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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 1)
QUALITY DINING, INC.
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(Name of Issuer)
COMMON STOCK, WITHOUT PAR VALUE 74756P 10 5
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(Title of class of securities) (CUSIP number)
DAVID E. ZELTNER, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NY 10153
(212) 310-8000
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(Name, address and telephone number of person authorized to receive notices and
communications)
MARCH 17, 1997
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(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: When filing this statement in paper format, six copies of this statement,
including exhibits, should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
Continued on Following Pages
Page 1 of 15 Pages
Exhibit Index Appears on Page 10
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CUSIP No. 74756P 10 5 13D Page 2 of 15
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1 NAME OF REPORTING PERSON: NORDAHL L. BRUE
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [_]
PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF UNITED STATES OF AMERICA
ORGANIZATION:
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NUMBER OF 7 SOLE VOTING POWER: 2,149,625*
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER: 2,149,625*
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 2,149,625*
REPORTING PERSON:
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_]
SHARES:
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 12.7%
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14 TYPE OF REPORTING PERSON: IN
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*Includes 2,586 shares which Mr. Brue holds as custodian for his minor
child.
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CUSIP No. 74756P 10 5 13D Page 3 of 15
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1 NAME OF REPORTING PERSON: MICHAEL J. DRESSELL
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [_]
PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF UNITED STATES OF AMERICA
ORGANIZATION:
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NUMBER OF 7 SOLE VOTING POWER: 2,163,701
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER: 2,163,701
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 2,163,701
REPORTING PERSON:
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_]
SHARES:
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 12.8%
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14 TYPE OF REPORTING PERSON: IN
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CUSIP No. 74756P 10 5 13D Page 4 of 15
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1 NAME OF REPORTING PERSON: STEVEN P. SCHONBERG
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [_]
PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF UNITED STATES OF AMERICA
ORGANIZATION:
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NUMBER OF 7 SOLE VOTING POWER: 11,724
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER: 11,724
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 11,724
REPORTING PERSON:
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [_]
SHARES:
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): LESS THAN
0.1%
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14 TYPE OF REPORTING PERSON: IN
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This Statement amends and restates the respective Statements on
Schedule 13D (collectively, the "Schedule 13D") filed with the Securities and
Exchange Commission (the "Commission") by each of Nordahl L. Brue and Michael J.
Dressell with respect to their beneficial ownership of the common stock, without
par value (the "Common Stock"), of Quality Dining, Inc., an Indiana corporation
(the "Company"), and includes information regarding the beneficial ownership of
the Company's Common Stock by Steven P. Schonberg. For purposes hereof, Messrs.
Brue, Dressell and Schonberg are referred to collectively as the "Reporting
Persons".
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is
the Common Stock of the Company, whose principal executive offices are located
at 3820 Edison Lakes Parkway, Mishawaka, Indiana 46545.
The percentages of beneficial ownership reflected in this Schedule
13D is based upon 16,909,609 shares of Common Stock outstanding as of January
20, 1997.
Item 2. Identity and Background.
This statement is being filed by and on behalf of the Reporting
Persons. The principal occupation of each of Mr. Brue and Mr. Dressell is
entrepreneur, and the principal occupation of Mr. Schonberg is President of
Champlain Management Services, Inc. ("Champlain"), a Delaware corporation that
is owned and controlled by Messrs. Brue and Dressell and that is engaged in the
provision of management services to certain franchisees of the Company's
Bruegger's Bagel Bakery ("Bruegger's") franchises and other businesses. During
the last five years, none of the Reporting Persons has (i) been convicted in a
criminal proceeding or (ii) 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. The
business address of Mr. Brue is c/o Sheehey Brue Gray & Furlong, 119 South
Winooski Avenue, Burlington, Vermont 05402. The business address of Messrs.
Dressell and Schonberg is c/o Champlain Management Services, Inc., 159 Bank
Street, 3rd Floor, Burlington, Vermont 05402. Messrs. Brue, Dressell and
Schonberg are citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
Prior to the merger of BAC, Inc., a wholly-owned subsidiary of the
Company, with and into Bruegger's Corporation on June 7, 1996 (the "Merger"),
Mr. Brue owned 1,662,382 shares of Bruegger's Corporation's common stock, $.001
par value per share ("Bruegger's Common Stock"), Mr. Dressell owned 1,673,267
shares of Bruegger's Common Stock and Mr. Schonberg owned 40,000 shares of
Bruegger's Common Stock. At the effective time of the Merger, each share of
Bruegger's Common Stock was converted into 1.2931 shares of the Company's Common
Stock and, accordingly, the Reporting Persons acquired shares of the Company's
Common Stock, including the shares reported in Item 5 hereof.
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Item 4. Purpose of Transaction.
The information contained in Items 3 and 6 hereof is incorporated
herein by reference.
Messrs. Brue and Dressell, by letters dated February 11, 1997,
resigned as directors of the Company. Messrs. Brue, Dressell and their
affiliates, taken together, operate in excess of 150 Bruegger's and constitute
the Company's largest franchisee and, at the time of their resignations as
directors, Messrs. Brue and Dressell intended to focus their business time and
attention primarily on the operations of the Bruegger's system. However, since
their resignations, Messrs. Brue and Dressell have become increasingly concerned
with the operation of the Company as a whole, including (i) the declining market
prices of the Company's Common Stock, (ii) the fact that, in their judgment,
management of the Company does not have a viable plan to grow, or to finance the
growth of, its business as owner, operator and franchisor of Bruegger's Bagel
Bakery (the "Bagel Business"), which the Company acquired from the Reporting
Persons in the Merger, and (iii) their view that, in general, the Company lacks
strategic direction. Subsequent to their resignations, Messrs. Brue and Dressell
have been considering what alternatives are available to the Company to enhance
stockholder value.
Messrs. Brue and Dressell have not yet reached a determination as to
what actions should be taken to maximize the value of the Company's Common
Stock. In order to reach such a determination, they have engaged the investment
banking firm of Gleacher NatWest Inc. ("Gleacher NatWest") to, among other
things, analyze the Company, its capital structure, its relevant markets and
other industry participants, and to develop suggestions as to alternatives that
might maximize the value of the Company's Common Stock and their investment in
the Company. The Reporting Persons, and Gleacher NatWest on the Reporting
Persons' behalf, may contact the Company, third parties and/or other
stockholders as to their interest in any such alternatives. A copy of the
engagement letter dated March 17, 1997 between Mr. Brue, Mr. Dressell and
Gleacher NatWest (the "Gleacher NatWest Engagement Letter") is filed as an
exhibit hereto and is hereby incorporated herein by reference.
With a view toward ensuring that meaningful consideration is given
by the Company to any alternative courses of action that may be proposed, the
Reporting Persons are also considering the nomination of three Directors at the
annual meeting of shareholders of the Company scheduled to be held March 26,
1997, at which three current Directors are slated for reelection. The Reporting
Persons have not yet determined to make any such nomination nor have they
identified any persons who might be so nominated. The Reporting Persons' future
course of action will be influenced by the Company's willingness to consider any
proposals that may be made by the Reporting Persons.
Although no plan or proposal has been adopted, the Reporting
Persons, with the assistance of Gleacher NatWest, intend to explore whether the
value of the Company's equity might best be enhanced through, among other
things, one or more of the following alternatives: (i) the separation of the
Bagel Business from the non-bagel operations of the Company through the sale of
the non-bagel operations, including its Grady's American Grill(R), Spageddies
Italian Kitchen(R) and Papa Vino's Italian Kitchen(R) restaurants and its Burger
King(R) and Chili's(R) franchises, and the use of the proceeds from such sale to
reduce the Company's indebtedness and to expand the Bagel Business; (ii) the
spin-off of the Company's non-bagel operations, together with a substantial
portion of the Company's indebtedness, to the Company's stockholders as a
separate public company,
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thereby permitting the Bagel Business to be financed and developed as an
independent public company; (iii) a recapitalization of the Company through the
infusion of additional equity (either offered to the public or privately
placed), followed by the separation of the Bagel Business and the Company's
non-bagel operations; or (iv) a sale of the Company through a merger, sale of
capital stock or assets or otherwise.
Although it is not the Reporting Persons' present intention to do
so, the Reporting Persons may acquire additional shares of the Company's Common
Stock (subject to availability of shares at prices deemed favorable) in the open
market, in privately negotiated transactions or otherwise; alternatively, the
Reporting Persons reserve the right to dispose of some or all of their shares of
the Company's Common Stock in the open market or in privately negotiated
transactions to third parties or otherwise depending upon the course of action
that the Reporting Persons pursue, market conditions and other factors.
Although the foregoing represents the range of activities presently
contemplated by the Reporting Persons with respect to the Common Stock, it
should be noted that the possible activities of the Reporting Persons are
subject to change at any time. Except as set forth above, the Registrants have
no present plans or intentions which would result in or relate to any of the
transactions required to be described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of the date of this Statement, the Reporting Persons
beneficially owned, in the aggregate, 4,325,050 shares of the
Company's Common Stock, constituting 25.6% of the outstanding
shares.
(b) Mr. Brue has sole voting and dispositive power with respect
to the 2,149,625 shares of the Company's Common Stock (which
includes 2,586 shares that he holds as custodian for his
minor child and over which he, alone, has voting and
dispositive power). This number constitutes 12.7% of the
outstanding shares. Mr. Dressell has sole voting and
dispositive power with respect to the 2,163,701 shares of
the Company's Common Stock, which constitutes 12.8% of the
outstanding shares. Mr. Schonberg has sole voting and
dispositive power with respect to 11,724 shares of the
Company's Common Stock, which constitutes less than one-
tenth of one percent of the outstanding shares.
(c) None of the Reporting Persons has effected any transaction in
the shares of the Company's Common Stock in the past 60 days.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds
from the sale of, any such shares of the Company's Common
Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
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Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Reporting Persons
or between the Reporting Persons and any other person with respect to any
securities of the Company, including but not limited to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
losses, or the giving or withholding of proxies.
None of the Reporting Persons has any right or power, directly or
indirectly, to vote or direct the voting of, or dispose or direct the
disposition of, the shares of the Company's Common Stock beneficially owned by
any other Reporting Person, and none of the Reporting Persons has any direct or
indirect economic interest in the shares of the Company's Common Stock
beneficially owned by any other Reporting Person. Nevertheless, because Messrs.
Brue and Dressell are acting together in considering and discussing with others
alternatives to maximize the value of the Company's Common Stock and their
investment in the Company, and have jointly retained Gleacher NatWest and legal
counsel with respect thereto, they may be deemed to be a "group" for purposes of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In addition, because Mr. Schonberg has joined with Messrs. Brue and
Dressell in considering and discussing alternatives among themselves and with
others, and because he is employed by Champlain, an affiliate of Messrs. Brue
and Dressell, Mr. Schonberg may be deemed to be part of a "group" with Messrs.
Brue and Dressell for purposes of Rule 13d-3 under the Exchange Act.
Each of Mr. Brue and Mr. Dressell borrowed, during the period August
1996 through January 1997 and for purposes other than acquiring shares of the
Company's Common Stock, a total of $6,850,000 from The Chase Manhattan Bank and
each has pledged his shares of the Company's Common Stock to such bank as
collateral security for such loan.
As described in Item 4 hereof, Messrs. Brue and Dressell retained
Gleacher NatWest pursuant to the Gleacher NatWest Engagement Letter, which is
filed as an exhibit hereto and incorporated herein by reference, to develop
suggestions as to alternatives that might maximize the value of the Company's
Common Stock and their investment in the Company.
Item 7. Materials to be Filed as Exhibits.
The following are filed herewith as Exhibits to this Schedule 13D:
1. Joint Filing Agreement among Nordahl L. Brue, Michael J. Dressell and
Steven P. Schonberg dated March 17, 1997.
2. Engagement Letter Agreement dated March 17, 1997, among Nordahl L.
Brue, Michael J. Dressell, and Gleacher NatWest Inc.
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SIGNATURES
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: March 17, 1997
By: /s/ Nordahl L. Brue
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Nordahl L. Brue
By: /s/ Michael J. Dressell
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Michael J. Dressell
By: /s/ Steven P. Schonberg
---------------------------
Steven P. Schonberg
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EXHIBIT INDEX
Item No. Page No.
1. Joint Filing Agreement among Nordahl L. Brue, Michael J. Dressell and
Steven P. Schonberg dated March 17, 1997.
2. Engagement Letter Agreement, dated March 17, 1997, among Nordahl L.
Brue, Michael J. Dressell and Gleacher NatWest Inc.
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NYFS08...:\68\31468\0003\1867\SCH3147L.55C
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act
of 1934, as amended, the persons named below agree to the joint filing, on
behalf of each of them, of a statement and/or amendment to statement on Schedule
13D (including further amendments thereto) with respect to the common stock, no
par value, of Quality Dining, Inc., and further agree that this Joint Filing
Agreement be included as an Exhibit to such joint filing. In evidence thereof,
the undersigned, hereby execute this Agreement this 17th day of March, 1997.
By: /s/ Nordahl L. Brue
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Nordahl L. Brue
By: /s/ Michael J. Dressell
-------------------------
Michael J. Dressell
By: /s/ Steven P. Schonberg
-------------------------
Steven P. Schonberg
11
March 17, 1997
ULYSSES
c/o Sheehey Brue Gray & Furlong
P.O. Box 66
Burlington, Vermont 05402
Attn: Nordahl L. Brue
Michael J. Dressell
Dear Nord and Michael:
We are pleased to confirm the arrangements under which Gleacher NatWest Inc.
("Gleacher NatWest") has been engaged by Nordahl L. Brue and Michael J. Dressell
(collectively "Ulysses") as its exclusive financial advisor to advise Ulysses on
maximizing the value of its investment in a company known to the parties as
Penelope ("Penelope").
During the term of its engagement hereunder, Gleacher NatWest will, upon
request, provide Ulysses and its affiliates with strategic and financial advice
including, but not limited to: (i) definition of key objectives for Ulysses;
(ii) valuation analysis; (iii) market and industry analysis; (iv) assistance in
developing, planning and executing potential alternatives; and (v) contacting
Penelope, third parties and/or other stockholders as to their interest in any
such alternatives.
COMPENSATION
Our compensation structure is set forth below. Our fees depend on the outcome of
the assignment and are designed to reflect the collective contribution of
Gleacher NatWest's efforts to Ulysses' objectives.
(1) A retainer fee (the "Retainer Fee") of $100,000 per month for a period of
five months, unless mutually terminated within the first month, with the
first payment payable upon the execution of this letter agreement.
(2) An announcement fee (the "Announcement Fee") of $250,000 payable upon
Ulysses' or its affiliates' taking a public position in Penelope requiring
SEC documentation (excluding 13D and Section 16 filings).
(3) In the event Ulysses or its affiliates gains control of Penelope through
either removing some or all of the members of Penelope's Board of
Directors or some other means, subject to the Board of Directors
fulfilling their fiduciary duties, Gleacher NatWest will have the right to
be the exclusive financial advisor and provide financing for a one-year
period on issues related to Penelope or Ulysses investment in Penelope
unless Gleacher NatWest declines or cannot provide such advice on market
terms. Customary terms will be pursuant to a separate engagement letter.
OTHER MATTERS
In addition to any fees that may be payable to Gleacher NatWest, Ulysses agrees
to reimburse Gleacher NatWest for all reasonable and documented travel and other
out-of-pocket expenses incurred by Gleacher NatWest in connection with Gleacher
NatWest's engagement hereunder, including all reasonable fees and
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Ulysses
March 17, 1997
Page 2
disbursements of Gleacher NatWest's legal counsel and any other professional
advisors, provided that the retention of such professional advisors has been
approved by Ulysses. In addition to such compensation described above, Ulysses
shall reimburse Gleacher NatWest at such times as Gleacher NatWest shall
request, for any applicable sales, use or similar taxes arising in connection
with this assignment as and when such taxes become due and payable.
Ulysses recognizes and confirms that in advising Ulysses in completing its
engagement hereunder, Gleacher NatWest will be using and relying on data,
material and other information furnished to Gleacher NatWest by Ulysses. It is
understood that in performing under this engagement Gleacher NatWest may
reasonably rely upon any information so supplied without independent
verification and that Gleacher NatWest shall not have any responsibility for
such independent verification.
Ulysses acknowledges that all advice given by Gleacher NatWest in connection
with its engagement hereunder is intended solely for the benefit and use of
Ulysses in evaluating potential alternatives and strategies to maximize the
value of their investment in Penelope to which such advice relates and, except
as may be required by applicable law, Ulysses agrees that no such advice shall
be used for any other purpose or be reproduced, disseminated, quoted or referred
to at any time, in any manner or for any purpose, nor shall any public
references to Gleacher NatWest be made by or on behalf of Ulysses, in each case
without Gleacher NatWest's prior written consent.
Ulysses recognizes that Gleacher NatWest has been retained only by Ulysses and
that its engagement is not deemed to be on behalf of, and is not intended to
confer any rights or bestow the status of third-party beneficiary upon any other
person not a party hereto as against Gleacher NatWest or any of its affiliates,
respective limited and general partners, directors, officers, agents and
employees of Gleacher NatWest or its affiliates or each other person, if any,
controlling Gleacher NatWest or any of its affiliates. Unless otherwise
expressly stated in writing by Gleacher NatWest, no advice or opinions rendered
to Ulysses during the course of the engagement hereunder shall constitute a
recommendation to any other party and no one other than Ulysses is authorized to
rely upon the engagement of Gleacher NatWest or any statements or conduct by
Gleacher NatWest. Moreover, it is acknowledged that the relationship of Gleacher
NatWest to Ulysses is that of an independent contractor, that the obligations
and responsibilities of Gleacher NatWest to Ulysses are limited to those
specifically set forth herein, and that Gleacher NatWest, by entering into this
agreement and satisfying its obligations hereunder, does not assume any
fiduciary duties with respect to Ulysses. All decisions made with respect to the
potential alternatives and strategies, whether or not consistent with advice
rendered by Gleacher NatWest, shall be those of Ulysses.
In connection with matters described in this letter, Ulysses and Gleacher
NatWest have entered into a separate letter agreement, dated the date hereof,
providing for indemnification, contribution and reimbursement of Gleacher
NatWest and certain other individuals and entities, a copy of which is attached
hereto.
Any right to trial by jury with respect to any claim or action arising out of
this agreement or conduct in connection with the engagement is hereby waived by
the parties hereto and their affiliates. This agreement shall be deemed made in
New York. This agreement and all controversies arising from or related to
performance under this agreement shall be governed by the laws of the state of
New York, without regard to such state's rules concerning conflicts of laws. All
controversies arising from or related to performance under this agreement shall
be adjudicated in State or Federal court within the State of New York.
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Ulysses
March 17, 1997
Page 3
Gleacher NatWest's services hereunder may be terminated with or without cause by
Ulysses or by Gleacher NatWest with cause (in each case by 14 days' advance
notice in writing to the other party except if mutually terminated within the
first month) at any time. Upon termination, this agreement shall have no further
force or effect except that (i) any fees or other consideration earned or
payable as of the date of termination and any out-of-pocket expenses incurred by
Gleacher NatWest prior to the date of termination which are required to be
reimbursed hereunder shall be paid or reimbursed in accordance with the terms of
this agreement; and (ii) the indemnity, contribution and other provisions as
contained in the attached letter agreement shall continue to apply
notwithstanding termination.
The rights and obligations of Ulysses under this agreement shall be assignable
and delegable to an entity controlled by Ulysses upon prior written notice to
and approval from Gleacher NatWest.
Very truly yours,
GLEACHER NATWEST INC.
/s/ Michiel C. McCarty
----------------------
Michiel C. McCarty
Managing Director
Accept and Agreed to:
ULYSSES
By: /s/ Nordahl L. Brue
-----------------------
Nordahl L. Brue
By: /s/ Michael J. Dressell
-----------------------
Michael J. Dressell
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GLEACHER NATWEST INC.
660 MADISON AVENUE
NEW YORK, NEW YORK 10021
Gentlemen:
In connection with the activities of Gleacher NatWest Inc. ("Gleacher NatWest")
pursuant to a letter agreement, dated as of the date hereof, between Ulysses and
Gleacher NatWest, as the same may be amended from time to time, including
without limitation any activities of Gleacher NatWest in connection with any
transaction contemplated by such letter agreement, whether occurring before, at
or after the date hereof, Ulysses agrees to indemnify and hold harmless Gleacher
NatWest and its affiliates, the respective limited and general partners,
directors, officers, agents and employees of Gleacher NatWest and its affiliates
and each other person, if any, controlling Gleacher NatWest or any of its
affiliates (hereinafter collectively referred to as the "indemnified parties"),
to the full extent lawful, from and against any losses, damages, liabilities,
expenses or claims (or actions in respect thereof, including, without
limitation, shareholder and derivative actions and arbitration proceedings)
related to or otherwise arising out of such engagement or Gleacher NatWest's
role in connection therewith, and will reimburse any indemnified party for all
expenses (including counsel fees and disbursements) as they are incurred by any
indemnified party in connection with investigating, preparing or defending any
claim, action, proceeding or investigation, whether or not in connection with
pending or threatened litigation to which any indemnified party is a party,
arising in connection with or related to Gleacher NatWest's engagement or
Gleacher NatWest's role in connection therewith. Ulysses will not, however, be
responsible for any losses, damages, liabilities, expenses or claims which are
finally judicially determined to have resulted primarily from Gleacher NatWest's
bad faith or gross negligence. Ulysses also agrees that no indemnified party
will have any liability (whether direct or indirect, in contract, tort or
otherwise) to Ulysses for or in connection with such engagement except for any
such liability for losses, damages, liabilities, expenses or claims incurred by
Ulysses that result primarily from Gleacher NatWest's bad faith or gross
negligence. If multiple claims are brought against any indemnified party in an
arbitration, with respect to at least one of which indemnification is permitted
under applicable law and provided for under this agreement, Ulysses agrees that
any arbitration award shall be conclusively deemed to be based on claims as to
which indemnification is permitted and provided for, except to the extent the
arbitration award expressly states that the award, or any portion thereof, is
based solely on a claim as to which indemnification is not available.
In the event that the foregoing indemnity is unavailable to any indemnified
party for any reason or insufficient to hold any indemnified party harmless,
then Ulysses agrees to contribute to any such losses, damages, liabilities,
expenses, claims or actions and will do so in such proportion as is appropriate
to reflect the relative benefits received (or anticipated to be received) by,
and the relative fault of, the indemnified parties, on the one hand, and
Ulysses, on the other, as well as any other relevant equitable considerations,
from any actual or proposed transaction. Ulysses and Gleacher NatWest agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above.
Ulysses agrees that it will not, without the prior written consent of Gleacher
NatWest, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not Gleacher NatWest is an actual or potential party to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of Gleacher NatWest from all liability arising out of such
claim, action, suit or proceeding. Ulysses will also promptly reimburse Gleacher
NatWest for all expenses (including counsel fees) as they are incurred in
connection with investigating, preparing or defending, or providing evidence in,
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not Gleacher
NatWest is an actual or potential party to such claim or action).
The foregoing agreement shall be in addition to any rights that any indemnified
party may have at common law or otherwise, and shall be in addition to any
liability which Ulysses may otherwise have. Ulysses hereby consents to personal
jurisdiction, service and venue in any court in which any claim which is subject
to this agreement is brought against Gleacher NatWest or Ulysses. ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF THIS AGREEMENT
IS WAIVED. This agreement shall remain in full force and effect following the
completion or termination of Gleacher NatWest's engagement and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of Ulysses and any indemnified party.
Very truly yours
Accepted:, Accepted:
NORDAHL L. BRUE GLEACHER NATWEST INC.
- ----------------------------- -------------------------------
By:/s/ Nordahl L. Brue By: /s/ Michiel C. McCarty
MICHAEL J. DRESSELL Date: March 17, 1997
- -----------------------------
By:/s/ Michael J. Dressell
Date:March 17, 1997
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