Exhibit 10.2
ESCROW AGREEMENT
ESCROW AGREEMENT (the "Escrow Agreement") made as of the 12th day of
January, 2005, by and among Vertex Interactive, Inc., a New Jersey corporation
(the "Company"), the Sellers listed on Schedule A attached hereto (each a
"Seller" and collectively, the "Sellers") and the Law Office of Jeffrey D.
Marks, P.C. (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Company has entered into that certain Stock Purchase
Agreement dated as of September -, 2004 (the "Purchase Agreement") with the
Sellers;
WHEREAS, the parties have agreed pursuant to section 1.2 (b) of the
Purchase Agreement that the sum of two hundred thousand ($200,000.00) dollars
shall be paid into escrow and the Escrow Agent has agreed to receive, hold and
pay such funds, upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and legal sufficiency
of which is hereby acknowledged, the parties to this Escrow Agreement hereby
agree as follows:
1. Defined Terms. Capitalized terms used and not otherwise defined herein
shall have the meanings respectively assigned to them in the Purchase Agreement.
2. Escrow of Funds. On the date hereof, the following shall occur: the
Sellers shall instruct the Company to remit by wire transfer $200,000 to the
Escrow Agent pursuant to this Escrow Agreement (the "Escrow Amount"). The Escrow
Agent shall hold the Escrow Amount for a period of fifteen (15) months in
accordance with the terms and conditions of this Escrow Agreement (the "Escrow
Period"). At the end of the Escrow Period, upon written instruction provided by
the Company and the Sellers, and subject to the terms and conditions of this
Escrow Agreement, the Escrow Agent shall disburse the balance of the Escrow
Amount to the Sellers.
3. Investment of Funds. The Escrow Agent shall invest the monies in the
Escrow Amount in an interest bearing bank account with, or certificates of
deposit or time deposits with, maturities of no more than thirty (30) days
issued by, a domestic commercial bank or such other bank or other financial
institution as normally holds such funds.
4. Release of Funds.
(a) The purpose of the escrow is to provide a fund against which
indemnity claims, pursuant the terms of the Purchase Agreement, may be made.
Upon written notice and instruction provided by the Company and the Sellers, the
Escrow Agent shall disburse the Escrow Amount, or any portion thereof, in
accordance with such instructions, subject to the terms of this Escrow
Agreement.
(b) If conflicting or adverse claims or demands are made or notices
served upon the Escrow Agent with respect to the escrow provided for herein, the
Company and the Sellers agree that the Escrow Agent shall refuse to comply with
any such claim or demand and withhold and stop all further performance of this
escrow so long as such disagreement shall continue. In so doing, the Escrow
Agent shall not be or become liable for damages, losses, costs, expenses or
interest to any or any other person for its failure to comply with such
conflicting or adverse demands. The Escrow Agent shall be entitled to continue
to so refrain and refuse to so act until such conflicting claims or demands
shall have been finally determined by a court or arbitrator of competent
jurisdiction or shall have been settled by agreement of the parties to such
controversy, in which case the Escrow Agent shall be notified thereof in a
notice signed by such parties. The Escrow Agent may also elect to commence an
interpleader or other action for declaratory judgment for the purpose of having
the respective rights of the claimants adjudicated, and may deposit with the
court all funds held hereunder pursuant to this Escrow Agreement; and if it so
commences and deposits, the Escrow Agent shall be relieved and discharged from
any further duties and obligations under this Escrow Agreement.
5. Further Assurances. The Company and the Sellers agree to do such
further acts and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the Escrow Agent from time to
time reasonably may request in connection with the administration, maintenance,
enforcement or adjudication of this Escrow Agreement in order (a) to give the
Escrow Agent confirmation and assurance of the Escrow Agent's rights, powers,
privileges, remedies and interests under this Escrow Agreement and applicable
law, (b) to better enable the Escrow Agent to exercise any such right, power,
privilege, remedy or interest, or (c) to otherwise effectuate the purpose and
the terms and provisions of this Escrow Agreement, each in such form and
substance as may be reasonably acceptable to the Escrow Agent.
6. Disputes. Each of the parties hereto hereby covenants and agrees that
the state courts located in the State of New Jersey shall have exclusive
jurisdiction over any dispute relating to this Escrow Agreement.
7. Compensation and Expenses of the Escrow Agent. The Company agrees to
pay the Escrow Agent the sum of $1.00 on the date hereof as compensation for
acting as Escrow Agent herein. The Company agrees to pay any and all
out-of-pocket costs and expenses incurred by the Escrow Agent in connection with
all waivers, releases, discharges, satisfactions, modifications and amendments
of this Escrow Agreement, the administration and holding of the Escrow Amount
and the investment of such funds, and the enforcement, protection and
adjudication of the Escrow Agent's rights hereunder by the Escrow Agent,
including, without limitation, the out-of-pocket disbursements of the Escrow
Agent itself and expenses and costs of other attorneys it may retain, if any.
The Company shall be liable to the Escrow Agent for any expenses payable by the
Escrow Agent.
8. Reliance on Documents and Experts. The Escrow Agent shall be entitled
to rely upon any notice, consent, certificate, affidavit, statement, paper,
document, writing or communication (collectively, the "Certificate") (which to
the extent permitted hereunder may be by telegram, cable, telex, telecopier, or
telephone) reasonably believed by it to be genuine and to have been signed, sent
or made by the proper person or persons, and upon opinions and advice of legal
counsel (including itself or counsel for any party hereto), independent public
accountants and other experts selected by the Escrow Agent and mutually
acceptable to each of the Company and the Sellers. The Escrow Agent shall not be
responsible to review the Certificate other than to confirm that it has been
signed or to determine the clearance of checks received for the Escrow Amount.
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9. Status of the Escrow Agent, Etc. The Escrow Agent is acting under this
Escrow Agreement as a stakeholder only. No term or provision of this Escrow
Agreement is intended to create, nor shall any such term or provision be deemed
to have created, any joint venture, partnership or attorney-client relationship
between or among the Escrow Agent and the Company or the Sellers. This Escrow
Agreement shall not be deemed to prohibit or in any way restrict the Escrow
Agent's representation of the Company, who may be advised by the Escrow Agent on
any and all matters pertaining to this Escrow Agreement. To the extent the
Sellers have been represented by the Escrow Agent, the Sellers hereby waive any
conflict of interest and irrevocably authorize and direct the Escrow Agent to
carry out the terms and provisions of this Escrow Agreement fairly as to all
parties, without regard to any such representation and irrespective of the
impact upon the Sellers. The Escrow Agent's only duties are those expressly set
forth in this Escrow Agreement, and each of the Sellers authorize the Escrow
Agent to perform those duties in accordance with its usual practices in holding
funds of its own or those of other escrows. The Escrow Agent may exercise or
otherwise enforce any of its rights, powers, privileges, remedies and interests
under this Escrow Agreement and applicable law or perform any of its duties
under this Escrow Agreement by or through its partners, employees, attorneys,
agents or designees.
10. Exculpation. The Escrow Agent and its designees, and their respective
partners, employees, attorneys and agents, shall not incur any liability
whatsoever for the investment or disposition of funds or the taking of any other
action in accordance with the terms and provisions of this Escrow Agreement, for
any mistake or error in judgment, for compliance with any applicable law or any
attachment, order or other directive of any court or other authority
(irrespective of any conflicting term or provision of this Escrow Agreement), or
for any act or omission of any other person selected with reasonable care and
engaged by the Escrow Agent in connection with this Escrow Agreement (other than
for such Escrow Agent's or such person's own acts or omissions breaching a duty
owed to the claimant under this Escrow Agreement and amounting to willful
misconduct as finally determined pursuant to applicable law by a governmental
authority having jurisdiction); and each of the Company and the Sellers hereby
waive any and all claims and actions whatsoever against the Escrow Agent and its
designees, and their respective partners, employees, attorneys and agents,
arising out of or related directly or indirectly to any and all of the foregoing
acts, omissions and circumstances. Furthermore, the Escrow Agent and its
designees, and their respective partners, employees, attorneys and agents, shall
not incur any liability (other than for a person's own acts or omissions
breaching a duty owed to the claimant under this Escrow Agreement and amounting
to willful misconduct as finally determined pursuant to applicable law by a
governmental authority having jurisdiction) for other acts and omissions arising
out of or related directly or indirectly to this Escrow Agreement or the Escrow
Amount; and each of the Company and the Sellers hereby expressly waive any and
all claims and actions (other than those attributable to a person's own acts or
omissions breaching a duty owed to the claimant and amounting to willful
misconduct as finally determined pursuant to applicable law by a governmental
authority having jurisdiction) against the Escrow Agent and its designees, and
their respective partners, employees, attorneys and agents, arising out of or
related directly or indirectly to any and all of the foregoing acts, omissions
and circumstances.
11. Indemnification. The Escrow Agent and its designees, and their
respective partners, employees, attorneys and agents, shall be indemnified,
reimbursed, held harmless and, at the request of the Escrow Agent, defended, by
the Company from and against any and all claims, liabilities, losses and
expenses (including, without limitation, the reasonable disbursements, expenses
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and fees of their respective attorneys) that may be imposed upon, incurred by,
or asserted against any of them, arising out of or related directly or
indirectly to this Escrow Agreement or the Escrow Amount, except such as are
occasioned by the indemnified person's own acts and omissions breaching a duty
owed to the claimant under this Escrow Agreement and amounting to willful
misconduct as finally determined pursuant to applicable law by a governmental
authority having jurisdiction.
12. Notices. Any notice, request, demand or other communication permitted
or required to be given hereunder shall be in writing, shall be sent by one of
the following means to the addressee at the address set forth below (or at such
other address as shall be designated hereunder by notice to the other parties
and persons receiving copies, effective upon actual receipt) and shall be deemed
conclusively to have been given: (a) on the first business day following the day
timely deposited with Federal Express (or other equivalent national overnight
courier) or United States Express Mail, with the cost of delivery prepaid; (b)
on the fifth business day following the day duly sent by certified or registered
United States mail, postage prepaid and return receipt requested; or (c) when
otherwise actually delivered to the addressee.
If to the Company: Vertex Interactive, Inc.
3619 Kennedy Road
South Plainfield, NJ 07080
Attention: Chief Executive Officer
Telephone: (908) 756-2000
Facsimile: (908) 756-2332
If to any Sellers: At
the address of such
Seller set forth on
Schedule A to the
Escrow Agreement.
If to the Escrow Agent: Law Office of Jeffrey D. Marks, P.C.
PO Box 2665
415 Clifton Avenue
Clifton, NJ 07011
Telephone: (973) 253-8855
Facsimile: (973) 253-8858
13. Section and Other Headings. The section and other headings contained
in this Escrow Agreement are for convenience only, shall not be deemed a part of
this Escrow Agreement and shall not affect the meaning or interpretation of this
Escrow Agreement.
14. Governing Law. This Escrow Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New Jersey
without regard to principles of conflicts of law. Each of the Company and the
Sellers (i) hereby irrevocably submit to the jurisdiction of the Courts of the
State of New Jersey for the purposes of any suit, action or proceeding arising
out of or relating to this Agreement or the Purchase Agreement and (ii) hereby
waive, and agree not to assert in any such suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of such court, that the
suit, action or proceeding is brought in an inconvenient forum or that the venue
of the suit, action or proceeding is improper. Each of the Company and the
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Sellers consent to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section 14
shall affect or limit any right to serve process in any other manner permitted
by law.
15. Counterparts. This Escrow Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts shall together constitute one and
the same agreement.
16. Resignation of Escrow Agent. The Escrow Agent may, at any time, at its
option, elect to resign its duties as Escrow Agent under this Escrow Agreement
by providing notice thereof to each of the Company and the Sellers. In such
event, the Escrow Agent shall deposit the Escrow Amount with a successor
independent escrow agent to be appointed by (a) the Company and the Sellers
within thirty (30) days following the receipt of notice of resignation from the
Escrow Agent, or (b) the Escrow Agent if the Company and the Sellers shall have
not agreed on a successor escrow agent within the aforesaid 30-day period, upon
which appointment and delivery of the Escrow Amount the Escrow Agent shall be
released of and from all liability under this Escrow Agreement.
17. Successors and Assigns; Assignment. Whenever in this Escrow Agreement
reference is made to any party, such reference shall be deemed to include the
successors, assigns and legal representatives of such party, and, without
limiting the generality of the foregoing, all representations, warranties,
covenants and other agreements made by or on behalf of each of the Company and
the Sellers in this Escrow Agreement shall inure to the benefit of any successor
escrow agent hereunder; provided, however, that nothing herein shall be deemed
to authorize or permit the Company or the Sellers to assign any of its rights or
obligations hereunder to any other person (whether or not an affiliate of the
Company or the Sellers) without the written consent of each of the other parties
nor to authorize or permit the Escrow Agent to assign any of its duties or
obligations hereunder except as provided in Section 16 hereof.
18. No Third Party Rights. The representations, warranties and other terms
and provisions of this Escrow Agreement are for the exclusive benefit of the
parties hereto, and no other person, including the creditors of the Company or
the Sellers, shall have any right or claim against any party by reason of any of
those terms and provisions or be entitled to enforce any of those terms and
provisions against any party.
19. No Waiver by Action, Etc. Any waiver or consent respecting any
representation, warranty, covenant or other term or provision of this Escrow
Agreement shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of a party
at any time or times to require performance of, or to exercise its rights with
respect to, any representation, warranty, covenant or other term or provision of
this Escrow Agreement in no manner (except as otherwise expressly provided
herein) shall affect its right at a later time to enforce any such term or
provision. No notice to or demand on either the Company or the Sellers in any
case shall entitle such party to any other or further notice or demand in the
same, similar or other circumstances. All rights, powers, privileges, remedies
and interests of the parties under this Escrow Agreement are cumulative and not
alternatives, and they are in addition to and shall not limit (except as
otherwise expressly provided herein) any other right, power, privilege, remedy
or interest of the parties under this Escrow Agreement or applicable law.
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20. Modification, Amendment, Etc. Each and every modification and
amendment of this Escrow Agreement shall be in writing and signed by all of the
parties hereto, and each and every waiver of, or consent to any departure from,
any covenant, representation, warranty or other provision of this Escrow
Agreement shall be in writing and signed by the party granting such waiver or
consent.
21. Entire Agreement. This Escrow Agreement contains the entire agreement
of the parties with respect to the matters contained herein and supersedes all
prior representations, agreements and understandings, oral or otherwise, among
the parties with respect to the matters contained herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the date first written above.
VERTEX INTERACTIVE, INC. (Company)
By: /s/ NICHOLAS R. H. TOMS
-----------------------
Nicholas R.H. Toms
Chief Executive Officer
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LAW OFFICE OF JEFFREY D. MARKS P.C. (ESCROW AGENT)
By: /s/ JEFFREY D. MARKS
----------------------------
Jeffrey D. Marks
President
/s/ PETER B. AYLING
---------------------------------
Peter B. Ayling (Seller)
/s/ ELIZABETH M. AYLING
---------------------------------
Elizabeth M. Ayling (Seller)
/s/ BRAD L. LEONARD
---------------------------------
Brad L. Leonard (Seller)
/s/ MICHAEL C. MOORE
---------------------------------
Michael C. Moore (Seller)
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