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EXHIBIT 10.6
ATRIUM INDEMNIFICATION ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") dated November 27, 1996 is
among Hicks, Muse, Tate & Furst Equity Fund III, L.P., a Delaware limited
partnership (the "Buyer"), Atrium Corporation, a Delaware corporation (the
"Company"), Randall S. Fojtasek (the "Atrium Indemnitor Representative"),
Heritage Fund I, L.P., a Delaware limited partnership ("Heritage"), and
Citibank N.A., a national banking association with its headquarters in New York
City, New York (the "Escrow Agent").
RECITALS
A. Pursuant to the Stock Purchase Agreement dated as of November
7, 1996 (the "Purchase Agreement"), by and among HMTF Acquisition Corp. (whose
interests under the Purchase Agreement have been assigned to Buyer and HM3
Coinvestors, L.P.), the Company and the Selling Securityholders named therein
(including the Atrium Indemnitors (as defined in the Purchase Agreement)), the
Company will issue and sell to Buyer and HM3 Coinvestors, L.P., and Buyer and
HM3 Coinvestors, L.P. shall purchase from the Company, 32,000,000 shares of the
Company's Common Stock, par value $0.01 per share ("Common Stock"), upon the
terms and conditions set forth in the Purchase Agreement. Unless otherwise
defined herein, capitalized terms used herein shall have the meanings assigned
to them in the Purchase Agreement.
B. It is a condition precedent to the consummation of the
Purchase that the Buyer, the Company, the Atrium Indemnitor Representative, on
behalf of the Atrium Indemnitors, Heritage and the Escrow Agent execute and
deliver this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the recitals and of the respective
agreements and covenants set forth herein and in the Purchase Agreement, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as follows:
Section 1. Establishment of Atrium Escrow Account. At the
Closing (as defined in the Purchase Agreement), the Company will, and the
Atrium Indemnitor Representative and Heritage hereby instruct the Company to,
deliver to the Escrow Agent $2,000,000 in cash (the "Escrow Property") by wire
transfer of immediately available funds to an account designated by the Escrow
Agent as the "Atrium Escrow Account." The Escrow Property shall be held,
administered and disposed of by the Escrow Agent in accordance with the terms
and conditions hereinafter set forth.
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Section 2. Investment of Proceeds of Escrow Property.
(a) The Escrow Agent shall from time to time invest and
reinvest the Escrow Property, if any, in the Pacific Horizon Treasury Only
Fund, or in such other of the following investments as Buyer and the Atrium
Indemnitor Representative may from time to time elect by joint notice in
writing ("Permitted Investments") from each of the following persons to the
Escrow Agent: Lawrence D. Stuart, Jr, on behalf of Buyer, and the Atrium
Indemnitor Representative.
(i) Any U.S. Government or U.S. Government Agency
security;
(ii) Any commercial paper rated A1/P1 or better;
(iii) Any certificate of deposit or time deposit in
any bank with a long-term debt rating of A or
better from Moody's or Standard & Poor's;
(iv) The Citibank Insured Money Market Deposit
Account; or
(v) The following institutional money market
funds:
(1) Dreyfuss Treasury Cash Management
Fund
(2) Provident T-Fund Dollar Account
(3) Federated Treasury Obligations Fund
(4) AIM Treasury Portfolio
(b) Any interest or other income received on such
investment and reinvestment of the Escrow Property shall be set aside and
distributed as provided in Section 2(d).
(c) The Escrow Agent will act upon investment
instructions the day that such instructions are received, provided the requests
are communicated within a sufficient amount of time to allow the Escrow Agent
to make the specified investment. Instructions received after an applicable
investment cutoff deadline will be treated as being received by the Escrow
Agent on the next business day, and the Escrow Agent shall not be liable for
any loss arising directly or indirectly, in whole or in part, from the
inability to invest Escrow Property on the day the instructions are received.
The Escrow Agent shall not be liable for any loss incurred by the actions of
third parties or by any loss arising by error, failure or delay in making of an
investment or reinvestment, unless such error, failure or delay results from
the Escrow Agent's gross negligence or willful misconduct, and the Escrow Agent
shall not be liable for any loss of principal or income in connection
therewith. As and when the Escrow Property or any portion thereof is to be
released under this Agreement, the Escrow Agent shall cause the Escrow Property
to be converted into cash, and the Escrow Agent shall not be liable for any
loss of principal or income in connection therewith. None of the parties
hereto shall be liable for any loss of principal or income due to the choice of
Permitted Investments in which the Escrow Property is invested or the choice of
Permitted Investments converted into cash pursuant to this Section 2(c).
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(d) Except as otherwise provided herein, all interest,
dividends and other income earned on the Escrow Property shall be distributed
upon the termination of this Agreement pursuant to Section 16 in accordance
with joint written instructions received by the Escrow Agent and signed by each
of Buyer, the Atrium Indemnitor Representative and Heritage. Subject to the
provisions of Section 2(e) below, the Escrow Agent shall distribute to the
Company, on a quarterly basis as of the last day of March, June, September and
December, upon written demand of the Company, an amount equal to the product of
the Effective Tax Rate (as defined below) times the taxable interest, dividends
and other income earned on the Escrow Property for the quarter. For purposes
of determining taxable interest, dividends and other income, the Escrow Agent
shall provide an itemized report of all interest, dividends and other income
earned on the Escrow Property for the quarter to the Buyer, the Company,
Heritage and the Atrium Indemnitor Representative at the close of business of
the last day of the end of each such quarter, and the Company shall provide a
summary to the Escrow Agent of all such income that is taxable. As used in
this Agreement, the "Effective Tax Rate" shall mean the actual effective
combined federal, state and local income tax rate applicable to the Company as
reasonably computed and provided to the Escrow Agent by the Company.
(e) For tax purposes, the Escrow Property shall be deemed
property of the Company and all interest, dividends and other income earned on
the Escrow Property shall be the income of the Company. The Company and the
Atrium Indemnitors shall file Tax Returns and the Escrow Agent shall file a
Form 1099 consistent with such treatment. In the event that the Internal
Revenue Service or any other governmental authority successfully claims that
the interest, dividends and other income earned on the Escrow Property is
taxable to the Atrium Indemnitor Representative or any of the other Atrium
Indemnitors for a taxable period, the Company shall promptly pay to the Atrium
Indemnitor Representative or such Atrium Indemnitor all amounts paid by the
Escrow Agent to the Company pursuant to Section 2(d) for such taxable period,
plus interest on such amounts at the rate specified by section 6621(a)(2) of
the Code and corresponding provisions of applicable state and local laws to the
extent such interest has been received by or credited to the Company, and the
Company shall thereafter no longer have any right to receive payments under
Section 2(d).
Section 3. Release of the Escrow Property to Indemnitees. The
Escrow Agent shall disburse to the Buyer (for its own account or for the
account of any Indemnitee, as defined in Section 8) such portion of the Escrow
Property as instructed pursuant to this Section 3, which amount Buyer agrees to
use, or to deliver to such Indemnitee to use, to pay the Buyer Indemnified
Costs (as defined in the Purchase Agreement) for which the Indemnitee is
entitled to reimbursement pursuant to Article X of the Purchase Agreement.
Payment shall be made not more than three business days after: (a) the
delivery to the Escrow Agent of joint written instructions signed by the Buyer,
Heritage and the Atrium Indemnitor Representative specifying an amount to be
paid to an Indemnitee or (b) the delivery to the Escrow Agent, Heritage and the
Atrium Indemnitor Representative of a copy of a Final Determination (as defined
below) establishing the Indemnitee's right to reimbursement under this
Agreement with respect to such Buyer Indemnified Costs. A "Final
Determination" shall mean a final non-appealable judgment of a court of
competent jurisdiction, accompanied by an
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opinion of counsel for the presenting party reasonably satisfactory to the
Escrow Agent to the effect that such judgment is a Final Determination.
Section 4. No Distribution of Expenses. Neither the Atrium
Indemnitor Representative, nor Heritage, nor the Buyer nor the Company shall be
entitled to reimbursement out of the Escrow Property for any costs and expenses
incurred by them in connection with exercising their rights or performing their
duties under this Agreement.
Section 5. Segregation of the Fund. (a) Notwithstanding any
other provision of this Agreement to the contrary, from and after such time as
the Escrow Agent shall receive notification that the aggregate amount of Buyer
Indemnified Costs (as defined in the Purchase Agreement) with respect to all
Claims (as defined in Section 8) asserted by the Indemnitees exceeds the
Minimum Loss (as defined in the Purchase Agreement), the Escrow Agent shall
segregate from the Atrium Escrow Account and transfer into a separate account
maintained by the Escrow Agent for the benefit of the Company, the Buyer and
the Atrium Indemnitors (the "Pending Claim Account") the portion of the Escrow
Property that may be necessary to satisfy in full all Pending Claims (as
defined below) in excess of the Minimum Loss, and shall hold such portion in
accordance with this Section 5. "Pending Claims" shall mean unresolved Claims
that are the subject of Claim Notices delivered under Section 8(d).
(b) Any portion of the Escrow Property segregated under
Section 5(a) shall continue to be segregated by the Escrow Agent until the
Escrow Agent is directed to release such Escrow Property by (i) written
instructions signed by the Buyer, Heritage and the Atrium Indemnitor
Representative instructing the Escrow Agent how to pay all or any portion of
such segregated Escrow Property or (ii) a copy of a Final Determination
establishing the Indemnitee's, Heritage's or the Atrium Indemnitor
Representative's right to reimbursement under Section 8. The Escrow Agent shall
be entitled to rely conclusively on the written advice of counsel to the Buyer,
Heritage or the Atrium Indemnitor Representative, as the case may be, that the
judgment delivered to the Escrow Agent pursuant to this Section 5(b) is a Final
Determination. Notwithstanding the foregoing, if there is no Escrow Property
remaining except the Escrow Property held in the Pending Claims Account, the
Escrow Agent is authorized and directed to release from the Pending Claims
Account any amount that is at the time necessary to make a payment required
under Section 2.
Section 6. Distribution of Escrow Property to Atrium
Indemnitors. Not later than the second business day after May 27, 1998 (the
"Expiration Date"), the Escrow Agent shall distribute from the Escrow Property,
to the extent sufficient therefor, the Escrow Remainder in accordance with
joint written instructions received by the Escrow Agent and signed by each of
Buyer, the Atrium Indemnitor Representative and Heritage. For purposes hereof,
the "Escrow Remainder" shall mean an amount equal to $2,000,000 (plus accrued
and undistributed earnings on the Escrow Property) minus the sum of (a) the
total amount of Escrow Property that is then being segregated with respect to
Pending Claims under Section 5 plus (b) the amount of any Escrow Property that
was previously paid by the Escrow Agent to an Indemnitee to reimburse Buyer
Indemnified Costs with respect to
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Claims, plus (c) the distributions made pursuant to Section 2(d) prior to the
Expiration Date. Any amounts segregated with respect to Pending Claims shall
be released as provided in Section 5(b).
Section 7. Taxpayer Identification Numbers. The parties
acknowledge that payment of any interest earned on the Escrow Property invested
in this escrow, or the distribution of any other amounts under this escrow,
will be subject to backup withholding penalties unless a properly completed
Internal Revenue Service Form W-8 or W-9 certification is submitted to the
Escrow Agent by the party entitled to receive such payment. Any Form W-8 or
W-9 certification shall be submitted to the Escrow Agent on or before the date
hereof.
Section 8. Claims Against the Escrow Property. From and after
the Closing, but subject to the conditions and limitations set forth in this
Agreement and the Purchase Agreement, the Buyer Indemnified Parties (as defined
in the Purchase Agreement) and their respective successors and assigns
(collectively, the "Indemnitees") shall be entitled to reimbursement out of the
Escrow Property for any and all Buyer Indemnified Costs as provided in Article
X of the Purchase Agreement (collectively, the "Claims").
(a) Claims against the Escrow Property may be made by the
Buyer, on its own behalf or on behalf of any other Buyer Indemnified Party, for
indemnification of any Buyer Indemnified Cost. No person other than Buyer
shall be permitted to make a claim on behalf of the Indemnitees against the
Escrow Property for Buyer Indemnified Costs under this Section 8 unless Buyer
provides written notice to Escrow Agent and the other parties hereto that Buyer
has authorized another Indemnitee to make such claims.
(b) Buyer shall promptly notify Heritage, the Atrium
Indemnitor Representative and the Escrow Agent in writing (a "Claim Notice") of
any sums which Buyer claims are subject to indemnification. Failure of Buyer
to exercise promptness in such notification shall not amount to a waiver of
such Claim unless the resulting delay materially prejudices the position of the
Atrium Indemnitors with respect to such Claim. Such Claim Notice shall consist
of a description of the Claim and specify each Buyer Indemnified Party and the
amount (which may be estimated) of the Claim in United States dollars.
(c) Heritage and/or the Atrium Indemnitor Representative
may contest the Claims specified in the Claim Notice (or any portion thereof)
by giving Escrow Agent and Buyer written notice of such contest within ten days
after receipt by Heritage or the Atrium Indemnitor Representative, as the case
may be, of the Claim Notice from Buyer, which notice of contest shall include a
statement of the grounds of such contest and shall state the amount of any such
Claim by Buyer that Heritage or the Atrium Indemnitor Representative, as the
case may be, does not dispute.
(d) Payment of any Claim for indemnification (or portion
thereof) to which the Escrow Property is subject shall become due and payable
as follows:
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(i) If, at 5:00 p.m.( Dallas, Texas time), on the
fifteenth business day after receipt by the Escrow Agent of a Claim Notice, the
Escrow Agent has not received written notice from either Heritage or the Atrium
Indemnitor Representative that either Heritage or the Atrium Indemnitor
Representative contests the Claim (or portion thereof) pursuant to Section 8(c)
above, the Claim (or the uncontested portion thereof) shall be paid by the
Escrow Agent to Buyer as promptly as practicable;
(ii) If either Heritage or the Atrium Indemnitor
Representative contests the Claims (or portion thereof) pursuant to Section
8(c) within fifteen business days after receipt by the Escrow Agent of a Claim
Notice and the Claim (or portion thereof) is thereafter settled by written
agreement of each of Heritage, the Atrium Indemnitor Representative and Buyer,
the amount provided in such written agreement shall, upon receipt by the Escrow
Agent of a copy of such written agreement, be promptly paid by the Escrow Agent
pursuant to the terms of such written agreement; and
(iii) If either Heritage or the Atrium Indemnitor
Representative contests the Claim (or portion thereof) pursuant to Section 8(c)
hereof within fifteen business days after receipt by the Escrow Agent of a
Claim Notice and a Final Determination is thereafter entered with respect to
such Claim (or portion thereof), such amount of the Final Determination shall
be promptly paid by the Escrow Agent pursuant to the terms of such Final
Determination.
Section 9. Expiration of Indemnification Claims. Any claim for
reimbursement from the Atrium Escrow Account that is not asserted in writing by
Buyer or any Indemnitee in a writing received by the Atrium Indemnitor
Representative and the Escrow Agent prior to 5:00 p.m. (Dallas, Texas time) on
the Expiration Date may not be asserted or pursued and shall be irrevocably
waived, and neither Buyer nor any Indemnitee shall be entitled to make any
claim for reimbursement with respect thereto.
Section 10. Appointment of Atrium Indemnitor Representative.
Randall S. Fojtasek has been appointed, pursuant to the Purchase Agreement, as
the agent and representative of each of the Atrium Indemnitors other than
Heritage.
Section 11. Language Concerning the Escrow Agent. To induce the
Escrow Agent to act hereunder, it is further agreed by Buyer, the Company,
Heritage and the Atrium Indemnitor Representative that:
(a) The Escrow Agent shall not be under any duty to give
the Escrow Property held by it hereunder any greater degree of care than it
gives its own similar property and shall not be required to invest any Escrow
Property held hereunder except as directed in this Agreement. Uninvested
Escrow Property held hereunder shall not earn or accrue interest.
(b) This Agreement expressly sets forth all the duties of
the Escrow Agent with respect to any and all matters pertinent hereto. No
implied duties or obligations shall be read into
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this agreement against the Escrow Agent. The Escrow Agent shall not be bound
by the provisions of any agreement among the other parties hereto except this
Agreement.
(c) The Escrow Agent shall not be liable, except for its
own gross negligence or willful misconduct and, except with respect to claims
based upon such gross negligence or willful misconduct that are successfully
asserted against the Escrow Agent, Buyer, the Company, Heritage and the Atrium
Indemnitor Representative shall jointly and severally indemnify and hold
harmless the Escrow Agent (and any successor Escrow Agent) from and against any
and all losses, liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of and in connection
with this Agreement. Without limiting the foregoing, the Escrow Agent shall in
no event be liable in connection with its investment or reinvestment of any
cash held by it hereunder in good faith, in accordance with the terms hereof,
including without limitation, any liability for any delays (not resulting from
its gross negligence or willful misconduct) in the investment or reinvestment
of the Escrow Property or any loss of interest incident to any such delays.
This Section 11(c) shall survive notwithstanding any termination of this
Agreement or the resignation of the Escrow Agent.
(d) The Escrow Agent shall be entitled to rely upon any
order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the authenticity
or the correctness of any fact stated therein or the propriety or validity or
the service thereof. The Escrow Agent may act in reliance upon any instrument
or signature believed by it to be genuine and may assume that any person
purporting to give receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized to
do so.
(e) The Escrow Agent may act pursuant to the advice of
counsel with respect to any matter relating to this Agreement and shall not be
liable for any action taken or omitted in accordance with such advice.
(f) The Escrow Agent does not have any interest in the
Escrow Property deposited hereunder but is serving as escrow holder only and
having only possession thereof. The Company and the Atrium Indemnitors shall
on a 50%/50% basis pay or reimburse the Escrow Agent upon request for any
transfer taxes or other taxes relating to the Escrow Property incurred in
connection herewith and shall indemnify and hold harmless the Escrow Agent from
any amounts that it is obligated to pay in the way of such taxes. Any payments
of income from the Escrow Property shall be subject to withholding regulations
then in force with respect to United States taxes. It is understood that the
Escrow Agent shall be responsible for income reporting only with respect to
income earned on investment of the Escrow Property and is not responsible for
any other reporting. This Section 11(f) shall survive notwithstanding any
termination of this Agreement or the resignation of the Escrow Agent.
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(g) The Escrow Agent makes no representation as to the
validity, value, genuineness or the collectability of any security or other
document or instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise
any party as to the wisdom in selling or retaining or taking or refraining from
any action with respect to any securities or other property deposited
hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may
at any time resign as such by delivering the Escrow Property to any successor
Escrow Agent jointly designated by the other parties hereto in writing or to
any court of competent jurisdiction, whereupon the Escrow Agent shall be
discharged of and from any and all further obligations arising in connection
with this Agreement. The resignation of the Escrow Agent will take effect on
the earlier of (i) the appointment of a successor (including a court of
competent jurisdiction) or (ii) the day which is 30 days after the date of
delivery of its written notice of resignation to the other parties hereto. If
at that time the Escrow Agent has not received a designation of a successor
Escrow Agent, the Escrow Agent's sole responsibility after that time shall be
to safekeep the Escrow Property until receipt of a designation of successor
Escrow Agent or a joint written disposition instruction by the other parties
hereto or a Final Determination.
(j) The Escrow Agent shall have no responsibility for the
contents of any writing of the arbitrators or any third party contemplated
herein as a means to resolve disputes and may rely without any liability upon
the contents thereof.
(k) In the event of any disagreement between the Buyer or
any Buyer Indemnified Party and Heritage and/or the Atrium Indemnitor
Representative resulting in adverse claims or demands being made in connection
with the Escrow Property, or in the event that the Escrow Agent in good faith
is in doubt as to what action it should take hereunder, the Escrow Agent shall
be entitled to retain the Escrow Property until the Escrow Agent shall have
received (i) a Final Determination directing delivery of the Escrow Property or
(ii) a written agreement executed by each of the Buyer, Heritage and the Atrium
Indemnitor Representative directing delivery of the Escrow Property, in which
event the Escrow Agent shall disburse the Escrow Property in accordance with
such Final Determination or agreement. The Escrow Agent shall act on such Final
Determination or agreement without further question.
(l) The compensation of the Escrow Agent (as payment in
full) for the services to be rendered by the Escrow Agent hereunder shall be
the amount of $4,000 at the time of execution of this Agreement and $3,000
annually thereafter to be paid by the Company and the Atrium Indemnitors on a
50%/50% basis, together with reimbursement for all reasonable expenses,
disbursements and advances incurred or made by the Escrow Agent in performance
of its duties hereunder (including reasonable fees, expenses and disbursements
of its counsel). All fees and expenses of the Escrow Agent hereunder, other
than initial fee paid upon the execution hereof, shall, if not paid by the
Company and the Atrium Indemnitors as required in the immediately preceding
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sentence, be paid first out of interest, dividends, and other income earned on
the Escrow Property, if any, and then, to the extent of any shortfall, by the
Company and the Atrium Indemnitors on a 50%/50% basis. Any fees or expenses of
the Escrow Agent or its counsel which are not paid as provided for herein may
be taken from any property held by the Escrow Agent hereunder. It is
understood that the Escrow Agent's fees may be adjusted from time to time to
conform to its then current guidelines.
(m) The Buyer, the Company, Heritage and the Atrium
Indemnitor Representative hereby irrevocably submit to the jurisdiction of any
New York State or federal court sitting in the Borough of Manhattan in New York
City in any action or proceeding arising out of or relating to this Agreement,
and the parties hereby irrevocably agree that all claims in respect of such
action or proceeding shall be heard and determined in such a New York State or
federal court. The other parties hereby consent to and grant to any such court
jurisdiction over the persons of such parties and over the subject matter of
any such dispute and agree that delivery or mailing of any process or other
papers in the manner provided herein above, or in such other manner as may be
permitted by law, shall be valid and sufficient service thereof.
(n) This Agreement shall be binding upon and inure solely
to the benefit of the parties hereto and their respective successors and
assigns, heirs, administrators and representatives and shall not be enforceable
by or inure to the benefit of any third party, except as provided in Section
11(i) with respect to a resignation by the Escrow Agent. No party may assign
any of its rights or obligations under this Agreement without the written
consent of the other parties. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS RULE AS TO CONFLICTS OF LAW).
(o) This Agreement may only be modified by a writing
signed by all of the parties hereto, and no waiver hereunder shall be effective
unless in a writing signed by the party to be charged.
(p) The other parties hereto authorize the Escrow Agent,
for any securities held hereunder, to use the services of any United States
central securities depository it deems appropriate, including, but not limited
to, the Depositary Trust Company and the Federal Reserve Book Entry System.
Section 12. Notices. All notices, requests, consents or other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given or delivered by any party (a) when
received by such party if delivered by hand, (b) upon confirmation when
delivered by telecopy (any communication delivered by telecopy shall be
followed promptly with an original thereof), (c) within one day after being
sent by recognized overnight delivery service, or (d) within three business
days after being mailed by first-class mail, postage prepaid, and in each case
addressed as follows:
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(i) if to the Buyer, the Company or to any other
Indemnitee:
Lawrence D. Stuart, Jr.
Hicks, Muse, Tate & Furst Equity Fund III, L.P.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Telecopy No.: (214) 740-7313
with copies to:
Michael D. Wortley
Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Telecopy No.: (214) 220-7716
(ii) if to the Atrium Indemnitor Representative, to:
Randall S. Fojtasek
Atrium Corporation
1341 West Mockingbird Lane
Suite 1200W
Dallas, Texas 75247
Telecopy No.: (214) 634-4231
with a copy to
O. Haynes Morris, Jr.
Adair, Morris & Osborn, P.C.
835 One Main Place
1801 Main Street
Dallas, Texas 75202
Telecopy No.: (214) 761-0658
(iii) if to Heritage, to:
T. Brook Parker
Heritage Partners, Inc.
30 Rowes Wharf, Suite 300
Boston, Massachusetts 02110
Telecopy No.: (617) 439-0689
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with a copy to
Robert M. Wolf
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110-1726
Telecopy No.: (617) 951-8736
(iv) if to the Escrow Agent, to:
Citibank N.A.
Corporate Trust/Escrow Administration
120 Wall Street, 13th Floor
New York, NY 10043
Telephone No.: (212) 412-6257
Telecopy No.: (212) 480-1614
Telex Numbers:
Foreign - 420392 FNC UI
Domestic - 127001 Citibank NYKB
Reference in Telex "Citiswitch -
NYCTA"
Federal Reserve Fund Transfers:
Citibank, N.A.
111 Wall Street
New York, NY 10043
For credit to A/C 36855852
Escrow Administration Concentration
Account
for further credit(enter Account
Number assigned)
Attn: Jeff Zeiler
ABA Number: 0210-0008-9
Any party by written notice to the other parties pursuant to this Section 12
may change the address or the persons to whom notices or copies thereof shall
be directed.
Section 13. Waivers. Any waiver by any party hereto of any
breach of or failure to comply with any provision of this Agreement by any
other party hereto shall be in writing and shall not be construed as, or
constitute, a continuing waiver of such provision, or a waiver of any other
breach of, or failure to comply with, any other provision of this Agreement.
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Section 14. Construction. The headings in this Agreement are
solely for convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement. Unless otherwise stated,
references to Sections and Exhibits are references to Sections and Exhibits of
this Agreement.
Section 15. Third Parties. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
or entity other than Buyer, the Company, the Indemnitees, the Atrium Indemnitor
Representative, the Atrium Indemnitors and the Escrow Agent any rights or
remedies under, or by reason of, this Agreement.
Section 16. Termination. This Agreement shall terminate at the
time of the final distribution by the Escrow Agent of all Escrow Property in
accordance with the provisions of this Agreement.
Section 17. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute a single instrument.
Section 18. Waiver of Offset Rights. The Escrow Agent hereby
waives any and all rights to offset that it may have against the Escrow
Property including, without limitation, claims arising as a result of any
claims, amounts, liabilities, costs, expenses, damages, or other losses
(collectively "Escrow Agent Claims") that the Escrow Agent may be otherwise
entitled to collect from any party to this Agreement or any Atrium Indemnitor,
other than Escrow Agent Claims arising under this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first
above written.
THE COMPANY:
ATRIUM CORPORATION
By: /s/ RANDALL S. FOJTASEK
-----------------------------------
Randall S. Fojtasek
President
ATRIUM INDEMNITOR REPRESENTATIVE:
on behalf of the Atrium Indemnitors other
than Heritage Fund I, L.P.
By: /s/ RANDALL S. FOJTASEK
-----------------------------------
Randall S. Fojtasek
HERITAGE FUND I, L.P.
By: HF Partners I, L.P., its general partner
By: /s/ MICHEL REICHERT
-------------------------------------
Name: Michel Reichert
-------------------------------------
Title: General Partner
-------------------------------------
[SIGNATURE PAGE TO ATRIUM INDEMNIFICATION ESCROW AGREEMENT]
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BUYER:
HICKS, MUSE, TATE & FURST EQUITY FUND
III, L.P.
By: HM3/GP Partners, L.P.,
its General Partner
By: Hicks, Muse GP Partners III, L.P.
its General Partner
By: Hicks, Muse Fund III Incorporated,
its General Partner
By: /s/ JEFFRY S. FRONTERHOUSE
-----------------------------------
Jeffry S. Fronterhouse
Vice President
Agreed and Accepted:
Date:
CITIBANK, N.A.
ESCROW AGENT
By: /s/ ROBERT A. MASSIMILLO
------------------------
Name: ROBERT A. MASSIMILLO
------------------------
Title: Senior Trust Officer
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[SIGNATURE PAGE TO ATRIUM INDEMIFICATION ESCROW AGREEMENT]
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