INDEMNIFICATION ESCROW AGREEMENT
THIS INDEMNIFICATION ESCROW AGREEMENT (this "Agreement") is made and
entered into as of October 2, 1998 by and among Xxxxx, Muse Fund III
Incorporated, a Texas corporation, as the true and lawful agent and
attorney-in-fact for each of the Securityholders (as defined in the Merger
Agreement referred to below) (the "Representative"), D and W Holdings, Inc., a
Delaware corporation ("Buyer"), and Norwest Bank Texas, N.A., a national banking
association with its headquarters in Dallas, Texas (the "Escrow Agent").
RECITALS
Pursuant to the Agreement and Plan of Merger, dated as of August 3, 1998
(the "Merger Agreement"), by and between Buyer, D and W Acquisition Corp.
("Sub"), Atrium Corporation, a Delaware corporation ("Atrium"), and the
securityholders named therein (the "Securityholders"), the parties have agreed
that Sub shall be merged with and into Atrium upon the terms and subject to the
conditions set forth in the Merger Agreement (the "Merger"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings assigned
to them in the Merger Agreement.
The Securityholders have appointed, authorized and empowered Xxxxx, Muse
Fund III Incorporated to act as the Representative pursuant to Article 12 of the
Merger Agreement in connection with, and to facilitate the consummation of the
transactions contemplated by, the Merger Agreement and in connection with the
activities to be performed on behalf of the Securityholders under this
Agreement.
It is a condition precedent to the consummation of the Merger that Buyer,
the Representative and the Escrow Agent execute and deliver this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the recitals and of the respective
agreements and covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound hereby, hereby agree as follows:
SECTION 1. ESTABLISHMENT OF ESCROW ACCOUNT. Concurrently with the
execution hereof and pursuant to the Merger Agreement, Buyer will deliver to the
Escrow Agent by wire transfer of immediately available funds to an account
designated by the Escrow Agent as the "Atrium Indemnity Account" the sum of
$15,000,000 (as such amount may be reduced in accordance with Section 6, the
"Escrow Amount"). The Escrow Amount is being delivered to the Escrow Agent to
be held under the terms of this Agreement as security for the indemnification
obligations of the Securityholders to Buyer Indemnified Parties (as defined in
the Merger Agreement) in accordance with Article 11 of the Merger Agreement.
The Escrow Amount, together with any Interest (as defined below) earned thereon,
is hereinafter referred to as the "Escrowed Property." The Escrowed Property
and any interest, dividends, income or other
proceeds earned thereon from and after the Closing Date (the "Interest") shall
be held, administered and disposed of by the Escrow Agent in accordance with the
terms and conditions hereinafter set forth.
SECTION 2. INVESTMENT OF PROCEEDS OF ESCROWED PROPERTY.
(a) The Escrow Agent shall from time to time invest and reinvest the
Escrowed Property, if any, in such of the following investments as Buyer and the
Representative may from time to time elect by joint notice in writing
("Permitted Investments"):
(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 Xxxxx'x Investor
Services, Inc. or Standard & Poor's Corporation;
(iv) The Norwest Treasury Fund; or
(v) The following institutional money market funds:
(A) Dreyfus Treasury Cash Management Fund
(B) Provident T-Fund Dollar Account
(C) Federated Treasury Obligations Fund
(D) AIM Treasury Portfolio
In the absence of written instructions to the contrary from Buyer and the
Representative, the Escrow Agent shall invest the Escrowed Property in Permitted
Investments set forth in clause (iv) of this Section 2(a).
(b) Any Interest shall be set aside and distributed as provided in Section
2(d).
(c) The Escrow Agent will act upon investment instructions the Business
Day after 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
Escrowed 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 the making of an investment or
reinvestment, and the Escrow Agent shall not be liable for any loss of principal
or income in connection therewith, unless such error, failure or delay results
from the Escrow Agent's gross negligence or willful misconduct. As and when the
Escrowed Property or any Interest or any portion thereof is to be released under
this Agreement, the Escrow Agent shall cause the Permitted Investments to be
converted into cash, and the Escrow Agent shall not be liable for any loss of
principal or income due to the choice of Permitted Investments in which the
Escrowed Property is invested or the choice of Permitted Investments that are
converted into
cash pursuant to this Section 2(c).
(d) All Interest shall be distributed to the Securityholders on a
quarterly basis as of the last day of each March, June, September and December
hereafter, in accordance with written instructions received by the Escrow Agent
and executed by the Representative. In the absence of such written
instructions, all Interest shall be paid at the end of the term of this
Agreement to the Representative. Notwithstanding anything to the contrary
contained herein, any provision hereof requiring the disbursement of Interest by
the Escrow Agent shall be construed to refer only to Interest which has accrued
and been paid to the Escrow Agent. Any Interest which has accrued and, except
for the fact that it has not been paid to the Escrow Agent, would be required to
be disbursed, shall be disbursed within three Business Days of being paid.
(e) For tax purposes, the Escrowed Property shall be deemed property of
the Securityholders and all Interest earned thereon shall be the income of the
Securityholders. Buyer and each of the Securityholders shall file Tax Returns
and the Escrow Agent shall file a Form 1099 consistent with such treatment.
SECTION 3. RELEASE OF THE ESCROWED PROPERTY TO INDEMNITEES. The Escrow
Agent shall disburse to Buyer (for its own account or for the account of any
other Indemnitee, as defined in Section 8) any portion of the Escrow Amount with
respect to which the Escrow Agent receives instructions pursuant to this Section
3 to pay Buyer Indemnified Costs (as defined in the Merger 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 Buyer and the
Representative specifying an amount to be paid to an Indemnitee, or (b) the
delivery to the Escrow Agent and the Representative of a copy of a Final
Determination (as defined below) establishing the Indemnitee's right to
reimbursement under this Agreement and Article 11 of the Merger Agreement with
respect to such Buyer Indemnified Costs. A "Final Determination" shall mean a
final, non-appealable judgment of a court of competent jurisdiction and shall be
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 a court of competent jurisdiction.
SECTION 4. NO DISTRIBUTION OF EXPENSES. Except as set forth in Section 8
of this Agreement, neither the Representative nor Buyer shall be entitled to
reimbursement out of the Escrowed 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 from either of Buyer or the
Representative that the aggregate amount of Buyer Indemnified Costs with respect
to all Claims (as defined in Section 8) asserted by Indemnitees exceeds the
Minimum Loss (as defined in the Merger Agreement), the Escrow Agent shall
segregate from the Atrium Indemnity Account and transfer into a separate account
(the "Pending Claims Account") maintained by the Escrow Agent for the benefit of
Buyer and the Securityholders the portion of the Escrow Amount equal to the
amount of all Buyer Indemnified
Costs in excess of the Minimum Loss which any Indemnitee asserts, in any Claims
Notices, that it may suffer, and shall hold such portion in accordance with this
Section 5. "Pending Claims" shall mean unresolved Claims (as defined in Section
8) that are the subject of Claims Notices delivered under Section 8(b). Such
segregated portion of the Escrow Amount will be invested pursuant to Section 2.
(b) Any portion of the Escrow Amount segregated under Section 5(a) shall
continue to be segregated by the Escrow Agent until the Escrow Agent is directed
to release such portion of the Escrow Amount by (i) written instructions signed
by Buyer and the Representative instructing the Escrow Agent how to pay all or
any portion of such segregated amount or (ii) a copy of a Final Determination
establishing the Indemnitee's or the Representative's right to reimbursement
under Section 8. The Escrow Agent shall be entitled to rely conclusively on the
written advice of counsel to Buyer or the Representative, as the case may be,
that the judgment delivered to the Escrow Agent pursuant to this Section 5(b) is
a Final Determination.
SECTION 6. DISTRIBUTION OF ESCROWED PROPERTY TO THE SECURITYHOLDERS.
(a) Not later than the second Business Day after October 2, 1999 (the "First
Release Date"), the Escrow Agent shall distribute from the Escrowed Property, in
accordance with written instructions received by the Escrow Agent and executed
by the Representative, an amount equal to the excess, if any, of $10,000,000
over the sum of (x) all amounts previously disbursed from the Escrow Amount
pursuant to Section 3, and (y) the aggregate amount that is then being
segregated with respect to Pending Claims under Section 5. Any amounts
segregated with respect to Pending Claims shall be released as provided in
Section 5(b). From and after the First Release Date, the portion of the Escrow
Amount that continues to be held by the Escrow Agent pursuant to this Agreement
shall, for all purposes of this Agreement, be the "Escrow Amount."
(b) Not later than the second Business Day after April 3, 2000 (the "Final
Release Date"), the Escrow Agent shall distribute to the Securityholders the
excess of the Escrowed Property over the aggregate portion of the Escrow Amount
that is then being segregated with respect to Pending Claims under Section 5.
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 Escrowed 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 AMOUNT. From and after the Closing,
but subject to the conditions and limitations set forth in this Agreement and
the Merger Agreement, the Buyer Indemnified Parties (collectively with their
respective successors and assigns, the "Indemnitees") and the Indemnifying
Parties shall be entitled to reimbursement out of the Escrow Amount for any and
all (i) Buyer Indemnified Costs, with respect to the Buyer Indemnified
Parties, and (ii) court costs and reasonable attorneys' fees and expenses
incurred, or for which an invoice or similar request for payment has been
received, by a Buyer Indemnified Party or an Indemnifying Party who controls the
defense of any third-party action for Buyer Indemnified Costs (other than a
Buyer Indemnified Party in respect of a Buyer Controlled Claim) in investigating
and preparing for any litigation proceedings relating to such third-party action
pursuant to, and as provided in, Article 11 of the Merger Agreement
(collectively, the "Claims"). Notwithstanding any of the provisions of the
Merger Agreement, the Escrow Agent shall be entitled to conclusively rely upon
the provisions of Sections 8(a)-(d) hereof in determining whether a Claim for
indemnification shall be paid out of the Escrow Amount.
(a) Claims against the Escrow Amount may be made by 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 Buyer Indemnified Parties against the Escrow Amount
for Buyer Indemnified Costs under this Section 8 unless Buyer provides written
notice to the Escrow Agent and the Representative that Buyer has authorized
another Buyer Indemnified Party to make such claims.
(b) Buyer shall promptly notify the Representative and the Escrow Agent in
writing of any sums which Buyer claims are subject to indemnification (a "Claims
Notice"). Failure of Buyer to exercise promptness in such notification shall
not amount to a waiver of such Claim unless, and only to the extent that, the
resulting delay materially and adversely prejudices the Securityholders. Each
Claims 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) The Representative may contest any Claim (or any portion thereof)
specified in any Claims Notice by giving the Escrow Agent and Buyer written
notice of such contest within 15 Business Days after receipt by the
Representative and the Escrow Agent of such Claims Notice, 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 the Representative does not dispute.
(d) Payment of any Claim for indemnification (or portion thereof) shall
become due and payable as follows:
(i) If, notwithstanding Section 3 of this Agreement, at 5:00 p.m.
(Dallas time) on the fifteenth Business Day after receipt by the
Representative and the Escrow Agent of a Claims Notice pursuant to Section
8(b) above, the Escrow Agent has not received written notice from the
Representative that the Representative contests the Claim (or portion
thereof) pursuant to Section 8(c) above, the amount of the Claim (or the
uncontested portion thereof) shall be promptly paid by the Escrow Agent to
Buyer;
(ii) If the Representative contests a Claim (or portion thereof)
pursuant to Section 8(c) and the Claim (or portion thereof) is thereafter
settled by a written agreement
of the 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 the Representative contests the Claim (or portion thereof)
pursuant to Section 8(c) hereof and a Final Determination is thereafter
obtained, the amount set forth in such 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 Buyer
Indemnified Costs to be reimbursed from the Atrium Indemnity Account must be
asserted by Buyer or any Buyer Indemnified Party designated pursuant to Section
8(a) by delivery of a Claims Notice which must be received by the Representative
and the Escrow Agent prior to 5:00 p.m. (Dallas time) on the Final Release Date.
SECTION 10. THE ESCROW AGENT. To induce the Escrow Agent to act
hereunder, it is further agreed by Buyer and the Representative that:
(a) The Escrow Agent shall not be under any duty to give the Escrowed
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 Escrowed Property held
hereunder except as directed in this Agreement. Uninvested Escrowed 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 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 and the 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 Escrowed Property or any loss of
interest incident to any such delays. This Section 10(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 in good faith upon any
order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder in accordance with the terms hereof 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 in good faith 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 good faith in accordance with such advice.
(f) The Escrow Agent does not have any interest in the Escrowed Property
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Buyer and the Representative shall on a 50%/50% basis pay
or reimburse the Escrow Agent upon request for any transfer taxes or other taxes
relating to the Escrowed 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
Atrium Indemnity Account 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 Escrowed Property and is not responsible for any
other reporting. This Section 10(f) shall survive notwithstanding any
termination of this Agreement or the resignation of the Escrow Agent.
(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 taking 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 Escrowed 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 date (the
"Resignation Date") which is the earlier to occur of: (i) the date a successor
is appointed (including a court of competent jurisdiction) or (ii) the date
which is 30 days after the date of delivery of its written notice of resignation
to the other parties hereto. Upon the appointment of a successor escrow agent,
such successor escrow agent shall deliver written notice to Buyer and the
Representative on the appointment of such successor escrow agent. If, at the
Resignation Date, the Escrow Agent has not received a designation of a successor
escrow agent, the Escrow Agent's sole responsibility after the Resignation Date
shall be to safekeep the Escrowed 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 to the effect that the Escrow Agent may
transfer the Escrowed Property to another party without incurring liability
under this Agreement.
(j) The Escrow Agent shall have no responsibility for the contents of any
writing of 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 Buyer and the Securityholders
resulting in adverse claims or demands being made in connection with the
Escrowed 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 Escrowed Property until the Escrow Agent shall have
received (i) a Final Determination (accompanied by the opinion of counsel
referred to in Section 3) directing delivery of the Escrowed Property or (ii) a
written agreement executed by Buyer and the Representative directing delivery of
the Escrowed Property, in which event the Escrow Agent shall disburse the
Escrowed 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 except for
the establishment, if necessary, of the Pending Claims Account) for the services
to be rendered by the Escrow Agent hereunder shall be the amount of $2,500 paid
by Buyer and the Securityholders on a 50%/50% basis at the time of execution of
this Agreement, 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) not to exceed $1,000 absent any litigation or other dispute
arising under this Agreement. All fees and expenses of the Escrow Agent
hereunder shall be paid by Buyer and the Securityholders 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. The Escrow Agent's fee may be adjusted from time to time to conform
to its then current guidelines. If the Escrow Agent establishes the Pending
Claims Account under Section 5 of this Agreement, Buyer and the Securityholders
shall pay the amount of $1,500 annually on a 50%/50% basis to the Escrow Agent
for the set-up and administration of such Pending Claims Account.
(m) No prospectuses, press releases, reports and promotional material, or
other similar materials which mention in any language the Escrow Agent's name or
the rights, powers or duties of the Escrow Agent shall be issued by the other
parties hereto or on such parties' behalf unless the Escrow Agent shall first
have given its specific written consent thereto.
(n) 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 11. NOTICES. All notices, requests, consents, waivers and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if: (a) transmitted by facsimile,
upon acknowledgment of receipt thereof in writing by facsimile or otherwise;
(b) personally delivered, upon delivery or refusal of
delivery; (c) mailed by registered or certified United States mail, return
receipt requested, postage prepaid, upon delivery or refusal of delivery; or
(d) if sent by a nationally recognized overnight delivery service, upon delivery
or refusal of delivery. All notices, consents, waivers or other communications
required or permitted to be given hereunder shall be addressed to the respective
party to whom such notice, consent, waiver or other communication relates at the
following addresses:
(i) if to Buyer or to any Buyer Indemnified Party:
D and W Holdings, Inc.
c/o Ardshiel, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Paul, Hasting, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxx
Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxx Xxxxxxxxxx LLP
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) if to the Representative, to:
Xxxxx, Muse Fund III Incorporated
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) if to the Escrow Agent, to:
Norwest Bank Texas, N.A.
000 Xxxx Xxxxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party by written notice to the other parties pursuant to this Section
11 may change the address or the persons or party to whom
notices or copies thereof shall be directed.
SECTION 12. WAIVERS; AMENDMENTS. 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. This Agreement
may only be modified by a writing signed by all of the parties hereto.
SECTION 13. 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 are references to Sections of this Agreement.
SECTION 14. ASSIGNMENT; THIRD PARTIES. Neither this Agreement nor any of
the rights, interests, or obligations hereunder shall be assigned by any of the
parties hereto, whether by operation of law or otherwise; provided, however,
that (a) upon notice to the Representative and without releasing Buyer from any
of its obligations or liabilities hereunder, Buyer may assign or delegate any or
all of its rights or obligations under this Agreement to any Affiliate of Buyer,
and (b) nothing in this Agreement shall limit Buyer's ability to make a
collateral assignment of its rights under this Agreement without the consent of
the Representative to any institutional lender that provides funds to Buyer or
Buyer's designee; PROVIDED, HOWEVER, that unless written notice is given to the
Representative that any such collateral assignment has been foreclosed upon, the
Representative shall be entitled to deal exclusively with Buyer as to any
matters arising under this Agreement or any of the other agreements delivered
pursuant hereto. In the event of such an assignment, the provisions of this
Agreement shall inure to the benefit of and be binding on Buyer's assigns.
SECTION 15. TERMINATION. This Agreement shall terminate at the time of
the final distribution by the Escrow Agent of all Escrowed Property in
accordance with the provisions of this Agreement.
SECTION 16. 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 17. GOVERNING LAW; SEVERABILITY. This Agreement shall be
construed in accordance with and governed by the internal law of the state of
Delaware (without reference to its rules as to conflicts of law). The
invalidity, legality or enforceability of any provisions of this Agreement shall
in no way affect the validity, legality or enforceability of any other
provision; and if any provision is held to be unenforceable as a matter of law,
the other provisions shall not be affected thereby and shall remain in full
force and effect.
SECTION 18. CONSENT TO SERVICE. Buyer and the Representative hereby
irrevocably submit to the jurisdiction of any Texas State or federal court in
any action or proceeding to which the Escrow Agent is a party 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 Texas State or federal court. The
parties hereby consent to and grant to any such court jurisdiction over the
person 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.
SECTION 19. WAIVER OF OFFSET RIGHTS. The Escrow Agent hereby waives any
and all rights to offset that it may have against the Escrowed Property
including, without limitation, claims arising as a result of any claims,
amounts, liabilities, costs, expenses, Buyer Indemnified Costs 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 Indemnitee, other
than Escrow Agent Claims arising under this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
D AND W HOLDINGS, INC.
By:
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Name:
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Title:
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XXXXX, MUSE FUND III INCORPORATED
as Representative
By:
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Name:
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Title:
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NORWEST BANK TEXAS, N.A.
By:
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Name:
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Title:
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