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<br />APPLICABLE LAW. The laws of the State of California govern the <br /> <br />interpretation and enforcement of this Agreement, and the conduct of the parties <br /> <br />16. <br /> <br />under this Agreement. <br /> <br />17. <br /> <br />LITIGATION EXPENSES. <br /> <br />a) <br /> <br />If either party brings an action or proceeding (including any <br /> <br />cross-complaint, counterclaim, or third-party claim) against the other party <br /> <br />arising out of this Agreement, the prevailing party in that action or <br /> <br />,- <br /> <br />proceeding is entitled to its costs and expenses of suit, including reasonable <br /> <br />attorneys' fees, which are payable whether or not the action is prosecuted to <br /> <br />judgment. <br /> <br />b) <br /> <br />If either party must initiate or defend any action or proceeding. <br /> <br />counterclaim or third-party claim) because the other party is in default under <br /> <br /> <br />with a third person (including, without limitation, any cross-complaint, <br /> <br />this Agreement, or has failed to enforce this Agreement, or otherwise failed <br /> <br />to perform duties or obligations arising out of this Agreement, whether or <br /> <br />not that failure constitutes a default under this Agreement, and the party <br /> <br />initiating or defending the action or proceeding prevails therein, then the <br /> <br />prevailing party is entitled to reasonable attorneys' fees from the other party. <br /> <br />c) <br /> <br />Attorneys' fees include attorneys' fees on any appeal, and, in <br /> <br />addition, a party entitled to attorneys' fees is entitled to receive all other <br /> <br />reasonable costs and expenses incurred in connection with the action. <br /> <br />18. <br /> <br />CERTAIN OBLIGATIONS NON-RECOURSE. Flatiron's obligations <br /> <br />hereunder are intended to be the obligations of the limited partnership and of the <br /> <br />-11- <br />