Exhibit 4.5
BOTTOMLINE TECHNOLOGIES (de), INC.
INVESTOR RIGHTS AGREEMENT
This INVESTOR RIGHTS AGREEMENT (this "Agreement") is made as of June 9,
2000 by and among Bottomline Technologies (de), Inc., a Delaware corporation
(the "Company"), and Nevada Bond Investment Corp. II, a Nevada corporation (the
"Investor").
WHEREAS, the Company has agreed to issue and sell to the Investor, and the
Investor has agreed to purchase from the Company, 307,882 shares (the "Initial
Shares") of the Company's common stock, $0.001 par value per share (the "Common
Stock"), and a warrant (the "Warrant") to purchase up to 307,882 shares (the
"Warrant Shares," and together with the Initial Shares, the "Shares") of Common
Stock upon the terms and conditions set forth in that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") and Warrant, each dated of even date
herewith, between the Company and the Investor; and
WHEREAS, the terms of the Stock Purchase Agreement provide that it shall be
a condition precedent to the closing of the transactions thereunder for the
Company and the Investor to execute and deliver this Agreement.
NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. Definitions. The following terms shall have the meanings provided
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therefor below or elsewhere in this Agreement as described below:
"Closing" shall have the meaning ascribed to such term in the Stock
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Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and all of the rules and regulations promulgated thereunder.
"Prospectus" means the prospectus included in the Registration
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Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registration Statement" means the registration statement on Form S-3
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filed by the Company with the Commission pursuant to Section 2 hereof.
"Registration Expenses" means the expenses described in Section 2.4.
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"Registrable Shares" shall mean the Shares; provided, that those
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shares as to which the following apply shall cease to be Registrable Shares
when: (a) a Registration Statement with respect to the sale of such Registrable
Shares shall have become effective under the Securities Act and such Registrable
Shares have been disposed of under such Registration Statement; (b) such
Registrable Shares shall have been transferred in a transaction in which the
Investor's rights and obligations under this Agreement were not assigned in
accordance with this Agreement; (c) such Registrable Shares shall have ceased to
be outstanding; or (d) such Registrable Shares shall have been sold pursuant to
Rule 144.
"Securities Act" shall mean the Securities Act of 1933, as amended,
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and all of the rules and regulations promulgated thereunder.
2. Registration Rights.
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2.1 Required Registration of Registrable Shares. The Company shall
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file with the SEC, as promptly as possible, but in any event within 60 days
following the Closing, a Registration Statement on Form S-3 covering the resale
to the public by the Investor of the Registrable Shares. The Company shall use
all commercially reasonable efforts to cause the Registration Statement to be
declared effective by the SEC as soon as practicable. The Company shall cause
the Registration Statement to remain effective until (i) with respect to the
Initial Shares, the date two years and nine months from the date of the Closing,
(ii) with respect to the Warrant Shares, the date two years from date that the
Warrants have been exercised in full, or (iii) such earlier time as all of the
Registrable Shares covered by the Registration Statement have been sold pursuant
thereto or otherwise cease to be Registrable Shares as defined herein.
2.2 Registration Procedures.
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(a) If and whenever the Company is required by the provisions of
this Agreement to use its commercially reasonable efforts to effect the
registration of any Registrable Shares under the Securities Act, the Company
shall:
(i) furnish to the Investor such reasonable numbers of
copies of the Prospectus, including any preliminary Prospectus, in conformity
with the requirements of the Securities Act, and such other documents the
Investor may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by the Investor;
(ii) use commercially reasonable efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the Investor shall reasonably
request, and do any and all other acts and things that may be necessary to
enable the Investor to consummate the public sale or other disposition in such
states of the Registrable Shares owned by the Investor; provided, however, that
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the Company shall not be required in connection with this paragraph (ii) to
qualify as a foreign corporation or execute a general consent to service of
process in any jurisdiction;
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(iii) cause all such Registrable Shares to be listed on
each securities exchange or automated quotation system on which similar
securities issued by the Company are then listed;
(iv) notify the Investor, promptly after it shall receive
notice thereof, of the time when the Registration Statement has become effective
or a supplement to any Prospectus forming a part of the Registration Statement
has been filed; and
(v) notify the Investor of any request by the Commission
for the amending or supplementing of the Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Investor
and after having done so the Prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Investor and, if requested, the Investor shall immediately cease making offers
of Registrable Shares and return all Prospectuses to the Company. The Company
shall promptly provide the Investor with revised Prospectuses and, following
receipt of the revised Prospectuses, the Investor shall be free to resume making
offers of the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in the Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify the Investor to such
effect, and, upon receipt of such notice, the Investor shall immediately
discontinue any sales of Registrable Shares pursuant to the Registration
Statement until the Investor has received copies of a supplemented or amended
Prospectus or until the Investor is advised in writing by the Company that the
then current Prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. In the event that any such black-out occurs during the
period during which the Company is required to cause a Registration Statement to
remain effective under Section 2.1 hereto, such period shall be extended for the
number of days equal to the duration of such black-out. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.2(c) to suspend sales of Registrable Shares for a period in excess of
120 days in any 365-day period.
2.3 Incidental Registration of Registrable Shares.
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(a) Whenever the Company proposes to file a registration
statement (other than the Registration Statement filed pursuant to Section 2.1)
at any time and from time to time until five years from the date of the Closing,
it will, prior to such filing, give written notice to the Investor of its
intention to do so; provided, that no such notice need be given if no
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Registrable Shares are to be included therein as a result of a determination of
the managing underwriter pursuant to Section 2.3(b). Upon the
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written request of the Investor given within 20 days after the Company provides
such notice (which request shall state the intended method of disposition of
such Registrable Shares), the Company shall use its best efforts to cause all
Registrable Shares which the Company has been requested by the Investor to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of the Investor; provided that the
Company shall have the right to postpone or withdraw any registration effected
pursuant to this Section 2.3 without obligation to the Investor.
(b) If the registration for which the Company gives notice
pursuant to Section 2.3(a) is a registered public offering involving an
underwriting, the Company shall so advise the Investor as a part of the written
notice given pursuant to Section 2.3(a). In such event, the right of the
Investor to include its Registrable Shares in such registration pursuant to
Section 2.3 shall be conditioned upon the Investor's participation in such
underwriting on the terms set forth herein. Should the Investor propose to
distribute the Registrable Shares through such underwriting, it shall enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by the Company. Notwithstanding any other
provision of this Section 2.3, if the managing underwriter determines that the
inclusion of all shares requested to be registered would adversely affect the
offering, the Company may limit the number of Registrable Shares to be included
in the registration and underwriting. The Company shall so advise all holders of
Registrable Shares requesting registration, and the number of shares that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner. The securities of the Company held by holders other
than the Investor and other holders of securities of the Company who are
entitled, by contract with the Company, to have securities included in such
registration ("Other Holders") shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and, if
a further limitation on the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among the Investor and Other Holders requesting registration in proportion, as
nearly as practicable, to the respective number of shares of Common Stock (on
an as-converted basis) which they held at the time the Company gives the notice
specified in Section 2.3(a). If the Investor or any Other Holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among the Investor and Other Holders pro rata in
the manner described in the preceding sentence. If the Investor disapproves of
the terms of any such underwriting, the Investor may elect to withdraw therefrom
by written notice to the Company, and any Registrable Shares or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
2.4 Allocation of Expenses. The Company will pay all Registration
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Expenses for the Registration Statement. For purposes of this Section 2, the
term "Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the
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Company, reasonable fees and expenses of counsel to the Investor, state Blue Sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration, but excluding underwriting discounts and selling
commissions.
2.5 Indemnification and Contribution.
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(a) In the event of the registration of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the Investor, each underwriter, if any, of Registrable Shares,
and each other person, if any, who controls the Investor or underwriter within
the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Investor, such
underwriter or controlling person may become subject under the Securities Act,
the Exchange Act, state securities or Blue Sky laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such Registration Statement, or arise out of or are
based upon the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and the Company will reimburse the Investor, such underwriter and each such
controlling person for any legal or any other expenses reasonably incurred by
the Investor, such underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of the Investor or such underwriter or controlling
person specifically for use in the preparation thereof.
(b) In the event of the registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Investor will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material
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fact required to be stated therein or necessary to make the statements therein
not misleading, if the statement or omission was made in reliance upon and in
conformity with information relating to the Investor furnished to the Company by
or on behalf of the Investor for use in connection with the preparation of the
Registration Statement, prospectus, amendment or supplement; provided, however,
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that the obligations of the Investor hereunder shall be limited to an amount
equal to the net proceeds to the Investor of Registrable Shares sold in
connection with the registration.
(c) Each party entitled to indemnification under this Section
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
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give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
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Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding; provided, further,
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that in no event shall the Indemnifying Party be required to pay the expenses of
more than one law firm as counsel for the Indemnified Party. The Indemnifying
Party also shall be responsible for the expenses of such defense if the
Indemnifying Party does not elect to assume such defense. No Indemnifying Party,
in the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.5 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Investor on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Investor shall be
determined
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by reference to, among other things, whether the untrue or alleged untrue
statement of material fact related to information supplied by the Company or the
Investor and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Investor agree that it would not be just and equitable if contribution
pursuant to this Section 2.5 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph of Section 2.5, (a) in no case shall the Investor be liable or
responsible for any amount in excess of the net proceeds received by the
Investor from the offering of Registrable Shares and (b) the Company shall be
liable and responsible for any amount in excess of such proceeds; provided,
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however, that no person guilty of fraudulent misrepresentation (within the
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meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve such party from any other
obligation it or they may have thereunder or otherwise under this Section. No
party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its prior written consent, which consent
shall not be unreasonably withheld.
2.6 Lock-up. Notwithstanding whether a registration statement filed
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in accordance with this Section 2 has been declared effective by the SEC, for a
period of three months after the date of this Agreement, the Investor may not,
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 (other than to Affiliates of the Investor, as such term is defined in the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder). After such three month period and until six months after the date
of this Agreement, 66% of the Shares shall continue to be subject to such lock-
up. Thereafter, until nine months after the date of this Agreement, 33% of the
Shares shall continue to be subject to such lock-up. Nine months after the date
of this Agreement, such lock-up shall no longer apply to any of the Shares. In
addition, with respect to any Shares then subject to lock-up under this Section
2.6, the Investor shall not, during the period in which such shares are subject
to the lock-up, 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 such
Shares even if such Shares would be disposed of by someone other than the
Investor. 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.
2.7 Information by Investor. The Investor shall furnish to the
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Company such information regarding it and the distribution proposed by it as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.
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3. Effectiveness; Termination. This Agreement shall become effective and
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legally binding only if the Closing occurs.
4. Entire Agreement. This Agreement constitutes and contains the entire
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agreement and understanding of the parties with respect to the subject matter
hereof, and it also supersedes any and all prior negotiations, correspondence,
agreements or understandings with respect to the subject matter hereof.
5. Miscellaneous.
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5.1 This Agreement may not be amended, modified or terminated, and no
rights or provisions may be waived, except with the written consent of the
Investor and the Company.
5.2 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, and shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns. This Agreement shall also be binding
upon and inure to the benefit of any Affiliate of the Investor or any party to
whom the Investor transfers the majority of the Shares.
5.3 Notices.
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(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be sent by courier (overnight or same day) or fax or delivered
by hand to the party to whom such correspondence is required or permitted to be
given hereunder. The date of giving any notice shall be the date of its actual
receipt.
(b) All correspondence to the Company shall be addressed as
follows:
Bottomline Technologies (de), Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President & CFO
With a copy to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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(c) All correspondence to the Investor shall be addressed as
follows:
Nevada Bond Investment Corp. II
c/o United Technologies Corporation
United Technologies Building
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, NBIC
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
5.4 Either party may change the address to which correspondence to it
is to be addressed by notification as provided for herein.
5.5 The parties acknowledge and agree that in the event of any breach
of this Agreement, remedies at law may be inadequate, and both of the parties
hereto shall be entitled to seek specific performance of the obligations of the
other parties hereto and such appropriate injunctive relief as may be granted by
a court of competent jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date and year first above written.
BOTTOMLINE TECHNOLOGIES (de), INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Exec VP & CFO
NEVADA BOND INVESTMENT CORP. II
By: /s/ ▇. ▇. ▇▇▇▇▇▇
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Name: ▇.▇. ▇▇▇▇▇▇
Title: Vice President
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