EXHIBIT
10.16


LEASE


THIS LEASE, made and entered into this 8th day of
June, 2006 by and between Le Baron Investments and Southern Textile Recycling,
Inc. hereinafter respectively referred to as Landlord and Tenant, without
regard to number or gender.


WITNESSETH


1.             USE.  The landlord hereby leases to Tenant and
Tenant hereby hires from Landlord, for purposes of conducting thereon wholesale
and retail sales of general merchandise those certain premises with
appurtenances described as hereinafter set forth.


2.             PREMISES.  The premises leased to Tenant, together with
appurtenances, are hereinafter referred to as the “demised premises” 1850-1900
East Orangethorpe Avenue and are situated in the City of Fullerton, County of
Orange, State of California.  The demised
premises shall be approximately 68,000 square feet.


3.             TERMS.  The term of this lease shall be for a period
of five (5) years.  The term of this
lease, and a Tenant’s obligation to pay rent, shall commence on July 11, 2006.


4.             RENTAL.


A.            Guaranteed
Minimum Monthly Rental.  Tenant shall pay
to the Landlord during the term of this lease as minimum monthly rental for the
demised premises the sum of **See Below ($                 )
Dollars per month, which sum shall be paid in advance on the first day of each
calendar month.  All rental to be paid by
Tenant to Landlord shall be in lawful money of the United States of America and
shall be paid without deduction or offset, prior notice or demand at the
address designated in Article 30.  Any
rent payment not paid within ten (10) days of its due date shall be subject to
a ten (10) percent late charge. 








	
  **Year 1:

  	
   

  	
  Base rent of $39,698.40, plus R.E. Tax/CAM charges
  of $5,861.60 = $45,560.00 mo.

  
	
   

  	
   

  	
   

  
	
  Years 2 through 5:

  	
   

  	
  Base rent increased each July by CPI adjustment (not
  less than 3%, nor greater than 6%), plus R.E. Tax/CAM charges

  






 


5.             REAL ESTATE TAXES
AND RENTAL TAX.  In addition to all
rentals herein reserved, Tenant shall pay to Landlord annual real estate taxes
and assessments levied upon the demised premises together with a prorata share
of the parking and common area of the Shopping center.  Such amount shall be payable within ten (10)
days after the receipt of a semi-annual statement to be sent by Landlord to
Tenant setting forth the amount of such tax based upon the actual tax bill
received by Landlord; or Landlord at its option shall have the right to
estimate the amount of taxes next due and to collect and impound them from
Tenant on a monthly or quarterly basis the amount of Tenant’s estimated tax
obligation.  Within thirty (30) days
following receipt of the actual tax bill, Landlord shall provide to Tenant a
reconciliation of Tenant’s impound account.










 



In the event the demised premises together with a prorata share of the
parking lot and common area are not separately assessed, the applicable taxes
and assessments shall be determined by the ratio that the floor area of the
demised premises, including mezzanine, if any, bears to the total floor area,
including mezzanines, of the building or buildings which included the demised
premises and for which a separate assessment is made.  In the event such separate assessment does
not reflect a pro rata share of the parking and common area based upon the
ratio of building to parking and common area shown on the attached exhibit A an
appropriate adjustment shall be made.


Any such tax for the year in which this lease commences or ends shall
be apportioned and adjusted.  With
respect to any assessment which may be levied against or upon the demised
premises and which, under the laws then in force, may be evidenced by
improvement or other bonds, payable in annual installments, only the annual
payments on said assessment shall be included in computing Tenant’s obligation
for taxes and assessments.


The term “real estate taxes” as used herein shall be deemed to mean all
taxes imposed upon the real property and permanent improvements constituting
the demised premises, and all assessments levied against said premises, but
shall not include personal income taxes, personal property taxes, inheritance
taxes, or franchise taxes levied against the Landlord, but not directly against
said property, even though such taxes shall become a lien against said
property.


Tenant shall pay to Landlord any and all excise, privilege and other
taxes, other than net income and estate taxes levied or assessed by any
federal, state or local authority upon the rent received by Landlord hereunder,
and Tenant shall bear any business tax imposed upon Landlord by any
governmental authority which is based or measured in whole or in part by
amounts charged or received by Landlord from Tenant under this lease.


6.             PERSONAL PROPERTY
TAX.  During the term hereof Tenant shall
pay prior to delinquency all taxes assessed against and levied upon fixtures,
furnishings, equivalent and all shall cause said fixtures, furnishings,
equivalent and other personal property to be assessed and billed separately
from the real property of Landlord.  In
the event any or all of the Tenant’s fixtures, furnishings, equipment and other
personal property shall be assessed and taxed with the Landlord’s real
property, the Tenant shall pay to Landlord its share of such taxes within ten
(10) days after delivery to Tenant by Landlord of a statement in writing
setting forth the amount of such taxes applicable to the Tenant’s property.


7.             PARKING AND COMMON
FACILITIES. Landlord covenants that the common and parking areas of the
shopping center of which the demised premises are a part shall be available for
the non-exclusive use of Tenant during the full term of this lease or any
extension of the term hereof, provided that the condemnation or any other
taking by any public authority, or sale in lieu of condemnation, or any or all
of such common and parking areas shall not constitute a violation of this
covenant.  Landlord reserves the right to
change the entrances, exits, traffic lanes and the boundaries and locations of
such parking area or areas.  This lease
shall be subordinate to any agreement existing as of the date of this lease or
subsequently placed upon the real property of which the demised premises are a
part, which agreement provides for reciprocal easements and restrictions
pertaining to the common and parking areas, and in the event of conflict
between the provisions of such agreement and this lease, the provisions of said



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agreement shall prevail.  Provided, however, nothing therein shall
cause the Tenant to pay a greater share of the common area maintenance cost
than herein provided, and shall further that there shall at all times be
maintained common and parking areas of not less than two (2) square feet of
common and parking area for each square foot of ground floor building area
within the shopping center.


A.            Prior to the date of
Tenant’s occupation of the demised premises, Landlord shall cause said common
and parking area or areas to be graded, blacktopped, lighted and appropriately
marked and landscaped at no expense to Tenant, and shall cause the same to be
maintained in good condition and repair during the entire term hereof.


B.            The Landlord shall
keep or cause to be kept said automobile parking and common areas in a neat,
clean and orderly condition, property lighted and landscaped, and shall repair
any damage to the facilities thereof, but all expenses in connection with said
automobile parking and common areas shall be charged and prorated in the manner
hereinafter set forth.  It is understood
and agreed that the phrase “expenses in connection with said automobile parking
and common areas” as used herein shall be construed to include, but not limited
to, all sums expended by Landlord in connection with said automobile parking
and common areas for all general maintenance and repairs, resurfacing,
painting, restriping, cleaning, sweeping and janitorial services; planting and
landscaping; lighting and other utilities; directional signs and other markers
and bumpers; personnel to implement such services and to police the automobile
parking and common areas; required fees or charges levied pursuant to any
governmental requirements; and a fee equal to ten (10%) percent of said costs
to Landlord for Landlord’s supervision of said automobile parking and common
areas.


In addition to monthly rental, Tenant agrees to pay to Landlord, on a
monthly basis, Tenant’s pro rata share of automobile parking and common area
expenses.  Tenant’s prorata share of the
total expenses shall be that portion of all such expenses which is equal to the
proportion thereof which the number of square feet of gross floor area in the
demised premises bears to the total number of square feet of gross floor area
of the building.  There shall be
appropriate adjustments of Tenant’s share of the automobile parking and common
area expenses as of the commencement and expiration of the term of this
lease.  The term “gross floor area” as
used herein shall be deemed to mean the ground floor in either the demised
premises or any other buildings in the shopping center, with measurements to be
from outside of exterior walls and from the center of interior separation
partitions.


C.            Tenant, for the use
and benefit of Tenant, its agents, employees, customers, licensees and
subtenants, shall have the non-exclusive right in common with Landlord, and
other present and future owners, tenants and their agents, employees,
customers, licensees and subtenants, to use said common and parking areas
during the entire term of this lease, or any extension thereof, for ingress and
egress, roadway, sidewall, and automobile parking, provided however Tenant and
Tenant’s employees shall park their automobiles in those areas designated for
employee parking, or at Landlord’s written request shall park their automobiles
outside of the shopping center.



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D.            The Tenant, in the
use of said common and parking areas, agrees to comply with such reasonable
rules and regulations as the Landlord may adapt from time to time for the
orderly and proper operation of said common areas.


8.             USES
PROHIBITED.  Tenant shall not use, or
permit said premises, or any part thereof, to be used for any purpose or
purposes other than the purpose or purposes for which said premises are hereby
leased; and no use shall be made or permitted to be made of said premises, nor
acts done, which will increase the existing rate of insurance upon the building
in which said premises may be located (once said rate is established), or cause
a cancellation of any insurance policy covering said building or any part
thereof, nor shall Tenant sell or permit to be kept, used or sold in or about
said premises any article which may be prohibited by standard form of fire
insurance policies.  Tenant shall, at his
sole cost, comply with any and all requirements, pertaining to the use of said
premises, of any insurance organization or company necessary for the maintenance
of reasonable fire and public liability insurance, covering said building and
appurtenances.  In the event Tenant’s use
of the premises, as recited in Article 1 hereof, results in a rate increase for
the building of which the demised premises are a part, Tenant shall pay
annually on the anniversary date of this lease, as additional rent, a sum equal
to that of the additional premium occasioned by said rate increase.


9.             ALTERATIONS AND
FIXTURES.  Tenant shall not make, or
suffer to be made, any alteration of the demised premises, or any part thereof,
without the prior written consent of Landlord, and any additions to, or
alterations of, said premises, except movable furniture and trade fixtures,
shall become at once a part of the realty and belong to Landlord.  Any such alterations shall be in conformance
with the requirements of all municipal, state and federal authorities.


Tenant agrees to promptly fixturize the store in a manner comparable to
a store of similar nature.


10.           MAINTENANCE AND REPAIR.  Tenant shall, subject to Landlord’s
obligations hereinafter provided, at all times during the term hereof, and at
Tenant’s sole cost and expense, keep, maintain and repair the building and
other improvements upon the demised premises in good and sanitary order and
condition (except as hereinafter provided) including without limitation, the
maintenance and repair of any store front, doors, window casements, glazing,
heating and air conditioning system (if any), plumbing, pipes, electrical
wiring and conduits.  Tenant shall also
at its sole cost and expense be responsible for any alterations or improvements
to the demised premises necessitated as a result of the requirement of any
municipal, state or federal authority. 
Tenant hereby waives all right to make repairs at the Expense of the
landlord, and if the demised premises are located in the State of California,
Tenant hereby waives all rights provided by Section 1941 of the Civil Code of
the State of California to make said repairs. 
By entering into the demised premises, Tenant shall be deemed to have
accepted the demised premises as being in good and sanitary order, condition
and repair, and Tenant agrees on the last day of said term or sooner
termination of this lease to surrender the demised premises with appurtenances,
in the same condition as when received, reasonable use and wear thereof and
damage by fire, act of God or by the elements excepted.  Tenant shall periodically sweep and clean the
sidewalks adjacent to the demised premises, as needed.



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Landlord shall, subject to Tenant’s reimbursement as herein provided,
maintain in good repair the exterior walls, roof and sidewalks.  Tenant agrees that it will not, nor will
authorize any person to, go onto the roof of the building of which the demised
premises are a part without the prior written consent of Landlord.  Said consent will be given only upon Landlord’s
satisfaction that any repairs necessitated as a result of Tenant’s action will
be made by Tenant at Tenant’s expense and will be made in such a manner so as
not to invalidate any guarantee relating to said roof.  Landlord shall not be required to make any
repairs to the exterior walls, roof and sidewalls unless and until Tenant has
notified Landlord in writing of the need for such repairs and Landlord shall
have had a reasonable period of time thereafter to commence and complete said
repairs.  Tenant shall reimburse Landlord
for its prorata share of the cost of said repairs and maintenance incurred by
Landlord, said prorata share to be determined according to the area of the
demised premises as it relates to the total area of the building which contains
the demised premises.


11.           COMPLIANCE WITH
LAWS.  Tenant shall, at its sole cost and
expense, comply with all of the requirements of all municipal, state and
federal authorities now in force or which may hereafter be in force pertaining
to the use of said premises, and shall faithfully observe in said use all
municipal ordinances and state and federal statutes now in force or which shall
hereinafter be in force.  The judgment of
any court of competent jurisdiction, or the admission of Tenant in any action
or proceeding against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such order or statute in said use, shall be conclusive
of that fact as between the Landlord and Tenant.


Tenant shall not commit, or suffer to be committed, any waste upon the
demised premises, or any nuisance or other act of thing which may disturb the
quiet enjoyment of any other Tenant in the building in which the demised
premises may be located.


12.           INSURANCE.  Landlord shall maintain fire and extended
coverage insurance throughout the term of this lease in an amount equal to at
least ninety (90%) percent of the replacement value of the building which
includes the demised premises, together with such other insurance as may be
required by Landlord’s lender or by any governmental agency.  Tenant hereby waives any right of recovery
from Landlord, its officers and employees, and Landlord hereby waives any right
of recovery from Tenant, its officers or employees, for any loss or damage
(including consequential loss) resulting from any of the perils insured against
in the standard form fire insurance policy with extended coverage endorsement.  Tenant agrees to pay Landlord its prorata
share of the cost of said insurance to be determined by the relationship that
the gross floor area of the demised premises bears to the total gross floor
area of the building or buildings for which such policy relates.


Tenant, if involved in food preparation and sales as a cafe,
restaurant, or similar use, and/or food takeout service, shall install at
Tenant’s expense any fire protective systems in grill, deep fry, and cooking
areas which are required by city, county, state fire ordinances, and such
system when installed shall qualify for full fire protective credits allowed by
the fire insurance rating and regulatory body in whose jurisdiction the
premises are located.


13.           INDEMNIFICATION OF
LANDLORD - LIABILITY INSURANCE BY TENANTS. 
Tenant, as a material part of the consideration to be rendered to
Landlord under this



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lease, hereby waives all claims against Landlord for
damage to goods, wares and merchandise, in, upon or about said premises and for
injuries to persons in or about said premises, from any cause arising at any
time; and Tenant will hold Landlord exempt and harmless from any damage or
injury to any person, or the goods, wares, and merchandise of any person,
arising from the use of the premises by Tenant, or from the failure of Tenant
to keep the premises in good condition and repair, as herein provided.


During the entire term of this lease, the Tenant shall, at the Tenant’s
sole cost and expense, but for the mutual benefit of Landlord and Tenant,
maintain general public liability insurance against claims for personal injury,
death or property damage occurring in, upon or about the demised premises and
on any sidewalks directly adjacent to the demised premises.  The limitation of liability of such insurance
shall be not less than One Million and 00/100 ($1,000,000.00) Dollars in
respect to injury or death on one person and to the limit of not less than One
Million and 00/100 ($1,000,000.00) Dollars in respect to anyone accident and to
the limit of not less than Five Hundred Thousand and 00/100 ($500,000.00)
Dollars in respect to property damage or policy in the amount of One Million
and 00/100 ($1,000,000.00) Dollars combined single liability limit.  All such policies of insurance shall be
issued in the name of Tenant and Landlord and for the mutual and joint benefit
and protection of the parties, and such policies of insurance or copies thereof
shall be delivered to the Landlord.


14.           FREE FROM
LIENS.  Tenant shall keep the demised
premises and the property in which the demised premises are situated free from
any liens arising out of any work performed, material furnished, or obligation
incurred by Tenant.


15.           ABANDONMENT.  Tenant shall not vacate or abandon the
demised premises at any time during the term of this lease; and if Tenant shall
abandon, vacate of surrender the demised premises or be dispossessed by process
of law, or otherwise, any personal property belonging to the Tenant and left on
the demised premises shall be deemed to be abandoned, at the option of Landlord,
except such property as may be mortgaged to Landlord.


16.           SIGNS AND
AUCTIONS.  Tenant shall not place or
permit to be placed any sign upon the exterior or in the windows of the demised
premises without Landlord’s prior written consent, nor shall Tenant change the
color or exterior appearance of the demised premises without Landlord’s prior
written consent.  Landlord will provide
to Tenant an approved sign criteria drawing, and Tenant shall thereafter at its
sole cost and expense prepare sign construction drawings, in accordance with
said criteria drawings, which shall be submitted to Landlord for Landlord’s
written approval.  Tenant agrees to
install a sign in accordance with approved sign construction drawings within
thirty (30) days after the commencement of the term of this lease.


Tenant shall not without Landlord’s prior written consent display or
sell merchandise outside the defined exterior walls and permanent doorways of
the demised premises.  Tenant shall not
conduct or permit to be conducted any sale by auction in, upon or from the
demised premises, whether said auction be voluntary, involuntary, pursuant to
any assignment for the payment of creditors, or pursuant to any bankruptcy or
other solvency proceeding.


17.           UTILITIES.  Tenant shall pay before delinquency all
charges for water, gas, heat, electricity, power, telephone service, and all
other services of utilities used in, upon, or about the



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demised premises by Tenant or any of its subtenants,
licensees, or concessionaires during the term of this lease.  If any utility is not separately metered,
Tenant agrees to reimburse Landlord for the cost of said service.


18.           ENTRY AND
INSPECTION.  Tenant shall permit landlord
and his agents to enter into and upon the demised premises at all reasonable
times for the purpose of inspecting the same or for the purpose of maintaining
the building in which said premises are situated, or for the purpose of making
repairs, alterations or additions to any other portion of said building,
including the erection and maintenance of such scaffolding, canopy, fences and
props as may be required, or for the purpose of posting notices of
non-liability for alterations, additions or repairs, or for the purpose of
placing upon the property in which the premises are located any usual or
ordinary “For Sale” signs.  Landlord
shall be permitted to do any of the above without any rebate of rent and
without any liability to Tenant for any loss of occupation or quiet enjoyment
of the premises thereby occasioned. 
Tenant shall permit Landlord, at any time within thirty (30) days prior
to the expiration of this lease, to place upon said premises any usual or
ordinary “For Lease” signs, and during such thirty (30) day period Landlord or
his agents may, during normal business hours, enter upon said premises and
exhibit same to prospective Tenants.


19.           DAMAGE AND
DESTRUCTION OF PREMISES.  In the event of
(a) partial or total destruction of said building containing same during said
term which requires repairs to said building, or (b) said building being
declared unsafe or unfit for occupancy by any authorized public authority for
any reason other than Tenant’s act, use or occupation, which declaration
requires repairs to said building, Landlord shall forthwith make said repairs
provided Tenant gives to landlord thirty (30) days written notice of the
necessity therefor.  No such partial
destruction (including any destruction necessary in order to make repairs
required by any declaration made by any public authority) shall in any wise annul
or void this lease except that Tenant shall be entitled to a proportionate
reduction of minimum guaranteed rental while such repairs are being made, such
proportionate reduction to be based upon the extent to which the making of such
repairs shall interfere with the business carried on by Tenant in said
premises.  However, if during the last
four (4) years of the term of this lease the building is damaged as a result of
fire or any other insured casualty to an extent in excess of twenty-five (25%)
percent of its then replacement cost, (excluding foundation(s)), Landlord may
within thirty (30) days following the date such damage occurs terminate this
lease by written notice to Tenant.  If
Landlord, however, elects to make said repairs, and provided Landlord uses due
diligence in making said repairs to building, this lease shall continue in full
force and effect, and the minimum guaranteed rental shall be proportionately
reduced as hereinabove provided.  If
Landlord elects to terminate this lease, all rentals shall be prorated between
Landlord and Tenant as of the date of such destruction.


The foregoing to the contrary notwithstanding, if the building is
damaged or destroyed at any time during the term hereof to an extent of more
than twenty-five (25%) percent of its then replacement cost (excluding
foundation(s)) as a result of a casualty not insured against, Landlord may
within thirty (30) days following the date of such destruction terminate this
lease upon written notice to tenant.  If
Landlord does not elect to so terminate because of said uninsured casualty,
Landlord shall promptly rebuild and repair said building and Tenant’s rental
obligation shall be proportionately reduced as hereinabove provided.



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In respect to any partial or total destruction (including any
destruction necessary in order to make repairs required by any such declaration
of any authorized public authority) which Landlord is obligated to repair or
may elect to repair under the terms of this Article 20, Tenant waives any
statutory right it may have to cancel this lease as a result of such
destruction.


20.           ASSIGNMENT AND
SUBLETTING.  Tenant shall not assign this
lease, or any interest therein, and shall not sublet the demised premises or
any part thereof, or any right or privilege appurtenant thereto, or permit any
other person (the agents and servants of Tenant excepted) to occupy or use the
demised premises, or any portion thereof, without first obtaining the written
consent of Landlord, which consent shall not be unreasonably withheld.  Consent by Landlord to one assignment,
subletting, occupation or use by another person shall not be deemed to be a
consent to any subsequent assignment, subletting, occupation or use by another
person.  Consent to an assignment shall
not release the original named Tenant from liability for the continued
performance of the terms and provisions on the part of Tenant to be kept and
performed, unless Landlord specifically releases the original named Tenant from
said liability.  Any assignment or
subletting without the prior written consent of Landlord shall be void, and
shall, at the option of Landlord terminate this lease.  Neither this lease nor any interest therein
shall be assignable, as to the interest of Tenant, by operation of law, without
the prior written consent of Landlord. 
Furthermore, any increase in rent over Tenant’s current rent received by
Tenant related to such sublease shall be split equally between Landlord and
Tenant.


21.           DEFAULT.  If Tenant fails to make any payment required
by the provisions of this lease, when due, or fails within thirty (30) days
after written notice thereof to correct any breach or default of the other
covenants, terms or conditions of this lease, or if Tenant breaches this lease
and abandons the property before the end of the term, Landlord shall have the
right at any time thereafter to elect to terminate said lease and Tenant’s
right to possession thereunder.  Upon
such termination, Landlord shall have the right to recover against Tenant:


A.            The worth at the
time of award of the unpaid rent which has been earned at the time of
termination;


B.            The worth at the
time of award of the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that the Tenant proves could have been reasonably avoided;


C.            The worth at the
time of award of the amount by which the unpaid rent for the balance of the
term after the time of award exceeds the amount of such rental loss that the
Tenant proves could be reasonably avoided; and


D.            Any other amount
necessary to compensate the Landlord for all the detriment proximately caused
by Tenant’s failure to perform its obligations under the lease or which in the
ordinary course of things would be likely to result therefrom.


The “worth at the time of award” of the amounts referred to in
subparagraphs A and B above shall be computed by allowing interest at ten (10%)
percent per annum.  The Worth at the time
of award of the amount referred to in subparagraph C shall be computed by
discounting



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such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one (1%) percent.


Such efforts as Landlord may make to mitigate the damages caused by
Tenant’s breach of this lease shall not constitute a waiver of Landlord’s right
to recover damages against Tenant hereunder, nor shall anything herein
contained affect Landlord’s right to indemnification against Tenant for any
liability arising prior to the termination of this lease for personal injuries
or property damage, and Tenant hereby agrees to indemnify and hold Landlord
harmless from any such injuries and damages, including all attorney’s fees and
costs incurred by Landlord in defending any action brought against Landlord for
any recovery thereof, and in enforcing the terms and Provisions of this
indemnification against Tenant.


Notwithstanding any of the foregoing, the breach of this lease by
Tenant, or an abandonment of the demised premises by Tenant, shall not
constitute a termination of this lease, or of Tenant’s right of possession
hereunder, unless and until Landlord elects to do so, and until such time
Landlord shall have the right to enforce all of its rights and remedies under
this lease, including the right to recover rent, and all other payments to be
made by Tenant hereunder, as it becomes due; provided, however, that until such
time as Landlord elects to terminate this lease, and Tenant’s right of
possession hereunder, Tenant shall have the right to sublet the demised premises
or to assign its interests in this lease, or both, subject only to the written
consent of Landlord, which consent shall not be unreasonably withheld.


As security for the performance by Tenant of all of its duties and
obligations hereunder, Tenant does hereby assign to Landlord the right, power
and authority, during the continuance of this lease, to collect the rents,
issues and profits of the demised premises, reserving unto Tenant the right,
prior to any breach or default by it hereunder, to collect and retain said
rents, issues and profits as they become due and payable.  Upon any such breach or default, Landlord
shall have the right at any time thereafter, without notice except as provided
for above, either in person, by agent or by a receiver to be appointed by a
court, enter and take possession of said demised premises and collect such
rents, issues and profits, including those past due and unpaid, and apply the
same, less costs and expenses of operation and collection, including reasonable
attorney’s fees, upon any indebtedness secured hereby, and in such order as
Landlord may determine.


The parties hereto agree that acts of maintenance or preservation or
efforts to release the premises, or the appointment of a receiver upon the
initiative of the Landlord to protect its interests under this lease shall not
constitute a termination of Tenant’s right of possession for the purposes of
this paragraph unless accompanied by a written notice from Landlord to Tenant
of Landlord’s election to so terminate.


22.           INSOLVENCY OF
TENANT.  Tenant agrees that in the event
all or substantially all of its assets be placed in the hands of a receiver or
trustee, and in the event such receivership or trusteeship continue for a
period of ten (10) days, or should Tenant make an assignment for the benefit of
creditors, or be adjudicated a bankrupt, or should Tenant institute any
proceedings under any state or federal bankruptcy act wherein Tenant seeks to
be adjudicated a bankrupt, or seeks to be discharged of its debts, or should
any voluntary proceeding be filed against such Tenant under such bankruptcy
laws and Tenant consents thereto or acquiesces therein by



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pleading or default, then this lease or any interest
in and to the demised premises shall not become an asset in any such
proceedings and, in any of such events and in addition to any and all rights or
remedies of Landlord hereunder or as provided by law, it shall be lawful for
Landlord at his option to declare the term hereof ended and to re-enter the
demised premises and take possession thereof and remove all persons therefrom
and Tenant shall have no further claim, therein or hereunder.


23.           SURRENDER OF
LEASE.  The voluntary or other surrender
of this lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and shall, at the option of Landlord, terminate all or any existing subleases
or subtenancies, or may, at the option of Landlord, operate as an assignment to
him of any or all of such subleases or subtenancies.


24.           SALE OF PREMISES BY
LANDLORD.  In the event of any sale of
the demised premises by Landlord, Landlord shall be and is hereby entirely
freed and relieved of all liability under any and all of its covenants and
obligations contained in or derived from this lease arising out of any act, occurrence
or omission occurring after the consummation of such sale; and the purchaser,
at such sale or any subsequent sale of the demised premises, shall be deemed
without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the
Landlord under this lease.


25.           HOURS OF
BUSINESS.  Subject to the provisions of
Article 19 hereof, Tenant shall continuously during the entire term hereof
conduct and carry on Tenant’s business in the demised premises and shall keep
the demised premises open for business and cause Tenant’s business to be
conducted therein during the usual business hours of each and every business day
as it is customary for businesses of like character in the city in which the
demised premises are located to be open for business; provided, however, that
this provision shall not apply if the demised premises should be closed and the
business of Tenant temporarily discontinued therein on account of strikes,
lockouts, or similar causes beyond the reasonable control of Tenant, or closed
for not more than three (3) days out of respect to the memory of any deceased
officer or employee of Tenant, or the relative of any such officer or
employee.  Tenant shall keep the demised
premises adequately stocked with merchandise, and with sufficient sales
personnel to care for the patronage, and to conduct said business in accordance
with sound business practices.


26.           ATTORNEY’S
FEES.  If Landlord is involuntarily made
a party defendant to any litigation concerning this lease or the demised
premises by reason of any act or omission of Tenant, then, Tenant shall hold
harmless Landlord from all liabilities by reason thereof, including reasonable
attorney’s fees and all costs incurred by Landlord in such litigation.


If either landlord or Tenant shall commence any legal proceedings
against the other with respect to any of the terms and conditions of this
lease, the non-prevailing party therein shall pay to the other all expenses of
said litigation, including a reasonable attorneys’ fees as may be fixed by the
court having jurisdiction over the matter. 
The parties hereto agree that the State of California is the proper jurisdiction
for litigation of any matters relating to this lease, and service mailed to the
address of tenants set forth herein shall be adequate service for such
litigation.



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27.           SECURITY
DEPOSIT.  Tenant contemporaneously with
the execution of this lease, has deposited with landlord the sum of **Thirty
Thousand and 00/100 ($30.000.00) Dollars, receipt of which is hereby
acknowledged by Landlord, said deposit being given to secure the faithful
performance by the Tenant of all of the terms, covenants, and conditions of
this lease by the Tenant to be kept and performed during the term hereof.  Tenant agrees that if the Tenant shall fail
to pay the rent herein reserved promptly when due, said deposit may, at the
option of the Landlord (but Landlord shall not be required to) be applied to
any rent due and unpaid, and if the Tenant violates any of the other terms,
covenants, and conditions of this lease, said deposit shall be applied to any
damages suffered by Landlord as a result of Tenant’s default to the extent of
the amount of the damages suffered.


Nothing contained in this Article 28 shall in any way diminish or be
construed as waiving any of the Landlord’s other remedies as provided in
Article 22 hereof, or by law or in equity. 
Should the entire security deposit, or any portion thereof, be
appropriated and applied by Landlord for the payment of overdue rent or other
sums due and payable to Landlord by Tenant hereunder, then Tenant shall, on the
written demand of Landlord, forthwith remit to landlord a sufficient amount in
cash to restore said security deposit to its original amount, and Tenant’s
failure to do so within fifteen (15) days after receipt of such demand, shall
constitute a breach of this lease. 
Should Tenant comply with all of the terms, covenants, and conditions of
this lease and promptly pay all of the rental herein provided for as it falls
due, and all other sums payable by Tenant to landlord hereunder, said security
deposit shall be returned in full to Tenant at the end of the term of this
lease, or upon the earlier termination of this lease pursuant to the provisions
of Article 20 hereof, except in the event the demised premises are sold as a
result of the exercise of any power of sale under any mortgage or deed of
trust, in which event this lease shall be automatically amended to delete any
reference to this Article 28, and Tenant shall be entitled to immediate
reimbursement of its security deposit from the party then holding said deposit.






**Transferred from Lease dated July 11, 2001


28.           HOLDING OVER.  Any holding over after the expiration of the
term of this lease, with the consent of landlord, shall be construed to be a
tenancy from month to month, cancelable upon thirty (30) days written notice,
and at a monthly rental, terms and conditions as agreed upon between landlord
and Tenant.


29.           NOTICES.  Wherever in this lease it shall be required
or permitted that notice and demand be given or served by either party to this
lease to or on the other, such notice or demand shall be given or served and
shall not be deemed to have been duly given or served unless in writing and
forwarded by 1st class mail, addressed as follows: 


	
  TO: Landlord

  	
   

  	
  TO: Tenant

  
	
   

  	
   

  	
   

  
	
  Le Baron Investments

  2020 E. Orangethorpe Avenue

  Fullerton, CA 92831-5327

  Telephone: (714) 680-3812

  Fax: (714) 680-3340

  	
   

  	
  Southern Textile Recycling, Inc.

  Attn: Carl C. Jones

  1850-1900 E. Orangethorpe Avenue

  Fullerton, CA 92831

  phone: (714) 738-6400

  



 



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Either party may change such address by written notice by certified
mail to the other.


30.           SUCCESSORS IN
INTEREST.  The covenants herein contained
shall, subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of all the parties hereto;
and all of the parties hereto shall be jointly and severally liable hereunder.


31.           TENANT’S
PERFORMANCE.  In the event Tenant shall
fall within any time limits which may be provided herein to complete any work
or perform any other requirements provided to be performed by Tenant prior to
the commencement of the term hereof, or in the event Tenant shall cause a delay
in the completion of any work, landlord may send Tenant written notice of said
default and if said default is not corrected within ten (10) days thereafter,
Landlord may by written notice prior to the curing of said default terminate
this lease. landlord shall be entitled to retain as liquidated damages all
deposits made hereunder and such improvements as Tenant may have annexed to the
realty that cannot be removed without damage thereto.


32.           FORCE MAJEURE.  If either party hereto shall be delayed or
prevented from the performance of any act required hereunder by reasons of acts
of God, strikes, lockouts, labor troubles, inability to procure materials,
restrictive governmental laws or regulations or other cause without fault and
beyond the control of the party obligated (financial liability excepted),
performance of such act shall be excused for the period of the delay and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay; provided, however, nothing in this
Article 33 contained shall excuse Tenant from the prompt payment of any rental
or other charge required of Tenant hereunder except as may be expressly
provided elsewhere in this lease.


33.           PARTIAL
INVALIDITY.  If any term, covenant,
condition or provision of this lease is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
provisions hereof shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereof.


34.           MARGINAL
CAPTIONS.  The various headings and
numbers herein and the grouping of the provisions of this lease into separate
articles and paragraphs are for the purpose of convenience only and shall not
be considered a part hereof.


35.           TIME.  Time is of the essence of this lease.


36.           SUBORDINATION,
ATTORNMENT.  This lease, at Landlord’s
option, shall be subordinate to the lien of any first deed of trust or first
mortgage subsequently placed upon the real property of which the demised
premises are a part, and to any and all advances made on the security thereof,
and to all renewals, modifications, consolidations, replacements and extensions
thereof; provided, however, that as to the lien of any such deed of trust or
mortgage Tenant’s right to quiet possession of the premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay the rent
and observe and perform all of the provisions of this lease, unless this lease
is otherwise terminated pursuant to its terms. 
If any mortgagee, trustee or ground lessor shall elect to have this
lease prior to the lien of its mortgage, deed of trust, or



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ground lease, and shall give written notice thereof to
Tenant, this lease shall be deemed prior to such mortgage, deed of trust or
ground lease, whether this lease is dated prior or subsequent to the date of
said mortgage, deed of trust or ground lease or the date of recording thereof.


In the event any proceedings are brought, or in the event the exercise
of the power of sale under any mortgage or deed of trust made by the landlord
covering the demised premises, Tenant shall attorn to the purchaser upon any
such foreclosure or sale and recognize such purchaser as the landlord under
this lease.


If upon any sale, assignment, or hypothecation of the demised premises
or the land thereunder by Landlord, or at any other time, an estoppel
certificate and/or financial statement shall be requested of Tenant, Tenant
agrees, within ten (10) days thereafter, to deliver such financial statement,
and to deliver such estoppel certificate (in recordable form) addressed to any
such proposed mortgagee or purchaser or to the Landlord certifying the
requested information, including among other things the dates of commencement
and termination of this lease, the amounts of security deposits, and that this
lease is in full force and effect (if such be the case) and that there are no
differences, offsets or defaults of Landlord, or noting such differences,
offsets or defaults as actually exist. 
Tenant shall be liable for any loss or liability resulting from any incorrect
information certified, and such mortgagee and purchaser shall have the right to
rely on such estoppel certificate and financial statement.  Tenant shall in the same manner acknowledge
and execute any assignment of rights to receive rents as required by any
mortgagee of Landlord.


37.           RIGHT TO
RELOCATE.  Landlord reserves the
unrestricted and unconditional right, after the commencement of the term
hereof, to relocate the demised premises to substantially comparable space
within the shopping center.  Landlord
will give Tenant written notice of its intention to relocate the demised
premises, and Tenant will complete such relocation within thirty (30) days
after receipt of such written notice.  If
the furnishings of the space to which Landlord proposes to relocate Tenant are
not substantially the same as those of the demised premises, or if the
Guaranteed Minimum Monthly Rental of the new space is not substantially the
same as the prior Guaranteed Minimum Monthly Rental, Tenant may so notify
Landlord, and if landlord fails to offer other space satisfactory to Tenant,
Tenant may terminate this Lease effective as of the thirtieth (30th) day after
Landlord’s initial notice.  Upon Tenant’s
peaceable vacation and abandonment of the demised premises pursuant to this
Section, landlord will pay to Tenant a sum equal to one monthly installment of
the Guaranteed Minimum Monthly Rental then payable under this Lease.  If Tenant does relocate within the shopping
center then effective on the date of such relocation this Lease will be amended
by deleting the description of the original demised premises and substituting
for it a description of the relocated space. 
Landlord agrees to reimburse Tenant for its actual, reasonable moving
costs to such other space within the shopping center.


38.           COST OF LIVING
ADJUSTMENT.  Upon the first anniversary
date of commencement of the term of this lease, the Guaranteed Minimum Monthly
Rental shall be changed to an amount that bears the same relationship to the
Guaranteed Minimum Monthly Rental in effect immediately preceding such
adjustment which the consumer price index for the month in which said
adjustment occurs bears to the index for the month one year(s) preceding the
month in which such adjustment occurs. 
However, in no event shall the rent be reduced



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below that Guaranteed Minimum Monthly Rental in effect
immediately preceding such adjustment. 
The consumer price index to be used is the Consumer Price Index — All
Items, for the United States, published monthly by the United States
Department of labor, in which 1967 equals 100. 
If said Consumer Price Index is no longer published at the adjustment
date, it shall be constructed by conversion tables included in such new
index.  Annual CPI
adjustment to be not less than 3%, nor greater than 6%, each year.


39.           SURRENDER OF PREMISES.  At the expiration of the tenancy hereby
created, Tenant shall surrender the leased premises in the same condition as
the leased premises were in upon delivery of possession thereto under this
lease, in addition to any alterations or additions which Landlord elects to
keep pursuant to Paragraph 10, reasonable wear and tear excepted, and shall
surrender all keys for the leased premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the leased premises.  No act or conduct of Landlord, except a
written acknowledgement of acceptance of surrender signed by Landlord, shall be
deemed to be or constitute an acceptance of the surrender of the leased
premises by Tenant prior to the expiration of the term of this lease.


If prior to the termination of this lease, or within 15 days
thereafter, Landlord elects, by written notice to Tenant, Tenant shall promptly
remove the additions, improvements, fixtures, trade fixtures and installations
which were placed in the leased premises by Tenant and which are designated in
said notice, and shall repair any damage occasioned by such removal; and in
default thereof Landlord may effect said removals and repairs at Tenant’s expense.  The covenants of Tenant contained herein
shall survive the expiration or termination of the lease term.


40.           PREMATURE SURRENDER
OF PREMISES.  If tenant, prior to the
expiration of the term of this set forth herein, prematurely vacates the
premises in breach of the Lease Agreement, without the written consent of
Landlord, in addition to all other damages and remedies set forth in this Lease
Agreement, the Tenant will be responsible for consequential losses allowed by
Code of Civil Procedures § 1951.2(4). 
These losses will include, but are not limited to, all necessary
expenses to relocate any existing tenant from another location to occupy the
subject premises, any expenses necessary to prepare the subject premises for a
new tenant, any expenses required to procure a new tenant including, but not
limited to lease concessions, tenant improvements, all repairs necessary to
make the subject premises re-leasable and all other expenses arising from
Tenant’s premature surrender of the premises. 
Tenant agrees that Landlord shall have exclusive discretion to make
commercially reasonable decisions in order to mitigate the losses arising from
the premature surrender of the subject premises.


41.           CONDEMNATION.  In the event of a condemnation or a transfer
in lieu thereof twenty (20%) percent or more of the demised premises is taken,
or in the event as a result of such taking or transfer in lieu thereof Landlord
is unable to provide the parking required by Article 8 hereof, landlord or
Tenant may, upon written notice given within thirty (30) days after such taking
or transfer in lieu thereof, terminate this lease.  Tenant shall not be entitled to share in any
portion of the award and Tenant hereby expressly waives any right or claim to
any part thereof.  Tenant shall, however,
have the right to claim and recover, only from the condemning authority (but
not from the Landlord), any amounts necessary to reimburse Tenant for the cost
of removing stock and fixtures.



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42.           NO ORAL
AGREEMENTS.  This lease covers in full
each and every agreement of every kind or nature whatsoever between the parties
hereto concerning this lease, and all preliminary negotiations and agreements
of whatsoever kind or nature are merged herein, and there are no oral
agreements or implied covenants.


43.           CONFIDENTIALITY:  In consideration of the mutual promises
herein contained, Landlord and Tenant agree not to communicate or disclose to
any other person, entity, or organization, orally or in writing, direct or
implied, the provisions contained in the Lease relating to the rental
rate.  Tenant understands that this is a
material inducement to Landlord’s execution of the Lease.  If Tenant breaches this confidentiality
provision, then the base rent shall be increased retroactively to equal the
highest lease rate charged by Landlord to any other Tenant on the premises,
calculated as of the date of this lease.


44.           If not in default
under the terms of this lease, Landlord grants Tenant a five (5) year option at
the then market rents and terms, but not less than the previous rate.


IN WITNESS WHEREOF, the parties have duly executed this lease together
with the herein referred to Exhibits which are attached hereto, on the day and
year first above written. 


	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  Le Baron Investments

  	
   

  	
  Southern Textile Recycling,
  Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Carl
  C. Jones, President            

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PERSONALLY GUARANTEED
  BY: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Carl
  C. Jones                      51%

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Eddie
  R. Fischer                 49%

  



 



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