AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER (this "Amendment"),
dated as of April 14, 1999, is made by and among D and W Holdings, Inc., a
Delaware corporation ("Parent"), Atrium Corporation, a Delaware corporation (the
"Company"), and each of the persons whose names are set forth on the signature
pages hereto (collectively, the "Securityholders").
PRELIMINARY STATEMENTS
A. Parent, the Company, D and W Acquisition Corp., a Delaware corporation
which was a wholly owned subsidiary of Parent and predecessor by merger to the
Company ("Sub"), and the Securityholders entered into an Agreement and Plan of
Merger dated as of August 3, 1998 with respect to the merger of Sub with and
into the Company (as subsequently amended by Amendment No. 1 to Agreement and
Plan of Merger dated as of October 2, 1998, by and among Parent and the
individuals set forth on the signature pages thereto, the "Agreement").
B. Capitalized terms used and not defined herein shall have the
respective meanings ascribed to them in the Agreement.
C. The parties hereto wish to amend the Agreement as set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and upon the terms and subject to the
conditions hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS.
(a) Section 1.1 of the Agreement is hereby amended by inserting the
following new defined terms in the appropriate alphabetical order:
"▇▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
"INITIAL MAXIMUM SECURITYHOLDER ESCROW AMOUNT" shall mean, with
respect to any Securityholder, the amount set forth opposite such
Securityholder's name in column C of SCHEDULE I to the Agreement.
"LETTER OF CREDIT" shall mean the original irrevocable letter of
credit in favor of
the Escrow Agent in the form of ANNEX I hereto, to be issued by Bankers Trust
Company.
(b) Section 1.1 of the Agreement is hereby amended by amending and
restating the following defined terms to read in their entirety as follows:
"ESCROW AMOUNT" shall mean an amount equal to $15,000,000 deposited
with the Escrow Agent (which shall include the Letter of Credit and the funds
that may be drawn under the Letter of Credit) minus any amounts paid from the
Escrow Amount in accordance with Article 11, or such lesser amount as may be
defined as the Escrow Amount from time to time as set forth in Section
11.5(e)(ii).
"MAXIMUM SECURITYHOLDER ESCROW AMOUNT" shall mean, at any time with
respect to any Securityholder, such Securityholder's Initial Maximum
Securityholder Escrow Amount, less any amounts previously deducted from such
Securityholder's Maximum Securityholder Escrow Amount in accordance with Section
11.5(e) (including such Securityholder's PRO RATA portion (based upon the
Maximum Securityholder Escrow Amounts of all Securityholders at the time of such
release) of the amount, if any, released to the Representative pursuant to
Section 11.5(e)(ii)); provided, that, the release of any funds by the Escrow
Agent to ▇▇▇▇▇▇▇▇ upon the deposit of the Letter of Credit with the Escrow Agent
shall not affect ▇▇▇▇▇▇▇▇'▇ Maximum Securityholder Escrow Amount.
2. INDEMNIFICATION ESCROW. Each of Parent, the Company and the
Securityholders hereby acknowledge and agree that, in accordance with Section
2.10 of the Agreement and in order to secure the indemnity obligations of the
Securityholders to the Buyer Indemnified Parties under the Agreement, at the
Closing a portion of the Merger Consideration that would otherwise have been
required to be delivered to the Securityholders equal to $15,000,000 was
deposited and has been held in escrow pursuant to the terms of the
Indemnification Escrow Agreement, and that the portion of such amount that was
withheld from the portion of the Merger Consideration that would otherwise have
been delivered to such Securityholder is set forth opposite such
Securityholder's name in column C of Schedule I to the Agreement.
Each of Parent, the Company and the Securityholders hereby acknowledge and
agree that, as promptly as practicable following the execution and delivery of
this Amendment by all parties hereto, the Representative, Parent and the Escrow
Agent will enter into an amendment to the Indemnification Escrow Agreement in
the form of ANNEX II hereto, subject only to the comments, if any, of the Escrow
Agent as to its rights and obligations under the Indemnification Escrow
Agreement (the "Escrow Agreement Amendment"). Simultaneously with the execution
and delivery of the Escrow Agreement Amendment, and in order to secure
▇▇▇▇▇▇▇▇'▇ indemnity obligations to the Buyer Indemnified Parties, ▇▇▇▇▇▇▇▇
shall deposit the Letter of Credit with the Escrow Agent to be held in
accordance with the terms hereof and the Indemnification Escrow Agreement. Each
of Parent, the Company and the Securityholders hereby covenant and agree that
the Agreement is hereby amended to the extent required to allow the substitution
of the Letter of Credit for the portion of the Escrow Amount which was
previously deposited on behalf
of ▇▇▇▇▇▇▇▇, and hereby irrevocably waive any breach or default that would
otherwise result from such substitution.
3. AMENDMENT TO SECTION 11.5(e)(i). Section 11.5(e)(i) is hereby amended
and restated in its entirety to read as follows:
"(i) In determining whether a Buyer Indemnified Party is entitled
to any amounts from a Securityholder with respect to Buyer Indemnified
Company Costs or Buyer Indemnified Securityholder Costs, Section
11.5(a) and Section 11.5(b) shall apply. Parent hereby covenants and
agrees that, with respect to any claim by a Buyer Indemnified Party
against any Securityholder for Buyer Indemnified Securityholder Costs
payable under this Article 11 other than Title Claims and claims
contemplated in Section 13.16, the Buyer Indemnified Party shall seek
payment only out of the Escrow Amount for all amounts due to the Buyer
Indemnified Party from such Securityholder with respect to such claim
in an amount not to exceed such Securityholder's Maximum
Securityholder Escrow Amount. In the event of any claim by a Buyer
Indemnified Party against a Securityholder for Buyer Indemnified
Securityholder Costs related to a Title Claim or a claim contemplated
in Section 13.16, the Buyer Indemnified Party shall seek payment first
out of the Escrow Amount in an amount not to exceed such
Securityholder's Maximum Securityholder Escrow Amount and, if such
Securityholder's Maximum Securityholder Escrow Amount has been reduced
to zero pursuant to this Section 11.5(e), the Buyer Indemnified Party
shall be entitled, subject to the terms and conditions of this
Agreement, to seek payment directly from such Securityholder for all
amounts remaining due to the Buyer Indemnified Party from such
Securityholder with respect to such Title Claim or claim contemplated
in Section 13.16. If any amount is paid out of the Escrow Amount with
respect to any claim against any Securityholder for Buyer Indemnified
Securityholder Costs, such Securityholder's Maximum Securityholder
Escrow Amount shall be reduced (but not below zero) by the amount so
paid. In no event shall the Buyer Indemnified Party be entitled to be
paid out of the Escrow Amount in respect of claims against a
Securityholder for Buyer Indemnified Securityholder Costs an amount in
excess of such Securityholder's Maximum Securityholder Escrow Amount.
In the event of any claim by a Buyer Indemnified Party against one or
more Securityholders for Buyer Indemnified Company Costs, the Buyer
Indemnified Party shall seek the amount of such claim from the Escrow
Amount, and each Securityholder's Maximum Securityholder Escrow Amount
shall be reduced (but not below zero) by such Securityholder's
PRO RATA portion (based upon the Initial Maximum Securityholder Escrow
Amounts of all Securityholders whose respective Maximum Securityholder
Escrow Amounts then exceed zero) of the amount paid out of the Escrow
Amount in respect of such claim (or, if applicable, such
Securityholder's Maximum Securityholder Escrow Amount shall be reduced
(but
not below zero) by that portion of such Securityholder's Maximum
Securityholder Escrow Amount as may be set forth in written release
instructions executed and delivered to the Escrow Agent by the
Representative on behalf of such Securityholder), and, to the extent
that the portion of such claim for which such Securityholder is liable
exceeds such Securityholder's Maximum Securityholder Escrow Amount as of
the time of payment of such claim out of the Escrow Amount, then the
Buyer Indemnified Party shall not be entitled to seek payment from such
Securityholder directly for such excess; provided that the Buyer
Indemnified Party shall then be entitled to seek the remaining amount of
any Buyer Indemnified Company Costs from the Escrow Amount with respect
to such other Securityholders whose respective Maximum Securityholder
Escrow Amounts then exceed zero, PRO RATA based upon the Initial Maximum
Securityholder Escrow Amounts of such Securityholders, until such
amounts have been paid in full or each Securityholder's Maximum
Securityholder Escrow Amount has been reduced to zero, after which the
Buyer Indemnified Party shall not be entitled to seek payment from any
Securityholders directly for such excess."
4. AMENDMENT TO SECTION 12.1. Section 12.1 of the Agreement is hereby
amended by inserting the following paragraph immediately prior to the last
paragraph of Section 12.1:
"In addition to the specific grants of authority previously
provided for in this Section 12.1, and without limiting such specific
grants of authority, ▇▇▇▇▇▇▇▇ hereby acknowledges and agrees that the
grant of authority provided for in this Section 12.1 shall include the
power and authority of the Representative to cause to be drawn into
the account established with the Escrow Agent any and all funds which
may be drawn under the Letter of Credit, and to cause such funds to be
held, handled and distributed in the same manner as the Representative
may cause the other funds held by the Escrow Agent to be held, handled
or distributed, including without limitation (i) to distribute those
funds in payment, compromise or settlement of any claim, action,
proceeding or investigation as contemplated in Section 12.1(c),
(including claims asserted under Article 11 of this Agreement), (ii)
to cause such funds to be paid out of the escrow account in payment of
the full amount of any judgment or judgments and legal interest and
costs awarded in favor of any Buyer Indemnified Party arising out of
the indemnification provisions set forth in Article 11 of this
Agreement, (iii) to use such funds to pay expenses as contemplated in
Section 12.2, (iv) to invest and reinvest such funds as contemplated
in Section 12.4, and (v) to use such funds to pay expenses as
contemplated in Section 12.5.
5. EXPENSES. All costs and expenses incurred by the Representative on
behalf of the Securityholders in connection with this Amendment shall be paid by
the Company up to a
maximum amount of $5,000, and any such expenses in excess of $5,000 shall be
paid by ▇▇▇▇▇▇▇▇.
6. COUNTERPARTS. This Amendment may be executed and delivered (including
by facsimile transmission) in one or more counterparts, all of which shall be
considered one and the same Amendment and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAW PROVISIONS.
8. HEADINGS. The headings of this Amendment are for convenience of
reference only and are not part of the this Amendment.
9. EFFECT OF AMENDMENT. Except as amended hereby, the terms and
provisions of the 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.
THE COMPANY:
ATRIUM CORPORATION
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
PARENT:
D AND W HOLDINGS, INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SECURITYHOLDERS:
HERITAGE FUND I, L.P.
By: HF Partners I, L.P., its general partner
By:
Name:
Title:
HICKS, MUSE, ▇▇▇▇ & ▇▇▇▇▇
EQUITY FUND III, L.P.
By: HM3/GP Partners, L.P.,
its General Partner
By: ▇▇▇▇▇, Muse GP Partners III, L.P.,
its General Partner
By: ▇▇▇▇▇ Muse Fund III Incorporated,
its General Partner
By:
Name:
--------------------------------------------
Title:
-------------------------------------------
HM3 COINVESTORS, L.P.,
By: ▇▇▇▇▇, Muse GP Partners III, L.P.,
its General Partner
By: ▇▇▇▇▇, Muse Fund III Incorporated,
its General Partner
By:
Name:
--------------------------------------------
Title:
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ TRUST
By:
O. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr., Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ TRUST
By:
O. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr., Trustee
▇▇▇ ▇▇▇▇▇▇▇▇, AS CUSTODIAN FOR ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
DOW POINTER
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
IRREVOCABLE TRUST
By:
_______________________, Trustee
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
IRREVOCABLE TRUST
By:
_______________________, Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ TRUST
By:
O. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr., Trustee
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
C. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
