Settlement Agreement: In the Matter of The Farini Companies Inc. et al. - Angelo Panza and Camille Ayoub

February 28, 2003

Settlement Agreement

IN THE MATTER OF THE SECURITIES ACT,

R.S.O. 1990, c. S-5, as amended

- and -

IN THE MATTER OF THE FARINI COMPANIES INC.,

ANGELO PANZA and CAMILLE AYOUB

SETTLEMENT AGREEMENT BETWEEN STAFF

OF THE ONTARIO SECURITIES COMMISSION,

ANGELO PANZA and CAMILLE AYOUB

INTRODUCTION

Pursuant to section 5(1) of the "Practice Guidelines - Settlement Procedures in Matters Before the Ontario Securities Commission" of the Ontario Securities Commission Rules of Practice, Staff of the Ontario Securities Commission, Angelo Panza and Camille Ayoub propose to settle the matters described further below.

STATEMENT OF FACTS

The Farini Companies Inc. ("Farini") is an Ontario corporation which manufactured and distributed pasta makers and food products.

Farini is a reporting issuer in Ontario whose shares traded on the Canadian Dealers Network until October, 2000.

Angelo Panza was, at all material times, the President, Chief Executive Officer and a Director of Farini.

Camille M. Ayoub was, at all material times, the Secretary of Farini and has been a Director of Farini since May 20, 1997.

Failure to Meet Financial Statement Filing Requirements

During the period between May, 1996 and May, 2002, Farini repeatedly failed to file both interim and audited annual financial statements with the Commission within the time periods prescribed by sections 77 and 78 of the Securities Act.

In particular, Farini failed on 11 occasions to file its interim financial statements within the time period prescribed by section 77 of the Securities Act.

Specifically, Farini failed to file:

(a)		its first quarter interim financial statements for the 1998, 1999, 2000, 2001 and 2002 fiscal years;
(b)		its second quarter interim financial statements for the 1998, 2000, 2001 and 2002 fiscal years; and
(c)		its third quarter interim financial statements for the 1998, 1999 and 2000 and 2002 fiscal years

within the required time period.

In addition, Farini failed on 8 occasions to file its annual comparative financial statements within the time period prescribed by section 78 of the Securities Act.

10.

Specifically, Farini failed to file its annual comparative financial statements for the 1995, 1996, 1997, 1998, 1999, 2000, 2001, and 2002 fiscal years within the required time period.

11.

As a result of Farini's failure to file its financial statements in a timely manner, the Commission imposed four cease trade orders on its shares. The Commissions orders to this effect were dated May 28, 1999, July 26, 2000, May 25, 2001 and May 24, 2002.

12.

To date, Farini's latest failure to file has not been rectified, and the Commission's cease trade order dated May 24, 2002 remains in effect.

Conduct Contrary to the Public Interest

13.

Panza and Ayoub authorized, permitted or acquiesced in Farini's contraventions of sections 77 and 78 of the Securities Act and thereby acted in a manner contrary to the public interest.

III

POSITION OF PANZA AND AYOUB

14.

Panza and Ayoub state that the reason that Farini's financial statements were not filed in a timely manner was that the company did not have sufficient funds to pay its auditors.

TERMS OF SETTLEMENT

15.

Panza and Ayoub agree to the following terms of settlement:

(a)		Panza and Ayoub undertake to resign their positions as directors and officers of Farini, as well as of any other issuer, by February 28, 2003; and
(b)		Panza and Ayoub undertake not to assume a position or act as a director or officer of any issuer for a period of two years following the date of the Executive Director's consent to this Settlement Agreement.

16.

Panza and Ayoub agree that they will not, in any proceeding, refer to or rely upon this Settlement Agreement, the settlement negotiations or the process of obtaining the Executive Director's consent to this Settlement Agreement as the basis for any attack on the Executive Director or the Commission's jurisdiction, alleged bias or appearance of bias, alleged unfairness or any other remedies or challenges that may otherwise be available.

STAFF COMMITMENT

17.

If this Settlement Agreement receives the consent of the Executive Director, Staff will not initiate any other proceeding under the Act against Panza and/or Ayoub in relation to the facts set out in Part II of this Settlement Agreement, subject to the provisions of paragraphs 18 and 23 below.

18.

If this Settlement Agreement receives the consent of the Executive Director, and at any subsequent time Panza and/or Ayoub fail to honour the undertakings contained in paragraph 15 of this Settlement Agreement, Staff reserve the right to bring proceedings under Ontario securities law against Panza and/or Ayoub based on the facts set out in Part II of the agreement, as well as the breach of the undertakings.

APPROVAL OF SETTLEMENT

19.

If, for any reason whatsoever, the Executive Director does not consent to this Settlement Agreement:

(a)		this Settlement Agreement and its terms, including all settlement negotiations between Staff and Panza and Ayoub leading up to the execution of this Settlement Agreement, shall be without prejudice to Staff and Panza and Ayoub; and
(b)		Staff and Panza and Ayoub shall be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of these matters before the Commission, unaffected by this Settlement Agreement or the settlement negotiations.

VII

DISCLOSURE OF SETTLEMENT AGREEMENT

20.

This Settlement Agreement and its terms will be treated as confidential by Staff and Panza and Ayoub until consented to by the Executive Director, and forever, if for any reason whatsoever this settlement is not consented to by the Executive Director, except with the consent of Staff and Panza and Ayoub or as may be required by law.

21.

Any obligation of confidentiality shall terminate upon receiving the Executive Director's consent to this settlement.

22.

Staff and Panza and Ayoub agree that if the Executive Director does consent to this Settlement Agreement, they will not make any public statements inconsistent with this Settlement Agreement.

23.

If Panza and/or Ayoub fail to honour the agreement contained in paragraph 22 of this Settlement Agreement, Staff reserve the right to bring proceedings under Ontario securities law against Panza and/or Ayoub based on the facts set out in Part II of the agreement, as well as the breach of the agreement.

24.

If the Executive Director does consent to this Settlement Agreement, a copy of the Settlement Agreement shall be published in the Ontario Securities Commission Bulletin and posted on the Commission's website.

VIII

EXECUTION OF SETTLEMENT AGREEMENT

25.

This Settlement Agreement may be signed in one or more counterparts which together shall constitute a binding agreement.

26.

A facsimile copy of any signature shall be effective as an original signature.

DATED this 16th day of February, 2003

_____________		"Angelo Panza"
Witness		Angelo Panza

DATED this 25th day of February, 2003

_____________		"Camille Ayoub"
Witness		Camille M. Ayoub

DATED this 27th day of February, 2003

	STAFF OF THE ONTARIO SECURITIES COMMISSION
	(Per) "Michael Watson"
	Michael Watson Director, Enforcement Branch

I hereby consent to the settlement of this matter on the terms contained in this Settlement Agreement.

DATED this 28th day of February, 2003

	ONTARIO SECURITIES COMMISSION
	"Charles Macfarlane" Charles Macfarlane Executive Director