SHARE PURCHASE AGREEMENT between RLC GROUP B.V. as the Seller, and BLACKBAUD, INC. as the Purchaser

Exhibit 10.42

*Portions of this document marked [*] are requested to be treated confidentially.

EXECUTION COPY

 

SHARE PURCHASE AGREEMENT

between

RLC GROUP B.V.

as the Seller,

and

BLACKBAUD, INC.

as the Purchaser

 

 

 

for the acquisition by

the Purchaser of the entire issued share

capital of RLC Customer Centric Technology B.V.

 

NautaDutilh

Amsterdam

TABLE OF CONTENTS

 

 

 

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SHARE PURCHASE AGREEMENT

THE UNDERSIGNED

 

1.	Blackbaud, Inc. , a corporation organised under the laws of the state of Delaware, United States of America, whose corporate seat is at Charleston, South Carolina, hereinafter referred to as the “Purchaser”;

and

 

2.	RLC Group B.V. , a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organised under the laws of the Netherlands, whose corporate seat is at Amsterdam, hereinafter referred to as the “Seller”;

WHEREAS

 

A.	The Purchaser provides non-profit organisations with software and services, enabling them to improve operational efficiency, build strong relationships and raise more funds to support their missions;

 

B.	The Company develops, supplies, and implements Customer Relations Management (“CRM”) software under the names Charibase, Publicbase, Microdirect and OneDirect, which software is mainly targeted at and used by fundraisers and membership organizations but also municipal governments (the “Business”);

 

C.	The Seller has full right and title to the Shares and wishes to sell the Shares to the Purchaser;

 

D.	The Purchase wishes to purchase the Shares from the Seller;

 

E.	The Seller and the Purchaser have signed a letter of intent dated 1 December 2008 (the “LOI”), which sets forth the basic terms and conditions upon which the Purchaser considers to purchase and acquire the Shares from the Seller;

 

F.	After signing the LOI, the Purchaser has with the help of professional advisers performed a due diligence investigation into the Company through access to an electronic data room; interviews with management; site visits and an exchange of questions and answers via the electronic

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data room but also via direct e-mail between the Seller, who was also assisted by professional advisors, and the Purchaser and their advisors;

 

G.	Parties have entered into the Escrow Agreement;

 

H.	The Seller has provided the Purchaser with all relevant information in relation to the registration of the transfer of the domain names as mentioned in Annex 11.2.

 

I.	The Seller has provided the Purchaser with the March Figures;

 

J.	The Parties wish to lay down in this Agreement the terms and conditions of the sale and purchase of the Shares.

NOW HEREBY AGREE AS FOLLOWS

 

1.	INTERPRETATION

 

1.1	Definitions

The following capitalised terms and expressions in this Agreement shall have the following meanings:

 

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4

 

5

 

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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1.2	Interpretation

 

a.

No provision of this Agreement shall be interpreted adversely against a Party solely because that Party was responsible for drafting that particular provision.

 

b.

Words denoting the singular shall include the plural and vice versa. Words denoting one gender shall include another gender.

 

c.

English language words used in this Agreement intend to describe Dutch legal concepts only and the consequences of the use of those words in English law or any other foreign law shall be disregarded.

 

d.

This Agreement has been drawn up in English. In the event of any discrepancy between the English text of this Agreement or any agreement resulting therefrom or relating thereto and any translation thereof, the English language version shall prevail.

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Subject to Clause 1.2.c, the English language version shall also prevail for interpretation purposes.

 

e.

References to any Dutch legal concept shall, in respect of any jurisdiction other than the Netherlands, be deemed to include the concept which in that jurisdiction most closely approximates the Dutch legal concept.

 

f.

The words “include”, “included” or “including” are used to indicate that the matters listed are not a complete enumeration of all matters covered.

 

g.

The headings used in this Agreement are for convenience or reference only and are not to affect the construction of this Agreement or to be taken into consideration in the interpretation of this Agreement.

 

h.

Unless otherwise stated, references to Clauses are to Clauses of this Agreement.

 

1.3	Schedules and Annexes

Any Schedule and Annex referred to in this Agreement forms an integral and inseparable part of this Agreement.

 

2.	PURCHASE, SALE AND TRANSFER OF THE SHARES

 

2.1	Purchase and sale of the Shares

Subject to the terms and conditions set out in this Agreement, the Purchaser hereby purchases the Shares from the Seller and the Seller hereby sells the Shares to the Purchaser.

 

2.2	Transfer of the Shares

On the date of this Agreement the Seller shall transfer the Shares to the Purchaser through the execution of the Deed of Transfer before the Civil Law Notary. A draft of the Deed of Transfer is attached hereto as Schedule 1 .

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2.3	Acknowledgement

The Seller shall procure that the Company will acknowledge the transfer of the Shares by co-signing the Deed of Transfer and will immediately enter such transfer in it register of shareholders.

 

2.4	Effective Date

Subject to Closing taking place, the Shares and the Company shall be for the risk and benefit of the Purchaser as of the Effective Date.

 

3.	PURCHASE PRICE AND PAYMENT

 

3.1	Purchase Price

The Purchase Price shall consist of an amount to be paid at closing of EUR 1,800,000 (one million eight hundred thousand euro (the “ Closing Amount ”) and certain amounts to be paid after Closing subject to certain conditions being fulfilled as provided for in Clause 3.2 below (the “ Earn Out Amounts ”).

 

3.2

Earn Out

First Earn Out:

The Purchaser shall pay to the Seller the amount of the First Earn out on [*] (or, if later, ultimately on the [*] Business Day after the relevant EBITDA Statement as defined in Clause 3.3 shall have been finally established in accordance with Clause 3.3), provided that (i) the EBITDA Margin for the period of [*] shall be at least [*]% and (ii) the total Revenue of the Company for the period of [*] shall be at least EUR [*] ([*] euro), all as established in accordance with Clause 3.3.

The First Earn Out amount, if payable in accordance with this Clause 3.2, shall be:

 

(i)

EUR [*] ([*] euro) if the total Revenue of the Company for the period of [*] as established in accordance with Clause 3.3 shall be between EUR [*] ([*]

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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euro and EUR [*] ([*] euro); or

 

(ii)

EUR [*] ([*] euro) if the total Revenue of the Company for the period of [*] as established in accordance with Clause 3.3 shall be equal to or above EUR [*] ([*] euro).

Second Earn Out

The Purchaser shall pay to the Seller the amount of the Second Earn Out on [*] (or, if later, ultimately on the [*] Business Day after the relevant EBITDA Statement as defined in Clause 3.3 shall have been finally established in accordance with Clause 3.3), provided that (i) the EBITDA Margin for the period of [*] shall be at least [*]%; and (ii) the total Revenue of the Company for the period of [*] shall be at least EUR [*] ([*] euro), all as established in accordance with Clause 3.3.

The Second Earn Out amount, if payable in accordance with this Clause 3.2, shall be:

 

(i)

EUR [*] ([*] euro) if the total Revenue of the Company for the period of [*], as established in accordance with Clause 3.3, shall be between EUR [*] ([*] euro) and EUR [*] ([*] euro); or

 

(ii)

EUR [*] ([*] euro) if the total Revenue of the Company for the period of [*], as established in accordance with Clause 3.3, shall be between EUR [*] ([*] euro) and EUR [*] ([*] euro); or

 

(iii)

EUR [*] ([*] euro) if the total Revenue of the Company for the period of [*], as established in accordance with Clause 3.3, shall be equal to or above EUR [*]

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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([*] euro).

 

3.3	EBITDA Statement

As soon as possible and in any event no later than [*] Business Days after [*] and [*] respectively, the Purchaser shall cause the Company, for the purpose of establishing the EBITDA Margin and the Revenue for the period of [*] and [*] respectively, to prepare a draft statement setting out such EBITDA Margin and Revenue in accordance with Dutch GAAP applied on a basis consistent with the Accounts and past practice (the “EBITDA Statement”) and the Purchaser shall cause the Company to submit this draft EBITDA Statement to the Seller and the Purchaser for it to review. Any objections to this draft EBITDA Statement shall be notified by one Party to the other Party within [*] Business Days of the draft EBITDA Statement being submitted.

Where no objections have been submitted against the draft EBITDA Statement within the aforesaid objection period of [*] Business Days, the EBITDA Margin and the Revenue reflected therein for the relevant period shall be binding on the Parties.

Where any objection has been made, the Parties shall try to resolve the issue. Should they fail to do so within [*] Business Days of the end of the aforesaid objection period of [*] Business Days (the “ Disagreement Date ”), then any such unresolved issue (for the purpose of this Clause the “ Open Issues ”) shall be submitted to and settled by an accountant of an independent reputable firm or accountants (for the purpose of this Clause to be referred to as the “ Accountant ”) to be jointly appointed by the Parties within [*] Business Days of the Disagreement Date or, if the Parties fail to agree on such appointment within that period, by the Chairman of the Netherlands Institute of Registered Accountants (“ NIVRA ”). The Parties shall immediately upon such appointment submit the EBITDA Statement and statements of their respective positions in writing to the Accountant. The Accountant shall determine the further procedural rules at his discretion.

The Parties undertake to procure that the Accountant shall finally resolve the Open Issues by way of a binding advice ( bindend advies ) in accordance with this Agreement and that the Accountant shall notify the Parties of his decision, inter alia certifying the final version of the EBITDA Statement and the resulting EBITDA margin and Revenue for

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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the relevant period which he has established, as promptly as possible and in any event no later than [*] Business Days after his appointment. The fees and expenses arising out of the engagement of the Accountant shall be borne by the party which has on balance been put in the wrong as decided by the Accountant.

The failure of either the Seller or the Purchaser to timely submit to the Accountant a written statement of its position or to otherwise fail to respond to any request of the Accountant for information shall not preclude or delay the Accountant’s determination of the Open Issues on the basis of the information which will have been submitted.

The Parties shall, and the Purchaser shall procure that the Company shall, give all information and assistance to the Accountant requested by the Accountant for the preparation of his binding advice. Simultaneously with providing such information to the Accountant, the Parties shall provide each other with the same information.

 

3.4

Payment

The Closing Amount shall be paid on the date of this Agreement in same day funds. The Purchaser shall transfer the Closing Amount on the date of this Agreement to the Notary’s Account with reference to file number [*].

The Civil Law Notary is hereby instructed by the Parties to release the Closing Amount immediately after the Deed of Transfer shall have been executed as follows

 

a.

an amount of EUR [*] ([*] euro) to be transferred to the bank account of the Seller with ABN AMRO Bank (account number [*]); and

 

b.

an amount of EUR [*] ([*] euro) to be transferred to the bank account of the Seller with Rabobank Randmeren (account number [*]); and

 

c.

an amount of EUR [*] ([*] euro) to be transferred to the current account of RLC Management B.V. (account number [*]), whereupon all of the Encumbrances over any assets of the Company under the Credit

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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Facility will be released in accordance with the letter from the Bank attached as Schedule 3 ; and

 

d.

an amount of EUR 250,000 (two hundred fifty thousand euro) (the Escrow Amount) to be kept in the Escrow Account in accordance with the provisions of the Escrow Agreement; and

 

e.

an amount of EUR [*] ([*] euro) to be transferred to the bank account of the Company with ABN AMRO Bank N.V. (account number [*]) constituting the settlement and termination of the current account ( rekening courant ) relationship between the Company and the Seller (the “ Current Account Facility ”);

The Earn Out Amounts, if payable in accordance with Clause 3.2 and subject to the deduction of any amount referred to in Clause 8.1, shall be paid on the dates mentioned in Clause 3.2 in same day funds. The Purchaser shall transfer the Earn Out Amount to the bank account of the Seller with Rabobank Randmeren (account number [*]).

 

4.	CONDUCT OF BUSINESS

Since the Balance Sheet Date until the date of this Agreement, the Company has operated its business in a normal and prudent manner consistent with past practice and has preserved good relationships with customers and suppliers and good relationships with the Employees and the trade unions and furthermore has continued to maintain the Real Property Rented and other goods in use by the Company in good working order and state of maintenance and repair.

 

5.	PRE-CLOSING COVENANTS AND NO LEAKAGE

 

5.1	The Seller guarantees that since the Balance Sheet Date until the date of this Agreement, the Company has not, without the prior written consent of the Purchaser or except as explicitly disclosed in writing by the Seller to the Purchaser prior to entering into this Agreement:

 

a.

incurred or increased any interest bearing financial debt;

 

b.

assumed, guaranteed or otherwise became liable for the obligations or, or made any loans or advances to, any other Person, other than to the Seller under the Current Account

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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Facility, which has been terminated as of the date of this Agreement after which no such liabilities exist;

 

c.

waived or released any right of material value without adequate consideration;

 

d.

acquired or disposed of any business or any material asset, other than in the ordinary course of business, consistent with past practice and at arm’s length terms;

 

e.

entered into, amended or terminated any material agreement with a value in excess of a total aggregate amount of EUR [*] ([*] euro) as listed in Schedule 7 ;

 

f.

with respect to its Employees except as required by law, amended any of their terms of employment or awarded any incentives, other than customary annual increases/incentives consistent with past practice, nor paid them any bonuses, other than the [*];

 

g.

made or became obligated to make any capital expenditures in an amount exceeding a total aggregate amount of EUR [*] ([*] euro) as listed in Schedule 8 ;

 

h.

mortgaged, pledged, subjected to any lien, charged or otherwise encumbered any of its material assets;

 

i.

made any alteration in the manner of keeping its books, accounts or records, except to the extent required by law and/or Dutch GAAP;

 

j.

amended its articles of association;

 

k.

issued any shares in its share capital, or issued or sold any securities convertible into or exchangeable for or carrying the right to subscribe for any shares in its capital;

 

l.

declared, authorised paid or made any dividends or other distribution, or reduced its paid-up capital with respect to its shares, other than a dividend payment in respect of the year 2008

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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in the amount of EUR [*];

 

m.

made any payments to or on behalf of the Seller or any of its affiliates (not being the Company), other than under the Current Account Facility, which has been terminated as of the date of this Agreement after which no such liabilities exist;

 

n.

made any payments in connection with the Transaction other than as contemplated in this Agreement;

 

o.

entered into any agreement obligating it to do any of the foregoing.

 

5.2	The Seller agrees to reimburse the Purchaser on a euro for euro basis for any breach of this Clause 5, increased with interest thereon at a rate of [*] euribor + [*]%.

 

5.3	The obligation of the Seller to reimburse the Purchaser pursuant to this Clause 5 shall terminate on the date falling [*] after the date of this Agreement, unless prior to that date the Purchaser has notified the Seller in writing of a breach of this Clause 5.

 

6.

CLOSING

 

6.1	Place of Closing

Closing shall take place on the date of this Agreement at the offices of NautaDutilh in Amsterdam.

 

6.2	Release of guarantees

The Seller shall procure prior to or at Closing the release of the Company from any guarantee or Encumbrance given by the Company or existing over the assets of the Company under the Group Credit Facility, subject to the payment to the Bank of the outstanding amount under the Group Credit Facility as set out in the Release Letter attached hereto as Schedule 3 .

 

6.3	Release of guarantees

The Purchaser shall procure, as soon as possible after the date of this Agreement but in any event no later than ten (10) Business Days after the

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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date of this Agreement, the release of the Seller from the guarantee given by the Seller in the amount of EUR 22,413 (twenty two thousand four hundred and thirteen euro) in respect of the Lease Agreement.

 

6.4	Further action to be taken at Closing

At Closing the Parties shall take such action and shall sign such documents as shall be required to be taken or signed in order to complete the Transaction, including:

 

a.

payment of the Closing Amount by the Purchaser into the Notary’s Account in accordance with Clause 3.4;

 

b.

termination of the management agreements with ESMB B.V. and R.G. Schneiders Beheer B.V.;

 

c.

execution by [*] and [*] and each of their personal holding companies of a statement whereby they commit themselves to the Company that they shall each transfer any and all intellectual property rights held or acquired by them in exercise of their activities on behalf of the Company, in the form attached hereto as Schedule 6 ;

 

d.

execution of employment agreements between (i) the Company and [*], and (ii) the Company and [*];

 

e.

resignation of the Seller and the granting of discharge ( decharge ) to the Seller and appointment of the Purchaser in the position of managing director of the Company;

 

f.

resignation of [*] as board member of the Foundation and appointment of Marc Chardon and Timothy V. Williams as new board members of the Foundation;

 

g.

execution of the Deed of Transfer;

 

h.

termination of the fiscal unity between the Company and the Seller with effect from the date of this Agreement (which shall take place by operation of law);

 

i.

transfer of an amount of:

 

a.

EUR [*] ([*] euro) out of the

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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Notary’s Account to the bank account of the Seller at ABN AMRO Bank;

 

b.

EUR [*] ([*] euro) out of the Notary’s Account to the bank account of the Seller at Rabobank Randmeren;

 

c.

EUR [*] ([*] euro) to the Bank; and

 

d.

EUR [*] ([*] euro) to be transferred to the bank account of the Company, all of the foregoing in accordance with Clause 3.4.

 

7.	REPRESENTATIONS AND WARRANTIES

 

7.1	Representations and Warranties

The Seller represents and warrants to the Purchaser that each of the Representations and Warranties set out in Schedule 4 is true and accurate at the date of this Agreement, save to the extent:

 

a.

that any disclosures have explicitly, specifically and unambiguously been made in Schedule 4 ;

 

b.

fairly disclosed in the Disclosed Information (Schedule 5).

For the purpose of this Clause any disclosures shall be deemed to have been “fairly” made if the Purchaser (or any of its attorneys, accountants, advisors, representatives, and or affiliates), by reviewing the Disclosed Information as a reasonably professional purchaser assisted by legal and tax advisors, could reasonably be expected to have been aware of such facts or circumstances constituting a breach of the Representations and Warranties.

For the avoidance of doubt, if for example (i) a reference is included in one of the documents which has been included in the Disclosed Information which refers to a document that has not been made part of the Disclosed Information the latter document shall not be considered fairly disclosed, or (ii) documents are included in the Disclosed Information in which uncommon abbreviations were included to which abbreviations was not given a meaning in the documents itself, such document shall not be considered fairly disclosed, insofar as it concerns this abbreviation and the context in which it has been made.

The Purchaser hereby warrants to the Seller that upon signing of this Agreement the Purchaser has not awareness of any breach of the

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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Representations and Warranties.

The Purchaser acknowledges that the Representations and Warranties are the only representations and warranties given by the Seller on which the Purchaser may rely (and has relied) in entering into this Agreement.

The Purchaser does not rely on and hereby waives the right to invoke any warranties that are in any way contained in or implied by Dutch law or any other relevant jurisdiction, including but not limited to sections 7:17 and 7:20-23 of the Dutch Civil Code.

 

7.2	Separate Representations and Warranties

Each of the Representations and Warranties shall be construed