<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 6)
Chart House Enterprises, Inc.
-----------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
---------------------------------------
(Title of Class of Securities)
160902102
--------------
(CUSIP Number)
Alisa M. Singer
Rosenberg & Liebentritt
Two North Riverside Plaza, Suite 600
Chicago, Illinois 60606
--------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 7, 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 Rule 13d-1(b)(3) or (4), check the
following box [__].
Check the following box if a fee is being paid with the statement
[__].
PAGE 1 OF 12
EXHIBIT INDEX APPEARS ON PAGE 12
<PAGE>
SCHEDULE 13D
CUSIP No. 160902102
------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
EGI-Chart House Investors, L.L.C. FEIN: 36-4141805
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [__]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
--------------------------------------------------------------
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
--------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,331,677(1)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,331,677(1)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [__]
CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.3%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
O0
- -------------------------------------------------------------------------------
(1) Represents the number of shares owned by all members of the group, in the
aggregate. This filing shall not be construed as an admission that such
reporting person is the beneficial owner of all such shares.
PAGE 2 OF 12
<PAGE>
SCHEDULE 13D
CUSIP No. 160902102
------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Samstock, L.L.C. FEIN: 36-4156890
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 3,516,677(1)
-----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 185,000
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,331,677(1)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,516,677(1)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.9%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
(1) Represents the number of shares owned by all members of the group, in the
aggregate. This filing shall not be construed as an admission that such
reporting person is the beneficial owner of all such shares.
PAGE 3 OF 12
<PAGE>
SCHEDULE 13D
CUSIP No. 160902102
-------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Samstock/ZFT, L.L.C. FEIN: 36-3022976
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
-----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,331,677(1)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,331,677(1)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.3%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
(1) Represents the number of shares owned by all members of the group, in the
aggregate. This filing shall not be construed as an admission that such
reporting person is the beneficial owner of all such shares.
PAGE 4 OF 12
<PAGE>
SCHEDULE 13D
CUSIP No. 160902102
-------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
F. Philip Handy as Trustee of the Blaine Trust FEIN: 59-6963521
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
-----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,331,677(1)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,331,677(1)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.3%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
(1) Represents the number of shares owned by all members of the group, in the
aggregate. This filing shall not be construed as an admission that such
reporting person is the beneficial owner of all such shares.
PAGE 5 OF 12
<PAGE>
SCHEDULE 13D
CUSIP No. 160902102
------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
MelChart, L.L.C. FEIN: 36-4183204
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
-----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,331,677(1)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,331,677(1)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.3%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
(1) Represents the number of shares owned by all members of the group, in the
aggregate. This filing shall not be construed as an admission that such
reporting person is the beneficial owner of all such shares.
PAGE 6 OF 12
<PAGE>
SCHEDULE 13D
CUSIP No. 160902102
------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
F. Philip Handy
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States citizen
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
----------------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 20,000(2)
----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
----------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,351,677(1)(2)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,351,677(1)(2)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.5%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
(1) Includes 3,331,677 shares owned by all members of the group, in the
aggregate. This filing shall not be construed as an admission that such
reporting person is the beneficial owner of all such shares.
(2) Includes 20,000 shares held by the Handy Family Partnership, a family
limited partnership, which Mr. Handy is deemed to beneficially own through
its corporate general partner. Pursuant to Rule 13d-4, Mr. Handy disclaims
beneficial ownership with respect to 19,800 of such shares that are
attributable to the limited partners of the Handy Family Partnership.
PAGE 7 OF 12
<PAGE>
This Amendment No. 6 (this "Amendment") amends and supplements the
Schedule 13D filed on March 20, 1997 (as previously amended, the "Schedule
13D") with respect to the common stock, par value $0.01 par value per share
(the "Common Stock") of Chart House Enterprises, Inc. (the "Issuer"). Only
those Items amended are reported herein. All capitalized terms used in this
Amendment and not otherwise defined herein have the meanings ascribed to such
terms in Amendment No. 4 to the Schedule 13D filed October 7, 1997
("Amendment No. 4").
Item 2. IDENTITY AND BACKGROUND.
Item 2. is hereby amended as follows:
By amendment of its certificate of formation, Chart House
Investors, L.L.C. changed its name to EGI-Chart House Investors, L.L.C.
("EGI-Chart House"). The other information concerning Chart House Investors,
L.L.C. disclosed in subsections (a) through (e) of the Schedule 13D remains
unchanged.
In addition, this Item 2. is hereby further amended to reflect the
current members of the reporting group, as reflected in the cover pages of
this Amendment, following the withdrawal of certain former members of the
reporting group (the "Withdrawing Parties"). As set forth in Item 6. below,
the Withdrawing Parties are no longer parties to certain agreements relating
to the Common Stock.
The information previously reported in Appendix A to the Schedule
13D is hereby amended to reflect that (i) ZFT Partnership's four partners are
trusts created for the benefit of Mr. Zell and his family; and (ii) the
trustee of the four trusts associated with ZFT Partnership and the three
previously identified trusts associated with Alphabet Partners, is Chai Trust
Company, L.L.C., an Illinois limited liability company ("Chai Trust"). The
officers and directors of Chai Trust are as follows:
Bert Cohen is a Director of Chai Trust. Mr. Cohen is also a
semi-retired investor, whose residence is 181 North Carmelina Avenue,
Los Angeles, California 90049.
Kellie Zell Harper is a Director of Chai Trust and also works as a
homemaker.
Donald J. Liebentritt is a Vice President, Secretary and Director of
Chai Trust. Mr. Liebentritt is also the Chief Operating Officer and
General Counsel of EGI.
Sheli Z. Rosenberg is President, Chief Executive Officer and a Director
of Chai Trust. Ms. Rosenberg is also President and Chief Executive
Officer of EGI.
Leah Zell Wanger is a Director of Chai Trust. Ms. Wanger also co-owns
and co-manages Wanger Asset Management, the registered advisor for the
Acorn Mutual Funds, whose business address is 227 West Monroe Street,
Suite 300, Chicago, Illinois 60603.
JoAnn Zell is a Director of Chai Trust. Ms. Zell is also a medical
student.
Matthew Zell is a Director of Chai Trust. Mr. Zell is also
President of Prometheus Network Solutions, Inc., whose business address
is Two North Riverside Plaza, Suite 1700, Chicago, Illinois 60606.
Robert M. Levin is the Senior Trust Officer of Chai Trust. Mr. Levin is
also a partner in the law firm Levin & Schreder Ltd., whose business
address is 120 North LaSalle Street, Suite 3800, Chicago, Illinois 60602.
John Zoeller is Vice President, Chief Financial Officer, Assistant Trust
Officer and Treasurer of Chai Trust. Mr. Zoeller is also the Vice
President - Taxes of EGI.
The business address of Chai Trust and Kellie Zell Harper, Donald
Liebentritt, JoAnn Zell and John Zoeller is Two North
Riverside Plaza, Chicago, Illinois 60606. All of the officers and
directors of Chai Trust are United States citizens.
PAGE 8 OF 12
<PAGE>
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3. is hereby amended to add the following:
As a result of (i) the withdrawal of the Withdrawing Parties from
the reporting group, (ii) the purchase of 75,000 Initial Shares by Samstock
pursuant to the Rivera Purchase Agreement and (iii) the sale by Samstock of
43,478 Initial Shares to Richard Melman as trustee of the Richard Melman
Revocable Trust under trust agreement dated January 16, 1982 (the "Melman
Trust"), pursuant to a stock purchase agreement dated July 28, 1998 for
consideration of $5.75 per share, the number of Initial Shares and Additional
Shares beneficially owned in the aggregate by the reporting group members has
been reduced to 3,331,677 shares.
As described in Item 5.(c) herein, on April 6 and 7, 1999, Samstock
purchased in open market transactions an additional 185,000 shares of Common
Stock. The total purchase price for the 185,000 shares was $785,162,
inclusive of commission, which was paid from Samstock's working capital.
In addition, on April 7, 1999, the Handy Family Partnership, the
corporate general partner of which is controlled by F. Philip Handy,
purchased in an open market transaction an additional 20,000 shares of Common
Stock. The total purchase price for the 20,000 shares was $85,800, inclusive
of commission, paid from the working capital of the partnership. Pursuant to
Rule 13d-4, Mr. Handy disclaims beneficial ownership of 19,800 of these
shares which are attributable to limited partners of the Handy Family
Partnership.
Item 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5. is hereby amended to add the following:
(a) and (b) To the best knowledge of the Stockholders (defined
below), there are 11,762,561 shares of Common Stock outstanding as of the
date hereof, as reported by the Issuer on its Annual Report on Form 10-K for
the year ended December 31, 1998. As of the date hereof, the 3,331,677
shares of Common Stock owned in the aggregate by the Stockholders, and as to
which they share dispositive power, represent approximately 28.3% of the
Common Stock issued and outstanding. Such Common Stock is held as follows:
<TABLE>
<CAPTION>
HOLDER SHARES
------ ------
<S> <C>
EGI-Chart House . . . . . . . . 428,591
Samstock . . . . . . . . . . . 1,891,522
Samstock/ZFT . . . . . . . . . 705,808
FPH Trustee . . . . . . . . . . 103,539
MelChart . . . . . . . . . . . 202,217
---------
Total . . . . . . . . . . 3,331,677
</TABLE>
In addition to the 3,331,677 shares of Common Stock beneficially
owned in the aggregate by the Stockholders, Samstock owns an additional
185,000 shares of Common Stock. Accordingly, Samstock has sole voting and
dispositive power with respect to 3,516,677 and 185,000 shares, respectively,
and shared dispositive power with respect to 3,331,677 shares of Common
Stock. The 3,516,677 shares of Common Stock beneficially owned by Samstock
represent approximately 29.9% of the Common Stock issued and outstanding.
In addition to the 3,331,677 shares of Common Stock beneficially
owned in the aggregate by the Stockholders, F. Philip Handy is deemed to
beneficially own an additional 20,000 shares of Common Stock as the sole
owner of the corporate general partner of the Handy Family Partnership, the
owner of the 20,000 shares. Accordingly, Mr. Handy has shared voting and
dispositive power with respect to 20,000 and 3,351,677 shares, respectively.
The 3,351,677 shares of Common Stock beneficially owned by Mr. Handy
represent approximately 28.5% of the Common Stock issued and outstanding.
Pursuant to Rule 13d-4, Mr. Handy disclaims beneficial ownership of 19,800
shares that are attributable to the limited partners of the Handy Family
Partnership.
Subject to the limitations of the Second Amended Standstill,
pursuant to an Amended Stockholders' Agreement, Samstock has the sole power
to vote or to direct the vote of the 3,331,677 shares of Common Stock owned
in the aggregate by the Stockholders. Each Stockholder has the power to
dispose of or to direct the disposition of such Stockholder's shares of
Common Stock subject to certain limitations under the Amended Stockholders'
Agreement attached hereto as Exhibit 2.4 and is incorporated herein by
reference.
PAGE 9 OF 12
<PAGE>
At the date hereof, neither the Stockholders, nor to the best
knowledge of the Stockholders, any of the reporting group members or any of
the persons listed in Appendix A to the Schedule 13D, owns any shares of
Common Stock other than shares of Common Stock owned by the Stockholders, as
described herein, of which one or more of such other persons may be deemed to
have beneficial ownership pursuant to Rule 13d-3 of the Exchange Act, and
except as follows: (i) Samuel Zell beneficially owns 719 shares of Common
Stock and options to purchase 2,500 shares; and (ii) Richard Melman as
trustee of the Melman Trust beneficially owns 43,478 shares of Common Stock.
(c) During the last 60 days, the only transactions in the
Common Stock effected by the Stockholders, or to the best knowledge of the
Stockholders, by any of the reporting group members or the persons listed in
Appendix A to the Schedule 13D, were the following: On April 6, 1999
Samstock purchased 60,000 shares of Common Stock at a price of $4.0652 per
share. On April 7, 1999, Samstock purchased 125,000 shares of Common Stock
at a price of $4.25 per share. On April 7, 1999, the Handy Family
Partnership, the corporate general partner of which is controlled by F.
Philip Handy, purchased 20,000 shares of Common Stock at a price of $4.25
per share.
(d) No person other than a Stockholder has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of the shares of Common Stock owned by such Stockholder.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUES.
Item 6. is hereby amended to add the following:
As of March 31, 1999, EGI-Chart House, Samstock, Samstock/ZFT,
Handy, FPH Trustee and Melchart (collectively, the "Stockholders"), the
Issuer and, solely as guarantor, Alpha/ZFT entered into a Second Amended and
Restated Standstill Agreement (the "Second Amended Standstill"). This
agreement restates and supersedes the Amended Standstill Agreement: (i) to
eliminate certain standstill provisions described in Item 4 of Amendment No.
4 relating to restrictions on acquisition, disposition or distribution of
voting securities of the Issuer, proxy solicitations, formation of voting
trusts, solicitation of bidders, material transactions with the Issuer and
voting on matters relating to possible changes of control of the Issuer; and
(ii) to reflect the withdrawal of the Withdrawing Parties. The Second
Amended Standstill retains those registration rights, confidentiality
provisions and voting rights and agreements described in Amendment No. 4.
The Second Amended Standstill is attached hereto as Exhibit 2.3 and is
incorporated herein by reference.
The Stockholders and the Issuer also entered into an Amended and
Restated Stockholders' Agreement dated as of March 31, 1999 (the "Amended
Stockholders' Agreement"), which agreement restates and supersedes the
Stockholders' Agreement: (i) to remove restrictions on acquisition or sale
of voting securities of the Issuer that were intended to ensure compliance
with the standstill provisions of Sections 3.1 and 3.2 of the Amended
Standstill Agreement (which Sections were omitted in the Second Amended
Standstill which supersedes the Amended Standstill Agreement); (ii) to
remove the Withdrawing Parties; and (iii) to eliminate certain restrictions on
the transfer of CHI Shares by Samstock, Samstock/ZFT or EGI-Chart House,
subject to certain conditions. The Amended Stockholders' Agreement is
attached hereto as Exhibit 2.4 and is incorporated herein by reference.
The description contained in this Amendment of certain provisions
of the Second Amended Standstill and the Amended Stockholders' Agreement are
not intended to be complete and are qualified in their entirety by reference
to each agreement attached as an Exhibit hereto and incorporated herein by
reference.
Item 7. MATERIALS TO BE FILED AS EXHIBITS.
<TABLE>
<C> <C> <S>
Exhibit 2.3 -- Second Amended and Restated Standstill Agreement,
dated as of March 31, 1999
Exhibit 2.4 -- Amended and Restated Stockholders' Agreement, dated as
of March 31, 1999
</TABLE>
PAGE 10 OF 12
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certify that the information set forth
in the statement is true, complete and correct.
DATED: April 15, 1999
EGI-CHART HOUSE INVESTORS, L.L.C.
By: /s/ Donald J. Liebentritt
------------------------------------------
Name: Donald J. Liebentritt
-------------------------------------
Title: Vice President
------------------------------------
SAMSTOCK, L.L.C.
By: /s/ Donald J. Liebentritt
------------------------------------------
Name: Donald J. Liebentritt
-------------------------------------
Title: Vice President
------------------------------------
SAMSTOCK/ZFT, L.L.C.
By: /s/ Donald J. Liebentritt
------------------------------------------
Name: Donald J. Liebentritt
-------------------------------------
Title: Vice President
------------------------------------
/s/ F. Philip Handy
-----------------------------------------------
F. Philip Handy
/s/ F. Philip Handy
-----------------------------------------------
F. Philip Handy, as Trustee of the Blaine Trust
MELCHART, LLC
By: /s/ Richard Melman
------------------------------------------
Richard Melman, its manager, by
Michael E. Fox under Power of Attorney
PAGE 11 OF 12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
1 Stock Purchase and Sale Agreement, dated as of March 10, 1997 *
1.1 Distribution and Contribution Agreement, dated as of October 1,
1997 *
1.2 Stock Purchase and Sale Agreement, dated as of October 1, 1997
(MelChart) *
1.3 Stock Purchase and Sale Agreement, dated as of October 1, 1997
(Rivera) *
2 Standstill Agreement dated as of March 10, 1997 *
2.1 Amended and Restated Standstill Agreement, dated as of October 1,
1997 *
2.2 Stockholders' Agreement, dated as of October 1, 1997 *
2.3 Second Amended and Restated Standstill Agreement, dated as of
March 31, 1999 **
2.4 Amended and Restated Stockholders' Agreement, dated as of
March 31, 1999 **
3 Option Agreement, dated as of May 12, 1997 *
3.1 Amended and Restated Option Agreement, dated as of September,
1997 *
4 Share letter, dated July 29, 1997 *
</TABLE>
* Previously filed.
** Filed herewith.
PAGE 12 OF 12
<PAGE>
CHART HOUSE ENTERPRISES, INC.
SECOND AMENDED AND RESTATED STANDSTILL AGREEMENT
DATED AS OF MARCH 31, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
Section 1. CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . .2
Section 2. REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . . . . . . .3
Section 3. COVENANTS WITH RESPECT TO CONFIDENTIAL MATERIAL AND OTHER
MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3.1 CONFIDENTIAL MATERIAL. . . . . . . . . . . . . . . . . . . . .5
3.2 GUARANTEE BY ALPHA. . . . . . . . . . . . . . . . . . . . . . .7
Section 4. VOTING OF COMPANY SECURITIES AND OTHER RELATED MATTERS. . . . .7
Section 5. REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . . . .9
5.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . .9
5.2 REQUEST FOR REGISTRATION.. . . . . . . . . . . . . . . . . . . .9
5.2A SHELF REGISTRATION. . . . . . . . . . . . . . . . . . . . . . 10
5.3 PIGGYBACK REGISTRATION. . . . . . . . . . . . . . . . . . . . 11
5.4 OBLIGATIONS OF THE COMPANY. . . . . . . . . . . . . . . . . . 11
5.5 FURNISH INFORMATION. . . . . . . . . . . . . . . . . . . . . 12
5.6 EXPENSES OF DEMAND REGISTRATION AND SHELF
REGISTRATION. . . . . . . . . . . . . . . . . . . . . . 12
5.7 EXPENSES OF PIGGYBACK REGISTRATION. . . . . . . . . . . . . . 13
5.8 UNDERWRITING REQUIREMENTS. . . . . . . . . . . . . . . . . . 13
5.9 DELAY OF REGISTRATION. . . . . . . . . . . . . . . . . . . . 14
5.10 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 14
5.11 REPORTS UNDER THE EXCHANGE ACT. . . . . . . . . . . . . . . . 16
5.12 NO ASSIGNMENT OF REGISTRATION RIGHTS. . . . . . . . . . . . . 16
5.13 WAIVER PROCEDURES. . . . . . . . . . . . . . . . . . . . . . 16
5.14 "MARKET STAND-OFF" AGREEMENT. . . . . . . . . . . . . . . . . 17
Section 6. TERM OF AGREEMENT; CERTAIN PROVISIONS REGARDING TERMINATION. . 17
Section 7. LEGEND AND STOP TRANSFER ORDER. . . . . . . . . . . . . . . . 17
Section 8. REMEDIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9. GENERAL PROVISIONS.. . . . . . . . . . . . . . . . . . . . . . 18
9.1 CONSENT TO JURISDICTION; SERVICE OF PROCESS. . . . . . . . . 18
9.2 ADDITIONAL ZELL GROUP PARTIES; JOINT AND SEVERAL
OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 19
9.5 AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.6 DESCRIPTIVE HEADINGS. . . . . . . . . . . . . . . . . . . . . 20
9.7 COUNTERPARTS; FACSIMILE SIGNATURES. . . . . . . . . . . . . . 20
9.8 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . 20
</TABLE>
<PAGE>
SECOND AMENDED AND RESTATED STANDSTILL AGREEMENT
Second Amended and Restated Standstill Agreement dated as of March 31,
1999, (this "Agreement") among Chart House Enterprises, Inc., a Delaware
corporation (the "Company"), EGI-Chart House Investors, LLC, a Delaware limited
liability company (f/k/a Chart House Investors, LLC) ("CHI"), Samstock, L.L.C.,
a Delaware limited liability company ("Samstock"), Samstock/ZFT, L.L.C., a
Delaware limited liability company ("ZFT"), F. Philip Handy, individually
("Handy"), F. Philip Handy, as trustee of the Blaine Trust ("FPH Trustee"), and
MelChart LLC, an Illinois limited liability company ("MelChart"), (each of the
foregoing parties, other than the Company, individually a "Stockholder" and
collectively the "Stockholders") and, solely for purposes of Section 3.2 hereof,
Alpha/ZFT Partnership, an Illinois general partnership ("Alpha").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase and Sale Agreement dated as of
March 10, 1997 (the "Stock Purchase and Sale Agreement") among the Company, CHI
and Alpha, CHI purchased from the Company, and the Company sold to CHI,
3,400,000 newly issued shares of the Company's Common Stock, par value $.01 per
share ("Common Stock"), representing approximately 29.2% of the Common Stock
then outstanding.
WHEREAS, Samstock, ZFT, FPH Trustee and MelChart have acquired from
CHI or its affiliates, directly or indirectly, the shares of Common Stock set
forth on EXHIBIT A hereto.
WHEREAS, Handy has entered into an Amended and Restated Option
Agreement with CHI, pursuant to which Handy has the option to acquire 163,581
shares of Common Stock from CHI (the "Handy Option Shares").
WHEREAS, reference is made to that certain Amended and Restated
Standstill Agreement, dated as of October 1, 1997, among the parties hereto (the
"First Amended Standstill Agreement").
WHEREAS, the parties hereto are entering into this Agreement to
establish certain arrangements with respect to the relationships between them,
and intend for this Agreement to amend, restate and supersede the First Amended
Standstill Agreement in its entirety.
WHEREAS, the Company believes that these arrangements will be in the
best interests of the Company and all of its stockholders.
NOW, THEREFORE, intending to be legally bound, the parties hereto
agree as follows:
<PAGE>
Section 1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
1.1 "Company Voting Securities" shall mean, collectively, Common
Stock, any preferred stock of the Company that is entitled to vote generally for
the election of directors, any other class or series of Company securities that
is entitled to vote generally for the election of directors and any other
securities, warrants, options or rights of any nature (whether or not issued by
the Company) that are convertible into, exchangeable for, or exercisable for the
purchase of, or otherwise give the holder thereof any rights in respect of,
Common Stock, Company preferred stock that is entitled to vote generally for the
election of directors, or any other class or series of Company securities that
is entitled to vote generally for the election of directors.
1.2 The "Combined Voting Power" at any measurement date shall mean
the total number of votes which could have been cast in an election of directors
of the Company had a meeting of the stockholders of the Company been duly held
based upon a record date as of the measurement date if all Company Voting
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.
1.3 The terms "beneficial ownership," "person" and "group" shall
have the respective meanings ascribed to such terms pursuant to Regulation 13D-G
adopted by the Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date hereof. The term "affiliate" shall have the meaning ascribed to
such term pursuant to Rule 12b-2 under the Exchange Act, as in effect on the
date hereof.
1.4 "Zell Affiliate" means CHI, Samstock, ZFT, Handy, FPH Trustee
and any of their respective affiliates (exclusive of MelChart and its
affiliates).
1.5 "Zell Group" means each Stockholder and any corporations,
partnerships, limited liability companies or other entities that are their
affiliates, collectively; provided, however, that publicly held entities that
might fall within this definition as a result of their affiliation with any Zell
Affiliate (a "Public Zell Affiliate") shall not be treated as affiliates of any
Zell Affiliate hereunder unless its affiliates took any action, directly or
indirectly, to suggest, encourage or assist such entity in taking the relevant
action to be attributed to the Zell Group hereunder. For purposes of the
preceding sentence and the similar clause appearing in the second sentence of
Section 3.1, the failure of any Zell Affiliate or any of its affiliates, upon
learning of a Public Zell Affiliate's action, to request that such Public Zell
Affiliate refrain from taking such action because of the provisions of this
Agreement will be deemed to constitute "encouraging or assisting" in such
action.
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1.6 "Independent Director" means directors of the Company who (i)
are not employees or officers of the Company, (ii) are not serving as designees
of Samstock pursuant to Section 4 hereof, and (iii) have no financial interest
in and are not otherwise associated with CHI, Samstock, ZFT, any Public Zell
Affiliate or their affiliates, excluding however any equity interest of not more
than 2% of any publicly-held entity. The term "associated" means having a
business, financial or familial relationship that might reasonably be expected
to affect the individual's judgment with respect to matters in which a member of
the Zell Group might be interested.
1.7 "Disinterested Director" means Independent Directors who are
"disinterested directors" as that term is used in Section 144 of the Delaware
General Corporate Law.
Section 2. REPRESENTATIONS AND WARRANTIES.
2.1 CHI, Samstock and ZFT jointly and severally represent and
warrant to the Company as follows:
(a) Each of CHI, Samstock and ZFT is a limited liability company
duly organized, validly existing and in good standing under the laws of
Delaware. Alpha is a validly existing partnership under the laws of Illinois.
Each of CHI, Samstock, ZFT and Alpha has the power and authority to enter into
this Agreement and perform its respective obligations hereunder.
(b) This Agreement has been duly authorized, executed and
delivered by CHI, Samstock, ZFT and Alpha and constitutes the legal, valid and
binding agreement of CHI, Samstock, ZFT and Alpha, enforceable against them in
accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or of any agreement or instrument to which CHI, Samstock, ZFT
or Alpha is bound or by which it is affected or of any charter documents of CHI,
Samstock, ZFT or Alpha.
(d) As of the date hereof, no shares of Common Stock are currently
beneficially owned by any member of the Zell Group (other than Handy, FPH
Trustee and MelChart and their respective affiliates), except for those shares
of Common Stock originally acquired by CHI pursuant to the Stock Purchase and
Sale Agreement and set forth on EXHIBIT A hereto (exclusive of any options
granted by the Company).
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<PAGE>
2.2 Handy and FPH Trustee jointly and severally represent and
warrant to the Company as follows:
(a) He has the legal capacity to enter into this Agreement and
perform his respective obligations hereunder both for himself individually and
on behalf of the Blaine Trust.
(b) This Agreement has been duly executed and delivered by him
both for himself and on behalf of the Blaine Trust and constitutes his legal,
valid and binding agreement enforceable against him in accordance with the terms
hereof both in his individual capacity and in his capacity as trustee of the
Blaine Trust.
(c) Neither the execution and delivery of this Agreement nor the
performance of his obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or of any agreement or instrument to which he is bound or by
which he is affected, both in his individual capacity and in his capacity as
trustee of the Blaine Trust.
(d) As of the date hereof, no shares of Common Stock are currently
beneficially owned by him or his affiliates, except for those shares of Common
Stock set forth on EXHIBIT A hereto (exclusive of the Handy Option Shares and
any stock options granted by the Company).
2.3 MelChart represents and warrants to the Company as follows:
(a) MelChart is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization. MelChart has the power and authority to enter into this Agreement
and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and
delivered by MelChart and constitutes the legal, valid and binding agreement of
MelChart enforceable against MelChart in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or of any agreement or instrument to which MelChart is bound or
by which MelChart is affected or of any charter documents of MelChart.
(d) As of the date hereof, no shares of Common Stock are currently
beneficially owned by MelChart or any of its affiliates, except for those shares
of Common Stock set forth on EXHIBIT A hereto.
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<PAGE>
2.4 The Company represents and warrants to the Stockholders and
Alpha as follows:
(a) The Company is a validly existing corporation under the laws
of the jurisdiction of its organization and has the corporate power and
authority to enter into this Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with the terms
hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or of any agreement or instrument to which the Company is bound
or by which it is affected or of any charter documents of the Company.
Section 3. COVENANTS WITH RESPECT TO CONFIDENTIAL MATERIAL AND OTHER
MATTERS. CHI, Samstock and ZFT hereby agree with respect to all members of the
Zell Group, other than Handy, FPH Trustee and MelChart and any of their
respective affiliates, and each of Handy, FPH Trustee and MelChart agree with
respect to themselves and their respective affiliates, as follows:
3.1 CONFIDENTIAL MATERIAL.
(a) DEFINITIONS. For purposes of this Section:
(i) The term "Confidential Material" means all information,
whether oral, written or otherwise (including any information furnished prior to
the execution of this Agreement), furnished by the Company to any member of the
Zell Group or any of the Representatives (as defined below), and all notes,
reports, analyses, compilations, studies and other materials prepared by the
Zell Group or any of the Representatives (in whatever form maintained, whether
documentary, computer storage or otherwise) containing or based upon, in whole
or in part, any such information, and the fact that such information has been
delivered to the Zell Group or any of its Representatives. The term
"Confidential Material" does not include information which is or becomes
generally available to the public other than as a result of a disclosure by any
member of the Zell Group or any of the Representatives or becomes available to
any member of the Zell Group or any of the Representatives on a non-confidential
basis from any source that is not known by such member of the Zell Group or such
Representative to be bound by an obligation of confidentiality to the Company.
5
<PAGE>
(ii) The term "Representatives" shall mean any and all
employees, agents, financial advisors, partners, affiliates or other
representatives of any member of the Zell Group.
(b) Each member of the Zell Group and each of the Representatives
will preserve the confidentiality of the Confidential Material and will not
disclose any of the Confidential Material in any manner whatsoever; PROVIDED,
HOWEVER, that (i) the Zell Group may make any disclosure of such information to
which the Company gives its prior consent, (ii) any of such information may be
disclosed to the Representatives who need to know such information, and who are
informed of the confidential nature of the Confidential Material and of the
terms of this Section 3.1 and who agree to keep such information confidential,
(iii) any Zell Affiliate may make any disclosure of such information in
connection with any activity which such Zell Affiliate reasonably believes to be
in the best interests of the Company and not prohibited by this Agreement,
provided the recipient of such information is informed of the confidential
nature of the Confidential Material and of the terms of this Section 3.1 and
agrees in writing to keep such information confidential and otherwise to be
fully subject to the terms of this Section 3.1, and (iv) any member of the Zell
Group may make any disclosure of such information to any other member of the
Zell Group. In any event, the Zell Group will be responsible for any actions by
the Representatives which are not in accordance with the provisions hereof.
(c) If any member of the Zell Group or any of the Representatives
are requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand, any informal or
formal investigation by any government or governmental agency or authority or
otherwise) to disclose any Confidential Material or such person's opinion,
judgment, view or recommendation concerning the Company as developed from the
Confidential Material, the Zell Group agrees (i) to promptly notify the Company
of the existence, terms and circumstances surrounding such a request, (ii) to
the extent possible, to consult with the Company on the advisability of taking
legally available steps to resist or narrow such request and (iii) if disclosure
of such information is required, to furnish only that portion of the
Confidential Material which, in the opinion of counsel to the Zell Group, the
Zell Group is legally compelled to disclose, and to cooperate with any action by
the Company to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Material.
(d) The Stockholders hereby acknowledge that the United States
securities laws prohibit, in certain circumstances, any person who has received
from an issuer material, non-public information, including certain information
that may be part of the Confidential Material, while such information is
non-public, from purchasing or selling securities of such issuer or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities.
6
<PAGE>
(e) This Section 3.1 shall survive until the earlier of June 30,
2004 or two years following the date of termination of this Agreement.
3.2 GUARANTEE BY ALPHA. Alpha hereby irrevocably and
unconditionally guarantees the performance by CHI, Samstock and ZFT of all of
their obligations hereunder and under the other agreements and documents
contemplated hereby.
Section 4. VOTING OF COMPANY SECURITIES AND OTHER RELATED MATTERS. CHI,
Samstock and ZFT hereby agree with respect to all members of the Zell Group,
other than Handy, FPH Trustee and MelChart and any of their respective
affiliates, and each of Handy, FPH Trustee and MelChart agree with respect to
themselves and their respective affiliates, as follows:
(a) Each member of the Zell Group that is a holder of record of
Company Voting Securities shall be present, and each member of the Zell Group
that is a beneficial owner of Company Voting Securities shall cause the holder
of record to be present, in person or by proxy, at all meetings of stockholders
of the Company so that all Company Voting Securities owned of record or
beneficially by the Zell Group may be counted for the purpose of determining the
presence of a quorum at such meetings.
(b) At all times prior to June 30, 2002, except to the extent
otherwise provided herein, the Company shall take all necessary or appropriate
action to assist in the nomination and election as directors of (i) that number
of individuals specified in Section 4(d) below designated by Samstock to be
elected as directors of the Company, provided such designees are reasonably
acceptable to the Independent Directors at the time of their designation, and
(ii) so long as Samstock is entitled to designate one or two directors,
Independent Directors constituting a majority of the total number of directors
of the Company. All persons to be so designated as Independent Directors shall
be individuals selected by a majority of the Independent Directors then in
office, except that one of the Independent Directors shall be an individual
mutually acceptable to Samstock on the one hand and a majority of the
Independent Directors on the other hand. The Company hereby agrees and
acknowledges that Sam Zell and F. Philip Handy are reasonably acceptable to the
Independent Directors as directors of the Company. The Company further agrees
that one position on the Board of Directors of the Company is intended to be
filled by the chief executive officer to be selected by the Board of Directors
of the Company. Samstock shall cause its designees on the Board of Directors of
the Company to take all necessary or appropriate action to assist in the
nomination and election as directors of all such nominees as may be selected to
serve as Independent Directors in the manner described above. The Zell Group
and the directors designated by Samstock shall not vote (as stockholders or
directors) in favor of, and shall not take any other action in furtherance of or
seeking to cause, a reduction of the number of directors of the Company below
seven directors, the removal of any directors, or a majority of the directors
not consisting of Independent Directors. Notwithstanding the foregoing, the
Company hereby waives the requirements contained in this Section 4(b) relating
to a majority of the directors consisting of Independent Directors, to the
extent that such
7
<PAGE>
requirements would not be satisfied as the result of Stephen Ottman
("Ottman") being a director of the Company.
(c) For purposes of this Agreement, directors "designated by
Samstock" shall include directors designated by Samstock as anticipated by this
Section 4, and any other directors of the Company affiliated or associated with
any member of the Zell Group, but, notwithstanding the foregoing, shall not
include Ottman.
(d) At all times prior to June 30, 2002, Samstock shall be
entitled to designate the following number of directors pursuant to Section 4(b)
hereof:
(i) so long as the members of the Zell Group that have
executed this Agreement as parties (the "Zell Contracting Parties") beneficially
own at least 15% of the Combined Voting Power of all Company Voting Securities
(calculated in accordance with Section 3.1 hereof), Samstock shall have the
right to designate two directors of the Company (it being understood that Ottman
shall not count as one of such two directors), provided such designees are
reasonably acceptable to the Independent Directors at the time of their
designation; and
(ii) so long as the Zell Contracting Parties beneficially
own less than 15%, but at least 7.5% of the Combined Voting Power of all Company
Voting Securities (as so calculated), Samstock shall have the right to designate
one director of the Company (it being understood that Ottman shall not count as
such director), provided such designee is reasonably acceptable to the
Independent Directors at the time of his or her designation;
PROVIDED, HOWEVER, that at any time when the Zell Contracting Parties shall no
longer beneficially own at least 15% of the Combined Voting Power of all Company
Voting Securities (as so calculated), Samstock shall cause one of its two
designees to resign forthwith such that only one designee remains on the Board
of Directors of the Company; and PROVIDED, FURTHER, that at any time when the
Zell Contracting Parties shall no longer beneficially own at least 7.5% of the
Combined Voting Power of all Company Voting Securities (as so calculated),
Samstock shall not have the right to designate any directors of the Company,
Samstock's rights under this Section 4 shall terminate, Samstock shall cause its
designees to resign forthwith such that no designee of Samstock remains on the
Board of Directors of the Company and all of the covenants under Section 3 of
this Agreement shall lapse and no longer be of any force or effect. In
addition, all of the covenants under Section 3 of this Agreement shall lapse and
no longer be of any force or effect if for any reason any of the director
designees designated by Samstock pursuant to the rights granted by Section 4(b)
shall not be nominated for election as a director of the Company with the
unanimous recommendation of all of the directors of the Company (other than
those directors designated by Samstock pursuant to Section 4(b)) at the next
election of directors of the Company following Samstock's designation. At any
time when Samstock shall have the right to designate one or two directors, as
the case may be, pursuant to this Section 4, the Company shall
8
<PAGE>
not increase the number of directors to more than seven directors without the
prior written consent of Samstock.
Section 5. REGISTRATION RIGHTS. The Company covenants and agrees as
follows:
5.1 DEFINITIONS. For purposes of this Section 5:
(a) The term "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act").
(b) The term "Registrable Securities" means the shares of Common
Stock held, from time to time, by the Zell Group.
(c) The term "Holder" means any Zell Contracting Party who owns of
record Registrable Securities.
(d) The term "Rule 415 Offering" means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Act.
(e) The term "Shelf Registration Statement" means a registration
statement intended to effect a shelf registration in connection with a Rule 415
Offering.
5.2 REQUEST FOR REGISTRATION.
(a) If the Company shall at any time receive a written request
from any Zell Affiliates who are the Holders of at least 500,000 shares of
Common Stock that the Company file a registration statement under the Act
covering the registration of at least 500,000 shares of Common Stock, then the
Company shall, within 10 days after the receipt thereof, give written notice of
such request to all Holders, and shall, subject to the limitations of Section
5.2(b), effect as soon as practicable after the receipt of such request the
registration under the Act of all Registrable Securities which the Holders
request to be registered within 15 days after the mailing of such notice by the
Company in accordance with Section 9.3.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 5.2 and the Company
shall include such information in the written notice referred to in Section
5.2(a). In such event, the right of any Holder to include Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided
9
<PAGE>
herein. All Holders proposing to distribute Registrable Securities through
such underwriting shall (together with the Company as provided in Section
5.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Initiating
Holders and reasonably acceptable to the Company. The Company at its sole
discretion may offer a right to participate in any registration statement
filed pursuant to this Section 5.2 to other holders of Common Stock, and may
itself participate in any registration statement filed pursuant to this
Section 5.2. However, notwithstanding any other provision of this Section
5.2, if the offering is an underwritten offering and the lead managing
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares of Common Stock to be
underwritten, then (subject to any contrary provisions in registration rights
agreements executed by the Company prior to the date hereof) the total number
of shares of Common Stock to be underwritten shall be reduced, with such
reduction coming first from selling stockholders who are not Holders, and
then from the Company. If further reduction is required, the Company shall
so advise all Holders of Registrable Securities that would have otherwise
been underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the underwriting shall be allocated among
all Holders thereof, including the Initiating Holders, in proportion (as
nearly as practicable) to the amount of Registrable Securities sought to be
registered by each Holder.
(c) The Company is obligated to effect only two such registrations
pursuant to this Section 5.2; PROVIDED, HOWEVER, that if, as a result of a
reduction in the size of an offering pursuant to Section 5.2(b), Holders are
prevented from registering, in the aggregate, one-half of all of their
Registrable Securities, then the Company shall be obligated to effect a third
such registration pursuant to this Section 5.2.
(d) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 5.2 a
certificate signed by the Chief Executive, Chief Operating, or Chief Financial
Officer of the Company stating that, in the good faith judgment of a majority of
the Disinterested Directors, it would be materially detrimental to the Company
for such registration statement to be filed, the Company shall have the right to
defer such filing for a period of not more than 120 days after receipt of the
request of the Initiating Holders; PROVIDED, HOWEVER, that the Company may not
utilize this right more than twice in any 12-month period.
5.2A SHELF REGISTRATION. If the Company shall at any time receive
a written request from any Zell Affiliates who are the Holders of at least
500,000 shares of Common Stock that the Company file a Shelf Registration
Statement, then the Company shall upon receipt of such notice prepare and file a
Shelf Registration Statement that shall include all Registrable Securities (and
shall include in the "plan of distribution" of such Shelf Registration
Statement, pledgees of any Holder), provided such Shelf Registration Statement
shall not include securities of the Company for sale for the Company's own
account. The Company shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective within 60 days of
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such written request. The Company shall keep such Shelf Registration
Statement effective until such time as all Registrable Securities have been
sold or disposed of thereunder or sold, transferred or otherwise disposed of
(other than pursuant to a pledge of such Registrable Securities) to a person
that is not a Holder. The Shelf Registration Statement shall not be counted
as a request for registration pursuant to Section 5. 2 hereof.
5.3 PIGGYBACK REGISTRATION. If (but without any obligation to do
so) the Company proposes to register any of its Common Stock under the Act in
connection with the public offering of such Common Stock by the Company solely
for cash (other than a registration relating solely to the sale of securities to
participants in a dividend reinvestment plan, stock plan or employee benefit
plan; a registration relating solely to the issuance of securities to the
security holders of an acquired company in connection with an acquisition; or a
registration on any form which does not permit inclusion of selling
stockholders), or the Company proposes to register any of its securities on
behalf of a holder exercising demand registration rights similar to those set
forth in Section 5.2, the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given within 15 days after mailing of such notice by the Company in accordance
with Section 9.3, the Company shall, subject to the provisions of Section 5.8,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
5.4 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 5 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable efforts to cause
such registration statement to become effective, and (other than with respect to
a Shelf Registration Statement), upon the request of the Holders of a majority
of the Registrable Securities registered thereunder, keep such registration
statement effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such states or other
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jurisdictions as shall be reasonably requested by the Holders, provided that
the Company shall not be required to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the underwriters of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and then
use its best efforts to promptly correct such statement or omission.
Notwithstanding the foregoing and anything to the contrary set forth in this
Section 5.4, each Holder acknowledges that there may occasionally be times when
the Company must suspend the use of the prospectus forming a part of the
registration statement until such time as an amendment to the registration
statement has been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. Each Holder hereby covenants that it will (a)
keep any such notice strictly confidential, and (b) not sell any shares of
Common Stock pursuant to such prospectus during the period commencing at the
time at which the Company gives the Holder notice of the suspension of the use
of such prospectus and ending at the time the Company gives the Holder notice
that it may thereafter effect sales pursuant to such prospectus. The Company
shall only be able to suspend the use of such prospectus for periods aggregating
no more than 60 days in respect of any registration and, in any event, the
120-day period of effectiveness referred to in Section 5.4(a) shall be extended
one day for each day that sales are suspended under this Section 5.4(f).
5.5 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 5 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities and as may be required from time to time to keep such registration
current.
5.6 EXPENSES OF DEMAND REGISTRATION AND SHELF REGISTRATION. All
expenses incurred by or on behalf of the Company in connection with
registrations, filings or qualifications pursuant to Section 5.2 and Section
5.2A, including, without limitation, all registration, filing and qualification
fees, printers' and accounting fees, and fees and disbursements of counsel for
the Company, shall be borne by the Company; PROVIDED, HOWEVER,
12
<PAGE>
that the Company shall not be required to pay for any expenses of any
registration begun pursuant to Section 5.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating
Holders shall reimburse the Company promptly for all such reasonable
expenses), unless the Holders of a majority of the Registrable Securities
agree to forfeit their right to one demand registration pursuant to Section
5.2. In no event shall the Company be obligated to bear any underwriting
discounts or commissions relating to Registrable Securities or the fees and
expenses of counsel to the selling Holders.
5.7 EXPENSES OF PIGGYBACK REGISTRATION. The Company shall bear
and pay all expenses incurred by or on behalf of the Company in connection with
any registration, filing or qualification of Registrable Securities with respect
to the registrations pursuant to Section 5.3 for each Holder, including, without
limitation, all registration, filing, and qualification fees, printing and
accounting fees and fees and disbursements of counsel for the Company relating
or allocable thereto, but excluding any underwriting discounts or commissions
relating to Registrable Securities and the fees and disbursements of counsel to
the selling Holders.
5.8 UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares being issued by the Company, the Company
shall not be required under Section 5.3 to include any of the Holders'
Registrable Securities in such underwriting or the registration statement
relating thereto unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by the Company. If the total
amount of securities, including Registrable Securities, requested by Holders and
other stockholders to be included in such offering exceeds the amount of
securities offered other than by the Company that the underwriters reasonably
believe can be offered without jeopardizing the success of the offering, then
the Company shall be required to include in the offering only that number of
such securities, including Registrable Securities, which the underwriters
believe will not jeopardize the success of the offering. To achieve any
necessary reduction in the securities to be sold, the securities to be excluded
from the offering shall first be selected (in each case, pro rata among such
class of holders according to the total amount of securities proposed to be
included in the registration statement or in such other proportions as shall
mutually be agreed to by such class of holders) in the following order (subject
to any contrary provisions in registration rights agreements executed by the
Company prior to the date hereof): (i) first, securities being included on
behalf of holders other than members of the Zell Group shall be excluded, except
for securities of holders referred to in clause (iii) below; (ii) next, if
additional securities must be excluded, Registrable Securities included pursuant
to Section 5.3 shall be excluded; (iii) thereafter, if additional securities
must be excluded, securities included on behalf of a holder exercising demand
registration rights similar to those set forth in Section 5.2 shall be excluded;
and (iv) finally, if additional securities must be excluded, securities offered
by the Company shall be excluded.
13
<PAGE>
5.9 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 5.
5.10 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 5:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder and the affiliates of such Holder, and their
respective directors, officers, general and limited partners, agents and
representatives (and the directors, officers, affiliates and controlling persons
thereof), and each other person, if any, who controls such Holder within the
meaning of the Act, against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus (but only if such statement is not corrected in the final
prospectus) contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading (but
only if such omission is not corrected in the final prospectus), or (iii) any
violation or alleged violation by the Company in connection with the
registration of Registrable Securities under the Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Act, the
Exchange Act or any state securities law; and the Company will pay to each such
Holder, affiliate or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 5.10(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder or controlling
person. Each indemnified party shall furnish such information regarding itself
or the claim in question as an indemnifying party may reasonably request in
writing and as shall be reasonably required in connection with defense of such
claim and litigation resulting therefrom.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages
14
<PAGE>
or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 5.10(b) in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section
5.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder, which consent shall not be unreasonably withheld; PROVIDED,
that, in no event shall any indemnity under this section 5.10(b) exceed the
gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 5.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 5.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to deliver written notice to the
indemnifying party within a reasonable time after the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 5.10 to the extent of such prejudice, but the omission so to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 5.10. The indemnified party shall have the right, but not the
obligation, to participate in the defense of any action referred to above
through counsel of its own choosing and shall have the right, but not the
obligation, to assert any and all separate defenses, cross claims or
counterclaims which it may have, and the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of such
counsel has been specifically authorized in advance by the indemnifying party,
(ii) there is a conflict of interest that prevents counsel for the indemnifying
party from adequately representing the interests of the indemnified party or
there are defenses available to the indemnified party that are different from,
or additional to, the defenses that are available to the indemnifying party,
(iii) the indemnifying party does not employ counsel that is reasonably
satisfactory to the indemnified party, or (iv) the indemnifying party fails to
assume the defense or does not reasonably contest such action in good faith, in
which case, if the indemnified party notifies the indemnifying party that it
elects to employ separate counsel, the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party
and the reasonable fees and expenses of such separate counsel shall be borne by
the indemnifying party; PROVIDED, HOWEVER, that, the indemnifying party shall
not, in connection with any proceeding or related proceedings
15
<PAGE>
in the same jurisdiction, be liable for the reasonable fees and expenses of
more than one separate firm (in addition to one firm acting as local counsel)
for all indemnified parties.
(d) The obligations of the Company and the holders under this
Section 5.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 5.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement (if any) entered into in connection with any underwritten public
offering of the Registrable Securities are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall control.
5.11 REPORTS UNDER THE EXCHANGE ACT. With a view to making
available to the holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the SEC in a timely manner
all reports and other documents required under the Act and the Exchange Act; and
(c) furnish to any Holder forthwith upon request (i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144, or as to whether it qualifies as a registrant whose securities may be
resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
5.12 NO ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 5 may only
be assigned by a Holder to a transferee or assignee of any Registrable
Securities if (i) such transferee or assignee is a Zell Contracting Party and
(ii) immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
5.13 WAIVER PROCEDURES. The observance by the Company of any
provision of this Section 5 may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the Holders of a majority of the Registrable Securities, and any waiver effected
in accordance with this paragraph shall be binding upon each Holder of
Registrable Securities.
16
<PAGE>
5.14 "MARKET STAND-OFF" AGREEMENT. Any Holder of Registrable
Securities, if requested by an underwriter of any registered public offering of
Company securities being sold in a firm commitment underwriting, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other Company
Voting Securities) held by such Holder other than shares of Registrable
Securities included in the registration during the seven days prior to, and
during a period of up to 120 days following, the effective date of the
registration statement. Such agreement shall be in writing in a form reasonably
satisfactory to the Company and such underwriter. The Company may impose
stop-transfer instructions with respect to the securities subject to the
foregoing restriction until the end of the required stand-off period.
Section 6. TERM OF AGREEMENT; CERTAIN PROVISIONS REGARDING TERMINATION.
Unless this Agreement specifically provides for earlier or later termination
with respect to any particular right or obligation, this Agreement shall
terminate if the Zell Group shall, at any time (in compliance with this
Agreement), sell or otherwise dispose of or otherwise cease to own Company
Voting Securities such that the Zell Group beneficially owns in the aggregate
Company Voting Securities representing less than 2% of the Combined Voting Power
of all Company Voting Securities.
Section 7. LEGEND AND STOP TRANSFER ORDER. To assist in effectuating the
provisions of this Agreement, each Stockholder hereby consents (i) to the
placement within 10 business days after any Company Voting Securities become
subject to the provisions of this Agreement, of the legend specified in Section
4.10(b) of the Stock Purchase and Sale Agreement on all certificates
representing ownership of Company Voting Securities owned of record or
beneficially by any member of the Zell Group, until such shares are sold,
transferred or disposed in a manner permitted hereby to a person who is not then
a member of the Zell Group, and (ii) to the entry of stop transfer orders with
the transfer agent or agents of Company Voting Securities against the transfer
of Company Voting Securities except in compliance with the requirements of this
Agreement. The Company agrees to remove promptly all legends and stop transfer
orders with respect to the transfer of Company Voting Securities being made to a
person who is not then a member of the Zell Group in compliance with the
provisions of this Agreement.
Section 8. REMEDIES.
The Stockholders and the Company acknowledge and agree that
(i) the provisions of this Agreement are reasonable and necessary to protect the
proper and legitimate interests of the parties hereto, and (ii) the parties
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that, except as otherwise provided
in Section 5.9 hereof, each party shall be entitled to preliminary and permanent
injunctive relief to prevent breaches of the provisions of this Agreement by the
other party (or its affiliates) without the necessity of proving actual damages
or of posting any bond, and to enforce specifically the terms and provisions
hereof and thereof in any court of the United States or any state thereof
17
<PAGE>
having jurisdiction, which rights shall be cumulative and in addition to any
other remedy to which the parties may be entitled hereunder or at law or
equity.
Section 9. GENERAL PROVISIONS.
9.1 CONSENT TO JURISDICTION; SERVICE OF PROCESS. This agreement
shall be governed by and interpreted and enforced in accordance with the laws of
the State of Delaware without giving effect to any conflicts of law provisions.
Each of the parties hereto irrevocably and unconditionally (a) agrees that any
suit, action or other legal proceeding (collectively, "suit") arising out of
this agreement shall be brought and adjudicated in the United States District
Court for the District of Delaware or the Northern District of Illinois, or, if
such courts will not accept jurisdiction, in any court of competent civil
jurisdiction sitting in either the State of Delaware or the City of Chicago,
Illinois, (b) submits to the jurisdiction of any such court for the purposes of
any such suit and (c) waives and agrees not to assert by way of motion, as a
defense or otherwise in any such suit, any claim that it is not subject to the
jurisdiction of the above courts, that such suit is brought in an inconvenient
forum or that the venue of such suit is improper. Each of the parties also
irrevocably and unconditionally consents to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 9.3.
9.2 ADDITIONAL ZELL GROUP PARTIES; JOINT AND SEVERAL OBLIGATIONS.
All of the obligations of the Zell Group and its members (other than Handy, FPH
Trustee, MelChart and their affiliates) hereunder shall be joint and several.
All of the obligations of Handy, FPH Trustee, MelChart and their affiliates
hereunder shall be several and not joint. Each member of the Zell Group that
shall become or have the right to become the beneficial owner, within the
meaning and scope of Section 3.1 hereof, of Company Voting Securities shall,
promptly upon becoming such owner or holder, execute and deliver to the Company
a joinder agreement, agreeing to be legally bound by this Agreement to the same
extent as if it had signed this Agreement as an original signatory as a member
of the Zell Group; PROVIDED that failure to execute such an agreement shall not
excuse such member's non-compliance with any provision of this Agreement. No
member of the Zell Group shall transfer securities to another member of the Zell
Group unless the transferee shall agree to be bound by this Agreement in the
manner specified above in this Section 9.2.
9.3 NOTICES. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be in writing and
18
<PAGE>
shall be decreed to be validly given, made or served when delivered
personally or deposited in the U.S. mail, postage prepaid, for delivery by
express, registered or certified mail, or delivered to a recognized overnight
courier service, addressed as follows:
If to the Company:
Chart House Enterprises, Inc.
640 North LaSalle
Suite 295
Chicago, Illinois 60610
Attn: Chief Executive Officer
With a copy to:
Seyfarth, Shaw, Fairweather & Geraldson
55 East Monroe Street
Suite 4200
Chicago, Illinois 60603
Attn: Robert F. Weber
If to any Stockholder or any member of the Zell Group:
Samstock, L.L.C.
Two North Riverside Plaza
Suite 1900
Chicago, Illinois 60606
Attn: F. Philip Handy
With a copy to:
Rosenberg & Liebentritt
Two North Riverside Plaza
Suite 1515
Chicago, Illinois 60606
Attn: Joseph M. Paolucci
or to such other address as may be specified in a notice given pursuant to this
Section 9.3.
9.4 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect
19
<PAGE>
and shall in no way be affected, impaired or invalidated. The parties hereto
agree that they will use their best efforts at all times to support and
defend this Agreement.
9.5 AMENDMENTS. This Agreement may be amended only by an
agreement in writing signed by each of the parties hereto; PROVIDED, HOWEVER,
that any amendment executed by the Company must prior thereto be approved by a
majority of the Disinterested Directors then in office.
9.6 DESCRIPTIVE HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.
9.7 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, bears the signatures of each of the parties hereto. This Agreement
may be executed in any number of counterparts, each of which shall be an
original as against the party whose signature appears thereon, or on whose
behalf such counterpart is executed, but all of which taken together shall be
one and the same agreement. A facsimile copy of a signature of a party to this
Agreement or any such counterpart shall be fully effective as if an original
signature.
9.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the successors and assigns of
the parties hereto.
20
<PAGE>
IN WITNESS WHEREOF, the parties hereto intending to be legally bound
have duly executed this Agreement, all as of the day and year first above
written.
Company: CHART HOUSE ENTERPRISES, INC.
By:
---------------------------------------------
Name:
Title:
CHI: EGI-CHART HOUSE INVESTORS, LLC, by ALPHABET PARTNERS,
its managing member, by a general partners
By:
---------------------------------------------
Name:
Title:
Samstock: SAMSTOCK, L.L.C., by SZ INVESTMENTS, L.L.C.,
its sole member, by ZELL GENERAL PARTNERSHIP,
INC., its sole member
By:
---------------------------------------------
Name:
Title:
ZFT: SAMSTOCK/ZFT, L.L.C., by ZFT PARTNERSHIP, its sole
member, by a general partner
By:
---------------------------------------------
Name:
Title:
21
<PAGE>
Handy:
---------------------------------------------
F. Philip Handy, individually
FPH Trustee:
---------------------------------------------
F. Philip Handy, as Trustee of the Blaine Trust
MelChart: MELCHART, LLC
By:
---------------------------------------------
Richard Melman, manager, by Michael E. Fox
under Power of Attorney
Alpha: ALPHA/ZFT PARTNERSHIP, by a general partner
of one of its general partners, solely for purposes of
Section 3.2 hereof
By:
---------------------------------------------
Name:
Title:
22
<PAGE>
EXHIBIT A
OWNERSHIP OF COMMON STOCK
As of the date of the Second Amended and Restated Standstill Agreement,
3,331,677 of the 3,400,000 shares of Common Stock of Chart House Enterprises,
Inc. (the "Company") originally acquired by EGI-Chart House Investors, LLC
(f/k/a Chart House Investors, LLC) from the Company pursuant to that certain
Stock Purchase and Sale Agreement dated as of March 10, 1997, and subsequently
acquired, directly or indirectly, by sale, distribution, contribution or
otherwise by other Stockholders, are held by the Stockholders as follows:
<TABLE>
<CAPTION>
STOCKHOLDER NUMBER OF SHARES HELD
<S> <C>
Samstock, L.L.C. 1,891,522
Samstock/ZFT, L.L.C. 705,808
EGI-Chart House Investors, LLC 428,591
F. Philip Handy, as Trustee
of the Blaine Trust 103,539
MelChart LLC 202,217(1)
- ------------ ----------
Total 3,331,677
</TABLE>
(1) In addition, Richard Melman as trustee of the Richard Melman Revocable
Trust U/T/A dated January 16, 1982, as amended, acquired 43,478 shares of
Common Stock from Samstock on or about June 30, 1998, which shares are not
subject to this agreement.
23
<PAGE>
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT ("Agreement") is
executed as of March , 1999, by and among Samstock, L.L.C., a Delaware
limited liability company ("Samstock"), Samstock/ZFT, L.L.C., a Delaware
limited liability company ("ZFT"), EGI-Chart House Investors, L.L.C., a
Delaware limited liability company, f/k/a Chart House Investors, L.L.C.
("CHI"), F. Philip Handy, individually ("Handy"), F. Philip Handy, as trustee
of the Blaine Trust ("FPH Trustee"), and MelChart LLC, an Illinois limited
liability company ("MelChart"), (each of the foregoing parties individually a
"Stockholder" and collectively the "Stockholders") (each of Samstock, ZFT and
CHI, individually an "SZ Affiliate" and collectively the "SZ Affiliates")
(each of Handy and FPH Trustee individually a "Handy Affiliate" and
collectively the "Handy Affiliates") and, solely for purposes of Sections 1,
2(g), 2(h), 3, 4(a) and 10 through 19 inclusive of this Agreement, Chart
House Enterprises, Inc., a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, reference is hereby made to (i) that certain Stock Purchase and
Sale Agreement, dated as of March 10, 1997, (the "Purchase Agreement") among
the Company, CHI and, solely for purposes of Section 4.13 of the Purchase
Agreement, Alpha/ZFT Partnership, an Illinois general partnership
("Alpha/ZFT"), pursuant to which CHI purchased an aggregate of 3,400,000
newly issued shares of common stock ("Common Stock") of the Company, par
value $.01 per share (such 3,400,000 shares of Common Stock, the "Original
CHI Shares"); (ii) that certain Stockholders' Agreement, dated as of October
1, 1997, among the parties hereto, together with certain other parties( such
other parties, collectively, the "Withdrawing Parties") (the "Original
Stockholders' Agreement"); and (iii) that certain Amended and Restated
Standstill Agreement, dated as of October 1, 1997, among the parties hereto,
the Withdrawing Parties and Alpha/ZFT (the "First Amended Standstill
Agreement"). Certain capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in Section 9 below;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto together with the Withdrawing Parties and
Alpha/ZFT have entered into a Consent to Termination dated as of the date
hereof ("Consent") evidencing the termination of the First Amended Standstill
Agreement and the Original Stockholders' Agreement as to the Withdrawing
Parties;
WHEREAS, as a result of (i) the termination of the Withdrawing Parties;
(ii) that certain purchase by Samstock of 75,000 Original CHI Shares owned by
one of the Withdrawing Parties on or about April 17, 1998; and (iii) that
certain sale by Samstock of 43,478 Original CHI Shares to Mr. Richard Melman
as trustee of the Richard Melman Revocable Trust U/T/A dated January 16,
1982, as amended ("Melman"), on or about June 30, 1998, the number of
Original CHI Shares has been reduced to 3,331,677 (the "CHI Shares");
WHEREAS, ZFT, Handy, FPH Trustee and MelChart have acquired from CHI or
its Affiliates, directly or indirectly, that number of CHI Shares, or options
to purchase CHI Shares, set forth opposite such Stockholder's name on EXHIBIT
A hereto;
WHEREAS, contemporaneously herewith the parties hereto and Alpha/ZFT
have entered into a Second Amended and Restated Standstill Agreement dated as
of the date hereof
<PAGE>
(as such agreement may be amended, modified, supplemented, restated or
superseded, from time to time, the "Second Amended Standstill Agreement"),
which Second Amended Standstill Agreement amends, restates and supersedes the
First Amended Standstill Agreement in its entirety;
WHEREAS, all of the rights, benefits and remedies to which any
Stockholder may be entitled under the Purchase Agreement, the Second Amended
Standstill Agreement, the Company's Certificate of Incorporation, the
Company's By-laws, all of the other agreements, documents and instruments
entered into or delivered in connection with such agreements or the
consummation of the transactions contemplated thereby, excluding this
Agreement (collectively, the "Transaction Documents"), or by operation of law
with respect to the CHI Shares, whether now owned or hereafter acquired,
other than any rights, benefits or remedies conferred by this Agreement, are
hereinafter collectively referred to as "Stock Rights," and all of the
obligations, restrictions and liabilities to which any Stockholder may be
subject pursuant to the Transaction Documents or by operation of law with
respect to the CHI Shares, whether now owned or hereafter acquired, other
than any obligations, restrictions or liabilities created by this Agreement,
are hereinafter collectively referred to as "Stock Obligations"; and
WHEREAS, the parties hereto are entering into this Agreement to restate
the terms of the relationships between them which continue to exist
notwithstanding the termination of the Original Stockholders' Agreement as to
the Withdrawing Parties, and intend for this Agreement to amend, restate and
supersede the Original Stockholders' Agreement in its entirety solely with
respect to the parties hereto;
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
Section 1. ASSIGNMENT OF PURCHASE AGREEMENT. The rights, interests,
remedies and obligations of CHI under the Purchase Agreement hereby are
assigned to, inure to the benefit of and are assumed by the SZ Affiliates on
a PRO RATA basis based on their respective relative ownership of CHI Shares
from time to time as of October 1, 1997; provided, however, in no event shall
such PRO RATA assignment in any way diminish the aggregate rights, interests
and remedies of the SZ Affiliates under the Purchase Agreement, as compared
to the rights, interests and remedies to which CHI would be entitled under
the Purchase Agreement if not for such assignment. The assumption by the SZ
Affiliates of any obligations or liabilities of CHI under the Purchase
Agreement shall not expand the rights or remedies of the Company or any third
party against the SZ Affiliates as compared to the rights and remedies which
the Company or such third party would have against CHI had the SZ Affiliates
not assumed any obligations or liabilities of CHI under the Purchase
Agreement. The Company hereby consents to the assignment and assumption
provided in this Section 1.
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<PAGE>
Section 2. VOTING OF CHI SHARES / EXERCISE OF STOCK RIGHTS / RELATED
MATTERS.
(a) Each Stockholder does hereby constitute and appoint Samstock its
true and lawful attorney and proxy during the period that this Agreement
remains in force, to appear for, represent, and vote all CHI Shares held
by such Stockholder, whether now owned or hereafter acquired, for such
Stockholder at all meetings of the stockholders of the Company, with power
to vote upon any and all questions which may arise at any such meeting or
meetings, as fully and with the same effect as if such Stockholder had
voted such CHI Shares, subject, however, to the voting restrictions
contained in the Second Amended Standstill Agreement.
(b) Samstock may vote on behalf of each Stockholder in person or by
proxy, and, promptly upon request from Samstock, from time to time, each
Stockholder shall execute and deliver to Samstock a separate written proxy
conferring upon Samstock, or such other person as Samstock may designate,
the full, irrevocable authority to vote all of such Stockholder's CHI
Shares, whether now owned or hereafter acquired, at any specified meeting
of the stockholders of the Company, subject, however, to the voting
restrictions contained in the Second Amended Standstill Agreement.
(c) Irrespective of the grant of the proxies referred to in
subparagraphs (a) and (b) above, in each event where any Stockholder is
entitled to vote any CHI Shares, if and when requested by Samstock, such
Stockholder shall vote all of the CHI Shares, whether now owned or
hereafter acquired, held by such Stockholder which such Stockholder is
entitled to vote as directed by Samstock, subject, however, to the voting
restrictions contained in the Second Amended Standstill Agreement.
(d) No Stockholder shall exercise any Stock Rights or fulfill any
Stock Obligations (including, without limitation, with respect to (i)
selecting Company directors pursuant to Section 4 of the Second Amended
Standstill Agreement or otherwise, (ii) exercising any registration rights
under Section 5 of the Second Amended Standstill Agreement, (iii) voting of
any CHI Shares, (iv) exercising any remedial rights under Section 8 of the
Second Amended Standstill Agreement, (v) exercising any rights with respect
to CHI Shares whether under the Transaction Documents or arising by
operation of law, and (vi) amending, modifying, extending, terminating,
exercising or waiving any rights or remedies arising under the Transaction
Documents, as the same may be amended from time to time, or otherwise
arising by operation of law), except through Samstock as such Stockholder's
representative as directed or permitted by Samstock. Samstock shall act as
each Stockholder's sole representative with respect to the exercise of any
Stock Rights or the fulfillment of any Stock Obligations, and each
Stockholder hereby instructs the Company to take all directions regarding
the exercise of any Stock Rights or the fulfillment of any Stock
Obligations by such Stockholder only from Samstock.
(e) In the event of any exercise of Stock Rights or the fulfillment
of any Stock Obligations in accordance with this Section 2, each
Stockholder shall execute and deliver such agreements, documents or
instruments and shall do such other acts or things as Samstock may
reasonably request in connection with such exercise or fulfillment.
-3-
<PAGE>
(f) Each of the Stockholders hereby agrees that: (i) Samstock may
appoint any Affiliate of Samstock to act on Samstock's behalf or as
Samstock's successor under this Section 2 with the same power and authority
conferred on Samstock; and (ii) all power and authority conferred on
Samstock by this Section 2 is coupled with an interest and is irrevocable
and, to the extent not prohibited by law, shall not be terminated by any
act of any Stockholder or by operation of law or by the occurrence of any
event whatsoever, including without limitation, the death, incapacity,
dissolution, liquidation, termination, bankruptcy, dissolution of marital
relationship or insolvency of any Stockholder (including, without,
limitation, Samstock) or any similar event.
(g) Each Stockholder and the Company acknowledge that the Company
shall be entitled to rely conclusively on any written direction or
instruction received from Samstock regarding any exercise of Stock Rights,
fulfillment of Stock Obligations or any other matters referred to in this
Section 2 as they relate to any Stockholder. The Company agrees that it
will not recognize any purported exercise of Stock Rights, fulfillment of
Stock Obligations or any other act, matter or thing referred to in this
Section 2 as they relate to any Stockholder, except pursuant to written
direction or instruction received from Samstock.
(h) Notwithstanding anything to the contrary in this Agreement,
neither MelChart nor any Permitted Transferee of MelChart shall be entitled
to exercise any right, satisfy any obligation or otherwise take any action
or do anything under this Agreement, except through Melman (or Melman's
duly appointed representative, in the event of Melman's death or
incapacity), as such party's exclusive representative. MelChart and each
Permitted Transferee of MelChart acknowledge that each Stockholder and the
Company shall be entitled to rely conclusively on any written direction or
instruction received from Melman (or Melman's duly appointed
representative, in the event of Melman's death or incapacity) regarding the
exercise of any right, the satisfaction of any obligation or the taking of
any other action under this Agreement by MelChart or any Permitted
Transferee of MelChart or any other matters pertaining to this Agreement as
they relate to MelChart or any Permitted Transferee of MelChart. Each
Stockholder and the Company agree that they will not recognize any
purported exercise of any right, satisfaction of any obligation or the
taking of any other action under this Agreement by MelChart or any
Permitted Transferee of MelChart or any other matters pertaining to this
Agreement as they relate to MelChart or any Permitted Transferee of
MelChart, except pursuant to written direction or instruction received from
Melman (or Melman's duly appointed representative, in the event of Melman's
death or incapacity).
Section 3. PRUDENT BUSINESS JUDGMENT/NO LIABILITY. Samstock shall use
prudent business judgment in making decisions or taking actions in accordance
with Section 2 hereof. Notwithstanding the foregoing, whenever pursuant to
this Agreement Samstock is permitted or required to make a decision or to
take any action on behalf of any other Stockholder, Samstock shall be
entitled to make such decision or to take such action in its sole discretion
and to consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any consideration to
any interest of or factors affecting any other Stockholder or the Company,
regardless of any conflict of interest which may exist or arise between
Samstock and any other Stockholder or the Company. In any event, neither
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<PAGE>
Samstock nor any officer, member, manager, representative, agent or Affiliate
of Samstock shall have any liability or obligation whatsoever to any
Stockholder or the Company deriving from or resulting in connection with any
such decision or action.
Section 4. RESTRICTIONS ON TRANSFER AND PURCHASE / PERMITTED TRANSFEREES.
(a) No Stockholder shall Transfer any CHI Shares except for a Transfer
to a Permitted Transferee pursuant to Section 4(b) or a Transfer in
compliance with Section 5, 6, 7 or 8, as applicable. If any Transfer is made
or attempted contrary to the provisions of this Agreement, such purported
Transfer shall be void AB INITIO; and both the Stockholders not involved in
such purported Transfer and the Company shall refuse to recognize any such
purported transferee of CHI Shares as a holder of CHI Shares for any purpose.
Notwithstanding the foregoing, any SZ Affiliate may Transfer CHI Shares to
another Stockholder or another Person (subject to Section 7 and 8 hereof),
provided in the event of a Transfer to a person other than a Stockholder,
such Person concurrently with the Transfer executes a joinder to this
Agreement, agreeing to be bound by all of the terms and conditions of this
Agreement as if such Person were a Stockholder hereunder.
(b) Notwithstanding anything to the contrary in Section 4(a) hereof,
for purposes of this Agreement, a Stockholder may Transfer CHI Shares to a
Permitted Transferee of such Stockholder without complying with the
provisions of Sections 5, 6, or 7. As a condition to the effectiveness of
any Transfer of CHI Shares to a Permitted Transferee, the Permitted
Transferee shall execute a counterpart to this Agreement, whereupon the
Permitted Transferee shall hold CHI Shares subject to all of the provisions
of this Agreement, as if the Stockholder who Transferred the CHI Shares to
the Permitted Transferee were the holder of the CHI Shares actually held by
the Permitted Transferee. Notwithstanding anything to the contrary in this
Agreement: (i) all rights and benefits originally granted to the Stockholders
under this Agreement shall remain with each of them (or such Stockholder's
duly appointed representative, in the event of such Stockholder's death or
incapacity), and shall not be assigned or transferred to their Permitted
Transferees, notwithstanding any Transfer of CHI Shares by them to their
Permitted Transferees, as if the Stockholders who Transferred CHI Shares to
their Permitted Transferee were the holders of the CHI Shares actually held
by their Permitted Transferee; and (ii) no Permitted Transferee shall be
entitled to exercise any right, satisfy any obligation or otherwise take any
action or do anything under this Agreement, except through the Stockholder
who Transferred CHI Shares to its Permitted Transferee (or such Stockholder's
duly appointed representative, in the event of such Stockholder's death or
incapacity), as the representative for all of such party's Permitted
Transferees.
Section 5. RIGHT OF FIRST OFFER ON PRIVATE TRANSFER. In the event that
any Stockholder other than an SZ Affiliate (the "Selling Stockholder") wishes
to sell for cash in a bona fide transaction with an independent third party
all or any portion of the CHI Shares now owned or hereafter acquired by the
Selling Stockholder, other than in a Public Sale, the Selling Stockholder
shall first notify the other Stockholders (the "Non-Selling Stockholders") in
writing of the number of CHI Shares for sale by the Selling Stockholder (the
"Offered CHI Shares") and the proposed price and other terms of sale. The
Non-Selling Stockholders thereupon shall have the right to purchase all (but
not less than all) of the Offered CHI Shares at the proposed price in cash
and on the other proposed terms of sale. In order to exercise their purchase
rights, within thirty (30) days after receiving written notice from the
Selling Stockholder, each of the Non-Selling Stockholders shall deliver to
the Selling Stockholder a written election to purchase so many of the Offered
CHI Shares as each may desire to purchase. If the total number of Offered
CHI Shares that all Non-Selling Stockholders desire to purchase exceeds the
number of available Offered CHI Shares subject to purchase by them, each such
Non-Selling Stockholder who elects to purchase Offered CHI Shares shall have
the right to purchase
-5-
<PAGE>
that portion of the available Offered CHI Shares that the ratio of the number
of CHI Shares owned by such Non-Selling Stockholder bears to the number of
CHI Shares owned by all Non-Selling Stockholders who elect to purchase
Offered CHI Shares or in such other proportions agreed upon by all such
Non-Selling Stockholders. If the Non-Selling Stockholders together do not
exercise their purchase rights with respect to all (and not less than all) of
the Offered CHI Shares within the time period as provided herein with respect
to all of the Offered CHI Shares, the Selling Stockholder shall be free for a
period of sixty (60) days thereafter to complete a sale of the Offered CHI
Shares to any Person at or above the price in cash and on substantially the
same other terms as set forth in the Selling Stockholder's notice of intended
sale. If such a sale is not consummated within such sixty (60) day period by
the Selling Stockholder, the Offered CHI Shares shall again be subject to a
right of first offer by the Non-Selling Stockholders under the provisions of
this Section 5. Except as provided herein, the Selling Stockholder shall be
bound by the restrictions and limitations imposed by this Agreement after any
notice of a desire to sell is given and whether or not any such sale actually
occurs. As a condition precedent to the effectiveness of any Transfer of the
Offered CHI Shares to any Person that is not a party to this Agreement, such
transferee shall execute a counterpart to this Agreement and, thereupon,
shall be included as a "Stockholder" pursuant to the terms hereof.
Section 6. RIGHT OF FIRST OFFER ON PUBLIC SALE. In the event that any
Stockholder other than any SZ Affiliate (the "Selling Stockholder") wishes to
sell for cash in a bona fide transaction all or any portion of the CHI Shares
now owned or hereafter acquired by the Selling Stockholder through a Public
Sale, the Selling Stockholder shall first notify the other Stockholders (the
"Non-Selling Stockholders") in writing (the "Notice of Intended Sale") of the
number of CHI Shares for sale by the Selling Stockholder (the "Offered CHI
Shares"). The Non-Selling Stockholders thereupon shall have the right to
purchase all or any part of the Offered CHI Shares for cash at their Market
Price. In order to exercise their purchase rights, within five (5) business
days after receiving the Notice of Intended Sale from the Selling
Stockholder, each of the Non-Selling Stockholders shall deliver to the
Selling Stockholder a written election to purchase so many of the Offered CHI
Shares as each may desire to purchase. If the total number of Offered CHI
Shares that all Non-Selling Stockholders desire to purchase exceeds the
number of available Offered CHI Shares subject to purchase by them, each such
Non-Selling Stockholder who elects to purchase Offered CHI Shares shall have
the right to purchase that portion of the available Offered CHI Shares that
the ratio of the number of CHI Shares owned by such Non-Selling Stockholder
bears to the number of CHI Shares owned by all Non-Selling Stockholders who
elect to purchase Offered CHI Shares or in such other proportions agreed upon
by all such Non-Selling Stockholders. If the Non-Selling Stockholders
together do not exercise their purchase rights with respect to all of the
Offered CHI Shares within the time period as provided herein, the Selling
Stockholder shall be free for a period of ten (10) days thereafter to
complete a Public Sale of that number of Offered CHI Shares with respect to
which the Non-Selling Stockholders failed to exercise their purchase rights.
If such Public Sale is not consummated within such ten (10) day period by the
Selling Stockholder, the Offered CHI Shares shall again be subject to a right
of first offer by the Non-Selling Stockholders under the provisions of this
Section 6. Except as provided herein, the Selling Stockholder shall be bound
by the restrictions and limitations imposed by this Agreement after the
Notice of Intended Sale is given and whether or not any such sale actually
occurs.
Section 7. CO-SALE RIGHTS. In the event that one or more SZ Affiliates
or Handy Affiliates (the "Selling Stockholders") enter into an agreement to
sell to any purchaser or group of purchasers (other than any other SZ
Affiliate, Handy Affiliate or any of their Affiliates), in a
-6-
<PAGE>
single transaction or related series of transactions, other than a Public
Sale, such number of CHI Shares as equals or exceeds more than twenty percent
(20%) of the CHI Shares held by the SZ Affiliates and the Handy Affiliates in
the aggregate, the Selling Stockholders shall first notify the other
Stockholders (the "Tag-Along Stockholders") in writing, of the identity of
the proposed purchaser(s), the number of CHI Shares proposed to be sold and
the proposed purchase price and terms of sale. The Tag-Along Stockholders
thereupon shall have the right to participate in the proposed sale at the
same net price per share and other terms of sale as offered to the Selling
Stockholders. In order to exercise their co-sale rights, the Tag-Along
Stockholders, within ten (10) days after receiving notice from the Selling
Stockholders, shall deliver to the Selling Stockholders a written election to
participate in the sale to the extent allowed by this Section 7. If any
Tag-Along Stockholders have elected to participate in the proposed sale, each
participating Tag-Along Stockholder shall be entitled to sell in the proposed
sale a number of CHI Shares equal to the product of (i) the quotient (the
"Co-Sale Fraction") determined by dividing the percentage of CHI Shares owned
by such participating Tag-Along Stockholder by the aggregate percentage of
CHI Shares owned by the Selling Stockholders and the participating Tag-Along
Stockholders, multiplied by (ii) the total number of CHI Shares to be sold in
the proposed sale. Notwithstanding anything to the contrary in this Section
7, the sale proceeds to which any Tag-Along Stockholder would otherwise be
entitled by reason of its participation in a sale pursuant to this Section 7
shall be reduced by an amount equal to the product of such Tag-Along
Stockholder's Co-Sale Fraction multiplied by the sum of any costs, fees and
expenses, including, without limitation, attorneys', accountants' and
investment bankers' fees and expenses, incurred by the Selling Stockholders
in connection with the sale or the exercise of the Tag-Along Stockholders'
rights under this Section 7. The participating Tag-Along Stockholders shall,
as promptly as practicable and as a condition to their participation, enter
into such agreements as shall be reasonably requested by the Selling
Stockholders for the sale of their CHI Shares in the proposed sale.
Section 8. DRAG-ALONG RIGHTS. Subject to Section 5 and Section 6, if
Stockholders owning more than fifty percent (50%) of the CHI Shares then held
by all Stockholders ("Control Group") enter into an agreement (including an
agreement in principle) to sell all of their CHI Shares to any purchaser or
group of purchasers (other than any Permitted Transferees or any then
existing Stockholders), in a single arms-length transaction or related series
of arms-length transactions, such Control Group may require that the other
Stockholders (the "Other Stockholders") sell all of their CHI Shares to such
purchaser or group of purchasers at a net price and on terms and conditions
the same as those on which the Control Group has agreed to sell their CHI
Shares. The Control Group shall give prompt notice to the Other Stockholders
that such Control Group has entered into an agreement of the type described
in this Section 8, and the Other Stockholders shall, as promptly as
practicable, enter into such agreements as shall be reasonably requested by
the Control Group for the sale of all the CHI Shares in the proposed sale.
Notwithstanding anything to the contrary in this Section 8, the sale proceeds
to which any of the Other Stockholders would otherwise be entitled by reason
of its participation in a sale pursuant to this Section 8 shall be reduced by
an amount equal to the product of (i) the percentage of CHI Shares to be sold
in the proposed sale owned by such Other Stockholder, multiplied by (ii) the
sum of any costs, fees and expenses, including, without limitation,
attorneys', accountants' and investment bankers' fees and expenses, incurred
by the Control Group in connection with the sale or the exercise of the
Control Group's rights under this Section 8.
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<PAGE>
Section 9. CERTAIN DEFINITIONS.
"AFFILIATE" means, with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person; "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
"HANDY FAMILY ENTITY" means any corporation, partnership, limited
liability company or trust wholly controlled by Handy and wholly owned
beneficially and of record by Handy and Handy's wife, children, grandchildren
and/or parents or a trust established for their benefit, provided such trust
is wholly controlled by Handy.
"MARKET PRICE" means the closing price of the Common Stock on the New
York Stock Exchange (or, if not trading on the New York Stock Exchange, such
other securities exchange or over the counter market on which the Company's
Common Stock is then trading) on the last trading day immediately prior to
the date of Samstock's receipt of the Notice of Intended Sale.
"MELMAN CONTROLLED ENTITY" means any corporation, partnership, limited
liability company or trust wholly controlled by Melman and at least in part
owned beneficially and of record by Melman and/or his wife, children,
grandchildren and/or parents or a trust established for their benefit,
provided such trust is wholly controlled by Melman.
"PERMITTED TRANSFEREE" means:
(i) with respect to the Transfer of CHI Shares by any SZ
Affiliate, any SZ Affiliate, any Affiliate of any SZ Affiliate, or any
stockholder, partner or member of any of the foregoing;
(ii) with respect to any Transfer of CHI Shares by Handy or FPH
Trustee, Handy or any Handy Family Entity; and
(iii) with respect to the Transfer of CHI Shares by MelChart, any
Melman Controlled Entity.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint-stock company, a
trust, a business trust, a government or any agency or any political
subdivision, any unincorporated organization or any other entity.
"PUBLIC SALE" means the sale of CHI Shares either in "broker's transactions"
within the meaning of Section 4(4) of the Securities Act of 1933, as amended,
or in transactions directly with a "market maker" as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended.
"TRANSFER" means any voluntary or involuntary, direct or indirect,
transfer, sale, assignment, donation, pledge, hypothecation, issuance, grant
of a security interest in or other disposition or attempted disposition of
CHI Shares or any right or interest whatsoever therein, including, without
limitation, by operation of law or otherwise, whether with or without
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<PAGE>
consideration or value, and whether for cash, other securities or other property
and specifically including any share for share or similar exchange; provided,
however, that:
(i) any pledge or hypothecation of or grant of security interest
in CHI Shares by any Stockholder which is either approved by Samstock in
writing prior to the pledge, hypothecation or grant of security interest or
is effected by any SZ Affiliate shall not constitute a "Transfer" of CHI
Shares for any purpose under this Agreement; and
(ii) any Transfer effected as a result of a Stockholder's death,
pursuant to the laws of descent and distribution, by operation of law or
otherwise, to such Stockholder's spouse, children, grandchildren and/or
parents or a trust or trusts established for their benefit, shall not
constitute a "Transfer" of CHI Shares for any purpose under this Agreement,
provided each transferee of CHI Shares executes a counterpart to this
Agreement, whereupon such transferee shall hold such CHI Shares subject to
all of the provisions of this Agreement, as if the transferor were the
holder of CHI Shares held by the transferee.
Section 10. NOTICES. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process
in regard hereto shall be in writing and shall be decreed to be validly
given, made or served when delivered personally or deposited in the U.S.
Mail, postage prepaid, for delivery by express, registered or certified mail,
or delivered to a recognized overnight courier service, addressed as follows:
If to the Company:
Chart House Enterprises, Inc.
640 North LaSalle Street, Suite 295
Chicago, Illinois 60610
Attn: Chief Executive Officer
With a copy to:
Seyfarth, Shaw, Fairweather & Geraldson
55 East Monroe Street
Suite 4200
Chicago, Illinois 60603
Attn: Robert F. Weber
If to any SZ Affiliate:
c/o Equity Group Investments, Inc.
Two North Riverside Plaza
Suite 1900
Chicago, Illinois 60606
Attn: F. Philip Handy
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<PAGE>
With a copy to:
Rosenberg & Liebentritt
Two North Riverside Plaza
Suite 1515
Chicago, Illinois 60606
Attn: Joseph M. Paolucci
If to any Handy Affiliate:
F. Philip Handy
222 West Comstock
Winter Park, Florida 32789
If to MelChart, LLC:
5419 N. Sheridan Road
Chicago, Illinois 60640
Attn: Richard Melman
With a copy to:
Michael Fox, Esq.
500 N. Dearborn Street
Chicago, Illinois 60610
or to such other address as may be specified in a notice given pursuant to this
Section 10.
Section 11. REMEDIES. Any party having rights under this Agreement may
enforce such rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. The parties agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and,
accordingly, in addition to all other remedies available to any party, such
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce, or prevent any violation of, the provisions of this Agreement.
Section 12. ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the Second Amended Standstill Agreement, constitutes the entire
agreement between the parties with respect to the subject matter hereof and
shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, successors and permitted assigns. Any
amendments, or alternative or supplementary provisions to this Agreement must be
made in writing and duly executed by an authorized representative or agent of
each of the parties hereto.
Section 13. NON-WAIVER. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege in this Agreement conferred,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a
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<PAGE>
subsequent waiver of any such terms, covenants, conditions, rights or
privileges, but the same shall continue and remain in full force and effect
as if no such forbearance or waiver had occurred. No waiver shall be
effective unless it is in writing and signed by an authorized representative
of the waiving party. A breach of any representation, warranty or covenant
shall not be affected by the fact that a more general or more specific
representation, warranty or covenant was not also breached.
Section 14. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
Section 15. SEVERABILITY. The invalidity of any provision of this
Agreement or portion of a provision shall not affect the validity of any
other provision of this Agreement or the remaining portion of the applicable
provision.
Section 16. APPLICABLE LAW. This Agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect
and in all other respects by the internal laws of the State of Illinois
applicable to contracts made in that State.
Section 17. BINDING EFFECT; BENEFIT, NON-CIRCUMVENTION. This Agreement
shall inure to the benefit of and be binding upon the parties hereto, and
their successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended to confer on any person other than the parties
hereto, and their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
No Stockholder shall take any action, alone or in concert with any other
person, to circumvent any of the provisions of this Agreement.
Section 18. ASSIGNABILITY. This Agreement shall not be assignable by
any party without the prior written consent of each of the other parties.
Section 19. HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
SAMSTOCK, L.L.C.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
SAMSTOCK/ZFT, L.L.C.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
EGI-CHART HOUSE INVESTORS, L.L.C.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
________________________________________________
F. Philip Handy, individually
________________________________________________
F. Philip Handy, as trustee of the Blaine Trust
MELCHART, LLC
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
CHART HOUSE ENTERPRISES, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
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EXHIBIT A
OWNERSHIP OF CHI SHARES
As of the date of the Amended and Restated Stockholders' Agreement, the
remaining 3,331,677 shares of common stock (the "CHI Shares") of Chart House
Enterprises, Inc. (the "Company") out of the 3,400,000 shares of common stock
of the Company originally acquired by EGI-Chart House Investors, L.L.C.,
f/k/a Chart House Investors, L.L.C., from the Company pursuant to that
certain Stock Purchase and Sale Agreement dated as of March 10, 1997, and
subsequently acquired, directly or indirectly, by sale, contribution,
distribution or otherwise by the other Stockholders are held by the
Stockholders as follows:
<TABLE>
<CAPTION>
Stockholder Number of Options
CHI Shares Held
- ------------ ---------------- --------
<S> <C> <C>
Samstock, L.L.C. 1,891,522
Samstock/ZFT, L.L.C. 705,808
EGI-Chart House Investors, L.L.C. 428,591
F. Philip Handy, as Trustee 103,539
of the Blaine Trust
F. Philip Handy, individually - 163,581 (1)
MelChart, LLC 202,217
- ------------- ----------------
Total 3,331,677
</TABLE>
- -------------------
(1) Represents options to acquire up to 163,581 CHI Shares held by Chart House
Investors, L.L.C.
