Exemption Orders (Discretionary)

OPUS CRANBERRIES III LIMITED PARTNERSHIP


2001 BCSECCOM 1071





ORDER UNDER SECTIONS 48, 76 AND 171 OF THE SECURITIES ACT, R.S.B.C. 1996, c.418

OPUS CRANBERRIES III LIMITED PARTNERSHIP
OPUS CRANBERRIES III FINANCIAL CORP.

Background

[para 1]
By order dated September 14, 2000 (the “Order”) the British Columbia Securities Commission exempted the Partnership and Corp. from the registration requirements in section 34(1)(a) of the Act and the requirement to file and obtain receipts for a preliminary prospectus and prospectus in section 61 of the Act, for certain intended trades;

[para 2]
The Partnership and Corp. wish to amend the terms of the offering that was the subject of the Order and have applied for exemptions from sections 34(1)(a) and 61 of the Act in connection with such amendments;

Representations

[para 3]
The Partnership and Corp. represent that:

1. the Partnership was formed solely to invest in, and profit from, cranberry farming operations in British Columbia;

2. the certificate of the Partnership divides the limited partnership interests into an unlimited number of series 1, series 2, series 3 and series 4 partnership interests;

3. Opus Agrimanagement Services Inc., a British Columbia company, is the general partner of the Partnership and is the promoter of the offering;

4. Corp. was incorporated under the laws of Alberta, solely to provide funds to the Partnership and will carry on no other business;

5. Corp. is a wholly-owned subsidiary of Knightswood Financial Corp., which is a reporting issuer under the Act and the Securities Act (Alberta) and whose securities are listed and posted for trading on the Canadian Venture Exchange Inc.;

6. none of the Partnership, Corp. or the general partner is a reporting issuer under the Act;

7. the Partnership, Corp. and the general partner have common management;

8. the Partnership and Corp. intend to jointly offer up to 4,000 units, each unit consisting of one series 1 interest in the Partnership and one non-convertible participating bond of Corp.;

9. the subscription price of each unit will be $2,500, with $1,250 allocated to a series 1 interest in the Partnership and $1,250 allocated to a non-convertible participating bond of Corp.;

10. the proceeds from distributing the series 1 interests will be used by the Partnership to invest in the cranberry farming operations;

11. the proceeds from distributing the bonds will be used to purchase series 2 interests in the Partnership, and the Partnership will use these proceeds to invest in the cranberry farming operations;

12. each purchaser must purchase a minimum of ten units, by paying $3,000 cash on subscription and the balance by promissory notes, so that the units have a net present value in excess of $25,000 as a consequence of principal and interest over the term of the promissory notes;

13. the units will be offered for sale in British Columbia to residents of British Columbia under an offering memorandum prepared by the Partnership and Corp. in BC Form 45-904F (formerly Form 43);

14. the units will be sold through a dealer, other than a limited dealer, registered under the Act;

15. the units have been structured in accordance with farm loss rules under the Income Tax Act (Canada) and each purchaser should have an annual net income before tax of not less than $85,000 in order to maximize the tax benefits under the rules;

16. the series 1 interests are non-transferable, except to the following as is permitted by the Partnership Agreement:

(a) a parent, spouse, child, brother or sister of a purchaser;

(b) any trust or estate in which the purchaser and any of the persons referred to in paragraph (a) collectively have a 100% beneficial interest or as to which the purchaser serves as sole trustee or in a similar capacity;

(c) any company of which the purchaser beneficially owns, directly or indirectly, either individually or together with a person referred to in paragraphs (a) or (b), 100% of the voting rights attached to all the outstanding voting securities of that company;

(d) if the purchaser is a corporation, any shareholder of the purchaser who beneficially owns, directly or indirectly, voting securities carrying at least 50% of the voting rights attached to all outstanding voting securities of the purchaser, provided that such shareholder is an employee, officer or director of the purchaser;

(e) if the purchaser is a partnership, any partner of the purchaser; or

(f) any other series 1 interest holder,

(collectively, the “Permitted Purchasers”);

17. if a series 1 interest is transferred, the purchaser may lose tax benefits previously realized under the farm loss rules;

18. a series 1 interest and bond may only be transferred as a unit;

19. the general partner of the Partnership will call an annual general meeting no later than December 31 in each year and will provide each holder of a series 1 interest with notice of the meeting and an information circular in the required form under the Act;

20. the Partnership will comply with the Securities Rules, B.C. Reg. 194/97, as if the Partnership were a reporting issuer, regarding preparation and delivery of interim and annual financial statements;

21. Corp. will comply with the Rules, as if Corp. were a reporting issuer, regarding preparation and delivery of interim and annual financial statements; and

22. the Partnership and Corp. will not use financial forecasts or projections in any communications to potential investors by the Partnership or Corp., as applicable, unless they are derived from financial forecasts or projections included in the offering memorandum or financial statements and have been prepared in accordance with section 4250 of the CICA Handbook and audited in accordance with the Auditing and Related Services Guideline of the CICA Handbook entitled “Examination of a Financial Forecast or Project Included in a Prospectus or Other Offering Document”;

Order

[para 4]
Because it is not prejudicial to the public interest, the Executive Director orders that:

1. under section 76 of the Act, an intended trade in a unit by the Partnership and Corp. is exempt from the requirements of section 61 of the Act provided that:

(a) a copy of this order is delivered to the purchaser before an agreement of purchase and sale is entered into;

(b) an offering memorandum in BC Form 45-904F is delivered to the purchaser in compliance with section 133 of the Rules;

(c) BC Form 45-903F acknowledgment is obtained from the purchaser and retained by the Partnership and Corp. in compliance with section 135 of the Rules; and

(d) the Partnership and Corp. file a BC Form 45-902F on or before the 10th day after the distribution;

2. under section 76 of the Act, an intended trade in a unit acquired by the seller under this order is deemed to be a distribution unless:

(a) the issuer is a reporting issuer, and:

(i) if the issuer is listed on an exchange with recognized resale requirements, the seller has held the security for the time required by the recognized resale requirements; or

(ii) if the issuer is not listed on an exchange with recognized resale requirements, the issuer has been a reporting issuer for the 12 months immediately preceding the trade;

(b) if the seller is an insider of the issuer, other than a director or senior officer of the issuer, the seller has filed all records required to be filed under sections 87 and 90 of the Act;

(c) if the seller is a director or senior officer of the issuer, the seller has filed all records required to be filed under sections 87 and 90 of the Act and the issuer has filed all records required to be filed under Part 12 of the Act and of the Rules;

(d) the trade is not a distribution from the holdings of a control person;

(e) no unusual effort is made to prepare the market or create a demand for the security; and

(f) no extraordinary commission or other consideration is paid in respect of the trade;

3. under sections 48 and 76 of the Act, an intended trade in a unit acquired by the seller under this order to a Permitted Purchaser is exempt from the requirements of sections 34(1)(a) and 61 of the Act; and

4. under section 171 of the Act, the Order is revoked.

[para 5]
DATED November 15, 2001

Derek E. Patterson
Manager

©2024 British Columbia Securities Commission