Document:

ASSIGNMENT
                             OF
                     PURCHASE AGREEMENT

      THIS ASSIGNMENT made and entered into this 19th day of
August  2003,  by and between AEI FUND MANAGEMENT,  INC.,  a
Minnesota corporation, ("Assignor") and AEI REAL ESTATE FUND
XV  LIMITED  PARTNERSHIP,  a Minnesota  limited  partnership
("Assignee");

     WITNESSETH, that:

      WHEREAS,  on  the 25th of July 2003, Assignor  entered
into a Purchase Agreement ("the Agreement") for that certain
property located at 16778 I-45 South, Conroe, TX  77384 (the
"Property")   with   Cypress/GR   Woodlands   I,    LP    as
Seller/Lessee; and

     WHEREAS, Assignor desires to assign an undivided twenty-
one percent (21.0%) of its rights, title and interest in, to
and under the Agreement to Assignee as hereinafter provided;

      NOW, THEREFORE, for One Dollar ($1.00) and other  good
and  valuable  consideration, receipt  of  which  is  hereby
acknowledged,  it is hereby agreed between  the  parties  as
follows:

     1.    Assignor  assigns all of its  rights,  title  and
     interest in, to and under the Agreement to Assignee, to
     have  and  to  hold  the same unto  the  Assignee,  its
     successors and assigns;

     2.    Assignee  hereby  assumes all  rights,  promises,
     covenants,   conditions  and  obligations   under   the
     Agreement  to be performed by the Assignor  thereunder,
     and  agrees  to be bound for all of the obligations  of
     Assignor under the Agreement.

All  other  terms  and  conditions of the  Commitment  shall
remain unchanged and continue in full force and effect.

AEI FUND MANAGEMENT, INC.
("Assignor")

By:/s/ Robert P Johnson
       Robert P. Johnson, its President

AEI REAL ESTATE FUND XV
LIMITED PARTNERSHIP ("Assignee")

BY: AEI FUND MANAGEMENT 86-A, INC.

By:/s/ Robert P Johnson
       Robert P. Johnson, its President

                       PURCHASE AGREEMENT

     This  PURCHASE AGREEMENT (the "Agreement"), is entered  into
effective as of the 25 of July, 2003 (the date this Agreement  is
executed by the latter of Buyer and Seller).

     l.    Parties. Seller is Cypress/GR Woodlands I,  LP,  which
owns  an undivided 100% interest in the fee title to that certain
real  property legally described in the attached Exhibit "A" (the
"Property"). Buyer is AEI Fund Management, Inc., or  its  assigns
(being  an affiliate of Buyer).  Seller wishes to sell and  Buyer
wishes to buy the Property.

     2.    Property.  The Property to be sold to  Buyer  in  this
transaction consists of an undivided 100% interest the  Property.
Seller owns no interest in any personalty in connection with  the
Property.

     3.   Purchase Price. The purchase price for this Property is
$8,195,960,   all   cash,   plus   $100   non-refundable   Option
consideration,  payable  directly to  Seller  upon  both  parties
having signed this Agreement.

     4.    Terms.   The purchase price for the Property  will  be
paid by Buyer as follows:

          (a)   When  this  agreement  is  executed,  Buyer  will
deposit  $50,000  with  the Title Company  (hereinafter  defined)
(which  shall  be deposited into escrow according  to  the  terms
hereof)  by  wire  transfer or delivery  of  a  cashier's  check,
immediately  available federal funds (the "First Payment").   The
First  Payment will be credited against the purchase  price  when
and if escrow closes and the sale is completed.

          (b)   Buyer  will deposit the balance of  the  purchase
price,  (the "Second Payment") into escrow in sufficient time  to
allow escrow to close on the closing date.

     5.    Closing  Date.  Escrow shall close on or before  sixty
(60) days from the effective date hereof.

     6.    Due Diligence. Buyer will have until the expiration of
thirty  (30) days from the effective date hereof to conduct  such
investigation into the Property as Buyer shall deem necessary and
appropriate to satisfy itself regarding each item, the  Property,
and  this transaction ("Site Inspection Period"). Seller, subject
to  the  provisions  of  the Lease, shall permit  Buyer  and  its
authorized agents and representatives to enter upon the  Property
at  all  reasonable times during normal business hours to inspect
and  conduct  reasonably necessary tests which  are  approved  in
writing  by  Seller,  which approval shall  not  be  unreasonably
withheld.   Buyer  shall  notify  Seller,  in  writing,  of   its
intention, or the intention of its agents or representatives,  to
enter the Property at least forty-eight (48) hours prior to  such
intended entry, and obtain Seller's prior written consent to  any
tests to be conducted thereon.  Buyer shall bear the cost of  all
such  inspections and tests.  Buyer agrees to indemnify and  hold
Seller and Tenant (hereinafter defined) harmless for any loss  or
damage  to the Property or persons caused by Buyer or its  agents
arising  out  of  such  physical  inspections  of  the  Property.
Subject  to Section 16 hereof, unless Buyer shall terminate  this
Agreement  in  writing  prior  to  the  expiration  of  the  Site
Inspection  Period, this site inspection contingency  to  Buyer's
obligations hereunder shall be deemed satisfied.

     Within  five  (5)  business days after the  effective  date,
Seller shall deliver the following items to Buyer.

          (a)   One copy of a title insurance commitment  for  an
Owner's Title insurance policy (see Section 8 below).

          (b)  A copy of a Certificate of Occupancy or other such
document   certifying  completion  and  granting  permission   to
permanently  occupy the improvements on the Property  as  are  in
Seller's possession.

          (c)   A  copy  of an "as built" survey of the  Property
done concurrent with Seller's acquisition of the Property, if  in
Seller's possession.

          (d)   A copy of any Phase I Environmental Report on the
Property, if in Seller's possession.

          (e)   A  copy  of the Lease (as further  set  forth  in
Section  11(a)  below)  of the Property  and  Guaranty,  if  any,
accompanied by such tenant financial statements as may have  been
provided most recently to Seller by the Tenant and/or Guarantors.
True  and correct copies of the Lease and all amendments  thereto
as well as the Guaranty are in AEI's Possession.

          (f)   Copies of all warranties relating to construction
and maintenance of the Property as are in Seller's possession;

          (g)   A  copy of the Plans and Specifications  for  the
Improvements   on  the  Property  and  a  certified   architect's
certification   as   to  the  substantial   completion   of   the
improvements on the Property having been completed in  accordance
with  local  code  and  the  Plans  and  Specifications  for  the
improvements.

     Buyer  may cancel this Agreement for ANY REASON in its  sole
discretion  by  delivering a cancellation notice, return  receipt
requested,  to Seller and escrow holder before the expiration  of
the Site Inspection Period. Such notice shall be deemed effective
only  upon  receipt by Seller. If this Agreement is not cancelled
as  set  forth  above, the First Payment shall be  non-refundable
unless Seller shall default hereunder.

     If  Buyer  cancels  this Agreement as permitted  under  this
Section,  except  for  any  escrow  cancellation  fees  and   any
liabilities  under  the first paragraph  of  Section  6  of  this
Agreement  (which will survive), Buyer (after execution  of  such
documents   reasonably  requested  by  Seller  to  evidence   the
termination  hereof)  shall be returned its  First  Payment,  and
Buyer  will have absolutely no rights, claims or interest of  any
type  in  connection  with  the  Property  or  this  transaction,
regardless of any alleged conduct by Seller or anyone else.

     Unless  this Agreement is canceled by Buyer pursuant to  the
terms  hereof, if Buyer fails to make the Second Payment,  Seller
shall   be  entitled  to  retain  the  First  Payment  and  Buyer
irrevocably will be deemed to be in default under this Agreement.
Seller  may, at its option, retain the First Payment and  declare
this Agreement null and void, in which event Buyer will be deemed
to  have  canceled  this Agreement, or Seller  may  exercise  its
rights  under  Section  14  hereof.  If  this  Agreement  is  not
canceled  and the First Payment and the Second Payment  are  made
when  required, all of Buyer's conditions and contingencies  will
be deemed satisfied.

     7.    Escrow.  Escrow shall be opened by  Seller  and  funds
deposited  in  escrow upon acceptance of this Agreement  by  both
parties. The escrow holder will be Republic Title of Texas, Inc.,
2626  Howell Street, 10th Floor, Dallas, Texas 75204, Attn: Becky
Etter  as  agent for First American Title Insurance Company  (the
"Title  Company" or "Escrow Holder").  A copy of  this  Agreement
will  be delivered to the escrow holder and will serve as  escrow
instructions   together   with  the  escrow   holder's   standard
instructions  and  any additional instructions  required  by  the
escrow  holder to clarify its rights and duties. If there is  any
conflict  between  these other instructions and  this  Agreement,
this Agreement will control.

     8.    Title. Closing will be conditioned on the agreement of
the  Title Company to issue an Owner's Policy of Title Insurance,
dated  as  of  the  close of escrow, in an amount  equal  to  the
purchase  price, insuring that Buyer will own insurable title  to
the  Property  subject  only  to: the  title  company's  standard
exceptions;  current real property taxes and assessments;  survey
exceptions; the rights of parties in possession pursuant  to  the
lease   defined  in  Section  11  below;  all  of  the  Permitted
Exceptions (hereinafter defined).

     Buyer  shall be allowed five (5) business days after receipt
of  said  commitment  for  examination  and  the  making  of  any
objections  thereto, said objections to be  made  in  writing  or
deemed  waived.  If any objections are so made, the Seller  shall
be  allowed  thirty  (30) days to cure such  objection,  provided
Seller  shall  be  under  no obligation  to  do  so,  or  in  the
alternative  to obtain a commitment for insurable title  insuring
over  Buyer's  objections.  If, within the time specified,  Buyer
does  not  deliver  notice of its objections, all  title  matters
shall  be deemed approved.  If, within the time specified, Seller
does  not  have  each  such objectionable  exception  removed  or
corrected,  Buyer  must,  prior to the  expiration  of  the  Site
Inspection  Period, as its sole and exclusive remedy, either  (i)
terminate this Agreement, in which event this Agreement,  without
further  action of the parties, shall become null  and  void  and
neither party shall have any further rights or obligations  under
this Agreement, or (ii) elect to accept title to the Property  as
it  then  exists,  without reduction to the Purchase  Price.   If
Buyer  fails to timely make either such election, Buyer shall  be
deemed  to  have  elected option (ii).  If Buyer terminates  this
Agreement prior to the expiration of the Site Inspection  Period,
Buyer's First Payment will be returned (after execution by  Buyer
of  such documents reasonably requested by Seller to evidence the
termination hereof) and this Agreement shall be null and void and
of  no  further  force and effect.  Seller has no  obligation  to
spend any funds or make any effort to satisfy Buyer's objections,
if any.

     As  used  in this Agreement, the term "Permitted Exceptions"
shall mean all matters either shown on the Survey or in the Title
Commitment, and all matters which Purchaser has accepted  or  has
been deemed to accept.

     9.    Closing  Costs.   Seller will pay one-half  of  escrow
fees, all recording fees, transfer taxes and clerk's fees imposed
upon  the recording of the deed, and all of the cost of the basic
premium   for  the  title  insurance  policy  and  any  brokerage
commissions  payable to broker(s) representing Seller,  including
but  not  limited  to Staubach Retail Services,  Progressive  NNN
Properties,  and Terrace Associates.  Seller will pay  the  basic
premium for a Standard TLTA Owners Title Insurance Policy in  the
full  amount  of the purchase price.  Buyer will pay one-half  of
all  recording fees, transfer taxes and clerk's fees imposed upon
the  recording  of the deed, one-half of the escrow  fees.   Each
party will pay its own attorney's fees and costs to document  and
close this transaction.

     10.  Real Estate Taxes, Special Assessments and Prorations.

          (a)  Because  the Property is subject to a  triple  net
lease  (as  further  set forth in Section 11(a)(i),  the  parties
acknowledge  that there shall be no need for a  real  estate  tax
proration.  However, Seller warrants that all real  estate  taxes
and  installments of special assessments due and payable  in  all
years prior to the year ofClosing have been paid in full.  Unpaid
real   estate  taxes  and  unpaid  levied  and  pending   special
assessments  existing  on  the  date  of  Closing  shall  be  the
responsibility  ofBuyer,  pro-rated,  however,  to  the  date  of
closing  for  the  period prior to closing.   Taxes  and  special
assessments  prior  to  closing shall be  the  responsibility  of
Seller,  if  Tenant shall not pay the same. Buyer shall  likewise
pay  all taxes due and payable in the year after Closing and  any
unpaid installments of special assessments payable therewith  and
thereafter, if such unpaid levied and pending special assessments
and real estate taxes are not paid by any tenant of the Property.

     (b)   All incomeand all operating expenses from the Property
     shall  be prorated between the parties and adjusted by  them
     as  of the date of Closing.  Seller shall be entitled to all
     income  earnedand  shall  be responsible  for  all  expenses
     incurred  prior to the date of Closing, and Buyer  shall  be
     entitled  to all income earned and shall be responsible  for
     all  operating expensesof the Property incurred on and after
     the date of closing.

11.  Seller's Representation and Agreements.

     (a)  Seller represents and warrants as of this date that:

     (i)  Except for the Lease Agreement in existence between Seller
          (as Lessor) and Garden Ridge, L.P.(as Tenant), dated July 13,
          2000 (the "Lease"), Seller is not aware of any leases of the
          Property.

     (ii) It is not aware of any pending litigation or condemnation
          proceedings against the Property or Seller's interest in the
          Property.

     (iii)      Except  as previously disclosed to Buyer  and  as
          permitted in paragraph (b) below, Seller is not aware of any
          contracts Seller has executed that would be binding on Buyer
          after the closing date.

     (b)   Provided  that  Buyer performs  its  obligations  when
     required, Seller agrees that it will not enter into any  new
     contracts that would materially affect the Property  and  be
     binding  on  Buyer  after the Closing Date  without  Buyer's
     prior consent, which will not be unreasonably withheld.

12.  Disclosures.

     (a)   Seller  has  not received anynotice of  any  material,
     physical,  or mechanical defects of the Property,  including
     without limitation, the plumbing, heating, air conditioning,
     ventilating, and electrical systems. To the best of Seller's
     knowledge  without  inquiry, all  such  items  are  in  good
     operating  condition and repair and in compliance  with  all
     applicable   governmental,  zoning,  and  land   use   laws,
     ordinances,  regulations and requirements. If  Seller  shall
     receive any notice to the contrary prior to Closing,  Seller
     will inform Buyer prior to Closing.

     (b)   Seller  has not received any notice that the  use  and
     operation  of  the Property is not in full  compliance  with
     applicable  building codes, safety, fire, zoning,  and  land
     use  laws,  and  other applicable local, state  and  federal
     laws,  ordinances, regulations and requirements.  If  Seller
     shall  receive any notice to the contrary prior to  Closing,
     Seller will inform Buyer prior to Closing.

     (c)   Seller  knows  of no facts nor has  Seller  failed  to
     disclose  to  Buyer  any fact known to  Seller  which  would
     prevent  the  Tenant from using and operating  the  Property
     after  the  Closing in the manner in which the Property  has
     been  used and operated prior to the date of this Agreement.
     If  Seller shall receive any notice to the contrary prior to
     Closing, Seller will inform Buyer prior to Closing.

     (d)  Seller has not received any notice that the Property is
     in  violation of any federal, state or local law, ordinance,
     or   regulations  relating  to  industrial  hygiene  or  the
     environmental  conditions on, under, or about the  Property,
     including,   but  not  limited  to,  soil,  and  groundwater
     conditions.  To the best of Seller's knowledge, there is  no
     proceeding  or  inquiry by any governmental  authority  with
     respect  to  the  presence  of Hazardous  Materials  on  the
     Property or the migration of Hazardous Materials from or  to
     other  property.   Buyer agrees that  Seller  will  have  no
     liability  of  any  type  to Buyer  or  Buyer's  successors,
     assigns,  or  affiliates in connection  with  any  Hazardous
     Materials  on  or  in  connection with the  Property  either
     before  or  after  the Closing Date, except  such  Hazardous
     Materials on or in connection with the Property arising  out
     of  Seller's gross negligence or intentional misconduct.  If
     Seller  shall  receive any notice to the contrary  prior  to
     Closing, Seller will inform Buyer prior to Closing.

     (e)   BUYER AGREES THAT IT SHALL BE PURCHASING THE  PROPERTY
     IN  ITS  THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER
     HAS  NO  OBLIGATIONS TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
     THEREON  OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY,
     EXCEPT  AS  EXPRESSLY  PROVIDED HEREIN.   SELLER  AGREES  TO
     INDEMNIFY  BUYER FOR ANY CLAIM RISING OUT OF THE PERFORMANCE
     OF  LANDLORD'S  WORK UNDER THE LEASE PRIOR TO  THE  DATE  OF
     CLOSING.

     (f)    BUYER  ACKNOWLEDGES  THAT,  HAVING  BEEN  GIVEN   THE
     OPPORTUNITY  TO  INSPECT  THE PROPERTY  AND  SUCH  FINANCIAL
     INFORMATION  ON THE LESSEE AND GUARANTORS OF  THE  LEASE  AS
     BUYER   OR  ITS  ADVISORS  SHALL  REQUEST,  IF  IN  SELLER'S
     POSSESSION, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION
     OF  THE  PROPERTY  AND  NOT ON ANY INFORMATION  PROVIDED  BY
     SELLER OR TO BE PROVIDED EXCEPT AS SET FORTH HEREIN.   BUYER
     FURTHER ACKNOWLEDGES THAT THE INFORMATION PROVIDED AND TO BE
     PROVIDED  BY  SELLER WITH RESPECT TO THE  PROPERTY,  TO  THE
     LESSEE, AND TO THE GUARANTORS OF LEASE WAS OBTAINED  FROM  A
     VARIETY   OF  SOURCES  AND  SELLER  NEITHER  (A)  HAS   MADE
     INDEPENDENT   INVESTIGATION   OR   VERIFICATION   OF    SUCH
     INFORMATION,  OR  (B) MAKES ANY REPRESENTATIONS  AS  TO  THE
     ACCURACY  OR  COMPLETENESS  OF SUCH  INFORMATION  EXCEPT  AS
     HEREIN SET FORTH.  THE SALE OF THE PROPERTY AS PROVIDED  FOR
     HEREIN  IS  MADE  ON AN "AS IS" BASIS, AND  BUYER  EXPRESSLY
     ACKNOWLEDGES  THAT, IN CONSIDERATION OF  THE  AGREEMENTS  OF
     SELLER  HEREIN,  EXCEPT  AS OTHERWISE  SPECIFIED  HEREIN  IN
     PARAGRAPH 11(A) AND (B) ABOVE AND THIS PARAGRAPH 12,  SELLER
     MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,  OR
     ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED  TO,
     ANY  WARRANTY  OF  CONDITION,  HABITABILITY,  TENANTABILITY,
     SUITABILITY  FOR  COMMERCIAL PURPOSES,  MERCHANTABILITY,  OR
     FITNESS  FOR  A  PARTICULAR  PURPOSE,  IN  RESPECT  OF   THE
     PROPERTY.

     The provisions (d) - (f) above shall survive Closing.

13.  Closing.

     (a)        Before the closing date, Seller will deposit into
     escrow an executed special warranty  deed  warranting  title
     against lawful claims by, through,or under a conveyance from
     Seller,  but not further or otherwise,  conveying  insurable
     title of the  Property  to  Buyer,  subject to the Permitted
     Exceptions contained in  Section  8  above. Seller will also
     deliver  an  Estoppel Certificate  certified by Lessee as to
     the absence  of  known defaults by Landlord and Tenant under
     the Lease.

     (b)       On or  before the closing date, Buyer will deposit
     into escrow: the balance of the Purchase Price when required
     under  Section  4;  any  additional  funds required of Buyer
     (pursuant to this agreement  or any other agreement executed
     by Buyer) to close escrow.  Both parties will deliver to the
     escrow holder any other documents reasonably required by the
     escrow holder to  close escrow.

     (c)   On  the  closing date, if escrow is in a  position  to
     close,  the  escrow  holder will: record  the  deed  in  the
     official  records  of  the  county  where  the  Property  is
     located;  cause  the title company to commit  to  issue  the
     title  policy; immediately deliver to Seller the portion  of
     the  purchase price deposited into escrow by cashier's check
     or  wire  transfer  (less debits and  prorations,  if  any);
     deliver  to  Seller  and Buyer a signed counterpart  of  the
     escrow  holder's certified closing statement  and  take  all
     other actions necessary to close escrow.

14.   Defaults.  If Buyer defaults, Buyer will forfeit all rights
and  claims  and  Seller will be relieved of all obligations  and
will  be  entitled to retain all monies heretofore  paid  by  the
Buyer. In addition, Seller shall retain all remedies available to
Seller at law or in equity.

      If  Seller shall default,Seller will forfeit all rights and
claims and Buyer will be relieved of all obligations and will  be
entitled  to the prompt return of all monies heretofore  paid  by
the Buyer. In addition, Buyer shall retain all remedies available
to  Buyer  at law or in equity.  Provided, however,  that  in  no
event  shall Seller be liable for any punitive, consequential  or
speculative  damages  arising  out  of  any  default  by   Seller
hereunder.

15.  Buyer's Representations and Warranties.

     a.  Buyer represents and warrants to Seller as follows:

     (i)   In  addition to the acts and deeds recited herein  and
     contemplated  to  be performed, executed, and  delivered  by
     Buyer, Buyer shall perform, execute and deliver or cause  to
     be  performed,  executed, and delivered at  the  Closing  or
     after  the  Closing,  any and all further  acts,  deeds  and
     assurances as Seller or the Title Company may require and be
     reasonable   in   order  to  consummate   the   transactions
     contemplated herein.

     (ii)   Buyer  has  all  requisite  power  and  authority  to
     consummate  the  transaction contemplated by this  Agreement
     and  has by proper proceedings duly authorized the execution
     and  delivery of this Agreement and the consummation of  the
     transaction contemplated hereby.

     (iii)   To  Buyer's  knowledge, neither  the  execution  and
     delivery  of  this  Agreement nor the  consummation  of  the
     transaction  contemplated  hereby  will  violate  or  be  in
     conflict with (a) any applicable provisions of law, (b)  any
     order  of  any  court or other agency of  government  having
     jurisdiction  hereof, or (c) any agreement or instrument  to
     which Buyer is a party or by which Buyer is bound.

     (iv)  Buyer  represents that Buyer has dealt with  no  other
     broker other than Staubach Retail Services, Progressive  NNN
     Properties, and Terrace Associates and that any fees payable
     to them are payable by the Seller.

16.  Damages, Destruction and Eminent Domain.

     (a)   If, prior to closing, the Property or any part thereof
     be  destroyed  or further damaged by fire, the elements,  or
     any cause, due to events occurring subsequent to the date of
     this Agreement to the extent that the cost of repair exceeds
     $10,000.00,  this Agreement shall become null and  void,  at
     Buyer's  option exercised, if at all, by written  notice  to
     Seller within ten (10) days after Buyer has received written
     notice  from Seller of said destruction or damage.   Seller,
     however,  shall  have  the right to  adjust  or  settle  any
     insured  loss  until  (i)  all contingencies  set  forth  in
     Section  6 hereof have been satisfied, or waived;  and  (ii)
     any  ten-day  period provided for above in this Subparagraph
     16a  for  Buyer  to  elect to terminate this  Agreement  has
     expired  or  Buyer has, by written notice to Seller,  waived
     Buyer's right to terminate this Agreement.  If Buyer  elects
     to  proceed  and  to  consummate the purchase  despite  said
     damage  or  destruction, there shall be no reduction  in  or
     abatement of the purchase price, and Seller shall assign  to
     Buyer the Seller's right, title, and interest in and to  all
     insurance  proceeds (pro-rata in relation to  the  Property)
     resulting from said damage or destruction to the extent that
     the same are payable with respect to damage to the Property,
     subject to rights of any Tenant of the Property.

     If  the cost of repair is less than $10,000.00, Buyer  shall
     be  obligated  to  otherwise  perform  hereinunder  with  no
     adjustment  to  the Purchase Price, reduction or  abatement,
     and  Seller shall assign Seller's right, title and  interest
     in and to all insurance proceeds pro-rata in relation to the
     Property, subject to rights of any Tenant of the Property.

     (b)   If,  prior  to  closing, the  Property,  or  any  part
     thereof,  is  taken by eminent domain, this Agreement  shall
     become null and void, at Buyer's option.  If Buyer elects to
     proceed  and to consummate the purchase despite said taking,
     there  shall  be  no  reduction in,  or  abatement  of,  the
     purchase  price,  and  Seller  shall  assign  to  Buyer  the
     Seller's  right,  title, and interest in and  to  any  award
     made, or to be made, in the condemnation proceeding pro-rata
     in relation to the Property, subject to rights of any Tenant
     of the Property.

      In the event that this Agreement is terminated by Buyer  as
provided  above  in  Subparagraph 16a or 16b, the  First  Payment
shall  be immediately returned to Buyer (after execution by Buyer
of  such documents reasonably requested by Seller to evidence the
termination hereof.)

17.  Cancellation

      If any party elects to cancel this Agreement because of any
breach  by another party or because escrow fails to close by  the
agreed date, the party electing to cancel shall deliver to escrow
agent a notice containing the address of the party in breach  and
stating that this Agreement shall be cancelled unless the  breach
is  cured within thirteen (13) days following the delivery of the
notice  to  the escrow agent.  Within threedays after receipt  of
such notice, the escrow agent shall send it by United States Mail
to the party in breach at the address contained in the Notice and
no  further notice shall be required. If the breach is not  cured
within  the  thirteen  (13) days following the  delivery  of  the
notice to the escrow agent, this Agreement shall be cancelled.

18.  Miscellaneous.

     (a)  This Agreement may be amended only by written agreement
     signed by both Seller and Buyer, and all waivers must be  in
     writing  and signed by the waiving party.  Time  is  of  the
     essence.   This  Agreement  will not  be  construed  for  or
     against  a party whether or not that party has drafted  this
     Agreement.  If there is any action or proceeding between the
     parties relating to this Agreement the prevailing party will
     be  entitled to recover attorney's fees and costs.  This  is
     an  integrated  agreement containing all agreements  of  the
     parties  about the Property and the other matters described,
     and  it  supersedes any other agreements or  understandings.
     Exhibits  attached  to this Agreement are incorporated  into
     this Agreement.

     (b)  Funds to be deposited or paid by Buyer must be good and
     clear  funds in the form of cash, cashier's checks  or  wire
     transfers.

     (c)   All notices from either of the parties hereto  to  the
     other  shall be in writing and shall be considered  to  have
     been  duly  given or served if sent by first class certified
     mail,  return receipt requested, postage prepaid,  or  by  a
     nationally recognized courier service guaranteeing overnight
     delivery to the party at his or its address set forth below,
     or  to  such  other  address  as such  party  may  hereafter
     designate by written notice to the other party.

     If to Seller:
                    Cypress/GR Woodlands I, L.P.
                    c/o Staubach Retail Services, Inc.
                    15601 Dallas Parkway, Suite 400
                    Addison, Texas 75201
                    Attn:     Christopher C. Maguire
                    Fax: (972) 361-5909
                    Email: cmaquire@staubach.com

     with  a  copy to:  Kane, Russell, Coleman & Logan, P.C.
                        3700 Thanksgiving Tower
                        1601 Elm Street
                        Dallas, Texas  75201
                        Attn:  Robert J. Riek
                        Fax: (214) 777-4299
                        Email: rriek@krcl.com

     If to Buyer:

          AEI Fund Management, Inc.
          Attn:  Robert P. Johnson, President
          1300 Minnesota World Trade Center
          Saint Paul, Minnesota  55101
          Fax: (651) 227-7705
          Email:    rjohnson@aeifunds.com

          (d)    Time  is of the essence in all things pertaining
to the performance of this Agreement.

          (e)    This  Agreement  may  be  executed  in  multiple
counterparts, each of which is to be deemed an original  for  all
purposes.  This Agreement may be executed by facsimile signature.

          (f)   In the event that any date or any period provided
for  in  this Agreement shall end on a Saturday, Sunday or  legal
holiday  in  the  state  defined  in  Section  11.6  hereof,  the
applicable date or period shall be extended to the first business
day following such Saturday, Sunday or legal holiday.

      When  accepted, this offer will be a binding agreement  for
valid  and  sufficient consideration which will bind and  benefit
Buyer, Seller and their respective successors and assigns.  Buyer
is  submitting  this offer by signing a copy of  this  offer  and
delivering it to Seller.  Seller has five (5) business days  from
receipt within which to accept this offer.

      This  Agreement  shall be governed by, and  interpreted  in
accordance with, the laws of the state of  Texas.

      IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.

BUYER:    AEI FUND MANAGEMENT, INC.

          By:/s/ Robert P Johnson
                 Robert P. Johnson, President

     SELLER:   CYPRESS/GR WOODLANDS 1, L.P.

          By:  Cypress/GR Woodlands, Inc., general partner

          By:/s/ Christopher C Maguire
                 Christopher C. Maguire, President

                           EXHIBIT "A"
                    LEGAL DESCRIPTION OF LAND

A tract or parcel of land containing 9.9991 acres (435,562 square
feet) out of the George Taylor Survey, Abstract 555 and the James
McCambridge Survey, Abstract 390, Montgomery County,  Texas,  out
of  lands owned by The Woodlands Land Development Company, LP,  a
Texas limited partnership, by virtue of Memorandum of Merger  and
Ownership dated July 31, 1997 recorded in File No. 9747722 of the
Montgomery County Real Property Records, also being a portion  of
Restricted Reserve "A" of the Woodlands College Park Section  One
as  shown  on  a  plat recorded in Cabinet "M" Sheet  55  of  the
Montgomery County Map Records, said 9.9991 acre tract being  more
particularly  described by metes and bounds as follows  with  all
control referred to the 1927 Texas State Plane Coordinate System,
Lambert Projection, South Central Zone:

BEGINNING  at  a 5/8" iron rod with aluminum cap  found  for  the
southwest  corner of the herein described tract  having  a  Texas
State Plane Coordinate Value of X=3,117,868.40, Y=881,502.36  and
being SOUTH 86 degrees 18 minutes 01 seconds EAST, 1,770.91  feet
from  the  southwest corner of said James McCambridge Survey,  A-
390,  common to the northwest corner of the George Taylor Survey,
located in the east line of the Daniel F. Whillden Survey, A-640;

THENCE  NORTH 03 degrees 04 minutes 30 seconds WEST, 491.00  feet
to  a 5/8" iron rod with aluminum cap set at a point of curvature
and a northwest corner of the herein described tract;

THENCE NORTHEASTERLY along a curve to the right through a central
angle of 90 degrees 00 minutes 00 seconds to a 5/8" iron rod with
aluminum  cap set for a point of tangency and a northwest  corner
of  the  herein described tract, said curve having  a  radius  of
30.00 feet, an arc length of 47.12 feet, and a long chord bearing
NORTH 41 degrees 55 minutes 30 seconds EAST, 42.42 feet;

THENCE  NORTH 86 degrees 55 minutes 30 seconds EAST, 791.33  feet
to  a 5/8" iron rod with aluminum cap set at the northeast corner
of the herein described tract;

THENCE  SOUTH 06 degrees 23 minutes 00 seconds EAST, 521.87  feet
to  a  5/8"  iron  rod with aluminum cap found at  the  southeast
corner of the herein described tract;

THENCE  SOUTH 86 degrees 55 minutes 30 seconds WEST, 851.44  feet
to  the  POINT  OF  BEGINNING, containing 9.9991  acres  (435,562
square feet) of land.This Deed Prepared By and After Recording Return To:

Scott A. Dyche, Esquire
Kane, Russell, Coleman & Logan, P.C.
3700 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201
(214) 777-4228

     ASSIGNMENT OF LEASE, INDEMNITY AND ASSUMPTION AGREEMENT

     THIS ASSIGNMENT OF LEASE, INDEMNITY AND ASSUMPTION AGREEMENT is
made  and  entered  into  as of August 27, 2003  ("Assignment"),  by
CYPRESS/GR   WOODLANDS   I,  L.P.,  a  Texas   limited   partnership
("Assignor")  to  AEI REAL ESTATE FUND XV LIMITED  PARTNERSHIP  (21%
undivided  ownership interest); AEI REAL ESTATE FUND  XVIII  LIMITED
PARTNERSHIP  (24%  undivided ownership  interest);  AEI  INCOME  AND
GROWTH  FUND  XXII  LIMITED  PARTNERSHIP  (32%  undivided  ownership
interest);  and  AEI  INCOME AND GROWTH FUND 24 LLC  (undivided  23%
ownership   interest),    (herein  collectively   referred   to   as
"Assignee").

                       W I T N E S S E T H

     WHEREAS,  pursuant  to  that certain Purchase  Agreement  dated
effective July 25, 2003,  by and between Assignor and Assignee  (the
"PURCHASE AGREEMENT"), Assignor is selling to Assignee and  Assignee
is  purchasing certain real property legally described in Exhibit  A
attached   hereto  and  made  a  part  hereof,  together  with   the
improvements   and   certain  personal  property   located   thereon
(collectively, the "PROPERTY").

     WHEREAS,  in  connection with such transfer  of  the  Property,
Assignor  desires to assign to Assignee that certain Lease made  and
entered into by Assignor, as landlord ("LANDLORD") and Garden Ridge,
L.P.,  a  Texas limited partnership, as tenant ("TENANT"),  security
and  other  deposits, if any, and Assignee desires  to  accept  such
assignment;

     NOW,  THEREFORE, in consideration of TEN DOLLARS  ($10.00)  and
other  good  and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

           1.    All capitalized terms used herein and not otherwise
defined  herein  shall have the meanings ascribed  to  them  in  the
Purchase Agreement.

          2.    The  Lease.  Assignor hereby agrees and warrants  as
follows:   (i)  a  true and correct originals of the Lease  (defined
below)  has been delivered by Assignor to Assignee; (ii)  the  Lease
constitutes  the  sole  agreement between Assignor  and  the  Tenant
(defined  below)  with  respect to the premises  therein  described;
(iii)  the  Lease  is  unmodified and in full force  and  effect  in
accordance  with their terms; and (iv) Assignor has not given,  made
or received, any notice of default or claim under or with respect to
the Lease.

          3.    Assignment  of Lease by Assignor.   Assignor  hereby
assigns  and transfers unto Assignee all of its right, title,  claim
and interest, if any, in and under that certain lease dated July 13,
2000  (the  "Lease"), made and entered into by and between Assignor,
as  Landlord,  and  Garden Ridge, L.P., a Texas limited  partnership
("Garden  Ridge"), as Tenant, with respect to the Property  and  all
security  and  other deposits, if any, paid or deposited  by  Garden
Ridge in respect thereof.

          4.    Assumption  of Lease by Assignee.   Assignee  hereby
accepts  the foregoing assignment and assumes and agrees to  perform
all  obligations, covenants and provisions accruing  or  arising  or
required from and after the date hereof with respect to the Lease.

          5.    Indemnity from Assignor.  Assignor shall  indemnify,
defend,  and  hold  harmless Assignee from  all  claims,  causes  of
action, costs, losses, damages and attorney's fees arising out of or
incurred  in  connection  with  the Lease,  if  any,  prior  to  the
Effective Date of this Agreement.

          6.      Indemnity   from   Assignee.    Subject   to   the
representations and warranties made by Assignor in Section 1 of this
Agreement,  Assignee  shall  indemnify,  defend  and  hold  harmless
Assignor  from all claims, causes of action, costs, losses,  damages
and  attorney's  fees arising out of or incurred in connection  with
the Lease from and after the Effective Date of this Agreement.

          4.    Successors  and Assigns.  This Assignment  shall  be
binding  on  and inure to the benefit of the parties  hereto,  their
heirs,   executors,  administrators,  successors  in  interest   and
assigns.

          5.    Execution in Counterparts.  This Assignment  may  be
executed  in  counterparts,  each  of  which  shall  constitute   an
original,  but  all  together  shall constitute  one  and  the  same
Assignment.

          6.    Attorneys' Fees.  If any litigation between Assignor
and Assignee arises out of the obligations of the parties under this
Assignment  or  concerning  the meaning  or  interpretation  of  any
provision  contained  herein,  the  losing  party  shall   pay   the
prevailing  party's costs and expenses of such litigation including,
without limitation, reasonable attorneys' fees.

          7.    Conflict Between Assignment and Purchase  Agreement.
In  the event of any conflict or inconsistency between the terms  of
this  Assignment and the terms of the Purchase Agreement, the  terms
of the Purchase Agreement shall prevail.

           8.    Governing Applicable Law.  This Agreement shall  be
construed  under  and enforced in accordance with the  laws  of  the
State of Texas.

     IN  WITNESS  WHEREOF, Assignor and Assignee have executed  this
Agreement the day and year first above written.

     ASSIGNOR:                CYPRESS/GR WOODLANDS I, L.P.,
                              a limited partnership

                              By:  CYPRESS WOODLANDS, INC.,
                                   a Texas corporation,
                                   its general partner

                              By:  Chiristopher C Maguire
                                   Christopher C. Maguire,
                                   President

         ASSIGNEE:            AEI REAL ESTATE FUND XV, LIMITED
                              PARTNERSHIP (21% undivided ownership
                              interest)

                              By:AEI FUND MANAGEMENT 86-A,
                                 INC., a Minnesota corporation

                              By: /s/ Robert P Johnson
                              Name:   Robert P. Johnson
                              Title:  President

                              AEI REAL ESTATE FUND XVIII LIMITED
                              PARTNERSHIP (24% undivided ownership
                              interest)

                              By:AEI FUND MANAGEMENT XVIII, INC.,
                                 a Minnesota corporation

                              By: /s/ Robert P Johnson
                              Name:   Robert P. Johnson
                              Title:  President

                              AEI INCOME AND GROWTH FUND XXII
                              LIMITED PARTNERSHIP (32% undivided
                              ownership interest)

                              By:AEI FUND MANAGEMENT XXII, INC.,
                                 a Minnesota corporation

                              By: /s/ Robert P Johnson
                              Name:   Robert P. Johnson
                              Title:  President

                              AEI INCOME AND GROWTH FUND 24 LLC (23%
                              undivided ownership interest)

                              By:AEI FUND MANAGEMENT  XXI,
                                 INC., a Minnesota corporation

                              By: /s/ Robert P Johnson
                              Name:   Robert P. Johnson
                              Title:  President

STATE OF TEXAS

COUNTY OF DALLAS

     BEFORE ME, the undersigned authority, a Notary Public in and  f
or  the  State of Texas, on this day personally appeared Christopher
C.  Maguire,  as president of Cypress/GR Woodlands,  Inc.,  a  Texas
corporation, as general partner for Cypress/GR Woodlands I, L.P.,  a
Texas   limited   partnership,  known  to  me   (or   has   produced
as  identification) to be the person whose name is subscribed to the
foregoing  instrument, and acknowledged to me that he  executed  the
same   as   his/her  free  act  and  deed,  for  the  purposes   and
consideration therein expressed and in the capacity therein stated.

     GIVEN  UNDER  MY  HAND  AND SEAL OF OFFICE,  this  25  day  of
September 2003.

                                     /s/ Merrilee Biagioni
  [notary stamp]                   Notary Public, State of Texas

My Commission Expires:                   Merrilee Biagioni

STATE OF MINNESOTA

COUNTY OF Ramsey

     BEFORE  ME, the undersigned authority, a Notary Public  in  and
for  the State of Minnesota, on this day personally appeared  Robert
P. Johnson, President of AEI Fund Management 86-A, Inc., a Minnesota
corporation,   AEI   Fund  Management  XVIII,  Inc.,   a   Minnesota
corporation,   AEI   Fund  Management  XXII,   Inc.,   a   Minnesota
corporation,   and  SEI  Fund  Management  XXI,  Inc.,  a  Minnesota
corporation, known to me (or  has  produced as identification) to be
the person whose name is  subscribed  to  the foregoing  instrument,
and acknowledged to me that he  executed  the same as  his/her  free
act and deed,for the  purposes   and consideration therein expressed
and in the capacity therein stated.

    GIVEN  UNDER MY HAND AND SEAL OF OFFICE, this 25 day of August
2003.

                                       /s/ Michael B Daugherty
                                   Notary Public, State of Minnesota

My Commission Expires:                     Michael B Daugherty

                                           [notary stamp]

                           Exhibit "A"
                Legal Description of the Property

     TRACT I (FEE SIMPLE):

     BEING a 9.9996 acre (called 9.9991 acre)(435,580 square feet)
     tract of land, being the same parcel of land described in an
     "Annexation" dated July 17, 2000 as recorded in Montgomery
     County Clerk File Number (MCCF#) 2000-059756 and Film Code
     Number (FC#) 741-00-0315 and being a portion of a called
     1,972.22 acre tract, as described in a deed dated July 31, 1997
     between The Woodlands Commercial Properties Company, L.P. and
     The Woodlands Land Development Company, L.P., as recorded in
     MCCF# 9747722 Montgomery County Real Property Records (MCRPR)
     and The Woodlands College Park, Section One, an addition to
     Montgomery County as recorded in Cabinet M, Sheet 55, of the
     Montgomery County Map Records (M.C.M.R.), all bearings related
     to said plat, which is referenced to the Texas State Plane
     Coordinate System, South Central Zone (NAD 27) and being more
     particularly described by metes and bounds as follows:

     COMMENCING at a 5/8 inch iron rod with cap, found for the
     northwest corner of said plat, also being the point of
     beginning of said plat, having a coordinate value of
     X=3,116,971.62, Y=881,621.38;

     THENCE, along a curve to the right, having a radial line
     bearing of S 84 degrees 34 minutes 16 seconds W, a central
     angle of 02 degrees 20 minutes 51 seconds, a radius of 500.00
     feet, a chord which bears of S 04 degrees 14 minutes 54 seconds
     E, a distance of 20.48 feet, an arc distance of 20.49 feet, to
     a 5/8" iron rod with cap, found for the end of curve, also
     being a point on the west line of said College Park Section One
     and the east line The Woodlands Commerce Center Section One, as
     recorded in Cabinet "H", Sheets 109A and 109B (M.C.M.R.);

     THENCE, along said common line S 03 degrees 04 minutes 51
     seconds E, a distance of 146.35 feet, to a point;

     THENCE, leaving said common line, N 86 degrees 55 minutes 30
     seconds E, a distance of 888.72 feet, to a 5/8" iron rod with
     cap found, as called, for the southwest corner of herein
     described tract and the POINT OF BEGINNING;

     THENCE N 03 degrees 04 minutes, 30 seconds W, a distance of
     491.00 feet to a 5/8 inch iron rod with cap, found as called,
     for the most westerly northwest corner of the herein described
     tract, said point also being a point of curvature;

     THENCE, along a curve to the right and northeasterly, an arc
     distance of 47.12 feet to a 5/8 inch iron rod with cap, found,
     as called, for the point of tangency and the most northerly
     northwest corner of the herein described tract, said curve
     having a central angle of 90 degrees 00 minutes 00 seconds, a
     radius of 30.00 feet, and a long chord with bears N 41 degrees
     55 minutes 30 seconds E, 42.43 feet;

     THENCE N 86 degrees 55 minutes 30 seconds E, a distance of
     791.33 feet to a "PK" nail in concrete, found, as called, for
     the northeasterly corner of the herein described tract;

     THENCE S 06 degrees 23 minutes 28 seconds E, a distance of
     521.87 feet to a 5/8" iron rod, with cap, set, for the
     southeast corner of the herein described tract;

     THENCE S 86 degrees 55 minutes 30 seconds W, a distance of
     851.52 feet to the POINT OF BEGINNING, delineating and
     encompassing within the metes recited 9.9996 acres (435,580
     square feet) of land, more or less.

     TRACT II (NON-EXCLUSIVE EASEMENT):

     Non-exclusive easement estate appurtenant to Tract I created in
     Reciprocal Easement Agreement dated December 15, 1999, recorded
     under Clerk's File No. 99104055 of the Real Property Records of
     Montgomery County, Texas, as amended by Designation of
     Additional Tract and Easement dated July 17, 2000, recorded in
     the Real Property Records of Montgomery County, Texas, covering
     and affecting the real property more particularly described
     therein.

                    FIRST AMENDMENT TO LEASE

     This  First  Amendment  to Lease (this  "First  Amendment")  is
entered  into between CYPRESS/GR WOODLANDS I, L.P. ("Landlord")  and
GARDEN RIDGE, L.P. ("Tenant") dated as of May 31, 2001.

Recitals

     A.   Landlord and Tenant entered into a Lease, dated as of July
13,  2000  (the  "Lease") regarding the lease  of  certain  property
located in the City of Houston, County of Harris, State of Texas, as
more particularly defined therein (the "Premises").

     B.   Landlord  and Tenant want to amend certain  provisions  of
the Lease subject to the terms and conditions contained herein.

     C.   Unless  otherwise  defined herein, all  capitalized  terms
used in this First Amendment shall have the meaning given to them in
the Lease.

     In  consideration of the foregoing recitals, and the provisions
contained  herein, the receipt and sufficiency of which  are  hereby
acknowledged, the parties agree as follows:

     1.    Base Rent. Section 4.1 is deleted in its entirety and the
following language is inserted in its place:

     "(a) Commencing on the Rent Commencement Date of this Lease and
terminating  on  the  last day of the twentieth  (20th)  Lease  Year
hereunder, monthly Base Rent of Seventy Eight Thousand Five  Hundred
Forty Four and 62/100 Dollars ($78,544.62);"

    2.    Miscellaneous.

          (a)  The  Lease,  as  amended  by  this  First  Amendment,
constitutes  the understanding between the parties relating  to  the
subject  matter  of this First Amendment, and all prior  agreements,
proposals,  negotiations, understandings and correspondence  between
the  parties in this regard, whether written or oral, are superseded
and  merged  with this First Amendment. Except as modified  in  this
First  Amendment, the Lease remains in fill force and effect and  is
hereby ratified in all respects.

          (b)  This  First  Amendment may be executed simultaneously
in  counterparts, each of which shall be deemed an original, but all
of  which together shall constitute one and the same instrument. The
use of telecopied signatures in place of original signatures on this
First Amendment is expressly allowed. Landlord and Tenant intend  to
be  bound  by the signatures on the telecopied document,  are  aware
that  the other parties will rely on the telecopied signatures,  and
waive  any  defenses  to  enforcement of the  terms  of  this  First
Amendment based on the form of signature.
                                1

          (c) The recitals set forth above are incorporated herein
               by this reference.

          Landlord and Tenant have duly executed this First
Amendment as of the day and year first above written.

                            LANDLORD:

                              CYPRESS/GR WOODLANDS I, L.P.

                              By: Cypress/GR Woodlands, Inc.,
                                  General Partner

                              By: /s/ Christopher C Maguire
                                      Christopher C. Maguire,
                                      President

                             TENANT:

                              GARDEN RIDGE, L.P.

                              By:  Garden Ridge Management, Inc.,
                                   General Partner

                                   By:/s/ Jane Arbuthnot
                                   Name:  Jane Arbuthnot
                                   Title: CFO

                                2

                      AMENDED AND RESTATED
                    FIRST AMENDMENT TO LEASE

    This  Amendment  and  Restated First Amendment  to  Lease  (this
"Amended  First  Amendment")  is  entered  into  between  CYPRESS/GR
WOODLANDS  I,  L.P. ("Landlord") and GARDEN RIDGE,  L.P.  ("Tenant")
dated as of January 31, 2002, but effective as of May 31, 2001.

Recitals

     A.   Landlord and Tenant entered into a Lease, dated as of July
13,  2000  (the  "Lease") regarding the lease  of  certain  property
located in the City of Houston, County of Harris1 State of Texas, as
more particularly defined therein (the "Premises").

     B.   Landlord and Tenant entered into a certain First Amendment
to  Lease (the "Amendment"), dated as of May 31, 2001, amending  the
Lease in certain respects.

     C.   Landlord  and  Tenant  desire to  amend  and  restate  the
Amendment in its entirety to correct a typographical error,

     In  consideration of the foregoing recitals, and the provisions
contained  herein, the receipt and sufficiency of which  are  hereby
acknowledged, the parties agree as follows:

     1.   Base  Rent. Section 4.1(a) only is deleted in its entirety
and the following language is inserted in its place:

     "(a) Commencing on the Rent Commencement Date of this Lease and
terminating  on  the  last day of the twentieth  (20th)  Lease  Year
hereunder, monthly Base Rent of Seventy Eight Thousand Five  Hundred
Forty Four and 62/100 Dollars ($78,544.62);"

     2.  Miscellaneous

          (a)   The   Lease,  as  amended  by  this  Amended   First
Amendment,   constitutes  the  understanding  between  the   parties
relating to the subject matter of this Amended First Amendment,  and
all  prior  agreements, proposals, negotiations, understandings  and
correspondence  between the parties in this regard, whether  written
or   oral,  are  superseded  and  merged  with  this  Amended  First
Amendment.  Except as modified in this Amended First Amendment,  the
Lease remains in full force and effect and is hereby ratified in all
respects.

          (b)   This   Amended  First  Amendment  may  be   executed
simultaneously  in counterparts, each of which shall  be  deemed  an
original,  but all of which together shall constitute  one  and  the
same  instrument.  The  use of telecopied  signatures  in  place  of
original  signatures  on this Amended First Amendment  is  expressly
allowed. Landlord and Tenant intend to be bound by the signatures on
the  telecopied document, are aware that the other parties will rely
on  the telecopied signatures, and waive any defenses to enforcement
of  the  terms of this Amended First Amendment based on the form  of
signature.                       1

          (c)  The recitals set forth above are incorporated herein
               by this reference.

     Landlord and Tenant have duly executed this Amended First
Amendment as of the day and year first above written.

                              LANDLORD:

                              CYPRESS/OR WOODLANDS 1, LP.

                              By:  Cypress/GR Woodlands, Inc.,
                                   General Partner

                              By:
                                     Christopher C. Maguire,
                                      President

                             TENANT:

                              GARDEN RIDGE, L.P.

                              By: Garden Ridge Management, Inc.,
                                  General Partner

                              By: /s/ Jane Arbuthnot
                              Name:   Jane Arbuthnot
                              Title:      CFO

                                 2

                              LEASE

                         BY AND BETWEEN

                  CYPRESS/GR WOODLANDS I, L.P.

                          AS LANDLORD,

                              AND

                       GARDEN RIDGE, L.P.

                            AS TENANT

               WOODLANDS, MONTGOMERY COUNTY, TEXAS

                            INDEX TO
                        LEASE PROVISIONS

ARTICLE I Incorporation of Preambles - Certain Definitions    1

    1.1 Incorporation of Preambles                            1

    1.2 Certain Definitions                                   1

ARTICLE II Lease of Premises                                  2

ARTICLE III Term and Extensions                               2

    3.1 Initial Term                                          2

    3.2 Lease Year                                            3

    3.3 Extensions                                            3

    3.4 Rent Commencement Date                                3

ARTICLE IV Rent                                               4

    4.1 Base Rent                                             4

    4.2 Partial Month Rent                                    5

    4.3 Terms of Payment                                      5

    4.4 Additional Rent                                       5

    4.5 Rent                                                  5

    4.6 Guaranty                                              5

ARTICLE V Absolute Net Lease                                  5

ARTICLE VI Use                                                6

ARTICLE VII Subletting and Assignment                         6

    7.1 Subletting and Assignment                             6

    7.2 Assignment by Landlord                                7

ARTICLE VIII Quiet Enjoyment - Landlord's Warranty            7

ARTICLE IX Alterations                                        7

    9.1 Tenant's Alterations                                  7

    9.2 Method of Alterations                                 8

ARTICLE X Tenant's Property                                   8

   10.1 Installation, Removal                                 8

   10.2 Required Removal                                      8

   10.3 Title at Termination                                  9

   10.4 Tenant Financing                                      9

ARTICLE XI Lien or Encumbrance                                9

   11.1 No Liens                                              9

   11.2 No Consent to Work, Lien or Encumbrance               9

ARTICLE XII Repairs and Maintenance                          10

   12.1 DutytoRepair                                         10

   12.2 Definition and Standard of Repair                    10

   12.3 No Obligation to Repair                              10

ARTICLE XIII Requirements of Law                             11

   13.1 Requirements                                         11

   13.2 Nullification of Termination                         11

   13.3 Recapture of Landlord's Payment; Additional Rent     12

ARTICLE XIV Damage or Destruction                            12

   14.1 Tenant's Obligation to Rebuild                       12

   14.2 Approval of Plans and Specifications                 12

   14.3 Payment from Escrow                                  12

   14.4 Failure to Reconstruct: Termination                  13

   14.5 Force Majeure                                        13

   14.6 No Abatement of Rent                                 13

   14.7 Default in Payment of Rent                           13

ARTICLE XV Insurance                                         14

   15.1 Casualty Property Insurance                          14

   15.2 Boiler Insurance                                     14

   15.3 Public Liability Insurance                           14

   15.4 Workers' Compensation,Employer's Liability Insurance 15

   15.5 Business Interruption                                15

   15.6 Insurance on Tenant's Property                       15

   15.7 No Separate Insurance                                15

   15.8 Conduct of Business, Cooperation                     15

   15.9 Requirements of Policies                             15

   15.10Release, Waiver of Subrogation                       16

ARTICLE XVI Indemnification of Landlord                      17

ARTICLE XVII Condemnation                                    18

   17.1 Authority                                            18

   17.2 Taking                                               18

   17.3 Termination                                          18

   17.4 Restoration                                          18

ARTICLE XVIII Default                                        19

   18.1 Events of Default                                    19

   18.2 Landlord's Rights Upon Tenant's Default              19

   18.3 Re-letting                                           20

   18.4 Damages Upon Termination                             21

ARTICLE XIX Signs                                            22

ARTICLE XX Taxes and Other Liens                             22

   20.1 Impositions                                          22

   20.2 Tax on Tenant Additions                              22

   20.3 Exceptions                                           22

   20.4 Proof of Payment                                     23

   20.5 Refunds                                              23

   20.6 Protest                                              23

   20.7 Requirements of Mortgage                             23

ARTICLE XXI Utilities                                        24

   21.1 Payment of Charges                                   24

   21.2 Provision of Services                                24

ARTICLE XXII Holding Over                                    24

ARTICLE XXIII Notice                                         24

   23.1 Notice Address                                       24

   23.2 Service of Notice                                    25

ARTICLE XXIV Subordination                                   25

   24.1 Lease Subordinate                                    25

   24.2 Attomment                                            26

   24.3 Attomment to Successor                               26

ARTICLE XXV Landlord's Access to the Premises                26

ARTICLE XXVI Environmental Compliance                        27

   26.1 Definitions                                          27

   26.2 Compliance                                           27

ARTICLE XXVII Landlord's Work                                28

ARTICLE XXVIII Estoppel Certificates                         28

ARTICLE XXIX Reports                                         29

ARTICLE XXX Declarations, Covenants, Conditions Restrictions and

          Agreements                                         29

ARTICLE XXXI Provisions of General Application               30

                              LEASE

     THIS  LEASE (hereinafter sometimes referred to as this  "Lease"
or  this  "Agreement"), as of the 13th day of  July,  2000,  by  and
between  CYPRESS/GR WOODLANDS I, L.P., a Texas limited  partnership;
having  its  principal  place of business at 15601  Dallas  Parkway,
Suite   400,  Dallas,  Texas  75001  (hereinafter  referred  to   as
"Landlord"),  and  GARDEN RIDGE, L.P., a Texas limited  partnership,
maintaining  its  headquarters at 19411  Atrium  Place,  Suite  170,
Houston, Texas 77084 (hereinafter referred to as "Tenant");

                        WITNESSETH THAT:

     WHEREAS,  Tenant desires to lease from Landlord upon the  terms
and  conditions  set  out  herein, the real  property  described  in
Exhibit  A  (the  "Site") and illustrated in Exhibit  B  (the  "Site
Plan") located in the City of Woodlands, County of Montgomery, State
of Texas; and

     WHEREAS, Landlord is willing to purchase and improve said  real
property  and to lease said real property to Tenant upon  the  terms
and conditions set out herein;

     NOW,  THEREFORE,  for  and in consideration  of  the  foregoing
preambles, of the mutual promises and covenants contained herein, of
Ten  Dollars  ($10.00) in hand paid by Tenant to  Landlord,  and  of
other  good  and valuable consideration, the receipt and sufficiency
of  all of which is hereby acknowledged by both Landlord and Tenant,
Landlord and Tenant hereby agree as follows:

                             ARTICLE I
        Incorporation of Preambles - Certain Definitions

     1.1  Incorporation  of Preambles. The foregoing  preambles  and
the  exhibits  referenced herein are hereby incorporated  into  this
Lease as a part hereof by this reference thereto.

     1.2  Certain Definitions. Reference is made in this Article 1.2
to  certain  defined  terms used herein which  are  defined  in  the
Articles referred to opposite each such term, as follows:

Term                                  Article Where Defined
"Additional Rent"                     Article 4.4
"Agreement"                           Preamble
"Base Rent"                           Article 4.1
"Covenants and Agreements"            Article VI
"Environmental Laws"                  Article 26.1(a)
"Force Majeure"                       Article 14.5
"Improvements"                        Article II
"Initial Term"                        Article 3.1
"Landlord"                            Preamble

                                 1
"Laws"                                Article 13.1
"Lease"                               Preamble
"Lease Year"                          Article 3.2
"Premises"                            Article II
"Prime Rate"                          Article 18.3(c)
"REA"                                 Exhibit C, Paragraph (A)(4)
"Regulated Substance"                 Article 26.1(b)
"Rent"                                Article 4.5
"Rent Adjustment Date"                Article 4.1
"Rent Commencement Date"              Article 3.1
"Site"                                Preamble
"Site Plan"                           Preamble
"Tenant"                              Preamble
"Tenant Delay"                        Exhibit C, Paragraph (G)
"Tenant's Building"                   Article II
"Tenant Environmental Event"          Article 26.2(a)
"Tenant's Property"                   Article 10.1
"Term"                                Article 3.3

                           ARTICLE II
                        Lease of Premises

     Landlord, for and in consideration of the rent to be  paid  and
of  the  covenants and agreements herein contained to  be  kept  and
performed  by  Tenant, does hereby exclusively lease and  demise  to
Tenant,  and Tenant does hereby exclusively hire from Landlord,  the
real  property  being  located in the City of Woodlands,  County  of
Montgomery,  State of Texas, described in Exhibit A and  illustrated
on  Exhibit  B,  including all improvements now or hereafter  to  be
constructed thereon, which improvements are to consist of  a  retail
sales  building containing approximately one hundred eleven thousand
five hundred seventy (111,570) square feet (the same, as modified in
accordance  with  Article IX below is herein  called  the  "Tenant's
Building")  and  all  fixtures  and accessory  improvements  now  or
hereafter   thereon,  including  all  roadway,  parking  areas   and
landscaped areas now or hereafter located thereon (collectively such
Tenant's   Building,  fixtures  and  improvements  are   hereinafter
referred  to  as  the "Improvements") together with  all  easements,
rights, privileges and amenities otherwise appurtenant to such  real
property   (herein  called  the  "Premises").  Said   Premises   and
Improvements  are  indicated upon the site plan attached  hereto  as
Exhibit B (the "Site Plan").

                           ARTICLE III
                       Term and Extensions

     3.1  Initial  Term. The initial term ("Initial Term")  of  this
Lease shall commence on the day (the "Rent Commencement Date") which
is  the  earlier  to  occur of (x) ninety (90)  days  following  the
Delivery  Date (defined below) or (y) the date Tenant commences  the
conduct   of   its   normal   and  customary   business   therefrom.
Notwithstanding the foregoing, if the Delivery Date  occurs  between
December 1 and the following January 15, the Delivery Date shall  be
deemed  to  be such January 15. The "Delivery Date" shall  mean  the
date  upon  which  all of the following have been accomplished:  (i)
exclusive  (subject  to  Landlord's, its  agents',  contractors'  or

                                 2

employees',  entry for the purposes of completing the  punch  list),
actual possession of the Premises is delivered to Tenant with all of
the  Landlord's  Work (defined in Exhibit C attached hereto)  having
been substantially completed in accordance with, and as defined  in,
said Exhibit C, (ii) Landlord has obtained and delivered to Tenant a
duly   executed   subordination,  non-disturbance   and   attornment
agreement in the form of Exhibit D attached hereto from all  lenders
holding  a  lien  on  any  of the land upon which  the  Premises  is
located,  (iii)  Landlord has delivered to Tenant a  certificate  of
occupancy (or the equivalent thereof) with respect to the Landlord's
Work  from  all  applicable governmental authorities and  under  the
Covenants and Agreements; Landlord shall be deemed to have  obtained
such  certificate if the same is not issued because  of  work  being
conducted  by  Tenant within the Premises or due  to  Tenant  Delays
(defined  in Exhibit C hereto). The Initial Term shall  end  on  the
twentieth (20th) complete Lease year following the Rent Commencement
Date. Regardless of the exercise or non-exercise by Tenant of any or
all  of  the options to renew set forth in this Lease, Tenant  shall
have,  unless the last day of the Term shall be January  31  of  any
year,  the option to extend (or further extend, as the case may  be)
the  Term  of this Lease for such period of time as shall cause  the
last  day  of  the  Term of this Lease to be  the  January  31  next
succeeding  the date upon which the term of this Lease would  expire
but  for the exercise of this option. This option shall be exercised
by  notice  to  Landlord not less than six (6) months prior  to  the
expiration of the Term of this Lease or any extension thereof.  Base
Rent  during this option period shall be the same Base Rent  payable
under  the terms of this Lease at the time Tenant notifies  Landlord
of its intention to exercise this option.

     3.2  Lease Year. The first Lease Year during the Term shall  be
the  period commencing on the Rent Commencement Date and terminating
at  the  end  of the twelfth (12th) calendar month thereafter.  Each
subsequent  Lease  Year during the Term shall  consist  of  a  year,
except  that the last Lease Year during the Term shall terminate  on
the date that this Lease is terminated.

     3.3  Extensions. Provided that Tenant is not in default of this
Lease,  Landlord hereby grants to Tenant four (4) successive options
to  extend the Term for periods of five (5) years each on  the  same
terms  and  conditions  as applied during  the  Initial  Term,  each
exercisable by Tenant's written notice to Landlord of such  exercise
given  (i)  not less than twelve (12) months prior to the expiration
of  the  Initial Term hereof, or of the then existing option period,
as  the  case may be, or (ii) within ten (10) days following service
of  notice  from  Landlord advising Tenant that it  has  not  timely
exercised any option to extend the Term of this Lease. Should Tenant
fail  to exercise any prior extension option offered hereunder,  all
subsequent extension options shall be deemed waived as well.  Tenant
shall have no other renewal rights hereunder, except as set forth in
Section 3.1 above. No assignee or subtenant of Tenant shall have the
right  to exercise any renewal rights nor shall any assignee  (other
than any assignee as a result of a merger of Tenant with another, an
assignee  who  is  controlled  by,  under  common  control  with  or
controlling  Tenant, or an assignee who has acquired,  in  a  single
transaction or a series of transactions, all or substantially all of
the  assets  of  Tenant). The Initial Term of this Lease,  plus  all
options validly exercised by Tenant as provided in this Article III,
are herein collectively referred to as the "Term".

     3.4  Rent  Commencement Date. When the Rent  Commencement  Date
has  been determined, Landlord and Tenant shall execute and  deliver
to  one  another  a  memorandum in the form of  Exhibit  E  attached
hereto, which shall expressly confirm the Base Rent, the Rent
                                 3

Commencement Date, the expiration date of the Initial Term, that the
Landlord's Work has been completed (other than punch-list items) and
accepted  by  Tenant and which shall ratify and affirm  all  of  the
provisions of this Lease.

                           ARTICLE IV
                              Rent

     4.1  Base  Rent.  Tenant  shall pay to Landlord  as  base  rent
("Base Rent"), without, except as expressly provided for in Articles
XVII,  XVIII,  XXVII,  and  XXX(p) of this  Lease,  demand,  notice,
abatement, deduction or offset, for the Premises, on the  first  day
of  each  month  in advance, during the Term of this Lease  and  any
extensions hereof, as follows:

     (a)  Commencing on the Rent Commencement Date of this Lease and
terminating  on  the  last day of the twentieth  (20th)  Lease  Year
hereunder,  monthly Base Rent of Seventy-Nine Thousand Four  Hundred
Sixty-Nine and 58/100 Dollars ($79,469.58);

     (b)  "Rent Adjustment Date" shall be on the first day after the
end  of  the Fifth (5th), Tenth (10th), Fifteenth (15th)  and  every
Fifth (5th) Lease Year thereafter and continuing throughout the term
of  this  Lease  and any extension thereof. On each Rent  Adjustment
Date, the annual Base Rent shall be increased and shall be equal  to
the  lesser  of (x) 110% of the annual Base Rent for the immediately
preceding  Lease  Year  or  (y) the CPI Adjusted  Rent  (hereinafter
defined).

     (c)  Notwithstanding anything to the contrary contained in this
Lease,  the monthly Base Rent to be paid by Tenant pursuant to  this
Section  4.1  from time to time during the Lease Term shall  be  the
lesser of (x) the amount of monthly Base Rent as stipulated in  this
Section  4.1(a),  (b) and (c), or (y) an amount (the  "CPl  Adjusted
Rent")  equal  to  (i) the product of the monthly  Base  Rent  first
required to be paid by Tenant pursuant to this Lease, times (ii) one
(1) plus a fraction, the numerator of which is thirty (30) times the
difference between the Consumer Price Index (as hereinafter defined)
most  recently  published at the time of calculation  (the  "Current
CPI") minus the Consumer Price Index as published at the time Tenant
commenced  its payment of Base Rent hereunder (the "Base CPI"),  and
the  denominator of which shall be the Base CPI (provided,  however,
that  in  no event shall such fraction be less than zero).  The  CPI
Adjusted Rent is illustrated by the following formula:

     Original Base Rent x 1 + 30 x (Current CPI - Base CPI)
                         Base CPI

(d)   "Consumer Price Index" shall mean the United States Department
of  Labor, Bureau of Labor Statistics, Consumer Price Index  -  U.S.
City  Average, All Items (1982-84 = 100). The Consumer  Price  Index
for  any year shall be that published in December for that year.  If
the  manner in which the Consumer Price Index is determined  by  the
Bureau   of   Labor  Statistics  shall  be  substantially   revised,
including, without limitation, a change in the base index  year,  an
adjustment shall be made by the parties in such revised index  which
would  produce results equivalent, as nearly as possible,  to  those
which would have been obtained if such Consumer Price Index had  not
been   so  revised.  If  the  Consumer  Price  Index  shall   become
unavailable to the
                                  4

public  because  publication is discontinued, or  otherwise,  or  if
equivalent  data is not readily available to enable the  parties  to
make  the  calculations referred to herein, then the  parties  shall
substitute  therefor a comparable index based upon  changes  in  the
cost  of living or purchasing power of the consumer dollar published
by  any  other  governmental agency, or if no such  index  shall  be
available,  then  a comparable index published by a  major  bank  or
other  financial  institution or by a  university  or  a  recognized
financial publication.

     4.2  Partial Month Rent. If the Rent Commencement Date  or  the
date  upon which the Term expires shall be other than the  first  or
last day of a calendar month, as the case may be, Base Rent shall be
pro-rated for such month (based upon a month consisting of 30 days).

     4.3 Terms of Payment. All Rent and other payments to be made by
Tenant  to  Landlord hereunder shall be made payable to Landlord  in
current  legal tender of the United States of America  and  sent  to
Landlord  at  the  place in the United States  to  which  notice  to
Landlord  is  required  to be sent hereunder unless  Landlord  shall
direct  otherwise by notice to Tenant. Extensions,  indulgences,  or
changes by Landlord upon any occasion in the mode or time of payment
of  rent  or  any  other payment to be made by  Tenant  to  Landlord
hereunder shall not be construed as any continuing waiver or change,
or  as  requiring  or allowing in the future any similar  change  or
indulgence. Any Rent not paid when due shall bear interest from  the
date due until paid at an annual rate equal to the lesser of (x) the
maximum  non-usurious rate of interest permitted by law or (y)  18%.
Additionally,  should  Tenant fail to pay Rent  when  due  and  such
failure  continues for a period of three (3) business days following
Landlord's notice to Tenant of such failure, then Tenant shall  also
pay  to  Landlord a late fee equal to four percent (4%) of the  past
due Rent; provided, that, Landlord shall not be obligated to provide
notice  as described in this sentence on more than two (2) occasions
in any Lease Year.

     4.4  Additional  Rent. All amounts other than Base  Rent  which
Tenant  is  required  to  pay or discharge pursuant  to  this  Lease
including,  but  not  limited  to,  charges  for  taxes,  insurance,
utilities,  and  any penalties for late payment of Base  Rent  shall
constitute "Additional Rent".

     4.5  Rent. The term "Rent" shall mean all amounts due  as  Base
Rent and Additional Rent.

     4.6  Guaranty.  Concurrent herewith, Tenant has  caused  Garden
Ridge  Corporation to execute and deliver to Landlord a guaranty  of
this Lease in the form of Exhibit H attached hereto.

                            ARTICLE V
                         Absolute Net Lease

     It  is  the purpose and intent of Landlord and Tenant that  the
Rent  hereinabove  provided to be paid  to  Landlord  by  Tenant  be
absolutely  net to Landlord so that this Lease shall  yield  net  to
Landlord without abatement, set-off or deduction therefrom the  Rent
as hereinabove provided, to be paid during the Term of this Lease or
any   extensions  hereof,  and,  that  all  costs,   expenses,   and
impositions  of  every  kind or nature whatsoever  relating  to  the
Premises which may become due during the Term of this Lease  or  any
extensions  hereof (including, without limitation, pursuant  to  the
Covenants  and  Agreements)  be paid  by  Tenant,  and  Landlord  be
indemnified, defended and
                                 5

saved  harmless by Tenant from and against the same.  Tenant  hereby
assumes  and  agrees  to  perform all duties  and  obligations  with
relation  to  the  Premises,  as well as  the  use,  operation,  and
maintenance  thereof even though such duties and  obligations  would
otherwise  be construed to be those of the Landlord. Nothing  herein
contained,  however, shall be deemed to require  Tenant  to  pay  or
discharge  any franchise taxes imposed on Landlord or  income  taxes
imposed  upon  Landlord  or  liens or  mortgages  of  any  character
whatever  which  may be placed upon the Premises by the  affirmative
act  of Landlord, or the costs and expenses incurred by Landlord  in
connection  with  any  sale  of the Premises.  Furthermore,  nothing
herein   shall  release  or  relieve  Landlord  from  its   warranty
obligations with respect to the Landlord's Work set forth in Exhibit
C attached hereto.

                           ARTICLE VI
                               Use

     The Premises shall be initially occupied and used by Tenant for
the   purpose  of  conducting  Tenant's  business  as  is  generally
conducted  in Tenant's other stores as of the date hereof; provided,
that,  at  anytime after conducting such business for any period  of
time,  Tenant  may  thereafter use and occupy the Premises  for  the
conduct  of  any  lawful business, subject to  compliance  with  the
Covenants  and Agreements. Tenant shall use and occupy the  Premises
in   accordance  with  all  governmental  laws,  statutes,   orders,
ordinances, rules and regulations of any governmental authority with
jurisdiction  affecting the Premises from time to  time,  including,
without  limitation, applicable zoning ordinances. Tenant agrees  to
comply  with  the  agreements identified on  Exhibit  F  hereto  and
incorporated  herein by reference (the "Covenants  and  Agreements")
and those to which the Premises or Lease is later made in accordance
with  this Lease and to assume and perform any duties or obligations
thereunder  applicable  to the Premises  or  to  the  owner  of  the
Premises.  Tenant shall not use, or allow the Premises to  be  used,
for any purpose other than as specified herein and shall not use  or
permit  the Premises to be used for any unlawful purpose or  in  any
way  in violation of any certificate of occupancy applicable to  the
Premises, or permit the Premises to be occupied in whole or in  part
by any other person, except as otherwise provided herein.

                           ARTICLE VII
                    Subletting and Assignment

     7.1 Subletting and Assignment. Tenant may assign this Lease  or
sublet  all  or any part of the Premises for occupancy  without  the
prior  written consent of Landlord; provided, that, in the  case  of
subleases where demising walls are to be constructed, Tenant may not
have, at any one time, more than two (2) such subtenancies in effect
at  any  one  time.  In the event of any assignment  or  subletting,
Tenant shall nevertheless at all times remain fully responsible  and
liable  for the payment of Rent and for compliance with all  of  its
other obligations under the terms, provisions and covenants of  this
Lease  and  Tenant's assignee shall assume in writing and  agree  to
keep  and  perform all of the terms of this Lease  on  the  part  of
Tenant to be kept and performed and shall be and become jointly  and
severally liable with Tenant for the keeping and performing thereof.
A  copy  of  such  assignment or sublease and, in  the  case  of  an
assignment,  an executed assumption agreement shall be delivered  to
Landlord at the time of any assignment. Tenant shall also deliver to
Landlord  copies of any financial statements provided to  Tenant  by
such assignee or sublessee. In addition, Tenant shall have the right
to transfer and assign this
                                 6

Lease  without  Landlord's  consent to  any  parent,  subsidiary  or
affiliated company of Tenant, with Tenant remaining liable  for  the
performance of the terms of this Lease.

     7.2  Assignment by Landlord. Landlord shall have the  right  to
transfer all or any part of Landlord's interest in the Lease and the
Premises  without  the  consent or approval of  Tenant  and  without
notice  to Tenant, which transfer shall work an absolute release  of
Landlord's liabilities and obligations hereunder arising  after  the
date  of  such  assignment provided that the  assignee  assumes  all
obligations  of Landlord hereunder and Landlord shall not  have  the
right to assign this Lease prior to the Rent Commencement Date.

                          ARTICLE VIII
              Quiet Enjoyment - Landlord's Warranty

     Landlord  covenants  and agrees with Tenant  that  so  long  as
Tenant keeps and performs all of the covenants and conditions to  be
kept  and  performed by Tenant hereunder, Tenant shall  have  quiet,
undisturbed and continued possession of the Premises free  from  any
claims  by  any  persons  claiming under, by  or  through  Landlord,
subject,  however,  to the Covenants and Agreements  and  the  other
matters affecting title to the Premises as described on Exhibit  F-I
attached hereto.

                           ARTICLE IX
                           Alterations

     9.1  Tenant's Alterations. Tenant shall have the right, at  its
sole cost and expense, at the commencement of and during the term of
this  Lease  or  any extension thereof to make such  alterations  in
and/or  additions  to the Premises, including without  limiting  the
generality  of  the  foregoing, alterations in the  water,  gas  and
electrical  wiring systems as may be necessary to fit the  same  for
Tenant's  business, upon first delivering to Landlord written  plans
and  specifications  for all such work and, in the  case  where  the
proposed  alteration  would  materially  and  adversely  affect  the
structural  components of the Premises (including without limitation
weight  bearing  members, footings, foundations,  walls  and  roof),
obtaining  the written approval of Landlord as to written plans  and
specifications and the materials to be used and the manner of making
such  alterations  and/or  additions, which  consent  shall  not  be
unreasonably  withheld,  delayed  or  conditioned.  Landlord   shall
respond to such request for such consent within thirty (30) days  of
receipt  of  the  same. If Landlord does not object to  the  request
within such thirty (30) day period, Landlord shall be deemed to have
consented  to  the same. Upon the termination of this Lease,  Tenant
shall  not  be  required to remove any of the original  Improvements
comprising  part  of the Landlord's Work still in existence  or  any
subsequent alterations or improvements approved by Landlord (unless,
at  the time Landlord approves the same, Landlord concurrently gives
notice  to  Tenant that Landlord will require Tenant to remove  such
alteration  upon  termination  of the  Lease),  or  to  restore  the
Premises  to its original condition provided, however, at Landlord's
election, Tenant shall remove alterations made without the  approval
of  Landlord  and  restore the Premises to its  original  condition,
ordinary  wear and tear excepted. Upon the termination or expiration
of  this Lease, such Improvements and alterations (excluding Tenant'
s  Property  [as  defined  in Article X]) as  are  not  already  the
property  of  Landlord  shall, at Landlord's  election,  become  the
property  of  Landlord. Tenant's obligations under this Section  9.1
are  subject  to  the provisions of Articles XIV and  XVII  of  this
Lease.
                                  7

     9.2  Method  of  Alterations.  All alterations,  additions  and
improvements made by Tenant shall be done in a good and  workmanlike
manner  without impairing the structural soundness of the  Premises.
All  such  work shall be performed in accordance with the  Covenants
and   Agreements,  all  applicable  laws,  ordinances,  rules,   and
regulations and requirements of all governmental authorities  having
jurisdiction  over the Premises. Before commencing any work,  Tenant
shall  obtain  or  cause to be obtained, workers'  compensation  (if
required  by  law)  and employees liability insurance  covering  all
persons  employed in connection with the work and  with  respect  to
whom  death  or  bodily  injury claims  could  be  asserted  against
Landlord  and/or  Tenant, and general liability  insurance  insuring
Landlord and Tenant against any liability that may be incurred as  a
result of any work done by Tenant in, to or upon the Premises,  such
insurance  to  be in such amounts as are reasonably satisfactory  to
Landlord. A certificate of insurance or copy of said policy shall be
delivered  to  Landlord and such policy shall name  Landlord  as  an
additional  insured. Tenant shall procure and pay for  all  permits,
licenses  and  authorizations required in connection with  any  such
alteration,  addition  or  improvement,  and  Landlord   agrees   to
cooperate  with  Tenant,  at  Tenant's expense,  in  procuring  such
permits, licenses and authorizations.

                            ARTICLE X
                          Tenant's Property

     10.1  Installation. Removal. Tenant may, at its sole  cost  and
expense,  install any trade fixtures, equipment, and other  personal
property  used in connection with its business on the Premises,  and
Tenant  shall  have the right at any time during the  Term  or  upon
expiration or earlier termination of the Lease, provided  Tenant  is
not  in default of any of the terms of this Lease, to remove any and
all such trade fixtures, equipment, and other personal property that
it  may  have  stored  or  installed upon  the  Premises  ("Tenant's
Property");  provided, however, that Tenant shall have no  right  to
remove  any item which is necessary for the operation or maintenance
of  the  Premises as an integrated building, without regard  to  the
nature  of  the  business conducted therein; and provided,  further,
that  in  the event of such removal, Tenant shall repair any  damage
caused  by the removal of such trade fixtures, equipment, and  other
personal property and restore the Premises substantially to the same
condition,  ordinary wear and tear excepted, in which they  were  at
the  time  Tenant took possession. Tenant's obligations  under  this
Section 10.1 to repair the Premises are subject to the provisions of
Articles XIV and XVII of the Lease.

     10.2Required  Removal.  In  case Tenant  shall  decide  not  to
remove  any  part  of Tenant's Property upon expiration  or  earlier
termination of this Lease, Tenant shall notify Landlord  in  writing
not  fewer than ninety (90) days prior to the expiration of the Term
of  this  Lease,  specifying those items of Tenant's  Property  that
Tenant has decided not to remove. If, within thirty (30) days  after
service of such notice, Landlord shall request Tenant to remove  any
of  said Tenant's Property, Tenant shall, at its own expense, at  or
before  the  expiration or earlier termination of the  Term,  remove
said  Tenant's  Property and, in case of damage by  reason  of  such
removal,  repair such damage, such obligation to repair  to  survive
the  expiration or sooner termination of this Lease. Tenant will pay
all costs and expenses incurred by Landlord in removing, storing, or
disposing  of  Tenant's Property and repairing  all  damage  to  the
Premises  caused  by removal of Tenant's Property which  Tenant  has
failed  to  remove  despite  Landlord's  request  therefor.  Any  of
Tenant's Property not removed by Tenant upon the expiration of the

                                 8

Term  or  earlier  termination of this  Lease  shall  be  considered
abandoned  by  Tenant and may be appropriated, sold,  destroyed,  or
otherwise disposed of by Landlord without liability or obligation on
Landlord's part to pay or account same.

     10.3  Title  at  Termination. As to the Tenant's Property  that
Tenant  has not elected to remove pursuant to Section. 10.1 or  that
Tenant  is not required to remove pursuant to Sections 9.01 or  10.2
above, at the expiration of the Term or earlier termination of  this
Lease,  all remaining Tenant's Property shall become and remain  the
property  of  Landlord,  free and clear of  any  claim  or  interest
whatsoever  including, without limitation, any claim or interest  of
Tenant  or  anyone claiming thereunder. At the request of  Landlord,
Tenant  ~iill,  at such time, execute, acknowledge, and  deliver  to
Landlord  a  bill  of sale or other appropriate conveyance  document
(with  disclaimers  of warranty, express or implied,  except  as  to
title)  evidencing the transfer to Landlord of all right, title  and
interest of Tenant in and to the remaining Tenant's Property. Tenant
shall  also  assign to Landlord, without recourse,  all  assignable,
third party warranties with respect to Tenant's Property.

     10.4  Tenant  Financing. Notwithstanding anything contained  in
this  Lease  to  the  contrary, Tenant is hereby  given  the  right,
without  Landlord's prior consent, to mortgage or otherwise encumber
its  interests  in  Tenant's Property and any  inventory  of  Tenant
located  within the Premises and Landlord agrees that any  statutory
or common law Landlord's lien in such Tenant's Property or inventory
is and shall be subordinate to such mortgage or encumbrance.

                           ARTICLE XI
                        Lien or Encumbrance

     11.1  No Liens. Tenant will pay or cause to be paid all charges
for  all  work  done,  including without limitation  all  labor  and
materials  for all repairs, alterations, and additions, to  or  upon
the  Premises  during  the Term and will not suffer  or  permit  any
mechanic's,  materialman's, or similar liens for labor or  materials
furnished  to the Premises during the Term to be filed  against  the
Premises;  and if any such lien shall be filed, Tenant  will  either
pay the same or procure the discharge thereof by giving security  or
by  posting  a  bond within thirty (30) days after  such  filing  or
within  such  shorter time period as may be required by law.  Tenant
shall have the right, however, at its sole cost and expense, in  its
name  or  in the name of Landlord or in the name of both, to contest
any  such  lien,  provided the existence of such lien  pending  such
contest  shall  not jeopardize Landlord's interest in the  Premises.
Tenant  shall  indemnify  and  defend  Landlord  against,  and  save
Landlord   harmless  from,  any  and  all  loss,   damage,   claims,
liabilities,  judgments, interest, costs, expenses,  and  attorney's
fees  arising out of the filing or contesting of any such lien, such
obligations  to expressly survive the termination or  expiration  of
this Lease.

     11.2No  Consent to Work, Lien or Encumbrance. Nothing contained
herein  shall constitute any consent or request by Landlord, express
or  implied,  to or for the performance of any labor or services  or
the  furnishing of any materials or other property in respect of the
Premises  nor  as  giving Tenant any right, power, or  authority  to
contract  for or permit the performance of any labor or services  or
the furnishing of any materials or other property in such fashion as
would  permit  the  making  of any claim  against  Landlord  or  the
Premises  in  respect  thereto.  Nothing  in  this  Lease  shall  be
construed as empowering Tenant to encumber or cause to be encumbered
the  title  or  interest of Landlord in the Premises in  any  manner
whatsoever.
                                 9

                           ARTICLE XII
                     Repairs and Maintenance

     12.1Duty  to Repair. During the Term Tenant shall, at its  sole
cost  and  expense,  keep the Premises and the adjoining  sidewalks,
curbs,  parking  areas and passageways, if required by  governmental
authority,  free  from  unlawful obstructions,  and  will  keep  the
Premises  in  as  good  condition  and  repair  as  they  were  upon
commencement of the Term, ordinary wear and tear excepted, and  will
make   all   necessary  repairs  thereto,  interior  and   exterior,
structural  and  non-structural,  ordinary  and  extraordinary,  and
foreseen  and  unforeseen, including but not limited to  maintenance
and  repair of the plumbing, electrical wiring, air conditioning and
heating equipment, maintenance of the parking area, painting of  the
walls  of  the  Improvements, and repair of all glass  and  casualty
damage. The provisions of this Article XII are subject to and Tenant
shall  have no obligation thereunder to repair the Premises  in  the
event the Lease is terminated as permitted in Articles XIV and  XVII
below.  Except  for repairs of an emergency nature with  respect  to
which  Tenant  shall  take reasonable measures to  advise  Landlord,
Tenant   shall,  prior  to  making  any  repair  to  the  structural
components  of  the Premises which, if not made or improperly  made,
could  effect the structural integrity of the Improvements,  deliver
to  Landlord written plans and specifications for all such work  and
obtain  the written approval of Landlord as to the materials  to  be
used  and  the  manner of making such repairs.  Landlord  shall  not
unreasonably  withhold,  delay or condition  its  approval  of  said
repairs  proposed  to be made by Tenant. Landlord shall  respond  to
such request for such consent within thirty (30) days of receipt  of
the  same.  If Landlord does not object to this request within  such
thirty  (30) day period, Landlord shall be deemed to have  consented
to  the  same. Landlord agrees to cooperate with Tenant, at Tenant's
expense,  in  the  enforcement of all warranties and  guarantees  of
third  party  contractors  and suppliers  obtained  or  provided  in
connection  with  the construction of the Improvements.  Nothing  in
this  section  shall release or relieve Landlord from  its  warranty
obligations set forth in Exhibit C attached hereto.

     12.2Definition  and  Standard of  Repair.  The  term  "repairs"
shall  include  all  necessary replacements, renewals,  alterations,
additions,  and  betterments.  The necessity  for  and  adequacy  of
repairs to the Improvements shall be measured by the standard  which
is  appropriate  for buildings of similar quality  of  construction,
class, type of materials, and age provided that Tenant shall in  any
event  make  repairs  necessary to avoid any  structural  damage  or
injury to any of the Improvements. All repairs made by Tenant  shall
be  equal in quality and class to the original work, shall meet  the
same requirements as are set out in Article 9.2 of this Lease to the
extent  necessary and shall be made in a good and workmanlike manner
and in compliance with all applicable permits and authorizations and
building   and   zoning  laws  and  with  all  other  laws,   rules,
regulations, and ordinances governing such work. Tenant will perform
all  necessary  shoring  of foundations and  walls  of  any  of  the
Improvements  and  every  other act or  thing  for  the  safety  and
preservation  thereof  which  may be  necessary  by  reason  of  any
excavation or other  building  operation upon any adjoining property
or Street, alley  or passageway. Tenant will not commit any waste of
the Premises.

     12.3No  Obligation  to Repair. Landlord  shall  not  under  any
circumstances  be required to furnish any services or facilities  or
to  make  any repairs, replacements or alterations of any nature  or
description in or to the Premises whether ordinary or extraordinary,
structural or nonstructural, foreseen or unforeseen, or to make  any
expenditure whatsoever in connection with
                                 10

this  Lease  or  to maintain the Premises in any way. Tenant  hereby
waives the right to make repairs at the expense of Landlord pursuant
to  any law in effect at the time of the execution of this Lease  or
thereafter enacted, and assumes the full and sole responsibility for
the  condition,  operation,  repair, replacement,  maintenance,  and
management  of  the Premises. Landlord covenants to  cooperate  with
Tenant,  at  Tenant's expense, in processing claims with respect  to
matters  covered  by such insurance. Nothing in this  section  shall
release or relieve Landlord from its warranty obligations set  forth
in Exhibit C attached hereto.

ARTICLE XIII
                        Requirements of Law

     13.1  Requirements. Tenant shall, at its expense, comply  with,
or  cause to be complied with, all insurance requirements imposed by
insurers  providing insurance to Tenant hereunder, and  all  current
and  future  laws, statutes, ordinances and regulations of  federal,
state,  county and, municipal authorities including, but not limited
to,  the Americans With Disabilities Act (collectively, "Laws"), the
Covenants  and  Agreements and those to which the Premises  or  this
Lease  is  later  made in accordance with this  Lease,  which  shall
impose  any duty or obligation on the Premises or the owner  thereof
including,  but  not  limited  to, a duty  to  construct  additional
improvements  or  modify the Improvements or  with  respect  to  the
conduct of Tenant's business therein to the extent the last date for
mandatory  compliance falls within the Term; provided,  however,  in
the  event  of a required compliance with laws if two (2)  years  or
less  remain  in the Term and the cost of a mandated improvement  or
alteration  (competitively  bid) exceeds  the  sum  of  One  Hundred
Thousand  and  No/100  Dollars  ($100,000.00),  Tenant  may,  unless
nullified  by Landlord as provided in Section 13.2 hereof, terminate
the Lease effective upon ninety (90) days notice to Landlord and  in
the  event of such termination shall have no obligation to construct
such  additional improvements or modify the Improvements  to  comply
with   such  laws.  Tenant  shall,  together  with  its  notice   of
termination,  provide Landlord with copies of all  bids  secured  by
Tenant  to perform such improvement or alteration and any  plans  or
specifications  prepared by or for Tenant.  Tenant  shall  have  the
right  at  Tenant's own expense, to object to and  appeal  from  any
administrative   or  judicial  decision  requiring  compliance   and
Landlord  shall cooperate at Tenant's expense with any  such  appeal
and/or  objection by Tenant. In the event compliance  shall  require
improvements  or  alterations to the Premises during  the  Term  and
Tenant  is  obligated to perform the same as provided  for  in  this
Section 13.1, Tenant shall, at Tenant's sole expense, construct such
improvements   in  accordance  with  the  provisions  for   Tenant's
alterations contained in Article IX of this Lease.

     13.2Nullification   of   Termination.  Landlord   may   nullify
termination of the Lease by Tenant on account of compliance with the
requirement  of  law  as permitted in Section  13.1  above,  on  the
condition  that  Landlord,  within forty-five  (45)  days  following
receipt  of  notice  from Tenant electing to terminate  this  Lease,
gives  written notice to Tenant that Landlord will pay that part  of
the cost of such mandated improvement or alteration in excess of One
Thousand   and   No/100  Dollars  ($100,000.00)   (the   "Landlord's
Payment").  Landlord may require that the contracts for construction
of  the mandated improvement or alteration required by law shall  be
competitively  bid  and implemented through a  fixed  or  guaranteed
maximum  price  construction contract or contracts  that  have  been
approved  by  Landlord,  approval not to be  unreasonably  withheld,
conditioned or delayed.

                               11
     13.3  Recapture of Landlord's Payment: Additional Rent.  Tenant
shall  pay  as Additional Rent amounts sufficient to fully  amortize
the Landlord's Payment as finally determined at an interest rate  of
ten  percent  (10%)  per  annum over  the  period  measured  by  the
remaining  part  of the Initial Term, if any, plus  five  (5)  Lease
Years.  The  payments of Additional Rent to amortize the  Landlord's
Payment  shall commence upon the first month following the month  in
which  Landlord pays the Landlord's Payment and continue  until  the
sooner  to occur of the end of the Term or the complete amortization
of the Landlord's Payment.

                          ARTICLE XIV
                        Damage or Destruction

     14.1 Tenant's Obligation to Rebuild. In the event of damage  to
or  destruction of the Improvements during the Term of this Lease by
fire,  the  elements,  or  other casualty for  which  the  insurance
carried pursuant to Article 15 of this Lease entitled "Insurance" is
paid,  said insurance proceeds shall be paid into an escrow  account
with Landlord's first mortgage lender or a bank selected by Landlord
and reasonably agreed to by Tenant. The insurance proceeds shall  be
used  by Tenant for the prompt reconstruction or repair, as the case
may be, of the Improvements. Tenant shall rebuild or repair the same
in such manner that the Improvements shall be substantially the same
as existed immediately prior to such damage or destruction and in a.
good  and  workmanlike  condition, and shall have  same  rebuilt  or
repaired  and ready for occupancy within eighteen (18)  months  from
the  time  and  loss or destruction occurred, subject to  force  maj
cure.  Tenant  covenants to seek prompt recovery  of  the  insurance
proceeds  and  agrees  to  commence  re-construction  as   soon   as
reasonably  practicable,  but in any event  within  six  (6)  months
following the date of the payment of the insurance proceeds. If  the
insurance proceeds exceed the cost of repair or restoration,  Tenant
shall  receive  said  excess  upon  completion  of  such  repair  or
restoration. If the insurance proceeds are insufficient to  pay  the
cost of repair or restoration, Tenant shall nonetheless be obligated
to repair and restore the Improvements.

     14.2Approval  of Plans and Specifications. In the  event  of  a
loss  hereunder,  Tenant  shall submit to  Landlord  the  plans  and
specification for reconstruction or repair for Landlord's  approval.
Landlord shall have a fifteen (15) business day period within  which
to  review and approve or disapprove the plans and specifications by
delivering  written notice to Tenant, which approval  shall  not  be
unreasonably withheld, delayed or conditioned. Failure  by  Landlord
to  disapprove the same within such fifteen (15) business day period
shall constitute Landlord's approval.

     14.3Payment  from Escrow. Amounts shall be paid out  from  said
escrow  account established pursuant to Section 14.1  from  time  to
time  upon the certification of Tenant's architect that said  amount
is being applied to the payment of the reconstruction or repair (and
associated  design and related costs) at a reasonable cost  therefor
and   that  the  disbursement  then  requested,  plus  all  previous
disbursements and the amount of any applicable "deductible"  do  not
exceed  the cost of the repair or restoration already completed  and
paid  for, and that the balance in said escrow account is sufficient
to   pay  for  the  estimated  cost  of  completing  the  repair  or
restoration. If the insurance proceeds shall be less than  the  cost
of repair or restoration, Tenant shall pay the excess cost.

                                 12

     14.4      Failure  to  Reconstruct:  Termination.  In  case  of
Tenant's failure to enter into the reconstruction or repair  of  the
Improvements within six (6) months from the date of payment of  such
insurance  proceeds and to prosecute said reconstruction  or  repair
with  such dispatch as may be necessary to complete the same  within
eighteen  (18)  months  after  the  occurrence  of  such  damage  or
destruction, subject to force majeure, then, at Landlord's election,
the  amount  so collected, or the balance thereof remaining  in  the
escrow  account,  shall  be  paid to  Landlord  and  Landlord  shall
complete  the  repair and restoration (if the cost to completed  the
same  exceeds the balance of insurance proceeds released from escrow
to  Landlord,  Tenant  shall  pay  the  same).  Notwithstanding  any
contrary provision of this Article XIV, Tenant shall have the  right
to  terminate  this Lease if less than two (2) years remain  in  the
Term at the time of any such casualty and the reasonable estimate of
the  time  to  repair the damage caused thereby exceeds thirty  (30)
days,  and in such event Tenant shall have no obligation to  rebuild
the  Improvements, Landlord shall have the sole and exclusive  right
to  adjust  the  loss with the insurance carriers and all  insurance
proceeds shall be paid to and retained by Landlord.

     14.5Force Maieure.

     "Force  maieure" shall mean events beyond the  control  of  the
parties,  including, without limitation, fire,  flood,  tornado,  or
earthquake,  war,  riot, insurrection, strike, lockout,  boycott  or
embargo,  acts  of God, unavoidable casualties, labor disputes,  and
unusual  delays  in  transportation,  unavailability  of  materials,
adverse weather conditions not reasonably anticipatable.

     Any  party  who  asserts the occurrence of force majeure  shall
give  written  notice  within  five  (5)  business  days  after  the
commencement of a delay caused by an event of force majeure. and any
party making claim therefor shall give a supplemental notice of  the
period  of  time such delay caused by an event of force  majeure  is
expected  to  last  otherwise any right of claim therefor  shall  be
deemed waived.

     14.6No  Abatement  of Rent. Notwithstanding any  contrary  law,
Rent shall not be suspended or abated as a result of such damage  or
destruction, and restoration or rebuilding, but will cease to accrue
or be due if this Lease is terminated as a consequence thereof as is
provided for herein.

     14.7Default  in  Payment of Rent. If, at any  time  after  such
insurance  proceeds come into possession of Tenant or are placed  in
escrow  pursuant  to  this Article after destruction  or  damage  by
casualty, Tenant is in default of any Rent or other charges  payable
under this Lease, then Landlord shall be entitled to so much of said
proceeds as may be necessary to pay and discharge any such  Rent  or
other  charges of which Tenant is in default, whenever and as  often
as  any  such default shall occur. Tenant shall forthwith  reimburse
such escrow account by depositing therein any amount so paid out  on
account  of  Tenant's  default. Nothing herein  contained,  however,
shall be construed as permitting Tenant to default in the payment of
Rent  or  other  charges herein stipulated to  be  paid  or  in  the
performance of any other covenants of this Lease, and Landlord  may,
at  its  option, proceed against Tenant for the collection  of  such
Rent or other charges in default and recover and take possession  of
the Premises in accordance with the provisions of this Lease without
prejudice to Landlord's right to the benefit of such insurance money
as security for Tenant's performance under the terms of this Lease.

                                 13

                           ARTICLE XV
                            Insurance

     15.1      Casualty Property Insurance. Tenant shall, throughout
the  Term,  at Tenant's sole cost and expense, provide and  keep  in
force for the benefit of Landlord and Tenant insurance against  loss
or  destruction  of or damage or injury to any Improvements  now  or
hereafter  erected on the Premises resulting from fire or  from  any
casualty  or  hazard  included  in the so-called  extended  coverage
endorsement  (including  plate glass insurance,  increased  cost  of
construction endorsement, sprinkler leakage, collapse and  vandalism
and  malicious mischief, also known as "All Risks of Physical  Loss"
coverage).  In addition to the foregoing, Tenant shall, at  Tenant's
sole cost and expense, provide and keep in force for the benefit  of
Landlord  and  Tenant,  throughout the Term  of  this  Lease,  flood
insurance,  provided the Tenant's Building (or any portion  thereof)
is  located  within  the "Federal Flood Plain Area"  of  the  United
States,  as  well as insurance against loss or damage or  injury  or
destruction  of  any Improvements now or hereafter  erected  on  the
Premises  resulting  from water or earthquake damage.  Tenant  shall
provide  and  keep  in full force all such insurance  in  an  amount
sufficient  to prevent Landlord or Tenant from becoming a co-insurer
under the terms of the applicable policy, but in no event less  than
the  full  replacement  cost  of  the  Improvements,  including  the
fixtures  and  equipment appurtenant thereto and used in  connection
with  the  Premises.  Such  replacement  cost  shall  be  determined
annually  by  a  method required by the insurer(s).  The  deductible
under each of said policies shall be an amount not greater than  One
Hundred  Thousand  Dollars  ($100,000),  which  deductible  may  .be
increased  with  increases  in  the Consumer  Price  Index  (or  the
equivalent thereof) for U.S. Wage Earners in the Dallas, Texas area.
Such  insurance  policies to be provided for and kept  in  force  by
Tenant  shall provide that the loss, if any, be payable to  Landlord
and  Tenant,  as  their respective interests may appear,  except  as
herein   provided,   and   such  insurance  policies   may   exclude
foundations, excavation and the usual items customarily excluded  in
such insurance policies, and that the proceeds thereof shall be used
to  repair or replace the damage sustained by the casualty. Landlord
may  require that the interest of any mortgagee under a fee mortgage
covering  the Premises, be protected by proper endorsements  to  any
such  policies  of insurance, and that duplicate originals  of  such
policies  of insurance be delivered to such mortgagee. Tenant  shall
provide Landlord certificates confirming that such insurance  is  in
full force and effect.

     15.2Boiler  Insurance. Tenant shall also provide  and  maintain
insurance, at Tenant's cost and expense throughout the Term of  this
Lease,  for  loss or damage by explosion of steam boilers,  pressure
vessels, air conditioning systems or similar apparatus to be now  or
hereafter installed on the Premises, to the extent applicable.  Said
insurance shall be on a Boiler and Machinery Broad Form Policy on  a
repair and replacement basis, with Use and Occupancy coverage for at
least one (1) year.

     15.3Public  Liability Insurance. During the Term,  at  Tenant's
sole  cost  and  expense, Tenant shall maintain in  full  force  and
effect  broad  form  commercial or comprehensive  general  liability
insurance,   including   blanket  contractual   liability   coverage
specifically  endorsed  to  provide  coverage  for  the  obligations
assumed by Tenant pursuant to the Lease against claims and liability
for  personal  injury,  bodily  injury,  death  or  property  damage
occurring on, in or about the Premises, with limits of liability  of
not  less than Five Million Dollars ($5,000,000.00) arising  out  of
any  one  occurrence or annual aggregate. Tenant  shall  cause  such
insurance policy or policies
                                 14

to  name  Landlord,  and/or any successor  Landlord  and  Landlord's
mortgagee   as  additional  insured  (to  the  extent  of   Tenant's
indemnification  obligations  hereunder),  as  their  interests  may
appear.

     15.4Workers'  Compensation.  Employer's  Liability   Insurance.
Tenant  shall also provide and maintain, at Tenant's sole  cost  and
expense  throughout  the Term, workers' compensation  insurance,  if
required  by law, with statutory limits of liability and  employer's
liability  insurance with limits of liability of not less than  Five
Hundred  Thousand Dollars ($500,000.00) in respect of  any  work  or
other  operations  done or performed on or about  the  Premises.  If
workers' compensation insurance is not required by law, Tenant shall
maintain  supplemental  accident,  medical  and  income  replacement
programs or coverages for all employees as may be required  to  "opt
out" of workers' compensation insurance requirements.

     15.5Business  Interruption. Tenant shall, during  the  Term  of
this  Lease,  at  its  sole cost and expense, procure  and  maintain
business interruption (or use and occupancy) insurance including, at
a  minimum, coverage for rent and other charges for which Tenant  is
obligated hereunder for a period not to exceed twelve (12) months.

     15.6Insurance  on  Tenant's  Property.  It  is  understood  and
agreed that Tenant may self-insure with respect to any damage to  or
destruction of Tenant's Property.

     15.7No  Separate Insurance. Tenant shall not take out  separate
insurance  concurrent in form or contributing in the event  of  loss
with  that required herein to be furnished by Tenant unless Landlord
is  included therein as additional insured, and as loss  payee  with
loss  payable  as  set out herein. Tenant shall  immediately  notify
Landlord whenever any such separate insurance is taken out and shall
deliver   the   policy  or  policies  or  duplicates   thereof,   or
certificates  evidencing  the  same  at  Landlord's  request  or  as
otherwise provided herein.

     15.8Conduct of Business. Cooperation. Tenant shall comply  with
all requirements of said insurance policies and shall not conduct or
allow  to  be  conducted  business or other activities  or  fail  to
maintain or take other actions with regard to the Premises in such a
manner as will result in an increase in said premiums (unless Tenant
pays  each  increase) or a decrease in the recovery thereunder.  Any
casualty  insurance proceeds payable by reason of any  insured  loss
pursuant to or this Article XV shall, subject to the rights  of  the
holders  of  any mortgage upon the Premises be used exclusively  for
the purpose of restoring and rebuilding the Premises (subject to the
provisions  of Article XV). Subject to the foregoing,  Tenant  shall
have the sole right to adjust with the insurance carriers the amount
of  the loss upon any such policies, and Landlord shall, at Tenant's
cost  and expense, cooperate in all reasonable respects with  Tenant
in order to obtain the largest possible insurance recovery and shall
execute  any  and all consents and other instruments  and  take  all
other  actions  reasonably  necessary  or  desirable  in  order   to
effectuate the same and to cause such proceeds to be paid; provided,
however,  that  in  the  event  of a  termination  pursuant  to  the
provisions  of this Lease, Landlord shall have the right  to  adjust
the amount of the loss with the insurance carriers.

     15.9Requirements of Policies.

     (a)  All  policies  required to be  carried  pursuant  to  this
Article XV:
                                 15

          (i)   shall   be  written  and  signed  by   solvent   and
responsible  insurance companies authorized to do  business  in  the
jurisdiction wherein the Premises are located having a rating of not
less  than  Best  A+,  Class XV and having a claims  paying  ability
rating of not less than Standard & Poor's A;

          (ii)shall  contain an agreement by the insurer  that  such
policy  or policies shall not be canceled or non-renewed without  at
least  thirty (30) days prior written notice to Landlord, Landlord's
mortgagee and Tenant;

          (iii)  may  be  carried under so-called blanket  policies,
provided  that the protection afforded thereunder as to the Premises
shall  be  not  less than that which would have been afforded  under
separate  policy  or  policies relating only  to  the  Premises  and
provided,  however,  any  such policy  of  blanket  insurance  shall
specify   therein,  or  Tenant  shall  furnish  Landlord  a  written
statement  from  the  insurer under such policy so  specifying,  the
amount  of  the  total  insurance allocated to the  Premises,  which
amount  shall  be not less than the amount required herein  and  any
such  policy shall comply in all respects with the requirements  set
out in this Article.

          (iv)  may  be  carried  under  a  combination  of  primary
insurance and umbrella coverage;

          (v)  the policies described in Section 15.1 and 15.2 shall
     name  Landlord and Landlord's mortgagee as additional insureds;
     and

          (v)  shall  be  primary insurance by the  party  obligated
under  Article  XV,  which will not call upon  any  other  insurance
effected or procured by the other party for defense, contribution or
payment.

     (b)  Tenant  retains  full responsibility for  payment  of  all
deductibles under each policy provided for hereunder.

     (c)  Annually,  Tenant will promptly furnish  to  Landlord  and
Landlord's  mortgagee  (if Tenant has been  provided  the  name  and
address   of  such  mortgagee)  certificates  evidencing  that   the
insurance required pursuant to this Article XV is in full force  and
effect.  If the certificates of insurance do not provide for  thirty
(30)  days  prior written notice of cancellation or  non-renewal  to
Landlord and Landlord's mortgagee, Tenant shall no later than twenty
(20)  days  prior  to  termination by  cancellation  or  non-renewal
provide  to  Landlord  and  its mortgagee paid  receipts  evidencing
continuation or renewal of insurance.

     (d)  If  Tenant shall fail or refuse to effect or maintain  any
of  said insurance, Landlord may, but shall have no obligation to do
so,  following Tenant's failure to remedy such default  within  five
(5)  business  days  following written  notice  to  Tenant  of  such
default,  effect or maintain said insurance and the amount of  money
so paid, with interest at the Prime Rate, shall be payable by Tenant
to   Landlord  as  Additional  Rent  immediately  due  and   payable
hereunder.

     15.10      Release,  Waiver  of  Subrogation.   Tenant   hereby
releases  Landlord  and Landlord's respective  officers,  directors,
employees  and  agents,  from and waives  all  claims  against  such
parties  for liability or responsibility for any loss or damage  in,
about, or to the Premises
                                 16

(including, without limitation, loss or damage to Tenant's  personal
property,  or  Tenant's business) AND THIS RELEASE AND WAIVER  SHALL
APPLY  NOTWITHSTANDING THE FAULT OR NEGLIGENCE OF LANDLORD OR ANYONE
FOR  WHOM LANDLORD MAY BE RESPONSIBLE. The aforesaid policies  shall
contain  an  endorsement recognizing this release  and  waiving  all
rights  of  subrogation  by the respective  property  and  liability
insurance carriers.

                           ARTICLE XVI
                   Indemnification of Landlord

     Tenant will defend, indemnify, and hold harmless Landlord  from
and  against  any  and  all  liabilities, claims,  losses,  damages,
actions,   judgments,   costs,  and  expenses   (including   without
limitation attorney's fees and expenses) of every kind imposed  upon
or  asserted  against Landlord or Landlord's title in  the  Premises
arising  by reason of or in connection with (a) the making  of  this
Lease  and the ownership by Tenant of the interest created  in  this
Lease  or  Tenant's possession, use, occupancy, or  control  of  the
Premises; (b) any accident, injury to or death of persons,  or  loss
of  or  damage  to  property occurring on or about the  Premises  or
adjoining public passageways not caused, by Landlord's negligent act
or  willful misconduct, (c) the possession, operation, use,  misuse,
maintenance,  or  repair of the Premises;  (d)  any  damage  to  the
environment  and `any property and persons injured  thereby;  (e)  a
claim by any employee, agent, or contractor of Tenant that would  be
subject  to applicable workers' compensation laws if Tenant provided
workers'  compensation  coverage; (f) any failure  on  the  part  of
Tenant  to  perform or comply with any of the terms of the covenants
and agreements applicable to the Premises or to Landlord as owner of
the  Premises; and (g) any failure on the part of Tenant to  perform
or  comply with any of the terms of this Lease. LANDLORD'S NEGLIGENT
ACT  SHALL BE UNDERSTOOD TO REQUIRE THE AFFIRMATIVE ACT OF  LANDLORD
AND  SHALL  EXCLUDE ANY CLAIM OR DETERMINATION OF  NEGLIGENCE  BASED
UPON  AN  OMISSION, A CONDITION OF THE PREMISES, THE MAKING  OF  THE
LEASE  OR  THE PERFORMANCE BY LANDLORD OF ANY OBLIGATION  OF  TENANT
HEREUNDER  IN  THE  EVENT OF TENANT'S DEFAULT. If  Tenant  fails  to
undertake defense of Landlord when required to do so by this Article
XVI  and  it  becomes necessary for Landlord to  defend  any  action
seeking  to impose any such liability, Tenant will pay Landlord  all
costs,  expenses,  and  attorney's  fees  incurred  by  Landlord  in
effecting such defense, in addition to any other sums which Landlord
may be called upon to pay by reason of the entry of judgment against
Landlord  in  the litigation (including arbitration, mediation,  and
appeals  from  any  of the same) in which such  claim  is  asserted.
Landlord  shall  not be responsible for the loss  of  or  damage  to
property or injury to or death of persons occurring in or about  the
Premises  by  reason  of any existing or future  condition,  defect,
matter,  or  thing  in the Premises, or the property  of  which  the
Premises  are  a part, or for the acts, omissions, or negligence  of
other  persons  or  tenants in and about the  Premises;  and  Tenant
agrees  to  defend, indemnify, and hold Landlord harmless  from  and
against  all claims and liability for same. Nothing in this  section
shall   release  or  relieve  Landlord  from  any  of  its  warranty
obligations  set forth in Exhibit C hereto, nor shall the  indemnity
obligations  of  Tenant extend to or cover any claims,  liabilities,
losses,  damages, actions, judgments, costs or expenses suffered  or
incurred by Landlord in the performance of the Landlord's Work.  The
obligations  of Tenant set forth in this Article XVI  shall  survive
the  expiration of the Term or sooner termination of this Lease with
respect  to  matters within Tenant's obligations which occur  during
the Term.                        17

                          ARTICLE XVII
                          Condemnation

     17.1       Authority.   If  eminent  domain   proceedings   are
instituted  by any entity having powers of eminent domain,  Landlord
shall  have  the  exclusive  right and  authority  to  act  in  said
proceedings, although Tenant may participate in such proceedings  at
its expense if it so desires.

     17.2      Taking.  Subject to the rights of Tenant  hereinafter
set  forth, Tenant hereby irrevocably assigns to Landlord any  award
or  payment  to  which Tenant may become entitled by reason  of  any
taking  of  the Premises, or any part thereof, in or by condemnation
or other eminent domain proceedings pursuant to any law or by reason
of the temporary requisition of the use or occupancy of the Premises
or  any  part  thereof by any governmental authority,  whether  same
shall  be  paid or payable in respect of Tenant's leasehold interest
hereunder  or  otherwise,  but nothing in this  Lease  shall  impair
Tenant's  right  to  any  separate award or payment  on  account  of
Tenant's  trade  fixtures, equipment, and other  tangible  property,
moving  expenses,  loss of business and the like, and  Tenant  shall
have  the right to a separate claim therefor against the appropriate
governmental authority provided such separate award or claim is  not
based  in  whole  or  in part upon the value of  Tenant's  leasehold
interest and will not diminish the award or payment to Landlord.  To
the  extent  of  such  right, Tenant shall not  be  deemed  to  have
assigned  the  same  to Landlord, and Tenant shall  be  entitled  to
participate  in  any such proceedings described in this  section  at
Tenant's  sole  expense. Tenant's rights thereto shall  survive  the
termination of this Lease.

     17.3     Termination. If all of the Premises shall be taken  in
or  by  such  proceedings, or if Landlord shall convey  all  of  the
Premises  under the threat of the exercise of the power  of  eminent
domain, this Lease shall terminate as of the day preceding the  date
of  the  vesting of title to the Premises or portion thereof in  the
condemning  authority,  and all rent and other  amounts  payable  by
Tenant  hereunder  shall  be apportioned as  of  the  date  of  such
vesting.

     17.4Restoration.  If  less than all of the  Premises  shall  be
taken by condemnation or other eminent domain proceedings and if  as
a result (x) access to the Premises to and from either Interstate 1-
45  or  State  Highway 242 is permanently, materially and  adversely
impaired  such that Tenant no longer has access to said roads  in  a
manner  reasonably equivalent to that existing as  of  the  Delivery
Date,  or  (y) any part of the Premises is taken and following  such
taking,  there are less than 450 parking spaces within the  Premises
(and Landlord fails to provide substantially equivalent parking  [in
terms of number of spaces and utility and convenience to Tenant  and
its  customers] within thirty (30) days following such  taking),  or
(z)  any part of the Premises taken includes any portion of Tenant's
Building  and  the  same is no longer suitable for  the  conduct  of
Tenant's  business as reasonably determined by Tenant, Tenant  shall
have  the  right and option to terminate this Lease.  In  the  event
Tenant  does  not elect to terminate this Lease within  ninety  (90)
days  after  the  occurrence of such event, then  this  Lease  shall
continue  in full force and effect. In the event of any such  lesser
taking  where  Tenant does not terminate this Lease, Landlord  shall
promptly  make  payment  of  the  award,  payment,  or  compensation
received by Landlord into escrow (following the procedures set forth
in Article XIV with regard to the escrow of insurance proceeds), and
Tenant shall have the right to disbursement of such funds (following
the  procedures set forth in Section 14.3 above), in the same manner
as  insurance proceeds are used to repair casualty damage hereunder,
to promptly repair any damage caused by
                                 18

any  such taking or requisition such that, after completion of  such
repair,  the Premises shall be as nearly as possible in a  condition
as good as the condition thereof immediately prior to such taking or
requisition,  ordinary wear and tear excepted. Any proceeds  not  so
used  by  Tenant  shall be disbursed to and shall belong  solely  to
Landlord. In the event any portion of the Tenant's Building shall be
taken by condemnation or conveyed in lieu thereof and this lease  is
not  terminated, then the square footage of Tenant's Building  shall
be  reduced  by  the number of square feet taken and  the  Rent  and
Additional Rent shall be thereafter reduced proportionately. Subject
to  the  application of the proceeds as described herein,  all  sums
awarded for the taking of fee title or the leasehold estate, whether
as  damages or as compensation, will be the property of Landlord  as
is provided for in Section 17.2 above.

                          ARTICLE XVIII
                             Default

     18.1 Events of Default.

     Each of the following shall be deemed a default by Tenant:

     (a)  Tenant's  failure to pay Rent when  such  becomes  due  as
herein   provided  and/or  any  other  charges  or  payments  herein
reserved,  included  or agreed to be treated or  collected  as  Rent
and/or any other charge, expense or cost herein agreed to be paid by
Tenant,  provided  that Landlord shall have first given  Tenant  ten
(10)  days' prior written notice and opportunity to cure  the  same,
with  no  cure  having been made within such ten  (10)  day  period;
provided, further, that Landlord shall be obligated to provide  such
notice on no more than two (2) occasions in any Lease Year; or

     (b)  Tenant's failure to perform, within thirty (30) days after
written notice from Landlord (or within a reasonable time thereafter
if  the  default  is of such a nature that it cannot  reasonably  be
expected to be cured within such thirty (30) day period, and  Tenant
does  not either commence the cure within thirty (30) days from such
notice  and  complete  the same in good faith  and  with  reasonable
diligence) any other terms, conditions or covenants of this Lease to
be observed by Tenant; or

     (c)  The adjudication of Tenant as a bankrupt or insolvent;  or
the  making  by  Tenant of a general assignment for the  benefit  of
creditors;  or  the  appointment of a receiver  in  equity  for  the
property  of  Tenant,  provided such appointment  is  not  released,
bonded  according  to  law or otherwise provided  for  by  indemnity
within thirty (30) days after written notice thereof first given  to
Tenant,  within a reasonable time after the occurrence  thereof;  or
the  appointment  of a trustee, custodian or receiver  for  Tenant's
Property  in  a  reorganization,  arrangement  or  other  bankruptcy
proceeding;  or  Tenant's  filing  of  a  voluntary  or  involuntary
petition in bankruptcy or for a bankruptcy organization, liquidation
or arrangement; or Tenant's filing of an answer admitting bankruptcy
or   agreeing   to  a  bankruptcy  reorganization,  liquidation   or
arrangement.

     18.2Landlord's Rights Upon Tenant's Default. In  the  event  of
any  default set forth in Article 18.1, Landlord, in addition to any
other rights or remedies it may have at law or in equity, may do any
one or more of the following:

     (a) elect to terminate this Lease; or

                               19

     (b)  perform, on behalf and at the expense of Tenant  (entering
upon the Premises for such purpose, if necessary), any obligation of
Tenant  under this Lease which Tenant has failed to perform  and  of
which  Landlord shall have given Tenant notice, the  cost  of  which
performance or liability by Landlord shall be deemed Additional Rent
and  incurred  for the account of Tenant and Tenant shall  reimburse
Landlord  therefor and save Landlord harmless therefrom upon  demand
provided, however, that Landlord may cure any such default described
in  this subparagraph prior to the expiration of the waiting  period
established  in  Section 18.1, but after notice  to  Tenant  if  the
curing  of  such  default prior to the expiration  of  said  waiting
period is reasonably necessary to protect the Premises or Landlord's
interest in the Premises, or to prevent injury or damage to  persons
or  property. If Tenant shall fail to reimburse Landlord upon demand
for any amount paid for the account of Tenant hereunder, said amount
shall  be  added to and become due as a part of the next payment  of
Rent   due  hereunder.  Notwithstanding  anything  to  the  contrary
contained herein, in the case of emergency, notice required pursuant
to  this Article 18 may be given verbally or in any other reasonably
due  and  sufficient manner having regard to the emergency  and  the
attending  circumstances. If any such notice shall not be  given  in
the  manner  described  in  Article XXIII  of  this  Lease  entitled
"Notice", then as soon thereafter as practicable, such notice  shall
be  followed  up  by notice given in the manner prescribed  in  said
Article. No entry by Landlord, in accordance with the provisions  of
this  Article,  shall  be  deemed  to  be  an  eviction  of  Tenant.
Landlord's  performance of any such covenant shall  neither  subject
Landlord  to  liability  for any loss, inconvenience  or  damage  to
Tenant  nor be construed as a waiver of Tenant's default or  of  any
other right or remedy of Landlord in respect of such default, or  as
a waiver of any covenant, term or condition of this Lease; or

     (c)   immediately,  using  such  force  as  may  be  reasonably
necessary,  re-enter  upon  the Premises,  remove  all  persons  and
property therefrom, and store such property in a public warehouse or
elsewhere  at  the  sole  cost and for the account  of  Tenant,  all
without service of notice or resort to legal process, without  being
deemed  guilty of trespass or becoming liable for any loss or damage
which  may  be  occasioned thereby (except for any  loss  or  damage
resulting from or caused by the gross negligence or criminal act  of
Landlord or its employees, agents or contractors), and without  such
re-entry being deemed to terminate this Lease.

     (d)  Tenant,  its bankruptcy trustee, or any entity  authorized
by  court order to act on behalf of Tenant, shall reject this  Lease
under  11 USC sec. 365(a) or any other provision of Title 11 of  the
United  States  Code,  or  the deemed rejection  of  this  Lease  by
operation of law under 11 USC sec. 365(d)(4). Any such rejection  of
this  Lease  terminates this Lease, without notice of  any  kind  to
Tenant,  effective on the later of: (1) the date Tenant vacates  the
Premises following such rejection; (2) the date the Bankruptcy Court
with jurisdiction over Tenant's bankruptcy case enters and order  on
its  docket authorizing Tenant to reject this Lease; or (3) the date
this Lease is deemed rejected under 11 USC sec. 365(d)(4).

     18.3Re-1etting.  In  the  event  Landlord  re-enters  upon  the
Premises as provided in clause (c) of the foregoing Section 18.2, or
takes  possession of the Premises as provided herein or pursuant  to
legal  proceedings or pursuant to any notice provided  for  by  law,
Landlord  may in addition to all other rights and remedies  provided
at law or in equity:

     (a)  Landlord may terminate this Lease and forthwith  repossess
the  Premises  and remove all persons or property therefrom  and  be
entitled to recover from Tenant, as damages, the

                                 20

sum  of  money  equal  to the total of (i) the  reasonable  cost  of
recovering the Premises, (ii) the accrued and unpaid rentals owed at
the time of termination plus interest thereon from such due date  at
Prime Rate, as hereinafter defined, or the maximum rate permitted by
law,  (iii) the discounted net present value, at the Prime Rate,  of
the  balance of the Base Rent for the remainder of the Term  to  the
extent  the  same exceeds the then fair market rental value  of  the
Premises for the balance of the Term (with due consideration for the
costs  and delay in reletting), and (iv) any other sum of money  and
damages owed by Tenant to Landlord; or

     (b)  Landlord  may terminate Tenant's right of possession  (but
not  this  Lease) and may repossess the Premises without  demand  or
notice  of any kind to Tenant and without terminating this Lease  in
which  event Landlord shall, to the extent required under applicable
law, relet the same for the account of Tenant for such rent and upon
such terms as shall be satisfactory to Landlord. For the purpose  of
such  reletting,  Landlord is authorized to make  repairs,  changes,
alterations  or  additions to the Premises to make same  relettable,
and  (i) jf Landlord shall be unable to relet the Premises, or  (ii)
if the same are relet and sufficient sums shall not be realized from
such  reletting (after paying: (a) the unpaid rentals due under  the
Lease  earned,  but  unpaid at the time of reletting  plus  interest
thereon  at  the  lesser  of  the Prime Rate  or  the  maximum  rate
permitted  by applicable law, (b) the cost of recovering possession,
including  Landlord's  attorney's fees, (c) all  of  the  costs  and
expenses  of  reletting including advertising therefor, decorations,
repairs, changes, alterations and additions by Landlord, and (d) the
expense of the collection of the Rent accruing therefrom) to satisfy
the rent and all other charges provided for in this Lease to be paid
by  Tenant  then Tenant shall pay to Landlord, as damages,  the  sum
equal to the amount of the Rent and other expenses payable by Tenant
for  such  period  or periods, or if the Premises have  been  relet,
Tenant  shall  satisfy  and  pay any  such  deficiency  upon  demand
therefore from time to time and Tenant agrees that Landlord may file
suit to recover any sums falling due under the terms of this Article
from  time to time upon one or more occasions without Landlord being
obligated  to wait until expiration of the term of this Lease.  Such
reletting  shall  not be construed as an election  on  the  part  of
Landlord  to  terminate this Lease unless a written notice  of  such
intention be given to Tenant by Landlord. Notwithstanding  any  such
reletting  without termination, Landlord may at any time  thereafter
elect  to terminate this Lease for such previous breach. Failure  of
Landlord to declare any default immediately upon occurrence  thereof
or  delay  in  taking any action in connection therewith  shall  not
waive such default but Landlord shall have the right to declare  any
such default at any time thereafter.

     (c)  As  used herein "Prime Rate" shall mean the base  rate  on
corporate loans charged by Bank One, Dallas, Texas.

     18.4Damages  Upon  Termination. In the event that  Landlord  at
any  time  terminates  this  Lease for any  default  by  Tenant,  in
addition  to  any  other remedies Landlord may  have,  Landlord  may
recover from Tenant (i) all damages Landlord may incur by reason  of
such default, including, without limitation, all repossession costs,
brokerage  commissions,  court costs, attorneys'  fees,  alteration,
reletting  advertising  and refitting and  repair  costs,  (ii)  the
accrued  and  unpaid  rentals owed at the time of  termination  plus
interest  thereon  from  such due date at the  Prime  Rate,  or  the
maximum  rate  permitted  by law, (iii) the discounted  net  present
value, at the Prime Rate, of the balance of the fixed annual minimum
rent  for  the remainder of the Term to the extent the same  exceeds
the then fair market rental value of the Premises for the balance of
the  Term  (with due consideration given to the costs and  delay  of
reletting), and (iv) any other sum of
                                 21

money and damages owed by Tenant to Landlord. All such amounts shall
be immediately due and payable from Tenant to Landlord.

                           ARTICLE XIX
                              Signs

     Tenant  shall  have the right to erect, at its expense  and  in
accordance  with  the Covenants and Agreements  and  all  applicable
laws, ordinances, rules and regulations, in or on the Premises  such
sign or signs as it may desire.

                              ARTICLE XX
                        Taxes and Other Liens

     20.1  Impositions. Tenant shall pay before any  fine,  penalty,
interest,  or cost may be added thereto for the nonpayment  thereof,
all real estate, municipal utility district and other similar taxes,
assessments, ad valorem taxes (including municipal utility and other
similar  district  taxes), water and sewer charges,  vault  charges,
license and permit fees, dues or assessments, general or special  of
any   association  to  which  the  Premises  is  subject  and  other
governmental levies and charges, general and special, ordinary,  and
extraordinary,  unforeseen  as well as foreseen,  of  any  kind  and
nature  (collectively "Impositions") which may be charged, assessed,
levied,  imposed  upon or become due and payable, during  the  Term;
provided, however, that if, by law, any Imposition is payable or  at
the  option of the taxpayer may be paid in installments (whether  or
not  interest  shall accrue on the unpaid balance  thereof),  Tenant
shall  pay the same (and any accrued interest on the unpaid balance)
in  installments and shall be required to pay only such installments
as  may  become due during the Term as the same respectively  become
due  and  before any fine, penalty, interest, or cost may  be  added
thereto  for  nonpayment  thereof and  provided  further,  that  any
Imposition relating to a fiscal period of a taxing authority, a part
of  which period is included within the Term and a part of which  is
included in a period of time before the commencement of the Term  or
after  the  termination of this Lease, other than a  termination  of
this  Lease  pursuant  to Article 18, shall  (whether  or  not  such
Imposition shall be assessed, levied, confirmed, imposed, or  become
a lien upon the Premises or shall become payable, during the term of
this Lease) be appropriately pro rated between Landlord and Tenant.

     20.2Tax  on  Tenant Additions. Tenant shall pay all  additional
taxes levied, assessed or becoming payable during the Term by reason
of or assessed against the improvements, alterations or additions to
the Premises installed by Tenant at any time during the Term of this
Lease.

     20.3Exceptions. Nothing in this Lease shall require  Tenant  to
pay  any  franchise,  corporate,  estate,  inheritance,  succession,
capital  levy,  stamp, transfer or similar tax of Landlord,  or  any
income,  excess  profits, revenue or similar tax or any  other  tax,
assessment,  charge, or levy upon the Base Rent, or any  other  Rent
payable under this Lease, nor shall any tax, assessment, charge,  or
levy of the character described in this Section 20.3 be deemed to be
included within the term "Imposition"; provided, however, that if at
any  time  under the laws of the State or any political  subdivision
thereof  in  which the Premises is located a future  change  in  the
method  of  taxation or in the taxing authority, or  for  any  other
reason,  a  franchise,  income, transfer, profit  or  other  tax  or
governmental imposition, however designated, shall be levied against
Landlord in
                                 22

substitution in whole or in part for any imposition, or in  lieu  of
additions  to or increases of said impositions then said  franchise,
income,  transfer,  profit or other tax or  governmental  imposition
shall  be  deemed  to be included within the term "Imposition,"  and
Tenant  shall  pay and discharge such Imposition in accordance  with
Section 20.1 in respect of the payment of Impositions, to the extent
it  would  be  payable  if the Premises were the  only  property  of
Landlord subject to such Imposition.

     20.4Proof  of  Payment.  Tenant agrees to  submit  to  Landlord
official  receipts evidencing payment of said Impositions  prior  to
delinquency  thereof  at  the place at  which  rental  payments  are
required to be made.

     20.5Refunds.  If  Landlord  shall  receive  a  refund  of   any
Imposition  theretofore paid by Tenant pursuant  to  the  provisions
hereof,  such  refund,  net  of Landlord's reasonable  out-of-pocket
costs of recovery, shall be promptly paid to Tenant.

     20.6Protest. If Tenant shall, in good faith, desire to  contest
the validity of such Impositions, Tenant shall have the right to  do
so  without  being in default hereunder provided that  Tenant  shall
give  Landlord  prompt  written  notice  of  Tenant's  intention  to
institute   such   legal  proceedings  as  are  appropriate,   which
proceedings shall be promptly instituted and conducted in good faith
and   with  due  diligence;  such  proceedings  shall  suspend   the
collection  of such Impositions, and the Premises shall  not  be  in
danger  of being sold, forfeited, or lost; and Tenant shall  furnish
Landlord or the appropriate governmental agency with a bond made  by
a  surety company qualified to do business in the State in which the
Premises is located and reasonably satisfactory to Landlord or shall
pay cash to a recognized escrow agent in the County within which the
Premises  is  located in the amount of such Impositions, conditioned
to  pay  such Impositions when the validity thereof shall have  been
finally determined, which said written notice and security shall  be
given  by Tenant to Landlord or the appropriate governmental  agency
not fewer than ten (10) days before such Impositions proposed to  be
contested would otherwise become delinquent. Upon the conclusion  of
such   contest,  Landlord  shall  return  to  Tenant  the   security
hereinabove required to be deposited by Tenant, provided that Tenant
shall first evidence payment of such Impositions.

     20.7Requirements  of  Mortgage.  In  the  event  the  financing
institution  where  Landlord has financing  on  the  Premises  shall
require  Landlord to prepay the Impositions in monthly  installments
of  one-twelfth (1/12th) of the annual amount thereof,  then  Tenant
shall  make to Landlord, in addition to the Rent reserved hereunder,
monthly payments of one-twelfth (1/12th) of such Impositions, and to
the  extent it does so, Tenant shall be deemed to have satisfied its
obligations to pay the Impositions and Tenant shall not be  required
to provide the evidence described in Section 20.3 above and Landlord
shall  cause  all  such Impositions to be timely paid.  If  Landlord
fails  to timely pay or cause payment of an Imposition where  Tenant
has  made  monthly  installments as provided in  this  Section,  and
provided the failure to pay the Imposition would constitute  a  lien
upon  Tenant's  Property  or  Tenant's  leasehold  interest  in  the
Premises  will  be subordinate to the lien of such Imposition,  then
Tenant  may, but shall have no obligation (to the extent Tenant  has
already  made monthly payments as provided in this Article 20.7)  to
pay  such Imposition. If Landlord fails to pay or cause the  payment
of an Imposition prepaid by Tenant and Tenant makes separate payment
of  such Impositions as provided in this Article 20.7, Tenant  shall
from and after such payment by Tenant no longer be obligated to make
payment in
                                 23

monthly   installments  as  provided  in  this  section  but   shall
thereafter  make  direct  payment  of  Impositions  to  the   taxing
authority  as otherwise provided in this Article and Landlord  shall
refund  to  Tenant  such  prepayments  not  applied  in  payment  of
Impositions, any interest or penalties on such Impositions  paid  by
Tenant  on  account thereof, together with interest thereon  at  the
Prime Rate accruing from the date of payment by Tenant to the taxing
authority.

                           ARTICLE XXI
                            Utilities

     21.1      Payment  of Charges. Tenant shall, during  the  Term,
pay  and discharge punctually as and when the same shall become  due
and  payable without penalty all water and sewer rents,  rates,  and
charges,  charges for removal of waste materials,  and  charges  for
water,  steam  heat, gas, electricity, light, and power,  and  other
service  or  services  furnished to the Premises  or  the  occupants
thereof  during  the  Term of this Lease or any  extensions  hereof.
Tenant  shall indemnify, defend, and hold harmless Landlord  against
any and all liability on such account, such obligations to expressly
survive  the expiration of the Term or earlier termination  of  this
Lease.

     21.2Provision  of Services. Landlord shall not be  required  to
furnish any services or facilities (except as part of the Landlord's
Work)  to  the Premises and shall not be liable for any  failure  of
water  supply or electric current or of any service by any  utility,
nor  for  injury or damage to person (including death)  or  property
caused by or resulting from steam, gas, electricity, water, heat, or
by  rain or snow that may flow or leak from any part of the Premises
or from any pipes, appliances, or plumbing works of the same or from
the   Street  or  subsurface  or  from  any  other  place,  nor  for
interference  with  light  or  other  incorporeal  hereditaments  or
easements,  however  caused, unless due to the affirmative  acts  of
Landlord. Tenant hereby assumes the full and sole responsibility for
the  condition  or  the  Improvements  and  the  operation,  repair,
replacement, maintenance, and management of the Premises;  provided,
that,  nothing  herein shall release or relieve  Landlord  from  its
warranty obligations set forth in Exhibit C attached hereto.

                          ARTICLE XXII
                          Holding Over

     If Tenant or anyone claiming under Tenant remains in possession
of  the  Premises  at  the expiration of the Term,  such  continuing
possession shall create a month-to-month tenancy on the terms herein
specified,  if  Rent in the amount of one hundred and fifty  percent
(150%)  of the immediately preceding monthly installment of Rent  is
paid  by  Tenant  and  accepted by Landlord.  Such  tenancy  may  be
terminated  by  either  party by giving at least  thirty  (30)  days
notice thereof to the other party.

                          ARTICLE XXIII
                             Notice

     23.1      Notice  Address. Any notice or  demand  which  either
party  hereto either is required to or may desire to serve upon  the
other,  must be in writing, and shall be sufficiently served if  (1)
personally  delivered, (ii) sent by registered  or  certified  mail,
postage prepaid, or (iii) sent by commercial overnight carrier,  and
addressed, in the instance of Landlord, to:

                                 24

               Cypress/GR Woodlands I, L.P.
               do Cypress Equities, Inc.
               15601 Dallas parkway, Suite 400
               Dallas, Texas 75001
               Attention:  Christopher C. Maguire

               with a copy to:

               Kane, Russell, Coleman & Logan, P.C.
               3700 Thanksgiving Tower
               1601 Elm Street
               Dallas, Texas 75201
               Attention:  Raymond J. Kane

     or any other address which Tenant may be notified of in writing
by Landlord, and in the instance of Tenant, to:

               Garden Ridge, L.P.
               19411 Atrium Place, Suite 170
               Houston, Texas 77084
               Attention:  President

               with a copy to:

               Stephen C. Jacobs
               Locke Liddell & Sapp LLP
               600 Travis
               3200 Chase Tower
               Houston, Texas 77002

or  such other address which Landlord may be notified in writing  by
Tenant.

     23.2Service  of  Notice. Such notice shall be  deemed  to  have
been served within three (3) days of the time of the mailing thereof
(certified  mail, return receipt requested) or upon receipt  in  the
event  of  personal service or overnight courier; provided, however,
that  should such notice pertain to the change of address to  either
of  the  parties hereto, such notice shall be deemed  to  have  been
served  upon  receipt thereof by the party to whom  such  notice  is
given.

                          ARTICLE XXIV
                          Subordination

     24.1Lease Subordinate. Tenant agrees to subordinate this  Lease
and  all  of  Tenant's right, title, and interest in and under  this
Lease  to  the lien of any and all ground leases underlying  leases,
mortgages,  and deeds of trust and to any and all terms, conditions,
provisions, extensions, renewals or modification of any such leases,
mortgages, or deeds of trust which Landlord or any

                               25
grantee  or  assignee of Landlord or may place upon the Premises  in
the  same  manner and to the same extent as if this Lease  had  been
executed  subsequent to the execution, delivery,  and  recording  of
such  Lease, mortgage, or deed of trust; provided, that,  concurrent
with  and  as  a  condition to Tenant's obligation  to  subordinate,
Tenant  is  provided,  from the holder of such  lien,  an  agreement
whereby the holder thereof agrees that for so long as Tenant is  not
in  default under this Lease, Tenant's rights under this Lease shall
not  be  disturbed. The form of such an agreement is attached hereto
as  Exhibit  D. Tenant agrees to execute and deliver such instrument
to  Landlord  within fifteen (15) days following Landlord's  request
therefor.

     24.2Attornment.  Tenant covenants and  agrees  that,  upon  any
mortgage foreclosure or foreclosure under a deed of trust,  it  will
attom  to any mortgagee, trustee, assignee, or any purchaser at  any
foreclosure  sale as its Landlord, and this Lease shall continue  in
full  force  and effect as a direct Lease between Tenant herein  and
such  party upon all terms, conditions, and agreements set forth  in
this Lease.

     24.3  Attornment  to Successor. In the event  Landlord  or  any
successor  owner of the Premises shall transfer the Premises,  which
transfer  may be freely effected by Landlord without the consent  or
approval  of  Tenant  and such assignee assumes  the  obligation  of
Landlord  hereunder, Landlord or such successor owner, as  the  case
may  be, shall thereupon be released from all future liabilities and
obligations  of  Landlord  under this  Lease  and  all  such  future
liabilities and obligations shall thereupon automatically be binding
upon  the new owner, and Tenant will attorn to any new owner as  its
Landlord, and this Lease shall continue in full force and effect  as
a  direct Lease between Tenant herein and such party upon all terms,
conditions, and agreements set forth in this Lease.

                           ARTICLE XXV
                Landlord's Access to the Premises

     Landlord, or its agents or authorized representatives, upon not
less  than two (2) business days prior notice, shall have access  to
the  Premises  during  normal business hours  for  the  purposes  of
examining or inspecting the condition of same. Such inspection to be
performed  in  such a manner as to minimize, to the  maximum  extent
practicable, interference with Tenant's conduct of its business.  In
the  event  of any emergency such as, but not limited  to,  a  fire,
flood,  or severe windstorm, Landlord shall have free access to  the
Premises for the purpose of examining or inspecting damage  done  to
them.  Unless  Tenant shall have given notice of  its  intention  to
exercise  its  option to extend the Term of this Lease  pursuant  to
Article  III of this Lease entitled "Term and Extensions",  Landlord
shall  have the right, within twelve (12) months prior to expiration
of  this  Lease  or any extensions hereof, to show the  Premises  to
prospective  tenants,  at reasonable times  during  normal  business
hours  and  upon not less than two (2) business days  prior  notice.
Landlord  further  reserves  the  right  to  show  the  Premises  to
prospective purchasers any time during the Term of the Lease, during
normal  business hours, or at other times upon reasonable notice  to
Tenant.

                                 26

                          ARTICLE XXVI
                    Environmental Compliance

     26.1     Definitions. For purposes of this Lease:

     (a)  the  term "Environmental Laws" shall mean and include  the
Resource  Conversation and Recovery Act, as amended by the Hazardous
and  Solid Waste Amendments of 1984, the Comprehensive Environmental
Response,  Compensation and Liability Act, the  Hazardous  Materials
Transportation  Act, the Toxic Substances Control Act,  the  Federal
Insecticide, Fungicide and Rodenticide Act and all applicable  state
and  local  environmental  laws,  ordinances,  rules,  requirements,
regulations and publications, as any of the foregoing may have  been
or  may be from time to time amended, supplemented or supplanted and
any  and all other federal, state or local laws, ordinances,  rules,
requirements,  regulations  and  publications,  now   or   hereafter
existing,  relating  to the preservation of the environment  or  the
regulation or control of toxic or hazardous substances or materials;
and

     (b)  the term "Regulated Substance" shall mean and include any,
each  and  all  substances or materials now or  hereafter  regulated
pursuant  to any Environmental Laws, including, but not limited  to,
any such substance or material now or hereafter defined as or deemed
to  be  a "regulated substance," "pesticide,~~ "hazardous substance"
or   "hazardous   waste"  or  included  in  any  similar   or   like
classification or categorization thereunder.

     26.2Compliance. Tenant shall:

     (a)  not  cause or permit any Regulated Substance to be placed,
held,  located, released, transported or disposed on, under,  at  or
from the Premises in violation of any Environmental Laws due to  the
acts or omissions of Tenant, its agents, contractors or employees (a
"Tenant Environmental Event");

     (b)  at its own cost and expense or at the cost and expense  of
any  party  other  than  Landlord, contain at  or  remove  from  the
Premises,  or  perform  any other necessary  or  desirable  remedial
action regarding any Tenant Environmental Event in any way affecting
the  Premises  if,  as and when such containment, removal  or  other
remedial  action  is required under and in a manner  satisfying  any
Environmental Laws;

     (c) provide Landlord with written notice (and a copy as may  be
applicable)  of any of the following within ten (10)  days  thereof:
(i) Tenant's obtaining actual knowledge or notice of any kind of the
presence,  or  any  actual or threatened release, of  any  Regulated
Substance  in  any  way affecting the Premises  in  a  manner  which
violates any Environmental Laws; (ii) Tenants receipt or submission,
or  Tenant's  obtaining actual knowledge or notice  of  any  report,
citation,  notice  or other communication from or  to  any  federal,
state   or   local  governmental  or  quasi-governmental   authority
regarding any Regulated Substance in any way affecting the Premises;
or  (iii)  Tenant's  obtaining actual knowledge  or  notice  of  the
incurrence  of  any cost or expense by any federal, state  or  local
governmental or quasi-governmental authority or any private party in
connection with the assessment, monitoring, containment, removal  or
remediation  of  any  kind of any Regulated  Substance  in  any  way
affecting the Premises, or of the filing or recording of any lien on
the  Premises  or any portion thereof in connection  with  any  such
action or Regulated Substance in any way affecting the Premises; and

                                 27

    (d)   defend all actions against the Landlord and its  mortgagee
and  pay, protect, indemnify, defend and save harmless Landlord  and
its  mortgagee  from  and against any and all  liabilities,  losses,
damages,  costs, expenses (including, without limitation, attorneys'
and consultant's fees, response and clean-up costs, court costs, and
litigation  expenses), causes of action, suits,  claims  demands  or
judgments of any nature relating to any of the following which occur
during  the  Term or arise out of an event that occurred during  the
Term:  (i)  a  Tenant Environmental Event; (ii) any personal  injury
(including  wrongful death) or property damage  (real  or  personal)
arising  out  of or relating to any Tenant Environmental  Event;  or
(iii)   any  violation  of  Environmental  Laws  due  to  a   Tenant
Environmental  Event. If at the expiration or other  termination  of
this  Lease  any  response or clean up of a  condition  involving  a
Tenant  Environmental  Event is required by any  federal,  state  or
local governmental authority, Tenant shall remain solely responsible
for  such requirement and this Lease shall remain in full force  and
effect pursuant to the terms of Article XXII until such response  or
clean  up  is  completed  to  the  satisfaction  of  the  respective
governmental  authority.  The  indemnity  and  defense   obligations
contained  in  this  Article 26.2 shall survive  the  expiration  or
earlier termination of this Lease but in no event shall it extend to
any  of the foregoing if caused by the affirmative acts of Landlord,
its agents, contractors or employees.

    Landlord  hereby  represents and warrants  to  Tenant  that  the
Premises are free from Regulated Substances and agrees to indemnify,
defend  and hold Tenant harmless of, from, and against any  and  all
liabilities  related to or arising out of the presence or  existence
of Regulated Substances in, on, or about the Premises as of the Rent
Commencement Date.

                          ARTICLE XXVII
                         Landlord's Work

    Landlord agrees to construct the initial Improvements and  other
elements  of  the  Landlord's Work pursuant  to  the  provisions  of
Exhibit  C  attached  hereto at Landlord's sole  cost  and  expense.
Notwithstanding  any  contrary  provisions  hereof,  in  the   event
Landlord  does  not achieve the Delivery Date within  eighteen  (18)
months  following the date of this Lease: (i) Tenant shall have  the
right  and option to terminate this Lease at anytime thereafter  and
prior  to  the  day  upon which the Delivery  Date  is  achieved  by
providing  written notice to Landlord to such effect (in which  case
neither  party  hereto  shall have any further  rights,  duties,  or
obligations  one  to  the other hereunder) or,  (ii)  alternatively,
Tenant may elect to assume control over completion of the Landlord's
Work  (in  which case Landlord shall fully cooperate with Tenant  in
transferring  equipment and materials to Tenant  and  in  permitting
Tenant to supervise the completion of the Landlord's Work). In  such
later  case,  Tenant  shall be entitled to  recover  all  costs  and
expenses  incurred by Tenant in causing such work to  be  completed,
plus interest
thereon  from the date expended until repaid at the Prime  Rate,  by
offset against Rent thereafter accruing hereunder.

                         ARTICLE XXVIII
                      Estoppel Certificates

    Upon  the request of either party hereto, the other party  will,
within  ten  (10) days following such request, execute, acknowledge,
and  deliver a certificate, certifying that this Lease is unmodified
and is a full force and effect (or, if modified, that this Lease  is
in full force and
                                 28

effect,  as  modified, and stating the date of  each  instrument  so
modifying  this lease); the dates, if any, to which Rent  and  other
charges  payable  hereunder have been paid;  and,  whether,  in  the
opinion  of  the  party  delivering the  same,  any  default  exists
hereunder and, if so, the nature and period of existence thereof and
what  action should be taken with respect thereto and whether notice
thereof  has  been  given to the other and such  other  and  further
matters  as  may  reasonably be requested. If  such  certificate  is
required to be delivered by a corporation, the same shall be  signed
by  the  President  or  a Vice President and  the  Secretary  or  an
Assistant Secretary thereof, and if such certificate is required  to
be delivered by a partnership, the same shall be signed by a general
partner thereof. Any certificate required under this Article may  be
relied  upon  by  a  prospective  purchaser,  mortgagee,  or   other
transferee of Landlord's `or Tenant's interest under this Lease.

                           ARTICLE XXIX
                             Reports

     Tenant   agrees   to  furnish  to  Landlord,  with   reasonable
promptness, copies of financial statements of Tenant (including, but
not limited to, annual balance sheets, income statements and surplus
statements)   prepared   in  accordance  with   generally   accepted
accounting   principles  consistently  applied  and   certified   by
independent certified public accountants which shall be prepared not
less  often  than annually. If Tenant prepares financial  statements
certified  by Tenant's public accountants more often than  annually,
Tenant   agrees  to  provide  a  copy  of  the  same  to   Landlord.
Additionally, if requested in writing by (i) an institutional lender
with  a  mortgage lien on the Premises, (ii) an institutional lender
proposing  to  make a loan to Landlord secured by the  Premises,  or
(iii)  a  prospective purchaser of the Premises, Tenant will deliver
to  such  requesting party a copy of Tenant's most recent  quarterly
financial statements within fifteen (15) days following such request
and  upon  the  agreement  of such party to  maintain  the  same  in
confidence  by  executing and delivering to Tenant a confidentiality
agreement  in form and substance reasonably satisfactory to  Tenant.
Landlord  agrees to maintain such statements in confidence  and  may
disclose the same only to its lenders and prospective purchasers and
then only if such parties execute and deliver to Tenant an agreement
whereby  such  parties  agree to keep the  same  confidential,  such
agreement  to  be  in form and substance reasonably satisfactory  to
Tenant.

                           ARTICLE XXX
               Declarations, Covenants, Conditions
                   Restrictions and Agreements

     The Premises is subject to and has the benefit of the Covenants
and Agreements and is made subject to and shall have the benefits of
those  new  or  additional  covenants and agreements  to  which  the
Premises  may  hereafter  be made subject  in  accordance  herewith.
Tenant  shall  pay  all costs with respect to the  Premises  or  the
ownership  thereof that are due and owing during the Term hereof  on
account  of  the  Covenants and Agreements,  or  such  declarations,
conditions,  warranties, restrictions, and agreements as  though  an
Imposition. Tenant shall provide Landlord with evidence  of  payment
in  accordance  with  the  provisions of Article  XX.  Tenant  shall
perform  and  satisfy  all  of  the terms  and  conditions  of  such
agreements  that  are applicable to the Premises  or  the  ownership
thereof  during  the  Term  of  this  Lease.  Landlord  agrees  that
Landlord's  rights and benefits under the Covenants  and  Agreements
pertaining to ingress and egress and cross

                                 29

parking and rights to signage shall inure to Tenant's benefit during
the  Term.  Landlord agrees to enforce such agreements, at  Tenant's
expense,  for  the  benefit of the Premises and Landlord  shall,  at
Tenant's  sole cost and expense, cooperate and execute all documents
necessary  to do so upon Tenant's request. Landlord and Tenant  each
covenants  and  agrees  it will not enter  into  any  amendments  or
modifications  to such agreements or enter into new agreements  made
after  the  date  of  this Lease without the  other  parties'  prior
written  consent,  not  to  be  unreasonably  withheld  or  delayed.
Tenant's  consent to any requested amendments or new  or  additional
covenants shall not be deemed unreasonably withheld, conditioned  or
delayed if the potential effect of the requested amendment or new or
additional   covenant  that  would  materially   increase   Tenant's
obligations  under  this Lease or materially reduce  or  impair  its
rights  under  this Lease, or impose additional limitations  on  the
uses which can be made of the Premises. Tenant may also request that
Landlord  consent  to and execute amendments to  the  Covenants  and
Agreements,  or to enter into new, similar agreements. Landlord  may
refuse  to  grant  consent  to any Tenant  requested  amendments  or
modifications or new agreements if the same would impose  additional
limitations on uses which can be made of the Premises or would  have
a material adverse effect on the value of the Premises.

                           ARTICLE XXXI
                Provisions of General Application

     (a)  Landlord  hereby  represents and  warrants  to  Tenant  as
follows:

          (i)  That  Landlord is duly organized and validly existing
under  the  laws  of  the  state of Texas and  has  full  power  and
authority to enter into this Lease.

          (ii)That  Landlord  is not a party  to  any  agreement  or
litigation  which could adversely affect the ability of Landlord  to
perform its obligations under this Lease or which would constitute a
default  on the part of the Landlord under this Lease, or  otherwise
adversely affect Tenant's rights or entitlements under this Lease.

          (iii) That the execution, delivery and performance of this
Lease  will not: (i) violate any provisions of the law of the  State
of  Texas  or any applicable regulation, order, writ, injunction  or
decree  of  any  court or governmental authority; or  (ii)  conflict
with,  be  inconsistent with, or result in any breach or default  of
any  of  the  terms,  covenants, conditions  or  provisions  of  any
indenture, mortgage, deed of trust, instrument, document,  agreement
or  contract of any kind or nature to which Landlord is a part or by
which Landlord or the Premises may be bound.

     (b)  Tenant  hereby  represents and  warrants  to  Landlord  as
follows:

          (i)  That  Tenant  is duly organized and validly  existing
under  the  laws  of  the  state of Texas and  has  full  power  and
authority to enter into this Lease.

          (ii)That  Tenant  is  not  a party  to  any  agreement  or
litigation  which could adversely affect the ability  of  Tenant  to
perform its obligations under this Lease or which would

                                 30

constitute a default on the part of the Tenant under this Lease, or
otherwise adversely affect Landlord's rights or entitlements under
this Lease.

          (iii) That the execution, delivery and performance of this
Lease  will not: (i) violate any provisions of the law of the  State
of  Texas  or any applicable regulation, order, writ, injunction  or
decree  of  any  court or governmental authority; or  (ii)  conflict
with,  be  inconsistent with, or result in any breach or default  of
any  of  the  terms,  covenants, conditions  or  provisions  of  any
indenture, mortgage, deed of trust, instrument, document,  agreement
or  contract of any kind or nature to which Landlord is a part or by
which Tenant or the Premises may be bound.

     (c)  The language in all parts of this Lease shall in all cases
be  construed as a whole and according to its fair meaning, and  not
strictly  for  or  against  either  Landlord  or  Tenant,  and   the
construction  of this Lease and any of its various provisions  shall
be unaffected by any argument or claim, whether or not justified, it
has  been  prepared, wholly or in substantial part, by  or  on  that
behalf of Landlord or Tenant.

     (d)  The  Article and section headings in this  Lease  are  for
convenience only and are not a part of this Lease, and do not in any
was  limit  or simplify the terms and provisions of this Lease,  nor
should  they  be used to determine the intent of the  parties.  Each
reference  herein to an "Article" or "section" shall mean and  refer
to the indicated numbered Article or section within an Article.

     (e)  If  any  term,  covenant, condition or provision  of  this
Lease,  or  the  application thereof to any person or circumstances,
shall,  to  any  extent, be invalid, illegal, or unenforceable,  the
remainder  of  this  Lease,  or  the application  of  such  term  or
provision to persons or circumstances other than those as  to  which
it  is held invalid or unenforceable, shall not be affected thereby;
and  it is the intention of the parties hereto that if any provision
of  this  Lease is capable of two constructions, one of which  would
render  the provision invalid, and the other which would render  the
provision  valid,  then the provision shall have the  meaning  which
renders  it valid; and each term, covenant, condition and  provision
of  this Lease shall be valid and be enforced to the fullest  extent
permitted by law.

     (f)  It  is  mutually covenanted and agreed by and between  the
parties  that  no  waiver of a breach of any  of  the  covenants  or
conditions  of this Lease shall be construed to be a waiver  of  any
preceding or succeeding breach of the same covenant or condition. It
is  further  agreed by and between the parties that no modification,
release, discharge or waiver of any provision of this Lease shall be
of  any  force, effect or value unless in writing and signed by  the
Landlord and Tenant.

     (g)  This  Lease shall be governed and construed in  accordance
with the laws of the State wherein the Premises are located.

     (h)   The  words  "Landlord"  and  "Tenant"  and  the  pronouns
referring  thereto,  as used in this Lease, shall  mean,  where  the
context  requires or permits, the persons named, herein as  Landlord
and  as  Tenant,  respectively, and their  respective  heirs,  legal
representatives,  successors, and assigns, irrespective  of  whether
singular   or  plural,  or  masculine,  feminine,  or  neuter.   The
agreements  and conditions in this Lease contained on  the  part  of
Landlord to be performed and

                                 31

observed  shall  be  binding  upon Landlord  and  its  heirs,  legal
representatives,  successors, and assigns, and shall  enure  to  the
benefit  of Tenant and its heirs, legal representatives, successors,
and assigns; and the agreements and conditions on the part of Tenant
to  be performed and observed hereunder shall be binding upon Tenant
and  its  heirs, legal representatives, successors and assigns,  and
shall  enure  to  the  benefit  of Landlord  and  its  heirs,  legal
representatives, successors, and assigns.

     (i)  Landlord and Tenant represent to each other that no broker
or person is entitled to any commission by reason of the negotiation
and  execution of this Lease except that Tenant has engaged Staubach
Retail  Services,  Inc.  and  Landlord agrees  to  pay~  such  party
pursuant to a separate agreement. Landlord and Tenant agree to  hold
each  other  harmless against any and all claims by any  person  for
brokerage  commissions arising out of any conversation, negotiations
or  other dealings held by the other party with any broker regarding
this  Lease (except that Tenant's indemnity shall not extend to  the
claims of Staubach Retail Services, Inc.).

     (j)  The  parties will, at any time at the written  request  of
either  one,  promptly execute duplicate originals of an instrument,
in  recordable form, which will constitute a short form of lease  in
the  form  of  Exhibit  G  attached hereto. All  costs  incurred  in
connection with recording the short form of lease shall be  paid  by
Tenant.

     (k)  If Landlord or Tenant uses the services of an attorney  in
order  to  secure  compliance with this Lease or to recover  damages
therefor  from  the  other the prevailing party  in  any  litigation
resulting  therefrom  or settlement associated  therewith  shall  be
entitled  to  recover from the other party any  and  all  reasonable
attorneys'  fees  and expenses incurred by the prevailing  party  in
connection with such dispute.

     (l)  This  instrument contains the entire  and  only  agreement
between  the parties relating to the subject matter hereof,  and  no
oral  statements or representations or written matter not  contained
in  this instrument shall have any force or effect. This Lease shall
not  be  amended or modified in any way except by a writing executed
by both parties.

     (m)  The relationship between the parties hereto is solely that
of Landlord and Tenant, and nothing in this Lease shall be construed
as  creating  a  partnership or joint venture  between  the  parties
hereto, it being the express intent of Landlord and Tenant that  the
business of Tenant on the Premises and elsewhere, and the good  will
thereof, shall be and remain the sole property of Tenant.

     (n)  Throughout this Lease, wherever the context  so  requires,
the  singular  shall  include the plural, and the  masculine  gender
shall include the feminine and neuter genders.

     (o)  There  shall be no merger of this Lease or  the  leasehold
estate  created by this Lease with any other estate or  interest  in
the  Premises  by  reason  of the fact of  the  same  person,  firm,
corporation,  Or  other  entity  acquiring  or  owning  or  holding,
directly or indirectly, this Lease or the leasehold interest created
by  this  Lease  or any interest in this Lease, and any  such  other
estate or interest in the Premises or any part thereof, and no  such
merger  shall  occur unless and until all corporations,  firms,  and
other entities having an interest (including a security interest) in
this  Lease or the leasehold interest created by this Lease and  any
such other estate or interest in the Demised
                                 32

premises  or  any  part thereof, shall join in a written  instrument
effecting such merger and shall duly record the same.

     (p)  Notwithstanding any other provision hereof, Landlord shall
not have any personal liability hereunder. In the event of any beach
or  default  by  Landlord of any term or provision  of  this  Lease,
Tenant agrees to look solely to the equity or interest then owned by
Landlord  in  the Premises or of the Building of which the  Premises
are  a  part.  Nothing herein shall prohibit or prevent Tenant  from
obtaining injunctive or other equitable relief. Furthermore,  Tenant
shall  have the right to seek and obtain a monetary judgment against
Landlord  but  shall  only  be entitled to  collect  the  same  from
Landlord's interests in the Premises, insurande maintained hereunder
by  Landlord  or  by  offset against rent then  due  and  thereafter
becoming due under this Lease.

     Landlord  and Tenant have duly executed this Lease on  the  day
and year first above written.

                         LANDLORD:

                         CYPRESS/GR WOODLANDS I, L.P.

                         By: Cypress/GR Woodlands, Inc. general
                             partner

                         /s/ Christopher C Maguire
                         By: Christopher C. Maguire, President

                         TENANT:

                         GARDEN RIDGE, L.P.

                         By: Garden Ridge Management, Inc.,
                             General Partner

                         By: /s/ Jane Arbuthnot
                         Name:   Jane Arbuthnot
                         Title:    CFO

Exhibits
A-   Site
B-   Site Plan
C -  Landlord's Work
D -  Subordination, Non-Disturbance and
     Attornment Agreement
E -  Rent Commencement Date Memorandum
F -  Covenants and Agreements
F-I  Additional Title Matters
G -  Memorandum of Lease
H -  Guaranty

                               33

                            EXHIBIT A

                  METES AND BO~SNDS DESCRIPTION
                     9.9991 ACRES OUT OF THE
                   GEORGE TAYLOR SURVEY, A-555
                 JAMF,S MCCAMBRDGE SURVEY, A-390
                    MONTGOMERY COUNTY, TEXAS

A  tract  or parcel of land containing 9.9991 acres (435,562  square
feet)  out of the George Taylor Survey, Abstract 555 and the  Jarnes
McCamhridge Survey, Abstract 390, Montgomery County, Texas,  out  of
lands  owned by The Woodlands Land Development Company, LY., a Texas
Limited  Partnership by virtue of Memorandum of Merger and Ownership
dated  July  31, 1997 recorded in File No. 9747722 of the Montgomery
County  Real  Property Records, also being a portion  of  Restricted
Reserve "A" of The Woodlands College Park Section One as shown on  a
plat  recorded in Cabinet "M" Sheet 55 of the Montgomery county  Map
Records, said 9.9991 acre tract being more particularly described by
metes  and bounds as follows with all control referred to  the  1927
Texas  State  Plane  Coordinate System,  Lambert  Projection,  South
Central Zone.

BEGINNTING  at  the southwest corner of the herein  described  tract
having  a  Texas  State  Plane Coordinate Value  of  X=3,117,868.40,
Y=881,502.36 and being NORTH 57 degrees 05 minutes 40 seconds  EAST,
2,046.21  feet  from the southwest corner of said James  McCambridge
Survey,  A-390, common to the northwest corner of the George  Taylor
Survey,  A-555, located in the east line of the Daniel  F.  Whillden
Survey, A-640;

THENCE NORTH 03 degrees 04 minutes 30 seconds WEST, 491.00 feet to a
point  of  curvature and a northwest corner of the herein  described
tract;

THENCE  NORTHEASTERLY along a curve to the right  though  a  central
angle of 90 degrees 00 minutes 00 seconds to a point of tangency and
a  northwest corner of the herein described tract, said curve having
a  radius  o  130.00 feet, an arc length of 47.12 feet, and  a  long
chard  bearing  NORTH 41 degrees 55 minutes 30 seconds  EAST,  42.43
feet;

THENCE NORTH 86 degrees 55 minutes 30 seconds EAST, 791.33 feet to
the northeast corner of the herein described tract;

THENCE SOUTH 06 degrees 23 minutes 00 seconds EAST, 521.87 feet to
the southeast corner of the herein described tract;

THENCE SOUTH 86 degrees 55 minutes 30 seconds WEST, 851.44 feet to
the POINT OF BEGINNING, containing 9.9991 acres (435,562 square
feet) of land.

                            EXHIBIT B
                RENT COMMENCEMENT DATE MEMORANDUM

     Reference  is made to that Lease Agreement (the "Lease")  dated
July 13, 2001, between Cypress/GR Woodlands I, LY., as Landlord, and
GARDEN  RIDGE, L..P., a Texas limited partnership, as Tenant.  Terms
that  are defined in the Lease have the same meanings when  used  in
this acknowledgment. The parties agree as follows:

     1.   Landlord has satisfactorily completed the construction  of
Landlord's  Work,  including, without limitation, Tenant's  Building
and  parking areas, that Landlord undertook to build under the terms
of   the   Lease,  subject  to  cure  of  defective  materials   and
workmanship, if any, which Landlord obligated to satisfy  under  the
Lease  and  the  completion of the punch list items  listed  on  the
attachment to this acknowledgment.

     2.   Landlord has tendered exclusive possession of the Premises
to Tenant and Tenant has accepted possession.

     3.   The Rent Commencement Date of the Initial Term is March 5,
2001, and the Expiration Date is March 4, 2021.

     4.   The  monthly  Base Rent payable during the  fist  full  60
months  of the Initial Term is $78,544.62 and the monthly Base  Rent
payable  during the remainder of the Initial Term shall be  adjusted
as is provided for in Article 4.1(c) of the Lease.

     5.   The  terms  and conditions of the Lease will  continue  in
full force and effect and
the parties ratify arid confirm those terms and conditions.

                         LANDLORD:

                         CYPRESS/GR WOODLANDS I, L.P.

                         By: Cypress/GR Woodlands, Inc. general
                             partner

                         /s/ Christopher C Maguire
                         By: Christopher C. Maguire, President

                         TENANT:

                         GARDEN RIDGE, L.P.

                         By: Garden Ridge Management, Inc.,
                             General Partner

                         By: /s/ Jane Arbuthnot
                         Name:   Jane Arbuthnot
                         Title:    CFO

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