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EXHIBIT 10.8
 
ESCROW AGREEMENT
 
THIS ESCROW AGREEMENT (the “Agreement”) is made this 6th day of June, 2012, by
and among MIDMARK INVESTORS, L.P., a Delaware limited partnership, and MIDMARK
CAPITAL, L.P., a Delaware limited partnership (each, an “Shareholder” and
collectively, the “Shareholders”), QAD IRELAND LTD., an Irish limited liability
company (the “Purchaser”),  and MCCARTER & ENGLISH, LLP, a New Jersey limited
liability partnership (the “Escrow Agent”).  The Purchaser and the Shareholders
are sometimes referred to herein individually as a “Party” and collectively as
the “Parties.”
 
Background
 
A.           Pursuant to that certain Share Purchase Agreement dated as of June
6, 2012 (the “Purchase Agreement”) by and between the Purchaser and the
Shareholders, the Purchaser has agreed to purchase all of the issued and
outstanding shares of capital stock (the “Shares”) of DynaSys, S.A., a French
limited stock corporation (société anonyme) (the “Company”), and the
Shareholders have agreed to sell the Shares to the Purchaser in accordance with
the terms of the Purchase Agreement.  Sections 2.2(c) of the Purchase Agreement
provides for Purchaser to pay the Escrow Amount (as defined below) to the Escrow
Agent at Closing to be held in escrow in accordance with the terms of this
Agreement.  Capitalized terms used herein without definition shall be defined as
set forth in the Purchase Agreement.
 
B.           This Agreement is the Escrow Agreement referred to in the Purchase
Agreement whereby the Parties and the Escrow Agent have set forth their
agreements with respect to the holding and disbursement of the Escrow Amount.
 
NOW, THEREFORE, in consideration of the premises and of the transactions and
payments set forth herein and in the Purchase Agreement, the parties hereto,
each intending to be legally bound hereby, agree as follows:
 
1.             Appointment of Escrow Agent.  Shareholders and Purchaser hereby
appoint the Escrow Agent to serve as escrow agent under the terms of this
Agreement, and the Escrow Agent hereby accepts such appointment.  Wherever this
Agreement provides for a notice or instructions to be given by Purchaser, such
notice shall be accepted by Escrow Agent if signed by an officer of Purchaser.
Wherever this Agreement provides for a notice or instructions to be given by the
Shareholders, such notice shall be accepted by Escrow Agent if signed by each
Shareholder.  Escrow Agent’s duties to the other parties hereto are limited to
those set forth in this Escrow Agreement.  Although Escrow Agent has been
furnished with a copy of the Purchase Agreement solely for convenience of
reference, Escrow Agent has no duties whatsoever with respect to the Purchase
Agreement or compliance with any of the terms thereof; this Agreement is the
sole instrument setting forth the duties and responsibilities of the Escrow
Agent.
 
2.             Escrow Amount.
 
2.1      Amount.  Contemporaneously herewith, Purchaser have deposited in escrow
with the Escrow Agent Five Hundred Thousand Euros (€500,000) (the “Escrow
Amount”) pursuant to Section 2.2(c) of the Purchase Agreement.  The Escrow Agent
hereby acknowledges receipt thereof.
 
 
 

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2.2      Interest-Bearing Account.  The Escrow Agent shall deposit the Escrow
Amounts in a federally insured, interest-bearing savings or money market
account, or if so desired by the Shareholders, another account, at Wells Fargo
Bank, N.A. (or another bank selected by the Escrow Agent) until disbursed as
provided herein.  All interest credited to the Escrow Amounts shall be for the
account of the Shareholders (subject to the distribution adjustments described
below).
 
3.             Disposition of Escrow Amounts.  Until the date for the release of
the Escrow Amounts provided in Section 3.4 hereof, or for such longer periods as
may be required in the event of a dispute as provided below, the Escrow Agent
shall hold and disburse the Escrow Amounts as follows:
 
3.1      Mutual Instructions.  At any time hereafter, the Parties may give
Escrow Agent joint written instructions (signed by an authorized officer of
Purchaser and each Shareholder) for disposition of the Escrow Amount or any
portions thereof.
 
3.2      Indemnification Claims.  In the event that Purchaser determines that it
is entitled under the Purchase Agreement to any portion of the Escrow Amount due
to any Damages suffered by Purchaser that are subject to indemnification by the
Shareholders in accordance with the provisions of Article VII of the Purchase
Agreement, Purchaser shall provide notice (the “Claim Notice”) to Escrow Agent
and the Shareholders of its claim against the Escrow Amount. The Claim Notice
shall state (a) the amount of the claim, (b) that such amount is properly
chargeable against the Escrow Amount under the terms hereof or of the Purchase
Agreement, and (c) the basis, with reasonable specificity, of the underlying
claim.  Unless Escrow Agent receives a Disputed Claim Notice (as defined below)
from the Shareholders within thirty (30) days after receipt of the Claim Notice,
as provided in Section 3.3 below, the Escrow Agent shall deliver to Purchaser,
out of the Escrow Amount, the amount specified in Purchaser’s Claim Notice (but
not to exceed the balance remaining of the Escrow Amount). Delivery of such
payment shall be made by wire transfer or by check, delivered by nationally
recognized overnight courier service, as soon as practicable after expiration of
such 30-day period for submission of a Disputed Claim Notice.
 
3.3      Dispute of Claim.  The Shareholders shall have the right to dispute a
claim contained in the Claim Notice by delivering to Escrow Agent and to
Purchaser written notice (a “Disputed Claim Notice”).  The Disputed Claim Notice
shall be delivered to Purchaser and Escrow Agent within thirty (30) days
following the giving of the Claim Notice by Purchaser to the Shareholders. The
Disputed Claim Notice shall state the basis, with reasonable specificity, of the
Shareholders’ dispute with respect to the validity or the amount of the claim in
question.  The Escrow Agent shall take no action with respect to the amount of
the Escrow Amount in dispute (the “Disputed Amount”) except:
 
3.3.1           Upon the joint written instructions of Purchaser, on the one
hand, and the Shareholders, on the other hand; or
 
3.3.2           Upon joint written notice from Purchaser and the Shareholders
that the dispute with respect to the Disputed Amount has been determined and
resolved by a final non-appealable order, decree or judgment entered by a court
of competent jurisdiction, which notice shall be accompanied by a certified copy
of any such order, decision, decree or judgment.
 
 
 

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If the date upon which a disbursement is to be made pursuant to Section 3.4
below shall have passed, then, upon notice in accordance with Sections 3.3.1 or
3.3.2 above, directing that all or any portion of the Disputed Amount be
released to the Shareholders or the Purchaser, as the case may be, the Escrow
Agent shall cause such amount to be delivered to the Shareholders or the
Purchaser, as the case may be.
 
3.4      Release of Escrow Amount.  The Escrow Agent is authorized by the
Purchaser and the Shareholders to disburse the Escrow Amount to the Shareholders
on December 6, 2012; provided that any portion of the Escrow Amount subject to
an indemnification claim outstanding as of the date thereof pursuant to Article
VII of the Purchase Agreement shall not be released until the final resolution
of such claim.  Notwithstanding the foregoing, the Escrow Agent shall not
disburse (a) any portion of the Escrow Amount as to which Purchaser has given a
Claim Notice less than thirty (30) days prior to the date of disbursement as
provided for in this Section 3.4 (i.e., as to which the time for submission of a
Disputed Claim Notice has not yet expired); and (b) any Disputed Amounts
(collectively, the “Withheld Amounts”).  Subject to Section 4 below, the
Withheld Amounts shall continue to be held hereunder by the Escrow Agent, and
this Agreement shall continue in full force and effect with respect thereto
until a final determination is made with respect thereto as provided in Section
3.3 above.
 
3.5      No Effect on Purchase Agreement.  As between Purchaser and the
Shareholders only, nothing in this Section 3 shall be deemed to modify the
rights and obligations of Purchaser and the Shareholders under the Purchase
Agreement; Purchaser and the Shareholders agree as between themselves to follow
the procedures set forth therein with respect to the making of any claim for any
Damages, or any request for disbursement of the Escrow Amount, and further agree
that although the Escrow Agent shall have no responsibility for determining
whether or not they have done so, any disagreement between the Parties as to
whether such proper procedures have been followed shall be treated as a dispute
for purposes of this Section 3 and shall be subject to resolution in accordance
with the terms hereof.
 
4.             Right to Interplead.  If, after delivery of the copy of a Claim
Notice, Escrow Agent receives a Disputed Claim Notice from the Shareholders
within the time limit set forth above, Escrow Agent may either (a) continue to
hold the Escrow Amount in accordance with Section 3.3 above, or (b) file an
action or bill in interpleader, or similar action for such purpose, the cost
thereof to be borne by whichever of the Parties is the losing Party, in a court
of competent jurisdiction as set forth in the Purchase Agreement, and pay the
Escrow Amount into said court, less escrow fees and costs, in which event,
Escrow Agent’s duties, responsibilities and liabilities with respect to the
Escrow Amount and the proceeds therefrom and this Agreement shall terminate,
without liability to Escrow Agent.
 
5.             Duties of the Escrow Agent.
 
5.1      Generally.  The Escrow Agent is acting hereunder as escrow agent only
and shall not be responsible or liable in any manner for the sufficiency,
correctness, genuineness or validity of any document provided to the Escrow
Agent except and only to the extent expressly provided in this Agreement.  The
Escrow Agent shall have no responsibility to act except to dispose of the Escrow
Amount as provided in this Agreement.  The Escrow Agent is authorized to act
upon any document believed by it to be genuine and to be signed by the person
purported to have signed it, and will incur no liability in so acting.  Upon
delivery or deposit of the Escrow Amount in accordance with the terms of this
Agreement (including a deposit of the Escrow Amount in a court of competent
jurisdiction), the Escrow Agent shall be discharged from any liability or
responsibility therefor and shall have no further obligations hereunder.  The
Escrow Agent may cease to serve at any time without incurring any liability
hereunder.
 
 
 

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5.2      Exculpation of Escrow Agent.  Shareholders and Purchaser, for
themselves and any of their assigns or successors in interest, hereby waive any
suit, claim, demand and cause of action of any kind which any or all of them may
have or hereafter assert against the Escrow Agent with respect to the execution
or performance by the Escrow Agent of its duties under this Agreement, unless
such suit, claim, demand or cause of action is based upon the gross negligence
or willful misconduct of the Escrow Agent.  If any Party asserts a claim against
the Escrow Agent concerning the Escrow Amount, then the Party asserting such
claim shall indemnify and hold harmless the Escrow Agent for its costs
(including attorneys’ fees and costs of suit) in connection therewith if the
Escrow Agent successfully defends such claim.  The Parties agree that the Escrow
Agent shall not be liable for any error of judgment or for any act done or
omitted by it in good faith, or for anything which it may, in good faith, do or
refrain from doing in connection with this Agreement.
 
5.3      Written Instructions.  The Parties agree to sign and deliver such
written instructions to the Escrow Agent as may be necessary to cause release of
the Escrow Amount pursuant to the terms of this Agreement or that the Escrow
Agent may request to clarify or confirm the terms under which the Escrow Agent
is to hold and/or disburse the Escrow Amount (or any portion thereof).
 
5.4      Accounting.  The Escrow Agent shall under no circumstances be compelled
to furnish a formal accounting for the Escrow Amount; provided that the Escrow
Agent shall be required to notify the Parties as to the distribution or
disbursement of the Escrow Amount.
 
5.5      Inability of Designated Escrow Agent to Serve.  In the event that the
Escrow Agent designated herein is for any reason unable or unwilling to serve or
to continue to serve as escrow agent, Purchaser and the Shareholders shall
choose a mutually agreeable new escrow agent.  The new escrow agent shall have
all of the rights and perform all of the duties and obligations of the Escrow
Agent set forth in this Agreement, provided that no person or entity shall serve
as escrow agent unless he has executed a consent to abide by the terms of this
Agreement applicable to the Escrow Agent and the Escrow Amount.  If Purchaser
and the Shareholders fail to designate a new escrow agent within ten (10)
business days after notice by the Escrow Agent of its resignation, the Escrow
Agent shall be free to resign and to pick a substitute escrow agent of its
choice (in its sole discretion); provided, however, such substitute escrow agent
shall be a commercial bank or trust company organized under the laws of the
United States or any state thereof or an attorney or law firm or a certified
public accountant or public accounting firm, licensed to practice in the State
of New Jersey.
 
5.6      Costs and Expenses.  Each of Purchaser, on the one hand, and the
Shareholders, on the other hand, shall be responsible for one-half of all
reasonable costs and expenses incurred by Escrow Agent in connection with the
performance of its duties under this Agreement, except as expressly provided to
the contrary in Sections 4 and 5.2 above.
 
 
 

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5.7      Continued Representation.  Shareholders and Purchaser agree that
neither the designation of McCarter & English, LLP, as Escrow Agent nor its
performance of its duties hereunder shall disqualify the firm or any of its
attorneys from representing the Shareholders, or any of their affiliates, in
connection with this Agreement or any dispute arising between the Parties with
respect to the Purchase Agreement, or any other matter.  The Purchaser hereby
waives any conflict of interest arising from such continued legal representation
and acknowledges that it has consulted with independent legal counsel in
connection with this waiver.
 
6.             Miscellaneous.
 
6.1      Notices, Etc.  All notices, requests, demands and other communication
hereunder shall be in writing, shall be given simultaneously to all Parties
hereunder and the Escrow Agent and shall deemed to be given when given by any of
the means provided in the Purchase Agreement, the terms of which are hereby
incorporated herein by this reference.  Notices to the Escrow Agent shall be
delivered to the attention of David F. Broderick, Esq., at McCarter & English,
LLP, Four Gateway Center, 100 Mulberry Street, Newark, New Jersey 07102, fax:
XXXXXXXXXX, email: XXXXXXXXXX.
 
6.2      Construction, Entire Agreement.  The interpretation and construction of
this Agreement and the conduct of the parties hereunder shall be governed by the
laws of the State of New Jersey, without giving effect to principles of
conflicts of law thereof.  As between the Escrow Agent on the one hand and the
other Parties on the other, this Escrow Agreement contains all the agreements
between the parties hereto with respect to the matters referred to herein.
 
6.3      Amendment.  Any modification or amendment of this Agreement shall be in
writing and signed by each of the Parties and the Escrow Agent.  Without
limiting the generality of the foregoing, no modification or rescission of the
terms of this Agreement and/or Escrow Agent’s responsibilities hereunder shall
be effective or binding upon the Escrow Agent unless and until consented to by
Escrow Agent in writing.
 
6.4      Parties Bound; No Third-Party Rights.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors and
permitted assigns.  The terms and provisions of this Agreement relating to the
Escrow Amount shall create no right in any person, firm or corporation other
than the Parties and the Escrow Agent, and their respective successors and
permitted assigns, and no third party shall have the right to enforce or benefit
from the terms hereof.
 
6.5      Counting Time.  Should any date, on or before which the performance of
any act (including the making of any payment) is required under the terms
hereof, fall on a Saturday, Sunday, or a federal holiday, the date for
performance shall be extended to and shall occur on the next succeeding business
day.
 
[Signature Page Follows]

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Note:  Certain personal and/or confidential information marked with Xs has been
redacted.
 
 
 

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IN WITNESS WHEREOF, the Parties and the Escrow Agent have caused this Agreement
to be executed on the date set forth above.
 

 
SHAREHOLDERS:
          MIDMARK INVESTORS, L.P.     a Delaware limited partnership          
 
By: 
MidMark Associates II, LLC,       its general partner               By: /s/
Ariel Weil       Name: Ariel Weil       Title: Managing Director  

 
MIDMARK CAPITAL, L.P.
    a Delaware limited partnership        
 
By: 
MidMark Associates Inc.      
its general partner
            By:  /s/ Ariel Weil       Name: Ariel Weil       Title:  Managing
Director  

 

 
PURCHASER:
          QAD IRELAND LTD.           By: /s/ Peter Geddes     Name: Peter Geddes
    Title: Director           ESCROW AGENT:           MCCARTER & ENGLISH, LLP  
        By: /s/ David Broderick     Name: David Broderick     Title: Partner  

 
 

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