Document:

GROUND LEASE

THIS GROUND LEASE (the "Ground Lease"), is made and entered as of the 30th day of April 2010 by and between:

ROUTE 94 DEVELOPMENT CORPORATION, a New Jersey corporation with an office at 3621 Route 94, Hamburg, New Jersey ("Lessor"); and

BOOMERANG SUB, INC., a Delaware corporation with an office at 355 Madison Avenue, Morristown, New Jersey ("Lessee/Developer").

RECITALS:

WHEREAS, Lessor is the owner of real property which is legally described on Exhibit A hereto and graphically depicted on Exhibit B hereto (the "Site"); and

WHEREAS, the Site is currently used for a portion of a golf course and overflow parking area; and

WHEREAS, Lessees/Developer has determined that a portion of the Site more particularly described on Exhibit C attached hereto and depicted on Exhibit D attached hereto (the "Premises"), may be suitable for development of an automated parking garage (the "Project"); and

WHEREAS, Lessee/Developer desires to supervise, manage and cause to be designed, developed, financed, constructed, equipped, furnished and delivered, the Project (such design, development, financing, construction, equipping, furnishing and delivery is herein referred to as the "Work"); and

WHEREAS, Lessee/Developer, desires to lease the Premises from Lessor for completion of the Project; and

WHEREAS, Lessee/Developer and Lessor desire to establish certain put and call options for purchase by Lessor of the fully constructed Project (the "Improvements").

NOW, THEREFORE, for and in consideration of the Premises and the covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee/Developer hereby mutually covenant and agree as follows:

  

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ARTICLE I

DEMISE. TERM. CONSIDERATION

	 	
Section 1.01

	
Demise of Premises. Lessor hereby leases and demises unto Lessee/Developer, the real property more particularly described on Exhibit C attached hereto and depicted on Exhibit D attached hereto (the "Premises"), for the Term (as that term is defined in Section 1.02 hereof) of this Ground Lease. In addition, Lessee/Developer shall have, subject to compliance with applicable Lessor requirements, the right of ingress and egress through the Site that is necessary for Lessee/Developer to use and enjoy the Premises, perform its obligations hereunder or to obtain access to the Premises. Lessee/Developer's use and occupancy of the Premises are subject to the terms and conditions of this Ground Lease.

 

	 	
Section 1.02

	
Term of Lease. The term of this Ground Lease (herein called the "Term") shall commence as of the date all parties have executed this Ground Lease and, unless sooner terminated as hereinafter provided, shall continue thereafter for 20 years.

 

	 	
Section 1.03

	
Consideration.

	
  

	
(a)

	
In consideration of the rights, benefits and privileges accruing to the Lessee/Developer resulting from this Lease and its use of the Premises, Lessee/Developer agrees to use best efforts to finance, design, construct, operate and, maintain the Project.

	
  

	
(b)

	
As further consideration for the rights, benefits and privileges accruing to the Lessee/Developer resulting from this Lease, Lessee/Developer agrees to provide Lessor and Lessor's affiliates, including but not limited to Grand Cascades Lodge at Crystal Springs, LLC, parking and storage space within the Improvements at no cost to Lessor or Lessor's affiliates subject to the limitations in Subsection 1.03 (c) below.

	
  

	
(c)

	
Lessee/Developer and Lessor acknowledge that a principal purpose of this Lease and the Project is to allow Lessee/Developer to demonstrate its Robotic Va1etTM parking system. Lessor acknowledges that Lessee/Developer may limit the use of the Improvements under Subsection 1.03 (b) by Lessor and Lessor's affiliates upon twelve (12) hours advance notice to Lessor for demonstrations conducted by Lessee/Developer.

  

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ARTICLE II

COVENANTS AND WARRANTIES OF THE LESSOR AND LESSEE

	 	
Section 2.01

	
Estate and Authority of Lessor. Lessor covenants, represents and warrants that:

	
  

	
(a)

	
The execution, delivery and performance of this Ground Lease by Lessor have been authorized by all necessary action on the part of Lessor;

	
  

	
(b)

	
This Ground Lease constitutes a legal, valid, and binding obligation of Lessor enforceable in accordance with its terms subject to equitable principles, which could affect specific performance;

	
  

	
(c)

	
Lessor has the authority to lease the Premises to Lessee/Developer;

	
  

	
(d)

	
The Lessor has fee simple good and marketable title to the Premises,

	
  

	
(e)

	
There are no liens or encumbrances on the Premises other than:

	
  

	
1.

	
the lien of the Mortgage between Lessor, inter alia, and M&T Bank ("Lender") dated December 23, 2009 and recorded on January 20, 2010 in Mortgage Book 8699 at Page 525 in the Office of the County Recording Officer of Sussex County;

	
  

	
2.

	
the Absolute Assignment of Leases, Rents, Incomes and Profits between Lessor, inter alia, and Lender dated December 23, 2009 and recorded on January 20, 2010 in Mortgage Book 8699 at Page 560 in the Office of the County Recording Officer of Sussex County;

	
  

	
3.

	
UCC Financing Statement in favor of Lender dated December 23, 2009 relating the Site and recorded on January 20, 2010 in Book 70 at Page 936 in the Office of the County Recording Officer of Sussex County;

	
  

	
4.

	
any existing utility easements.

(f)     Lessor agrees to secure execution of a Subordination, Nondisturbance and Attornment Agreement ("SNDA") in substantially the form appended hereto as Exhibit F by Lender with mortgages liens on the Site.

(g)     Lessor has control of the Premises;

(h)     Lessor has no knowledge of, nor has Lessor received any notice of, any actual or threatened action, litigation, or proceeding by any organization, person, individual or governmental agency (including governmental actions under condemnation authority or proceedings similar thereto) against the Premises (including the Project) and/or Lessor, nor has any such organization, person, individual or governmental agency communicated to Lessor anything which Lessor believes to be a threat of any such action, litigation or proceeding; and

  

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(i) Lessor has no knowledge of, nor has Lessor received notice of any violations of law or of any municipal or county ordinances, agency rules or regulations, court orders or decrees, or other legal requirements with respect to the Premises or with respect to the use, occupancy or construction thereon, including any of the foregoing pertaining to wetlands, woodlands, wildlife refuges or other protected areas or the designation of any portion of the Premises (including the Project) as a wetland, woodland, wildlife refuge or other protected area.

	 	
Section 2.02 

	
Existing and Future Easements and Rights of Ways

Subject to the representations of the Lessor contained in Article 2.01 above, this Lease is subject to all outstanding easements and rights of way over, across, in, and upon the Premises, or any portion thereof, and to the right of Lessor to grant such additional easements and rights of way over, across, in, and upon the Premises as Lessor shall determine to be in Lessor's interest, provided, however, that such easements and rights of way shall not interfere with the construction or completion of the Project, and such easements and rights of way are subject to the prior written consent of the Lessee/Developer, which consent shall not be unreasonably withheld, conditioned or delayed. Lessor shall notify Lessee/Developer of any easement activities that could impact Lessee/Developer's operation.

	 	
Section 2.03

	
Quiet Possession. Lessor covenants that Lessee/Developer, upon performing and observing the covenants to be observed and performed by Lessee/Developer under this Ground Lease, shall peaceably hold, occupy and enjoy the Premises during the Term of this Ground Lease. Nothing herein shall limit Lessor's right to enter and inspect the Premises on a reasonable basis on prior notice to the Lessee/Developer during normal business hours so long as Lessor does not interfere with the operations of Lessee/Developer or its contractors.

	 	
Section 2.04 

	
Authority of Lessee. Lessee covenants, represents and warrants that:

	
  

	
(a)

	
The execution, delivery and performance of this Ground Lease by Lessee/Developer have been authorized by all necessary action on the part of Lessee/Developer;

	 	
(b)

	
This Ground Lease constitutes a legal, valid, and binding obligation of Lessee/Developer enforceable in accordance with its terms subject to equitable principles, which could affect specific performance; and

  

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(c)

	
Lessee/Developer has the authority to lease the Premises from Lessor.

ARTICLE III

INSURANCE AND PROPERTY TAXES

	 	
Section 3.01

	
Insurance. Lessee/Developer shall be responsible for paying prior to the delinquency date all premiums for insurance required pursuant to the terms of this Lease for the Premises and Project during the Term. Lessee/Developer shall deliver to the Lessor copies of paid receipts for all insurance premiums prior to any applicable delinquency date.

	 	
Section 3.02

	
Property Taxes. Lessor shall pay all property taxes related to the Site. Lessee/Developer shall be reimburse Lessor related to increased property tax assessments associated with the Improvement.

ARTICLE IV

USE OF THE PREMISES: AND

DEVELOPMENT OF THE PROJECT

	 	
Section 4.01

	
General. The parties agree that during the term of this Lease, Lessee/Developer shall have no use of the Premises except construction and operation of the Project. Lessee/Developer covenants and agrees that it shall not make any material alterations or additions not required in the ordinary course of its management and operation of the Project without Lessor's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.

	 	
Section 4.02

	
Right of Entry. Lessee/Developer and its contractors and assigns shall have a non-exclusive right to access the Property, subject to reasonable security and access requirements and standards, in order to have ingress to and egress from the Premises as may be necessary from time to time for construction, installation, operation, maintenance, repair, and replacements to the Project and to the Premises. Lessee/Developer's use of the Property shall be subject to such reasonable security limitations and conditions as Lessor may require from time to time. Lessee/Developer's use and occupation of the Premises, including the Project, shall be subject to such reasonable rules and regulations and limitation regarding health, safety, security, and access as Lessor may prescribe from time to time or as may be applicable by operation of law. Lessor reserves the right to deny access to the site of anyone who Lessor has reasonably determined is not abiding by such rules and regulations.

  

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Lessor reserves unto itself, its contractors, and assigns the right to inspect the Premises, including the Project, for compliance with health, safety, fire protection, maintenance and other provisions of the Lease. Lessor shall give advance notice of such inspection to Lessee/Developer and offer the opportunity to accompany Lessor. Lessor's exercise of its right of entry shall not interfere with or endanger Lessee/Developer's use and quiet enjoyment of the Premises, including the Project.

 

	 	
Section 4.03

	
Engagement of Lessee/Developer. Lessor hereby confirms and agrees that it has selected the Lessee/Developer to enter into this Ground Lease to design and construct the Project in accordance with the terms and conditions set forth herein.

 

ARTICLE V

INSURANCE AND INDEMNITY

	 	
Section 5.01

	
Insurance. Lessee/Developer shall maintain at all times during the term of this Ground Lease, genera] liability insurance insuring against bodily injury or property damage occasioned by occurrence, accident or disaster in or about the Premises. Such policy or policies are to be written with a limit of coverage of not less than $1,000,000.00 in respect to bodily injury and not less than $500,000.00 with respect to property damage for any one occurrence, together with umbrella liability insurance of not less than $2,000,000.00. No later than the date of commencement of construction and continuing until substantial completion of the Project, Lessee/Developer shall obtain or cause to be obtained and kept in effect or cause to be kept in effect a standard builder's risk policy with extended coverage, including vandalism and malicious mischief, in an amount equal to the greater of (i) the full replacement cost of the Project or (ii) the then outstanding principal of any loan secured by the lien on the Project. Upon thirty (30) days notice from Lessor, Lessee/Developer shall update and augment such insurance with such additional amounts and/or coverages as are then reasonably requested by Lessor of other holders of similar rights or interests. All policies shall provide by appropriate language that the Lessor and its officers, trustees, agents or employees are additional insureds, that the insurance afforded by such policies is primary insurance, and that all rights of the insurer for contribution from other insurers of Lessor are waived. Lessee/Developer shall insure that all contractors at whatever tier performing work under this Ground Lease shall comply with the insurance requirements provided herein.

	 	
Section 5.02

	
Certificates. Certificates of insurance required by Section 5.01 shall be delivered to Lessor annually upon request. Such certificates shall confirm that Lessor and its officers, trustees, agents or employees arc additional insureds with respect to such insurance, and that such insurance may not be canceled or amended without thirty (30) days prior written notice to Lessor.

  

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Section 5.03

	
Indemnity. The parties indemnify and save/hold harmless each other and their respective officers, trustees, agents or employees from and against any and all liability, loss, damages, expenses, costs of legal action and judgments, including attorney's fees (to the extent that same are not paid out of the proceeds of insurance) caused by or arising out of or from any activities under this Ground Lease, by the respective party, its agents, employees, contractors, representatives, or licensees, including but not limited to any and all claims to persons or premises occasioned by the negligence of that party, its agents, employees, contractors, representatives, and licensees. The parties, at their own cost and expense, will defend any and all suits which may be brought and claims which may be made against the other party, its officers, trustees, agents or employees upon any such liability, and shall satisfy and discharge any and all judgments that may be recovered against the indemnified party, its officers, trustees, agents or employees in any such action or actions in which the indemnified party its officers, trustees, agents or employees may be a party defendant or that may be filed against the Premises, except to the extent such claims, actions or losses were caused by or arose out of, directly or indirectly, the negligent acts or willful misconduct of that party, its officers, trustees, agents or employees. In no event shall the Lessee/Developer have any liability resulting from any act or omission occurring prior to the term of this Ground Lease.

ARTICLE VI

LEGAL TITLE TO IMPROVEMENTS/OPTION ON IMPROVEMENTS

	 	
Section 6.01

	
Legal Title to Improvements. Legal title to the buildings, structures and other improvements, machinery and equipment associated with the Project now or hereafter constructed, installed or placed by Lessee/Developer upon the Premises and all alterations thereto when constructed, installed or placed upon the Premises (together "Improvements"), shall be and remain in Lessee/Developer during the continuance of this Ground Lease. Upon the termination or expiration hereof, legal title to all buildings, structures and other improvements, machinery and equipment associated with the Project shall automatically and without further consideration vest in the Lessor.

	 	
Section 6.02

	
Options related to Sale/Purchase of Improvements.

(a) DEFINITIONS. The following words and phrases, wherever used in this Section 6.02, shall have the following meanings:

"CALL ACQUISITION DATE" shall mean the date that is [X] years after the date all parties have executed this Ground Lease

"CALL NOTICE" shall mean the notice delivered by Lessor on Lessee/Developer pursuant to Subsection 6.02 (b)1. of this Agreement

  

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"CALL/PUT OPTION PERIOD" shall means the period of sixty (60) months following each of the Call Acquisition Date or Put Acquisition Date.

"CALL OPTION PRICE" shall mean [110%] of the greater of: (a) the depreciated value of the Improvement; or (b) the Fair Market Value of the Improvement.

"ENCUMBRANCE" means any charge, lien, equity, third party right, option, right of pre-emption or any other encumbrance, priority or security interest of whatsoever nature.

"NOTICE DATE" shall mean the date of service of the Call Notice pursuant to Subsection 6.02 (b)1., or the date of service of the Put Notice pursuant to Subsection 6.02 (b)2.

"FAIR MARKET VALUE" shall mean the value of the Improvements as determined by an independent, third party appraiser approved by both Lessor and Lessee/Developer.

"OPTION PRICE" shall mean either the Call Option Price or the Put Option Price.

"PUT ACQUISITION DATE" shall mean the date that is five (5) years after the date all parties have executed this Ground Lease.

"PUT NOTICE" shall mean the notice delivered by Lessee/Developer on Lessor pursuant to Subsection 6.02 (b)2.

"PUT OPTION PRICE" shall mean One Dollar (S 1.00).

"SETTLEMENT DATE" shall mean the date for the transfer of the Option Shares not being earlier than sixty (60) days and not later than ninety (90) days from the relevant Notice Date.

"SETTLEMENT PERIOD" means the period between the Notice Date and the Settlement Date.

(b) CALL AND PUT OPTION

	
  

	
1.

	
At any time during the Call/Put Option Period, Lessor shall have the option to purchase the Improvements by issuing a Call Notice at the relevant Call Option Price. Upon exercise of such option by Lessor. Lessee/Developer shall be obligated to sell to Lessor at the relevant Call Option Price, and such sale shall be subject to Lessor's confirmation that the Improvements are sale shall be subject to Lessor's confirmation that the Improvements are without any Encumbrance. Such purchase by Lessor of the Improvements shall be completed on the Settlement Date.

  

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2.

	
At any time during the Call/Put Option Period, Lessee/Developer shall have the option to sell the Improvements by issuing a Put Notice at the relevant Put Option Price. Upon exercise of such an option by Lessee/Developer, Lessor shall be shall be obligated to purchase the Improvements at the Put Option Price, and such purchase shall be subject to Lessor's confirmation that the Improvements are without any Encumbrance. Such purchase by Lessor of the Improvements at the Put Option Price shall be completed on the Settlement Date.

	 	
3.

	
Lessee/Developer shall be bound, upon receipt of the Call Notice or issue of the Put Notice, as the case may be, to sell the Improvements at the applicable Option Price to Lessor and undertake all necessary action in the Settlement Period including, but not limited to, the execution of any and all documents and transfer documents required to complete such sale and transfer of the Improvements for consideration received at settlement.

	 	
4.

	
Lessor shall be bound, upon issue of the Call Notice or receipt of Put Notice, as the case may be to purchase from the Lessee/Developer the Improvements at the applicable Option Price and make payment of the consideration at settlement.

	 	
5.

	
Settlement shall take place on the Settlement Date at the office of Lessor.

	 	
6.

	
All notices required or permitted by this Section 6.02 shall be made in accordance with Section 12.02.

ARTICLE VII

ASSIGNMENT

	 	
Section 7.01

	
Assignment. Lessee/Developer shall neither transfer nor assign this Ground Lease, the Improvements or any property on the Premises, nor sublet the Premises or any part of the Premises, nor grant any interest, privilege, or license whatsoever in connection with this Ground Lease, other than to secure the necessary financing for the Project, without prior Lessor approval; provided, however, that the Lessee/Developer may assign this Ground Lease to an entity affiliated with, or controlled by, or under common control with, or controlling, the Lessee/Developer. The Lessee/Developer may enter into a separate management agreement with a third party to manage the Project once it has been constructed and the certificates of occupancy issued.

  

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Section 7.02

	
Mortgage of the Premises.

	
  

	
(a)

	
Nothing contained in this Lease shall be construed as authorizing Lessee/Developer to encumber the fee simple interest of Lessor with respect to the Premises, in any manner whatsoever, except that Lessee/Developer may assign, pledge and/or hypothecate its rights hereunder. Such fee and reversionary interest with respect to the Premises shall not be subordinated or otherwise made subject to any, mortgage, or other lien or encumbrance granted, suffered or permitted by Lessee/Developer with respect to the Premises.

	
  

	
(b)

	
Except as provided herein, Lessee/Developer covenants that it shall not: (i) engage in any financing or other transaction creating any mortgage upon the Premises; (ii) place or suffer to be placed upon the Premises any lien or other encumbrance; or (iii) suffer any levy or attachment to be made on Lessee/Developer's leasehold interest in the Premises, other than such levy or attachment as may result from a foreclosure of a mortgage, lien or encumbrance permitted by this Section. Any mortgage, lien or encumbrance which is not permitted by this Section shall be deemed to be a violation of this covenant on the date of its execution or filing of record regardless of whether or when it is foreclosed or otherwise enforced, unless said mortgage, lien or encumbrance is removed within thirty (30) days after Lessee/Developer receives written notice of the execution or filing of such mortgage, lien or encumbrance.

	
  

	
(c)

	
During the term of this Lease, Lessee/Developer may encumber its leasehold interest in the Premises and the Improvements by a mortgage, lien or other encumbrance. The holder of any such mortgage, lien or encumbrance shall be referred to herein as the "Leasehold Mortgagee" and the transaction under which such mortgage, lien or encumbrance is given is referred to herein as the "Financing". Copies of all loan documents associated with the Financing shall be provided to Lessor. The Financing may be further secured by a conditional assignment of this Lease by Lessee/Developer to the Leasehold Mortgagee. Lessor, if requested, agrees to execute an estoppel certificate or any similar documentation as may reasonably be requested by the Leasehold Mortgagee for the purpose of consenting to Lessee/Developer's conditional assignment of this Lease and certifying as to the status of this Lease and to the performance by Lessee/Developer of its duties and obligations hereunder as of the date of such certification. Lessee/Developer's duties and obligations under this Lease incurred prior to the date of any foreclosure pursuant to the Financing documents shall survive the termination of this Lease.

  

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(d)

	
Promptly after assigning this Lease or encumbering the Premises or the Improvements as provided herein, Lessee/Developer shall furnish Lessor a written notice setting forth the name and address of such Leasehold In Mortgagee. Further. Lessee/Developer shall notify Lessor promptly of any lien or encumbrance which has been created or attached to the Premises or the Improvements or to Lessee/Developer's leasehold interest in the Premises or the Improvements, whether by act of Lessee/Developer or otherwise, of which the Lessee/Developer itself has notice.

	
  

	
(e)

	
Promptly upon written request from the Lessee/Developer, the Lessor shall execute and deliver to the Lessee/Developer and any prospective Leasehold Mortgagee any amendment to this Lease as may be reasonably required to accommodate the requirements of any prospective Leasehold Mortgagee. Under no circumstances shall the Lessor be required to enter into an amendment that would change the economic terms of the Ground Lease or which would require the Lessor to mortgage or encumber its fee simple interest in the Premises.

	 	
(f)

	
If a Leasehold Mortgagee or purchaser at a foreclosure sale shall acquire the Lessee/Developer's Leasehold Estate, this Lease shall continue in full force and effect for its entire term notwithstanding the payment of any obligation created in connection with such Financing and secured by such Leasehold Mortgage and the purchaser shall be fully bound by the provisions of this Lease (except to the extent that any unperformed obligations of Lessee/Developer at the time of foreclosure are personal in nature and incapable of being performed by the Leasehold Mortgagee or such purchaser).

	
  

	
(g)

	
Upon the occurrence of an Event of Default as described in this Lease, Lessor shall provide a copy of the notice of such Event of Default to the Leasehold Mortgagee. The Leasehold Mortgagee shall have the right to cure said Event of Default on or before that day which is thirty (30) days after the expiration of the time period provided to Lessee/Developer hereunder to cure such default, and Lessor may not exercise any of the remedies available to it until the expiration of such cure period; provided, however, that if in connection with such Event of Default, the Leasehold Mortgagee commences and diligently continues an action to acquire title to the Lessee/Developer's leasehold estate, the Leasehold Mortgagee shall have such reasonable additional time as is necessary to complete such action to obtain such title.

	
  

	
(h)

	
Intentionally Omitted.

	
  

	
(i)

	
There shall be no cancellation, surrender or modification of this Lease by Lessor or the Lessee/Developer without the prior written consent of any Leasehold Mortgagee. Notwithstanding the foregoing (but, in any event, subject to a Leasehold Mortgagee's curative rights set forth in subsection (g) hereof), nothing herein shall be deemed to prohibit the Lessor from exercising its rights and remedies upon an Event of Default by the Lessee/Developer in accordance with its terms.

  

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(j)

	
Lessee/Developer agrees that in the event of any foreclosure under any Leasehold Mortgage, either by judicial proceedings or under power of sale contained therein, all right, title and interest encumbered by such Leasehold Mortgage may under a public sale be assigned to and vest in the purchaser at such foreclosure sale. All such sales and transfers shall be subject and subordinate, however, to the rights, title and interests of Lessor under this Lease. Upon a foreclosure or, prior to any foreclosure, within thirty (30) days after any termination of this Lease by reason of any Event of Default by the Lessee/Developer hereunder (including, without limitation, any termination of this Lease in connection with any bankruptcy or similar proceeding), Lessor agrees to amend this Lease or execute a replacement lease upon the same terms and conditions hereof ("Replacement Lease") with such Leasehold Mortgagee or subsequent purchaser who complies with the provisions of this subsection (j).

 

	 	
(k) 

	
Notwithstanding any other provision of this Lease, Lessee/Developer agrees that any Leasehold Mortgagee or purchaser from the Leasehold Mortgagee or at the foreclosure sale shall in no manner or respect whatsoever be (i) liable or responsible for any of Lessee/Developer's obligations or covenants under this Lease (nor shall any rights of such Leasehold Mortgagee be contingent on the satisfaction of such obligations or covenants), or (ii) required to cure any Event of Default by Lessee/Developer; provided, however, that if such Leasehold Mortgagee (or any purchaser at a foreclosure sale or any subsequent person or entity to whom the leasehold estate hereunder may be subsequently assigned pursuant to subsection (j) above) becomes the owner of the Leasehold Estate created hereunder or becomes the Lessee/Developer under a Replacement Lease, then such Leasehold Mortgagee or other person or entity shall be responsible and liable for all obligations and covenants accruing during such Leasehold Mortgagee's or such other person's or entity's tenure as owner of such leasehold estate or as Lessee/Developer under a Replacement Lease.

 

ARTICLE VII

DEFAULT

	 	
Section 8.01

	
Events of Default. The occurrence of any of the following acts or events shall constitute events of default under this Ground Lease (herein referred to as "Default"):

   

  

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(a)

	
Lessee/Developer fails to make any payment of insurance or other monetary obligations required of Lessee/Developer under this Ground Lease, and such failure continues for a period of ten (10) days after Lessor shall have given Lessee/Developer written notice of such failure;

	
  

	
(b)

	
The Lessee/Developer fails to fulfill or perform any of the Lessee/Developer's covenants (other than those described in (a) above), agreements or obligations under this Ground Lease, and such failure continues for a period of thirty (30) days after the Lessor shall have given Lessee/Developer written notice specifying the nature of such failure; provided, however, in the event the Default is of a non-monetary character that requires additional time in which to cure and the Lessee/Developer has commenced and is prosecuting with diligence said cure, the termination date specified in said notice shall be extended for the period reasonably required to cure the non-monetary Default, so long as there is no monetary Default.

	 	
Section 8.02

	
Rights of Lessor Upon Default.

	
  

	
(a)

	
Upon the occurrence of any Default hereunder and after the expiration of all required notice and cure periods, Lessor may:

	
  

	
(1)

	
Give Lessee/Developer written notice of its intention to terminate this Ground Lease in accordance with the provisions of this Lease. On the date that Lessee/Developer's right to possession of the Premises ceases the Ground Lease will be terminated, except as to the Lessee/Developer's liability as set forth herein. If this Ground Lease is terminated due to Default, Lessee/Developer will remain liable to Lessor for damages.

	
  

	
(2)

	
Exercise any remedies available at law or in equity for a default by the Lessee/Developer occurring at any time under this Ground Lease and shall be entitled to recover attorneys' fees and costs incurred to enforce this Ground Lease.

 

	 	
(b)

	
Immediately upon termination of this Ground Lease for default by the Lessee/Developer under the provisions of this Lease, ownership of and title to all buildings, structures, and other improvements, and all machinery and equipment, as provided in Article VI herein, shall vest in Lessor.

  

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ARTICLE IX

TERMINATION

	 	
Section 9.01

	
Termination by Lessee/Developer. Lessee / Developer may terminate this Ground Lease upon thirty (30) days written notice to Lessor.

	 	
Section 9.02

	
Termination by Lessor. If Lessee/Developer has not placed the Project in service on or before December 31, 2010, Lessor may terminate this Ground Lease effective upon written notice to Lessee/Developer.

ARTICLE X

LESSOR PROVISIONS

	 	
Section 10.01

	
Covenant Against Contingent Fees. Lessee/Developer warrants that no person or selling agency has been employed or retained to solicit or secure this Ground Lease upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Lessee/Developer for the purpose of securing business.

	 	
Section 10.02

	
Lessor's Right to Enter. Lessor, its agents, employees, or representatives shall have the right to enter upon the Premises at any time for the purpose of performing inspections, inventory, conducting any necessary response action or corrective action, and when otherwise reasonably deemed necessary in Lessor's judgment, and Lessee/Developer shall have no claim of any character on account of such entry against Lessor, or any of its agents, representatives, or employees. In exercising the rights granted herein, Lessor shall use reasonable efforts to minimize interference with the construction of the Facilities.

	 	
Section 10.03

	
Compliance with Laws. Lessee/Developer shall comply with all applicable federal, state, and local laws, ordinances, regulations, codes and standards applicable to its leasing and operation of the Premises and ownership of the buildings and improvements associated with the Project including, without limitation, laws applicable to the construction, ownership, alteration or operation of the Project, and such compliance shall be a material requirement of this Ground Lease. Lessee/Developer, without additional expense to Lessor, shall be responsible for obtaining any licenses and permits necessary to fulfill its obligations under the terms and conditions of this Ground Lease.

	 	
Section 10.04

	
Posting of Signs. No signs or advertisements shall be placed upon the Premises except those signs and locations required by applicable codes, ordinances, other governmental regulations applicable to the Project generally. With the consent and approval of the Lessor, which consent shall not be unreasonably withheld, conditioned or delayed, Lessee/Developer or its General Contractor and construction lender may post an identification sign during the construction of the Project. The costs of constructing and maintaining such signs shall be borne by Lessee/Developer.

  

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ARTICLE XI

ENVIRONMENTAL SAFETY AND HEALTH

The following provisions apply to those operations and activities performed by the Lessee/Developer, its agents, employees, contractors, representatives or licensees.

	 	
Section 11.01

	
Environmental, Safety and Health. It is the responsibility of the Lessee/Developer to perform work in a manner that is protective of workers, the public, and the environment. It is the responsibility of the Lessee/Developer to comply with all applicable federal, state and local environmental, safety and health laws, regulations, ordinances, codes and standards. It is the responsibility of the Lessee/Developer to obtain any necessary licenses, approvals and permits needed to perform its operations and activities. The Lessee/Developer is responsible for compliance with applicable environmental permits, plans and/or reports. Lessor will cooperate with Lessee/Developer in securing such permits, with any costs incurred by Lessor paid by Lessee/Developer.

	 	
Section 11.02

	
Intentionally Omitted.

	 	
Section 11.03

	
Waste Management. It is the responsibility of the Lessee/Developer to comply with applicable federal, state and local liquid, sanitary/industrial, solid and hazardous waste management laws, regulations, ordinances, codes and standards. It is the responsibility of the Lessee/Developer to properly characterize, manage and dispose of any waste generated by the Lessee/Developer. It is the responsibility of the Lessee/Developer to make any regulatory notifications and obtain any necessary licenses, approvals, special waste approvals and permits needed for the characterization, management and disposal of liquid, industrial/sanitary, solid or hazardous waste generated by the Lessee/Developer. Lessee/Developer shall not be responsible for any environmental conditions that existed prior to the execution of this Ground Lease.

	 	
Section 11.04

	
Occupational Safety and Health. Lessee/Developer shall comply with all applicable federal, Lessor, state and local occupational safety and health laws, regulations, ordinances, codes and standards.

 

	 	
Section 11.05

	
Protection of Premises. Lessee/Developer hereby covenants and agrees that it shall, at its sole cost and expense, through the term of this Ground Lease protect and maintain in good order and condition all portion of the Premises. The Lessee/Developer/ shall exercise due diligence in the protection of the Premises against damage or destruction by fire and other causes.

 

  

15

  

ARTICLE XII

MISCELLANEOUS

	 	
Section 12.01

	
Separability. All rights, powers and remedies provided herein may be exercised only to the extent that the exercise thereof Lessors not violate applicable law and shall be limited to the extent necessary to render this Ground Lease valid and enforceable.

	 	
Section 12.02

	
Notices, Demands and Other Instruments. When either party desires to give notice to the other in connection with and according to the terms of this Ground Lease, such notice shall be given by certified mail, return receipt requested, with sufficient postage prepaid thereon, or by nationally recognized overnight delivery service and said notices shall be addressed as follows, or to such other address(es) as may be designated, in writing, to the other party:

For Lessor:

 

Mr. Andrew Mulvihill

Route 94 Development Corporation

3621 Route 94

Hamburg, New Jersey 079419

For the Lessee/Developer:

 

Mr. Christopher Mulvihill

Boomerang Systems, Inc.

355 Madison Avenue

Morristown, New Jersey 07960

	 	
Section 12.03

	
Headings and Captions. The headings and captions to the various sections and articles of this Ground Lease have been inserted for purposes of reference only and shall not limit or define the express terms and provisions of this Ground Lease.

	 	
Section 12.04

	
Exhibits. The following Exhibits attached hereto are by this reference incorporated herein and made a part hereof:

Exhibit A           Legal Description of Property

Exhibit B            Graphic Depiction of the Property

 

  

16

  

 

Exhibit C            Legal Description of Premises

Exhibit D            Graphic Depiction of the Premises

Exhibit E             Memorandum of Ground Lease

Exhibit F             SNDA

 

	 	
Section 12.05

	
Lease Not Joint Venture. Nothing contained in this Ground Lease shall be construed as creating or establishing a joint venture or partnership between Lessor and Lessee/Developer.

	 	
Section 12.06

	
Entire Agreement; Amendments. This Ground Lease (and the Exhibits attached hereto) sets forth the entire understanding and agreement of Lessor and Lessee/Developer with respect to the Premises; all courses of dealing, usage of trade and all prior representations, promises, understandings and agreements whether oral or written, are superseded by and merged into this Ground Lease. No modification of or amendment to this Ground Lease shall be binding upon the Lessee/Developer and/or the Lessor unless in writing and signed by both parties hereto.

	 	
Section 12.07

	
All Genders and Numbers Included. Whenever the singular or plural number; or masculine, feminine, or neuter gender is used in this Ground Lease, it shall equally apply to, extend to and include the other.

	 	
Section 12.08

	
Severability. If any provision of this Ground Lease shall be held to beinvalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

	 	
Section 12.09

	
Construction of Document. All provisions of this Ground Lease have been negotiated by both parties at arm's length and neither party shall be deemed the scrivener of this Ground Lease. This Ground Lease shall not be construed for or against either party by reason of the authorship or alleged authorship of any provision hereof,

	 	
Section 12.10

	
Binding Effect. This instrument shall also bind and benefit, as the case may require, the heirs, legal representatives, assigns and successors of the respective parties, and all covenants, conditions and agreements herein contained shall be construed as covenants running with the Premises. This instrument shall not become binding upon the parties until it shall have been executed and delivered by both Lessor and Lessee/Developer.

	 	
Section 12.11

	
Waiver. The waiver by the Lessee/Developer or Lessor of any term, covenant or condition herein contained shall not be deemed to be a waiver of any other term, covenant or condition, nor shall either party's consent to any breach of any term, covenant or condition be deemed to constitute or imply its consent to any subsequent breach of the same or any other term, covenant or condition herein contained.

  

17

  

	 	
Section 12.12

	
Bankruptcy. If Lessee/Developer enters into or is placed into any proceeding relating to bankruptcy, it shall give written notice via certified mail to the Lessor within five days of initiation of the proceedings. The notification shall include the date on which the proceeding was filed, the identity and location of the court, and any identification numbers related to the case.

ARTICLE XIII

DISPUTE RESOLUTION

The parties agree to make good-faith efforts to settle any dispute or claim that arises under this Ground Lease through discussion and negotiation. If such efforts fail to result in a mutually agreeable resolution, the parties shall consider the use of alternative disputes resolution (ADR). Costs shall be allocated by the mediator or arbitrator, except that there shall be no pre-decisional interest costs, and each party shall bear its discretionary costs. Any litigation shall be brought and prosecuted exclusively in Sussex County, New Jersey.

The parties agree that, substantive issues presented for mediation, arbitration, dispute, claim, litigation, or other effort at resolution shall be determined in accordance with the laws of the State of New Jersey.

There shall be no interruption in the performance of the Work, and Lessee/Developer shall proceed diligently with the performance of this Ground Lease pending final resolution of any dispute arising under this Ground Lease between the parties hereto or between Lessee/Developer and its contractors.

ARTICLE XIV

ESTOPPEL CERTIFICATE

Lessor and the Lessee/Developer agree to execute and deliver to the other within thirty (30) days from receipt of either party's written request, estoppel certificates in a commercially reasonable form, which certificates shall include information as to any modification of this Ground Lease, and this and to the best of Lessee/Developer's or the Lessor's knowledge, whether or not the other party is in default of this Ground Lease.

  

18

  

ARTICLE XV

FORCE MAJEURE

Whenever a party is required to perform an act under this Ground Lease by a certain time, said time shall be deemed extended (unless otherwise specifically provided elsewhere in this Lease) so as to take into account events of force majeure. As used herein "force majeure" shall mean a delay in a party's reasonable performance hereunder due to act of God, fire, earthquake, flood, explosion, war, invasion, insurrection, riot, mob violence, sabotage, vandalism, inability to procure or general shortage of labor, equipment, facilities, materials or supplies in the open market, failure of transportation, strikes, lockouts, litigation, condemnation, requisition, laws or orders of governmental, civil, military or naval authorities, or any other cause, whether similar or dissimilar to the foregoing, not within such party's control, other than lack of or inability to procure monies to fulfill its commitments and obligations under this Ground Lease.

ARTICLE XVI

TRANSFER TAX

Any transfer tax or other tax payable to any governmental taxing authority, including but not limited to the County of Sussex or State of New Jersey, by reason of the execution of this Ground Lease and/or recordation of a memorandum thereof shall be paid by Lessor.

ARTICLE XV

MEMORANDUM OF GROUND LEASE

The parties agree upon signing of this Ground Lease to execute and record the Memorandum of Ground Lease in the form attached hereto as Exhibit E.

ARTICLE XVIII

COUNTERPARTS

This Ground Lease may be executed in several counterparts, each of which may be deemed to be an original, and all of such counterparts together shall constitute one and the same Ground Lease.

  

19

  

IN WITNESS WHEREOF, Lessor and Lessee/Developer have caused this Ground Lease to be executed as of the day and year first above written.

	  	
ROUTE 94 DEVELOPMENT CORPORATION

	  	  	  
	  	
By:

	
/s/ Andrew Mulvihill

	  	  	
Andrew Mulvihill

	  	  	  
	  	
Its:

	  
	  	  	  
	  	
By:

	
/s/ Christopher Mulvihill

	  	  	
Christopher Mulvihill

	  	  	  
	  	
Its:

	
President

 

  

20

  

EXHIBIT A

  

21

  

EXHIBIT B

  

22

  

EXHIBIT C

  

23

  

EXHIBIT D

  

24

  

EXHIBIT E

MEMORANDUM OF GROUND LEASE

THIS MEMORANDUM OF GROUND LEASE is made and entered into effect as of the 30th day of April, 2010, by and between:

 

ROUTE 94 DEVELOPMENT CORPATION, a New Jersey corporation with an office at 3621 Route 94, Hamburg, New Jersey ("Lessor"); and

 

BOOMERANG SUB, INC., a Delaware corporation with an office at 355 Madison Avenue, Morristown, New Jersey, 07419 ("Lessee/Developer").

1. TERM AND PREMISES. For the term of 20 years and upon the provisions set forth in that certain written Ground Lease of even date herewith from Landlord to Tenant (the "Lease"), all of which provisions are specifically made a part hereof as fully and completely as if set out in full herein, Landlord leases to Tenant and Tenant leases from Landlord that certain real property consisting of approximately 0.1653 acres of land (the "Land") located on Wild Turkey Way, in the Hardyston Township, County of Sussex, New Jersey, consisting of a portion of Landlord's property commonly known as Wild Turkey Way and designated as tax block 16.31, Lot 1 and being more particularly depicted and/or described on Exhibit A attached hereto and by this reference made a part hereof, together with all rights, privileges, easements and appurtenances pertaining thereto all of which are more particularly described in the Lease. The Land and all improvements now or hereafter located thereon, including, without limitation, the building(s) to be located thereon, together with the appurtenances pertaining thereto, are herein collectively referred to as the "Premises."

 

2. QUIET ENJOYMENT The Landlord covenants and agrees that the Tenant, upon paying the basic rent and all other charges herein provided for and observing and keeping the covenants, agreements and conditions of the Lease on its part to be kept, shall lawfully and quietly hold, occupy and enjoy the Premises during the term of the Lease without hindrance or molestation of the Landlord or of anyone claiming by, through or under the Landlord.

 

3. PURPOSE OF MEMORANDUM OF GROUND LEASE. This Memorandum of Ground Lease is prepared for the purposes of recording a notification as to the existence of the Lease but in no way modifies the express and particular provisions of the Lease.

 

4. FOR THE BENEFIT OF THE PREMISES. It is the intention of Landlord and Tenant that the covenants described and referred to herein shall not be personal to Landlord and Tenant and shall be binding on successors and assigns and shall run with the Land. Each successive owner of the real property described in Exhibit "A", or of any portion thereof, and each person having any interest therein derived through any owner thereof, shall be bound by such covenants for the benefit of the Premises.

  

25

  

IN WITNESS WHEREOF this Memorandum of Ground Lease has been executed as of the day and year first above written.

	
LANDLORD:

	 	
TENANT:

	  	 	  
	
ROUTE 94 DEVELOPMENT

CORPORATION

	 	
BOOMERANG SUB, INC.

	  	 	  
	
By:

	
/s/ Andrew Mulvihill

	 	
By:

	
/s/ Christopher Mulvihill

	
Name:

	
Andrew Mulvihill

	 	
Name:

	
Christopher Mulvihill

	  	  	 	  	  
	
Federal Employer Identification Number: 22-3579380

	 	
Federal Employer Identification Number: 26-1913805

	  	 	  
	
Date of Execution: April 30, 2010

	 	
Date of Execution: April 30, 2010

  

26

  

EXHIBIT F

  

27

  

SUBORDINATION NONDISTURBANCE AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT ("Agreement") is made to be effective as of the __ day of ______________________, ___, between ______________________, a ______________________ organized and existing under the laws of _________________ ("Lender") and _______________________ ("Tenant").

BACKGROUND:

Tenant has entered into a lease agreement with _______________________ ("Landlord") dated _______________________ , (the "Lease") relating to the property described in Exhibit "A" attached to this Agreement and by this reference made a part of this Agreement (the "Property"). Lender has made or has committed to make or has purchased a loan to Landlord in the original principal amount of $ ____________ (the "Loan") secured by a mortgage, deed of trust or security deed (the "Mortgage") covering the Property. Tenant has agreed that the Lease will be subject and subordinate to the Mortgage held by Lender, provided Tenant is assured of continued use of the Property under the terms of the Lease.

AGREEMENT:

For and in consideration of the mutual covenants contained in this Agreement, the sum of Ten Dollars ($10.00) and other good and valuable considerations, the receipt and sufficiency of which are acknowledged, and notwithstanding anything in the Lease to the contrary, the parties agree as follows:

Subordination. The Lease with all rights, options, liens and charges created by the Lease is expressly made and will continue to be subject to and subordinate in all respects to the terms, conditions, lien, operation and effect of the Mortgage and to any renewals, modifications, consolidations, replacements and extensions of the Mortgage.

	
2.

	
Nondisturbance. If Lender takes possession of the Property or becomes the owner of the Property by foreclosure, conveyance in lieu of foreclosure or otherwise, so long as Tenant complies with and performs its obligations under the Lease and no event of default has occurred under the Lease, then Lender agrees as follows:

	
  

	
a.

	
Lender will not terminate, impair or disturb the possession of Tenant.

	
  

	
b.

	
The Lease will continue in full force and effect as a direct Lease between Lender and Tenant, upon and subject to all of the terms, covenants and conditions of the Lease, for the balance of the term of the Lease.

	
3.

	
Mortgage Remedies. Nothing contained in this Agreement will prevent Lender from naming Tenant in any foreclosure or other action or proceeding initiated by Lender pursuant to the Mortgage to the extent necessary under applicable law in order for Lender to avail itself of and complete the foreclosure or other remedy.

	
4.

	
Attornment. If Lender or any other party becomes the owner of the Property by foreclosure, conveyance in lieu of foreclosure or otherwise ("Successor Landlord"), then

  

1

  

Tenant agrees as follows:

	 	
a. 

	
Tenant will perform and observe its obligations under the Lease.

	
  

	
b.

	
Tenant will attorn to and recognize Successor Landlord as the Landlord under the Lease for the remainder of the term of the Lease, such attornment to be automatic and self-operative.

	
  

	
c.

	
Tenant will execute and deliver upon request of Successor Landlord an appropriate agreement of attornment to Successor Landlord.

	
5.

	
Protection of Successor Landlord. Tenant agrees that Successor Landlord will not be liable for, subject to or bound by any of the following:

	
  

	
a.

	
claims,-offsets or defenses which Tenant might have against Landlord;

	
  

	
b.

	
acts or omissions of Landlord;

	
  

	
c.

	
rent or additional rent which Tenant might have paid for more than the current month;

	
  

	
d.

	
any security deposit or other prepaid charge paid to Landlord;

	
  

	
e.

	
construction or completion of any improvements for Tenant's use and occupancy;

	
  

	
f.

	
warranties of any nature whatsoever, including any warranties respecting use, compliance with zoning, hazardous wastes or environmental laws, Landlord's title, Landlord's authority, habitability, fitness for purpose or possession; or

	
  

	
g.

	
amendments or modifications of the Lease made without its written consent

	
6.

	
Successor Landlord Exculpation. Tenant will look solely to Successor Landlord's interest in the Property for the payment and discharge of any obligation or liability imposed upon Successor Landlord under the Lease.

 

	
7.

	
Estoppel. To the best of Tenant's knowledge, there does not exist any default, claim, controversy or dispute under the Lease. Tenant has not commenced any action nor sent or received any notice to terminate the Lease.

	
8.

	
Notice to Lender. Tenant agrees that it will deliver to Lender a copy of all notices of default or termination received by it under the terms of the Lease.

	
9.

	
Assignment to Lender. Tenant acknowledges that the Landlord may execute and deliver to Lender an assignment of the Lease as security for the Loan and Lender may assign the Loan to Freddie Mac. Tenant expressly consents to such assignments.

	
10.

	
Invalidity. If any portion of this Agreement is held invalid or inoperative, then all of the remaining portions will remain in full force and effect, and, so far as is reasonable and possible, effect will be given to the intent manifested by the portion or portions held to be invalid or inoperative.

	
11.

	
Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State where the Property is located.

  

2

  

	
12.

	
Notices.

	
  

	
(a)

	
All notices, demands and other communications ("Notices") under or concerning this Agreement must be in writing. Each Notice shall be addressed to the intended recipient at its address set forth in this Agreement, and will be deemed given on the earliest to occur of (1) the date when the Notice is received by the addressee; (2) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery; or (3) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. The term "Business Day" means any day other than a Saturday, a Sunday or any other day on which Lender is not open for business.

	
  

	
(b)

	
Any party to this Agreement may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

Any Notice, if given to Lender, must be addressed as follows:

Seller/Servicer’s Name

Seller/Servicer’s Address

Any Notice, if given to Tenant, must be addressed as follows:

	
  

	
  

	
  

	
13. 

	
Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties to this Agreement and their respective heirs, legal representatives, successors, successors-in-title and assigns.

	
14. 

	
Counterparts. This Agreement may be executed in any number of counterparts, all of which when taken together will constitute one and the same instrument.

 

SIGNATURE PAGE FOLLOWS

  

3

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement [under seal] as of the date first above written.

	  	
LENDER:

	  	  
	  	
TENANT:

 

  

4EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of March 31, 2008 (the "Effective Date") between Boomerang Systems, Inc., a Delaware Corporation (the "Company") and Christopher Mulvihill (the "Executive").

 

RECITAL

 

The Company desires to employ the Executive, and the Executive desires to be so employed by the Company, on the terms and subject to the conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual promises set forth in this Agreement, the Company and the Executive hereby agree as follows:

	 	
1.

	
Definitions. Unless otherwise defined herein, the capitalized terms defined in Exhibit A shall have the meanings therein specified for all purposes of this Agreement.

 

	 	
2.

	
Employment

	
  

	
(a)

	
Subject to the terms and conditions contained herein, the Company hereby agrees to employ the Executive, and the Executive accepts such employment, on the Effective Date until the Termination Date.

	
  

	
(b)

	
During the Executive's employment under this Agreement, the Executive shall render services to the Company in the position of President. The Executive shall perform such duties and responsibilities as are normally related to such position, subject to such modified or additional duties (that are not materially inconsistent with duties and responsibilities as are normally related to such positions) as may be assigned by the Board. The Executive will report to the Board.

	
  

	
(c)

	
In performing his services hereunder, the Executive shall abide by the rules, regulations, and practices of the Company as adopted or modified from time to time in the sole discretion of the Company.

	
  

	
(d)

	
The Executive will devote his entire business time, energy, attention and skill to the services of the Company and to the promotion of its interests. So long as the Executive is employed by the Company, the Executive shall not, without the written consent of the Company:

	
  

	
(i)

	
engage in any other activity for compensation, profit or other pecuniary advantage, whether received during or after the term of this Agreement;

	
  

	
(ii)

	
render or perform services of a business, professional, or commercial nature other than to or for the Company, either alone or as an employee, consultant, director, officer, or partner of another business entity (including serving on boards of directors), whether or not for compensation; or

	
  

	
(iii)

	
plan or otherwise take any preliminary steps, either alone or in concert with others, to establish or engage in any business or activity that would compete with the current or proposed business of the Company;

 

provided, that it shall not be a violation of this Agreement for the Executive to (A) serve on civic or charitable boards, (B) manage personal investments, (C) serve on corporate boards, or (D) engage in such other activities as the Chief Executive Officer may approve, so long as such activities do not interfere materially with the performance of the Executive's duties and responsibilities to the Company.

	 	
(e)

	
Prior to, concurrently with or after the execution of this Agreement, the Executive has executed / will execute an Executive Proprietary Information, Trade Secret and Confidentiality Agreement (the "Confidentiality Agreement").

  

  

  

	 	
3.

	
Location of Employment: The Executive's principal place of employment shall initially be at the Company's offices in Morristown, New Jersey; provided that at the reasonable direction of the Board the Executive may, from time to time, be required to travel to various domestic and foreign locations for purposes consistent with his duties hereunder.

	 	
4.

	
Compensation.

	
  

	
(a)

	
In exchange for full performance of the Executive's obligations and duties under this Agreement, the Company shall pay the Executive a salary at the rate of One Hundred Fifty Thousand ($150,000.00) per year ("Base Salary"). The Base Salary shall be paid in accordance with the Company's regularly established payroll practice. The Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be adjusted in the sole discretion of the Board or the Company's Compensation Committee. Such adjusted salary shall become the "Base Salary."

 

	
  

	
(b)

	
The Base Salary hereof is a gross amount, and the Company shall be required to withhold from such amount deductions with respect to Federal, state and local taxes, FICA, unemployment compensation taxes and similar taxes, assessments or withholding requirements.

 

	
  

	
(c)

	
During the Executive's employment under this Agreement, the Executive shall also be reimbursed by the Company for reasonable business expenses actually incurred or paid by the Executive, consistent with the policies established by the Board, in rendering to the Company the services provided for in this Agreement.

 

	
  

	
(d)

	
The Executive shall be entitled to vacation and sick leave on terms equivalent to those of other executive officers of the Company. The Executive shall accrue four (4) weeks of vacation in his first year of employment with the Company in accordance with the Company's standard vacation policy.

 

	
  

	
(e)

	
The Executive shall be entitled to participate in all benefit plans (including but not limited to any medical, dental, life insurance, retirement and disability plans) fully paid for by Company.

 

	
  

	
(f)

	
During the Executive's employment under this Agreement, the Executive shall be eligible to receive additional annual compensation in an amount equal to three percent (3%) of Company’s Gross Sales during the subject year (“Sales Compensation”).

 

	 	
5.

	
Term. The Executive's employment hereunder shall commence on the Effective Date and shall continue in effect until the later of: i) the date that is five (5) years after the Effective Date (“5 Year Term”); or ii) terminated pursuant to Section 6 below.

	 	
6.

	
Termination. The Executive's employment hereunder may be terminated as follows:

 

	
  

	
(a)

	
The employment of the Executive under this Agreement shall terminate on the date of the Executive's death.

	
  

	
(b)

	
The employment of the Executive under this Agreement may be terminated by the Company immediately upon giving the Executive notice if the Executive becomes Disabled.

	
  

	
(c)

	
The employment of the Executive under this Agreement may be terminated by the Company immediately upon giving the Executive notice upon the occurrence of Cause.

	
  

	
(d)

	
In addition to the circumstances described in subsection (c) above, the Company may terminate the Executive's employment at any time (immediately upon giving notice to the Executive) for any reason or no reason, with or without Cause or prior notice; provided, that a cessation of the Company's employment of the Executive in connection with a Sale Transaction shall not be deemed for purposes of this Agreement to be a termination of the Executive by the Company if the Successor assumes and agrees to perform the Company's obligations hereunder.

	
  

	
(e)

	
(i) The Executive may voluntarily terminate his employment under this Agreement by giving the Board written notice of his resignation signed by the Executive or, if no notice is given, on the date on which the Executive voluntarily terminates his employment relationship with the Company.

  

  

  

 

(ii) Such voluntary termination shall be deemed for purposes hereof to have occurred for "Good Reason" only if (1) the Executive provides written notice to the Company within twenty (20) days after the Executive becomes aware of the circumstances giving rise to "Good Reason", (2) the Company fails to correct the circumstances giving rise to "Good Reason" within thirty (30) days following receipt of such notice and (3) the Executive resigns within fifteen (15) days following such thirty (30) day period.

 

	
  

	
7.

	
Consequences of Termination.

	
  

	
(a)

	
If the employment of the Executive under this Agreement is terminated pursuant to 6(c) (termination With Cause), 6(e)(i) (voluntary termination, other than for Good Reason) or expiration of the 5 Year Term and this Agreement is not renewed or extended, then (i) the Company shall pay the Executive the Accrued Compensation, (ii) the Company shall provide to the Executive (or his dependents, as applicable) such benefits, if any, as may be required to be provided by the Company under the Consolidated Omnibus Budget Reconciliation Act ("COBRA") and any disability policy of the Company applicable to the Executive, and (iii) the Executive (or, as applicable, his heirs, estate or representative) shall be entitled to vested benefits, stock options and other equity awards as applicable (iv) the Executive shall not be entitled to any other compensation or benefits from the Company, under this Agreement or otherwise. The Accrued Compensation shall be paid promptly after termination of employment, provided that the benefits and amounts accrued under the plans and programs shall be paid or provided in accordance with such plans or programs.

	
  

	
(b)

	
If the employment of the Executive under this Agreement is terminated pursuant to 6(a) (death), 6(b) (disability), Section 6(d) (termination Without Cause), or Section 6(e)(ii) (voluntary termination for Good Reason), then the Executive shall not be entitled to any compensation or benefits from the Company, under this Agreement or otherwise, except for the following:

	
  

	
(i)

	
The Company shall pay to the Executive (or, as applicable, his heirs, estate or representative) all Accrued Compensation and COBRA benefits described in Section 7(a);

	
  

	
(ii)

	
Following the Termination Date, the Company shall pay the Executive (or, as applicable, his heirs, estate or representative), for the duration of the Severance Period, severance payments at an annual rate (pro rated over the Severance Period) equal to sum of (A) the 50% of Base Salary plus (B) an amount equal to two percent (2%) of Company’s Gross Sales during each year of the Severance Period.

 

	
  

	
(iii)

	
The vesting of the stock options and other equity awards granted to the Executive shall accelerate so that such options and other equity awards shall have vested to the same extent as would if the Executive were terminated on the last day of the Severance Period;

 

provided, that the Executive shall not be entitled to receive any post-termination benefits described in clause (ii), and (iii) of this subsection (b) unless, within twenty-one (21) days following the Termination Date, he executes and delivers to the Company a Release of Claims in the form attached as Exhibit B hereto.

	
  

	
(c)

	
The Executive agrees that all property (including, without limitation, all equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) furnished to or created or prepared by Executive incident to Executive's employment belongs to the Company and shall be promptly returned to the Company upon termination of the Executive's employment.

 

	
  

	
(d)

	
Upon termination of the Executive's employment, the Executive shall be deemed to have resigned from all offices and directorships then held with the Company, and each of its subsidiaries. Following any termination of employment, the Executive shall reasonably cooperate with the Company (i) in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees and (ii) in the defense of any action brought by any third party against the Company that relates to the Executive's employment by the Company; provided, that in each case the Company shall reimburse the executive for any out-of-pocket fees and expenses incurred by the Executive in connection with such cooperation.

 

  

  

  

 

	 	
8.

	
Additional Post-Termination Obligations.

	
  

	
(a)

	
The Executive acknowledges that (x) because of his position with the Company, he will have access to the information about the operations, business strategies and customers, and other valuable proprietary information and trade secrets, of the Company and its affiliates (y) the use or disclosure of such information and trade secrets in violation of this Agreement would be extremely difficult to detect or prove and (z) any activities restricted by this Section 8 would necessarily involve the use or disclosure of the Company's trade secrets and/or proprietary information. Accordingly, the Executive agrees that from the date hereof until after the eighteen month anniversary of the Termination Date, the Executive will not, directly or indirectly:

	
  

	
(i)

	
engage in any business activity that is or may reasonably be found to be in competition with the business of the Company or any of its subsidiaries, as such business may exist at any time from the Effective Date through the Termination Date; provided, that nothing in this Agreement shall be deemed to prohibit Executive from owning not more than one percent (1%) of any class of publicly traded securities of a competitor.

	
  

	
(ii)

	
Solicit, raid, entice or induce any employee of the Company or any of its subsidiaries to be employed by any competitor thereof (except to the extent that such employee has first responded to a general advertisement or general employment search by Executive's place of employment at the time);

	
  

	
(iii)

	
Solicit business for any competitor from, or transact such business for any competitor with, any person, firm or corporation which was, at any time during Executive's employment hereunder, a customer of the Company or any of its subsidiaries; or

	
  

	
(iv)

	
Assist a competitor in taking such action.

	
  

	
(b)

	
Executive agrees that he will not disparage, or otherwise communicate to anyone, information which may be harmful to the business or the business reputation of the Company or any of its subsidiaries or their respective employees, officers, directors, customers, suppliers, successors, and assigns, including without limitation, negative comments about any such company, its management methods, policies and/or practices. Notwithstanding the foregoing, Executive may respond accurately and fully to any question, inquiry or request made in connection with any governmental inquiry, investigation, review, audit, or proceeding, or as otherwise required by law.

	
  

	
(c)

	
If the Executive fails to perform his obligations under this Section 8, then the Company may, in addition to any rights and remedies then available to the Company (under Section 11 hereof or otherwise), cease providing the payments and benefits described in Section 7(b) so long as such failure, if reasonably capable of being cured, is not cured by the Executive within thirty (30) days following a written notice from the Company of such failure to perform.

	
  

	
9.

	
Representations.

	
  

	
(a)

	
The Executive represents that he has full authority to enter into this Agreement and is not under any contractual restraint which would prohibit the Executive from satisfactorily performing his duties to the Company under this Agreement.

 

  

  

  

 

	
  

	
(b)

	
The Executive hereby agrees to indemnify and hold harmless the Company and its respective officers, directors and stockholders from and against any losses, liabilities, damages or costs (including reasonable attorney's fees) arising out of a material breach of any of the representations, warranties and covenants of the Executive set forth in this Agreement.

 

	 	
(c)

	
The Executive acknowledges that he is free to seek advice from independent counsel with respect to this Agreement. The Executive has either obtained such advice or, after carefully reviewing this Agreement, has decided to forego such advice. The Executive is not relying on any representation or advice from the Company or any of its respective officers, directors, attorneys or other representatives regarding this Agreement, its content or effect.

 

	 	
10.

	
Arbitration. Subject to Section 11 below, the parties acknowledge and agree to the provisions of the Arbitration Agreement attached hereto as Exhibit C and incorporated by this reference.

 

	 	
11.

	
Equitable Relief. Notwithstanding Section, 10 above, the Executive acknowledges that the Company is relying for its protection upon the existence and validity of the provisions of this Agreement, that the services to be rendered by the Executive are of a special, unique and extraordinary character, and that irreparable injury will result to the Company from any violation or continuing violation of the provisions of Section 8 for which damages may not be an adequate remedy. Accordingly, the Executive hereby agrees that in addition to the remedies available to the Company by law or under this Agreement, the Company shall be entitled to obtain such equitable relief as may be permitted by law in a court of competent jurisdiction including, without limitation, injunctive relief from any violation or continuing violation by the Executive of any term or provision of Section 8. If the Company seeks to enforce its rights under this Section 11, the prevailing party or parties shall be entitled to recover reasonable fees, costs and expenses incurred in connection therewith including, without limitation, the fees, costs and expenses of attorneys, accountants and experts, whether or not litigation is instituted, and including such fees, costs and expenses of appeals.

 

	 	
12.

	
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal substantive laws (and not the laws of conflicts) of the State of New Jersey.

 

	 	
13.

	
Entire Agreement. This Agreement (including the Exhibits hereto) constitutes the whole agreement of the parties hereto in reference to any employment of the Executive by the Company and in reference to any of the matters or things herein provided for or hereinabove discussed or mentioned in reference to such employment; all prior agreements, promises, representations and understandings relative thereto being herein merged.

 

	
  

	
14.

	
Assignability.

 

	 	
(a)

	
This Agreement is personal in nature and the Executive shall not, without the written consent of the Company, assign or transfer this Agreement or any rights or obligations hereunder.

 

	 	
(b)

	
Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give to any person, other than the parties to this Agreement, any right, remedy or claim under or by reason of this Agreement or of any term, covenant or condition of this Agreement.

 

	
  

	
15.

	
Amendments; Waivers.

 

	 	
(a)

	
This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants of this Agreement may be waived only by a written instrument executed by the parties to this Agreement or, in the case of a waiver, by the party waiving compliance. Any such written instrument must be approved by the Board to be effective as against the Company. The failure of any party at any time or times to require performance of any provision of this Agreement shall in no manner affect the right at a later time to enforce the same. No waiver by any party of the breach of any term or provision contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

  

  

  

  

 

	 	
(b)

	
This Agreement is intended to comply with Section 409A (as amplified by any Internal Revenue Service or U.S. Treasury Department guidance), and shall be construed and interpreted in accordance with such intent. The Executive and the Company acknowledge that the Executive and the Company intend that the compensation arrangements set forth in this Agreement are in compliance with Section 409A, and the Executive and the Company agree to cooperate with one another, to the extent reasonably requested by the other party, to restructure any compensation set forth in this Agreement in a manner, if possible and without any increase in cost to the Company, such that no earlier and/or additional taxes to the Executive or the Company will arise under Section 409A. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the Code or any regulations or rulings thereunder). With regard to any provision hereby that provides that a payment shall be made promptly after a date, such payment shall be made within thirty (30) days thereafter.

 

	
  

	
16.

	
Notice. All notices, requests or consents required or permitted under this Agreement shall be made in writing and shall be given to the other parties by personal delivery, registered or certified mail (with return receipt), overnight air courier (with receipt signature) or facsimile transmission (with "answerback" confirmation of transmission), sent to such party's addresses or telecopy numbers as are set forth below such party's signatures to this Agreement, or such other addresses or telecopy numbers of which the parties have given notice pursuant to this Section 16. Each such notice, request or consent shall be deemed effective upon the date of actual receipt, receipt signature or confirmation of transmission, as applicable (or if given by registered or certified mail, upon the earlier of (i) actual receipt or (ii) three days after deposit thereof in the United States mail).

 

	
  

	
17.

	
Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

	
  

	
18.

	
Survival. The representations and agreements of the parties set forth in Sections 7 (Consequences of Termination), 8 (Additional Post-Termination Obligations), 9 (Representations), 10 (Arbitration), and 11 (Equitable Relief), of this Agreement shall survive the expiration or termination of this Agreement (irrespective of the reason for such expiration or termination).

  

  

  

  

  

IN WITNESS WHEREOF, the parties to this Agreement have executed this Employment Agreement as of the date first above written.

	  	BOOMERANG SYSTEMS, INC.
	  	  
	 	By:	  /s/ Joseph Bellantoni
	  	  	
Joseph Bellantoni

	  	  	
Chief Financial Officer

	  	
Address for Notices:

355 Madison Avenue

Morristown, NJ 07960

 

By signing below, the undersigned acknowledges and agrees that, except as expressly set forth in a written agreement signed by an authorized representative of the Company, the undersigned (i) has not been promised any equity interests in the Company or any of its subsidiaries, affiliates or predecessors and (ii) does not and will not have any right to any equity interests in the Company or any of its subsidiaries, affiliates or predecessors.

	  	  By:	
 /s/Christopher Mulvihill

	 	 	 Christopher Mulvihill
	  	  
	  	
Address for Notices: 

66 Orton Road

West Caldwell, NJ 07006

 

  

  

  

 

EXHIBIT A

 

DEFINITIONS

 

"Accrued Compensation" shall mean (i) all base salary and vacation pay accrued through the Termination Date, (ii) any unpaid Sales Compensation and (iii) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination Date.

 

"Base Amount" shall mean the amount of Executive's annual base salary at the highest base salary in effect during the one year period ending on the Termination Date.

 

"Board" shall mean the Board of Directors.

 

"Cause" shall mean any of the following (i) Executive commits a material breach of this Agreement, the Confidentiality Agreement, or any policy of the Company; which breach is not cured to the satisfaction of the Board within twenty days after written notice to Executive from the Company; (ii) the Executive fails (other than a failure resulting from a Disability) to substantially perform his duties hereunder, or to implement or follow a lawful policy or directive of the Company, and such failure continues for a period of twenty days after written notice to Executive from Company; (iii) the Executive is indicted for a crime involving dishonesty, breach of trust, physical harm to any person or serious moral turpitude, (iv) the Executive engages in dishonesty, gross negligence or willful misconduct in the performance of his duties, as reasonably determined by the Board, (v) the Executive engages in conduct which is materially injurious to the Company (monetarily or otherwise) or which constitutes a material violation of federal or state law relating to the Company or its business.

 

"Code" shall mean the Internal Revenue Code of 1986, as amended.

 

"Common Stock" shall mean the Company's Common Stock.

 

"Disability" means (i) the Executive becomes eligible for the Company's long term disability benefits or (ii) in opinion of the Board, Executive has been unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental impairment for more than ninety consecutive days or more than one hundred and twenty days in any twelve-month period.

 

"Good Reason" means, without the Executive's express written consent, the occurrence of any of the following circumstances: (i) there is a change in the Executive's status or responsibilities which represents a material and adverse change from the Executive's overall status or responsibilities, taken as a whole; or (ii) the Executive is required to be based at any place outside a fifty (50) mile radius from Morristown, New Jersey without his written consent, except for travel that is reasonably necessary in connection with the Company's business; (iii) a reduction in the Executive's Base Salary or benefits (unless such reduction applies similarly to all other officers of the Company); or (iv) any failure by a Successor to assume and agree to perform the Company's obligations hereunder.

"Gross Sales" means total sales of the Company in a calendar year not adjusted for customer discounts or returns, which total sales shall be calculated by adding all sales invoices and not deducting operating expenses, cost of goods sold, payment of taxes, or any other charge.

"Sale Transaction" shall mean (i) a transaction (including a stock sale, merger, consolidation, reorganization or recapitalization) pursuant to which the holders of the voting capital stock of the Company immediately prior to such transaction (or their affiliates) cease to beneficially own more than fifty percent (50%) of voting capital stock of the Company or its successor (or, if there is a parent of the Company following such transaction, of the ultimate parent) immediately following such transaction or (ii) the Company sells all or substantially all of its assets to a third party.

 

"Section 409A" shall mean Section 409A of the Code, together with and the related final regulations thereunder and other guidance relating thereto.

 

"Successor" shall mean the successor or transferee in a Sale Transaction.

 

"Severance Period" shall mean the period commencing on the Termination Date and ending on the twenty four (24) month anniversary of such Termination Date.

 

"Termination Date" means the date on which the Executive's employment is terminated pursuant to Section 6 hereof.

 

  

  

  

EXHIBIT B

 

RELEASE

 

In consideration for the payments described in Section 7 of the Agreement, the Executive hereby releases and discharges Boomerang Systems, Inc. and any subsidiaries or affiliates thereof (collectively the "Company"), and their respective directors, officers, employees, benefit plans and administrators, successors and assigns from any and all claims, obligations, and liabilities, whether known or unknown, at law or in equity, arising out of the Executive's employment with the Company and the termination thereof. This Release is to be broadly construed so as to resolve all pending or potential disputes including, but without limiting the generality of the foregoing, any and all claims under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act of 1990, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, the Equal Pay Act, the Family and Medical Leave Act, the discrimination and wage payment laws of the State of California, and any other statute, regulation, or ordinance, and any and all claims based upon alleged wrongful or retaliatory discharge, negligence, intentional infliction of emotional distress, defamation, invasion of privacy, other torts, harassment, employment discrimination or breach of contract (express or implied). Notwithstanding the foregoing, Executive does not waive any rights Executive may have to enforce the terms of the Employment Agreement, if any, to amounts or benefits to be paid or provided after termination under the Employment Agreement or any Company-sponsored employee benefit plan, to insurance protection and/or indemnification for actions taken by the Executive while an employee, officer and/or director of the Company or to make any claims for workers' compensation.

 

Executive acknowledges and agrees that: (a) Executive has read and understands this Release in its entirety; (b) Executive has been advised in writing to consult with an attorney concerning this Release before signing it. This subparagraph constitutes such written advice; (c) Executive has twenty-one (21) calendar days after receipt of this Release to consider its terms before signing it; (d) nothing contained in this Release waives any claim that may arise after the date of its execution; and (e) Executive executes this Release knowingly and voluntarily, without duress or reservation of any kind, and after having given the matter full and careful consideration.

 

Executive has the right to revoke this Release in full within seven (7) calendar days of executing it. Any revocation must be personally delivered to the General Counsel of the Company or his designee, or mailed to Boomerang Systems, Inc, Board of Directors, 355 Madison Avenue, Morristown, NJ  07960 and postmarked within seven (7) calendar days of the date of execution of this Release. None of the terms and provisions of this Release shall become effective or be enforceable until such revocation period has expired.

 

  

  

  

EXHIBIT C

 

ARBITRATION

 

1. Any controversy or claim arising out of, relating to or in connection with this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association ("AAA") in accordance with its then existing Commercial Arbitration rules and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

 

2. It is the express agreement of the parties that the provisions of this Section, including the rules of the AAA , as modified by the terms of this Exhibit C, shall govern the arbitration of any disputes arising pursuant to this Agreement. In the event of any conflict between the law of the State of New Jersey, the law of the arbitral location, and the U.S. Arbitration Act (Title 9, U.S. Code), with respect to any arbitration conducted pursuant to this Agreement, to the extent permissible, it is the express intent of the parties that the law of Illinois, as modified herein, shall prevail. Either party (the "Initiating Party") may commence an arbitration by submitting a Demand for Arbitration under the AAA Rules and by notice to the other Party (the "Respondent") in accordance with Section 16. Such notice shall set forth in reasonable detail the basic operative facts upon which the Initiating Party seeks relief and specific reference to the clauses of this Agreement, the amount claimed, if any, and any non-monetary relief sought against the Respondent. After the initial list of issues to be resolved has been submitted, the arbitrators shall permit either party to propose additional issues for resolution in the pending proceedings.

 

3. The place of arbitration shall be Morristown, New Jersey or any other place selected by mutual agreement.

 

4. The parties shall attempt, by agreement, to nominate a sole arbitrator for confirmation by the AAA. If the parties fail so to nominate a sole arbitrator within 30 days from the date when the Initiating Party's Demand for Arbitration has been communicated to the other party, a board of three arbitrators shall be appointed by the parties jointly or, if the parties cannot agree as to three arbitrators within 30 days after the commencement of the arbitration proceeding, then one arbitrator shall be appointed by each of Executive and the Company within 60 days after the commencement of the arbitration proceeding and the third arbitrator shall be appointed by mutual agreement of such two arbitrators. If such two arbitrators shall fail to agree within 75 days after commencement of the arbitration proceeding upon the appointment of the third arbitrator, the third arbitrator shall be appointed by the AAA in accordance with its then existing rules. Notwithstanding the foregoing, if any party shall fail to appoint an arbitrator within the specified time period, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with its then existing rules. For purposes of Section 10, the "commencement of the arbitration proceeding" shall be deemed to be the date upon which the Demand for Arbitration has been received by the AAA. Any award shall be rendered by a majority of the members of the board of arbitration.

 

5. An award rendered in connection with an arbitration pursuant to Section 10 shall be final and binding upon the parties, and any judgment upon such an award may be entered and enforced in any court of competent jurisdiction.

 

6. The parties agree that the award of the arbitral tribunal will be the sole and exclusive remedy between them regarding any and all claims between them with respect to the subject matter of the arbitrated dispute. The parties hereby waive all jurisdictional defenses in connection with any arbitration hereunder or the enforcement of any order or award rendered pursuant thereto (assuming that the terms and conditions of this arbitration clause have been complied with).

 

7. With respect to any award issued by the arbitrators pursuant to this Agreement, the parties expressly agree (i) that such order shall be conclusive proof of the validity of the determination(s) of the arbitrators underlying such order; and (ii) any federal court sitting in New Jersey, or any other court having jurisdiction, may enter judgment upon and enforce such order, whether pursuant to the U.S. Arbitration Act, or otherwise.

 

8. The arbitrators shall issue a written explanation of the reasons for the award and a full statement of the facts as found and the rules of law applied in reaching their decision to both parties. The arbitrators shall apportion to each party all costs (other than attorneys' fees) incurred in conducting the arbitration in accordance with what the arbitrators deem just and equitable under the circumstances. The prevailing party shall be entitled to recover its attorneys' fees from the other party. Any provisional remedy which would be available to a court of law shall be available from the arbitrators pending arbitration of the dispute. Either party may make an application to the arbitrators seeking injunctive or other interim relief, and the arbitrators may take whatever interim measures they deem necessary in respect of the subject matter of the dispute, including measures to maintain the status quo until such time as the arbitration award is rendered or the controversy is otherwise resolved. The arbitrator shall have the authority to award any remedy or relief that a court of the State of New Jersey could order or grant, including, without limitation, specific performance of any obligation created under this Agreement, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process, but specifically excluding punitive damages (the parties specifically agree that punitive damages shall not be available in the event of any dispute).

 

  

  

  

 

9. The parties may file an application in any proper court for a provisional remedy in connection with an arbitrable controversy, but only upon the ground that the award to which the application may be entitled may be rendered ineffectual without provisional relief.

 

10. Except as expressly provided in the following sentence, neither party may disclose to any person or entity (i) any testimony or evidence presented or submitted in the arbitration proceedings, (ii) the nature or terms of any award or judgment rendered in such arbitration, or any portion thereof or (iii) the opinion of the arbitrator or arbitration panel, or any portion thereof (collectively, the "Arbitration Information") . To the extent either party brings an action pursuant to Section 7(ii) above to enforce or appeal any such judgment or award, then the filing party shall (x) file under seal all documents filed or submitted in such action (including all Arbitration Information) and (y) fully cooperate with the non-filing party in ensuring that all documents filed or submitted in such action (including all Arbitration Information) shall be kept confidential.

 

11. THE PARTIES ALSO UNDERSTAND AND AGREE THAT THIS AGREEMENT CONSTITUTES A WAIVER OF THEIR RIGHT TO A TRIAL BY JURY OF ANY CLAIMS OR CONTROVERSIES COVERED BY THIS AGREEMENT. THE PARTIES AGREE THAT NONE OF THOSE CLAIMS OR CONTROVERSIES SHALL BE RESOLVED BY A JURY TRIAL.

 

12. THE PARTIES FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH THEIR LEGAL COUNSEL AND HAVE AVAILED THEMSELVES OF THAT OPPORTUNITY TO THE EXTENT THEY WISH TO DO SO.

 

  

  

  

 

AMENDMENT # 1 TO EMPLOYMENT AGREEMENT

 

THIS AMENDMENT #1 TO EMPLOYMENT AGREEMENT ("Amendment #1") is entered into as of October , 2010 (the "Effective Date") between Boomerang Systems, Inc., a Delaware Corporation (the "Company") and Christopher Mulvihill (the "Executive").

 

RECITALS

 

	 	
A.

	
Whereas Company and Executive entered into that certain Employment Agreementdated March 31, 2008.

 

	 	
B.

	
Whereas Company has determined to adjust Executive's compensation based onperformance from March 31, 2008 to the present.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual promises set forth in this Agreement, the Company and the Executive hereby agree as follows:

 

1.           Amendment of Paragraph 4. A new subparagraph 4.(g) is added as follows:

 

(g) As additional compensation, on October ______, 2010, the Company grants to Executive ten (10) year options to purchase up to 4,000,000 Restricted Shares of the Company stock at a purchase price of twenty five cents ($0.25) per share.

 

2.           Amendment of Paragraph 5.(a). The reference to "October 31. 2011- is hereby deleted and replaced with "October 31, 2016".

 

3.           No Modification of Other Terms. Nothing contained herein is intended to modify any terms of the Employment Agreement except as expressly stated in paragraphs 1 and 2 of this Amendment #1.

 

4.           Counterparts. This Amendment #1 may be executed in two counterparts, each of which shall be deemed an original and all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered (by facsimile or otherwise) to the other party, it being understood that all parties need not sign the same counterpart. Any counterpart or other signature hereupon delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Amendment #1 by the party delivering it.

 

  

Page 1 of 2

  

 

IN WITNESS WHEREOF, the parties have executed this Amendment #1 To Employment Agreement as of the date first above written.

 

	    BOOMERANG SYSTEMS, INC.
	 
	  /s/ Joseph Bellantoni
	 	 BY: 
	   JOSEPH BELLANTONI
	 
	ITS: CFO
	 
	Address for Notices:
	 
	355 Madison Avenue
	 
	Morristown, NJ 07960

 

By signing below, the undersigned acknowledges and agrees that, except as expressly set forth in a written agreement signed by an authorized representative of the Company, the undersigned (i) has not been promised any equity interests in the Company or any of its subsidiaries, affiliates or predecessors and (ii) does not and will not have any right to any equity interests in the Company or any of its subsidiaries, affiliates or predecessors.

 

	 
	  
	
/s/ Christopher Mulvihill

	
Christopher Mulvihill

 

  

Page 2 of 2

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