-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ats8dHQAP2i0iG34gY+/mq7CtETHRZlQWdfBarl/nE2mEIlXXomF1Xe7nHUL8ii4 bSL5HuriQLiSQoSlaaHarw== 0000950134-03-009398.txt : 20030623 0000950134-03-009398.hdr.sgml : 20030623 20030623171351 ACCESSION NUMBER: 0000950134-03-009398 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030623 GROUP MEMBERS: DAVID EINHORN GROUP MEMBERS: GREENLIGHT CAPITAL INC GROUP MEMBERS: GUY W ADAMS GROUP MEMBERS: SAUL E DIAMOND SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MERCER INTERNATIONAL INC CENTRAL INDEX KEY: 0000075659 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 916087550 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-36414 FILM NUMBER: 03753832 BUSINESS ADDRESS: STREET 1: 14900 INTERURBAN AVENUE SOUTH STREET 2: SUITE 282 CITY: SEATTLE STATE: WA ZIP: 98168 BUSINESS PHONE: 2066744639 MAIL ADDRESS: STREET 1: 14900 INTERURBAN AVENUE SOUTH STREET 2: SUITE 282 CITY: SEATTLE STATE: WA ZIP: 98168 FORMER COMPANY: FORMER CONFORMED NAME: ASIAMERICA EQUITIES LTD DATE OF NAME CHANGE: 19920109 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC WEST REALTY TRUST DATE OF NAME CHANGE: 19860219 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GREENLIGHT CAPITAL LLC CENTRAL INDEX KEY: 0001040272 IRS NUMBER: 133886851 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 420 LEXINGTON AVE SUITE 875 CITY: NEW YORK STATE: NY ZIP: 10170 BUSINESS PHONE: 2129731900 MAIL ADDRESS: STREET 1: 420 LEXINGTON AVENUE STREET 2: SUITE 875 CITY: NEW YORK STATE: NY ZIP: 10170 SC 13D 1 d06946sc13d.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) Under the Securities Exchange Act of 1934 MERCER INTERNATIONAL INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Shares, $1.00 par value per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 5880561015 - -------------------------------------------------------------------------------- (CUSIP NUMBER) Greenlight Capital, L.L.C. 420 Lexington Avenue, Suite 1740 New York, New York 10170 Tel. No.: (212) 973-1900 Attention: Chief Operating Officer - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - with copies to - Eliot D. Raffkind Akin Gump Strauss Hauer & Feld LLP 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201-4618 (214) 969-2800 June 20, 2003 - -------------------------------------------------------------------------------- (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(e), 13d-1(f) or 13d-1(g) check the following box [X] The information required in 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, as amended (the "Act"), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. Page 1 of 13 CUSIP No. 640497103 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Greenlight Capital, L.L.C. 13-3886851 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 1,286,700 OWNED BY ----------------------------------------- EACH REPORTING 8 SHARED VOTING POWER PERSON WITH 0 ----------------------------------------- 9 SOLE DISPOSITIVE POWER 1,286,700 ----------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,286,700 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT Page 2 of 13 CUSIP No. 640497103 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) David Einhorn - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 2,517,500 OWNED BY ----------------------------------------- EACH REPORTING 8 SHARED VOTING POWER PERSON WITH 0 ----------------------------------------- 9 SOLE DISPOSITIVE POWER 2,517,500 ----------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,517,500 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.9% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT Page 3 of 13 CUSIP No. 640497103 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Greenlight Capital, Inc. 13-3871632 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 1,230,800 OWNED BY ----------------------------------------- EACH REPORTING 8 SHARED VOTING POWER PERSON WITH 0 ----------------------------------------- 9 SOLE DISPOSITIVE POWER 1,230,800 ----------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,230,800 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT Page 4 of 13 CUSIP No. 640497103 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Saul E. Diamond - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 50,000 OWNED BY ----------------------------------------- EACH REPORTING 8 SHARED VOTING POWER PERSON WITH 0 ----------------------------------------- 9 SOLE DISPOSITIVE POWER 50,000 ----------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 50,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT Page 5 of 13 CUSIP No. 640497103 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Guy W. Adams - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 325,000 OWNED BY ----------------------------------------- EACH REPORTING 8 SHARED VOTING POWER PERSON WITH 0 ----------------------------------------- 9 SOLE DISPOSITIVE POWER 325,000 ----------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 325,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.9% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT Page 6 of 13 SCHEDULE 13D This Schedule 13D (the "Schedule 13D") is being filed on behalf of Greenlight Capital, L.L.C., a Delaware limited liability company ("Greenlight LLC"), Greenlight Capital, Inc., a Delaware corporation ("Greenlight Inc." and together with Greenlight LLC, "Greenlight"), and Mr. David Einhorn, the principal of each of Greenlight LLC and Greenlight Inc., relating to common shares of beneficial interest of Mercer International Inc., a Massachusetts trust organized under Washington law (the "Issuer"). Mr. Einhorn and Greenlight are collectively referred to herein as the "Greenlight Persons." This Schedule 13D is also being filed by Mr. Saul E. Diamond and Mr. Guy W. Adams. The Greenlight Persons, together with Messrs. Diamond and Adams, are collectively referred to herein as the "Reporting Persons." Because of activities that have been undertaken or may be undertaken by the Reporting Persons, the Reporting Persons may be deemed to constitute a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act"). Notwithstanding the foregoing, the filing of this Schedule 13D should not be deemed an admission that the Reporting Persons comprise a group within the meaning of Section 13(d)(3) of the Exchange Act. Information with respect to each person filing this statement is given solely by such person and no person has responsibility for the accuracy or completeness of the information supplied by another person. Greenlight LLC and Mr. Einhorn previously reported beneficial ownership of shares of the Issuer on a Schedule 13G, the last amendment to such Schedule 13G being filed March 18, 2003. This Schedule 13D relates to common shares of beneficial interest of the Issuer, par value $1.00 per share ("Common Shares"), owned by (i) Greenlight Capital, L.P. ("Greenlight Fund") and (ii) Greenlight Capital Qualified, L.P. ("Greenlight Qualified"), of which Greenlight LLC is the general partner, and (iii) Greenlight Capital Offshore, Ltd. ("Greenlight Offshore", and together with Greenlight Fund and Greenlight Qualified, the "Greenlight Funds") for which Greenlight Inc. acts as the investment advisor. It also relates to Common Shares underlying certain options with respect to which Messrs. Diamond and Adams may be deemed beneficial owners. ITEM 1. SECURITY AND ISSUER Securities: Common Shares, par value $1.00 per share Issuer: Mercer International Inc. 14900 Interurban Avenue South Suite 282 Seattle, Washington 98168 ITEM 2. IDENTITY AND BACKGROUND (a) This Schedule 13D is filed by: (i) Greenlight Capital, L.L.C., a Delaware limited liability company, (ii) Greenlight Capital, Inc., a Delaware corporation, and (iii) Mr. David Einhorn, principal of Greenlight. Mr. Einhorn is the sole Senior Managing Member of Greenlight LLC and the President and sole Director of Greenlight Inc. In addition Page 7 of 13 to Mr. Einhorn, the executive officers of Greenlight, Inc. are Mr. Daniel Roitman, Chief Operating Officer, and Mr. Harry Brandler, Chief Financial Officer. This Schedule 13D is also filed by Mr. Saul E. Diamond and Mr. Guy W. Adams. (b) The business address of each of the Greenlight Persons and each of the other executive officers of Greenlight Inc. is 420 Lexington Avenue, Suite 1740, New York, NY 10170. The business address of Mr. Diamond is 535 Fifth Avenue, 33rd Floor, New York, NY 10017. The business address of Mr. Adams is 55 South Lake Avenue, Suite 720, Pasadena, CA 91101. (c) Greenlight provides investment management services to private individuals and institutions. The principal occupation of Mr. Einhorn is investment management. The principal occupation of Mr. Roitman is Chief Operating Officer of Greenlight Inc. and its affiliates. The principal occupation of Mr. Brandler is Chief Financial Officer of Greenlight Inc. and its affiliates. The principal occupation of Mr. Adams is Managing Member of GWA Advisors, LLC, GWA Capital Partners, LLC and GWA Investments, LLC. The principal occupation of Mr. Diamond is Principal of Diamond Capital Partners, LLC. (d) None of the Reporting Persons, or other persons with respect to whom information is given in response to this Item 2, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons, or other persons with respect to whom this information is given in response to this Item 2, has, during the last five years, 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. (f) Greenlight LLC is a Delaware limited liability company, and Greenlight Inc. is a Delaware corporation. Messrs. Einhorn, Roitman, Brandler, Diamond and Adams are United States citizens. ITEM 3. SOURCE AND AMOUNT OF FUNDS As of June 20, 2003, Greenlight Inc. had invested $9,904,336 through Greenlight Offshore, and Greenlight LLC had invested (i) $3,949,832 through Greenlight Fund and (ii) $7,711,431 through Greenlight Qualified. The above amounts include any commissions incurred in making the investments. The source of these funds was the working capital of each of Greenlight Fund, Greenlight Qualified and Greenlight Offshore. Page 8 of 13 As discussed more fully below, the options held by Messrs. Adams and Diamond were acquired by them as part of the consideration for their agreeing to serve as nominees of Greenlight for election to the Board of Trustees of the Issuer at the 2003 Annual Meeting of Shareholders of the Issuer (the "Annual Meeting"). ITEM 4. PURPOSE OF THE TRANSACTION The Greenlight Persons originally acquired the Common Shares owned by them for portfolio investment purposes. The Greenlight Persons have determined to nominate two persons for election to the Board of Trustees of the Issuer at the Annual Meeting and to solicit proxies from other shareholders in connection therewith. Messrs. Diamond and Adams have agreed to be the nominees of Greenlight and, if elected, to serve as trustees of the Issuer. On June 20, 2003, the Greenlight Persons filed a preliminary proxy statement on Schedule 14A (the "Preliminary Proxy Statement") with the Securities and Exchange Commission relating to their proxy solicitation. Also on June 20, 2003, Greenlight LLC entered into agreements with each of Messrs. Diamond and Adams, which agreements are described more fully below in response to Item 6. Pursuant to the agreement between Greenlight LLC and Mr. Diamond, in consideration of Mr. Diamond agreeing to serve as a nominee, Greenlight LLC granted Mr. Diamond an option to acquire 50,000 Common Shares owned by the Greenlight Funds. Pursuant to the agreement between Greenlight LLC and Mr. Adams, in consideration of Mr. Adams agreeing to serve as a nominee, Greenlight LLC granted (1) Mr. Adams an option to acquire 100,000 Common Shares owned by the Greenlight Funds and (2) GWA Investments LLC, which is managed by Mr. Adams, an option to acquire 225,000 Common Shares owned by the Greenlight Funds. As more fully discussed in the Preliminary Proxy Statement, although only two persons are being slated for election to the Board of Trustees, the Greenlight Persons believe that there are actually three seats on the Board of Trustees that should be filled at the Annual Meeting. In addition, the Greenlight Persons question whether the election of trustees at the 2002 Annual Meeting of Shareholders was valid. The Greenlight Persons have requested from the Issuer, among other things, copies of resolutions, minutes and written consents of the Board of Trustees and its committees to help reconcile the above-mentioned matters. Each of the Reporting Persons reserves the right to acquire, or dispose of, additional securities of the Issuer, in the ordinary course of business, to the extent deemed advisable in light of their general investment and trading policies, market conditions, the availability of Common Shares or other factors. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of June 20, 2003, the Greenlight Persons beneficially owned in the aggregate 2,517,000 Common Shares of the Issuer, which represents 14.9% of the Issuer's outstanding Common Shares, which such percentage was calculated by dividing (i) the 2,517,000 Common Shares beneficially owned by the Reporting Persons as of such date, by (ii) 16,874,899 Common Shares outstanding as of May 12, 2003, based upon the Issuer's Page 9 of 13 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 13, 2003. Mr. Diamond may be deemed the beneficial owner of the 50,000 Common Shares underlying his option. Mr. Adams may be deemed the beneficial owner of the 100,000 Common Shares underlying his option and the 225,000 Common Shares underlying the option held by GWA Investments, LLC. (b) Greenlight Inc, for the account of Greenlight Offshore, has the power to vote and dispose of the Common Shares held by Greenlight Offshore. Greenlight LLC, for the account of Greenlight Fund and Greenlight Qualified, has the power to vote and dispose of the Common Shares held by such entities. Mr. Adams, for the account of GWA Investments, LLC, has the sole power to vote and dispose of the Common Shares underlying the option held by GWA Investments, LLC. The filing of this Schedule 13D shall not be construed as an admission that any of the Greenlight Persons is for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any of the 2,517,000 Common Shares owned by Greenlight Fund, Greenlight Offshore or Greenlight Qualified or of any of the Common Shares that may be deemed owned by Messrs. Adams and Diamond. Pursuant to Rule 13d-4, each of the Greenlight Persons disclaims all such beneficial ownership. The filing of this Schedule 13D shall not be construed as an admission that Messrs. Diamond and Adams are for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any of the 2,517,500 shares of Common Stock owned by Greenlight Fund, Greenlight Offshore or Greenlight Qualified. Pursuant to Rule 13d-4, each of Messrs. Diamond and Adams disclaims all such beneficial ownership. The filing of this Schedule 13D shall not be construed as an admission by Mr. Adams that he is the beneficial owner of the 225,000 Common Shares underlying the option held by GWA Investments, LLC. Mr. Adams disclaims all such beneficial ownership. (c) Other than the granting and acquisition of the options described above, none of the Reporting Persons have engaged in any transactions in the Common Shares during the 60 days preceding the date of this Schedule 13D. (d) Not Applicable. (e) Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER In consideration for their agreeing to serve as nominees of Greenlight for election to the Board of Trustees of Issuer, Greenlight LLC entered into an agreement dated as of June 20, 2003 (the "Agreement") with each of Messrs. Diamond and Adams whereby Greenlight LLC agrees to, among other things, indemnify such person in certain circumstances. Pursuant to the Page 10 of 13 terms of each Agreement, Greenlight LLC has agreed to indemnify such person to the fullest extent permitted by applicable law from any and all damages, judgments, fines, penalties, settlements, deficiencies, losses and expenses, other than certain excluded losses, resulting from any action, suit or proceeding arising in connection with such person serving as a nominee of Greenlight to the Issuer's Board of Trustees, or if elected, as a trustee of the Issuer. Greenlight LLC has also agreed, subject to certain restrictions, to advance payments to such person for expenses incurred as a result of any such action, suit or proceeding. In addition to providing indemnification, the Agreement with Mr. Diamond provides that Greenlight LLC will (1) pay Mr. Diamond the amount of $100,000 and (2) grant Mr. Diamond an option to purchase 50,000 Common Shares with an exercise price of $4.53 per share and a one year expiration date. The Agreement with Mr. Adams provides that Greenlight LLC will (1) pay Mr. Adams the amount of $75,000, (2) grant Mr. Adams an option to purchase 100,000 Common Shares with an exercise price of $4.53 per share and a one year expiration date, and (3) grant GWA Investments LLC, which is managed by Mr. Adams, an option to purchase 225,000 Common Shares with an exercise price of $4.53 per share. This option expires at the later of 60 days from the date of the Agreement or 30 days after the Annual Meeting. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1 Joint Filing Agreement dated June 23, 2003, among Greenlight LLC, Greenlight Inc. and Messrs. Einhorn, Adams and Diamond. Exhibit 2 Agreement dated as of June 20, 2003 between Greenlight LLC and Saul E. Diamond. Exhibit 3 Agreement dated as of June 20, 2003 between Greenlight LLC and Guy W. Adams. Page 11 of 13 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: June 23, 2003 GREENLIGHT CAPITAL, L.L.C. By: /s/ DAVID EINHORN ---------------------------------------- David Einhorn, Senior Managing Member GREENLIGHT CAPITAL, INC. By: /s/ DAVID EINHORN ---------------------------------------- David Einhorn, President /s/ DAVID EINHORN ------------------------------------------------- David Einhorn /s/ SAUL E. DIAMOND ------------------------------------------------- Saul E. Diamond /s/ GUY W. ADAMS ------------------------------------------------- Guy W. Adams Page 12 of 13 EX-1 3 d06946exv1.txt JOINT FILING AGREEMENT EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the common shares of beneficial interest, par value $1.00 per share, of Mercer International Inc. and further agree that this Joint Filing Agreement shall be included as an Exhibit to such joint filings. The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate. This Joint Filing Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of June 23, 2003. GREENLIGHT CAPITAL, L.L.C. By: /s/ DAVID EINHORN -------------------------------------- David Einhorn, Senior Managing Member GREENLIGHT CAPITAL, INC. By: /s/ DAVID EINHORN -------------------------------------- David Einhorn, President /s/ DAVID EINHORN ---------------------------------------------- David Einhorn /s/ SAUL E. DIAMOND ---------------------------------------------- Saul E. Diamond /s/ GUY W. ADAMS ---------------------------------------------- Guy W. Adams Page 13 of 13 EX-2 4 d06946exv2.txt AGREEMENT BETWEEN GREENLIGHT LLC AND SAUL DIAMOND EXHIBIT 2 AGREEMENT AGREEMENT dated as of June 20, 2003 between Greenlight Capital, L.L.C. ("GREENLIGHT") and the undersigned nominee (the "INDEMNITEE"). WHEREAS, Greenlight has asked and the Indemnitee has agreed to be a nominee for election to the Board of Trustees of Mercer International Inc. (the "COMPANY") at the 2003 annual meeting of shareholders of the Company (the "ANNUAL MEETING"); and WHEREAS, Greenlight and/or its affiliates may, in appropriate circumstances, solicit proxies from the shareholders of the Company in support of the Indemnitee's election as a trustee of the Company at the Annual Meeting; NOW, THEREFORE, in consideration of the foregoing and with the understanding on the part of Greenlight that the Indemnitee is relying on this Agreement in agreeing to be a nominee as aforesaid and for other and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following defined terms have the meanings indicated below: "CLAIM" means any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, formal or informal, investigative or other), whether instituted by Greenlight, any shareholder of the Company, the Company or any other party (other than by the Indemnitee), or any inquiry or investigation that the Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding. "EXCLUDED LOSSES" means any Losses (1) arising out of liability under Section 16(b) of the Securities Exchange Act of 1934 or under federal or state securities laws for "insider trading," or (2) to the extent it is ultimately determined in a final judgment without further right to appeal by a court of appropriate jurisdiction that (a) the Loss arose as a result of any action or inaction on the part of the Indemnitee constituting knowingly fraudulent, dishonest or willful misconduct, or (b) with respect to any Indemnifiable Event defined in clause (ii) thereof, the Loss arose as a result of any action or inaction on the part of the Indemnitee that was not in good faith or was based upon or attributable to improper receipt by the Indemnitee of a personal benefit. Notwithstanding the foregoing, Excluded Losses shall not include Losses arising out of any action or inaction on the part of the Indemnitee expressly approved in advance by Greenlight. "EXPENSES" means all reasonable attorney's fees and all other reasonable fees, costs, expenses and obligations paid or incurred in connection with (i) the election of trustees at the Annual Meeting or related matters, and/or (ii) if elected, Indemnitee's services as a trustee of the Company while so serving at the request of Greenlight, including, in the case of both clauses (i) and (ii) without limitation, investigating, defending or participating (as a party, witness or otherwise) in (including on appeal), or preparing to defend or participate in, any Claim relating to any Indemnifiable Event. In the case of any Claim relating to an Indemnifiable Event occurring while serving as a trustee at the request of Greenlight, Expenses also include all such reasonable attorney's fees and all other reasonable fees, costs, expenses and obligations paid or incurred in connection with such Claim, even though incurred after the Indemnitee ceases to so serve at the request of Greenlight. "INDEMNIFIABLE EVENT" means any event or occurrence relating to or directly or indirectly arising out of, or any action taken or omitted to be taken in connection with, (i) election of trustees at the Annual Meeting or related matters, and/or (ii) if the Indemnitee is so elected, the Indemnitee's capacity as a trustee of the Company while serving as such at the request of Greenlight. "LOSS" means any and all damages, judgments, fines, penalties, amounts paid or payable in settlement, deficiencies, losses and Expenses (including all interest, assessments, and other charges paid or payable in connection with or respect of such Losses). 2. Agreement to Serve as a Nominee. (a) The Indemnitee hereby consents to being named as a nominee for election as a trustee of the Company at the Annual Meeting (or any special meeting of the shareholders of the Company called for that purpose) in any materials submitted by or on behalf of Greenlight to the Company or filed by or on behalf of Greenlight or the Company with the Securities and Exchange Commission, and further consents to serve as a trustee of the Company if elected at the Annual Meeting (or any special meeting of the shareholders of the Company called for that purpose). The indemnification provisions of this Agreement will continue in effect even if the Indemnitee does not serve as a trustee following the Annual Meeting. (b) Notwithstanding anything to the contrary contained in paragraph (a) above, the Indemnitee hereby agrees with Greenlight that the Indemnitee does not and will not (unless previously approved by Greenlight in writing) consent to serve as a nominee for election as a trustee of the Company, or to otherwise stand for election as or become a trustee of the Company, as part of a slate of nominees proposed by any party other than Greenlight (including the Board of Trustees of the Company or any nominating committee). (c) In consideration for the Indemnitee's consent and agreement to serve as a nominee for election as a trustee of the Company, Greenlight hereby agrees: (i) to pay Indemnitee the amount of $100,000.00, which amount is being paid as compensation to the Indemnitee, and is deemed to be fully earned upon the execution and delivery of this Agreement, and is not to be considered to be an advance of or as an offset against any indemnity payments which may, in the future, become due and owing under this Agreement; (ii) to grant, or cause an affiliate of Greenlight to grant, an at-the-money option for 50,000 shares of Common Stock of the Company, with a one-year expiration from the date of this Agreement, to be negotiated between the parties within 10 days of the date of this Agreement; and (iii) to cover the reasonable costs of legal counsel, experienced in the laws of the State of Washington and reasonably acceptable to the Indemnitee, to assist and provide advice to the Indemnitee with respect to the proper exercise of Indemnitee's 2 duties and obligations as a trustee of the Company; provided, however, that in no event will Greenlight be required to cover the costs of more than one legal counsel to represent all of Greenlight's nominees elected to the Board of Trustees of the Company. 3. Indemnification. (a) If the Indemnitee in his capacity as a nominee for election to the Company's Board of Trustees at the Annual Meeting, or if elected, in his capacity as a trustee of the Company was, is or becomes a party to or other participant in, or is threatened to be made a party to or other participant in, a Claim by reason of (or arising or allegedly arising in any manner out of or relating to in whole or in part) an Indemnifiable Event or Indemnitee's agreeing to serve at the request of Greenlight and/or any one or more of its affiliates as a nominee for election to the Company's Board of Trustees at the Annual Meeting, or, if elected, being a trustee of the Company at the request of Greenlight, Greenlight to the fullest extent permitted by applicable law shall indemnify and hold harmless the Indemnitee from and against any and all Losses suffered, incurred or sustained by the Indemnitee or to which the Indemnitee becomes subject, resulting from, arising out of or relating to such Claim (it being understood that except as provided in Section 3(c) with respect to Expenses, reimbursements of any such Losses shall be made as soon as practicable but in any event no later than 30 days after written request (a "CLAIM NOTICE") is made to Greenlight accompanied by supporting documentation); provided, however, that the Indemnitee shall not be entitled to indemnification for (i) any Excluded Losses or (ii) any Losses resulting from Claims made with respect to actions taken or not taken by the Indemnitee in his capacity as a trustee after receipt of written notice by Indemnitee from Greenlight or by Greenlight from Indemnitee that Indemnitee is no longer serving as trustee at the request of Greenlight. The Indemnitee shall give Greenlight written notice of any Claim (accompanied by such reasonable supporting documentation as may be in the Indemnitee's possession) as soon as practicable after the Indemnitee becomes aware thereof; provided that the failure of the Indemnitee to give such notice shall not relieve Greenlight of its indemnification obligations under this Agreement, except to the extent that such failure materially prejudices the rights of Greenlight. (b) In the case of the commencement of any action against the Indemnitee in respect of which the Indemnitee may seek indemnification from Greenlight hereunder, Greenlight will be entitled to participate therein, including, without limitation, the negotiation and approval of any settlement of such action and, to the extent that Greenlight may wish to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee, and after notice from Greenlight to the Indemnitee of Greenlight's election so to assume the defense thereof, together with Greenlight's written acknowledgement and agreement that it will fully indemnify the Indemnitee under the terms of this Agreement with regard to such Claim, Greenlight will not be liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the Indemnitee in connection with the defense thereof other than reasonable costs of investigation and preparation therefor (including, without limitation, appearing as a witness and reasonable fees and expenses of legal counsel in connection therewith). If in any action for which indemnity may be sought hereunder Greenlight shall not have timely assumed the defense thereof with counsel reasonably satisfactory to the Indemnitee, or the Indemnitee shall have been advised by counsel that it would constitute a conflict of interest for the same counsel to represent both the Indemnitee and Greenlight in such action, or if 3 the Indemnitee may have separate or additional defenses with regard to such action, the Indemnitee shall have the right to employ counsel for the Indemnitee reasonably satisfactory to Greenlight in such action, in which event Greenlight shall reimburse the Indemnitee for all reasonable legal fees and expenses incurred by the Indemnitee in connection with the defense thereof. Greenlight shall in no event be liable for any settlement of any action effected without its prior written consent, such consent not to be unreasonably withheld or delayed; provided, however, that no consent need be obtained with respect to any matter as to which (i) Greenlight has disputed indemnity coverage under this Agreement (Greenlight's ultimate liability to reimburse Indemnitee for any such settlement to be determined in connection with the determination of whether the Claim settled was otherwise subject to indemnity coverage under this Agreement), and/or (ii) Greenlight has otherwise refused or failed to make the indemnity payments provided for in this Agreement with respect to such matter. Greenlight shall not settle any Claim in any manner that would impose any expense, penalty, obligation or limitation on the Indemnitee, or would contain language other than a recitation of any amounts to be paid in settlement, the fact of the settlement or the underlying claim relating to the settlement, that would reasonably be viewed as an acknowledgement of wrongdoing on the part of the Indemnitee or as detrimental to the reputation of the Indemnitee, without the Indemnitee's prior written consent. (c) The Indemnitee's right to indemnification in Section 3 of this Agreement shall include the right of the Indemnitee to be advanced by Greenlight any Expenses incurred in connection with any Indemnifiable Event as such Expenses are incurred by the Indemnitee; provided, however, that all amounts advanced in respect of such Expenses shall be repaid to Greenlight by the Indemnitee if it shall ultimately be determined in a final judgment without further right to appeal by a court of appropriate jurisdiction that the Indemnitee is not entitled to be indemnified for such Expenses because such Expenses are Excluded Losses. 4. Partial Indemnity. If the Indemnitee is entitled under any provision of this Agreement to indemnification by Greenlight for some or a portion of any Loss, but not for all of the total amount thereof, Greenlight shall nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, the Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 5. No Presumptions. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval), or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 6. Nonexclusivity. The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under any bylaw, insurance policy, applicable law or otherwise. The rights provided to the Indemnitee under this Agreement shall continue as to the Indemnitee after he has ceased serving as a trustee of the Company at Greenlight's request with 4 respect to any action or inaction on the part of the Indemnitee while the Indemnitee was so serving as a trustee of the Company at Greenlight's request. 7. Amendment, etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 8. Subrogation. In the event of any payment under this Agreement, Greenlight shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, and the Indemnitee shall execute all papers reasonably required and shall take such action that may be reasonably necessary to secure such rights, including the execution of such documents reasonably necessary to enable Greenlight effectively to bring suit to enforce such rights. Notwithstanding anything herein to the contrary, Greenlight should not be obligated to provide indemnification or advance Expenses hereunder to the extent the Indemnitee is in fact indemnified or advanced Expenses as the case may be, by the Company or any other source. 9. No Duplication of Payments. Greenlight shall not be liable under this Agreement to make any payment in connection with a Claim made against the Indemnitee to the extent the Indemnitee has otherwise actually received payment (under any insurance policy, bylaw or otherwise) of the amounts otherwise indemnifiable hereunder; provided that, if the Indemnitee for any reason is required to disgorge any payment actually received, Greenlight shall be obligated to pay such amount to the Indemnitee in accordance with the other terms of this Agreement (i.e., disregarding the terms of this Section 9). 10. Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws. Any action brought to enforce or interpret this Agreement will be brought only in the state or federal court sitting in the County of New York, State of New York, and the parties hereby waive any objection to and submit to the personal jurisdiction of such courts. The parties also hereby wave any claim or forum non conveniens. 11. Counterparts. This Agreement may be executed in one or more counterparts for the convenience of the parties hereto, all of which together shall constitute one and the same instrument. [Signature Page Follows] 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. GREENLIGHT CAPITAL, L.L.C. By: /s/ David Einhorn ------------------------------- Name: David Einhorn ------------------------------- Title: Senior Managing Member ------------------------------- /s/ Saul E. Diamond ---------------------------------------- Name: Saul E. Diamond 6 EX-3 5 d06946exv3.txt AGREEMENT BETWEEN GREENLIGHT LLC AND GUY ADAMS EXHIBIT 3 AGREEMENT AGREEMENT dated as of June 20, 2003 between Greenlight Capital, L.L.C. ("GREENLIGHT") and the undersigned nominee (the "INDEMNITEE"). WHEREAS, Greenlight has asked and the Indemnitee has agreed to be a nominee for election to the Board of Trustees of Mercer International Inc. (the "COMPANY") at the 2003 annual meeting of shareholders of the Company (the "ANNUAL MEETING"); and WHEREAS, Greenlight and/or its affiliates may, in appropriate circumstances, solicit proxies from the shareholders of the Company in support of the Indemnitee's election as a trustee of the Company at the Annual Meeting; NOW, THEREFORE, in consideration of the foregoing and with the understanding on the part of Greenlight that the Indemnitee is relying on this Agreement in agreeing to be a nominee as aforesaid and for other and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following defined terms have the meanings indicated below: "CLAIM" means any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, formal or informal, investigative or other), whether instituted by Greenlight, any shareholder of the Company, the Company or any other party (other than by the Indemnitee), or any inquiry or investigation that the Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding. "EXCLUDED LOSSES" means any Losses (1) arising out of liability under Section 16(b) of the Securities Exchange Act of 1934 or under federal or state securities laws for "insider trading," or (2) to the extent it is ultimately determined in a final judgment without further right to appeal by a court of appropriate jurisdiction that (a) the Loss arose as a result of any action or inaction on the part of the Indemnitee constituting knowingly fraudulent, dishonest or willful misconduct, or (b) with respect to any Indemnifiable Event defined in clause (ii) thereof, the Loss arose as a result of any action or inaction on the part of the Indemnitee that was not in good faith or was based upon or attributable to improper receipt by the Indemnitee of a personal benefit. Notwithstanding the foregoing, Excluded Losses shall not include Losses arising out of any action or inaction on the part of the Indemnitee expressly approved in advance by Greenlight. "EXPENSES" means all reasonable attorney's fees and all other reasonable fees, costs, expenses and obligations paid or incurred in connection with (i) the election of trustees at the Annual Meeting or related matters, and/or (ii) if elected, Indemnitee's services as a trustee of the Company while so serving at the request of Greenlight, including, in the case of both clauses (i) and (ii) without limitation, investigating, defending or participating (as a party, witness or otherwise) in (including on appeal), or preparing to defend or participate in, any Claim relating to any Indemnifiable Event. In the case of any Claim relating to an Indemnifiable Event occurring while serving as a trustee at the request of Greenlight, Expenses also include all such reasonable attorney's fees and all other reasonable fees, costs, expenses and obligations paid or incurred in connection with such Claim, even though incurred after the Indemnitee ceases to so serve at the request of Greenlight. "INDEMNIFIABLE EVENT" means any event or occurrence relating to or directly or indirectly arising out of, or any action taken or omitted to be taken in connection with, (i) election of trustees at the Annual Meeting or related matters, and/or (ii) if the Indemnitee is so elected, the Indemnitee's capacity as a trustee of the Company while serving as such at the request of Greenlight. "LOSS" means any and all damages, judgments, fines, penalties, amounts paid or payable in settlement, deficiencies, losses and Expenses (including all interest, assessments, and other charges paid or payable in connection with or respect of such Losses). 2. Agreement to Serve as a Nominee. (a) The Indemnitee hereby consents to being named as a nominee for election as a trustee of the Company at the Annual Meeting (or any special meeting of the shareholders of the Company called for that purpose) in any materials submitted by or on behalf of Greenlight to the Company or filed by or on behalf of Greenlight or the Company with the Securities and Exchange Commission, and further consents to serve as a trustee of the Company if elected at the Annual Meeting (or any special meeting of the shareholders of the Company called for that purpose). The indemnification provisions of this Agreement will continue in effect even if the Indemnitee does not serve as a trustee following the Annual Meeting. (b) Notwithstanding anything to the contrary contained in paragraph (a) above, the Indemnitee hereby agrees with Greenlight that the Indemnitee does not and will not (unless previously approved by Greenlight in writing) consent to serve as a nominee for election as a trustee of the Company, or to otherwise stand for election as or become a trustee of the Company, as part of a slate of nominees proposed by any party other than Greenlight (including the Board of Trustees of the Company or any nominating committee). (c) In consideration for the Indemnitee's consent and agreement to serve as a nominee for election as a trustee of the Company, Greenlight hereby agrees: (i) to pay Indemnitee the amount of $75,000.00, which amount is being paid as compensation to the Indemnitee, and is deemed to be fully earned upon the execution and delivery of this Agreement, and is not to be considered to be an advance of or as an offset against any indemnity payments which may, in the future, become due and owing under this Agreement; (ii) to grant, or cause an affiliate of Greenlight, to grant, an at-the-money option for 100,000 shares of Common Stock of the Company, with a one-year expiration from the date of this Agreement, to be negotiated between the parties within 10 days of the date of this Agreement; (iii) to grant, or cause an affiliate of Greenlight, to grant to GWA Investments LLC, an at the money option for 225,000 shares of Common Stock of the Company, which option shall expire upon the later to occur of (a) 60 days from the date 2 of this Agreement or (b) 30 days from the date of the Annual Meeting, to be negotiated between the parties within 10 days of the date of this Agreement, and (iv) to cover the reasonable costs of legal counsel, experienced in the laws of the State of Washington and reasonably acceptable to the Indemnitee, to assist and provide advice to the Indemnitee with respect to the proper exercise of Indemnitee's duties and obligations as a trustee of the Company; provided, however, that in no event will Greenlight be required to cover the costs of more than one legal counsel to represent all of Greenlight's nominees elected to the Board of Trustees of the Company. 3. Indemnification. (a) If the Indemnitee in his capacity as a nominee for election to the Company's Board of Trustees at the Annual Meeting, or if elected, in his capacity as a trustee of the Company was, is or becomes a party to or other participant in, or is threatened to be made a party to or other participant in, a Claim by reason of (or arising or allegedly arising in any manner out of or relating to in whole or in part) an Indemnifiable Event or Indemnitee's agreeing to serve at the request of Greenlight and/or any one or more of its affiliates as a nominee for election to the Company's Board of Trustees at the Annual Meeting, or, if elected, being a trustee of the Company at the request of Greenlight, Greenlight to the fullest extent permitted by applicable law shall indemnify and hold harmless the Indemnitee from and against any and all Losses suffered, incurred or sustained by the Indemnitee or to which the Indemnitee becomes subject, resulting from, arising out of or relating to such Claim (it being understood that except as provided in Section 3(c) with respect to Expenses, reimbursements of any such Losses shall be made as soon as practicable but in any event no later than 30 days after written request (a "CLAIM NOTICE") is made to Greenlight accompanied by supporting documentation); provided, however, that the Indemnitee shall not be entitled to indemnification for (i) any Excluded Losses or (ii) any Losses resulting from Claims made with respect to actions taken or not taken by the Indemnitee in his capacity as a trustee after receipt of written notice by Indemnitee from Greenlight or by Greenlight from Indemnitee that Indemnitee is no longer serving as trustee at the request of Greenlight. The Indemnitee shall give Greenlight written notice of any Claim (accompanied by such reasonable supporting documentation as may be in the Indemnitee's possession) as soon as practicable after the Indemnitee becomes aware thereof; provided that the failure of the Indemnitee to give such notice shall not relieve Greenlight of its indemnification obligations under this Agreement, except to the extent that such failure materially prejudices the rights of Greenlight. (b) In the case of the commencement of any action against the Indemnitee in respect of which the Indemnitee may seek indemnification from Greenlight hereunder, Greenlight will be entitled to participate therein, including, without limitation, the negotiation and approval of any settlement of such action and, to the extent that Greenlight may wish to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee, and after notice from Greenlight to the Indemnitee of Greenlight's election so to assume the defense thereof, together with Greenlight's written acknowledgement and agreement that it will fully indemnify the Indemnitee under the terms of this Agreement with regard to such Claim, Greenlight will not be liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the Indemnitee in connection with the defense thereof other than 3 reasonable costs of investigation and preparation therefor (including, without limitation, appearing as a witness and reasonable fees and expenses of legal counsel in connection therewith). If in any action for which indemnity may be sought hereunder Greenlight shall not have timely assumed the defense thereof with counsel reasonably satisfactory to the Indemnitee, or the Indemnitee shall have been advised by counsel that it would constitute a conflict of interest for the same counsel to represent both the Indemnitee and Greenlight in such action, or if the Indemnitee may have separate or additional defenses with regard to such action, the Indemnitee shall have the right to employ counsel for the Indemnitee reasonably satisfactory to Greenlight in such action, in which event Greenlight shall reimburse the Indemnitee for all reasonable legal fees and expenses incurred by the Indemnitee in connection with the defense thereof. Greenlight shall in no event be liable for any settlement of any action effected without its prior written consent, such consent not to be unreasonably withheld or delayed; provided, however, that no consent need be obtained with respect to any matter as to which (i) Greenlight has disputed indemnity coverage under this Agreement (Greenlight's ultimate liability to reimburse Indemnitee for any such settlement to be determined in connection with the determination of whether the Claim settled was otherwise subject to indemnity coverage under this Agreement), and/or (ii) Greenlight has otherwise refused or failed to make the indemnity payments provided for in this Agreement with respect to such matter. Greenlight shall not settle any Claim in any manner that would impose any expense, penalty, obligation or limitation on the Indemnitee, or would contain language other than a recitation of any amounts to be paid in settlement, the fact of the settlement or the underlying claim relating to the settlement, that would reasonably be viewed as an acknowledgement of wrongdoing on the part of the Indemnitee or as detrimental to the reputation of the Indemnitee, without the Indemnitee's prior written consent. (c) The Indemnitee's right to indemnification in Section 3 of this Agreement shall include the right of the Indemnitee to be advanced by Greenlight any Expenses incurred in connection with any Indemnifiable Event as such Expenses are incurred by the Indemnitee; provided, however, that all amounts advanced in respect of such Expenses shall be repaid to Greenlight by the Indemnitee if it shall ultimately be determined in a final judgment without further right to appeal by a court of appropriate jurisdiction that the Indemnitee is not entitled to be indemnified for such Expenses because such Expenses are Excluded Losses. 4. Partial Indemnity. If the Indemnitee is entitled under any provision of this Agreement to indemnification by Greenlight for some or a portion of any Loss, but not for all of the total amount thereof, Greenlight shall nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, the Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 5. No Presumptions. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval), or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 4 6. Nonexclusivity. The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under any bylaw, insurance policy, applicable law or otherwise. The rights provided to the Indemnitee under this Agreement shall continue as to the Indemnitee after he has ceased serving as a trustee of the Company at Greenlight's request with respect to any action or inaction on the part of the Indemnitee while the Indemnitee was so serving as a trustee of the Company at Greenlight's request. 7. Amendment, etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 8. Subrogation. In the event of any payment under this Agreement, Greenlight shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, and the Indemnitee shall execute all papers reasonably required and shall take such action that may be reasonably necessary to secure such rights, including the execution of such documents reasonably necessary to enable Greenlight effectively to bring suit to enforce such rights. Notwithstanding anything herein to the contrary, Greenlight should not be obligated to provide indemnification or advance Expenses hereunder to the extent the Indemnitee is in fact indemnified or advanced Expenses as the case may be, by the Company or any other source. 9. No Duplication of Payments. Greenlight shall not be liable under this Agreement to make any payment in connection with a Claim made against the Indemnitee to the extent the Indemnitee has otherwise actually received payment (under any insurance policy, bylaw or otherwise) of the amounts otherwise indemnifiable hereunder; provided that, if the Indemnitee for any reason is required to disgorge any payment actually received, Greenlight shall be obligated to pay such amount to the Indemnitee in accordance with the other terms of this Agreement (i.e., disregarding the terms of this Section 9). 10. Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws. Any action brought to enforce or interpret this Agreement will be brought only in the state or federal court sitting in the County of Los Angeles, State of California, and the parties hereby waive any objection to and submit to the personal jurisdiction of such courts. The parties also hereby wave any claim or forum non conveniens. 11. Counterparts. This Agreement may be executed in one or more counterparts for the convenience of the parties hereto, all of which together shall constitute one and the same instrument. [Signature Page Follows] 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. GREENLIGHT CAPITAL, L.L.C. By: /s/ David Einhorn ----------------------------------- Name: David Einhorn ----------------------------------- Title: Senior Managing Member ----------------------------------- /s/ Guy W. Adams -------------------------------------------- Name: Guy W. Adams 6 -----END PRIVACY-ENHANCED MESSAGE-----