Document:

EXHIBIT 4.13

                                ESCROW AGREEMENT

      ESCROW AGREEMENT (the "Escrow Agreement") made as of the 28th day of
April, 2004, by and among Vertex Interactive, Inc., a New Jersey corporation
(the "Company"), the Purchasers listed on Schedule A attached hereto (each a
"Purchaser" and collectively, the "Purchasers") and Owen Naccarato, Esq. (the
"Escrow Agent").

                              W I T N E S S E T H:

      WHEREAS, the Company desires to raise capital in order to finance the
growth of its business operations and for other general corporate purposes;

      WHEREAS, the Company and the Purchasers have agreed that, in order to
raise capital, the Company shall issue and sell to the Purchasers notes (the
"Notes"), convertible into shares of the Company's common stock, $0.005 par
value per share (the "Common Stock"), and Warrants to purchase shares of Common
Stock (the "Warrants") for an aggregate purchase price of $1,500,000;

      WHEREAS, the Company has entered into that certain Securities Purchase
Agreement dated as of April 28, 2004 (the "Purchase Agreement") with the
Purchasers;

      WHEREAS, the parties have agreed that certain interest payments due and
payable through the Maturity Date (as defined in the Notes) 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
Company shall instruct the Purchasers to remit by wire transfer $225,000 to the
Escrow Agent pursuant to this Escrow Agreement (the "Escrow Amount"). The Escrow
Agent shall hold the Escrow Amount only in accordance with the terms and
conditions of this Escrow Agreement.

      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 it normally holds such funds.

      4. Release of Funds.

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            (a) So long as all or a portion of the aggregate principal amount of
the Notes remains outstanding, the Escrow Agent shall release the Escrow Amount,
or a portion thereof, to the Purchasers in an amount equal to the aggregate
outstanding principal amount of the Notes multiplied by 2.5% on March 31, June
30, September 30 and December 31 of each year (the "Interest Payment Dates")
beginning on December 31, 2004. The Purchasers shall provide written
instructions regarding the aggregate outstanding principal amount of the Notes
and directing the manner in which the distribution of the Escrow Amount, or a
portion thereof, is to be made on or prior to each of the Interest Payment
Dates. Upon receipt of joint written instructions from the Purchasers and the
Company stating that that no portion of the aggregate principal amount of the
Notes remains outstanding, the Escrow Agent shall release any remaining portion
of the Escrow Amount to the Company in accordance with the written instructions
of the Company directing the manner in which the distribution of the remaining
portion of the Escrow Amount is to be made.

            (b) Upon written notice from the Purchasers that the Company is in
default of its obligations under the Purchase Agreement, the Escrow Agent shall
immediately release all of the Escrow Amount to the Purchasers in accordance
with the written instruction provided by the Purchasers directing the manner in
which the distribution of the Escrow Amount is to be made.

      5. Further Assurances. The Company and the Purchasers 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. Conflicting Demands. 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 Purchasers 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.

      7. Disputes. Each of the parties hereto hereby covenants and agrees that
the Federal or state courts located in the Borough of Manhattan, State of New
York shall have jurisdiction over any dispute with the Escrow Agent or relating
to this Escrow Agreement.

      8. Expenses of the Escrow Agent. 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.

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            9. 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 Purchasers. 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.

            10. 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
Purchasers. 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 Purchasers have been represented by the Escrow Agent, the
Purchasers 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 Purchasers. The Escrow Agent's only
duties are those expressly set forth in this Escrow Agreement, and each of the
Company and the Purchasers 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.

            11. 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 gross negligence or willful misconduct as finally determined
pursuant to applicable law by a governmental authority having jurisdiction); and
each of the Company and the Purchasers 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 Purchasers 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 gross negligence or
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. The Escrow Agent's designees excludes the
Purchasers for purposes hereof.

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      12. Indemnification. The Escrow Agent and its designees (excluding the
Purchasers), 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 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.

      13. 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

               with a copy to:             Sichenzia Ross Friedman Ference LLP
                                           1065 Avenue of the Americas
                                           New York, NY  10018
                                           Attention:   Gregory Sichenzia, Esq.
                                           Telephone:  (212) 930-9700
                                           Facsimile:   (212) 930-9725

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               If                          to any Purchaser: At
                                           the address of such
                                           Purchaser set forth
                                           on Schedule A to the
                                           Escrow Agreement,
                                           with copies to such
                                           Purchaser's counsel
                                           as set forth on
                                           Schedule A or as
                                           specified in writing
                                           by such Purchaser.

               If to the Escrow Agent:     Owen Naccarato, Esq.
                                           Naccarato & Associates
                                           19600 Fairchild, Suite 260
                                           Irvine, CA  92612
                                           Telephone:  (949) 851-9261
                                           Facsimile:   (949) 851-9262

      14. 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.

      15. Governing Law. This Escrow Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflicts of law. Each of the Company and the
Purchasers (i) hereby irrevocably submit to the jurisdiction of the United
States District Court sitting in the Southern District of New York 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 Purchasers 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 15 shall affect
or limit any right to serve process in any other manner permitted by law.

      16. 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.

      17. 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 Purchasers. 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 Purchasers
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 Purchasers 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.

      18. 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 Purchasers 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 Purchasers to assign any of
its rights or obligations hereunder to any other person (whether or not an
affiliate of the Company or the Purchasers) 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 17 hereof.

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<PAGE>

      19. 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 Purchasers, 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.

      20. 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 Purchasers 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.

      21. 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.

      22. 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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the date first written above.

                                   VERTEX INTERACTIVE, INC.

                                   By: /s/ Nicholas R. Toms
                                       -----------------------------
                                       Nicholas R. Toms
                                       Chief Executive Officer

                                   By:  /s/ Own Naccarato
                                       -----------------------------
                                        Owen Naccarato, Esquire, as escrow agent

                                   AJW PARTNERS, LLC
                                   By:  SMS Group, LLC

                                   By: /s/ Corey S. Ribotsky
                                       -----------------------------
                                       Corey S. Ribotsky
                                       Manager

                                   AJW OFFSHORE, LTD.
                                   By:  First Street Manager II, LLC

                                   By: /s/ Corey S. Ribotsky
                                       -----------------------------
                                       Corey S. Ribotsky
                                       Manager

                                   AJW QUALIFIED PARTNERS, LLC
                                   By:  AJW Manager, LLC

                                   By: /s/ Corey S. Ribotsky
                                       -----------------------------
                                       Corey S. Ribotsky
                                       Manager

                                   NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                   By:  First Street Manager II, LLC

                                   By: /s/ Corey S. Ribotsky
                                       -----------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       7EXHIBIT 4.14

                        7 GUARANTY AND PLEDGE AGREEMENT

      GUARANTY AND PLEDGE AGREEMENT (this "Agreement"), dated as of April 28,
2004, among Vertex Interactive, Inc., a New Jersey corporation (the "Company"),
Nicholas R. Toms (the "Pledgor"), and the pledgees signatory hereto and their
respective endorsees, transferees and assigns (collectively, the "Pledgees").

                              W I T N E S S E T H:

      WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof, between Company and the Pledgees (the "Purchase Agreement"), Company has
agreed to issue to the Pledgees and the Pledgees have agreed to purchase from
Company certain of Company's 10% Callable Secured Convertible Notes, due two
years from the date of issue (the "Notes"), which are convertible into shares of
Company's Common Stock, par value $.005 per share (the "Common Stock"). In
connection therewith, Company shall issue the Pledgees certain Common Stock
purchase warrants (the "Warrants"); and

      WHEREAS, as a material inducement to the Pledgees to enter into the
Purchase Agreement, the Pledgees have required and the Pledgor has agreed (i) to
unconditionally guarantee the timely and full satisfaction of all obligations of
the Company, whether matured or unmatured, now or hereafter existing or created
and becoming due and payable (the "Obligations") to the Pledgees, their
successors, endorsees, transferees or assigns under the Transaction Documents
(as defined in the Purchase Agreement) to the extent of the Collateral (as
defined in Section 5 hereof), and (ii) to grant to the Pledgees, their
successors, endorsees, transferees or assigns a security interest in the number
of shares of Common Stock currently owned by the Pledgor as set forth below the
Pledgor's signature on the signature page hereto (collectively, the "Shares"),
as collateral security for Obligations. Terms used and not defined herein shall
have the meaning ascribed to them in the Purchase Agreement.

      NOW, THEREFORE, in consideration of the foregoing recitals, and the mutual
covenants contained herein, the parties hereby agree as follows:

      1. Guaranty. To the extent of the Collateral, the Pledgor hereby
absolutely, unconditionally and irrevocably guarantees to the Pledgees, their
successors, endorsees, transferees and assigns the due and punctual performance
and payment of the Obligations owing to the Pledgees, their successors,
endorsees, transferees or assigns when due, all at the time and place and in the
amount and manner prescribed in, and otherwise in accordance with, the
Transaction Documents, regardless of any defense or set-off counterclaim which
the Company or any other person may have or assert, and regardless of whether or
not the Pledgees or anyone on behalf of the Pledgees shall have instituted any
suit, action or proceeding or exhausted its remedies or taken any steps to
enforce any rights against the Company or any other person to compel any such
performance or observance or to collect all or part of any such amount, either
pursuant to the provisions of the Transaction Documents or at law or in equity,
and regardless of any other condition or contingency. The Pledgor shall have no
obligation whatsoever to the Pledgees beyond the Collateral pledged for the
Obligations set forth herein.

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      2. Waiver of Demand. The Pledgor hereby unconditionally: (i) waives any
requirement that the Pledgees, in the event of a breach in any material respect
by the Company of any of its representations or warranties in the Transaction
Documents, first make demand upon, or seek to enforce remedies against, the
Company or any other person before demanding payment of enforcement hereunder;
(ii) covenants that this Agreement will not be discharged except by complete
performance of all the Obligations to the extent of the Collateral; (iii) agrees
that this Agreement shall remain in full force and effect without regard to, and
shall not be affected or impaired, without limitation, by, any invalidity,
irregularity or unenforceability in whole or in part of the Transaction
Documents or any limitation on the liability of the Company thereunder, or any
limitation on the method or terms of payment thereunder which may now or
hereafter be caused or imposed in any manner whatsoever; and (iv) waives
diligence, presentment and protest with respect to, and notice of default in the
performance or payment of any Obligation by the Company under or in connection
with the Transaction Documents.

      3. Release. The obligations, covenants, agreements and duties of the
Pledgor hereunder shall not be released, affected or impaired by any assignment
or transfer, in whole or in part, of the Transaction Documents or any
Obligation, although made without notice to or the consent of the Pledgor, or
any waiver by the Pledgees, or by any other person, of the performance or
observance by the Company or the Pledgor of any of the agreements, covenants,
terms or conditions contained in the Transaction Documents, or any indulgence in
or the extension of the time or renewal thereof, or the modification or
amendment (whether material or otherwise), or the voluntary or involuntary
liquidation, sale or other disposition of all or any portion of the stock or
assets of the Company or the Pledgor, or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings, affecting the Company
or the Pledgor or any assets of the Company or the Pledgor, or the release of
any proper from any security for any Obligation, or the impairment of any such
property or security, or the release or discharge of the Company or the Pledgor
from the performance or observance of any agreement, covenant, term or condition
contained in or arising out of the Transaction Documents by operation of law, or
the merger or consolidation of the Company, or any other cause, whether similar
or dissimilar to the foregoing.

      4. Subrogation.

            (a) Unless and until complete performance of all the Obligations to
the extent of the Collateral, the Pledgor shall not be entitled to exercise any
right of subrogation to any of the rights of the Pledgees against the Company or
any collateral security or guaranty held by the Pledgees for the payment or
performance of the Obligations, nor shall the Pledgor seek any reimbursement
from the Company in respect of payments made by the Pledgor hereunder.

            (b) In the extent that the Pledgor shall become obligated to perform
or pay any sums hereunder, or in the event that for any reason the Company is
now or shall hereafter become indebted to the Pledgor, the amount of such sum
shall at all times be subordinate as to lien, time of payment and in all other
respects, to the amounts owing to the Pledgees under the Transaction Documents
and the Pledgor shall not enforce or receive payment thereof until all
Obligations due to the Pledgees under the Transaction have been performed or
paid. Nothing herein contained is intended or shall be construed to give to the
Pledgor any right of subrogation in or under the Transaction Documents, or any
right to participate in any way therein, or in any right, title or interest in
the assets of the Pledgees.

                                       2
<PAGE>

      5. Security. As collateral security for the punctual payment and
performance, when due, by the Company of all the Obligations, the Pledgor hereby
pledges with, hypothecates, transfers and assigns to the Pledgees all of the
Shares and all proceeds, shares and other securities received, receivable or
otherwise distributed in respect of or in exchange for the Shares, including,
without limitation, any shares and other securities into which such Shares may
be convertible or exchangeable (collectively, the "Additional Collateral" and
together with the Shares, the "Collateral"). Simultaneously herewith, the
Pledgor shall deliver to the Pledgees the certificate(s) representing the
Shares, stamped with a bank medallion guarantee, along with a stock transfer
power duly executed in blank by the Pledgor, to be held by the Pledgees as
security. Any Collateral received by the Pledgor on or after the date hereof
shall be immediately delivered to the Pledgees together with any executed stock
powers or other transfer documents requested by the Pledgees, which request may
be made at any time prior to the date when the Obligations shall have been paid
and otherwise satisfied in full.

      6. Voting Power, Dividends, Etc. and other Agreements.

            (a) Unless and until an Event of Default (as set forth in Section 7
hereof) has occurred, the Pledgor shall be entitled to:

                  (i) Exercise all voting and/or consensual powers pertaining to
the Collateral, or any part thereof, for all purposes;

                  (ii) Receive and retain dividends paid with respect to the
Collateral; and

                  (iii) Receive the benefits of any income tax deductions
available to the Pledgor as a shareholder of the Company.

            (b) The Pledgor agrees that it will not sell, assign, transfer,
pledge, hypothecate, encumber or otherwise dispose of the Collateral.

            (c) The Pledgor and the Company jointly and severally agree to pay
all costs including all reasonable attorneys' fees and disbursements incurred by
the Pledgees in enforcing this Agreement in accordance with its terms.

      7. Default and Remedies.

            (a) For the purposes of this Agreement, "Event of Default" shall
mean:

                  (i) default in or under any of the Obligations after the
expiration, without cure, of any applicable cure period;

                                       3
<PAGE>

                  (ii) a breach in any material respect by the Company of any of
its representations or warranties in the Transaction Documents; or

                  (iii) a breach in any material respect by the Pledgor of any
of its representations or warranties in this Agreement.

            (b) the Pledgees shall have the following rights upon any Event of
Default:

                  (i) the rights and remedies provided by the Uniform Commercial
Code as adopted by the State of New York (the "UCC") (as said law may at any
time be amended);

                  (ii) the right to receive and retain all dividends, payments
and other distributions of any kind upon any or all of the Collateral;

                  (iii) the right to cause any or all of the Collateral to be
transferred to its own name or to the name of its designee and have such
transfer recorded in any place or places deemed appropriate by the Pledgees; and

                  (iv) the right to sell, at a public or private sale, the
Collateral or any part thereof for cash, upon credit or for future delivery, and
at such price or prices in accordance with the UCC (as such law may be amended
from time to time). Upon any such sale the Pledgees shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
The Pledgees shall give the Pledgor not less than ten (10) days' written notice
of its intention to make any such sale. Any such sale, shall be held at such
time or times during ordinary business hours and at such place or places as the
Pledgees may fix in the notice of such sale. The Pledgees may adjourn or cancel
any sale or cause the same to be adjourned from time to time by announcement at
the time and place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In case of any sale of all or any
part of the Collateral upon terms calling for payments in the future, any
Collateral so sold may be retained by the Pledgees until the selling price is
paid by the purchaser thereof, but the Pledgees shall incur no liability in the
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in the case of such failure, such Collateral may again be sold upon
like notice. The Pledgees, however, instead of exercising the power of sale
herein conferred upon them, may proceed by a suit or suits at law or in equity
to foreclose the security interest and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction, the Pledgor having been given due notice of all such action. The
Pledgees shall incur no liability as a result of a sale of the Collateral or any
part thereof. All proceeds of any such sale, after deducting the reasonable
expenses and reasonable attorneys' fees incurred in connection with such sale,
shall be applied in reduction of the Obligations, and the remainder, if any,
shall be paid to the Pledgor.

                                       4
<PAGE>

      8. Application of Proceeds; Release. The proceeds of any sale or
enforcement of or against all or any part of the Collateral, and any other cash
or collateral at the time held by the Pledgees hereunder, shall be applied by
the Pledgees first to the payment of the reasonable costs of any such sale or
enforcement, then to reimburse the Pledgees for any damages, costs or expenses
incurred by the Pledgees as a result of an Event of Default, then to the payment
of the principal amount or stated valued (as applicable) of, and interest or
dividends (as applicable) and any other payments due in respect of, the
Obligations. The remainder, if any, shall be paid to the Pledgor. As used in
this Agreement, "proceeds" shall mean cash, securities and other property
realized in respect of, and distributions in kind of, the Collateral, including
any thereof received under any reorganization, liquidation or adjustment of debt
of any issuer of securities included in the Collateral.

      9. Representations and Warranties.

            (a) The Pledgor hereby represents and warrants to the Pledgees that:

                  (i) the Pledgor has full power and authority and legal right
to pledge the Collateral to the Pledgees pursuant to this Agreement and this
Agreement constitutes a legal, valid and binding obligation of the Pledgor,
enforceable in accordance with its terms.

                  (ii) the execution, delivery and performance of this Agreement
and other instruments contemplated herein will not violate any provision of any
order or decree of any court or governmental instrumentality or of any mortgage,
indenture, contract or other agreement to which the Pledgor is a party or by
which the Pledgor and the Collateral may be bound, and will not result in the
creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Pledgor's properties pursuant to the provisions of such
mortgage, indenture, contract or other agreement.

                  (iii) the Pledgor is the sole record and beneficial owner of
all of the Shares; and

                  (iv) the Pledgor owns the Collateral free and clear of all
Liens.

            (b) The Company represents and warrants to the Pledgees that:

                  (i) it has no knowledge that any of the representations or
warranties of the Pledgor herein are incorrect or false in any material respect;

                  (ii) all of the Shares were validly issued, fully paid and
non-assessable; and

                  (iii) the Pledgor is the record holder of the Shares.

                                       5
<PAGE>

      10. No Waiver; No Election of Remedies. No failure on the part of the
Pledgees to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by the Pledgees of any right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law. In addition, the exercise of any right or remedy of
the Pledgees at law or equity or under this Agreement or any of the documents
shall not be deemed to be an election of Pledgee's rights or remedies under such
documents or at law or equity.

      11. Termination. This Agreement shall terminate on the date on which all
Obligations have been performed, satisfied, paid or discharged in full.

      12. Further Assurances. The parties hereto agree that, from time to time
upon the written request of any party hereto, they will execute and deliver such
further documents and do such other acts and things as such party may reasonably
request in order fully to effect the purposes of this Agreement. The Pledgees
acknowledge that they are aware that Pledgor shall have no obligations
whatsoever to the Pledgees beyond the Collateral pledged for the Obligations set
forth herein, and no request for further assurance may or shall increase such
Obligations.

      13. Miscellaneous.

            (a) Modification. This Agreement contains the entire understanding
between the parties with respect to the subject matter hereof and specifically
incorporates all prior oral and written agreements relating to the subject
matter hereof. No portion or provision of this Agreement may be changed,
modified, amended, waived, supplemented, discharged, canceled or terminated
orally or by any course of dealing, or in any manner other than by an agreement
in writing, signed by the party to be charged.

            (b) Notice. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 6:30 p.m. (New
York City time) on a Business Day (as defined in the Purchase Agreement), (ii)
the Business Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Agreement later than 6:30 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the Business Day following
the date of mailing, if sent by nationally recognized overnight courier
services, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:

         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

                                       6
<PAGE>

         With copies to:              Sichenzia Ross Friedman Ference LLP
                                      1065 Avenue of the Americas
                                      New York, NY  10018
                                      Attention:   Gregory Sichenzia, Esq.
                                      Telephone:  (212) 930-9700
                                      Facsimile:   (212) 930-9725

         If to the Pledgor:           Nicholas R. Toms
                                      c/o Vertex Interactive, Inc.
                                      3619 Kennedy Road
                                      South Plainfield, NJ  07080
                                      Attention:  Chief Executive Officer
                                      Telephone:  (908) 756-2000
                                      Facsimile:   (908) 756-2332

         If to the Pledgees:          AJW Partners, LLC
                                      AJW Offshore, Ltd.
                                      AJW Qualified Partners, LLC
                                      New Millennium Capital Partners II, LLC
                                      1044 Northern Boulevard
                                      Suite 302
                                      Roslyn, New York  11576
                                      Facsimile No.:  (516) 739-7115
                                      Attn:  Corey S. Ribotsky

         With copies to:              Ballard Spahr Andrews & Ingersoll, LLP
                                      1735 Market Street, 51st Fl.
                                      Philadelphia, PA  19103
                                      Facsimile No.:  (215) 864-8999
                                      Attn:  Gerald J. Guarcini, Esquire

            (c) Invalidity. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.

            (d) Benefit of Agreement. This Agreement shall be binding upon and
inure to the parties hereto and their respective successors and assigns.

            (e) Mutual Agreement. This Agreement embodies the arm's length
negotiation and mutual agreement between the parties hereto and shall not be
construed against either party as having been drafted by it.

                                       7
<PAGE>

            (f) New York Law to Govern. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to the principals of conflicts of law thereof. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
Federal courts sitting in the city of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court or that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents 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 contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

      IN WITNESS WHEREOF, the parties hereto have caused this Guaranty and
Pledge Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.

                                        VERTEX INTERACTIVE, INC.

                                        By:  /s/ Nicholas R. Toms
                                        --------------------------------
                                        Nicholas R. Toms
                                        Chief Executive Officer

                                        PLEDGEES:

                                        AJW PARTNERS, LLC
                                        By:      SMS Group, LLC

                                        By:  /s/ Corey S. Ribotsky
                                        --------------------------------
                                        Corey S. Ribotsky
                                        Manager

                                        AJW OFFSHORE, LTD.
                                        By:  First Street Manager II, LLC

                                        By:  /s/ Corey S. Ribotsky
                                        --------------------------------
                                        Corey S. Ribotsky
                                        Manager

                                        AJW QUALIFIED PARTNERS, LLC
                                        By:  AJW Manager, LLC

                                        By:  /s/ Corey S. Ribotsky
                                        --------------------------------
                                        Corey S. Ribotsky
                                        Manager

                                        NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                        By:  First Street Manager II, LLC

                                        By: /s/ Corey S. Ribotsky
                                        --------------------------------
                                        Corey S. Ribotsky
                                        Manager

                    [Signatures Continued on Following Page]

                                       8
<PAGE>

                                        PLEDGOR:

                                        /s/ Nicholas R. Toms
                                        --------------------------------
                                        Nicholas R. Toms

                    Number of Shares subject to this pledge:
                                                             _______________

                             Date such Shares were acquired:
                                                             _______________

                                       9

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