Exhibit 10.15
FIRST AMENDMENT
THIS FIRST AMENDMENT (this "Amendment") is made and entered into as of
April 1, 2008, by and between XXXXXX CWCA XXXXX CREEK 28, L.L.C., a Delaware
limited liability company ("Landlord"), and AEHR TEST SYSTEMS, a California
corporation ("Tenant").
RECITALS
A. Landlord (as successor in interest to Xxxxx Creek Three Trust, a
Maryland real estate investment trust) and Tenant are parties to that certain
Multi-Tenant Office Triple Net Lease dated July __, 1999 (sic) (the "Lease").
Pursuant to the Lease, Landlord has leased to Tenant space currently
containing approximately 51,289 rentable square feet (the "Premises")
described as Suite No. 100 of the building commonly known as Xxxxx Xxxxx
Xxxxxxxx Xxxx - Xxxxxxxx X located at 000 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxx
(the "Building").
B. The Lease by its terms shall expire on December 31, 2009 ("Prior
Termination Date"), and the parties desire to extend the Lease Term, all on
the following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
1. Extension. The Lease Term is hereby extended for a period of sixty-six
(66) months and shall expire on June 30, 2015 ("Extended Termination Date"),
unless sooner terminated in accordance with the terms of the Lease. That
portion of the Term commencing the day immediately following the Prior
Termination Date ("Extension Date") and ending on the Extended Termination
Date shall be referred to herein as the "Extended Term". That portion of the
Lease Term retroactively commencing April 1, 2008 and ending on the Prior
Termination Date shall be referred to as the "Remaining Portion of the Lease
Term".
2. Base Rent. Notwithstanding anything to the contrary contained in
Section 4 of the Summary in the Lease, the schedule of Base Rent payable with
respect to the Premises during the Remaining Portion of the Lease Term and the
Extended Term shall be the following:
Period Rental Annual Base Rent Monthly Installment of
Square Base Rent
Footage
---------------- ------- ------------------ ----------------------
4/1/08 - 6/30/09 51,289 $492,753.35 $41,062.78
7/1/09 - 6/30/10 51,289 $507,795.39 $42,316.28
7/1/10 - 6/30/11 51,289 $523,439.11 $43,619.93
7/1/11 - 6/30/12 51,289 $539,708.58 $44,975.71
7/1/12 - 6/30/13 51,289 $556,628.82 $46,385.74
7/1/13 - 6/30/14 51,289 $574,225.88 $47,852.16
7/1/14 - 6/30/15 51,289 $592,526.82 $49,377.24
All such Base Rent shall be payable by Tenant in accordance with the
terms of the Lease, as amended hereby. Notwithstanding anything in the Lease
or this Amendment to the contrary, provided that Tenant is not in default
beyond applicable notice and cure periods under the Lease, as amended hereby,
Tenant shall be entitled to an abatement of Base Rent with respect to the
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Premises in the amount of $41,062.78 per month during the months of May, June
and July of 2008. The maximum total amount of Base Rent abated with respect
to the Premises in accordance with the foregoing shall equal $123,188.34 (the
"Abated Base Rent"). If Tenant defaults under the Lease, as amended hereby,
at any time during the Remaining Portion of the Lease Term or the Extended
Term (as the same may be further extended) and fails to cure such default
within any applicable cure period under the Lease, then all unamortized Abated
Base Rent (i.e., based upon the amortization of the Abated Base Rent in equal
monthly amounts, without interest, during the period commencing on the
Extension Date and ending on the Extended Termination Date) shall immediately
become due and payable. Only Base Rent shall be abated pursuant to this
Section, as more particularly described herein, and Tenant's Share of Building
Direct Expenses all other costs and charges specified in the Lease shall
remain as due and payable pursuant to the provisions of the Lease, as amended
hereby. Landlord acknowledges that, notwithstanding the above, Tenant has
already paid Base Rent for April 2008. Landlord shall promptly upon execution
of this Amendment refund to Tenant such payment in excess of Base Rent for
April 2008 and any other Base Rent payments made by Tenant after April 1, 2008
and prior to the execution of this Amendment.
3. Letter of Credit. Landlord currently holds a letter of credit in the
amount of $50,000.00 (the "Letter of Credit") as collateral for the full
performance by Tenant of all of its obligations under this Lease and for all
losses and damages Landlord may suffer as a result of Tenant's failure to
comply with one or more provisions of the Lease. Notwithstanding anything in
Section 21 of the Lease to the contrary, the Letter of Credit shall have a
term that automatically renews on a year to year basis until a period ending
not earlier than two months subsequent to the expiration date of the Extended
Term (as the same may be further extended). Notwithstanding the foregoing, at
any time during the Remaining Portion of the Lease Term or the Extended Term,
Tenant may elect, by delivering five (5) business days written notice to
Landlord, to instead provide Landlord with cash in the amount of $50,000.00,
to be held by Landlord as a security deposit in accordance with Section 4
below. If Tenant so elects, Landlord shall return the original Letter of
Credit to Tenant within ten (10) business days following Landlord's receipt of
such cash amount. Notwithstanding anything to the contrary in Article 21 of
the Lease, Landlord and Tenant (a) acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor or any proceeds thereof be deemed to be or treated as a "security
deposit" under any laws, codes and regulations applicable to security deposits
in the commercial context including Section 1950.7 of the California Civil
Code, as such section now exist or as may be hereafter amended or succeeded
("Security Deposit Laws"), (b) acknowledge and agree that the Letter of Credit
(including any renewal thereof or substitute therefor or any proceeds thereof)
is not intended to serve as a security deposit, and the Security Deposit Laws
shall have no applicability or relevancy thereto, and (c) waive any and all
rights, duties and obligations either party may now or, in the future, will
have relating to or arising from the Security Deposit Laws. Tenant hereby
waives the provisions of Section 1950.7 of the California Civil Code and all
other provisions of laws, now or hereafter in effect, which (i) establish the
time frame by which Landlord must refund a security deposit under a lease,
and/or (ii) provide that Landlord may claim from the security deposit only
those sums reasonably necessary to remedy defaults in the payment of rent, to
repair damage caused by Tenant or to clean the Premises, it being agreed that
Landlord may, in addition, claim those sums specified Section 21.1 of the
Lease and/or those sums reasonably necessary to compensate Landlord for any
loss or damage caused by Tenant's breach of this Lease or the acts or omission
of Tenant or any contractor, agent, servant, employee, invitee, guest or
licensee of Tenant, including any damages Landlord suffers following
termination of the Lease.
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4. Security Deposit. If Tenant provides to Landlord cash (the "Security
Deposit") in lieu of a letter of credit, said sum shall be held by Landlord as
security for the faithful performance by Tenant of all the terms, covenants
and conditions of the Lease to be kept and performed by Tenant and not as an
advance rental deposit or as a measure of Landlord's damage in case of
Tenant's default. If Tenant defaults with respect to any provision of the
Lease, Landlord may use any part of the Security Deposit for the payment of
any Rent or any other sum in default, or for the payment of any amount which
Landlord may spend or become obligated to spend by reason of Tenant's default,
or to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default. If any portion is so used, Tenant shall
within five (5) days after written demand therefor, deposit with Landlord an
amount sufficient to restore the Security Deposit to its original amount and
Tenant's failure to do so shall be a material breach of the Lease. Except to
such extent, if any, as shall be required by law, Landlord shall not be
required to keep the Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on such deposit. If Tenant shall
fully and faithfully perform every provision of the Lease to be performed by
it, the Security Deposit or any balance thereof shall be returned to Tenant at
such time after termination of the Lease when Landlord shall have determined
that all of Tenant's obligations under the Lease have been fulfilled.
Notwithstanding anything to the contrary contained herein or in the Lease,
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code, or any similar or successor laws or other laws now or hereinafter in
effect.
5. Building Direct Expenses. During the Remaining Portion of the Lease
Term and the Extended Term, Tenant shall pay for Tenant's Share of Building
Direct Expenses in accordance with the terms of the Lease, as amended hereby.
6. Improvements to Premises.
6.1 Condition of Premises. Tenant is in possession of the Premises and
accepts the same "as is" without any agreements, representations,
understandings or obligations on the part of Landlord to perform any
alterations, repairs or improvements, except as may be expressly provided
otherwise in this Amendment or in Section 7.1 (Landlord Repair) of the Lease.
6.2 Responsibility for Improvements to Premises. Tenant may perform
improvements to the Premises in accordance with Exhibit A attached hereto and
Tenant shall be entitled to an improvement allowance in connection with such
work as more fully described in Exhibit A.
7. Options to Renew. Article 30 of the Lease is hereby deleted in its
entirety. Tenant, provided the Lease, as amended hereby, is in full force and
effect and Tenant is not in default beyond applicable notice and cure periods
under any of the other terms and conditions of the Lease, as amended hereby,
at the time of notification or commencement, shall have two (2) options to
renew (each, a "Renewal Option") the Lease, each for a term of thirty-six (36)
months (each, a "Renewal Term"), for the portion of the Premises being leased
by Tenant as of the date the applicable Renewal Term is to commence, on the
same terms and conditions set forth in the Lease, except as modified by the
terms, covenants and conditions as set forth below:
7.1 If Tenant elects to exercise the applicable Renewal Option, then Tenant
shall provide Landlord with written notice no earlier than the date which is
three hundred sixty-five
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(365) days prior to the expiration of the then current Lease Term but no later
than the date which is two hundred seventy (270) days prior to the expiration
of the then current Lease Term. If Tenant fails to provide such notice,
Tenant shall have no further or additional right to extend or renew the Lease
Term.
7.2 The Base Rent in effect at the expiration of the then current Lease Term
shall be adjusted to reflect the Prevailing Market (defined below) rate as of
the date the Renewal Term is to commence, taking into account the specific
provisions of this Lease which will remain constant. Landlord shall advise
Tenant of the new Base Rent for the Premises no later than thirty (30) days
after receipt of Tenant's written request therefor. Said request shall be
made no earlier than thirty (30) days prior to the first date on which Tenant
may exercise the applicable Renewal Option under this Section 7. Said
notification of the new Base Rent may include a provision for its escalation
to provide for a change in fair market rental between the time of notification
and the commencement of the applicable Renewal Term. If Tenant and Landlord
are unable to agree on the Prevailing Market for the Renewal Term not later
than sixty (60) days prior to the expiration of the Term, then Landlord and
Tenant shall each appoint a qualified MAI appraiser doing business in the
area, in turn those two independent MAI appraisers shall appoint a third MAI
appraiser and the majority shall decide upon the fair market rental for the
Premises as of the expiration of the Extended Term. Landlord and Tenant shall
equally share in the expense of this appraisal except that in the event the
Base Rent is found to be within ten percent (10%) of the original rate quoted
by Landlord, then Tenant shall bear the full cost of all the appraisal
process.
7.3 The Renewal Options are not transferable; the parties hereto acknowledge
and agree that they intend that the aforesaid Renewal Options shall be
"personal" to Tenant and any Affiliate as set forth above and that in no event
will any assignee (other than an Affiliate) or sublessee have any rights to
exercise the Renewal Options.
7.4 If Tenant fails to validly exercise the first Renewal Option, Tenant
shall have no further right extend the term of the Lease. In addition, if
both Renewal Options are validly exercised or if Tenant fails to validly
exercise the second Renewal Option, Tenant shall have no further right to
extend the term of the Lease.
7.5 For purposes of this Section 7, "Prevailing Market" shall mean the arms
length fair market annual rental rate per rentable square foot under renewal
and expansion amendments and new leases entered into on or about the date on
which the Prevailing Market is being determined hereunder for space comparable
to the Premises in the Building and buildings comparable to the Building in
the Fremont, California area as of the date the applicable Renewal Term is to
commence, taking into account the specific provisions of the Lease which will
remain constant, and may, if applicable, include parking charges. The
determination of Prevailing Market shall take into account any material
economic differences between the terms of the Lease and any comparison lease
or amendment, such as rent abatements, construction costs and other
concessions and the manner, if any, in which the landlord under any such lease
is reimbursed for operating expenses, insurance costs and taxes.
8. Other Pertinent Provisions. Landlord and Tenant agree that, effective
as of the date of this Amendment, the Lease shall be amended in the following
additional respects:
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8.1 Rent Payment Address. Landlord's rent payment address set forth in
Article 3 of the Lease is hereby deleted in its entirety and replaced with the
following:
"Xxxxxx CWCA Xxxxx Creek 28, L.L.C.
X.X. Xxx 000000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Wire Instructions:
US Bank
ABA #00000000
Account Name: Xxxxxx Calwest Holdings, LLC
Account #152307765163"
8.2 Address of Landlord. Landlord's notice address set forth in Section
29.18 of the Lease is hereby deleted in its entirety and replaced with the
following:
"Xxxxxx Street Capital, LLC
Attention: Xxxxx X. Xxxxx, Principal
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
With a copy to:
c/o Colliers International
0000 Xx. Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Property Manager"
8.3 Tenant Improvements. The parties hereby acknowledge and agree that
Landlord has fully performed all of its obligations pursuant to Exhibit "B" of
the Lease.
8.4 Deletion. Section 1.2 (Expansion Space) of the Lease is hereby deleted
in its entirety and shall be of no further force and effect.
9. Miscellaneous.
9.1 This Amendment, including Exhibit A (Tenant Alterations) attached
hereto, sets forth the entire agreement between the parties with respect to
the matters set forth herein. There have been no additional oral or written
representations or agreements. Under no circumstances shall Tenant be
entitled to any Rent abatement, improvement allowance, leasehold improvements,
or other work to the Premises, or any similar economic incentives that may
have been provided Tenant in connection with entering into the Lease, unless
specifically set forth in this Amendment.
9.2 Except as herein modified or amended, the provisions, conditions and
terms of the Lease shall remain unchanged and in full force and effect.
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9.3 In the case of any inconsistency between the provisions of the Lease and
this Amendment, the provisions of this Amendment shall govern and control.
9.4 Submission of this Amendment by Landlord is not an offer to enter into
this Amendment but rather is a solicitation for such an offer by Tenant.
Landlord shall not be bound by this Amendment until Landlord has executed and
delivered the same to Tenant.
9.5 The capitalized terms used in this Amendment shall have the same
definitions as set forth in the Lease to the extent that such capitalized
terms are defined therein and not redefined in this Amendment.
9.6 Tenant hereby represents to Landlord that Tenant has dealt with no
broker in connection with this Amendment other than CPS, A Commercial Real
Estate Company, and, as Landlord's broker, Colliers International. Tenant
agrees to indemnify and hold Landlord, its members, principals, beneficiaries,
partners, officers, directors, employees, mortgagee(s) and agents, and the
respective principals and members of any such agents harmless from all claims
of any other brokers claiming to have represented Tenant in connection with
this Amendment. Landlord hereby represents to Tenant that Landlord has dealt
with no broker in connection with this Amendment other than Colliers
International. Landlord agrees to indemnify and hold Tenant harmless from all
claims of any other brokers claiming to have represented Landlord in
connection with this Amendment.
9.7 Each party to this Amendment represents hereby that the signatory
executing this Amendment on its behalf has the authority to execute and
deliver the same. Tenant hereby represents and warrants that neither Tenant,
nor any persons or entities holding any legal or beneficial interest
whatsoever in Tenant, are (i) the target of any sanctions program that is
established by Executive Order of the President or published by the Office of
Foreign Assets Control, U.S. Department of the Treasury ("OFAC"); (ii)
designated by the President or OFAC pursuant to the Trading with the Enemy
Act, 50 U.S.C. App. Section 5, the International Emergency Economic Powers Act,
50 U.S.C. Sections 1701-06, the Patriot Act, Public Law 107-56, Executive Order
13224 (September 23, 2001) or any Executive Order of the President issued
pursuant to such statutes; or (iii) named on the following list that is
published by OFAC: "List of Specially Designated Nationals and Blocked
Persons." If the foregoing representation is untrue at any time during the
Lease Term, an event of default under the Lease will be deemed to have
occurred, without the necessity of notice to Tenant.
9.8 Redress for any claim against Landlord under the Lease and this
Amendment shall be limited to and enforceable only against and to the extent
of the amount of Landlord's interest in the Building. The obligations of
Landlord under the Lease are not intended to and shall not be personally
binding on, nor shall any resort be had to the private properties of, any of
its trustees or board of directors and officers, as the case may be, its
investment manager, the general partners thereof, or any beneficiaries,
stockholders, employees, or agents of Landlord or the investment manager.
IN WITNESS WHEREOF, Landlord and Tenant have entered into and executed this
Amendment as of the date first written above.
LANDLORD: TENANT:
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XXXXXX CWCA XXXXX CREEK 28,L.L.C., AEHR TEST SYSTEMS,
A Delaware limited liability company a California corporation
By: WCV Commercial Properties Inc.,
an Illinois corporation,
its Authorized Agent
By: /s/ Xxx Xxxxxx By: /s/ XXXX X. XXXXXXX
------------------------- --------------------------
Name: Xxx Xxxxxx Name: Xxxx X. Xxxxxxx
------------------------- --------------------------
Title: Managing Director Title: CEO, Chairman
------------------------- --------------------------
Date: May 6, 2008 Date: April 24, 2008
------------------------- --------------------------
By: /s/ XXXX X. XXXXXX
--------------------------
Name: Xxxx X. Xxxxxx
--------------------------
Title: VP, CFO
--------------------------
Date: April 24, 2008
--------------------------
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EXHIBIT A - TENANT ALTERATIONS
attached to and made a part of the Amendment dated as of April 1, 2008,
between XXXXXX CWCA XXXXX CREEK 28, L.L.C., a Delaware limited liability
company, as Landlord and AEHR TEST SYSTEMS, a California corporation, as
Tenant
1. Tenant, following the full and final execution and delivery of the
Amendment to which this Exhibit A is attached, shall have the right to perform
alterations and improvements in the Premises (the "Tenant Alterations").
Notwithstanding the foregoing, Tenant and its contractors shall not have the
right to perform Tenant Alterations in the Premises unless and until Tenant
has complied with all of the terms and conditions of Article 8 of the Lease,
including, without limitation, approval by Landlord of the final plans for the
Tenant Alterations and the contractors to be retained by Tenant to perform
such Tenant Alterations. Tenant shall be responsible for all elements of the
design of Tenant's plans (including, without limitation, compliance with law,
functionality of design, the structural integrity of the design, the
configuration of the premises and the placement of Tenant's furniture,
appliances and equipment), and Landlord's approval of Tenant's plans shall in
no event relieve Tenant of the responsibility for such design. Landlord's
approval of the plans and contractors to perform the Tenant Alterations shall
not be unreasonably withheld. The parties agree that Landlord's approval of
the general contractor to perform the Tenant Alterations shall not be
considered to be unreasonably withheld if any such general contractor (a) does
not have trade references reasonably acceptable to Landlord, (b) does not
maintain insurance as required pursuant to the terms of the Lease, (c) does
not have the ability to be bonded for the work in an amount of no less than
one hundred fifty percent (150%) of the total estimated cost of the Tenant
Alterations, (d) does not provide current financial statements reasonably
acceptable to Landlord, or (e) is not licensed as a contractor in the
state/municipality in which the Premises is located. Tenant acknowledges the
foregoing is not intended to be an exclusive list of the reasons why Landlord
may reasonably withhold its consent to a general contractor.
2. Provided Tenant is not in default, Landlord agrees to contribute the sum
of $51,289.00 (i.e., $1.00 per rentable square foot of the Premises) (the
"Allowance") toward the cost of performing the Tenant Alterations. The
Allowance may only be used for the cost of preparing design and construction
documents and mechanical and electrical plans for the Tenant Alterations and
for hard costs in connection with the Tenant Alterations. The Allowance shall
be paid to Tenant within thirty (30) days following receipt by Landlord of
(a) receipted bills covering all labor and materials expended and used in the
Tenant Alterations; (b) a sworn contractor's affidavit from the general
contractor and a request to disburse from Tenant containing an approval by
Tenant of the work done; (c) full and final waivers of lien; (d) as-built
plans of the Tenant Alterations; and (e) the certification of Tenant and its
architect that the Tenant Alterations have been installed in a good and
workmanlike manner in accordance with the approved plans, and in accordance
with applicable laws, codes and ordinances. The Allowance shall be disbursed
in the amount reflected on the receipted bills meeting the requirements above.
Notwithstanding anything herein to the contrary, Landlord shall not be
obligated to disburse any portion of the Allowance during the continuance of
an uncured default under the Lease, and Landlord's obligation to disburse
shall only resume when and if such default is cured.
3. In no event shall the Allowance be used for the purchase of equipment,
furniture or other items of personal property of Tenant. If Tenant does not
submit a request for payment of the entire Allowance to Landlord in accordance
with the provisions contained in this Exhibit A by December 31, 2008, any
unused amount shall accrue to the sole benefit of Landlord, it being
understood that Tenant shall not be entitled to any credit, abatement or other
concession in connection therewith. Tenant shall be responsible
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for all applicable state sales or use taxes, if any, payable in connection
with the Tenant Alterations and/or Allowance. No construction management fee
shall be due with respect to the Tenant Alterations unless Tenant elects to
request an Additional Allowance in accordance with the terms of Section 4
below, in which case Landlord shall be entitled to deduct from the Additional
Allowance a construction management fee for Landlord's oversight of the Tenant
Alterations in an amount equal to $3,077.34 (representing three percent (3%)
of the Additional Allowance).
4. If (a) the cost of the Tenant Alterations exceed the Allowance (the
"Excess Costs"), (b) Tenant has used the entire Allowance as provided herein,
and (c) Tenant is not in default under the Lease, Tenant shall be entitled to
request an additional allowance of up to $102,578.00 (i.e., $2.00 per rentable
square foot of the Premises) (the "Additional Allowance") from Landlord in
order to finance the Excess Costs during the Lease Term. Landlord shall
disburse the Additional Allowance to Tenant subject to and in accordance with
the provisions applicable to the disbursement of the Allowance described in
this Exhibit A. In no event shall Tenant be entitled to any disbursement of
the Additional Allowance after September 30, 2008. Any Additional Allowance
paid to or on behalf of Tenant hereunder shall be repaid to Landlord as
Additional Rent in equal monthly installments throughout the remainder of the
Lease Term, commencing on the first day of the first full calendar month
following the date the Additional Allowance is disbursed to Tenant, at an
interest rate equal to nine percent (9%) per annum. If Tenant is in default
under the Lease after the expiration of applicable cure periods, the entire
unpaid balance of the Additional Allowance paid to or on behalf of Tenant
shall become immediately due and payable and, except to the extent required by
applicable law, shall not be subject to mitigation or reduction in connection
with a reletting of the Premises by Landlord. Upon request of Landlord,
Tenant shall execute an amendment to the Lease or other appropriate agreement,
prepared by Landlord, evidencing the amount of the Additional Allowance
requested by Tenant and the repayment schedule relating to Tenant's repayment
of the Additional Allowance, as described herein.
5. Tenant agrees to accept the Premises in its "as-is" condition and
configuration, it being agreed that Landlord shall not be required to perform
any work or, except as provided above with respect to the Allowance or except
as expressly provided in the Lease, incur any costs in connection with the
construction or demolition of any improvements in the Premises.
6. This Exhibit A shall not be deemed applicable to any additional space
added to the Premises at any time or from time to time, whether by any options
under the Lease or otherwise, or to any portion of the original Premises or
any additions to the Premises in the event of a renewal or extension of the
original Term of the Lease, whether by any options under the Lease or
otherwise, unless expressly so provided in the Lease or any amendment or
supplement to the Lease.
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