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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2000
Balanced Care Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-13845 25-1761898
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1215 Manor Drive, Mechanicsburg, PA 17055
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 717-796-6100
Page 1 of 8 pages.
Exhibit Index begins on page 7.
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Item 5. Other Events.
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On November 6, 2000, Balanced Care Corporation (the "Company")
entered into an agreement with IPC Advisors S.a.r.l. ("IPC Advisors"), HR
Investments Limited, RH Investments Limited and VXM Investments Limited
(collectively, the "Lenders") whereby the Lenders agreed to loan the Company up
to $8.0 million, with the proceeds to be used by the Company to retire debt and
for working capital (the "Loan"). The Loan has a maturity date of January 31,
2001 and is secured by a pledge of the stock of certain of the Company's
subsidiaries.
Also on November 6, 2000, IPC Advisors and the Company, based
on the considerations of a special committee of certain of the independent
directors of the Board of Directors of the Company (the "Special Committee"),
entered into a letter agreement (the "Letter Agreement") pursuant to which IPC
Advisors indicated that it would consider making an offer of $1.00 per common
share in cash for the entire equity interest in the Company not already owned by
IPC Advisors, subject to the completion of due diligence satisfactory to IPC
Advisors in its sole discretion, and to the negotiation and execution of
mutually satisfactory definitive documentation (the "Proposed Offer").
Under the Letter Agreement, in consideration of the Lenders'
willingness to make the Loan and in further consideration of IPC Advisors
incurring time and expense in conducting due diligence, the Company agreed to
amend Section 6.8 of the Subscription Agreement dated as of October 8, 1999
between the Company and IPC Advisors to permit IPC Advisors to make the Proposed
Offer. In addition, the Company agreed, subject to the fiduciary duties of the
Company's board of directors, not to solicit, participate in discussions or
negotiations concerning or furnish information to any person other than IPC
Advisors until January 15, 2001. In the event the Company receives an
unsolicited request for information or an unsolicited acquisition proposal, if
the Special Committee determines in its good faith judgment (after receiving the
advice of counsel) that if the Company fails to participate in such discussions
or negotiations with or provide such information to, the person making the
acquisition proposal or requesting information, there is a reasonable
probability that the Board of Directors would be in violation of its fiduciary
duties under applicable law, then the Company must notify IPC Advisors and keep
IPC Advisors fully informed of the status and details of any such acquisition
proposal or inquiry. If such an acquisition proposal is approved by the Board of
Directors prior to January 31, 2000, the Company is required to reimburse IPC
Advisors for its documented costs and expenses (including, without limitation,
reasonable attorneys' fees), in connection with the transactions contemplated by
the Letter Agreement, up to an aggregate of $500,000.
Page 2 of 8 pages.
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The Special Committee has received an opinion dated November
6, 2000 from Raymond James & Associates, Inc., its financial advisors, to the
effect that, subject to certain assumptions, limitations and qualifications,
cash consideration of $1.00 per share is fair to the stockholders of the Company
from a financial point of view. In addition, the Special Committee of the board
of directors of the Company confirmed that it had determined that the
consideration of $1.00 per share in cash for each share of the Company's
outstanding common stock not owned by IPC Advisors and its affiliates was
advisable and fair to the stockholders of the Company and, subject to
negotiation of definitive agreements relating to the Proposed Offer acceptable
to the Special Committee, the Special Committee would recommend that the board
of directors of the Company approve and adopt such definitive agreements and the
Special Committee would then recommend that stockholders of the Company tender
into and/or vote to approve and adopt such definitive agreements as applicable,
and once recommended, the Special Committee will not modify, amend or withdraw
such recommendations, unless the Special Committee determines, in its good faith
judgment (after receiving the advice of counsel), that if the Special Committee
fails to modify, amend or withdraw such recommendations, there is a reasonable
probability that the Special Committee would be in violation of its fiduciary
duties under applicable law. In the Letter Agreement, the Company acknowledged
that IPC Advisors would not be under any obligation to make such Proposed Offer.
The Letter Agreement is attached hereto as an exhibit and is
incorporated in its entirety by reference herein.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits. The following Exhibits are filed with this Current
Report on Form 8-K:
Page 3 of 8 pages.
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Exhibit No. Description
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10.1 Amended and Restated Subordination Agreement
by and among the entities listed on Exhibit A
and D, Balanced Care Corporation, FRR
Investments Limited, IPC Advisors S.a.r.l.,
HR Investments Limited, RH Investments
Limited, VXM Investments Limited, and Heller
Healthcare Finance, Inc. dated as of November
6, 2000(filed herewith)
10.2 Amendment and Joinder to Stock Pledge
Agreement by and among Balanced Care
Corporation, the parties listed on Schedule 1
and 2, FRR Investments Limited, IPC Advisors,
S.a.r.l., HR Investments Limited, RH
Investments Limited, and VXM Investments
Limited dated November 6, 2000 (filed
herewith)
10.3 Promissory Note made by and between Balanced
Care Corporation and VXM Investments Limited
dated November 6, 2000 (filed herewith)
10.4 Promissory Note made by and between Balanced
Care Corporation and HR Investments Limited
dated November 6, 2000 (filed herewith)
10.5 Promissory Note made by and between Balanced
Care Corporation and RH Investments Limited
dated November 6, 2000 (filed herewith)
10.6 Letter Agreement between IPC Advisors
S.a.r.l. and Balanced Care Corporation dated
November 6, 2000 (filed herewith)
10.7 Third Amendment to Loan Documents by and
among Heller Healthcare Finance, Inc.,
Balanced Care Corporation, Balanced Care
Realty at Berwick, Inc., Balanced Care Realty
at Lewistown, Inc., Balanced Care Realty at
Mansfield, Inc.,
Page 4 of 8 pages.
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Balanced Care Realty at Martinsburg, Inc.,
Balanced Care Realty at Maumelle, Inc,
Balanced Care Realty at Mountain Home, Inc.,
Balanced Care Realty at Peckville, Inc.,
Balanced Care Realty at Reading, Inc.,
Balanced Care Realty at Scranton, Inc.,
Balanced Care Realty at Sherwood, Inc.,
Balanced Care Realty at State College, Inc.,
BCC at Darlington, Inc., Balanced Care at
Eyers Grove, Inc., Balanced Care at Butler,
Inc., Balanced Care at Sarver, Inc., and
Balanced Care at North Ridge, Inc. dated
November 6, 2000 (filed herewith)
99.1 Press Release dated November 7, 2000 (filed
herewith)
Page 5 of 8 pages.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Balanced Care Corporation
Date: November 13, 2000 By: /s/ Brad E. Hollinger
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Brad E. Hollinger
Chairman of the Board,
President and Chief Executive
Officer
Page 6 of 8 pages.
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EXHIBIT INDEX
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Exhibit No. Description
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10.1 Amended and Restated Subordination Agreement by and among
the entities listed on Exhibit A and D, Balanced Care
Corporation, FRR Investments Limited, IPC Advisors S.a.r.l.,
HR Investments Limited, RH Investments Limited, VXM
Investments Limited, and Heller Healthcare Finance, Inc.
dated as of November 6, 2000(filed herewith)
10.2 Amendment and Joinder to Stock Pledge Agreement by and among
Balanced Care Corporation, the parties listed on Schedule 1
and 2, FRR Investments Limited, IPC Advisors, S.a.r.l., HR
Investments Limited, RH Investments Limited, and VXM
Investments Limited dated November 6, 2000 (filed herewith)
10.3 Promissory Note made by and between Balanced Care
Corporation and VXM Investments Limited dated November 6,
2000 (filed herewith)
10.4 Promissory Note made by and between Balanced Care
Corporation and HR Investments Limited dated November 6,
2000 (filed herewith)
10.5 Promissory Note made by and between Balanced Care
Corporation and RH Investments Limited dated November 6,
2000 (filed herewith)
10.6 Letter Agreement between IPC Advisors S.a.r.l. and Balanced
Care Corporation dated November 6, 2000 (filed herewith)
10.7 Third Amendment to Loan Documents by and among Heller
Healthcare Finance, Inc., Balanced Care Corporation,
Balanced Care Realty at Berwick, Inc., Balanced Care Realty
at Lewistown, Inc., Balanced Care Realty at Mansfield, Inc.,
Balanced Care Realty at Martinsburg, Inc., Balanced Care
Realty at Maumelle, Inc, Balanced Care Realty at Mountain
Home, Inc., Balanced Care Realty at Peckville, Inc.,
Balanced Care Realty at Reading, Inc., Balanced Care
Page 7 of 8 pages.
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Realty at Scranton, Inc., Balanced Care Realty at Sherwood,
Inc., Balanced Care Realty at State College, Inc., BCC at
Darlington, Inc., Balanced Care at Eyers Grove, Inc.,
Balanced Care at Butler, Inc., Balanced Care at Sarver,
Inc., and Balanced Care at North Ridge, Inc. dated November
6, 2000 (filed herewith)
99.1 Press Release dated November 7, 2000 (filed herewith)
Page 8 of 8 pages.
