UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
BALANCED CARE CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
057630-10-5
(CUSIP Number)
IPC Advisors S.A.R.L. c/o Unsworth & Associates
Herengracht 483, 1017 BT, Amsterdam.
Tel. No.: 011-31-20-623-2205
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
October 11, 1999
(Date of Event which Requires Filing of
this Statement)
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 ss.ss. 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box [ ].
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 21
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SCHEDULE 13D
CUSIP No. 057630-10-5 Page 2 of 21 Pages
-----------
1 Names of Reporting Persons
I.R.S. Identification Nos. Of Above Persons (entities only)
IPC Advisors S.A.R.L.
2 Check the Appropriate Box if a Member of a Group (a)[X]
(See Instructions) (b)[ ]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Luxemburg
7 Sole Voting Power
NUMBER OF 3,300,000
SHARES
BENEFICIALLY OWNED 8 Shared Voting Power
BY EACH REPORTING
PERSON 3,855,892
WITH
9 Sole Dispositive Power
3,300,000
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,155,892
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
35.7%
14 Type of Reporting Person (See Instructions)
CO
Page 2 of 21
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SCHEDULE 13D
CUSIP No. 057630-10-5 Page 3 of 21 Pages
-----------
1 Names of Reporting Persons
I.R.S. Identification Nos. Of Above Persons (entities only)
LMR Investments Limited
2 Check the Appropriate Box if a Member of a Group (a)[X]
(See Instructions) (b)[ ]
3 SEC Use Only
4 Source of Funds (See Instructions)
N/A
5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
NUMBER OF 3,300,000
SHARES
BENEFICIALLY OWNED 8 Shared Voting Power
BY EACH REPORTING
PERSON 3,855,892
WITH
9 Sole Dispositive Power
3,300,000
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,155,892
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
35.7%
14 Type of Reporting Person (See Instructions)
CO
Page 3 of 21
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SCHEDULE 13D
CUSIP No. 057630-10-5 Page 4 of 21 Pages
-----------
1 Names of Reporting Persons
I.R.S. Identification Nos. Of Above Persons (entities only)
The LMR Family Trust
2 Check the Appropriate Box if a Member of a Group (a)[X]
(See Instructions) (b)[ ]
3 SEC Use Only
4 Source of Funds (See Instructions)
N/A
5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
NUMBER OF 3,300,000
SHARES
BENEFICIALLY OWNED 8 Shared Voting Power
BY EACH REPORTING
PERSON 3,855,892
WITH
9 Sole Dispositive Power
3,300,000
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,155,892
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
35.7%
14 Type of Reporting Person (See Instructions)
OO
Page 4 of 21
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SCHEDULE 13D
CUSIP No. 057630-10-5 Page 5 of 21 Pages
-----------
1 Names of Reporting Persons
I.R.S. Identification Nos. Of Above Persons (entities only)
Caledonian Bank & Trust Limited
2 Check the Appropriate Box if a Member of a Group (a)[X]
(See Instructions) (b)[ ]
3 SEC Use Only
4 Source of Funds (See Instructions)
N/A
5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
NUMBER OF 3,300,000
SHARES
BENEFICIALLY OWNED 8 Shared Voting Power
BY EACH REPORTING
PERSON 3,855,892
WITH
9 Sole Dispositive Power
3,300,000
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,155,892
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
35.7%
14 Type of Reporting Person (See Instructions)
CO
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Item 1. Security and Issuer.
This statement relates to the common stock of the Issuer, par value
$0.001 per share (the "Common Stock") of Balanced Care Corporation, a Delaware
corporation (the "Issuer"). The address of the Issuer's principal executive
offices is 1215 Manor Drive, Mechanicsburg, Pennsylvania 17055.
Item 2. Identity and Background.
(a) The names of the persons filing this statement are IPC Advisors
S.A.R.L., a Luxemburg corporation ("IPC Advisors"), LMR Investments Limited, a
Cayman Islands corporation ("LMR Investments"), The LMR Family Trust, a Cayman
Islands trust (the "Trust") and Caledonian Bank & Trust Limited, a Cayman
Islands corporation (the "Trustee" and, collectively with IPC Advisors, LMR
Investments and the Trust, the "Reporting Persons"). LMR Investments owns 100%
of the equity of IPC Advisors and the Trust owns 100% of the equity of LMR
Investments.
The names of the directors of IPC Advisors are H. Reichmann and J.B.
Unsworth. The names of the directors of LMR Investments are H. Reichmann and
J.B. Unsworth. The names of the directors and executive officers of the Trustee
are W.S. Walker, D.G. Bird, G.J.R. Stein, A.J.E. Foster, D.S. Sargison, D.J.V.
Burge, D.S. Walker, B.G.H. McGrath, Vijayabalan Murugesu and F.M. Barrie.
(b) The business address of IPC Advisors is IPC Advisors S.A.R.L. c/o
Unsworth & Associates, Herengracht 483, 1017 BT, Amsterdam. The business address
of each of the directors of IPC Advisors is IPC Advisors S.A.R.L. c/o Unsworth &
Associates, Herengracht 483, 1017 BT, Amsterdam.
The business address of LMR Investments is Walker House, Mary Street,
Georgetown, Grand Cayman, Cayman Islands. The business address of each of the
directors of LMR Investments is Walker House, Mary Street, George Town, Grand
Cayman, Cayman Islands.
The business address of the Trust is Caledonian House, Jennette Street,
P.O. Box 1043, George Town, Grand Cayman, Cayman Islands.
The business address of the Trustee is Caledonian House, Jennette
Street, P.O. Box 1043, George Town, Grand Cayman, Cayman Islands. The business
address of each of the directors and executive officers of the Trustee is
Caledonian House, Jennette Street, P.O. Box 1043, George Town, Grand Cayman,
Cayman Islands.
(c) IPC Advisors is a corporation whose principal business is to hold,
finance and participate in investments. LMR Investments is a corporation whose
principal business is to hold, finance and participate in investments. The Trust
is a trust whose principal business is to hold assets on behalf of the
beneficiaries of the Trust. The Trustee is a corporation whose principal
business is to act as Trustee subject to the agreement of trust.
The present principal occupation of each of the directors of IPC
Advisors is a private investor. The present principal occupation of each of the
directors of LMR Investments is a private investor. The present principal
occupation of each of the directors and
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executive officers of the Trustee is:
W.S. Walker Chairman of the Trustee
D.G. Bird Non-executive Director of Trustee
G.J.R. Stein Attorney-at-law with W.S. Walker & Company
A.J.E. Foster Attorney-at-law with W.S. Walker & Company
D.S. Sargison Managing Director of Trustee
D.J.V. Burge Managing Director of Caledonian (Isle of
Man) Limited
D.S. Walker Assisting Managing Director of Trustee
B.G.H. McGrath Assisting Managing Director of Trustee
Vijayabalan Murugesu Assisting Managing Director of Trustee
F.M. Barrie Assistant Secretary of Trustee
(d) During the past five years, none of the persons referred to in
paragraph (a) above has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) During the past five years, none of the persons referred to in
paragraph (a) above has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding, was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
(f) IPC Advisors is organized under the laws of Luxemburg. Each of the
directors of IPC Advisors is a Canadian citizen.
LMR Investments is organized under the laws of the Cayman Islands. Each
of the directors of LMR Investments is a Canadian citizen.
The Trust is organized under the laws of the Cayman Islands.
The Trustee is organized under the laws of the Cayman Islands. The
directors and executive officers of the Trustee have the following citizenship:
W.S. Walker Cayman Islands
D.G. Bird Cayman Islands
G.J.R. Stein United Kingdom
A.J.E. Foster United Kingdom
D.S. Sargison United Kingdom
D.J.V. Burge United Kingdom
D.S. Walker Cayman Islands
B.G.H. McGrath Republic of Ireland
Vijayabalan Murugesu Malaysia
F.M. Barrie United Kingdom
Item 3. Source and Amount of Funds or Other Consideration.
IPC Advisors entered into a subscription agreement with the Issuer on
October 8, 1999, as amended and restated on October 11, 1999, (the "Subscription
Agreement"), structured in two phases. In the first phase of the transaction, on
October 11, 1999, IPC Advisors purchased 3,300,000 shares of the Series C
Convertible Preferred Stock of the Issuer (the "Preferred Stock") for an
aggregate purchase price of $4,125,000. As mentioned in Item 1 above, these
shares of Preferred Stock are convertible into Common Stock on a one for one
share basis.
Page 7 of 21
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With respect to the second phase of the transaction, IPC Advisors has agreed to
purchase an additional 13,400,000 shares of Common Stock for an aggregate
purchase price of $16,750,000, subject to certain conditions, including
shareholder approval. Following completion of the proposed transaction, IPC
Advisors will own approximately 49% of the equity interest in the Issuer. As
part of the transaction, the membership of the Issuer's board of directors has
been expanded from seven to nine members and four of the nine seats have been
filled by appointees designated by IPC Advisors.
IPC Advisors obtained the funds for the purchase of the Preferred Stock
through a loan from Canary Investments S.A.R.L., a Luxemburg corporation and a
sister corporation of IPC Advisors.
Item 4. Purpose of Transaction.
The Reporting Persons have acquired the Preferred Stock for investment
purposes. The Reporting Persons will continuously evaluate their ownership of
Preferred Stock and the Issuer's business and industry. Depending on market
conditions and other factors that the Reporting Persons may deem material to
their investment decision, each of the Reporting Persons may from time to time
acquire additional shares of Common Stock in the open market or in privately
negotiated transactions or may dispose of all or a portion of the shares of
Preferred Stock or Common Stock that such Reporting Person now owns or may
hereafter acquire. Accordingly, the Reporting Persons should not be considered
passive investors.
Other than with respect to the purchase of Common Stock pursuant to the
Subscription Agreement referred to above, none of the Reporting Persons
currently has any plans or proposals, though each Reporting Person reserves the
right, subject to the terms and conditions of the Subscription Agreement, to
subsequently devise or implement plans or proposals, which relate to or would
result in: (a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a
material amount of assets of the Issuer or any of its subsidiaries; (d) any
change in the present board of directors or management of the Issuer, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board; (e) any material change in the present
capitalization or dividend policy of the Issuer; (f) any other material change
in the Issuer's business or corporate structure; (g) changes in the Issuer's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person; (h) causing a
class of securities of the Issuer to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (i) a class of equity
securities of the Issuer becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) IPC Advisors directly holds 3,300,000 shares of Preferred Stock.
LMR Investments, the Trust and the Trustee may each, pursuant to Rule 13d-3 of
the Exchange Act, be deemed to be the beneficial owner of such shares, which may
be converted into 3,300,000 shares of Common Stock. IPC Advisors also is a party
to the Voting Agreement (as defined herein) whereby certain stockholders of the
Issuer have agreed to vote their shares as directed by IPC Advisors as described
in Item 6 below.
(b) IPC Advisors, LMR Investments, the Trust and the Trustee have sole
voting and investment power with respect to the 3,300,000 shares of Common Stock
(which may be issued upon conversion of the Preferred Stock) and shared voting
power over 3,855,892 shares of Common Stock (as a result of the Voting
Agreement), which represent 35.7% of the issued and outstanding shares of the
Common Stock.
Page 8 of 21
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(c) During the last 60 days, IPC Advisors has acquired the following
shares of Preferred Stock:
NUMBER OF PURCHASE PRICE
DATE SHARES PER SHARE ($)
---- ------ -------------
10/11/99 3,300,000 1.25
These shares were purchased pursuant to the Subscription Agreement described
above.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
IPC Advisors entered into a Voting Agreement with certain shareholders
of the Issuer, Brad E. Hollinger, David K. Barber, Robert Sutton, Robin Barber,
Bill R. Foster, Sr., John Brennan, Suzanne B. Croco, Stacey Reitz, Sarah Barber,
James Diebold and F. David Carr (collectively, the "Shareholders"), dated
October 8, 1999 (the "Voting Agreement"), in which each of the Shareholders
agreed to vote in favor of the adoption and approval of the issuance of shares
of Common Stock of the Issuer pursuant to the Subscription Agreement. The
Shareholders also agreed to vote as directed by IPC Advisors on any other
matter. The Voting Agreement terminates following the occurrence of the annual
or special meeting of the shareholders of the Issuer at which the issuance of
shares contemplated by the Subscription Agreement is voted on by the
shareholders of the Issuer. IPC Advisors disclaims beneficial ownership of the
shares of Common Stock of the Issuer held by the Shareholders.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Voting Agreement, dated October 8, 1999.
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth on this statement is true, complete and
correct.
Dated: October 21, 1999
IPC Advisors, S.A.R.L.
By: /s/ J.B. Unsworth
---------------------
Name: J.B. Unsworth
Title: Manager
LMR Investments Limited
By: /s/ J.B. Unsworth
---------------------
Name: J.B. Unsworth
Title: Director
LMR Family Trust by Caledonian Bank
& Trust Limited in its capacity as
Trustee
By: /s/ David Sargison
----------------------
Name: David Sargison
Title: Managing Director
Caledonian Bank & Trust Limited in
its capacity as Trustee of The LMR
Family Trust
By: /s/ David Sargison
----------------------
Name: David Sargison
Title: Managing Director
Page 10 of 21
<PAGE>
Exhibits
- --------
Exhibit 1 - Voting Agreement
Page 11 of 21
EXHIBIT 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of October 8, 1999 (this "Agreement"), by
and among IPC Advisors S.A.R.L., a Luxemburg corporation ("Purchaser") and the
stockholders of Balanced Care Corporation, a Delaware corporation (the
"Company") listed on the signature pages hereto (each, a "Shareholder" and,
collectively, the "Shareholders").
WHEREAS, the Company and Purchaser propose to enter into an
Subscription Agreement, dated as of the date hereof (the "Subscription
Agreement"), which provides for, among other things, the purchase by the
Purchaser from the Company of 13,400,000 shares of common stock, par value $.001
per share (the "Company Common Stock") of the Company (the "Issuance");
WHEREAS, as of the date hereof, the Shareholders are holders of record
or Beneficially Own (as defined herein) shares of Company Common Stock; and
WHEREAS, as a condition to the willingness of Purchaser to enter into
the Subscription Agreement, Purchaser has required that each Shareholder agrees,
and in order to induce Purchaser to enter into the Subscription Agreement, each
Shareholder has agreed, severally and not jointly, to enter into this Agreement
with respect to all of the shares of Company Common Stock now held of record or
Beneficially Owned and which may hereafter be acquired by such Shareholder
(collectively, the "Shares").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section I.1 General. Capitalized terms used and not defined herein have
the respective meanings ascribed to them in the Subscription Agreement.
Section I.2 Beneficial Ownership. For purposes of this Agreement,
"Beneficially Own" or Beneficial Ownership" with respect to any securities shall
mean "beneficial ownership" of such securities (as determined pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
ARTICLE II
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Section II.1 Voting Agreement. Each of the Shareholders hereby agrees
as follows:
(a) to appear, or cause the holder of record on any applicable record
date with respect to any Shares Beneficially Owned by such Shareholder (the
"Record Holder") to appear, in person or by proxy, for the purpose of obtaining
a quorum at any annual or special meeting of stockholders of the Company and at
any adjournment or postponement thereof at which matters relating to the
Issuance, the Subscription Agreement or any transaction contemplated thereby are
considered; and
(b) at any meeting of the stockholders of the Company, however called,
and in any action by consent of the stockholders of the Company, to vote, or
cause to be voted by the Record Holder, in person or by proxy, the Shares held
of record or Beneficially Owned by such Shareholder: (i) in favor of the
adoption and approval of the Issuance pursuant to the Subscription Agreement and
(ii) as directed by the Purchaser on any other matter.
Section II.2 No Ownership Interest. Except as set forth in Section 2.1,
nothing contained in this Agreement shall be deemed to vest in Purchaser any
direct or indirect ownership or incidence of ownership of or with respect to any
Shares. All rights, ownership and economic benefits of and relating to the
Shares shall remain and belong to the Shareholders, and Purchaser shall have no
authority to exercise any power or authority to direct the Shareholders in the
voting of any of the Shares except as otherwise provided herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders hereby represents and warrants, severally and
not jointly, to Purchaser as follows:
Section III.1 Authority Relative to This Agreement. Such Shareholder
has all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. Where such Shareholder is a corporation, partnership or
other entity, the execution and delivery of this Agreement by such Shareholder
and the consummation by such Shareholder of the transactions contemplated hereby
have been duly and validly authorized by the board of directors or other
governing body of such Shareholder, and no other proceedings on the part of such
Shareholder are necessary to authorize this Agreement or to consummate such
transactions and where such Shareholder is an individual, such individual has
the capacity to enter into this Agreement. This Agreement has been duly and
validly executed and delivered by such Shareholder and, assuming the due
authorization, execution and delivery by the other parties hereto, constitutes a
legal, valid and binding obligation of such
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Shareholder, enforceable against such Shareholder in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights generally or by
general principles governing the availability of equitable remedies.
Section III.2 No Conflict. (a) The execution and delivery of this
Agreement by such Shareholder does not, and the performance of this Agreement by
such Shareholder shall not, (i) where such Shareholder is a corporation,
partnership or other entity, conflict with or violate the organizational
documents of such Shareholder, (ii) conflict with or violate any agreement,
arrangement, law, rule, regulation, order, judgment or decree to which such
Shareholder is a party or by which such Shareholder (or the Shares held of
record or Beneficially Owned by such Shareholder) is bound or affected or (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse or time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the Shares held of record or
Beneficially Owned by such Shareholder pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Shareholder is a party or by which such
Shareholder (or the Shares held of record or Beneficially Owned by such
Shareholder) is bound or affected, except, in the case of clauses (ii) and (iii)
of this Section 3.2, for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent the performance by such Shareholder of
its obligations under this Agreement.
(b) The execution and delivery of this Agreement by such
Shareholder does not, and the performance of this Agreement by such Shareholder
shall not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Authority except for applicable requirements, if
any, of federal or state securities and antitrust laws and except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent the performance by such
Shareholder of its obligations under this Agreement.
Section III.3 Title to the Shares. As of the date hereof, such
Shareholder is the record or Beneficial Owner of the Shares listed opposite the
name of such Shareholder on such Shareholder's signature page hereto. The Shares
listed opposite the name of such Shareholder on such Shareholder's signature
page hereto are all the securities of the Company either held of record or
Beneficially Owned by such Shareholder. Such Shareholder has not appointed or
granted any proxy, which appointment or grant is still effective, with respect
to the Shares held of record or Beneficially Owned by such Shareholder. The
Shares listed opposite the name of such Shareholder on such Shareholder's
signature page hereto are owned free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, limitations on such
Shareholder's voting rights, charges and other encumbrances of any nature
whatsoever other than Encumbrances under applicable Law.
Page 14 of 21
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ARTICLE IV
COVENANTS OF THE SHAREHOLDER
Section IV.1 No Inconsistent Agreements. Each Shareholder hereby
represents, warrants, covenants and agrees that, except as contemplated by this
Agreement and the Subscription Agreement, such Shareholder has not and shall
not, and will use its reasonable best efforts to not permit any Person under
such Shareholder's control (including any Record Holder) to, enter into any
voting agreement or grant a proxy or power of attorney with respect to the
Shares held of record or Beneficially Owned by such Shareholder which, in either
case, is inconsistent with this Agreement.
Section IV.2 Transfer of Title. Each Shareholder hereby covenants and
agrees that such Shareholder will not, prior to the termination of this
Agreement, either directly or indirectly, offer or otherwise agree to sell,
assign, pledge, hypothecate, transfer, exchange, or dispose of any Shares or
options, warrants or other convertible securities to acquire or purchase Company
Common Stock (collectively "Derivative Securities"), owned either directly or
indirectly by such Shareholder or with respect to which such Shareholder has the
power of disposition, whether now or hereafter acquired, without the prior
written consent of Purchaser (provided nothing contained herein will be deemed
to restrict the exercise or conversion of Derivative Securities outstanding on
the date hereof), unless the Person to whom Shares or Derivative Securities have
been sold, assigned, pledged, hypothecated, transferred, exchanged or disposed
agrees to be bound by this Agreement as if a party hereto. Each Shareholder
hereby agrees and consents to the entry of stop transfer instructions by the
Company against the transfer of any Shares inconsistent with the terms of this
Section 4.2.
ARTICLE V
MISCELLANEOUS
Section V.1 No Solicitation. From the date hereof until the
consummation of the Issuance or, if earlier, the payment of both the Put
Purchase Payment under the Certificate of Designations for the Series C
Preferred Stock, in the event the Purchaser exercises the Put Right thereunder,
and the Non-Completion Fee pursuant to Section 6.8 the Subscription Agreement,
the Shareholders (a) shall not have, or shall immediately terminate any
discussions with, any third party concerning a Material Transaction and (b)
shall not, and shall not permit any officer, director, employee, controlled
Affiliate, investment banker or other agent (in such agency capacity), of the
Shareholder to, directly or indirectly, (i) solicit, engage in discussions or
negotiate with any Person (whether such discussions or negotiations are
initiated by the Shareholder or otherwise) or take any other action intended or
designed to facilitate the efforts of any Person, other than Purchaser, relating
to a
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Material Transaction, (ii) provide information with respect to the Company or
any of its subsidiaries to any Person, other than Purchaser, relating to a
possible Material Transaction by any person other than Purchaser, (iii) enter
into an agreement with any person, other than Purchaser, providing for a
possible Material Transaction, or (iv) make or authorize any statement,
recommendation or solicitation in support of any possible Material Transaction
by any Person, other than by Purchaser.
Section V.2 Further Assurances. Each Shareholder shall use reasonable
commercial efforts to assist the Company in fulfilling its obligations pursuant
to Section 6.6 of the Subscription Agreement.
Section V.3 Termination. This Agreement shall terminate following the
occurrence of the annual or special meeting of the stockholders of the Company
at which the Issuance is voted on by the stockholders. Upon such termination, no
party shall have any further obligations or liabilities hereunder; provided,
however, that nothing in this Agreement shall relieve any party from liability
for the breach of any of its representations, warranties, covenants and
agreements set forth in this Agreement prior to such termination.
Section V.4 Additional Shares. If, after the date hereof, a Shareholder
acquires the right to vote any additional shares of Company Common Stock (any
such shares shall be referred to herein as "Additional Shares"), including,
without limitation, upon exercise or conversion of any Derivative Security or
through any stock dividend or stock split, the provisions of this Agreement
applicable to the Shares shall be applicable to such Additional Shares as if
such Additional Shares had been outstanding Shares as of the date hereof. The
provisions of the immediately preceding sentence shall be effective with respect
to Additional Shares without action by any Person immediately upon the
acquisition by a Shareholder of record or Beneficial Ownership of such
Additional Shares.
Section 5.1 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section V.6 Entire Agreement. This Agreement constitutes the entire
agreement between Purchaser and the Shareholders with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between Purchaser and the Shareholders with respect to the
subject matter hereof.
Section V.7 Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
Section V.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or
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<PAGE>
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereby shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in a mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated.
Section V.9 Notices. Any notice, consent, waiver, approval or other
communication required or permitted to be given hereunder shall be in writing
and shall be given by prepaid first-class mail, by facsimile or other means of
electronic communication or by hand delivery as hereinafter provided. Any such
notice, consent, waiver, approval or other communication, if mailed by prepaid
first-class mail at any time other than during a general discontinuance of
postal service due to strike, lock-out or otherwise shall be deemed to have been
received on the fourth (4th) Business Day after the post-marked date thereof, or
if sent by facsimile or other means of electronic communication, shall be deemed
to have been received on the Business Day following the sending, or if delivery
by hand shall be deemed to have been received at the time it is delivered to the
applicable address noted below either to the individual designated below or to
an individual at such address having apparent authority to accept deliveries on
behalf of the addressee. Notice of change of address shall also be governed by
this section. In the event of a general discontinuance of postal service due to
strike, lockout or otherwise, notices or other communications shall be delivered
by hand or sent by facsimile or other means of electronic communication and
shall be deemed to have been received in accordance with this section. Notices
and other communications shall be addressed as follows:
If to a Shareholder to the address set forth on such Shareholder's
signature page hereto.
If to Purchaser, to:
IPC Advisors S.A.R.L.
c/o Unsworth & Associates
Herengrach 483
1017 BT
Amsterdam
Attention: Brad Unswroth
Fax: 011-31-20-623-2285
Page 17 of 21
<PAGE>
with a copy to:
Central Park Lodges
175 Bloor Street East
South Tower
Toronto, Ontario M4W 3R8
Attention: Manfred J. Walt
Fax: (416) 323-3818
with another copy to:
Goodman Phillips & Vineberg
250 Yonge Street
Suite 2400
Toronto, Ontario M5B 2M6
Attention: Stephen Pincus
Fax: (416) 979-1234
Section V.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such state.
Section V.11 Obligation of Shareholders. The obligations of the
Shareholders hereunder shall be "several" and not "joint" or "joint and
several." Without limiting the generality of the foregoing, under no
circumstances will any Shareholder have any liability or obligation with respect
to any misrepresentation or breach of covenant of any other Shareholder.
Section V.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which, when
taken together, shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, each of the Shareholders and Purchaser have caused
this Agreement to be duly executed on the date hereof.
IPC Advisors S.A.R.L.
By: /s/ J.B. Unsworth
---------------------
Name: J.B. Unsworth
Title: Manager
/s/ Brad E. Hollinger
---------------------
Number of Shares: 779,463
Address: Balanced Care Corporation
1215 Manor Drive
Mechanicsburg, Pennsylvania
17055
/s/ David K. Barber
-------------------
Number of Shares: 71,554
Address: Balanced Care Corporation
1215 Manor Drive
Mechanicsburg, Pennsylvania
17055
/s/ Robert Sutton
-----------------
Number of Shares: 433,838
Address: Balanced Care Corporation
1215 Manor Drive
Mechanicsburg, Pennsylvania
17055
Page 19 of 21
<PAGE>
/s/ Robin Barber
----------------
Number of Shares: 64,054
Address: Balanced Care Corporation
1215 Manor Drive
Mechanicsburg, Pennsylvania
17055
/s/ Bill R. Foster, Sr.
-----------------------
Number of Shares: 767,412
Address: Foster Health Care Group
426 South Jefferson
Springfield, MO
65801-2351
/s/ John Brennan
----------------
Number of Shares: 1,049,051
Address: 11212 Mann Road
Mooresville, IN
46158
Acknowledged:
BALANCED CARE CORPORATION
By: ____________________________
Name:
Title:
Page 20 of 21
<PAGE>
*
---------------------------------------
Suzanne B. Croco (by Power of Attorney)
Number of Shares: 41,554
Address: 2956 Alta Court
Lisle, Illinois
60532
*
---------------------------------------
Stacey Reitz (by Power of Attorney)
Scott Reitz (by Power of Attorney)
Number of shares: 36,353
Address: 516 Seminole Drive
Blacksburg, Virginia
24060
*
---------------------------------------
Sarah Barber (by Power of Attorney)
Number of Shares: 306,100
Address: 4076 Greystone Drive
Harrisburg, Pennsylvania
17112
*
---------------------------------------
James Diebold (by Power of Attorney)
Number of Shares: 190,852
Address: 735 Markham Court
Lewisberry, Pennsylvania
17339
*
---------------------------------------
F. David Carr (by Power of Attorney)
Number of Shares: 115,661
Address: 1350 Bayshore Highway, Suite 300
Burlingame, California
94010
* By: /s/ Robin L. Barber
-------------------
Name: Robin L. Barber
Title: Attorney-in-fact
Page 21 of 21
