Securities Law & Instruments

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c S.5, AS AMENDED

AND

IN THE MATTER OF

DJL CAPITAL CORP. AND DENNISJOHN LITTLE

 

ORDER

(Sections 127 and 127.1)

WHEREAS on October 13, 1999 and January11, 2000 the Ontario Securities Commission (the "Commission")issued Notices of Hearing pursuant to sections 127 and 127.1of the Securities Act (the "Act") in respectof DJL Capital Corp. ("DJL Capital") and Dennis JohnLittle ("Little");

AND WHEREAS the respondents DJL Capitaland Little entered into a settlement agreement dated March 11,2003 (the "Settlement Agreement") wherein they agreedto a proposed settlement of the proceedings commenced by theNotices of Hearing, subject to the approval of the Commission,and wherein Little provided to the Commission a written undertakingnever to apply for registration in any capacity under Ontariosecurities law;

AND UPON reviewing the Settlement Agreementand the Statements of Allegations of Staff of the Commission,and upon hearing submissions from the respondent and from Staffof the Commission;

AND WHEREAS the Commission is of theopinion that it is in the public interest to make this Order;

IT IS ORDERED THAT:

(1) the Settlement Agreement dated March 11,2003, attached to this Order, is hereby approved;

(2) pursuant to clause 2 of subsection 127(1)of the Act, DJL Capital and Little will cease trading securitiespermanently effective the date of this Order, with the exceptionthat, after five years from the date of the approval of thissettlement, Little is permitted to trade securities througha registered dealer for the account of his registered retirementsavings plan (as defined in the Income Tax Act (Canada);

(3) pursuant to clause 7 of subsection 127(1)of the Act, Little shall resign his position as an officeror director of any issuer which has an interest directly orindirectly in any registrant effective the date of this Order.Little shall resign his position as an officer or directorof any issuer in which Little holds the position of an officeror director effective 180 days from the date of this Order.The 180 day period is to permit Little to wind up the followingcompanies in which he holds the position as sole officer ordirector:

- DJL Capital Corp.

- Heritage Arabian Farms Ltd.

- Heritage Egyptian Arabian Management 1Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsXII Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsXI Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsX Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsIX Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsVII Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsVI Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsIII Inc.

- Heritage Egyptican Arabian BloodstockInvestments II Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsI Inc.

- Diversified Corporate Benefits Limited

- 1510259 Ontario Limited

(4) pursuant to clause 8 of subsection 127(1)of the Act, Little is prohibited permanently from becomingor acting as an officer or director of any issuer which hasan interest directly or indirectly in any registrant and frombecoming an officer or director of any issuer effective thedate of this Order. Little is prohibited permanently fromacting as an officer or director of any issuer effective 180days after the date of the Order of the Commission approvingthis settlement; and

(5) pursuant to clause 6 of subsection 127(1)of the Act, Little is reprimanded.

March 20, 2003.

"Paul Moore"                    "DerekBrown"

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, C. S.5, AS AMENDED

AND

IN THE MATTER OF

DJL CAPITAL CORP. AND DENNISJOHN LITTLE

 

SETTLEMENT AGREEMENT

I INTRODUCTION

1. By Notice of Hearing dated October 13,1999 (the "Notice of Hearing"), the Ontario SecuritiesCommission (the "Commission") announced that itproposed to hold a hearing to consider whether, pursuant tosection 127 of the Securities Act, R.S.O. 1990, c.S.5, as amended (the "Act"), in the opinion of theCommission, it is in the public interest for the Commission:

(a) to make an order pursuant to section127(1) clause 2 of the Act that trading in securities byDJL Capital Corp. ("DJL Capital") and Dennis JohnLittle ("Little") cease permanently or for suchother period as specified by the Commission;

(b) to make an order pursuant to section127(1) clause 3 of the Act that any exemptions containedin Ontario securities law do not apply to DJL Capital andLittle;

(c) to make an order pursuant to section127(1) clause 6 of the Act that DJL Capital and Little bereprimanded; and

(d) to make such other order as the Commissionconsiders appropriate.

2. By Notice of Hearing dated January 11,2000 (the "Second Notice of Hearing"), the Commissionannounced that it proposed to hold a hearing to consider whether,pursuant to sections 127 and 127.1 of the Act, in the opinionof the Commission, it is in the public interest for the Commission:

(a) to make an order that the respondentsDJL Capital and Little cease trading in securities, permanentlyor for such time as the Commission may direct;

(b) to make an order that the registrationof the respondents be terminated, suspended or restrictedfor such period as directed by the Commission, and/or thatterms and conditions be imposed as directed by the Commission;

(c) to make an order that any exemptionscontained in Ontario securities law do not apply to therespondents or any of them permanently, or for such periodas specified by the Commission;

(d) to make an order that Little resignhis position as a director and/or officer of DJL Capital;

(e) to make an order that Little is prohibitedfrom becoming or acting as a director or officer of anyissuer;

(f) to make an order that the respondentsbe reprimanded;

(g) to make an order that the respondents,or any of them, pay the costs of Staff's investigation inrelation to the matters subject to this proceeding;

(h) to make an order that the respondents,or any of them, pay the costs of this proceeding incurredby or on behalf of the Commission; and/or

(i) to make such other order as the Commissionmay deem appropriate.

II JOINT SETTLEMENT RECOMMENDATION

3. Staff of the Commission ("Staff")agree to recommend settlement of the proceedings initiatedin respect of the respondents by the Notice of Hearing andSecond Notice of Hearing (collectively, the "Noticesof Hearing") in accordance with the terms and conditionsset out below. The respondents agree to the settlement onthe basis of the facts agreed to as hereinafter provided andthe respondents consent to the making of an Order in the formattached as Schedule "A" on the basis of the factsset out below.

4. This settlement agreement, including theattached Schedule "A" (collectively, the "SettlementAgreement"), will be released to the public only if andwhen the settlement is approved by the Commission.

III SETTLEMENT OF FACTS AND CONCLUSIONS

Acknowledgement

5. Staff and the respondents agree with thefacts and conclusions set out in Part III of the SettlementAgreement.

Introduction

6. DJL Capital is a corporation incorporatedunder the laws of Ontario on August 9, 1993 and carried onbusiness in London, Ontario. DJL Capital was registered fromJuly 7, 1995 to January 11, 2000 as a dealer in the categoryof limited market dealer, pursuant to section 26(1) of theAct (with the exception of the period from August 7, 1999to October 6, 1999 for failure to pay renewal fees as required).During the material times as described below, DJL Capitalwas the promoter of the offering for sale of the units inDual Capital Limited Partnership, and the promoter of theoffering for sale of the units of DJL Capital.

7. Little is an individual residing in Ontarioand at all material times was the sole director and officerof DJL Capital. Little was registered from July 7, 1995 toJanuary 11, 2000 as the trading officer and director withDJL Capital, a limited market dealer pursuant to section 26(1)of the Act (with the exception of the period from August 7,1999 to October 6, 1999 as described above).

8. By Temporary Order (the "TemporaryOrder") of the Ontario Securities Commission (the "Commission")made on January 11, 2000, the Commission ordered that tradingby DJL Capital and Little cease. The Temporary Order was extended,on the consent of DJL Capital and Little, by Order of theCommission made on January 21, 2000.

Trading by Little in Dual Capital Units Contraryto the Requirements of Ontario Securities Law

9. During the period from October, 1994 toDecember, 1996, Little traded in securities, namely units(the "Dual Capital Units") of Dual Capital LimitedPartnership (the "Limited Partnership"), where suchtrading was a distribution of such securities, without havingfiled a preliminary prospectus and a prospectus and obtainingreceipts therefor from the Director as required by section53(1) of the Act. Dual Capital Management Limited ("DualCapital") was the limited partner. During the materialtime, Dual Capital accepted subscriptions to the Dual CapitalUnits from at least 56 members of the public and raised fundsin the amount of at least U.S. $1,500,000.

10. The Dual Capital Units were purportedlyoffered for sale pursuant to the "seed capital"prospectus exemption set out in section 72(1)(p) of the Act.The requirements of the "seed capital" exemptionfrom the prospectus requirements in Ontario securities lawwere not satisfied. An offering memorandum dated October 18,1994, as amended on December 19, 1994 for the Limited Partnership(the "Offering Memorandum"), was provided to someof the investors who purchased the Dual Capital Units.

11. DJL Capital is described in the OfferingMemorandum as the promoter, and received payments in the amountof approximately U.S. $161,525.00 from Dual Capital in relationto the offering of the Dual Capital Units. DJL Capital madepayments to Dual Capital in the amount of U.S. $97,964.00.

12. On October 26, 2000, in a related prosecutionunder section 122 of the Act before the Honourable Mr. JusticeDouglas, Dual Capital, and its two officers, Warren Wall andShirley Joan Wall, entered pleas of guilty in relation totrading by Dual Capital in securities, namely, the Units,without being registered to trade in such securities as requiredby section 25(1) of the Ontario Securities Act and distributingsecurities without having filed a prospectus in contraventionof section 53(1) of the Ontario Securities Act. Mr. JusticeDouglas accepted the pleas, entered convictions and sentencedthe two officers, Warren Wall and Shirley Joan Wall, to atotal of 30 months and 22 months, respectively, and Dual Capitalto a total fine of $1,000,000.

13. In the course of delivering his Reasonsfor Sentence on October 30, 2000 [cited at (2001) 24 OSCB763, February 2, 2001], Mr. Justice Douglas stated the followingin relation to the description of the investment scheme inthe Dual Capital Limited Partnership (also referred to asthe "Roll Programme" and the "InternationalLending Programme"):

I find that the Roll Programme as conceived,was and remains utter nonsense. The programme, consideredin and of itself, is a fraudulent means....

...I find that the Roll Programme was perse dishonest.

...Indeed, the evidence is conclusive andnearly complete that all of the investors were neither sophisticated(but naïve), nor rich (but poor) or, at least, dependentupon the little money they had.

14. The Offering Memorandum represented thatDJL Capital would not receive any benefits, directly or indirectlyfrom the issuance of the Limited Partnership Units other thanas described therein. The Offering Memorandum further representedthat DJL Capital would receive payment equal to 4.5% of the30% rate of return described above. During the material time,DJL Capital received payments from Dual Capital in the amountof approximately U.S. $161,525.00 when Little knew that thesource of payments were funds received from investors andnot income earned from any investment made by the LimitedPartnership. As stated above, DJL Capital made payments toDual Capital in the amount of U.S. $97,964.00.

15. During the Material Time, Little soldUnits to two investors. The investors paid approximately $130,000for the purchase of the Units through Little.

Representations in Promotional Material

16. Further, a brochure (the "Brochure")entitled "International Lending Programme - InvestorInformation" prepared by Little under the name of DualCapital, was distributed to investors in furtherance of thesale of the Units, and made various representations to investorswhich were contrary to the public interest. Such representationsto investors included the promise of high annual returns underthe heading in the Brochure "High Annual Returns ....with Absolutely No Risk" which representationswere false and misleading to investors and contrary to thepublic interest.

Conduct Contrary To The Public Interest inrelation to Sale of Dual Capital Units

17. In summary, during the material time,Little violated Ontario securities law and engaged in conductcontrary to the public interest, by reason of the following:

(a) Little traded in securities withoutbeing registered contrary to section 25(1) of the Act;

(b) Little traded in securities which constituteda distribution without a prospectus contrary to section53(1) of the Act;

(c) Little, in his capacity as the soleofficer of DJL Capital, the promoter, prepared promotionalmaterial which contained false and misleading representationsto investors as described above;

(d) Little failed to disclose to investorsthat investors' funds were used to fund payments to DJLCapital and/or Little, and trading in the Units, when Littleknew or ought to have known of the foregoing in his capacityas an officer and director of DJL Capital; and

(e) failing to assess the suitability ofthe Units sold by Little to the needs of the investors.

18. DJL Capital, through its officer and director,Little, sold Units and engaged in conduct to effect the saleof Units, contrary to the prospectus and registration requirementsof Ontario securities law described above.

Trading in the DJL Capital Units Contraryto the Requirements of Ontario Securities Law

19. During the period from August, 1997 toSeptember, 1998, DJL Capital and its sole officer, Little,accepted subscriptions to Units in DJL Capital (the "DJLCapital Units") from investors residing in Ontario, andraised funds in the amount of at least Cdn. $950,000.

20. During the material times, DJL Capitaland Little traded in securities, namely the DJL Capital Units,where such trading was a distribution of such securities,without having filed a preliminary prospectus and a prospectusand obtaining receipts therefor from the Director as requiredby section 53(1) of the Act.

21. The DJL Capital Units were purportedlyoffered for sale pursuant to the "seed capital"prospectus exemption set out in section 72(1)(p) of the Act.

22. The Offering Memorandum dated January1, 1998 (the "DJL Offering Memorandum") preparedby DJL Capital in connection with the offering of the DJLCapital Units was not delivered to the Commission as requiredunder Ontario securities law. Further, the DJL Offering Memorandumwas not provided to each investor who purchased the DJL CapitalUnits.

23. During the material times, DJL Capitaldistributed securities for a period greater than six monthscontrary to the requirements of the exemption set out in section72(1)(p)(i) of the Act.

24. In addition, the respondents failed tofile a report under Form 20 contrary to the requirements containedin section 72(3) of the Act and additional requirements containedin the Act.

25. As set out in paragraph 6 above, duringthe material time, DJL Capital was registered in the categoryof limited market dealer and Little was registered as itstrading officer. The Units were not sold in accordance withthe exemptions from the prospectus and registration requirementscontained in 72(1)(p) and 35(1)(21) of the Act and other requirementscontained in the Act. Accordingly, DJL Capital and Littledid not sell the Units in accordance with their registrationunder section 26(1) of the Act.

Misrepresentations to Investors Contraryto the Public Interest

Use of Proceeds

26. DJL Capital represented to investors inthe DJL Offering Memorandum and in promotional material thatDJL Capital was establishing itself as a merchant bank forthe purpose of raising capital for dynamic, growing businesses.The summary of the DJL Offering Memorandum states, in part,the following with respect to "Use of Proceeds"from the sale of the Units:

The estimated net proceeds to the Corporationfrom a maximum offering hereunder will be $612,000 afterdeducting the Agent's fee, corporate finance fee. Of thisamount, approximately $480,000 will be used to institutea $30,000,000 bond offering (See "Bond Offering").The writing and preparation of customized software for thebusiness is expected to require $40,000. A further $20,000will be used as capital to establish the appropriate officefacilities and systems. The remaining $72,000 will be addedto the working capital.

27. During the material time, DJL Capitaland Little failed to disclose to investors that most of thefunds accepted from investors for the purchase of DJL CapitalUnits were not used for the purposes set out in the DJL OfferingMemorandum and further failed to disclose that most of theinvestors' funds were used instead for payments to variouscompanies and persons, including payments to Little in theamount of at least approximately Cdn. $58,000.00. In addition,investor funds of at least Cdn. $654,000 were deposited toan account held in the name of Heritage Arabian Farms Ltd.("Heritage"), a company incorporated under the lawsof Ontario, carrying on the business of providing board andcare for horses. Little was during the material time the soleofficer and director of Heritage.

Price of Units Offered by DJL Capital

28. The DJL Offering Memorandum states thatthe offering is comprised of a maximum of 25 unequal DJL CapitalUnits, and that each DJL Capital Unit consists of a minimumof 2,000 Class A preferred shares to a maximum of 15,000 ClassA preferred shares per DJL Capital Unit. However, the accompanyingsubscription form for the sale of the DJL Capital Units statesthat each DJL Capital Unit consists of 100 Class A Preferredshares. The subscription form further states that the subscriptionprice of each DJL Capital Unit is $1,000.00 (or 100 ClassA Preferred shares at a price of $10.00 per preferred share).

29. DJL Capital and/or Little further representedin the DJL Offering Memorandum that the subscription priceper DJL Capital Unit was established by DJL Capital and "MichaelCarnegie, C.A., C.B.V., Senior Vice-President, TL CorporateFinancial Services Inc., of Hamilton, Ontario". MichaelCarnegie and/or TL Corporate Financial Services Inc. had norole in establishing the subscription price per DJL CapitalUnit contrary to the representations made to investors asset out in the DJL Offering Memorandum.

Additional Representations made by DJL Capitaland Little

30. DJL Capital and Little made the followingrepresentations which were false and misleading to investorsand contrary to the public interest:

(a) DJL Capital and Little represented inpromotional material that"... capital will be guaranteedby money on deposit held by the corporation ....",and that " .... at all times there will be at leastfive dollars on reserve for each dollar of obligation toinvestors";

(b) DJL Capital and Little represented inthe DJL Offering Memorandum that DJL Capital intended topay a 12% annual dividend on its preferred shares and thatthe return would commence March 31, 1998 once funding wascompleted and that dividends would thereafter be paid quarterly;and

(c) DJL Capital and Little represented inthe DJL Offering Memorandum that DJL Capital".... anticipatesprofits of $15,000,000.00 by the year 2002" and thatthis".... anticipated growth of approximately 750%over five years should allow all shareholders to experiencea significant gain". It is further stated in the DJLOffering Memorandum that DJL Capital".... anticipatesan annualized rate of return of approximately 100%".

31. Investors have not received dividendscontrary to the representations made by DJL Capital and Littleoutlined above. Further, investors have requested repaymentof funds invested in respect of the DJL Capital Units offeredby DJL Capital and Little or requested that DJL Capital repurchasethe Units for the price paid by investors. DJL Capital andLittle have not repaid funds or repurchased shares from investors.

Other Matters

32. Little represents to Staff that he haslimited assets or funds on hand, as more particularly describedin the Statutory Declaration filed herein and marked as Schedule"C" to this Settlement Agreement. Little furtherrepresents to Staff that he requires such limited assets andfunds for the purpose of paying household and living expenses.Little represents to Staff that the income earned by him in2000, 2001 and 2002, as set out in Schedule C-7 of the StatutoryDeclaration, relates to work he did as a consultant. Littlefurther represents that no funds or income received in 2000,2001 and 2002, as set out in Schedule C-7, were from the saleof securities or related to trading in securities.

Conduct Contrary to the Public Interest

33. DJL Capital acted contrary to the publicinterest by:

(a) trading in securities which constituteda distribution without a prospectus contrary to section53(1) of the Act;

(b) trading in securities contrary to itsregistration under section 26(1) of the Act; and

(c) making representations to investorsin the Offering Memorandum and promotional material, asdescribed above, which representations were false and misleadingto investors and contrary to the public interest.

34. Little acted contrary to the public interestby:

(a) trading in securities which constituteda distribution without a prospectus contrary to section53(1) of the Act;

(b) trading in securities contrary to hisregistration under section 26(1) of the Act; and

(c) authorizing, permitting or acquiescingin the representations made by DJL Capital, and making suchrepresentations, to investors in the DJL Offering Memorandumand promotional material, as described above, which representationswere false and misleading to investors and contrary to thepublic interest.

IV TERMS OF SETTLEMENT

35. The respondents, DJL Capital and Little,agree to the following terms of settlement:

(a) pursuant to clause 2 of subsection 127(1)of the Act, DJL Capital will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein;

(b) pursuant to clause 2 of subsection 127(1)of the Act, Little will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein, with the sole exception that after five years fromthe date of the Order approving this settlement, Littleis permitted to trade securities through a registered dealerfor the account of his registered retirement savings plan(as defined in the Income Tax Act (Canada));

(c) Little undertakes never to apply forregistration in any capacity under Ontario securities law,and agrees to execute the undertaking to the Commissionin the form attached as Schedule "B" to this settlementagreement;

(d) pursuant to clause 7 of subsection 127(1)of the Act, Little shall resign his position as an officeror director of any issuer which has an interest directlyor indirectly in any registrant effective the date of theOrder of the Commission approving this settlement. Littleshall resign his position as an officer or director of anyissuer in which Little holds the position of an officeror director effective 180 days after the date of the Orderof the Commission approving this settlement. Little acknowledgesthat the effective date of resignation by him as an officeror director of an issuer, as provided for in this settlement,is for the sole purpose of permitting Little to wind upthe following companies in which he holds the position assole officer or director:

- DJL Capital Corp.

- Heritage Arabian Farms Ltd.

- Heritage Egyptian Arabian Management1 Inc.

- Heritage Egyptian Arabian BloodstockInvestments XII Inc.

- Heritage Egyptian Arabian BloodstockInvestments XI Inc.

- Heritage Egyptian Arabian BloodstockInvestments X Inc.

- Heritage Egyptian Arabian BloodstockInvestments IX Inc.

- Heritage Egyptian Arabian BloodstockInvestments VII Inc.

- Heritage Egyptian Arabian BloodstockInvestments VI Inc.

- Heritage Egyptian Arabian BloodstockInvestments III Inc.

- Heritage Egyptican Arabian BloodstockInvestments II Inc.

- Heritage Egyptian Arabian BloodstockInvestments I Inc.

- Diversified Corporate Benefits Limited

- 1510259 Ontario Limited

(e) pursuant to clause 8 of subsection 127(1)of the Act, Little is prohibited permanently from becomingor acting as an officer or director of any issuer whichhas an interest directly or indirectly in any registrantand from becoming an officer or director of any issuer effectivethe date of the Order of the Commission approving this settlement.Little is prohibited permanently from acting as an officeror director of any issuer effective 180 days after the dateof the Order of the Commission approving this settlement;

(f) Little agrees to be reprimanded by theCommission under clause 6 of subsection 127(1) of the Act;and

(g) Little will attend, in person, at thehearing before the Commission to consider the proposed settlement.

V POSITION OF RESPONDENT

36. The respondent Little represents to Staffthat the companies referred to in paragraph 35(d) are notactive and do not have any assets. In response to Staff'srequests for tax returns filed by Little and DJL Capital forthe past three years, Little represented to Staff that suchtax returns have not yet been prepared or filed. Little representsto Staff that he has limited assets or funds on hand as moreparticularly described in the Statutory Declaration filedherein and marked as Schedule "C" to this SettlementAgreement. Little further represents to Staff that he requiressuch limited funds and assets for the purpose of paying householdand living expenses.

VI STAFF COMMITMENT

37. If this Settlement Agreement is approvedby the Commission, Staff will not initiate any complaint tothe Commission or request the Commission to hold a hearingor issue any order in respect of any conduct or alleged conductof the respondents in relation to the facts set out in PartIII of this Settlement Agreement.

VII PROCEDURE FOR APPROVAL OF SETTLEMENT

38. The approval of the settlement as setout in the Settlement Agreement shall be sought at a publichearing before the Commission in accordance with the proceduresdescribed herein and such further procedures as may be agreedupon between Staff and the respondents.

39. If this Settlement Agreement is approvedby the Commission, it will constitute the entirety of theevidence to be submitted respecting the respondents in thismatter and the respondents agree to waive any right to a fullhearing, judicial review or appeal of this matter under theAct.

40. If this Settlement Agreement is approvedby the Commission, the parties to this Settlement Agreementwill not make any statement that is inconsistent with thisSettlement Agreement.

41. If, for any reason whatsoever, this settlementis not approved by the Commission, or the Order set forthin Schedule "A" is not made by the Commission:

(a) each of Staff and the respondents willbe entitled to proceed to a hearing of the allegations inthe Notices of Hearing and related Statement of Allegationsunaffected by the Settlement Agreement or the settlementnegotiations;

(b) the terms of the Settlement Agreementwill not be raised in any other proceeding or disclosedto any person except with the written consent of Staff andthe respondent or as may be otherwise required by law; and

(c) the respondents agree that they willnot raise in any proceeding the Settlement Agreement orthe negotiation or process of approval thereof as a basisfor any attack on the Commission's jurisdiction, allegedbias, appearance of bias, alleged unfairness or any otherchallenge that may otherwise be available.

42. If, prior to the approval of this SettlementAgreement by the Commission, there are new facts or issuesof substantial concern, in the view of Staff, regarding thefacts set out in Part III of this Settlement Agreement, Staffwill be at liberty to withdraw from this Settlement Agreement.Notice of such intention will be provided to the respondentsin writing. In the event of such notice being given, the provisionsof paragraph 41 in this part will apply as if this SettlementAgreement had not been approved in accordance with the proceduresset out herein.

VIII DISCLOSURE OF SETTLEMENT AGREEMENT

43. Staff or the respondents may refer toany part or all of this Settlement Agreement in the courseof the hearing convened to consider this agreement. Otherwise,this Settlement Agreement and its terms will be treated asconfidential by all parties to the Settlement Agreement untilapproved by the Commission, and forever if, for any reasonwhatsoever, this settlement is not approved by the Commission.

44. Any obligation as to confidentiality shallterminate upon the approval of this Settlement Agreement bythe Commission.

IX EXECUTION OF SETTLEMENT AGREEMENT

45. This Settlement Agreement may be signedin one or more counterparts which together shall constitutea binding agreement and a facsimile copy of any signatureshall be as effective as an original signature.

March 11, 2003.

"Dennis John Little"
Dennis John Little
 
"Michael Hubley"
Staff of the Ontario Securities Commission
Per: Michael Hubley

 

SCHEDULE "A"

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c S.5, AS AMENDED

AND

IN THE MATTER OF

DJL CAPITAL CORP. AND DENNISJOHN LITTLE

 

ORDER

(Sections 127 and 127.1)

WHEREAS on October 13, 1999 and January11, 2000 the Ontario Securities Commission (the "Commission")issued Notices of Hearing pursuant to sections 127 and 127.1of the Securities Act (the "Act") in respectof DJL Capital Corp. ("DJL Capital") and Dennis JohnLittle ("Little");

AND WHEREAS the respondents DJL Capitaland Little entered into a settlement agreement dated March 11,2003 (the "Settlement Agreement") wherein they agreedto a proposed settlement of the proceedings commenced by theNotices of Hearing, subject to the approval of the Commission,and wherein Little provided to the Commission a written undertakingnever to apply for registration in any capacity under Ontariosecurities law;

AND UPON reviewing the Settlement Agreementand the Statements of Allegations of Staff of the Commission,and upon hearing submissions from the respondent and from Staffof the Commission;

AND WHEREAS the Commission is of theopinion that it is in the public interest to make this Order;

IT IS ORDERED THAT:

(1) the Settlement Agreement dated March 11,2003, attached to this Order, is hereby approved;

(2) pursuant to clause 2 of subsection 127(1)of the Act, DJL Capital and Little will cease trading securitiespermanently effective the date of this Order, with the exceptionthat, after five years from the date of the approval of thissettlement, Little is permitted to trade securities througha registered dealer for the account of his registered retirementsavings plan (as defined in the Income Tax Act (Canada);

(3) pursuant to clause 7 of subsection 127(1)of the Act, Little shall resign his position as an officeror director of any issuer which has an interest directly orindirectly in any registrant effective the date of this Order.Little shall resign his position as an officer or directorof any issuer in which Little holds the position of an officeror director effective 180 days from the date of this Order.The 180 day period is to permit Little to wind up the followingcompanies in which he holds the position as sole officer ordirector:

- DJL Capital Corp.

- Heritage Arabian Farms Ltd.

- Heritage Egyptian Arabian Management 1Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsXII Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsXI Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsX Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsIX Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsVII Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsVI Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsIII Inc.

- Heritage Egyptican Arabian BloodstockInvestments II Inc.

- Heritage Egyptian Arabian Bloodstock InvestmentsI Inc.

- Diversified Corporate Benefits Limited

- 1510259 Ontario Limited

(4) pursuant to clause 8 of subsection 127(1)of the Act, Little is prohibited permanently from becomingor acting as an officer or director of any issuer which hasan interest directly or indirectly in any registrant and frombecoming an officer or director of any issuer effective thedate of this Order. Little is prohibited permanently fromacting as an officer or director of any issuer effective 180days after the date of the Order of the Commission approvingthis settlement; and

(5) pursuant to clause 6 of subsection 127(1)of the Act, Little is reprimanded.

DATED at Toronto this          dayof March, 2003

_________________________     _________________________

 

SCHEDULE "B"

IN THE MATTER OF

DJL CAPITAL CORP. AND DENNISJOHN LITTLE

 

UNDERTAKING TO THE

ONTARIO SECURITIES COMMISSION

I, Dennis John Little, am a Respondent to aNotice of Hearing dated October 13, 1999 and a Respondent toa Notice of Hearing dated January 11, 2000 each issued by theOntario Securities Commission. I undertake to the Ontario SecuritiesCommission that I will never apply for registration in any capacityunder Ontario securities law. I have agreed to this term ofthe settlement between Staff of the Commission and me datedFebruary     , 2003.

_________________________

____________________

Witness:

Dennis John Little

 

Date: February 26, 2003

Date: February 26, 2003

 

Acknowledgement as Received by,

 

 

_________________________

 

John Stevenson

 

the Secretary to the

 

Ontario Securities Commission

 

 

Date: March 20, 2003

 

 

SCHEDULE "C"

STATUTORY DECLARATION OF DENNISJOHN LITTLE

TOWN OF GRANTON

PROVINCE OF ONTARIO

I, Dennis John Little, of the Town of Granton,in the Province of Ontario, do solemnly declare that:

1. I am a Respondent to a Notice of Hearingdated October 13, 1999 and a Respondent to a Notice of Hearingdated January 11, 2000 each issued by the Ontario SecuritiesCommission (collectively, the "Notices of Hearing").

2. I have entered into a settlement agreementwith Staff of the Ontairo Securities Commission in settlementof the proceedings initiated by the Notices of Hearing, whichsettlement will be submitted to the Commission for its approval,as described in the settlement agreement.

3. For the purpose of this declaration, "property"includes money, bonds, investments, goods, things in action,land and every description of property, whether real or personal,moveable or immoveable, legal or equitable, and whether situatedin Ontario or elsewhere, and includes obligations, easementsand every description of estate, interest and profit, presentor future, vested or contingent, in, arising out of, or incidentalto such property ("Property").

4. Annexed hereto as Schedule "1"to this Statutory Declaration is a true and correct statementof each bank account (savings, chequing or otherwise) with anybank, trust company, loan association or similar financial institutionengaged in the business of maintaining bank accounts which Iown or maintain, or over which I have the power, right or authorityto issue cheques or withdraw funds.

5. Annexed hereto as Schedule "2"to this Statutory Declaration is a true and correct statementof all automotive vehicles which I own.

6. Annexed hereto as Schedule "3"to this Statutory Declaration is a true and correct statementof any and all real estate which I own or in which I have anylegal or equitable interest (directly or as beneficiary).

7. Annexed hereto as Schedule "4"to this Statutory Declaration is a true and correct statementof any and all safety deposit boxes rented to me or to whichI have access privileges, including the locations thereof.

8. Annexed hereto as Schedule "5"to this Statutory Declaration is a true and correct statementof all of my direct and indirect liabilities and indebtednessand creditors with respect thereto. I am indebted to such creditorsin the amounts set out opposite their respective names.

9. Annexed hereto as Schedule "6"to this Statutory Declaration is a true and correct statementof all general household items and vehicles in which I havean interest, whether legal, beneficial, direct, indirect orotherwise, aside from Property otherwise disclosed herein.

10. Annexed hereto as Schedule "7"to this Statutory Declaration is a true and correct statementof all income, dividends, money, compensation, bonuses, salaryand similar benefits and entitlements received by me (the "Income")in the past three years and the names of the persons, corporationsor otherwise which pay me the Income.

11. Annexed hereto as Schedule "8"to this Statutory Declaration is a true and correct statementof any registered or unregistered pension fund, mutual funds,retirement fund or annuity, retirement savings plan or othersavings plan, owned by me or in which I have any interest.

12. I do not, as of the date of execution ofthis Statutory Declaration, have any interest, direct or indirect,beneficial, legal or otherwise, in any agreement, which, uponcompletion, would result n my becoming a legal or beneficialowner, whether directly or indirectly, of any Property.

13. Collectively, Schedules "1" to"8", inclusive, set out my personal net worth as atthe date of execution of this Statutory Declaration.

AND I MAKE this solemn declaration conscientiouslybelieving it to be true and knowing that it is of the same forceand effect as if made under oath and by virtue of the OntarioEvidence Act.

DECLARED BEFORE ME

)

 

at the City of London,

)

 

in the Province of Ontario

)

______________________

this 11th day of

)

"Dennis John Little"

February, 2003

)

 

 

________________________

 

A Commissioner, etc.

 

 

 

Schedule 1

List of Bank Accounts for Dennis JohnLittle

Royal Bank

# 04262 5019914

-410

Royal Bank

# 04262 4500724

5

CIBC

# 60 53130

40

Schedule 2

Automobiles owned by Dennis John Little

1989 Oldsmobile 98.

Schedule 3

No real estate is owned by Dennis John Little

Schedule 4

No safety deposit boxes rented by or for DennisJohn Little

Schedule 5

List of Liabilities of Dennis John Little

Mastercard

8,000.00

Amex

12,000.00

CTC

6,500.00

Mastercard

8,500.00

Chrysler Credit

7,800.00

Stc Mgt.

13,000.00

Personal Loans

82,000.00

CCRA

7,000.00

Misc. Bills

5,000.00

ESP L.P.

137,250.00

Trafalgar L.P.

140,000.00

Select Tech L.P.

70,000.00

Schedule 6

List of General Household Item Include

Home Furnishings
Office Furnishings

Schedule 7

List of Income for Dennis John Little for theyears 2000, 2001, 2002

Income for 2000:

 

Laser Show Systems

37,675.00

Heritage Arabian Farms

9,900.00

PelLab Limited

18,900.00

DJL CapitalCorp.

16,927.00

Esperal Mgt.

3,026.00

Misc. Income

366.00

 

 

86,794.00

Income for 2001:

 

PelLab Limited

20,638.00

Lumiere International

11,930.00

Esperal Management

4,909.00

Arcadia Resources

10,553.00

RRSP Redemption

5,232.00

Miscellaneous Income

1,707.00

 

54,969.00

 

Income for 2002:

 

Stillwater Consulting

2,000.00

Lumiere International

40,000.00

Esperal Management

1,262.00

 

43,262.00

Schedule 8

The registered and unregistered saving plansand investments owned by Dennis John Little

RRSP

30.00