EXHIBIT 1
_________
SHARE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT made as of the 20th day of July 1999.
BETWEEN: JASMINE PACIFIC HOLDINGS LTD, 581115 BC LTD, 581116 BC
LTD, 581284 BC LTD, 581287 BC LTD, XXXXX XXXXXX, XXXX XXX, SOUTH RIM
FINANCIAL CORPORATION, 556375 BC LTD AND XXXXX XXXXXX & ASSOCIATES LTD
(individually and collectively, the "Vendors")
AND: VESCAN EQUITIES INC., a body corporate incorporated under the
laws of Alberta, and carrying on business in the City of Vancouver,
British Columbia and whose shares are listed for trading over the
counter on the Canadian Dealing Network
(the "Purchaser")
AND: XXXXXX TECHNOLOGIES INC., a body corporate incorporated under
the laws of British Columbia and carrying on business in the City of
Vancouver, British Columbia
(the "Corporation")
WHEREAS the Vendors are the registered and beneficial owners of
common shares in the capital stock of the Corporation (the "Xxxxxx
Shares"); and
WHEREAS the Vendors wish to sell, transfer and convey the Xxxxxx
Shares to the Purchaser and the Purchaser is offering to purchase
the Xxxxxx Shares, subject to the terms and conditions contained
herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants, agreements, representations and warranties
contained herein and other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged) the parties
covenant and agree as follows:
ARTICLE I
INTERPRETATION
1.1 Where used herein, the following terms shall have the following
meanings:
(a) "Act" means the Income Tax Act (Canada),
(b) "Agreement", "hereto", "hereof", "herein", "hereby", and
"hereunder" and similar expressions mean and refer to this Agreement
as the same may be amended, modified or supplemented at any time or
from time to time;
(c) "Assets" means the right, title and interest of the Corporation
in, to and in the Xxxxxx technologies and Intellectual Products;
(d) "ASC" means the Alberta Securities Commission ;
(e) "Closing" means the completion of the purchase and sale of the
Xxxxxx Shares pursuant hereto;
(f) "Closing Date" means September 30 1999, subject to sub-section
9.3;
(g) "Closing Time" means 10:00 a.m. on the Closing Date or such
other time as the parties hereto agree upon;
(h) "Company Act" means the Company Act (British Columbia);
(i) ""Effective Date" means the Closing Date;
(j) "Financial Statements" means the audited financial statements.
(k) "Vescan Share" means units one post-consolidated common share,
in the capital stock of the Purchaser;
(l) "Indebtedness " means all liabilities, obligations, guarantees,
indemnities, capitalized leases and indebtedness known or unknown,
contingent or vested, of the Corporation;
(m) "Xxxxxx Technologies" means and includes the intellectual
property and proprietary information which is particularly described
in Schedule "A" attached hereto, and which shall include the
Improvements, any other proprietary information necessary for the
design, development, manufacture, and sale of Xxxxxx products and
enhancements;
(n) "Management Vendors" means Xxxxx Xxxxxx, Xxxxx Xxxxxx &
Associates and 556375 BC Ltd.;
(o) "Non-Management Vendors" means each of the Vendors other than
the Management Vendors;
(p) "Intellectual Products" means those Xxxxxx technologies
described in Schedule "B" hereto;
(q) "Purchase Price" means the purchase price set out in paragraph
2.1 hereof;
(r) "Purchaser's Counsel" means Xxxxxx Xxx Barristers and
Solicitors, of Vancouver, British Columbia; and
(s) "CDN " means the Canadian Dealing Network .
1.2 Unless otherwise indicated, all dollar amounts referred to in
this Agreement and in the attached Schedules shall be in Canadian
funds.
ARTICLE II
PURCHASE OF SHARES
2.1 Subject to Closing, as of the Effective Date the Vendors hereby
sell, assign, transfer and convey to the Purchaser, and the
Purchaser hereby purchases from the Vendors, the Xxxxxx Shares (the
"Purchase Price'')
2.2 The Purchase Price shall be payable by the allotment and
issuance to each of the Vendors of one fully paid and non-assessable
post-consolidated Vescan Share for each Xxxxxx Share held by the
respective Vendors. Fractional post-consolidated Vescan Share will
not be issued to any of the Vendors and where the exchange ratio
provided for in this paragraph would otherwise result in a Vendor
being entitled to receive a fractional post-consolidated Vescan
Share, such fraction will be disregarded and the Vendor will receive
the next lower number of whole post-consolidated Vescan Share.
2.3 The Vendors and the Purchaser acknowledge and agree that the
issuance of the post-consolidated Vescan Shares are subject to the
policies, rules and bylaws of the ASC and CDN and the post
consolidated Vescan Shares contemplated to be issued to Vendors
pursuant to this Agreement may be subject to escrow provisions
imposed by the ASC and CDN. The Vendors and the Purchaser agree to
be bound by and comply with all of the policies, rules and bylaws of
the ASC and CDN in respect of the post consolidated Vescan Shares,
and with all laws and securities regulations in respect of the
trading of the post-consolidated Vescan Shares.
ARTICLE III
ELECTIONS.
3.1 The parties agree that they will jointly elect in prescribed
form and within the time required under the provisions of Section 85
of the Act in order that, for income tax purposes, the Xxxxxx Shares
will be deemed to be transferred from the Vendors to the Purchaser
at such amount as may be determined by the Vendors in the Vendors'
sole discretion (the "Elected Amount").
3.2 The parties acknowledge that the Elected Amount is intended to
equal the adjusted cost base of the Xxxxxx Shares to the Vendors at
the time of sale to the Purchaser. If it is subsequently determined
that the Elected Amount does not equal the adjusted cost base then
the Vendors and the Purchaser shall jointly elect in accordance with
the provisions of subsection 85(7) or (7. 1) of the Act to have the
transfer take place at an amended elected amount equal to the
adjusted cost base.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
4.1 The Non-Management Vendors severally, in proportion to their
respective ownership of Xxxxxx Shares, hereby represent and warrant
to and in favor of the Purchaser that, as of the date hereof and as
at the Closing Date:
(a) the number of Xxxxxx Shares listed opposite each Non-Management
Vendor's name below will be issued and outstanding and owned by that
Non-Management Vendors
Name Xxxxxx Shares
Jasmine Pacific Holdings Ltd. 3,700,000
581115 BC Ltd. 1,500,000
581116 B.C Ltd. 1,000,000
581284 B.C Ltd. 1,300,000
581287 B.C Ltd. 1,200,000
Xxxx Xxx 450,000
South Rim Financial Corporation 500,000
TOTAL: 9,650,000
(b) the Xxxxxx Shares will be validly and issued and outstanding as
fully paid and non-assessable with no options, contracts, calls,
commitments or rights of any character relating thereto;
(c) each of the Non-Management Vendors will have the full capacity
and authority to sell their Xxxxxx Shares in accordance with the
terms of this Agreement and all necessary corporate action, as the
case may be, will have been taken;
(d) this agreement and all other documents executed and delivered
by the Non-Management Vendors pursuant hereto constitute legal,
valid and binding obligations of the Non-Management Vendors
enforceable in accordance with its terms;
(e) each of the Non-Management Vendors will have legal and
beneficial title to their Xxxxxx Shares, which will be free and
clear of all liens , encumbrances, adverse claims and demands
created by, through, or under any of them;
(f) the Non-Management Vendors are not a party to any actions,
suits or other legal, administrative or arbitration proceedings or
government investigations which might reasonably be expected to
result in impairment or loss of the Non-Management Vendors'
interests in the Xxxxxx Shares;
(g) the entering into of this Agreement by the Non-Management
Vendors and the completion of sale by the Non-Management Vendors of
the Xxxxxx Shares pursuant hereto will not result in the violation
of any law of Canada or in any province thereof;
(h) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the
terms and provisions of the constating documents of any of the
Non-Management Vendors, as the case may be, or of the terms and
provisions of any contract, indenture, lease or other agreement to
which the respective Non-Management Vendors as a party, the breach
of which could have a material adverse effect on the Xxxxxx Shares;
(i) the copies of all instruments, agreements, other documents and
written information set forth as, or referred to in Schedules to
this Agreement, delivered to the Purchaser prior to the date of this
Agreement, or specifically required to be furnished to the Purchase
by the Non-Management Vendors pursuant to this Agreement are and
will be complete and correct in all material respects;
(j) there is no written or oral agreement, option, understanding or
commitment or any right or privilege capable of becoming an
agreement, for the purchase from the Non-Management Vendors of the
Xxxxxx Shares; and
(k) the Non-Management Vendors have incurred no obligations or
liabilities, contingent or otherwise, for brokers' or finders' fees
in respect of this transaction for which the Purchaser shall have
any obligation or liability.
4.2 The Management Vendors severally, in proportion to their
respective ownership of Xxxxxx Shares, hereby represent and warrant
to and in favor of the Purchaser that as of the date hereof and as
at the Closing Date:
(a) the number of Xxxxxx Shares listed opposite each Management
Vendor's name below will be issued and outstanding and owned by that
Management Vendor:
Name Xxxxxx Shares
Xxxxx Xxxxxx 450,000
562796 BC Ltd. 6,050,000
Xxxxx Xxxxxx & Associates 550,000
TOTAL: 7,050,000
(b) the Corporation is a private company duly incorporated,
properly organized, validly existing and qualified to carry on
business under the Company Act and has all necessary power,
authority and capacity to own or other-wise hold its property and
assets, is in good standing, and has conducted its business in
accordance with applicable laws, the failure to comply with which
would not have a material adverse impact on the Corporation;
(c) there will be $25,000 outstanding shareholders' loans owing to
three Vendors by the Corporation;
(d) the Corporation holds no assets other than the Assets;
(e) none of the Management Vendors or the Corporation are party to
any actions, suits or other legal, administrative or arbitration
proceedings or government investigations, actual or threatened,
which might reasonably be expected to result in impairment or loss
of the Management Vendors' interests in the Xxxxxx Shares;
(f) the entering into of this Agreement by the Management Vendors
and the completion of sale by the Management Vendors of the Xxxxxx
Shares pursuant hereto will not result in the violation of any law
of Canada or in any province thereof ;
(g) the Corporation does not own any shares in any corporations or
any beneficial interests in any other entities, nor is the
Corporation a party to any agreements of any nature to acquire any
such shares or beneficial interests or to acquire or lease any other
business operations;
(h) the entering into of this Agreement, and the transactions
contemplated hereby, will not result in the violation of any of the
terms and provisions of the constating documents of any of the
Management Vendors, as the case may be, or of the Corporation, or of
the terms and provisions of any contract, indenture, lease or other
agreement to which the Management Vendors or the Corporation is a
party or by which the Assets are bound, the breach of which could
have a material adverse affect on the Xxxxxx Shares;
(i) there will be no material adverse chance in the quality of the
Assets since the Effective Date;
(k) the Corporation will have good and marketable title to the
Assets, free and clear of all material liens, mortgages, charges,
costs, expenses, liabilities and encumbrances of every nature and
kind whatsoever other than those set out in Schedule "D";
(l) there are no claims, claims for damages, actions, causes of
action, suits or proceedings by or against the Corporation, or the
Assets, either threatened or affecting the subject matter of this
purchase and sale, nor any suits or proceedings at law or equity
before or by any federal, provincial, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, which could adversely affect the business of the
Corporation or the purchase and sale herein contemplated;
(m) the copies of all instruments, agreements, other documents and
written information set forth as, or referred to in, Schedules to
this Agreement, delivered to the Purchaser prior to the date of this
Agreement, or specifically required to be furnished to the Purchaser
by the Management Vendors and the Corporation pursuant to this
Agreement are and will be complete and correct in all material
respects;
(n) the Corporation has paid in a timely manner all liabilities
owing to utilities authorities;
(o) the Corporation has paid any and all material debts,
liabilities, costs, charges and expenses incurred in connection with
the Assets which are due and owing, except as set out in Schedules
"C" and "D" hereto;
(p) the Corporation is not in breach of any bylaws, statutes,
regulations or ordinances in force affecting its business, whether
municipal, federal or provincial,
(q) neither the execution nor delivery of this Agreement nor the
completion of the transactions contemplated hereby will:
(i) result in any fees, duties, taxes, assessments or other
amounts relating to the Assets becoming due or payable (other than
sales and similar taxes payable by the Corporation or the Purchaser
in connection with the transaction contemplated hereby including,
without limitation, under any municipal or provincial statute or
regulation); or
(ii) result in acceleration of any of the dates for payment
of any of the liabilities of the Corporation;
(r) there has not been any material adverse change in the condition
or operations of the business, assets or financial condition or
prospects of the Corporation or any circumstance which might
reasonably be expected to result in any such material adverse change;
(s) the business of the Corporation has been carried on only in the
ordinary and usual course;
(t) the Corporation is not a party to or bound by any Material
Contracts the result of which would have a material adverse affect
on the Corporation or any of its assets and such Material Contracts
will not require any consent or otherwise be affected in any
material respect by the entering into of this Agreement and the
performing of its terms;
(u) the Management Vendors have incurred no obligations or
liabilities, contingent or otherwise, for brokers' or finders' fees
in respect of this transaction for which the Purchase shall have any
obligation or liability;
(v) all governmental licenses, consents, permits and authorities
required for the conduct in the ordinary course of the operations of
the business of the Corporation and the owning of the Assets, have
been obtained, are validly issued and are in good standing and such
conduct and uses are not in breach or default of any statute, bylaw,
regulation, covenant, restriction, plan, permit, licence or authority;
(w) there is no written or oral agreement, option, understanding or
commitment or any right or privilege capable of becoming an
agreement, for the purchase from the Corporation of the Assets;
(x) no dividends have been made or authorized by the Corporation to
the Vendors or former shareholders of the Corporation;
(y) the Management Vendors have no information or knowledge of any
material facts relating to the Corporation's business or to the
Xxxxxx Shares which, if known to the Purchaser, might reasonably be
expected to deter the Purchaser from completing the transaction of
purchase and sale herein contemplated, except any such information
which has been disclosed in writing to the Purchaser prior to the
Closing Date;
(z) as of the date of this Agreement, there are no material
liabilities of the Corporation of any kind whatsoever, whether or
not accrued and whether or not determined or determinable, in
respect of which the Corporation or the Purchaser may become liable
on or after the consummation of the transaction contemplated by this
Agreement other than:
(i) liabilities disclosed on, reflected in or provided for in
the Financial Statements;
(ii) liabilities disclosed or referred to in this Agreement
or otherwise disclosed in writing by the Management Vendors to the
Purchaser;
(iii) liabilities incurred in the ordinary course of business
and attributable to the period since July 1 1999, none of which has
been materially adverse to the nature of the business, results of
operations, assets, financial condition or manner of conducting the
business;
(aa) the Financial Statements have been prepared in accordance with
generally accepted accounting principles and fairly and correctly
set out and disclose in all material respects the financial position
of the Corporation at the time or for the period indicated therein;
(bb) the Corporation has no Indebtedness to any person, firm,
corporation or government or agency thereof including any
Indebtedness which might by operation of law or otherwise now or
hereafter constitute a material lien, charge or encumbrance upon any
of the Assets other than as set out in Schedule " C " hereto;
(cc) there is no written or oral agreement, option, understanding
or commitment or any right or privilege capable of becoming an
agreement, for the purchase from the Management Vendors of the
Xxxxxx Shares or of any of the Assets; and
(dd) the Corporation has duly and timely filed all returns,
elections, filings and reports in respect of income and other taxes
required to be filed by it by law and all such returns, elections,
filings and reports are true, complete and correct in all material
respects; there are no tax arrears, including income tax, goods and
services tax, employee withholdings or property tax nor any related
interest or penalties owing to any foreign, federal, state,
territorial or municipal tax authorities; the Management Vendors'
have no knowledge of any delinquent taxes or any actual or
threatened assessment of deficiency or additional tax or other
governmental charge or a basis for such claim against the
Corporation; there has been no tax audit of the Corporation by any
taxing or other authority within 12 months of the Closing Date, the
Management Vendors have no knowledge of any such audit currently
pending or threatened and there are no tax liens on any of the
Assets or the Properties; there are no agreements, waivers, or other
arrangements with any taxation authority providing for an extension
of time with respect to the filing of any tax return, election or
payment of any tax, governmental charges , penalty, interest or
fine, by the Corporation; there are no actions, suits, proceedings,
investigations or claims now threatened or pending (to the knowledge
of the Management Vendors) against or affecting the Corporation in
respect of taxes, governmental charges, penalties, interest or
fines, or any matters under discussion with any governmental
authority relating, to taxes, governmental charges, penalties,
interest or fines asserted by any such authority.
4.3 All statements contained in any certificate or other instrument
delivered by the Vendors pursuant hereto or in connection with the
transaction contemplated hereby shall be deemed to be
representations and warranties by the Vendors hereunder.
4.4 The Vendors acknowledge and agree that the Purchaser has
entered into this Agreement relying on the warranties and
representations and other terms and conditions hereof and that no
information which is now known or which may hereafter become known
to the Purchaser or its officers, directors or professional advisors
shall limit or extinguish the right to indemnity under this Agreement.
4.5 No investigations made by or on behalf of the Vendors at any
time shall have the affect of waiving, diminishing the scope of or
otherwise affecting any representation or warranty or covenant made
by the Purchaser herein or pursuant hereto. No waiver by the
Vendors of any term of this Agreement, in whole or in part, shall
operate as a waiver of any other terms of this Agreement. In the
event that Closing does not take place no party shall have any claim
against the other for any breach of any representation or warranty
contained in Articles IV and V.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
5.1 The Purchaser represents and warrants to the Vendors (the
Vendors relying on such representations and warranties in entering
into this Agreement) that as of the date hereof and as at the
Closing Date:
(a) the Purchaser is a corporation duly incorporated under the laws
of the Province of Alberta, is validly existing in good standing
with respect to the filing of annual returns, and has the authority
and capacity to enter into this Agreement and to carry out the
transactions contemplated hereby;
(b) the Purchaser is not subject to any liabilities other than
those disclosed in the Financial Statements for the period ended
August 31 1998, except for liabilities incurred in the ordinary
course of business which do not materially impair the value or
prospects of the Purchaser and liabilities disclosed to the Vendors
are those set out in Schedule "E" and "F".
(c) all information with respect to the business activities of the
Purchaser publicly disclosed by the Purchaser is true and correct;
(d) all necessary corporate actions have been or will be taken to
authorize the Purchaser to enter into and perform this Agreement and
this Agreement constitutes a legal, valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with
its terms;
(e) there are no material claims or lawsuits outstanding or
foreseen that would have a material adverse effect on the
Purchaser's business, operations or assets;
(f) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation or breach of
any of the terms and provisions of any indenture, lease or
agreement, written or oral, to which the Purchaser is a party or by
which the Purchaser is bound or affected;
(g) the entering into of this Agreement by the Purchaser and the
completion by the Purchaser of the purchase of the Xxxxxx Shares
pursuant hereto will not result in the violation of any law of the
Province of British Columbia and Alberta or the laws of Canada
applicable therein;
(h) the Purchaser has not made any arrangements, commitments or
undertakings for the payment of any finder's fees, commissions or
brokerage fees in respect of the transactions contemplated by this
Agreement for which the Vendors will have any liability;
(i) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the
terms and provisions of the constating documents or bylaws of the
Purchaser or the Purchaser's Listing Agreement with the CDN and ACS;
(j) the Purchaser is not in default of any requirements of the
Securities Act (Alberta) and the rules and regulations thereunder or
of the rules and policies of the CDN and
(k) there has not been any material adverse change since August 31
1998 in the business, assets, conditions (financial or otherwise),
or results of operations of the Purchaser, except as generally
disclosed.
(l) the entering into of this Agreement, and the transactions
contemplated hereby, will not result in the violation of any of the
terms and provisions of the constating documents of the Purchaser,
or the terms and provisions of any contract, indenture, lease or
other agreement to which the Purchaser's Assets are bound, the
breach of which could have a material adverse affect on the Vescan
Shares;
(m) there will be no material adverse chance in the quality of the
Assets since the Effective Date;
(n) the Purchaser will have good and marketable title to the
Assets, free and clear of all material liens, mortgages, charges,
costs, expenses, liabilities and encumbrances of every nature and
kind whatsoever other than those set out in Schedule "F";
(o) there are no claims, claims for damages, actions, causes of
action, suits or proceedings by or against the Purchaser, or the
Assets, either threatened or affecting the subject matter of this
purchase and sale, nor any suits or proceedings at law or equity
before or by any federal, provincial, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, which could adversely affect the business of the
Purchaser or the purchase and sale herein contemplated;
(p) the copies of all instruments, agreements, other documents and
written information set forth as, or referred to in, Schedules to
this Agreement, delivered to the Corporation prior to the date of
this Agreement, or specifically required to be furnished to the
Corporation by the Purchaser pursuant to this Agreement are and will
be complete and correct in all material respects;
(q) the Purchaser has paid in a timely manner all liabilities owing
to utilities authorities;
(r) the Purchaser has paid any and all material debts, liabilities,
costs, charges and expenses incurred in connection with the
Purchaser which are due and owing, except as set out in Schedules
"E" and "F" hereto;
(s) the Purchaser is not in breach of any bylaws, statutes,
regulations or ordinances in force affecting its business, whether
municipal, federal or provincial,
(t) neither the execution nor delivery of this Agreement nor the
completion of the transactions contemplated hereby will:
(i) result in any fees, duties, taxes, assessments or other
amounts relating to the Purchaser becoming due or payable
including, without limitation, under any municipal or provincial
statute or regulation; or
(ii) result in acceleration of any of the dates for payment
of any of the liabilities of the Purchaser;
(u) there has not been any material adverse change in the condition
or operations of the business, assets or financial condition or
prospects of the Purchaser or any circumstance which might
reasonably be expected to result in any such material adverse change;
(v) the business of the Purchaser has been carried on only in the
ordinary and usual course;
(w) the Purchaser is not a party to or bound by any Material
Contracts the result of which would have a material adverse affect
on the Purchaser or any of its assets and such Material Contracts
will not require any consent or otherwise be affected in any
material respect by the entering into of this Agreement and the
performing of its terms;
(x) the Purchaser has incurred no obligations or liabilities,
contingent or otherwise, for brokers' or finders' fees in respect of
this transaction for which the Vendors shall have any obligation or
liability;
(y) all governmental licenses, consents, permits and authorities
required for the conduct in the ordinary course of the operations of
the business of the Purchaser have been obtained, are validly issued
and are in good standing and such conduct and uses are not in breach
or default of any statute, bylaw, regulation, covenant, restriction,
plan, permit, licence or authority;
(z) there is no other written or oral agreement, option,
understanding or commitment or any right or privilege capable of
becoming an agreement, except for this agreement for the purchase of
the Corporation's Assets;
(aa) no dividends have been made or authorized by the Purchaser to
the former shareholders of the Purchaser;
(bb) the Purchaser has no information or knowledge of any material
facts relating to the Corporation's business or to the Xxxxxx Shares
which, if known to the Purchaser, might reasonably be expected to
deter the Purchaser from completing the transaction of purchase and
sale herein contemplated, except any such information which has been
disclosed in writing to the Purchaser by the Corporation prior to
the Closing Date;
(cc) as of the date of this Agreement, there are no material
liabilities of the Purchaser of any kind whatsoever, whether or not
accrued and whether or not determined or determinable, in respect of
which the Vendors and the Corporation may become liable on or after
the consummation of the transaction contemplated by this Agreement
other than:
(i) liabilities disclosed on, reflected in or provided for in
the Financial Statements;
(ii) liabilities disclosed or referred to in this Agreement
or otherwise disclosed in writing by the Purchaser to the Corporation;
(iii) liabilities incurred in the ordinary course of business
and attributable to the period since August 31,1998, none of which
has been materially adverse to the nature of the business, results
of operations, assets, financial condition or manner of conducting
the business;
(dd) the Financial Statements have been prepared in accordance with
generally accepted accounting principles and fairly and correctly
set out and disclose in all material respects the financial position
of the Purchaser at the time or for the period indicated therein;
(ee) the Purchaser has no Indebtedness to any person, firm,
corporation or government or agency thereof including any
Indebtedness which might by operation of law or otherwise now or
hereafter constitute a material lien, charge or encumbrance upon any
of the Assets other than as set out in Schedule " F " hereto;
(ff) the Purchaser has duly and timely filed all returns,
elections, filings and reports in respect of income and other taxes
required to be filed by it by law and all such returns, elections,
filings and reports are true, complete and correct in all material
respects; there are no tax arrears, including income tax, goods and
services tax, employee withholdings or property tax nor any related
interest or penalties owing to any foreign, federal, state,
territorial or municipal tax authorities;
5.2 All statements contained in any certificate or other instrument
delivered by or on behalf of the Purchaser pursuant hereto or in
connection with the transaction contemplated hereby shall be deemed
to be representations and warranties by the Purchaser hereunder.
5.3 The Purchaser acknowledges and agrees that the Vendors have
entered into this Agreement relying on the warranties and
representations and other terms and conditions hereof and that no
information which is now known or which may hereafter become known
to the Vendors or its officers, directors or professional advisors
shall limit or extinguish the right to indemnity under this Article.
5.4 No investigations made by or on behalf of the Purchaser at any
time shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representation or warranty or covenant made
by the Vendors herein or pursuant hereto. No waiver by the
Purchaser of any term of this Agreement, in whole or in part, shall
operate as a waiver of any other terms of this Agreement. In the
event that Closing does not take place no party shall have any claim
against the other for any breach of any representation or warranty
contained in Articles IV and V.
ARTICLE VI
COVENANTS OF THE VENDORS
6.1 The Vendors covenant and agree that they will:
(a) cause to be taken all proper steps, actions and corporate
proceedings on the part of the Corporation (including the approval
of the sale by the directors of the Corporation) to enable it to
vest a good and marketable title to the Xxxxxx Shares in the
Purchaser, free and clear of all liens, mortgages, encumbrances,
equities or claims of every nature and kind whatsoever; and
(b) if necessary, forthwith after the execution of this
Agreement, obtain all necessary consents that may be required in
respect of the acquisition by the Purchaser of the Xxxxxx Shares.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 All representations, warranties, covenants and agreements made
by the Vendors in this Agreement or pursuant hereto shall, unless
otherwise expressly stated, survive the Closing, execution of
further conveyances and the Closing Date, the payment of the
Purchase Price and any investigation at any the made by or on behalf
of the Purchaser and shall continue in full force and effect for the
benefit of the Purchaser for a period of one years following Closing
save and except only any such representation, warranty, covenant or
agreement relating to the Assets or any, breach or default related
to fraud, in respect of any of which there shall be an unlimited
survival period.
ARTICLE IX
INDEMNITY
8.1 The Vendors and the Purchaser (the "Indemnifying Party") hereby
agree to indemnify the other (the "Indemnified Party") for, and to
hold the Indemnified Party harmless against any and all costs,
expenses (including legal fees on a solicitor and his own client
basis), damages, liabilities and losses suffered or incurred by the
Indemnified Party in connection with its reliance upon any of the
representations, warranties or covenants of the Indemnifying Party
set forth herein or contained in any document or certificate
delivered by the Indemnifying Party pursuant hereto, in the event
that any of such representations or warranties should prove to be
inaccurate or untrue, or in the event that any of such covenants
should be breached by the Indemnifying Party.
ARTICLE X
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION
9.1 Notwithstanding, anything herein contained, the obligation of
the Purchaser to complete the purchase of the Xxxxxx Shares
hereunder is subject to the following conditions:
(a) the representations and warranties of the Vendors contained in
this Agreement and in any certificate or document delivered pursuant
to the provisions hereof or in connection with the transactions
contemplated hereby shall be true on and as of the Closing Date with
the same effect as though such representations and warranties had
been made on and as of the Closing Date;
(b) all of the covenants, agreements and deliveries of the Vendors
to be performed on or before the Closing Date pursuant to the terms
of this Agreement shall have been duly performed;
(c) prior to the Closing Date the Corporation shall not have
experienced any event or condition or taken any action of any
character or have become aware of any action of any character that
would adversely affect the Assets, or financial condition of the
Corporation so as to materially reduce the value of the Assets to
the Purchaser;
(d) the Purchaser and its counsel in their sole discretion are
satisfied that at the Closing:
(i) the Purchaser will acquire good and valid title to the Xxxxxx
Shares free and clear of liens, charges and encumbrances;
(ii) this transaction will not be subject to being set aside under
any applicable insolvency, bankruptcy, or similar legislation;
(e) the transactions contemplated by this Agreement shall have been
duly approved by the boards of directors of the Corporation, the
Purchaser, and by the CDN and the ASC If necessary, and the
shareholders of the Corporation at the Annual General Meeting to be
held on August 30 1999; and
(f) no federal, provincial, regional or municipal government or
any agency there of shall have enacted any statute, regulation or
bylaws or announced any policy that will materially and adversely
affect the Assets or the right of the corporation to the full
enjoyment of the Assets.
9.2 The foregoing conditions are for the exclusive benefit of the
Purchaser and such conditions may be waived in whole or in part by
the Purchaser on or prior to the Closing Date by delivery to the
Vendors of a written waiver to that effect, signed by the Purchaser.
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE VENDORS
10.1 Notwithstanding anything herein contained the obligation of
each of the Vendors to complete the sale hereunder is subject to the
following conditions:
(a) the representations and warranties of the Purchaser
contained in this Agreement and in any certificate or document
delivered pursuant to the provisions hereof or in connection with
the transactions contemplated hereby shall be true on and as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date;
(b) the Purchaser shall have performed and complied with all
covenants, agreements and conditions required by this Agreement to
be performed or complied with by it at or prior to the Closing Date;
and
(c) the transactions contemplated by this Agreement shall
have been duly approved by the boards of directors of the
Corporation, the Purchaser, and by the CDN and the ASC, and the
shareholders of the Corporation at the Annual General Meeting to be
held on August 30 1999; and
(d) prior to the Closing Date the Purchaser shall not have
experienced any event or condition or taken any action of any
character or have become aware of any action of any character that
would adversely affect the financial condition of the Purchaser so
as to materially reduce the value of the Purchaser to the Vendors
and the Corporation;
(e) the transaction contemplated by this Agreement shall be
declared void if the Purchaser fails to obtain at the Annual General
Meeting to be held on August 30 1999 the shareholder's approval for
the capital reorganization of the Purchaser wherein all outstanding
shares of the Purchaser are consolidated on the basis of one common
share for every one hundred shares whereby effectively reducing the
number of issued and outstanding common shares prior to the Closing
date not exceeding, two million four hundred thousand (2,400,000)
common shares;
10.2 The foregoing conditions are for the exclusive benefit for the
Vendors and any such condition may be waived in whole or in part by
the Vendors at or prior to the time of Closing Date by delivering to
the Purchaser a written waiver to that effect, signed by the Vendors.
10.3 The Closing Date as defined in Article I may be postponed
until as late as October 20 1999 at the sole election of the Vendors.
ARTICLE XII
VENDORS' DELIVERIES
11.1 At the Closing the Vendors shall deliver or cause to be
delivered to the Purchaser,:
(a) a resolution of the board of directors of the Corporation
approving the transfer of the Xxxxxx Shares to the Purchaser;
(b) share certificates for the Xxxxxx Shares duly endorsed
for transfer;
(c) the corporate records and seals of the Corporation
including, without limiting the generality of the foregoing, the
Corporation's constating documents and all minutes and resolutions
of the Corporation's directors and shareholders;
(d) resignations of all of the directors and officers of the
Corporation requested by the Purchaser (other than Xxxxx Xxxxxx who
shall remain as a director of the corporation following Closing,)
and releases by all such directors and officers of the Corporation
of all claims they have against the Corporation, conditional on the
completion of the sale of the Xxxxxx Shares pursuant hereto;
(e) copies of all documents (including, without limitation,
records, correspondence and contracts) that have not been previously
delivered before Closing and that the Purchaser in its reasonable
opinion considers to be necessary or desirable for the conduct by
the Purchaser of any activities related to the Assets.
ARTICLE XIII
PURCHASER'S DELIVERIES
12.1 Subject to paragraph 2.3, at the Closing, the Purchaser shall
deliver or cause to be delivered share certificate(s) for an
aggregate of up to sixteen million seven hundred thousand
(16,700,000,) post-consolidated Vescan Shares registered in the
names of those Vendors agreeing to sell their Xxxxxx Shares to the
Purchaser.
12.2 at the Closing the Purchaser shall appoint following four (4)
directors to the board:
Xx. Xxxxx Xxxxxx
Xx. Xxxx Xxx
Xx. Xxxxxxx Xxxxx
Xx. Xxxxxx Xxxxxxx
(a) resignations of all of the directors and officers and
releases by all such directors and officers of the Purchaser of all
claims they have against the Purchaser, conditional on the
completion of the purchase of the Xxxxxx Shares pursuant hereto;
(b) copies of all documents (including, without limitation,
records, correspondence and contracts) that have not been previously
delivered before Closing and that the Corporation and Vendors in its
reasonable opinion consider to be necessary or desirable.
ARTICLE XIV
LOSS OR DAMAGE PRIOR TO CLOSING
13.1 From the Effective Date to the Closing Date, the Management
Vendors shall cause the Corporation and the Corporation shall
continue to satisfy and comply with its obligations and shall not
make or initiate any actions that could result in the default in or
breach of any term, condition, provision or obligation to be
performed under the Xxxxxx Technologies, which would impair or
result in the loss of the Corporation's interest in the Assets or
adversely affect the business of the Corporation or the purchase and
sale herein contemplated.
13.2 From the Closing Date, the Management Vendors shall consult
with and follow the recommendations of the Purchaser with respect to
the cancellation of contracts, agreements, commitments or other
understandings or arrangements to which the Corporation is a party,
including, without limitation, commitments for capital expenditures.
ARTICLE XV
NOTICES
14.1 Any notice or other writing required or permitted to be given
hereunder shall be deemed to be sufficiently given if personally
delivered, if mailed postage prepaid in any post office in Canada,
or if given by telegram, telecopier, or facsimile, addressed as
follows:
(a) To the Vendors: Xxxxxx Technologies Inc.
450 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx ,XX X0X 0X0
Attention: Xxxxxxx Xxx
FAX No: (000) 000 0000
(b) To the Purchaser: Vescan Equities Inc.
000 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: L Xxxxxxx
FAX No. (000) 000 0000
14.2 Any such notice given as aforesaid shall be deemed to have
been given to the parties hereto when delivered, if personally
delivered, on the third business day following the date of mailing,
if mailed, and on the same day as the telegraphing, telecopying, or
facsimile transmission thereof, if telegraphed, telecopied, or
transmitted by facsimile, PROVIDED HOWEVER, that during the period
of any postal interruption in Canada any notice given hereunder by
mail shall be deemed to have been given only as of the date of
actual delivery of the same.
14.3 Any party may from time to time by notice in writing given as
aforesaid change its address for the purposes of this Article XV.
14.4 Corporation agrees to forward to the Vendors at its cost any
notice to a Vendor, which it receives pursuant to paragraph 14. 1.
ARTICLE XVI
GENERAL PROVISIONS
15.1 Time shall be of the essence of this Agreement.
15.2 This Agreement contains the whole agreement between the
Vendors and the Purchaser in respect of the purchase and sale of
some or all of the Xxxxxx Shares contemplated hereby and there are
no warranties, representations, terms, conditions or collateral
agreements, express, implied or statutory, other than expressly set
forth in this Agreement.
15.3 This Agreement shall endure to the benefit of and be binding
upon the parties hereto and, as applicable, their heirs,
administrators, successors and assigns, and any reference herein to
the Vendors or the Purchaser shall include, as applicable, their
successors and assigns.
15.4 The parties hereto shall execute such further and other
documents and do such further and other things as may be necessary
to carry out and give effect to the intent of this Agreement.
15.5 This Agreement shall in all respects be governed by and be
construed in accordance with the laws of the Province of British
Columbia.
15.6 If any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect
in any jurisdiction, the validity, legality and enforceability of
such provision or provisions shall not in any way be affected or
impaired thereby in any other jurisdiction and the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless
In either case as a result of such determination this Agreement
would fail of its essential purpose.
15.7 Wherever the singular or masculine is used herein, the same
shall be deemed to include the plural or the feminine or the body
politic or corporate where the context or the parties so require.
15.8 The headings to the clauses of this Agreement are inserted for
convenience only and shall not affect the construction hereof.
15.9 Unless otherwise stated a reference herein to a numbered or
lettered Article or paragraph refers to the Article or paragraph
bearing that number or letter in this Agreement.
15.10 Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in Canadian dollars.
15.11 No public announcement or other public communication
concerning the transactions contemplated herein will be made by any
party without the prior written approval of the nature, content and
publication thereof by the Vendors and the Purchaser, unless
required to comply with legal, regulatory, reporting or other
obligations applicable to any party in which case the parties will
still use best efforts to consult each other on the announcement or
communication.
15.12 All costs and expenses (including, without limitation, the
fees and disbursements of legal counsel and any investment advisors'
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
expenses unless otherwise agreed to between the parties.
15.13 This Agreement may be executed in one or more counter-parts
and by facsimile, each of which counterparts so executed shall
constitute an original and all of which together shall constitute
the same agreement.
15.14 The parties undersigned have read, acknowledged, understood,
and accepted or, in the case of Vescan Equities Inc., consented
to,the terms of the offer above .
IN WITNESS WHEREOF this agreement has been executed by the parties
hereto as of the day and year first above written
XXXXXX TECHNOLOGIES INC.
By it's authorized signatories
Jasmine Pacific Holdings Ltd.
By it has authorized signatory
XXXX XXX
XXXXX XXXXXX
Xxxxx Xxxxxx & Associates Ltd.
By it has authorized signatory
South Rim Financial Corporation
By it has authorized signatory
556375 B.C. Ltd.
By it has authorized signatories
581115 BC LTD
By it has authorized signatory
581116 BC LTD
By it has authorized signatory
581284 BC LTD
By it has authorized signatory
581287 BC LTD
By it has authorized signatory
The terms of the above offer are hereby acknowledged and consented
to:
VESCAN EQUITIES INC.
By it has authorized signatories
SCHEDULE A
THE DESCRIPTION XXXXXX TECHNOLOGY
1.1. Xxxxxx Portable Dual Section Power Line Conditioner
The Synergistic Power Line Conditioner ("SPLC") is a portable,
dual-section, power-line conditioner designed to protect electronic
equipment by suppressing high energy surges/transients, radio
frequency interference, and all types of noise including pulsed,
continuous, and intermittent. Virtually any electrical or
electronic equipment that feeds interference into, or picks up
interference from, the power lines will be adequately filtered. As
a result, the performance and life span of the electronic equipment
plugged into the SPLC will be greatly enhanced.
Since its inception, the SPLC has been considered a technological
breakthrough product in terms of performance (it has a zero
performance failure rate to-date). Over the last decade, it has
earned over a dozen rave reviews from professional and trade
publications across North America. The SPLC was used at the
televised 1992 American Music Awards presentation for its theatrical
lighting systems to enhance audio and video performance. In
addition, the SPLC has also been used by numerous companies such as
Pioneer to showcase their electronic products (e.g. stereo, video,
TV, etc.) at trade shows and exhibitions.
The company is presently involved with further developing the
technology for a commercial version of the SPLC in response to
market interest. The commercial version is a permanent unit built
into electronic equipment and appliances.
1.1.1. Product Description
The SPLC consists of a 14 gauge aluminum chassis finished with
semi-gloss black epoxy base enamel with gold silk-screening. The
internal electronic components are securely mounted to a military
specification double-sided PTH glass epoxy circuit board with a
flash point of 23 C. The internal wiring is 14 AWG and is rated at
105 C. All the electronic components are CSA and UL approved. The
SPLC has two isolated and individually grounded hospital grade
outlets attached at the front panel. The rear panel consists of an
IEC recessed 3-prong type power line receptacle with a
high-frequency bypassed red-lighted 16A/250VAC rocker switch to
control the electrical power. Power enters through a detachable two
meter long 14AWG IEC line cord and passes through a standard
16A/250VAC IEC connector into a built-in 15 ampere thermal circuit
breaker.
The SPLC is divided into four primary circuits, two secondary
circuits, and two tertiary circuits. Each primary circuit comprises
a set of two bi-directional high-frequency, low-pass filters for
preconditioning and phase-compensation. Each of the secondary
circuits comprise of two radio frequency interference suppression
circuits to eliminate common-mode and differential noise. The third
circuits each comprises of a double-fused, voltage and current
transient-suppression circuit to suppress common-mode and
differential spikes and surges. Visual indicators are provided to
alert the user when the transient-suppression circuitry has been
compromised. The SPLC device is rated at a maximum output power of
1,800 xxxxx.
2.1. Xxxxxx VideoGuard Power Line Conditioner
The VideoGuard is similar to the SPLC in that it is also a portable
power-line conditioner designed to protect electronic equipment by
suppressing voltage transients, radio frequency interference, and
pulsed, continuous, and intermittent noises. However, the
VideoGuard uses a new patentable noise suppression technology
designed in-house by the company's R & D department. This new
technology enables the company to design the VideoGuard that is
optimized for, not only high-end video applications, but general
purpose television viewing. These enhancements also protect
equipment, both CATV cable and electrical connections, from the
onslaught of atmospheric disturbances such as lighting, safeguarding
both the equipment in use and the user.
The company is currently pursuing patent protection on the product
design in response to inquiries by Pioneer (for its video products)
and Ricoh (for its photocopiers) to have the PowerBar Plus
manufactured for them on an OEM basis.
2.1.1. Product Description
The VideoGuard is a portable power-line conditioner designed to
protect a television's AC power circuitry, TV/Antenna (CATV/ANT)
input circuitry and any associated ancillary equipment such as DVD,
LaserDisc or VHS machines.
Power-line conditioning is afforded by way of an electronic
multi-stage, bi-directional noise suppression system and a three
level, high-energy, transient and surge protector (patent pending).
The VideoGuard is available in two versions. Both units are housed
in a matte-black, textured, glass-filled polycarbonate (Lexan(tm)),
injection-molded plastic case ensuring a virtually indestructible
and fire-retardant structure.
All the electronic components are CSA certified and UL listed where
necessary and assembled to the strictest of instrument-grade
commercial standards. All internal electronic components are
securely mounted to a military specification double-sided,
plated-through-hole (PTH), glass-epoxy circuit board.
The VideoGuard comes as a completely assembled unit. An 18 page
owner's manual prepared by our applications engineering department
answers ten of the most frequently asked questions regarding
power-line conditioning. This manual is designed to fully acquaint
the user with the VideoGuard and power related problems. Also
included in the manual are fully illustrated diagrams detailing
basic applications and the necessary precautions to take in order to
maximize its use for a flawless installation.
3.1. Xxxxxx PM-2 Preamplifier and PA-100 Power Amplifier
Although the choices available for separate home audio systems are
many and varied, in order to select a system that is matched in
terms of compatible music recovery capability, the task becomes
increasingly difficult. Many expensive separate home audio systems
fail to achieve their sonic superiority due primarily to the lack of
properly matched components. In order to eliminate problems of
incompatibility, the PM-2 Dual Mono Preamplifier and the PA-100 Dual
Mono Power Amplifier have been specifically designed to mate with
each other as a pair, both sonically and aesthetically, to produce a
fully optimized and compatible musical recovery system. This means
that the sonic produced by the PM-2 and PA-100 system has a lower
level of resolution and a greater spatial/ambient information
recovery. As a consequence of this, the end result has a more
layered and realistic 3-dimensional sound stage.
As of to-date, both the PM-2 preamplifier and PA-100 power amplifier
has been produced on a limited basis and distributed for market
testing. Based on the feedback received from industry sources, the
musical quality produced by the pair is far more superior to many of
the audio systems currently available in the market today. The
company will begin full scale production of the PM-2 preamplifier
and PA-100 amplifier in the near future.
3.1.1. Product Description
The PM-2 preamplifier comprises of two chassis finished with
semi-gloss, black epoxy enamel with gold silk screening. The remote
power supply is housed in a 14 gauge aluminum chassis whereas the
control chassis is contained in a black epoxy enameled, 16 gauge
welded steel enclosure with aluminum cover. All electronic
components are securely mounted to a military specification double
side, PTH, glass epoxy circuit board with a flash point of 230 C.
Front panel is made of 3/8 inch thick glass-beaded natural anodized
matte finished aluminum plate.
The PM-2 preamplifier control chassis employs six highly regulated
power supplies feeding a network of low-pass filters that supply a
dual-channel line amplifier. All switches in the audio path are
military specification silver plated for long life and quite
operation. The main board includes a delay circuit that eliminates
turn-on transients and harbors the line-stages and support
circuitry. Optional daughter boards are available for phono stage
circuitry or additional line-stage outputs. Frequency response is
greater than 200kHz. Noise is down 90dB for a 1V output.
The PA-100 power amplifier is housed in a black epoxy enameled, 16
gauge welded steel enclosure with 1/8 inch thick black anodized
aluminum lid. All visible screws are black steel alloy flat head
socket screws. The front panel is a 3/8 inch thick glass-beaded
natural anodized matte finished aluminum plate. The front panel
support two custom designed solid aluminum handles finished as
above. All electronic components are securely mounted to three
military specification doubled-side, PTH, glass epoxy circuit boards.
The PA-100 power amplifier incorporates a three stage AC to DC
high-current power supply. The dual channel (stereo) amplifiers are
related at 100 xxxxx RMS into an 8( load; 184 xxxxx into a 4( load.
Minimum continuous load is 2( operating as a class AB stereo power
amplifier.
The input circuitry of the power amplifier is a matched, cascoded,
bipolar transistor differential stage. Although a differential pair
has twice the perceived noise (Xxxxxxxx-Xxxxxx effect) of a
single-ended first stage, a well balanced differential first stage
will inherently reject supply correcting, differential-amplifier
stage has shown that perfectly matched transistors (thermally
matched in a common package) and matched in terms of VBE and hFE
would allow for the lowest possible VOS and total harmonic
distortion; this assumes balanced choices for source and feedback
resistance's. This is taken advantage of in this design by
employing hand-selected, dual transistor pairs.
The input-stage is biased from a true current source whose output is
converted to a single-ended current via a unity-gain current mirror.
This current is necessary to feed the input of the very low input
impedance of the emitter-follower predriver. This circuit topology
achieves exceptional DC performance with very predictable and very
reliable low VOS, nominally less than ( 2.0mV production spread,
with little or no VOS (voltage offset) adjustment. The cascoded
input-stage allows for the use of lower noise, lower voltage, dual
bipolar transistors that would otherwise be prohibitive due to the
higher supply rail voltages inherent in a power amplifier. This
cascoding of the input-stage has the intrinsic ability of lowering
noise at high frequencies as well. In addition to biasing each
transistor of the differential stage at 2mA (which greatly increases
slew rate), the cascode pair is biased from a regulated, highly
stable, temperature compensated supply. Adjunct to the slew
enhancement techniques applied above, simple emitter degeneration is
implemented. By resistively and thermally matching these emitter
resistors, any contribution to VOS is minimized. The complexity of
properly applying cascoding substantially improves linearity, in
particular by overcoming the inherent distortions caused by the
"Xxxxxx" effect. This application also provides for the best
possible common-mode and power supply rejection ratios.
The above mentioned "Xxxxxx" or "early voltage" effect is a
phenomenon by which an effective feedback path between the input and
output of a semiconductor device is provided by the capacitance
between the specified electrodes. This can affect the total input
impedance, which results in the total dynamic input capacitance
being always equal to or greater than the sum of the static
electrode capacitance's. The benefits of cascoding are extremely
important at this stage where regenerative feedback is virtually
ineffective for CMRR (common-mode rejection ratio) and PSRR (power
supply rejection ratio).
To further reduce the effects of common-mode signals (thereby
encouraging CMR), it was necessary to fully balance the AC impedance
of the differential input-stage bipolar transistors. This involved
more than simply equalizing resistor values; properly balancing the
differential input-stage lowers distortion due to the reduction of
output currents from the input-stage differential pair in response
to common-mode input voltage. This reduction in the conversion
process also decreases thermal drifts.
In view of the non-standard source impedance's available, this power
amplifier has been specifically designed to mate with the PM-2
preamplifier, thereby ensuring optimized impedance matching and
CMRR. The initial sonic benefits are improved low level resolution
spatial and ambient information recovery and overall better
specificity, which translates into excellent imaging and a more
realistic 3-dimensional sound stage portrayal.
The thinking today has predominately assumed that the only solution
to low-frequency group-delay distortion is the elimination of all
coupling capacitors. Unless a no-holds-barred design, a truly
direct-coupled amplifier (with absolutely no capacitors in the
signal path or feedback circuitry) is inherently unreliable and
prone to thermal drift. The consequences can be a significant, and
often unpredictable amount of VOS at the speaker terminals due to
temperature drift, semiconductor mismatch or simply component aging.
The common practice today is to compensate any VOS drift with a
comparator and a servo amplifier. This method of controlling VOS is
to examine the output for excess VOS and apply an offsetting voltage
to the amplifier input. The problem arises when we remember, that
we must integrate the signal over its entirety and divide the result
by the time during which it was examined. This gives us the average
DC value of the waveform. Therefore, any VOS reduction circuitry
can only respond after the fact ... too late, since the waveform
has already passed through the amplifier before the error can be
distinguished from the signal. Our solution, was to retain the
coupling capacitors, but include a low-frequency, group-delay
compensation network. This network directly compensates for the
low-frequency attenuation created by the first and predominant
roll-off. The low-frequency characteristics in the time domain from
1Hz to 10Hz is substantially improved with a -3dB corner frequency
better than 3Hz as well as better low frequency transient response
and overall control.
Another prerequisite of this amplifier was to ensure that the power
bandwidth was passively limited, rather than being a manifestation
of the active circuitry limitation. Therefore, the bandwidth of the
total amplifier circuitry is limited by passive components in the
low-frequencies, by way of the feedback path and at
high-frequencies, by the input filter. This passive input filtering
ensures the amplifiers overall frequency response remains well below
the frequency limitations of the active componentry. The benefits
are twofold, primarily freedom from instabilities, and equally as
important, but often misunderstood - transient intermodulation
distortion (TID). The low-frequency limiting is accomplished by a
polypropylene bypassed, low ESR, audio grade, electrolytic
capacitor. This capacitor guarantees that the output is referenced
to ground potential, due to the increasing degenerative-feedback
(negative-feedback) as frequencies approach DC. This not only
provides for a stable and reliable amplifier, but also overcomes
many of the obstacles regarding VOS mentioned earlier.
In addition to the global degenerative-feedback, local-feedback is
employed in a number of locations for a total closed-loop gain of
approximately 24. This technique raises the output impedance of the
second stage common-collector bipolar pairs by way of a pair of
common-drain MOSFETs; the inherently faster switching capabilities
of the MOSFETs ensure less phase shift than their bipolar
counterparts. This allows the output impedance of the driver stage
to be independent of the modulating effects of amplitude and
frequency on the junction capacitance's, hence one less contributor
to a form of dynamic distortion. This compound driver stage
therefore comprises a class "A" biased at 25mA. This
common-collector stage provides a very low impedance and high
current drive in addition to isolating the predriver's high output
impedance from the non-linearity's of the low power MOSFET's input
capacitance's.
This next low power stage is a common heat-sinked pair of
complementary MOSFETs in a common-drain configuration, biased at
approximately 30mA. These MOSFETs additionally ensure that the
final output stage MOSFETs have sufficient gate drive current to
charge and discharge the input capacitance of their gates. This
allows for extra current when needed, particularly when driving low
impedance speaker loads at high frequencies. The output stage not
only provides the necessary signal gain, by way of current
requirements, but also is susceptible to all the back EMF and cable
reflections typical of any amplifier/speaker interface. This is
compounded by the prevalence of exotic, time compensated speaker
cables. These hardships imposed on the power amplifier are
particularly true in a class "AB" design, and where audio signals
are dealt with via a (supposedly) complementary stage. Regarding
complementary output devices, typically their inherent mismatched
parameters goes unnoticed or certainly improperly addressed. All
the semiconductors used herein are individually tested and
hand-selected for proper matching characteristics.
The output power stage is also a common-drain MOSFET configuration.
Although a common-drain MOSFET output stage is less efficient than a
common-source configuration, it is inherently more economical and
more forgiving to device matching and henceforth current sharing.
This makes for a consistently more reliable amplifier. A
common-drain output stage requires the driver stage to swing the
entire output voltage range, after subtracting bias voltage, this
would require an additional dual polarity, but higher voltage power
supply for the output stage to be capable of swinging from rail to
rail.
While power MOSFETs have many advantages, one problem is the
MOSFET's lower transconductance which results in considerable
crossover distortion unless biased extremely high. Likewise
harmonic distortion increases over bipolar, typically +10dB.
Regardless of the aforementioned concerns the advantages outweigh
the disadvantages in this application. The output devices chosen
for this power amplifier are capable of operating extremely linear
when biased at a minimum of 100mA and driven from the very stable
and high current driver stage previously mentioned. Therefore this
is the minimum bias current used here and why MOSFET's temperature
coefficient is zero; this allows for practically no temperature
drift, eliminating the need for an elaborate bias-tracking circuit.
The output stage is coupled to the amplifier output terminals
through a quasi second-order low-pass filter. Though raising the
measured damping factor, this decoupling network reduces THD at high
frequencies and minimizes the risks of parasitic oscillations. The
output inductor has an increasing impedance at high frequencies and
henceforth prevents capacitive loads from shorting the output stage.
Properly matching the output series inductor with an appropriate
damping resistor minimizes the overshoot and ringing prevalent when
driving into highly reactive loads by reducing the "Q" of the
resonant circuit.
4.1. Xxxxxx I-250 Stereo Integrated Amplifier
As the purchasing power increases in North America due to the
healthy economic condition, more and more people are considering
buying an upscale audio product that is smaller and simpler in
design but still offers an esoteric value as opposed to the mass
market remote controlled surround sound mega systems available
today. As a result of the change in market sentiment, the company
has developed a prototype integrated stereo amplifier to accommodate
this market segment. Although capable to be mass-produced, the
construction and detailing that comes with the I-250 stereo
integrated amplifier is first class all the way. It features a
remote power supply which is unique in the industry for this type of
product and price point. The prototype unit's performance has far
exceeded all design and performance criteria to date. Requests has
also been received from interested buyers to convert the I-250
stereo integrated amplifier with two channels to a multi-channel
system that can be used for theater surround sound purposes. The
company is currently researching the possibility of expanding the
two channels to multi-channels system.
4.1.1. Product Description
The I-250 integrated amplifier comprises two chassis. The remote
power supply is housed in a 14 gauge aluminum chassis with matching
lid. Finish is a semi-gloss, black epoxy enamel with gold
silk-screening. The control chassis is housed in a black epoxy
enameled, 16 gauge welded steel enclosure with 1/8 inch thick black
anodized aluminum lid. All electronic components are securely
mounted to a military specification double-side, PTH, glass epoxy
circuit board. Circuit board silk-screening and component ident.
has a flash point of 230oC. The front panel is a 3/8 inch thick
glass-beaded natural anodized matte finished aluminum plate. All
electronic components are securely mounted to three military
specification doubled-side, PTH, glass epoxy circuit boards.
Minimum continuous load is 3(.
The I-250 control chassis houses a dual-channel preamplifier stage,
a dual-channel power amplifier section and six highly regulated
power supplies. All switches in the audio path are military
specification silver plated for long life and quiet operation. The
main mother board includes a delay circuit that eliminates turn-on
transients. Optional daughter boards are available for phono stage
circuitry or additional line-stage outputs. Frequency response is
greater than 200Hz. Noise is down 90dB for a 1V output. Power
output is 50 xxxxx RMS into 8( and 85 xxxxx RMS into 4(.
The I-250 incorporates a four-stage push-pull audio power amplifier
design comprising a complementary MOSFET output stage driven by
fully discrete bipolar input and driver stages. This power
amplifier was designed not as a no-holds-barred approach nor as an
unusually esoteric design. Rather, a mid-priced, though, up-scale,
high-end contender. It includes a cascoded and symmetrical
differential-amplifier input stage, a voltage-amplifier gain-stage,
a high-current, voltage-boosted buffer and dual VBE multipliers for
bias stabilization. Hallmarks of power amplifiers in this price
category often exhibit grainy high-frequencies and loose,
uncontrolled, low-frequencies, typical symptoms of poor linearity
and a high-frequency instability problem.
Emphasis has been put on increasing open-loop linearity as well as
ensuring excellent stability into a variety of speaker loads that
are as low in impedance as they are high in inductance, both
real-world conditions. The thinking today has assumed that the only
viable and perhaps the only practical solution to minimize
low-frequency group-delay distortion is to eliminate the input
coupling capacitor. A truly direct-coupled amplifier, with
absolutely no capacitors in the signal path or feedback circuitry,
can prove to be unreliable. The consequences can be a significant,
and often unpredictable amount of VOS at the speaker terminals due
to thermal drift, semiconductor mismatch or simply component aging.
Another factor to consider is the non-standard output impedance
typical of the average returned to ground via the lower output
impedance of the preamplifier's output stage. It is not unusual to
have a preamplifier with an output impedance ranging from as high as
10K( to lower than 10(.
The alternative to AC coupling is to compensate any VOS drift with a
comparator and a servo amplifier. This method of controlling VOS is
to examine the output for excess VOS and apply and offsetting
voltage to the amplifier input. The problem arises when we remember
that we must integrate the signal over its entirety and divide the
result by the time during which it was examined. This gives us the
average DC value of the waveform. Therefore any VOS reduction
circuitry can only respond after the fact ... too late, since the
waveform has already passed through the amplifier before the error
can be distinguished from the signal. An audio-grade film capacitor
is included as part of the input signal conditioning where signal is
fed into a polypropylene bypassed polycarbonate film capacitor,
which is sized to minimize low frequency phase shift. The radio
frequency interference input filter follows and is incorporated to
maximize RF suppression with an fhb of approximately 200kHz. This
input signal conditioning forms a passive band-pass filter set at
over a decade above and below the minimum requisite bandwidth of
20Hz-20KHz for minimal phase shift at the pass-band. This RC filter
network not just a capacitor to ground, is in series with a small
value resistor, providing an additional transfer function-a zero.
This zero, eliminates an additional pole, and therefore an
additional phase lag, otherwise the high frequency phase shift would
eventually approach 90 , and be prone to oscillate.
Further low-frequency limiting is accomplished by a low ESR,
electrolytic capacitor in the return leg of the global-feedback
network. This capacitor guarantees that the output is referenced to
ground potential due to the increasing degenerative-feedback
(negative-feedback) as frequencies approach DC. This not only helps
to stabilize the power amplifier, but also overcomes many of the
obstacles regarding VOS mentioned earlier. The input stage
illustrated comprises a symmetrical cascoded pair of
differential-amplifiers. This input stage is essentially a
voltage-difference amplifier to current-output converter. Although
a differential amplifier has twice the perceived noise,
Xxxxxxxx-Xxxxxx Effect, as compared to a single-ended amplifier, a
well balanced differential amplifier can virtually eliminate
2nd-harmonic distortion and exhibit far greater power supply noise
rejection, particularly at low-frequencies. Ideally the
current-output seen at the collectors of a differential amplifier is
completely independent of their respective input signals, only the
voltage difference is amplified, hence common-mode rejection.
Analysis of this error-correcting-stage has shown that perfectly
matched transistors, matched in terms of VBE and hFE, would allow
for the lowest possible VOS and total harmonic distortion. It is of
particular importance to balance the collector currents to ensure
the lowest 2nd-harmonic distortion figures.
The common practice today is to actively load each differential
amplifier with a current mirror in order to ensure proper current
balancing. Passively balancing the collector currents also has the
advantage of not unnecessarily increasing differential amplifier
gain that would otherwise occur due to the very high effective load
impedance created by current mirror. This has only a marginal
degradation on 2nd-harmonic distortion performance. This is in part
owing to the very low load imposed by the following
voltage-amplifier stage. Total harmonic distortion should therefore
only be measurable at very high-frequencies. To further reduce the
effects of common-mode signals, thereby encouraging the common-mode
rejection, it is imperative to fully balance the AC impedance of the
differential amplifiers as well. This involves more than simply
equalizing resistor values. A truly balanced differential amplifier
input stage lowers distortion by reducing its current-output in
response too common-mode voltage-input. This reduction in the
conversion process also decreases thermal drifts that could
significantly degrade VOS. The benefits of cascoding are extremely
important at this stage where regenerative-feedback is virtually
ineffective for common-mode rejection and power supply noise
rejection. Cascoding also increases the input stage's linearity and
open-loop frequency response due to the minimization of the junction
capacitance, Xxxxxx-effect, of the input transistors. Otherwise,
this effect would adversely affect the total input impedance
resulting in the total dynamic input capacitance being always equal
to or greater than the sum of the transistor's static capacitances.
To maintain the high bandwidth and gain capability of the input
stage, it's output impedance which is governed predominantly ROUT,
must be terminated by a similar load impedance and a reasonably low
capacitive load, CLOAD of the next amplifying stage. This is
imperative to ensure a sufficient current swing at its output. The
power amplifier's second stage is built around a
complementary-cascode voltage-amplifier. The use of a cascode stage
here serves the dual role of splitting the power dissipation between
four devices as well as increasing open-loop frequency response.
This stage provides the current-to-voltage conversion and provides
the phase inversion necessary to drive the output stage drivers.
The lower frequency response typical of a common-emitter amplifier
is enhanced with the cascode connected common-base transistors.
These common-base transistors inherently have the best
high-frequency response as well as very high voltage gain, although
current gain is slightly less than unity. As large gain-stage, the
voltage-amplifier can contribute a consequential amount of
distortion if not linearized properly. First of all it is assumed
that if linearization of gain at low-frequencies is addressed by the
global-feedback network, then important, is the fact that, although
the voltage-amplifier stage is essentially a high gain stage in it's
own right, gain is difficult to maintain due to this stage's
inherent sensitivity to loading. High gain must be maintained in
order for local-feedback to be effective.
The benefits mentioned earlier from passively limiting the
high-frequency response of the input stage is equally realized here
by the action of Cdom passively limiting the high-frequency response
of the voltage-amplifier stage. Another reason to include these
capacitors is the ease at which linearization is accomplished.
Linearization can be so successful that any harmonic distortion
contribution will be predomiately lost in the noise floor and can be
virtually ignored. As indicated previously, the load subjected to
the differential amplifier stage should be as ideal as possible.
High-frequency stability can easily be threatened by the cumulative
phase errors that occur by cascading amplifier-stages. Therefore
the emphasis during development of the input differential amplifier
stage and voltage amplifier stage was to eliminate the possibility
of any high-frequency oscillations.
The output stage is a highly biased class "AB" complementary
push-pull source-follower (common-drain) MOSFET output stage.
MOSFETs were chosen in view of the significantly less odd-order
harmonic distortion that is contributed to the output signal than
their bipolar junction transistor counterparts. This stage supplies
all the current necessary for the speaker load. Connected to the
output is another XX Xxxxx network which dampen any high-frequency
resonances. This RC network terminates the output stage with a
resistive load at high frequencies minimizing the possibility of
oscillations. The inductor serves to isolate the power amplifier at
high-frequencies from capacitive speaker/cable loads.
5.1 ELECTRONICS HOBBY KITS
Electronics Hobby Kits are electronic kits that come in a ideal
assortment of project subjects as well as skill levels. A
comprehensive instructional manual comes will all kits as well as an
800 number for the first time kit builder. The skill level required
for assembly are ideal for the students
SCHEDULE B
DESCRIPTION OF XXXXXX PRODUCTS
POWERLINE PRODUCTS
Synergistic Power Line Conditioner
VideoGuard
VideoGuardPlus
Xxxxxx Synergistic Surge- Killer Technology
Power Bar Plus
PowerGuard System
AUDIO PRODUCTS
PA-100 Power Amplifier
PM-2 Preamplifier
I-250 Stereo Integrated Amplifier
MPA -200 Mono Power Amplifier
SPA -100 Stereo Power Amplifier
THX 6 - Channel Power Amplifier
DMP -20/50 Dual Mono Preamplifier
HDS -10 Headphone Amplifier
Moving -Coil Preamplifier
EDUCATIONAL
Electronics Hobby Kit
LOUDSPEAKER PRODUCTS
Modus I Speaker System
Modus II Speaker System
Modus III Speaker System
Modus V Speaker System
Modus VIII Speaker System
SCHEDULE C
INDEBTEDNESS
The debts of the Corporation shall, at closing, total no more than
$25,000.00, some of which are payable to the Vendors.
SCHEDULE D
DEBTS, LIABILITIES, COST, CHARGES, AND EXPENSES IN RESPECT OF ASSETS
DUE AND OWING BY THE CORPORATION
NIL
SCHEDULE E
INDEBTEDNESS
The debts of the Purchaser shall, at closing, total no more than
$5,000.00, some of which are payable to the Directors.
SCHEDULE F
DEBTS, LIABILITIES, COST, CHARGES, AND EXPENSES DUE AND OWING BY THE
PURCHASER
NIL except as noted in Schedule ''E''.
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