Document:

M&T Bank

 

EQUIPMENT SCHEDULE

UNDER MASTER EQUIPMENT LEASE dated as of July 30, 2007

	
Equipment Schedule Date: September 1, 2007

	
Equipment Schedule No. 01

	
Lessee's Name and

	
Lessor's Name and

	
Address: County: Cache

	
Address: County: Erie

	  	  
	
Boomerang Systems, Inc.

	
Manufacturers and Traders Trust Company

	
350 West 2450 North

	
M&T Center

	
Logan, Utah 84341

	
One Fountain Plaza

	  	
Buffalo, New York 14203

	
Attn: Guy Jardine

	
Attn: Counsel's Office

	
Phone: (801) 554-2521

	
Phone: (716) 842-5094

 

LESSEE: Corporation Organized in the State of Utah

 

	 	 	
EQUIPMENT DESCRIPTION

	 	 	 	 	 
	 
QTY

	 	
(Manufacturer, Model No., Item)

	 	 
SERIAL NO.

	 	 
COST

	 
	  	 	
See Schedule A attached hereto and made a part hereof

	 	  	 	$	899,903.92	 

 

Initial Equipment Location (if different from Lessee's address above): See Attached Schedule A

 

Vendor;

See Attached Schedule A

	
Lease Term:

	
Commencement Date: September 1, 2007

	
End Date: September 1, 2012

	
Interim Term:

	
Period Covering: N/A

	
Interim Rent: $0

Base Term: 60 Months Beginning: 09/01/07 Rent Commencement Date: 09/01/07 Last Payment: 08/01/12

	
Rent Payable

	 	
Payment Number

and Amounts

	 	
Sales Tax

	 	
Total Each

Lease Payment

	 	
Advance Rent

Received by

Lessor

	
Monthly

	 	
Periodic Rent:

60 at $ 12,749.12

	 	
$0

Exempt

	 	$	12,749.12	 	
1 at $ 12,749.12 to be applied to 1st payment

	
Insurance:

	
Lessee's insurance policy covering the Equipment shall contain minimum liability limits of $1,000,000.00 for each person, $1,000,000.00 for each occurrence and insure against claims for property damage in an amount not less than $1,000,000.00.

 

  

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Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the personal property described above together with all substitutions, replacements, repairs, upgrades, additions, accessories, products and proceeds (collectively, the "Equipment"), subject to the terms and conditions of the Master Equipment Lease identified above, which is incorporated herein in its entirety.  LESSEE ACKNOWLEDGES THAT ONLY LESSOR'S ORIGINAL OF THIS EQUIPMENT SCHEDULE CONSTITUTES CHATTEL PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE. No security interest can be perfected by possession of any other counterpart. THIS LEASE CAN BE AMENDED OR MODIFIED ONLY IN WRITING. THIS IS A NON-CANCELABLE LEASE.

 

	
LESSEE:

	
LESSOR:

	
BOOMERANG SYSTEMS, INC.

	
MANUFACTURERS AND TRADERS

	  	
TRUST COMPANY

  

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M&T Bank

PURCHASE OPTION RIDER

to

EQUIPMENT SCHEDULE NO. 01

Dated as of September 1, 2007 ("SCHEDULE")

to

MASTER EQUIPMENT LEASE

Dated as of July 30, 2007 ("LEASE")

between

MANUFACTURERS AND TRADERS TRUST COMPANY ("LESSOR")

and

BOOMERANG SYSTEMS, INC. ("LESSEE")

Subject to the satisfaction of the conditions set forth below, Lessee shall have the option to: (i) purchase all, but not less than all, of the Equipment at the expiration of the Base Term or any renewal term (the "Purchase Option") for a purchase price equal to the then fair market sale value, which has been predetermined to be 35% of the original equipment cost (the "Purchase Price"); or (ii) renew the Schedule for an additional Twelve (12) months at a fair market rental rate as determined by Lessor in its sole discretion ("Renewal Option"). Lessee's right to exercise either the Purchase Option or Renewal Option shall be subject to the satisfaction of the following conditions precedent: (i) No Default or Event of Default shall have occurred and be continuing with respect to Lease or any Schedule thereunder; and (ii) Lessee shall have given written notice to Lessor of Lessee's election to exercise the Purchase Option or Renewal Option, as the case may be, at least one hundred and twenty (120) days but not more than two hundred and seventy (270) days prior to the Base Term Expiration Date. Such notice shall be irrevocable.

If Lessee exercises the Purchase Option in accordance with the terms and conditions hereof, then at the expiration of the Base Term, Lessee shall tender the Purchase Price in immediately available funds and Lessor shall deliver a bill of sale transferring to Lessee all Lessor's right, title and interest in the Equipment IT BEING EXPRESSLY UNDERSTOOD THAT SUCH TRANSFER IS "AS IS, WHERE IS", WITHOUT ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, AND LESSOR EXPRESSLY DISCLAIMS THE SAME.

Except as specifically amended hereby, all of the terms and conditions set forth in the Lease are unaffected and remain in full force and effect.

IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS RIDER THIS 1ST DAY OF SEPTEMBER, 2007.

	
LESSEE:

	
LESSOR

	
BOOMERANG SYTEMS, INC.

	
MANUFACTURERS AND

TRADERS TRUST COMPANY

  

  

  

 

M&TBank

Manufacturers and Traders Trust Company

 

CONTINUING GUARANTY

(Personal)

	
GUARANTOR:

	
Gene Mulvihill

	  	
Name

	  	  
	  	
355 Madison Avenue, Morristown, NJ 07960

	  	
Residence Address

	  	  
	
LESSEE:

	
Boomerang Systems, Inc.

	  	
Name

	  	  
	  	
350 West 2450 North, Logan, Utah 84341

	  	
Address

LESSOR: Manufacturers and Traders Trust Company, One Fountain Plaza, Buffalo, New York 14203 Attention: Office of General Counsel

I. Guaranty.

(a)      Guarantor, intending to be legally bound, hereby unconditionally guarantees the full and prompt payment and performance of any and all of Lessee's Obligations (as defined below) to the Lessor when due, whether at stated maturity, by acceleration or otherwise. As used in this Guaranty, the term "Obligations" shall mean any and all obligations, indebtedness and other liabilities of Lessee to the Lessor now or hereafter existing, of every kind and nature and all accrued and unpaid interest thereon and all Expenses (as defined below) including without limitation, whether such obligations, indebtedness and other liabilities (i) are direct, contingent, liquidated, unliquidated, secured, unsecured, matured or unmatured; (ii) are pursuant to a guaranty or surety in favor of the Lessor; (iii) were originally contracted with the Lessor or with another party (including obligations under a guaranty or surety originally in favor of such other party); (iv) are contracted by Lessee alone or jointly with one or more other parties; (v) are or are not evidenced by a writing; (vi) are renewed, replaced, modified or extended; and (vii) are periodically extinguished and subsequently reincurred or reduced and thereafter increased. Guarantor will pay or perform his or her obligations under this Guaranty upon demand. This Guaranty is and is intended to be a continuing guaranty of payment (not collection) of the Obligations (irrespective of the aggregate amount thereof and whether or not the Obligations from time to time exceeds the amount of this Guaranty, if limited), independent of, in addition and without modification to, and does not impair or in any way affect, any other guaranty, endorsement, or other agreement in connection with the Obligations, or in connection with any other indebtedness or liability to the Lessor or collateral held by the Lessor therefor or with respect thereto, whether or not furnished by Guarantor. Guarantor understands that the Lessor can bring an action under this Guaranty without being required to exhaust other remedies or demand payment first from other parties.

(b)      Guarantor acknowledges the receipt of valuable consideration for this Guaranty and acknowledges that the Lessor is relying on this Guaranty in making a financial accommodation to Lessee, whether a commitment to lend, extension, modification or replacement of, or forbearance with respect to, any Obligation, cancellation of another guaranty, purchase of Lessee's assets, or other valuable consideration.

  

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2.      Continuing, Absolute, Unconditional. This Guaranty is irrevocable, absolute, continuing, unconditional and general without any limitation. This Guaranty is unlimited in amount unless an amount is inserted in the following blank. Only if an amount is so inserted, this Guaranty is limited in amount to (1) $                      N/A                     of the principal amount of the Obligations plus (2) a proportionate share (i.e., in the same proportion as the amount in (I) above bears to the total principal amount of the obligations) of all accrued and unpaid interest, premiums and Expenses (as defined below) incurred with respect to the Obligations and (3) all of the Expenses incurred with respect to this Guaranty (collectively, the "Guaranteed Amount").

3.      Guarantor's Waivers & Authorizations.

  (a)      Guarantor's obligations shall not be released, impaired or affected in any way including by any of the following, all of which Guarantor hereby waives (i) any bankruptcy, reorganization or insolvency under any law of Lessee or that of any other party, or by any action of a trustee in any such proceeding; (ii) any new agreements or obligations of Lessee or any other party with the Lessor; (iii) any adjustment, compromise or release of any Obligations of Lessee, by the Lessor or any other party; the existence or nonexistence or order of any filings, exchanges, releases, impairment or sale of, or failure to perfect or continue the perfection of a security interest in any collateral for the Obligations, (iv) any failure of Guarantor to receive notice of any intended disposition of such collateral; (v) any fictitiousness, incorrectness, invalidity or unenforceability, for any reason, of any instrument or other agreement which may evidence any Obligation; (vi) any composition, extension, stay or other statutory relief granted to Lessee including, without limitation, the expiration of the period of any statute of limitations with respect to any lawsuit or other legal proceeding against Lessee or any person in any way related to the Obligations or a part thereof or any collateral therefor; (vii) any change in form of organization, name, membership or ownership of Lessee or Guarantor; (viii) any refusal or failure of the Lessor or any other person prior to the date hereof or hereafter to grant any additional loan or other credit accommodation to Lessee or the Lessor's or any other party's receipt of notice of such refusal or failure; (ix) any setoff, defense or counterclaim of Lessee with respect to the obligations or otherwise arising, either directly or indirectly, in regard to the Obligations; or (x) any other circumstance that might otherwise constitute a legal or equitable defense to Guarantor's obligations under this Guaranty.

 

  (b)      Guarantor waives acceptance, assent and all rights of notice or demand including without limitation (i) notice of acceptance of this Guaranty, of Lessee's default or nonpayment of any Obligation, and of changes in Lessee's financial condition; (ii) presentment, protest, notice of protest and demand for payment; (iii) notice that any Obligations have been incurred or of the reliance by the Lessor upon this Guaranty; and (iv) any other notice, demand or condition to which Guarantor might otherwise be entitled prior to the Lessor's reliance on or enforcement of this Guaranty. Guarantor further authorizes the Lessor, without notice, demand or additional reservation of rights against Guarantor and without affecting Guarantor's obligations hereunder, from time to time: (i) to renew, refinance, modify, subordinate, extend, increase, accelerate, or otherwise change the time for payment of, the terms of or the interest on the Obligations or any part thereofi(ii) to accept and hold collateral from any party for the payment of any or all of the Obligations, and to exchange, enforce or refrain from enforcing, or release any or all of such collateral; (iii) to accept any endorsement or guaranty of any or all of the Obligations or any negotiable instrument or other writing intended to create an accord and satisfaction with respect to any or all of the Obligations; (iv) to release, replace or modify the obligation of any endorser or guarantor, or any party who has given any collateral for any of all of the Obligations, or any other party in any way obligated to pay any or all of the Obligations, and to enforce or refrain from enforcing, or compromise or modify, the terms of any obligation of any such endorser, guarantor or party; (v) to dispose of any and all collateral securing the Obligations in any manner as the Lessor, in its sole discretion, may deem appropriate, and to direct the order and the enforcement of any and all endorsements and guaranties relating to the Obligations in the Lessor's sole discretion; and (vi) to determine the manner, amount and time of application of payments and credits, if any, to be made on all or any part of the Obligations including, without limitation, if this Guaranty is limited in amount, to make any such application to Obligations, if any, in excess of the amount of this Guaranty.

  

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  (c) Notwithstanding any other provision in this Guaranty, Guarantor irrevocably waives, without notice, any right he or she may have at law or in equity (including without limitation any law subrogating Guarantor to the rights of the Lessor) to seek contribution, indemnification or any other form of reimbursement from Lessee or any other obligor or guarantor of the Obligations for any disbursement made under this Guaranty or otherwise.

4.      Termination. This Guaranty shall remain in full force and effect as to each Guarantor until actual receipt by the Lessor or the agent of the Lessor responsible for Lessee's relationship with the Lessor of written notice of Guarantor's intent to terminate (or Guarantor's death or incapacity) plus the lapse of a reasonable time for the Lessor to act on such notice (the "Receipt of Notice"); provided, however, this Guaranty shall remain in full force and effect thereafter until all Obligations outstanding, or contracted or committed for (whether or not outstanding), before such Receipt of Notice by the Lessor, and any extensions, renewals or replacements thereof (whether made before or after such Receipt of Notice), together with interest accruing thereon after such Receipt of Notice, shall be finally and irrevocably paid in full. Discontinuance of this Guaranty as to one Guarantor shall not operate as a discontinuance hereof as to any other guarantor. Payment of all of the Obligations from time to time shall not operate as a discontinuance of this Guaranty, unless a Receipt of Notice as provided above has been received by the Lessor. Guarantor agrees that, to the extent that Lessee makes a payment or payments to the Lessor on the Obligations, or the Lessor receives any proceeds of collateral to be applied to the Obligations, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or otherwise are required to be repaid to Lessee, its estate, trustee, receiver or any other party, including, without limitation, under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such repayment, the obligation or part thereof which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred, notwithstanding any contrary action which may have been taken by the Lessor in reliance upon such payment or payments. As of the date any payment or proceeds of collateral are returned, the statute of limitations shall start anew with respect to any action or proceeding by the Lessor against Guarantor under this Guaranty.

5.      Expenses. Guarantor agrees to reimburse the Lessor on demand for all the Lessor's expenses, damages and losses of any kind or nature, including without limitation costs of collection and actual attorneys' fees and disbursements whether for internal or external counsel incurred by the Lessor in attempting to enforce this Guaranty, collect any of the Obligations including any workout or bankruptcy proceedings or other legal proceedings or appeal, realize on any collateral, defense of any action under the prior paragraph or for any other purpose related to the Obligations (collectively, "Expenses"). Expenses will accrue interest at the highest default rate in any instrument evidencing the Obligations until payment is actually received by the Lessor.

6.      Financial and Other Information. Guarantor shall provide annual personal financial statements and any other financial information requested by the Lessor in form satisfactory to the Lessor. Guarantor represents that his or her assets are not subject to any liens, encumbrances or contingent liabilities except as fully disclosed to the Lessor in such statements. Guarantor warrants that all information Guarantor gives to the Lessor at any time is correct, complete and not misleading. Guarantor resides at the above address and will notify the Lessor immediately in writing upon any change in address. Guarantor understands this Guaranty and has satisfied himself or herself as to its meaning and consequences and acknowledges that it has made its own arrangements for keeping informed of changes or potential changes affecting the Lessee including the Lessee's financial condition.

  

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7.      Security; Right of Setoff. As further security for payment of the Obligations, Expenses and any other obligations of Guarantor to the Lessor, Guarantor hereby grants to the Lessor a security interest in all money, securities and other property of Guarantor in the actual or constructive possession or control of the Lessor or its affiliates including without limitation all deposits and other accounts owing at any time by the Lessor or any of its affiliates in any capacity to Guarantor in any capacity (collectively, "Property"). The Lessor shall have the right to set off Guarantor's Property against any of Guarantor's obligations to the Lessor. Such set-off shall be deemed to have been exercised immediately at the time the Lessor or such affiliate elect to do so. The Lessor shall also have all of the rights and remedies of a secured party under the Uniform Commercial Code, as the same may be in effect in the State of New York, as amended from time to time, in addition to those under this Guaranty and other applicable law and agreements.

8.      No Transfer of Assets. Guarantor shall not transfer, reinvest or otherwise dispose of his or her assets in a manner or to an extent that would or might impair Guarantor's ability to perform his or her obligations under this Guaranty,

9.      Nonwaiver by the Lessor; Miscellaneous. This Guaranty is intended by Guarantor to be the final, complete and exclusive expression of the agreement between Guarantor and the Lessor. This Guaranty may be assigned by the Lessor, shall inure to the benefit of the Lessor and its successors and assigns, and shall be binding upon Guarantor and his or her legal representative, successors and assigns and any participation may be granted by the Lessor herein in connection with the assignment or granting of a participation by the Lessor in the Obligations or any part thereof. All rights and remedies of the Lessor are cumulative, and no such right or remedy shall be exclusive of any other right or remedy. This Guaranty does not supersede any other guaranty or security granted to the Lessor by Guarantor or others (except as to Guarantor's Waiver of Subrogation rights above). No single, partial or delayed exercise by the Lessor of any right or remedy shall preclude exercise by the Lessor at any time at its sole option of the same or any other right or remedy of the Lessor without notice. Guarantor expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Lessor including, without limitation, representations to make loans to Lessee or enter into any other agreement with Lessee or Guarantor. No course of dealing or other conduct, no oral agreement or representation made by the Lessor or usage of trade shall operate as a waiver of any right or remedy of the Lessor. No waiver or amendment of any right or remedy of the Lessor or release by the Lessor shall be effective unless made specifically in writing by the Lessor. Each provision of this Guaranty shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting law. If any provision nevertheless is held invalid, the other provisions shall remain in effect. Guarantor agrees that in any legal proceeding, a copy of this Guaranty kept in the Lessor's course of business may be admitted into evidence as an original. Captions are solely for convenience and not part of the substance of this Guaranty. If this Guaranty is limited pursuant to Paragraph 2 hereof, until the Obligations are indefeasibly paid in full, the Guaranteed Amount shall not be reduced in any manner whatsoever by any amounts which the Lessor may realize before or after maturity of the Obligations (by acceleration, demand or otherwise), as a result of payments made by or on behalf of Lessee or by or on behalf of any other person or entity other than Guarantor primarily or secondarily liable for the Obligations or any part thereof, or otherwise credited to Lessee or such person or entity, or as a result of the exercise of the Lessor's rights with respect to any collateral for the Obligations or any part thereof. Payments made to the Lessor by Guarantor (other than, directly or indirectly, from collateral or other persons or entities liable for any portion of the Obligations) after maturity of the Obligations, by acceleration or otherwise, shall reduce the Guaranteed Amount.

10.      Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Guarantor (at its address on the Lessor's records) or to the Lessor (at the address on page one and separately to the Lessor's agent responsible for Lessee's relationship with the Lessor). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Guarantor and the Lessor.

  

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11.      Governing Law and Jurisdiction. This Guaranty has been delivered to and accepted by the Lessor and will be deemed to be made in the State of New York. Unless provided otherwise under federal law, this Guaranty will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN ANY JUDICIAL DISTRICT OR COUNTY IN THE STATE OF NEW YORK WHERE THE LESSOR MAINTAINS A BRANCH AND CONSENTS THAT THE LESSOR MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT GUARANTOR'S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS GUARANTY WILL PREVENT THE LESSOR FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST GUARANTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Guarantor acknowledges and agrees that the venue provided above is the most convenient forum for both the Lessor and Guarantor. Guarantor hereby waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Guaranty.

12.      Joint and Several. If there is more than one Guarantor, each Guarantor jointly and severally guarantees the payment and performance in full of all obligations under this Guaranty and the term "Guarantor" means each as well as all of them. Guarantor also agrees that the Lessor need not seek payment from any source other than the undersigned Guarantor. This Guaranty is a primary obligation. Guarantor's obligations hereunder are separate and independent of Lessee's, and a separate action may be brought against Guarantor whether or not action is brought or joined against or with Lessee or any other party.

13.      Waiver of Jury Trial. GUARANTOR AND THE LESSOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND THE LESSOR MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE LESSOR HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LESSOR WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. GUARANTOR ACKNOWLEDGES THAT THE LESSOR HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

  

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Acknowledgment. Guarantor acknowledges that it has read and understands all the provisions of this Guaranty, including the Governing Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.

Dated: July 30, 2007

 

NOTICE:       FOR PURPOSES OF THIS

AGREEMENT "OBLIGATIONS" IS NOT LIMITED

TO PRESENTLY EXISTING INDEBTEDNESS,

LIABILITIES AND OBLIGATIONS.

ACKNOWLEDGMENT

 

STATE OF NJ

COUNTY OF MORRIS

On the 24th day of August 2007 before me, the undersigned, a Notary Public in and for said State, personally appeared Gene Mulvihill, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

	  	
/s/ Beverly Pilger

	 
	  	
Notary Public

	 

 

  

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M&T Bank

CONTINUING GUARANTY

(Personal)

 

	
GUARANTOR:

	
Burton Koffman

	  	
Name

	  	  
	  	
300 Plaza Drive, Vestal, NY 13050

	  	
Residence Address

	  	  
	
LESSEE:

	
Boomerang Systems, Inc.

	  	
Name

	  	  
	  	
350 West 2450 North, Logan, Utah 84341

	  	
Address

LESSOR: Manufacturers and Traders Trust Company, One Fountain Plaza, Buffalo, New York 14203 Attention: Office of General Counsel

1. Guaranty.

(a)      Guarantor, intending to be legally bound, hereby unconditionally guarantees the full and prompt payment and performance of any and all of Lessee's Obligations (as defined below) to the Lessor when due, whether at stated maturity, by acceleration or otherwise. As used in this Guaranty, the term "Obligations" shall mean any and all obligations, indebtedness and other liabilities of Lessee to the Lessor now or hereafter existing, of every kind and nature and all accrued and unpaid interest thereon and all Expenses (as defined below) including without limitation, whether such obligations, indebtedness and other liabilities (i) are direct, contingent, liquidated, unliquidated, secured, unsecured, matured or unmatured; (ii) are pursuant to a guaranty or surety in favor of the Lessor; (iii) were originally contracted with the Lessor or with another party (including obligations under a guaranty or surety originally in favor of such other party); (iv) are contracted by Lessee alone or jointly with one or more other parties; (v) are or are not evidenced by a writing; (vi) arc renewed, replaced, modified or extended; and (vii) are periodically extinguished and subsequently reincurred or reduced and thereafter increased. Guarantor will pay or perform his or her obligations under this Guaranty upon demand. This Guaranty is and is intended to be a continuing guaranty of payment (not collection) of the Obligations (irrespective of the aggregate amount thereof and whether or not the Obligations from time to time exceeds the amount of this Guaranty, if limited), independent of, in addition and without modification to, and does not impair or in any way affect, any other guaranty, endorsement, or other agreement in connection with the Obligations, or in connection with any other indebtedness or liability to the Lessor or collateral held by the Lessor therefor or with respect thereto, whether or not furnished by Guarantor, Guarantor understands that the Lessor can bring an action under this Guaranty without being required to exhaust other remedies or demand payment first from other parties.

(b)      Guarantor acknowledges the receipt of valuable consideration for this Guaranty and acknowledges that the Lessor is relying on this Guaranty in making a financial accommodation to Lessee, whether a commitment to lend, extension, modification or replacement of, or forbearance with respect to, any Obligation, cancellation of another guaranty, purchase of Lessee's assets, or other valuable consideration.

  

  

  

 

2.      Continuing, Absolute, Unconditional. This Guaranty is irrevocable, absolute, continuing, unconditional and general without any limitation. This Guaranty is unlimited in amount unless an amount is inserted in the following blank. Only if an amount is so inserted, this Guaranty is limited in amount to (I) $           N/A          of the principal amount of the Obligations plus (2) a proportionate share (i.e., in the same proportion as the amount in (1) above bears to the total principal amount of the obligations) of all accrued and unpaid interest, premiums and Expenses (as defined below) incurred with respect to the Obligations and (3) all of the Expenses incurred with respect to this Guaranty (collectively, the "Guaranteed Amount").

3.      Guarantor's Waivers & Authorizations.

 

  (a)         Guarantor's obligations shall not be released, impaired or affected in any way including by any of the following, all of which Guarantor hereby waives (i) any bankruptcy, reorganization or insolvency under any law of Lessee or that of any other party, or by any action of a trustee in any such proceeding; (ii) any new agreements or obligations of Lessee or any other party with the Lessor; (iii) any adjustment, compromise or release of any Obligations of Lessee, by the Lessor or any other party; the existence or nonexistence or order of any filings, exchanges, releases, impairment or sale of, or failure to perfect or continue the perfection of a security interest in any collateral for the Obligations, (iv) any failure of Guarantor to receive notice of any intended disposition of such collateral; (v) any fictitiousness, incorrectness, invalidity or uncnforceability, for any reason, of any instrument or other agreement which may evidence any Obligation; (vi) any composition, extension, stay or other statutory relief granted to Lessee including, without limitation, the expiration of the period of any statute of limitations with respect to any lawsuit or other legal proceeding against Lessee or any person in any way related to the Obligations or a part thereof or any collateral therefor, (vii) any change in form of organization, name, membership or ownership of Lessee or Guarantor; (viii) any refusal or failure of the Lessor or any other person prior to the date hereof or hereafter to grant any additional loan or other credit accommodation to Lessee or the Lessor's or any other party's receipt of notice of such refusal or failure; (ix) any setoff, defense or counterclaim of Lessee with respect to the obligations or otherwise arising, either directly or indirectly, in regard to the Obligations; or (x) any other circumstance that might otherwise constitute a legal or equitable defense to Guarantor's obligations under this Guaranty.

  (b)         Guarantor waives acceptance, assent and all rights of notice or demand including without limitation (i) notice of acceptance of this Guaranty, of Lessee's default or nonpayment of any Obligation, and of changes in Lessee's financial condition; (ii) presentment, protest, notice of protest and demand for payment; (iii) notice that any Obligations have been incurred or of the reliance by the Lessor upon this Guaranty; and (iv) any other notice, demand or condition to which Guarantor might otherwise be entitled prior to the Lessor's reliance on or enforcement of this Guaranty. Guarantor further authorizes the Lessor, without notice, demand or additional reservation of rights against Guarantor and without affecting Guarantor's obligations hereunder, from time to time: (i) to renew, refinance, modify, subordinate, extend, increase, accelerate, or otherwise change the time for payment of, the terms of or the interest on the Obligations or any part thereof;(ii) to accept and hold collateral from any party for the payment of any or all of the Obligations, and to exchange, enforce or refrain from enforcing, or release any or all of such collateral; (iii) to accept any endorsement or guaranty of any or all of the Obligations or any negotiable instrument or other writing intended to create an accord and satisfaction with respect to any or all of the Obligations; (iv) to release, replace or modify the obligation of any endorser or guarantor, or any party who has given any collateral for any of all of the Obligations, or any other party in any way obligated to pay any or all of the Obligations, and to enforce or refrain from enforcing, or compromise or modify, the terms of any obligation of any such endorser, guarantor or party; (v) to dispose of any and all collateral securing the Obligations in any manner as the Lessor, in its sole discretion, may deem appropriate, and to direct the order and the enforcement of any and all endorsements and guaranties relating to the Obligations in the Lessor's sole discretion; and (vi) to determine the manner, amount and time of application of payments and credits, if any, to be made on all or any part of the Obligations including, without limitation, if this Guaranty is limited in amount, to make any such application to Obligations, if any, in excess of the amount of this Guaranty.

  

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  (c) Notwithstanding any other provision in this Guaranty, Guarantor irrevocably waives, without notice, any right he or she may have at law or in equity (including without limitation any law subrogating Guarantor to the rights of the Lessor) to seek contribution, indemnification or any other form of reimbursement from Lessee or any other obligor or guarantor of the Obligations for any disbursement made under this Guaranty or otherwise.

4.      Termination. This Guaranty shall remain in full force and effect as to each Guarantor until actual receipt by the Lessor or the agent of the Lessor responsible for Lessee's relationship with the Lessor of written notice of Guarantor's intent to terminate (or Guarantor's death or incapacity) plus the lapse of a reasonable time for the Lessor to act on such notice (the "Receipt of Notice"); provided, however, this Guaranty shall remain in full force and effect thereafter until all Obligations outstanding, or contracted or committed for (whether or not outstanding), before such Receipt of Notice by the Lessor, and any extensions, renewals or replacements thereof (whether made before or after such Receipt of Notice), together with interest accruing thereon after such Receipt of Notice, shall be finally and irrevocably paid in full. Discontinuance of this Guaranty as to one Guarantor shall not operate as a discontinuance hereof as to any other guarantor. Payment of all of the Obligations from time to time shall not operate as a discontinuance of this Guaranty, unless a Receipt of Notice as provided above has been received by the Lessor. Guarantor agrees that, to the extent that Lessee makes a payment or payments to the Lessor on the Obligations, or the Lessor receives any proceeds of collateral to be applied to the Obligations, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or otherwise are required to be repaid to Lessee, its estate, trustee, receiver or any other party, includiag, without limitation, under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such repayment, the obligation or part thereof which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred, notwithstanding any contrary action which may have been taken by the Lessor in reliance upon such payment or payments. As of the date any payment or proceeds of collateral are returned, the statute of limitations shall start anew with respect to any action or proceeding by the Lessor against Guarantor under this Guaranty.

5.      Expenses. Guarantor agrees to reimburse the Lessor on demand for all the Lessor's expenses, damages and losses of any kind or nature, including without limitation costs of collection and actual attorneys' fees and disbursements whether for internal or external counsel incurred by the Lessor in attempting to enforce this Guaranty, collect any of the Obligations including any workout or bankruptcy proceedings or other legal proceedings or appeal, realize on any collateral, defense of any action under the prior paragraph or for any other purpose related to the Obligations (collectively, "Expenses"). Expenses will accrue interest at the highest default rate in any instrument evidencing the Obligations until payment is actually received by the Lessor.

6.      Financial and Other Information. Guarantor shall provide annual personal financial statements and any other financial information requested by the Lessor in form satisfactory to the Lessor. Guarantor represents that his or her assets are not subject to any liens, encumbrances or contingent liabilities except as fully disclosed to the Lessor in such statements. Guarantor warrants that alI information Guarantor gives to the Lessor at any time is correct, complete and not misleading. Guarantor resides at the above address and will notify the Lessor immediately in writing upon any change in address. Guarantor understands this Guaranty and has satisfied himself or herself as to its meaning and consequences and acknowledges that it has made its own arrangements for keeping informed of changes or potential changes affecting the Lessee including the Lessee's financial condition.

  

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7.      Security; Right of Setoff. As further security for payment of the Obligations, Expenses and any other obligations of Guarantor to the Lessor, Guarantor hereby grants to the Lessor a security interest in all money, securities and other property of Guarantor in the actual or constructive possession or control of the Lessor or its affiliates including without limitation all deposits and other accounts owing at any time by the Lessor or any of its affiliates in any capacity to Guarantor in any capacity (collectively, "Property"). The Lessor shall have the right to set off Guarantor's Property against any of Guarantor's obligations to the Lessor. Such set-off shall be deemed to have been exercised immediately at the time the Lessor or such affiliate elect to do so. The Lessor shall also have all of the rights and remedies of a secured party under the Uniform Commercial Code, as the same may be in effect in the State of New York, as amended from time to time, in addition to those under this Guaranty and other applicable law and agreements.

8.      No Transfer of Assets. Guarantor shall not transfer, reinvest or otherwise dispose of his or her assets in a manner or to an extent that would or might impair Guarantor's ability to perform his or her obligations under this Guaranty.

9.      Nonwaiver by the Lessor; Miscellaneous. This Guaranty is intended by Guarantor to be the final, complete and exclusive expression of the agreement between Guarantor and the Lessor. This Guaranty may be assigned by the Lessor, shall inure to the benefit of the Lessor and its successors and assigns, and shall be binding upon Guarantor and his or her legal representative, successors and assigns and any participation may be granted by the Lessor herein in connection with the assignment or granting of a participation by the Lessor in the Obligations or any part thereof. All rights and remedies of the Lessor are cumulative, and no such right or remedy shall be exclusive of any other right or remedy. This Guaranty does not supersede any other guaranty or security granted to the Lessor by Guarantor or others (except as to Guarantor's Waiver of Subrogation rights above). No single, partial or delayed exercise by the Lessor of any right or remedy shall preclude exercise by the Lessor at any time at its sole option of the same or any other right or remedy of the Lessor without notice. Guarantor expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Lessor including, without limitation, representations to make loans to Lessee or enter into any other agreement with Lessee or Guarantor. No course of dealing or other conduct, no oral agreement or representation made by the Lessor or usage of trade shall operate as a waiver of any right or remedy of the Lessor. No waiver or amendment of any right or remedy of the Lessor or release by the Lessor shall be effective unless made specifically in writing by the Lessor. Each provision of this Guaranty shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting law. If any provision nevertheless is held invalid, the other provisions shall remain in effect. Guarantor agrees that in any legal proceeding, a copy of this Guaranty kept in the Lessor's course of business may be admitted into evidence as an original. Captions are solely for convenience and not part of the substance of this Guaranty. If this Guaranty is limited pursuant to Paragraph 2 hereof, until the Obligations are indefeasibly paid in full, the Guaranteed Amount shall not be reduced in any manner whatsoever by any amounts which the Lessor may realize before or after maturity of the Obligations (by acceleration, demand or otherwise), as a result of payments made by or on behalf of Lessee or by or on behalf of any other person or entity other than Guarantor primarily or secondarily liable for the Obligations or any part thereof, or otherwise credited to Lessee or such person or entity, or as a result of the exercise of the Lessor's rights with respect to any collateral for the Obligations or any part thereof. Payments made to the Lessor by Guarantor (other than, directly or indirectly, from collateral or other persons or entities liable for any portion of the Obligations) after maturity of the Obligations, by acceleration or otherwise, shall reduce the Guaranteed Amount.

10.     Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Guarantor (at its address on the Lessor's records) or to the Lessor (at the address on page one and separately to the Lessor's agent responsible for Lessee's relationship with the Lessor). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (I) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Guarantor and the Lessor.

  

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11.    Governing Law and Jurisdiction. This Guaranty has been delivered to and accepted by the Lessor and will be deemed to be made in the State of New York. Unless provided otherwise under federal law, this Guaranty will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN ANY JUDICIAL DISTRICT OR COUNTY IN THE STATE OF NEW YORK WHERE THE LESSOR MAINTAINS A BRANCH AND CONSENTS THAT THE LESSOR MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT GUARANTOR'S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS GUARANTY WILL PREVENT THE LESSOR FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST GUARANTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Guarantor acknowledges and agrees that the venue provided above is the most convenient forum for both the Lessor and Guarantor. Guarantor hereby waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Guaranty.

12.    Joint and Several. If there is more than one Guarantor, each Guarantor jointly and severally guarantees the payment and performance in full of all obligations under this Guaranty and the term "Guarantor" means each as well as all of them. Guarantor also agrees that the Lessor need not seek payment from any source other than the undersigned Guarantor. This Guaranty is a primary obligation. Guarantor's obligations hereunder are separate and independent of Lessee's, and a separate action may be brought against Guarantor whether or not action is brought or joined against or with Lessee or any other party.

13.    Waiver of Jury Trial. GUARANTOR AND THE LESSOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND THE LESSOR MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE LESSOR HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LESSOR WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER GUARANTOR ACKNOWLEDGES THAT THE LESSOR HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

 

  

  

  

Acknowledgment. Guarantor acknowledges that it has read and understands all the provisions of this Guaranty, including the Governing Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.

	  	
GUARANTOR:

	  	
BURTON KOFFMAN

 

Dated: July 30, 2007

 

NOTICE:       FOR PURPOSES OF THIS

AGREEMENT "OBLIGATIONS" IS NOT LIMITED

TO PRESENTLY EXISTING INDEBTEDNESS,

LIABILITIES AND OBLIGATIONS.

 

	
STATE OF NY

	
ACKNOWLEDGMENT

	  

 

COUNTY OF Broome

On the 24th day of August, 2007, before me, the undersigned, a Notary Public in and for said State, personally appeared Burton Koffman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, t individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	  	
/s/ Ornella Harvey

	 
	  	
Notary PublicCHANGE IN TERMS AGREEMENT

 

	
Principal

	
Loan Date

	
Maturity

	  
	
$200,000.00

	
05-16-2010

	
05-16-2011

	  
	
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

	
Any item above containing "ww— has been omitted due to text length limitations.

 

	
Borrower:

	
Boomerang Systems, Inc

	
Lender:

	
Highlands State Bank

	   	
1 Wild Turkey Way

	  	
310 Route 94

	  	
Hamburg, NJ 07419

	  	
PO Box 160

	  	  	  	
Vernon, NJ 07462

 

	
Principal Amount: $200,000.00

	
Date of Agreement: May 16, 2010

 

DESCRIPTION OF CHANGE IN TERMS. Original loan maturity date is extended to May 16, 2011. The new rate will be 3.05% All other terms and conditions remain the same. Highlands State Bank Cd # 2102 is held as collateral for this loan.

 

PAYMENT. Borrower will pay this loan in one principal payment of $200,000.00 plus interest on May 16, 2011. This payment due on May 16, 2011, will be for all principal, accrued interest, and all other applicable fees and expenses, if any, not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

 

INTEREST CALCULATION METHOD. Interest on this loan is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this loan is computed using this method.

 

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Highlands State Bank, 310 Route 94, PO Box 160, Vernon, NJ 07462.

 

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this loan shall be increased by 2.000 percentage points. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

   

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: II

 

Payment Default. Borrower fails to make any payment when due under the Indebtedness.

 

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

 

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

 

Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to Borrower demanding cure of such default: (1) cures the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

 

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (iincluding efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.

 

  

  

  

   

	  	
CHANGE IN TERMS AGREEMENT

	  
	
Loan No: 136

	
(Continued)

	
Page 2

 

GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of New Jersey without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of New Jersey.

 

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Sussex County, State of New Jersey.

 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $30.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.

 

COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein: deposit accounts described in an Assignment of Deposit Account dated May 16, 2010.

 

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.

 

SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness.

 

MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs, guarantees or endorses this Agreement, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Agreement, and unless otherwise expressly stated in writing, no party who signs this Agreement, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

 

	
BORROWER:

	  
	  	  
	
/s/ Chris Mulvihill

	  
	
Chris Mulvihill

	  
	  	  
	
BOOMERANG SYSTEMS, INC

	  
	  	  
	
LENDER:

	  
	  	  
	
HIGHLANDS STATE BANK

	  

 

  

  

  

 

CHANGE  IN TERMS AGREEMENT

 

	
Principal

	
Loan Date

	
Maturity

	  
	
$300,728.36

	
05-16-2010

	
 05-16-2011

	  
	
 
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

	
Any item above containing "''" has been omitted due to text length limitations.

 

	
Borrower:

	
Boomerang Systems, Inc

	
Lender:

	
Highlands State Bank

	  	
1 Wild Turkey Way

	  	
310 Route 94

	  	
Hamburg, NJ 07419

	  	
PO Box 160

	  	  	  	
Vernon, NJ 07462

	 	 	 	 

 

	
Principal Amount: $300,728.36

	
Date of Agreement: May 14, 2010

 

DESCRIPTION OF CHANGE IN TERMS. Original loan maturity date is extended to May 14, 2011. The new rate will be 3.05% All other terms and conditions remain the same. Highlands State Bank Cd # 1936 is held as collateral for this loan.

 

PAYMENT. Borrower will pay this loan in one principal payment of $300,728.36 plus interest on May 14, 2011. This payment due on May 14, 2011, will be for all principal, accrued interest, and all other applicable fees and expenses, if any, not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

 

INTEREST CALCULATION METHOD. Interest on this loan is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this loan is computed using this method.

 

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Highlands State Bank, 310 Route 94, PO Box 160, Vernon, NJ 07462.

 

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this loan shall be increased by 2.000 percentage points. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

 

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

 

Payment Default. Borrower fails to make any payment when due under the Indebtedness.

 

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

 

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

 

Insecurity. Lender in good faith believes itself insecure.

 

Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to Borrower demanding cure of such default: (1) cures the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

 

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.

 

  

  

  

 

	 	 	 
	  	
CHANGE IN TERMS AGREEMENT

	  
	
Loan No:

	
(Continued)

	
Page 2

 

 

GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of New Jersey without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of New Jersey.

 

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Sussex County, State of New Jersey.

 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $30.00 if Borrower makes a payment on Borrowers loan and the check or preauthorized charge with which Borrower pays is later dishonored.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.

 

COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein: deposit accounts described in an Assignment of Deposit Account dated May 14, 2010.

 

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.

 

SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness.

 

MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs, guarantees or endorses this Agreement, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Agreement, and unless otherwise expressly stated in writing, no party who signs this Agreement, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

 

	
BORROWER:

	  
	  	  
	
BOOMERANG SYSTEMS, INC

	  
	  	  
	
/s/ Chris Mulvihill

	  
	
Chris Mulvihill

	  
	  	  
	
LENDER:

	  
	
HIGHLANDS STATE BANK

	  

 

  

  

  

 

LOAN ASSUMPTION AGREEMENT

BETWEEN BOOMERANG SYSTEMS, INC. AND

J AND A FINANCING, INC.

 

During fiscal year 2008, J and A Financing, Inc. ("J and A") loaned $1,000,000 to Boomerang Systems. Inc. ("the Company"). This loan is due to mature on March 31, 2011. The interest rate is 9% and the principal amount due at June 30, 2010 was $1,000,000. In addition, J and A had posted cash collateral to guarantee two loans on behalf of the Company from a non-affiliated bank, which totaled $500,728 as of June 30, 2010. The loans bear interest at 3.341% and 3.5% respectively, and are due to mature on May 14, 2010 and May 16, 2010, respectively.

 

J and A has agreed to use the cash collateral posted to repay the non-affiliated bank loans in full for the benefit of the Company, thereby, assuming this debt and adding it to the current $1,000,000 loan due to J and A. It is further agreed that the total outstanding debt owed to J and A will be converted to common stock as part of the Debt Conversion Agreement (Exhibit A attached). In total, $1,678,304 of debt, constituting all of the principal plus all accrued interest, will be converted into 6,713,218 units consisting of one share of the Company's common stock and one five-year warrant to purchase one share of common stock with an exercise price $0.25.

 

	
Dated:  July 6, 2010

	  
	  	  
	
AGREED AND ACCEPTED:

	  
	  	  
	
Boomerang Systems, Inc.

	  
	  	  
	
/s/ Joseph Bellantoni

	  
	
By:  Joseph Bellantoni, CFO

	  
	  	  
	
J and A Financing, Inc.

	  
	  	  
	
/s/ Gene Mulvihill

	  
	
By:  Gene Mulvihill, President

	  

 

  

  

  

EXHIBIT A

 

DEBT CONVERSION AGREEMENT

WITH J&A FINANCING, INC.

 

During Fiscal year 2008, J and A Financing Inc. ("J&A'') loaned $1,000,000 to Boomerang Systems, Inc. This Loan matures on March 31, 2011. The interest rate is 9% and the principle and accrued interest amount due at July 8, 2010 is $1,678,304.

 

This will confirm that J&A has agreed at the March 11, 2010 Board of Directors Meeting to exchange their indebtedness of $1,678,304 for one share for every $0.25 of debt or 6,713.218 shares, and includes the same number of warrants exercisable at $0.25 per share.

 

	
AGREED AND ACCEPTED:

	  
	  	  
	
/s/ Gene Mulvihill

	  
	
Gene Mulvihill, President

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