AMENDMENT NO. 1 TO INDEMNIFICATION ESCROW AGREEMENT
THIS AMENDMENT NO. 1 TO INDEMNIFICATION ESCROW AGREEMENT (this
"Amendment"), is made and entered into as of April 14, 1999 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
(as subsequently amended, the "Merger Agreement"), by and among Buyer, D and
W Acquisition Corp., a Delaware corporation, Atrium Corporation, a Delaware
corporation, and the Securityholders named therein (the "Securityholders"),
the Representative, Buyer and the Escrow Agent entered into an
Indemnification Escrow Agreement as of October 2, 1998 (the "Escrow
Agreement"). Capitalized terms used and not defined herein shall have the
respective meanings ascribed to them in the Escrow 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 transaction contemplated by, the Merger Agreement and in connection
with the activities to be performed on behalf of the Securityholders under
the Escrow Agreement.
The parties hereto wish to amend the Escrow Agreement as set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the recitals and the respective
agreements and covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
1. SUBSTITUTION OF ESCROWED PROPERTY. At the time the parties entered
into the Escrow Agreement, the Escrow Amount was deposited with the Escrow
Agent to be held under the terms of the Escrow 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. Simultaneously with the execution and
delivery of this Amendment, to secure the indemnity obligations of Xxxxxxx X.
Xxxxxxxx ("Xxxxxxxx") to Buyer Indemnified Parties in accordance with
Article 11 of the Merger Agreement, Xxxxxxxx has delivered to the Escrow
Agent a Letter of Credit issued by Bankers Trust Company (the "LC Agent"),
naming the Escrow Agent as beneficiary (the "Letter of Credit") issued in the
original amount of $1,566,625. Upon receipt by the Escrow Agent of the
Letter of Credit, the Escrow Agent is hereby authorized and instructed by
Buyer and the Representative to distribute a portion of the Escrow Amount
equal to $1,566,625 in accordance with the instructions set forth in Appendix
I hereto. Each of Buyer, the Representative and the Escrow Agent hereby
covenant and agree that the Escrow Agreement is hereby amended to the extent
required to allow the substitution of the Letter of Credit for the portion of
the Escrowed Property which is distributed in accordance with this Section 1,
and hereby irrevocably waive any breach or default under the Escrow Agreement
that would otherwise result from such substitution.
2. LETTER OF CREDIT. The Escrow Agreement is hereby amended by inserting
the following Section 1A immediately following Section 1 to the Escrow
Agreement:
"Section 1A LETTER OF CREDIT. The Letter of Credit shall be
deemed "Escrowed Property" for all purposes under the Escrow
Agreement. If the Escrow Agent receives (i) written instructions
executed by the Representative requesting the Escrow Agent to draw
funds under the Letter of Credit, or (ii) joint written
instructions executed by Buyer and the Representative requesting
the Escrow Agent to draw funds under the Letter of Credit, or (iii)
a Final Determination setting forth an amount to be drawn under the
Letter of Credit, or (iv) written instructions executed by Buyer
requesting the Escrow Agent to draw funds under the Letter of
Credit in connection with a Claim made pursuant to Section 8 of the
Escrow Agreement, then within two (2) Business Days after receipt
of such written instructions or Final Determination, as applicable,
the Escrow Agent shall present to the LC Agent a Drawing
Certificate in the form attached hereto as Appendix II (the
"Drawing Certificate") duly executed by an officer of the Escrow
Agent and requesting payment under the Letter of Credit in an
amount equal to the amount set forth in such written instructions
or Final Determination, as applicable. The Escrow Agent shall then
deposit into the Atrium Indemnity Account any funds received upon
the draw under the Letter of Credit and, if less than the full
amount of the Letter of Credit is drawn, the Escrow Agent shall
continue to hold the Letter of Credit pursuant to the terms of this
Agreement, including those set forth in this Section 1A. Any funds
drawn under the Letter of Credit and deposited into the Atrium
Indemnity Account shall be deemed a part of the "Escrow Amount" for
all purposes under the Escrow Agreement and shall be held,
administered and disposed of by the Escrow Agent in accordance with
the terms and conditions set forth in the Escrow Agreement. If the
Letter of Credit has not been fully drawn at or prior to the second
Business Day after the Final Release Date, not later than the
fourth Business Day after the Final Release Date, the Escrow Agent
shall deliver the Letter of Credit to the Representative."
3. CONSTRUCTION. The headings in this Amendment are solely for
convenience of reference and shall not be given any effect in the
construction or interpretation of this Amendment or the Escrow Agreement.
Unless otherwise stated, references to Sections are references to Sections of
this Amendment.
4. COUNTERPARTS. This Amendment 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.
5. GOVERNING LAW. This Amendment 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).
6. Effect of Amendment. Except as amended hereby, the terms and
provisions of the Escrow Agreement shall remain in full force and effect, and
are hereby in all respects ratified and confirmed by the parties hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written above.
D AND W HOLDINGS, INC.
By:
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Name:
Title:
XXXXX, MUSE FUND III INCORPORATED,
as Representative
By:
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Name:
Title:
NORWEST BANK TEXAS, N.A.
By:
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Name:
Title:
APPENDIX I
DISTRIBUTION INSTRUCTIONS
