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EXHIBIT 99.3
STOCKHOLDER VOTING AGREEMENT
This STOCKHOLDER VOTING AGREEMENT (the "Agreement") is entered into as
of July 30, 1997, by and among the undersigned stockholder(s) (collectively, if
more than one, "Stockholder") of Sterling House Corporation, a Kansas
corporation ("Twister"), Alternative Living Services, Inc., a Delaware
corporation ("Tango"), and Tango Merger Corporation, a Kansas corporation and a
wholly owned subsidiary of Tango ("Merger Sub").
WITNESSETH:
WHEREAS, concurrently with the execution of this Agreement, Tango,
Merger Sub and Twister are entering into an Agreement and Plan of Merger (the
"Merger Agreement") (capitalized terms used but not defined herein shall have
the same meaning assigned to such terms in the Merger Agreement), pursuant to
which Tango proposes to combine with Twister by means of a merger (the "Merger")
of Merger Sub with and into Twister in which (a) each issued and outstanding
share of common stock, no par value, of Twister (the "Twister Common Stock"),
other than shares of Twister Common Stock that are owned by Twister as treasury
stock, shall automatically be converted into the right to receive 1.1 shares
(the "Exchange Ratio") of the common stock, $.01 par value, of Tango; (b) the
issued and outstanding shares of the common stock, $.01 par value, of Merger Sub
shall be converted into one hundred (100) shares of fully paid and nonassessable
shares of common stock, no par value, of the Surviving Corporation; and (c) each
option to purchase Twister Common Stock outstanding as of the Effective Time
shall be assumed by Tango as provided in Section 5.7 of the Merger Agreement;
WHEREAS, Stockholder owns, as of the date hereof, the shares of Twister
Common Stock as set forth on Schedule A attached hereto (collectively, the
"Existing Shares," together with any shares of Twister Common Stock acquired
after the date hereof and prior to the termination hereof, hereinafter
collectively referred to as the "Shares"); and
WHEREAS, Tango and Merger Sub have entered into the Merger Agreement in
reliance on Stockholder's representations, warranties, covenants and agreements
hereunder.
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
PROXY
1.1 PROXY.
(a) With respect to the Merger Agreement or any Third Party Transaction
for which approval of the stockholders of Twister is sought, and any
transactions contemplated thereby,
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Stockholder hereby irrevocably makes, constitutes and appoints Tango to act as
Stockholder's true and lawful proxy and attorney-in-fact in the name and on
behalf of Stockholder, with full power to appoint a substitute or substitutes.
Stockholder further directs Tango, and Tango hereby agrees, to vote all of the
Shares which are entitled to vote at any meeting of the stockholders of Twister
(whether annual or special and whether or not an adjourned meeting), or by
written consent in the place and stead of Stockholder in favor of the Merger as
set forth in the Merger Agreement and against any Third Party Transaction. By
giving this proxy Stockholder hereby revokes any other proxy granted by
Stockholder at any time with respect to the Shares and no subsequent proxies
will be given with respect thereto by Stockholder.
(b) All power and authority hereby conferred is coupled with an
interest and is irrevocable, shall not be terminated by any act of Stockholder
or by operation of law, by lack of appropriate power of authority, or by the
occurrence of any other event or events and shall be binding upon all
beneficiaries, heirs at law, legatees, distributees, successors, assigns and
legal representatives of Stockholder. If after the execution of this Agreement,
Stockholder shall cease to have appropriate power or authority, or if any other
such event or events shall occur, Tango is nevertheless authorized and directed
to vote the Shares in accordance with the terms of this Agreement as if such
lack of appropriate power or authority or other event or events had not occurred
and regardless of notice thereof.
(c) Stockholder agrees to use all good faith efforts to cause any
record owner of the Shares of which Stockholder is the beneficial owner to grant
to Tango a proxy of the same effect as that contained herein. Stockholder shall
perform such further acts and execute such further documents as may be required
to vest in Tango the sole power to vote the Shares in accordance herewith during
the term of the proxy granted herein.
(d) The proxy granted herein shall expire on the date of termination of
this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
2.1 REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder
represents and warrants to Tango and Merger Sub as follows:
(a) Ownership of Shares. On the date of this Agreement the Existing
Shares are all of the Shares currently beneficially owned by Stockholder.
Stockholder does not have any rights to acquire any additional shares of Twister
Common Stock other than as set forth on Schedule A attached hereto. Other than
as set forth on Schedule B attached hereto, Stockholder currently has good,
valid and marketable title to the Shares, free and clear of all liens,
encumbrances, restrictions, options, warrants, rights to purchase and claims of
every kind (other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable federal and state securities laws).
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(b) Power; Binding Agreement. Stockholder has the full legal right,
power and authority to enter into and perform all of Stockholder's obligations
under this Agreement. The execution and delivery of this Agreement by
Stockholder will not violate any other agreement to which Stockholder is a party
including, without limitation, any voting agreement, stockholders agreement or
voting trust. This Agreement has been duly executed and delivered by Stockholder
and constitutes a legal, valid and binding agreement of Stockholder, enforceable
in accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect affecting creditors' rights and remedies generally or
general principles of equity. Neither the execution or delivery of this
Agreement nor the consummation by Stockholder of the transactions contemplated
hereby will (i) require any consent or approval of or filing with any person or
entity or (ii) constitute a violation of, conflict with or constitute a default
under, any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Stockholder is a party or by which Stockholder
is bound.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
TANGO AND MERGER SUB
3.1 REPRESENTATIONS AND WARRANTIES OF TANGO AND MERGER SUB. Each of
Tango and Merger Sub represents and warrants to Stockholder as follows:
(a) Power; Binding Agreement. Each of Tango and Merger Sub has full
legal right, power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
by Tango and Merger Sub will not violate any other agreement to which Tango or
Merger Sub is a party. This Agreement has been duly executed and delivered by
each of Tango and Merger Sub and constitutes a legal, valid and binding
agreement of Tango and Merger Sub, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect,
affecting creditors' rights and remedies generally or general principles of
equity. Neither the execution of this Agreement nor the consummation by Tango or
Merger Sub of the transactions contemplated hereby will (i) require any consent
or approval of or filing with any person or entity or (ii) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Tango or Merger Sub is a party or by which it is bound.
ARTICLE IV
TERMINATION
4.1 TERMINATION. This Agreement (other than the provisions of Sections
6.1 and 7.1 hereof) shall terminate on the earlier of (i) the date on which
Tango, Merger Sub and
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Stockholder mutually consent in writing to terminate this Agreement, (ii) the
date of the Closing (as defined in the Merger Agreement), (iii) the termination
of the Merger Agreement in accordance with the terms thereof or (iv) June 30,
1998.
ARTICLE V
CERTAIN COVENANTS OF STOCKHOLDER
5.1 CERTAIN COVENANTS OF STOCKHOLDER.
(a) Except in accordance with the provisions of this Agreement,
Stockholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(i) Sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares unless the party to whom
such Shares are (or are to be) sold, pledged, assigned or otherwise transferred
shall have executed an acknowledgement and ratification of the grant of proxy
effected by this Agreement, in such form and substance as are reasonably
acceptable to Tango; or
(ii) Grant any proxy, deposit any Shares into a voting trust
or enter into a voting agreement with respect to any of the Shares.
(b) Stockholder agrees, while this Agreement is in effect, to notify
Tango promptly of the number of any shares of Twister Common Stock acquired by
such Stockholder after the date hereof.
(c) Until such time as this Agreement is terminated, Stockholder agrees
to take any actions as reasonably requested by Twister, within his, her or its
power as are necessary or appropriate to enable Twister to satisfy the
conditions precedent set forth in the Merger Agreement to Tango's obligations to
consummate the Merger, and to use his, her or its best efforts to cause Twister
to satisfy such conditions precedent.
ARTICLE VI
CERTAIN COVENANTS OF TANGO
6.1 CERTAIN COVENANTS OF TANGO. In the event that the shares of Tango
Common Stock received or to be received by the Stockholder in the Merger were
not or will not be registered under the Securities Act as contemplated by the
Merger Agreement or are or will be otherwise deemed to be "restricted
securities" (as such term is defined in Rule 144 promulgated under the
Securities Act) (each, a "Triggering Event"), then the Stockholder may request
Tango at any time after the Effective Time (i) to effect, as promptly as
practicable, a registration or registrations under the Securities Act, covering
that portion of the number of shares of Tango Common Stock that the Stockholder
receives in the Merger as he would otherwise be entitled
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to sell pursuant to Rule 144 promulgated under the Securities Act within the
first twelve (12) months following the Effective Time in the event such shares
were registered in the manner contemplated by the Merger Agreement, taking into
account the period during which the Stockholder will otherwise be prohibited
from selling any shares of Tango Common Stock pursuant to Section 8 of the
Affiliate Agreement attached as Exhibit C-1 to the Merger Agreement (the
"Registered Shares"), (ii) to cause such registration to become effective not
later than the day on which Tango publishes the earnings release contemplated by
the penultimate paragraph of the Affiliate Agreement attached as Exhibit C-1 to
the Merger Agreement and to use its reasonable best efforts to keep each such
registration effective until the one year anniversary of the Effective Time (the
"Shelf Registration Statement") and (iii) to use its reasonable best efforts to
qualify such shares of Tango Common Stock under any applicable state securities
laws. The Stockholder, however, agrees not to sell under the Shelf Registration
Statement in any three month period more than that number of Registered Shares
that he would be permitted to sell under Rule 144 in the absence of the Shelf
Registration Statement (assuming that the Shares covered by the Shelf
Registration Statement were eligible for sale under Rule 144). All expenses
incident to the Shelf Registration Statement shall be borne by Tango, except
that the Stockholder shall pay any underwriting discounts, commissions or fees
attributable to the sale of any shares of Tango Common Stock registered thereby.
In connection with any registration pursuant to this Section 6.1, Tango and
Stockholder shall provide each other and any underwriter of the offering with
customary representations, warranties, covenants, indemnification and
contribution. In addition, in the event of a Triggering Event and, if Tango at
any time prior to the one year anniversary of the Effective Time proposes to
register for sale under the Securities Act any shares of Tango Common Stock held
by directors of Tango other than the Twister Directors, then Tango shall offer
to register the shares of Tango Common Stock held by the Stockholder on a pro
rata basis with all other shares of Tango Common Stock to be registered under
the Securities Act for the directors of Tango other than the Twister Directors.
ARTICLE VII
MISCELLANEOUS
7.1 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall be
deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed to Stockholder at the address(es) set forth on the signature
page hereof and to Tango or Merger Sub at:
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With copies to:
Rogers & Hardin LLP
2700 International Tower
229 Peachtree Street, NE
Atlanta, Georgia 30303
Attn: Alan C. Leet, Esq.
Telecopier: (404) 525-2224
7.2 ENTIRE AGREEMENT. This Agreement, together with the documents
expressly referred to herein, constitute the entire agreement among the parties
hereto with respect to the subject matter contained herein and supersede all
prior agreements and understandings among the parties with respect to such
subject matter.
7.3 ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
7.4 GOVERNING LAW. This Agreement, and all matters relating hereto,
shall be governed by, and construed in accordance with the laws of the State of
Kansas without giving effect to the principles of conflicts of laws thereof.
7.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
7.6 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
7.7 FURTHER ASSURANCES. Each party hereto shall execute and deliver
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
7.8 LEGAL EXPENSES. In the event any legal proceeding is commenced by
any party to this Agreement to enforce or recover damages for any breach of the
provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorney's fees.
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7.9 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified
and supplemented only by a written document executed by Tango, Merger Sub and
Stockholder.
7.10 SPECIFIC PERFORMANCE. The parties agree that in the event of a
breach of any provision of this Agreement, irreparable damage would occur, the
aggrieved party would be without an adequate remedy at law and damages would be
difficult to determine. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of such
provision. By seeking or obtaining such relief, the aggrieved party will not be
precluded from seeking or obtaining any other relief to which it may be entitled
at law or in equity.
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IN WITNESS WHEREOF, Tango and Merger Sub have caused this Agreement to
be executed by their duly authorized officers and Stockholder has executed this
Agreement, each as of the date set forth above.
"TANGO"
ALTERNATIVE LIVING SERVICES, INC.
By:
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Name:
Title:
"MERGER SUB"
TANGO MERGER CORPORATION
By:
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Name:
Title:
Stockholder(s)
Name of Stockholder:
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By:
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Name:
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Title:
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Address:
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Fax No.:
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Name of Stockholder:
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By:
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Name:
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Title:
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Address:
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Fax No.:
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Schedule A to Stockholder Voting Agreement
1. Shares Owned Beneficially by Stockholder:
Name:
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Record Holder: No. of Shares
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Beneficial Holder:
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(if different)
Name:
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Record Holder: No. of Shares
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Beneficial Holder:
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(if different)
Name:
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Record Holder: No. of Shares
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Beneficial Holder:
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(if different)
2. Stockholder's Options to Purchase Shares:
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Name of Option Holder No. of Shares
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Name of Option Holder No. of Shares
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Schedule B to Stockholder Voting Agreement