Sample Business Contracts

California-San Carlos-1681-1687 Industrial Road Occupancy Agreement - Gailerd Smith, Eileen Ruder and Short Run Labels Inc.

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                              OCCUPANCY AGREEMENT

     OCCUPANCY AGREEMENT ("Agreement") made as of the 11th day of August, 
1993, between GAILERD SMITH and EILEEN RUDER with an address of 27240 
Altamont Road, Los Altos Hills, California 94002 (hereinafter called 
"Landlord") and Short Run Labels, Inc., a Delaware corporation with an 
address of 1681 Industrial Road, San Carlos, CA 94070 (hereinafter called 


                                   ARTICLE I

     SECTION 1.1.   THE PREMISES.   The Premises consist of the Building and 
Property commonly known and numbered 1681-1687 Industrial Road, San Carlos, 

     SECTION 1.2.   OCCUPANCY OF THE PREMISES.  Landlord hereby grants to 
Tenant the exclusive right to occupy the Premises, subject to the terms and 
provisions of this Agreement.

                                   ARTICLE II

     SECTION 2.1.  TERM.  TO HAVE AND TO HOLD on a month to month basis 
commencing as of the date hereof until terminated by Tenant. At time of 
termination, Tenant shall either vacate the Premises or shall execute the 
Lease contemplated by the Stock for Cash Purchase Agreement dated July 30, 
1993 (the "Purchase Agreement") by and among the Landlord, Far West 
Marketing, Inc. and Label Art, Inc. Notwithstanding the above, this Agreement 
and Tenant's occupancy hereunder shall terminate no later than sixty (60) 
days after Tenant's acceptance of the Phase II Study contemplated by Section 
8.5 of the Purchase Agreement or, in the event Tenant does not accept such 
Phase II Study, no later than one hundred and fifty (150) days after Tenant 
declines to so accept such Phase II Study. This Agreement may be terminated 
effective the last day of any calendar month upon written notice given by 
Tenant to Landlord at the address set forth above (or at such other address 
as the Landlord may designate in writing) before the first day of the 
calendar month at the end of which the Tenant desires to terminate this 

                                   ARTICLE III

     SECTION 3.1.  MINIMUM RENT.  YIELDING AND PAYING therefor Minimum Rent 
at the rate Ten Thousand Nine Hundred Seventy-Three and 70/100 Dollars 
($10,973.70) per month payable in advance on the first day of each monthly 

     SECTION 3.2.  ADDITIONAL RENT.  Tenant shall pay as Additional Rent an 
amount equal to the cost of electricity and other utilities consumed at the 
Premises as well as an amount each month equal to one-twelfth of the real 
estate taxes and cost of fire and casualty insurance attributable to the 
Premises. The term "Additional Rent" shall mean all amounts, other than 
Minimum Rent, due from Tenant to Landlord.


                                   ARTICLE IV

     SECTION 4.1.  USE.  The Premises shall be used and occupied by Tenant 
for any lawful purpose.

                                   ARTICLE V

     SECTION 5.1.  NO WASTE.  Tenant shall not overload, damage or deface the 
Premises nor shall it suffer or permit the same to be done, nor shall it 
commit any waste.

     SECTION 5.2.  MAINTENANCE; REPAIRS; AND YIELD-UP. Tenant agrees that it 
will keep the Premises in the same repair and condition as the Premises are 
now in, reasonable wear and tear and fire or other casualty excluded. 
Landlord shall be responsible for making any structural or other repairs that 
require replacement of any component or system.

     SECTION 5.3.  WAIVER OF SUBROGATION.  Landlord hereby releases Tenant 
from any and all liability for any loss or damage caused by fire, earthquake, 
any of the extended coverage casualties, or other casualties, even if such 
fire or other casualty shall be brought about by the fault or negligence of 
the Tenant or its agents. Landlord agrees that its respective fire, extended 
coverage, and other insurance policies will include a clause acknowledging 
this release and a waiver of any right of subrogation.

     SECTION 5.4.  NOTICES.  All notices shall be in writing and be given by 
certified by mail, return receipt requested, postage prepaid, addressed as 
set forth in the preamble hereof.

     SECTION 5.5. ENVIRONMENTAL.  Landlord shall be responsible for the 
entire cost of, and shall hold Tenant harmless and indemnify Tenant from, any 
remediation of any environmental problem affecting the Premises no matter 
when caused or discovered unless such environmental problem is proved to be 
the result of Tenant's acts occurring from and after the date of this 

     This Agreement sets forth the entire agreement between the parties 
hereto and cannot be modified or amended, except in writing duly executed by 
the respective parties.

     TENANT:                           SHORT RUN LABELS, INC.

                                       /s/ Gailerd Smith, PRESIDENT
                                       By: THOMAS J. COBURY, Chairman
                                        hereunto duly authorized


     LANDLORD:                                       /S/ Gailerd Smith
                                                         Gailerd Smith

                                                     /S/ Eileen Ruder
                                                         Eileen Ruder