8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2009

Bottomline Technologies (de), Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-25259	02-0433294
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

325 Corporate Drive, Portsmouth, New Hampshire 03801

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (603) 436-0700

Not Applicable.

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01  Entry into a Material Definitive Agreement

On August 5, 2009 Bottomline Technologies (de), Inc., a Delaware corporation (the “Company”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Bank of America N.A. (the “Bank”), pursuant to which the Company has agreed to purchase substantially all of the assets and related operations of the Bank’s PayMode business (the “Asset Purchase”). In connection with the Purchase, the Company and the Bank have agreed to enter into a Services Agreement (the “Services Agreement”) pursuant to which the Company will provide PayMode services to the Bank and the Bank’s customers for a initial term of five years, subject to renewal for successive three-year periods, on terms and conditions further described below.

Asset Purchase Agreement

Under the terms of the Purchase Agreement, the Bank will sell to the Company the Bank’s PayMode electronic payments business, including the vendor network, application software, intellectual property rights and other assets, properties and rights used exclusively or primarily in the PayMode business.  The Purchase Agreement provides that the Company will pay the Bank a cash purchase price of $17,000,000 and issue the Bank a warrant to purchase 1,000,000 shares of common stock of the Company at a purchase price of $8.50 per share.

The warrant will have a term of 10 years and will provide that, subject to certain exceptions, the Bank may not sell shares issued to it upon exercise of the warrant in an amount in excess of 200,000 shares per month or transfer the warrant other than to Bank affiliates for a period of one year from the date the warrant is issued. The Company and the Bank will also enter into a Registration Rights Agreement, pursuant to which the Bank may request that the Company file a registration statement with respect to the warrant shares.  The Bank may request such filing to become effective on or after the one year anniversary of the closing of the Asset Purchase.

The Purchase Agreement contains customary covenants, representations and warranties by the Bank and the Company, including operating covenants by the Bank covering the period after the signing of the Purchase Agreement and prior to the closing of the Asset Purchase. These covenants include a requirement that the Bank not solicit proposals relating to alternative transactions or enter into discussions, provide confidential information or enter into any agreement in connection with proposals for alternative transactions with respect to the PayMode business. The Purchase Agreement also contains customary provisions providing that each party will indemnify the other for breaches of such party’s representations, warranties and covenants set forth in the Purchase Agreement and certain related agreements, as well as for certain other liabilities.  Subject to certain exceptions, each party’s liability with respect to those indemnification obligations relating to breaches of representations and warranties shall not exceed $8,500,000, and neither party will be obligated to indemnify the other in such circumstances for individual damages totaling $25,000 or less, or for the first $200,000 of such indemnifiable damages incurred.

The Company and the Bank currently expect to complete the Asset Purchase in September 2009.  The obligation of each party to consummate the Asset Purchase is subject to the satisfaction or waiver of customary closing conditions including, with respect to the Company’s obligation to close, conditions relating to retention of employees and the availability of transition services.

The Purchase Agreement contains non-compete provisions prohibiting the Company from offering any PayMode products to specified Bank customers during the initial term of the Services Agreement or to certain designated financial institutions for a period of two years after closing. These non-compete obligations will cease in the event the Services Agreement is terminated by the Company due to a material uncured breach by the Bank, insolvency of the Bank or an attempt by the Bank to assign the Services Agreement in violation of its terms, or by the Bank for convenience.

The board of directors of the Company has unanimously approved the Asset Purchase and the Purchase Agreement.

The foregoing description of the Asset Purchase and the Purchase Agreement is not complete and is qualified in its entirety by reference to the Purchase Agreement, which the Company expects to file as an Exhibit to its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009. The Company intends to request confidential treatment for certain exhibits to the Purchase Agreement, including the Services Agreement.

Services Agreement

In connection with the Purchase Agreement, the Company and the Bank have agreed to enter into a Services Agreement pursuant to which the Company will provide PayMode services to the Bank and its customers, including customary maintenance and support services. The Bank will pay the Company an annual subscription fee plus other specified variable fees for the services.  The Company will deliver enhancements to the system used to provide the PayMode services and related infrastructure and the enhancements will have a specified minimum value over the initial term of the Services Agreement.  A specified set of enhancements to the system used to provide the PayMode services must be delivered within designated timeframes, certain of which will be available exclusively to the Bank and its customers for specified periods. 

The Services Agreement has an initial term of five years, to be followed, unless notice of non-renewal is given by either Party, by successive three-year renewal periods,  subject to customary termination events, including the Bank’s right to terminate for convenience, in which case it will pay a specified variable termination fee to the Company.  Should the Services Agreement terminate, the Bank may elect to continue to pay for and receive the PayMode services for up to two years.

Item 8.01. Other Events

     On August 5, 2009, the Company issued a press release announcing its entry into the Purchase Agreement. The description of the press release set forth under this “Item 8.01. Other Events” is qualified in its entirety by reference to the press release, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.

Item 9.01.   Financial Statements and Exhibits

(d)           Exhibits

See Exhibit Index attached hereto.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BOTTOMLINE TECHNOLOGIES (de), INC.
Date:  August 6, 2009	By:	/s/ Kevin Donovan
		Kevin Donovan
		Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.		Description
	99.1	Press Release dated August 5, 2009.

EX-99.1

Bank of America and Bottomline Technologies Form Strategic Relationship for Electronic Payment and Invoice Network

Bottomline to Acquire Market-Leading SaaS Offering

PORTSMOUTH, N.H. and CHARLOTTE, N.C. – AUGUST 5, 2009 – Bank of America (NYSE: BAC) and Bottomline Technologies (NASDAQ: EPAY) today announced a strategic relationship to advance the growth of Bank of America’s market-leading electronic network for payment and invoice automation.

Bottomline Technologies will acquire Bank of America’s PayMode® product, operations and vendor network. The two companies are entering into a multi-year agreement to operate and enhance this innovative Software as a Service (SaaS) offering. In addition to continuing to market PayMode to new clients, Bank of America will retain existing PayMode client relationships and join Bottomline’s Strategic Advisory Council. The bank will also have an equity interest in the company via warrants for one million Bottomline shares.

Under this agreement, Bank of America and Bottomline will deliver next generation solutions for integrated payables automation, enabling businesses to capitalize on the two organizations’ shared vision for automated business-to-business electronic invoice and payment processing and remittance data delivery. With 80,000 vendors, PayModeis one of the largest and fastest-growing business-to-business payments networks operating today. The relationship will leverage Bottomline’s experience with SaaS solutions including its advanced invoice management workflow, global payment platforms and innovative cash management offerings used by leading corporations around the globe.

“PayMode remains an important part of Bank of America’s electronic payments suite of solutions,” said Dub Newman, Global Product Management executive for Bank of America. “This deal ensures clients will receive the same high level of service they expect from the PayMode service into the future. After a thorough evaluation, we concluded that working with Bottomline will accelerate the growth and capability of PayMode and enable us to quickly deliver an even more compelling offering to our clients. We selected Bottomline due to its deep domain expertise, focus on financial supply chain technology and impressive order-to-pay solution set. Combining forces, we will provide even greater value to our clients.”

“We have entered into a very significant relationship for Bottomline,” said Rob Eberle, President and CEO of Bottomline Technologies. “With Bank of America, we have teamed up with a truly market-moving organization and added one of the largest vendor networks available today to our payment and invoice management solution set. We believe that this arrangement will significantly accelerate our strategic plan and business model, while firmly establishing Bottomline as a leading player in financial supply chain automation.”

PayModefacilitates the electronic exchange of payments and invoices between organizations and suppliers. By making vendor payments electronically, organizations can quickly raise operational efficiency and derive greater value from the accounts payable and corporate treasury functions. In addition, there are significant environmental benefits achieved by cutting the use of paper checks, invoices and remittance advices, hence reducing all participants’ carbon footprint.

Today, approximately 550 Bank of America clients leverage PayMode for their payables automation and 80,000 suppliers receive electronic payments and comprehensive remittance data. This results in processing cost savings, improved working capital management and enhanced payment processes and controls. Approximately $300 billion in electronic transactions have been processed through PayMode since its inception. Bottomline will provide PayMode service and support for Bank of America and Bank of America clients under a long-term agreement, while making PayMode available to its own customers and other channels.

Financial terms of the arrangement, which is expected to close in the next 90 days, were not disclosed at this time. Bottomline expects the transaction to be accretive to its results during fiscal year ended June 30, 2010.

To help raise awareness of the environmental benefits achieved by transitioning from paper to electronic processing, Bottomline has posted a green savings calculator on its corporate web site. The calculator can be accessed by clicking this link: www.bottomline.com/gogreen.

About Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 53 million consumer and small business relationships with more than 6,100 retail banking offices, more than 18,500 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

About Bottomline Technologies

Bottomline Technologies (NASDAQ: EPAY) provides collaborative payment, invoice and document automation solutions to corporations, financial institutions and banks around the world. The company’s solutions are used to streamline, automate and manage processes involving payments, global cash management, transactional documents and invoice approval. Organizations trust these solutions to meet their needs for cost reduction, competitive differentiation and optimization of working capital. Headquartered in the United States, Bottomline also maintains offices in Europe and Asia-Pacific. For more information, visit www.bottomline.com.

Bottomline Technologies and the BT logo are trademarks of Bottomline Technologies (de), Inc. which may be registered in certain jurisdictions. All other brand/product names are trademarks of their respective holders.

 

Bank of America Media Contact:	Bottomline Media Contacts:
Will Wilson	Chip Martin
Bank of America	Bottomline Technologies
(980) 388-3360	(603) 501-5324
will.wilson@bankofamerica.com	cmartin@bottomline.com
	Kevin Donovan
	Bottomline Technologies
	(603) 501-5240
	kdonovan@bottomline.com

Safe Harbor for Forward-Looking Statements

Statements in this press release regarding the strategic relationship between Bottomline and Bank of America, the expected timetable for completing the transaction, future financial and operating results and benefits expected to result from the transaction and strategic relationship and the impact of the strategic relationship on Bottomline’s strategic plan and business model, as well as any other statements about Bottomline or Bank of America’s future expectations, beliefs, goals, plans or prospects, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “will”, “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate the transaction; the ability of Bottomline to successfully integrate and operate PayMode technology, operations and employees; the ability to realize anticipated benefits of the transaction; and the other factors described in Bottomline’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and its most recent quarterly report filed with the SEC. Bottomline and Bank of America disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.