Settlements

Panorama Ridge Enterprises Limited, et al. [Agreed Stmt]

BCSECCOM #:
Document Type:
Agreed Stmt
Published Date:
1995-01-13
Effective Date:
1994-12-22
Details:


IN THE MATTER OF The Securities Act, S.B.C. 1985, c. 83
AND IN THE MATTER OF Panorama Ridge Enterprises Limited
Partnership
AND IN THE MATTER OF Max Herndl International Corporation,
474835 B.C. Limited, Mark Kohan and Max Herndl
Agreed Statement of Facts and Undertaking
D.E. Holley
December 22, 1994

      AGREED STATEMENT OF FACTS AND UNDERTAKING:-- The following agreement has been reached between Panorama Ridge Enterprises Limited Partnership ("Panorama") and the Superintendent of Brokers:

1.
As the basis for the undertakings referred to in paragraph 3 of this agreement, Panorama acknowledges the following facts to be correct:
Panorama is a limited partnership registered on November 24, 1994 under the Partnership Act, R.S.B.C. 1979, c. 312, is not a reporting issuer and is in the business of purchasing and developing a parcel of land near Kelowna, British Columbia (the "Property");
(b)
Max Herndl International Corporation ("MHIC") is incorporated under the Company Act, R.S.B.C. 1979, c. 59 (the "Company Act") and is not a reporting issuer;
(c)
474835 B.C. Limited ("474835") is incorporated under the Company Act and is not a reporting issuer;
(d)
Max Herndl ("Herndl") is the sole director and officer of MHIC;
(e)
Herndl and Mark Kohan are the directors and officers of 474835;
(f)
474835 is represented in an Offering Memorandum of Panorama dated November 26, 1994 (the "Offering Memorandum") to be the General Partner of Panorama;
(g)
MHIC and Herndl are represented in the Offering Memorandum to be the promoters of Panorama and soliciting agents for the distribution of securities under the Offering Memorandum;
(h)
MHIC has contracted to purchase the Property at a price of approximately $7,974,067;
(i)
The Offering Memorandum disclosed that MHIC had contracted to purchase the Property at a price less than the sale price of the Property to Panorama but was paying the expenses of the Offering;
(j)
The Offering Memorandum failed to disclose the following material facts:
(i)
MHIC has contracted to purchase the Property for approximately $7,974,067 prior to assigning its right to purchase the Property to Panorama whereby Panorama will pay approximately $11,350,000 to purchase the Property;
(ii)
MHIC has assigned its right to purchase the Property to Panorama for a markup of approximately $3,376,000 payable from the sale of the Property to Panorama out of which the disclosed fees of $1,201,368 (now $1,776,769) are to be paid by MHIC;
(iii)
of the $1,201,368 (now $1,776,769) fees to be paid by MHIC,
(1)
$822,000 are syndication services fees of which $548,000 is retained by MHIC and $274,000 is payable in commissions;
(2)
$238,590 are offering expenses;
(3)
$209,500 are corporate finance fees;
(4)
$209,854 are property purchase tax and conveyancing fees; and
(5)
$296,825 are promotional fees and expenses;
(iv)
a marketing system operating on several levels was used to solicit investment in Panorama; and
(v)
the Use of Proceeds Section VIII of the Offering Memorandum did not disclose the use to which the proceeds from each Investor's Promissory Note would be put;
(k)
Herndl and MHIC have made statements concerning Panorama in  promotional materials other than the Offering Memorandum that, at the time and in light of the circumstances under which they were made, are misrepresentations, including, but not limited to:
(i)
"This project was purchased at such wholesale cost, we're in at 70-90% instant equity";
(ii)
in a worst case scenario, each investor will still earn a profit of $30,000; and
(iii)
when asked "What's MHI getting out of this", it is explained that MHIC is sharing in the profit from Phase II and Phase III, is paid an asset management fee of $120,000 per year and offering expenses totalling $1,201,368, but no mention is made of the profit to MHIC from assigning its right to purchase the Property to Panorama;
2.
Panorama, MHIC, 474835, Kohan and Herndl (the "Respondents") have co-operated fully with staff during the investigation of the matters herein;
3.
the Respondents undertake:
(a)
to prepare an amended Offering Memorandum in Form 43 and deliver, by December 31, 1994, to each person who has made an investment in Panorama (the"Investors"):
(i)
a copy of the amended Offering Memorandum;
(ii)
a copy of this agreement; and
(iii)
a written offer of a right of rescission expiring January 18, 1995;
(b)
from the date of this agreement, to ensure that any material used by the Respondents in the solicitation of investments in securities offered or promoted by any of them is free from misrepresentation and complies with the requirements of Form 43 and Local Policy Statement 3-39;
(c)
without limiting the foregoing, from the date of this agreement, to refrain from stating or implying that all 168 acres of Phase III is available for development without also stating that up to 50 acres will have to be set aside as uneconomic to develop; and
(d)
to pay to the Minister of Finance and Corporate Relations the sum of $10,000;
4.
the Respondents waive any right they may have under the Act or otherwise, to a hearing, hearing and review, judicial review or appeal related to, in connection with, or incidental to this agreement.
SIGNED BY MARK KOHAN          )
in the presence of:           )
)
)
_"Larissa Vanderstel"________ )
Name                           )
)
)
___"Mark Kohan"__________
_Brandon, Manitoba___________ )
      Mark Kohan
Address                        )
)
)
_Salesclerk__________________ )
Occupation                     )
)
THE COMMON SEAL OF MAX        )
HERNDL INTERNATIONAL          )
CORPORATION was hereunto      )
affixed in the presence of:   )
)
_"Mark Kohan"________________ )
Authorized Signatory          )
)
)
SEAL
_____________________________ )
Authorized Signatory          )
)
THE COMMON SEAL OF 474835 B.C. )
LIMITED as General Partner    )
signing on behalf of the       )
PANORAMA RIDGE ENTERPRISES     )
LIMITED PARTNERSHIP was        )
hereunto affixed in the        )
presence of:                    )
                                        )
_"Mark Kohan"________________________)
Authorized Signatory           )
                                        )
                                        )SEAL
____________________________________)
Authorized Signatory           )
                                        )
THE COMMON SEAL OF 474835 B.C.)
LIMITED was hereunto affixed  )
in the presence of            )
)
_"Mark Kohan"________________ )
Authorized Signatory          )
)
)
SEAL
_____________________________ )
Authorized Signatory          )
)
SIGNED BY MAX HERNDL          )
in the presence of:           ) ) )
_"John E. Roger"_____________ )
Name                           ) )
 1210 - 400 Burrard Street    ) ______"Max Herndl"_________
_Vancouver, B.C.  V6C 3A6____ )         Max Herndl
Address                        ) )
 Barrister and Solicitor      )
_____________________________ )
Occupation                     ) )

D.E. HOLLEY, Superintendent of Brokers

 

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