8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

Amendment No. 1 to

CURRENT REPORT

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

Date of Report (Date of earliest event reported): September 14, 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 (see General Instruction A.2. below):

¨ 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))

Explanatory Note 2

This Current Report on Form 8-K/A is filed as Amendment No. 2 to the Current Report on Form 8-K as filed by Bottomline Technologies (de), Inc. (the “Registrant” or the “Company”) on September 14, 2009. This Amendment  No. 2 is being filed to appropriately display Exhibit 99.2, which inadvertently included other information in the original filing.  Except as described in the immediately preceding sentence, all other disclosures contained in the Form 8-K filed on September 14, 2009 as amended by Amendment No. 1 and all exhibits thereto are not amended hereby in any manner.

Explanatory Note 1

This Current Report on Form 8-K/A is filed as an amendment to the Current Report on Form 8-K filed by Bottomline Technologies (de), Inc. (the “Registrant” or the “Company”) on September 14, 2009. The Amendment No. 1 is being filed to include the financial information required under Item 9.01 that was previously omitted in accordance with Item 9.01(a) and Item 9.01(b).

Historical audited financial statements of an acquired business are required if the acquisition exceeds certain quantitative tests of significance.  PayMode represents a significant acquisition, at a level requiring one year of historical audited financial statements.  The Company has concluded that it is impracticable to prepare full financial statements of PayMode and instead has furnished a statement of assets sold and a statement of revenues and direct expenses of PayMode for the period for which audited financial information is required.  These financial statements are included at Exhibit 99.2.

The conclusion that it was impracticable to prepare full historical financial statements for PayMode was based on a number of factors, including:

·   PayMode was neither a separate legal entity nor an entity that had been subject to discrete financial reporting within Bank of America.  On a historical basis, separate financial statements for PayMode had never been prepared.

·   Bank of America did not maintain separate administrative support functions, such as for finance, treasury, tax and legal, for PayMode; these functions were provided by the Bank at the corporate level.

·   Certain corporate level expenses, such as interest and income taxes, had never been allocated to PayMode.

In addition to the conclusion that full financial statements were impracticable, the Company believes that the historical financial information that follows is a more meaningful financial reporting alternative than full financial statements since it provides information that is specific to the operation of PayMode.

Item 9.01 of the aforementioned Current Report on Form 8-K is hereby amended to read as follows:

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited statements of assets sold and revenues and direct expenses of PayMode as of and for the year ended December 31, 2008 are filed as Exhibit 99.2 hereto and incorporated herein by reference.

 (b) Pro forma Financial Information.

The unaudited pro forma condensed combined financial information with respect to the transaction described in Item 2.01 is filed as Exhibit 99.3 hereto and incorporated herein by reference.

(d) Exhibits.

Exhibit No.	Description
2.1†	Asset Purchase Agreement, dated as of August 5, 2009 between the Registrant and Bank of America, N.A.
23.1	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
99.1*	Press Release dated August 5, 2009.
99.2	Audited statements of assets sold and revenues and direct expenses of PayMode as of and for the year ended December 31, 2008.
99.3	Unaudited pro forma condensed combined financial information of the Registrant.

†Previously filed as an exhibit to the Quarterly Report on Form 10-Q on November 9, 2009.

*Previously filed as an exhibit to the Current Report on Form 8-K on August 6, 2009.

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:  November 24, 2009	By:	/s/ Kevin Donovan
		Kevin Donovan
		Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.	Description
2.1†	Asset Purchase Agreement, dated as of August 5, 2009 between the Registrant and Bank of America, N.A.
23.1	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
99.1*	Press Release dated August 5, 2009.
99.2	Audited statements of assets sold and revenues and direct expenses of PayMode as of and for the year ended December 31, 2008.
99.3	Unaudited pro forma condensed combined financial information of the Registrant.

†Previously filed as an exhibit to the Quarterly Report on Form 10-Q on November 9, 2009.

*Previously filed as an exhibit to the Current Report on Form 8-K on August 6, 2009.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-153477, 333-146051, 333-140235, 333-78471, 333-78467, 333-78469, 333-78473, 333-50418, 333-50202, 333-65044, 333-102060, 333-111803, 333-125463 and 333-125464) and Form S-3 (Nos. 333-43842, 333-50810, 333-62330, 333-73366, 333-102064, 333-116196, 333-122906 and 333-128295) of Bottomline Technologies (de), Inc. of our report dated November 13, 2009 relating to the financial statements of PayMode®, a product line of Bank of America Corporation, which appears in Amendment No. 1 to the Current Report on Form 8-K/A of Bottomline Technologies (de), Inc. dated November 24, 2009.

/s/ PricewaterhouseCoopers LLP

Charlotte, North Carolina

November 23, 2009

EX-99.2

Exhibit 99.2

PayMode®, a product line of Bank of America Corporation

Financial Statements

December 31, 2008

PayMode®, a product line of Bank of America Corporation

Index

December 31, 2008

	Page(s)
Report of Independent Registered Public Accounting Firm	1
Consolidated Financial Statements
Statements of Assets Sold	2
Statement of Revenue and Direct Expenses	3
Notes to Financial Statements	4-7

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of

Bank of America National Association:

We have audited the accompanying Statement of Assets Sold at December 31, 2008 and Statement of Revenue and Direct Expenses of PayMode®, a product line of Bank of America Corporation (the "Corporation") for the year ended December 31, 2008.  These Statements are the responsibility of the Corporation’s management.  Our responsibility is to express an opinion on these Statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statement of Assets Sold and Statement of Revenue and Direct Expenses are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statement of Assets Sold and Statement of Revenue and Direct Expenses.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statement of Assets Sold and Statement of Revenue and Direct Expenses.  We believe that our audit provides a reasonable basis for our opinion.

The accompanying Statement of Assets Sold and Statement of Revenue and Direct Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Current Report on Form 8-K/A of Bottomline Technologies (de), Inc.) as described in Note 2 and are not intended to be a complete presentation of the financial position or results of operations of PayMode®, a product line of the Corporation

In our opinion, the Statement of Assets Sold and Statement of Revenue and Direct Expenses referred to above present fairly, in all material respects, the assets sold at December 31, 2008 and revenue and direct expenses for the year ended December 31, 2008 as described in Note 2 in conformity with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers

November 13, 2009

1

PayMode®, a product line of Bank of America Corporation

Statements of Assets Sold

December 31, 2008

(in thousands of dollars)	2008
Assets Sold:
Prepaid expenses	$	36
Property and equipment		746
Software		23
Total assets sold	$	805

The accompanying notes are an integral part of these financial statements.

2

PayMode®, a product line of Bank of America Corporation

Statement of Revenue and Direct Expenses

December 31, 2008

(in thousands of dollars)	2008
Revenue:
Interest Income	$	6,160
Fee revenue		5,669
Total revenue		11,829
Direct Expenses:
Cost of revenue		8,053
Selling, general and administrative		911
Total direct expenses		8,964
Revenue less direct expenses	$	2,865

The accompanying notes are an integral part of these financial statements.

3

PayMode®, a product line of Bank of America Corporation

Notes to Financial Statements

December 31, 2008

1.   Description of Business

PayMode® is a product line within the Treasury Services business of Bank of America Corporation (the "Corporation").  Specifically, PayMode® is an internet based payment system that enables the initiation, processing and transmission of electronic payments and remittance information between disbursing companies, which are the Corporation's clients, and their vendors, suppliers and service providers.  The Corporation’s clients utilize PayMode® for their payables automation with those clients' suppliers receiving electronic payments and comprehensive remittance data.  PayMode® currently only provides services to the Corporation’s customers.  PayMode®’s services enhance its customer's operational efficiency in the accounts payable and corporate treasury functions, including payment processes and controls.

On August 5, 2009, Bottomline Technologies (de), Inc. ("Bottomline") entered into an Asset Purchase Agreement (the "Agreement") with Bank of America, N.A. (a wholly owned indirect subsidiary of the Corporation) to purchase substantially all the assets and related operations of the PayMode® product line, and assume certain liabilities.  Under the terms of the Agreement, Bottomline became the owner of PayMode® and the Corporation received consideration consisting of $17 million in cash and a warrant to purchase 1,000,000 shares of common stock of Bottomline.  The transaction was consummated on September 14, 2009.

Purchased assets included prepaid assets, software, property and equipment, intellectual property, the vendor network and other intangible assets.  Liabilities assumed were limited to obligations arising under the permits transferred, contracts assigned and accrued but unused vacation time of employees hired by Bottomline.  Based on the nature of these liabilities, as well as, the Corporation's vacation policies, no book value has been assigned to the assumed liabilities.

2.   Basis of Presentation

PayMode® is a product line within the Treasury Services business of the Corporation.  Historically, separate financial statements have not been prepared for PayMode®.  The accompanying Statement of Assets Sold as of December 31, 2008 and the Statement of Revenue and Direct Expenses for the year ended December 31, 2008 (the "Statements") have been prepared for the purpose of complying with Rule 3-05 of Regulation S-X of the Securities and Exchange Commission.  The Statements have been prepared in lieu of complete audited financial statements as the Corporation does not believe that such US GAAP financial statements can be prepared without arduous efforts and undue costs.  During the reporting period, PayMode® has not been required to produce stand-alone financial statements under the Corporation or operate as a stand-alone entity.  The Corporation also has not historically pushed down corporate level expenses to PayMode® and cannot provide such allocations without undue cost and effort.  Corporate level expenses include expenses such as services provided by senior management, human resources, legal and finance departments.  The Statements were prepared using the Corporation’s accounting policies.

The accompanying Statement of Revenue and Direct Expenses includes fee revenue and interest revenue allocated through the Corporation's intercompany funds transfer pricing process and the direct expenses of PayMode®.  Indirect expenses such as interest and income taxes, certain management expenses and shared administrative expenses have been excluded from the accompanying Statement of Revenue and Direct Expenses, as it is not practical to isolate and allocate such expenses to PayMode®.  The accompanying Statement of Assets Sold has been derived from the accounting records of the Corporation.  These financial statements are not intended to be a complete representation of the financial position or results of PayMode® as a

4

PayMode®, a product line of Bank of America Corporation

Notes to Financial Statements

December 31, 2008

stand-alone going concern, nor are they indicative of the results to be expected from future operations of PayMode®.  Management believes that the assumptions underlying the Statements are reasonable and appropriate under the circumstances.

The accompanying Statement of Assets Sold reflects the assets sold and the liabilities assumed by Bottomline pursuant to the Agreement.  Any other assets and liabilities have been excluded from the Statement of Assets Sold as these items will be retained by the Corporation.

3.   Summary of Significant Accounting Policies

Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.  As discussed in Note 1, these financial statements include allocations and estimates that are not necessarily indicative of the costs and expenses that would have resulted if PayMode® had been operated as a separate entity or of the future results of PayMode®.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and consists of the specific assets identified in the Agreement as being sold to Bottomline in conjunction with the sale of PayMode®.  Depreciation is recognized using the straight-line method over the estimated useful lives of the assets, which ranges from 3 to 5 years and is recorded within the Statement of Revenue and Direct Expenses.  Maintenance and repairs are expensed as incurred, while improvements that extend the useful life of the related asset are capitalized and depreciated over the remaining life of the related asset.

Revenue recognition

Interest income represents income allocated through the Corporation's intercompany fund transfer pricing process whereby PayMode® is compensated for deposits placed with the Corporation.  As part of its transaction processing, PayMode® may hold cash balances, which are invested overnight with the Corporation.  The rate of interest paid to PayMode® by the Corporation is based upon the aforementioned funds transfer pricing methodology and does not necessarily reflect a market rate of interest.  The Corporation maintains all debt and notes payable on a consolidated basis to fund and manage operations; accordingly, debt and related interest expense were not allocated to PayMode®.

Fee revenue is mostly driven by fees charged to customers, based on the number of transactions processed on the customer's behalf.  In addition to the aforementioned transaction based fees, PayMode® also bills its customers for implementation and monthly maintenance services.  These fees are recognized in the period services have been provided, significant obligations have been performed, and collection is reasonably assured.

Direct expenses

Direct expenses are classified as either, Cost of Revenue or Selling, General and Administrative based on the underlying activity.  Direct expenses that were allocated to these expense categories include Personnel Expense, Occupancy Expense and Direct Processing Expense.

5

PayMode®, a product line of Bank of America Corporation

Notes to Financial Statements

December 31, 2008

Personnel expense

The Corporation has certain qualified retirement and defined contribution plans covering full-time, salaried employees and certain part-time employees.  Expenses under these plans are accrued each year.  The costs are charged to current operations and, for defined benefit plans, consist of several components of net pension cost based on various actuarial assumptions regarding future expectations under the plans.  Total employee benefits costs were approximately $912 thousand for the year ended December 31, 2008.

Certain employees of the Corporation participate in a management compensation plan which provides incentive awards based on the extent to which performance objectives and profit goals are met.  Incentive expenses under the plan were approximately $171 thousand for the year ended December 31, 2008.

Occupancy expense

Occupancy expense consists of rent expense on the operating lease directly related to PayMode®, as well as, an allocation of depreciation expense related to the equipment utilized within the premises from the Corporation based up the square footage of the premises and a deprecation rate determined by the Corporation.

Direct processing expense

The Corporation provides business-to-business payment processing services to customers.  Direct processing expense consists of software and hardware maintenance and development costs, amortization, and various fees relating to these activities.  These activities are performed by a centralized technology unit and have been allocated to PayMode® based on usage.

4.   Property and Equipment

 Property and equipment consists of the following at December 31, 2008 (in thousands of dollars):

[Missing Graphic Reference]

Depreciation expense was $477 thousand for the year ended December 31, 2008 and is recorded in the Statement of Revenue and Direct Expenses.

5.   Commitment and Contingencies

The Corporation has entered into operating leases for premises related to PayMode®.  Future minimum rental payments under these leases are $231 thousand for 2009, $233 thousand for 2010, $233 thousand for 2011, $233 thousand for 2012 and 1,416 thousand thereafter.  Rental expense was $230 thousand for the year ended December 31, 2008 and is included in Occupancy Expense in the Statement of Revenue and Direct Expenses.

In addition, Bottomline assumed the liabilities of PayMode® as it relates to permits transferred and contracts assigned to Bottomline arising subsequent to the reporting date.

6

PayMode®, a product line of Bank of America Corporation

Notes to Financial Statements

December 31, 2008

6.   Related Parties

PayMode® has significant transactions with the Corporation and its' affiliates.  During the year ended December 31, 2008, Fee Revenue recognized based upon transactions processed for the Corporation or its' affiliates was approximately $566 thousand.  The entirety of the interest income allocated to PayMode® is earned based upon interest rates determined by the Corporation.

PayMode® also benefits from discounts and pricing negotiated with suppliers and vendors by the Corporation.

7

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On September 14, 2009, the Company completed the purchase of substantially all of the assets and related operations of PayMode from Bank of America (the “Bank”).  PayMode facilitates the electronic exchange of payments and invoices between organizations and their suppliers, and is operated as a Software as a Service (SaaS) offering.  There are currently in excess of 90,000 vendors participating in the PayMode network.  As a result of the acquisition, the Company acquired the 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. As purchase consideration, the Company paid the Bank cash of $17.0 million and issued the Bank a warrant to purchase 1,000,000 shares of common stock of the Company at an exercise price of $8.50 per share.

The unaudited pro forma condensed combined balance sheet as of June 30, 2009 was prepared as if the acquisition had occurred on that date and combines the historical consolidated balance sheet of the Company with the unaudited statement of assets sold of PayMode as of June 30, 2009.  The unaudited pro forma condensed combined statement of operations for the twelve months ended June 30, 2009 was prepared as if the acquisition had occurred at the beginning of that annual period and combines the historical consolidated statements of operations of the Company with the unaudited historical consolidated statements of revenues and direct expenses of PayMode for the twelve months ended June 30, 2009.

The unaudited pro forma condensed combined financial statements have been prepared for informational purposes only, to show the effect of the combination of the Company and PayMode on a historical basis. These financial statements do not purport to be indicative of the financial position or results of operations that would have actually occurred had the business combination been in effect at those dates, in particular because the historical financial statements of PayMode exclude certain operating expenses, nor do they project the expected results of operations or financial position for any future period or date.

The unaudited pro forma condensed combined financial statements do not reflect any adjustments for non-recurring items or anticipated synergies resulting from the acquisition. The purchase price allocation is not finalized, as the Company is still in the process of finalizing its estimates of fair value for property, equipment and intangible assets acquired. Accordingly, the Company has prepared the pro forma adjustments based on assumptions that it believes are reasonable but that are subject to change as additional information becomes available and the preliminary purchase price allocation is finalized.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

June 30, 2009

(in thousands)

	Historical Bottomline			Historical PayMode		Pro Forma Adjustments				Pro Forma Combined
Assets
Current Assets:
Cash and marketable securities	$	50,303				$	(17,000	)	(A)	$	33,303
Accounts receivable, net		23,118									23,118
Other current assets		5,531		$	36		1,352		(B)		6,919
Total current assets		78,952			36		(15,648	)			63,340
Property and equipment, net		10,106			523		4,602		(B)		15,231
Intangible assets, net		89,589					21,040		(C)		110,629
Other assets		4,504									4,504
Total assets	$	183,151		$	559	$	9,994			$	193,704
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	5,955								$	5,955
Accrued expenses		9,290				$	436		(D)		9,726
Deferred revenue		33,029									33,029
Total current liabilities		48,274					436				48,710
Deferred revenue, non current		10,213									10,213
Deferred income taxes		2,263									2,263
Other liabilities		1,852									1,852
Total liabilities		62,602					436				63,038
Stockholders' equity:
Common stock		27									27
Additional paid-in-capital		287,082					10,520		(E)		297,602
Accumulated other comprehensive loss		(4,920	)								(4,920	)
Treasury stock		(24,360	)								(24,360	)
Accumulated deficit		(137,280	)				(403	)	(D)		(137,683	)
Other equity				$	559		(559	)	(F)		----
Total stockholders' equity		120,549			559		9,558				130,666
Total liabilities and stockholders' equity	$	183,151		$	559	$	9,994			$	193,704

See accompanying notes

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED JUNE 30, 2009

(in thousands except per share amounts)

	Historical Bottomline			Historical PayMode		Pro Forma Adjustments				Pro Forma Combined
Revenues:
Software licenses	$	13,309								$	13,309
Subscriptions and transactions		31,196		$	12,718	$	(6,954	)	(G)		36,960
Service and maintenance		84,220									84,220
Equipment and supplies		9,289									9,289
Total revenues		138,014			12,718		(6,954	)			143,778
Cost of revenues:
Software licenses		821									821
Subscriptions and transactions		15,045			8,617		1,485		(H)		25,147
Service and maintenance		38,100									38,100
Equipment and supplies		6,875									6,875
Total cost of revenues		60,841			8,617		1,485				70,943
Operating expenses:
Selling, general and administrative		53,432			975		150		(H)		54,557
Product development and engineering		20,096					51		(H)		20,147
Amortization of intangible assets		15,563					1,869		(I)		17,432
Total operating expenses		89,091			975		2,070				92,136
Income (loss) from operations		(11,918	)		3,126		(10,509	)			(19,301	)
Other, net		443					(291	)	(J)		152
Income (loss) before provision (benefit) for income taxes		(11,475	)		3,126		(10,800	)			(19,149	)
Provision (benefit) for income taxes		813					(382	)	(K)		431
Net income (loss)	$	(12,288	)	$	3,126	$	(10,418	)		$	(19,580	)
Basic and diluted net loss per common share	$	(0.51	)							$	(0.81	)
Shares used in computing basic and diluted net loss per share		24,044									24,044		(L)

See accompanying notes

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1.   Pro Forma Adjustments (dollar amounts in thousands):

The following pro forma adjustments are included in the unaudited pro forma condensed combined balance sheet:

(A)   To record cash paid by the Company to Bank of America as purchase consideration for PayMode.

(B)   To record the preliminary fair value adjustments to certain assets acquired in connection with the PayMode acquisition.  The Company has not finalized its estimates of fair value for certain property, equipment and software acquired.  Accordingly, these values are subject to change in the final purchase price allocation.

(C)   To reflect the estimated net increase in intangible assets arising in the PayMode acquisition, as follows:

Customer related intangible assets	$	9,349
Core technology		7,648
Tradename		1,038
Below market lease		624
Goodwill		2,381
	$	21,040

The Company has not finalized its estimates of fair value for intangible assets, accordingly these values are subject to change in the final purchase price allocation.

(D)   To record adjustment for acquisition related costs ($403) which relate principally to accounting and legal fees and to record the fair value of certain accrued vacation liabilities ($33) assumed by the Company in the acquisition.  The acquisition related costs are expensed as incurred and as such, for purposes of this pro-forma presentation, increase the Company’s accumulated deficit as of June 30, 2009.

(E)   To record the value of the warrant to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $8.50 per share.  The warrant was issued to Bank of America as purchase consideration for PayMode and was exercisable upon issuance.  The warrants were valued using a Black-Scholes valuation model that used the following inputs:

Dividend yield	0%
Expected term	10 years
Risk free interest rate	3.42%
Volatility	78%

The expected term of ten years equates to the contractual life of the warrants.  Volatility was based on the Company’s actual stock price over a ten year historical period.

(F)   To eliminate historical equity of PayMode.

The following pro-forma adjustments are included in the unaudited pro-forma condensed combined statement of operations:

(G)   To eliminate revenue earned by PayMode from interest income allocated to PayMode through Bank of America’s intercompany fund transfer process since, in general terms, the Company will not be eligible to earn revenues in this manner.

(H)   To record depreciation and amortization expense associated with equipment and software acquired in the PayMode acquisition.  These amounts are based on the Company’s preliminary estimates of fair value of the assets acquired, which are not finalized and may change in the final purchase price allocation.

(I)   To record amortization expense related to intangible assets arising in the PayMode acquisition, the valuations for which are not finalized and may change in the final purchase price allocation.  For purposes of the pro-forma adjustments presented, the Company has used the following estimated lives (in years):

Customer related intangible assets	17
Core technology	7
Tradename	17
Below market lease	10

Estimated amortization expense for subsequent fiscal years ending June 30, based on these preliminary intangible asset values, is as follows:

	(in thousands)
2010	$	2,036
2011		2,023
2012		1,993
2013		1,672
2014		1,551
2015 and thereafter		7,515

(J)   To record a reduction in interest income as a result of cash paid by the Company to acquire PayMode.  The pro-forma impact on interest income assumes a 1.71% interest yield, which was the Company’s yield on interest bearing cash accounts during fiscal 2009.

(K)   To record the estimated tax impact of the historical PayMode operations and the pro-forma adjustments.  The overall reduction in tax expense arises from a decrease in the utilization of certain of the Company’s acquired net operating losses (the utilization of which had been previously charged to income tax expense) and a reduction in alternative minimum tax, offset in part by tax expense associated with PayMode goodwill that is deductible for tax purposes but not expensed for financial reporting purposes.  The entry is based on the actual effective tax rate for the Company’s US operations for fiscal year 2009.

(L)   The warrants issued as purchase consideration for PayMode were excluded from the shares used in calculating diluted earnings per share since their effect would have been anti-dilutive.