LEASE BETWEEN

                              PHILIP WOOD

                                  AND

                     REAL GOODS TRADING CORPORATION,
                        a California corporation
</PAGE>
<TABLE>
<CAPTION>
                                 INDEX

SECTION                                                      PAGE
<S>    <C>                                                   <C>
1.     PREMISES                                               1
2.     TERM                                                   2
3.     RENT:  SPECIAL NET LEASE                               3
4.     USE                                                    5 
5.     MAINTENANCE, REPAIRS AND ALTERATIONS                   7
6.     INSURANCE INDEMNITY                                    9
7.     DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD, RENT
       ABATEMENT                                             12
8.     REAL PROPERTY TAXES                                   13 
9.     UTILITIES                                             14
10.    ASSIGNMENT AND SUBLETTING                             14
11.    DEFAULTS:   REMEDIES                                  16
12.    CONDEMNATION                                          18
13.    OPTION TO EXTEND TERM                                 19
14.    GENERAL PROVISIONS                                    20
</TABLE>
</PAGE>
                              LEASE

     THIS LEASE (hereinafter the "Lease"), dated, for reference
purposes only, August 31, 1997, is made by and between PHILIP
WOOD (herein called "Landlord") and REAL GOODS TRADING
CORPORATION, a California corporation (herein called "Tenant").

1.    PREMISES.

      1.1  PREMISES. Landlord hereby leases to Tenant and Tenant
leases from Landlord for the term, at the rental, and on the
terms and conditions herein specified, that certain real property
situated in the City of Berkeley, County of Alameda, State of
California, commonly known as a portion of 1324 Tenth Street, and
particularly described on Exhibit "All attached hereto and
incorporated herein by this reference (the "Premises"). Subject
to the provisions of paragraph 1.3, Tenant shall also have the
right in conjunction with its use of the Premises to non-
exclusive use of the parking described on Exhibit "A-1".

      1.2  LANDLORD'S WORK AND CONDITION OF THE PREMISES. The
Premises shall be delivered in its current "As-Is" condition,
broom-clean, except that Landlord, on or before the Commencement
Date, shall install additional lighting in the front 1,400 square
feet of the Premises reasonably satisfactory for Tenant's
use. Tenant shall accept the Premises in its "As-Is" condition,
and Landlord shall have no responsibility for tenant improvements
or  the condition of the Premises prior to or at delivery of
possession of the Premises or during the term of this Lease,
except as provided in paragraph 5.2. The Premises shall be deemed
to be in the condition required pursuant to this paragraph 1.2,
except as otherwise specified by Tenant by written notice to
Landlord received within ten (10) days after delivery of
possession of the Premises to Tenant. In the event that any
conditions are noted by Tenant in such written notice, Landlord
shall reasonably repair or remedy any conditions which are not in
compliance with the requirements of this paragraph 1.2, but the
Commencement Date shall not be amended or delayed in any manner
notwithstanding the existence of any such condition or the
pendency of repairs thereof.

      1.3  PARKING. Tenant shall have the nonexclusive right in
common with other occupants, invitees, and customers of the
Building of which the Premises are a part to use the parking area
depicted on Exhibit "A-1" (the "parking area,"). Tenant's
employees and contractors shall not park in the parking area.
Tenant shall cause its employees, contractors, and customers to
comply with the requirements of this paragraph. Landlord reserves
the right to redesign, restripe, or alter, from time to time, the
parking area and any landscaping and watering systems located
therein in Landlord's discretion provided that no substantial
reduction of parking available to Tenant shall result. Landlord
shall also have the right to remove portions of any landscaping
and watering systems at any time, and to change or to temporarily
close portions of the parking area in conjunction with the
installation of tenant improvements, entrances, and other
improvements in the adjacent premises owned by Landlord. Landlord
shall have the right to impose rules, post such gates, signs and
directions as Landlord deems prudent in the use of the parking
area, and otherwise regulate use and control access thereto.

      1.4  HAZARDOUS SUBSTANCES. Landlord represents and warrants
that, to the best of Landlord's knowledge, there have been no
leaks, spills, releases, discharges, emissions, installation, or
disposal of hazardous or toxic wastes, materials or substances
(as such substances are regulated or may be regulated by any
applicable local, state or federal laws or regulations)
("Hazardous Substances"), occurring on the Premises, except as
set forth in Landlord's disclosure letter dated August 12, 1997,
receipt of which is hereby acknowledged by Tenant. Tenant
acknowledges that Tenant has had the opportunity to fully inspect
the Premises and the underlying soil and groundwater, and to
review the records of all applicable governmental agencies having
jurisdiction over the Premises and the surrounding property, and
accepts the Premises in its current condition.

      1.5  SIGNAGE. Tenant, at Tenant's cost, shall design,
install and maintain its signs on the exterior of the Premises in
accordance with the requirements of the City of Berkeley and all
applicable governmental entities having jurisdiction over the
Premises. In the event that Landlord, at Landlord's sole
discretion, installs a monument or common sign, including space
for Tenant names, on the Premises or areas adjacent thereto
during the term of this Lease, Tenant shall have the right, at
Tenant's cost, to proportionate use on said monument or common
sign in conjunction with all other tenants of Landlord within the
buildings of the Premises are a part and/or areas adjacent
thereto leased or subleased by Landlord.

      1.6  USE PERMIT. This Lease and all of Landlord and
Tenant's obligations thereunder shall be subject to the condition
precedent that within sixty (60) days of the date of execution of
this Lease the City of Berkeley shall issue a use permit for
Tenant's use within the Premises. Tenant shall at all times from
and after the date of execution of this Lease diligently seek
approval of its application for use permit including but not
limited to the provision of such information, materials and fees
required by the City of Berkeley in conjunction therewith.

2.    TERM.

      2.1  TERM. The term of this Lease shall commence on
September 15, 1997 (the "Commencement Date"), and shall end at
midnight on September 14, 1998, unless sooner terminated pursuant
to any provision hereof (the "term"). In the event that Landlord
and  Tenant execute a lease for alternate space within the real
property of which the Premises are a part which commences prior
to the termination date of this Lease, this Lease shall terminate
upon the commencement date of such lease. The term is subject to
a provision to extend as provided in paragraphs 13.1 and 13.2.

      2.2  DELAY IN COMMENCEMENT. Notwithstanding said
Commencement Date, if for any reason Landlord cannot deliver
possession of the Premises on the date provided in paragraph 2.1,
Landlord shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder or extend the term hereof, but in
such case Tenant shall not be obligated to pay rent until
possession of the Premises is tendered to Tenant; provided,
however, that if Landlord shall not have delivered possession of
the Premises within ninety (90) days from the applicable date,
Tenant may, at Tenant's option, by notice in writing to Landlord
within ten (10) days thereafter, cancel this Lease, in which
event the parties shall be discharged from all obligations
hereunder.

3.    RENT:  SPECIAL NET LEASE.

      3.1  BASE RENT FOR MONTHS 1 THROUGH 12. INCLUSIVE. Tenant
shall pay to Landlord as base rent for the Premises monthly
installments of Six Thousand Eight hundred Thirty-Two and
00/100ths Dollars ($6,832.00), in advance on the first day of
each month or part thereof, for the period from the Commencement
Date to and including the end of the twelfth month of the term.
Tenant shall pay to Landlord one-half (1/2) month's rent upon
execution of this Lease which shall be applied to the period from
September 15, 1997 to September 30, 1997, inclusive, and shall
thereafter pay monthly base rent commencing October 1, 1997, and
on the first day of each successive month to and including the
end of the term, except that Tenant shall pay rent for one-half
month on September 1, 1998, effective for the period September 1,
1998 to September 14, 1998, inclusive. Rent shall be payable in
lawful money of the United States to Landlord at the address
stated herein or such other persons or at such other places as
Landlord may designate in writing.

      3.2  RENT ADJUSTMENTS FOR THE OPTION TERM. Provided that
the option to extend term provided in paragraphs 13.1 and 13.2 is
duly exercised, the monthly rental provided for in paragraph 3.1
shall be adjusted as described in this paragraph 3.2. Adjustments
to the monthly rental shall be made effective on the commencement
of the second year of the term and on the commencement of the
third, fourth and fifth years of the term to and including the
end of the Option Term.

            (a)  An adjustment to the monthly rental shall be
made effective on the commencement of the second year of the term
as provided in this Paragraph 3.2(a). The monthly rental for the
Premises shall be adjusted to its full fair market value, at its
highest and best use without reference to the use being made by
any particular proposed tenant, in no event less than the base
monthly rental payable pursuant to paragraph 3.1. Prior to the
end of the first year of the term, Landlord shall give notice to
Tenant of Landlord's determination of the full fair market rental
for the second year of the term. In the event that Tenant
disagrees with Landlord's determination of rent for the second
year of the term, and Landlord and Tenant are unable to agree
upon same after a period of fifteen (15) days, determination of
the fair market rental pursuant to this paragraph 3.1(a) shall be
submitted to arbitration in accordance with the rules of the
American Arbitration Association then applicable in Alameda
County.

            (b)  Thereafter, further adjustment to the adjusted
monthly rental effective as provided for in paragraph 3.2(a),
above, shall be made, respectively, effective on the commencement
of the third, fourth, and fifth years of the term. The adjustment
provided for in this paragraph 3.2(b) shall be based on the
monthly Consumer Price Index for All Urban Consumers released by
the Bureau of Labor Statistics (San Francisco/Oakland)
(hereinafter called the "Index"). Said adjustments shall be made
as follows: The monthly rental which is payable immediately prior
to the commencement of that year for which said adjustment is
made shall be increased, effective on the commencement of that
succeeding year by a certain percentage (hereinafter called the
"Periodic Adjustment Percentage").

            (c)  The Periodic Adjustment Percentage applicable to
each succeeding year is the net percentage increase in the Index
in the month immediately prior to said date of adjustment as
compared to like month of the previous year.

            (d)  If, in the future, the Index shall be changed,
the Index shall be converted in accordance with the conversion
factor published by the United States Department of Labor, Bureau
of Labor Statistics. In the event the Index is discontinued or
revised during the term hereof, such other governmental index or
computation with which it is replaced shall be used in order to
obtain substantially the same result that would be obtained if
said present Index had not been discontinued or revised. In the
event the Index is not replaced with another governmental index
or computation, Landlord and Tenant shall accept comparable
statistics on the purchasing power of the consumer dollar as
published at the time of said discontinuance by a nationally
renowned periodical or recognized authority chosen by the
parties. If the parties cannot agree upon a financial periodical
as the source of comparable statistics after attempting for
twenty (20) days to reach such agreement, the percentage increase
for the ensuing period and the placement index or computation
shall be determined by arbitration according to the rules of the
American Arbitration Association.

            (e)  Notwithstanding any provision of this Section to
the contrary, in no event shall the monthly rent payable pursuant
to any adjustment be less than the monthly rent payable for the
previous month. If the Index has not been made available to the
public as of the time that an adjustment is to be made, Tenant
shall pay the rent for the prior period until the Index is made
public. When the index is made public, Tenant shall immediately
pay to Landlord the deficiency in rent, if any, between the date
of adjustment and the date that the adjustment can be calculated.
Any acceptance by Landlord of any partial payment or of rent at
the rate due prior to an increase shall not waive Tenant's
obligation and liability to pay such increase. Excess payments,
if any, shall be credited by Landlord to Tenant's next rent
installment. 

      3.3  RENT. In addition to the base rent provided in
paragraph 3.1, Tenant shall pay any other charges, costs and
expenses which arise or may be required to be paid by Tenant
under the provisions of this Lease during the term hereof, all of
which shall constitute additional rent. Upon the failure of
Tenant to pay any of said costs, charges or expenses, Landlord
shall have the same rights and remedies as otherwise provided in
this Lease for the failure of Tenant to pay base rent. It is the
intention of the parties hereto that this Lease shall not be
terminable for any reason by Tenant, and that Tenant shall in no
event be entitled to any abatement of or reduction of rent
payable under this Lease, except as herein expressly provided.
Any present or future law to the contrary shall not alter this
arrangement by the parties.

4.    USE.

      4.1  USE. The Premises shall be used and occupied only for
retail and wholesale sales of hardware, building materials,
building supplies, soft goods and books, and related storage and
office uses ancillary thereto, provided that no hazardous waste
or hazardous materials (as defined under federal, State of
California, or County of Alameda or City of Berkeley law,
ordinance, regulation or statute) (hereinafter "Hazardous
Substances") will be used, placed or stored on the Property.
Tenant may allow on the Premises small quantities of cleaning
and/or office supply materials maintained in commercial
containers and used in the ordinary course of retail business,
and such other items as are customarily sold by Tenant or offered
for sale in stores operated by Tenant or those stores similar to
the business conducted by Tenant in the Premises, provided all
applicable laws and regulations on use, storage, sale,
disposal, and disclosure are fully complied with at all times by
Tenant. Tenant shall on request provide to Landlord a complete
inventory of all Hazardous Substances brought onto, maintained,
or present on the Premises, and immediately notify Landlord of
any release of Hazardous Substances on or near the Premises.
Tenant shall indemnify, defend with counsel selected by Landlord,
and hold Landlord harmless from any and all claims arising from
the presence of Hazardous substances on, in, under or about the
Property the presence of which were or allegedly were a result of
Tenant's conduct. without limiting the generality of the
foregoing, this indemnification obligation shall specifically
cover costs incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal, or restoration
work required by any federal, state or local government agency or
political subdivision, or by any third party resulting from the
presence or the suspected presence of Hazardous Substances in,
on, under or about the Premises. Tenant has been advised of the
requirement that commercial tenants negotiate a First Source
Agreement with the City of Berkeley for permanent employment
needs. Notwithstanding any other provision hereof, Tenant's use
shall not violate the use restrictions set forth in the lease for
the space adjacent to the Premises. The Premises shall not at any
time be used for or as a theater; auditorium, meeting hall or
other place of assembly; any sports or entertainment facility;
automobile sales or repairs; bowling alley, pool hall or skating
rink; bar serving alcoholic beverages (except as an incident to a
full kitchen restaurant operation); funeral parlor; massage
parlor; any type of karate, gymnasium, health club or physical
fitness facility; car wash; off track betting establishment;
amusement or game room; a so called "flea market" or other
operation for the sale of used goods (except that Tenant shall be
permitted to sell incidentally used and demonstration merchandise
sold with new merchandise warranties and within its permitted
use); night club, discotheque or dance hall; hotel or other
lodging facilities; offices (except incidental to a retail
operation); school (including, without limitation, trade
school or class sessions of any nature whatsoever except that
Tenant shall be permitted to conduct workshops for customers
regarding use of Tenant's merchandise incidental to Tenant's
business); gun range; any business or use which emits offensive
odors, fumes, dust or vapor, or constitutes a public or private
nuisance, or emits loud noise or sounds which are objectionable,
or creates a fire, explosive or other hazard under the
regulations of the City of Berkeley Fire Protection District or
applicable board of fire insurance underwriters; heavy
manufacturing facility; adult book store or similar store selling
or exhibiting pornographic materials as a substantial part of its
business.

      4.2  COMPLIANCE WITH LAW. Tenant shall, at Tenant's
expense, comply promptly with all applicable statutes, laws,
ordinances, rules, regulations, orders, restrictions of record,
and requirements in effect during the term or any part of the
term hereof regulating the condition of the Premises or use
thereof by Tenant, including building and zoning codes, and
environmental and hazardous waste laws and regulations. Tenant
shall not use nor permit the use of the Premises in any manner
 that will tend to create waste or a nuisance of, if there shall
be more than one tenant in the building containing the Premises,
shall tend to disturb such other tenants. 

5.    MAINTENANCE. REPAIRS AND ALTERATIONS.

      5.1  TENANT'S OBLIGATIONS. Tenant shall keep in good order,
condition and repair the interior of the Premises and every part
thereof (whether or not such portion of the Premises requiring
repair, or the means of repairing the same are reasonably or
readily accessible to Tenant, and whether or not the need for
such repairs occurs as a result of Tenant's use or wear and tear)
including, without limiting the generality of the foregoing, any
of the following: plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities and equipment within
the interior of the Premises, fixtures, the interior surfaces of
exterior walls, foundations, the interior surfaces of ceilings
and roofs, all surface and structural portions of interior,
non-load-bearing walls, and the floors, windows, doors, plate
glass and skylights located within the Premises.

      5.2  LANDLORD'S OBLIGATIONS. Subject to the provisions of
sections 6 and 7 of this Lease, Landlord shall keep the
foundation, structural portions of load bearing walls, roof
(including skylights), the exterior of the building, and the
pipes and utility installations located outside of the Premises
that provide services to the Premises, in good order, condition,
and repair, and in compliance with the requirements of
governmental authorities having jurisdiction over the Premises,
except that nothing herein shall require Landlord to make
modifications, alterations or replacements which become necessary
or desirable by reason of the use of the Premises made by Tenant,
or by the acts or omissions of Tenant's agents, servants,
employees, representatives, contractors or invitees.
Notwithstanding any other provision hereof, Tenant shall pay one
hundred percent (100%) of the cost for repairs, replacement
or maintenance arising from the neglect or intentional acts of
Tenant and/or Tenant's agents, servants, employees,
representatives, contractors, and invitees. Landlord reserves the
right at its sole discretion, from time to time, to make
alterations, additions or improvements in or to the Premises
provided that such alterations, additions or improvements do not
materially interfere with Tenant's access, use and enjoyment of
the Premises. Except to the extent provided herein, Landlord
shall have no obligation, in any manner whatsoever, to repair or
maintain the Premises nor the building of which the Premises are
a part, nor the equipment therein, whether structural or
nonstructural. Tenant expressly waives the benefit of any statute
now or hereinafter in effect which would otherwise afford Tenant
the right to make repairs at Landlord's expense or terminate the
Lease because of Landlord's failure to keep the Premises in good
order, condition and repair. Subject to the notice requirements
of paragraph 13.8, Landlord shall have the right to enter in or
upon the Premises for the purpose of performing any and all acts
of maintenance, repair or replacement, without limitation, and
Tenant shall reasonably cooperate with Landlord and Landlord's
contractors in all work performed in connection therewith. Except
for loss of use proven to arise from Landlord's active negligence
or intentional acts, or as provided in paragraph 7.3, there shall
be no abatement of rent and no liability of Landlord by reason of
injury to or interference with Tenant's business arising from
such maintenance, repair or replacement to the Premises, the
Building of which the Premises are a part, or to fixtures,
appurtenances, or equipment therein.

      5.3  SURRENDER. On the last day of the term hereof, or on
any sooner termination, Tenant shall surrender the Premises and
Tenant's Improvements to Landlord broom clean and in good
condition and repair, ordinary wear and tear excepted. Tenant
shall repair any damage to the Premises occasioned by the removal
of Tenant's trade fixtures, furnishings and equipment pursuant to
paragraph 5.5(d), which repair shall include the patching and
filling of holes and repair of structural damage. Notwithstanding
any of the provisions of this Lease, Tenant shall, at Tenant's
expense, remove any alterations made by Tenant during the term of
the Lease and restore the Premises to its original configuration
and condition upon request made by Landlord within ten (10) days
of Tenant's surrender of the Premises.

      5.4  LANDLORD'S RIGHTS. If Tenant fails to perform any of
Tenant's obligation under this paragraph 5, Landlord may at its
option (but shall have no obligation or duty to) enter upon the
Premises, after ten (10) days' prior written notice to Tenant,
and put the same in good order, condition and repair, and the
cost thereof together with interest thereon at the rate of ten
percent (10%) per annum from the date of advancement to the date
of repayment shall become due and payable as additional rental to
Landlord together with Tenant's next rental installment.

      5.5   ALTERATIONS AND ADDITIONS.

            (a)  Except for initial installation and construction
of Tenant's Improvements described in paragraph 1.2 hereof,
Tenant shall not make any alterations, improvements, additions,
or utility installations in, on or about the Premises, without
the prior written consent of Landlord, which shall not be
unreasonably withheld. As used in this paragraph 5.5, the term
,,utility Installations" shall mean bus ducting, power panels,
wiring, fluorescent fixtures, space heaters, conduits, air
conditioning equipment and plumbing. Landlord may require that
Tenant remove any or all of said alterations, improvements,
additions or Utility Installations (not including Tenant's
Improvements) at the expiration of the term, and restore the
Premises to their prior condition as improved by the Tenant's
Improvements. Should Tenant make any alterations, improvements,
additions or Utility Installations without the prior approval of
Landlord, Landlord may require that Tenant remove any or all of
the same.

          (b)  Any alterations, improvements, additions or
Utility Installations in or about the Premises that Tenant shall
desire to make and which require the consent of Landlord shall be
presented to Landlord in written form, with proposed detailed
plans. If Landlord shall give its consent the consent shall be
deemed conditioned upon Tenant acquiring a permit to do so from
appropriate governmental agencies, the furnishing of a copy
thereof to Landlord prior to the commencement of the work and the
compliancy by Tenant of all conditions of said permit in a
prompt, expeditious, and workmanlike manner.

          (c)  Tenant shall pay, when due, all claims for labor
for materials furnished or alleged to have been furnished to or
for Tenant at or for use in the Premises, which claims are or may
be secured by any mechanics' or materialmen's lien against the
Premises or any interest therein. Tenant shall give Landlord not
less than ten (10) days' notice prior to the commencement of any
work in the Premises, and Landlord shall have the right to post
notices of nonresponsibility in or on the Premises as provided by
law. If Tenant shall, in good faith, contest the validity of any
such lien, claim or demand, then Tenant shall, at its sole
expense defend itself and Landlord against the same and shall pay
and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against Landlord or the
Premises, upon the condition that if Landlord shall require,
Tenant shall furnish to Landlord a surety bond satisfactory to
Landlord in an amount equal to such contested lien, claim or
demand indemnifying Landlord against liability for the same and
holding the Premises free from the effect of such lien or claim.
In addition, Landlord may require Tenant to defend Landlord in
such action if Landlord shall reasonably determine that it is to
its best interest to do so.

          (d)  Unless Landlord requires their removal, as set
forth in paragraph 5.3, all alterations, improvements, additions
and Utility Installations (whether or not such Utility
Installations constitute trade fixtures of Tenant), which may be
made on the Premises, shall remain upon and become the property
of Landlord at the expiration of the term, to be surrendered with
the Premises at that time. Notwithstanding the provisions of this
paragraph 5.5(d), Tenant's trade fixtures, machinery and
equipment, other than that which is affixed to the Premises so
that it cannot be removed without material unrepaired damages to
the Premises, shall remain the property of Tenant and may be
removed by Tenant subject to the provisions of paragraphs 5.2 and
5.3.

6.    INSURANCE INDEMNITY.

      6.1  LIABILITY INSURANCE. Tenant shall, at Tenant's
expense, obtain and keep in force during the term of this Lease a
policy or policies of Combined Single Limit, Bodily Injury and
Property Damage Insurance insuring Landlord and Tenant against
any liability arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto
including but not limited to the parking area. Such insurance
shall be a combined single limit policy in an amount not less
than Two Million and 00/100ths Dollars ($2,000,000.00). The
policy shall contain cross liability endorsements and shall
insure performance by Tenant of the indemnity provisions of this
paragraph 6. The limits of said insurance shall not, however,
limit the liability of Tenant hereunder. In the event that the
Premises constitute a part of a larger property said insurance
shall have a Landlord's Protective Liability endorsement attached
thereto. If Tenant shall fail to procure and maintain said
insurance Landlord may, but shall not be required to procure and
maintain the same, but at the expense of Tenant.

      6.2  PROPERTY INSURANCE. Landlord shall obtain and keep in
force during the term of this Lease a policy or policies of
insurance insuring Landlord and Tenant covering all loss or
damage to the Premises, in the amount of the full replacement
value thereof, as the same may exist from time to time, and in no
event less than the total amount of promissory notes secured by
liens on the Premises including, but not limited to, perils
included within the classification of fire, extended coverage,
vandalism, malicious mischief, special extended perils (all risk)
and sprinkler leakage. Rental interruption insurance for the
Premises shall be procured if available. In the event that such
rental interruption insurance is not available, Landlord shall so
notify Tenant. At Landlord's election, earthquake coverage shall
be included. Said insurance shall provide for payment of loss
thereunder to Landlord or to the holders of mortgages or deeds of
trust on the Premises. If such insurance coverage has a
deductible clause, Tenant shall be liable for the deductible
amount. If Landlord procures insurance providing coverage as to a
building or improvements of which the Premises are a part, Tenant
shall reimburse Landlord for the equitable portion said expense
that relates to the Premises.

      6.3  INSURANCE POLICIES. Insurance required of Tenant under
paragraph 6.1 shall be in the form and issued by companies
reasonably acceptable to Landlord, holding a General
Policyholders Rating of A10 or better as rated by A.M. Best
Insurance Guide, or equivalent rating service. Tenant shall
deliver to Landlord copies of policies of such insurance or
certificates evidencing the existence and amounts of such
insurance with loss payable clauses satisfactory to Landlord. No
such policy shall be cancelable or subject to reduction of
coverage or other modification except after thirty (30) days'
prior written notice to Landlord. Tenant shall, within thirty
(30) days prior to the expiration of such policies, furnish
Landlord with renewals or "binders" thereof. Tenant shall
not do or permit to be done anything which shall cause the
Insurer to assign a higher risk category to the Premises which
increases the cost of the insurance policies referred to in
paragraphs 6.1 or 6.2.  If Tenant does or permits to be done
anything which shall increase the costs of said insurance
policies, then Tenant shall forthwith upon Landlord's demand
reimburse Landlord for any additional premiums attributable to
any act or omission or operation of Tenant causing such increase
in the cost of insurance.

      6.4  WAIVER OF SUBROGATION. Tenant and Landlord each hereby
waive any and all rights of recovery against the other, or
against the officers, employees, agents and representations of
the other, for loss of or damage of such waiving party or its
property or the property of others under its control to the
extent that such loss or damage is insured against under any
insurance policy in force at the time of such loss or damages.
Tenant shall, upon obtaining the policies of insurance required
hereunder, give notice to the insurance carrier or carriers that
the foregoing mutual waiver of subrogation is contained in this
Lease.

      6.5  INDEMNITY. Except for loss proven to arise from
Landlord's active negligence or intentional acts, Tenant shall
indemnify and hold harmless Landlord from and against any and all
claims arising from Tenant's use of the Premises, or from the
conduct of Tenant's business or from any activity, work or things
done, permitted or suffered by Tenant in or about the Premises or
elsewhere and shall further indemnify and hold harmless Landlord
from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to
be performed under the terms of this Lease, or arising from any
negligence of Tenant, or any of Tenant's agents, contractors, or
employees, and from and against all costs, attorneys, fees,
expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon; and in case
any action or proceeding be brought against Landlord by reason of
any such claim, Tenant upon notice from Landlord shall defend the
same at Tenant's expense by counsel reasonably satisfactory to
Landlord. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury
to persons, in, upon or about the Premises arising from any cause
and Tenant hereby waives all claims in respect thereof against
Landlord.

      6.6  EXCEPTION OF LANDLORD FROM LIABILITY. Tenant hereby
agrees that Landlord shall not be liable for injury to Tenant's
business or any loss of income therefrom or for damage to the
goods, ware, merchandise or other property of Tenant, Tenant's
employees, invitees, customers, or any other person in or about
the Premises, nor shall Landlord be liable for injury to the
person of Tenant, Tenant's employees, agents or contractors,
whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers,
wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause whether the said damage or
injury results from conditions arising upon the Premises or upon
portions of the building of which the Premises are a part, or
from other sources or places, and regardless of whether the cause
of such damage or injury or the means of repairing the same is
inaccessible to Tenant. Landlord shall not be liable for any
damages arising from any act or neglect of any if any, of the
building in which the Premises are located.

7.    DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD, RENT ABATEMENT.

      7.1  DAMAGE AND REPAIR. In the event that the Premises are
damaged or destroyed, partially or totally, from any cause that
is completely covered by insurance, then Landlord shall within a
reasonable time repair, restore and rebuild the Premises (not
including the tenant improvements described in paragraph 1.3
hereof or any fixtures, equipment, inventory or personalty
installed or maintained within the Premises, which shall be
Tenant's sole responsibility) to its condition existing
immediately prior to such damage or destruction and this Lease
shall remain in full force and effect. In the event that the
Premises or part or all of the building of which the Premises are
a part are damaged or destroyed, partially or totally, from any
cause not completely covered by insurance, and the cost of repair
and restoration to Landlord will exceed ten percent (lot) of the
full replacement cost of the Premises or the building of which
the Premises are a part, as the case may be, at the time of such
damage, Landlord shall have the right to terminate this Lease
upon written notice to Tenant given within thirty (30) days
following the event of such damage, unless Tenant (or Tenant
acting in concert with other tenant(s) of the building of which
the Premises are a part) shall, within ten (10) days following
receipt of such notice of termination, give notice to Landlord of
it or their written agreement to pay for the cost of repairs or
restoration of the Premises or building of which the Premises are
a part, as the case may be, to the extent that such cost exceeds
ten percent (lot) of the full replacement cost of the Premises or
the building of which the Premises are a part, as the case may
be, and thereafter make such payment including arrangement for
such security as shall be reasonably required by third party
contractors as a requirement of the performance of such work. As
used herein, the term "covered by insurance" shall mean that
insurance proceeds are payable to Landlord pursuant to the
policies described in this Lease and are actually paid by such
insurer(s), subject to the requirement that Landlord shall make
commercially reasonable efforts to obtain such proceeds in the
event of any breach or delay by such insurer(s) with respect to
payment. Any repair, restoration and rebuilding (all of which are
herein called "repair") provided for herein shall be commenced
within a reasonable time after such damage or destruction has
occurred and shall be diligently pursued to completion, subject
to the requirements of governmental entities having jurisdiction
over such repair and other causes beyond Landlord's reasonable
control.

      7.2  INSURANCE PROCEEDS. The proceeds of any insurance
maintained under paragraph 6.2 hereof for fixtures shall be made
available to Landlord for payment of costs and expense of repair.

      7.3  ABATEMENT OF RENT.  Notwithstanding the partial or
total
destruction of the Premises or any part thereof, except to the
extent that the continuing payment of rent is covered by rental
interruption insurance or other applicable insurance, there shall
be a reasonable abatement of rent and the other obligations of
Tenant hereunder by reason of such damage or destruction.

      7.4  DAMAGE NEAR END OF TERM. If the Premises are
substantially or completely destroyed or damaged during the last
six (6) months of the term of this Lease, Landlord or Tenant may
cancel and terminate this Lease by giving written notice to the
other of the election to do so within thirty (30) days after the
date of occurrence of such damage. In such event, the applicable
proceeds of the insurance policy described in paragraph 6.2 shall
be the property of Landlord.

      7.5  WAIVER. Tenant waives the provisions of California
Civil Code Sections 1932(2) and 1933(4) which relate to
termination of leases when the thing leased is destroyed and
agrees that such event shall be governed by the terms of this
Lease.

8.    REAL PROPERTY TAXES.

      8.1  Payment of Taxes. Landlord shall pay the taxes
applicable to the Premises during the term of the Lease. As used
herein, the term "tax" shall include any form of assessment,
license fee, commercial rental tax, levy, penalty, or tax (other
than inheritance or estate taxes), imposed by any authority
having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural,
lighting, drainage or other improvement district thereof, as
against any legal or equitable interest in the Premises or in the
real property of which the Premises are a part, or against
Landlord's right to rent or other income therefrom, or as against
Landlord's business of leasing the Premises or any tax imposed in
substitution, partially or totally, of any tax previously
included within the definition of real property tax, or any
additional tax the nature of which was previously included within
the definition of real property tax.

      8.2  JOINT ASSESSMENT. If the Premises are not separately
assessed, the taxes applicable to the Premises shall be deemed to
be an equitable proportion of the real property taxes for all the
land and improvements included within the tax parcel assessed,
such proportion to be determined by Landlord from the respective
valuations assigned in the assessor's work sheets or such other
information as being reasonably available.

      8.3  PERSONAL PROPERTY TAXES.

                (a)  Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant
contained in the Premises or elsewhere. When possible, Tenant
shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from
the real property of Landlord.

                (b)  If any of Tenant's said personal property
shall be assessed with Landlord's real property, Tenant shall pay
Landlord the taxes attributable to Tenant not less than ten (10)
days prior to the due date.

9.   UTILITIES. Tenant shall pay for all water, gas, heat, light,
power, telephone and other utilities and services supplied to the
Premises, together with taxes thereon. If any such services are
not separately metered to Tenant, Tenant shall pay a reasonable
proportion to be determined by Landlord of all charges jointly
metered with other premises.

10.   ASSIGNMENT AND SUBLETTING.

      10.1  LANDLORD'S CONSENT REQUIRED. Tenant shall not
voluntarily or by operation of law assign, transfer, mortgage,
sublet, or otherwise transfer or encumber (hereinafter
collectively referred to as an "assignment or sublease," or to
"assign or sublease" as the case may be) all or any part of
Tenant's interest in this Lease or in the Premise, without
Landlord's prior written consent, which shall not be unreasonably
withheld as to a proposed assignee or sublessee that satisfies
the standard set forth in this paragraph 10.1. Except as provided
in paragraph 10.2, consent by Landlord shall be restricted to
persons who in Landlord's good faith determination (i) possess
reputation and character reasonably acceptable to Landlord, (ii)
shall use the Premises in compliance with Section 4 of this
Lease, and for purposes complementary and consistent with the
retail goals of the adjacent space leased by Landlord, and (iii)
have sufficient monetary reserves and creditworthiness to ensure
direct performance of all of Tenant's obligations under the Lease
for the balance of the term. Any attempted assignment or
subletting without such consent shall be void, and shall
constitute a breach of this Lease. If Landlord consents to an
assignment or a sublease and any amounts or consideration are
payable to Tenant in excess of the rent due from Tenant pursuant
to the provisions of this Lease, Tenant shall pay to Landlord
one-half of such amounts or consideration paid to Tenant pursuant
to the provisions of paragraph 10.3 hereof.

       10.2  TENANT AFFILIATE. Notwithstanding the provisions of
paragraph 10.1, Tenant may assign or sublet the Premises, or any
portion thereof, without Landlord's consent, only to any
corporation which controls, is controlled by or is under common
control with Tenant, or to any corporation resulting from the
merger or consolidation with Tenant, or to any person or entity
which acquires all the assets of Tenant as a going concern
of the business that is being conducted on the Premises, provided
that said assignee assumes, in full, the obligations of Tenant
under this Lease. Any such assignment shall not, in any way,
affect or limit the liability of Tenant under the terms of this
Lease even if after such assignment or subletting the terms of
this Lease are materially changed or altered without the consent
of Tenant, the consent of whom shall not be necessary.

       10.3  CONSIDERATION. If Tenant shall assign or sublet with
consent of Landlord the Premises or any portion thereof, such
assignment or sublease shall be made at the then current fair
market rent for the Premises. One-half of all consideration paid
by the assignee or sublessee to Tenant that exceeds the Rent payable
under this Lease for such portion of the Premises subject to such
assignment or sublease shall be due, owing and payable from
Tenant to Landlord when paid after first crediting for Tenant's
account the actual cost of broker's commissions paid by Tenant with
regard to the assignment or subletting, and the cost, if any, of
improvements made to the Premises by Tenant in order to procure
the assignee or subtenant. For the purpose of this section, the rent
for each square foot of the Premises shall be deemed equal. If
Tenant shall assign or sublet the Premises or any part, Tenant
hereby immediately and irrevocably assigns to Landlord, as
security for Tenant's obligations under this Lease, all consideration
and rent therefrom and Landlord as assignee and as attorney-in-fact
for Tenant, or a receiver for Tenant appointed on Landlord's
application, may collect such consideration and rent and apply it
toward Tenant's obligations under this Lease; except that, until
the occurrence of an act of default by Tenant, Tenant shall have
the right to collect such rent.

       10.4  NO RELEASE OF TENANT. Regardless of Landlord's
consent, no subletting or assignment shall release Tenant of
Tenant's obligation or alter the primary liability of Tenant
to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed to be a 
waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any
subsequent assignment or subletting. In the event of default by
any assignee of Tenant or any successor of Tenant, in the
performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting
remedies against said assignee. Except for assignment, subleases,
amendments, or modifications by Tenant's affiliate(s) as defined
in paragraph 10.2 hereof, subsequent assignments or subletting of
this Lease or material amendments or modifications to this Lease
with assignees of Tenant shall require consent of Landlord and
Tenant unless Tenant is relieved of liability under this Lease.

       10.5 ATTORNEY'S FEES. In the event Tenant shall assign or
sublet the Premises or request the consent of Landlord to any
assignment or subletting, or if Tenant shall request the consent
of Landlord for any act that Tenant proposes to do then Tenant
shall pay Landlord's reasonable attorney's fees incurred in
connection therewith.

11.    DEFAULTS:  REMEDIES.

       11.1 DEFAULTS. The occurrence of any one or more of the
following events shall constitute a material default and breach
of this Lease by Tenant:

            (a)  The vacating or abandonment of the Premises by
Tenant.

            (b)  The failure by Tenant to make any payment of
rent or any other payment required to be made by Tenant
hereunder, as and when due, where such failure shall continue for
a period of five (5) days after written notice thereof from
Landlord to Tenant.

            (c)  The failure by Tenant to observe or perform any
of the covenants, conditions or provisions of this Lease to be
observed or performed by Tenant, other than described in
paragraph (b) above, where such failure shall continue for a
period of thirty (30) days after written notice thereof from
Landlord of Tenant; provided, however, that if the nature of
Tenant's default is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed
to be in default if Tenant commenced such cure within said thirty
(30) day period and thereafter diligently pursues such cure to
completion.

            (d)  (i) The making by Tenant of any general
assignment, or general arrangement for the benefit of creditors;
(ii) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the
case of a petition filed against Tenant, the same is dismissed
within ninety (90) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within sixty
(60) days; or iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the
Premises, or of Tenant's interest in this Lease, where such
seizure is not discharged within sixty (60) days.

            (e)  The discovery by Landlord that any financial
statement given to Landlord by Tenant, any assignee of Tenant,
any subtenant of Tenant, any successor in interest of Tenant or
any guarantor of Tenant's obligations hereunder, and any of them,
are materially false.

       11.2  PARKING PROVISION. Notwithstanding any other
provision of this Section 11, it is recognized by Landlord
and Tenant that enforcement by Tenant of the provision for
proportionate use of the parking area by Tenant's customers as
provided in paragraph 1.3 will be difficult to ascertain and
enforce. A failure or breach of the Lease by Tenant that shall
occur through excess use by customers shall not be a default or
ground for exercise of the remedies described in paragraph
11.2(a). The provisions of this paragraph 11.2 shall not extend
to misuse of the parking area by Tenant's employees in violation
of the provisions of paragraph 1.3.

       11.3  REMEDIES. In the event of any such material default
or breach by Tenant, Landlord may at any time thereafter, with or
without notice or demand and without limiting Landlord in the
exercise of any right or remedy which Landlord may have by reason
of such default or breach:

             (a)  Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of
the Premises to Landlord. In such event Landlord shall be
entitled to recover from Tenant all damages incurred by Landlord
by reason of Tenant's default including, but not limited to, the
cost of recovering possession of the Premises; expenses of
reletting, including reasonable renovation and alteration of
the Premises, reasonable attorney's fees, and any real estate
commission actually paid; the worth at the time of award of
unpaid rent which had been earned at the time of termination; the
worth at the time of the award of the amount by which the unpaid
rent which would have been earned after Termination or until the
time of the award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; and that portion of
the leasing commission paid by Landlord applicable to the
unexpired term of this Lease.

             (b)  Even though Tenant has breached this Lease and
abandoned the Premises, the Lease shall continue in effect for so
long as Landlord does not terminate the Tenant's right to
possession, and Landlord may enforce all his rights and remedies
under the Lease, including the right to recover the rent as it
becomes due under the Lease.

             (c)  Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the
State of California.

       11.4 DEFAULT BY LANDLORD. Landlord shall not be in default
unless Landlord fails to perform obligations required of Landlord
under this Lease within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have theretofore been
furnished to Tenant in writing, specifying wherein Landlord has
 failed to perform such obligations; provided, however, that if
the nature of Landlord's obligation is such that more than thirty
(30) days are required for performance then Landlord shall not be
in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently pursues the same to
completion.

       11.5 LATE CHARGES. Tenant hereby acknowledges that late
payment by Tenant to Landlord of rent and other sums due
hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult
to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed
covering the Premises. Accordingly, if any installment of rent or
any other sum due from Tenant shall not be received by Landlord
or Landlord's designee within ten (10) days after such amount
shall be due, Tenant shall pay to Landlord late charge equal to
three percent (3%) of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted
hereunder.

12.    CONDEMNATION. If the Premises or any portion thereof are
taken under the power of eminent domain, or sold under the threat
of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so
taken as of the date the condemnation authority takes title or
possession, whichever first occurs. If more than ten percent
(10%) of the floor area of the improvements on the Premises, or
more than twenty-five percent (25%) of the land area of the
Premise which is not occupied by any improvements, is taken by
condemnation, or other taking by condemnation occurs which
renders the Premises unsuitable for Tenant's use, Tenant
may, at Tenant's option, to be exercised in writing only within
ten (10) days after Landlord shall have given Tenant written
notice of such taking (or in the absence of such notice, within
ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning
authority takes such possession. If Tenant does not terminate
this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises
remaining, except that the rent and the percentage set forth in
paragraphs 5.1(a), 6.2 and 8.1 shall be reduced in the proportion
that the floor area taken bears to the total floor area of the
building situated on the Premises. Any award for the taking of
all or any part of the Premises under the power of eminent domain
or any payment made under threat of the exercise of such power
shall be the property of Landlord, whether such award shall be
made as compensation for diminution in value of the leasehold or
for the taking of the fee, or as severance damages; provided,
however, that Tenant shall be entitled to any award for loss of
or damage to Tenant's trade fixtures, removable personal
property, and the un-amortized portion of Tenant's improvements
to the Premises, if any, which amortization shall be based upon a
fraction, the numerator of which shall be the remaining unexpired
term of the Lease from the date of such condemnation, and the
denominator of which shall be the period from the date of such
improvement to the expiration of the term of the lease, and any
award for Tenant's loss of business, goodwill, or relocation. In
the event that this Lease is not terminated by reason of such
condemnation, Landlord in connection with such condemnation shall
repair any damage to the Premises caused by such condemnation
except to the extent that Tenant has been reimbursed therefor by
the condemning authority.

13.    OPTION TO EXTEND TERM.

       13.1  CONDITION PRECEDENT. The option provided in
paragraph 13.2 shall be subject to the condition precedent set
forth in this paragraph 13.1. The provisions of paragraph 13.2
shall be available to Tenant only in the event that Landlord has
not offered Tenant the opportunity to lease an alternate location
within the property of which the Premises are a part on or before
expiration of the term provided in paragraph 2.1 of this Lease.
In the event that Landlord does offer to Tenant such alternate
premises, the provisions of paragraph 13.2 shall be of no force
and effect.

       13.2  OPTION TO EXTEND TERM. Tenant is given the option to
extend the base term of this Lease described in paragraph 2.1 for
four (4) years (herein the "Option Term") on all of the terms and
provisions contained in this Lease, by giving notice of exercise
of the option ("Option Notice") to Landlord no less than one
hundred twenty (120) days before the expiration of the term
described in paragraph 2.1; provided that if Tenant has received
a notice of default in its performance of any of the terms and
provisions of this Lease on the date the notice is given or upon
the date the First Option Period is to commence, and has failed
to cure such default (as defined in paragraph 11.1 hereof) as of
such date, said extended term shall not commence and this Lease
shall expire at the end of the unextended term. Time is of the
essence as to notice of exercise of the option.

14.    GENERAL PROVISIONS.

       14.1   ESTOPPEL CERTIFICATE.

              (a)  Tenant shall at any time upon not less than
ten (10) days, prior written notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing (i)
certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification
and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are
paid in advance, if any, and (ii) acknowledging that there are
not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Premises.

              (b)  Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant (i) that this
Lease is in full force and effect, without modification except as
may be represented by Landlord; (ii) that there are not uncured
defaults in Landlord's performance; and (iii) that not more than
one month's rent has been paid in advance, or such failure may be
considered by Landlord as a default by Tenant under this Lease.

              (c)  If Landlord desires to finance or refinance
the Premises, or any part thereof, Tenant hereby agrees to
deliver to any lender designated by Landlord such information of
Tenant as may be reasonably required by such lender to evaluate
the creditworthiness of Tenant, not including confidential trade
information of Tenant. All such information shall only be
delivered to said Lender upon receipt by Tenant of Lender's
written certification that it shall be deemed confidential and
shall be released to no third parties except as may be required
by law.

        14.2  LANDLORD'S LIABILITY.  The term "Landlord" as used
herein shall mean only the owner or owners at the time in
question of the Premises. In the event of any transfer of such
title or interest, Landlord herein named (and in case of any
subsequent transfers the then grantor) shall be relieved from and
after the date of such transfer of all liability as respects
Landlord's obligations thereafter to be performed, provided that
any funds in the hands of Landlord or the then grantor at the
time of such transfer, in which Tenant has an interest, shall be
delivered to the grantee. The obligations contained in this Lease
to be performed by Landlord shall, except as aforesaid, be
binding on Landlord's successors and assigns, only during their
respective periods of ownership.

        14.3  SEVERABILITY.  The invalidity of any provision of
this Lease as determined by a court of competent jurisdiction,
shall in no way affect the validity of any other provision
hereof.

        14.4  INTEREST ON PAST DUE OBLIGATIONS.  Except as
expressly herein provided, any amount due Landlord not paid when
due shall bear interest at ten percent (10%) per annum from the
date due. Payment of such interest shall not excuse or cure any
default by Tenant under this Lease, provided, however, that
interest shall not be payable on late charges incurred by Tenant
nor on any amounts upon which late charges are paid by Tenant.

        14.5  TIME OF ESSENCE. Time is of the essence in the
performance of all obligations to be performed pursuant to this
Lease.

        14.6  CAPTIONS. Article and paragraph captions are not a
part hereof.

        14.7 INCORPORATION OF PRIOR AGREEMENT; AMENDMENTS. This
Lease contains all agreements of the parties with respect to any
matter mentioned herein. No prior agreement or understanding
pertaining to any such matter shall be effective. This Lease may
be modified only in writing, signed by the parties in interest at
the time of the modification. Except as otherwise stated in this
Lease, Tenant hereby acknowledges that no real estate broker nor
the Landlord or any employees or agents of any of said persons
has made any oral or written warranties or representations to
Tenant relative to the condition or use by Tenant of said
Premises and Tenant acknowledges that Tenant assumes all
responsibility regarding the Occupational Safety Health Act or
the legal use or adaptability of the Premises and the compliance
thereof to all applicable laws and regulations enforced during
the term of this Lease except as otherwise specifically stated in
this Lease.

        14.8 NOTICES. Any notice required or permitted to be
given hereunder shall be in writing and may be given by personal
delivery or by certified mail, and if given personally or by
mail, shall be deemed sufficiently given if addressed to Tenant
or to Landlord at the address noted below. Notice by mail shall
be deemed effective forty-eight (48) hours after deposit in the
U.S. Mail. Either party may by notice to the other specify a
different address for notice purposes, except that upon Tenant's
taking possession of the Premises, the Premises shall constitute
Tenant's address for notice purposes. A copy of all notices
required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such
addresses as Landlord may from time to time hereafter designate
by notice to Tenant.

LANDLORD:                          TENANT:

Mailing:                           Prior to the Commencement
                                   Date:

     Philip Wood                        555 Leslie Street
     c/o Wood Properties                Ukiah, CA  95482
     P.O. Box 7123 
     Berkeley, CA 94707            On or after the Commencement
                                   Date:
For Personal Delivery:                  The Premises

     Philip Wood 
     c/o Wood Properties
     999 Harrison Street 
     Berkeley, CA

        14.9  WAIVERS. No waiver by Landlord of any provision
hereof shall be deemed to waive of any other provision hereof or
of any subsequent breach by Tenant of the same or any other
provision. Landlord's consent to or approval of any act shall not
be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of
any preceding breach by Tenant of any provision hereof, other
than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding
breach at the time of acceptance of such rent.

        14.10  HOLDING OVER. If Tenant remains in possession of
the Premises or any part thereof after the expiration of the term
hereof without the express written consent of Landlord, such
occupancy shall be tenancy from month to month at a rental in the
amount of the last monthly rental plus all other charges payable
hereunder, and upon all the terms hereof applicable to a
month-to-month tenancy.

        14.11  CUMULATIVE REMEDIES. No remedy or election
hereunder shall be deemed exclusive but shall, wherever possible,
be cumulative with all other remedies at law or in equity.

        14.12  BINDING EFFECT; CHOICE OF LAW. Subject to any
provisions hereof restricting assignment or subletting by Tenant,
this lease shall bind the parties, their successors and assigns.
This Lease shall be governed by the laws of the State of
California.

        14.13  ATTORNEY'S FEES. If either party named
herein brings an action to enforce the terms hereof or declare
rights hereunder, the prevailing party in any such action, on
trial or appeal, shall be entitled to reasonable attorney's fees
to be paid by the losing party as fixed by the court.

        14.14  LANDLORD'S ACCESS. Landlord and Landlord's agents
shall have the right to enter the Premises at reasonable times
for the purpose of inspecting the same, showing the same to
prospective purchasers, or lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises
or to the building of which they are a part as Landlord may deem
necessary or desirable. Reasonable notice shall be deemed to be
Forty Eight (48) hours advance written or telephonic notice
except in cases of emergency, in which event access may be
immediate. Landlord may at any time during the last one hundred
twenty (120) days of the terms hereof place on or about the
Premises any ordinary "For Lease" signs, all without rebate of
rent or liability to Tenant.

        14.15  SIGNS AND AUCTIONS. All signs and any auctions
conducted on the Premises shall be related to Tenant's business
and shall be in accordance with all applicable laws and
ordinances.

        14.16 MERGER. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, or a
termination by Landlord, shall not work a merger, and shall, at
the option of Landlord, terminate all of any existing
subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies or may,
at the option of Landlord, operate as an assignment to Landlord
of any or all of such subtenancies.

        14.17 CORPORATE AUTHORITY. If Tenant is a corporation
each individual executing this Lease on behalf of Tenant
represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of Tenant in accordance with a duly
adopted resolution of the Board of Directors of Tenant or in
accordance with the Bylaws of Tenant, and that this Lease is
binding upon Tenant in accordance with its terms. Tenant shall,
within thirty (30) days after execution of this Lease, deliver to
Landlord a certified copy of a resolution of the Board of
Directors of Tenant authorizing or ratifying the execution of
this Lease.

        IN WITNESS WHEREOF, Landlord and Tenant have executed
this Lease the day and year first above written.

LANDLORD:                          TENANT:

                                   REAL GOODS TRADING CORPORATION
                                                                 
[S]PHILIP WOOD                       [S]JOHN SCHAEFFER
                                   BY:  JOHN SCHAEFFER, President
                                      and Chief Executive Officer