RETRACTION AGREEMENT
Exhibit 2.2
THIS RETRACTION AGREEMENT (“Agreement”) is made and entered into this 21st day of
June, 2006, by and between SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP., a Delaware corporation
(“Stockholder”) and M&M ENGINEERING LTD, a company duly incorporated under the laws of the Province
of Newfoundland and Labrador (the “Corporation”).
WITNESSETH:
WHEREAS, the issued and outstanding common and preference stock of the Corporation as of the
date hereof consists of 274 common shares and 3,857 preference shares, which shares are presently
owned and held of record by Stockholder;
WHEREAS, Stockholder desires to sell all shares of the common and preference stock of the
Corporation held by it;
WHEREAS, Stockholder is a party to that certain Share Purchase Agreement, dated June 21, 2006
(the “Share Purchase Agreement”), pursuant to which 53341 Newfoundland and Labrador
Limited, a company duly incorporated under the laws of the Province of Newfoundland and
Labrador (“Purchaser”) has agreed to purchase from Stockholder 274 common shares and 1,107
preference shares of the Corporation currently held by Stockholder; and
WHEREAS, Stockholder desires to sell to the Corporation, and the Corporation desires to
purchase and retract from Stockholder, the 2,750 preference shares of the Corporation held by
Stockholder and excluded from the Share Purchase Agreement (the “Retracted Shares”) at the price,
and upon the terms and conditions, hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises of the parties
hereto, the parties agree as follows:
1. Purchase Price. The Purchase Price to be paid by the Corporation to the Stockholder for
the Retracted Shares is $1,000 per share, or, in the aggregate, $2,750,000, in lawful money of
Canada.
2. Closing. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall be held at such place as shall be agreed upon by the Corporation and Stockholder on or before
June 21, 2006 (the “Closing Date”). The Closing shall occur immediately prior to the closing of
the transactions contemplated by the Share Purchase Agreement. The closing of the transactions
contemplated under this Agreement shall take place via the simultaneous exchange of facsimile
signature pages or deposit of executed signature pages with an internationally recognized courier
service, as mutually agreed upon by Stockholder and the Corporation.
3. Surrender of Shares. At the Closing, Stockholder shall surrender to the Corporation the
certificates representing the Retracted Shares, duly endorsed to the Corporation.
4. Payment of Purchase Price. At the Closing, the Corporation will pay the Purchase Price
to Stockholder in cash paid by wire transfer of immediately available Canadian funds.
5. Canadian Withholding Tax. Notwithstanding the provisions of Section 4, if, on or before
the Closing Date, the Stockholder fails to deliver to the Corporation a clearance certificate
issued by the Canada Revenue Agency pursuant to Section 116 of the Income Tax Act (Canada) in
respect of the sale of the Retracted Shares fixing a certificate limit which is at least equal to
the Purchase Price, then twenty-five percent (25%) of the Purchase Price payable to the Stockholder
hereunder shall be withheld from the Purchase Price (the “Withholding Amount”), and the Withholding
Amount shall be deposited and held in
escrow on the terms and subject to the conditions of the Escrow Agreement in substantially the form
attached to the Share Purchase Agreement as Exhibit “D.”
6. Representations of Stockholder. Stockholder hereby represents as follows:
a. The execution and delivery of this Agreement by Stockholder and the sale of the Retracted
Shares have been duly authorized by all necessary corporate action and Stockholder has all
requisite corporate power and authority to enter into this Agreement, to consummate the
transactions contemplated herein and to perform its obligations hereunder.
b. This Agreement constitutes, or upon execution and delivery will constitute, the legal,
valid and binding obligation of Stockholder, enforceable in accordance with its terms, except as
such enforcement may be limited by general equitable principles or by applicable bankruptcy,
insolvency, or similar laws and judicial decisions from time to time in effect which affect
creditors’ rights generally.
c. The entering into of this Agreement and the transactions contemplated hereby will not
violate or conflict with any of the terms, conditions or provisions of the certificate of
incorporation or bylaws of Stockholder, and will not violate, conflict with, result in a breach
of, constitute a default under (whether with or without notice or the lapse of time or both), or
accelerate or permit the acceleration of the performance required by, or give any other party the
right to terminate, any material contract, written or oral, to which Stockholder is a party.
d. Stockholder is the owner of the Retracted Shares, free and clean of any liens, encumbrances
or other rights of third parties.
7. Representations of the Corporation. The Corporation hereby represents as follows:
a. The execution and delivery of this Agreement by the Corporation and the retraction of the
Retracted Shares have been duly authorized by all necessary corporate action and the Corporation
has all requisite corporate power and authority to enter into this Agreement, to consummate the
transactions contemplated herein and to perform its obligations hereunder.
b. This Agreement constitutes, or upon execution and delivery will constitute, the legal,
valid and binding obligation of the Corporation, enforceable in accordance with its terms, except
as such enforcement may be limited by general equitable principles or by applicable bankruptcy,
insolvency, or similar laws and judicial decisions from time to time in effect which affect
creditors’ rights generally.
c. The entering into of this Agreement and the transactions contemplated hereby will not
violate or conflict with any of the terms, conditions or provisions of the constating documents of
the Corporation, and will not violate, conflict with, result in a breach of, constitute a default
under (whether with or without notice or the lapse of time or both), or accelerate or permit the
acceleration of the performance required by, or give any other party the right to terminate, any
material contract, written or oral, to which the Corporation is a party.
d. The Corporation is not insolvent as of the date hereof, and, the Corporation’s consummation
of the transactions contemplated hereby and performance of its obligations hereunder will not
render the Corporation insolvent.
8. Integrated Agreement. This Agreement represents the entire understanding and agreement
between the parties hereto and supersedes all prior agreements and understandings, either oral or
written, between them, with respect to the subject matter hereof. Any modification of this
Agreement must be in writing and signed by all the parties hereto.
9. Resident of Canada. The Stockholder is a “non-Canadian person” within the meaning of
the Investment Canada Act and appropriate actions will be taken as required by applicable laws to
conclude
this transaction in compliance with such laws. Subject to Section 5 of this Agreement, the
Stockholder shall provide to the Corporation on the Closing Date any and all certificates required
to evidence such compliance, including but not limited to appropriate clearance certificates from
Canada Revenue Agency.
10. Governing Law. This Agreement shall be subject to, and interpreted and construed in
accordance with the laws of the Province of Newfoundland and Labrador, without regard to the
principles of conflicts of law. The parties hereto agree the courts of Newfoundland and Labrador
shall have exclusive jurisdiction to hear and determine any claims or disputes arising in relation
to this Agreement, or to any matter arising therefrom; provided that, notwithstanding anything to
the contrary in this Section 10, the choice of law and forum selection provisions included in the
Note, the Guarantees and the Collateral Guarantees (as each is defined in the Share Purchase
Agreement”) shall govern any claims or disputes arising in relation to the Note, the Guarantees and
the Collateral Guarantees.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of the date first
above written.
| “CORPORATION” | ||||
| M & M ENGINEERING LIMITED, a company duly incorporated under the laws of the Province of Newfoundland and Labrador. | ||||
| /s/ Xxxx Xxxxxx | ||||
| Authorized Signing Officer | ||||
| “STOCKHOLDER” | ||||
| SPECTRUM SCIENCES & SOFTWARE HOLDINGS CORP., a Delaware corporation. | ||||
| /s/ Xxxxxxx Xxxxxxx | ||||
| Authorized Signing Officer |
