SHARE REPURCHASE AGREEMENT BETWEEN CPAS SYSTEMS INC. AND TIER VENTURES CORPORATION AND TIER TECHNOLOGIES INC. MADE AS OF JUNE 29, 2007 SHARE REPURCHASE AGREEMENT
Exhibit
99.1
BETWEEN
CPAS
SYSTEMS INC.
AND
TIER
VENTURES CORPORATION
AND
MADE
AS OF
JUNE
29, 2007
THIS
AGREEMENT is made as of June 29, 2007;
B
E T W E
E N:
CPAS
SYSTEMS INC., a corporation incorporated under the laws of Ontario (the
“Purchaser”),
-
and
-
TIER
VENTURES CORPORATION, a corporation incorporated under the laws of Nova
Scotia (the “Vendor”),
-
and
–
TIER
TECHNOLOGIES, INC., a corporation organized under the laws of the State
of Delaware (“Tier”)
WHEREAS
the Vendor is the sole legal, beneficial and registered owner of 1,481,796
common shares (the “Shares”) in the capital of the Purchaser;
AND
WHEREAS the Purchaser has agreed to repurchase the Shares, upon the terms and
conditions hereinafter set forth;
AND
WHEREAS Tier owns, directly or indirectly, all of the issued shares of the
Vendor;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the
covenants and agreements herein contained the parties hereto agree as
follows:
ARTICLE
1 - INTERPRETATION
|
1.01
|
Definitions
|
In
this
Agreement, unless something in the subject matter or context is inconsistent
therewith:
“Agreement”
means this agreement and all amendments made hereto by written agreement between
the Vendor and the Purchaser;
“Business
Day” means a day other than a Saturday, Sunday or statutory holiday in
Ontario;
“Closing
Date” means June 29, 2007 or such other date as may be agreed to in writing
between the Vendor and the Purchaser;
“Liens”
means any mortgage, charge, pledge, hypothecation, security interest,
assignment, lien (statutory or otherwise), charge, title retention agreement
or
arrangement,
restrictive covenant or other encumbrance of any nature or any other arrangement
or condition which, in substance, secures payment or performance of an
obligation;
“Marketing
Agreement” means the North America Marketing Alliance agreement between the
Vendor, Tier and the Purchaser dated October 1, 2004;
“Share
Purchase Price” has the meaning set out in Section 2.01(1);
“Shareholders
Agreement” means the shareholders agreement dated as of October 1, 2004 by and
among the Vendor, the Purchaser and the other parties thereto;
“Shares”
has the meaning set out in the recitals hereto;
“Subscription
Agreement” means the Subscription Agreement between the parties hereto dated
October 1, 2004;
“Termination
Time” means 11:59 a.m. (Toronto Time) on the Closing Date; and
“Time
of
Closing” means 12:05 p.m. (Toronto Time) on the Closing Date.
|
1.02
|
Currency
|
All
references to currency herein are to lawful money of Canada.
ARTICLE
2 - PURCHASE AND SALE
|
2.01
|
Purchase
and Sale and Share Purchase
Price
|
(1) The
Vendor hereby sells to the Purchaser, and the Purchaser hereby purchases from
the Vendor, the Shares, for an aggregate purchase price of Cdn.$5,100,000.00
in
cash (the “Share Purchase Price”), upon and subject to the terms and conditions
hereof.
(2) The
Share
Purchase Price shall be paid and satisfied by the delivery to Vendor by
Purchaser at the Time of Closing of a wire transfer representing the Share
Purchase Price, against delivery to the Purchaser of a share certificate or
certificates evidencing the Shares, duly endorsed for transfer.
|
2.02
|
Closing
|
The
sale
and purchase of the Shares shall be completed at the Time of Closing at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (solicitors for the Purchaser), ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ Dominion ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇. The Vendor shall deliver to the Purchaser’s solicitors the
share certificates in escrow, to be held by the solicitors in trust pending
the
closing. Upon the funds for the Share Purchase Price being received
by the Vendor’s bank, the closing will conclude and the Purchaser’s solicitors
will deliver the share certificates to the Purchaser for
cancellation.
ARTICLE
3 - REPRESENTATIONS AND WARRANTIES
|
3.01
|
Vendor’s
Representations and
Warranties
|
The
Vendor represents and warrants to the Purchaser that:
(1) the
Vendor is a corporation incorporated, organized and subsisting under the laws
of
the Province of Nova Scotia, and has the corporate power and authority to enter
into and perform its obligations under this Agreement. The execution,
delivery and performance by the Vendor of this Agreement has been duly
authorized by all necessary corporate action on the part of the
Vendor;
(2) the
Vendor is the sole beneficial, legal and registered owner of the Shares with
a
good title, free and clear of all Liens. Upon completion of the
transaction contemplated by this Agreement, the Vendor will have transferred
to
the Purchaser good and valid title to the Shares owned by the Vendor, free
and
clear of all Liens;
(3) The
execution, delivery and performance by the Vendor of this Agreement (i) does
not
(and will not with the giving of notice, the lapse of time or the happening
of
any other event or condition) result in a breach or a violation of, or conflict
with, or allow any other person to exercise any rights under, any contracts
or
instruments to which the Vendor is a party or pursuant to which any of its
assets or property may be affected, and (ii) will not result in the violation
of
any law, or require the Vendor to make any filing with, give any notice to,
or
obtain any authorization of, any governmental entity;
(4) except
for the Purchaser’s right under this Agreement, no person has any written or
oral agreement, option or warrant or any right or privilege (whether by law,
pre-emptive or contractual granted by the Vendor) capable of becoming such
for
the purchase or acquisition from the Vendor of any of the Shares;
(5) the
Vendor is not a non-resident of Canada for purposes of the Income Tax
Act (Canada);
(6) the
Vendor has good and sufficient power, authority and right to enter into and
deliver this Agreement; and
(7) this
Agreement constitutes a valid and legally binding obligation of the Vendor,
enforceable against the Vendor in accordance with its terms subject to
applicable bankruptcy and other laws of general application limiting the
enforcement of creditors’ rights generally and to the fact that specific
performance is an equitable remedy available only in the discretion of the
court.
|
3.02
|
Survival
of Vendor’s Representations, Warranties and
Covenants
|
(1) The
representations and warranties of the Vendor set forth in Section 3.01 shall
survive the completion of the sale and purchase of the Shares herein
provided.
(2) The
covenants of the Vendor set forth in this Agreement shall survive the completion
of the sale and purchase of the Shares herein provided for and, notwithstanding
such completion,
shall
continue in full force and effect for the benefit of the Purchaser in accordance
with the terms thereof.
|
3.03
|
Purchaser’s
Representations and
Warranties
|
The
Purchaser represents and warrants to the Vendor that:
(1) the
Purchaser is a corporation incorporated, organized and subsisting under the
laws
of Ontario, and has the corporate power and authority to enter into and perform
its obligations under this Agreement. The execution, delivery and
performance by the Purchaser of this Agreement has been duly authorized by
all
necessary corporate action on the part of the Purchaser; and
(2) this
Agreement constitutes a valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms subject to
applicable bankruptcy and other laws of general application limiting the
enforcement of creditors’ rights generally and to the fact that specific
performance is an equitable remedy available only in the discretion of the
court; and
(3) the
share
capital of the 3,155,736 issued and outstanding common shares of the Purchaser
as reflected on the balance sheet of the Purchaser dated March 31, 2007 is
$4,586,926 or $1.45352 per common share.
|
3.04
|
Survival
of Purchaser’s Representations, Warranties and
Covenants
|
(1) The
representations and warranties of the Purchaser set forth in Section 3.03 shall
survive the completion of the sale and purchase of the Shares herein
provided.
(2) The
covenants of the Purchaser set forth in this Agreement shall survive the
completion of the sale and purchase of the Shares herein provided for and,
notwithstanding such completion, shall continue in full force and effect for
the
benefit of the Vendor in accordance with the terms thereof.
ARTICLE
4 - OTHER AGREEMENTS;
COVENANTS
|
4.01
|
Subscription
Agreement Terminated
|
The
Purchaser and the Vendor agree that effective as of the Termination Time, the
Subscription Agreement is terminated.
|
4.02
|
Shareholders
Agreement Terminated
|
The
Purchaser and the Vendor agree that effective as of the Termination Time, the
Vendor shall cease to be a party to the Shareholders Agreement.
|
4.03
|
Marketing
Agreement Terminated
|
(1) Pursuant
to Section 11(b)(iii) of the Marketing Agreement, the Purchaser, Tier and the
Vendor agree that effective as of the Termination Time, the Marketing Agreement
is terminated.
As
well,
the parties agree that notwithstanding Section 11(c) of the Marketing Agreement,
Section 23 of the Marketing Agreement shall not survive the termination of
the
Marketing Agreement. The parties agree that upon the termination of
the Marketing Agreement, the only work that the Purchaser will be obliged
to
perform for Tier will be the work to be performed under the existing
Subcontractor Agreement (the “Contra Costa Contract”) between Tier and the
Purchaser related to “the Contra Costa County Project” dated January 17,
2006. The Parties agree that notwithstanding the termination of the
Marketing Agreement generally, Sections 12 and 14 of the Marketing Agreement
(which survive the termination of the Marketing Agreement), shall continue
to
apply to the work performed by the Purchaser for Tier for the Contra Costa
project.
(2) The
Vendor and Tier confirm they have either returned to the Purchaser, or have
destroyed, all Confidential Information of the Purchaser previously provided
by
the Purchaser to the Vendor and Tier under or in respect of the Marketing
Agreement.
(3) The
Vendor and Tier confirm that under or pursuant to the Marketing Agreement (or
otherwise) they have not granted any third parties any license or sub-license
to
use CPAS software or other CPAS confidential information. The Vendor
and Tier also confirm that they have not developed a “white label” version of
the CPAS software.
(4) The
parties confirm that there is no active teaming arrangement between them in
respect of any prospects or clients.
(5) The
parties confirm that in respect of Section 8 of the Marketing Agreement, no
escrow arrangement was ever established.
|
4.04
|
Financial
Statements
|
Within
10
days after the date hereof, the Purchaser shall provide to the Vendor a copy
of
the audited financial statements for the Purchaser for the year ended March
31,
2007. Within 15 days after the date hereof, the Purchaser shall
provide to the Vendor copies of the unaudited monthly financial statements
for
the Purchaser for each of April, May and June, 2007.
ARTICLE
5 - GENERAL
|
5.01
|
Further
Assurances
|
Each
of
the Vendor and the Purchaser shall from time to time execute and deliver all
such further documents and instruments and do all acts and things as the other
party may, either before or after the Closing Date, reasonably require to
effectively carry out or better evidence or perfect the full intent and meaning
of this Agreement.
|
5.02
|
Time
of the Essence
|
Time
shall be of the essence of this Agreement.
|
5.03
|
Legal
Fees
|
Each
of
the parties hereto shall pay their respective legal and accounting costs and
expenses incurred in connection with the preparation, execution and delivery
of
this Agreement and all documents and instruments executed pursuant hereto and
any other costs and expenses whatsoever and howsoever incurred related to the
preparation, execution and delivery of this Agreement.
|
5.04
|
Public
Announcements
|
No
written public announcement or press release concerning the sale and purchase
of
the Shares shall be made by the Vendor or the Purchaser without the prior
consent and joint approval of the Vendor and the Purchaser, such approval not
to
be unreasonably withheld. The foregoing shall not apply in respect of
disclosure regarding the sale/purchase of the Shares that a party is required
to
make in order to comply with applicable laws or regulations, provided that
in
such case the party making the disclosure shall use commercially reasonable
efforts to provide reasonable advance written notice to the other party
regarding such proposed disclosure (together with a draft copy of such
disclosure), and shall permit the other party to comment on such proposed
disclosure (which comments will not be unreasonably rejected).
|
5.05
|
Benefit
of the Agreement
|
This
Agreement shall enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the
parties hereto.
|
5.06
|
Entire
Agreement
|
This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and cancels and supersedes any prior
understandings and agreements between the parties hereto with respect
thereto. There are no representations, warranties, terms, conditions,
undertakings or collateral agreements, express, implied or statutory, between
the parties other than as expressly set forth in this Agreement.
|
5.07
|
Amendments
and Waiver
|
No
modification of or amendment to this Agreement shall be valid or binding unless
set forth in writing and duly executed by both of the parties hereto and no
waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
|
5.08
|
Notices
|
Any
demand, notice or other communication to be given in connection with this
Agreement shall be given in writing and shall be given by personal delivery,
by
registered mail or by electronic means of communication addressed to the
recipient as follows:
To
the
Vendor:
c/o
Tier
Technologies, Inc.
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇
Attention:
General Counsel
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
To
the
Purchaser:
CPAS
Systems Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: The
President
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
or
to
such other address, individual or electronic communication number as may be
designated by notice given by either party to the other. Any demand,
notice or other communication given by personal delivery shall be conclusively
deemed to have been given on the day of actual delivery thereof and, if given
by
registered mail, on the fifth Business Day following the deposit thereof in
the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during the normal business hours of the recipient and on the
Business Day during which such normal business hours next occur if not given
during such hours on any day. If the party giving any demand, notice
or other communication knows or ought reasonably to know of any difficulties
with the postal system which might affect the delivery of mail, any such demand,
notice or other communication shall not be mailed but shall be given by personal
delivery or by electronic communication.
|
5.09
|
Governing
Law
|
This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of Ontario and the laws of Canada applicable therein.
|
5.10
|
Attornment
|
For
the
purpose of all legal proceedings this Agreement shall be deemed to have been
performed in the Province of Ontario and the courts of the Province of Ontario
shall have jurisdiction to entertain any action arising under this
Agreement. The Vendor and the Purchaser each hereby attorns to the
jurisdiction of the courts of the Province of Ontario.
|
5.11
|
Counterparts
|
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original and all of which taken together shall be deemed to
constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the parties adopt any signatures received
by a receiving fax machine as original signatures of the parties.
IN
WITNESS WHEREOF the parties have executed this Agreement.
|
CPAS
SYSTEMS INC.
|
||||
|
By:
|
||||
|
Name:
Title:
|
||||
|
TIER
VENTURES CORPORATION
|
||||
|
By:
|
||||
|
Name:
Title:
|
||||
|
TIER
TECHNOLOGIES, INC.
|
||||
|
By:
|
||||
|
Name:
Title:
|
||||