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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
Under the Securities Exchange Act of 1934
Canarc Resource Corp.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
13722D101
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(CUSIP Number of Class of Securities)
Anthony Low-Beer
100 Park Avenue, Suite 2150
New York, New York 10017
(212) 686-6633
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Roger D. Blanc
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
(212) 821-8000
August 1, 1996
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(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3)
or (4), check the following: |_|
Check the following box if a fee is being paid with this
statement:|_|
<PAGE>2
SCHEDULE 13D
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CUSIP No. 13722D101 Page 2 of 8 Pages
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1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Anthony Low-Beer I.D. ####-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
3,202,900 shares of Common Stock
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NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0 shares of Common Stock
OWNED BY
EACH
REPORTING
PERSON WITH
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9 SOLE DISPOSITIVE POWER
1,688,100 shares of Common Stock
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10 SHARED DISPOSITIVE POWER
1,514,800 shares of Common Stock
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
3,202,900 shares of Common Stock
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.46%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>3
This Amendment No. 1, dated August 26, 1996, to the Schedule
13D dated July 11, 1996 (the "Schedule 13D"), filed on behalf of Anthony
Low-Beer ("Mr. Low-Beer"), relates to the common stock (the "Common Stock") of
Canarc Resource Corp., a corporation organized under the laws of Canada (the
"Company"), and is being filed pursuant to Rule 13d-2 under the Securities
Exchange Act of 1934, as amended.
Item 3. Source and Amount of Funds or Other Consideration.
The 2,742,900 shares of Common Stock and the 460,000
purchase warrants (each warrant is exerciseable into one share of Common
Stock) (the "Purchase Warrants") beneficially owned by Mr. Low-Beer were
acquired in brokered and privately negotiated transactions for an aggregate
purchase price of $4,185,090.10. The sources of funds for the purchases
were (i) investment capital contributed by Mr. Low-Beer and (ii) investment
capital contributed by persons and entities (the "Investors") with which
Low-Beer Advisory has entered into advisory agreements (the "Advisory
Agreements") or Mitchell Securities has entered into letters of authorization
("Letters of Authorization"), providing Mr. Low-Beer trading discretion over
the Investors' accounts.
Item 5. Interest in Securities of the Issuer.
(a) As of August 20, 1996, Mr. Low-Beer beneficially owned a
total of 3,202,900 shares of the Common Stock of the Company, constituting 9.46%
of the shares of Common Stock then outstanding, based on 33,412,911 shares of
Common Stock
<PAGE>4
outstanding as of August 20, 1996 as disclosed in a letter from the Company to
Mr. Low-Beer, dated August 20, 1996.
(b) Mr. Low-Beer has sole voting and dispositive power with
respect to 1,688,100 shares of Common Stock which he owns directly and shared
dispositive power pursuant to the Advisory Agreements and Letters of
Authorization with respect to 1,514,800 shares of Common Stock owned by
Investors.
(c) Information concerning transactions in the Common Stock
effected by Mr. Low-Beer for his own account and for the accounts of Investors
since the filing of the Schedule 13D on July 11, 1996 is set forth in Schedule A
hereto and is incorporated by reference. Except as set forth in Schedule A, no
transactions in the Common Stock have been effected by Mr. Low-Beer since the
filing of the Schedule 13D on July 11, 1996.
(d) Not applicable.
(e) Not applicable.
Item 7. Material to be Filed as Exhibits.
1. Form of Subscription Agreement.
2. Form of Letter of Authorization by and between Mr.
Low-Beer and Investors.
3. Account Manager Agreement, dated as of December 31,
1992, by and between Budge Collins, Inc. and Low-Beer Advisory Services, Inc.
4. Investment Advisory Agreement, dated as of April 1,
1992, by and between Hamilton Partners, L.P. and Low-Beer Advisory Services,
Inc.
<PAGE>5
SCHEDULE A
1. On July 12, 1996, Mitchell Securities, Inc. purchased 46,000 shares of
Common Stock of the Company for the accounts of Investors in brokered
transactions at a price of $1.34 per share.
2. On July 12, 1996, Mitchell Securities, Inc. purchased 3,000 shares of
Common Stock of the Company for the accounts of Investors in brokered
transactions at a price of $1.30 per share.
3. On July 17, 1996, Mitchell Securities, Inc. purchased 10,000 shares of
Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.11 per share.
4. On July 18, 1996, Mitchell Securities, Inc. purchased 5,000 shares of
Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.16 per share.
5. On July 19, 1996, Mitchell Securities, Inc. purchased 5,000 shares of
Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.16 per share.
6. On July 24, 1996, Mitchell Securities, Inc. purchased 10,000 shares of
Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.14 per share.
7. On July 26, 1996, Mitchell Securities, Inc. purchased 10,000 shares of
Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.15 per share.
8. On July 31, 1996, Mitchell Securities, Inc. purchased 2,000 shares of
Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.15 per share.
9. On August 1, 1996, 450,000 special warrants of the Company purchased
by Investors on June 24, 1996 at a price of $1.65 per special warrant
and 470,000 special warrants of the Company purchased by Mr.
Low-Beer on June 24, 1996 at a price of $1.65 per special
warrant were automatically exercised. Each special warrant
converted into one share of Common Stock and one-half Purchase
Warrant.
10. On August 2, 1996, Mitchell Securities, Inc. purchased 12,800 shares
of Common Stock of the Company for the account of Mr. Low-Beer in
brokered transactions at a price of $1.19 per share.
11. On August 6, 1996, Mitchell Securities, Inc. purchased 3,000 shares of
Common Stock of the Company for the accounts of Investors in brokered
transactions at a price of $1.19 per share.
12. On August 8, 1996, Mitchell Securities, Inc. purchased 1,000 shares of
Common Stock of the Company for the accounts of Investors in brokered
transactions at a price of $1.22 per share.
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: August 27, 1996 By:/s/ Anthony Low-Beer
--------------------
Anthony Low-Beer
<PAGE>1
CANARC RESOURCE CORP.
SUBSCRIPTION AGREEMENT
(United States Residents)
June 20, 1996
TO: CANARC RESOURCE CORP.
FROM: ________________________ (the "Subscriber")
Subscription for and purchase of __________ Special Warrants
of Canarc Resource Corp.
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Reference is made to an agency agreement (the "Agency Agreement" which
will be dated as of June 20, 1996 between Canarc Resource Corp. (the "Company")
and Nesbitt Burns Securities Inc. (the "Agent") providing for the issuance and
sale by the Company with the assistance of the Agent of up to 4,100,000 special
warrants (the "Special Warrants") for a consideration of Cdn.$2.25 per Special
Warrant (the "Offering") on the terms and conditions set forth in the Agency
Agreement. A copy of a term sheet (the "Term Sheet") outlining the features of
the Special Warrants and certain terms of the Agency Agreement is attached as
Schedule "A" hereto.
1. Subscription
The undersigned (the "Subscriber") hereby irrevocably subscribes for
and agrees to purchase, subject to the terms and conditions set forth herein
that number of Special Warrants of the Company set out above, and above the
Subscriber's name on page 8 hereof at a price of Cdn.$2.25 per Special Warrant.
The Subscriber understands that the Special Warrants subscribed for constitute a
portion of the aggregate number of Special Warrants which are being offered for
sale under the Agency Agreement.
2. Description of Special Warrants
The Special Warrants shall be created and issued pursuant to a special
warrant indenture (the "Special Warrant Indenture") between Montreal Trust
Company of Canada, as trustee, (the "Trustee"), and the Company to be dated as
of the Closing Date (as hereinafter defined). The specific attributes of the
Special Warrants shall be set forth in the Special Warrant Indenture, which
shall provide, among other things, that the holders of Special Warrants shall be
entitled to receive, without additional payment of any consideration in addition
to the purchase price therefor, upon exercise of the Special Warrants in
accordance with the terms of the Special Warrant Indenture, one common share
(each, a "Common Share" and collectively, the
<PAGE>2
"Common Shares") and one-half of one whole common share purchase warrant (each,
a "Purchase Warrant" and collectively, the "Purchase Warrants") subject to
adjustment as described herein.
The Special Warrants shall be exercisable at the option of the holder
at any time on or before the earlier of 5:00 p.m. (Toronto time) on (a) the 5th
business day after a receipt is issued by the last of the securities regulatory
authorities in each of the Qualifying Jurisdictions (as hereinafter defined) for
the final prospectus (the "Prospectus") qualifying the issuance (the "Prospectus
Qualification") of the Common Shares and the Purchase Warrants and (b) June 20,
1997 (the "Expiry Date"). Any Special Warrants not exercised by the Expiry Date
shall be exercised as contemplated herein immediately prior thereto without any
further action on the part of the holder.
The Company shall undertake to file the Prospectus and obtain receipts
therefor from the applicable securities regulatory authorities in Ontario, and
each of the other provinces of Canada where Subscribers reside (the "Qualifying
Jurisdictions") within 90 days from the Closing Date (defined below) and in any
event not later than 5:00 p.m. (Toronto time) on September 18, 1996 (the
"Qualification Deadline"). In the event that receipts for the Prospectus are not
obtained prior to the Qualification Deadline, then the holders of any
outstanding Special Warrants shall have the option of electing either: (i) that
Special Warrants held by them, upon exercise, will be subject to the Conversion
Rate Increase defined below or (ii) to require the Company to repurchase the
Special Warrants held by them for Cdn.$2.25 per Special Warrant, plus deemed
interest thereon equal to the 90-day Canadian T-Bill rate, for the period from
the date of issuance of the Special Warrants until the date of their repurchase.
"Conversion Rate Increase" means an increase of 10% in the number of securities
to be issued upon exercise of a Special Warrant such that 1.1 Common Shares and
0.55 of a Purchase Warrant are to be issued upon exercise of each Special
Warrant, subject to adjustment as otherwise provided for in the Special Warrant
Indenture. At the closing, one-half of the gross proceeds of the sale of the
Special Warrants will be delivered to the Company less the commission referred
to in paragraph 10 herein. The balance of the proceeds shall be held in escrow
by the Trustee until the Qualification Deadline.
The foregoing description of the Special Warrants is a summary only
and is subject to the detailed provisions of the Special Warrant Indenture under
which such securities shall be issued. In the event of a conflict, the
provisions of the Special Warrant Indenture shall prevail.
3. Payment
The aggregate amount payable by the Subscriber in respect of the
Special Warrants (the "Subscription Price") must accompany this Subscription
Agreement and shall be made by
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certified cheque or bank draft drawn on a Canadian chartered bank and payable to
Nesbitt Burns Securities Inc. or payable in such other manner as may be
specified by the Agent to be dealt with in accordance with the provisions set
forth herein.
4. Questionnaire, Undertaking, Direction and Investment Letter
The Subscriber must complete, sign and return the following documents
along with two (2) executed copies of this Subscription Agreement to Nesbitt
Burns Securities Inc. (Attention: Stephen Burleton) as soon as possible and, in
any event, not later than two days prior to the Closing Date (defined below):
(a) Schedule I, a questionnaire and undertaking required by The
Toronto Stock Exchange on which the Common Shares are
listed;
(b) Schedule II, a direction with respect to registration and
delivery instructions; and
(c) Schedule III, a letter with respect to United States
securities law matters.
The Company will file the questionnaires and undertakings of
Subscribers whose subscriptions are accepted by the Company with The Toronto
Stock Exchange.
5. Other Documentation
The Subscriber may also be required to execute any further
documentation as required under securities legislation or by the stock exchange
or other regulatory authority in the province or jurisdiction in which the
Subscriber is resident and covenants and agrees to do so upon request by the
Company or the Agent.
6. Closing
Delivery and payment for the Special Warrants (the "Closing") will be
completed at the offices of Grossman & Stanley, Barristers & Solicitors,
800-1090 West Georgia Street, Vancouver, British Columbia at 7:00 a.m.
(Vancouver time) (the "Closing Time") on June 20, 1996 or such other date or
time as the Company and the Agent shall mutually agree (the "Closing Date").
Certificates representing the Special Warrants (individually a
"Special Warrant Certificate" and collectively, the "Special Warrant
Certificates") will be available for delivery against payment to the Company of
the Subscription Price in the manner specified below.
<PAGE>4
It is a condition of Closing that all necessary regulatory approvals
be obtained and the documents completed in accordance with Section 4 hereof be
received prior to the Closing Date. By its execution of this Subscription
Agreement, the Company hereby agrees with the Subscriber that the Subscriber
shall have the benefit of the following provisions set forth in the Agency
Agreement:
(a) the representation and warranties made by the Company to the
Agent and the undersigned as a purchaser of the Special
Warrants; and
(b) the covenants of the Company in favour of the Agent and the
undersigned as a purchaser of the Special Warrants;
which representations or warranties, covenants and conditions are hereby
incorporated by reference such that they form an integral part of this
Subscription Agreement and all of which shall survive the closing of the
purchase and sale of the Special Warrants and shall continue in full force and
effect for the benefit of the Subscriber for the period set forth in the Agency
Agreement.
7. Prospectus Exemptions
The sale and delivery of the Special Warrants to the Subscriber is
conditional upon such sale being exempt from the requirements as to the filing
of a prospectus and as to the delivery of an offering memorandum as defined in
the applicable securities legislation or upon the issuance of such rulings,
orders, consents or approvals as may be required to permit such sale without the
requirement of filing a prospectus or delivering an offering memorandum.
The Subscriber acknowledges and agrees that: (a) it (or others for
whom it is contracting hereunder) was not provided with, has not requested, and
does not need to receive, a prospectus or an offering memorandum as defined in
the applicable securities legislation or similar document; (b) its decision to
execute this subscription agreement and to purchase the Special Warrants agreed
to be purchased hereunder (or by others for whom it is contracting hereunder)
has not been based upon any verbal or written representations as to fact or
otherwise made by or on behalf of the Company, the Agent or any other person or
company and that its decision (or the decision of others for whom it is
contracting hereunder) is based entirely upon the Term Sheet and publicly
available information concerning the Company which was obtained by the
Subscriber; (c) the sale of the Special Warrants was not accompanied by any
advertisement in printed media of general and regular paid circulation, radio or
television or otherwise; and (d) it (or others for whom it is contracting
hereunder) has been advised to consult its own legal advisors with respect to
applicable resale restrictions and it (or others for whom it is contracting
hereunder) is solely responsible (and
<PAGE>5
neither the Company nor the Agent is in any way responsible) for compliance with
applicable resale restrictions.
The Subscriber acknowledges and agrees that the Special Warrants and
the Common Shares and Purchase Warrants issuable upon exercise of the Special
Warrants are subject to statutory hold periods during which these securities may
not be offered, resold or otherwise transferred in Canada, the United States or
elsewhere except in compliance with applicable securities laws and the
requirements of applicable stock exchanges and that the Subscriber shall not so
offer, resell or otherwise transfer these securities except in compliance with
applicable securities laws and the requirements of applicable stock exchanges.
Subscribers confirm that no representation has been made respecting the
applicable hold periods for the Special Warrants. Subscribers are advised to
consult with their own legal advisers in connection with any applicable resale
restrictions.
8. Representations, Warranties and Covenants of the Subscriber
The Subscriber hereby represents and warrants to the Company and the
Agent (which representations and warranties shall survive closing) that:
1. the Subscriber and any beneficial purchaser for whom you are
acting are resident in the jurisdiction set out above your
signatures on page 8; and
2. the statements made by you in Schedule "III" are true and correct
as at the date thereof.
9. Reliance Upon Representations, Warranties and Covenants
The Subscriber acknowledges that the representations and warranties
and covenants contained in this Subscription Agreement and in Schedules hereto
are made with the intent that they may be relied upon by the Company and the
Agent to, among other things, determine its eligibility or (if applicable) the
eligibility of others on whose behalf it is contracting hereunder to purchase
Special Warrants and the Subscriber hereby agrees to indemnify the Company and
the Agent against all losses, claims, costs, expenses and damages or liabilities
which they may suffer or incur which are caused by or arise from, directly or
indirectly, their reliance thereon. The Subscriber further agrees that by
accepting the Special Warrants the Subscriber shall be representing and
warranting that the foregoing representations and warranties are true as at the
Closing Time with the same force and effect as if they had been made by the
Subscriber at the Closing Time and that they shall survive the purchase by the
Subscriber of the Special Warrants and shall continue in full force and effect
notwithstanding any subsequent disposition by him of the Special Warrants or the
Common Shares or Purchase Warrants.
<PAGE>6
10. The Agent
The Subscriber understands that upon completion of the purchase from
the Company of the Special Warrants, the Agent will receive from the Company a
cash commission equal to 6% of the gross proceeds received by the Company from
the sale of the Special Warrants to be sold under the Offering. In addition, the
Agent will receive 150,000 Broker's Warrants with an exercise price of $2.45 and
otherwise on the same terms and conditions as the Special Warrants. No other fee
or commission is payable by the Company in connection with the sale of the
Special Warrants. This Subscriber further understands that the Agent, their
directors, officers, employees and affiliates may, from time to time, hold
positions in securities of the Company.
11. Contractual Right of Action for Rescission
In the event that a holder of Special Warrants, who acquires Common
Shares and Purchase Warrants upon the exercise of the Special Warrants as
provided for in the Prospectus, is or becomes entitled under the Securities Act
(Ontario) or the securities laws of any other Qualifying Jurisdiction to the
remedy of rescission by reason of the Prospectus or any amendment thereto
containing a misrepresentation, such holder shall be entitled to rescission not
only of the holder's exercise of its Special Warrant(s) but also of the private
placement transaction pursuant to which the Special Warrants were initially
acquired, and shall be entitled in connection with such rescission to a full
refund of all consideration paid on the acquisition of the Special Warrants. In
the event such holder is a permitted assignee of the interest of the original
Special Warrants subscriber, such permitted assignee shall be entitled to
exercise the rights of rescission and refund granted hereunder as if such
permitted assignee were such original subscriber. The foregoing is in addition
to any other right or remedy available to a holder of Special Warrants under
Section 130 of the Securities Act (Ontario), or otherwise at law or pursuant to
the applicable securities regulatory requirements of the Qualifying
Jurisdictions.
12. Costs
All costs and expenses incurred by the Subscriber (including any fees
and disbursements of any special counsel retained by the Subscriber) relating to
the sale of the Special Warrants to the Subscriber shall be borne by the
Subscriber.
13. Appointment of Nesbitt Burns Securities Inc.
as Subscriber's Agent
The Subscriber, on its own behalf and (if applicable) on behalf of
others for whom the Subscriber is contracting hereunder, hereby:
<PAGE>7
(a) irrevocably authorizes Nesbitt Burns Securities Inc., to
negotiate and settle the form of the Special Warrant Indenture
and any other agreement to be entered into in connection with
this transaction and to waive on its own behalf and on behalf
of the purchasers of Special Warrants in whole or in part, or
extend the time for compliance with, any of the closing
conditions in such manner and on such terms and conditions as
Nesbitt Burns Securities Inc. may determine, acting
reasonably, without in any way affecting the Subscriber's
obligations or the obligations of such others hereunder;
(b) acknowledges and agrees that Nesbitt Burns Securities Inc. and
the Company may vary, amend, alter or waive, in whole or in
part, one or more of the conditions or covenants set forth in
the Agency Agreement in such manner and on such terms and
conditions as it may determine, acting reasonably, without
affecting in any way the Subscriber or such others'
obligations hereunder; provided, however, that Nesbitt Burns
Securities Inc. shall not vary, amend, alter or waive any such
condition where to do so would result in a material change to
any of the material attributes of the Special Warrants
described herein; and
(c) irrevocably authorizes Nesbitt Burns Securities Inc. to swear,
accept, execute, file and record any documents (including
receipts) necessary to accept delivery of the Special Warrants
on the Closing Date and to terminate this subscription on
behalf of the Subscriber in the event that any condition
precedent of the offering has not been satisfied.
14. Appointment of Trustee
The Subscriber hereby directs the Trustee or other suitable party to
exercise all of the Special Warrants held by the Subscriber, on the Subscriber's
behalf, if the Subscriber has not so exercised all or part of the Special
Warrants on or before the Expiry Date, such direction being subject to
revocation by the Subscriber at any time by providing the Trustee or other
suitable party with written notice of such revocation. The Subscriber
acknowledges and agrees that the terms of this Subscription Agreement do not
require the Subscriber to give the authorization and direction set forth herein
and the Subscriber may elect not to so authorize and direct by deleting this
paragraph 14 and placing the Subscriber's initials beside the same at the time
the Subscriber executes this Subscription Agreement.
<PAGE>8
15. Facsimile to Subscriptions
The Company and the Agent will be entitled to rely upon delivery by
facsimile machine of an executed copy of this Subscription Agreement and
acceptance of the Company of such facsimile copy will be legally effective to
create a valid and binding agreement between the Subscriber and the Company in
accordance with the terms hereof.
16. Governing Law
This Subscription Agreement is governed by the laws of the
Province of British Columbia and the federal laws of Canada applicable therein.
17. Survival
This Subscription Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the Subscriber
notwithstanding the completion of the purchase of the Special Warrants by the
Subscriber pursuant hereto, the issuance of Special Warrants of the Company and
any subsequent disposition by the Subscriber of the Special Warrants, the Common
Shares or the Purchase Warrants.
18. Assignment
This Subscription Agreement is not transferable or assignable by the
parties hereto.
19. Time of the Essence
Time shall be of the essence of this Subscription Agreement.
20. Entire Agreement
This Subscription Agreement contains the entire agreement of the
parties hereto relating to the subject matter hereof and there are no
representations, covenants or other agreements relating to the subject matter
hereof except as otherwise stated or referred to herein.
21. Information
The Company hereby agrees with the Subscriber that it will, upon
request, provide to the Subscriber or to any Qualified Institutional Buyer who
is a prospective purchaser of the Special Warrants or the securities issuable on
exercise thereof the business and financial information specified in Rule
144A(d) under the U.S. Securities Act of 1933 as amended.
<PAGE>9
22. Language
The Subscriber hereby acknowledges that it has consented and requested
that all documents evidencing or relating in any way to the sale of Special
Warrants be drawn up in the English language only. Nous, soussignes,
reconnaissans par les presentees avoir consenti et exige que tous les documents
faisant foi ou se rapportant de quelqu maniere a la vente de ces warrants soient
re diges en langue anglaise seulement.
IN WITNESS WHEREOF the Subscriber has duly executed this subscription
as of the date first above mentioned.
Number of Special Warrants
to be purchased at Cdn.$2.25 each: ________________
Total Purchase Price: ________________
------------------------------------------
(Name of Subscriber - Please type or print)
-----------------------------------------
(Signature and, if applicable, Office)
------------------------------
(Address of Subscriber)
------------------------------
(City, State, Postal Code)
If the Subscriber is signing as agent for a principal, and the
Subscriber is not a trust company signing as trustee or as an agent for a
fully-managed account, please complete the following:
---------------------------------
(Name of Beneficial Purchaser
- Please type or print)
---------------------------------
(Address of Beneficial Purchaser)
---------------------------------
(City, State, Postal Code)
<PAGE>10
ACCEPTANCE
The above-mentioned Subscription Agreement is hereby accepted and
agreed to by Canarc Resource Corp.
DATED at Toronto, Ontario, the _____ day of June, 1996.
CANARC RESOURCE CORP.
Per: _______________________
Authorized Signing
Officer
<PAGE>11
SCHEDULE "A"
CANARC RESOURCE CORP.
Special Warrants Exercisable into Units
Issuer: Canarc Resource Corp. ("Canarc" or the "Company")
Issue: Special Warrants, each exercisable without further
payment into Units consisting of one Common Share of
the Company ("Common Share") plus one-half Common
Share Purchase Warrant ("Purchase Warrant")
Form of Offering: Private Placement of Special Warrants Warrant
("Special Warrant")
Amount: $9,225,000
Price: Cdn.$2.25 per Special Warrant
Issue Size: 4,100,000 Special Warrants
Purchase
Warrant Terms: Each whole Purchase Warrant will entitle the holder
thereof to purchase one Common Share of Canarc
Resource Corp. at a price of Cdn.$2.75 per share for a
period of 24 months from closing.
Prospectus: In the event that a final receipt for a prospectus
qualifying the Units, Common Shares and Purchase
Warrants for distribution in Canada and for resale
through the facilities of The Toronto Stock Exchange
is not issued by the Ontario Securities Commission on
or before the date which is 90 days from closing, the
holders of the Special Warrants shall have the option
of electing either: (i) that their Special Warrants,
upon exercise, will be subject to the Conversion Rate
Increase defined below or (ii) to require the
Corporation to repurchase their Special Warrants for
Cdn.$2.25 per Special Warrant, plus deemed interest
thereon equal to the 90-day Canadian T-Bill rate, for
the period from the date of issuance of the Special
Warrants until the date of their purchase. "Conversion
Rate Increase" means an increase of 10% in the number
of Units to be issued upon exercise of a Special
Warrant, such that 1.1 Common Shares and 0.55 of a
Warrant are to be issued upon exercise of each Special
Warrant.
Listing: The Common Shares will be listed on The Toronto Stock
Exchange
<PAGE>12
Closing: On or about June 20, 1996
Underwriter: Nesbitt Burns Securities Inc.
Commission: 6% plus 150,000 Broker Dealer Warrants payable to the
Agents at the closing, having an exercise price of $2.45
and otherwise on the same terms and conditions as the
Special Warrants.
<PAGE>13
SCHEDULE I
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the securities: CANARC RESOURCE CORP.
(b) Number and class of securities to be purchased: _____________
Special Warrants each exchangeable for one Unit comprised of one
Common Share and one-half of one Common Share Purchase Warrant
(c) Purchase Price: (Cdn.) $2.25
2. DETAILS OF PURCHASER
(a) Name of Purchaser:
______________________________________
--------------------------------------
--------------------------------------
(b) Address: ____________________________
--------------------------------------
--------------------------------------
(c) Names and addresses of persons having a greater than
10% beneficial interest in the Purchaser:
--------------------------------------
--------------------------------------
--------------------------------------
<PAGE>14
3. RELATIONSHIP TO ISSUER
(a) Is the Purchaser (or any person named in response to 2(c) above)
an insider of the Issuer for the purposes of the Ontario
Securities Act (before giving effect to this private placement)?
If so, state the capacity in which the Purchaser (or person named
in response to 2(c)) qualifies as an insider:
------------------------------------------
------------------------------------------
------------------------------------------
(b) If the answer to (a) is "no", are the Purchaser and the Issuer
controlled by the same person or company? If so, give details:
-------------------------------------------
-------------------------------------------
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the Purchaser, as principal, in the
securities of the Issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the
60 days preceding the date hereof:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
<PAGE>15
UNDERTAKING
TO: THE TORONTO STOCK EXCHANGE
The undersigned has subscribed for and agreed to purchase, as
principal, the securities described in Item 1 of this Private Placement
Questionnaire and Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of
the said securities so purchased or any securities derived therefrom for a
period equal to the lesser of (a) six months from the date of the closing of the
transaction herein or for such period as is prescribed by applicable securities
legislation, whichever is longer; and (b) a period ending on the date that a
receipt for a final prospectus relating to the said securities or any securities
derived therefrom has been issued by the Ontario Securities Commission, without
the prior consent of The Toronto Stock Exchange and any other regulatory body
having jurisdiction.
DATED AT: ___________________________________
(Name of Purchaser - please print)
this____day of
June, 1996 ___________________________________
(Authorized Signature)
-----------------------------------
(Official Capacity - please print)
-----------------------------------
(please print here name of
individual whose signature
appears above if different
from name of purchaser
printed above)
SCHEDULE "II"
Canarc Resource Corp.
Suite 800, 850 W. Hastings Street
Vancouver, British Columbia
V6C 1E1
Dear Sirs:
Re: Canarc Resource Corp.
Private Placement of Special Warrants
-------------------------------------
<PAGE>16
1. Number of Special Warrants _______________ at
$2.25 for an aggregate subscription price of
$_____________________.
2. Delivery - please deliver the Special Warrant
certificate(s) at the address appearing above
unless indicated otherwise below:
--------------------------------------------
--------------------------------------------
3. Registration - registration of the single
certificate which is to be delivered at Closing
should be made as follows:
---------------------------------------------
(name)
---------------------------------------------
(address)
---------------------------------------------
4. The undersigned hereby acknowledges that it will
deliver to the Company all such additional
completed forms in respect of the Subscribers'
purchase of Special Warrants of the Company as may
be required for filing with the appropriate
securities commissions and regulatory authorities
and stock exchanges.
DATED:________________________, 1996.
----------------------------------
(name of purchaser)
Per: _____________________________
(signature)
_____________________________
(position)
<PAGE>17
In case more than one Special Warrant certificate is to be delivered at closing,
please complete a Schedule "II" for each certificate to be delivered.
<PAGE>18
SCHEDULE "III"
TO: Canarc Resource Corp.
Suite 800, 850 W. Hastings Street
Vancouver, British Columbia
V6C 1E1
Dear Sirs:
In connection with our purchase of Special Warrants and Common Shares
and Purchase Warrants issuable upon exercise of such Special Warrants (the
"securities") of Canarc Resource Corp. (the "Company"), we confirm to you that:
(a) we are authorized to consummate the purchase of the
securities;
(b) we understand that the securities have not and will not be
registered under the Securities Act of 1933, as amended (the
"U.S. Securities Act"), and that the sale contemplated hereby
is being made in reliance on a private placement exemption to
institutional accredited investors;
(c) we are an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) (an "Institutional
Accredited Investor") under the U.S. Securities Act and have
such knowledge, sophistication and experience in business and
financial matters that we are capable of evaluating the merits
and risks of the prospective investment;
(d) we are purchasing the securities in a minimum amount of the
greater of Cdn.$150,000 and U.S.$100,000 for our own account
(or for accounts as to which we exercise sole investment
management discretion and have authority to make the
statements contained in this letter, and each such account is
purchasing securities having such aggregate purchase price),
and not with a view to any resale, distribution or other
disposition of the securities in any transaction that would be
in violation of the securities laws of the United States or
any state thereof;
(e)
we have received a copy, for our information only, of the
U.S. Subscription Agreement for the securities and a U.S.
covering memorandum relating to the offering in the United
States of the securities and we have been afforded the
opportunity to obtain such additional information as we deem
necessary;
(f)
we have such knowledge and experience in financial and
business matters as to be capable of evaluating the
<PAGE>19
merits and risks of our investment in the securities and we
are able to bear the economic risks of such investment;
(g) we acknowledge that we have not purchased the securities as a
result of any form of general solicitation or general
advertising (as those terms are used in Rule 502(c) under the
U.S. Securities Act);
(h) we agree that we may offer, sell or otherwise transfer such
securities (other than pursuant to an effective registration
statement under the U.S. Securities Act) only if:
(i) the sale is to the Company; or
(ii)(A) the sale is to an Institutional Accredited Investor
and is a number of securities having an aggregate
market value at the time of such sale of not less
than U.S.$100,000;
(B) a purchaser's letter containing representations,
warranties and agreements substantially similar to
those contained in this purchaser's letter (except
that such purchaser's letter need not contain the
representation set forth in paragraph (d) above), and
satisfactory to Nesbitt Burns Securities Inc. (the
"Placement Agent") and the Company, is executed by
the purchaser and delivered to the Placement Agent
and the Company prior to the sale; and
(C) all offers or solicitations in connection with the
sale are arranged and conducted solely by the
Placement Agent or the Company;
(iii) the sale is made outside the United States in
accordance with the requirements of Rule 904 of
Regulation S under the U.S. Securities Act; or
(iv) the sale is made pursuant to the exemption from
registration under the U.S. Securities Act provided
by Rule 144A thereunder; or
(v) the sale is made pursuant to the exemption from
registration under the U.S. Securities Act provided
by Rule 144 thereunder and in accordance with any
applicable state securities or "Blue Sky" laws; or
(vi) the securities are sold in a transaction that does
not require registration under the U.S.
<PAGE>20
Securities Act or any applicable United States state
laws and regulations governing the offer and sale of
securities, and we have furnished to the Transfer
Agent (defined below) and the Company an opinion of
counsel, reasonably satisfactory to the Transfer
Agent (defined below) and the Company, to that
effect;
(i) we understand and acknowledge that upon original issuance of
the securities and for such time as is required under
applicable requirements of the U.S. Securities Act or state
securities laws, the certificates representing the
securities, and all certificates issued in exchange therefor
or in substitution thereof, shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "U.S. SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
ISSUER THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO THE ISSUER, (B) OUTSIDE THE UNITED
STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
U.S. SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE
144 OR RULE 144A THEREUNDER, OR (D) PURSUANT TO ANOTHER
EXEMPTION FROM REGISTRATION AFTER PROVIDING A SATISFACTORY
LEGAL OPINION TO THE ISSUER. DELIVERY OF THIS CERTIFICATE MAY
NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS
ON THE TORONTO STOCK EXCHANGE. A NEW CERTIFICATE, BEARING NO
LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY", MAY
BE OBTAINED FROM THE TRANSFER AGENT UPON DELIVERY OF THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM
SATISFACTORY TO THE TRANSFER AGENT AND THE COMPANY, TO THE
EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS
BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER
THE U.S. SECURITIES ACT.
and that all certificates representing Common Shares and
Purchase Warrants (and all certificates issued in exchange
thereof) issuable upon exercise of the securities so legended
will bear the same legend; provided, however, that if the
securities are being sold under paragraph (h)(iii) above, the
legend may be removed by providing a declaration to the
Montreal
<PAGE>21
Trust Company of Canada (the "Transfer Agent") as transfer
agent for the securities to the following effect:
"The undersigned (A) acknowledges that the sale of the
securities to which this declaration relates is being made in
reliance on Rule 904 of Regulation S under the United States
Securities Act of 1933 and (B) certifies that (1) the offer of
such securities was not made to a person in the United States
and either (a) at the time the buy order was originated, the
buyer was outside the United States, or the seller and any
person acting on its behalf reasonably believes that the buyer
was outside the United States or (b) the transaction was
executed on or through the facilities of The Toronto Stock
Exchange and neither the seller nor any person acting on its
behalf knows that the buyer is a U.S. person, (2) neither the
seller nor any person acting on its behalf engaged in any
directed selling efforts in the United States in connection
with the offer and sale of such securities and (3) the seller
is not an affiliate of the issuer of the securities. Terms
used herein shall have the meaning given to them by Regulation
S."
(j) we consent to the Company making a notation on its records or
giving instructions to the Transfer Agent of the securities in
order to implement the restrictions on Transfer set forth and
described herein.
You and the Transfer Agent are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
DATED: ____________________ ________________________
Name of Purchaser
By: _________________________
Name:
Title:
<PAGE>1
TRADING AUTHORIZATION LIMITED TO PURCHASES
AND SALES OF SECURITIES
Mitchell Securities
100 Park Avenue
New York, New York 10017
Gentlemen:
The undersigned hereby authorizes you as his agent and attorney in
fact to buy, sell (including short sales) and trade stocks, Put & Call Options
covered and uncovered, bonds and any other securities relating to the same on
margin or otherwise in accordance with your terms and conditions and your
clearing agent's terms and conditions for the undersigned's account and risk and
in the undersigned's name, or number on your books. The undersigned hereby
agrees to indemnify and hold you and your clearing agent harmless from and to
pay you promptly on demand any and all losses arising therefrom or debit balance
due thereon.
In all such purchases, sales or trades you are authorized to act at
your own discretion in every respect concerning the undersigned's account with
you and you are authorized to act for the undersigned and in the undersigned's
behalf in the same manner and with the same force and effect as the undersigned
might or could do with respect to such purchases, sales or trades as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or trades.
The undersigned hereby ratifies and confirms any and all transactions
with you heretofore or hereafter made by you for the undersigned's account.
This authorization and indemnity is in addition to (and in no way
limits or restricts) any rights which you may have under any other agreement or
agreements between the undersigned and your firm or the undersigned and your
clearing agent.
This authorization and indemnity is also a continuing one and shall
remain in full force and effect until revoked by the undersigned by a written
notice addressed to you and delivered to your office at 100 Park Avenue, New
York, New York 10017 but such revocation shall not affect any liability in any
way resulting from transactions initiated prior to such revocation. This
authorization and indemnity shall enure to the benefit of your present firm and
of any successor firm or firms
<PAGE>2
irrespective of any change or changes at any time in the personnel thereof for
any cause whatsoever, and of the assigns of your present firm or any successor
firm.
Very truly yours,
Date: ________________________ ________________________________
------------------------
City State
ACCEPTANCE BY AUTHORIZED AGENT:
- ------------------------------
<PAGE>1
COLLINS GROUP TRUST III
ACCOUNT MANAGER AGREEMENT
-------------------------
THIS ACCOUNT MANAGER AGREEMENT, dated as of December 31, 1992, is
entered into by and between Budge Collins, Inc., a California corporation doing
business as Collins Associates (the "Investment Manager"), and Low-Beer Advisory
Services, Inc., a New York corporation (the "Account Manager").
WHEREAS, Collins Group Trust III (the "Group Trust"), is a trust
organized pursuant to a Declaration of Trust dated as of December 15, 1989
(including any amendments thereto, the "Declaration of Trust"), pursuant to
which United States Trust Company of New York, as Trustee, or its successor
performs custodial and record keeping services and the Investment Manager and
certain account managers appointed by it perform investment management services
with respect to the funds (collectively, the "Group Trust Fund") contributed by
various employee pension, profit-sharing and stock bonus plans and governmental
plans and units (each a "Participating Trust");
WHEREAS, the Investment Manager is a "named fiduciary," as defined by
Section 402(a)(2) of the Employee Retirement Income Security Act of 1974, as
amended (the "Act"), of each participating plan and Participating Trust for the
purpose of appointing account managers of portions of the Group Trust Fund; and
WHEREAS, the Investment Manager wishes to appoint the Account Manager
as such an account manager;
NOW, THEREFORE, the parties hereby represent and agree as follows:
1. Appointment of Account Manager. The Investment Manager hereby
appoints the Account Manager as "investment manager" in accordance with Section
3(38) of the Act with respect to each Participating Trust and with respect to
such portion of the Group Trust Fund as may be designated by the Investment
Manager from time to time (the "Account").
2. Discretionary Authority. The Investment Manager hereby designates
the Account Manager as its agent and attorney-in-fact with full power and
complete discretion in the investment and reinvestment of the assets of the
Account, without prior consultation or approval, except as may be required by
law, and subject to the limitations, restrictions, and objectives set forth in
the Investment Guidelines and Restrictions attached hereto as Exhibit A. This
authority shall include the power to: (a) buy, sell (including short sales),
exchange, convert and otherwise trade in any and all publicly traded stocks,
bonds,
<PAGE>2
options and other securities as the Account Manager may deem advisable and in
the best interests of the Group Trust in light of such Investment Guidelines and
Restrictions; and (b) place orders for the execution of such securities
transactions through such brokers or dealers as the Account Manager may select.
The Account Manager shall manage the Account in accordance with the
requirements and fiduciary standards applicable to it under the Act and any
regulations from time to time promulgated thereunder. To the extent that any
provision of this Agreement or any written or oral instructions issued in
connection with the management of the Account conflicts with any provision of
the Act or any such regulation, the provisions of the Act or regulation shall be
followed.
3. Acceptance of Appointment. The Account Manager hereby accepts
appointment as an Account Manager of the Group Trust and acknowledges that it is
a "fiduciary" as defined in the Act with respect to the Group Trust and each
participating plan and each Participating Trust.
4. Procedures with Respect to Securities. All transactions, purchases
and sales of securities by the Account Manager with respect to the Account shall
be consummated by payment to or delivery by the Trustee or its agent of the cash
or securities or other property due to or from the Group Trust. Instructions of
the Account Manager with respect to the Group Trust shall be made to the Trustee
in writing (including facsimile transmission) or orally and confirmed in writing
(including facsimile transmission) as soon as practicable thereafter, with a
copy to the Investment Manager. The Account Manager shall instruct all brokers
executing orders with respect to the Account to forward to the Investment
Manager copies of all brokerage confirmations promptly after execution of all
such transactions.
5. Fees. The compensation of the Account Manager for its services
rendered hereunder shall be calculated in accordance with the Schedule of Fees
attached hereto as Exhibit B and shall be based upon the valuation of the
Account by the Trustee on the Valuation Date immediately preceding the calendar
quarter for which such fees are paid. To determine the valuation of the Account
each security therein shall be valued in accordance with the valuation rules set
forth in the Declaration of Trust.
The Trustee shall pay the Account Manager's quarterly fee from the
Group Trust's assets, in advance as instructed by the Investment Manager, in an
amount based on the valuation of the Account on the Valuation Date immediately
preceding such quarter. In the event that the Group Trust first deposits funds
or securities in the Account on a date which is not the last day of a calendar
quarter, the fee for the first quarterly period shall be based on the estimated
valuation of the Account on such date, and shall be prorated based on the number
of days remaining
<PAGE>3
in such quarterly period. In the event that the Investment Manager terminates
this Agreement with the Account Manager at any time other than the last business
day of a quarterly period, the fee for that quarterly period shall be prorated
based on the number of days elapsed in said quarterly period, and the Account
Manager shall refund any amount due the Group Trust within ten (10) days after
the date of termination, subject to Section 10 of this Agreement.
6. Dividends and Account Reports. Dividends and other income or
distributions on or with respect to any of the assets of the Account shall be
credited to the Account and reinvested by the Account Manager in accordance with
this Agreement. The Account Manager shall maintain complete records of income
and principal of the Account and shall furnish the Investment Manager, within
ten (10) days after the last business day of each calendar quarter, with
quarterly written statements of the Account and valuations of the assets of the
Account as of the last business day of each quarter, and such other reports as
the Investment Manager shall reasonably request.
7. Services to Other Clients. The Investment Manager understands and
agrees that the Account Manager, its directors, officers, employees, affiliates
or agents may perform investment advisory and investment management services for
various clients other than the Group Trust. The Investment Manager agrees that
the Account Manager, its directors, officers, employees, affiliates or agents
may give advice and take action in the performance of its duties with respect to
any of its other clients which may differ from advice given, or the timing or
nature of action taken, with respect to the Account. Nothing in this Agreement
shall be deemed to impose upon the Account Manager any obligation to purchase or
sell or to recommend for purchase or sale for the Account any security or other
property which the Account Manager or its respective affiliates may purchase or
sell for its own account or for the account of any other client, if in its sole
discretion the Account Manager, for any reason, considers it undesirable or
impractical to take such action or make such recommendation for the Account, and
further, nothing in this Agreement shall restrict the ability of the Account
Manager, its directors, officers, employees, affiliates or agents to engage in
any such transactions, notwithstanding the fact that the Account Manager may
have or may take a similar position of any kind for the Account or otherwise.
8. Liability. Neither the Account Manager nor any of its officers,
directors, employees, or agents shall be liable for any actions performed or
omitted, or for any loss, resulting from the exercise of its professional
judgment in carrying out its obligations under this Agreement (including,
without limitation, any damage, loss or expense arising from any choice of
investments by the Account Manager); provided that the Account Manager shall
remain responsible for its gross negligence, willful malfeasance or violation of
applicable law. The parties
<PAGE>4
acknowledge that the Act imposes responsibilities on persons acting as
fiduciaries thereunder, and agree that nothing herein shall in any way
constitute a waiver or limitation of any rights which the Group Trust or others
may have under the Act.
9. Voting and Exercise of Rights. The Account Manager shall have the
power to vote, either in person or by proxy, tender and take all actions
incident to the ownership of all securities in which assets of the Account may
be invested from time to time. The Account Manager shall further have the power
to act in all matters with respect to the assets in the Account, including,
without limitation, to tender, exchange and convert securities and exercise
rights related thereto.
10. Termination. This Agreement may be terminated by either party at
any time by giving to the other party written notice at least five (5) days
prior to the date on which such termination is to become effective (the "Date of
Termination"); provided, however, that the provisions of Sections 5, 8, and 10
hereof shall survive termination of this Agreement and the Trustee shall remain
liable for any obligation to pay any fees and expenses arising prior to the date
of such termination.
Promptly following any notice of termination, (i) the Account Manager
shall not be required to carry out any investment transactions following the
effective Date of Termination, and (ii) termination of this Agreement by the
Investment Manager shall not have any effect with respect to any transaction
carried out by the Account Manager hereunder (whether or not such transaction
has settled) prior to the date the Account Manager shall have received actual
notice of termination.
11. Representations by the Investment Manager. The Investment Manager
represents and warrants:
(a) The terms hereof do not violate any obligation by which it
is bound, whether arising by contract, operation of law or
otherwise, and that it has the power, capacity and authority
to enter into this Agreement and to perform in accordance
herewith, and this Agreement constitutes a valid and binding
obligation enforceable in accordance with its terms.
(b) This Agreement constitutes an arms-length agreement between
the Investment Manager and the Account Manager.
(c) The retention of the Manager by the Investment Manager as
investment manager with respect to the investment of all
assets held in the Account is authorized by the governing
documents of the Group Trust.
<PAGE>5
(d) The representations and warranties herein shall be
continuing during the term of this Agreement, and if at any
time during the term of this Agreement any event has
occurred which would make any of the foregoing
representations and warranties untrue or inaccurate in any
material respect, the Investment Manager will promptly
notify the Account Manager of such event and the parties
related thereto.
12. Representations of Account Manager. The Account Manager
represents and warrants:
(a) It is registered as an investment adviser under the
Investment Adviser Act of 1940, as amended, and appropriate
state registration laws; that the terms hereof do not
violate any obligation by which it is bound, whether arising
by contract, operation of law or otherwise; and that it has
the power, capacity and authority to enter into this
Agreement and to perform in accordance herewith, and this
Agreement constitutes a valid and binding obligation
enforceable in accordance with its terms.
(b) This Agreement constitutes an arms-length agreement between
the Investment Manager and the Account Manager.
(c) The representations and warranties herein shall be
continuing during the term of this Agreement, and if at any
time during the term of this Agreement any event has
occurred which would make any of the foregoing
representations and warranties untrue or inaccurate in any
material respect, the Account Manager will promptly notify
the Investment Manager of such event and the parties related
thereto.
13. Confidential Relationship. The parties agree that all
information and advice provided by either party to the other or the Trustee
hereunder and under the Declaration of Trust shall be treated as confidential
and shall not be disclosed to third parties (other than the Investment Manager
and the Trustee) except as required by law or to effectively perform its
obligations and duties under this Agreement.
14. Disclosure Report. The Investment Manager acknowledges that
it has received from the Account Manager, at least three days prior to the date
hereof, a copy of Part II of the Account Manager's Form ADV.
15. Fiduciary Status; Bond. The Account Manager acknowledges that
it is a fiduciary under the Act, and during the term of this Agreement shall
maintain a fidelity bond for the
<PAGE>6
protection of the Group Trust to the extent required by the Act (except to the
extent the Account Manager is included in such bonds maintained by one or more
Participating Trusts from time to time for the benefit of fiduciaries under the
Act).
16. Notices. All notices specified herein shall be deemed duly
given if transmitted by a party in writing by first class mail to the other
party at the address set forth below, or at such other address as shall be
specified by the other party in a notice duly given. All notices given hereunder
shall be deemed delivered upon receipt.
17. Amendment and Assignment. This Agreement may not be amended
without the prior written consent of both parties, and may not be assigned by
either party without the prior written consent of the other. The parties
understand that the Trustee intends to apply to the Internal Revenue Service for
a ruling on the tax status of the Group Trust and agree to make such amendments
to this Agreement as may be required as a condition of any such ruling.
18. Waivers. A waiver by either party of a breach of any
provision of this Agreement shall not constitute a waiver of any subsequent
breach of such provision or of any other provision hereof. Failure of either
party to enforce at any time or from time to time any provision of this
Agreement shall not be construed as a waiver thereof.
19. Attorneys' Fees. The prevailing party in any action brought
by either party hereto to enforce its rights under this Agreement shall be
entitled to recover all costs and expenses (including reasonable attorneys'
fees) incurred in prosecuting or defending such action.
20. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, except as otherwise required
by the Act or the Investment Advisers Act of 1940, as amended.
21. Prohibited Transaction Class Exemption 86-128. The Investment
Manager hereby acknowledges that it is independent of the Account Manager, and
authorizes the Account Manager to engage in "covered transactions" (as that term
is defined in Prohibited Transaction Class Exemption 86-128). The Account
Manager acknowledges that the authorization provided by this section is
terminable at will by the Investment Manager upon receipt by the Account Manager
of the form of written notice attached hereto as Exhibit C. The Account Manager
agrees to adhere to the requirements of Prohibited Transaction Class Exemption
86-128 with respect to all covered transactions.
22. Independent Contractor. The Account Manager shall for all
purposes of this Agreement be deemed to be an independent
<PAGE>7
contractor and not an employee or agent of the Investment Manager.
23. Additional Disclosures. Reference is made to Exhibit D
attached hereto. The Investment Manager and the Trustee do hereby acknowledge
and agree that they have reviewed and understand the disclosures set forth in
Exhibit D. The parties agree that the terms of such disclosure are incorporated
herein by reference.
LOW-BEER ADVISORY SERVICES, INC.
By: Anthony Low-Beer
Title: President
Address: 100 Park Avenue
New York, New York 10017
(212) 686-0021
COLLINS ASSOCIATES
By: You Wah Hong
Address: 840 Newport Center Drive
Suite 660
Newport Beach, CA 92660
(714) 644-5771
<PAGE>8
EXHIBIT A
COLLINS GROUP TRUST III
INVESTMENT OBJECTIVES AND RESTRICTIONS
Performance Goal
- ----------------
To outperform the S&P 500 Index by four percentage points per year compounded
(net of fees) over a full market cycle.
Restrictions
- ------------
An Account Manager shall not:
1. Hold more than 50% of the Group Trust assets managed by it (at
market value) in any one industry, without prior written approval
of Collins Associates.
2. Hold more than 25% of the Group Trust assets managed by it (at
market value) in the securities of any one company, without prior
written approval of Collins Associates.
3. Hold more than 20% of the Group Trust assets managed by it (at
market value) in foreign securities or American Depository
Receipts, without prior written approval of Collins
Associates.
4. Hold in the Group Trust account and all other accounts managed
by it more than 5% of the outstanding shares of any one
company unless it has notified Collins Associates by copy of a
13-D or 13-G filing with the Securities and Exchange
Commission.
5. Make direct investments in commodities or real estate.
6. Invest in "restricted" (investment letter) stock without prior
approval of Collins Associates.
<PAGE>9
EXHIBIT B
ACCOUNT MANAGER AGREEMENT
LOW-BEER ADVISORY SERVICES, INC.
FEE SCHEDULE
The trust shall pay to the Account Manager, Low-Beer Advisory
Services, Inc., an annual management fee, as follows:
(1) The Account Manager shall receive a basic annual management
fee at the annual rate of 50 basis points of the average
valuation of the Account, payable quarterly in advance as
specified in Section 5.
(2) Notwithstanding any other provision of this Agreement to the
contrary, an additional fee shall be payable in arrears,
within 30 days after the end of each twelve-month period
commencing on the date of the initial Contribution hereunder
(as such term is hereafter defined), in an amount equal to
the excess, if any, of (a) the amount of the annual
incentive management fee specified in paragraph (3) for such
period, over (b) the amount of the basic annual management
fee specified in paragraph (1) for such period.
(3) The annual incentive management fee with respect to each
portion of the Group Trust Fund as may be designated from
time to time for inclusion in the Account (each a
"Contribution") shall be payable if the Actual Performance
of the Contribution for such annual period is more favorable
than the Target Performance of the Contribution for such
annual period. For the purposes hereof: (a) the "Actual
Performance" of a Contribution for an annual period means
the change in the valuation of the Contribution during such
annual period, and (b) the "Target Performance" of a
Contribution for an annual period means an amount equal to
the product of the valuation of the Contribution at the
start of the period and a percentage equal to 50 basis
points plus the change in the Standard & Poor's 500 Stock
Price Index (including dividends) for such period.
The amount of the incentive management fee for any annual period with respect to
a Contribution shall be 30% of the amount, if any, by which the Actual
Performance of the Contribution for such Annual Period is more favorable than
the Target Performance of the Contribution for such annual period; provided,
however, that no incentive fee shall be payable with respect to a Contribution
for any period to the extent that such payment would cause the
<PAGE>10
Actual Performance of the Contribution for such period to be less favorable than
the Target Performance of the Contribution for such period; and provided
further, that no incentive fee shall be payable with respect to a Contribution
for any period unless the cumulative Actual Performance of the Contribution
since the date of the Contribution, after deduction of all incentive management
fees, has been more favorable than the cumulative Target Performance of the
Contribution since the date of the Contribution.
Notwithstanding any other provision of this Agreement to the contrary, the
annual incentive management fee with respect to a Contribution, if any, shall be
payable in arrears, within 30 days after the end of each twelve-month period
commencing on the date of the initial Contribution hereunder (the "Anniversary
Date"); provided, however, that no annual incentive management fee will be
payable with respect to any portion of a Contribution withdrawn within twelve
months after the date of the Contribution; and provided further that, for any
subsequent Contribution made on a date other than an Anniversary Date, the
initial incentive management fee, if any, shall be payable within 30 days after
the next Anniversary Date to occur which is at least twelve months after the
date of such subsequent Contribution, and all subsequent incentive management
fees shall be payable within 30 days after the end of each subsequent
Anniversary Date.
Upon withdrawal from the Account of any portion of a Contribution at any time
which is not an Anniversary Date, the annual incentive management fee with
respect to such withdrawn portion for the year of withdrawal, if any, shall be
the excess of (i) the incentive fee that would have been payable with respect to
such portion pursuant to the preceding paragraph if calculated for the period
beginning on the first day of the last twelve-month period for which such fee
was determined and ending on the date of withdrawal, over (ii) the annual
incentive management fee, if any, payable with respect to such portion for such
preceding twelve-month period. For purposes of this paragraph, funds shall be
deemed withdrawn from the Account in the order in which they were contributed to
the Account.
<PAGE>11
EXHIBIT C
ACCOUNT MANAGER AGREEMENT
LOW-BEER ADVISORY SERVICES, INC.
Anthony B. Low-Beer
Low-Beer Advisory Services, Inc.
Spring Valley Road
Ossining, NY 10562
Dear Tony:
We have engaged you as an investment manager pursuant to an Investment
Management Agreement, dated December 31, 1992. Pursuant to that agreement or our
Authorization Letter dated December 31, 1992, we authorized you to engage in
brokerage transactions on our behalf in compliance with Department of Labor
Prohibited Transaction Class Exemption 86-128.
We have decided to terminate such brokerage transaction authorization, effective
on your receipt of this notice. This termination does not terminate the
Investment Management Agreement referred to herein.
Dated: ____________
COLLINS GROUP TRUST III
By: You Wah Hong
Authorizing Fiduciary
INSTRUCTIONS:
1. An employee benefit plan may terminate at any time, without penalty, its
authorization permitting an investment adviser to effect brokerage transactions.
To do so, date, sign and return this form to Anthony B.
Low-Beer at the address noted above.
2. Unless and until this Notice is completed and returned to Low-Beer Advisory
Services, Inc., Low-Beer Advisory Services, Inc.'s authorization to effect
brokerage transactions on behalf of the Collins Group Trust III will be in
effect.
<PAGE>1
April 1, 1992
INVESTMENT ADVISORY AGREEMENT
between
HAMILTON PARTNERS, L. P.
and
LOW-BEER ADVISORY SERVICES, INC.
Hamilton Partners, L.P. (the "Partnership") and Low-Beer Advisory
Services, Inc. hereby agree as follows:
1. The Partnership hereby appoints Low-Beer Advisory Services, Inc.,
and Low-Beer Advisory Services, Inc. hereby accepts appointment, as investment
adviser and manager with respect to the Partnership's Portfolio, on the terms
and conditions set forth herein.
2. The Portfolio shall consist of such cash, stocks, bonds, options,
and other securities which, from time to time, the Partnership places under the
supervision of Low-Beer Advisory Services, Inc. and/or which shall become part
of the Portfolio as a result of trading in respect thereof or otherwise. The
Partnership may make additions to, and withdrawals from, the Portfolio in such
amounts as the Partnership shall determine, provided that (a) with respect to
additions, Low-Beer Advisory Services, Inc. shall have received prompt written
notice thereof, and (b) with respect to withdrawals by limited partners,
Low-Beer Advisory Services, Inc. shall have received not less than 45 days'
prior written notice thereof.
3. The assets of the Portfolio shall be held in the custody of a bank,
trust company, brokerage firm or other entity acceptable to Low-Beer Advisory
Services, Inc. The Partnership has notified Low-Beer Advisory Services, Inc. as
to the identity of the custodian (Weiss, Peck, & Greer) as of the date hereof,
and shall notify Low-Beer Advisory Services, Inc. of any subsequent changes in
the custodian. The Partnership shall be
<PAGE>2
responsible for all custodial arrangements and the payment of all custodial
charges and fees, and Low-Beer Advisory Services, Inc. shall have no
responsibility or liability with respect to custody arrangements or the acts,
omissions or other conduct of the custodian.
4. Low-Beer Advisory Services, Inc. shall have full discretion and
authority, without obtaining any prior approval, as the Partnership's agent and
attorney-in-fact, and at the Partnership's expense, (i) to make all investment
decisions in respect of the Portfolio; (ii) to buy, sell and otherwise trade in
stocks, bonds, options, and all other securities in respect of the Portfolio;
(iii) to place orders with respect to, and arrange for, any of the foregoing;
and (iv) in furtherance of the foregoing, to do anything which Low-Beer Advisory
Services, Inc. shall deem requisite, appropriate or advisable in connection
therewith, including, without limitation, effecting securities transactions
and/or selecting such brokers, dealers and others as Low-Beer Advisory Services,
Inc. shall determine.
5. For the services rendered as investment adviser to the Partnership
by Low-Beer Advisory Services, Inc., the General Partner of the Partnership
shall pay Low-Beer Advisory Services, Inc. the performance fees set forth on
Schedule A attached hereto.
6. The Partnership hereby agrees that Low-Beer Advisory Services, Inc.
shall have full authority and discretion to select the broker or dealer through
or with whom any transaction in respect of the Portfolio shall be executed
(including any broker or dealer with which Low-Beer Advisory Services, Inc. may
be affiliated) and that, in selecting a broker or dealer to execute a particular
transaction, Low-Beer Advisory Services, Inc. need not solicit competitive bids,
and shall have no obligation to seek the lowest available cost to the
Partnership, so long as Low-Beer Advisory Services, Inc. (i) uses its reasonable
efforts to cause such transactions to be executed at not more than prevailing
market prices, and (ii) determines that the cost is reasonable in relation to
the total quality and reliability of the brokerage and research and other
services and products made available to Low-Beer Advisory Services, Inc. for the
benefit of its clients, notwithstanding that the Partnership may not be the
direct or exclusive beneficiary of any such service or that another broker or
dealer may be willing to charge the Partnership a lower cost on the particular
transaction.
7. Subject to Low-Beer Advisory Services, Inc.'s right to comply with
any demand of any regulatory or taxing authority having jurisdiction over
Low-Beer Advisory Services, Inc., Low-Beer Advisory Services, Inc. shall treat
as confidential all information pertaining to the Portfolio and the Partnership
shall treat the advice of Low-Beer Advisory Services, Inc. and its other actions
in respect thereof in the same manner.
<PAGE>3
8. Except for violation of applicable law, or as otherwise provided in
the federal securities laws, neither Low-Beer Advisory Services, Inc. nor any of
its directors, officers, employees or agents shall be liable hereunder or
otherwise for any action performed or omitted to be performed or for any errors
of judgment in managing the Portfolio. The federal securities laws impose
liabilities under certain circumstances on persons who act in good faith, and
therefore, nothing herein shall in any way constitute a waiver or limitation of
any rights which the Partnership may have under any federal securities laws.
9. This Agreement may not be assigned by either Low-Beer Advisory
Services, Inc. or the Partnership without the prior written consent of the
other. The Partnership may terminate this agreement without penalty at any time
upon not less than 60 days' written notice to Low-Beer Advisory Services, Inc.
Low-Beer Advisory Services, Inc. may terminate this agreement without penalty
only upon not less than 90 days' written notice to the Partnership prior to the
end of the year.
10. This Agreement shall be construed in accordance with, and governed
by, the laws of the State of New York.
If the foregoing correctly sets forth our understanding, please sign
and return to the General Partner of the Partnership one copy of this letter and
Schedule A attached to such copy.
Very truly yours,
/s/ Lee Woltman
_______________________________
Lee Woltman
General Partner,
Hamilton Partners, L.P.
Agreed to as of the date first
set forth above:
LOW-BEER ADVISORY SERVICES, INC.
/s/ Anthony B. Low-Beer
- --------------------------------
Anthony B. Low-Beer, President
