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.
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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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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
Xxxxxxxxxx 000
0000 XX
Xxxxxxxxx
Xxxxxxxxx: Xxxx Unswroth
Fax: 000-00-00-000-0000
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with a copy to:
Central Park Lodges
000 Xxxxx Xxxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
with another copy to:
Xxxxxxx Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
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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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/ X.X. Xxxxxxxx
---------------------
Name: X.X. Xxxxxxxx
Title: Manager
/s/ Xxxx X. Xxxxxxxxx
---------------------
Number of Shares: 779,463
Address: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx
00000
/s/ Xxxxx X. Xxxxxx
-------------------
Number of Shares: 71,554
Address: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx
00000
/s/ Xxxxxx Xxxxxx
-----------------
Number of Shares: 433,838
Address: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx
00000
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/s/ Xxxxx Xxxxxx
----------------
Number of Shares: 64,054
Address: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx
00000
/s/ Xxxx X. Xxxxxx, Xx.
-----------------------
Number of Shares: 767,412
Address: Xxxxxx Health Care Group
000 Xxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX
00000-0000
/s/ Xxxx Xxxxxxx
----------------
Number of Shares: 1,049,051
Address: 00000 Xxxx Xxxx
Xxxxxxxxxxx, XX
00000
Acknowledged:
BALANCED CARE CORPORATION
By: ____________________________
Name:
Title:
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*
---------------------------------------
Xxxxxxx X. Croco (by Power of Attorney)
Number of Shares: 41,554
Address: 0000 Xxxx Xxxxx
Xxxxx, Xxxxxxxx
00000
*
---------------------------------------
Xxxxxx Xxxxx (by Power of Attorney)
Xxxxx Xxxxx (by Power of Attorney)
Number of shares: 36,353
Address: 000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx
00000
*
---------------------------------------
Xxxxx Xxxxxx (by Power of Attorney)
Number of Shares: 306,100
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx
00000
*
---------------------------------------
Xxxxx Xxxxxxx (by Power of Attorney)
Number of Shares: 190,852
Address: 000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx
00000
*
---------------------------------------
F. Xxxxx Xxxx (by Power of Attorney)
Number of Shares: 115,661
Address: 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx
00000
* By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
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