EXHIBIT 10.137

                      FIRST MODIFICATION OF LEASE AGREEMENT


LANDLORD NAME
AND ADDRESS:                        CONCORD MILLS LIMITED PARTNERSHIP,
                                    A Delaware Limited Partnership
                                    1300 Wilson Boulevard, Suite 400
                                    Arlington, Virginia 22209

TENANT NAME
AND ADDRESS:                        TOYS INTERNATIONAL, INC.,
                                    A California Corporation
                                    550 Rancheros Drive
                                    San Marcos, California 92069

DATE OF LEASE:             August 10, 1998

LEASED PREMISES:  Store #522 (approximately 8,135 sf)

SHOPPING CENTER:  Concord Mills,
                                    Concord, North Carolina


                                  R E C I T A L

         WHEREAS, Landlord and Tenant have entered into a Lease dated August 10,
1998 ("Lease"),  whereby Landlord has leased to Tenant the Leased Premises for a
term of approximately ten (10) years.

         WHEREAS,  Landlord  and  Tenant  have  agreed  to  modify  the Lease to
increase  Tenant's  square footage of the Leased Premises and adjust the Minimum
Rent and Percentage Rent accordingly, all as provided for herein.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained, it is hereby agreed as follows:

1.       DESCRIPTION OF LEASED PREMISES:

     Store Number: 518, consisting of approximately  10,402 square feet of floor
area as shown on Exhibit "A".


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2.       MINIMUM RENT:

         Original Term:

     From the Commencement  Date and continuing  through the fifth (5th) year of
the Original  Term, the sum of  $228,844.00  ($22.00 psf)  annually,  payable in
equal consecutive monthly installments of $19,070.33 each;

     Beginning with the sixth (6th) year and  continuing  through the expiration
of the Original Term, the sum of $249,648.00  ($24.00 psf) annually,  payable in
equal consecutive monthly installments of $20,804.00 each.

3.       PERCENTAGE RENT:

     Percentage Factor: 6%

     Sales Break Point for the Original Term:

     From the  Commencement  Date  through the fifth (5th) year of the  Original
Term: $3,269,200.00;

     Beginning with the sixth (6th) year and  continuing  through the expiration
of the Original Term: $3,566,400.00.

4.       Exhibit "A" is replaced with the attached Exhibit "A" dated August 5,
         1998.

5.       Exhibit "D", page 14, line 41 is replaced with 10,402 square feet.

6.       Except  as  expressly  modified  in this  First  Modification  of Lease
         Agreement,  all the terms, covenants and conditions of said Lease shall
         remain the same and in full force and  effect,  shall be binding on the
         parties  hereto,   and  are  hereby   ratified  and  affirmed.   Unless
         specifically  defined herein,  the capitalized terms used in this First
         Modification of Lease Agreement shall have the meanings  defined in the
         Lease.


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IN WITNESS  WHEREOF,  the parties  hereto have set their hand and seal as of the
___ day of  __________,  19__  and  declare  this  First  Modification  of Lease
Agreement  to be binding on them,  their  respective  successors  and  permitted
assigns.

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<CAPTION>
<S>                                         <C>
WITNESS:                                    LANDLORD:

                                            CONCORD MILLS  LIMITED PARTNERSHIP, a Delaware limited partnership

                                            By:      Concord Mills, L.L.C., a Delaware limited liability company
                                            Its:     General Partner

                                            By:      The Mills Limited Partnership, a Delaware limited partnership
                                            Its:     Manager

                                            By:      The Mills Corporation, a Delaware corporation
                                            Its:     General Partner
                                            By:      ________________________
                                                     Judith Berson
                                                     Executive Vice President


WITNESS/ATTEST:                             TENANT:

                                            TOYS INTERNATIONAL, INC.,
                                            a California corporation

__________________________                  By:     ___________________________

__________________________                  Its:    ___________________________


__________________________                  By:     ___________________________

__________________________                  Its:    ___________________________


                                                     Corporate Seal:

</TABLE>
<PAGE>
                           ACKNOWLEDGEMENT OF LANDLORD


COMMONWEALTH OF VIRGINIA   )
                           )ss.
COUNTY OF ARLINGTON        )


         On this ______ day of  ________________,  19___,  before me  personally
appeared  Judith  Berson to me known to be the person who executed the foregoing
First  Modification of Lease Agreement and  acknowledged  before me that she was
duly  authorized  and did  execute  same on  behalf  of  CONCORD  MILLS  LIMITED
PARTNERSHIP, a Delaware limited partnership.


                     -----------------------------------------
                     Notary Public, Commonwealth of Virginia
                     My Commission expires:_________________


         ACKNOWLEDGMENT OF CORPORATE TENANT


STATE OF                   )
                           )ss.
COUNTY OF                  )


         On this ______ day of  ________________,  19___,  before me  personally
appeared  ____________________________ and __________________,  to me personally
known,  who,  being by me duly sworn,  did for  themselves say that they are the
___________________ and  ______________________  of TOYS INTERNATIONAL,  INC., a
California  corporation,  the corporation named in and which executed the within
instrument,  and that the seal affixed to said  instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its board of directors and acknowledged  before
me said instrument to be the free act and deed of said corporation.


                                  -----------------------------------
                                  Notary Public

                                  My Commission expires:_____________