Table of Contents
Premises                                                      3
Term                                                          4
Renewal Option                                                4
Holding Over                                                  5
Assignment and Subletting                                     5
Minimum Rent                                                  7
Additional Rent                                               7
Personal Property Taxes                                      10
Use                                                          11
Use Prohibited                                               11
Compliance With Law                                          11
Repairs                                                      12
Reconstruction                                               13
Alterations and Additions                                    15
Liens                                                        16
Hold Harmless                                                16
Insurance                                                    17
Subrogation                                                  18
Default by Lessee                                            18
Remedies in Default                                          19
Default by Lessor                                            21
Entry by Lessor                                              21
Rules and Regulations                                        21
Parking and Common Areas                                     21
Signs                                                        22
Displays                                                     23
Hours of Business                                            23
Auctions                                                     24
Merchants Association                                        24
Security Deposit                                             24
General Provisions                                           24
Eminent Domain                                               28
No Personal Liability of Lessor                              29
Estoppel Certificate                                         29
Contruction of Leasehold Improvements                        29
Brokers                                                      31
Surrender of Premises                                        31
Modification for Lenders                                     31
Other Tenancies                                              32
Exhibit A - Site Plan                                        33
Exhibit B - Rent Schedule                                    34
Exhibit C - Lessor's Workletter                              35
Exhibit D - Sign Program                                     36
Exhibit E - Commencement Date Memorandum                     37
Exhibit F - Rules and Regulations                            37


                CORNERSTONE OF LOS GATOS, LLC LEASE

     THIS LEASE, dated as of the Second day of September 1999,
(herein called the "Lease Date") is made by and
betweenCornerstone of Los Gatos, LLC,  (herein called "Lessor"),
and Real Goods, Inc.(herein called "Lessee"), a corporation with
its principal place of business at Santa Rosa, California.  This
Lease is subject to the terms, covenants and conditions herein
set forth and the Lessee covenants as a material part of the
consideration for this Lease to keep and perform each and all of
said terms, covenants and conditions by it to be kept and
performed.

1.   PREMISES. Lessor does hereby lease to Lessee and Lessee
hereby leases from Lessor that certain space (herein called the
"Premises") that is designated on the site plan (described below)
of the shopping center currently known as Cornerstone of Los
Gatos (the "Shopping Center"), located in the Town of Los Gatos,
County of Santa Clara, State of California.  The Premises are
located within the building designated as Building 2 (the
"Building") on the site plan.  The site plan is attached to this
Lease as Exhibit A and is hereby incorporated by reference. The
Premises contain approximately 3,448 square feet of gross floor
area, measured as follows: the frontage dimensions of the
Premises are measured from the center of the interior walls and
from the outside of the exterior walls of the Premises, and,
using the same procedure, the depth dimensions of the Premises
are measured from the rear exterior wall to the front exterior
wall. "Premises" does not include, and Lessee has no right in,
the land or improvements below the floor slab of the Premises or
above the interior ceiling of the Premises.

     Lessor and Lessee shall verify and acknowledge the gross
floor area on the COMMENCEMENT DATE MEMORANDUM, Exhibit E of this
lease.  The terms and conditions of the Lease that are calculated
on a per square foot basis shall be adjusted accordingly.

     For the term of this Lease, Lessor also grants Lessee and
its employees, agents, customers and invitees, the nonexclusive
right, in common with Lessor and all others to whom Lessor has or
may grant the right, to use the Common Areas, subject to Lessee's
compliance with any rules and regulations enacted or modified by
Lessor from time to time that govern the use of the Common Areas.
Lessor agrees to enforce such rules and regulations in a
nondiscriminatory manner (except where Lessor's ability to do so
is limited by pre-existing leases).  As used herein, "Common
Areas" means all areas, facilities, space, equipment and signs
made available by Lessor at any time for the common and joint use
and benefit of Lessor, Lessee, and other lessees and occupants of
the Shopping Center, including their respective employees,
agents, customers and invitees.  "Common Areas" includes the
following, to the extent provided by Lessor:  parking areas,
driveways, access roads, landscaped areas, truck serviceways,
loading facilities, pedestrian malls, stairs, ramps, sidewalks
and public restrooms.

     Lessee agrees at all times to abide by and cause its
employees, agents, customers, contractors and invitees to abide
by Lessor's rules and regulations for the Common Areas.
Subsequent to this lease Lessor may lease space in the Building
to a restaurant.  In doing so Lessor may designate a certain
portion of the Common Areas for the restaurant's exclusive use.
Without limiting the generality of the foregoing, Lessee
acknowledges and agrees that the area designated as the "Outside
Dining Area" on Exhibit A will not be available for use as part
of the Common Areas during the term of this Lease.  In that
event, the "Outside Dining Area" shall be excluded from the
Common Areas in the calculation of Taxes or Shopping Center
Operating Expenses.

2.   TERM.  The lease term ("Term") shall be sixty (60) full
calendar months (the "Primary Term"), starting with the date (the
"Commencement Date") which is the earlier of Lessee's opening for
business or 60 days after Lessor's delivery of the Premises.
Time is of the essence and Lessee shall diligently pursue opening
for business.  The Commencement Date (COMMENCEMENT DATE
MEMORANDUM, Exhibit E) shall be confirmed and acknowledged in
writing by letter from Lessor to Lessee.

3.   RENEWAL OPTION.
     A.  Lessee shall have the right to extend the term of this
Lease for one (1) additional renewal term of sixty (60) months on
the same terms and conditions set forth in this Lease except as
expressly provided to the contrary herein.  Should Lessee elect
to exercise the renewal option, it shall do so by written notice
to Lessor at least six (6) months but not more than twelve (12)
months prior to the expiration of the Primary Term.

     Notwithstanding anything herein to the contrary, Lessee's
right to exercise the renewal option is conditioned on no Event
of Default existing hereunder either at the time that Lessee
exercises such renewal option or at the conclusion of the Primary
Term of this Lease.

     B.  The Minimum Rent payable during the renewal term shall
equal the fair market rental value of space of comparable size
and quality and of comparable location, quality, size and
character (the "Fair Market Rental Value"), determined as set
forth below.

     C.  Within thirty (30) days after Lessee delivers notice of
its election to exercise the renewal option, Lessor and Lessee
shall attempt to agree upon the Minimum Rent for the renewal
term.  If Lessor and Lessee cannot agree within the specified
time period, Lessor and Lessee shall each select, within fifteen
(15) days thereafter, an appraiser who must be a MAI member of
the Appraisal Institute, or its successor organization, with not
less than five years experience in valuing commercial property in
Santa Clara County.  The appraiser (hereinafter referred to as
"Appraiser") shall determine the Fair Market Rental Value of the
Premises  as of the commencement date of the lease extension and
based on its highest and best use as part of the Shopping Center.
If one party fails to so designate an Appraiser within the time
required, the determination of the Fair Market Rental Value of
the one Appraiser who has been designated by the other party
within the time required shall be binding on both parties.  The
Appraisers shall submit their determinations of the Fair Rental
Value to both parties within thirty (30) days after their
selection.  A written summary of each Appraiser's findings shall
be sufficient for this determination.  If the difference between
the two determinations is ten percent (10%) or less of the higher
determination, then the average of the determinations shall be
the Fair Market Rental Value.  If said difference is greater than
ten percent (10%), then the two Appraisers shall within five (5)
days of the date the second determination is submitted to the
parties designate a third appraiser who must also be a qualified
member of the Appraisal Institute, or its successor organization,
with not less than five years experience in valuing commercial
property in Santa Clara County.  A written report of the
Appraisers' determination of Fair Market Value shall be delivered
to the third Appraiser.  The sole responsibility of the third
Appraiser will be to determine which of the determinations made
by the first two Appraisers is most accurate.  The third
Appraiser shall have no right to propose a middle ground or any
modification of either of the determinations made by the first
two Appraisers. The third Appraiser's choice shall be submitted
to the parties within fifteen (15) days after his or her
selection.  Such determination shall bind both parties and shall
establish the Fair Market Rental Value.  Each party shall pay the
fees and expenses of the Appraisers selected by it, and each
shall pay one-half of the fees and expense of the third
Appraiser.  Any of the foregoing to the contrary notwithstanding,
in no event shall the initial Minimum Rent for the renewal term
be less than the Minimum Rent for the final month of the Primary
Term.

     If the first two appraisers cannot agree on a third
appraiser then the third appraiser shall be selected by the
presiding judge of the Superior Court.

     D.  The Minimum Rent during the option period shall be
increased at the commencement of the thirteenth month of the
option period, and annually thereafter, by an amount equal to 4%
of the Minimum Rent for the period next preceding.

4.   HOLDING OVER.  If Lessee remains in possession of the
Premises or any part thereof after the expiration of the term
hereof with the express written consent of Lessor, such occupancy
shall be a tenancy from month-to-month at a monthly rent equal to
150% of the last monthly Minimum Rent (hereinafter defined), plus
all other charges payable hereunder, and upon all the terms
hereof applicable to a month-to-month tenancy.  Provided that, if
Lessee shall fail to surrender the Premises to Lessor upon the
termination of this Lease, in addition to any other liabilities
to Lessor arising therefrom, Lessee shall indemnify, defend and
hold harmless Lessor from any loss or liability resulting from
such failure, including, without limitation, claims made by any
succeeding lessee of the Premises.

5.   ASSIGNMENT AND SUBLETTING.

     A.  Transfers; Consent. Lessee shall not, without the prior
written consent of Lessor, (a) assign, transfer, mortgage,
hypothecate, or encumber this Lease or any estate or interest
herein, whether directly, indirectly or by operation of law, (b)
permit any other entity to become a Lessee hereunder by merger,
consolidation, or other reorganization, (c) if Lessee is a
corporation, partnership, limited liability company, limited
liability partnership, trust, association or other business
entity (other than a corporation whose stock is publicly traded),
permit, directly or indirectly, the transfer of any ownership
interest in Lessee so as to result in (i) a change in the current
control of Lessee or (ii) a transfer of twenty-five percent (25%)
or more in the aggregate in any twelve (12) month period in the
beneficial ownership of such entity, (d) sublet any portion of
the Premises, (e) grant any license, concession, or other right
of occupancy of or with respect to any portion of the Premises,
or (f) permit the use of the Premises by any party other than
Lessee (each of the foregoing events being referred to herein as
a "Transfer").  If Lessee requests Lessor's consent to any
Transfer, then concurrently with such request, Lessee shall
provide Lessor with a written description of all terms and
conditions of the proposed Transfer and all consideration
therefor (including a calculation of the Transfer Profits
described below), copies of the proposed documentation, and the
following information about the proposed transferee: name and
address; information reasonably satisfactory to Lessor about the
proposed transferee's business and business history; its proposed
use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Lessor
to determine the proposed transferee's creditworthiness and
character.  Lessor shall not unreasonably withhold its consent to
any assignment or subletting of the Premises, provided that the
parties agree that it shall be reasonable for Lessor to withhold
any such consent if Lessor determines in good faith that (A) the
proposed transferee is not of a reasonable financial standing or
is not creditworthy, (B) the proposed transferee has the power of
eminent domain, is a governmental agency or an agency or part of
a foreign government, (C) the proposed transferee, or any
affiliate thereof, is then an occupant in the Shopping Center has
engaged in discussions with Lessor concerning a lease of direct
space in the Shopping Center, or (D) the proposed Transfer would
result in a breach of any obligation of Lessor or permit any
other Lessee in the Shopping Center to terminate or modify its
lease.  Lessor may withhold its consent to any other form of
Transfer in its sole and absolute discretion.  Any Transfer made
without Lessor's consent shall be void and at Lessor's election,
shall constitute a default by Lessee.  Lessee shall also
reimburse Lessor immediately upon demand therefor for all of its
attorneys' fees and other costs reasonably incurred in connection
with considering any request for consent to a proposed Transfer.
If Lessor consents to a proposed Transfer, then the proposed
transferee shall deliver to Lessor, in a form reasonably
satisfactory to Lessor, a written agreement whereby the proposed
transferee expressly assumes the Lessee's obligations hereunder.
Lessor's consent to a Transfer shall not release Lessee from its
obligations under this Lease, but rather Lessee and its
transferee shall be jointly and severally liable for all
obligations under this Lease allocable to the space subject to
such Transfer.  Lessor's consent to any Transfer shall not waive
Lessor's rights as to any subsequent Transfers.

     Upon Lessor's consent, such consent shall not be
unreasonably withheld, Lessee may assign the Lease, or sublet the
Premises (a) to a corporation or other entity with which Lessee
may merge or consolidate, or (b) in connection with the sale of
all or a substantial portion of Lessee's assets, or (c) to any
Affiliates (as defined below), or (d) in connection with the sale
of stock in a public offering.  The withholding of Lessor's
consent will be considered reasonable in the event of: (i) any
unapproved change of use of the Premises, (ii) any expected
lowering of the character and quality of the Lessee, or, (iii) if
anticipated changes in the Premises are not in keeping for a
first class shopping center in the Town of Los Gatos.  The term
"Affiliate" shall mean any corporation, limited liability company
or other entity which controls, is controlled by, or is under
common control with Lessee.  The term "control" shall mean
ownership of more than fifty percent (50%) of all of the voting
stock of a corporation or more than fifty percent (50%) of all of
the legal and equitable interest of any other business entity.

     B.  CANCELLATION AND RECAPTURE.  Except as provided in the
second paragraph of Subsection A above, Lessor may in its sole
and absolute discretion, within thirty (30) days after submission
of Lessee's written request for Lessor's consent to a Transfer,
cancel this Lease as to the portion of the Premises that is
subject to the proposed Transfer as of the date such proposed
Transfer is proposed to be effective and, thereafter, Lessor may
lease such portion of the Premises to the prospective transferee
(or to any other person or entity or not at all) without
liability to Lessee.  If Lessor does not cancel this Lease within
such thirty-day period and notwithstanding any Lessor consent to
the proposed Transfer, Lessee shall pay to Lessor, immediately
upon receipt thereof any and all consideration paid to Lessee
directly or indirectly for the assignment by Lessee of its
leasehold interest, and 100% of any and all subrentals payable by
sublessees to Lessee which are in excess of the Minimum Rent and
Additional Rent payable by Lessee hereunder.

     If Lessor cancels this Lease as provided in this
Subparagraph B. then Lessor shall make a lump sum payment to
Lessee for the unamortized portion of Lessee's capital
improvements to the Premises, per GAAP accounting methods, to the
extent that such capital improvements shall be used by the
subsequent lessee.

     Lessee is entitled to deduct from the amount required to be
paid to Lessor pursuant to the second sentence of Section 5(B)
(i) reasonable leasing commissions paid by Lessee; (ii) other
reasonable out-of-pocket costs paid by Lessee (including attorney
fees, advertising costs, and expenses of readying the Premises
for occupancy by the transferee); and (iii) any consideration
paid to the transferee or any third party to induce the
transferee to consummate the assignment or subletting, provided
these expenses shall only be deducted from amounts in excess of
Rent (as defined below).

6.   MINIMUM RENT.

     A.  Lessee agrees to pay to Lessor as minimum monthly rent
("Minimum Rent"), without notice or demand, beginning on the
Commencement Date, in advance on or before the first day of each
and every successive calendar month, the amount shown in the
schedule attached hereto as "Exhibit B".

     The Minimum Rent for any period which is for less than one
(1) month shall be a prorated portion of the monthly installment
herein based upon a thirty (30) day month.  Said Minimum Rent
shall be paid to Lessor, without any deduction or offset
whatsoever, in lawful money of the United States of America at
such place as Lessor may from time to time designate in writing.

     Concurrently with Lessee's execution of this Lease, Lessee
shall pay to Lessor the sum of EIGHT THOUSAND SIX HUNDRED
EIGHTY-NINE AND NO/100 DOLLARS ($8,689.00) as an advance payment
of the Minimum Rent payable by Lessee hereunder for the first
full calendar month of the Term.

7.   ADDITIONAL RENT.

     A.   (1)  In addition to the Minimum Rent payable by Lessee
under this Lease, any other monetary sum required under this
Lease to be paid by Lessee to Lessor or to others (including but
not limited to the payments required by this Section) is deemed
under this Lease to be additional rent payable by Lessee
("Additional Rent"), whether or not the monetary sum is so
designated as Additional Rent.  Unless otherwise provided, all
Additional Rent is due and payable at the same time as Minimum
Rent, and Lessor has the same remedies for Lessee's failure to
pay Additional Rent as it has for Lessee's failure to pay Minimum
Rent. The term "Rent" as used in this Lease shall mean Minimum
Rent and Additional Rent, collectively.

          (2)  With respect to each calendar year during the term
of the Lease, Lessor shall endeavor to deliver to Lessee by March
1 of the following year (or as soon thereafter as is reasonably
practical), an itemized statement of the total actual Shopping
Center Operating Expenses, Taxes and Insurance for such calendar
year.  If the statement discloses an underpayment by Lessee for
the calendar year covered by the statement, Lessee shall pay
Lessor the amount of the underpayment within 30 days after the
date of the statement.  If the statement discloses an overpayment
by Lessee, the overpayment will be applied to the following
month's estimated payment therefor unless the overpayment is more
than twice the estimated payment due for the following month, in
which the excess shall be refunded within 30 days after receipt
of the statement from Lessor, provided Lessee is not in default
of the Lease at the time the refund is due.  Lessor shall
endeavor to maintain accurate, detailed records of all costs and
expenses of the Shopping Center at Lessor's office for at least
twelve (12) months after delivery of the Lessor's annual
statement to Lessee.  Lessee and Lessee's agent, at Lessee's
expense, may inspect, copy and/or audit said records at Lessor's
offices one (1) time per year with seven (7) days prior written
notice to Lessor.

     B.   (1)  Lessee shall pay to Lessor, as Additional Rent, a
proportionate share of Shopping Center Operating Expenses
(defined below).  Lessee's proportionate share of these costs
shall be a sum equal to the product obtained by multiplying (1)
the total actual Shopping Center Operating Expenses for the
calendar year in question by (2) a fraction, the numerator of
which is the number of square feet of gross floor area of the
Premises, and the denominator of which is the number of total
square feet of  gross floor area of all areas in the Shopping
Center that are available for the exclusive use and occupancy of
lessees of the Shopping Center.  As of the lease date, the
fraction representing Lessee's proportionate share of the
leasable area of the Shopping Center is 3,448/59,080 = 5.84%

          (2)  Concurrently with its monthly payment of Minimum
Rent to Lessor, Lessee shall pay its proportionate share of
Shopping Center Operating Expenses in the estimated amount
determined and billed by Lessor.  The amount paid monthly shall
be based on Lessor's estimate of Shopping Center Operating
Expenses for the current calendar year.  That estimate shall not
exceed by more than 10% the total Shopping Center Operating
Expenses for the immediately preceding calendar year, except that
in any year in which resurfacing is contemplated Lessor shall be
permitted to include the anticipated cost as part of the
estimated Shopping Center Operating Expenses.

          For the period of this Lease from the Commencement
Date to the end of the 1999 calendar year, the estimated monthly
payments for Shopping Center Operating Expenses and Taxes shall
be $0.31 per square foot per month.

          (3)  "Shopping Center Operating Expenses" means all
costs and expenses of managing, operating, repairing and
maintaining the Shopping Center in a manner deemed reasonable and
appropriate by Lessor, including but not limited to all costs and
expenses of or relating to the following: operating, heating,
cooling, ventilating, repairing, cleaning, replacing, lighting,
painting and maintaining the Common Areas; security services for
the Shopping Center; garbage and trash removal for the Shopping
Center; the premiums for the insurance maintained by Lessor with
respect to the Shopping Center (including the insurance described
in Section 17 below) and the amount of any deductibles payable
thereunder; regulation of traffic; repairing and replacing paved
surfaces, roofs, landscaping, drainage, electrical lines and
heating and air-conditioning systems; all on-site personnel used
for the management, operation and maintenance of the Shopping
Center; trucks and other equipment used for the management,
operation and maintenance of the Shopping Center; depreciation of
machinery, equipment and other non-real estate assets used in the
maintenance and operation of the Shopping Center; and measures
undertaken by Lessor to comply with any environmental or similar
law, ordinance or regulation.  Further, "Shopping Center
Operating Expenses" shall include a management fee paid to Lessor
or to a management company  employed by Lessor which shall not
exceed 10% of the total Shopping Center Operating Expenses,
excluding property taxes and insurance premiums.  "Shopping
Center Operating Expenses" shall not include sums payable by
Lessee pursuant to Paragraph F of this Section.  In addition,
"Shopping Center Operating Expenses" shall not include (a) costs
of leasing space in the Shopping Center (including brokerage
commissions, legal expenses, improvement costs or allowances, and
costs of enforcement or negotiation of leases), (b) Lessor's debt
service or ground lease payments, charges for goods and services
provided by affiliates of Lessor, to the extent greater than the
amounts charged for similar goods and services by unaffiliated
parties on a competitive basis, (c) fines, penalties, damage
awards or other amounts for which Lessor is liable as a result of
violating any law or any agreement to which Lessor is a party, or
costs to correct violations of Applicable Laws, or (d) expenses
for which Lessor is reimbursed by insurance proceeds or by any
third party.

     C.   (1)  Except for utility services provided by Lessor
pursuant to subparagraph (2) of this paragraph C, Lessee shall
apply to the appropriate local utility companies to begin service
on the Premises on or before the Commencement Date, and shall pay
the cost of any required deposit, hook-up fee, metering charge,
or other charge by the utility provider.  Throughout the Term of
this Lease, Lessee shall pay, prior to delinquency, the cost of
all utilities used on the Premises (including but not limited to
water, rubbish disposal, gas, heat, light, power, sewer charges
and telephone service), whether supplied by a local utility
company or by Lessor.  When any service is separately metered and
supplied by a local utility company, Lessee shall arrange for the
utility company to bill Lessee directly.  In the case of any
utility services provided by Lessor directly to Lessee, Lessor
shall bill Lessee for those services monthly at the same time
Lessor bills Lessee for its proportionate share of Shopping
Center Operating Expenses, and Lessee shall pay the bill for
those services at the same time Lessee is required to pay its
share of Shopping Center Operating Expenses.  For utility
services provided by Lessor that are not separately metered and
that are used by Lessee in common with other Lessees of the
Shopping Center, Lessee shall pay Lessor a proportionate share
based on total square footage of gross floor area of all lessees
using the common utility services.
          (2)  Lessor shall furnish, at Lessee's expense, the
following utilities to the Premises:  water and sewer, and, if
the Premises are not separately metered, gas and electricity.
Further, Lessor may elect at any time during the Term of this
Lease to furnish, or to select an agent or independent contractor
to furnish, other utilities to the Premises (excluding
telecommunications and data transmission services).  In that
case, Lessee agrees to accept the furnished utility services to
the exclusion of any other provider, provided the charge to
Lessee for the furnished service is competitive with other
providers or has been approved by the appropriate regulatory
agency.  On at least 30 days' prior written notice to Lessee,
Lessor may discontinue furnishing any utility service previously
provided to Lessee.  In that event, Lessor shall be responsible
for connecting the Premises to a new provider, but shall have no
other responsibility toward Lessee.  Lessor has no responsibility
for the interruption, curtailment or suspension of any utility
services to the Premises provided by a local utility company or
other provider, or in the case of services furnished by Lessor,
for any interruption, curtailment or suspension necessitated by
repairs, action of public authority, strikes, acts of God or
public enemy, other similar causes beyond the reasonable control
of Lessor, or a default by Lessee under this Lease unless such
interruption, curtailment or suspension is caused by the gross
negligent acts of Lessor or Lessor's agents, servants, employees
or invitees.  Interruption, curtailment or suspension of utility
services shall not constitute a constructive eviction under this
Lease or entitle Lessee to any abatement in Rent.

     D.   (1)  Lessor shall pay all Taxes (defined below) that
maybe levied or assessed against the land, buildings or other
improvements in the Shopping Center; provided, however, that
Lessee shall pay a proportionate share of Taxes as provided in
this Paragraph D.  In no event shall Lessee be obligated to pay
any penalty or interest which may result from the delinquency
payment of Real Estate Taxes by Lessor, unless such delinquency
is due to the failure by Lessee to pay its proportionate share of
Taxes as provided in this Paragraph D.  "Taxes" means any real
property taxes, assessments, and other levies or charges imposed
by a governmental entity that are or may be levied, assessed,
imposed, become a lien on, or arise in connection with the
ownership, use, occupancy or possession of all or any portion of
the Shopping Center or the land, buildings or other improvements
in the Shopping Center.  "Taxes" do not include any inheritance,
estate, succession, transfer, gift, franchise, corporation,
income or profit tax that is or may be levied or imposed on
Lessor; provided, however, that the term "Taxes" does include any
tax, assessment or charge (a) that is imposed or levied on Lessor
(directly or indirectly) by a taxing authority with jurisdiction
over the Shopping Center, and (b) that is measured, computed or
determined in whole or in part based on rents paid by lessees in
the Shopping Center.  "Taxes" do not include sums payable by
Lessee pursuant to Paragraph F of this Section.

          (2)  Lessee's annual share of Taxes for each Tax Year
(defined below) of the Term of the Lease shall be a sum equal to
the product obtained by multiplying the total amount of all Taxes
payable during a Tax Year by a fraction, the numerator of which
is a number equal to the total square feet of gross floor area in
the Premises, and the denominator of which is a number equal to
the total square feet of gross floor area in the Shopping Center
designed for the exclusive use and occupancy of lessees. Lessee's
annual share of Taxes shall be paid in advance on a monthly basis
in equal installments in the amount billed by Lessor,
concurrently with Lessee's payment of Minimum Rent under this
Lease.  In the absence of anything other than regular annual tax
increases, and at Lessor's option, Lessor may estimate the amount
of Lessee's monthly share of Taxes.  If some other event causes
an increase in taxes, Lessor will notify Lessee in writing and,
upon doing so, Lessor may increase Lessee's estimated monthly
share of Taxes accordingly.  An official tax bill or copy of the
tax bill shall be conclusive evidence of any amount taxed or
levied.

          (3  "Tax Year" means the 12 full calendar months of
the term beginning on January 1 immediately following the
Commencement Date and ending on December 31 of that same calendar
year, and each successive twelve-month period in the Term of this
Lease; provided, however, that the first Tax Year under this
Lease shall begin on the Commencement Date and shall end on
December thirty first of the same calendar year.  When the
Commencement Date is a date other than January 1 or when this
Lease terminates on a date other than December 31, Lessee's
proportionate share of Taxes for either year, as the case may be,
shall be equitably prorated.

          (4)  Lessee shall not and shall have no right to
contest the amount of any Taxes assessed or levied or the
underlying valuation giving rise to the Taxes for purposes of
obtaining a tax reduction or for any other purpose.  If Lessor
obtains a refund  of Taxes previously paid for a Tax Year and for
which Lessee has fully paid its proportionate share, Lessor shall
refund to Lessee its net proportionate share after first
deducting all costs and expenses incurred by Lessor in obtaining
the refund, including attorneys' and appraisers' fees.  Lessor
shall have no duty to contest the amount of any Taxes imposed or
levied on the Shopping Center.

     E.   [Intentionally Deleted]

     F.   Lessee shall pay to Lessor within 10 days following
Lessor's demand, as Additional Rent, 100% of (1) the costs of
maintenance and repair performed by Lessor for the primary
benefit of Lessee and (2) all real estate taxes, sewer taxes, and
premiums for insurance which arise or are required due to the
nature of Lessee's business and/or any improvements or
alterations to the Premises.

     G.   Even though the Lease has expired and Lessee has
vacated the Premises, when the final determination is made of
Additional Rent payable by Lessee for the year in which this
Lease terminates, Lessee shall within 30 days of receipt of
invoice pay any increase due over the estimated Additional Rent
previously paid and, conversely, any overpayment made shall,
within thirty(30) days, be rebated by Lessor to Lessee.

     H.   Failure of Lessor to submit statements as called for
herein shall not be deemed to be a waiver of Lessee's requirement
to pay sums as herein provided.

     I.   Lessee may question a component of the Additional Rent
calculation only by providing Lessor with written notice thereof
within sixty (60) days following Lessee's receipt of Lessor's
annual statement therefor.  If Lessee does not provide such
notice within such sixty (60) day period, then the annual
statement in question shall be binding on Lessee.  If Lessee
timely questions a component of the Additional Rent calculation,
Lessor shall, within thirty (30) days of Lessee's request
therefor, provide Lessee with a copy of the actual invoices or
other reasonable documentation reasonably acceptable to Lessee
substantiating such component.

8.   PERSONAL PROPERTY TAXES.  Lessee shall pay or cause to be
paid, before delinquency, any and all taxes levied or assessed
and which become payable upon all Lessee's leasehold
improvements, equipment, furniture, fixtures and any other
personal property located in, on or about the Premises.  In the
event any such taxes are included as part of Taxes, then Lessee
shall pay the taxes thereon to Lessor within ten (10) days after
delivery to Lessee by Lessor of a statement in writing setting
forth the amount of such taxes applicable to such improvements,
equipment, furniture, fixtures and other personal property.

9.   USE.  Lessee shall use and occupy the Premises for THE
RETAIL SALE OF ENVIRONMENTALLY FRIENDLY PRODUCTS, RENEWABLE
ENERGY PRODUCTS, and shall not use or permit the Premises to be
used for any other purpose or purposes without the prior written
consent of Lessor, which consent may be withheld by Lessor in its
sole discretion.

10.  USE PROHIBITED.

     Lessee shall not do or permit anything to be done in or
about the Premises nor bring or keep anything therein which is
not within the permitted use of the Premises which will in any
way increase the existing rate of or affect any fire or other
insurance upon the Shopping Center or any of its contents, or
cause a cancellation of any insurance policy covering said
Shopping Center or any part thereof or any of its contents.
Lessee shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the
rights of other lessees or occupants of the Shopping Center or
injure or annoy them or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose; nor
shall Lessee cause, maintain or permit any nuisance in, on, or
about the Premises.  Lessee shall not commit or allow to be
committed any waste in or upon the Premises.  This Lease shall be
subject to all existing and future covenants, restrictions,
conditions and easements of record affecting the Shopping Center,
and Lessee agrees to at all times comply with and observe, and
shall cause all its employees, agents, contractors, customers and
invitees to comply with and observe, all such covenants,
restrictions, conditions and easements, provided, as to future
covenants, restrictions, conditions and easements, that the same
will not materially affect Lessee's rights under this Lease or
increase Lessee's obligations with respect to the Premises.

11.  COMPLIANCE WITH LAW.  Lessee shall not use the Premises, or
permit any thing to be done in or about the Premises, which will
in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may
hereafter be enacted or promulgated.  Lessee shall, at its sole
cost and expense promptly comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements
now in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar
bodies now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises, excluding
pre-existing conditions as of the Commencement Date, if any,
and/or structural changes not related to or affected by Lessee's
improvements, alterations or particular use of the Premises. The
judgment of any court of competent jurisdiction or the admission
of Lessee in any action against Lessee, whether Lessor be a party
thereto or not, that Lessee has violated any law, statute,
ordinance or governmental rule, regulation or requirement, shall
be conclusive of that fact as between the Lessor and Lessee.

     Lessor represents to Lessee that, on the date the Premises
is delivered to Lessee, the Premises complies with all laws,
statutes, ordinances and governmental rules, regulations and
requirements ("Applicable Laws") applicable thereto, including,
without limitation, the ADA and all Applicable Laws relating to
Toxic Materials.

     1.  Lessor indemnifies and will defend Lessee against
damages  and claims relating to Toxic Materials in, on or about
the Shopping Center as of the Commencement Date, except for Toxic
Materials brought onto the Premises by Lessee.

     2.  The Certificate of Occupancy from the Town of Los Gatos
demonstrates that the Premises is in compliance with applicable
codes.

In particular, Lessee, at its sole cost, shall comply with all
laws, statutes, ordinances and governmental rules, regulations
and requirements relating to Lessee's storage, use, handling, and
disposal of hazardous, toxic or radioactive matter, including but
not limited to those materials identified in Sections 66680
through 66685 of Title 22 of the California Administrative Code,
Division 4, Chapter 30, as they may be amended from time to time
(collectively "Toxic Materials"). If Lessee does store, handle,
use or dispose of any Toxic Materials (except for customary
cleaning and office supplies used in the ordinary course of
Lessee's business conducted on the Premises or other Toxic
Materials approved by Lessor), Lessee shall notify Lessor in
writing at least ten (10) days prior to their first appearance on
the Premises. Lessee shall be solely responsible for and shall
defend, indemnify and hold Lessor and its employees, agents and
representatives harmless from and against all claims, costs and
liabilities, including attorneys' fees and costs and costs and
expenses of removal, clean-up and restoration, arising out of or
in connection with the storage, use, handling or release and
disposal of Toxic Materials in, on or about the Premises and the
Shopping Center by Lessee, its employees, agents, contractors,
customers and invitees.  Lessee's obligations hereunder shall
survive the expiration or sooner termination of this Lease.

12.  REPAIRS.

     A.   By entering into this Lease, Lessee shall have accepted
the Premises as being in good, sanitary order, condition and
repair. Lessee shall, at Lessee's sole cost and expense, keep the
Premises and every part thereof in good condition and repair
(except as hereinafter provided with respect to Lessor's
obligations) including without limitation, the maintenance,
replacement and repair of storefront glass, equipment, exterior
doors, window casements, glazing, heating and air-conditioning
system (when there is an air-conditioning system, Lessee shall
obtain a service contract for repair and maintenance of said
system, said maintenance contract to conform to the requirements
under the warranty, if any, on said system and shall otherwise be
subject to Lessor's approval), plumbing, pipes, electrical wiring
and conduits.  Lessor reserves the right to obtain an HVAC
service contract at Lessee's cost (Lessee to pay or reimburse
Lessor for the cost of such service within 10 days after receipt
of Lessor's invoice therefor) if Lessee fails to maintain the
HVAC system to Lessor's satisfaction.

     Lessee shall, upon the expiration or sooner termination
of this Lease, surrender the Premises to the Lessor in accordance
with Section 37 below. Any damage to adjacent premises or any
other portion of the Shopping Center caused by Lessee's use of
the Premises shall be repaired at the sole cost and expense of
Lessee.

     Lessor will inspect and service HVAC system in order to
assure Lessee that the system is in good working order as of the
Commencement Date.  If Lessee is required to make repairs or
replacements to the HVAC which (i) are of a capital nature under
generally accepted accounting principles and (ii) are not caused
by Lessee's negligent maintenance, Lessor shall make such repairs
or replacements and Lessee shall pay to Lessor, in equal monthly
installments hereunder with Minimum Rent, the portion of the cost
thereof allocable to the remaining Term (determined by amortizing
the cost of the HVAC repairs or replacements on a straight-line
basis over the useful life of such repairs or replacements).

     Lessee shall have no obligation to repair any damage or
defects caused by any intentional act or negligence of Lessor,
its agents or contractors; or which may be caused by or result
from any repairs, alterations, replacements or other improvements
or installations made by Lessor, its agents or contractors,
except that Lessee shall maintain, as provided above, alterations
and other improvements or installations made to the Premises by
Lessor, its agents or contractors for the benefit of Lessee.

     B.   Notwithstanding the provisions of this Section,
Paragraph A, above, Lessor shall repair and maintain the
structural portions of the Shopping Center including the exterior
walls, roof and storefront, excluding glazing, window casements
and doors, unless such maintenance and repairs are necessitated
in part or in whole by the act, neglect, fault or omission of any
duty by the Lessee,its agents, servants, employees, invitees,
contractors or customers, or any damage caused by breaking and
entering, in which case Lessee shall pay to Lessor the actual
cost of such maintenance and repair within 10 days following
Lessor's demand therefor.  Lessor shall not be liable for any
failure to make such repairs or to perform any maintenance unless
such failure shall persist for an unreasonable time after written
notice of the need of such repairs or maintenance is given to
Lessor by Lessee.  Except as provided in this Lease, there
shallbe no abatement of Rent and no liability of Lessor by reason
of any injury to or interference with Lessee's business arising
from the making of any repairs, alterations or improvements in or
to any portion of the Shopping Center or the Premises or in or to
fixtures, appurtenance and equipment therein. Repairs,alterations
or improvements which Lessor may perform in the Shopping Center,
including the Premises, shall not unreasonably interfere with the
intended use of and usual access to the Premises by Lessee's
customers and suppliers without affording reasonable alternative
means of access; and all such work shall be done as promptly as
reasonably possible and so as to cause as little interference to
Lessee's business as reasonably possible. Lessee waives the right
to make repairs at Lessor's expense or terminate this lease due
to the condition of the Premises under any law, statute or
ordinance now or hereafter in effect except in the case of
emergency and after notice to Lessor and Lessor's failure to act.
In the event of an emergency and upon Lessee's notification to
Lessor and Lessor's failure to respond within a reasonable time,
Lessee may undertake immediate repairs with respect to the
Premises of such a nature as would normally be Lessor's
responsibility and notify Lessor promptly after such repairs have
been undertaken.  The reasonable billing for such Repairs will be
reimbursed by Lessor to Lessee within ten days upon presentation
of the paid invoice for the repairs.

     C.   Lessee shall promptly replace any windows on the
Premises broken or damaged during the Term, or extended term, of
this lease, at its sole cost and expense.

     D.   Lessor agrees to maintain the Shopping Center and the
Common Areas at all times as a first class shopping center
consistent with the highest standards of operation applicable to
comparable centers in the vicinity.

13.  RECONSTRUCTION.  In the event the Premises are damaged by
fire or other perils covered by Lessor's insurance, Lessor agrees
to forthwith repair same, and this Lease shall remain in full
force and effect, except that Lessee shall be entitled to a
proportionate reduction of the Minimum Rent and Additional Rent
from the date of damage and while such repairs are being made,
such proportionate reduction to be based upon the extent to which
the damage and making of such repairs shall reasonably interfere
with the business carried on by the Lessee in the Premises. If
the damage is due to the fault or neglect of Lessee or its
employees, there shall be no abatement of rent (except to the
extent Lessor receives rent loss insurance proceeds therefor),
and Lessee shall pay to Lessor the actual cost of repairs,
subject to Section 18 below.

     In the event the Premises are damaged as a result of any
cause other than insured perils required under this Lease covered
by Lessor's insurance, then Lessor shall forthwith repair the
same, provided the extent of the destruction be less than ten
(10%) percent of the then full replacement cost of the Premises.
In the event the destruction of the Premises is to an extent of
ten (10%) percent or more of the full replacement cost then
Lessor shall have the option, exercisable in its sole discretion:

          (1)  To repair or restore such damage, this Lease
continuing in full force and effect, but the Minimum Rent to be
proportionately reduced as herein above in this Section provided;
or
          (2)  Give notice to Lessee at any time within sixty
(60) days after such damage, terminating this Lease as of the
date specified in such notice, which date shall be no more than
thirty (30) days after the giving of such notice.  In the event
of giving such notice, this Lease shall expire and all interest
of the Lessee in the Premises shall terminate on the date so
specified in such notice and the Minimum Rent reduced by a
proportionate reduction, based upon the extent, if any, to which
such damage interfered with the business carried on by the Lessee
in the Premises, shall be paid up to date of said such
termination.

     Notwithstanding anything to the contrary contained in this
Section,

          (a)  Lessor shall not have any obligation whatsoever to
repair, reconstruct or restore the Premises when (1) damage of
over twenty-five (25%) percent of the floor area in which the
Premises are located has resulted from any casualty covered under
this Section and such damage has occurred during the last
twenty-four (24) months of the Term of this Lease or, (2) if in
Lessor's reasonable estimation, the repair, reconstruction or
restorationion question will take more than 180 days to complete
following the occurrence of the damage in question; and

          (b)  Lessor shall not be obligated to expend for
repairs or rebuilding an amount in excess of the net insurance
proceeds for damage to the Premises recovered by it.  "Net
insurance proceeds" means the total amount of proceeds recovered
for damage to the Premises, less any expenses incurred by Lessor
in recovering the proceeds; and less any amounts of such proceeds
required to be paid to Lessor's lender.

     Upon the occurrence of either of the matters described in
subsection (a) above or if the estimated cost of the repairs or
rebuilding in question is in excess of the net insurance
proceeds, then, in such event, Lessor shall have the options
described in subsection (1) and (2) of this Section 13 above.

     Lessor shall not be required to repair any injury or damage
by fire or other cause, or to make any repairs or replacements of
any leasehold improvements, equipment, fixtures, or other
personal property of Lessee.

     If, by virtue of the foregoing provisions, Lessor elects not
to fully restore the Premises, or is not required to fully
restore the Premises (due to the lack of net insurance proceeds
or otherwise), or if Lessor determines in accordance with the
foregoing provisions that the repair, reconstruction or
restoration in question will take more than 180 days to complete
following the occurrence of the damage in question, Lessee shall
have the right to terminate this Lease by giving written notice
of termination to Lessor not later than 30 days after Lessor
advises Lessee that the Premises will not be fully restored, or
that the restoration will take more than 180 days to complete, as
the case may be.  Such termination will be effective as of the
date of such notice, unless Lessee continues to operate its
business from the Premises, in which case the termination will be
effective on the date that Lessee surrenders possession of the
Premises to Lessor, in which case Minimum Rent, reduced by a
proportionate reduction based upon the extent, if any, to which
such damage interfered with the business carried on by the Lessee
in the Premises, shall be paid up to date of said such
termination.


14.  ALTERATIONS AND ADDITIONS.  Lessee shall not make or allow
to be made any alterations, additions or improvements to the
Premises or to the exterior of the Premises without first
obtaining the written consent of Lessor, which consent may be
withheld in Lessor's sole discretion.  In the event Lessor
consents to the making of any alterations, additions or
improvements to the Premises by Lessee, the same shall be made by
Lessee at Lessee's sole cost and expense and in accordance with
the terms and conditions of this Lease, including this Section
14.
     Upon the expiration or sooner termination of the Lease,
Lessee shall, upon written demand by Lessor, at Lessee's sole
cost and expense, forthwith and with all due diligence, remove
any alterations, additions, or improvements made by Lessee,
designated by Lessor to be removed as a condition of approval of
Lessee's improvement plans.  Lessee shall forthwith and with all
due diligence, at its sole cost and expense, repair any damage to
the Premises caused by such removal.

     Lessee's right to make alterations, additions or
improvements when permitted by this Section shall be deemed
conditioned, without limitation, upon:  (i) Lessee's acquiring
all applicable permits required by governmental authorities, (ii)
the furnishing of copies of such permits together with a copy of
the plans and specifications for the alterations, additions or
improvements to Lessor prior to commencement of the work thereon
(which plans and specifications shall be subject to Lessor's
prior written approval), (iii) the compliance by Lessee with all
conditions of said permits in a prompt and expeditious manner and
(iv) such other conditions and Lessor may impose. All
alterations, additions or improvements by Lessee during the
Term of this Lease shall be done by duly licensed contractors in
a good and workmanlike manner, with good and sufficient
materials, and in compliance with all applicable laws.  Lessee
shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor.[ Lessor may (but
without obligation to do so) condition its consent to any
requested alterations, additions or improvements upon Lessee's
providing Lessor with a lien and completion bond in an amount
equal to one and one-half times the estimated cost of such
alterations, additions or improvements and/or upon Lessee's
posting an additional security deposit with Lessor under Section
30 hereof.]

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

Real Goods shall be allowed to install a total of 6 solar panels
on the roof provided that:

     1.  The panels do not impose a significant structural load
         requiring additional structural bracing for the
         building.
     2.  The panels are not an obstruction to the maintenance and
         service of other rooftop equipment.
     3.  The panels are installed carefully and the panels and
         associated equipment, lines and support structure do not
         cause roof leaks.
     4.  The panels are lower than the mansard roof so that they
         are not visible when viewed from a position level with
         the mansard.

15.  LIENS.  Lessee shall, at all times, keep the Shopping
Center and the Premises and the property in which the Premises
are situated free from any liens arising out of any work
performed, materials furnished or obligation incurred by or on
behalf of Lessee.

16.  HOLD HARMLESS.  To the fullest extent permitted by law,
Lessee shall defend, indemnify and hold harmless Lessor against
and from any and all claims arising from Lessee's use of the
Premises or from the conduct of its business or from any
activity, work, or other things done, permitted or suffered by
the Lessee in or about the Premises or the Shopping Center, and
shall further defend, indemnify and hold harmless Lessor against
and from any and all claims arising from any breach or default in
the performance of any obligation on Lessee's part to be
performed under the terms of this Lease, or arising from any act
or negligence of the Lessee, or any officer, agent, employee,
contractor, customer, or invitee of Lessee (except to the extent
any such claims arise (i) from the gross negligence or willful
misconduct of Lessor or its authorized agents, contractors or
employees, or (ii) from any default by Lessor under this Lease,
and, in either instance, are not otherwise covered by the
insurance required to be carried by Lessee under this Lease), and
from all costs, attorney's fees, and liabilities incurred in or
about the defense of any such claim or any action or proceeding
brought thereon and in case any action or proceeding be brought
against Lessor by reason of such claim, Lessee upon notice from
Lessor shall defend the same at Lessee's expense by counsel
reasonably satisfactory to Lessor.  Lessee shall give prompt
notice to Lessor in case of casualty in the Premises.  The
obligations of Lessee under this Section 16 shall survive the
expiration or sooner termination of this Lease.

     Lessor or its agents shall not be liable for any loss or
damage to persons or property resulting from fire, earthquake,
explosion, falling plaster, steam, gas, electricity, water or
rain which may leak from any part of the Premises or from the
pipes, appliances or plumbing works therein or from the roof,
street or subsurface or from any other place resulting from
dampness or any other cause whatsoever, unless caused by or due
to the gross negligence of Lessor, its agents, servants or
employees, or any default by Lessor resulting in one of the above
conditions; provided, however, in no event shall Lessor or its
agents be liable for any consequential damages, opportunity costs
or loss profits incurred or suffered by Lessee.  Lessor or its
agents shall not be liable for interference with the light, air,
or for any defect in the Premises.

17.  INSURANCE.

     A.   LESSEE'S COVERAGE.  Lessee agrees to maintain in full
force and effect at all times following delivery of possession of
the Premises and continuing until the expiration or sooner
termination of this Lease, at its own expense, for the protection
of Lessee and Lessor, as their interests may appear, policies of
insurance issued by a responsible carrier to the reasonable
satisfaction of Lessor which afford the following coverages:

          (1).  Comprehensive general liability insurance in an
amount not less than Five Million and no/100ths Dollars
($5,000,000.00) (or such greater amount as may in the future be
typical for a business similar to that of Lessee operating in the
vicinity of the Shopping Center) combined single limit for both
bodily injury and property damage which includes blanket
contractual liability broad form property damage, personal
injury, completed operations, product liability, and legal
expenses naming Lessor and any Lenders (as defined below), and
their respective and its agents as additional insureds.

          (2).  Risk of Direct Physical Loss Special Form
property insurance (including, without limitation, vandalism,
malicious mischief, and sprinkler leakage endorsement) on
Lessee's equipment, trade fixtures and other personal property
located on or in the Premises.  Such insurance shall be in the
full amount of the replacement cost, as the same may from time to
time increase as a result of inflation or otherwise, and shall be
in a form providing coverage comparable to the coverage provided
in the standard ISO Risk of Direct Physical Loss Special Form.
As long as this Lease is in effect, and except as provided for
herein to the contrary (i.e. damage terminating this Lease), the
proceeds of such policy shall be used for the repair or
replacement of such items so insured.  Lessor shall have no
interest in the insurance upon Lessee's personal property.

          Lessee may self-insure the coverages required to be
carried pursuant to subparagraph (A)(2) or such coverages may be
obtained by an endorsement on a blanket insurance policy covering
other Lessee stores.

     B.   INCREASED COVERAGE.  Upon demand, Lessee shall provide
Lessor, at Lessee's expense, with such increased amount of
existing insurance, and such other insurance as Lessor or
Lessor's lender may reasonably require to afford Lessor and
Lessor's lender adequate protection.

     C.   CO-INSURER.  If, on account of the failure of either
Lessor or Lessee (the "failing party") to comply with the
foregoing provisions, and if the other party is adjudged a
co-insurer by its insurance carrier, then, any loss or damage
that that party shall sustain by reason thereof, including
attorneys' fees and costs, shall be borne by the failing party
and shall be immediately paid by the failing party upon receipt
of a bill therefor and evidence of such loss.

     D.   INSURANCE REQUIREMENTS.  All such insurance shall be in
a form reasonably satisfactory to Lessor and shall be carried
with companies that have a general policy holder's rating of not
less than "A" and a financial rating of not less than Class
"VII"in the most current edition of Best's Insurance Reports;
shall provide that such policies shall not be subject to material
alteration or cancellation except after at least thirty (30)
days' prior written notice to Lessor; and shall be primary as to
Lessor.  Executed certificates evidencing the insurance to be
maintained by Lessee hereunder shall be deposited with Lessor
prior to the delivery of possession of the Premises to Lessee,
and upon renewal of such policies, within thirty (30) days of the
expiration of the term of such coverage.  If Lessee fails to
procure and maintain the insurance required hereunder, Lessor
may, but shall not be required to, order such insurance at
Lessee's expense and Lessee shall reimburse Lessor after Lessee
has been afforded at least ten (10) days notice.  Such
reimbursement shall include all costs incurred by Lessor
including Lessor's reasonable attorneys' fees, with interest
thereon at the Applicable Rate (as defined below).

     Lessor shall maintain comprehensive general liability
insurance on the Shopping Center and all buildings and
improvements located thereon, protecting Lessor against loss,
cost or expense by reason of injury to or death of persons or
damage to or destruction of property. Such insurance shall be
carried with companies that have a general policy holder's
rating of not less than "A" and a financial rating of not less
than Class "VII" in the most current edition of Best's Insurance
Reports; and shall have limits of at least $5,000,000.00 for each
occurrence, bodily injury and property damage combined.  Lessor
shall also maintain property insurance adequate to fully insure
the Shopping Center and all buildings and improvements thereon.
Lessor shall also maintain earthquake insurance on the Shopping
Center and all buildings and improvements thereon provided it is
available at commercially reasonable rates or is otherwise
required by any Lenders.  The cost of all such insurance
(including any deductibles payable by Lessor thereunder) shall be
included as part of Shopping Center Operating Expenses.

18.  SUBROGATION.  Lessor and Lessee each waives any claim, loss
and cost it might have against the other for any injury to or
death of any person or persons or damage to or theft,
destruction, loss, or loss of use of any property, to the extent
the same is insured against under any insurance policy that
covers the Shopping Center, the Premises, Lessor's or Lessee's
fixtures, equipment, personal property, leasehold improvements or
business, or is otherwise required to be insured against under
the terms of this Lease, regardless of whether the negligence of
the other party caused such loss; however, such waiver shall not
include any deductible amounts required to be paid under any
insurance policies or to any coinsurance penalty which a party
may sustain.  Each party shall cause its insurance carrier to
endorse all applicable policies waiving the carrier's rights of
recovery under subrogation or otherwise against the other party.

19.  DEFAULT BY LESSEE.  The occurrence of any one or more of
the following events shall constitute a default and breach of
this Lease by Lessee (each is called an "Event of Default"):

     A.   The vacating or abandonment of the Premises by Lessee
for more than three (3) days or any breach by Lessee of the
covenants set forth in Section 27 below.

     B.   The failure by Lessee to make any payment of Rent or
any other payment required to be made by Lessee hereunder, as and
when due and such failure continues for five (5) days after due
date.

     C.   The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed
or performed by the Lessee, other than described in this Section,
Paragraph A and B, above, where such failure shall continue for a
period of fifteen (15) days after written notice thereof by
Lessor to Lessee; provided, however, that if the nature of
Lessee's default is such that more than fifteen (15) days are
reasonably required for its cure, then Lessee shall not be deemed
to be in default if Lessee commences such cure within said
fifteen (15) days period and thereafter diligently prosecutes
such cure to completion.


     D.   The making by Lessee of any general assignment or
general arrangement for the benefit of creditors; or the filing
by or against Lessee of a petition to have Lessee adjudged a
bankrupt, or a petition or reorganization or arrangement under
any law relating to bankruptcy (unless, in the case of a petition
filed against Lessee, the same is dismissed within sixty (60)
days); or the appointment of a trustee or a receiver to take
possession of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially
all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged in
thirty (30) days.

20.  REMEDIES IN DEFAULT.    Upon the occurrence of any Event of
Default by Lessee, Lessor shall have, in addition to any other
remedies available to Lessor at law or in equity (all of which
remedies shall be distinct, separate, and cumulative), the option
to pursue any one (1) or more of the following remedies, each and
all of which shall be cumulative and non-exclusive, without any
notice or demand whatsoever:

     (a)  Terminate this Lease, in which event Lessee shall
immediately surrender the Premises to Lessor and if Lessee fails
to do so, Lessor may, without prejudice to any other remedy which
it may have for possession or arrearages in Rent, enter (in any
lawful manner) upon and take possession of the Premises and expel
or remove Lessee and any other person who may be occupying the
Premises or any part thereof, without being liable for
prosecution or any claim or damages therefor[)], and Lessor may
recover from Lessee the following:

          (i)   The worth at the time of any unpaid rent which
has been earned at the time of such termination; plus,

          (ii)  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 Lessee proves could have been reasonably
avoided; plus,

          (iii) 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 Lessee
proves could have been reasonably avoided; plus,

          (iv)  Any other amount necessary to compensate Lessor
for all the detriment proximately caused by Lessee's failure to
perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom
(specifically including, without limitation, brokerage
commissions and advertising expenses incurred, expenses of
remodeling the Premises or any portion thereof for a new tenant,
whether for the same or a different use, and any special
concessions made to obtain a new tenant); and,

          (v)   At Lessor's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from
time to time by applicable law.


     The term "rent" as used in this Section 20(a) shall be
deemed to be and to mean all sums of every nature required to be
paid by Lessee pursuant to the terms of this Lease, whether to
Lessor or to others.  As used in Sections 20(a)(i) and (ii),
above, the "worth at the time of award" shall be computed by
allowing interest at the Applicable Rate, but in no case greater
than the maximum amount of such interest permitted by law.  As
used in Section 20(a)(iii) above, the "worth at the time of the
award" shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).

     (b)  Lessor shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect
after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has the right to sublet or assign, subject
only to reasonable limitations).  Accordingly, if Lessor does not
elect to terminate this Lease on account of any Event of Default
by Lessee, Lessor may, from time to time, without terminating
this Lease, enforce all of its rights and remedies under this
Lease, including the right to recover all rent as it becomes due.

     (c)  Lessor shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in
addition to those rights and remedies available under Sections
20(a) and 20(b) above, or any law or other provision of this
Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive, or other
equitable relief, and specifically enforce this Lease, or
restrain or enjoin a violation or breach of any provision hereof.

     (d)  Additionally:

          (i)  Intentionally omitted.

          (ii) In the event that Lessor shall elect to relet,
then rentals received by Lessor from such reletting shall be
applied: first, to the payment of any indebtedness (other than
Rent) due hereunder from Lessee to Lessor; second, to the payment
of any cost of such reletting (including brokerage commissions);
third, to the payment of the cost of any alterations and repairs
to the Premises; fourth, to the payment of Rent due and unpaid
hereunder; and the residue, if any, shall be held by Lessor and
applied in payment of future Rent as the same may become due and
payable hereunder.  Should reletting, during any month to which
such Rent is applied, result in the actual payment of rentals at
less than the Rent payable during that month by Lessee hereunder,
then Lessee shall pay such deficiency to Lessor immediately upon
demand therefor by Lessor.  Such deficiency shall be calculated
and paid monthly.  Lessee shall also pay to Lessor as soon as
ascertained, any costs and expenses incurred by Lessor in such
reletting or in making such alterations and repairs not covered
by the rentals received from such reletting.

          (iii)  No lawful re-entry or taking of possession of
the Premises by Lessor pursuant to this Section 20 shall be
construed as an election to terminate this Lease unless a written
notice of such election shall be given to Lessee or unless the
termination thereof be decreed by a court of competent
jurisdiction.  Notwithstanding any reletting without termination
by Lessor, Lessor may, at any time after such reletting, elect to
terminate this Lease for any such default.  Upon the occurrence
of an Event of Default by Lessee under Section 20, if the
Premises or any portion thereof are sublet, Lessor may, at its
option and in addition and without prejudice to any other
remedies herein provided or provided by law, collect directly
from the sublessee all rentals becoming due to the Lessee and
apply such rentals against other sums due hereunder to Lessor.

          (iv) Without prejudice to any other right or remedy of
Lessor, if Lessee shall be in default under this Lease, Lessor
may cure the same at the expense of Lessee (A) immediately and
without notice in the case (1) of emergency, (2) where such
default unreasonably interferes with any other tenant in the
Shopping Center, or (3) where such default will result in the
violation of law or the cancellation of any insurance policy
maintained by Lessor, and (B) in any other case if such default
continues for 10 days from the receipt by Lessee of notice of
such default from Lessor.  All costs incurred by Lessor in curing
such default(s), including, without limitation, attorneys' fees,
shall be reimbursable by Lessee as Rent hereunder upon demand,
together with interest thereon, from the date such costs were
incurred by Lessor, at the Applicable Rate.

          (v)  Lessee hereby waives for Lessee and for all those
claiming under Lessee all rights now and hereafter existing to
redeem by order or judgment of any court or by any legal process
or writ, Lessee's right of occupancy of the Premises after any
termination of this Lease.  Notwithstanding any provision of this
Lease to the contrary, the expiration or termination of this
Lease and/or the termination of Lessee's rights to possession of
the Premises shall not discharge, relieve, or release Lessee from
any obligation or liability whatsoever under any indemnity
provision of this Lease.

21.  DEFAULT BY LESSOR.  Lessor shall not be in default of this
Lease unless Lessor fails to perform obligations required of
Lessor within thirty (30) days after written notice by Lessee to
Lessor; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days are required
for performance then Lessor shall not be in default if Lessor
commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.

22.  ENTRY BY LESSOR.  Upon twenty-four (24) hours notice except
in the event of an emergency (in which case no notice shall be
required), Lessor shall have the right to enter the Premises to
inspect the same, to submit said Premises to prospective
purchasers or lessees, to post notices of non-responsibility, to
repair the Premises and any portion of the building of which the
Premises are a part that Lessor may deem necessary or desirable,
without abatement of rent, and may for that purpose erect
scaffolding and other necessary structures where reasonably
required by the character of the work to be performed, always
providing that the entrance to the Premises shall not be
unreasonably blocked thereby, and further providing that Lessor
shall use reasonable efforts to minimize any interference with
the business of the Lessee.  Lessee hereby waives any claim for
damages or for any injury or inconvenience to or interference
with Lessee's business, any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby.  Lessor
shall have the right to use any and all means which Lessor may
deem proper to open said doors in an emergency, in order to
obtain entry to the Premises without liability to Lessee except
for any failure to exercise due care under the circumstances for
Lessee's property and any entry to the Premises obtained by
Lessor by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction of
Lessee from the Premises or any portion thereof.

23.  RULES AND REGULATIONS.  Subject to the provisions of Section
1 of this Lease, Lessee shall faithfully observe and comply with,
and shall cause all its employees, agents, contractors, customers
and invitees to observe and comply with, the reasonable rules and
regulations that Lessor shall from time to time promulgate and/or
modify, including, without limitation, the rules and regulations
attached hereto as Exhibit "F".  The rules and regulations shall
be binding upon the Lessee upon delivery of a copy of them to
Lessee.  Lessor shall not be responsible to Lessee for the
nonperformance of any said rules and regulations by any other
lessees or occupants.

     Notwithstanding any provision to the contrary contained in
this Lease, in the event of any conflict between the rules and
regulations and the provisions of this Lease, the provisions of
this Lease shall govern and control.

24.  PARKING AND COMMON AREAS.  Subject to the terms and
conditions of this Lease, Lessor covenants that the Common Areas
shall be at all times available for the non-exclusive use of
Lessee during the Term of this Lease, provided that the
condemnation or other taking by a public authority, or sale in
lieu of condemnation, of any or all of the Common Areas or the
occurrence of any other matters beyond the reasonable control of
Lessor shall not constitute a violation of this covenant.  Lessor
reserves the right to change the design, entrances, exits,
traffic lanes and the boundaries and locations of such parking
area or areas, provided, however, that anything to the contrary
notwithstanding contained in this Section, said parking area or
areas shall include the number of parking spaces required by the
Town of Los Gatos at the time that this Lease is executed and
shall include the maximum number of compact parking stalls
allowed in the Town now or in the future.  In addition, Lessor
reserves the right to make changes in, additions to and deletions
from the Common Areas and the purposes to which they are devoted
and to close portions of the Common Areas from time to time for
the purpose of making repairs and alterations thereto and for any
other commercially reasonable purposes.  The foregoing right of
Lessor shall include, without limitation, the right to erect
additional buildings on the Common Area or change the location of
buildings or other structures set forth on the site plan attached
hereto as Exhibit "A" to any location in the Shopping Center
including the Common Area.  Upon erection or change of location,
the portion of the Shopping Center upon which buildings or
structures have been erected shall no longer be deemed to be part
of the Common Area.

     Notwithstanding any provision to the contrary contained in
this Lease, Lessor warrants to Lessee that throughout the Term
the Shopping Center shall contain at least the number of parking
spaces required by applicable law.  Lessor shall not grant the
right to use the Common Areas to any party other than lessees of
the Shopping Center, their agents, customers, employees, business
invitees and suppliers, except for marketing and promotional
events only and with agreement of 2/3 of the lessees represented
by their leased area.  Unless required by law or a governmental
agency having authority, no direct charge shall be made for the
parking of vehicles in the Shopping Center.

     A.   The Lessor shall keep the Common Areas in a neat, clean
and orderly condition and shall repair any damage, periodically
reseal and repave the facilities thereof, but all expenses in
connection therewith shall be included as part of Shopping Center
Operating Expenses and prorated in the manner set forth in
Section 7 hereof.

     B.   Subject to the terms and conditions of this Lease
Lessee, for the use and benefit of Lessee, its agents, employees,
customers and sub-lessees, shall have, subject to Section 1
hereof, the non-exclusive right in common with Lessor and other
present and future owners, lessees and their agents, employees,
customers, business invitees and suppliers, to use the Common
Areas during the entire Term of this Lease, for ingress and
egress, and automobile parking.

     C.   Lessee, in the use of said Common Areas, agrees to
comply with such reasonable rules, regulations and charges for
parking as the Lessor may adopt from time to time for the orderly
and proper operation of said Common Areas.  Such rules may
include but shall not be limited to the following:

         (1)  The restricting of employee parking to a limited,
              designated area; and

         (2)  Lessee is responsible for disposing of rubbish in
              an acceptable, sanitary manner.

25.  SIGNS.  The Lessee may affix and maintain upon the glass
panes and supports of the show windows and of the Premises within
twelve (12) inches of any window and upon the exterior walls of
the Premises only such signs, advertising placards, names,
insignia, trademarks and descriptive material as shall have first
received the written approval of the Lessor and the Town of Los
Gatos as to type, size, color, location, copy nature and display
qualities.  Anything to the contrary in this Lease
notwithstanding, Lessee shall not affix any sign to the roof.
Lessee shall however, erect signs on the front of the Premises in
accordance with a design to be prepared by Lessee in accordance
with Lessor's sign program set forth in Exhibit D and approved in
writing by Lessor.

     Lessee will be permitted, subject to obtaining necessary
governmental approvals, to install Lessee's signage and logo on
the entry tower in front of the Premises, such signage having
been approved by Lessor prior to the execution of this Lease.

     Installation of signs shall be performed at Lessee's sole
cost
and expense by a reputable sign contractor selected by Lessee and
approved by Lessor in writing.  Such installation shall be made
in accordance with all applicable governmental laws, ordinances
and permits.  Upon the expiration or sooner termination of the
Lease, Lessee shall cause its signage to be removed and any
damage caused thereby repaired to the reasonable satisfaction of
Lessor, all at Lessee's sole cost and expense.

26.  DISPLAYS.  The Lessee may not display or sell merchandise
or allow merchandise to be stored or to remain outside the
defined exterior walls and permanent doorways of the Premises
except as approved in writing by the Lessor.  Lessee further
agrees not to install any exterior lighting, amplifiers or
similar devices or use in or about the Premises any advertising
medium which may be heard or seen outside the Premises, such as
flashing lights, searchlights, loudspeakers, phonographs or radio
broadcasts.

27.  HOURS OF BUSINESS.  Lessee covenants to open for business
within the Premises upon the later of (i) the Commencement Date,
or (ii) the completion of the leasehold improvements pursuant to
Section 35 below and Lessee's receipt of all governmental
permits, certificates and approvals necessary for the performance
of Lessee's Work and the lawful use and occupancy of the Premises
for the uses permitted under this Lease.  Lessee agrees to use
its best efforts to complete such leasehold improvements and
obtain such permits, certificates and approvals on or before the
Commencement Date; provided, however, that this Lease is
conditioned upon Lessee obtaining all such permits, certificates
and approvals, and may be terminated by Lessee if,
notwithstanding Lessee's best efforts, such licenses, permits and
approvals are not obtained within sixty (60) days from delivery
of premises.  From and after the later of (i) the Commencement
Date, or (ii) the completion of such leasehold improvements and
Lessee's receipt of such permits, certificates and approvals, and
continuing for the balance of the Term, subject to the provisions
of Section 13 hereof, Lessee shall continuously, during the
entire term hereof, conduct and carry on Lessee's business in the
Premises and shall keep the Premises open for business and cause
Lessee's business to be conducted therein for a minimum of eight
(8) hours per day on weekdays and seven (7) hours per day on
Saturdays, all between the hours of 9:00 a.m. and 8:00 p.m., and
such additional hours as Lessee may desire subject to Lessor's
approval.

     Lessee may elect to be open or closed on Holidays.  For the
purposes of this Section, Holidays are identified as:
Thanksgiving, Christmas, and other Federally-observed Holidays.

     This provision shall not apply if the Premises should be
temporarily closed and the business of Lessee temporarily
discontinued therein on account of repairs or refurbishment to
the Premises, strikes, lockouts or similar causes beyond the
reasonable control of Lessee.  Lessee shall keep the Premises
adequately staffed with sufficient sales personnel to care for
the patronage, and to at all times conduct said business in
accordance with sound business practice.

     In the event of breach by the Lessee of any of the
conditions contained in this Section, the Lessor shall have, in
addition to any and all remedies herein provided, the right at
its option to collect not only the Minimum Rent and Additional
Rent herein provided, but Additional Rent at the rate of
one-thirtieth (1/30) of the Minimum Rent herein provided for each
and every day that the Lessee shall fail to conduct its business
as herein provided.

28.  AUCTIONS.  Lessee shall not conduct or permit to be
conducted any sale by auction in, upon or from the Premises
whether said auction be voluntary, involuntary, pursuant to any
assignment for the benefit of creditors or pursuant to any
bankruptcy or other insolvency proceeding.

29.  MERCHANTS' ASSOCIATION.  If the Lessor and a majority of
lessees in the Shopping Center shall determine that it is in the
best interests of the Shopping Center, Lessee will become a
member of, and participate fully in, and remain in good standing
in a Merchants Association ("Association") (if and when the same
has been formed), organized for lessees occupying premises in the
Shopping Center, and Lessee will abide by the regulations of such
Association.  Each member lessee shall have one (1) vote, and the
Lessor shall also have one (1) vote, in the operation of said
Association.  The objects of such Association shall be to
encourage its members to deal fairly and courteously with their
customers, to encourage ethical business practices, and to assist
the business of the lessees by sales promotion and center-wide
advertising.  The Lessee agrees to pay minimum dues to the
Association, provided however, that in no event shall the dues
paid by Lessee in any fiscal year of said Association be in
excess of fifteen percent (15%) of the monthly Minimum Rent for
any full month during said fiscal year. For example, Association
dues during the first year of the term of this Lease may not
exceed $1,303.35 per annum (15% of $8,689, which is one month's
Minimum Rent).  Association dues constitute Additional Rent for
purposes of this Lease.

30.  SECURITY DEPOSIT.  Concurrently with Lessee's execution of
this Lease, Lessee shall deposit with Lessor a sum equal to EIGHT
THOUSAND SIX HUNDRED AND EIGHTY-NINE AND NO/100 Dollars
($8,689.00).  Said sum shall be held by Lessor as security for
the faithful performance by Lessee of all the terms, covenants
and conditions of this Lease to be kept and performed by Lessee
during the Term.  If Lessee defaults with respect to any
provision of this Lease, including but not limited to the
provisions relating to the payment of Rent, Lessor may (but shall
not be required to) use, apply or retain all or any part of this
security deposit for the payment of any Rent or any other sum in
default, or for the payment of any amount which Lessor may spend
or become obligated to spend by reason of Lessee's default, or to
compensate Lessor for any other loss or damage which Lessor may
suffer by reason of Lessee's default,  Lessor's right to the
possession of the Premises for non-payment of Rent or for any
other reason shall not in any event be affected by reason of the
fact that the Lessor holds this security.  If any portion of said
deposit is so used or applied then Lessee shall, within five (5)
days after written demand therefor, deposit cash with Lessor in
an amount sufficient to restore the security deposit to its
original amount and Lessee's failure to do so shall be a default
under this Lease.  Lessor shall not be required to keep this
security deposit separate from its general funds, and Lessee
shall not be entitled to interest on such deposit.  If Lessee
shall fully and faithfully perform every provision of this Lease
to be performed by it, the security deposit or any unapplied
balance thereof shall be returned to Lessee (or, at Lessor's
option, to the last assignee of Lessee's interest hereunder)
within fifteen (15) days following expiration of the Term.

31.  GENERAL PROVISIONS.

     A.  PLATS AND RIDERS. Clauses, plats, riders and addenda, if
any, affixed to this Lease are a part hereof.

     B.  WAIVER.  No waiver of any term, condition or covenant of
this Lease shall be presumed or implied.  Any such waiver must be
expressly made in writing by the party waiving the term,
condition or covenant.  One or more waivers of any covenant or
condition by Lessor shall not be construed as a waiver of a
subsequent breach of the same covenant or condition, and the
consent or approval by Lessor to or of any act by Lessee
requiring Lessor's consent or approval shall not be deemed to
waive or render unnecessary Lessor's consent or approval to or of
any subsequent similar act by Lessee.  The acceptance by Lessor
from Lessee of any amount paid for any reason under this Lease in
a sum less than what is actually owing shall not be deemed a
compromise, settlement, accord and satisfaction, or other final
disposition of the amount owing unless Lessor agrees otherwise in
writing.

     C.   JOINT OBLIGATION.  If there be more than one person or
entity comprising "Lessee", the obligations hereunder imposed on
Lessee shall be joint and several.

     D.   MARGINAL HEADINGS.  The marginal headings and Section
titles to the Sections of this Lease are not a part of the Lease
and shall have no effect upon the construction or interpretation
of any part hereof.

     E.   TIME.  Time is of the essence of this Lease and each
and all of its provisions in which performance is a factor.

     F.   SUCCESSORS AND ASSIGNS.  The covenants and conditions
herein contained, subject to the provisions as to assignment and
subletting, apply to and bind the heirs, successors, executors,
administrators and assigns of the parties hereto.

     G.   RECORDING.  Lessee shall not record this Lease.  Upon
request of Lessor, Lessee agrees to sign and acknowledge a short
form Lease in recordable form which may be recorded.

     H.   QUIET POSSESSION.  Upon Lessee paying the rent reserved
hereunder and observing and performing all of the covenants,
conditions and provisions on Lessee's part to be observed and
performed hereunder, Lessee shall have quiet possession of the
Premises for the entire term hereof as against any person
claiming the same by, through or under Lessor, subject to all the
provisions of this Lease.

     I.   LATE CHARGES AND INTEREST.  Lessee hereby acknowledges
that late payment by Lessee to Lessor of rent or other sums due
hereunder will cause Lessor 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 upon Lessor by terms of any mortgage or trust deed
covering the Premises.

     Therefore, if any installment of Minimum Rent or any payment
of Additional Rent due from Lessee is not received by Lessor in
good funds by the fifth (5th) day from the applicable due date,
Lessee shall pay to Lessor an additional amount equal to five
percent (5%) of the amount overdue as a late charge for every
month or portion thereof that such amount remains unpaid.

     Lessee is responsible for any attorneys' fees incurred by
Lessor by reason of Lessee's failure to pay rent and/or other
charges when due hereunder, whether or not legal action is
commenced. The parties hereby agree that such late charges
represent a fair and reasonable estimate of the cost that Lessor
will incur by reason of the late payment by Lessee.  Acceptance
of payment for such late charges by the Lessor shall in no event
constitute a waiver of Lessee's default with respect to such
overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder.  In addition to the
foregoing late charge, any Rent due under this Lease that is not
paid to Lessor within five (5) days of the date when due shall
commence to bear interest at the Applicable Rate (as defined
below) until fully paid.  Neither accrual nor the payment of
interest shall cure any default by Lessee under this Lease.  For
purposes of this Lease, the term "Applicable Rate" shall mean the
greater of ten percent (10%) per annum or five percent (5%) in
excess of the discount rate of the Federal Reserve Bank of San
Francisco in effect on the 25th day of the calendar month
immediately prior to the event giving rise to the Applicable Rate
imposition; provided, however, in no event shall the Applicable
Rate exceed the maximum interest rate permitted to be charged by
applicable law.

     J.   Prior Agreements.  This Lease contains all of the
agreements of the parties hereto with respect to any matter
covered or mentioned in this Lease, and no prior agreements or
understanding pertaining to any such matters shall be effective
for any purpose.  No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest.  This Lease
shall not be effective or binding on any party until fully
executed by both parties hereto.  Submission of this Lease for
examination or signature by Lessee does not create a reservation
or option to lease the Premises.

     K.   Inability to Perform.  Any prevention, delay or
stoppage due to strikes, lockouts, labor disputes, acts of God or
Nature, inability to obtain labor or materials or reasonable
substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, judicial orders, enemy or
hostile governmental action, civil commotion, fire or other
casualty, and other causes beyond the reasonable control of the
party obligated to perform, shall excuse the performance by such
party for a period equal to the period of any such prevention,
delay or stoppage, except the obligations imposed on Lessee with
regard to the payment of Rent and other charges, which
obligations shall not be affected thereby.

     L.   Partial Invalidity.  Any provision of this Lease which
shall prove to be invalid, void, or illegal shall in no way
affect, impair or invalidate any other provision hereof and such
other provision shall remain in full force and effect.

     M.   Cumulative Remedies.  No remedy or election hereunder
shall be deemed exclusive but shall, whenever possible, be
cumulative with all other remedies at law or in equity.

     N.   Choice of Law.  This Lease shall be governed by the
laws of the State in which the Premises are located.

     O.   Attorneys' Fees.  In the event of any action
o rproceeding brought by either party against the other under
this Lease the prevailing party shall be entitled to recover for
the fees of its attorneys in such action or proceeding, in such
amount as the court may adjudge reasonable as attorneys' fees and
costs.

     P.   Sale of Premises by Lessor.  The term "Lessor" as used
in this Lease, so far as covenants and obligations on the part of
Lessor are concerned, shall be limited to mean and include only
the owner or owners at the time in question of the Premises.  In
the event of any sale, transfer or gifting of the Premises by
Lessor, Lessor 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, transfer or gift; and the purchaser,
transferee or donee, at such sale, transfer or gifting or any
subsequent sale, transfer or gifting of the Premises shall be
deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such
purchaser, transferee or donee, to have assumed and agreed to
carry out any and all of the covenants and obligations of the
Lessor under this Lease.

     Q.   SUBORDINATION; ATTORNMENT.  This Lease and all of
Lessee's rights in this Lease shall be subject and subordinate to
any mortgage, deed of trust, ground lease or other instrument of
encumbrance   (collectively referred to in this paragraph as a
"security instrument") that is now or hereafter placed against
any part of the real property on which the Shopping Center is
located, the Premises, or any or all of the buildings currently
or in the future located in the Shopping Center.  Lessor or any
Lender (as defined below) shall have the right, at its election,
to subordinate or cause to be subordinated any such security
instrument to this Lease.  Within 10 days following written
request of the holder of any security instrument (a "Lender") or
Lessor, Lessee shall execute, acknowledge and deliver any
documents evidencing subordination or superiority, as applicable,
of this Lease to Lender's security instrument that the Lender or
Lessor may reasonably request; provided, that for each further
security instrument that is made superior to this Lease, the
Lender shall agree in writing that, in the event of a foreclosure
under the security instrument, Lender shall not terminate this
Lease and shall not disturb Lessee's right to possession under
this Lease, provided no Event of Default then exists under this
Lease and Lessee continues thereafter to fully perform all of its
obligations under this Lease.

     If Lessor transfers its interest in the Premises or if any
proceeding is brought to foreclose any mortgage, deed of trust or
instrument to secure debt affecting the Premises or any ground
lease made by Lessor, Lessee shall attorn, upon request, to the
purchaser or transferee of Lessor's interest in the Premises and
this Lease, and to execute, acknowledge and deliver within ten
(10) days following request any documents reasonably requested by
such purchaser or transferee to evidence such attornment.

     R.   Notices.  All notices and demands which may or are to
be required or permitted to be given by either party on the other
hereunder shall be in writing.  All notices and demands by the
Lessor to the Lessee shall be sent by United States Mail, postage
prepaid, personal delivery or overnight courier, in each
instance, addressed to the Lessee at the Premises, and to the
address herein below, or to such other place as Lessee may from
time to time designate in a notice to the Lessor.  All notices
and demands by the Lessee to the Lessor shall be sent by United
States Mail, postage prepaid, personal delivery or overnight
courier, in each instance, addressed to the Lessor at the address
set forth herein, and to such other person or place as the Lessor
may from time to time designate in a notice to the Lessee.

         TO LESSOR AT:  1631 Willow St. Suite 225
                         San Jose, CA  95125

         TO LESSEE AT:  3440 Airway Drive, Suite E
                         Santa Rosa, CA  94503-2065

     S.   AUTHORITY OF LESSEE.  If Lessee is a corporation,
partnership or limited liability company, each individual
executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation, partnership or limited
liability company, in accordance with the bylaws or other
organizational documents of said corporation, partnership or
limited liability company, and that this Lease is binding upon
this corporation, partnership or limited liability company.
Within ten (10) days following written request by Lessor, Lessee
shall deliver to Lessor evidence reasonably satisfactory to
Lessor of such signatory's authority to execute this Lease and
bind such corporation, partnership or limited liability company
hereunder.

     T.   NON-LIABILITY.  Lessor shall not be responsible or
liable to Lessee for any loss, liability or damage that may be
occasioned by or through the acts or omissions of persons (other
than Lessor and Lessor's agents, contractors and employees)
occupying any part of the Shopping Center.

     U.   CHANGE OF NAME OR ADDRESS.  Lessor shall have the
right, from time to time, exercisable in its sole discretion and
without liability to Lessee, to change the name and/or the street
address of the Shopping Center and/or building of which the
premises are a part.

     V.   CHRONIC DELIQUENCY.  In the event that Lessee defaults
in its obligations under this Lease more than three (3) times in
any twelve-month period at any time during the Term or any
extended term of this Lease, and based upon at least three (3) of
any such defaults in any twelve-month period Lessor serves Lessee
with a notice or notices pursuant to California Code of Civil
Procedure Section 1161, then (i) upon the service of the third
such notice, any option to extend the Term of this Lease granted
to Lessee pursuant to this Lease hereof shall become
automatically null and void and of no further force or effect,
and (ii) upon the occurrence of an additional default within such
twelve-month period that results in the service of an additional
notice by Lessor pursuant to California Code of Civil Procedure
Section 1161, the Minimum Rent and Additional Rent payable by
Lessee pursuant to Section 6 and Section 7 hereof shall
immediately become due and payable quarterly in advance,
throughout the remainder of the term and any extended Term
hereof.

32.  EMINENT DOMAIN.     If more than ten (10%) percent of the
Premises shall be taken or appropriated by any public or
quasi-public authority under the power of eminent domain
(including by sale under the threat or proposal of such taking),
Lessor  shall  have the right, at its option, within sixty (60)
days after said taking, to terminate this Lease upon thirty (30)
days written notice.  If either less than ten (10%) percent of
the Premises are taken, or more than ten (10%) percent of the
Premises are taken and Lessor elects not to terminate as herein
provided, the Minimum Rent thereafter to be paid shall be reduced
on the basis of a formula using the square footage of the
Premises taken by eminent domain as it relates to the area of the
Premises prior to the taking.  If 10% or more of the Shopping
Center other than the Premises be so taken or appropriated,
Lessor shall within sixty (60) days of said taking have the right
at its option to terminate this Lease upon written notice to
Lessee.

     In the event of any taking or appropriation (including sale
under threat or proposal of the same) whatsoever, Lessee shall
have no claim whatsoever for the value of any unexpired term of
tHis Lease.


     If Lessor receives notice of the intention of any authority
to appropriate, take or condemn any portion of the Premises or
Shopping Center for public or quasi-public use under any right of
eminent domain, condemnation or other law (collectively,
"Taking"), Lessor shall promptly notify Lessee thereof.  In the
event of any such Taking or sale under the threat or proposal of
a Taking, then any award, settlement or proceeds shall be
distributed to the parties in proportion to the value of their
respective interests in the Premises; provided, however, that in
the event that this Lease is terminated as a result of a Taking,
the Lessee's portion of the award shall not exceed the
unamortized cost of the improvements constructed by Lessee in the
Premises (including any additions, replacements or renovations
thereto), plus Lessee's relocation costs incurred as a result of
vacating the Premises.  In the event of such Taking or like
proceeding, the parties shall represent their own interests and
shall present and prosecute their own claims for damages insofar
as possible, subject to the limitations of this Section 32.  If
the parties are not permitted to proceed as separate parties,
they shall jointly select counsel to present and prosecute their
claim, and all costs thereof shall be paid by the parties in
proportion to the amount of the award, settlement or sale
proceeds that each receives.

33.  NO PERSONAL LIABILITY OF LESSOR.   Lessee agrees that Lessor
shall have no personal liability with respect to any provision of
this Lease, and that in the event Lessor fails to perform any
obligation under this Lease or otherwise breaches this Lease,
Lessee shall look solely to Lessor's ownership interest in the
real property and improvements constituting the Shopping Center
(including any rents, issues and profits therefrom), to insurance
proceeds received by Lessor relating to the Shopping Center,
and/or to sales proceeds received by Lessor from a sale of the
Shopping Center by Lessor following the entry of a judgment in
favor of Lessee against Lessor, for satisfaction of any judgment
or any other remedy of Lessee, subject to any prior rights of any
holder of a security instrument covering the Shopping Center.  No
other assets of Lessor shall be subject to levy, execution, or
other judicial process for the satisfaction of Lessee's claim.
The foregoing limitation of personal liability shall apply to any
failure by Lessor to perform its obligations under this Lease,
but shall not apply to the tortious acts of Lessor or its
authorized agents, contractors or employees.

34.  ESTOPPEL CERTIFICATE.    Lessee agrees to execute, in
recordable form, and deliver to Lessor or a Lender, when
requested by Lessor or a Lender, an estoppel certificate
regarding the status of this Lease.  The certificate shall be in
the form reasonably designated by Lessor or the Lender and may
contain, without limitation, the following:  (1) a statement that
the Lease is in full force and effect with no modifications, or a
statement that the Lease is in full force and effect as modified,
together with a description of the modifications; (2) the
Commencement Date and expiration date of this Lease; (3) the
amount of advance rent, if any, paid by Lessee, and the date to
which the rent has been paid; (4) the amount of any security
deposit deposited with Lessor; (5) a statement indicating whether
or not Lessor is, in Lessee's good faith opinion, in default
under any of the terms of this Lease, and if so, a description of
the alleged default and of any defense or offset claimed by
Lessee relating thereto; and (6) any other certifications or
information reasonably required by Lessor or Lender.  Lessee
shall deliver the certificate to the requesting party not later
than 10 business days after receipt of the written request for
the statement.  Lessee's failure to deliver the certificate
within the foregoing time period shall constitute an
acknowledgment by Lessee that (except as otherwise stated in the
certificate) this Lease has not been assigned or modified, that
the Lease is in full force and effect, and that all rent payable
under this Lease has been fully paid up to but not beyond the due
date immediately preceding the date of Lessor or Lender's written
request for the statement.  Such an acknowledgment may be relied
on by any person holding or intending to acquire any interest in
the Premises or the Shopping Center.  Lessee's failure to timely
deliver the required certificate shall also constitute, as
between Lessee and the persons entitled to rely on the statement,
a waiver of any defaults by Lessor not listed in such
certificate, and of Lessee's defenses or offsets (unless listed
in such certificate) against the enforcement of this Lease that
may exist prior to the date of the written request for the
statement.  Lessor may also treat Lessee's failure to timely
deliver the certificate as a default under this Lease.

     In addition, within 10 days following receipt of Lessor's
written request, Lessee shall furnish to Lessor financial
statements and other information and documentation reflecting
Lessee's current financial condition, all certified by Lessee to
be true, accurate and correct.  Copies of the most recent Form
10-K (and if applicable, Forms 10-Q) filed by Lessee with the SEC
shall be deemed to satisfy the foregoing requirement.

35.  CONSTRUCTION OF LEASEHOLD IMPROVEMENTS.

     A.   Lessee shall be responsible for constructing the
leasehold improvements in the Premises ("Lessee's Work") in
accordance with this Section and the Leasehold Improvement
Workletter which is attached hereto as Exhibit C and incorporated
herein by reference.

     B.   Except for the Work Letter Agreement, Lessor shall not
be responsible for, nor shall Lessee construct any additional
improvements on the Premises unless Lessee complies with the
provisions of Section 14 of this Lease with respect thereto.

     C.   From and after the full execution of this Lease
("Effective Date"), Lessee may enter the Premises at Lessee's
sole risk and expense, for the sole purpose of constructing and
installing the leasehold improvements in the Premises; provided,
however, that prior to any such entry, Lessee shall pay for and
provide Lessor with evidence of the insurance to be provided by
Lessee pursuant to the provisions of Section 17 above.

     D.   Within thirty (30) days following the Effective Date of
this Lease, Lessee shall deliver to Lessor for its written
approval one (1) set of scale drawings depicting Lessee's Work
("Plans").  Lessor shall have five (5) days within which to
approve or disapprove Lessees drawings.  If the plans are
disapproved, Lessee shall make such reasonable changes to the
Plans as are required by Lessor and shall again submit one (1)
sets to Lessor for approval.  The foregoing procedure shall be
followed until a mutually satisfactory set of plans is approved
by Lessor.  Notwithstanding the foregoing, if Lessor disapproves
Lessee's plans, the Commencement Date shall be delayed by seven
(7) business days on the Lessor's first review of Lessee's plans
and three (3) business days on Lessor's subsequent review of
Lessee's plans. Upon the approval by Lessor of the Plans and
Lessee's acquisition of all governmental permits and approvals
necessary for the lawful installation and construction of
Lessee's Work, Lessee shall thereupon immediately proceed with
due diligence, at its own expense, to install thereon Lessee's
property (meaning all items of Lessee's Work and Lessee's trade
fixtures, equipment and merchandise) without interference with
other work, if any, being done in the Shopping Center or the use
and occupancy of the Shopping Center by any other lessee, and in
compliance with all reasonable rules which Lessor, its architect
and its contractors may make.  Lessee shall, upon final
completion of  its work, furnish Lessor with all certificates and
approvals relating to any work or installations done by Lessee
that may be required by any governmental or insurance
requirements.  Lessor shall have no responsibility for any loss
of or damage to any of Lessee's property so installed or left on
the Premises.  Lessee's entry shall be subject to all of the
provisions of this Lease other than the payment of rent and other
charges to Lessor; and at all times after such entry, Lessee
shall maintain or cause to be maintained in effect insurance
complying with this Lease. All constructions and installations
undertaken by Lessee shall be performed in accordance with all
applicable governmental laws and ordinances, all at Lessee's sole
cost and expense, and shall be accomplished in a good and
workmanlike manner, free of defects.

     E.   Lessee's work shall include, but not be limited to, the
purchase and/or installation and/or performance of any and all of
the items required by Lessee in its plans, including all
applicable governmental, architectural and engineering fees
therefore.

     F.   All work performed on the Premises by Lessee shall be
performed by certified licensed (in good standing) contractors,
workers, subcontractors and material men.  At the time Lessee
submits its drawings to Lessor for approval, under this Section,
Lessee shall also submit the bid list of its General
Contractor(s) and significant subcontractors for approval.
Lessor shall have fifteen (15) days to approve or disapprove such
contractors (approval shall not be unreasonably withheld).  If
Lessor disapproves one or more contractors, Lessee shall submit
additional names for which Lessor shall have fifteen (15) days to
approve or disapprove. Lessor's approval shall not be
unreasonably withheld. All contractors, workers, subcontractors
and materialmen shall be required to carry such insurance
coverages as Lessor may reasonably require, with evidence thereof
being provided to Lessor prior to the commencement of work.[ In
addition, at Lessor's election, Lessee shall obtain and provide
to Lessor, at Lessee sole cost and expense, a lien and completion
bond, the form and amount of which shall be subject to the
approval of Lessor.

     G.   Any Lessee roof penetrations shall be made by Lessor's
roofing contractor if required to maintain roof guarantee and the
cost thereof shall be reimbursed by Lessee.  All construction
debris must be removed from Premises by Lessee.  Any construction
debris remaining for more than five (5) days shall be removed by
Lessor and cost of removal billed to Lessee.

     H.   Lessee shall at all times keep the Premises free and
clear of all liens, claims and encumbrances in any way arising
out of, in connection with, or by reason of, any improvements
carried out as a part of Lessee's work under this Lease. The
terms and provisions of the fourth paragraph of Section 14 above
shall apply to any such liens, claims and/or encumbrances. In
addition, and subject to the fourth paragraph of Section 14
above, if any such liens, claims and/or encumbrances are recorded
and not discharged within 10 days, then this Lease shall be in
default and Section 20 of this Lease shall apply.

     I.   Lessee and Lessee's representatives and contractors
shall keep the work site and all Common Areas clean and safe and
free of debris during the construction of the tenant
improvements.  In the event that Lessor believes Lessee has not
properly maintained its work site or the Common Areas, Lessor,
with two days prior notice, may contract with a company to
provide such clean up services and the expenses for such services
shall be paid by Lessee on demand.

36.  BROKERS.  Each party represents and warrants to the other
that neither had any dealings or negotiations with any broker or
finder with respect to the Premises or this Lease other than
JOHN CUMBELICH, CB-RICHARD ELLIS.  THE BROKERAGE FOR THIS LEASE
IS GOVERNED PER A SEPARATE AGREEMENT DATED JULY 21, 1999 BETWEEN
JOHN CUMBELICH AND CARL CILKER.  In the event of any claim for
payment or compensation by any other agent or broker with respect
to Lessee's lease of the Premises is asserted based on the
dealings with a party hereto or their agents or representatives,
then, the responsible party agrees to defend, indemnify and hold
the other harmless from and against all costs, fees, liabilities
and other claims incurred by the indemnified party as a result of
the claim. The obligations under this Section 36 shall survive
the expiration or sooner termination of this Lease.


37.  SURRENDER OF PREMISES.   At the expiration or sooner
termination of this Lease, Lessee will surrender and deliver up
the Premises to the Lessor, or those having the Lessor's estate
therein, in good repair and condition as at the commencement of
Lessee's occupancy, reasonable wear and tear, damages or
destruction by fire or other casualty and repairs which Lessor is
obligated under this Lease to perform excepted.  Lessee shall
remove those improvements identified for removal at Lessee's
termination of occupancy of the Premises and repair any damage to
the Premises caused by such removal, all at Lessee's sole cost
and expense.  Identification of improvements to be removed shall
be detailed in a separate letter from Lessor to Lessee and shall
be accompany Lessor's approval of Lessee's improvement plans.
With regard to Lessee's subsequent improvements to the Premises,
additions to the letter may be made upon Lessor's review of
improvements pursuant to Section 14 of this lease. In addition,
Lessee shall cause all trade fixtures, furnishings, equipment and
other personal property of Lessee to be completely removed from
the Premises upon the expiration or sooner termination of this
Lease.

38.  MODIFICATIONS FOR LENDERS.  If, in connection with
obtaining financing for the Shopping Center or any portion
thereof, Lessor's prospective lender shall request reasonable
modifications to this Lease as a condition to such financing,
Lessee shall not unreasonably withhold, delay or condition its
consent thereto, provided such modifications do not adversely
affect Lessee's rights hereunder.  Lessee's failure to so consent
shall constitute an Event of Default under this Lease.

39.  [INTENTIONALLY DELETED]

40.  OTHER TENANCIES.    Lessor reserves the absolute right to
effect such other tenancies in the Shopping Center as Lessor
shall determine to best promote the interests of the Shopping
Center.  Lessee does not rely on the fact nor does Lessor
represent that any specific tenant or number of tenants shall
occupy any space in the Shopping Center during the Term of this
Lease.

[SIGNATURE BLOCK FOLLOWS]
SIGNATURES:
LESSOR:                           LESSEE:
Cornerstone of Los Gatos, LLC     Real Goods, Inc.

by: [S]CARL A. CILKER             by: [S] MARK A. SWEDLUND
       Carl A. Cilker                     Mark A. Swedlund
                                          Chief Financial Officer

Date:  Sept. 7, 1999              Date:   Septemer 3, 1999

by:  [S]ELIZABETH J.C. SMITH      by:  [S]LESLIE B. SEELY
        Elizabeth J.C. Smith              Leslie B. Seely
                                          Chief Financial Officer

Date:   September 7, 1999         Date:   September 3, 1999


by:  [S]WILLIAM H. CILKER
        William H. Cilker

Date:   September 7, 1999
</PAGE>





         Cornerstone of Los Gatos, LLC/Real Goods Lease, Inc.
                               Exhibit A
                               Site Plan


                               Exhibit B
                             Rent Schedule




          Cornerstone of Los Gatos, LLC/Real Goods Lease, Inc.
                                Exhibit C
                         Lessor's Workletter

     A.   Except as set forth herein, Lessee shall be responsible
for constructing the leasehold improvements in the Premises, and
Lessor's prior written consent shall be required for any
alteration and/or improvements to the Premises and to any
exterior portion of the Premises. All such leasehold improvements
constructed and installed by Lessee shall be at Lessee's sole
cost and expense.

     B.   Lessor shall provide the following improvements and
          installations in the Premises:

          1) Water, gas, electrical and telephone service stubbed
             to the space.
          2) Storefront in keeping with the architecture of the
             shopping center (existing).
          3) Demising walls with sheet rock and insulation.
          4) Concrete slab floor.
          5) Present HVAC system. Lessee is responsible for the
             maintenance of the system.
          6) Fire Protection Sprinkler System (existing).
          7) Interior lighting equivalent to front to rear, open
             type, 2' x 4' fluorescent fixtures. (With Lessor
             approval, expenditure amount may be credited to a
             style of Lessee's preference.)
          8) One handicapped accessible restroom (existing).


               Cornerstone of Los Gatos/Real Goods Lease
                               Exhibit D
                             Sign Program


</PAGE>

         Cornerstone of Los Gatos, LLC/Real Goods, Inc. Lease
                                 EXHIBIT E
                     COMMENCEMENT DATE MEMORANDUM


LESSEE:
LESSOR:
LEASE DATE:
PREMISES:
GROSS FLOOR AREA:


Pursuant to Section 3 of the above referenced Lease, the
Commencement Date is hereby established as


Dated:                             LESSEE:

                                   By:

                                   Its:


                                   By:

                                   Its:



Dated:                             LESSOR:


                                   By:[S]CARL A. CILKER
                                         Carl A. Cilker

                                      [S]ELIZABETH J.C. SMITH
                                         Elizabeth J.C. Smith
</PAGE>


               Cornerstone of Los Gatos/Real Goods Lease
                                 Exhibit F
                         Rules and Regulations
                  Which Constitute a Part of the Lease

A.   No awning or shade shall be affixed or installed over or in
     the show windows or the exterior of the Premises except with
     the prior written consent of Lessor.  Lessor and Lessee will
     use good faith efforts to agree on design, color, and
     placement of awnings.  If Lessee desires window drop
     curtains in the show windows of the Premises, the same must
     be of such uniform shape, color, material, and make as may
     be prescribed by Lessor and must be put up as directed by
     Lessor, and paid for by Lessee.

B.   No boring or cutting for wires shall be allowed in the
     exterior walls, the demising wall(s), the floor or roof,
     except as provided in working drawings or with the prior
     written consent of Lessor.

C.   Lessee shall not use any machinery within the Premises even
     though its installation may have been permitted, which may
     cause any unreasonable noise or jar, or tremor to the floors
     or walls, or which by its weight might injure the floors of
     the Premises.

D.   Lessor may limit weight, size and position of all safes,
     fixtures and other equipment used in the Premises.  In the
     event Lessee shall require extra heavy equipment, Lessee
     shall notify Lessor of such fact and shall pay the cost of
     structural bracing to accommodate same.  All damage done to
     the Premises or Shopping Center by putting in or taking out,
     or maintaining extra heavy equipment shall be repaired at
     the expense of Lessee.

E.   Lessee and Lessee's officers, agents and employees shall not
     make nor permit any loud, unusual or improper noises nor
     interfere in any way with other lessees or those having
     business with them, not bring into nor keep within the
     Shopping Center any animal or bird (with the exception of
     the authorized pet store, automobile or other vehicle,
     except such vehicle as Lessor may from time to time permit.
     Lessee and Lessee's officers, agents, employees, customers
     or invitees shall not throw refuse or other substances or
     litter of any kind in or about the Shopping Center,
     except in receptacles placed therein for such purposes by
     Lessor or government authorities.

F.   Except as provided in this Lease, no radio or television or
     other device shall be installed without first obtaining in
     each instance Lessor's consent in writing.  No aerial shall
     be erected on the roof or exterior walls of the Premises, or
     on the grounds, without in each instance, the written
     consent of Lessor.  Any aerial so installed without such
     written consent shall be subject to removal without notice
     at any time at Lessee's sole cost and expense.

G.   All garbage, including wet garbage, refuse or trash shall be
     placed by the Lessee in the receptacles provided by the
     Lessor for that purpose and only during those times
     prescribed by the Lessor.

H.   Lessee shall not burn any trash or garbage at any time in or
     about the Premises or any area of Shopping Center.

I.   Lessee shall use, at Lessee's cost, such pest extermination
     contractor to be selected by Lessor and at such intervals as
     Lessor may require.  If Lessee fails to provide adequate
     pest control for its premises then Lessor may select and
     hire an agent to provide such control for the Premises at
     Lessee's sole cost and expense.  Such cost and expense shall
     be reasonable and competitive for the trade area surrounding
     the Shopping Center. Lessee will pay pest control expenses
     within 30 days of receipt of invoice for work performed.

J.   Lessees are required to observe all security regulations
     issued by the Lessor and to comply with instructions and/or
     directions of the duly authorized security personnel for the
     protection of the Shopping Center and all lessees therein.

K.   Any requests of Lessee consistent with the terms of the
     Lease will be attended to only upon written application to
     Lessor at the General Offices of the Shopping Center.

L.   No waiver of any rule or regulation by Lessor shall be
     effective unless expressed in writing and signed by Lessor
     or their authorized agent.

M.   Lessor reserves the right to exclude or expel from the
     Shopping Center any person who, in the judgment of Lessor,
     is intoxicated or under the influence of liquor or drugs, or
     who shall in any manner do any act in violation of the law
     or the rules and regulations of the Shopping Center.

N.   Lessor reserves the right at any time to change or rescind
     any one or more of these rules or regulations or to make
     such other and further reasonable rules and regulations as
     in Lessor's judgment may from time to time be necessary for
     the management, operation, safety, care and cleanliness of
     the Shopping Center, and for the preservation of good order
     therein, as well as for the convenience of other occupants
     and lessees of the Shopping Center.  Lessor shall not be
     responsible to Lessee or to any other person for the
     nonobservance or violation of the rules and
     regulations by any other lessee or other person.  Lessee
     shall be deemed to have read these rules and to have agreed
     to abide by them, together with any modifications hereof
     and/or further rules and regulations made by Lessor from
     time to time, as a condition to its occupancy of the space
     hereinleased. In addition, Lessee shall cause all its
     employees,agents, customers, contractors and invitees to
     abide by these rules and regulations, together with any
     modifications hereof and/or further rules and regulations
     made by Lessor from time to time.

O.   Lessee shall abide by any additional rules or regulations
     which are ordered or requested by any governmental or
     military authority.

P.   In the event of any conflict between these rules and
     regulations or any further or modified rules and regulations
     from time to time issued by lessor and the Lease provisions,
     the Lease provisions shall govern and control.

Q.   Lessor specifically reserves to itself or to any person or
     firm it selects, the right to place in and upon the Shopping
     Center, coin operated vending machines in the Common Areas
     for the sale of goods or services and the revenue resulting
     therefrom, including the sale of goods which may compete
     with those which Lessee is permitted to sell.  In no event
     shall any vending machines be placed in the common area
     outside of Lessee's store front.

R.   Lessee and Lessee's employee's shall not obstruct any
     walkway of the building.  This includes storage, even on a
     temporary basis, of boxes, goods and like items.

S.   Distribution of handbills, brochures or fliers, etc. or any
     other form of solicitation in the Common Area of the
     Shopping Center is expressly prohibited.

T.   Lessee shall keep the Premises neat and orderly.  A reason
     for Lessee's interest in this space is its high visibility
     in the Shopping Center.  Lessee therefore has the
     responsibility to maintain its Premises with the awareness
     that it is on display. If in Lessor's sole judgement Lessee
     is not maintaining its business in a neat and orderly way,
     Lessor will notify Lessee in writing.  Lessee shall have no
     more than 3 days to correct the items noted by Lessor.  If
     Lessee does not correct the items so noted to Lessor's
     satisfaction, then, in addition to any other right or
     remedy, Lessor shall have the right, without obligation,
     to take corrective action and Lessee shall be responsible
     for any costs incurred with such corrective action.  Lessee
     shall reimburse Lessor within 10 days for such costs.  Any
     bill remaining unpaid shall be subject to interest and
     penalties as provided for in Section 31.I.

U.   Toilets, urinals and wash basins shall not be used for any
     purpose other than those for which they were constructed and
     no rubbish, newspapers, food or other substance of any kind
     shall be put into them.  The expenses of repairing any
     breakage, stoppage or damage resulting from a violation of
     this rule shall be borne by Lessee