for your consideration #4
3550020V1
B/09618
ALBERTA SECURITIES COMMISSION
IN THE MATTER OF the Securities Act 1981
statutes of Alberta, Chapter S-6.1
(the "Act") as amended
-and -
IN THE MATTER OF Edward R. Kruchkowski,
Angela Y. Pisicoli, Donald J. Barker and
Keylock Resources Inc. (the "Respondents")
O R D E R
(SECTIONS 165 AND 166)
1. Upon the commencement of the Hearing on August 17, 1989 pursuant to a Notice of Hearing dated August 2, 1989 and upon several adjournments of the Hearing until today's date;
2. AND UPON hearing read the (i) the Agreed Statement of Facts consented to by the Respondents Edward R. Kruchkowski ("Kruchkowski) and Angela Y. Pisicoli, ("Pisicoli") and (ii), upon hearing the representations of counsel for the Alberta Securities Commission Agency;
3. AND UPON the Alberta Securities Commission Agency not proceeding against the Respondent Donald J. Barker and Keylock Resources Inc. ("Keylock")
4. AND UPON the Alberta Securities Commission Board finding that:
4.1 Keylock Resources Inc. ("Keylock") was, at all material times, a "junior capital pool" company subject to the Alberta Securities Commission Policy 4.11 ("Policy 4.11");
4.2 Kruchkowski was, at all material times, the president, secretary/treasurer and a director of Keylock;
4.3 Angela Y. Pisicoli ("Pisicoli") was, at all material times, a director of Keylock;
4.4 Prior to completing the Major Transaction, Kruchkowski and Pisicoli allowed or caused Keylock into enter a letter of intent dated June 29, 1989 (the "Letter of Intent") with Catear Resources Inc. ("Catear"). 3550020V1
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4.5 Catear is a public company listed on the Vancouver Stock Exchange. Two of the directors of Keylock are also directors of Catear. Catear shares office space with Keylock.
4.6 The Letter of Intent described a transaction which was proposed by the Respondents to be Keylock's Major Transaction (as defined in Policy 4.11). The Letter of Intent provided that Keylock would acquire an interest in a mineral property (the "Tennyson Property") in consideration of among other things, contributing $150,000 to an exploration program on the Tennyson Property in 1988. A collateral oral agreement subsisted between Keylock and Catear pursuant to which Keylock was entitled to back out of the Tennyson Property transaction without penalty if shareholder approval was not obtained by Keylock in connection with the proposed Major Transaction; however, the back-out obligation of Catear was an unsecured obligation. Although the acquisition of the Tennyson Property was ultimately approved by the shareholders of Keylock as part of its Major Transaction, Keylock paid $129,000 to Catear prior to such shareholder approval. The advance by Keylock to Catear was characterized as a "loan" to Catear on the books and records of Keylock. A substantial portion of the funds advanced by Keylock to Catear, being $76,000, was funded by a private placement of Catear securities in September, 1988.
4.7 The advance of funds by Keylock to Catear, together with other expenses of Keylock, caused Keylock to expend more than 30% of all proceeds from the sale of all its securities on items not in pursuit of its intended business purpose, contrary to Section 2.12 of Policy 4.11. The advance of funds constituted Keylock carrying on an active business before it had completed a Major Transaction, contrary to Policy 4.11. At the time Keylock entered into the Letter of Intent, the transaction constituted a material change in business and affairs of Keylock in respect of which Keylock did not prepare, file and publish a notice of material change, contrary to Section 118 of the Act. 3550020V1
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4.8 The Respondents Kruchkowski and Pisicoli have received due and proper service of the Notice of Hearing dated August 2, 1989.
5. IT IS ORDERED THAT Edward R. Kruchkowski and Angela Y. Pisicoli cease trading in all securities for a period of ninety days from the date of this Order and all of the exemptions contained in sections 65, 66, 107, 115, 116, 132 and 133 of the Act and in the Regulation under the Act do not apply to Edward R. Kruchkowski and Angela Y. Pisicoli for a period of ninety days commencing as of the date of this Order.
DATED at Calgary, Alberta, this 25th day of April, 1991.
DATED at the City of Calgary,
in the Province of Alberta
this 25th day of April, 1991.
ALBERTA SECURITIES COMMISSION BOARD
"original signed by"
ROBERT G. DONLEVY, MEMBER
"original signed by"
BRIAN R. HEIDECKER, MEMBER
"original signed by"
LAL NARANG, MEMBER
TO: Edward R. Kruchkowski
AND TO: Angela Y. Pisicoli
AND TO: Donald J. Barker
AND TO: Keylock Resources Inc.
AND TO: Alberta Securities Commision Agency