ESCROW AGREEMENT
THIS
ESCROW AGREEMENT, dated as of June17, 2010 (the “Escrow Agreement”), by and
among Retailer Networks Inc., a New York Corporation having an address at 000
Xxxx 00xx Xx, Xxxxx
0000, Xxx Xxxx, XX00000 (“Seller”), The OLB
Group Inc., a Delaware Corporation having an address at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000-0000 (“Buyer”), and Transfer
Online, Inc. 000 XX Xxxxxx Xxxxxx Xxxxxxxx, XX 00000 (“Escrow
Agent”).
WHEREAS,
Seller and Buyer have entered into and executed that certain agreement of sale
to which this Escrow Agreement is an exhibit (the “Agreement;”
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement), pursuant to which Buyer has agreed to
purchase, and Seller has agreed to sell, the assets of the Seller’s
business;
WHEREAS,
pursuant to the terms of the Agreement, upon the execution and delivery of the
Agreement, Buyer is required to deliver 1,155,684 shares of common stock of The
OLB Group (the “Escrow
Deposit”), to Escrow Agent; and
WHEREAS, the parties hereto hereby agree that their respective rights to all
amounts paid to Escrow Agent hereunder, and all earnings, if any, thereon, will
be exclusively governed by the terms hereof.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in
the Agreement herein, the parties agree as follows:
1. Immediately upon the execution of this Escrow Agreement, Buyer has
delivered the Escrow Deposit to Escrow Agent.
2. Escrow
Agent shall retain the Escrow Stock and store it safely and shall disburse
the Escrow Deposit as provided for herein. Except as otherwise expressly
provided herein, the Escrow Deposit shall be held by the Escrow Agent until the
earliest to occur of the following events: (a) the parties hereto jointly
instruct the Escrow Agent to dispose of the Escrow Deposit; (b) one party hereto
delivers to Escrow Agent an order of a court of competent jurisdiction providing
for the release of the Escrow Deposit; (c) one party hereto delivers to Escrow
Agent a judgment in favor of such party for damages under the Agreement in a
specified amount and which judgment provides (or a separate judgment provides)
the value of the shares in the Escrow Deposit as of the date of such judgment
for damages, in which case the Escrow Agent may release sufficient shares from
the Escrow Deposit to satisfy such damages based upon such valuation of such
shares; or (d) 180 days pass after the closing of the transaction under the
Agreement and the Escrow Agent shall not have received notice of any claim under
the Agreement, in which case the Escrow Agent may release the Escrow Deposit to
Seller.
3. Upon
receipt of a written notice from Buyer and Seller to release the Escrow Deposit,
to either Buyer or Seller, or as otherwise jointly directed by Buyer and Seller,
the Escrow Agent shall promptly thereafter deliver the Escrow Deposit, as
directed by Buyer and Seller.
4.
Should any party (other than Escrow Agent) institute any action or proceeding to
enforce this Agreement or any provision hereof, or for damages by reason of any
alleged breach of this Escrow Agreement or of any provision hereof, or for a
declaration of rights hereunder, the prevailing party in any such action or
proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys’ fees, incurred by the prevailing party
in connection with such action or proceeding and the enforcement of any judgment
issued in connection therewith or settlement thereof. This provision is not
intended to be applicable to Escrow Agent or payment of its counsel’s fees,
which are specifically addressed in other provisions of this Escrow
Agreement.
5. Notwithstanding
any other provision herein, Escrow Agent shall have the right but not the
obligation to consult counsel and to require and receive such written
certifications or instructions from any party hereto as Escrow Agent reasonably
deems necessary or appropriate before taking any action hereunder.
6. If
any dispute concerning (a) receipt or disbursement of the assets then held
hereunder and/or (b) this Escrow Agreement arises between any of the parties
hereto, or if Escrow Agent is uncertain as to Escrow Agent’s obligations
hereunder, Escrow Agent shall have the right but not the obligation to refrain
from taking any action other than to continue to hold the assets then held
hereunder in escrow until otherwise directed by a final order or judgment of a
New York State Court or by a written agreement signed by the parties
hereto.
7. Escrow
Agent may assume the genuineness of any document or signature which appears to
Escrow Agent to be genuine (whether or not original or photocopy). Escrow Agent
shall have no obligations other than those specifically set forth herein. Escrow
Agent shall have no liability to any party hereto except with respect to actions
or omissions taken or suffered by Escrow Agent in willful disregard of this
Escrow Agreement or involving gross negligence and shall in no event be liable
or responsible for any failure of the financial institution in which the Escrow
Deposit is deposited to pay such amount at Escrow Agent’s
direction.
8.
Escrow Agent shall not be obligated to, but may, institute legal proceedings of
any kind that it deems in its reasonable judgment to be necessary or
appropriate, including but not limited to a legal proceeding or action in a
court of competent jurisdiction to determine Escrow Agent’s obligations
hereunder or to seek permission to deposit the Escrow Deposit in court and be
relieved of all further obligations hereunder.
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9. The
signatories hereto acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience; that Escrow Agent shall
not be deemed to be the agent of any of the parties; and that Escrow Agent
shall not be liable to any of the parties hereto for any act or omission on
Escrow Agent’s part unless taken or suffered in willful disregard of this Escrow
Agreement or involving gross negligence.
10. Any
notice or other communication hereunder shall be sent by registered or certified
mail, return receipt requested, or sent by an overnight express delivery service
(e.g. Federal Express) or by messenger (requiring the signature of the recipient
thereof), to the party for which intended at the address first stated above for
that party or at such other address of which that party gives notice as provided
herein with copies simultaneously sent by like delivery or fax to Escrow Agent.
Notices shall be deemed given on the date said notice is received. Escrow
Agent’s address for serving any notice or other communication hereunder on
Escrow Agent is as first stated above (Attention: Xxxx Xxxxxx, Esq.) and any
such notice or communication shall be sent as provided in the preceding
sentence.
11. Escrow
Agent may resign hereunder (i) upon 10 days’ written notice to the parties
hereto, subject to the appointment of a substitute escrow agent by the parties
hereto and the acceptance by the substitute escrow agent of such appointment, or
(ii) following the petitioning of a court of competent jurisdiction seeking the
appointment of a substitute escrow agent, upon the appointment by such court of
a substitute escrow agent and the acceptance by such court appointed substitute
escrow agent of such appointment, or (iii) upon the deposit of the escrowed
assets, if any, then held by Escrow Agent with any court having
jurisdiction.
12. This
Escrow Agreement shall terminate upon Escrow Agent’s delivery of the entire
remaining balance of the escrowed assets then held hereunder or the transfer of
such escrowed assets to a substitute escrow agent or a court of competent
jurisdiction, in either case, pursuant to the terms and conditions of this
Escrow Agreement, whether to the parties provided for herein, or in the case of
the transfer of the remaining escrowed assets then held hereunder, to a
substitute escrow agent or a court of competent jurisdiction or to such other
persons as shall be lawfully entitled to same, whereupon Escrow Agent’s
obligations, responsibilities and liability hereunder shall
terminate.
13. The
signatories hereto acknowledge the fact that Escrow Agent, as a law firm,
represents Seller and certain of its or their principals, and Buyer irrevocably
waives any conflict of interest arising therefrom, and hereby consents to Akabas
& Xxxxxxx acting as attorney on behalf of Seller, its or their principals
and/or the Escrow Agent, including in a dual capacity, in any dispute as to the
delivery of any documents and/or disbursement of escrowed assets or any other
dispute between the parties relating to this Escrow Agreement, or otherwise,
whether or not Escrow Agent is then in possession of the Escrow Deposit or
earnings thereon, if any.
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14.
Buyer and Seller, jointly and severally, hereby agree to indemnify the Escrow
Agent for, and to hold it harmless against, any loss, liability or expense
incurred by Escrow Agent, including reasonable attorneys’ fees, arising out of
or in connection with any actions taken by it or any omission by it in
connection with its duties pursuant to this Escrow Agreement, including
attorneys’ fees, costs and expenses (in all cases, including legal fees at
Akabas & Sproule’s then normal time rates attributable to defending itself)
against any claim of liability hereunder or in bringing any action or proceeding
(including, without limitation, the enforcement of any judgment issued in
connection therewith or settlement thereof) required or permitted to be brought
by it hereunder, except if incurred by reason of the gross negligence or willful
misconduct of Escrow Agent. The provisions of this Section 14 shall survive the
termination of this Escrow Agreement. Escrow Agent shall be entitled to
compensation at its customary rates for all services and disbursements rendered
or incurred by it under this Escrow Agreement; provided, that Seller shall not
be responsible to pay any portion of any fee to Escrow Agent in connection with
the Escrow Agent’s ordinary course of administration of the Escrow Deposit and
its release upon the joint instructions of Seller and Buyer.
15. This
Escrow Agreement may not be changed, modified or terminated, nor may any
provision hereof be waived, except by an agreement in writing executed by all of
the parties hereto. This Escrow Agreement constitutes the entire
understanding and agreement among the parties hereto in connection with the
particular subject matter hereof, notwithstanding any prior understandings or
agreements, oral or written, with respect to such subject matter.
16. If
any term or provision of this Escrow Agreement or the application thereof to any
person or circumstance shall to any extent be held invalid or unenforceable by a
court of competent jurisdiction, such invalidity shall not affect any other
provision of this Escrow Agreement or the application of the invalid provision
in circumstances in which same would be valid, it being agreed that the
provisions of this Escrow Agreement are severable.
17. THIS
ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF. THE PARTIES HERETO EACH HEREBY IRREVOCABLY SUBMIT TO
THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS OF THE
STATE OF NEW YORK, COUNTY OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR
OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS ESCROW AGREEMENT OR THE
SUBJECT MATTER HEREOF. EACH PARTY HERETO CONSENTS TO THE SERVICE OF PROCESS
IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF TO SUCH PARTY
AT ANY TIME AT ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO SECTION
10. EACH PARTY HERETO, TO THE EXTENT IT MAY LEGALLY DO SO, HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION,
OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS ESCROW AGREEMENT, OR IN ANY
WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES
HERETO WITH RESPECT TO THIS ESCROW AGREEMENT OR THE TRANSACTIONS
RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE. EACH PARTY HERETO, TO THE EXTENT IT MAY LEGALLY DO SO,
HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION, OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 17 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.
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18. This
Escrow Agreement shall be binding upon and inure to the benefit of the parties
hereto, their respective legal representatives, successors and
assigns.
19
This Escrow Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but, when taken together, shall constitute one
agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of
the day and year first above written.
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THE
OLB GROUP INC.
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By:
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Name:
Xxxxx Xxxxx
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Title:
CEO
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RETAILER
NETWORKS INC.
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By:
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Name:
Xxxxx Xxxx
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Title:
CEO
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Transfer
Online, Inc,
as
Escrow Agent
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By:
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Name:
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