Exhibit 10.26
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is made and entered into
as of this 20th day of April, 1999 by and among ATRIUM COMPANIES, INC., a
Delaware corporation ("Buyer"), H.I.G. VINYL, INC., a Cayman Island corporation,
as the Shareholder Representative ("H.I.G. Cayman") and BANK ONE, TEXAS, N.A.,
as escrow agent (the "Escrow Agent").
RECITALS:
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of
April 20, 1999 (the "Stock Purchase Agreement"), by and among Buyer, Heat, Inc.,
a Delaware corporation (the "Company"), the Persons listed on Schedule A hereto
(collectively, the "Shareholders"), the Persons listed on Schedule B attached
hereto (collectively, the "Optionholders"), H.I.G. Cayman, H.I.G. Investment
Fund, L.P., a Cayman Island limited partnership and H.I.G. Capital Management,
Inc., a Delaware corporation, a copy of which is attached hereto as Annex A,
Buyer has agreed to purchase from the Shareholders, the Optionholders and H.I.G.
Cayman, and the Shareholders, the Optionholders and H.I.G. Cayman have agreed to
sell and transfer to Buyer, all of the shares of capital stock of the Company
(the "Shares") owned by the Shareholders, all of the options to acquire Shares
owned by the Optionholders and all of the shares (the "Vinyl Shares") of H.I.G.
Vinyl, Inc., a Delaware corporation and a Shareholder (collectively, the
"Acquisition"), on the terms and conditions set forth in the Stock Purchase
Agreement; and
WHEREAS, pursuant to Article X of the Stock Purchase Agreement,
each of the Shareholders, the Optionholders and H.I.G. Cayman has appointed
H.I.G. Cayman as the Shareholder Representative to act on his or its behalf, and
on its own behalf, in connection with the Acquisition and this Agreement; and
WHEREAS, as an inducement for Buyer to enter into the Stock
Purchase Agreement and as a condition precedent to the consummation of the
Acquisition, Buyer has required that the Deposit and $5,000,000 be deposited
into escrow accounts, subject to the terms and conditions set forth herein; and
WHEREAS, the Shareholders, the Optionholders and H.I.G. Cayman
have determined that it is in their best interests for H.I.G. Cayman, as the
Shareholder Representative, to enter into this Agreement and to establish the
escrow arrangement required by Buyer on the terms and conditions set forth
herein; and
WHEREAS, Buyer, H.I.G. Cayman and the Escrow Agent desire to set
forth the terms and conditions pursuant to which the Deposit Fund (defined
below) and the Escrow Fund (defined below), will be held by the Escrow Agent and
disbursed to Buyer and/or H.I.G. Cayman, as the Shareholder Representative, as
the case may be.
NOW, THEREFORE, in consideration of the mutual premises,
agreements and covenants set forth herein and in the Stock Purchase Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending legally to be
bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
All capitalized terms not otherwise defined herein and defined in
the Stock Purchase Agreement shall have the meanings attributed to them in the
Stock Purchase Agreement.
ARTICLE 2
TERM OF THE AGREEMENT
The term of this Agreement shall commence on the date of this
Agreement and shall continue in effect until the distribution in full of the
Escrow Fund pursuant to the terms and conditions set forth herein (the "Term").
ARTICLE 3
ESTABLISHMENT OF THE DEPOSIT FUND
AND THE ESCROW FUND
3.01 DELIVERY OF THE DEPOSIT FUND AND THE ESCROW FUND; RECEIPT BY
ESCROW AGENT.
(a) Contemporaneous with the execution of the Stock Purchase
Agreement, Buyer shall, in accordance with Section 1.02 of the Stock Purchase
Agreement, deliver to the Escrow Agent cash, which represents the Deposit, in
the aggregate amount of two million five hundred thousand dollars ($2,500,000)
(the "Deposit Fund"), which shall be deposited in a segregated interest-bearing
account (the "Deposit Account"). The Deposit Fund shall be invested and
reinvested as provided in Section 3.02 below. Any interest that accrues on any
portion of the Deposit Fund during the Term shall not be considered part of the
Deposit Fund, but shall be deposited by the Escrow Agent in a segregated
interest-bearing account (the "Deposit Interest Account") in the name of Buyer,
which account shall be under the sole control and dominion of Buyer, except as
set forth in Section 6.02 hereof.
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(b) On the Closing Date, Buyer shall, in accordance with Section
1.05 of the Stock Purchase Agreement, deliver to the Escrow Agent cash in the
aggregate amount of five million dollars ($5,000,000) (the "Escrow Fund"), which
shall be deposited in a segregated interest-bearing account (the "Escrow
Account") The Escrow Fund shall be invested and reinvested as provided in
Section 3.02 below. Any interest that accrues on any portion of the Escrow Fund
during the Term shall not be considered part of the Escrow Fund, but shall be
deposited by the Escrow Agent in a segregated interest-bearing account (the
"Escrow Interest Account") in the name of H.I.G. Cayman, as the Shareholder
Representative, which account shall be under the sole control and dominion of
H.I.G. Cayman, as the Shareholder Representative, except as set forth in Section
6.02 hereof.
(c) The Escrow Agent agrees to hold and dispose of the Deposit
Fund and the Escrow Fund in accordance with the terms and conditions of this
Agreement. The parties hereto acknowledge and agree that the Deposit Fund and
the Escrow Fund may not be insured by the Federal Deposit Insurance Corporation.
The Deposit Account and the Escrow Account shall be under the sole control and
dominion of the Escrow Agent and subject to the terms of this Agreement, and
shall require an authorized signature of the Escrow Agent in order to make
withdrawals therefrom.
3.02 INVESTMENT OF THE DEPOSIT FUND AND THE ESCROW FUND.
(a) The Deposit Fund shall be invested, at the written direction
of Buyer, and the Escrow Fund shall be invested, at the written direction of
H.I.G. Cayman, as the Shareholder Representative, in any of the following
(collectively, the "Permitted Investments"): (i) United States Treasury Bills
maturing within ninety-one (91) days of the date of purchase; (ii) demand
deposit accounts, money market deposit accounts and certificates of deposit with
a term not greater than ninety (90) days with a depository having a reported
capital and surplus of not less than fifty million ($50,000,000); (iii)
commercial paper which is rated on the date of purchase in one of the two
highest rating categories by both Standard & Poor's Ratings Group and Moody's
Investors Service, Inc. (together, the "Rating Agencies") and matures not more
than ninety (90) days from the date of purchase; and (iv) investment agreements,
guaranteed investment contracts, repurchase agreements and similar investment
instruments, the issuer or guarantor of which is rated in one of the two highest
rating categories by both of the Rating Agencies or which investment instruments
are collateralized by Permitted Investments rated on the date of purchase in one
of the two highest rating categories by both of the Rating Agencies, which
instruments have a term not greater than ninety (90) days. In the absence of any
direction for investing the Deposit Fund and/or the Escrow Fund, the Escrow
Agent shall invest the Deposit Fund and the Escrow Fund in One Group Treasury
Only Money Market Fund.
(b) The Escrow Agent shall have no liability for any loss
incurred as a result of investments made or liquidated by it in accordance with
the provisions of this Agreement.
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ARTICLE 4
DISTRIBUTION OF THE DEPOSIT FUND
AND THE ESCROW FUND
4.01 DISTRIBUTION OF THE DEPOSIT FUND AND THE ESCROW FUND.
(a) Unless otherwise set forth herein and subject to the terms
and conditions of this Agreement, the Deposit Fund shall be distributed to
either H.I.G. Cayman, as the Shareholder Representative, or Buyer, as the case
may be, in accordance with the terms of the Stock Purchase Agreement (i) in the
manner set forth in a joint written notice given to the Escrow Agent and signed
by both H.I.G. Cayman and Buyer, or (ii) upon delivery to the Escrow Agent of a
final, non-appealable judgment of a court of competent jurisdiction in
Pittsburgh, Pennsylvania, accompanied by a written opinion of counsel for the
presenting party reasonably satisfactory to the Escrow Agent to the effect that
such judgment is a final, non-appealable judgment of such court of competent
jurisdiction.
(b) Unless otherwise set forth herein and subject to the terms
and conditions of this Agreement, the Escrow Fund minus (i) any Pending Claims
Amount (defined below) and (ii) any amounts previously distributed to Buyer
pursuant to the terms of this Agreement shall, if such amount is positive, be
distributed to H.I.G. Cayman, as the Shareholder Representative, on May 15, 2000
(the "Distribution Date") in the manner set forth in a written notice given to
the Escrow Agent by H.I.G. Cayman prior to the Distribution Date. The
Distribution Date may be extended in accordance with Section 4.02(b) hereof.
4.02 INDEMNIFICATION CLAIMS MADE AGAINST THE ESCROW FUND.
(a) Subject to the terms and conditions set forth in the Stock
Purchase Agreement, at any time following the Closing Date and prior to the
Distribution Date, Buyer may deliver written notice (a "Notice of Claim") to the
Escrow Agent and to H.I.G. Cayman, as the Shareholder Representative, to the
effect that Buyer is entitled to indemnification by the Shareholders, the
Optionholders and H.I.G. Cayman pursuant to the Stock Purchase Agreement and is
entitled to receive payment therefor out of the Escrow Fund, and such Notice of
Claim shall constitute the assertion of a claim by Buyer against the Escrow
Fund. Each Notice of Claim shall be given in good faith and shall set forth in
reasonable detail the nature and estimated amount of the claims, damages,
losses, liabilities, Taxes, regulatory actions, injuries to Persons, property or
natural resources, fines, penalties, costs and expenses (including, without
limitation, settlement costs, any reasonable legal, accounting or other expenses
incurred in connection with investigating or defending any actions or threatened
actions and court costs) (collectively, "Losses") giving rise to a right of
indemnification. Upon receipt by the Escrow Agent of any Notice of Claim, the
Escrow Agent shall retain in the Escrow Fund an amount equal to the Losses
claimed by Buyer until such time as there
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has been a determination of such Losses in accordance with the terms and
provisions of the Stock Purchase Agreement (a "Pending Claims Amount").
(b) The Shareholders, the Optionholders, H.I.G. Cayman and Buyer
shall follow the procedures and be subject to the limitations set forth in
Article IX of the Stock Purchase Agreement, in connection with any claim for
indemnification. Any actions taken by Buyer or the Shareholders, the
Optionholders and H.I.G. Cayman, as the case may be, pursuant to the provisions
of Article IX of the Stock Purchase Agreement, shall extend the Distribution
Date solely with respect to the Pending Claims Amount until such time as there
has been a determination of such Losses in accordance with the terms and
provisions of the Stock Purchase Agreement. The parties hereto shall promptly
notify the Escrow Agent in writing of any event that would extend the
Distribution Date.
(c) Within two (2) business days after the receipt of any notice
of final determination in favor of Buyer with respect to the Shareholders, the
Optionholders' and H.I.G. Cayman's indemnification obligations (which notice
shall be accompanied by a copy of any document, agreement, award or order,
judgment or decree evidencing such final determination) or upon written
instructions from H.I.G. Cayman, as the Shareholder Representative, the Escrow
Agent shall deliver to Buyer from the Escrow Fund, free and clear of any
interest of the Shareholders, the Optionholders and H.I.G. Cayman, an amount
equal to the amount of such Losses as finally determined in accordance with
Article IX of the Stock Purchase Agreement or as set forth in any written
instructions from H.I.G. Cayman, as the Shareholder Representative, as the case
may be. In the event that such final determination is in favor of the
Shareholders, the Optionholders and H.I.G. Cayman and the Distribution Date has
occurred, the Escrow Agent shall deliver to H.I.G. Cayman, as the Shareholder
Representative, in the manner set forth in a notice given to the Escrow Agent by
H.I.G. Cayman prior to such delivery, that amount of the Pending Claims Amount
relating to such final determination, if any, in excess of any other remaining
Pending Claims Amounts.
4.03 PROVISIONS OF THE STOCK PURCHASE AGREEMENT. Nothing in this
Agreement shall derogate from, or modify in any respect any of the terms and
provisions of the Stock Purchase Agreement, including, without limitation,
Article IX thereof with respect to indemnification. Nothing in this Agreement
shall prevent Buyer from exercising its rights to receive indemnification from
the Shareholders, the Optionholders, H.I.G. Cayman, HIG Fund and/or H.I.G.
Management pursuant to the Stock Purchase Agreement for amounts in excess of the
Escrow Fund.
ARTICLE 5
SETTLEMENT OF DISPUTES
5.01 SETTLEMENT OF DISPUTES. Other than with respect to matters
governed by the Stock Purchase Agreement, which shall be governed by the terms
and provisions
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thereof, any dispute that may arise under this Agreement with respect to (a) the
facts upon which the Escrow Agent's determinations are based, (b) the duties of
the Escrow Agent hereunder, and (c) any other questions arising under this
Agreement, including, without limitation, the basis of a claim for payment from
the Deposit Fund, or reimbursement or payment from the Escrow Fund, shall be
finally determined by (i) mutual agreement of Buyer and H.I.G. Cayman, as the
Shareholder Representative (evidenced by appropriate instructions in writing to
the Escrow Agent signed by Buyer and H.I.G. Cayman, as the Shareholder
Representative), within thirty (30) days after such dispute arises, or (ii) a
court of competent jurisdiction in Pittsburgh, Pennsylvania; provided, however,
that the foregoing shall not be construed to preclude Buyer and H.I.G. Cayman,
as the Shareholder Representative, from resolving any dispute arising hereunder
by mutual agreement in accordance with clause (i) above at any time; provided
further, that if the Escrow Agent has deposited the amount remaining in the
Deposit Fund or the Escrow Fund with a court pursuant to Section 6.08 hereof,
the dispute shall be determined by such court. The Escrow Agent shall be under
no duty to institute or defend any proceeding relating to any such dispute and
none of the costs and expenses of any such proceeding shall be borne by the
Escrow Agent. Pending the resolution of any dispute as provided in this Article
V, the Escrow Agent is authorized and directed to retain in its possession the
portion of the Deposit Fund or the Escrow Fund that is the subject of or
involved in the dispute.
5.02 ATTORNEYS' FEES AND EXPENSES. In the event action is brought
to enforce the provisions of this Agreement pursuant to this Article V, the
non-prevailing parties shall be required to pay the reasonable attorneys' fees
and expenses of the prevailing parties, except that if in the opinion of the
court deciding such action there is no prevailing party, each party shall pay
its own attorneys' fees and expenses.
ARTICLE 6
PROVISIONS CONCERNING THE ESCROW AGENT
6.01 AMENDMENTS AND MODIFICATIONS. Subject to the provisions of
Section 7.06 hereof, the Escrow Agent shall not in any way be bound or affected
by any amendment, modification or cancellation of this Agreement which increases
or alters the obligations of the Escrow Agent under or pursuant to this
Agreement, unless the same shall have been agreed to in writing by the Escrow
Agent.
6.02 COMPENSATION. The Escrow Agent shall be entitled to the fees
set forth on Schedule C attached hereto and to reimbursement for all reasonable
out-of-pocket expenses (including the reasonable fees and expenses of counsel)
incurred in connection with the performance of its services hereunder. Each of
Buyer, on the one hand, and the Shareholders, the Optionholders and H.I.G.
Cayman, on the other hand, shall bear one-half of any liability for fees owed to
and reimbursement of expenses incurred by the Escrow Agent pursuant to this
Section 6.02. Upon receipt by Buyer and H.I.G. Cayman, as the Shareholder
Representative, of the Escrow Agent's written notice itemizing such fees and
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out-of-pocket expenses, the Escrow Agent shall be entitled to the payment
thereof within thirty (30) days after such written notice is given.
Notwithstanding anything to the contrary contained herein, the Escrow Agent
shall be entitled to retain from any disbursements requested hereunder any
outstanding fees and/or expenses due from the party to whom such funds are to be
disbursed. The Escrow Agent is hereby granted a first lien on the portion of the
Deposit Fund, the Escrow Fund, the Deposit Interest Account and the Escrow
Interest Account otherwise payable to a party for all indebtedness that may
become owing to the Escrow Agent by such party pursuant to this Escrow
Agreement. In the event that such fees or expenses are not paid to the Escrow
Agent within thirty (30) days of written notice, the Escrow Agent may charge
such fee against that portion of the Deposit Fund, the Escrow Fund, the Deposit
Interest Account and the Escrow Interest Account, if any, determined to be due
to the party from whom such fees and expenses are owed; provided that all
amounts owing by Buyer hereunder shall first be charged against the Deposit
Interest Account, and all amounts owing by H.I.G. Cayman, as the Shareholder
Representative, hereunder shall first be charged against the Escrow Interest
Account.
6.03 DUTIES OF THE ESCROW AGENT. This Agreement sets forth the
duties and obligations of the Escrow Agent with respect to any and all matters
pertinent to its acting as such hereunder. The Escrow Agent shall not have
duties or responsibilities under this Agreement other than those specifically
set forth herein and shall act only in accordance with the provisions hereof.
Without limiting the generality of the foregoing, the Escrow Agent shall not
have any duty or responsibility (i) to enforce or cause to be enforced any of
the terms and conditions contained in the Stock Purchase Agreement, or (ii) to
verify the accuracy or sufficiency of any notice or other document received by
it in connection with this Agreement. The Escrow Agent shall be entitled to rely
upon any instructions or directions to it in writing under this Agreement signed
by the proper party or parties and shall be entitled to treat as genuine any
instruction or document delivered to the Escrow Agent hereunder and reasonably
believed by the Escrow Agent to be genuine and to have been presented by the
proper party or parties, without being required to determine the authenticity or
correctness of any fact stated therein, or the authority or authorization of the
person or persons making and/or delivering the same.
6.04 LIABILITY OF THE ESCROW AGENT. Neither the Escrow Agent nor
any of its officers, directors, employees, shareholders, representatives or
agents shall be liable to Buyer, the Shareholders, the Optionholders or H.I.G.
Cayman, or any other person or entity for or in respect of any Losses resulting
from or arising out of any act or failure to act by it in connection with this
Agreement, other than for any Loss which shall be finally adjudicated to be the
result of gross negligence or willful misconduct on the part of the Escrow Agent
or any such officers, directors, employees, shareholders, representatives or
agents. The Escrow Agent shall not be liable or responsible because of the loss
of any monies arising as a result of investments made in accordance with this
Agreement or through the insolvency or the act of default or omission of any
depository in which such monies shall have been deposited.
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6.05 INDEMNITY OF THE ESCROW AGENT. Buyer, other than with
respect to the matters described in Section 7.13 hereof, the Shareholders, the
Optionholders and H.I.G. Cayman hereby agree, severally but not jointly, to
protect, defend, indemnify and hold harmless the Escrow Agent against any and
all costs, losses, damages, liabilities, claims, expenses (including the
reasonable fees and expenses of counsel) and claims incurred by it without gross
negligence or willful misconduct on the indemnified party's part arising out of
or in connection with its entering into this Escrow Agreement and the carrying
out of its duties hereunder, including the reasonable costs and expenses of
defending itself against any claim of liability relating to this Escrow
Agreement.
6.06 RESIGNATION OF THE ESCROW AGENT. At any time that the Escrow
Agent so chooses, the Escrow Agent may resign from its duties hereunder by
giving not less than thirty (30) days' prior written notice to Buyer and H.I.G.
Cayman, as the Shareholder Representative, and shall designate, by mutual
consent, a successor escrow agent; provided, that notwithstanding any
resignation date set forth in the Escrow Agent's notice, such resignation shall
not take effect until receipt by the Escrow Agent of an instrument duly executed
by a successor escrow agent evidencing its appointment as Escrow Agent hereunder
and acceptance of this Agreement. If no successor escrow agent is appointed
within such thirty (30) day period, the Escrow Agent may deposit the amount
remaining in the Deposit Fund and the Escrow Fund with a court of competent
jurisdiction as provided in Section 6.08 hereof, whereupon the Escrow Agent
shall be discharged of all duties and obligations hereunder.
6.07 REMOVAL OF ESCROW AGENT. The Escrow Agent may be removed at
any time by mutual agreement of Buyer and H.I.G. Cayman, as the Shareholder
Representative, by giving not less than thirty (30) days' prior written notice
to the Escrow Agent. Prior to the expiration of such thirty (30) day period,
Buyer and H.I.G. Cayman, as the Shareholder Representative, shall designate, by
mutual consent, a successor escrow agent. If no successor escrow agent is
appointed within such thirty (30) day period, the Escrow Agent may deposit the
amount remaining in the Deposit Fund and the Escrow Fund with a court of
competent jurisdiction as provided in Section 6.08 hereof, whereupon the Escrow
Agent shall be discharged of all duties and obligations hereunder.
6.08 DEPOSIT WITH COURT. Notwithstanding anything herein to the
contrary, in the event of any disagreement between any of the parties to this
Agreement, or between them and any other person, resulting in adverse claims or
demands being made against the Deposit Fund or the Escrow Fund, or in the event
the Escrow Agent in good faith is in doubt as to what action it should take
hereunder, the Escrow Agent may be discharged of its duties and obligations
hereunder upon its deposit, at any time after ten (10) days' written notice to
Buyer and H.I.G. Cayman, as the Shareholder Representative, of the amount
remaining in the Deposit Fund or the Escrow Fund with a court of competent
jurisdiction in Pittsburgh, Pennsylvania. The parties hereto hereby submit to
the personal jurisdiction of any such
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court, waive any and all right to contest the jurisdiction of such court, and
consent to service of process by hand delivery or mail delivery thereof to their
respective addresses set forth in Section 7.01 hereof.
6.09 ABILITY TO CONSULT COUNSEL. The Escrow Agent may confer with
legal counsel in the event of any dispute or question as to the construction of
any of the provisions hereof, or its duties hereunder, and it shall incur no
liability and it shall be fully protected in acting in accordance with the
opinions of such counsel.
ARTICLE 7
MISCELLANEOUS
7.01 NOTICES. All notices, requests and other communications
which are required or permitted hereunder shall be sufficient if given in
writing and shall be deemed effective when delivered personally, delivered by
registered or certified mail, postage prepaid, five (5) business days after
being sent by regular mail with postage prepaid or sent by facsimile
transmission (with a copy simultaneously sent by registered or certified mail,
postage prepaid), as follows (or to such other address as shall be set forth in
a notice given in the same manner):
NOTICES TO BUYER:
Atrium Companies, Inc.
1341 W. Mockingbird Lane
Suite 1200W
Dallas, Texas 75247
Attn: Jeff L. Hull
Facsimile Number: (214) 630-5001
and
Atrium Companies, Inc.
c/o Ardshiel, Inc.
230 Park Avenue
New York, NY 10169
Attn: Daniel T. Morley
James G. Turner
Facsimile Number: (212) 972-1809
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
399 Park Avenue
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New York, NY 10022-4697
Attn: Joel M. Simon
Marie Censoplano
Facsimile Number: (212) 319-4090
NOTICES TO THE SHAREHOLDERS, THE OPTIONHOLDERS AND H.I.G. CAYMAN:
H.I.G. Vinyl , Inc.
c/o H.I.G. Capital Management, Inc.
1001 Brickell Bay Drive, Suite 2310
Miami, Florida 33131
Attn: Anthony A. Tamer
Brian D. Schwartz
Facsimile Number: (305) 379-2013
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: James L. Learner
E. Paul Quinn
Facsimile Number: (312) 861-2200
NOTICES TO THE ESCROW AGENT:
Bank One, Texas, N.A.
8111 Preston Road
2nd Floor
Dallas, Texas 75225
Facsimile: (214) 360-3980
Attn: Corporate Trust Department
A copy of any notice or other communication given or made to or by the Escrow
Agent pursuant to this Agreement shall in addition be given or made to each of
the other parties hereto.
7.02 COUNTERPARTS. This Agreement may be executed in several
counterparts each of which is an original and all of which, taken together,
shall constitute a single instrument.
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7.03 CONTENTS OF AGREEMENT: PARTIES IN INTEREST, ETC. This
Agreement and the Stock Purchase Agreement and the documents referred to therein
set forth the entire understanding of the parties. Any previous agreements or
understandings between the parties regarding the subject matter hereof are
merged into and superseded by this Agreement. All representations, warranties,
covenants, terms, conditions and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
legal representatives, successors and permitted assigns of the parties hereto.
Neither this Agreement nor any rights, interest or obligations hereunder may be
assigned by any party without the prior written consent of all other parties
hereto.
7.04 GOVERNING LAW; VENUE. This Agreement shall be construed and
enforced in accordance with the laws of the State of New York without regard to
the principles of conflict of laws. The parties hereto agree to submit to the
personal and exclusive jurisdiction of the state and federal courts serving
Pittsburgh, Pennsylvania with respect to the enforcement or interpretation of
this Agreement or the parties' obligations hereunder. Each party hereto
irrevocably consents to the service of any and all process in any action or
proceeding by the mailing of copies of such process by registered or certified
mail to such party at the address specified in Section 7.01 hereof. Nothing in
this section shall affect the right of any party hereto to serve legal process
in any other manner permitted by law. Each party hereto irrevocably waives, to
the full extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
7.05 SECTION HEADINGS. The section headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.
7.06 MODIFICATION AND WAIVER. Any of the terms or conditions of
this Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof, and this Agreement may be modified or amended
at any time by Buyer, H.I.G. Cayman, as the Shareholder Representative, and the
Escrow Agent. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by Buyer and H.I.G. Cayman, as the
Shareholder Representative and, in the case of Article VI only, the Escrow
Agent. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof nor shall such waiver
constitute a continuing waiver.
7.07 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement.
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7.08 THIRD PARTY BENEFICIARIES. Except as otherwise expressly set
forth herein, no individual or entity shall be a third-party beneficiary of the
representations, warranties, covenants and agreements made by any party hereto.
7.09 TERMINATION.
(a) This Agreement may, by written notice given prior to or at
the Closing, be terminated:
(1) By any of the parties hereto if the Stock Purchase
Agreement is terminated pursuant to its terms; or
(2) By mutual written consent of Buyer and H.I.G. Cayman,
as the Shareholder Representative.
(b) The Escrow Agent's rights to indemnity and to receive payment
of its fees and expenses shall survive any termination of this Escrow Agreement.
7.10 SECURITIES STATEMENTS. Pursuant to the regulations of the
Office of the Comptroller of the Currency, 12 C.F.R. 12.5(a), Buyer and H.I.G.
Cayman, as the Shareholder Representative, have the right to receive, at no
additional cost and within five (5) business days of the transaction, a written
notification disclosing certain information relating to securities purchase and
sale transactions in the Deposit Account and in the Escrow Account. The Escrow
Agent has the option of furnishing to Buyer and H.I.G. Cayman, as the
Shareholder Representative, either (i) a copy of the broker-dealer confirmation
relating to the transaction, or (ii) a written notification disclosing the
Escrow Agent's name, the account name, the Escrow Agent's capacity in the
transaction, the date of execution (and, upon the Buyer's and H.I.G. Cayman's
written request, the time of execution) of the transaction, the identity, price
and number of shares involved, the remuneration to the broker-dealer and its
identity, the total remuneration to be received by the Escrow Agent, and, if no
broker-dealer was involved, the identity of the person from whom the security
was purchased or to whom it was sold.
In lieu of the foregoing time and form of notification, Buyer and
H.I.G. Cayman, as the Shareholder Representative, agree that the Escrow Agent's
periodic statements, transmitted pursuant to the terms of this Escrow Agreement,
will suffice.
7.11 FORM 1099. The Escrow Agent shall provide any Form 1099
required to be provided in respect of the Deposit Interest Account to Buyer, and
in respect of the Escrow Interest Account to the Shareholders, the Optionholders
and H.I.G. Cayman.
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7.12 AUTHORIZED SIGNATORIES. The following persons are authorized
to direct the Escrow Agent regarding any transactions to this Escrow Agreement
including, but not limited to, investment and/or disbursement of the funds and
securities held hereunder.
/s/ Dan Morley /s/ Brian Schwartz
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on behalf of Buyer on behalf of the Shareholder
Representative
/s/ Roger Knight
---------------------------
on behalf of Buyer
7.13 TAX LIABILITIES. The Shareholders, the Optionholders and
H.I.G. Cayman warrant to the Escrow Agent that there are no federal, state or
local tax liabilities or filing requirements whatsoever concerning the Escrow
Agent's actions contemplated hereunder and warrant and represent to the Escrow
Agent that the Escrow Agent has no duty to withhold or file any report or any
tax liability under any federal or state income tax, local or state property
tax, local or state sales or use taxes, or any other tax by any taxing
authority. The Shareholders, the Optionholders and H.I.G. Cayman hereto agree to
indemnify the Escrow Agent fully from any tax liability, penalties or interest
incurred by the Escrow Agent arising hereunder and agree to pay in full any such
tax liability together with penalty and interest, if any, that is ultimately
assessed against the Escrow Agent for any reason as a result of its action or
inaction (other than for its gross negligence or willful misconduct) hereunder
(except for the Escrow Agent's individual income tax liability).
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and the year first above written.
ATRIUM COMPANIES, INC.
By: /s/ Jeff L. Hull
--------------------------------------
Name: Jeff L. Hull
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
THE SHAREHOLDERS NAMED ON SCHEDULE A
HERETO, THE OPTIONHOLDERS NAMED ON
SCHEDULE B HERETO AND H.I.G. VINYL, INC. (A
CAYMAN ISLAND CORPORATION)
BY: H.I.G. VINYL, INC. (a Cayman Island
corporation), as the Shareholder Representative
By: /s/ Brian Schwartz
--------------------------------------
Name: Brian Schwartz
Title:
BANK ONE, TEXAS, N.A., as Escrow Agent
By: /s/ Amy C. Perkins
--------------------------------------
Name: Amy C. Perkins
Title: Assistant Vice President
SCHEDULE A
THE SHAREHOLDERS
H.I.G. Vinyl, Inc. (a Delaware corporation)
David Rascoe
Todd Rascoe
Brian Warren
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SCHEDULE B
THE OPTIONHOLDERS
Emmett Barnes IV
Kent W. Davis
Jay I. Deems
Evan Kaffenes
Steven L. Malis
Duane Petitclerc
Gary Petitclerc
Arthur J. Poland
David Rascoe
Todd Rascoe
Dennis Siegel
Siri Strom
Brian Warren
Hartmut U. Zaun
NationsCredit Commercial Corporation
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SCHEDULE C
ESCROW AGENT FEES
See attached.
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ANNEX A
STOCK PURCHASE AGREEMENT
See attached.
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