Document:

SEVERANCE
      AGREEMENT

    

     

    This
      Severance Agreement (the “Agreement”) is effective as of the date set forth
      below in Paragraph 8(f) (the “Effective Date”) by and between Peerless Systems
      Corporation (“Company” or “Peerless”) and Richard L. Roll (“Mr. Roll” or
“Employee”) (collectively the “Parties”, and individually, a
“Party”).

     

    WHEREAS
      Mr. Roll is currently employed as the Company’s Chief Executive Officer and
      President pursuant to an Employment Letter between the Parties dated June 12,
      2008;

     

    WHEREAS
      Mr. Roll wishes
      to
      resign his employment as well as any and all offices, directorships and board
      memberships he currently holds with the Company, and the Company wishes to
      accept such resignations; and

     

    WHEREAS
      the Parties wish to resolve all disputes between them.

     

    NOW,
      therefore, the Parties agree as follows:

     

    1.    Separation
      of Employment:
      Mr.
      Roll will resign his employment with the Company effective October 1, 2008
      (the
“Resignation Date”). Upon the Resignation Date, Mr. Roll will also take all
      steps necessary to immediately resign from any and all offices, directorships
      and board memberships he currently holds with the Company and will execute
      the
      Resignation Letter attached hereto as Exhibit “A” in conjunction with such
      resignations. By his signature below, Mr. Roll confirms that he has received
      $10,461.44 which
      represents his final wages through the Resignation Date, $507 for reimbursement
      for expenses and is eligible for up to another $143 for reimbursement
      for any and all documented outstanding business expenses. As a result of Mr.
      Roll’s receipt of such payments on the Resignation Date, Mr. Roll acknowledges
      that he has now received payment for any and all outstanding wages, overtime
      pay, bonus, expenses, incentives and accrued but unused vacation pay and that
      Mr. Roll is not owed any further payment of any type as a result of Mr. Roll’s
      employment by Peerless, except as set forth herein. Mr. Roll specifically
      acknowledges that he is not entitled to any further bonus or incentive amounts
      from the Company of any type, including without limitation, any and all bonuses
      or incentives which are or may become due to him for Peerless’ 2009 fiscal year.

     

    2.    Payment:
      In
      consideration for Mr. Roll entering into this Agreement, Peerless will pay
      Mr.
      Roll the total gross amount of two hundred fifty thousand dollars ($250,000)
      to
      which Mr. Roll is not otherwise entitled, less deductions required by law.
      Included in this total amount is $35,907.76 representing Mr. Roll’s accrued but
      unused vacation pay through the Resignation Date. Such payment will be made
      in
      one lump sum payable within (5) five business days following the later of:
      (i)
      the expiration of the seven (7) day revocation period described in Paragraph
      8(f) below without revocation; (ii) Peerless’ receipt of this Agreement, duly
      executed by Mr. Roll and approved as to form by his attorneys and, (iii)
      delivery by Mr. Roll to the Company of the Certificates of Common Stock
      referenced in Paragraph 5 of this Agreement, collectively (the “Conditions of
      Payment”). In addition, the Company will pay 6 (six) months COBRA premiums for
      Mr. Roll’s existing health care coverage subject to the Conditions of Payment
      being met. Should the Company fail to make the payments described above, Mr.
      Roll may revoke the resignations set forth in Paragraph 1 after providing the
      Company’s Board of Directors with ten (10) days written notice of breach and the
      opportunity to cure.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.    General
      Release:
      For and
      in consideration of the payment described above in Paragraph 2 above to which
      Mr. Roll is not otherwise entitled, and other good and valuable
      consideration:

     

    (a) Mr.
      Roll
      hereby voluntarily, knowingly and willingly releases, acquits and forever
      discharges Company including, each of Company’s former, current and future
      parents, subsidiaries, divisions, affiliates, predecessors, successors and
      assigns and all of their current, former and future agents, employees, officers,
      directors, shareholders, board members, partners, joint venturers, members,
      attorneys, representatives, predecessors, successors, assigns, owners and
      servants, from any and all claims, costs or expenses of any kind or nature
      whatsoever, whether known or unknown, foreseen or unforeseen, including without
      limitation, any and all claims for any type of bonus or incentive compensation
      arising out of or relating to work performed for the Company in 2008, any claims
      related to the Company’s stock or the issuance of stock options, any and all
      claims arising out of or related to the June 12, 2008 Employment Letter, any
      and
      all claims under any Change of Control Severance Agreement, Stock Option Grant
      Notice or Restricted Stock Purchase Agreement between the Parties, any currently
      pending claim under the Company’s various policies of insurance for actions of
      directors or officers, any employment related claims under the Americans with
      Disabilities Act, the Age Discrimination in Employment Act, Title VII of the
      Civil Rights Act, the Family Medical Leave Act, the California Fair Employment
      and Housing Act, the California Family Rights Act, the Employment Retirement
      Income Security Act, the California Constitution, the California Labor Code,
      or
      under common law, which against any or all of them Mr. Roll ever had, now has
      or
      hereinafter may have, up to and including the date of Mr. Roll’s execution of
      this Agreement, including, without limitation, those arising out of or in any
      way related to Mr. Roll’s employment at Company or the separation of that
      employment.

     

    (b) Company
      hereby voluntarily, knowingly and willingly releases, acquits and forever
      discharges Mr. Roll from any and all claims, costs or expenses of any kind
      or
      nature whatsoever, whether known or unknown, foreseen or unforeseen, which
      Company ever had, now has or hereinafter may have, up to and including the
      date
      of Company’s execution of this Agreement, including, without limitation, those
      arising out of or in any way related to Mr. Roll’s employment at Company or the
      separation of that employment, except for such currently unknown claims for
      restitution arising directly from any currently unknown criminal conduct engaged
      in by Mr. Roll. In conjunction with this exception, the Company represents
      that
      it is not aware of, is not investigating as of the date hereof, and has no
      present intention to investigate any such conduct at the time of the Effective
      Date of this Agreement. 

     

    (c) It
      is a
      condition hereof, and it is all Parties intention in the execution of the
      General Release in subparagraphs 3(a) and (b), above, that the same shall be
      effective as a bar to each and every claim specified above. In furtherance
      of
      this intention, (and with the sole exception of unknown claims for restitution
      against Mr. Roll as described in Paragraph 3(b)above to which the Company’s
      waiver of Section 1542 of the California Civil Code does not apply) all Parties
      hereby expressly waive any and all rights and benefits conferred upon the other
      by Section 1542 of the California Civil Code, which provides:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    A
      general release does not extend to claims which the creditor does not know
      or
      suspect to exist in his or her favor at the time of executing the Release,
      which
      if known by him or her must have materially affected his or her settlement
      with
      the debtor.

     

    4.    Stock
      Options:
      Mr.
      Roll acknowledges and agrees that he has ninety (90) days from the Resignation
      Date in which to exercise any and all vested stock options. All options which
      remain unvested as of the Resignation Date will be extinguished as of that
      date.

     

    5.    Common
      Stock:
      By his
      signature below, Mr. Roll represents and warrants that he owns good and
      marketable title to two hundred thousand (200,000) shares of common stock in
      the
      Company and that his ownership of such stock is free and clear of any
      indebtedness, restrictions or encumbrances (the “Roll Stock”). Mr. Roll agrees
      to sell, and Company agrees to buy, such Roll Stock for $2.00 a share. Mr.
      Roll
      will deliver the Certificates of Common Stock for the Roll Stock to the Company
      as of the Effective Date of this Agreement. Payment for the Roll Stock will
      be
      made within five (5) business days of the date of the Conditions of Payment
      set
      forth in Paragraph 2 are satisfied.

     

    In
      addition, Mr. Roll acknowledges, agrees and warrants that for two (2) years
      following the Effective Date, he will not purchase, hold or contract to purchase
      or hold, directly or indirectly any stock of any type in the Company except
      with
      the sole exception of stock purchased in conjunction with the exercise of the
      vested stock options as set forth in Paragraph 4 of this Agreement.

     

    6.    Non-Disparagement:
      Unless
      otherwise compelled by applicable law, Company’s currently serving Board members
      while serving on the Board and Mr. Roll will not say or do anything to disparage
      the other or any of the Company’s current, former or future managers, officers,
      employees, board members, directors or agents or its products or services to
      any
      person or entity. Provided Mr. Roll directs inquiries regarding his employment
      history at the Company to the Chairman of the Board, the Company will respond
      to
      all such inquiries with only dates of employment and job title held, and final
      salary information. If asked for any other information concerning Mr. Roll’s
      employment, the Company shall state that Company policy does not permit the
      disclosure of any additional information. In addition, should Mr. Roll
      reasonably believe Mike Levine has breached his obligations to the Company
      and
      disclosed confidential information regarding Mr. Roll to a third party, the
      Company will assign its rights under its agreement with Mr. Levine to Mr. Roll
      for enforcement.

     

    7.    Non-Disclosure
      and Destruction of Mr. Roll’s Personal Information:
      The
      Company acknowledges that it is currently in possession of certain personal
      information regarding Mr. Roll and/or his family which does not pertain to
      Company business (“Personal Information”). Personal Information includes but is
      not limited to the following: (a) written correspondence and e-mails; (b)
      information embodied in such written correspondence and e-mails; and, (c)
      information obtained by any inquiry, discussion, or in any other manner relating
      to the Personal Information and/or Mr. Roll or his family other than standard
      personnel information. Unless otherwise compelled by applicable law, the Company
      (including its employees, shareholders, directors, officers, attorneys, agents,
      and/or representatives) shall not verbally or in writing discuss or disclose
      to
      any person or entity the Personal Information.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    The
      Company hereby represents that it shall destroy all written Personal Information
      contained in any media, whether electronic, paper, or otherwise. This obligation
      includes the obligation to destroy any information contained on backup tapes
      or
      any other backup system of the Company, as well as any information contained
      on
      hard drives or servers of the Company.

     

    8.    Miscellaneous:
      

     

    (a) The
      Parties represent and warrant that they have not assigned or transferred, or
      purported to assign or transfer, to any person, firm, corporation or entity
      any
      claim or other matter released by this Agreement. The Parties agree to indemnify
      each other and hold each other harmless against any claims, costs or expenses,
      including, without limitation, attorneys’ fees actually paid or incurred,
      arising out of, related to or in any manner whatsoever connected with any such
      transfer or assignment or purported or claimed transfer or
      assignment.

     

    (b) With
      the
      exception of any previously executed confidentiality and proprietary information
      agreements between Company and Mr. Roll, this Agreement sets forth the entire
      agreement between Mr. Roll and Company and fully supersedes any and all prior
      agreements or understanding between them pertaining to the subject matter of
      this Agreement. It may not be altered, modified, amended or changed, in whole
      or
      in part, except in writing executed by Mr. Roll and Company.

     

    (c) Should
      any provision or term or part of a provision or term, of this Agreement be
      declared or determined by any court or arbitrator to be illegal or invalid,
      the
      validity of the remaining parts, provision or terms shall not be affected
      thereby and said illegal or invalid part, provision or term shall not be deemed
      to be a part of this Agreement.

     

    (d) This
      Agreement shall be governed by the laws of the State of California.

     

    (e) Nothing
      contained in this Agreement nor the fact that the Parties sign this Agreement
      shall be considered as an admission of any type by either Party. Each Party
      shall bear its or his own attorneys fees in conjunction with all matters related
      to this Agreement and the events leading up to this Agreement.

     

    (f) Pursuant
      to the Older Workers Benefit Protection Act, Company and Mr. Roll acknowledge
      and agree that: (i) Mr. Roll will have twenty-one (21) days to consider the
      terms of this Agreement (including, without limitation, Mr. Roll’s release and
      waiver of any and all claims under the Age Discrimination in Employment Act)
      before executing it; (ii) Mr. Roll will have seven (7) days after Mr. Roll’s
      execution of this Agreement in which to revoke this Agreement, in which event
      a
      written notice of revocation must be received by 5pm PST, on or before the
      seventh day; and (iii) this Agreement will not become effective and enforceable
      until the seven (7) day revocation period has expired without revocation of
      the
      Agreement by Mr. Roll. However, nothing contained in this Paragraph 8(f) shall
      allow Mr. Roll to revoke the resignations as set forth in Paragraph 1 of this
      Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (g) Mr.
      Roll
      agrees to take all necessary steps to withdraw or otherwise extinguish his
      current claim under the Company’s Director and Officers liability policy for
      defense and indemnity and further agrees he will not reinstate a claim which
      arises out of or relates to the same underlying facts giving rise to his current
      claim under any Company insurance policy.

     

    (h) Mr.
      Roll
      acknowledges that: (i) Mr. Roll fully understands the terms of this Agreement
      including, without limitation, the significance and consequences of the General
      Release in Paragraph 3, above; (ii) Mr. Roll has been advised by Company to
      consult an attorney regarding any potential claims as well as the terms and
      conditions of this Agreement before executing it; (iii) Mr. Roll is executing
      this Agreement in exchange for consideration in addition to anything of value
      to
      which Mr. Roll is already entitled; and (iv) Mr. Roll is fully satisfied with
      the terms of this Agreement and is executing this Agreement voluntarily,
      knowingly and willingly and without duress.

     

    (i) This
      Agreement may be executed in several counterparts, each of which shall be deemed
      an original as against any Party who signed it, and all of which shall
      constitute one and the same document. This Agreement may also be signed by
      facsimile, and such facsimile copies shall be deemed originals against the
      Party
      who faxed them. That Party shall provide an original “wet ink” copy of his
      signature within five business days of sending the fax.

     

    (j) Arbitration.
      Except
      for claims under the National Labor Relations Act, the California Worker’s
      Compensation Act, claims for Unemployment benefits and claims before
      governmental administrative bodies, Mr. Roll and the Company agree that any
      dispute regarding this Agreement or Mr. Roll’s employment by the Company will be
      submitted to binding arbitration before a neutral arbitrator subject to rules
      of
      the American Arbitration Association. Disputes subject to this clause include
      any claims under Title VII of the Civil Rights Act, California’s Fair Employment
      and Housing Act, the Family Medical Leave Act and the California Family Rights
      Act. The Parties’ agreement to arbitrate any and all disputes is governed by and
      is subject to the rules of the Federal Arbitration Act and the California
      Arbitration Act including their mandatory and permissive rights to discovery.
      Each Party may seek injunctive or equitable relief pursuant to California Code
      of Civil Procedure § 1281.8(b). The Parties agree to file any demand for
      arbitration within the time limit established by the applicable statute of
      limitations. The award of the Arbitrator shall be in writing and shall set
      forth
      the basis for his or her decision. Fees of the Arbitrator shall be paid by
      the
      Company where required by applicable law. THE PARTIES UNDERSTAND AND AGREE
      THAT
      THEY ARE WAIVING THEIR RIGHTS TO BRING SUCH CLAIMS TO COURT, INCLUDING THE
      RIGHT
      TO A JURY TRIAL.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS HEREOF, this Agreement is entered into and executed by the Parties
      on
      the date set forth below in Los Angeles, California.

     

    

    
      	
              “Peerless
                Systems Corporation”

            	 	
              “Mr.
                Roll ”

            
	 	 	 
	
              By:
                /s/
                William Neil

              Its:
                Chief Financial Officer

            	 	
              /s/
                Richard L. Roll

              Richard
                L. Roll 

            
	 	 	 
	
              Dated:
                October 7, 2008

            	 	
              Dated:
                October 6, 2008

            

    

     

    

    
      	
              APPROVED
                AS TO FORM:

               

              /s/
                Michelle M. La Mar

              Michelle
                M. La Mar

              LOEB
                & LOEB LLP

              ATTORNEY
                FOR 

              PEERLESS
                SYSTEMS CORPORATION

            	 	
              APPROVED
                AS TO FORM:

               

              /s/
                Mark Fields

              Mark
                Fields

              Greenberg,
                Fields & Whitcombe LLP

              ATTORNEY
                FOR RICHARD L. ROLL

            
	 	 	 
	
              Dated:
                October 6, 2008

            	 	
              Dated:
                October 6, 2008

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    To: Board
      of
      Directors of Peerless Systems Corporation

    

    

    Gentlemen:

    

    The
      undersigned does hereby resign as a Director, Chief Executive Officer, President
      and all other offices which may be held by him of Peerless Systems Corporation
      and each of its subsidiaries and affiliates, effective immediately.

     

    
 

    
      	Dated: October 6, 2008	/s/ Richard L. Roll
	 	Richard L.
              Roll

    

     

    
      
        
        

      

      
        7a5800571-ex105.htm

     

    Exhibit
10.5

     

    
      SIXTH
AMENDMENT

      

      

      AGREEMENT, made this 27th day of
June, 2008, entered into between MACK-CALI CW REALTY ASSOCIATES
L.L.C., a New York limited liability company, having its principal office
c/o Mack-Cali Realty Corporation, 100 Clearbrook Road, Elmsford, New York
(herein referred to as "Landlord"), and AFP IMAGING CORPORATION, a New
York corporation, having an office at 250 Clearbrook Road, Elmsford, New York
10523 (herein referred to as "Tenant").

      

      W I T N E S S E T H
:

      

      WHEREAS, Landlord’s
predecessor in interest, Robert Martin Company, and Tenant entered into a
written lease agreement dated June 11, 1985, as amended by First Amendment dated
July 18, 1991, Second Amendment dated June 30, 1993, Third Amendment dated June
8, 1995, Fourth Amendment dated June 8, 1999 and Fifth Amendment dated March 4,
2004 (hereinafter collectively called the "Lease") wherein and whereby Landlord
currently leases to Tenant and Tenant currently hires from Landlord
approximately 47,735 square feet in the building known as 250 Clearbrook Road,
Elmsford, New York, for a term which currently expires December 31, 2009,
and

      

      WHEREAS, the parties hereto
desire to amend and extend the term of said Lease pursuant to the terms and
provisions set forth below;

      

      NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, each to the other in hand paid, IT IS AGREED as
follows:

      

      1.           The
Lease is hereby extended for a period of ten (10) years commencing on January 1,
2010 and expiring on December 31, 2019 (“Renewal Term”).

      

      2.           During
the Renewal Term, the Fixed Annual Rent shall be as follows:

      

      
        	
                Period

              	
                Yearly
      Rate

              	
                Monthly
      Installment

              	
                Annual
      Rate Per 

                Rentable
      Sq. Ft.

              
	
                January
      1, 2010 –

                December
      31, 2012

              	
                $548,952.50

              	
                $45,746.04

              	
                $11.50

              
	
                January
      1, 2013 –

                December
      31, 2016

              	
                $596,687.50

              	
                $49,723.96

              	
                $12.50

              
	
                January
      1, 2017 –

                December
      31, 2019

              	
                $644,422.50

              	
                $53,701.88

              	
                $13.50

              

      

      

      3.           As
of January 1, 2010, the definition of Base Tax set forth in the first sentence
of Article 42A(b) of the Lease (as recited in Paragraph 3 of the Second
Amendment to the Lease, as amended) is hereby deleted in its entirety and the
following shall be substituted in place thereof:

      

      “(b)           ‘Base
Tax’ is the product of the tax rates set forth on tax bills rendered for each
Tax for the 2008 calendar year for calendar year Taxes and the 2008/2009 fiscal
Tax Year for fiscal year Taxes multiplied by the full assessed valuations of the
Real Property for the 2008 calendar year for calendar year Taxes and the
2008/2009 fiscal Tax Year for fiscal year Taxes.”

      

      4.           As
of January 1, 2010, the Base Index set forth in Article 42B(i)(b) of the Lease
(as recited in Paragraph 4 of the Second Amendment to the Lease, as amended) is
hereby deleted in its entirety and the following shall be substituted in place
thereof:

      

      “(b)           ‘Base
Index’ shall mean the Index for the calendar month January, 2008.”

      

      5.           Landlord
hereby leases the demised premises to Tenant and Tenant hereby hires from
Landlord the demised premises in its as is condition during the Renewal Term,
upon the terms and conditions set forth herein.  Landlord shall have
no obligation to perform any work in or about the demised premises, except that
Landlord shall, at its sole cost and expense, perform the following work: (i)
furnish and install a fire alarm panel; (ii) replace six (6) of the ten (10)
existing space heaters in the warehouse area (and shall guaranty the remaining
four (4) existing space heaters, as hereinafter provided); (iii) furnish and
install exit and emergency lights; (iv) replace exterior staircase with new
prefab concrete staircase in the loading dock area; (v) re-caulk and insulate
the area below windows; (vi) paint rusted soffitt on the exterior of the
building; (vii) update lobby entrance (to include new step coverings, a stone
floor, refinishing banisters, painting & installing a sliding glass window);
(viii) balance HVAC in office area (collectively, Landlord’s Work”). Landlord’s
Work shall be performed at a mutually convenient time following the execution
and delivery of this Sixth Amendment. Tenant shall permit Landlord access to the
demised premises at any time during normal business hours to perform Landlord’s
Work without same constituting an eviction or entitling Tenant to any abatement
of rent or otherwise.  Tenant shall cooperate with Landlord during the
performance of Landlord’s Work by removing all wall hangings and relocating all
furniture, fixtures and personnel as may be necessary. Landlord shall use
commercially reasonable efforts to minimize interference with the conduct of
business by Tenant.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      6.           Notwithstanding
anything herein to the contrary, in addition to Landlord’s Work described in
Paragraph 5 above, Landlord shall also perform work in the demised premises as
shown on the floor plan attached hereto as Exhibit A-1 (the “Tenant Improvement
Work”). The parties agree that the cost of performing the Tenant Improvement
Work pursuant to Exhibit A-1 is TWO HUNDRED EIGHTY-TWO THOUSAND EIGHT HUNDRED
THIRTY-FIVE AND 00/100 DOLLARS ($282,835.00), as set forth on the construction
budget attached hereto as Exhibit B-1, subject to adjustment if Tenant requests
changes in the work.  Notwithstanding anything contained herein to the
contrary, Landlord shall contribute a gross amount not to exceed SEVENTY FIVE
THOUSAND AND 00/100 DOLLARS ($75,000.00), which amount includes 5% for
Landlord’s contingency and 5% for Landlord’s overhead, for the Tenant
Improvement Work to be performed by Landlord. If as a result of changes in the
Tenant Improvement Work requested by Tenant, the cost thereof is less than
$75,000.00, Landlord shall be responsible for the first $75,000.00 of the cost
of the Tenant Improvement Work and any unused portion of Landlord’s contribution
shall remain available to be used by Tenant for other construction work to be
performed in the demised premises during the term of the Lease. Tenant shall contribute
the sum of TWO HUNDRED SEVEN THOUSAND EIGHT HUNDRED THIRTY-FIVE AND 00/100
DOLLARS ($207,835.00) (subject to adjustment if Tenant requests changes in the
work) toward the cost of the Tenant Improvement Work, which shall be paid by
Tenant to Landlord as follows: fifty percent (50%) simultaneously with the
execution and delivery of this Sixth Amendment by Tenant and the balance upon
commencement of the Tenant Improvement Work. Part of the Tenant Improvement Work
consists of replacing all existing lighting fixtures in the demised premises.
Any rebates resulting from said replacement shall be for the benefit of Tenant.
The Tenant Improvement Work shall be performed at a mutually convenient time
following the execution and delivery of this Sixth Amendment. Tenant shall
permit Landlord access to the demised premises at any time during normal
business hours to perform the Tenant Improvement Work without same constituting
an eviction or entitling Tenant to any abatement of rent or
otherwise.  Tenant shall cooperate with Landlord during the
performance of Landlord’s Work by removing all wall hangings and relocating all
furniture, fixtures and personnel as may be necessary. Landlord shall use
commercially reasonable efforts to minimize interference with the conduct of
business by Tenant.

       

      7.          
Provided that Tenant continues its existing maintenance contract with
Landlord in full force and effect, from and after the date hereof, and during
the Renewal Term, Landlord shall guarantee the two (2) rooftop air-conditioning
units servicing the demised premises (unit model GCSII-953-250A-2Q and unit
model GCS3-953-125A-104) to be in good working order, including replacement (if
necessary in Landlord’s sole discretion).  Such guarantee shall not
extend to cover any negligence by Tenant.  All other rooftop
air-conditioning units are deemed to be in good working order and shall be
Tenant's responsibility per the terms of the Lease.  In addition,
Landlord shall guarantee the four (4) remaining existing heating space heaters
in the warehouse area to be in good working order during the Renewal
Term.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
      

      
        
           

          8.          
Article 57 (Right of First Refusal – Expansion) of the Lease is hereby
deleted in its entirety and the following is substituted in its
place:

           

          
            (a)          
i.          
Subject to
the provisions of this Article, Tenant shall have the option to lease from
Landlord contiguous space in the building,  as shown on the attached
floor plan annexed hereto and made a part hereof as Exhibit A-2, ("Additional
Space") at the expiration of the existing space lease (or if presently
un-leased, the initial space lease(s))  for such Additional Space,
subject to Landlord’s right to renew such leases or to enter into direct leases
with existing subtenants and subject to the rights of any existing tenants with
respect to the Additional Space.  If the Term of this Lease shall be
in full force and effect on the expiration or termination date of the existing
space leases or initial space lease, as the case may be, for the Additional
Space, subject to Landlord’s right to renew such leases or enter into direct
leases with existing subtenants and subject to the rights of any existing
tenants with respect to the Additional Space, and the date upon which Tenant
shall exercise the option hereinafter referred to, Tenant shall have the option
to lease all, but not less than all of the Additional Space on an as-is basis,
provided Tenant gives Landlord written notice of such election within ten (10)
days after Tenant shall receive Landlord's notice that such Additional Space is
available for leasing to Tenant.  If Tenant fails or refuses to
exercise this option within the time period set forth above (TIME BEING OF THE ESSENCE), then and in such event
Tenant shall have no further rights under this Section with respect to such
Additional Space.  If Tenant shall elect to lease said Additional
Space: (v) said Additional Space shall be deemed incorporated within and part of
the demised premises on the date that Landlord shall notify Tenant that such
Additional Space is ready for occupancy by Tenant and shall expire on the
Expiration Date of this Lease, (x) the Fixed Annual Rent payable under this
Lease shall be increased by an amount such that during the balance of the term
of this Lease the Fixed Annual Rent for said Additional Space shall be the then
fair market rent for the Additional Space, as determined in the manner set forth
in clause (ii) below, (y) Tenant’s Percentage Share shall be proportionately
increased, and (z) all other terms and provisions set forth in this Lease shall
apply, except that Landlord not be required to perform any work with respect to
said Additional Space or provide any tenant improvement
allowance.

          

        

      

      
      

       

      
        The
parties shall promptly execute an amendment of this Lease confirming Tenant's
election to lease said Additional Space and the incorporation of said Additional
Space into the demised premises.

      

      
      

       

      ii.          
Landlord
and Tenant shall use their best efforts, within thirty (30) days after Landlord
receives Tenant's notice of its election to lease said Additional Space,
("Negotiation Period") to agree upon the Fixed Annual Rent to be paid by Tenant
for said Additional Space.  If Landlord and Tenant shall agree upon
the Fixed Annual Rent, the parties shall promptly execute an amendment to this
Lease stating the Fixed Annual Rent for the Additional Space.

    

    
       

      If the
parties are unable to agree on the Fixed Annual Rent for said Additional Space
during the Negotiation Period, then within fifteen (15) days notice from the
other party, given after expiration of the Negotiation Period, each party, at
its cost and upon notice to the other party, shall appoint a person to act as an
appraiser hereunder, to determine the fair market rent for the Additional
Space.  Each such person shall be a real estate broker or appraiser
with at least ten (10) years' active commercial real estate appraisal or
brokerage experience (involving the leasing of similar space as agent for both
landlords and tenants) in Westchester County.  If a party does not
appoint a person to act as an appraiser within said fifteen (15) day period, the
person appointed by the other party shall be the sole appraiser and shall
determine the aforesaid fair market rent.  Each notice containing the
name of a person to act as appraiser shall contain the person's
address.  Before proceeding to establish the fair market rent, the
appraisers shall subscribe and swear to an oath fairly and impartially to
determine such rent.

       

      
        If the two
appraisers are appointed by the parties as stated in the immediately preceding
paragraph, they shall meet promptly and attempt to determine the fair market
rent.  If they are unable to agree within forty-five (45) days after
the appointment of the second appraiser, they shall attempt to select a third
person meeting the qualifications stated in the immediately preceding paragraph
within fifteen (15) days after the last day the two appraisers are given to
determine the fair market rent.  If they are unable to agree on the
third person to act as appraiser within said fifteen (15) day period, the third
person shall be appointed by the American Arbitration Association, upon the
application of Landlord or Tenant to the office of the Association nearest the
Building.  The person appointed to act as appraiser by the Association
shall be required to meet the qualifications stated in the immediately preceding
paragraph.  Each of the parties shall bear fifty percent (50%) of the
cost of appointing the third person and of paying the third person's
fees.  The third person, however selected, shall be required to take
an oath similar to that described above.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        The three
appraisers shall meet and determine the fair market rent.  A decision
in which two of the three appraisers concur shall be binding and conclusive upon
the parties.  In deciding the dispute, the appraisers shall act in
accordance with the rules then in force of the American Arbitration Association,
subject however, to such limitations as may be placed on them by the provisions
of this Lease.

      

      
      

       

      After the
Fixed Annual Rent for the Additional Space has been determined by the appraiser
or appraisers and the appraiser or appraisers shall have notified the parties,
at the request of either party, both parties shall execute and deliver to each
other an amendment of this Lease stating the Fixed Annual Rent for the
Additional Space.

      

        If the
Fixed Annual Rent for said Additional Space has not been agreed to or
established prior to the incorporation of said Additional Space in the demised
premises, then Tenant shall pay to Landlord an annual rent ("Temporary Rent")
which Temporary Rent on a per square foot basis shall be equal to the Fixed
Annual Rent, on a per square foot basis, then being paid by Tenant for the
demised premises.

      

       

      
        Thereafter,
if the parties shall agree upon a Fixed Annual Rent, or the Fixed Annual Rent
shall be established upon the determination of the fair market rent by the
appraiser or appraisers, at a rate at variance with the Temporary Rent (i) if
such Fixed Annual Rent is greater than the Temporary Rent, Tenant shall promptly
pay to Landlord the difference between the Fixed Annual Rent determined by
agreement or the appraisal process and the Temporary Rent, or (ii) if such Fixed
Annual Rent is less than the Temporary Rent, Landlord shall credit to Tenant's
subsequent monthly installments of Fixed Annual Rent the difference between the
Temporary Rent and the Fixed Annual Rent determined by agreement or the
appraisal process.

         

        
          In
determining the fair market rent for said Additional Space, the appraiser or
appraisers shall be required to take into account the rentals at which leases
are then being concluded for comparable space in the Building and in comparable
buildings in the County of Westchester, New York.  In no event shall
the Fixed Annual Rent for the Additional Space, on a per square foot basis, be
less than the Fixed Annual Rent for the demised premises, on a per square foot
basis.

           

        

      

      (b)           The
option granted to Tenant under this Article may be exercised only by Tenant, its
permitted successors and assigns, and not by any subtenant or any successor to
the interest of Tenant by reason of any action under the Bankruptcy Code, or by
any public officer, custodian, receiver, United States Trustee, trustee or
liquidator of Tenant or substantially all of Tenant's
property.  Tenant shall have no right to exercise any of such options
subsequent to the date Landlord shall have the right to give the notice of
termination referred to in Article 17.  Notwithstanding the foregoing,
Tenant shall have no right to exercise the option granted to Tenant hereunder
if, at the time it gives notice of such election (i) Tenant shall not be in
occupancy of substantially all of the demised premises or (ii) the demised
premises or any part thereof shall be the subject of a sublease.  If
Tenant shall have elected to exercise its option hereunder, such election shall,
at Landlord’s option in its sole discretion, be deemed withdrawn if, at any time
after the giving of notice of such election and prior to the occupancy of the
Additional Space, Tenant shall sublease all or any part of the demised
premises.”

      

      9.           A
new Article 58 (Option to Renew) is added to the Lease as follows:

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      OPTION TO
RENEW:

       

      

      (a)           If
the term of this Lease shall then be in full force and effect and Tenant has
complied fully with its obligations hereunder, Tenant shall have the option to
extend the term of this Lease for a period of five (5) years (the "Renewal
Term") commencing on the day immediately following the Expiration Date, provided
however that Tenant shall give Landlord notice of its election to extend the
term no earlier than eighteen (18) months prior to the Expiration Date nor later
than twelve (12) months prior to the Expiration Date of the
term.  TIME
BEING OF THE ESSENCE in connection with the exercise of Tenant's option
pursuant to this Article.

      

      (b)           Such
extension of the term of this Lease shall be upon the same covenants and
conditions, as herein set forth except for the Fixed Annual Rent (which shall be
determined in the manner set forth below), and except that Tenant shall have no
further right to extend the term of this Lease after the exercise of the single
option described in paragraph (a) of this Section.  If Tenant shall
duly give notice of its election to extend the term of this Lease, the Renewal
Term shall be added to and become a part of the Term of this Lease (but shall
not be considered a part of the initial Term), and any reference in this Lease
to the "Term of this Lease", the "Term hereof", or any similar expression shall
be deemed to include such Renewal Term, and, in addition, the term "Expiration
Date" shall thereafter mean the last day of such Renewal
Term.  Landlord shall have no obligation to perform any alteration or
preparatory or other work in and to the demised premises or provide a tenant
improvement allowance and Tenant shall continue possession thereof in its "as
is" condition.

      

      (c)           If
Tenant exercises its option for the Renewal Term, the Fixed Annual Rent during
the Renewal Term shall be the fair market rent for the demised premises, as
hereinafter defined.

      

      (d)           Landlord
and Tenant shall use their best efforts, within thirty (30) days after Landlord
receives Tenant's notice of its election to extend the Term of this Lease for
the Renewal Term ("Negotiation Period"), to agree upon the Fixed Annual Rent to
be paid by Tenant during the Renewal Term.  If Landlord and Tenant
shall agree upon the Fixed Annual Rent for the Renewal Term, the parties shall
promptly execute an amendment to this Lease stating the Fixed Annual Rent for
the Renewal Term.

      

      (e)           If
the parties are unable to agree on the Fixed Annual Rent for the Renewal Term
during the Negotiation Period, then within fifteen (15) days after notice from
the other party, given after expiration of the Negotiation Period, each party,
at its cost and upon notice to the other party, shall appoint a person to act as
an appraiser hereunder, to determine the fair market rent for the demised
premises for the Renewal Term.  Each such person shall be a real
estate broker or appraiser with at least ten years' active commercial real
estate appraisal or brokerage experience (involving the leasing of office space
as agent for both landlords and tenants) in the County of
Westchester.  If a party does not appoint a person to act as an
appraiser within said fifteen (15) day period, the person appointed by the other
party shall be the sole appraiser and shall determine the aforesaid fair market
rent.  Each notice containing the name of a person to act as appraiser
shall contain also the person's address.  Before proceeding to
establish the fair market rent, the appraisers shall subscribe and swear to an
oath fairly and impartially to determine such rent.

      

      If the two
appraisers are appointed by the parties as stated in the immediately preceding
paragraph, they shall meet promptly and attempt to determine the fair market
rent.  If they are unable to agree within forty-five (45) days after
the appointment of the second appraiser, they shall attempt to select a third
person meeting the qualifications stated in the immediately preceding paragraph
within fifteen (15) days after the last day the two appraisers are given to
determine the fair market rent.  If they are unable to agree on the
third person to act as appraiser within said fifteen (15) day period, the third
person shall be appointed by the American Arbitration Association (the
“Association”), upon the application of Landlord or Tenant to the office of the
Association nearest the Building.  The person appointed to act as
appraiser by the Association shall be required to meet the qualifications stated
in the immediately preceding paragraph.  Each of the parties shall
bear fifty percent (50%) of the cost of appointing the third person and of
paying the third person's fees.  The third person, however selected,
shall be required to take an oath similar to that described above.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The three
appraisers shall meet and determine the fair market rent.  A decision
in which two of the three appraisers concur shall be binding and conclusive upon
the parties.  In deciding the dispute, the appraisers shall act in
accordance with the rules then in force of the Association, subject however, to
such limitations as may be placed on them by the provisions of this
Lease.

      

      Notwithstanding
the foregoing, in no event shall the Fixed Annual Rent during the Renewal Term
be less than the Fixed Annual Rent during the last year of the Term of this
Lease immediately preceding the Renewal Term.

      

      (f)           After
the fair market rent for the Renewal Term has been determined by the appraiser
or appraisers and the appraiser or appraisers shall have notified the parties,
at the request of either party, both parties shall execute and deliver to each
other an amendment of this Lease stating the Fixed Annual Rent for the Renewal
Term.

      

      (g)           If
the Fixed Annual Rent for the Renewal Term has not been agreed to or established
prior to the commencement of the Renewal Term, then Tenant shall pay to Landlord
an annual rent ("Temporary Rent") which Temporary Rent shall be equal to two
hundred percent (200%) of the Fixed Annual Rent payable by Tenant for the last
year of the Term immediately preceding the Renewal Term.  Thereafter,
if the parties shall agree upon a Fixed Annual Rent, or the Fixed Annual Rent
shall be established upon the determination of the fair market rent by the
appraiser or appraisers, at a rate at variance with the Temporary Rent (i) if
such Fixed Annual Rent is greater than the Temporary Rent, Tenant shall promptly
pay to Landlord the difference between the Fixed Annual Rent determined by
agreement or the appraisal process and the Temporary Rent, or (ii) if such Fixed
Annual Rent is less than the Temporary Rent, Landlord shall credit to Tenant's
subsequent monthly installments of Fixed Annual Rent the difference between the
Temporary Rent and the Fixed Annual Rent determined by agreement or the
appraisal process.

      

      (h)           In
describing the fair market rent during the Renewal Term, the appraiser or
appraisers shall be required to take into account the rentals at which leases
are then being concluded (as of the last day of the Term) (for five (5) year
leases without renewal options with the Landlord and Tenant each acting
prudently, with knowledge and for self-interest, and assuming that neither is
under undue duress) for comparable space in the Building and in comparable
office buildings in the County of Westchester.

      

      (i)           The
option granted to Tenant under this Article may be exercised only by Tenant, its
affiliates, permitted successors and assigns, and not by any subtenant or any
successor to the interest of Tenant by reason of any action under the Bankruptcy
Code, or by any public officer, custodian, receiver, United States Trustee,
trustee or liquidator of Tenant or substantially all of Tenant's
property.  Tenant shall have no right to exercise this option
subsequent to the date Landlord shall have the right to give the notice of
termination referred to in Article 17 of the Lease unless Tenant cures the
default within the applicable grace period.  Notwithstanding the
foregoing, Tenant shall have no right to extend the term if, at the time it
gives notice of its election (i) Tenant shall not be in occupancy of
substantially all of the demised premises or (ii) the demised premises (or any
part thereof) shall be the subject of a sublease.  If Tenant shall
have elected to extend the term, such election shall be (at Landlord’s sole
option) deemed withdrawn if, at any time after the giving of notice of such
election and prior to the commencement of the Renewal Term, Tenant shall
sublease (all or any portion of) the demised premises or assign Tenant’s
interest in this Lease.”

      

      10.           Tenant
agrees not to disclose the terms, covenants, conditions or other facts with
respect to this Sixth Amendment, including, but not limited to, the Fixed Annual
Rent, to any person, corporation, partnership, association, newspaper,
periodical or other entity except pursuant to a valid business purpose or as
required by law.  This non-disclosure and confidentiality agreement
shall be binding upon Tenant without limitation as to time, and a breach of this
paragraph shall constitute a material breach under the Lease.

      

      11.           The
Tenant represents that it has dealt with no broker in connection with this Sixth
Amendment other than Austin Corporate Properties, Inc. and agrees to indemnify,
defend and hold Landlord harmless from any and all claims of any other broker
arising out of or in connection with negotiations of, or entering into of, this
Sixth Amendment.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.           Tenant
hereby represents to Landlord that (i) there exists no default under the Lease
either by Tenant or Landlord; (ii) Tenant is entitled to no credit, free rent or
other offset or abatement of the rents due under the Lease; and (iii) there
exists no offset, defense or counterclaim to Tenant’s obligation under the
Lease.

      

      13.           Except
as otherwise set forth herein, all the other terms and provisions contained in
the Lease shall remain in full force and effect.

      

      14.           It
is understood and agreed that this Sixth Amendment is submitted to the Tenant
for signature with the understanding that it shall not bind the Landlord unless
and until it has been executed by the Landlord and delivered to the Tenant or
Tenant's attorney.

      

      15.           The
Lease, as hereby amended, shall be binding upon the parties hereto, their
successors and assigns.

      

      IN WITNESS WHEREOF, the
parties hereto have hereunto set their hands and seals the day and year first
above written.

      

      
        
          	 
      	
                  MACK-CALI
      CW REALTY ASSOCIATES L.L.C.

                
	 
      	
                  By:

                	
                  Mack-Cali
      Realty, L.P., member

                
	 
      	
                  By:

                	
                  Mack-Cali
      Realty Corporation, general partner

                
	 
      	 
      	 
      	 	 
	 
      	 
      	 
      	 	 
	 
      	
                  By:

                	
                  /s/
      Michael A. Grossman

                	 
	 
      	 
      	
                  Michael
      A. Grossman

                	 
	 
      	 
      	
                  Executive
      Vice President

                	 
	 
      	 
      	 
      	 	 
	 
      	 
      	 
      	 	 
	 
      	 
      	 
      	 	 
	 
      	
                  AFP
      IMAGING CORPORATION

                
	 
      	 
      	 
      	 	 
	 
      	 
      	 
      	 	 
	 
      	
                  By:

                	
                  /s/
      Elise Nissen

                	 
	 
      	 
      	
                  Name:
      

                	Elise
      Nissen 	 
	 
      	 
      	
                  Title:
      

                	Chief
      Financial Officer
EVP
      Finance

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