Document:

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                                                                   EXHIBIT 10.30

                        INDEMNIFICATION ESCROW AGREEMENT

                  This INDEMNIFICATION ESCROW AGREEMENT (this "Agreement") is
made and entered into as of this 10th day of December, 2003 by and among KAT
HOLDINGS, INC., a Delaware corporation ("KAT Holdings"), ARDATRIUM, L.L.C., as
true and lawful agent and attorney-in-fact for each of the Securityholder
Parties (as defined in the Merger Agreement referred to below) (the
"Representative"), and WELLS FARGO BANK, N.A., as escrow agent (the "Escrow
Agent").

                                    RECITALS:

         WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of
October 27, 2003, as amended by Consent and Amendment No. 1 to the Agreement and
Plan of Merger dated as of November 6, 2003 (the "Merger Agreement"), by and
among KAT Holdings, Atrium Corporation, a Delaware corporation (the "Company"),
and each of the Securityholder Parties, the parties have agreed that KAT
Holdings shall be merged with and into the Company, with the Company as the
surviving entity (the "Surviving Company") upon the terms and subject to the
conditions set forth in the Merger Agreement (the "Merger");

         WHEREAS, the Securityholder Parties have appointed, authorized and
empowered Ardatrium L.L.C. to act as their 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 under this Agreement; and

         WHEREAS, it is a condition precedent to the consummation of the Merger
that KAT Holdings, the Representative and the Escrow Agent execute and deliver
this Agreement.

         NOW, THEREFORE, in consideration of the mutual premises, agreements and
covenants set forth herein and in the Merger Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto (the "Parties"), intending legally to be bound,
hereby agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

                  All capitalized terms not otherwise defined herein and defined
in the Merger Agreement shall have the meanings attributed to them in the Merger
Agreement.

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                                   ARTICLE II.

                              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
Indemnity Escrow Fund pursuant to the terms and conditions set forth herein (the
"Term").

                                  ARTICLE III.

                   ESTABLISHMENT OF THE INDEMNITY ESCROW FUND

                  3.1 Appointment of the Escrow Agent. The parties hereby
appoint and designate the Escrow Agent to act as escrow agent in accordance with
the terms and conditions hereof and the Escrow Agent hereby accepts such
appointment. The Escrow Agent shall have all of the rights, duties, powers and
obligations provided herein.

                  3.2 Delivery of the Indemnity Escrow Fund; Receipt by Escrow
Agent.

                      (a) On the Closing Date, (i) KAT Holdings shall, in
accordance with Section 2.10 of the Merger Agreement, deliver to the Escrow
Agent cash in the aggregate amount of $17,309,696.80 (the "First Portion of the
Fund") and (ii) ML IBK Positions, Inc. shall, in accordance with Section 2.10 of
the Merger Agreement, deliver to the Escrow Agent cash in the aggregate amount
equal to $940,303.20 (the "Second Portion of the Fund" and together with the
First Portion of the Fund, the "Indemnity Escrow Fund"), which shall be
deposited in a segregated account (the "Indemnity Escrow Account"). The
Indemnity Escrow Fund is being delivered to the Escrow Agent to be held under
the terms of this Agreement as security for the indemnification obligations of
the Company and the Securityholders to the Buyer Indemnified Parties in
accordance with Article 11 of the Merger Agreement. The Indemnity Escrow Fund
shall be invested and reinvested as provided in Section 3.3 below. Any interest
that accrues on, and any gains on any portion of, the Indemnity Escrow Fund from
such investments and reinvestments (the "Escrow Interest") shall not be
considered part of the Indemnity Escrow Fund, and shall be deposited by the
Escrow Agent in a segregated account (the "Escrow Interest Account") in the name
of the Representative and distributed to the Securityholders in the manner set
forth in a written notice given from time to time to the Escrow Agent by the
Representative.

                      (b) The Escrow Agent agrees to hold and dispose of the
Indemnity Escrow Fund and the Escrow Interest in accordance with the terms and
conditions of this Agreement. The Indemnity Escrow Account shall be under the
sole control and dominion of the Escrow Agent, subject to the terms of this
Agreement, and shall require an authorized signature of the Escrow Agent in
order to make withdrawals therefrom.

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                  3.3 Investment of the Indemnity Escrow Fund.

                      (a) The Indemnity Escrow Fund may be invested, at the
written direction of the Representative, in any of the following (collectively,
the "Permitted Investments"): (i) United States Treasury Bills maturing within
one hundred eighty (180) days of the date of purchase; (ii) demand deposit
accounts, money market deposit accounts and certificates of deposit with a term
not greater than one hundred eighty (180) days with a United States depository
having a reported capital and surplus of not less than $50 million; (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 one hundred eighty (180) 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, which
instruments have a term not greater than one hundred eighty (180) days. In the
absence of any direction for investing the Indemnity Escrow Fund, the Escrow
Agent shall invest the Indemnity Escrow Fund in Wells Fargo 100% Treasury Money
Market Fund.

                      (b) The Escrow Agent may sell or present for redemption
any Permitted Investments whenever it shall be necessary in order to make any
payments hereunder. 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.

                                   ARTICLE IV.

            DISTRIBUTION AND TERMINATION OF THE INDEMNITY ESCROW FUND

                  4.1 Distribution of the Indemnity Escrow Fund. Unless
otherwise set forth herein and subject to the terms and conditions of this
Agreement, on January 31, 2005 (the "Distribution Date"), the Indemnity Escrow
Fund minus (i) any pending Claims Amount (as defined below), (ii) any amounts
previously distributed to the Surviving Company pursuant to the terms of this
Agreement and (iii) any amounts that the Escrow Agent is required to withhold
pursuant to applicable laws for Taxes with respect to income earned on, or
derived from, the Indemnity Escrow Fund for those Securityholders for whom the
Representative has not provided a tax identification number to the Escrow Agent,
shall be distributed by the Escrow Agent to the Securityholders in the manner
set forth in a written notice given to the Escrow Agent by the Representative
prior to the Distribution Date.

                  4.2 Indemnification Claims Made Against the Indemnity Escrow
Fund.

                      (a) Subject to the terms and conditions set forth in the
Merger Agreement, at any time following the Closing Date and prior to the
Distribution Date, the Surviving Company may deliver written notice (a "Notice
of Claim") to the Escrow Agent (in which case a copy of such notice shall be
delivered to the Representative at the same time by the same method) to the
effect that a Buyer Indemnified Party is entitled to indemnification pursuant to
the Merger Agreement and is entitled to receive payment therefor out of the
Indemnity Escrow Fund, and such Notice of Claim shall constitute the

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assertion of a claim (individually, a "Claim" or collectively, "Claims") by the
Surviving Company against the Indemnity Escrow Fund. Each Notice of Claim shall
be given in good faith and shall set forth in reasonable detail the amount of
the Buyer Indemnified Costs giving rise to a right of indemnification, including
to the extent reasonably available, documentation evidencing the nature of such
Buyer Indemnified Costs. The Escrow Agent shall have no responsibility or
obligation for investigating or determining the validity or sufficiency of any
pending claim. The Escrow Agent shall retain (including, without limitation,
from and after the Distribution Date) in the Indemnity Escrow Fund an amount
equal to the Buyer Indemnified Costs claimed by the Surviving Company (a
"Pending Claims Amount") until such time as the Claims in respect of such Buyer
Indemnified Costs are finally resolved in accordance with the provisions of the
Merger Agreement and this Agreement.

                  (b) Within the time periods described below, the Escrow Agent
shall distribute money out of the Indemnity Escrow Fund upon its receipt of any
of the following:

                      (i) A written notice from the Surviving Company as
described in Section 4.2(a) hereof to distribute funds to pay or reimburse a
Pending Claims Amount, out of the Indemnity Escrow Account so long as no written
objection to such payment from the Representative is received by it in the
period specified below;

                      (ii) A certified order or ruling from a court instructing
it to do so (a "Court Order"); or

                      (iii) Joint written instructions of the Surviving Company
and Representative.

         Distributions shall be made within fifteen (15) days following Escrow
Agent's receipt of (A) any such instruction under clause (iii) above or (B) any
Court Order under clause (ii) above, so long as it has not received notice of an
application for a stay of such Court Order or notice of appeal therefrom or (c)
the written notice under clause (i) above so long as it has not received written
notice from the Representative objecting thereto after receipt of such notice
prior to the end of such fifteen (15) day period.

              4.3 No Transfer of Interest in Indemnity Escrow Fund. Upon the
consummation of the Merger in accordance with the Merger Agreement, the Parties
hereto acknowledge and agree that any and all interest of KAT Holdings in the
Indemnity Escrow Fund shall be transferred and assigned to the Surviving Company
as the successor to KAT Holdings, and, upon the consummation of the Merger, the
Surviving Company shall be deemed for all purposes a "Party" hereunder. Except
as otherwise set forth in the preceding sentence or as otherwise expressly
provided hereunder, the Surviving Company and the Securityholders may not assign
or transfer, any interest in the Indemnity Escrow Fund in whole or in part other
than transfers to heirs, administrators, executors, successors and legatees upon
death. The Indemnity Escrow Fund shall remain subject to this Escrow Agreement
and no assignment or transfer by

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Surviving Company or the Securityholders shall in any way affect any rights that
the Surviving Company or the Securityholders may have in the Indemnity Escrow
Fund.

              4.4 Termination of the Indemnity Escrow Account and Release of the
Indemnity Escrow Fund. The Escrow Agent shall hold the Indemnity Escrow Fund in
the Indemnity Escrow Account until the Distribution Date; provided, however, if
the Surviving Company has asserted any Claims under Section 4.2(a) hereof prior
to such time, the amount of such Claims shall be retained in the Indemnity
Escrow Account until all of such Claims are finally resolved in accordance with
the provisions of this Agreement and the Merger Agreement. Upon the resolution
of such Claims, the amounts remaining in the Indemnity Escrow Account will be
distributed in accordance with the terms of this Agreement.

              4.5 Provisions of the Merger Agreement. Nothing in this Agreement
shall derogate from, or modify in any respect any of the rights and obligations
of KAT Holdings, the Surviving Company and the Securityholders under the Merger
Agreement, including, without limitation, Article 11 thereof with respect to
indemnification.

              4.6 Reports. The Escrow Agent shall furnish to the Representative
and the Surviving Company reports accounting for all investments and interest
and income related to the Indemnity Escrow Fund. Such accounting shall be
furnished no less frequently than every 30 days and upon request of the
Representative or the Surviving Company.

                                   ARTICLE V.

                     PROVISIONS CONCERNING THE ESCROW AGENT

              5.1 Amendments and Modifications. 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.

              5.2 Compensation. The Escrow Agent shall be entitled to the fees
set forth on Schedule A 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. The
Surviving Company shall bear the liability for fees owed to and reimbursement of
expenses incurred by the Escrow Agent pursuant to this Section 5.2. Upon receipt
by the Surviving Company of the Escrow Agent's written notice itemizing such
fees and 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 and
payable to the Surviving Company any outstanding fees and/or expenses owed to it
by the Surviving Company. The fee agreed upon for the services rendered
hereunder is intended as full compensation for the Escrow Agent's services as
contemplated by this

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Agreement; provided however, that in the event that the conditions for the
disbursement of funds under this Agreement are not fulfilled, or there is any
assignment of interest in the subject matter of this Agreement, or any material
modification hereof, or if any material controversy arises hereunder, or the
Escrow Agent is made a party to any litigation (other than in respect of a
breach of the Escrow Agent's obligations hereunder) pertaining to this
Agreement, or the subject matter hereof, then the Escrow Agent shall be
reasonably compensated for such extraordinary services and reimbursed for all
costs and expenses, including reasonable attorney's fees, occasioned by any
delay, controversy or litigation.

              5.3 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 Merger Agreement, or (ii) to verify
the accuracy or sufficiency of any notice believed by it to be genuine or other
document believed by it to be genuine, received by it in connection with this
Agreement. The Escrow Agent shall be entitled to rely upon any instructions or
directions given 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 it hereunder and reasonably believed by it 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.

              5.4 Liability of the Escrow Agent. Neither the Escrow Agent nor
any of its officers, directors, employees, shareholders, representatives or
agents shall be liable to KAT Holdings, the Surviving Company or the
Representative, or any other person or entity for or in respect of any damages,
losses, charges, penalties, or costs and expenses ("Losses") resulting from or
arising out of any act or failure to act by it in good faith in connection with
this Agreement, other than for any Loss which shall be finally adjudicated to be
the result of gross negligence or willful or reckless 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.
Any payments of income from (i) the Indemnity Escrow Account, or the Escrow
Interest Account, as the case may be, shall be subject to withholding
regulations then in force with respect to United States Taxes. If applicable,
the Parties will provide the Escrow Agent with appropriate Internal Revenue
Service Forms W-9 for tax identification number certification, or non-resident
alien certifications. This Section 5.4 shall survive notwithstanding any
termination of this Agreement or the resignation of the Escrow Agent. The Escrow
Agent shall provide all appropriate forms and documentation to the
Representative (with copies thereof to the Surviving Company) so as to permit
the Securityholders to file Tax Returns, and pay all

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Taxes with respect to income earned on (i) the Indemnity Escrow Account or (ii)
the Escrow Interest Account, as the case may be.

              5.5 Indemnity of the Escrow Agent. The Surviving Company shall
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 Escrow Agent'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.

              5.6 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 the Surviving
Company and the Representative and the Surviving Company and the Representative
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 Indemnity Escrow Account and Escrow
Interest Account with a court of competent jurisdiction as provided in Section
5.8 hereof, whereupon the Escrow Agent shall be discharged of all duties and
obligations hereunder.

              5.7 Removal of Escrow Agent. The Escrow Agent may be removed at
any time by mutual agreement of the Surviving Company and the 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, the Surviving Company
and the 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 Indemnity
Escrow Account and Escrow Interest Account with a court of competent
jurisdiction as provided in Section 5.8 hereof, whereupon the Escrow Agent shall
be discharged of all duties and obligations hereunder.

              5.8 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 Indemnity 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 the Surviving
Company and the Representative of the amount remaining in the Indemnity Escrow
Fund with a federal court of competent jurisdiction in Southern District of New
York, New York. The Parties hereby submit to the personal jurisdiction of any
such court, waive any and all right to contest the jurisdiction of such

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court, and consent to service of process by hand delivery or mail delivery
thereof to their respective addresses set forth in Section 6.1 hereof.

              5.9 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 VI.

                                  MISCELLANEOUS

              6.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, faxed to the
parties at the following facsimile numbers or mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):

         Notices to KAT Holdings or the Surviving Company:

                           c/o Kenner & Company, Inc.
                           437 Madison Avenue
                           36th Floor

                            New York, NY 10022

                            Attn: Jeffrey L. Kenner
                                  Mark L. Deutsch
                                  Thomas M. Wolf
                            Facsimile: (212) 758-0406

                  with a copy to:

                            Mayer, Brown, Rowe & Maw LLP
                            1675 Broadway
                            New York, NY 10019

                            Attn: James B. Carlson
                            Facsimile: (212) 262-1910

         Notices to the Representative:

                           Ardatrium, L.L.C
                           Two Greenich Office Park
                           Greenwich, CT 06381

                           Attn: Daniel T. Morley
                           Facsimile: (203) 661-8210

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                  with a copy to:

                           Paul, Hastings, Janofsky & Walker LLP
                           75 East 55th Street
                           New York, NY 10022
                           Attn: Joel M. Simon
                                 Marie Censoplano
                           Facsimile: (212) 319-4090

         Notices to the Escrow Agent:

                           Wells Fargo Bank, N.A.
                           505 Main Street, Ste. 301
                           Fort Worth, Texas 76102
                           Attn: Melissa Scott
                           Facsimile: (817) 885-8650

                  Any of the above addresses may be changed at any time by
notice given as provided above; provided, however, that any such notice of
change of address shall be effective only upon receipt. All notices, requests or
instructions given in accordance herewith shall be deemed received on the date
of delivery, if hand delivered; on the date of receipt, if faxed; three Business
Days after the date of mailing, if mailed by registered or certified mail,
return receipt requested; and one Business Day after the date of sending, if
sent by Federal Express or other recognized overnight courier.

                  6.2 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement 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.

                  6.3 Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CONFLICTS OF LAW PROVISIONS.

                  6.4 Section Headings. The headings of this Agreement are for
convenience of reference only and are not part of the substance of this
Agreement.

                  6.5 Modification and Waiver. Subject to Section 5.1 hereof,
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 the written agreement of the Surviving
Company and the Representative, with the consent of the Escrow Agent (which
shall not be unreasonably withheld). Subject to Section 5.1 hereof, no
supplement, modification or amendment of this

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Agreement shall be binding unless executed in writing by the Surviving Company
and the Representative, with the consent of the Escrow Agent (which shall not be
unreasonably withheld). 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.

                  6.6 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
applicable law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. The parties
further agree that any court of competent jurisdiction is expressly authorized
to modify any such unenforceable provision of this Agreement in lieu of severing
such unenforceable provision from this Agreement in its entirety, whether by
rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such other
modifications as it deems warranted to carry out the intent and agreement of the
parties as embodied herein to the maximum extent permitted by law. The parties
expressly agree that this Agreement as so modified by a court of competent
jurisdiction shall be binding upon and enforceable against each of them.

                  6.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and their respective heirs,
administrators, executors, successors and permitted assigns. Nothing in this
Agreement is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement except as expressly
set forth herein. Notwithstanding anything to the contrary set forth herein,
upon the consummation of the Merger in accordance with the Merger Agreement, the
Parties hereto acknowledge and agree that any and all rights and obligations of
KAT Holdings hereunder shall be transferred and assigned to the Surviving
Company as the successor to KAT Holdings, and, upon the consummation of the
Merger, the Surviving Company shall be deemed for all purposes a "Party"
hereunder.

                  6.8 Termination.

                      (a) This Agreement shall terminate upon the earliest to
occur of (i) the expiration of the Term or (ii) by mutual written consent of the
Surviving Company and the 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.

                  6.9 Securities Statements. Pursuant to the regulations of the
Office of the Comptroller of the Currency, 12 C.F.R. 12.5(a), the Surviving
Company and the 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 Indemnity Escrow Account. The Escrow Agent has the option of
furnishing to the Surviving Company and the Representative either (i) a copy of
the broker-dealer confirmation relating to the transaction, or (ii) a

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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
Surviving Company's or the Representative'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, the
Surviving Company and the Representative agree that the Escrow Agent's periodic
statements, transmitted pursuant to the terms of this Escrow Agreement, will
suffice.

                  6.10 Form 1099. The Escrow Agent shall provide any Form 1099
required to be provided in respect of the Indemnity Escrow Account and Escrow
Interest Account to the Representative.

                  6.11 Authorized Signatories. The following persons are
authorized to direct the Escrow Agent regarding any transactions with respect to
this Escrow Agreement including, but not limited to, investment and/or
disbursement of the funds and securities held hereunder.

        -----------------------------------
        Mark Deutsch,
           on behalf of KAT Holdings

        -----------------------------------
        Daniel T. Morley,
        on behalf of the Representative

                  6.12 Tax Liabilities. For purposes of federal and other Taxes
the Securityholders shall be treated as the owners of one hundred percent (100%)
of the Indemnity Escrow Account and the Escrow Interest Account and the
Securityholders will report all income, if any, that is earned on, or derived
from, the Indemnity Escrow Account and Escrow Interest Account as the
Securityholders' income, in the taxable year or years in which such income is
properly includible and pay any and all Taxes attributable thereto, regardless
of whether any distributions are made to such Securityholder. The Parties agree
that this provision will be consistently applied by the Parties and is intended
to satisfy Proposed Treasury Regulation Section 1.468B-8(h)(2).

                  6.13 Tax-Related Information. To the extent furnished to the
Representative by any Securityholder, the Representative shall provide to the
Escrow Agent (i) a Tax Identification Number for such Securityholder as assigned
by the Internal Revenue Service ("IRS") (ii) a properly completed and fully
executed IRS Form W-9 for such Securityholder and (iii) documentation as to the
amount of the Indemnity Escrow Account allocated to such Securityholder.

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                  IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date and the year first above written.

                                          KAT HOLDINGS, INC.

                                          By:
                                             ----------------------------------
                                             Name:
                                             Title:

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                                            THE REPRESENTATIVE OF THE
                                            SECURITYHOLDER PARTIES
                                            PURSUANT TO SECTION 12 OF THE
                                            MERGER AGREEMENT:

                                            ARDATRIUM, L.L.C

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

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                                            ESCROW AGENT:

                                            WELLS FARGO BANK, N.A.

                                            By:
                                               ---------------------------------
                                               Name: Melissa Scott
                                               Title: Vice President

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                                   SCHEDULE A

                                Escrow Agent Fees
                             Wells Fargo Bank, N.A.
                                 as Escrow Agent

Acceptance Fee                                        $500

Acceptance Fee shall be due at closing and includes review of document and set
up of all accounts.

Annual; Administrative Fee                           $2,500

This Annual administrative fee includes all receipts and disbursements during
the term of the escrow. Also includes investment of funds, if any, in the Wells
Fargo Money Market Funds. Transaction charges of $35 per purchase/sale will be
billed for security purchases if funds are not invested in a Wells Fargo Money
Market Fund. The administrative fee shall be due upon opening of account and
annually thereafter for any year or part thereof.

Investments

Sweep fees for investment of funds in the Wells Fargo Money Market Fund Family
shall be waived.

Out of Pocket Expenses

All out-of-pocket expenses including but not limited to attorney's fees and
expenses, express mail, telecopier, wire transfer charges, courier expenses, or
other expenses incurred by the Escrow Agent during its acceptance and annual
administration shall be billed at cost.

Extraordinary Expenses

Charges for extraordinary expenses or for the performance of any service not of
a routine administrative nature or not specifically covered elsewhere in this
schedule of fees will be determined by appraisal at the time in amounts
commensurate with the service rendered.

                                       15<PAGE>

                                                                        Ex-10.7

                                FOURTH AMENDMENT
                                       TO
             FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

         Fourth Amendment (the "Fourth Amendment") dated as of October 31, 2003
to the Fourth Amended and Restated Revolving Credit and Term Loan Agreement (as
amended and in effect from time to time, the "Credit Agreement"), by and among
LEASECOMM CORPORATION, a Massachusetts corporation (the "Borrower"),
MICROFINANCIAL INCORPORATED, a Massachusetts corporation (the "Parent", together
with the Borrower, the "Companies"), FLEET NATIONAL BANK, a national banking
association ("Fleet"), the other financial institutions from time to time party
thereto (together with Fleet, the "Lenders") and FLEET NATIONAL BANK, as agent
for the Lenders (the "Agent"). Terms not otherwise defined herein which are
defined in the Credit Agreement shall have the same respective meanings herein
as therein.

         WHEREAS, the Borrower has informed the Agent and the Lenders that it
intends to sell certain contracts and related equipment to Accelerated Care Plus
Corp. ("ACP") pursuant to existing contractual arrangements between the Borrower
and ACP and that the Borrower shall apply the proceeds of such sale to the
prepayment of the Conversion Term Loan;

         WHEREAS, the Companies, the Agent and the Lenders desire to clarify
their agreement as to the manner of the application of such proceeds to the
Conversion Term Loan.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

         SECTION 1. ALLOCATION OF PAYMENTS. Section 2.9 of the Credit Agreement
is hereby amended by adding the following new paragraph (e) thereto in the
correct alphabetical location:

         "(e) Each of the Lenders and the Agent hereby agrees that all net
         proceeds from asset sales pursuant to Section 7.4(ii) shall be applied,
         on a pro rata basis, to each remaining regularly scheduled amortization
         payment of the Conversion Term Loan.".

         SECTION 2. CONDITION TO EFFECTIVENESS. This Fourth Amendment shall
become effective as of the date hereof upon receipt by the Agent of a
counterpart of this Fourth Amendment, executed by the Companies and the Majority
Lenders.

         SECTION 3. NO PRESENT CLAIMS. The Companies acknowledge and agree that,
as of the date hereof: (a) none of the Companies or, to the knowledge of any of
the Companies, any of their affiliates has any claim or cause of action against
any of the Lenders or the Agent (or any of their directors, officers, employees,
attorneys or agents); (b) none of the Companies, or to the knowledge of any of
the Companies, any of their affiliates has offset rights, counterclaims or
defenses of any kind against any of their obligations, indebtedness or
liabilities to any of the Lenders or the Agent; and (c) each of the Lenders and
the Agent has heretofore properly performed and satisfied in a timely manner all
of its obligations to the Companies and, to the knowledge of each of the
Companies, each of their affiliates. The Lenders and the Agent wish (and the
Companies agree) to eliminate any possibility that any past conditions, acts,
omissions, events, circumstances or matters would impair or otherwise adversely
affect any of

<PAGE>

                                       -2-

the rights, interests, contracts, collateral security or remedies of the Lenders
or the Agent. Therefore, Companies, each on its own behalf and on behalf of each
of its respective successors and assigns, hereby waives, releases and discharges
the Lenders and the Agent and all of their directors, officers, employees,
attorneys and agents, from any and all claims, demands, actions or causes of
action on or before the date hereof and arising out of or in any way relating to
the Loan Documents and any documents, instruments, agreements (including this
Fourth Amendment), dealings or other matters connected with the Loan Documents,
including, without limitation, all known and unknown matters, claims,
transactions or things occurring on or prior to the date of this Fourth
Amendment related to the Loan Documents. The waivers, releases, and discharges
in this paragraph shall be effective regardless of any other event that may
occur or not occur prior to, or on or after the date hereof.

         SECTION 4. MISCELLANEOUS.

         (a) Except as otherwise expressly provided for in this Fourth
Amendment, nothing in this Fourth Amendment shall extend to or affect in any way
any of the rights or obligations of the Borrower or any of the Agent's or the
Lenders' obligations, rights and remedies arising under the Loan Documents.
Neither the Agent nor any Lender shall be deemed to have waived any or all of
its rights or remedies with respect to any Default or Event of Default existing
on the date hereof or arising hereafter.

         (b) This Fourth Amendment shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts.

         (c) This Fourth Amendment shall constitute a Loan Document under the
Credit Agreement; the failure to comply with the covenants contained herein
shall constitute an Event of Default under the Credit Agreement; and all
obligations included in this Fourth Amendment (including, without limitation,
all obligations for the payment of principal, interest, fees, and other amounts
and expenses) shall constitute obligations under the Loan Documents and secured
by the collateral security for the Obligations.

         (d) The Companies agree to pay all fees and expenses, including,
without limitation, reasonable legal fees, of the Agent and the Lenders in
connection with this Fourth Amendment.

<PAGE>
                                      -3-

         IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment as a document under seal as of the date first above written.

                                        FLEET NATIONAL BANK, individually and
                                        as Agent

                                        By: /s/ Daniel D. Butler
                                            ------------------------------------
                                            Name:  Daniel D. Butler
                                            Title: Authorized Officer

                                        BANKNORTH, N.A.

                                        By: /s/ [ILLEGIBLE]
                                            ------------------------------------
                                            Name: [ILLEGIBLE]
                                            Title: E.V.P.

                                        BROWN BROTHERS HARRIMAN & CO.

                                        By: /s/ Jared Keyes
                                            ------------------------------------
                                            Name:  Jared Keyes
                                            Title: Managing Director

                                        CITIBANK

                                        By: /s/ George V. MilBury
                                            ------------------------------------
                                            Name:  George V. MilBury
                                            Title: Vice President

                                        CITIZENS BANK OF MASSACHUSETTS

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

<PAGE>
                                      -4-

                                        U.S. BANK

                                        By:    /s/ Joseph Howard
                                            ------------------------------------
                                            Name: Joseph Howard
                                            Title: Vice President

                                        UNION BANK OF CALIFORNIA, N.A.

                                        By:    /s/ Cecilia M. Valente
                                            ------------------------------------
                                            Name:  Cecilia M. Valente
                                            Title: Senior Vice President

                                        ACCEPTED and AGREED as of
                                        October 31, 2003:

                                        Borrower:

                                        LEASECOMM CORPORATION

                                        By:    /s/ Richard F. Latour
                                            ------------------------------------
                                            Name:  Richard F. Latour
                                            Title: Exec. V.P. COO/CFO

                                        Parent:

                                        MICROFINANCIAL INCORPORATED

                                        By:   /s/ James R. Jackson
                                            ------------------------------------
                                            Name:  James R. Jackson
                                            Title: VP & CFO

<PAGE>

                                      -5-

ACCEPTED and AGREED as of
October 31, 2003:

Borrower:

LEASECOMM CORPORATION

By: /s/ Richard F. Latour
    ------------------------------
    Name: Richard F. Latour
    Title: Exec. V.P. COO/CFO

Parent:

MICROFINANCIAL INCORPORATED

By: /s/ James A. Jackson
    ------------------------------
    Name:  JAMES A. JACKSON
    Title: VP & CFO

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