Settlements

ARAGON (PONY TRAIL) DEVELOPMENT [Agreed Stmt]

BCSECCOM #:
Document Type:
Agreed Stmt
Published Date:
1999-05-14
Effective Date:
1999-05-10
Details:


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF ARAGON (PONY TRAIL) DEVELOPMENT
(ONTARIO) CORPORATION

AND

ARAGON DEVELOPMENT CORPORATION

Agreed Statement of Facts and Undertaking


The following agreement has been reached between Aragon (Pony Trail) Development (Ontario) Corporation (“Aragon”), Aragon Development Corporation (“Aragon Development”) and the Executive Director:

1. As the basis for the undertakings referred to in paragraph 3 of this agreement, Aragon and Aragon Development acknowledges the following facts as correct:
      (a) Aragon, the developer, was incorporated in Ontario on November 27, 1995, and is not a reporting issuer under the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”);

      (b) Aragon Development is not a reporting issuer under the Act, and was incorporated under the Company Act, R.S.B.C. 1996, c. 62 on November 12, 1987, and later amalgamated and continued on as Aragon Development on February 1, 1998;

      (c) Aragon filed a prospectus, dated November 29, 1996 (the “Prospectus”), with the Superintendent of Real Estate for an offering of condominium strata lots in a development called “The Manors at Highland Creek”, located at 238 Galloway Road, Scarborough, Ontario (the “Offering”);

      (d) the Offering was deemed to be an offering of real estate securities (the “Real Estate Securities”) as defined under NIN #96/36, dated October 10, 1996 entitled Real Estate Securities (“NIN #96/36”), due to a rental revenue guarantee offered to initial purchasers;

      (e) during the period from December 17, 1996 to August 14, 1997, Aragon and Aragon Development distributed the Real Estate Securities in purported reliance upon the exemption from the prospectus requirements of the Act provided by section 45(2)(5) (formerly section 31(2)(5) of the Securities Act, S.B.C. 1985, c. 83 (the “Prior Act”)), and the exemption from the registration requirements provided by section 74(2)(4) of the Act (formerly section 55(2)(4) of the Prior Act);

      (f) the Real Estate Securities were distributed to 13 residents of British Columbia and 1 resident of Alberta (the “Purchasers”);

      (g) the subscription funds were held in trust by Aragon and Aragon Development;

      (h) advertisements for the Real Estate Securities contained information regarding tax benefits and a guaranteed return that may have been misleading to investors, contrary to the guidance provided by the Commission with respect to the marketing of real estate securities as set out in NIN#96/36; and

      (i) the exemptions under sections 45(2)(5) and 74(2)(4) of the Act were not available to be relied upon by Aragon and Aragon Development for the distribution of the Real Estate Securities to one of the Purchasers (the “Purchaser”) because the distribution of the Real Estate Securities to the Purchaser was accompanied by advertisements and, therefore, Aragon was required to prepare an offering memorandum in accordance with section 134(2) of the Securities Rules, B.C. Reg. 194/97 (the “Rules”) and deliver the offering memorandum to the Purchaser in accordance with section 133 of the Rules.

2. Aragon and Aragon Development have co-operated fully with the staff of the Commission during the investigation of these matters.

3. Aragon and Aragon Development undertake and agree to:
      (a) deliver a copy of this agreement to the Purchaser to whom the Real Estate Securities were distributed improperly under the Offering;

      (b) offer a right of rescission to the Purchaser;

      (c) pay $1,000 to the Commission, $500 of which represents the costs of the investigation, and the remainder a penalty which will be paid into the Industry Education Fund; and

      (d) comply fully with the Act,the Rules, and all applicable regulations, policies and guidelines from the date of this agreement.
4. Aragon and Aragon Development waive any right it may have, under the Act or otherwise, to a hearing and review, judicial review or appeal related to, in connection with or incidental to this agreement.

DATED at Vancouver, British Columbia, on May 7 , 1999.



__________________________
    )
    Aragon (Pony Trail) Development
Witness
    )
    (Ontario) Corporation)
    )
Thomas E. Baillie____________
    )
per:
    ___“Lenny Moy”______
Witness Name (Please print)
    )
    Authorized Signature
    )
1000 - 1055 West Georgia Street
    )
Address
    )
    )
Barrister and Solicitor_________
    )
Occupation
    )

DATED at Vancouver, British Columbia, on May 7 , 1999.


___________________________
    )
Aragon (Pony Trail) Development
Witness
    )
(Ontario) Corporation)
    )
Thomas E. Baillie_____________
    )
per:___“Lenny Moy”______
Witness Name (Please print)
    )
Authorized Signature
    )
1000 - 1055 West Georgia Street
    )
Address
    )
    )
Barrister and Solicitor__________
    )
Occupation
    )

DATED at Vancouver, British Columbia, on May 10 , 1999.






Wayne Redwick
A/Executive Director


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