LEASE
Preamble--Parties and Leasing
XXXXXX X. XXXXXXXX, herein called "Lessor", hereby leases to XXX XXXXX
DBA/X. X. XXXXX COMPANY, herein called "Lessee", those certain premises, herein
called "said premises", in the County of Sonoma, State of California, described
as 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx, on the following terms and
conditions:
ARTICLE 1. TERM OF LEASE
Original Term
Section 1.01. This lease shall be for an initial term of five (5) years
commencing on July 1, 1996, and shall have three successive options exercisable
by Lessee for five (5) years each. Lessee shall be required to notify Lessor six
months in advance of each successive option period whether Lessee intends to
exercise the option or not.
Hold Over
Section 1.02. Should Lessee hold over and continue in possession of
said premises after expiration of the term of this lease or any extension
thereof, Lessee's continued occupancy of said premises shall be considered a
month-to-month tenancy subject to all terms and conditions of this lease and the
rent in effect immediately prior to the period of the hold over.
Lessor's Inability to Deliver possession
Section 1.03. Should Lessor for any reason be unable to deliver
possession of said premises to Lessee on the date specified in Section 1.01 of
this lease as the date on which the term of the lease is to commence, this lease
shall not be void or voidable nor shall Lessor be liable to Lessee for any loss
or damage resulting from such failure to deliver possession to Lessee so long as
Lessor has exercised, and continues to exercise, reasonable diligence to deliver
possession or said premises to Lessee and so long as said premises are delivered
to Lessee by July 1, 1996. No rent shall, however, accrue or become due from
Lessee to Lessor under this lease until the actual physical possession of said
premises is delivered, or the right to actual unrestricted physical possession
of said premises under this lease is tendered, by Lessor to Lessee. The term of
this lease shall be extended by any inability by Lessor to deliver possession of
said premises to Lessee on the date specified in Section 1.01 for commencement
of the term of this lease by the actual period of Lessor's inability to deliver
possession.
Condition Warrants
Section 1.04. Lessor warrants that the premises will be turned over
with level floor, clean interior, and one demising wall having been mutually
agreed upon by Lessor and Lessee.
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Lessor also warrants that the three roll-up doors are in good repair and work
properly at the time of occupancy of the Lessee.
Section 1.05. Lessor agrees that, prior the lease commencement, the
roof and the skylites will be replaced and shall warrant roof to be leak free.
Section 1.06. Lessor shall make premises available to Lessee 30 days
prior to commencement date of this lease for the purpose of making tenant
improvements, and Lessee shall have the right to inspect the premises just prior
to the commencement date in order to determine if Lessor has made premises
acceptable as outlined in above sections.
ARTICLE 2. RENT
Minimum Rent
Section 2.01. Lessee agrees to pay Lessor a fixed minimum rental for
the use and occupancy of said promises of______________________ per month
payable on the first day of each and every month, commencing July 1,1996, at the
home of Lessor at 00 Xxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, or at such
other place or places as Lessor may from time to time designate by written
notice delivered to Lessee.
Cost of Living Adjustments
Section 2.02. Monthly rent for the space subject to the option provided
for in Section 2.01 hereof shall be subject to adjustment at the commencement of
the second year of the term and annually thereafter. This adjustment shall be as
follows: The base for computing the adjustment is the Consumer Price Index (San
Francisco Bay Area) published by the United States Department of Labor, Bureau
of Labor Statistics ("Index") which is published for July 1, 1996 ("Beginning
Index"). If the index published nearest each adjustment date ("Extension Index")
has changed from the Beginning Index, the monthly rent shall be adjusted by
multiplying the monthly rent by a fraction, the numerator of which is the
Extension Index and the denominator of which is the Beginning Index. In no case
shall the monthly rent be less than the monthly rent in effect commencing July
1, 1996. The maximum annual adjustment shall not exceed five percent (5%) per
year.
If the index is changed so that the base year differs from that used as
of July 1, 1996, the Index shall be converted in accordance with the conversion
factor published by the United States Department of Labor, Bureau of Labor
Statistics. If the Index is discontinued or revised during the term, such other
government Index or computation with which it is replaced shall be used in order
to obtain substantially the same result as would be obtained if the index had
not been discontinued or revised.
Late Payment Penalty
Section 2.03. In the event that Lessee tenders any monthly payment
specified in Section 2.01 and/or 2.02 above after the tenth of any month when
due, Lessee agrees to pay a Two Hundred Fifty ($250.00) Dollar late penalty.
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ARTICLE 3. USE OF PREMISES
Section 3.01. Said premises shall, during the term of this lease and
any extensions thereof, be used for the purpose of operating and conducting
thereon and therein "workshops, storage facilities, shipping and receiving, and
offices" for uses normally incident to such purpose, and for no other purpose
without Lessor's written permission. Leased "premises" includes approximately
10,000 square feet of floor space with three roll-up doors, together with
approximately 6,000 square feet of parking lot to park cars and trucks or other
vehicles and to make deliveries to and ship products from the premises.
Insurance Hazards
Section 3.02. Lessee shall not commit or permit the commission of any
acts on said premises nor use or permit the use of said premises in any manner
that will increase the existing rates for or cause the cancellation of any fire,
liability, or other insurance policy insuring said premises or the improvements
on said premises.
Waste or Nuisance
Section 3.03. Lessee shall not commit or permit the commission by
others of any waste on said premises; Lessee shall not maintain, commit, or
permit the maintenance or commission of any nuisance as defined in Section 3479
of the California Civil Code on said premises; and Lessee shall not use or
permit the use of said premises for any unlawful purpose.
ARTICLE 4. TAXES AND UTILITIES
Payment of Utility Charges
Section 4.01. Lessee shall pay, and hold Lessor and the property of
Lessor free and harmless from, all charges for the furnishing of gas, water,
electricity, telephone service, and other public utilities to said premises
during the term of this lease or any extension thereof and for the removal of
garbage and rubbish from said premises during the term of this lease or any
extensions thereof.
Personal Property Taxes
Section 4.02. Lessee shall pay before they become delinquent all taxes,
assessments, or other charges levied or imposed by any governmental entity on
the furniture, trade fixtures, appliances, and other personal property placed by
Lessee in, on, or about said premises including, without limiting the generality
of the other terms used in this section, any shelves, counters, vaults, vault
doors, wall safes, partitions, fixtures, machinery, plant equipment, office
equipment, television or radio antennas, or communication equipment brought on
said premises by Lessee.
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Real Property Taxes
Section 4.03. All real property taxes an assessments levied or assessed
against said premises by any governmental entity, including any special
assessments imposed on or against said premises for the construction or
improvement of public works in, on, or about said premises, shall be paid,
before they become delinquent, by Lessor.
ARTICLE 5. ALTERATIONS AND REPAIRS
Condition of Premises
Section 5.01. Lessee accepts said premises, as well as the improvements
thereon and the facilities appurtenant thereto, in their present condition and
stipulates with Lessor that said premises as well as the improvements thereon
and the facilities appurtenant thereto are in good, clean, safe, and tenantable
condition as of the date of this lease. Lessee further agrees with and
represents to Lessor that said premises have been inspected by Lessee and that
he has been assured by means independent of Lessor any agent of Lessor of the
suitability of the premises for its intended use by Lessee and that said
premises are being leased by Lessee as a result of his inspection and
investigation and not as a result of any representations made by Lessor or any
agent of Lessor.
Maintenance by Lessor
Section 5.02. Lessor shall, at his own expense, maintain in good
condition and repair the exterior roof, exterior walls; provided, however, that
the Lessor shall not be liable for any damage to Lessee or the property of
Lessee resulting from Lessor's failure to make any repairs required by this
section unless written notice of the need for such repairs has been given to
Lessor by Lessee and Lessor has failed for a period of thirty (30) days after
receipt of the notice, unless prevented by causes not the fault of the Lessor,
to make the needed repairs; provided, further, that Lessor shall promptly be
reimbursed by Lessee for the full cost of any repairs made pursuant to this
section required because of the negligence or other fault, other than normal and
proper use, of Lessee or his employees or agents or sublessees, if any.
Maintenance by Lessee
Section 5.03. Except as otherwise expressly provided in Section 5.02 of
this lease, Lessee shall at his own cost and expense keep and maintain all
portions of said premises as well as all improvements on said premises and all
facilities appurtenant to said premises in good order and repair and in as safe
and clean a condition as they were when received by Lessee from Lessor,
reasonable wear and tear expected.
Maintenance of Show Window Glass
Section 5.04. Lessee shall, at his own cost and expense, repair and
replace any glass in any show window on said premises that becomes broken
regardless of cause, including show window glass that is broken by fire, by act
of God, by fault of Lessor, or by fault of some employee or agent of Lessor.
Furthermore, Lessee shall at his own cost and
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expense at all times during the term of this lease carry adequate plate glass
insurance on the glass in all show windows on said premises to perform the
repair and replacement requirements of this section. Should Lessee fail to
repair or replace any glass broken in a show window or fail to maintain adequate
plate glass insurance on the glass in show windows on said premise, Lessor may
replace or repair the broken glass or secure such insurance and Lessee will
promptly reimburse Lessor for the cost thereof and pay Lessor interest on such
costs at the rate of ten percent (10%) per annum from the date the costs were
incurred by Lessor to tile date they are reimbursed to Lessor by Lessee.
Alterations and Liens
Section 5.05. Lessee shall not make or permit any other person to make
any alterations to said premises or to any improvement thereon or facility
appurtenant thereto without the written consent of Lessor first had and
obtained. Lessee shall keep the premises free and clear from any and all liens,
claims, and demands for work performed, materials furnished, or operations
conducted on said premises at the instance or request of Lessee. Furthermore,
any and all alterations, additions, improvements, and fixtures, except furniture
and trade fixtures, made or placed in or on said premises by Lessee or any other
person shall on expiration or sooner termination of this lease become the
property of Lessor and remain on said premises provided, however, that Lessor
shall have the option on expiration or sooner termination of this lease of
requiring Lessee, at Lessee's sole cost and expense, to remove any or all such
alterations, additions, improvements, or fixtures from said premises.
Inspection by Lessor
Section 5.06. Lessee shall permit Lessor or Lessor's agents,
representatives, or employees to enter said premises at all reasonable times for
the purpose of inspection of said premises to determine whether Lessee is
complying with the terms of this lease and for the purpose of doing other lawful
acts that may be necessary to protect Lessor's interest in said premises under
this lease or to perform Lessor's duties under this lease.
Surrender of Premises
Section 5.07. On expiration or sooner termination of this lease, or any
extensions or renewals of this lease, Lessee shall promptly surrender and
deliver said premises to Lessor in as good condition as they are now at the date
of this lease, reasonable wear and tear and repairs herein requited to be made
by Lessor excepted.
ARTICLE 6. INDEMNITY AND INSURANCE
Hold-Harmless Clause
Section 6.01. Lessee agrees to indemnify and hold Lessor and the
property of Lessor, including said premises, free and harmless from any and all
claims, liability, loss, damage, or expenses resulting from Lessee's occupation
and use of said premises, specifically including, without limitation, any claim,
liability, loss or damage arising by reason of:
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(a) The death or injury of any person or persons including Lessee or
any person -who is an employee or agent of Lessee, or by reason at, except as &
result of Lessor's negligence, the damage to or destruction of any property,
including property owned by Lessee or any person who is an employee or agent of
Lessee, and caused or allegedly caused by either the condition of said premises,
or some act or omission of Lessee or of some agent, contractor, employee,
servant, sublessee, or concessionaire of Lessee on said premises;
(b) Any work performed on said premises or materials furnished to said
premises at tile instance or request of Lessee or any agent or employee of
Lessee; and
(c) Lessee's failure to perform any provisions of this lease or to
comply with any requirement of law or any requirement imposed on Lessor or the
leased premises by any duly authorized governmental agency or political
subdivision.
Liability Insurance
Section 6.02. Lessee shall, at his own cost and expense, secure within
ten (10) days and maintain during the entire term of this lease and any renewals
or extensions of such term a broad form comprehensive coverage policy of public
liability insurance issued by an insurance company acceptable to or connected
with Lessee's occupation an use of said premises under this lease in amounts not
less than:
(a) Two Hundred Fifty Thousand ($250,000.00) Dollars for injury to or
death of one person and subject to such limitation for the injury or death of
one person, of not less than Five Hundred Thousand ($500,000.00) Dollars for
injury to or death of two or more persons as a result -of' any- one accident or
incident; and
(b) One Hundred Thousand ($100,000.00) Dollars for damage to or
destruction of -any property of others.
Waiver of Subrogation
Section 6.03. The parties release each other, and their respective
authorized representatives, from any claims for damage, to any person, or to the
premises and to the fixtures, personal property, Lessee's improvements and
alterations of either Lessor or Lessee in or on the premises that are caused by
or result from the risks insured against under any insurance policies carried by
the parties and in force at the time of any such damage.
Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by fire or any
of the risks insured against under any insurance policy required by this lease.
If any insurance policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) days after receiving
the notice either to place the insurance with
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a company that is reasonably satisfactory to the other party and that will carry
the insurance with a waiver of subrogation, or to agree to pay the additional
premium if such policy is obtainable at additional cost. If the insurance cannot
be obtained or the party in whose favor a waiver of subrogation is desired
refuses to pay the additional premium charged, the other party is relieved of
the obligation to obtain a waiver of subrogation rights with respect to the
particular insurance involved.
Fire Insurance
Section 6.04. In order that the business of Lessee and the gross sales
of Lessee as defined in this lease may continue with as little interruption as
possible, Lessee shall, during the full term of this lease and any renewals or
extensions thereof, maintain at Lessee's own cost and expense an insurance
policy issued by a reputable company authorized to conduct insurance business in
California insuring for their full insurable value all fixtures and equipment
and, to the extent possible, all merchandise that is, at any time during the
term of this lease or any renewal or extension thereof, in or on said premises
against damage or destruction by fire, theft, or the elements.
ARTICLE 7. SIGNS AND TRADE FIXTURES
Installation and Removal of Trade Fixtures
Section 7.01. Lessee shall have the right at any time and from time to
time during the term of this lease and any renewal or extension of such term, at
Lessee's sole cost and expense, to install and affix in, to, or on said premises
such items, herein called "trade fixtures", for use in Lessee's trade or
business as Lessee may, in his sole discretion, deem advisable. Any and all such
trade fixtures that can be removed without structural damage to said premises or
any building or improvements on said premises shall remain the property of the
Lessee and may be removed by Lessee at any time times prior to the expiration or
sooner termination of this lease.
ARTICLE 8. DESTRUCTION AND CONDEMNATION
Partial Destruction
Section 8.01. Should said premises or the building on said premises be
partially destroyed by any cause not the fault of Lessee or any person in or
about said premises with the consent, express or implied, of Lessee, this leash
shall continue in full force and effect and Lessor, at Lessor's own cost and
expense, shall promptly commence the work of repairing and restoring said
premises to their prior condition providing such work can be accomplished under
all applicable governmental laws and regulations within sixty (60) working days
at a cost not exceeding full insured value.
Total Destruction
Section 8.02. Should said premises or the building on said premises be
so far destroyed by any cause not the fault of Lessee or any person in or about
said premises with the
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consent, express or implied, of Lessee that they cannot be repaired or restored
to their former condition within sixty (60) working days or at a cost not
exceeding full insured value, Lessor or Lessee may at Lessor's or Lessee's
option either:
(a) Continue this lease in full force and effect by repairing and
restoring, at Lessor's own cost and expense, said premises to their former
condition; or
(b) Terminate this lease by giving Lessee written notice of such
termination.
Total Condemnation
Section 8.03. Should, during the term of this lease or any renewal or
extension thereof, title and possession of all of said premises be taken under
the taken of eminent domain by any public or quasi-public agency or entity, this
lease shall terminate as of 12:01 a.m. of the date actual physical possession of
said premises is taken by the agency or entity exercising the power of eminent
domain and both Lessor and Lessee shall thereafter be released from all
obligations, except those specified in Section 8.06 of this lease, under this
lease.
Termination Option for Partial Condemnation
Section 8.04. Should, during the term of this lease or any renewal or
extension thereof, title and possession of only a portion of said premises be
taken under the power of eminent domain by any public or quasi-public agency or
entity, Lessee may, at Lessee's option, terminate this lease if more than
Thirty-Five percent (35%) of the ground area or more than Thirty-Five percent
(35%) in value of said premises is taken under the power of eminent domain.
Lessee shall exercise his option by giving written notice to Lessor within
thirty (30) days after actual physical possession of the portion subject to the
eminent domain power is taken by the agency or entity exercising that power.
This lease shall terminate as of 12:01 a.m. of the date the notice is deemed
given to Lessor by the minimum rent specified in Section 2.01 of this lease
shall be reduced in the manner specified in Section 8.05 of this lease from the
date of taking to the date of termination of the lease.
Partial Condemnation Without Termination
Section 8.05. Should Lessee fail to exercise the option described in
Section 8.04 of this lease or should the portion of said premises taken under
the power of eminent domain be insufficient to give rise to the option described
in Section 8.04 of this lease, then, in that event:
(a) This lease shall terminate as to the portion of said premises taken
by eminent domain as of 12:01 a.m. of the day, herein called the "date of
taking", actual physical possession of that portion of said premises is taken by
the agency or entity exercising the power of eminent domain;
(b) The minimum rent specified in Section 2.01 together with any
adjustments specified in Section 2.02 of this lease shall, after the date of
taking, be reduced by an amount that bears the same ratio to the minimum rent
specified in Section 2.01. of this
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lease as the square footage store area of the portion of said premises taken
under the power of eminent domain bears to the total square footage ground area
of said premises as of the date of this lease.
Condemnation Award
Section 8.06. Should, during the term of this lease or any renewal or
extension thereof, title and possession of all or any portion of said premises
be taken under the power of eminent domain by any public or quasi-public agency
or entity, the portion of the compensation or damages for the taking awarded to
each of the parties to this lease, Lessor and Lessee, shall belong to and be the
sole property of the party Lessor or Lessee, to whom it is awarded. Lessee shall
be entitled to that portion of the compensation or damages awarded for the
eminent domain taking that represents (1) the reasonable value of the Lessee's
rights under this lease for the unexpired term of this lease and (2) the cost or
less sustained by Lessee because of the removal of Lessee's merchandise, trade
fixtures, equipment, and furnishings from the portion of said premises taken by
eminent domain.
Arbitration of Condemnation Award
Section 8.07. Should separate awards not be made to Lessor and Lessee
for the taking by eminent domain of all or any portion of said premises, and
should Lessor and Lessee be unable to agree on the manner the total award is to
be divided between them pursuant to Section 8.06 of this lease, the proper
division of the award between Lessor and Lessee shall be settled by arbitration.
Each party shall appoint an arbitrator and the two arbitrators so appointed
shall, within a month after both have been appointed, select a third arbitrator.
The decision of any two of the three arbitrators in writing shall be binding on
both Lessor and Lessee. Should no two arbitrators be able to agree within one
month after appointment of the third arbitrator, the report of the arbitrator
most favorable to Lessor and the report of the arbitrator most favorable to
Lessee shall both be disregarded and the report of the remaining arbitrator
shall be binding on both Lessor and Lessee. Should either Lessor or Lessee fail
to appoint an arbitrator within twenty (20) days after receiving notice from the
other to so do, the arbitrator selected by the other party shall act for both
and his decision in writing shall be binding on both Lessor and Lessee.
ARTICLE 9. DEFAULT, ASSIGNMENT, AND TERMINATION
Subleasing or Assigning as Breach
Section 9.01. Lessee shall not encumber, assign, or otherwise transfer
this lease, any right or interest in this lease, or any right or interest in
said premises or any of the improvements that may now or hereafter be
constructed or installed on said premises without the express written consent of
Lessor first had and obtained; provided that Lessor shall not unreasonably
withhold much express written consent.
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Default by Lessee
Section 9.02. Should Lessee default in the performance of any of the
covenants, conditions, or agreements contained in this lease, Lessee shall have
breached the lease and Lessor may re-enter and retain possession of said
premises in the manner provided by the laws of unlawful detainer of the State of
California then in effect.
Waiver of Breach
Section 9.03. The waiver of either party of any breach by the other of
any of the provisions of this lease shall not constitute a continuing waiver or
a waiver of any subsequent breach by either party, either of the same or another
provision of this lease.
ARTICLE 10. SALE OF LEASED PREMISES
Right of First Refusal to Purchase Leased Premises
Section 10.01. Should Lessor, during the lease term (or any extension
thereof) elect to sell all or any portion of the leased premises, Lessee shall
have the right of first refusal to meet any bona fide offer of sale on the same
terms and conditions of such offer, and on failure to meet such bona fide offer
within thirty (30) days after written notice thereof from Lessor, Lessor shall
be free to sell the premises or portion thereof to such third person in
accordance with the terms and conditions of his offer.
This right of first refusal by Lessee shall not extend to a sale of the
leased premises between XXXXXX AND XXXX XXXXXXXX and XXXXXX XXXXXXXX.
ARTICLE 11. MISCELLANEOUS
Force Majeure--Unavoidable Delays
Section 11.01. Should the performance of any act required by this lease
be performed by either Lessor or Lessee be prevented or delayed by reason of an
act of God, strike, lockout, labor troubles, inability to secure materials,
restrictive governmental laws or regulations, or any other cause, except
financial inability, not the fault of the party required to perform the act, the
time for performance of the act will be extended for a period equivalent to the
period of delay and performance of the act during the period of delay will be
excused; provided, however, that nothing contained in this section shall excuse
the prompt payment of rent by Lessee as required by this lease or the
performance of any act rendered difficult solely because of the financial
condition of the party, Lessor or Lessee, required to perform the act.
Notices
Section 11.02. Except as otherwise provided by law, any and all notices
or other communications acquired or permitted by this lease or by law to be
served on or given to either party hereto by the other party hereto shall be in
writing and shall be deemed duly served and given when personally delivered to
the party to whom they are directed, or in lieu
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of such personal service when deposited in the United States mail, first-class
postage prepaid, addressed to Lessee at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000 or to Lessor at 00 Xxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000.
Either party, Lessee or Lessor, may change his address for the purpose of this
section by giving written notice of such change to the other party in the manner
provided in this section.
Binding on Heirs and Successors
Section 11.03. This lease shall be binding on and shall inure to the
benefit of the heirs, executors, administrators, successors, and assigns of the
parties hereto, Lessor and Lessee, but nothing in this section contained shall
be construed as a consent by Lessor to any assignment of this lease or any
interest therein by Lessee except as provided in Article 9 of this lease.
Partial Invalidity
Section 11.04. Should any provision of this lease be held by a court of
competent jurisdiction to be either invalid, void, or unenforceable, the
remaining provisions of this lease shall remain in full force and effect
unimpaired by the holding.
Sole and Only Agreement
Section 11.05. This instrument constitutes the sole and only agreement
between Lessor and Lessee respecting said premises, the leasing of said premises
to Lessee, or the lease term herein specified, and correctly sets forth the
obligations of Lessor and Lessee to each other as of its date. Any agreement or
representations respecting said premises or their leasing by Lessor to Lessee
not expressly set forth in this instrument are null and void.
Attorney's Fees
Section 11.06. Should any litigation be commenced between the parties
to this lease concerning said premises, this lease, or the rights and duties or
either in relation thereto, the party prevailing in such litigation shall be
entitled in addition to such other relief as may be granted, to a reasonable sum
as and for his attorney's fees in the litigation which shall be determined by
the court in such litigation or in a separate action brought for that purpose.
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Time of Essence
Section 11.07. Time is expressly declared to be the essence of this
lease.
Executed on __________________, 1996 at Sebastopol, Sonoma County,
California.
LESSEE LESSOR
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XXX XXXXX XXXX XXXXXXXX
X. X. XXXXX COMPANY
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XXXXXX XXXXXXXX
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