UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
LODGIAN, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
54021P106
(CUSIP Number)
Casuarina Cayman Holdings Ltd.
1994 William J. Yung Family Trust
William J. Yung
c/o Columbia Sussex Corporation
207 Grandview Drive
Fort Mitchell, Kentucky 41017
Attn: Mr. William J. Yung
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attn: James M. Dubin, Esq.
November 9, 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
[ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 54021P106 Page 2 of 17 Pages
---------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Casuarina Cayman Holdings Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP */ (a)[ ]
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS */
Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands, B.W.I.
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES */ [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14 TYPE OF REPORTING PERSON */
CO
- ----------
*/ See Instructions Before Filling Out
<PAGE>
SCHEDULE 13D
CUSIP No. 54021P106 Page 3 of 17 Pages
---------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
1994 William J. Yung Family Trust
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP */ (a)[X]
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS */
Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kentucky
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,598,100
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES */ [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.3215%
14 TYPE OF REPORTING PERSON */
OO
- ----------
*/ See Instructions Before Filling Out
<PAGE>
SCHEDULE 13D
CUSIP No. 54021P106 Page 4 of 17 Pages
---------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Joseph Yung, Investment Advisor to the 1994 William J. Yung Family
Trust
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP */ (a)[X]
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS */
Not Applicable
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 of America
7 SOLE VOTING POWER
NUMBER OF 2,546,138
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
2,546,138
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,598,100
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES */ [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.3215%
14 TYPE OF REPORTING PERSON */
IN
- ----------
*/ See Instructions Before Filling Out
<PAGE>
SCHEDULE 13D
CUSIP No. 54021P106 Page 5 of 17 Pages
---------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
William J. Yung
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP */ (a)[X]
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS */
Not Applicable
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 of America
7 SOLE VOTING POWER
NUMBER OF 51,962
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
51,962
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,598,100
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES */ [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.3215%
14 TYPE OF REPORTING PERSON */
IN
- ----------
*/ See Instructions Before Filling Out
<PAGE>
Page 6 of 17
Item 1. Security and Issuer.
Item 1 is restated in its entirety as follows.
This Schedule 13D relates to the Common Stock, par value $.01 per share
(the "Shares"), of Lodgian, Inc., a Delaware corporation. The address of
Lodgian, Inc.'s principal executive offices is Two Live Oak Center, 3445
Peachtree Road, N.E., Suite 700, Atlanta, Georgia 30326.
Item 2. Identity and Background.
The information below supplements the information previously reported
in Item 2.
This statement on Schedule 13D is being filed by the 1994 William J.
Yung Family Trust (the "Trust"), Joseph Yung (an individual), as Investment
Advisor to the Trust, and William J. Yung (an individual).
On November 9, 1999, Casuarina Cayman Holdings Ltd. ("Casuarina")
transferred all 2,598,100 of its Shares to its shareholders. Casuarina's
shareholders are the Trust and William J. Yung. Casuarina transferred 2,546,138
Shares to the Trust and 51,962 Shares to William J. Yung.
The Trust was organized under the laws of Kentucky. The business of the
Trust is to hold its assets for the beneficiaries of the Trust in accordance
with the Trust Agreement dated December 19, 1994 and to dispose of such assets
and make distributions to such beneficiaries in accordance with the Trust
Agreement.**/ The address of the Trust's principal office is 207 Grandview
Drive, Fort Mitchell, Kentucky 41017.
Joseph Yung is the Investment Advisor to the Trust. Joseph Yung's
principal occupation is Director of Development of Columbia Sussex Corporation.
Joseph Yung is a citizen of the United States of America.
William J. Yung's principal occupation is President and Chief Executive
Officer of Columbia Sussex Corporation. William J. Yung is a citizen of the
United States of America.
Columbia Sussex Corporation's principal business is owning and managing
hotels. The address of Columbia Sussex Corporation's principal office and Joseph
Yung is 207 Grandview Drive, Fort Mitchell, Kentucky 41017. The business address
of William J. Yung is 1200 Cypress Street, Cincinnati, Ohio 45206.
- --------
**/ The ultimate beneficiaries of the trust are William J. Yung's seven
children: Joseph Yung, Julie Yung, Judy Yung, Jenny Yung, Michelle
Yung, Scott Yung and William J. Yung, IV.
<PAGE>
Page 7 of 17
During the past five years, none of the Trust, Joseph Yung or William
J. Yung has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
During the past five years, none of the Trust, Joseph Yung or William
J. Yung has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding, was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The information below supplements the information previously reported
in Item 3.
No consideration was paid by either the Trust or William J. Yung for
the Shares transferred to them by Casuarina.
Item 4. Purpose of Transaction.
The information below replaces the information previously reported in
Item 4.
Casuarina and its affiliates have retained a financial advisor,
Greenhill & Co., LLC ("Greenhill"), to assist them in evaluating their strategic
alternatives in respect of their investment in Lodgian, Inc.
The pursuit of available strategic alternatives may result in (a) the
acquisition by any person of additional securities of Lodgian, Inc., including
by way of tender offer, or the disposition of securities of Lodgian, Inc.; (b)
an extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving Lodgian, Inc. or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of Lodgian, Inc. or any of its
subsidiaries; (d) a change in the present board of directors or management of
Lodgian, Inc. (which may include proxy solicitations by the Trust and William J.
Yung), including any plans or proposals to change the number or term of
directors or to fill any vacancies on the board; (e) a material change in the
present capitalization or dividend policy of Lodgian, Inc.; (f) a material
change in Lodgian, Inc.'s business or corporate structure; (g) changes in
Lodgian, Inc.'s charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of Lodgian, Inc. by any
person; (h) a class of securities of Lodgian, Inc. being delisted from a
national securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) the common stock of Lodgian, Inc. becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act; (j) a
proposal being placed before the stockholders of Lodgian, Inc. at an upcoming
annual or special meeting of stockholders in connection with any of the
foregoing; or (k) any action similar to the
<PAGE>
Page 8 of 17
foregoing. The Trust and William J. Yung may formulate a plan or proposal
relating to one or more of the foregoing matters.
William J. Yung may seek representation on the Board of Directors of
Lodgian, Inc. While William J. Yung has no specific plans or proposals relating
to obtaining representation on the Board of Directors of Lodgian, Inc., such
representation may involve a plan or proposal to change the number or term of
directors or to fill an existing vacancy on the Board and may involve
solicitation of proxies to obtain such representation.
Although the Trust and William J. Yung are actively exploring their
options with respect to each of the foregoing, there can be no assurance that
the Trust and William J. Yung will actually seek to implement any of the
foregoing.
Item 5. Interest in Securities of the Issuer.
The information below replaces the information previously reported in
Item 5.
(a) The Trust directly owns 2,546,138 Shares, which represents
approximately 9.1351% of the outstanding Shares. Joseph Yung, as Investment
Advisor to the Trust, may be deemed to have beneficial ownership of all the
Shares owned by the Trust. William J. Yung may, pursuant to Rule 13d-5 of the
Securities Exchange Act of 1934, be deemed to be the beneficial owner of the
2,546,138 shares owned directly by the Trust.
William J. Yung directly owns 51,962 Shares, which represents
approximately .1864% of the outstanding Shares. The Trust and Joseph Yung may,
pursuant to Rule 13d-5 of the Securities Exchange Act of 1934, be deemed to be
the beneficial owner of the 51,962 Shares owned directly by William J. Yung.
(b) Joseph Yung has the sole power to vote and the sole power
to dispose with respect to the 2,546,138 Shares owned directly by the Trust.
William J. Yung has the sole power to vote and the sole power to
dispose with respect to the 51,962 Shares owned directly by him.
(c) Set forth below is a schedule of transactions of the
Shares effected by Casuarina during the 60 days preceding the date of this
filing, all of which involved purchases of Shares by Casuarina which were made
through broker/dealer transactions.
Date of Transaction No. of Shares Purchase Price Per Share
- ------------------- ------------- ------------------------
October 4, 1999 210,000 200,000 @ $4
10,000 @ $3-7/8
October 6, 1999 625,800 625,800 @ $4
<PAGE>
Page 9 of 17
October 7, 1999 5,400 5,400 @ $4
October 8, 1999 13,900 13,900 @ $4
October 11, 1999 29,900 29,900 @ $4
October 12, 1999 88,300 88,300 @ $4
October 13, 1999 125,000 6,000 @ $4
10,000 @ $4-1/16
109,000 @ $4-1/8
October 14, 1999 35,000 35,000 @ $4-3/16
October 15, 1999 121,500 121,500 @ $4-1/4
On November 9, 1999, Casuarina transferred all of its Shares to its
shareholders. The shareholders of Casuarina are the Trust and William J. Yung.
Casuarina transferred 2,546,138 Shares to the Trust and 51,962 Shares to William
J. Yung. Neither the Trust nor William J. Yung paid any consideration to
Casuarina for such Shares.
(e) On November 9, 1999, Casuarina ceased to be the beneficial
owner of more than five percent of the outstanding Shares of Lodgian, Inc.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Casuarina and its affiliates have entered into an Engagement Letter
with Greenhill, dated November 10, 1999, under which Casuarina and its
affiliates have retained Greenhill to act as financial advisor in connection
with the evaluation of their strategic alternatives in respect of their
investment in Lodgian, Inc. The Engagement Letter is attached hereto as Exhibit
1.
Item 7. Material to be Filed as Exhibits.
The following Exhibit is filed with this Amendment No. 1:
Exhibit 1. Engagement Letter between Casuarina Cayman Holdings Ltd. and
Greenhill & Co., LLC, dated November 10, 1999
<PAGE>
Page 10 of 17
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 10, 1999
1994 William J. Yung Family Trust
By: The Fifth Third Bank,
as Trustee
By: /s/ Timothy A. Rodgers
------------------------
Name: Timothy A. Rodgers
Title: Trust Officer
/s/ Joseph Yung
---------------
Joseph Yung
/s/ William J. Yung
-------------------
William J. Yung
<PAGE>
Page 11 of 17
Exhibit Index
-------------
Exhibit Description
------- -----------
1 Engagement Letter between Casuarina
Cayman Holdings Ltd. and Greenhill &
Co., LLC, dated November 10, 1999
Page 12 of 17
EXHIBIT 1
November 10, 1999
Mr. William J. Yung
President
Casuarina Cayman Holdings Ltd.
c/o Columbia Sussex Corporation
207 Grandview Drive
Ft. Mitchell, KY 41017-2799
Dear Bill:
The purpose of this letter is to confirm the engagement of Greenhill & Co., LLC
("Greenhill") to act as exclusive financial advisor to Casuarina Cayman Holdings
Ltd. (together with any affiliates and subsidiaries, the "Company") in
connection with the evaluation of all of the Company's strategic alternatives in
respect of its investment in Lodgian, Inc. ("Lodgian") which may include,
without limitation, consummation of a Transaction. For purposes of this letter
agreement, a "Transaction" shall mean, whether in one or a series of
transactions, the acquisition or purchase by the Company and its partners,
directly or indirectly, of all or a significant portion of Lodgian, whether by
way of negotiated purchase, minority or majority investment, merger,
partnership, joint venture or otherwise. The Company hereby appoints Greenhill
with the exclusive right to advise on its strategic alternatives, including the
possibility of a Transaction involving Lodgian, including the arranging of the
Company's partners and lenders in any such Transaction that may arise.
1. In connection with its engagement hereunder, Greenhill shall:
a. review the business and operations of Lodgian and its historical and
projected financial results;
b. identify and contact potential partners for the Company in a
Transaction;
c. prepare and negotiate (and, if authorized, execute on behalf of the
Company) any confidentiality agreements to be entered into by
potential partners and other third parties in connection with a
Transaction;
d. assist the Company in negotiations with potential partners and/or
Lodgian related to a Transaction and evaluate and recommend
alternatives with respect to a Transaction;
e. assist the Company in the structuring, negotiating and closing
phases of the Transaction; and
<PAGE>
Page 13 of 17
f. provide such other financial advisory and investment banking
services as are customary for similar transactions and as may be
mutually agreed upon by the Company and Greenhill.
We are convinced that our numerous relationships with both financial
and strategic investors in the real estate industry as well as our
extensive experience in structuring and executing large corporate M&A
assignments will be of significant benefit to the Company in the
Transaction.
2. As compensation for Greenhill's services hereunder, the Company hereby
agrees to pay Greenhill the following fees:
a. Retainer Fee
A retainer fee of $250,000 (the "Retainer Fee"), payable in five
installments, with $50,000 to be paid at the time of the signing of
this Agreement and $50,000 to be paid in four monthly installments
beginning 30 days after signing as long as this Agreement remains in
effect. The Retainer Fee will be fully credited against the payment
of any Transaction Fee.
b. Transaction Fee
A transaction fee (the "Transaction Fee") equal to 60 basis points
(0.6%) of the Transaction Value. The Transaction Fee is payable in
cash promptly upon the consummation of a Transaction. Greenhill will
be paid the full amount of the Transaction Fee if, during the term
of this agreement or within 12 months thereafter, a Transaction is
consummated or a definitive agreement is entered into that
subsequently results in a Transaction.
For the purpose of calculating a Transaction Fee, "Transaction
Value" shall equal the total gross proceeds and other consideration
paid or to be paid in connection with a Transaction (which
consideration shall be deemed to include amounts in escrow, payments
made in installments, and contingent payments), including, without
limitation: (i) cash; (ii) notes, securities and other property;
(iii) liabilities, including all debt, pension liabilities and
guarantees, assumed or newly incurred in connection with the
Transaction; (iv) payments made in installments; (v) amounts paid or
payable under agreements not to compete or similar agreements; and
(vi) contingent payments (whether or not related to future earnings
or operations). For purposes of computing any fees payable to
Greenhill hereunder, non-cash consideration shall be valued as
follows: (x) publicly traded securities shall be valued at the
average of their closing prices (as reported in The Wall Street
Journal) for five trading days prior to the closing of the
Transaction and (y) any other non-cash consideration shall be valued
at the fair market value thereof as determined in good faith by the
Company and Greenhill.
<PAGE>
Page 14 of 17
3. In addition to any fees that may be payable to Greenhill hereunder (and
regardless of whether a Transaction occurs), the Company hereby agrees
from time to time upon request to reimburse Greenhill promptly for
travel and other reasonable out-of-pocket expenses incurred by
Greenhill in performing its services hereunder, including the
reasonable fees and expenses of its legal counsel.
4. The term of Greenhill's engagement as financial advisor and exclusive
agent to the Company for evaluating strategic alternatives involving
Lodgian shall commence on the date hereof and continue until the
earlier of (i) the consummation of a Transaction and (ii) twelve months
after the date hereof, unless extended by mutual written consent or
earlier terminated by either party upon prior written notice; provided,
however, that no such termination shall affect the indemnification,
contribution and confidentiality obligations of the Company, the right
of Greenhill to receive any fees payable hereunder or fees that have
accrued prior to such termination or the right of Greenhill to receive
reimbursement for its out-of-pocket expenses as described above.
5. The Company hereby agrees to indemnify Greenhill and related persons in
accordance with the indemnification letter attached hereto as Schedule
A, the provisions of which are incorporated herein by reference in
their entirety.
6. The Company recognizes and confirms that Greenhill in acting pursuant
to this engagement will be using information in reports and other
information provided by others, including, without limitation,
information provided by or on behalf of Lodgian or the Company, and
that Greenhill does not assume responsibility for and may rely, without
independent verification, on the accuracy and completeness of any such
reports and information. The Company hereby warrants that any
information relating to the Company that is furnished to Greenhill by
or on behalf of the Company will be fair, accurate and complete and
will not contain any material omissions or misstatements of fact. The
Company agrees that any information or advice rendered by Greenhill or
its representatives in connection with this engagement is for the
confidential use of the Company only in its evaluation of its strategic
alternatives, which may include a Transaction, and, except as otherwise
required by law, the Company will not, and will not permit any third
party to, disclose or otherwise refer to such advice or information in
any manner without Greenhill's written consent.
7. Following the closing of a Transaction, Greenhill may, at its own
expense, place announcements or advertisements in financial newspapers
and journals describing its services hereunder.
8. This agreement (a) shall be governed by and construed in accordance
with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law
thereof, (b) incorporates the entire understanding of the parties with
respect to the subject matter hereof and supersedes all previous
agreements should they exist with respect thereto, (c) may not be
<PAGE>
Page 15 of 17
amended or modified except in a writing executed by the Company and
Greenhill and (d) shall be binding upon and inure to the benefit of the
Company, Greenhill, the other Indemnified Parties (as defined in
Schedule A) and their respective successors and assigns. The Company
and Greenhill agree to waive trial by jury in any action, proceeding or
counterclaim brought by or on behalf of either party with respect to
any matter whatsoever relating to or arising out of any actual or
proposed Transaction or the engagement of or performance by Greenhill
hereunder. The Company acknowledges that Greenhill in connection with
its engagement hereunder is acting as an independent contractor with
duties owing solely to the Company and that nothing in this agreement
is intended to confer upon any other person any rights or remedies
hereunder or by reason hereof.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which shall constitute one and the same
Agreement. Please confirm that the foregoing is in accordance with your
understanding of our Agreement by signing both enclosed copies and returning to
us a fully executed copy of this Agreement. My colleagues and I look forward to
working with you on this important assignment.
Very best regards,
GREENHILL & CO., LLC
By: /s/ Peter C. Krause
-------------------
Peter C. Krause
Managing Director
Accepted and agreed to as of the date set forth above:
CASUARINA CAYMAN HOLDINGS LTD.
By: /s/ William J. Yung
-------------------
Name: William J. Yung
Title: President
<PAGE>
Page 16 of 17
SCHEDULE A
INDEMNIFICATION
Recognizing that transactions of the type contemplated in this engagement
sometimes result in litigation and that Greenhill's role is advisory, the
Company agrees to indemnify and hold harmless Greenhill, its affiliates and
their respective officers, directors, employees, agents and controlling persons
(collectively, the "Indemnified Parties"), from and against any losses, claims,
damages and liabilities, joint or several, related to or arising in any manner
out of any transaction, proposal or any other matter (collectively, the
"Matters") contemplated by the engagement of Greenhill hereunder, and will
promptly reimburse the Indemnified Parties for all expenses (including fees and
expenses of legal counsel) as incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim related to or
arising in any manner out of any Matter contemplated by the engagement of
Greenhill hereunder, or any action or proceeding arising therefrom
(collectively, "Proceedings"), whether or not such Indemnified Party is a formal
party to any such Proceeding. Notwithstanding the foregoing, the Company shall
not be liable in respect of any losses, claims, damages, liabilities or expenses
that a court of competent jurisdiction shall have determined by final judgment
resulted solely from the gross negligence or willful misconduct of an
Indemnified Party. The Company further agrees that it will not, without prior
written consent of Greenhill, settle, compromise or consent to the entry of any
judgment in any pending or threatened Proceeding in respect of which
indemnification may be sought hereunder (whether or not Greenhill or any
Indemnified Party is an actual or potential party to such Proceeding), unless
such settlement, compromise or consent includes an unconditional release of
Greenhill and each other Indemnified Party hereunder from all liability arising
out of such Proceeding.
The Company agrees that if any indemnification or reimbursement sought pursuant
to this letter were for any reason not to be available to any Indemnified party
or insufficient to hold it harmless as and to the extent contemplated by this
letter, then the Company shall contribute to the amount paid or payable by such
Indemnified Party in respect of losses, claims, damages and liabilities in such
proportion as is appropriate to reflect the relative benefits to the Company and
its stockholders on the one hand, and Greenhill on the other, in connection with
the Matters to which such indemnification or reimbursement relates or, if such
allocation is not permitted by applicable law, not only such relative benefits
but also the relative faults of such parties as well as any other equitable
considerations. It is hereby agreed that the relative benefits to the Company
and/or its stockholders and to Greenhill with respect to Greenhill's engagement
shall be deemed to be in the same proportion as (i) the total value paid or
received or to be paid or received by the Company and/or its stockholders
pursuant to the Matters (whether or not consummated) for which Greenhill is
engaged to render financial advisory services bears to
<PAGE>
Page 17 of 17
(ii) the fees paid to Greenhill in connection with such engagement. In no event
shall the Indemnified Parties contribute or otherwise be liable for an amount in
excess of the aggregate amount of fees actually received by Greenhill pursuant
to such engagement (excluding amounts received by Greenhill as reimbursement of
expenses).
The Company further agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with Greenhill's engagement hereunder except for losses,
claims, damages, liabilities or expenses that a court of competent jurisdiction
shall have determined by final judgment resulted from the gross negligence or
willful misconduct of such Indemnified Party. The indemnity, reimbursement and
contribution obligations of the Company shall be in addition to any liability
which the Company may otherwise have and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Company or an Indemnified Party.
The indemnity, reimbursement and contribution provisions set forth herein shall
remain operative and in full force and effect regardless of (i) any withdrawal,
termination or consummation of or failure to initiate or consummate any Matter
referred to herein, (ii) any investigation made by or on behalf of any party
hereto or any person controlling (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended) any party hereto, (iii) any termination or the completion
or expiration of this letter or Greenhill's engagement and (iv) whether or not
Greenhill shall, or shall not be called upon to, render any formal or informal
advice in the course of such engagement.
Very truly yours,
GREENHILL & CO., LLC
By: /s/ Peter C. Krause
-------------------
Peter C. Krause
Managing Director
Accepted and agreed to as of the date set forth above:
CASUARINA CAYMAN HOLDINGS LTD.
By: /s/ William J. Yung
-------------------
Name: William J. Yung
Title: President
