such
-----------------
obligation shall be deemed satisfied only when a registration statement covering
all Requested Shares specified in the notice(s) received as aforesaid, for sale
in accordance with the method of disposition specified in the Demand
Registration Notice, shall have become effective.
4.5. Termination of Registration Rights. The registration rights granted
----------------------------------
pursuant to this Agreement shall terminate at such time as ▇▇▇▇▇▇▇ can publicly
sell Common Stock without compliance with the registration requirements of the
Securities Act pursuant to Rule 144 or other applicable exemption supported by a
written opinion of legal counsel for the Corporation which shall be reasonably
satisfactory in form and substance to legal counsel for ▇▇▇▇▇▇▇.
5. Attendance at Board Meetings.
----------------------------
The Existing Shareholders shall take all requisite action to ensure that
▇▇▇▇▇▇▇ is afforded the opportunity to have a representative present at all
meetings of the Board of Directors of the Corporation and to receive the same
prior notice of such meetings as is received by the members of the Board of
Directors and to obtain any informational distributions made in advance of and
in connection with those meetings as if such representative were a member of the
Board of Directors.
6. Miscellaneous Provisions.
------------------------
(a) Amendment. This Agreement may not be amended, in whole or in part,
---------
except by an instrument in writing signed by each of the parties hereto.
(b) Binding Effect. This Agreement shall be binding on and for the benefit
--------------
of the parties hereto and their respective heirs, personal and legal
representatives, successors, and assigns; provided, that no Shareholder shall be
entitled to assign or delegate any of his rights or obligations under this
Agreement without the prior written consent of the Corporation.
(c) Counterparts. This Agreement may be executed in one or more
------------
counterpart copies, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(d) Entire Agreement. Any oral or written statements, understandings,
----------------
correspondence, or agreements previously made by any party with respect to the
subject matter of this Agreement are superseded by this Agreement, which alone
14
fully and completely expresses the parties' respective obligations. This
Agreement is entered into by each party after opportunity for investigation, and
each party represents that such party is not relying upon any statements,
understandings, correspondence, or agreements not embodied in this Agreement and
made by any other party or on any other party's behalf.
(e) Governing Law; Jurisdiction. This Agreement and all rights, remedies,
---------------------------
and obligations under this Agreement, including matters of construction,
validity, and performance, shall be governed exclusively by the laws of the
State of New Hampshire. This Agreement shall be enforceable in any state or
federal court of competent jurisdiction; provided, that each party specifically
consents to, and agrees that such party is subject to, the jurisdiction of the
state and federal courts of the State of New Hampshire with respect to any
actions for enforcement of or breach of this Agreement.
(f) Headings. The article, section, and subsection headings used in this
--------
Agreement are for convenience and reference only, and the words contained
therein shall not be held to explain, modify, amplify, or aid in the
interpretation, construction, or meaning of any of the provisions of this
Agreement.
(g) Notices. Any demand, notice, or other communication required or
-------
permitted to be given by a party under this Agreement shall be in writing and,
with respect to each other party to whom -the demand, notice, or other
communication is to be given, shall be given to such party either:
(i) by being hand-delivered to such party,
(ii) by being telecopied to such party's Telecopy Number (as defined
below), with a copy of the telecopy being mailed by first class
mail, postage prepaid, to such party's Address (as defined
below), or
(iii) by being deposited in the mail (registered or certified) or
delivered to a private express company, postage or freight
prepaid, return receipt requested, addressed to such party at
such party's Address.
As used in this Section, a party's "Address" shall mean the address of such
party set forth in this Agreement underneath such party's signature line, and a
party's "Telecopy Number" shall mean the telephone number of such party set
forth in this Agreement underneath such party's signature line. Each party may
change such party's Address or Telecopy Number from time to time by giving the
other party or parties notice of the change in accordance with the provisions of
this Section.
15
(h) Severability. Each term, condition, and provision of this Agreement
------------
shall be valid and enforced to the fullest extent permitted by law. If there is
any conflict between any term, condition, or provision of this Agreement and any
statute, law, ordinance, order, rule, or regulation, the latter shall prevail;
provided, that any such conflicting term, condition, or provision shall be
curtailed and limited only to the extent necessary to bring it within the legal
requirements and the remainder of this Agreement shall not be affected thereby.
(i) Waiver. No waiver by any party of any breach or default by any other
------
party of any of such other party's obligations under this Agreement shall be
deemed to be a waiver of any other breach or default of the same or any other
nature. No failure by any party on any one or more occasions to exercise any
right or remedy provided in this Agreement shall preclude the exercise of such
right or remedy on any other occasion.
(j) Pronouns; Plurals. All pronouns and any variations thereof shall be
-----------------
deemed to include the masculine, feminine, neuter, singular, and plural thereof
as the context may require. In addition, all nouns shall be deemed to include
the singular and plural thereof as the context may require.
(k) Termination of Agreement. This Agreement shall terminate, except with
------------------------
respect to Sections 2 and 4, on the earliest of (a) the tenth anniversary of the
date of this Agreement, or (b) the closing of the Corporation's initial public
offering of Common Stock pursuant to an effective registration statement under
the Securities Act, resulting in at least $10,000,000 of gross proceeds to the
Corporation at a minimum price of $10.00 per share (subject to appropriate
adjustment for stock splits, stock dividends, recapitalizations and other
similar events).
IN WITNESS WHEREOF, the undersigned have executed this Agreement all as of
the date first above-written.
Corporation:
------------
Bottomline Technologies, Inc.
____________________________ By: _________________________________
Witness ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
16
Corporation:
------------
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ____________________________________
____________________________________
Telecopy Number: ____________________________________
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
------------------------------------
▇▇▇▇▇ ▇. Loomis_____________
Address: ____________________________________
____________________________________
Telecopy Number: ____________________________________
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ____________________________________
____________________________________
Telecopy Number: ____________________________________
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
____________________________________
____________________________________
Telecopy Number: ____________________________________
/s/▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇*
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Address:
____________________________________
____________________________________
Telecopy Number: ____________________________________
17
Corporation:
------------
/s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇*
------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ____________________________________
____________________________________
Telecopy Number: ____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ COMPANY
____________________________ By:_________________________________
Witness Its: Chairman, President and C.E.O.
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Address: ------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------
____________________________
Witness By:_________________________________
Attorney-in-Fact
One Court Street
Address: ------------------------------------
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------
18
EXHIBIT A
TO
SECOND STOCK RIGHTS AGREEMENT OF
BOTTOMLINE TECHNOLOGIES, INC.
Shareholders
------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
19
WAIVER AND AMENDMENT
WHEREAS, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ ("▇'▇▇▇▇▇") has proposed to transfer 10,000
shares of common stock, $.001 par value per share (the "Transfer Shares") of
Bottomline Technologies, Inc. ("Bottomline") at a per share purchase price of
$14.75 (the "Sale") to ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"); and
WHEREAS, Bottomline and the undersigned Shareholder, as defined in the
Second Stock Rights Agreement, dated as of March 4, 1994, as amended, (the
"Agreement") believe it is in the best interest of Bottomline and the
Shareholder to allow ▇'▇▇▇▇▇ to sell the Transfer Shares to ▇▇▇▇▇▇▇ and to amend
the Agreement;
NOW, THEREFORE:
1. The undersigned Shareholder hereby waives any and all Take-Along-
Rights which the undersigned may have with respect to the Transfer Shares
pursuant to Section 3 of the Agreement, provided such shares are sold only to
▇▇▇▇▇▇▇ or his assigns and such sale is effected on or prior to October 1, 1996,
and the undersigned hereby waives any rights to notice with respect to such
transfer by ▇'▇▇▇▇▇.
2. Bottomline and the undersigned Shareholder hereby agree to amend
Section 3(a)(i)(C) of the Agreement, effective upon consummation of the Sale, to
change the percentage listed therein next to ▇'▇▇▇▇▇'▇ name from 11.627907% to
10.999371%.
Capitalized terms not otherwise defined herein have the respective meaning
ascribed to them in the Agreement.
This Waiver and Amendment may be signed in one or more counterparts.
IN WITNESS WHEREOF, this Waiver and Amendment has been executed by
Bottomline and the undersigned Shareholder on or before August 10, 1996 with the
intent that it become effective, except as otherwise provided herein, as of and
on August 10, 1996.
1