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Exhibit 10.1 PURCHASE AGREEMENT
THIS AGREEMENT made as of the 30th day of June, 2000.
BETWEEN:
HR INVESTMENTS LIMITED, a corporation
incorporated under the laws of the Cayman
Islands ("HR")
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BALANCED CARE CORPORATION, a corporation
incorporated under the laws of Delaware (the
"Corporation")
WHEREAS HR ("Investor") has agreed with the Corporation that
Investor will subscribe for certain securities of the Corporation on the terms
and conditions set out in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration (the receipt and sufficiency
of which is hereby acknowledged by each of the parties), the parties, intending
to be legally bound hereby, agree as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions
Unless otherwise defined herein, the terms used herein shall
have the meanings ascribed to such terms in the Convertible Debentures (as
defined below):
"Agreement" means this agreement and all Schedules attached hereto;
"Approvals" means all licenses, approvals, authorizations, permits,
sanctions, rulings, orders, declarations, filings, registrations,
certificates of need or consents from any Authority, self-regulatory
organization, accrediting body or agency or any other Person necessary
for the execution of this Agreement, the Closing or the performance of
any terms hereof or any document delivered pursuant thereto or
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the completion of any of the transactions contemplated in this
Agreement (including to avoid the breach of or default under any
agreement, contract, instrument, lease, license or other document to
which any of the Corporation and its subsidiaries are a party or by
which any of them or their respective assets are bound);
"Authority" means any governmental or regulatory authority, body,
agency or department, whether federal, state, county, regional,
municipal or local, including any stock exchange, having or asserting
jurisdiction (including, but not limited to, by the imposition of any
taxes) over the Corporation or any of its subsidiaries or over any part
of their respective assets or business;
"Convertible Debentures" means the unsecured convertible grid
debentures of the Corporation, in the form attached as Schedule "A";
"Closing" means the closing of the transactions contemplated hereby to
occur on the Closing Date, in accordance with the terms hereof (as
modified or waived by the parties hereto in accordance herewith);
"Closing Date" means July 31, 2000, or such earlier date as may be
designated by Investor, in its sole discretion, upon 2 Business Days'
notice to the Corporation (provided that such earlier date may be again
extended by Investor, from time to time, to no later than July 31,
2000), or such other date as may be mutually agreed upon in writing by
the parties;
"NHP Lease" means, collectively, all leases among NHP and the
Corporation and/or any of its affiliates;
"Time of Closing" means the time that the Closing occurs;
1.2 Interpretation and Construction
Throughout this Agreement:
(a) nouns, pronouns and verbs shall be construed as masculine,
feminine, neuter, singular or plural, whichever shall be
applicable, and all adverbs shall be construed, where
applicable, consistently with the corresponding adjectives
which are defined in this Agreement;
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(b) whenever the words "include", "includes" or "including" are
used in this Agreement, they are deemed to be followed by the
words "without limitation";
(c) any reference a statute shall mean the statute in force, as
amended from time to time, and any regulation in force
thereunder, unless otherwise expressly provided;
(d) any tender of documents or money under this Agreement may be
made upon the parties or their respective counsel and money
shall be tendered by wire transfer of immediately available
federal funds; and
(e) each agreement and obligation of any of the parties hereto in
this Agreement even though not expressed as a covenant, is
considered for all purposes to be a covenant.
1.3 Descriptive Headings
The descriptive headings herein are inserted for convenience of
reference only and shall in no way be construed to define, limit, describe,
explain, modify, amplify, or add to the interpretation, construction or meaning
of any provision of, or scope or intent of, this Agreement nor in any way affect
this Agreement.
1.4 No Third-Party Beneficiaries
This Agreement shall not benefit or create any right or cause of action
in or on behalf of any Person other than the parties hereto; provided, however,
that this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
1.5 References to Sections and Schedules
Unless otherwise specified, any reference in this Agreement to a
Section or Schedule refers to the specified Section of, or Schedule to, this
Agreement.
1.6 Ambiguity Not to be Interpreted Against Drafting Party
The parties acknowledge that their respective legal counsel have
reviewed and participated in settling the terms of this Agreement. In the event
an ambiguity or question of intent
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or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
1.7 Business Day
Unless this Agreement specifically provides otherwise, any act to be
done, any notice to be given or any period of time that is to expire on any day
that is not a Business Day shall be done, given or expire on the next succeeding
Business Day and, in the case of any payment of any monetary amount, the
extension of time shall be included for the purpose of computation of interest.
1.8 Currency
All monetary amounts in this Agreement are deemed to be in United
States dollars.
ARTICLE II
PURCHASE
2.1 Subscription for Debentures
Subject to the terms and conditions of this Agreement, Investor hereby
agrees to purchase, on the Closing Date from the Corporation Convertible
Debentures in an aggregate face amount of $4,666,666 at a price equal to such
face amount.
2.2 Description of Securities
The Convertible Debentures will have the terms, conditions and
provisions described in Schedule "A".
2.3 Acceptance of Investor' Subscription
The Corporation will accept in whole the subscription by Investor
described in this Agreement upon receipt of the purchase price paid by Investor.
2.4 Closing
Delivery and payment for the Convertible Debentures will be completed
at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000 on the Closing Date. The
aggregate purchase price payable by Investor in respect of the Convertible
Debentures subscribed for by Investor shall be paid by wire transfer of
immediately available funds. Certificates
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representing the Convertible Debentures subscribed for by Investor will be
issued in the name(s) designated by Investor to the Corporation and will be
available for delivery to them on the Closing Date upon payment of the purchase
price therefor. Notwithstanding the foregoing, Investor may elect to require
that delivery of any portion of the Convertible Debentures be completed in
escrow for a period of up to 5 Business Days, at the expiry of which escrow
period Investor shall make payment for such escrowed Convertible Debentures, and
the escrow shall thereupon terminate and all documents and payments shall be
released.
2.5 Use of Proceeds
The Corporation and Investor agree that the use of the proceeds (the
"Proceeds") of the purchase of Convertible Debentures by Investor will be as set
out in the Convertible Debentures.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
AND COVENANTS
3.1 Representations and Warranties of the Corporation
The Corporation hereby makes the representations and warranties in the
Convertible Debentures as of the date hereof (and acknowledges that Investor is
relying on such representations and warranties in entering into this Agreement
and the transactions contemplated hereby).
3.2 Pre-Closing Covenants of the Corporation
The Corporation agrees that, prior to the Closing, it will do or will
cause to be done the following:
(a) The Corporation shall cause its business as presently
conducted to be carried on in the ordinary and normal course
of business and in compliance with all Laws.
(b) Prior to the Closing Date, the Corporation shall obtain all
Approvals necessary for the Corporation to obtain in
connection with the completion of the transactions
contemplated by this Agreement.
(c) The Corporation shall consult with Investor and its
representatives during negotiation of the consent to be
obtained from NHP prior to Closing.
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(d) The Corporation shall use all reasonable efforts to ensure
that the conditions of closing for the benefit of Investor set
forth in this Agreement have been fulfilled, performed and
satisfied on or prior to the Closing Date.
ARTICLE IV
CONDITIONS
4.1 Conditions to the Obligations of Investor
The obligations of Investor to complete the transactions contemplated
by this Agreement are subject to the satisfaction, prior to the Closing Date, of
the following conditions. The parties acknowledge and agree that each of the
following conditions is included for the exclusive benefit of Investor and may
be waived by Investor in whole or in part without prejudice to its right to rely
on any other conditions:
(a) the representations and warranties of the Corporation set out
in the Convertible Debentures shall be true and correct in all
material respects on the Closing Date and the Corporation
shall have delivered to Investor at the Time of Closing
certificates dated the Closing Date, duly executed by the
senior officers of the Corporation reasonably acceptable to
Investor, to such effect. The receipt of such certificates and
the closing of the transactions contemplated by this Agreement
shall not be nor be deemed to be a waiver of the
representations and warranties contained in the Convertible
Debentures, which representations and warranties shall
continue in full force and effect for the benefit of Investor
as provided in the Convertible Debentures;
(b) all of the terms, covenants, obligations and conditions of
this Agreement and the Convertible Debentures to be complied
with or performed by the Corporation on or before the Closing
Date shall have been complied with or performed in all
material respects, and the Corporation shall have delivered to
Investor at the Closing certificates dated the Closing Date,
duly executed by the senior officers of the Corporation
reasonably acceptable to Investor, to such effect;
(c) no action, suit or proceeding shall be pending or threatened
by any Authority or any other Person to restrain or prohibit
the completion of the
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transactions contemplated by this Agreement or to prevent or
restrain the Corporation, in any material respect, from
carrying on its business as presently carried on;
(d) all actions, proceedings, instruments, documents and all other
legal matters relating to the subscriptions contemplated by
this Agreement shall have been approved as to form and
legality to the satisfaction of Investor's outside counsel,
acting reasonably, and all instruments and documents to be
delivered by the Corporation pursuant to this Agreement prior
to or on the Closing Date shall have been delivered prior to
or on the Closing Date; without limiting the generality of the
foregoing, the Corporation shall duly authorize the execution
and delivery of the Convertible Debentures and the performance
of its obligations thereunder and provide documentation
evidencing same to Investor, and, without notice or any action
by Investor, the Corporation shall prepare and file, as
required, any amendments to its constating documents and
by-laws necessitated by the execution and delivery of the
Convertible Debentures and the performance of the
Corporation's obligations thereunder;
(e) there shall have been no change, which has had or could
reasonably be expected to have, a Material Adverse Effect (as
defined in the Convertible Debentures) since the date of the
Audited Financial Statements (as defined in the Convertible
Debentures);
(f) the Board of Directors of the Corporation shall have approved
the terms of this Agreement and the consummation of the
transactions contemplated hereby, including to an extent and
in a manner sufficient to render inapplicable to the
transactions contemplated by this Agreement the provisions of
Section 203 of the General Corporation Law of the State of
Delaware;
(g) the Corporation shall have delivered to Investor at the
Closing Date an opinion of the Corporation's outside counsel
as to such matters as are reasonably requested by Investor's
outside counsel, all reasonably satisfactory in form,
substance and scope to Investor's outside counsel;
(h) the Corporation and Investor shall have executed and delivered
the Amended Registration Rights Agreement (as defined in the
Convertible Debentures) on the
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terms contemplated by the Convertible Debentures and in a form
reasonably satisfactory to Investor's outside counsel, and
when delivered hereunder such Registration Rights Agreement
will be a legal, valid, binding and enforceable obligation of
the Corporation except as the same may be limited by creditors
rights laws and general principles of equity;
(i) the Corporation shall have filed and delivered to the American
Stock Exchange ("AMEX") an additional listing application
(with respect to all common shares into which any of the
Convertible Debentures may be converted) in a form and on
terms reasonably satisfactory in form, substance and scope to
Investor's outside counsel, and shall use its best efforts to
ensure that such common shares become listed on AMEX;
(j) the Corporation shall have obtained all waivers, consents and
other Approvals of all Authorities and other third Persons
(including consent by NHP (such consent and all documentation
executed in connection therewith to be in form and substance
reasonably satisfactory to Investor and its outside counsel)
to the "change in control" (as defined in the NHP Lease)
caused by execution of the Convertible Debentures and the
completion of the transactions contemplated thereby) required
to complete the transactions contemplated by this Agreement
(and shall have provided evidence in form and substance
satisfactory to Investor, acting reasonably, that all such
waivers, consents and other Approvals have been obtained).
4.2 Non-Fulfillment of Conditions by the Corporation
If any of the conditions in Section 4.1 have not been fulfilled or
performed by the Corporation on or prior to the Closing Date, Investor may
terminate this Agreement by written notice to the Corporation specifying that
such termination is effected pursuant to this Section 4.2. Investor shall then
be released from all obligations hereunder. Any of the foregoing conditions,
however, may be waived in whole or in part by Investor, without prejudice to its
rights of termination in the event of the non-fulfillment of any other condition
or conditions any such waiver to be binding on Investor only if given in
writing.
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4.3 Conditions to the Obligations of the Corporation
The obligations of the Corporation to complete the transactions
contemplated by this Agreement are subject to the satisfaction, prior to the
Closing Date, of the following conditions. The parties acknowledge and agree
that each of the following conditions is included for the exclusive benefit of
the Corporation and may be waived by the Corporation in whole or in part without
prejudice to its right to rely on any other conditions:
(a) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by Investor on or before the
Closing Date shall have been complied with or performed;
(b) no action, suit or proceeding shall be pending or threatened
by any Authority or any other Person (including a party
hereto) to restrain or prohibit the completion of the
transactions contemplated by this Agreement or to prevent or
restrain the Corporation, in any material respect, from
carrying on its business as presently carried on;
(c) the closing (whether in escrow or otherwise) of the purchase
of additional Convertible Debentures, in an aggregate face
amount of U.S.$9,333,334 million on terms substantially
similar to the terms hereof, shall have occurred; and
(d) all actions, proceedings, instruments, documents and all other
legal matters relating to the subscriptions contemplated by
this Agreement shall have been approved as to form and
legality to the satisfaction of the Corporation's counsel,
acting reasonably, and all instruments and documents to be
delivered by Investor pursuant to this Agreement prior to or
on the Closing Date shall have been delivered prior to or on
the Closing Date.
4.4 Non-Fulfillment of Conditions by Investor
If any of the conditions in Section 4.3 have not been fulfilled or
performed by Investor on or prior to the Closing Date, the Corporation may
terminate this Agreement by written notice to Investor specifying that such
termination is effected pursuant to this Section 4.4. The Corporation shall then
be released from all obligations hereunder. Any of the foregoing conditions may,
however, be waived in whole or in part by the
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Corporation without prejudice to its rights of termination in the event of the
non-fulfillment of any other condition or conditions, any such waiver to be
binding on the Corporation only if given in writing.
ARTICLE V
GENERAL
5.1 Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision or part thereof by a court of competent jurisdiction shall not affect
the validity or enforceability of any other provision hereof.
5.2 Schedule 13D
The Investor shall file and deliver to the Securities and Exchange
Commission in accordance with applicable law such statements and filings
containing the information required under Regulation 13D-G and Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
statements and filings will comply in all material respects as to form with the
requirements of the Exchange Act, and such statements and filings shall not
contain any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make statements therein, in light
of the circumstances under which they were made, not misleading and such
statements and filings shall not contain any untrue statement of material fact
or omit to state any material fact.
5.3 Amendment or Waiver
No amendment or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any provision
of this Agreement shall constitute a waiver of any other provision nor shall any
waiver of any provision of this Agreement constitute a continuing waiver unless
otherwise expressly provided.
5.4 Time of Essence
Time shall be of the essence in this Agreement.
5.5 Entire Agreement
This Agreement constitutes the entire agreement among the parties
hereto relating to the subject matter hereof and
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supersedes all oral statements and prior writings with respect hereto.
5.6 No Inconsistent Agreements
The Corporation will not hereafter enter into any agreement which is
inconsistent with, or would otherwise restrict the performance by the
Corporation of its obligations hereunder.
5.7 Successors and Assigns
This Agreement shall be binding on the Corporation and its successors
and shall enure to the benefit of Investor and its successors and assigns. This
Agreement may be assigned, in whole or in part, by Investor without the consent
of the Corporation. This Agreement may not be assigned by the Corporation
without the prior written consent of Investor, such consent not to be
unreasonably withheld.
5.8 Notice
Any notice 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 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:
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(a) if to the Corporation
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
X.X.X.
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
X.X.X.
Attention: Xxxxxxx Xxxxxx Xxxxxxx, Esq.
Telecopier: (000) 000-0000
(b) if to Investor:
HR Investments Limited
c/o Unsworth & Associates
Xxxxxxxxxxx 000, 0000XX
Xxxxxxxxx, Xxxxxxxxxxx
Attention: X. X. Xxxxxxxx
Telecopier: 011-31-20-623-2285
with a copy to:
Xxxxxxx X. Xxxx
x/x Xxxxxxx Xxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
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with a further copy to:
Xxxxxxx Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
5.9 Execution and Counterparts
For the convenience of the parties, this Agreement may be executed by
facsimile or otherwise in several counterparts, each of which when so executed
shall be, and be deemed to be, an original instrument and such counterparts
together shall constitute one in the same instrument.
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5.10 Governing Law
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA (WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF).
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of the date first above written.
HR INVESTMENTS LIMITED
Per: /s/X.X. Xxxxxxxx
X. X. Xxxxxxxx,
Manager
BALANCED CARE CORPORATION
Per: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Legal Counsel, Assistant Secretary
