SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 22, 1998

Stratus Properties Inc.
(Exact name of registrant as specified in its charter)

Delaware             0-19989            72-1211572
(State or other     (Commission File      (IRS Employer
jurisdiction of          Number)          Identification
incorporation or                             Number)
organization)

98 San Jacinto Blvd., Suite 220
Austin, Texas  78701
(Address of principal executive offices)

(512) 478-5788
(Registrant's telephone number, including area code)

FM Properties Inc.
98 San Jacinto Blvd. Suite 220
Austin, Texas  78701
(Former name or former address, if changes since last report)

Item 5.   Other Events.

On  May  22,  1998,  Stratus  Properties  Inc.  (STRS)  and
Olympus Real Estate Corporation (Olympus), an affiliate of Hicks,
Muse, Tate & Furst Incorporated, formed their previously announced
strategic alliance to develop certain of STRS' existing properties and
to pursue new real estate acquisition and development opportunities.
Under the terms of the agreements, Olympus made an approximately $10
million investment in  a  STRS  mandatory redeemable preferred stock,
provided a  $10 million  convertible  debt financing  facility to a
wholly owned subsidiary of STRS and made available up to $50 million
of capital for direct investment in joint STRS/Olympus projects. 

Pursuant to  a Securities Purchase  Agreement, a  copy of  
which is filed  as Exhibit 99.2  to this report,  STRS issued  to
Olympus 1,712,328  shares  of Series  B  Participating  Preferred
Stock (the Preferred Stock) at a stated value of $5.84 per share,
the average closing price of a share of STRS common stock on  the
Nasdaq Stock Market during  the 30 trading  days ending March  2,
1998,  the  date  of  STRS/Olympus  letter  of  intent  for   the
transaction.   The designations,  preferences and  rights of  the
Preferred Stock are set forth in a Certificate of Designations, a
copy of  which  is filed  as  Exhibit 4.1  to  this report.    In
addition,  Olympus  has  certain  rights  with  respect  to   the
Preferred Stock and certain other rights, including the right  to
designate for nomination 20  percent of STRS'  board  membership,
as set forth in an Investors Rights Agreement, a copy of which is
filed as Exhibit 4.2 to this report. 

The shares of   Preferred Stock are  redeemable (i) at  the
option of Olympus at  any time after May  22, 2001 for an  amount
per share  approximating the  economic  benefit that  would  have
accrued had  the shares  been converted  into common  stock on  a
one-to-one basis and sold  (the "common stock equivalent  value")
or (ii) at the option of STRS after May 22, 2003 (and in no event
later than May  22, 2004  at which  time the  Preferred Stock  is
required to be redeemed)  for the greater  of their common  stock
equivalent value or their par value  per share, plus accrued  and
unpaid dividends, if  any.   STRS has  an option  to satisfy  the
redemption with shares  of its common  stock, subject to  certain
limitations.   The  Preferred Stock will  share any dividends  or
distributions ratably with the STRS common stock, which currently
pays no dividend.   STRS used the proceeds  from the sale of  the
Preferred Stock to repay debt.

The $10 million convertible  debt facility is available  to
a wholly owned subsidiary of STRS in whole or in part through May
22, 2004, to finance STRS'  equity investment in new STRS/Olympus
joint venture opportunities in properties not currently owned  by
STRS.  A copy of  the Loan Agreement is  filed as Exhibit 4.3  to
this report.  The interest rate  on the convertible debt will  be
12 percent per year, with interest payable quarterly or  accrued.
Outstanding principal under the facility will be convertible  at
any time into STRS common stock  at a conversion price of  $7.31,
which is 125 percent of the average closing price of STRS  common
stock on  the Nasdaq  Stock Market  during  the 30  trading  days
ending March 2, 1998.   If not converted  into common stock,  the
convertible debt  will  be  repaid  by May  22,  2004.    If  the
combination of  interest  at 12  percent  and the  value  of  the
conversion right  does not  provide Olympus  with at  least a  15
percent annual  return on  the convertible  debt, STRS  will  pay
Olympus additional interest  upon retirement  of the  convertible
debt in an amount necessary to yield a 15 percent annual  return.
The  convertible debt is secured by a pledge of STRS'   interests
in investments in  new STRS/Olympus  joint venture  opportunities
financed with  the  proceeds  of  the  convertible  debt  and  is
non-recourse to STRS.   

Pursuant to a Master Agreement,  a copy of  which is  filed
as Exhibit  99.1  to  this report,  Olympus  has  made  available
through May 22, 2001, up to $50 million for its share of  capital
for direct  investments  in STRS/Olympus  joint  acquisition  and
development activities.  Through May 22, 2001, STRS has  provided
Olympus a right of first refusal to participate for no less  than
a 50  percent interest  in all  new acquisition  and  development
projects on properties not  presently owned by  STRS, as well  as
development opportunities on  existing properties  in which  STRS
seeks third-party equity participation.

Item 7.  Financial Statements and Exhibits.

(c)  Exhibit 4.1    Certificate of Designations  of the Series  B
Participating   Preferred    Stock   of    Stratus
Properties Inc.

Exhibit 4.2    Investors Rights Agreement,  dated as of  May
22, 1998, by and  between Stratus Properties  Inc.
and Oly/Stratus Equities, L.P.

Exhibit 4.3    Loan Agreement, dated as of May 22, 1998,  by
and among Stratus Ventures I Borrower L.L.C.,  Oly
Lender Stratus, L.P. and Stratus Properties Inc.

Exhibit 99.1   Master Agreement, dated as  of May 22,  1998,
by and among Oly Fund II GP Investments, L.P., Oly
Lender Stratus, L.P., Oly/Stratus Equities,  L.P.,
Stratus Properties  Inc.  and Stratus  Ventures  I
Borrower L.L.C.

Exhibit 99.2   Securities Purchase  Agreement, dated  as  of
May 22, 1998, by and between Oly/Stratus Equities,
L.P. and Stratus Properties Inc.

Exhibit 99.3   Press Release  issued  jointly  by  STRS  and
Olympus on May 26, 1998.

SIGNATURE

Pursuant to the requirements of the Securities Exchange  Act
of 1934, the registrant has duly caused this report to be  signed
on its behalf by the undersigned, thereunto duly authorized.

Stratus Properties Inc.

By:  /s/ C. Donald Whitmire        
-----------------------
C. Donald Whitmire
Controller-Financial Reporting
(Authorized signatory)

Date: June 03, 1998

Stratus Properties Inc.

EXHIBIT INDEX

Exhibit
Number

4.1            Certificate  of  Designations  of  the  Series   B
Participating Preferred  Stock  of  Stratus  Properties
Inc.

4.2       Investors Rights Agreement, dated  as of May 22,  1998,
by and between Stratus Properties Inc. and  Oly/Stratus
Equities, L.P.

4.3       Loan Agreement, dated as of May 22, 1998, by and  among
Stratus Ventures I Borrower L.L.C., Oly Lender Stratus,
L.P. and Stratus Properties Inc.

99.1      Master Agreement,  dated as  of May  22, 1998,  by  and
among Oly  Fund II  GP  Investments, L.P.,  Oly  Lender
Stratus,  L.P.,  Oly/Stratus  Equities,  L.P.,  Stratus
Properties Inc. and Stratus Ventures I Borrower L.L.C.

99.2      Securities Purchase  Agreement,  dated as  of  May  22,
1998, by  and between  Oly/Stratus Equities,  L.P.  and
Stratus Properties Inc.

99.3      Press Release issued jointly by STRS and Olympus on May
26, 1998.

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
SERIES B PARTICIPATING PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

Stratus Properties Inc. (formerly known as FM
Properties Inc.) (the "Corporation"), a corporation
organized and existing under the General Corporation Law of
the State of Delaware, does hereby certify that, pursuant to
authority conferred upon the board of directors of the
Corporation (the "Board of Directors") by its Amended and
Restated Certificate of Incorporation, as amended
(hereinafter referred to as the "Certificate of
Incorporation"), and pursuant to the provisions of
Section 151 of the General Corporation Law of the State of
Delaware, said Board of Directors, by unanimous vote at a
meeting duly called and held on May 14, 1998, duly approved
and adopted the following resolution (the "Resolution"):

RESOLVED, that, pursuant to the authority
vested in the Board of Directors by its
Certificate of Incorporation, the Board of
Directors does hereby create, authorize and
provide for the issuance of Series B Participating
Preferred Stock, par value $0.01 per share, with a
stated value of $5.84 per share, consisting
initially of 1,712,328 shares, having the
designations, preferences, relative,
participating, optional and other special rights
and the qualifications, limitations and
restrictions thereof that are set forth in the
Certificate of Incorporation and in this
Resolution as follows:

(a)  Designation.  There is hereby created out of
the authorized and unissued shares of Preferred Stock of the
Corporation a class of Preferred Stock designated as the
"Series B Participating Preferred Stock."  The number of
shares constituting such class shall be 1,712,328, and are
referred to as the "Series B Participating Preferred Stock."
The liquidation preference of the Series B Participating
Preferred Stock shall be $5.84 per share (the "Stated
Value").

(b)  Rank.  The Series B Participating Preferred
Stock shall, with respect to dividends and distributions
upon liquidation, winding-up and dissolution of the
Corporation, rank (i) on parity with respect to dividends
and senior with respect to liquidation, winding-up and
dissolution of the Corporation with the common stock, $0.01
par value ("Common Stock") of the Corporation; (ii) senior
to all other classes of Capital Stock of the Corporation
(other than the Common Stock) or series of Preferred Stock
of the Corporation hereafter created the terms of which
expressly provide that it ranks junior to the Series B
Participating Preferred Stock as to dividends and
distributions upon liquidation, winding-up and dissolution
of the Corporation (collectively referred to as "Junior
Stock"); (iii) on a parity with any class of Capital Stock
of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly
provide that such class or series will rank on a parity with
the Series B Participating Preferred Stock as to dividends
and distributions upon liquidation, winding-up and
dissolution (collectively referred to as "Parity Stock");
(iv) junior with respect to dividends and on parity with
respect to distributions upon liquidation, winding-up and
dissolution of the Corporation with any class of Capital
Stock of the Corporation or series of Preferred Stock of the
Corporation hereafter created the terms of which expressly
provide that such class or series will rank senior to the
Series B Participating Preferred Stock as to dividends and
on parity with the Series B Participating Preferred Stock as
to distributions upon liquidation, winding-up and
dissolution of the Corporation (collectively referred to as
"Senior Dividend Stock"); and (v) junior to each class of
Capital Stock of the Corporation or series of Preferred
Stock of the Corporation hereafter created that has been
approved by the Holders in accordance with paragraph
(f)(ii)(a) hereof and the terms of which do not expressly
provide that such class or series will rank junior to, or on
a parity with, the Series B Participating Preferred Stock as
to both dividends and distributions upon liquidation,
winding-up and dissolution of the Company (collectively
referred to as "Senior Stock").

(c)  Dividends.

i)  Beginning on the Issue Date, the Holders of
the outstanding shares of Series B Participating
Preferred Stock shall be entitled to participate
ratably with the outstanding shares of Common Stock as
if all shares were of a single class, in all
distributions in the form of dividends in cash, stock
or other property, when, as and if declared by the
Board of Directors out of funds legally available
therefor, with each share of Series B Participating
Preferred Stock entitling the Holder thereof to receive
a distribution amount equal to (A) the distribution
amount per share on the Common Stock, multiplied by (B)
a fraction, the numerator of which is the Stated Value
and the denominator of which is the Conversion Price
(as it may be adjusted and in effect from time to time
as provided in paragraph (h) hereof); provided, that
the Series B Participating Preferred Stock shall not be 
entitled to participate in any dividend reinvestment
plan that the Corporation may from time to time adopt
for the benefit of the holders of the Common Stock. 
Any such dividend shall be payable to Holders of record
of the Series B Participating Preferred Stock as they
appear on the stock books of the Corporation on the
record date of such dividend when, as and if declared
by the Board of Directors.

ii)  All dividends paid with respect to shares of
the Series B Participating Preferred Stock pursuant to
paragraph (c)(i) shall be paid pro rata to the Holders
entitled thereto.

iii)  Nothing herein contained shall in any way or
under any circumstances be construed or deemed to
require the Board of Directors to declare, or the
Corporation to pay or set apart for payment, any
dividends on shares of the Series B Participating
Preferred Stock at any time.

iv)  No dividends shall be declared, paid or set
apart for payment by the Corporation on the Common
Stock, any Parity Stock or any Junior Stock unless such
dividends have been or contemporaneously are declared
and paid in full, or, if payable in cash, a sum in cash
has been set apart sufficient for such payment, on the
Series B Participating Preferred Stock.  If any
dividends are not so paid, all dividends declared upon
shares of the Series B Participating Preferred Stock
and the Common Stock and any Parity Stock shall be
declared pro rata so that the amount of dividends
declared per share on the Series B Participating
Preferred Stock and such Common Stock and Parity Stock
shall in all cases bear to each other the same ratio
that accrued and unpaid dividends per share on the
Series B Participating Preferred Stock and such Common
Stock and Parity Stock bear to each other.  Accrued and
unpaid dividends shall not bear interest.

v)  a)   Holders of shares of the Series B
Participating Preferred Stock shall be entitled to
receive the dividends provided for in paragraph (c)(i)
hereof in preference to and in priority over any such
dividends upon any of the Junior Stock.

b)   So long as any share of the Series B
Participating Preferred Stock is outstanding, the
Corporation shall not make any payment on account of,
or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or other
retirement of, any of the Common Stock or Junior Stock
or any warrants, rights, calls or options exercisable
for or convertible into any of the Common Stock or
Junior Stock whether in cash, obligations or shares of
the Corporation or other property, and shall not permit
any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any
of the Common Stock or Junior Stock or any such
warrants, rights, calls or options; provided, however,
that this paragraph (c)(v)(b) shall not prohibit the
Corporation from purchasing, redeeming, or making any
payment on account of shares of Common Stock or
warrants, rights, calls or options exercisable for or
convertible into shares of Common Stock in an aggregate
amount not to exceed 20% of the fully-diluted number of
shares of Common Stock (including shares of Common
Stock issuable upon exercise or conversion of any
outstanding warrants, rights, calls or options
exercisable for or convertible into shares of Common
Stock) of the Corporation as of the Issue Date.

(d)  Liquidation Preference.

i)  In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs
of the Corporation, the Holders of shares of Series B
Participating Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the
Corporation available for distribution to its
stockholders an amount in cash equal to the Stated
Value for each share outstanding, plus an amount in
cash equal to accrued and unpaid dividends thereon to
the date fixed for liquidation, dissolution or winding
up before any payment shall be made or any assets
distributed to the holders of any of the Common Stock
or Junior Stock of the Corporation.  After (i) the
payment in full of the liquidation payments payable to
the Holders of outstanding shares of Series B
Participating Preferred Stock any Parity Stock and any
Senior Dividend Stock, and (ii) the payment in full to
the holders of the shares of Common Stock of an amount
equal to (A) the liquidation payment per share to the
Holders of Series B Participating Preferred Stock,
multiplied by (B) a fraction, the numerator of which is
the Stated Value and the denominator of which is the
Conversion Price (as it may be adjusted and in effect
from time to time as provided in paragraph (h) hereof)
for each share of Common Stock, then the Series B
Participating Preferred Stock and any Parity Stock
shall be entitled to participate ratably in an amount
per share equal to (A) the Stated Value, divided by,
(B) the Conversion Price, the result of which is
multiplied by (C) the amount per share of any
additional distributions on the Common Stock, in any
such distribution of cash, property or other assets of
the Corporation then remaining for distribution to the
stockholders of the Corporation.  If the assets of the
Corporation are not sufficient to pay in full the
liquidation payments payable to the Holders of
outstanding shares of the Series B Participating
Preferred Stock, all Parity Stock and all Senior
Dividend Stock, then the holders of all such shares
shall share equally and ratably in such distribution of
assets in proportion to the full liquidation
preference, including, with respect to the Series B
Participating Preferred Stock and any Parity Stock, all
accrued and unpaid dividends to which each is entitled.

ii)  For the purposes of this paragraph (d), the
sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of
all or substantially all of the property or assets of
the Corporation, the recapitalization or change in the
outstanding shares of Common Stock, or the
consolidation or merger of the Corporation with or into
one or more entities shall not be deemed to be a
liquidation, dissolution or winding up of the affairs
of the Corporation.

(e)  Redemption.

i)   Optional Redemption.  a) The Corporation may,
at its option, redeem at any time on or after May 22,
2003, subject to contractual and other restrictions
with respect thereto and to the extent of funds legally
available therefor, in whole or in part, in the manner
provided for in paragraph (e)(iii) hereof, any or all
of the shares of the Series B Participating Preferred
Stock, at a Redemption Price per share equal to the
greater of (i) the Stated Value plus, without
duplication, an amount equal to all accumulated and
unpaid dividends per share, or (ii) the Participation
Price.

b)   In the event of a redemption pursuant to
paragraph (e)(i)(a) hereof of only a portion of the
then outstanding shares of the Series B Participating
Preferred Stock, the Corporation shall effect such
redemption on a pro rata basis according to the number
of shares held by each Holder of the Series B
Participating Preferred Stock.

ii)  Mandatory Redemption.  On May 22, 2004, the
Corporation shall redeem, to the extent of funds
legally available therefor, in the manner provided for
in paragraph (e)(iii) hereof, and each Holder shall
surrender or redemption, all of the shares of the
Series B Participating Preferred Stock then outstanding
at a Redemption Price per share equal to the greater of
(i) the Stated Value, plus, without duplication, an
amount equal to all accumulated and unpaid dividends
per share, or (ii) the Participation Price.

iii) Procedures for Redemption.  a) At least
thirty (30) days and not more than sixty (60) days
prior to the date fixed for any redemption of the
Series B Participating Preferred Stock, written notice
(the "Redemption Notice") shall be given by first class
mail, postage prepaid, to each Holder of record on the
record date fixed for such redemption of the Series B
Participating Preferred Stock at such Holder's address
as it appears on the stock books of the Corporation,
provided that no failure to give such notice nor any
deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series B
Participating Preferred Stock to be redeemed except as
to the Holder or Holders to whom the Corporation has
failed to give said notice or except as to the Holder
or Holders whose notice was defective.  The Redemption
Notice shall state:

(1)  whether the redemption is pursuant to
paragraph (e)(i)(a) or (e)(ii) hereof;

(2)  the Redemption Price (or method of
calculation thereof, if not then fixed);

(3)  whether all or less than all the
outstanding shares of the Series B Participating
Preferred Stock are to be redeemed and the total
number of shares of the Series B Participating
Preferred Stock being redeemed;

(4)  the Redemption Date; and

(5)  that the Holder is to surrender to the
Corporation, in the manner, at the place or places
and at the price designated, his or its
certificate or certificates representing the
shares of Series B Participating Preferred Stock
to be redeemed.

b)   Each Holder of Series B Participating
Preferred Stock called for redemption shall surrender
the certificate or certificates representing such
shares of Series B Participating Preferred Stock to the
Corporation, duly endorsed (or otherwise in proper form
for transfer, as determined by the Corporation), in the
manner and at the place designated in the Redemption
Notice, and on the Redemption Date, against delivery of
such certificate or certificates to the Corporation,
the full Redemption Price for such shares shall, except
as provided in paragraphs (iv)(b) or (c) below, be
payable in cash to the Person whose name appears on
such certificate or certificates as the owner thereof,
and each surrendered certificate shall be canceled and
retired.  In the event that less than all of the shares
represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed
shares.

c)   On and after the Redemption Date, unless the
Corporation defaults in the payment in full of the
applicable Redemption Price, all rights of the Holders
of redeemed shares shall terminate with respect thereto
on the Redemption Date, other than the right to receive
the redemption price thereon without interest.

iv)  Payment of Redemption Price.  a) Except as
otherwise set forth in paragraphs (b) or (c) of this
paragraph (iv), the Redemption Price for the shares of
Series B Participating Preferred Stock shall be paid in
cash to the Holders of record of the shares of Series B
Participating Preferred Stock shown on the records of
the Corporation as of the Redemption Date.

b)   Notwithstanding the foregoing paragraph
(iv)(a) or anything in this Certificate of Designations
to the contrary, the Corporation may, upon written
notice to the Holders of record of the Series B
Participating Preferred Stock at least three Business
Days prior to the Redemption Date, elect to pay all or
a portion of the Redemption Price for the Series B
Participating Preferred Stock pursuant to paragraphs
(i) or (ii) above in Common Stock of the Corporation,
by delivering that number of whole shares of Common
Stock of the Corporation to each Holder of the Series B
Participating Preferred Stock equal to (x) the
Redemption Price per share, divided by (y) the average
Common Stock Price for the ten trading days immediately
preceding the Redemption Date, the result of which is
then multiplied by (z) the number of shares of Series B
Participating Preferred Stock to be so redeemed from
such Holder by payment in shares of Common Stock, and,
in the case of any fractional share of Common Stock,
rounded to the nearest number of whole shares;
provided, however, that the Corporation may only pay
any Redemption Price in shares of Common Stock if, as
of the Redemption Date, the Common Stock is then
registered under Section 12(b) or 12(g) under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and listed on the New York Stock
Exchange or the American Stock Exchange, or approved
for quotation on the Nasdaq Stock Market's National
Market System.

c)   In the event of a redemption of any or all of
the outstanding shares of Series B Participating
Preferred Stock for which the Corporation has elected
to pay the Redemption Price in whole or in part in
cash, the Corporation may, by written notice to the
Holders of record of the Series B Participating
Preferred Stock at least three Business Days prior to
the Redemption Date, elect to defer the Redemption
Date, solely with respect to the portion of shares of
Series B Participating Preferred Stock that the
Corporation elects to redeem in cash, for a period of
no longer than 180 days from the date of such written
notice for the purpose of effecting a public offering
(the "Offering") by the Corporation of shares of Common
Stock; provided that (i) the Corporation shall file
with the Securities and Exchange Commission within 45
days of the date of such Redemption Notice a
registration statement (the "Registration Statement")
under the Securities Act of 1933, as amended (the
"Securities Act") with respect to such Offering, (ii)
the Corporation shall designate the use of proceeds to
the Corporation from such Offering in the prospectus
forming a part of such Registration Statement for the
redemption in cash of the Series B Participating
Preferred Stock in accordance with this Certificate of
Designations, and (iii) the Offering shall be
consummated and the Redemption Date fixed on or prior
to 180 days following the date of such Redemption
Notice.  In the event that (x) the Registration
Statement is not filed within 45 days following the
date of such Redemption Notice or (y) the Offering is
not consummated within 180 days following the date of
such Redemption Notice (each of (x) and (y) being
referred to herein as a "Deferral Default"), the
Corporation shall, within ten Business Days after such
Deferral Default, pay the Redemption Price on all
shares of Series B Participating Preferred Stock called
for redemption in accordance with paragraph (iv)(a)
above.

d)   The obligation of the Corporation to pay the
Redemption Price in cash pursuant to paragraph
(e)(i)(a) or (e)(ii) shall be fully subordinated to the
Corporation's Senior Debt in accordance with the
provisions of this paragraph (e)(iv)(d).  The
Corporation may not make any cash payments on account
of the Series B Participating Preferred Stock if there
shall have occurred and be continuing a default in the
payment of principal of (or premium, if any) or
interest on any Specified Senior Debt, the payment of
commitment or facility fees, letter of credit fees or
agency fees under any Specified Senior Debt, or
payments with respect to letter of credit reimbursement
arrangements with one or more lenders under the credit
or other agreement evidencing any Specified Senior Debt
when due (a "Senior Payment Default").  Following the
occurrence of an event of default (other than a Senior
Payment Default) under any Specified Senior Debt
permitting the holders of such Specified Senior Debt
(or a trustee or agent on behalf thereof) to accelerate
the maturity thereof, or the occurrence of an event
which with the passage of time or the giving of notice,
or both, could become such an event of default (a
"Senior Nonmonetary Default") and, in each case,
following the giving of notice thereof to Parent in
accordance with the terms governing the relevant
Specified Senior Debt (a "Blockage Notice"), Parent may
not make any payments on account of the Payment
Obligations for a period (a "Blockage Period")
commencing on the date the Corporation receives the
Blockage Notice, and ending on the earliest of (i) 179
days after such date, (ii) the date, if any, on which
such Senior Nonmonetary Default is waived or otherwise
cured and (iii) the date, if any, on which such
Blockage Period shall have been terminated by written
notice to the Corporation from the holders of the
relevant Specified Senior Debt (or a trustee or agent
on behalf thereof).

Upon any payment or distribution of assets of any
kind or character, whether in cash, property or
securities, to creditors upon any dissolution or
winding up or total or partial liquidation or
reorganization of the Corporation, whether voluntary or
involuntary, or upon bankruptcy, insolvency,
receivership or other proceedings, then and in such
event, all principal, premium (if any) and interest and
all other amounts due or to become due upon all the
Corporation's Senior Debt shall first be paid in full
before the Holders of the Series B Participating
Preferred Stock shall be entitled to receive or retain
any assets so paid or distributed in respect of the
Series B Participating Preferred Stock; and, upon any
such dissolution or winding up or liquidation or
reorganization, any payment or distribution of assets
of any kind or character, whether in cash, property or
securities, that the Holders of the  Series B
Participating Preferred Stock would be entitled to,
except as otherwise provided herein, shall be paid by
the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person
making such payment or distributions, or by the Holders
of the Series B Participating Preferred Stock if
received by them, directly and ratably to the holders
of the Corporation's Senior Debt, to the extent
necessary to pay in full all the Corporation's Senior
Debt, after giving effect to any concurrent payment or
distribution to or for the holders of the Corporation's
Senior Debt, before any payment or distribution is made
to the Holders of the Series B Participating Preferred
Stock.

Each Holder of shares of Series B Participating
Preferred Stock hereby irrevocably authorizes and
empowers (without imposing any obligation on) the
holders of the Corporation's Senior Debt (or any
trustee or agent on behalf thereof), under the
circumstances set forth in the immediately preceding
paragraph, to demand, sue for, collect and receive
every such payment or distribution described therein
and give acquittance therefor, to file claims and
proofs of claims in any statutory or nonstatutory
proceeding, to vote such the Corporation's Senior Debt
holder's ratable share of the full amount of the
Redemption Price on the Series B Participating
Preferred Stock in its sole discretion in connection
with any resolution, arrangement, plan of
reorganization, compromise, settlement or extension and
to take all such other action (including, without
limitation, the right to participate in any composition
of creditors and the right to vote such the
Corporation's Senior Debt holders' ratable share of the
Redemption Price at creditors' meetings for the
election of trustees, acceptances of plans and
otherwise), in the name of the Holder of the Series B
Participating Preferred Stock, as such the
Corporation's Senior Debt holder or its representative
may deem necessary or desirable for the enforcement of
these subordination provisions.

If any payment or distribution of assets of any
kind or character, whether in cash, property or
securities, shall be collected or received by any
Holder of the Series B Participating Preferred Stock
and such holder shall not be permitted under the terms
of this instrument to receive or retain such payment or
distribution, such holder shall forthwith turn over the
same to the Corporation's Senior Debt holders for their
ratable benefit in the form received (except for the
endorsement or the assignment of such holder when
necessary) and, until so turned over, the same shall be
held in trust by such holder as the property and for
the ratable benefit of the Corporation's Senior Debt
holders.

(f)  Voting Rights.

i)  The Holders of Series B Participating
Preferred Stock, except as otherwise required under
Delaware law or as set forth in paragraph (ii) below,
shall not be entitled or permitted to vote on any
matter required or permitted to be voted upon by the
stockholders of the Corporation.

ii)  a) So long as any shares of the Series B
Participating Preferred Stock are outstanding, the
Corporation shall not authorize any class of Senior
Stock without the affirmative vote or consent of
Holders of at least two-thirds of the outstanding
shares of Series B Participating Preferred Stock,
voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting.

b)   So long as any shares of the Series B
Participating Preferred Stock are outstanding, the
Corporation shall not amend its Certificate of
Incorporation or this Certificate of Designations so as
to affect adversely the specified rights, preferences,
privileges or voting rights of the Series B
Participating Preferred Stock without the affirmative
vote or consent of Holders of at least two-thirds of
the issued and outstanding shares of Series B
Participating Preferred Stock, voting or consenting, as
the case may be, as one class, given in person or by
proxy, either in writing or by resolution adopted at an
annual or special meeting.

iii) In any case in which the Holders of Series B
Participating Preferred Stock shall be entitled to vote
pursuant to this paragraph (f) or pursuant to Delaware
law, each Holder of Series B Participating Preferred
Stock entitled to vote with respect to such matter
shall be entitled to one vote for each share of Series
B Participating Preferred Stock held.

(g)  Recapitalization, Merger, Consolidation or
Transfer of Assets.

i)  In the event that the Corporation shall, in a
single transaction or series of related transactions,
recapitalize, reclassify or change the outstanding
shares of Common Stock (other than a change in par
value or from par value to no par value or from no par
value to par value, or as a result of a subdivision or
combination provided for in paragraph (h) hereof),
consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another Person or
adopt a plan of liquidation, the Holders of shares of
Series B Participating Preferred Stock shall be
entitled, upon written notice to the Corporation within
15 Business Days of the public announcement of such
transaction, to require the Corporation to exchange or
cause to be exchanged all or a portion of the shares of
Series B Participating Preferred Stock held by such
Holder for such securities, cash and other property
receivable upon the consummation of such transaction by
the holders of shares of Common Stock, as if each share
of Series B Participating Preferred Stock so exchanged
was that number of shares of Common Stock (rounded to
the nearest whole share) equal to (x) the Stated Value,
divided by (y) the Conversion Price, and outstanding
immediately prior to the consummation of the
recapitalization, reclassification, merger,
consolidation, asset transfer or liquidation.

ii)  In the event that the Corporation shall, in a
single transaction or series of related transactions,
recapitalize, reclassify or change the outstanding
shares of Common Stock (other than a change in par
value or from par value to no par value or from no par
value to par value, or as a result of a subdivision or
combination provided for in paragraph (h) hereof),
consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another Person or
adopt a plan of liquidation, and any Holder of shares
of Series B Participating Preferred Stock shall not
have elected to exchange all shares of Series B
Participating Preferred Stock in accordance with
paragraph (g)(i) above, then the Corporation shall not
consummate such recapitalization, reclassification,
merger, consolidation, asset sale or liquidation
unless:  (A) either (1) the Corporation is the
surviving or continuing Person or (2) the Person (if
other than the Corporation) formed by such
recapitalization, consolidation or into which the
Corporation is merged or the Person that acquires by
conveyance, transfer or lease the properties and assets
of the Corporation substantially as an entirety or in
the case of a plan of liquidation, the Person to which
assets of the Corporation have been transferred, shall
be a corporation, partnership, limited liability
company or trust organized and existing under the laws
of the United States or any State thereof or the
District of Columbia; (B) the Series B Participating
Preferred Stock shall be converted into or exchanged
for and shall become shares of such successor,
transferee or resulting Person, having in respect of
such successor, transferee or resulting Person the same
powers, preferences and relative, participating,
optional or other special rights and the
qualifications, limitations or restrictions thereon,
that the Series B Participating Preferred Stock had
immediately prior to such transaction; and (C) the
Corporation has delivered to the Holders of the Series
B Participating Preferred Stock prior to the
consummation of the proposed transaction an Officers'
Certificate and an Opinion of Counsel, each stating
that such recapitalization, reclassification, merger,
consolidation, asset transfer or liquidation complies
with the terms hereof and that all conditions precedent
herein relating to such transaction have been
satisfied.

iii) For purposes of the foregoing provisions of
this paragraph (g), the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all of
the properties or assets of one or more Subsidiaries of
the Corporation, the Capital Stock of which constitutes
all or substantially all of the properties and assets
of the Corporation shall be deemed to be the transfer
of all or substantially all of the properties and
assets of the Corporation.

(h)  Adjustment of Common Stock and Conversion
Price.  In case the Corporation shall (i) pay a dividend or
make a distribution solely in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock, or (iii) combine
its outstanding shares of Common Stock into a smaller number
of shares of Common Stock, then concurrently with the
effectiveness of each such event, the Conversion Price in
effect immediately prior thereto shall be adjusted by
multiplying the Conversion Price in effect immediately prior
to such adjustment by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding
immediately prior to such adjustment and the denominator
shall be the number of shares of Common Stock outstanding
immediately following such adjustment.  Such adjustment to
the Conversion Price shall be made each time any such action
described in this paragraph (h) shall occur.

(i)  Reissuance of Series B Participating
Preferred Stock.  Shares of Series B Participating Preferred
Stock that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall
(upon compliance with any applicable provisions of the laws
of Delaware) have the status of authorized and unissued
shares of Preferred Stock undesignated as to series and may
be redesignated and reissued as part of any series of
Preferred Stock, provided that any issuance of such shares
as Series B Participating Preferred Stock must be in
compliance with the terms hereof.

(j)  Business Day.  If any payment, redemption or
exchange shall be required by the terms hereof to be made on
a day that is not a Business Day, such payment, redemption
or exchange shall be made on the immediately succeeding
Business Day.

(k)  Definitions.  As used in this Certificate of
Designations, the following terms shall have the following
meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:

"Blockage Notice" shall have the meaning ascribed
to it in paragraph (e)(iv)(d) hereof.

"Blockage Period" shall have the meaning ascribed
to it in paragraph (e)(iv)(d) hereof.

"Board of Directors" shall have the meaning
ascribed to it in the first paragraph of this
Resolution.

"Business Day" means any day except a Saturday, a
Sunday, or any day on which banking institutions in New
York, New York are required or authorized by law or
other governmental action to be closed.

"Capital Stock" means (i) with respect to any
Person that is a corporation, any and all shares,
interests, participations or other equivalents (however
designated) of capital stock of such Person and
(ii) with respect to any Person that is not a
corporation, any and all partnership or other equity
interests of such Person.

"Common Stock" shall mean the common stock, $0.01
par value, of the Corporation, and any other security
into which such shares of Common Stock may be
hereinafter converted or exchanged.

"Common Stock Price" shall mean the last per share
sale price of the Common Stock of the Corporation as
reported by the Nasdaq National Market (or any national
stock exchange or interdealer quotation system on which
the Common Stock is then listed or quoted).

"Conversion Price" shall mean initially $5.84,
subject to adjustment as set forth in paragraph (h)
hereof.

"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to
pay the deferred purchase price of property or
services, except accounts payable arising in the
ordinary course of business, (iv) all obligations of
such person as lessee under capital leases, (v) all
Debt of others secured by any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind on
any asset of such Person and (vi) all Debt of others
guaranteed by such Person.

"Holder" means a holder of shares of Series B
Participating Preferred Stock as reflected in the stock
books of the Corporation.

"Issue Date" means the date of original issuance
of the Series B Participating Preferred Stock.

"Junior Stock" shall have the meaning ascribed to
it in paragraph (b) hereof.

"Officers' Certificate" means a certificate signed
by two officers or by an officer and either an
Assistant Treasurer or an Assistant Secretary of the
Corporation which certificate shall include a statement
that, in the opinion of such signers all conditions
precedent to be performed by the Corporation prior to
the taking of any proposed action have been taken.  In
addition, such certificate shall include (i) a
statement that the signatories have read the relevant
covenant or condition, (ii) a brief statement of the
nature and scope of such examination or investigation
upon which the statements are based, (iii) a statement
that, in the opinion of such signatories, they have
made such examination or investigation as is reasonably
necessary to express an informed opinion and (iv) a
statement as to whether or not, in the opinion of the
signatories, such relevant conditions or covenants have
been complied with.

"Opinion of Counsel" means an opinion of counsel
that, in such counsel's opinion, all conditions
precedent to be performed by the Corporation prior to
the taking of any proposed action have been taken. 
Such opinion shall also include the statements called
for in the second sentence under "Officers'
Certificate".

"Parity Stock" shall have the meaning ascribed to
it in paragraph (b) hereof.

"Participation Price" shall mean, as of any
Redemption Date, an amount per share of the Series B
Participating Preferred Stock equal to (i) the Stated
Value, divided by (ii) the Conversion Price, the result
of which is then multiplied by (iii) the average of the
Common Stock Price for the ten trading days immediately
prior to the Redemption Date; provided, however, that
if all or any portion of the Participation Price is
paid by the Corporation in cash, the amount of the
Participation Price to be paid to the Holders in cash
shall be an amount equal to the Participation Price
multiplied by 0.95.

"Person" means an individual, partnership,
corporation, limited liability company, unincorporated
organization, trust or joint venture, or a governmental
agency or political subdivision thereof.

"Preferred Stock" of any Person means any Capital
Stock of such Person that has preferential rights to
any other Capital Stock of such Person with respect to
dividends or redemptions or upon liquidation.

"Redemption Date", with respect to any shares of
Series B Participating Preferred Stock, means the date
on which such shares of Series B Participating
Preferred Stock are redeemed by the Corporation.

"Redemption Notice" shall have the meaning
ascribed to it in paragraph (e) hereof.

"Redemption Price" shall mean, as of any
Redemption Date, the redemption price required to be
paid on shares the Series B Participating Preferred
Stock as calculated in accordance with paragraphs
(e)(i)(a) or (e)(ii) hereof, as applicable.

"Senior Debt" means all Debt of the Corporation,
including principal, premium, if any, and interest on
(including interest accruing after the filing of a
petition initiating any proceeding pursuant to any
bankruptcy law, whether or not allowed) or other
amounts payable in connection with any Debt of the
Corporation, whether presently outstanding or
subsequently created, incurred or assumed (other than
any other Debt of the Corporation which expressly
provides by its terms or the terms of the instrument
creating or evidencing it that it is subordinate in
right of payment in any respect to any other Debt of
the Corporation).  Notwithstanding the foregoing, the
Corporation's Senior Debt shall not include any Debt of
the Corporation to any subsidiary of the Corporation or
any liability for federal, state or local taxes owed by
the Corporation.

"Senior Dividend Stock" shall have the meaning
ascribed to it in paragraph (b) hereof.

"Senior Nonmonetary Default" shall have the
meaning ascribed to it in paragraph (e)(iv)(d) hereof.

"Senior Payment Default" shall have the meaning
ascribed to it in paragraph (e)(iv)(d) hereof.

"Senior Stock" shall have the meaning ascribed to
it in paragraph (b) hereof.

"Specified Senior Debt" means (i) all Senior Debt
under the Corporation's primary bank credit facility
existing from time to time and (ii) any other issue of
Senior Debt having a principal amount of at least
$10,000,000.

"Stated Value" shall have the meaning ascribed to
it in paragraph (a) hereof.

[The remainder of this page is intentionally left blank.]

IN WITNESS WHEREOF, Stratus Properties Inc., has
caused this Certificate to be signed on its behalf by a duly
authorized officer this 22nd day of May, 1998.

STRATUS PROPERTIES INC.
(formerly known as FM Properties Inc.)

By: /s/ William H. Armstrong,III  
------------------------------    
Name:  William H. Armstrong,III
Title: President and Chief Executive
Officer

Exhibit 4.2

INVESTORS RIGHTS AGREEMENT

THIS INVESTORS RIGHTS AGREEMENT (this "Agreement") dated  as
of May 22, 1998, is entered into by and among Stratus  Properties
Inc., a  Delaware  corporation  (including  its  successors,  the
"Company"), and  Oly/Stratus  Equities,  L.P.,  a  Texas  limited
partnership ("Olympus").

NOW, THEREFORE, for  and in consideration  of the  premises,
mutual covenants, and agreements  contained herein and for  other
good and  valuable consideration,  the  receipt and  adequacy  of
which are  hereby  acknowledged,  the  parties  hereto  agree  as
follows:

ARTICLE I
DEFINITIONS

I.1  Definitions.  As used in this Agreement, the  following
terms shall have the following meanings:

"Advice"  shall   have  the   meaning  set   forth   in
Section 3.6.

"Affiliate" shall mean, with respect to any Person, any
Person who, directly or indirectly, controls, is  controlled
by, or  is  under common  control  with that  Person.    For
purposes of this definition,  "control" and "controlled  by"
and when  used with  respect to  any Person  shall mean  the
power to direct the management and policies of such  Person,
directly or  indirectly, whether  through the  ownership  of
voting securities, by contract, or otherwise, but shall  not
be deemed to include, solely because of the ownership of the
voting securities of  such Person, any  Person who owns  not
more than 25% of the ordinary voting power for the  election
of directors or other governing body of such Person.

"Agreement"  shall  mean  this  Agreement,  as  may  be
amended from time to time.

"Blockage Notice" shall have  the meaning set forth  in
Section 2.2.2(e).

"Blockage Period" shall have  the meaning set forth  in
Section 2.2.2(e).

"Board Designee" shall  have the meaning  set forth  in
Section 2.1.1.

"Board of Directors" shall mean the board of  directors
of the Company.

"Business Day" shall  mean a day  that is  not a  Legal
Holiday.

"Change of Control" shall mean the occurrence of one or
more of the following  events:  a majority  of the Board  of
Directors shall consist  of persons who  are not  Continuing
Directors, or the  acquisition by  any person  or group,  of
related  persons  for
<Page 1>
purposes  of  Section  13(d)  of  the
Exchange Act (other than Olympus, any of its Affiliates,  or
any of  their  respective  officers or  directors),  of  the
power, directly or indirectly, to vote or direct the  voting
of securities having  more than 30%  of the ordinary  voting
power for the election of directors of the Company.

"Common Stock" shall mean  shares of the Common  Stock,
$0.01 par value per share, of  the Company, and any  capital
stock  into  which  such  Common  Stock  thereafter  may  be
changed.

"Common  Stock   Equivalents"   shall   mean,   without
duplication with  any other  Common  Stock or  Common  Stock
Equivalents,  any  rights,  warrants,  options,  convertible
securities  or  indebtedness,  exchangeable  securities   or
indebtedness,  or   other   rights,   exercisable   for   or
convertible or  exchangeable into,  directly or  indirectly,
Common Stock and securities convertible or exchangeable into
Common Stock, whether at  the time of  issuance or upon  the
passage of time or the occurrence of some future event.

"Company" shall  have  the  meaning set  forth  in  the
introductory paragraph hereof.

"Continuing Director"  shall mean,  as of  the date  of
determination, any person who (i) was a member of the  Board
of Directors  on the  date hereof,  (ii) was  nominated  for
election or  elected  to the  Board  of Directors  with  the
affirmative vote of a  majority of the Continuing  Directors
who were members of  the Board of Directors  at the time  of
such nomination or election, or (iii) is a Board Designee.

"Deferral Default" shall have the meaning set forth  in
Section 2.2.2(d).

"Deferral Offering" shall have the meaning set forth in
Section 2.2.2(d).

"Deferral  Registration  Statement"   shall  have   the
meaning set forth in Section 2.2.2(d).

"Demand Registration" shall have the meaning set  forth
in Section 3.1.1.

"Demand Request" shall  have the meaning  set forth  in
Section 3.1.1.

"Exchange Act" shall mean  the Securities Exchange  Act
of  1934,  as  amended,   and  the  rules  and   regulations
promulgated by the SEC thereunder.

"Excluded Registration" shall mean a registration under
the Securities Act of (i) securities pursuant to one or more
Demand    Registrations    pursuant    to    Section    3.1,
(ii) securities  registered  on  Form  S-8  or  any  similar
successor form,  (iii) securities registered  to effect  the
acquisition of or combination with another Person, and  (iv)
securities registered on Form  S-4 or any similar  successor
form  solely   to  effect   any  exchange   of   outstanding
securities.

"Holder" shall  mean  (i)  Oly/Stratus  Equities,  L.P.
(ii) any  direct  or   indirect  transferee   of  any   such
securityholder who shall  become a party  to this  Agreement
and
<Page 2>
entitled  to the  benefits of  Articles III,  IV, and  V
pursuant to Section 7.4 hereof.

"Inspectors"  shall  have  the  meaning  set  forth  in
Section 3.5(ix).

"Legal Holiday"  shall have  the meaning  set forth  in
Section 7.2.

"Material Adverse Effect"  shall have  the meaning  set
forth in Section 3.1.4.

"NASD"  shall   mean   the  National   Association   of
Securities Dealers, Inc.

"Observer Designee" shall have the meaning set forth in
Section 2.1.2.

"Olympus" shall  mean  Oly/Stratus  Equities,  L.P.,  a
Texas limited partnership, and its permitted successors  and
assigns.

"Optional Repurchase Event" shall have the meaning  set
forth in Section 2.2.2(a).

"Person"  or  "person"   shall  mean  any   individual,
corporation, partnership, limited  liability company,  joint
venture,   association,    joint-stock    company,    trust,
unincorporated organization, or  government or other  agency
or political subdivision thereof.

"Preferred Stock"  shall mean  shares of  the Series  B
Participating Preferred Stock, $0.01 par value per share, of
the Company, and any capital stock (other than Common  Stock
of the Company) into  which such Preferred Stock  thereafter
may be changed.

"Records"  shall  have   the  meaning   set  forth   in
Section 3.5(ix).

"Redemption Notice" shall have the meaning set forth in
Section 2.2.2.

"Redemption Price" shall have the meaning set forth  in
Section 2.2.2.

"Registrable Shares"  shall mean  at any  time  (a) the
Preferred Stock and (b) any shares of Common Stock issued or
issuable pursuant  to (i) the  redemption of  the  Preferred
Stock or (ii) the conversion of the obligations  outstanding
under that certain Loan Agreement (as it may be amended  and
in effect from time to time, the "Loan Agreement"), dated on
or  about  the  date  hereof,  among  the  Company,  Stratus
Ventures I Borrower L.L.C., and Oly Lender Stratus, L.P., in
each case owned by  the Holders, whether  owned on the  date
hereof  or  acquired  hereafter;  provided,  however,   that
Registrable Shares shall not include any shares (x) the sale
of which has been registered pursuant to the Securities  Act
and  which   shares  have   been  sold   pursuant  to   such
registration or (y) which  have been sold  pursuant to  Rule
144 of the SEC under the Securities Act.

"Registration Expenses"  shall  have  the  meaning  set
forth in Section 3.6.
<Page 3>
"Regulation D"  shall  mean  Regulation  D  promulgated
under the Securities Act by the SEC.

"Repurchase Notice" shall have the meaning set forth in
Section 2.2.2(b).

"Repurchase Price" shall have the meaning set forth  in
Section 2.2.2(a).

"Requesting Holder" shall have the meaning set forth in
Section 3.1.1(a).

"Required Filing Date" shall have the meaning set forth
in Section 3.1.1(b).

"Required Holders"  shall  mean Holders  who  then  own
beneficially more than 50% of the aggregate number of shares
of Preferred Stock subject to this Agreement.

"SEC"  shall   mean   the   Securities   and   Exchange
Commission.

"Securities" shall mean the Preferred Stock and  Common
Stock issued or issuable  pursuant to (i) the redemption  of
the  Preferred   Stock  or   (ii) the  conversion   of   the
obligations outstanding under the Loan Agreement.

"Securities Act" shall mean the Securities Act of 1933,
as amended, and the rules and regulations promulgated by the
SEC thereunder.

"Seller Affiliates" shall have the meaning set forth in
Section 3.8.1.

"Senior  Dividend  Stock"  shall  mean  each  class  of
capital stock of the Company or series of preferred stock of
the Company created on or after the date hereof the terms of
which expressly provide that such class or series will  rank
senior to the Preferred Stock as to dividends and on  parity
with  the   Preferred  Stock   as  to   distributions   upon
liquidation, winding-up and dissolution of the Company.

"Senior Nonmonetary Default" shall have the meaning set
forth in Section 2.2.2(e).

"Senior Payment  Default" shall  have the  meaning  set
forth in Section 2.2.2(e).

"Subsidiary" of  any Person  shall  mean any  Person  a
majority of  whose outstanding  shares of  capital stock  or
other equity  interests with  voting power,  under  ordinary
circumstances, to elect directors or other governing body of
such Person, is at the  time, directly or indirectly,  owned
by such Person, by one or  more subsidiaries of such  Person
or by  such Person  and one  or  more subsidiaries  of  such
Person.

"Suspension Notice" shall have the meaning set forth in
Section 3.6.

"Transfer" shall mean any  disposition of any  Security
or any  interest  therein  that would  constitute  a  "sale"
thereof within the meaning of the Securities Act.
<Page 4>
"Transfer Notice" shall have  the meaning set forth  in
Section 5.3.

I.2  Rules of Construction.   Unless  the context  otherwise
requires, all references to  "Articles" and "Sections"  contained
in this Agreement are,  unless specifically indicated  otherwise,
references to articles, sections,  subsections and paragraphs  of
this Agreement.  Whenever in  this Agreement the singular  number
is used, the same shall include the plural where appropriate (and
vice versa), and  words of any  gender shall  include each  other
gender where  appropriate.    As  used  in  this  Agreement,  the
following words or  phrases shall have  the meanings indicated:  
(i) "or" shall mean  "and/or"; (ii) "day"  shall mean a  calendar
day; (iii) "including" or "include" shall mean "including without
limitation";  and  (iv) "law"  or  "laws"  shall  mean  statutes,
regulations,   rules,   judicial    orders   and   other    legal
pronouncements having the effect of law.  Whenever any  provision
of this Agreement requires or permits a party to take or omit  to
take any action, or make or omit to make any decision, unless the
context clearly  requires  otherwise,  such  provision  shall  be
interpreted to  authorize  an  action  taken  or  omitted,  or  a
decision made or omitted, by the  party acting alone and in  good
faith.

1.3  Other Definitions.  Certain  capitalized terms used  in
this Agreement, but not defined in this Article I, shall have the
meanings set forth elsewhere in this Agreement.

ARTICLE II
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES

II.1 Board of Directors.

II.1.1    Board Representation.    Subject  to  Section
2.1.4, for so long  as at least 50.1%  of the shares of  the
Preferred  Stock  outstanding  on  the  date  hereof  remain
outstanding and beneficially owned by Olympus, Olympus shall
have the  exclusive  right to  appoint  the greater  of  one
director or 20% of the members  of the Board of Directors.  
Subject to Sections 2.1.3  and 2.1.4, on  or promptly  after
the date Olympus provides the Company with written notice of
Olympus' election to designate  Board Designees pursuant  to
this Section 2.1.1,  the Company agrees  to take all  action
required to cause  the Board of  Directors to  at all  times
include those Board Designees elected by Olympus.

II.1.2    Observer Rights.   For  so long  as at  least
50.1% of the  shares of Preferred  Stock outstanding on  the
date hereof  remain outstanding  and beneficially  owned  by
Olympus,  if  Olympus  fails   to  designate  directors   or
terminates its  right  to designate  directors  pursuant  to
Section 2.1.1, Olympus  shall be  entitled  to, in  lieu  of
designating such Board Designees, have two designees  attend
all meetings of  the Board of  Directors and each  committee
thereof (each, an "Observer Designee").   In the event  that
Olympus has  designated any  Observer Designee  pursuant  to
this Section 2.1.2, Olympus and each such Observer  Designee
shall  enter  into  a  confidentiality  agreement  with  the
Company in  form and  substance reasonably  satisfactory  to
each of Olympus and the Company.  No Observer Designee shall
be entitled to vote on any matters presented to the Board of
Directors or to  such committees.   The  Company shall  give
written notice, including any proposed agenda to Olympus, of
each such meeting at the same time and in the same manner as
the members  of the  Board of  Directors (or  any  committee
thereof) receive notice of such meetings.  Olympus shall  be
entitled  to  receive  all   written  materials  and
<Page 5>
other
information  given  to  the  directors  of  the  Company  in
connection  with  such  meetings  at  the  same  time   such
materials are  given  to such  directors.   If  the  Company
proposes to  take action  by written  consent in  lieu of  a
meeting of the  Board of  Directors, the  Company shall  (i)
orally notify Olympus 72 hours in  advance of the date  such
consent is first proposed to be executed by the directors of
the Company, and (ii) give a copy of such consent to Olympus
at the same time as such materials are given to the  members
of the Board  of Directors, which  in any case  shall be  at
least 24 hours  prior  to the  date  such consent  is  first
proposed to be executed  by the directors  of the Company.  
Notwithstanding   the   foregoing    provisions   of    this
Section 2.1.2, the Company reserves the right not to provide
information or to exclude  Observer Designees from  portions
of any  meeting  of the  Board  of Directors  (or  committee
thereof) if (i) delivery  of such information or  attendance
at  such  portion  of  any  such  meeting  by  the  Observer
Designees would, in the opinion  of counsel to the  Company,
cause the  Company  to  lose or  waive  the  attorney-client
privilege between the Company and  its counsel, or (ii)  the
subject matter of such information or agenda of such portion
of any meeting is reasonably related to consideration of the
Company's relationship with Olympus or any of its Affiliates
or any  transaction  between  the  Company  or  any  of  its
Affiliates on  the  one hand,  and  Olympus or  any  of  its
Affiliates on  the  other hand,  and  the delivery  of  such
information or  attendance  at  any  such  portion  of  such
meeting would, in  the opinion  of counsel  of the  Company,
adversely affect the ability of the Company or its Affiliate
to negotiate in good-faith and on an arms-length basis  with
Olympus  or  its  Affiliate.    In  the  event  the  Company
withholds information or excludes an Observer Designee  from
a portion of any meeting of the Board of Directors  pursuant
to the preceding sentence, the Company shall provide Olympus
with a written statement  identifying the subject matter  of
the  information  withheld  or  discussion  from  which  the
Observer  Designee  was  excluded  (which  notice  need  not
include any description of the legal advice rendered  during
such meeting).

II.1.3    Vacancies.  If, prior to his election to  the
Board of  Directors pursuant  to  Section 2.1.1,  any  Board
Designee shall be unable or unwilling to serve as a director
of the  Company, Olympus  shall be  entitled to  nominate  a
replacement who shall then be a Board Designee for  purposes
of this Section 2.1.  If, following an election to the Board
of Directors pursuant to  Section 2.1.1, any Board  Designee
shall resign, be  removed at the  request of  Olympus or  be
unable to serve for  any reason prior  to the expiration  of
his term as a director of the Company, Olympus shall, within
30 days of  such event,  notify the  Board of  Directors  in
writing of  a replacement  Board Designee,  and the  Company
shall take all such  actions as it  is legally empowered  to
take at the earlier of the next regularly scheduled  regular
meeting of  the  Board of  Directors  or a  special  meeting
thereof to be called not later than 30 days after receipt of
notice of the replacement Board Designee for the purpose  of
filling positions  on  the  Board of  Directors  or  in  any
written consent executed in lieu of such a meeting to  cause
the replacement Board Designee to be elected to the Board of
Directors.   If Olympus  requests  that any  Board  Designee
designated by  Olympus be  removed as  a director  (with  or
without cause)  by written  notice thereof  to the  Company,
then the Company  shall take  all actions  permitted by  its
certificate of incorporation and the General Corporation Law
of the State of Delaware that  are necessary to effect  such
removal upon such request.

II.1.4    Termination of Rights.  The right of  Olympus
to designate directors under
<Page 6>
Section 2.1.1 shall  terminate
upon the first to occur of (i) the termination or expiration
of this  Agreement or  this  Article II, (ii) such  time  as
Olympus elects in writing to terminate its rights under this
Article II,  or  (iii) such  time   as  Olympus  ceases   to
beneficially own  at  least  50.1%  of  the  shares  of  the
Preferred Stock outstanding on the date of this Agreement.

II.1.5    Costs  and  Expenses.    The  Company   shall
reimburse any Board  Designee or Observer  Designee for  all
reasonable out-of-pocket  expenses  incurred  in  connection
with his participation in meetings of the Board of Directors
(and committees thereof) of the Company on the same basis as
it reimburses its other directors.

II.2 Transactions Permitting Optional Redemption.

II.2.1    The Company agrees that, if the Company takes
any  of  the  following  actions,  directly  or  indirectly,
without the prior written  consent of Olympus, then  Olympus
shall have the repurchase option described in Section 2.2.2:

(a)  redeem, purchase, or otherwise acquire in one
transaction or in a  series of related transactions  an
amount  of  Common  Stock  greater  than  10%  of   the
outstanding Common Stock;

(b)  voluntarily liquidate or dissolve;

(c)  grant  or  issue  any  capital  stock,  stock
option, or  stock  purchase  right  (other  than  those
granted to all holders  of Common Stock  on a pro  rata
basis) to  any officer,  director, or  employee of  the
Company or any of its Subsidiaries, other than (i)  for
compensation in amounts reasonably consistent with past
practice, (ii)  Common Stock  issued upon  exercise  or
conversion of any stock options outstanding on the date
of this  Agreement,  or  (iii) Common  Stock  or  stock
options granted in compliance with this clause (c);

(d)  file  a  petition  under  any  bankruptcy  or
insolvency law,  fail  to  contest the  filing  of  any
involuntary petition under any bankruptcy or insolvency
law, or admit in writing its bankruptcy, insolvency, or
general inability to pay its debts;

(e)  merge or consolidate with or into any person;

(f)  sell, lease, exchange, or otherwise transfer,
in  one  transaction   or  in  a   series  of   related
transactions, assets of the Company having a book value
equal to or  greater than  25% of  the Company's  total
assets as of  the date  of the  most recently  prepared
audited balance sheet of the Company other than in  the
ordinary course of business;

(g)  permit the occurrence of a Change of Control;

(h)  issue any shares of Senior Dividend Stock  in
excess of $10,000,000 aggregate liquidation preference;
or
<Page 7>
(i)  agree to  do  any transaction  prohibited  by
subsections  (a)  through  (h)  of  this  Section 2.2.1
without such prior written consent.

II.2.2    (a)  So long as any shares of Preferred Stock
remain outstanding and at least  one owned by Olympus,  upon
the occurrence of  the occurrence  of any  of the  following
actions or events  (each, an  "Optional Repurchase  Event"),
Olympus shall be entitled, at its option, by written  notice
to the  Company in  accordance with  paragraph (b)  of  this
Section 2.2.2, to require the Company to repurchase all or a
portion of the shares of Preferred Stock held by Olympus, as
follows:

i)   at any time following  the date of  this
Agreement, in the case of an  occurrence of any of  the
events or actions  specified in  subsections (a),  (c),
(e), (f), (g) or (i) of Section 2.2.1 without the prior
written consent  of  Olympus, Olympus  shall  have  the
right to require  the Company  to repurchase  all or  a
portion of the shares of  Preferred Stock then held  by
Olympus in an amount equal to $5.84 per share, plus  an
amount equal to accrued  and unpaid dividends  thereon,
if any, to the date of repurchase;

ii)  at any time  on or after  May 22,  2001,
Olympus shall have the right to require the Company  to
repurchase all or a portion of the shares of  Preferred
Stock then held by  Olympus in an  amount equal to  the
Participation Price (as defined  in the Certificate  of
Designations governing the Preferred Stock) per  share;
and

iii) at any time following  the date of  this
Agreement, in the case of an  occurrence of any of  the
events or actions specified in subsections (b), (d)  or
(h) of Section 2.2.1 without the prior written  consent
of Olympus, Olympus shall have the right to require the
Company to repurchase all or a portion of the shares of
Preferred Stock then held by Olympus in an amount equal
to the greater of (A) $5.84  per share, plus an  amount
equal to accrued and unpaid dividends thereon, if  any,
to the date  of repurchase, and  (B) the  Participation
Price per share (the  amount to be  paid to Olympus  to
repurchase the Preferred Stock described in subsections
i), ii) and iii) of  this Section 2.2.2(a) is  referred
to collectively herein as the "Repurchase Price").

(b)  To exercise  the  optional  repurchase  right
described in this  Section 2.2.2, Olympus  shall deliver  to
the Company (if  an Optional Repurchase  Event described  in
subsections i) or iii) of Section 2.2.2(a) above, not  later
than  30  days  after   Olympus  receives  notice  of   such
occurrence) a  notice of  repurchase ("Repurchase  Notice"),
accompanied by the certificate  for the shares of  Preferred
Stock to be repurchased.  Any Repurchase Notice shall  state
(1) that  Olympus is  requiring  the Company  to  repurchase
shares of Preferred  Stock pursuant  to this  Section 2.2.2,
(2) the  Optional  Repurchase  Event  giving  rise  to  such
repurchase, and (3) the number of shares of Preferred  Stock
held by Olympus which  are to be repurchased.   In no  event
later than  20  Business  Days  following  receipt  of  such
Repurchase Notice by the Company, the Company shall,  except
as provided in Section 2.2.2(c) and (d) below, make  payment
in immediately available  funds of the  Repurchase Price  to
Olympus  as  specified  in  the  Repurchase  Notice.    Upon
<Page 8>
repurchase of less than all of the shares of Preferred Stock
evidenced by a  particular certificate, promptly  but in  no
event later than ten Business  Days after surrender of  such
certificate to  the  Company,  the  Company  shall  issue  a
replacement certificate for  the shares  of Preferred  Stock
that have not been repurchased.

(c)  Notwithstanding anything in this Agreement to
the contrary,  the  Company  may,  upon  written  notice  to
Olympus within seventeen  Business Days of  the date of  the
Repurchase Notice,  elect to  pay all  or a  portion of  the
Repurchase Price for the Preferred Stock in Common Stock, by
delivering that number  of whole shares  of Common Stock  to
Olympus equal to (x) the Repurchase Price per share, divided
by (y) the average  Common Stock Price  for the ten  trading
days immediately preceding the Repurchase Notice, the result
of which is then multiplied by (z) the number of shares  of
Preferred Stock to be so repurchased from Olympus by payment
in  shares  of  Common  Stock,  and,  in  the  case  of  any
fractional share  of Common  Stock, rounded  to the  nearest
number of whole shares; provided, however, that the  Company
may only pay any Repurchase Price in shares of Common  Stock
if, as of  the date  of delivery  of such  shares of  Common
Stock, the  Common Stock  is then  registered under  Section
12(b) or 12(g) under the Exchange Act and listed on the  New
York Stock  Exchange  or  the American  Stock  Exchange,  or
approved for quotation on the Nasdaq Stock Market's National
Market System.

(d)  In the event of a repurchase of any or all of
the outstanding  shares of  Preferred  Stock for  which  the
Company has elected to pay the Repurchase Price in whole  or
in part  in cash,  the Company  may,  by written  notice  to
Olympus within eight Business Days of the Repurchase Notice,
elect to defer  the repurchase  of the  Preferred Stock  set
forth in the Repurchase Notice,  solely with respect to  the
portion of shares of Preferred Stock that the Company elects
to redeem in cash, for a  period of no longer than 180  days
from the  date of  such written  notice for  the purpose  of
effecting a public offering (the "Deferral Offering") by the
Company of shares  of Common  Stock; provided  that (i)  the
Company shall file with the SEC  within 45 days of the  date
of such  Repurchase  Notice a  registration  statement  (the
"Deferral Registration Statement") under the Securities  Act
with respect  to such  Deferral Offering,  (ii) the  Company
shall designate the use of proceeds to the Company from such
Deferral Offering in the prospectus  forming a part of  such
Deferral Registration Statement for  the repurchase in  cash
of the Preferred  Stock in accordance  with this  Agreement,
and (iii) the Deferral Offering shall be consummated and the
date fixed for repurchase on or prior to 180 days  following
the date of such Repurchase Notice.   In the event that  (x)
the Deferral Registration Statement  is not filed within  45
days following the date of such Repurchase Notice or (y) the
Deferral  Offering  is  not  consummated  within  180   days
following the date  of such Repurchase  Notice (each of  (x)
and (y) being referred to  herein as a "Deferral  Default"),
the Company  shall,  within  ten Business  Days  after  such
Deferral Default, pay the Repurchase Price on all shares  of
Preferred Stock  called for  repurchase in  accordance  with
this Section 2.2.2.

(e)  The obligation  of  the Company  to  pay  the
Repurchase Price in cash pursuant to an Optional  Repurchase
Event shall be  fully subordinated to  the Company's  Senior
Debt (as  such term  is defined  in the  Loan Agreement)  in
accordance with the  provisions of this  Section 2.2.2(e).  
The Company may not make any cash payments on
<Page 9>
account of the
Preferred  Stock  if  there  shall  have  occurred  and   be
continuing a  default in  the payment  of principal  of  (or
premium, if any)  or interest on  any Specified Senior  Debt
(as such term is defined in the Loan Agreement), the payment
of commitment or  facility fees,  letter of  credit fees  or
agency fees  under any  Specified Senior  Debt, or  payments
with respect to letter of credit reimbursement  arrangements
with one or more lenders under the credit or other agreement
evidencing any  Specified Senior  Debt when  due (a  "Senior
Payment Default").  Following the occurrence of an event  of
default (other  than a  Senior  Payment Default)  under  any
Specified  Senior  Debt  permitting  the  holders  of   such
Specified Senior  Debt  (or a  trustee  or agent  on  behalf
thereof)  to  accelerate  the   maturity  thereof,  or   the
occurrence of an event which with the passage of time or the
giving of notice,  or both, could  become such  an event  of
default (a "Senior Nonmonetary Default") and, in each  case,
following  the  giving  of  notice  thereof  to  Parent   in
accordance with the terms  governing the relevant  Specified
Senior Debt (a "Blockage Notice"),  Parent may not make  any
payments on account of the Payment Obligations for a  period
(a "Blockage  Period") commencing  on the  date the  Company
receives the Blockage Notice, and ending on the earliest  of
(i) 179 days  after such  date, (ii)  the date,  if any,  on
which such Senior Nonmonetary Default is waived or otherwise
cured and (iii)  the date, if  any, on  which such  Blockage
Period shall have been terminated  by written notice to  the
Company from the  holders of the  relevant Specified  Senior
Debt (or a trustee or agent on behalf thereof).

Upon any payment or distribution of assets of any  kind
or character, whether  in cash, property  or securities,  to
creditors upon any  dissolution or  winding up  or total  or
partial  liquidation  or  reorganization  of  the   Company,
whether  voluntary  or  involuntary,  or  upon   bankruptcy,
insolvency, receivership or other  proceedings, then and  in
such event, all principal, premium (if any) and interest and
all other  amounts  due  or  to  become  due  upon  all  the
Company's Senior Debt shall first be paid in full before the
holders of the Preferred Stock shall be entitled to  receive
or retain any assets  so paid or  distributed in respect  of
the Preferred  Stock;  and,  upon any  such  dissolution  or
winding up or liquidation or reorganization, any payment  or
distribution of assets of any kind or character, whether  in
cash, property  or  securities,  that  the  holders  of  the
Preferred Stock would  be entitled to,  except as  otherwise
provided herein,  shall be  paid by  the Company  or by  any
receiver, trustee in bankruptcy, liquidating trustee,  agent
or other person making such payment or distributions, or  by
the holders  of the  Preferred Stock  if received  by  them,
directly and ratably to the holders of the Company's  Senior
Debt, to  the  extent  necessary to  pay  in  full  all  the
Company's Senior Debt, after giving effect to any concurrent
payment or  distribution  to  or  for  the  holders  of  the
Company's Senior Debt, before any payment or distribution is
made to the holders of the Preferred Stock.

Each  holder  of  shares  of  Preferred  Stock   hereby
irrevocably authorizes  and empowers  (without imposing  any
obligation on) the holders of the Company's Senior Debt  (or
any  trustee  or  agent   on  behalf  thereof),  under   the
circumstances  set  forth   in  the  immediately   preceding
paragraph, to  demand, sue  for, collect  and receive  every
such payment  or  distribution described  therein  and  give
acquittance therefor, to file claims and proofs of claims in
any statutory or nonstatutory  proceeding, to vote such  the
Company's Senior  Debt holder's  ratable share  of the  full
amount of the Redemption Price on the Preferred Stock in its
sole  discretion   in   connection  with   any   resolution,
arrangement, plan of reorganization, compromise,  settlement
or extension and to take  all such other action
<Page 10>
(including,
without  limitation,  the  right   to  participate  in   any
composition of  creditors and  the right  to vote  such  the
Company's  Senior  Debt  holders'   ratable  share  of   the
Redemption Price at creditors' meetings for the election  of
trustees, acceptances of plans  and otherwise), in the  name
of the holder of the Preferred Stock, as such the  Company's
Senior Debt holder or its representative may deem  necessary
or desirable  for  the enforcement  of  these  subordination
provisions.

If any payment or distribution of assets of any kind or
character, whether in cash, property or securities, shall be
collected or received by any  holder of the Preferred  Stock
and such holder shall  not be permitted  under the terms  of
this  instrument  to  receive  or  retain  such  payment  or
distribution, such holder shall forthwith turn over the same
to the  Company's  Senior  Debt holders  for  their  ratable
benefit in the form received (except for the endorsement  or
the assignment of such holder when necessary) and, until  so
turned over, the same shall be held in trust by such  holder
as the property and for the ratable benefit of the Company's
Senior Debt holders.

II.3 Other Activities of Olympus;  Fiduciary Duties.  It  is
understood and  accepted that  Olympus  and its  Affiliates  have
interests in other  business ventures  which may  be in  conflict
with the activities of the Company and its Subsidiaries and that,
subject to applicable law, nothing in this Agreement shall  limit
the current or future business  activities of Olympus whether  or
not such activities are competitive with those of the Company  or
its Subsidiaries.  Nothing in this Agreement, express or implied,
shall relieve any officer or director of the Company, any of  its
Subsidiaries, or Olympus,  of any  fiduciary or  other duties  or
obligations they may have to the  Company or the stockholders  of
the Company.

ARTICLE III
REGISTRATION RIGHTS

III.1     Demand Registration.

III.1.1   Request for Registration.

(a)  Holders of an  aggregate of  at least  twenty
percent (20%) of the total number of Registrable Shares
held by  all  Holders (the  "Requesting  Holders")  may
request the Company, in  writing (a "Demand  Request"),
to effect the registration under the Securities Act  of
all or  part  of  its  Registrable  Shares  (a  "Demand
Registration"),   provided,   that   the    anticipated
aggregate gross  proceeds  to  the  Requesting  Holders
therefrom would be at least $5,000,000.

(b)  Each Demand Request shall specify the  number
of Registrable Shares proposed to be sold.  Subject  to
Section 3.1.6,  the  Company  shall  file  the   Demand
Registration within  90 days after  receiving a  Demand
Request (the "Required Filing Date") and shall use  its
best efforts to cause the same to be declared effective
by the  SEC  as  promptly  as  practicable  after  such
filing; provided, however, that the Company need effect
only  two  Demand  Registrations  pursuant  to   Demand
Requests   made   under   Section 3.1.1(a);   provided,
further, that if any Registrable Shares requested to be
registered pursuant  to  a Demand  Request
<Page 11>
made  under
Section 3.1.1(a)  are  excluded  from  the   applicable
Demand Registration pursuant to Section 3.1.4, and such
Demand Registration would otherwise be the last  Demand
Registration permitted  under  this  Section  3.1,  the
Requesting Holders shall have  the right, with  respect
to each  such  exclusion,  to  request  one  additional
Demand Registration under Section 3.1.1(a).

III.1.2   Effective  Registration  and  Expenses.     A
registration will not count  as a Demand Registration  until
it has  become  effective  (unless  the  Requesting  Holders
withdraw all their  Registrable Shares and  the Company  has
performed  its   obligations  hereunder   in  all   material
respects, in which case such demand  will count as a  Demand
Registration  unless   the   Requesting  Holders   pay   all
Registration Expenses  in  connection  with  such  withdrawn
registration); provided,  however,  that if,  after  it  has
become effective, an offering of Registrable Shares pursuant
to a  registration is  interfered with  by any  stop  order,
injunction, or  other order  or requirement  of the  SEC  or
other governmental agency or  court, such registration  will
be deemed not to have been effected and will not count as  a
Demand Registration.

III.1.3   Selection of Underwriters.   If the  offering
of Registrable Shares pursuant  to a Demand Registration  is
to be  in  the  form of  a  "firm  commitment"  underwritten
offering, the Requesting Holders  shall select a  nationally
recognized investment banking  firm or firms  to manage  the
underwritten offering  and  provide  timely  notice  to  the
Company of  such  selection; provided,  however,  that  such
selection shall be subject to  the prior written consent  of
the Company,  which shall  not be  unreasonably withheld  or
delayed.

III.1.4   Priority  on  Demand  Registrations.    If  a
Demand  Registration  is  to  be  accomplished  through   an
underwritten sale, no securities to be sold for the  account
of  any  Person  (including   the  Company)  other  than   a
Requesting  Holder   shall  be   included  in   the   Demand
Registration unless  the managing  underwriter shall  advise
the Company and the Requesting  Holders in writing that,  in
its opinion,  the  inclusion  of such  securities  will  not
materially and adversely affect the price or success of  the
offering (a "Material  Adverse Effect").   In the event  the
managing  underwriter  shall  advise  the  Company  and  the
Requesting  Holders  that  even   after  exclusion  of   all
securities of  other  Persons pursuant  to  the  immediately
preceding  sentence,  the   amount  of  Registrable   Shares
proposed to  be  included  in such  Demand  Registration  by
Requesting Holders is sufficiently large to cause a Material
Adverse Effect,  the Registrable  Shares to  be included  in
such Demand Registration  shall equal the  number of  shares
which the Requesting Holders are so  advised can be sold  in
such offering  without a  Material Adverse  Effect and  such
shares shall be allocated  among the Requesting Holders  pro
rata based upon the  number of Registrable Shares  requested
to be included in such registration by each such  Requesting
Holder.   In the  event, however,  the managing  underwriter
advises the  Company  and  such other  Persons  entitled  to
participate therein that a  portion of their securities  may
be included in  the Demand Registration  without a  Material
Adverse Effect, those securities  shall be included in  such
proportions as the Company and such other Persons may  agree
among themselves.

III.1.5   Rights  of  Nonrequesting   Holders.     Upon
receipt of any  Demand Request, the  Company shall  promptly
(but in any  event within 10  days) give  written notice  of
such
<Page 12>
proposed Demand Registration to all other Holders,  who
shall have the right, exercisable  by written notice to  the
Company within 20  days of  their receipt  of the  Company's
notice, to elect to include in such Demand Registration such
portion of their  Registrable Shares as  they may request.  
All Holders  requesting  to have  their  Registrable  Shares
included in  a Demand  Registration in  accordance with  the
preceding  sentence  shall  be  deemed  to  be   "Requesting
Holders" for purposes of this Section 3.1.

III.1.6   Deferral of Filing.  Subject to Section  3.3,
the Company may defer the  filing (but not the  preparation)
of a registration statement required by Section 3.1 until  a
date not later than 75 days  after the Required Filing  Date
(or, if  longer, 75  days after  the effective  date of  the
registration statement contemplated by  clause (ii) of  this
Section 3.1.6) if (i) at the  time the Company receives  the
Demand Request, the Company or  any of its Subsidiaries  are
engaged in confidential  negotiations or other  confidential
business activities, disclosure of  which would be  required
in such registration statement (but would not be required if
such registration statement were  not filed), and the  Board
of Directors determines in  good faith that such  disclosure
would be  materially  detrimental  to the  Company  and  its
stockholders, or (ii) prior to receiving the Demand Request,
the Board of Directors had determined to effect a registered
underwritten public offering of the Company's securities for
the Company's account and the Company had taken  substantial
steps (including selecting a  managing underwriter for  such
offering) and  is proceeding  with reasonable  diligence  to
effect such  offering.    A deferral  of  the  filing  of  a
registration statement pursuant to this Section 3.1.6  shall
be lifted, and the requested registration statement shall be
filed forthwith, if, in the case  of a deferral pursuant  to
clause (i) of  the preceding sentence,  the negotiations  or
other activities  are disclosed  or terminated,  or, in  the
case of a deferral pursuant to clause (ii) of the  preceding
sentence,  the  proposed  registration  for  the   Company's
account is abandoned.   In order  to defer the  filing of  a
registration statement pursuant to  this Section 3.1.6,  the
Company shall promptly  (but in any  event within 15  days),
upon determining  to seek  such  deferral, deliver  to  each
Requesting Holder  a  certificate  signed  by  an  executive
officer of the Company stating that the Company is deferring
such filing pursuant  to this  Section 3.1.6  and a  general
statement  of   the  reason   for  such   deferral  and   an
approximation of  the anticipated  delay.   After  receiving
such certificate and (x),  until 20 days after  notification
from the Company that  the deferral has  been lifted or  (y)
the end of  the deferral period,  whichever is earlier,  the
holders of a majority of the Registrable Shares held by  the
Requesting Holders  may  withdraw  such  Demand  Request  by
giving notice  to the  Company.   If withdrawn,  the  Demand
Request shall  be  deemed not  to  have been  made  for  all
purposes of  this  Agreement.   The  Company may  defer  the
filing of a  particular registration  statement pursuant  to
this Section 3.1.6 only once.

<Page 13>

III.2     Piggyback Registrations.

III.2.1   Right to Piggyback.   Each  time the  Company
proposes to  register any  of its  equity securities  (other
than  pursuant  to  an  Excluded  Registration)  under   the
Securities Act  for  sale to  the  public (whether  for  the
account of the Company or the account of any  securityholder
of the Company) and the form of registration statement to be
used permits  the registration  of Registrable  Shares,  the
Company shall give prompt written  notice to each Holder  of
Registrable Shares  (which notice  shall be  given not  less
than 30 days prior  to the effective  date of the  Company's
registration statement), which notice shall offer each  such
Holder  the  opportunity  to  include  any  or  all  of  its
Registrable Shares in  such registration statement,  subject
to the limitations contained in Section 3.2.2.  Each  Holder
who desires to have its Registrable Shares included in  such
registration  statement  shall  so  advise  the  Company  in
writing  (stating  the  number  of  shares  desired  to   be
registered) within 20  days after  the date  of such  notice
from the  Company.   Any  Holder  shall have  the  right  to
withdraw  such  Holder's  request  for  inclusion  of   such
Holder's Registrable  Shares in  any registration  statement
pursuant to this Section 3.2.1  by giving written notice  to
the Company of such withdrawal not less than five days prior
to the  effective  date  of such  registration  statement.  
Subject to Section 3.2.2, the Company shall include in  such
registration  statement  all  such  Registrable  Shares   so
requested to be  included therein;  provided, however,  that
the Company may  at any  time withdraw  or cease  proceeding
with any  such registration  if it  shall at  the same  time
withdraw or cease  proceeding with the  registration of  all
other  equity   securities   originally   proposed   to   be
registered.

III.2.2   Priority on Registrations.

(a)  If the registration  subject to this  Section
3.2 is to be accomplished through an underwritten sale,
the Registrable Shares requested to be included in  the
registration statement by  any Holder  differ from  the
type of  securities proposed  to be  registered by  the
Company,  and  the  managing  underwriter  advises  the
Company in writing that, in its reasonable opinion, due
to such differences the  inclusion of such  Registrable
Shares would cause a Material Adverse Effect, then  (i)
the number  of such  Holder's or  Holders'  Registrable
Shares to  be included  in the  registration  statement
shall be reduced to an amount which, in the  reasonable
judgment of the  managing underwriter, would  eliminate
such  Material  Adverse  Effect  or  (ii)  if  no  such
reduction would,  in  the reasonable  judgment  of  the
managing underwriter, eliminate  such Material  Adverse
Effect, then  the  Company  shall  have  the  right  to
exclude  all   such   Registrable  Shares   from   such
registration statement provided no other securities  of
such type are included and  offered for the account  of
any other Person in  such registration statement.   Any
partial reduction in the  number of Registrable  Shares
to be included in  the registration statement  pursuant
to clause  (i) of  the immediately  preceding  sentence
shall be effected  pro rata  based on  the ratio  which
such Holder's  requested  shares  bears  to  the  total
number of  shares  requested  to be  included  in  such
registration  statement  by   all  Persons   (including
Requesting Holders)  who  have requested  (pursuant  to
contractual registration  rights)  to include,  or  who
otherwise have been permitted to include, their  shares
in such registration statement.
<Page 14>
(b)  If the registration  subject to this  Section
3.2 is to be accomplished through an underwritten sale,
the Registrable Shares requested to be included in  the
registration statement  are of  the  same type  as  the
securities being  registered by  the Company,  and  the
managing underwriter  advises  the Company  in  writing
that, in its reasonable opinion, the inclusion of  such
Registrable  Shares  would  cause  a  Material  Adverse
Effect, the  Company will  be obligated  to include  in
such registration  statement,  as  to  each  Requesting
Holder, only a  portion of the  shares such Holder  has
requested be registered equal  to the ratio which  such
Holder's requested shares bears to the total number  of
shares requested to  be included  in such  registration
statement by all Persons (including Requesting  Holders
but excluding the Company) who have requested (pursuant
to contractual registration rights) to include, or  who
have been permitted  to include their  shares, in  such
registration statement. 

(c)  If as  a result  of  the provisions  of  this
Section 3.2.2  any  Holder  shall not  be  entitled  to
include all Registrable Shares  in a registration  that
such Holder  has  requested  to be  so  included,  such
Holder may withdraw  such Holder's  request to  include
Registrable Shares in such registration statement. 

III.3     Information by Requesting Holders.

(a)  No Person may participate in any registration
statement hereunder unless  such Person  (x) agrees  to
sell such  Person's  Registrable Shares  on  the  basis
provided in any  underwriting arrangements approved  by
the Company and, if  a Demand Registration, a  majority
of Registrable Shares  held by  the Requesting  Holders
and (y)  completes  and  executes  all  questionnaires,
powers   of    attorney,   indemnities,    underwriting
agreements, and  other  documents,  each  in  customary
form, reasonably  required  under  the  terms  of  such
underwriting arrangements; provided,  however, that  no
such   Person   shall   be   required   to   make   any
representations or  warranties in  connection with  any
such  registration  other   than  representations   and
warranties as  to (i)  such Person's  ownership of  its
Registrable Shares to be  sold or transferred free  and
clear of all liens, claims, and encumbrances, (ii) such
Person's power and authority  to effect such  transfer,
and (iii) such  matters pertaining  to compliance  with
securities laws as may be reasonably requested; further
provided, however, that the  obligation of such  Person
to  indemnify   pursuant  to   any  such   underwriting
arrangements shall be several,  not joint and  several,
among such Persons selling Registrable Shares, and  the
liability of each such Person will be in proportion to,
and  provided  further  that  such  liability  will  be
limited to, the net amount received by such Person from
the sale  of its  Registrable Shares  pursuant to  such
registration.
<Page 15>

III.4     Holdback   Agreement.      Unless   the   managing
underwriter otherwise agrees, each of the Company and the Holders
agrees (and the Company agrees to  use its best efforts to  cause
its Affiliates and other stockholders to agree) not to effect any
public sale (except, if applicable, as part of such  underwritten
registration) or  private offer  or  distribution of  any  Common
Stock or Common  Stock Equivalents  during the  10 Business  Days
prior to  the  effectiveness  under the  Securities  Act  of  any
underwritten  registration  and  during  such  period  after  the
effectiveness  under  the  Securities  Act  of  any  underwritten
registration (not to exceed 120 days) as the managing underwriter
may require.

III.5     Registration Procedures.  Whenever any Holder  has
requested that any Registrable  Shares be registered pursuant  to
this Agreement, the Company will use  its best efforts to  effect
the registration  and  the sale  of  such Registrable  Shares  in
accordance with the intended  method of disposition thereof,  and
pursuant thereto the Company will as expeditiously as possible:

(i)  prepare and  file  with  the  SEC  a  registration
statement on any appropriate  form under the Securities  Act
with respect to  such Registrable  Shares and  use its  best
efforts to  cause  such  registration  statement  to  become
effective;

(ii) prepare and  file with  the SEC  such  amendments,
post-effective   amendments,   and   supplements   to   such
registration statement and the prospectus used in connection
therewith as  may be  necessary  to keep  such  registration
statement effective for a  period of not  less than 60  days
(or such lesser period as is necessary for the  underwriters
in an underwritten offering  to sell unsold allotments)  and
comply with  the  provisions  of  the  Securities  Act  with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with
the intended methods of  disposition by the sellers  thereof
set forth in such registration statement;

(iii)     furnish to each seller of Registrable  Shares
and the underwriters of the securities being registered such
number  of  copies  of  such  registration  statement,  each
amendment and supplement thereto, the prospectus included in
such  registration  statement  (including  each  preliminary
prospectus),  any   documents  incorporated   by   reference
therein,  and  such  other  documents  as  such  seller   or
underwriters may reasonably request  in order to  facilitate
the disposition  of the  Registrable  Shares owned  by  such
seller or the sale of  such securities by such  underwriters
(it being  understood  that,  subject to  Section  3.6,  the
requirements of  the  Securities Act  and  applicable  state
securities laws,  the Company  consents to  the use  of  the
prospectus and any amendment  or supplement thereto by  each
seller and the underwriters in connection with the  offering
and  sale  of   the  Registrable  Shares   covered  by   the
registration statement of which such prospectus,  amendment,
or supplement is a part);

(iv) use its best efforts  to register or qualify  such
Registrable Shares under the securities or blue sky laws  of
such jurisdictions  as the  managing underwriter  reasonably
requests (or, in the  event the registration statement  does
not relate to an underwritten offering, as the holders of  a
majority of such Registrable Shares may reasonably request);
use its  best  efforts to  keep  each such  registration  or
qualification (or exemption therefrom) effective during  the
period in which such  registration statement is required  to
be kept effective; and do any and all other acts and  things
which may  be reasonably  necessary or
<Page 16>
advisable to  enable
each seller to consummate the disposition of the Registrable
Shares owned by such seller in such jurisdictions (provided,
however, that  the  Company  will not  be  required  to  (A)
qualify generally to do  business in any jurisdiction  where
it would not otherwise be required  to qualify but for  this
subparagraph (iv)  or  (B)  consent to  general  service  of
process in any such jurisdiction);

(v)  promptly notify each  seller and each  underwriter
and (if requested by any such Person) confirm such notice in
writing (A) when a  prospectus or any prospectus  supplement
or post-effective amendment has been filed and, with respect
to a registration statement or any post-effective amendment,
when the same has become effective,  (B) of the issuance  by
any state securities  or other regulatory  authority of  any
order  suspending  the   qualification  or  exemption   from
qualification of any of  the Registrable Shares under  state
securities or  "blue  sky" laws  or  the initiation  of  any
proceedings for that  purpose, and (C)  of the happening  of
any event which  makes any  statement made  in an  effective
registration statement or related prospectus untrue or which
requires the  making of  any  changes in  such  registration
statement, prospectus, or  documents so that  they will  not
contain any untrue statement of a  material fact or omit  to
state any material  fact required  to be  stated therein  or
necessary to  make the  statements therein  not  misleading,
and, as promptly as practicable thereafter, prepare and file
with the SEC and furnish a  supplement or amendment to  such
prospectus  so  that,  as  thereafter  deliverable  to   the
purchasers of such Registrable Shares, such prospectus  will
not contain any untrue statement of a material fact or  omit
a material fact necessary to make the statements therein, in
light of the circumstances under  which they were made,  not
misleading;

(vi) make  generally   available   to   the   Company's
securityholders  an   earnings  statement   satisfying   the
provisions of Section 11(a) of  the Securities Act no  later
than 30 days after the end of the 12-month period  beginning
with the first  day of  the Company's  first fiscal  quarter
commencing  after  the  effective  date  of  a  registration
statement, which  earnings statement  shall cover  such  12-
month period, and  which requirement  will be  deemed to  be
satisfied if the Company timely files complete and  accurate
information on Forms 10-Q, 10-K, and 8-K under the  Exchange
Act  and  otherwise  complies   with  Rule  158  under   the
Securities Act;

(vii)     if requested by  the managing underwriter  or
any seller promptly incorporate  in a prospectus  supplement
or post-effective amendment such information as the managing
underwriter or any seller reasonably requests to be included
therein, including with  respect to  the Registrable  Shares
being sold by  such seller,  the purchase  price being  paid
therefor by the underwriters and  with respect to any  other
terms of the underwritten offering of the Registrable Shares
to be sold in such offering, and promptly make all  required
filings of  such  prospectus  supplement  or  post-effective
amendment;

(viii)    cooperate with the  sellers and the  managing
underwriter  to  facilitate   the  timely  preparation   and
delivery  of  certificates   (which  shall   not  bear   any
restrictive legends  unless required  under applicable  law)
representing  securities   sold   under   any   registration
statement,  and  enable  such  securities  to  be  in   such
denominations and registered in  such names as the  managing
underwriter or such sellers  may request and keep  available
and make available to the Company's transfer agent prior  to
the effectiveness of such registration statement a supply of
such certificates;
<Page 17>
(ix) promptly make  available  for  inspection  by  any
seller, any  underwriter  participating in  any  disposition
pursuant to any  registration statement,  and any  attorney,
accountant, or other agent or representative retained by any
such seller or underwriter (collectively, the "Inspectors"),
all  financial  and   other  records,  pertinent   corporate
documents and properties of  the Company (collectively,  the
"Records"), as shall be reasonably necessary to enable  them
to exercise their  due diligence  responsibility, and  cause
the Company's officers, directors,  and employees to  supply
all  information  requested   by  any   such  Inspector   in
connection  with  such  registration  statement;   provided,
however, that,  unless the  disclosure  of such  Records  is
necessary to avoid or correct a misstatement or omission  in
the registration statement or the release of such Records is
ordered pursuant to a subpoena or  other order from a  court
of competent jurisdiction, the Company shall not be required
to provide any information  under this subparagraph (ix)  if
(A) the Company  believes, after  consultation with  counsel
for the Company, that  to do so would  cause the Company  to
forfeit an attorney-client privilege that was applicable  to
such information  or  (B)  if either  (1)  the  Company  has
requested  and  been  granted  from  the  SEC   confidential
treatment of such information  contained in any filing  with
the SEC or documents provided supplementally or otherwise or
(2) the  Company reasonably  determines in  good faith  that
such Records are confidential and so notifies the Inspectors
in writing unless prior  to furnishing any such  information
with respect to clause (A) or (B) of this subparagraph  (ix)
such  Holder   of   Registrable   Shares   requesting   such
information agrees to enter into a confidentiality agreement
in customary form and  subject to customary exceptions;  and
further provided, however, that  each Holder of  Registrable
Shares agrees that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction,
give notice to  the Company and  allow the  Company, at  its
expense, to  undertake  appropriate action  and  to  prevent
disclosure of the Records deemed confidential;

(x)  furnish to each  seller and  underwriter a  signed
counterpart of (A) an opinion or opinions of counsel to  the
Company, and (B)  a comfort letter  or comfort letters  from
the  Company's  independent  public  accountants,  each   in
customary  form  and  covering  such  matters  of  the  type
customarily covered by opinions  or comfort letters, as  the
case  may  be,  as  the  sellers  or  managing   underwriter
reasonably requests;

(xi) cause  the  Registrable  Shares  included  in  any
registration statement to be  (A) listed on each  securities
exchange, if any, on which similar securities issued by  the
Company are  then listed,  or if  none are  then listed,  on
which the  managing  underwriter  for  such  offering  shall
request, or (B)  authorized to be  quoted and/or listed  (to
the extent  applicable)  on  the  NASD  Automated  Quotation
System or The Nasdaq Stock  Market's National Market if  the
Registrable Shares so qualify;

(xii)     provide a  CUSIP number  for the  Registrable
Shares included in any registration statement not later than
the effective date of such registration statement;

(xiii)    cooperate   with   each   seller   and   each
underwriter  participating  in   the  disposition  of   such
Registrable  Shares   and   their  respective   counsel   in
connection with any  filings required  to be  made with  the
NASD;

(xiv)     during the  period  when  the  prospectus  is
required to be delivered under the
<Page 18>
Securities Act,  promptly
file all  documents  required  to  be  filed  with  the  SEC
pursuant to  Sections  13(a), 13(c),  14,  or 15(d)  of  the
Exchange Act;

(xv) notify each underwriter and seller of  Registrable
Shares promptly of any request by  the SEC for the  amending
or  supplementing   of   such  registration   statement   or
prospectus or for additional information;

(xvi)     prepare and file  with the  SEC promptly  any
amendments or supplements to such registration statement  or
prospectus which, in the opinion of counsel for the  Company
or the managing underwriter, is required in connection  with
the distribution of the Registrable Shares;

(xvii)    enter   into   such   agreements   (including
underwriting  agreements  in   the  managing   underwriter's
customary form)  as  are  customary in  connection  with  an
underwritten registration; and

(xviii)   advise  each  seller   of  such   Registrable
Shares, promptly  after it  shall receive  notice or  obtain
knowledge thereof, of the issuance of any stop order by  the
SEC  suspending  the  effectiveness  of  such   registration
statement or the initiation or threatening of any proceeding
for such  purpose  and  promptly use  its  best  efforts  to
prevent the  issuance of  any stop  order or  to obtain  its
withdrawal at  the earliest  possible  moment if  such  stop
order should be issued.

III.6     Suspension of Dispositions.  Each Holder agrees by
acquisition of any Registrable Shares  that, upon receipt of  any
notice (a "Suspension Notice") from the Company of the  happening
of any  event of  the kind  described in  Section 3.5(v)(C)  such
Holder will  forthwith  discontinue  disposition  of  Registrable
Shares  until  such  Holder's  receipt  of  the  copies  of   the
supplemented or amended  prospectus, or  until it  is advised  in
writing (the  "Advice")  by  the Company  that  the  use  of  the
prospectus may  be  resumed,  and  has  received  copies  of  any
additional or  supplemental  filings which  are  incorporated  by
reference in the prospectus, and, if so directed by the  Company,
such Holder will deliver  to the Company  all copies, other  than
permanent file copies  then in such  Holder's possession, of  the
prospectus covering such Registrable  Shares current at the  time
of receipt of such notice.   In the event the Company shall  give
any such  notice,  the  period  regarding  the  effectiveness  of
registration statements  set forth  in Section  3.5(ii) shall  be
extended by  the  number  of days  during  the  period  from  and
including the date of the giving of the Suspension Notice to  and
including the date when each seller of Registrable Shares covered
by such registration statement shall have received the copies  of
the supplemented  or  amended  prospectus or  the  Advice.    The
Company shall use its best efforts  and take all such actions  as
are reasonably  necessary to  render the  Advice as  promptly  as
practicable.

III.7     Registration Expenses.   All expenses incident  to
the Company's performance of or compliance with this Article III,
including all registration and filing fees, all fees and expenses
associated with  filings  required  to  be  made  with  the  NASD
(including,  if  applicable,  the   fees  and  expenses  of   any
"qualified independent underwriter"  as such term  is defined  in
Schedule E of the By-Laws of the NASD), as may be required by the
rules  and  regulations  of  the  NASD,  fees  and  expenses   of
compliance  with  securities  or   "blue  sky"  laws   (including
reasonable fees and disbursements  of counsel in connection  with
"blue sky"  qualifications  of the  Registrable  Shares),  rating
agency fees, printing  expenses (including  expenses of  printing
certificates for the
<Page 19>
Registrable Shares in  a form eligible  for
deposit  with   Depository   Trust  Company   and   of   printing
prospectuses if the  printing of prospectuses  is requested by  a
holder of Registrable Shares),  messenger and delivery  expenses,
the Company's  internal  expenses (including,  all  salaries  and
expenses of  its  officers  and  employees  performing  legal  or
accounting duties), the fees and expenses incurred in  connection
with any listing of the Registrable Shares, fees and expenses  of
counsel for  the Company  and  its independent  certified  public
accountants (including the expenses of any special audit or "cold
comfort" letters required  by or incident  to such  performance),
securities acts  liability insurance  (if the  Company elects  to
obtain such  insurance), the  fees and  expenses of  any  special
experts  retained  by  the   Company  in  connection  with   such
registration, and the fees and expenses of other persons retained
by the Company and  reasonable fees and expenses  of one firm  of
counsel for the sellers (which shall  be selected by the  holders
of a majority  of the Registrable  Shares being  included in  any
particular  registration  statement)  (all  such  expenses  being
herein called  "Registration  Expenses")  will be  borne  by  the
Company  whether  or  not  any  registration  statement   becomes
effective; provided, however, that in no event shall Registration
Expenses include any underwriting discounts, commissions, or fees
or any  broker-dealer charges  attributable to  the sale  of  the
Registrable Shares  or any  counsel (except  as provided  above),
accountants,  or  other  persons  retained  or  employed  by  the
Holders.
<Page 20>

III.8     Indemnification.

III.8.1   In the  event  of  any  registration  of  any
Registrable Shares under the Securities Act pursuant to this
Article III, the Company  shall indemnify and reimburse,  to
the  fullest  extent  permitted  by  law,  each  seller   of
Registrable Shares,  and each  of its  employees,  advisors,
agents, representatives, partners,  officers, and  directors
and each Person who controls such seller (within the meaning
of the Securities Act or the Exchange Act) and any agent  or
investment  advisor  thereof   (collectively,  the   "Seller
Affiliates")  (A)  against  any  and  all  losses,   claims,
damages,  liabilities,  and   expenses,  joint  or   several
(including, attorneys'  fees  and  disbursements  except  as
limited  by  Section 3.8.3)  based  upon,  arising  out  of,
related to, or resulting from  any untrue or alleged  untrue
statement of a material  fact contained in any  registration
statement, prospectus  (if  used within  the  period  during
which the  Company  is  required to  keep  the  registration
statement in  which  such prospectus  is  contained  current
pursuant to the  terms of this  Agreement or the  Securities
Act), or  preliminary  prospectus  (if  used  prior  to  the
effective  date  of  the  registration  statement)  or   any
amendment thereof or supplement thereto, or any omission  or
alleged omission of  a material fact  required to be  stated
therein or  necessary to  make  the statements  therein  not
misleading, (B) against any and all loss, liability,  claim,
damage, and expense whatsoever,  as incurred, to the  extent
of the aggregate amount paid in settlement of any litigation
or investigation or proceeding by any governmental agency or
body, commenced or  threatened, or of  any claim  whatsoever
based upon, arising  out of, related  to, or resulting  from
any such  untrue statement  or  omission or  alleged  untrue
statement or omission, and (C) against any and all costs and
expenses (including  reasonable  fees and  disbursements  of
counsel) as  may be  reasonably incurred  in  investigating,
preparing,   or    defending   against    any    litigation,
investigation, or proceeding by  any governmental agency  or
body, commenced or threatened, or any claim whatsoever based
upon, arising out of, related to, or resulting from any such
untrue statement or omission or alleged untrue statement  or
omission, to the extent that any such expense or cost is not
paid under clause (A) or (B)  of this Section 3.8.1;  except
insofar as the same are made in reliance upon and in  strict
conformity with  information  furnished in  writing  to  the
Company by  such  seller or  any  Seller Affiliate  for  use
therein  or  arise   from  such  seller's   or  any   Seller
Affiliate's failure to  deliver a copy  of the  registration
statement or  prospectus or  any amendments  or  supplements
thereto after  the  Company  has furnished  such  seller  or
Seller Affiliate with a sufficient  number of copies of  the
same.   The reimbursements  required by  this Section  3.8.1
will be made by periodic payments  during the course of  the
investigation or defense, as and when bills are received  or
expenses incurred.

III.8.2   In connection with any registration statement
in which a  seller of Registrable  Shares is  participating,
each such seller will furnish to the Company in writing such
information  and  affidavits   as  the  Company   reasonably
requests for use  in connection with  any such  registration
statement or prospectus and, to the fullest extent permitted
by law, each such seller will indemnify the Company and  its
directors and  officers and  each  Person who  controls  the
Company (within the  meaning of  the Securities  Act or  the
Exchange Act) against any  and all losses, claims,  damages,
liabilities, and expenses (including, reasonable  attorneys'
fees and disbursements except  as limited by Section  3.8.3)
resulting  from  any  untrue  statement  or  alleged  untrue
statement of a
<Page 21>
material  fact contained in the  registration
statement, prospectus, or any preliminary prospectus or  any
amendment thereof or supplement  thereto or any omission  or
alleged omission of  a material fact  required to be  stated
therein or  necessary to  make  the statements  therein  not
misleading,  but  only  to  the  extent  that  such   untrue
statement or alleged untrue statement or omission or alleged
omission is  contained in  any information  or affidavit  so
furnished in writing  by such seller  or any  of its  Seller
Affiliates specifically  for inclusion  in the  registration
statement;  provided,  however,   that  the  obligation   to
indemnify will be several, not joint and several, among such
sellers of  Registrable Shares,  and the  liability of  each
such seller of Registrable Shares will be in proportion  to,
and provided further that such liability will be limited to,
the net  amount received  by such  seller from  the sale  of
Registrable Shares pursuant to such registration  statement;
further provided, however, that  such seller of  Registrable
Shares shall not be  liable in any such  case to the  extent
that prior to the filing of any such registration  statement
or prospectus or  amendment thereof  or supplement  thereto,
such  seller  has  furnished  in  writing  to  the   Company
information expressly for use in such registration statement
or prospectus or any amendment thereof or supplement thereto
which  corrected   or   made  not   misleading   information
previously furnished to the Company.

III.8.3   Any  Person   entitled   to   indemnification
hereunder  will  (A)  give  prompt  written  notice  to  the
indemnifying party of  any claim  with respect  to which  it
seeks indemnification  (provided that  the failure  to  give
such notice shall not limit the  rights of such Person)  and
(B) unless in such indemnified party's reasonable judgment a
conflict  of   interest   between   such   indemnified   and
indemnifying parties may exist  with respect to such  claim,
permit such indemnifying party to assume the defense of such
claim  with   counsel   reasonably   satisfactory   to   the
indemnified  party;  provided,  however,  that  any   person
entitled to indemnification hereunder  shall have the  right
to employ separate counsel and to participate in the defense
of such claim,  but the fees  and expenses  of such  counsel
shall be  at  the expense  of  such person  unless  (X)  the
indemnifying party has agreed to pay such fees or  expenses,
(Y) the indemnifying party shall  have failed to assume  the
defense  of  such  claim   and  employ  counsel   reasonably
satisfactory to  such  person  or  (Z)  in  the  indemnified
party's reasonable judgment a  conflict of interest  between
the indemnified party and  the indemnifying party may  exist
into respect to such claims.  If such defense is not assumed
by  the  indemnifying  party  as  permitted  hereunder,  the
indemnifying party will not be subject to any liability  for
any settlement  made by  the indemnified  party without  its
consent  (but  such   consent  will   not  be   unreasonably
conditioned, delayed,  or withheld).    If such  defense  is
assumed by the indemnifying party pursuant to the provisions
hereof,  such  indemnifying  party   shall  not  settle   or
otherwise compromise the  applicable claim  unless (1)  such
settlement or compromise contains  a full and  unconditional
release of  the indemnified  party  or (2)  the  indemnified
party otherwise consents in writing.  An indemnifying  party
who is not entitled to, or elects not to, assume the defense
of a  claim  will not  be  obligated  to pay  the  fees  and
expenses  of  more   than  one  counsel   for  all   parties
indemnified by such indemnifying party with respect to  such
claim, unless in the reasonable judgment of any  indemnified
party,  a  conflict  of  interest  may  exist  between  such
indemnified party and any other of such indemnified  parties
with respect to such claim, in which event the  indemnifying
party shall  be obligated  to pay  the reasonable  fees  and
disbursements of such additional counsel or counsels.
<Page 22>
III.8.4   Each party  hereto agrees  that, if  for  any
reason  the  indemnification   provisions  contemplated   by
Section 3.8.1 or 3.8.2 are unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses,
claims, damages,  liabilities, or  expenses (or  actions  in
respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party  as  a  result  of  such  losses,  claims,
liabilities, or expenses (or actions in respect thereof)  in
such proportion as  is appropriate to  reflect the  relative
fault of the indemnifying party and the indemnified party in
connection with the  actions which resulted  in the  losses,
claims, damages,  liabilities, or  expenses as  well as  any
other relevant equitable considerations.  The relative fault
of such indemnifying  party and indemnified  party shall  be
determined by reference to, among other things, whether  the
untrue or alleged  untrue statement  of a  material fact  or
omission or  alleged  omission  to  state  a  material  fact
relates to information supplied  by such indemnifying  party
or indemnified  party,  and the  parties'  relative  intent,
knowledge, access to information, and opportunity to correct
or prevent such statement or  omission.  The parties  hereto
agree  that  it   would  not  be   just  and  equitable   if
contribution pursuant to this Section 3.8.4 were  determined
by  pro  rata  allocation  (even  if  the  Holders  or   any
underwriters or all of them were  treated as one person  for
such purpose) or  by any  other method  of allocation  which
does  not  take  account  of  the  equitable  considerations
referred to  in this  Section 3.8.4.    The amount  paid  or
payable by an indemnified party as  a result of the  losses,
claims, damages,  liabilities, or  expenses (or  actions  in
respect thereof)  referred  to  above  shall  be  deemed  to
include any  legal  or  other fees  or  expenses  reasonably
incurred  by  such  indemnified  party  in  connection  with
investigating  or,  except  as  provided  in  Section 3.8.3,
defending any  such action  or claim.   Notwithstanding  the
provisions  of  this  Section 3.8.4,  no  Holder  shall   be
required to  contribute an  amount greater  than the  dollar
amount by which  the net  proceeds received  by such  Holder
with respect to the sale  of any Registrable Shares  exceeds
the amount of damages which  such Holder has otherwise  been
required to pay by reason of  any and all untrue or  alleged
untrue statements of material  fact or omissions or  alleged
omissions  of  material  fact   made  in  any   registration
statement, prospectus,  or  preliminary  prospectus  or  any
amendment thereof or supplement thereto related to such sale
of Registrable  Shares.    No person  guilty  of  fraudulent
misrepresentation (within the  meaning of  Section 11(f)  of
the Securities Act) shall  be entitled to contribution  from
any  person   who  was   not  guilty   of  such   fraudulent
misrepresentation.  The Holders' obligations in this Section
3.8.4 to contribute  shall be several  in proportion to  the
amount of  Registrable Shares  registered  by them  and  not
joint.  If indemnification  is available under this  Section
3.7,  the   indemnifying   parties  shall   indemnify   each
indemnified party to  the full extent  provided in  Sections
3.8.1 and 3.8.2 without regard to the relative fault of such
indemnifying  party  or  indemnified  party  or  any   other
equitable consideration provided for  in this Section  3.8.4
subject, in the case of the  Holders, to the limited  dollar
amounts set forth in Section 3.8.2.

III.8.5   The indemnification and contribution provided
for under  this  Agreement will  remain  in full  force  and
effect regardless of any investigation made by or on  behalf
of the  indemnified  party  or  any  officer,  director,  or
controlling  Person  of  such  indemnified  party  and  will
survive the transfer of securities.
<Page 23>
III.9     Limitations on  Future Registration  Rights.   The
Company shall not  in the  future grant  any Person  registration
rights in respect  of Preferred  Stock, Common  Stock, or  Common
Stock Equivalents more favorable than, or materially inconsistent
with, those  granted to  the Holders  herein unless  the  Company
shall concurrently modify and amend this Agreement to provide  to
the Holders the benefits of any such more favorable provisions.

III.10    Rule  144  Reporting.    With  a  view  to  making
available to  the  Holders  the benefits  of  certain  rules  and
regulations of the SEC that permit the sale of the shares of  any
class  or  series  of  capital   stock  to  the  public   without
registration, after the completion  of any registration  pursuant
to this Article III, the Company shall: (i) use its best  efforts
to make and keep public information available, as those terms are
understood  and  defined  in  SEC  Rule  144,  or  any  successor
provision thereto, at  all times, (ii)  use its  best efforts  to
file with  the SEC  in  a timely  manner  all reports  and  other
documents required of  the Company under  the Securities Act  and
the Exchange Act, and (iii) so  long as a Holder owns any  shares
of any  class or  series of  capital stock,  to furnish  to  such
Holder forthwith  upon its  request a  written statement  by  the
Company  as  to  the  Company's  compliance  with  the  reporting
requirements of Rule  144, the Securities  Act, and the  Exchange
Act.

ARTICLE IV
TRANSFERS OF SECURITIES

IV.1 Transfer and  Exchange.   Subject  to  the  limitations
described in Article V hereof,  when Securities are presented  to
the Company  with a  request to  register  the transfer  of  such
Securities or to exchange such Securities for Securities of other
authorized denominations, the Company shall register the transfer
or make the  exchange as requested  if the  requirements of  this
Agreement for such transaction  are met; provided, however,  that
the Securities surrendered for transfer or exchange shall be duly
endorsed or accompanied  by a written  instrument of transfer  in
form satisfactory to  the Company,  duly executed  by the  Holder
thereof or  its attorney  and duly  authorized  in writing.    No
service charge shall be made for any registration of transfer  or
exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge  payable
in connection therewith.

IV.2 Replacement of Securities.  If a mutilated Security  is
surrendered to the Company or if the Holder of a Security  claims
and submits an affidavit or  other evidence, satisfactory to  the
Company,  to  the  effect  that  the  Security  has  been   lost,
destroyed,  or  wrongfully  taken,  the  Company  shall  issue  a
replacement Security if the Company's  requirements are met.   If
required by the Company, such securityholder must provide a  lost
security affidavit  and  an  indemnity bond,  or  other  form  of
indemnity, sufficient in the judgment  of the Company to  protect
the Company against any loss which may be suffered.  The  Company
may charge such securityholder  for its reasonable  out-of-pocket
expenses in replacing a Security which has been mutilated,  lost,
destroyed, or wrongfully taken.

ARTICLE V
LIMITATION ON TRANSFERS

V.1  Restrictions on Transfer.  The Securities shall not  be
Transferred or  otherwise  conveyed,  assigned,  or  hypothecated
before  satisfaction   of  (i)   the  conditions   specified   in
<Page 24>
Sections 5.1, 5.2,  and 5.3,  which  conditions are  intended  to
ensure compliance with the provisions of the Securities Act  with
respect to the Transfer  of any Security, and  (ii) Article IV.  
Any purported Transfer in violation of this Article V, and/or, if
applicable, Article IV shall be void ab initio and of no force or
effect.   Other  than Transfers  to  the public  pursuant  to  an
effective registration statement or sales to the public  pursuant
to  Rule  144  under  the  Securities  Act  otherwise   permitted
hereunder, each Holder will cause any proposed transferee of  any
Security or any interest therein held by it to agree to take  and
hold such  securities  subject to  the  provisions and  upon  the
conditions specified in this Agreement.

V.2  Restrictive Legends.

V.2.1     Securities Act Legend.   Except as  otherwise
provided in Section 5.4, each Security held by a Holder, and
each Security issued  to any subsequent  transferee of  such
Holder, shall  be  stamped  or otherwise  imprinted  with  a
legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER  THE SECURITIES ACT  OF 1933,  AS
AMENDED, NOR PURSUANT TO  THE SECURITIES OR "BLUE  SKY"
LAWS OF ANY STATE.  SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR  OTHERWISE
ASSIGNED,  EXCEPT  PURSUANT   TO  (i)  A   REGISTRATION
STATEMENT WITH  RESPECT  TO SUCH  SECURITIES  WHICH  IS
EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT,
OR (iii) ANY  OTHER EXEMPTION  FROM REGISTRATION  UNDER
SUCH ACT.

V.2.2     Other Legends.  Except as otherwise permitted
by the last sentence of Section 5.1, each Security issued to
each Holder  or  a  subsequent transferee  shall  include  a
legend in substantially the following form:

THIS SECURITY IS  SUBJECT TO  RESTRICTIONS ON  TRANSFER
AND OTHER  TERMS AND  CONDITIONS AS  SET FORTH  IN  THE
INVESTORS RIGHTS AGREEMENT DATED AS OF MAY 22, 1998,  A
COPY OF WHICH MAY BE OBTAINED  FROM THE COMPANY AT  ITS
PRINCIPAL EXECUTIVE OFFICES.

V.3  Notice of Proposed Transfers.  Prior to any Transfer or
attempted Transfer of any Security,  the Holder of such  Security
shall (i)  give  five  Business Days'  prior  written  notice  (a
"Transfer Notice") to the Company  of such Holder's intention  to
effect such Transfer, describing the manner and circumstances  of
the proposed Transfer, and (ii) either (A) provide to the Company
an opinion reasonably  satisfactory to the  Company from  counsel
who shall be  reasonably satisfactory to  the Company (or  supply
such other evidence reasonably satisfactory to the Company)  that
the proposed Transfer  of such Security  may be effected  without
registration under the Securities Act, or (B) certify in  writing
to the Company that the  Holder reasonably believes the  proposed
transferee is  a "qualified  institutional buyer"  and that  such
Holder has taken reasonable steps to make the proposed transferee
aware that such Holder may rely on Rule 144A under the Securities
Act in effecting such  Transfer.  After  receipt of the  Transfer
Notice and opinion  (if required),  the Company  shall have  five
Business Days to object to the transfer by
<Page 25>
written notice to such
Holder  describing  in  reasonably  detail  the  basis  for   the
objection, and in the absence of  such notice, such Holder  shall
thereupon be  entitled to  Transfer such  Security in  accordance
with the terms of the Transfer Notice.  Each Security issued upon
such Transfer  shall bear  the restrictive  legend set  forth  in
Section 5.2, unless in the opinion of such counsel such legend is
not required in  order to ensure  compliance with the  Securities
Act. 

V.4  Termination of Certain  Restrictions.   Notwithstanding
the foregoing  provisions of  this  Article V,  the  restrictions
imposed  by  Section  5.2.1  upon  the  transferability  of   the
Securities and  the legend  requirements of  Section 5.2.1  shall
terminate as  to  any Security  (i)  when  and so  long  as  such
Security  shall  have  been  effectively  registered  under   the
Securities Act and disposed of pursuant thereto or (ii) when  the
Company shall  have received  an  opinion of  counsel  reasonably
satisfactory to it that such Security may be transferred  without
registration thereof  under  the  Securities Act  and  that  such
legend may  be removed.   Whenever  the restrictions  imposed  by
Section 5.2 shall  terminate  as  to  any  Security,  the  Holder
thereof shall be  entitled to receive  from the  Company, at  the
Company's expense,  a new  Security not  bearing the  restrictive
legend set forth in Section 5.2.

ARTICLE VI
TERMINATION

VI.1 Termination.  The  provisions of  this Agreement  shall
terminate on the earlier of (i) May 22, 2004, (ii) the first date
on which there ceases to  be any Registrable Shares  outstanding,
and (iii)  the  date  upon which  the  Company  and  each  Holder
mutually agree in writing to terminate this Agreement.

ARTICLE VII
MISCELLANEOUS

VII.1     Notices.   Any  notices  or  other  communications
required or permitted hereunder shall be in writing, and shall be
sufficiently given if made  by hand delivery, overnight  courier,
by telecopier, or first class or certified mail, postage prepaid,
return receipt requested, addressed as follows (or at such  other
address as may be substituted by notice given as herein  provided
in accordance with this Section 7.1):

If to the Company:

Stratus Properties Inc.
98 San Jacinto Boulevard, Suite 2200
Austin, Texas  78701
Facsimile No.: (512) 478-5788
Attention:  William H. Armstrong, III

With a copy to:

Stratus Properties Inc.
1615 Poydras
New Orleans, LA 70112
Facsimile No.: (504) 585-3513
Attention: John G. Amato
<Page 26>
If to any  Holder, at its  address listed  on the  signature
pages hereof.

Any notice  or communication  hereunder shall  be deemed  to
have been  given  or  made  as  of  the  date  so  delivered,  if
personally delivered  or  delivered by  overnight  courier;  when
receipt is  electronically confirmed,  if telecopied;  and  three
calendar days after  mailing if sent  by registered or  certified
mail (except that  a notice  of change  of address  shall not  be
deemed  to  have  been  given  until  actually  received  by  the
addressee).   Failure to  mail a  notice  or communication  to  a
Holder or any defect in it shall not affect its sufficiency  with
respect to other Holders.  If a notice or communication is mailed
in the manner provided  above, it is duly  given, whether or  not
the addressee receives it.

VII.2     Legal Holidays.    A  "Legal  Holiday"  used  with
respect to a particular place of payment is a Saturday, a Sunday,
or a day  on which  banking institutions  at such  place are  not
required to be open.   If a  payment date is  a Legal Holiday  at
such place,  payment  may be  made  at  such place  on  the  next
succeeding day that is  not a Legal Holiday,  and no interest  on
the amount  of  such payment  shall  accrue for  the  intervening
period.

VII.3     Governing Law.  THIS  AGREEMENT SHALL BE  GOVERNED
BY AND CONSTRUED  IN ACCORDANCE  WITH THE  LAWS OF  THE STATE  OF
DELAWARE, WITHOUT REGARD  TO THE PRINCIPLES  OF CONFLICTS OF  LAW
THEREOF.

VII.4     Successors and Assigns.   This  Agreement and  the
rights and obligations  hereunder shall  not be  assigned by  the
Company or  Olympus  without  the  other  party's  prior  written
consent; provided,  however,  that  whether  or  not  an  express
assignment has  been  made pursuant  to  the provisions  of  this
Agreement, the  provisions of  Articles III,  IV  and V  of  this
Agreement that are applicable  to the Holders  as the holders  of
any Securities are also  for the benefit  of, and enforceable  by
and against,  all subsequent  holders  of Securities,  except  as
otherwise expressly  provided herein.   This  Agreement shall  be
binding upon  the  Company,  each Holder,  and  their  respective
successors and assigns.

VII.5     Duplicate Originals.   All  parties may  sign  any
number of copies of this Agreement.  Each signed copy shall be an
original, but  all  of them  together  shall represent  the  same
agreement.

VII.6     Severability.  If any provision of this Agreement,
or  the  application   of  such  provision   to  any  person   or
circumstance, shall be held invalid  under the applicable law  of
any  jurisdiction,  the  remainder  of  this  Agreement  or   the
application of such provision  to other persons or  circumstances
or in other jurisdictions shall not  be affected thereby.   Also,
if any provision  of this Agreement  is invalid or  unenforceable
under any applicable  law, then  such provision  shall be  deemed
inoperative to  the extent  that it  may conflict  therewith  and
shall be deemed modified to conform with such law.  Any provision
hereof that  may prove  invalid or  unenforceable under  any  law
shall not  affect the  validity or  enforceability of  any  other
provision hereof.

VII.7     No Waivers; Amendments.
<Page 27>

VII.7.1   No failure  or  delay  on  the  part  of  the
Company or any  Holder in  exercising any  right, power,  or
remedy hereunder  shall operate  as  a waiver  thereof,  nor
shall any  single or  partial exercise  of any  such  right,
power, or  remedy preclude  any  other or  further  exercise
thereof or  the  exercise  of any  other  right,  power,  or
remedy.  The remedies provided for herein are cumulative and
are not exclusive of any remedies  that may be available  to
the Company or any Holder at law, in equity, or otherwise.

VII.7.2   Any  provision  of  this  Agreement  may   be
amended or waived if, but only if, such amendment or  waiver
is in writing and is signed by the Company and the  Required
Holders.
<Page 28>

IN WITNESS  WHEREOF, the  parties  hereto have  caused  this
Agreement to be duly executed as of the date first written above.

STRATUS PROPERTIES INC.

By: /s/ William H. Armstrong III 
----------------------------
Name: William H. Armstrong III    
Title: President                  

<Page 29>

[SIGNATURE PAGE TO INVESTORS RIGHTS AGREEMENT]

OLY/STRATUS EQUITIES, L.P.

By:  Oly Fund II  GP Investments,  L.P.,
its General Partner

By:  Oly Real  Estate Partners  II,
L.P., its General Partner

By:  Oly  REP  II,  L.P.,  its
General Partner

By:  Oly  Fund  II,  LLC,
its General Partner

By: /s/ Hal R. Hall         
---------------
Name: Hal R. Hall           
Title: Vice President        

Address:  200 Crescent Court, Suite 1650
Dallas, Texas  75201
Facsimile:  (214) 740-7340
Attention:  David D. Deniger

with a copy to:

Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas  75201
Facsimile:  (214) 746-7777
Attention:  Robert C. Feldman

<Page 30>

INVESTORS RIGHTS AGREEMENT
STRATUS PROPERTIES INC.
____________________
Dated as of May 22, 1998

____________________

TABLE OF CONTENTS

ARTICLE I
DEFINITIONS

1.1   Definitions .......................................  1

1.2   Rules of Construction .............................  5

1.3   Other Definitions .................................  6

ARTICLE II
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES

2.1   Board of Directors ............................      6

2.1.1 ..........................  Board Representation       6

2.1.2 .................................Observer Rights       6

2.1.3 .......................................Vacancies       7

2.1.4 ...........................Termination of Rights       8

2.1.5 ..............................Costs and Expenses       8

2.2   Transactions Permitting Optional Redemption .......  8

2.3   Other Activities of Olympus; Fiduciary Duties ..... 13

ARTICLE III
REGISTRATION RIGHTS

3.1   Demand Registration ............................... 13

3.1.1 ........................Request for Registration      13

3.1.2 .............Effective Registration and Expenses      14

3.1.3 .......................Selection of Underwriters      14

3.1.4 ................Priority on Demand Registrations      14

3.1.5 .................Rights of Nonrequesting Holders      15

3.1.6 ..............................Deferral of Filing      15

i

3.2   Piggyback Registrations ........................... 16

3.2.1 ..............................Right to Piggyback      16

3.2.2 .......................Priority on Registrations      17

3.3   Information by Requesting Holders ................. 18

3.4   Holdback Agreement ................................ 18

3.5   Registration Procedures ........................... 19

3.6   Suspension of Dispositions ........................ 23

3.7   Registration Expenses ............................. 23

3.8   Indemnification ................................... 24

3.9   Limitations on Future Registration Rights ......... 27

3.10  Rule 144 Reporting ................................ 27

ARTICLE IV
TRANSFERS OF SECURITIES

4.1   Transfer and Exchange ............................. 28

4.2   Replacement of Securities ......................... 28

ARTICLE V
LIMITATION ON TRANSFERS

5.1   Restrictions on Transfer .......................... 28

5.2   Restrictive Legends ............................... 29

5.2.1 ...........................Securities Act Legend      29

5.2.2 ...................................Other Legends      29

5.3   Notice of Proposed Transfers ...................... 29

5.4   Termination of Certain Restrictions ............... 30

ARTICLE VI
TERMINATION

6.1   Termination ....................................... 30

ii

ARTICLE VII
MISCELLANEOUS

7.1   Notices ........................................... 30

7.2   Legal Holidays .................................... 31

7.3   Governing Law ..................................... 31

7.4   Successors and Assigns ............................ 31

7.5   Duplicate Originals ............................... 32

7.6   Severability ...................................... 32

7.7   No Waivers; Amendments ............................ 32

iii

Exhibit 4.3

LOAN AGREEMENT

THIS LOAN  AGREEMENT  (this  "Agreement")  is  executed
effective as of the 22nd day of May, 1998 (the "Effective Date"),
by and between  STRATUS VENTURES  I BORROWER  L.L.C., a  Delaware
limited liability company ("Borrower"),  and OLY LENDER  STRATUS,
L.P., a Texas limited partnership ("Lender"), and, solely for the
purposes of acknowledging  the provisions of  Article XIV  hereof
relating to  the conversion  of the  Obligations (as  hereinafter
defined) hereunder  into  Parent  Common  Stock  (as  hereinafter
defined),  STRATUS  PROPERTIES   INC.,  a  Delaware   corporation
("Parent").

R E C I T A L S

WHEREAS, Borrower is a  special purpose entity  wholly-
owned by Parent, formed exclusively for the purpose of  investing
in joint  ventures  for new  land  acquisitions and  real  estate
development projects for which borrowings can be made  hereunder;
and

WHEREAS, Borrower has requested that Lender make a loan
to  Borrower,  available  in  multiple  draws,  in  the   maximum
principal amount of up to Ten Million Dollars ($10,000,000)  (the
"Loan") strictly for  the purposes set  forth in this  Agreement;
and

WHEREAS, Parent, as the sole owner of equity  interests
in Borrower, will derive significant direct and indirect economic
benefit from the Loans and other financial accommodations made by
Lender to  Borrower  pursuant to  this  Agreement, and  it  is  a
condition to the making of the  Loans pursuant to this  Agreement
that   Parent   shall   enter   into   certain   agreements   and
acknowledgments contained herein,  including without  limitation,
those contained in Article XIV hereof; and

WHEREAS, Lender has agreed to  make such Loan upon  the
terms and subject to the conditions set forth in this Agreement.

NOW,  THEREFORE,  for  and  in  consideration  of   the
foregoing premises,  the mutual  covenants contained  herein  and
other  good   and  valuable   consideration,  the   receipt   and
sufficiency of which are hereby acknowledged, the parties  hereto
hereby agree as follows:

A G R E E M E N T S

Article I
DEFINITIONS AND DETERMINATIONS

Section I.1    Definitions.  As used in this  Agreement
and in  the  other  Loan Documents,  unless  otherwise  expressly
indicated herein or therein, the  following terms shall have  the
following meanings (such meanings  to be applicable equally  both
to the singular and plural terms defined):

"Accountants" shall have the meaning given to such
term in Section 9.3(a).

"Advance" shall  have the  meaning given  to  such
term in Section 2.1.

"Affiliate" shall mean any Person that directly or
indirectly, through one or more intermediaries, controls  or
is controlled by  or is  under common  control with  another
Person.  The  term "control" means  possession, directly  or
indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the
ownership of voting securities,  by contract or otherwise.  
For the purpose hereof, any  Person which owns or  controls,
directly or indirectly, thirty percent (30%) or more of  the
equity securities, voting  or otherwise,  of another  Person
shall be deemed to  "control" such Person.   Notwithstanding
the  foregoing,  under  no  circumstances  shall  Lender  be
considered an Affiliate of Borrower.

"Agreement" means this Loan Agreement as the  same
may be amended, restated, supplemented or otherwise modified
from time to time.

"Blockage Notice" shall have the meaning given  to
such term in Section 14.4.

"Blockage Period" shall have the meaning given  to
such term in Section 14.4.

"Board"  means  the  Board  of  Governors  of  the
Federal Reserve System of the United States.

"Book Value of Assets" shall mean, as of any time,
the cost of any  assets and properties  as reflected on  the
books and records of Parent and its Restricted Subsidiaries.
If the cost of such assets or property was included in  the
balance sheet contained in the most recent Form 10-Q or Form
10-K filed with the SEC, the cost as so reflected, shall  be
the "Book Value", as such amount is adjusted for the cost of
subsequent improvements and investments.

"Borrower"  has  the  meaning  set  forth  in  the
preamble to this Agreement.

"Borrower Capital  Stock" shall  mean all  of  the
capital stock of Borrower, a  description and the owners  of
the outstanding shares of which is set forth in Exhibit 1.

"Business Day"  shall mean  any day  other than  a
Saturday, Sunday or holiday under the laws of the States  of
Texas or New York,  or a day  on which banking  institutions
located in the States of Texas or New York are authorized or
required by law or other governmental action to close.

"Capitalized  Lease"  shall  mean  any  lease   of
Property, the obligations for  rental of which are  required
to be capitalized in accordance with GAAP.

"Cash Collateral Account"  shall have the  meaning
given to such term in Section 2.3(d).

"Cash Collateral Agreement" shall have the meaning
given to such term in Section 2.3(d).

"CERCLA" means,  collectively,  the  Comprehensive
Environmental Response, Compensation,  and Liability Act  of
1980,  as   amended   by  the   Superfund   Amendments   and
Reauthorization Act of 1986, 42 U.S.C. SS 9601 et seq.

"Closing Date" shall mean the date occurring on or
after the Effective Date on which the first borrowing  under
the Loan occurs.

"Code" means the Internal Revenue Code of 1986, as
amended from time to time.

"Collateral" shall  mean  the  Property  in  which
Lender is  granted the  Security Interests  pursuant to  the
Loan Documents.

"Contingent Obligation" as applied to any  Person,
means  any  direct  or  indirect  liability,  contingent  or
otherwise,  of  that  Person:    (a) with  respect  to   any
indebtedness, lease, dividend or other obligation of another
Person if  the  primary  purpose or  intent  of  the  Person
incurring such liability, or the primary effect thereof,  is
to provide assurance to the  obligee of such liability  that
such liability  will  be paid  or  discharged, or  that  any
agreements relating thereto will  be complied with, or  that
the holders of such liability will be protected (in whole or
in part) against loss with respect thereto; (b) with respect
to any  letter of  credit issued  for  the account  of  that
Person or as to  which that Person  is otherwise liable  for
reimbursement of  drawings; (c) under  any foreign  exchange
contract, currency swap agreement or other similar agreement
or arrangement  designed  to  protect  that  Person  against
fluctuations in currency values; or (d) under any  commodity
futures contract.    Contingent  Obligations  shall  include
(i) the direct or indirect guaranty, endorsement  (otherwise
than for collection  or deposit  in the  ordinary course  of
business), co-making, discounting with recourse or sale with
recourse by  such  Person  of  the  obligation  of  another,
(ii) the obligation to make take-or-pay or similar  payments
if required regardless of nonperformance by any other  party
or parties to an agreement, and (iii) any liability of  such
Person for the obligations of another through any  agreement
to purchase, repurchase or otherwise acquire such obligation
or any property constituting  security therefor, to  provide
funds for the payment or discharge of such obligation or  to
maintain the solvency,  financial condition  or any  balance
sheet item or level of income of another.  The amount of any
Contingent Obligation shall  be equal to  the amount of  the
obligation so  guarantied or  otherwise supported  or, if  a
fixed  and  determined   amount,  the   maximum  amount   so
guaranteed.

"Conversion" shall have the meaning given to  such
term in Section 14.1.

"Conversion   Limitations"    shall    mean    the
limitations  on  the   issuance  of   Parent  Common   Stock
identified in Section 14.2.

"Coverage Ratio" shall mean,  as of any time,  the
ratio of  (A)  the Book  Value  of  Assets to  (B)  (i)  the
aggregate amount  of  outstanding  Debt of  Parent  and  its
Restricted Subsidiaries, plus (ii) any outstanding Preferred
Obligations.

"Debt" of any  Person means at  any date,  without
duplication, (i) all obligations of such Person for borrowed
money, (ii)  all obligations  of  such Person  evidenced  by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred  purchase
price of  property  or  services,  except  accounts  payable
arising  in  the  ordinary  course  of  business,  (iv)  all
obligations of such person  as lessee under capital  leases,
(v) all  Debt  of  others secured  by  any  mortgage,  lien,
pledge, charge, security interest or encumbrance of any kind
on any asset  of such  Person and  (vi) all  Debt of  others
Guaranteed by such Person.

"Default Rate" shall  mean the  lesser of  fifteen
percent (15%) per annum and the Maximum Lawful Rate.

"Default Rate Period" shall mean a period of  time
commencing on the date that an Event of Default has occurred
and ending on the date that  such Event of Default is  cured
or waived in writing by Lender.

"Dollars" and  the  sign  "$"  shall  mean  freely
transferable lawful money of the United States.

"Effective Date" shall have the meaning set  forth
in the preamble to this Agreement.

"Environmental Claim" means any written notice  of
violation, claim,  demand, order,  directive, cost  recovery
action or other  cause of action  by, or on  behalf of,  any
Governmental Body or any  Person for damages, injunctive  or
equitable  relief,  personal  injury  (including   sickness,
disease  or  death),  Remedial  Action  costs,  tangible  or
intangible  property  damage,   natural  resource   damages,
nuisance, pollution, any adverse  effect on the  environment
caused by any Hazardous Material, or for fines, penalties or
restrictions resulting from or based  upon:  (a) the  threat
or existence, or  the continuation  of the  existence, of  a
Release  (including  sudden  or  non-sudden,  accidental  or
nonaccidental  Releases);  (b)  exposure  to  any  Hazardous
material; (c) the  presence, use, handling,  transportation,
storage, treatment or disposal of any Hazardous Material; or
(d) the violation of any Environmental Law or  Environmental
Permit.

"Environmental  Law"  shall   mean  any  and   all
applicable  treaties,  laws,   rules,  regulations,   codes,
ordinances, orders, decrees, judgments, injunctions, notices
or binding agreements issued, promulgated or entered into by
any  Governmental  Body,   relating  in  any   way  to   the
environment,  preservation   or   reclamation   of   natural
resources, the management, Release or threatened Release  of
any Hazardous  Material or  to  health and  safety  matters,
including CERCLA, the Solid  Waste Disposal Act, as  amended
by the Resource  Conservation and Recovery  Act of 1976  and
Hazardous and  Solid Waste  Amendments  of 1984,  42  U.S.C.
SS 6901 et seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C. SS 1251 et
seq., the  Clean Air  Act of  1970,  as amended,  42  U.S.C.
SS 7401 et seq., the Toxic  Substances Control Act of  1976,
15 U.S.C.  SS 2601  et  seq., the  Occupational  Safety  and
Health Act of 1970,  as amended, 29  U.S.C. SS 651 et  seq.,
the Emergency Planning  and Community  Right-to-Know Act  of
1986, 42 U.S.C. SS 11001  et seq., the  Safe Drinking  Water
Act of 1974, as  amended, 42 U.S.C.  SS 300(f) et seq.,  the
Hazardous Materials Transportation Act, 49 U.S.C. SS 1801 et
seq., and any  similar or implementing  state or local  law,
and all amendments or regulations promulgated thereunder.

"Environmental  Permit"      means   any   permit,
approval,  authorization,  certificate,  license,  variance,
filing or permission  required by or  from any  Governmental
Body pursuant to any Environmental Law.

"ERISA" shall mean the Employee Retirement  Income
Security  Act  of  1974,  as  amended,  and  the  rules  and
regulations issued  thereunder, as  in effect  from time  to
time.

"ERISA Affiliate"  means  any  trade  or  business
(whether or not incorporated), that together with Parent, is
treated as a single employer under Section 414(b) or (c)  of
the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of  the Code, is  treated as  a single  employer
under Section 414 of the Code.

"ERISA Event" means (i) any "reportable event", as
defined in Section 4043 of  ERISA or the regulations  issued
thereunder, with respect to  a Plan;   (ii) the adoption  of
any amendment to a Plan that would require the provision  of
security pursuant to Section 401 (a)(29) of the Code;  (iii)
the existence with  respect to any  Plan of an  "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived; (iv) the incurrence of any  liability
under Title  IV  of  ERISA  with  respect  to  any  Plan  or
Multiemployer   Plan,   other   than   any   liability   for
contributions not yet  due or  payment of  premiums not  yet
due; (v)  the  receipt  by Parent  or  any  ERISA  Affiliate
thereof  from  the  PBGC  of  any  notice  relating  to  the
intention of the PBGC to terminate  any Plan or Plans or  to
appoint a trustee to administer  any Plan; (vi) the  receipt
by Parent  or  any ERISA  Affiliate  thereof of  any  notice
concerning the  imposition  of  Withdrawal  Liability  or  a
determination that a Multiemployer  Plan is, or is  expected
to be, insolvent or in reorganization, within the meaning of
Title IV  of ERISA;  and (vii)  any other  similar event  or
condition with respect to a Plan or Multiemployer Plan  that
could reasonably result in liability of Parent.

"Event of Default" shall mean any of the Events of
Default set forth in Section 11.1.

"Exit Fee"  shall  mean  an  amount,  which  shall
constitute additional interest payable hereunder,  necessary
to permit Lender to realize the Guaranteed Yield.

"Final Payment Date" shall mean the date on  which
(a) all outstanding Obligations  for principal and  interest
under the Loan have been satisfied and extinguished, whether
by way of cash payment or  Conversion, and (b) the  Lender's
commitment to make Advances under the Loan has terminated.

"GAAP" shall  mean generally  accepted  accounting
principles as  in  effect from  time  to time,  which  shall
include  the   official  interpretations   thereof  by   the
Financial Accounting Standards Board, consistently applied.

"Governmental  Body"  shall   mean  any   foreign,
federal,  state,  municipal  or  other  government,  or  any
department,  commission,  board,   bureau,  agency,   public
authority  or  instrumentality  thereof  or  any  court   or
arbitrator.

"Governmental Rule" shall  mean any statute,  law,
treaty,   rule,   code,   ordinance,   regulation,   permit,
certificate  or  order  of  any  Governmental  Body  or  any
judgment, decree, injunction, writ, order or like action  of
any court, arbitration or  other judicial or quasi  judicial
tribunal.

"Guarantee" by  any Person  means any  obligation,
contingent  or  otherwise,  of   such  Person  directly   or
indirectly guaranteeing any  Debt of any  other Person  and,
without  limiting  the  generality  of  the  foregoing,  any
obligation, direct or indirect, contingent or otherwise, (i)
to purchase  or pay  (or advance  or  supply funds  for  the
purchase or payment of) such Debt (whether arising by virtue
of partnership arrangements, by  agreement to keep-well,  to
purchase assets, goods, securities or services, to  take-or-
pay,  or  to  maintain  financial  statement  conditions  or
otherwise) or (ii) entered into for the purpose of  assuring
in any other manner the obligee of such Debt of the  payment
thereof or to protect such  obligee against loss in  respect
thereof  (in   whole   or  in   part);   and   "Guaranteed",
"Guaranteeing"   and   "Guarantor"   shall   have   meanings
correlative to the foregoing);  provided, however, that  the
Guarantee by any  Person shall not  include endorsements  by
such Person for collection or deposit, in either case in the
ordinary course of business.

"Guaranteed Yield" shall mean the aggregate amount
of money determined as  of the Final  Payment Date equal  to
fifteen percent (15%)  per annum, calculated  daily, on  the
principal Obligations outstanding from time to time.

"Guaranty  Agreement"  shall  mean  the   Guaranty
Agreement  dated  as  of  the  Closing  Date,  executed   by
Borrower.

"Hazardous  Materials"  means  all  explosive   or
radioactive materials,  substances or  wastes, hazardous  or
toxic materials,  substances or  wastes, pollutants,  solid,
liquid or gaseous wastes,  including petroleum or  petroleum
distillates,  asbestos  or  asbestos-containing   materials,
polychlorinated  biphenyls,   ("PCBs")   or   PCB-containing
materials or  equipment, radon  gas, infectious  or  medical
wastes and  all other  substances or  wastes of  any  nature
regulated pursuant to any Environmental Law.

"Indebtedness"   shall   mean   all   liabilities,
obligations and reserves, contingent or otherwise, which, in
accordance with GAAP, would be reflected as a liability on a
balance sheet  or would  be required  to be  disclosed in  a
financial  statement,  including,   without  duplication:   
(i) all   Indebtedness   for   Borrowed   Money,    (ii) all
obligations secured  by any  Lien upon  Property,  (iii) all
guaranties  and  other  contingent  obligations,  including,
without  limitation,   letters  of   credit,  and   (iv) all
liabilities in respect of unfunded vested benefits under any
retirement plan  and in  respect of  withdrawal  liabilities
incurred under ERISA by Borrower.

"Indebtedness  for  Borrowed  Money"  shall  mean,
without duplication, all  Indebtedness which  is owing  with
respect  to  any  of  the  following:  (i) money   borrowed,
(ii) obligations evidenced  by a  note, debenture  or  other
like written  obligation to  pay money  (including,  without
limitation,  all  of   the  Obligations,   and  the   Loan),
(iii) obligations  under  Capitalized  Leases  or  for   the
deferred purchase price of Property, (iv) obligations  under
conditional  sales  or  other  title  retention  agreements,
(v) any guaranty of  any or all  of the  foregoing, or  (vi)
trade payables.

"Joint  Venture"  shall  mean  any  joint  venture
entered into between  Borrower or a  Subsidiary and  Olympus
for new land  acquisition and development  of such land,  if
Borrower's contribution to such joint venture will be funded
with proceeds from the Loan, specifically excluding any land
owned or controlled by Parent or  an Affiliate of Parent  as
of  the  Effective  Date  and  any  projects  involving  the
development thereof.

"Joint Venture Distribution"  shall mean, for  any
period, any and all cash distributable to Borrower from  the
Joint Ventures.

"Joint Venture Distribution  Date" shall mean  the
date occurring  fifteen (15)  days after  any Joint  Venture
Distribution.

"Lender" shall have the  meaning set forth in  the
preamble to this Agreement.

"Lien"   shall   mean   any   mortgage,    pledge,
assignment, lien, charge,  encumbrance or security  interest
of any kind, or the interest of a vendor or lessor under any
conditional sale  agreement or  Capitalized Lease  or  other
title retention agreement.

"Loan" shall  have the  meaning set  forth in  the
recitals to this Agreement.

"Loan Documents"  shall mean  this Agreement,  the
Note  and  the  Security  Documents  and  all  certificates,
instruments,  documents   and  other   agreements   executed
pursuant to any of the foregoing or otherwise in  connection
with the  Loan, and  any and  all renewals,  extensions  and
modifications of any  of the  foregoing described  documents
and  instruments   and   any  and   all   replacements   and
substitutions therefor.

"Margin Stock" has  the meaning  assigned to  such
term in Regulation U.

"Market Value" means the last per share sale price
of the  Parent  Common  Stock  as  reported  by  the  Nasdaq
National  Market  (or   any  national   stock  exchange   or
interdealer quotation  system  on which  the  Parent  Common
Stock is then listed or quoted).

"Material Adverse Effect"  shall have the  meaning
given to such term in Section 6.3.

"Maturity Date" shall mean  the date which is  six
(6) years after the Closing Date, unless earlier accelerated
pursuant to the terms hereof.

"Maximum  Lawful  Rate"  shall  mean  the  maximum
nonusurious rate of  interest permitted by  the laws of  the
United States or applicable state law, whichever laws  allow
the greater rate of interest, as such laws now exist or  may
be changed or amended or come into effect in the future.

"Nonrestricted  Subsidiaries"   shall   have   the
meaning  attributed  to  such  term  in  the  Parent  Credit
Agreement.  If  such agreement  is terminated  or no  longer
includes the concept of Nonrestricted Subsidiaries and it is
not  replaced  by  a  successor  agreement  containing  such
concept  in  connection   with  a   refinancing,  then   the
definition of  such term  at the  time of  such  termination
shall be the definition of such term hereunder.

"Note"  shall   mean  that   certain   Convertible
Promissory Note dated  as of the  Closing Date, executed  by
Borrower, payable to  the order of  Lender, in the  original
principal amount of  Ten Million  Dollars ($10,000,000)  and
any and all renewals,  extensions and modifications  thereof
and substitutions and replacements therefor.

"Obligations"   shall   mean   (i) any   and   all
Indebtedness,  due  or  to  become  due,  now  existing   or
hereafter or  howsoever  arising from  Borrower  and/or  any
other Obligor to Lender  pursuant to the  terms of the  Loan
Documents, including,  without  limitation,  the  Loan,  and
(ii) the performance of the covenants of Borrower  contained
in the Loan Documents.

"Obligor" shall mean, as the context may  require,
Borrower, each Subsidiary and  any other Person (other  than
Lender) to the  extent such Person  is obligated under  this
Agreement or any other Loan Document.

"Olympus"   shall   mean   Olympus   Real   Estate
Corporation,  a  Texas   corporation,  and  any   Affiliates
thereof.

"Parent" shall have the  meaning set forth in  the
recitals of this Agreement.

"Parent Common Stock" shall mean the common  stock
of Parent, $0.01  par value, and  any securities into  which
the Parent  Common  Stock  may  hereafter  be  exchanged  or
converted   pursuant   to    any   merger,    consolidation,
recapitalization or reclassification effected by Parent.

"Parent Credit Agreement" shall mean the  Amended,
Restated and  Consolidated  Credit  Agreement  dated  as  of
December 15, 1997 among FM Properties Operating Co.,  Circle
C Land Corp., the  financial institutions party thereto  and
The Chase Manhattan  Bank, as agent,  with respect to  which
Parent  is  a  guarantor,  as  the  same  may  be   amended,
supplemented, replaced,  refinanced   or otherwise  modified
from time to time.

"Parent's Permitted Liens " shall have the  meaning
given to such term in Section 7.9.

"Parent's Senior Debt" means all  Debt  of  Parent
including  principal,  premium,  if  any,  and  interest  on
(including interest accruing after the filing of a  petition
initiating any proceeding  pursuant to  any bankruptcy  law,
whether  or  not  allowed)  or  other  amounts  payable   in
connection  with  any  Debt  of  Parent,  whether  presently
outstanding or  subsequently  created, incurred  or  assumed
(other  than  any  other  Debt  of  Parent  which  expressly
provides by  its  terms  or  the  terms  of  the  instrument
creating or evidencing it that it is subordinate in right of
payment in  any  respect to  any  other Debt  of  Parent).  
Notwithstanding the  foregoing, Parent's  Senior Debt  shall
not include any Debt of Parent  to any subsidiary of  Parent
or any liability for federal, state  or local taxes owed  by
Parent.

"Payment Amount" shall mean  the aggregate of  all
payments  received  by   Lender  in   connection  with   the
satisfaction of principal  and interest Obligations,  valued
as follows:

(a)  any cash payment made to Lender or  otherwise
received by Lender in respect of principal and interest
Obligations shall be valued at  the face value of  such
cash payment; and

(b)  any Parent Common Stock that is delivered  to
Lender in connection with the satisfaction of principal
Obligations pursuant to a Conversion shall be valued at
the average  of  the  Market Value  for  the  ten  (10)
trading  days  immediately   prior  to   the  date   of
Conversion, but not less than the Stock Price;

LESS the aggregate amount of all Advances made by Lender  to
Borrower.

"Payment Obligations" shall have the meaning given
to such term in Section 14.4.

"PBGC" shall  mean  the Pension  Benefit  Guaranty
Corporation referred to and defined in ERISA.

"Permits" shall  have the  meaning given  to  such
term in Section 6.11.

"Permitted Liens" shall mean any of the  following
Liens:

(i)       the Security Interests;

(ii)      Liens for taxes or assessments  and
similar charges,  which  either are  (A) not  delinquent  or
(B) being  contested  diligently  and   in  good  faith   by
appropriate proceedings,  and as  to which  Borrower or  any
Subsidiary has set aside adequate reserves on its books;

(iii)     statutory    Liens,     such     as
mechanic's,  materialman's,  warehouseman's,  carrier's   or
other like Liens,  incurred in  good faith  in the  ordinary
course of business, which are paid in the ordinary course of
business or which are bonded in order to remove such Lien of
record within 30 days after the moneys become due and owing;

(iv)      Liens in  respect of  judgments  or
awards, the existence of which would not constitute an Event
of Default or Potential Default pursuant to Section 7.1.6;

(v)       pledges or  deposits  made  in  the
ordinary course of  business to secure  payment of  worker's
compensation, or to  participate in any  fund in  connection
with worker's compensation, unemployment insurance,  old-age
pensions or other social security programs;

(vi)      Liens upon Property of Borrower  or
any Subsidiary to secure Indebtedness of any Joint  Venture,
which Liens may be senior to the Liens of Lender; and

(vii)     Liens upon the interest of Borrower
or any Subsidiary  in a Joint  Venture granted  in favor  of
other holders of interests in such Joint Venture.

"Person"  shall   mean   any   individual,   firm,
corporation, limited liability company, business enterprise,
trust, association, joint venture, partnership, Governmental
Body or  other  entity,  whether acting  in  an  individual,
fiduciary or other capacity.

"Plan" means  any  employee pension  benefit  plan
(other than a  Multiemployer Plan) which  is subject to  the
provisions of Title IV of ERISA  or Section 412 of the  Code
and in respect of  which Parent, or  any ERISA Affiliate  is
(or, if such plan were terminated, would under Section  4069
of ERISA  be  deemed to  be)  an "employer"  as  defined  in
Section 3(5) of ERISA.

"Pledge Agreement" shall mean the Pledge Agreement
dated as of the Closing Date, executed by Borrower.

"Potential  Default"  shall  mean  any  event   or
condition which, with the giving of  notice or the lapse  of
time, or both, would become an Event of Default.

"Preferred Obligation" shall  mean any  obligation
for the payment of money that has matured in connection with
a decision  by Parent  to pay  cash to  the holders  of  any
Preferred Stock in connection with a Conversion of Preferred
Stock.

"Primary Bank  Facility"  shall  mean  the  credit
facility evidenced by the Parent Credit Agreement.

"Property" shall mean all types of real,  personal
or mixed property  and all types  of tangible or  intangible
property owned by Borrower or a Subsidiary.

"Pursuit Costs"  shall  mean  costs  and  expenses
incurred  by  Parent  in   connection  with  a   Development
Opportunity (as such term is defined in that certain  Master
Agreement (the  "Master Agreement")  among  Oly Fund  II  GP
Investments,  L.P.,  Oly/Stratus  Equities,  L.P.,   Lender,
Parent and Stratus Oly L.L.C. dated the date hereof that was
pursued for the purposes set  forth in the Master  Agreement
but did not close.

"Quarterly Payment Date" shall  mean the last  day
of each calendar quarter occurring after the Closing Date.

"Regulation U" means Regulation U of the Board  as
from time to  time in effect  and all  official rulings  and
interpretations thereunder or thereof.

"Release" means  any spilling,  leaking,  pumping,
pouring,   emitting,   emptying,   discharging,   injecting,
escaping,   leaching,   dumping,   disposing,    depositing,
dispersing,  emanating   or  migrating   of  any   Hazardous
Materials in, into, onto or through the environment.

"Remedial Action" shall mean (a) "remedial action"
as such term is defined in CERCLA, 42 U.S.C. S 9601(24), and
(b) all other actions required  by any Governmental Body  or
voluntarily undertaken to (i) cleanup, remove, treat,  abate
or in any other  way address any  Hazardous Material in  the
environment, (ii) prevent the Release or threat of  Release,
or minimize the further Release of any Hazardous Material so
it does  not migrate  or endanger  or threaten  to  endanger
public health, welfare or  the environment or (iii)  perform
studies and  investigations  in  connection with,  or  as  a
precondition to, (i) or (ii) above.

"Restricted Junior  Payment"  shall  mean  (a) any
dividend or  other  distribution,  direct  or  indirect,  on
account of  any shares  of any  class of  stock of,  or  any
partnership interest of, Borrower or any of its Subsidiaries
now or hereafter outstanding, other than dividends or  other
distributions  from  a   Subsidiary  to  Borrower;   (b) any
redemption, conversion, exchange,  retirement, sinking  fund
or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock  of,
or of any partnership interest of, Borrower now or hereafter
outstanding; (c) any payment or prepayment of principal  of,
premium, if  any, or  interest on,  redemption,  conversion,
exchange, purchase, retirement, defeasance, sinking fund  or
similar payment with respect to, any Indebtedness other than
the Obligations; and (d) any payment  made to retire, or  to
obtain the surrender of,  any outstanding warrants,  options
or other rights to acquire shares  of any class of stock  of
Borrower now or hereafter outstanding.

"Restricted Subsidiaries" shall  have the  meaning
attributed to such term in the Parent Credit Agreement.   If
such agreement  is  terminated  or no  longer  includes  the
concept of Restricted Subsidiaries and it is not replaced by
a successor agreement containing such concept in  connection
with a refinancing, then the definition of such term at  the
time of such  termination shall  be the  definition of  such
term hereunder.

"SEC" shall have the meaning given to such term in
Section 8.2.

"Securities" shall have the meaning given to  such
term in Section 6.3.

"Securities Act" shall have  the meaning given  to
such term in Section 8.2.

"Security Documents" shall mean, collectively, the
Pledge Agreement,  the  Guaranty  Agreement  and  all  other
agreements and documents executed and delivered pursuant  to
the foregoing  and  any  and all  renewals,  extensions  and
modifications of  any  of  the foregoing  and  any  and  all
substitutions therefor.

"Security Interests" shall mean the Liens  granted
to Lender pursuant to the Loan Documents.

"Senior  Nonmonetary  Default"   shall  have   the
meaning given to such term in Section 14.4.

"Senior Payment  Default" shall  have the  meaning
given to such term in Section 14.4.

"Specified Senior  Debt"  means (i)  all  Parent's
Senior Debt  under  Parent's primary  bank  credit  facility
existing from time to time and (ii) other issue of  Parent's
Senior  Debt  having   a  principal  amount   of  at   least
$10,000,000.

"Stated Rate" shall mean the lesser of (i)  twelve
percent (12%) per annum or (ii) the Maximum Lawful Rate.

"Stock Price"  shall mean  a per  share price  for
Parent Common Stock  equal to $7.31,  as such  price may  be
adjusted from time to time pursuant to Section 14.5.

"Subsidiary"  shall  mean  any  Person  in   which
Borrower directly  or indirectly  owns one  hundred  percent
(100%) of  the  stock  or  other  equity  interest  therein,
expressly excluding Joint Ventures.

"Withdrawal Liability" shall  mean liability to  a
Multiemployer Plan  as a  result of  a complete  or  partial
withdrawal from such Multiemployer  Plan, as such terms  are
defined in Part I of Subtitle E of Title IV of ERISA.

Section I.2    Lender's Discretion.  Whenever the terms
"satisfactory  to,"  "determined  by,"  "acceptable  to,"  "shall
elect," "shall request," "consented to", "approved by" or similar
terms are  used  in this  Agreement  or  any of  the  other  Loan
Documents to apply  to Lender, except  as otherwise  specifically
provided herein or  therein, such terms  shall mean  satisfactory
to, determined by, acceptable to,  at the election of,  requested
by, consented to, or  approved by as  applicable, Lender, in  its
sole discretion.

Section I.3    Approval in  Writing.   Any  consent  or
approval to be given by Lender  hereunder shall not be  effective
and shall not be  deemed given unless  in writing, duly  executed
and delivered by Lender.

Article II
LOAN AND TERMS OF PAYMENT

Section II.1   Loan.     Subject  to   the  terms   and
conditions set forth in the Loan  Documents and in reliance  upon
the representations and warranties of Borrower contained  herein,
Lender agrees to make one or more advances to Borrower (each,  an
"Advance" and  collectively,  the  "Advances")  in  an  aggregate
amount not  to exceed  Ten Million  Dollars ($10,000,000),  which
together shall constitute the Loan.  Borrower's obligation to pay
the principal of, and interest on, the Loan shall be evidenced by
the Note.  Borrower shall not be entitled to reborrow any portion
of the Loan which is repaid or prepaid.

Section II.2   Interest. 

(a)  Borrower agrees to pay interest in respect of
the unpaid principal amount of the  Loan from the date of  a
cash Advance  until  such  Advance  is  repaid  (whether  by
acceleration, optional or  mandatory prepayment,  Conversion
or otherwise), at a rate per annum equal to the Stated Rate.

(b)  During a Default Rate Period, the Obligations
shall bear interest at the Default Rate.

(c)  Accrued  (and  theretofore  unpaid)  interest
shall be payable (i) quarterly in arrears on each  Quarterly
Payment Date, (ii) upon any repayment or prepayment (on  the
amount repaid  or prepaid),  (iii) at  maturity (whether  by
acceleration or otherwise)  and, (iv)  after maturity,  upon
demand.  Notwithstanding  the foregoing, Lender  may at  any
time elect, in its sole discretion, to defer the payment  of
such interest  (or  any  portion thereof)  by  accruing  and
compounding interest quarterly.

(d)  Interest shall be computed on the basis of  a
year consisting  of  365 days  and  charged for  the  actual
number of  days during  the period  for which  the  interest
accrues on the Loan.

(e)  At least fifteen (15) Business Days prior  to
each day on which a payment of interest would be required to
be made in  accordance with this  Section 2.2, Lender  shall
deliver to  Borrower  a written  notice  indicating  whether
Lender elects to receive the interest payment in cash or  to
defer the payment of interest.   In the event that  Borrower
fails to  receive such  notice  fifteen (15)  Business  Days
prior to any  such interest  payment date,  Lender shall  be
deemed to have elected to defer the payment of interest.

Section II.3   Prepayments; Payments. 

(a)  Borrower shall have the  right to prepay  the
Loans, without premium or  penalty, in whole  or in part  at
any time and from time to time.

(b)  In addition  to other  mandatory  repayments,
and subject  to  Section  11.4 hereof,  Borrower  shall  be
required to repay the  entire outstanding principal  balance
and all  accrued but  unpaid interest  on  the Loan  on  the
Maturity Date.

(c)  Except as provided in Section 2.3(d) and  (e)
hereinbelow,  on  each  Joint  Venture  Distribution   Date,
Borrower shall pay to Lender an amount equal to one  hundred
percent (100%)  of  any  Joint Venture  Distributions  as  a
mandatory repayment of principal and accrued interest on the
outstanding Loan until such  principal and accrued  interest
is repaid in full.

(d)  Upon written  request  of  Borrower  and  the
approval  of  Lender,  Borrower  may  retain  Joint  Venture
Distributions which it may use for the purposes permitted in
the Cash Collateral Agreement; provided, that Olympus  shall
make a reasonable determination of the net collateralization
of the  Loan relative  to all  of Borrower's  Joint  Venture
interests and may condition  its approval of such  retention
by Borrower  on  the  establishment  of  a  cash  collateral
reserve  in  a  reasonable  amount  (the  "Cash   Collateral   
Account"), which shall serve as additional security for  the
Loan, pursuant to  a cash collateral  agreement with  Lender
(the "Cash Collateral Agreement")  to allow Lender  adequate
protection for repayment of the Loan.  Withdrawal rights for
Borrower from the Cash Collateral Account will be  specified
in the Cash Collateral Agreement.

(e)  Borrower may upon  written notice to  Lender,
retain an amount of Joint Venture Distributions equal to any
cash interest required  to be paid  by Borrower pursuant  to
this Agreement  and  for any  taxes  for which  Borrower  is
liable, provided that any such amounts shall be retained  by
Borrower with recourse and such written notice shall specify
in reasonable detail the relevant terms of request to retain
such amounts.

(f)  To the extent that, at any time, there is  no
outstanding Indebtedness  owed  under the  Loan,  all  Joint
Venture Distributions shall be made to Borrower and Borrower
shall be permitted to pay such  amounts to Parent either  to
repay Indebtedness  owed  by  Borrower to  Parent  or  as  a
dividend.

(g)  Any reserve accounts established pursuant  to
this Section 2.3 shall be invested in money market  accounts
pursuant to instructions from the Borrower and shall  accrue
interest thereon.

Section II.4   Conversion into  Parent Common  Stock.  
Lender may elect, at any time and from time to time, in its  sole
and absolute discretion,  to convert all  or any  portion of  the
principal amount of the Loan  into Parent Common Stock,  pursuant
to Article XIV of this Agreement.

Section II.5   Payments After  Event of  Default.  Any
provision of the Loan Documents to the contrary  notwithstanding,
all payments received by Lender during the existence of an  Event
of Default may be  applied to the Obligations  in such manner  as
Lender may elect.

Section II.6   Method  of  Payment; Good  Funds;  Net 
Payments.

(a)  All payments to be made by Borrower to Lender
pursuant to the Loan Documents shall  be made in Dollars  in
immediately available funds by  wire transfer to an  account
of Lender, as designated by Lender. 

(b)  Whenever any payments to be made hereunder or
under any other Loan Document shall be stated to be due on a
day which is not a Business Day, the due date thereof  shall
be extended to  the next succeeding  Business Day and,  with
respect to payments of principal, interest shall be  payable
at the applicable rate during such extension.

(c)  All payments  made by  Borrower hereunder  or
under  any  Loan  Document  will  be  made  without  set-off
counterclaim or other defense.

Section II.7   Maximum Interest.   Notwithstanding  any
provision to  the contrary  herein  contained, Lender  shall  not
collect a rate of interest on any obligation or liability due and
owing by Borrower  to Lender in  excess of  the maximum  contract
rate of  interest  permitted  by  applicable  law.    Lender  and
Borrower have agreed that the interest laws of the State of Texas
shall govern the relationship among them, but in the event of  a
final adjudication to the contrary, nunc pro tunc, Borrower shall
be obligated to pay to Lender only such interest as then shall be
permitted by the laws of the  state found to govern the  contract
relationship among  Lender and  Borrower.   It is  the intent  of
Borrower and Lender in  the execution of  the Loan Documents  and
all other agreements among them to contract in strict  compliance
with applicable usury laws.  In furtherance thereof, Borrower and
Lender stipulate and agree that none of the terms and  provisions
contained in or pertaining  to any of the  Loan Documents or  any
other agreements among the  parties hereto or  any of them  shall
ever constitute or be construed to create (a) a contract to  pay,
for the use,  forbearance or detention  of money,  interest at  a
rate or in an  amount in excess of  the maximum rate of  interest
permitted by applicable law  or (b) a charging  of interest at  a
rate or in an  amount in excess of  the maximum rate of  interest
permitted by  applicable law.   Neither  Borrower nor  any  other
obligor under the  Loan Documents or  any other agreements  among
the parties hereto or any of  them shall ever be required to  pay
interest with respect to the Note or any of the other Obligations
at a rate  in excess  of the maximum  interest rate  that may  be
lawfully charged under applicable law, and the provisions of this
paragraph shall control  over all  other provisions  of the  Loan
Documents or any other agreements among the parties hereto or any
of them which may be in  apparent conflict herewith.  Lender  and
each other holder  of the Note  or any of  the other  Obligations
expressly disavows any intention  to charge or collect  excessive
unearned interest or finance charges in the event the maturity of
the Note or any of the other Obligations are accelerated.  If the
maturity of the  Note or any  of the other  Obligations shall  be
accelerated for any reason or if the principal of the Note or any
of the other Obligations is paid prior to the end of the term  of
such Obligations and  as a result  thereof the interest  received
for the actual  period of existence  of such Obligations  exceeds
the applicable maximum lawful rate, Lender shall, at its  option,
either refund the amount of such  excess or credit the amount  of
such excess  against the  principal  balance of  the  Obligations
outstanding and  thereby shall  render inapplicable  any and  all
penalties of any kind provided by  applicable law as a result  of
such excess interest.   If  due to  any circumstance  whatsoever,
fulfillment of any of the provisions of the Loan Documents or any
other agreement among the  parties hereto or any  of them at  the
time performance of such provision shall be due shall exceed  the
maximum amount  of interest  permitted by  applicable law,  then,
automatically, the obligation to be fulfilled shall be  modified,
reduced or  eliminated  to the  extent  necessary to  limit  such
interest to the maximum amount  permitted by applicable law,  and
if from any such circumstance Lender  or any other holder of  the
Note or other Obligations should  ever receive anything of  value
deemed interest by applicable law which would exceed the  Maximum
Lawful Rate,  such excessive  interest shall  be applied  to  the
reduction of the principal amount then outstanding on the Loan or
on account  of the  principal amount  of any  other  indebtedness
secured by the Loan Documents and not to the payment of interest,
or if  such  excessive  interest  exceeds  the  unpaid  principal
balance then outstanding thereunder and such other  indebtedness,
such excess  shall  be  refunded to  Borrower  or  the  agreement
creating such excess interest shall be cancelled, in which  event
any and  all penalties  of any  kind under  applicable law  as  a
result of  such  excess  interest  shall  be  inapplicable.    By
execution of this Loan  Agreement, Borrower acknowledges that  it
believes the Note  and the other  Obligations to be  non-usurious
and agree that if,  at any time, Borrower  should have reason  to
believe that the  Note or any  such other Obligation  is in  fact
usurious, Borrower shall give Lender notice of such condition and
Borrower agrees that  Lender shall  have ninety  (90) days  after
such  notice  in  which  to  make  appropriate  refund  or  other
adjustment in order  to correct such  condition if  in fact  such
exists.  All amounts paid or agreed to be paid in connection with
the  Obligations  which  would  under  any  law  in  effect   and
applicable to Lender  be deemed "interest"  shall, to the  extent
permitted  by  such  applicable  law,  be  amortized,   prorated,
allocated and spread throughout the full term of the  Obligations
and the Loan Documents.  Any and all notices, pleadings or  other
communications (whether oral or  written) from Lender and/or  any
agent, attorney or Affiliate of Lender to Borrower or any  agent,
attorney or Affiliate of  Borrower shall be conclusively  deemed,
without the necessity of  referencing this Loan Agreement  and/or
this Paragraph, to incorporate, for  all purposes, the terms  and
provisions of this Paragraph.  The term "applicable law" as  used
in Paragraph  shall  mean  the  laws  of  the  United  States  or
applicable state law,  whichever laws allow  the greater rate  of
interest, as such laws now exist or may be changed or amended  or
come into effect in the future.

Section II.8   Advances.  Borrower shall notify  Lender
not later than 10:30 a.m. ten (10) Business Days in advance of  a
requested Advance, which notice shall  specify the date on  which
the Advance  should be  made and  the payment  instructions  with
respect thereto.  Lender agrees to make the requested Advance  on
the date requested pursuant to  the instructions provided to  the
extent Borrower has  provided Lender  with reasonable  assurances
that the Advance is permitted under  Section 6.20.  Each  Advance
shall begin to  accrue interest from  and including  the date  of
funding.

Article III
CONDITIONS FOR CLOSING AND FUNDING OF LOAN
AND INITIAL ADVANCE

The obligation of  Lender to make  the initial  Advance
shall be subject  to the satisfaction  on or  before the  Closing
Date of all of the conditions  and the delivery of the  documents
set forth below in  this Article III, the  form and substance  of
each such document  and the manner  of the  satisfaction of  each
such condition to be satisfactory to Lender:

Section III.1  Representations and Warranties.  On  the
Closing Date and after giving effect  to the initial Advance  the
representations and warranties of the Borrower set forth in  this
Loan Agreement and in  any other of the  Loan Documents shall  be
true and correct in all material respects when made and at and as
of the  time of  the  Closing, except  to  the extent  that  such
representations and  warranties expressly  relate to  an  earlier
date, in  which case  such representations  and warranties  shall
continue to be true and correct as of such earlier date.

Section III.2  Delivery of  Documents.   The  following
shall have been  delivered to  Lender, each  duly authorized  and
executed:

(a)  all of the Loan Documents, which shall be  in
form and content acceptable to Lender.

(b)  certificates representing all  of the  equity
interests of Borrower  in any Joint  Ventures and a  signed,
undated stock power  duly executed  in blank  for each  such
certificate, or  UCC-1  financing statements  in  connection
with the  pledge  of  any such  equity  interests  that  are
uncertificated;

(c)  a certificate of incumbency for Borrower;

(d)  a certificate of existence and good  standing
for Borrower and any initial  Subsidiaries in the states  in
which Borrower  or  any  such Subsidiary  is  organized  and
qualified to do business;

(e)  certified   copies   of   the   articles   of
incorporation and  bylaws, and  all amendments  thereto,  of
Borrower and any initial Subsidiary;

(f)  certified copies  of resolutions  adopted  by
the  board  of  directors   of  Borrower  and  any   initial
Subsidiary authorizing the  execution by  Borrower and  such
Subsidiary of the Loan  Documents to which  each is a  party
and  the  consummation  of  the  transactions   contemplated
therein; and

(g)  such other documents, certificates,  consents
and waivers  as Lender  may request  and evidence  that  all
other actions  necessary  or,  in  the  opinion  of  Lender,
desirable have been taken.

Section III.3  Security Interests.    All  filings  and
actions necessary  or, in  the opinion  of Lender,  desirable  to
perfect and  maintain  the  Security Interests  purported  to  be
created by the Loan Documents as valid and perfected Liens in the
Property covered thereby, subject only to Permitted Liens,  shall
have been filed  or taken  and confirmation  thereof received  by
Lender.

Section III.4  Performance; No  Default.   Each of  the
Borrower and any  initial Subsidiaries shall  have performed  and
complied with all agreements and conditions contained in the Loan
Documents to be performed  or complied with  by Borrower or  such
Subsidiary prior to or at the Closing.

Section III.5  Approval of Loan Documents and  Security  
Interests.  The approval and/or consent shall have been  obtained
(and shall remain in effect) from each Governmental Body and  all
other Persons whose approval or consent is necessary or  required
to enable Borrower  or any initial  Subsidiary to (i) enter  into
and  perform  their   respective  obligations   under  the   Loan
Documents,  (ii) grant  to  Lender  the  Security  Interests  and
(iii) consummate the Loan.

Section III.6  Additional Items.

(a)  No litigation, inquiry, judgement, injunction
or restraining order shall be pending, entered or threatened
(including any proposed statute,  rule or regulation)  which
has a reasonable  likelihood of  being adversely  determined
and, if adversely determined,  would reasonably be  expected
to have  a  Material  Adverse Effect  on  (i) the  business,
assets, operations,  condition (financial  or otherwise)  or
prospects of  Borrower, (ii) Borrower's  ability to  perform
its obligations under the financing agreements or  (iii) the
rights and remedies of Lender.

(b)  There shall not have occurred any change,  or
development or event involving  a prospective change,  which
in either case  in the  reasonable opinion  of Lender  could
have  a  Material  Adverse   Effect  on  (i) the   business,
operations,   property,   assets,   liabilities,   condition
(financial  or  otherwise)  or  prospects  of  Borrower,  or
(ii) the rights and remedies of Lender.

(c)  Lender shall  not have  become aware  of  any
material  adverse  information   with  respect  to   (i) the
business,   operations,   property,   assets,   liabilities,
condition (financial or otherwise) or prospects of Borrower,
(ii) Borrower's ability to perform its obligations under the
financing agreements  or (iii) the  rights and  remedies  of
Lender.

(d)  There shall  exist no  event of  default  (or
condition which would  constitute an event  of default  with
the giving  of notice  or the  passage  of time)  under  any
capital stock,  financing  agreements, lease  agreements  or
other contracts of Borrower.

(e)  All filings  and  other actions  required  to
create and perfect a  first priority security interest  with
respect to assets  owned by  Borrower shall  have been  duly
made or taken, and all Collateral shall be free and clear of
other Liens, subject to Permitted Liens.

(f)  Lender  shall   have  determined   that   the
transactions  contemplated   hereby  or   entered  into   in
connection  herewith,  including  without  limitation,   the
making of the  Loan, do not  violate and  conflict with  any
applicable law or regulation in any material respect.

The acceptance of the initial Advance shall  constitute
a  representation  and  warranty  by  Borrower  and  any  initial
Subsidiary to the  Lender that all  conditions specified in  this
Article III have been satisfied as of that time.

Article IV
CONDITIONS FOR FUTURE FUNDING COMMITMENTS

The obligations of Lender  to make Advances  subsequent
to the initial Advance hereunder in connection with contributions
by Borrower to  each new Joint  Venture shall be  subject to  the
satisfaction on or  before the date  of such Advance  of all  the
conditions and delivery of  all the documents  set forth in  this
Article IV, the form and substance of each such document and  the
manner of satisfaction  of each such  condition to be  reasonably
satisfactory to Lender:

Section IV.1   Representations    Bringdown.        The
representations and warranties  contained in Article  VI of  this
Agreement are true and correct in all material respects on and as
of the date of such  Advance with the same  effect as if made  on
and as of such date, except to the extent such representation and
warranty expressly relates to a specific date, in which event  it
shall be  true  and  correct  as of  such  specific  date.    The
representations and warranties contained  in Article VII of  this
Agreement are true  and correct as  of the date  of such  Advance
with the same effect as if made on and as of such date where  any
untrue or  incorrect representation  and  warranty could  have  a
Material Adverse Effect  on the business,  assets, operations  or
condition, financial or otherwise of Parent.

Section IV.2   No  Default;  Compliance  With  Terms.  
Borrower  shall  be  in  compliance  with  all  other  terms  and
provisions set forth herein  and in each  other Loan Document  on
its part to  be observed  or performed, and  at the  time of  and
immediately after such Advance no  Potential Default or Event  of
Default shall have occurred and be continuing.

Section IV.3   Delivery of Documents.

(a)  All filings and actions that are necessary, or  in
the opinion  of  Lender,  desirable to  perfect  and  maintain  a
Security Interest  in Borrower's  interest in  the Joint  Venture
with respect  to  which  the Advance  relates,  as  a  valid  and
perfected Lien in the Property  covered thereby, subject only  to
Permitted Liens, shall have been filed or taken, and Lender shall
have received confirmation thereof;

(b)  Lender  shall  have  received  a  certificate   of
incumbency for Borrower; and

(c)  Lender shall  have  received such  legal  opinions
(including  opinions  (i)  from  counsel  to  Borrower  and   its
Subsidiaries, and (ii) from such special and local counsel as may
be  reasonably  required  by  Lender,  in  each  case  reasonably
acceptable to Lender) dated the date of the Advance, addressed to
Lender  addressing  issues  relating  to  the  Security  Interest
created in the  Borrower's Joint Venture  interest and any  other
matters incident  to  the  transactions  contemplated  hereby  as
Lender may reasonably require.

Section IV.4   Additional Items.  Each of the items set
forth in Section 3.6 shall be true and correct.

Article V
CONDITIONS FOR OTHER ADVANCES

The obligations of Lender  to make Advances other  than
those identified in Article III and Article IV hereunder shall be
subject to the satisfaction on or before the date of such Advance
of all the conditions and delivery of all the documents set forth
in this Article V, the form  and substance of each such  document
and the  manner of  satisfaction of  each  such condition  to  be
reasonably satisfactory to Lender:

Section V.1    Representations    Bringdown.        The
representations and warranties  contained in Article  VI of  this
Agreement are true and correct in all material respects on and as
of the date of such  Advance with the same  effect as if made  on
and as of such date, except to the extent such representation and
warranty expressly relates to a specific date, in which event  it
shall be  true  and  correct  as of  such  specific  date.    The
representations and warranties contained  in Article VII of  this
Agreement are true  and correct as  of the date  of such  Advance
with the same effect as if made on and as of such date where  any
untrue or  incorrect representation  and  warranty could  have  a
Material Adverse Effect  on the business,  assets, operations  or
condition, financial or otherwise of Parent.

Section V.2    No  Default;  Compliance  With  Terms.  
Borrower  shall  be  in  compliance  with  all  other  terms  and
provisions set forth herein  and in each  other Loan Document  on
its part to  be observed  or performed, and  at the  time of  and
immediately after such Advance no  Potential Default or Event  of
Default shall have occurred and be continuing.

Article VI
REPRESENTATIONS AND WARRANTIES OF BORROWER

In order to  induce Lender to  make the Loan,  Borrower
makes the following  representations, warranties and  agreements,
in each case after giving effect  to the making of the Loan,  all
of which  shall  survive  the  execution  and  delivery  of  this
Agreement and  the Note  and the  making of  the Loan;  provided,
however, none of the representations and warranties contained  in
this Article  V shall  be deemed  to relate  to any  matters  or
affairs derived from or based upon any activities, operations  or
occurrences relating to any Joint Venture.

Section VI.1   Organization   and   Good   Standing.   
Borrower and each Subsidiary is duly organized, validly  existing
and in  good  standing  under  the  laws  of  the  state  of  its
organization.   Borrower and  each Subsidiary  has the  requisite
power and authority to  own, lease or  otherwise hold the  assets
owned, leased  or  otherwise held  by  it  and to  carry  on  its
business as  presently  conducted  by  it.    Borrower  and  each
Subsidiary is  in good  standing and  duly qualified  to  conduct
business  as  a  foreign  corporation,  partnership  or   limited
liability company, as  applicable, in every  state of the  United
States in which its ownership or lease of property or conduct  of
business makes such qualification necessary.

Section VI.2   Authorization  of   Agreement;   Binding   
Obligation.   Borrower  has  the  requisite  corporate  power  to
execute  and  to  deliver  this  Agreement  and  the  other  Loan
Documents and to perform the transactions contemplated hereby and
thereby to be  performed by it.   The execution  and delivery  by
Borrower of this Agreement and the  other Loan Documents and  the
performance by  it of  the transactions  contemplated hereby  and
thereby to be performed  by it have been  duly authorized by  all
necessary corporate  action  on  the  part  of  Borrower.    This
Agreement and the  other Loan Documents  have been duly  executed
and  delivered  by  duly  authorized  officers  of  Borrower  and
constitute valid  and binding  obligations of  Borrower and  each
Subsidiary that owns  a Joint Venture  interest that  is a  party
thereto, enforceable against such  Person in accordance with  the
terms hereof or thereof, except as may be limited by  bankruptcy,
insolvency, reorganization,  moratorium  or  other  similar  laws
affecting the  enforcement of  creditors' rights  in general  and
subject to general  principles of equity  (regardless of  whether
such enforceability is considered in a proceeding in equity or at
law).

Section VI.3   Required Consents.   The  execution  and
delivery of  this  Agreement  and the  other  Loan  Documents  by
Borrower does  not,  and  the  performance  by  Borrower  of  the
transactions contemplated hereby or thereby to be performed by it
will not (a) conflict  with the certificate  of incorporation  or
bylaws, partnership  agreement,  operating  agreement,  or  other
organizational documents,  as  applicable,  of  Borrower  or  any
Subsidiary, (b) conflict with, or result in any violation of,  or
constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation
or acceleration  of  any material  obligation  or to  loss  of  a
benefit under, any material contract, permit, order, judgment  or
decree to which Borrower or any Subsidiary is a party or by which
any of their properties are bound, (c) constitute a violation  of
any law or regulation applicable  to Borrower or any  Subsidiary,
or (d) result in the creation of any lien, charge or  encumbrance
upon any of Borrower's or any Subsidiary's assets except, in  the
case of (a) through (d) hereof,  for those that, individually  or
in the  aggregate, could  not reasonably  be expected  to have  a
material adverse effect  (i) on the  business, assets,  financial
condition,  prospects,  financial  projections,  or  results   of
operations of Borrower  and any Subsidiary  taken as  a whole  or
(ii) on the ability of Borrower to perform on a timely basis  any
material obligation  under  this  Agreement  or  the  other  Loan
Documents or to consummate  the transactions contemplated  hereby
or thereby  (each, a  "Material Adverse  Effect").   No  consent,
approval, order or authorization of, or registration, declaration
or filing with, any Governmental Body is required to be  obtained
or made by  or with respect  to Borrower in  connection with  the
execution and delivery of this Agreement or any of the other Loan
Documents by  Borrower  or the  performance  by Borrower  of  the
transactions contemplated hereby  or thereby to  be performed  by
it.

Section VI.4   Financial  Statements.    The  financial
statements to be  delivered to Lender  on or  before ninety  (90)
days from the Closing  Date by or on  behalf of Borrower  present
fairly the financial condition and  results of the operations  of
Borrower as of the dates and for the periods indicated therein.  
No material adverse change in the business, operations, property,
assets, liabilities,  condition  (financial  or  otherwise  )  or
prospects of Borrower  has occurred since  the date  of the  last
financial statements  delivered  to Lender  by  or on  behalf  of
Borrower.  All of the foregoing financial statements and  balance
sheets, except as otherwise indicated therein, have been prepared
in accordance with GAAP.

Section VI.5   Absence  of  Undisclosed  Liabilities.  
Neither Borrower  nor any  Subsidiary  has any  Indebtedness  for
Borrowed  Money  or  Contingent  Obligations  except  for   those
permitted pursuant to Sections 10.1 and 10.4.

Section VI.6   Books of  Account.   The books,  records
and accounts  of  Borrower  accurately  and  fairly  reflect,  in
reasonable  detail,   the  transactions   and  the   assets   and
liabilities of Borrower  and each Subsidiary  and do not  contain
any  material  inaccurate  information   or  omit  any   material
information necessary in  order to make  such books, records  and
accounts, in light  of the  circumstances under  which they  were
prepared, not misleading.   Neither Borrower  nor any  Subsidiary
has engaged in  any transaction, maintained  any bank account  or
used any of the  funds of Borrower or  any Subsidiary except  for
transactions, bank accounts  and funds  which have  been and  are
reflected  in  the  normally  maintained  books  and  records  of
Borrower.

Section VI.7   Title to Property; Liens.  Borrower  and
each Subsidiary has good, valid and indefeasible title to all  of
its material  Property  free  and  clear  of  all  Liens,  except
Permitted Liens.    The  Security Instruments  create  valid  and
perfected Liens on the  Property described therein, subject  only
to Permitted Liens.

Section VI.8   Condition of Assets.  All of the  assets
of Borrower and each  Subsidiary, if any,  are in good  operating
condition and repair, subject to normal wear and maintenance, are
usable in  the  regular  and  ordinary  course  of  business  and
materially conform  to all  applicable laws,  ordinances,  codes,
rules  and   regulations,   and   permits   relating   to   their
construction, use and operation.

Section VI.9   Insurance.  Borrower and each Subsidiary
has insurance policies in full force and effect for such  amounts
as are sufficient for  material compliance with all  requirements
of law and of  all material agreements to  which Borrower or  any
Subsidiary is a party or by which any of them is bound.  No event
relating to  Borrower or  any Subsidiary  has occurred  that  can
reasonably be expected to result in a material retroactive upward
adjustment in premiums under any such insurance policies or  that
is likely to result in  a material prospective upward  adjustment
in such premiums.  Excluding insurance policies that have expired
and  been  replaced  in  the  ordinary  course  of  business,  no
insurance policy has  been cancelled  within the  last two  years
and, to Borrower's knowledge, no threat  has been made to  cancel
any insurance policy  of Borrower or  any Subsidiary during  such
period.  No  event has occurred,  including, without  limitation,
the failure by Borrower or any  Subsidiary to give any notice  or
information or Borrower or  any Subsidiary giving any  inaccurate
or erroneous notice or information,  which limits or impairs  the
rights of Borrower  or any  Subsidiary under  any such  insurance
policies.  Borrower  has provided Lender  with true and  complete
copies of all regularly prepared loss run reports as of the  date
hereof.

Section VI.10  Conduct of  the  Business.    Except  as
permitted  under  Article  X and  except  for  the  transactions
contemplated by  the  Loan  Documents  and  the  other  documents
entered into between Borrower,  Lender and Affiliates of  Lender,
from its  date of  formation through  the  Closing Date  for  the
initial Advance or the date of any future Advance, as applicable,
neither Borrower nor any Subsidiary has entered into any material
transactions or conducted any material business.

Section VI.11  Litigation.    There  are  no   actions,
suits,  arbitration  proceedings  or   claims  (whether  or   not
purportedly on behalf of Borrower or any Subsidiary) pending  or,
to the best knowledge  of Borrower, threatened, against  Borrower
or any Subsidiary  maintained by Borrower  or any Subsidiary,  at
law or in equity  (i) with respect to  any Loan Document or  (ii)
which have a reasonable likelihood of being adversely  determined
and which, if adversely determined, could have a material adverse
effect   on   the   business,   operations,   Property,   assets,
liabilities, condition (financial or  otherwise) or prospects  of
Borrower or any Subsidiary.

Section VI.12  Compliance With Law; Permits.   Borrower
and each Subsidiary has complied  with each law, judgment,  order
and decree,  including  ERISA  and  environmental  laws,  of  any
Governmental Body to  which Borrower or  any Subsidiary or  their
business, operations, assets or properties is subject and is  not
currently in violation of any of the foregoing, except where  the
failure to so comply  with or violation of  any of the  foregoing
could not reasonably be expected to have, individually or in  the
aggregate,  a  Material  Adverse  Effect.    Borrower  and   each
Subsidiary  owns,  holds,  possesses  or  lawfully  uses  in  the
operation  of  its  business  all  material  licenses,   permits,
authorizations and approvals (collectively, "Permits") which  are
necessary to conduct the business of Borrower and each Subsidiary
as now conducted or for the ownership and use of its assets, free
and clear of all Liens and in compliance with all laws.   Neither
Borrower nor any Subsidiary  is in default,  nor has Borrower  or
any Subsidiary received any notice of any claim of default,  with
respect to any such Permits.   All such Permits are renewable  by
their terms or  in the ordinary  course of  business without  the
need to comply  with any special  qualification procedures or  to
pay any amounts  other than routine  filing fees.   None of  such
Permits  will  be  adversely  affected  by  consummation  of  the
transactions contemplated  hereby.    No  shareholder,  director,
officer,  employee  or  former   employee  of  Borrower  or   any
affiliates of Borrower, or any other person, firm or  corporation
owns or has any proprietary, financial or other interest  (direct
or indirect)  in any  Permits which  Borrower or  any  Subsidiary
owns, possesses  or uses  in the  operation  of the  business  of
Borrower or any Subsidiary as now conducted.

Section VI.13  Taxes.  (a) All Tax Returns (as  defined
in paragraph  (e) below)  that are  required to  be filed  on  or
before the Closing Date by Borrower  or any Subsidiary have  been
duly filed  on  a  timely basis  under  the  statutes,  rules  or
regulations  of  each  applicable  jurisdiction.    To  the  best
knowledge of Borrower,  all such  Tax Returns  were complete  and
accurate in all material respects.   All Taxes reflected on  such
returns as owed  by Borrower or  any Subsidiary  have been  paid,
whether or not such Taxes are disputed.  Neither Borrower nor any
Subsidiary has  executed  or  filed  with  the  Internal  Revenue
Service or any other taxing authority any agreement extending the
period for filing any Tax Return.

(b)  No claim for assessment or collection of Taxes has
been asserted  against  Borrower  or  any  Subsidiary.    Neither
Borrower nor any  Subsidiary is a  party to  any pending  action,
proceeding or  investigation by  any  Governmental Body  for  the
assessment  or  collection  of  Taxes  nor  does  Borrower   have
knowledge  of   any  such   threatened  action,   proceeding   or
investigation.

(c)  No waivers of statutes of limitation in respect of
any Tax Returns have been given  or requested by Borrower or  any
Subsidiary nor  has  Borrower or  any  Subsidiary agreed  to  any
extension of time with respect to a Tax assessment or deficiency.
No claim  has  ever  been  made by  a  Governmental  Body  in  a
jurisdiction where Borrower or any Subsidiary does not  currently
file Tax Returns that it is or may be subject to taxation by that
jurisdiction nor is  Borrower aware  that any  such assertion  of
jurisdiction is  threatened.   No  security interests  have  been
imposed upon or asserted against any of the assets of Borrower or
any Subsidiary as a result of or in connection with any  failure,
or alleged failure, to pay any Tax.

(d)  Borrower and each Subsidiary has withheld and paid
all Taxes required to be withheld in connection with any  amounts
paid or owing to any employee, creditor, consultant,  independent
contractor or other third party.

(e)  For purposes of  this Agreement,  the terms  "Tax"
and "Taxes"  shall mean  all federal,  state, local,  or  foreign
income, payroll,  employee withholding,  unemployment  insurance,
social security,  sales,  use,  service,  service  use,  leasing,
leasing use,  excise,  franchise, gross  receipts,  value  added,
alternative or add-on  minimum, estimated,  occupation, real  and
personal  property,  stamp,   transfer,  workers'   compensation,
severance, windfall profits, environmental (including taxes under
Section 59A  of the  Code), or  other tax  of the  same or  of  a
similar nature,  including  any interest,  penalty,  or  addition
thereto, whether disputed or  not.  The  term "Tax Return"  means
any return, declaration, report, claim for refund, or information
return or statement relating to  Taxes or any amendment  thereto,
and including any schedule or attachment thereto.

Section VI.14  Conflicting Agreements.  Borrower is not
in default under any agreement to which Borrower is a party or by
which Borrower or  any of its  Property is bound,  the effect  of
which default  might  have  a  material  adverse  effect  on  the
business operations,  Property,  assets,  liabilities,  condition
(financial or otherwise) or prospects of Borrower.

Section VI.15  Patents, Trademarks,  Franchises, Etc. 
Borrower owns  or  possesses  all  patents,  trademarks,  service
marks, trade  names,  copyrights, franchises  and  licenses,  and
rights with respect  thereto, necessary  for the  conduct of  its
business as  now  conducted  and  as  presently  proposed  to  be
conducted, without any known conflict  with the rights of  others
and, in each case, free of any Lien other than Permitted Liens.

Section VI.16  Full Disclosure.   No representation  or
warranty contained  herein  and no  certificate,  information  or
report furnished or  to be  furnished by  Borrower in  connection
with any  of  the  Loan Documents  or  any  of  the  transactions
contemplated thereby, contains or will contain a misstatement  of
material fact, or omits or will omit a material fact required  to
be stated in  order to make  the statements  contained herein  or
therein not misleading  in the light  of the circumstances  under
which such  statements were  made.   There is  no fact  known  to
Borrower, or so far as Borrower presently reasonably can foresee,
which has not been expressly disclosed to Lender in writing, that
will  materially  adversely  affect  Borrower  or  its  business,
operations, Property, assets,  liabilities, condition  (financial
or  otherwise)  or  prospects  or  the  ability  of  Borrower  to
consummate the transactions and perform its obligations  pursuant
to the Loan Documents, other than facts which generally are known
to the public and relating to Borrower's business generally.

Section VI.17  Employee Matters.  None of the employees
of Borrower  or  any  Subsidiary is  subject  to  any  collective
bargaining agreement and there are no strikes, work stoppages  or
material controversies  pending,  or  to the  best  knowledge  of
Borrower, threatened between Borrower  or any Subsidiary and  any
of its  respective  employees,  other  than  employee  grievances
arising in the ordinary course of business which would not in the
aggregate be expected to  have a material  adverse effect on  the
business, operations,  Property, assets,  liabilities,  condition
(financial  or  otherwise)  or  prospects  of  Borrower  and  the
Subsidiaries taken as a whole.

Section VI.18  Other Indebtedness.   Borrower  has  not
incurred and as of  the Closing Date will  not have incurred  any
Indebtedness for  Borrowed Money  or any  Contingent  Obligations
other than the Indebtedness and Contingent Obligations  permitted
by Sections 10.1 and 10.4.

Section VI.19  Possession of Franchises, Licenses, Etc.
Borrower  and   each   Subsidiary  possesses   all   franchises,
certificates, licenses,  permits, and  other authorizations  from
each Governmental Body, free from unduly burdensome restrictions,
that are  necessary  or  advisable for  the  leasing,  ownership,
maintenance  and  operation  of  its  respective  properties  and
assets, and neither Borrower nor  any Subsidiary is in  violation
of any thereof in any respect.

Section VI.20  Use of Proceeds.   Proceeds of the  Loan
shall be  used by  Borrower solely  for investment  in the  Joint
Ventures, for payment of interest on the Loan, if required to  be
paid in cash,  for investment in  one or  more Subsidiaries  that
invest in Joint Ventures, and for Pursuit Costs.

Article VII
REPRESENTATIONS AND WARRANTIES OF PARENT

In order  to induce  Lender to  make the  Loan,  Parent
makes the following  representations, warranties and  agreements,
in each case after giving effect  to the making of the Loan,  all
of which  shall  survive  the  execution  and  delivery  of  this
Agreement and  the Note  and the  making of  the Loan;  provided,
however, none of the representations and warranties contained  in
this Article VII  shall be  deemed to  relate to  any matters  or
affairs derived from or based upon any activities, operations  or
occurrences relating to any Joint Venture.

Section VII.1  Organization; Powers.    Parent  (i)  is
duly organized, validly existing and  in good standing under  the
laws of the  state of its  organization, (ii)  has the  requisite
power and authority to own its  property and assets and to  carry
on its business as now conducted and as proposed to be  conducted
and (iii) is qualified to do business in every jurisdiction where
such qualification is  required, except where  the failure so  to
qualify  would  not  have  a  Material  Adverse  Effect  on   its
condition, financial or otherwise.   Parent has the corporate  or
other equivalent  power  to  execute,  deliver  and  perform  its
obligations under this Agreement and the other Loan Documents  to
which it  is or  is to  be a  party.   Parent has  all  requisite
corporate  or  other  equivalent  power,  and  has  all  material
governmental licenses,  authorizations,  consents  and  approvals
necessary to own its own assets and carry on its business as  now
being or as proposed to be conducted.

Section VII.2  Authorization.  The execution,  delivery
and performance of this Agreement and the other Loan Documents to
which Parent is or is to be a party (i) have been duly authorized
by all requisite corporate or partnership, as applicable, and, if
required, stockholder or  partner, as applicable,  action on  the
part of Parent and (ii) will not (A) violate (x) any Governmental
Rule or Parent's Certificate of Incorporation and By-laws or  (y)
any provisions of any indenture, agreement or other instrument to
which Parent  is  a party,  or  by which  Parent  or any  of  its
properties or assets  are or  may be  bound, (B)  be in  conflict
with, result in a breach of  or constitute (alone or with  notice
or lapse  of  time  or  both)  a  default  under  any  indenture,
agreement or other instrument referred to  in (ii) (A) (y)  above
or (C) result in the creation or  imposition of any Lien,  charge
or encumbrance  of any  nature whatsoever  upon any  property  or
assets of Parent.

Section VII.3  Governmental Approvals.  No registration
with  or  consent  or  approval  of,  or  other  action  by,  any
Governmental Body is or will be  required in connection with  the
execution, delivery and performance  by Parent of this  Agreement
or any other Loan Document to which it  is, or is to be, a  party
except such as have been made  or obtained and are in full  force
and effect.   Other than routine  authorizations, permissions  or
consents which are of  a minor nature  and which are  customarily
granted in due course  after application or  the denial of  which
would not  materially adversely  affect the  business,  financial
condition or  operations of  Parent, Parent  has all  franchises,
licenses, certificates,  authorizations,  approvals  or  consents
from all national,  state and local  governmental and  regulatory
authorities required to  carry on its  business as now  conducted
and as proposed to be conducted.

Section VII.4  Enforceability.  This Agreement and each
of  the  other  Loan  Documents  to  which  Parent  is  a   party
constitutes a  legal, valid  and  binding obligation  of  Parent,
enforceable in accordance with  their respective terms  (subject,
as to the enforcement of  remedies against Parent, to  applicable
bankruptcy, reorganization,  insolvency, moratorium  and  similar
laws affecting  creditors' rights  against Parent,  generally  in
connection with the bankruptcy,  reorganization or insolvency  of
Parent or a moratorium or similar event relating to Parent.

Section VII.5  Financial  Statements.      Parent   has
heretofore furnished to  Lender an  audited consolidated  balance
sheet  and  statement  of  operations  and  changes  in  retained
earnings and  cash flow  as  of and  for  the fiscal  year  ended
December 31, 1996 and 1997, and an unaudited consolidated balance
sheet and statement of operations and cash flow as of and for the
fiscal quarter ended March 31, 1998.  All such balance sheets and
statements  of  operations  and  cash  flow  present  fairly  the
financial condition and results of  operations of Parent and  its
subsidiaries as of the dates and for the periods indicated.  Such
financial statements and the notes thereto disclose all  material
liabilities, direct or contingent, of Parent and its subsidiaries
as of the dates thereof which are required to be disclosed in the
footnotes to  financial statements  prepared in  accordance  with
GAAP.  The financial statements referred  to in this Section  7.5   
have been prepared in  accordance with GAAP.   There has been  no
material adverse change since March 31, 1998, in the  businesses,
assets,  operations,   prospects  or   condition,  financial   or
otherwise, of Parent and its subsidiaries taken as a whole.

Section VII.6  Litigation; Compliance with Laws; etc.

(i) Except  as  disclosed  in  the  Parent  Annual
Report on Form 10-K for the  fiscal year ended December  31,
1997, and any subsequent filings made by Parent pursuant  to
the periodic reporting requirements of the SEC, there are no
actions, suits or proceedings at law  or in equity or by  or
before  any  Governmental  Body  now  pending  or,  to   the
knowledge of Parent, threatened against or affecting Parent,
or any  of its  subsidiaries or  the businesses,  assets  or
rights of  Parent,  or any  of  its subsidiaries  (x)  which
involve this Agreement or any of the other Loan Documents or
any of the  transactions contemplated hereby  or thereby  or
(y) as  to which  there is  a reasonable  possibility of  an
adverse determination  and which,  if adversely  determined,
could, individually or in  the aggregate, materially  impair
the ability of Parent to conduct its business  substantially
as now  conducted, or  materially and  adversely affect  the
businesses,  assets,  operations,  prospects  or  condition,
financial or otherwise, of Parent, or impair the validity or
enforceability of, or the ability  of Parent to perform  its
obligations under, this Agreement or  any of the other  Loan
Documents to which it is a party.

(ii) Neither Parent nor any of its subsidiaries is
in violation of  any Governmental Rule,  or in default  with
respect to any judgment, write, injunction, decree, rule  or
regulation of any Governmental Body, where such violation or
default could result in a Material Adverse Effect.   Without
limitation  of  the  foregoing,  Parent  and  each  of   its
subsidiaries have complied with all Environmental Laws where
any such noncompliance could have a Material Adverse  Effect
on the business, assets, operations or condition,  financial
or otherwise, of Parent or its subsidiaries.  Neither Parent
nor any  of  its subsidiaries  has  received notice  of  any
material failure so  to comply.   Neither  Parent's nor  its
Subsidiaries'  plants  handle  any  Hazardous  Materials  in
violation of any Environmental Law where any such  violation
could have  a  Material  Adverse  Effect  on  the  business,
assets, operations or condition,  financial or otherwise  of
Parent.   Parent  is  aware  of  no  events,  conditions  or
circumstances involving contaminants  or employee health  or
safety that  could  reasonably  be  expected  to  result  in
material liability  on the  part of  Parent  or any  of  its
subsidiaries.

Section VII.7  Title, etc.  Parent and its subsidiaries
have good and valid title to its material properties, assets  and
revenues (exclusive of oil, gas  and other mineral properties  on
which no development or production activities are being conducted
and commercially exploitable reserves have not been  discovered),
free and clear of all Liens (as such term is defined in  Parent's
Credit Agreement) except for the Permitted Liens (as such term is
defined in Parent's Credit Agreement).

Section VII.8  Federal  Reserve  Regulations;  Use   of   
Proceeds.   Neither Parent nor any of its subsidiaries is engaged
principally, or  as  one  of its  important  activities,  in  the
business of extending  credit for  the purpose  of purchasing  or
carrying Margin Stock.

Section VII.9  Taxes.  Parent and its subsidiaries have
filed or caused to  be filed all  material federal, state,  local
and foreign tax returns which are  required to be filed by  them,
and have paid or  caused to paid  all taxes shown  to be due  and
payable on such returns or on any assessments received by any  of
them, other than any taxes or  assessments the validity of  which
Parent or any of its subsidiaries is contesting in good faith  by
appropriate proceedings, and with respect to which Parent or  any
of its subsidiaries shall, to the  extent required by GAAP,  have
set aside on its books adequate reserves.

Section VII.10 Employee Benefit Plans.  Parent and  its
ERISA Affiliates are in compliance in all material respects  with
the  applicable  provisions  of  ERISA  and  the  Code  and   the
regulations and published interpretations  thereunder.  No  ERISA
Event has occurred or is reasonably expected to occur that,  when
taken together with all other such ERISA Events, could materially
and adversely affect  the financial condition  and operations  of
Parent and its ERISA Affiliates, taken  as a whole.  The  present
value of all benefit liabilities under each Plan, determined on a
plan termination  basis  (based  on those  assumptions  used  for
financial disclosure  purposes in  accordance with  Statement  of
Financial Accounting Standards No. 87 of the Financial Accounting
Standards Board  ("SFAS 87")),  did not,  as of  the last  annual
valuation date applicable thereto, exceed by more than $5,000,000
the value of the  assets of such Plan,  and the present value  of
all benefit liabilities of all underfunded Plans, determined on a
plan termination  basis  (based  on those  assumptions  used  for
financial disclosure purposes  in accordance with  SFAS 87),  did
not, as of  the last annual  valuation dates applicable  thereto,
exceed by more  than $5,000,000 the  value of the  assets of  all
such underfunded Plans.

Section VII.11 Investment Company Act.  Neither  Parent
nor any of its subsidiaries is an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of
1940, as amended from time to time.

Section VII.12 Public Utility  Holding  Company  Act.  
Neither  Parent  nor  any  of  its  subsidiaries  is  a  "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", or of a "subsidiary  company"
of a "holding company", within the meaning of the Public  Utility
Holding Company Act of 1935, as amended from time to time.

Section VII.13 Environmental Matters.

(i) The properties of Parent and its  subsidiaries
are in compliance, and in the last three years have been  in
compliance, with all Environmental  Laws, and all  necessary
Environmental Permits have been obtained and are in  effect,
and are  not  the  subject  of  any  pending  or  threatened
challenge by any Governmental Body or Person, except to  the
extent that  such  noncompliance, challenge  or  failure  to
obtain any necessary  permits, in the  aggregate, could  not
reasonably be  expected  to  result in  a  Material  Adverse
Effect.

(ii) There  have been  no Releases  or  threatened
Releases at, from, under or  proximate to its properties  or
otherwise in connection with the operations of Parent or its
subsidiaries, which Releases or threatened Releases, in  the
aggregate, could  reasonably  be  expected to  result  in  a
Material Adverse Effect.

(iii) Neither Parent nor  any of its  subsidiaries
has  received  any  notice  of  an  Environmental  Claim  in
connection with its properties  or the operations of  Parent
or its  subsidiaries  or with  regard  to any  Person  whose
liabilities  for   environmental  matters   Parent  or   its
subsidiaries has retained or assumed,  in whole or in  part,
contractually, by operation of  law or otherwise, which,  in
the aggregate,  could reasonably  be expected  to result  in
Material  Adverse   Effect,   nor  does   Parent   nor   its
subsidiaries have  reason to  believe that  any such  notice
will be received or is being threatened.

(iv) Hazardous Materials have not been transported
from the properties of Parent or its subsidiaries, nor  have
Hazardous  Materials  been  generated,  treated,  stored  or
disposed of at,  on or  under any  of such  properties in  a
manner  that  could  give   rise  to  liability  under   any
Environmental  Law,   nor  has   Parent  nor   any  of   its
subsidiaries   retained    or   assumed    any    liability,
contractually,  by  operation  of  law  or  otherwise,  with
respect to the generation, treatment, storage or disposal of
Hazardous  Materials,   which  transportation,   generation,
treatment, storage  or  disposal,  or  retained  or  assumed
liabilities, in the aggregate, could reasonably be  expected
to result in a Material Adverse Effect.

Section VII.14 No   Material    Misstatements.       No
information, report  (including any  exhibit, schedule  or  other
attachment thereto  or  other document  delivered  in  connection
therewith), financial statement, exhibit or schedule prepared  or
furnished by Parent to Lender  in connection with this  Agreement
or any of the other Loan Documents or included therein  contained
or contains any material misstatement of fact or omitted or omits
to state  any  material fact  necessary  to make  the  statements
therein, taken as a whole in the light of the circumstances under
which they were made, not misleading.

Article VIII
REPRESENTATIONS AND WARRANTIES OF LENDER

Lender makes the following representations,  warranties
and agreements, all of which  survive the execution and  delivery
of this Agreement and the Note and the making of the Loan.

Section VIII.1 Investment  Intent,  etc.   Lender   is
acquiring the Note  for its own  account for  investment and  not
with a view to,  or for sale or  other disposition in  connection
with any distribution thereof, not with any present intention  of
selling or otherwise disposing of the same.

Section VIII.2 Sophistication; Financial Strength, etc.
Lender is an  Accredited Investor (as  that term  is defined  in
Rule 501 promulgated by  the Securities Exchange Commission  (the
"SEC")) under  the  Securities  Act  of  1933,  as  amended  (the
"Securities Act"), with such knowledge and experience in business
and financial matters as to be capable of evaluting the merits
and risks of the investment contemplated  to be made hereunder.  
Lender has sufficient financial strength to  hold the Note as  an
investment and  to bear  the economic  risks of  such  investment
(including possible loss  of such investment)  for an  indefinite
period of time.

Section VIII.3 Restrictions  on   Transfer.      Lender
understands that neither  the Note  nor the  Parent Common  Stock
into which the Note is convertible has been registered under  the
Securities Act or  the securities  laws of  any jurisdiction  and
that neither the Note nor such Parent Common Stock may be offered
for sale,  sold,  transferred  or otherwise  disposed  of  unless
registered under  the Securities  Act  and any  applicable  state
securities laws  or Lender  delivers to  Borrower an  opinion  of
counsel reasonably acceptable to Borrower to the effect that  the
proposed offer,  sale, transfer  or other  disposition is  exempt
from registration.    Lender  understands that  Borrower  has  no
obligation to  register  the  Note  for  distribution  under  the
Securities Act or  the securities  laws of  any jurisdiction  and
that Borrower has not agreed to  comply with any exemption  under
the Securities Act  or the  securities laws  of any  jurisdiction
respecting the resale or other transfer of the Note.

Article IX
AFFIRMATIVE COVENANTS

Borrower hereby covenants and agrees that until all  of
the Obligations are paid and performed in full:

Section IX.1   Legal  Existence.    Borrower  and  each
Subsidiary then holding  a Joint Venture  interest will  maintain
its corporate or other legal existence  and good standing in  the
jurisdiction of its  incorporation or  organization and  maintain
its good  standing  and  authorization to  do  business  in  each
jurisdiction in  which the  failure so  to qualify  would have  a
material adverse effect  on the  business, operations,  Property,
assets,  liabilities,  condition  (financial  or  otherwise)   or
prospects of such Obligor.

Section IX.2   Inspection; Audit.

(a)  Borrower will,  upon forty  eight (48)  hours
notice,  permit  representatives  of  Lender  to  visit  its
offices  to  (i) examine  the  books  and  records   thereof
(including, without  limitation,  all accounts  payable  and
accounts receivable detail ledgers, all payroll records, all
bank statements and other documents, ledgers, statements  or
instruments Lender  may  deem necessary  or  desirable)  and
accountants' reports relating  thereto, (ii) make copies  or
extracts therefrom,  (iii) discuss the  affairs of  Borrower
with the  employees thereof,  (iv) examine and  inspect  the
Property of Borrower, and  (v) meet and discuss the  affairs
of Borrower with its principal outside accountants.

(b)  Upon   forty   eight   (48)   hours   notice,
representatives of Lender shall have the right to conduct an
audit of the books of Borrower.

Section IX.3   Financial    Statements    and     Other  
Information.   Borrower  shall  maintain  a  standard  system  of
accounting in accordance with GAAP and furnish to Lender:

(a)  Financial Statements.   As soon as  available
and in any event within ninety (90) days after the close  of
each year, a copy  of each of the  following for Borrower:  
(1) the balance  sheet  as of  the  end of  such  year,  and
(2) the   statements   of   operations,   cash   flow,   and
shareholder's equity  for such  year setting  forth in  each
case in comparative form  the corresponding figures for  the
preceding year  (the balance  sheet  and the  statements  of
operations, cash flow  and shareholder's equity  hereinafter
are referred to as the "Basic Financial Statements"), all in
reasonable detail,  and  in each  case,  prepared by  or  on
behalf of  Borrower and  accompanied by  an opinion  of  the
accountants (which accountants shall  be an accounting  firm
of  nationally   recognized  standing,   (hereinafter,   the
"Accountants")),  together   with  a   certificate  of   the
accountants which shall  state that  (A) the examination  by
the accountants  in  connection with  such  Basic  Financial
Statements  has  been  made  in  accordance  with  generally
accepted auditing standards and, accordingly, included  such
tests of  the accounting  records  and such  other  auditing
procedures   as   were    considered   necessary   in    the
circumstances, (B) such Basic Financial Statements have been
prepared in  accordance  with GAAP  and  that such  GAAP  in
accordance with which such  Basic Financial Statements  were
prepared are consistent with  those applied in prior  fiscal
periods, and  (C) such  Basic  Financial  Statements  fairly
present, in all material respects, the financial position of
Borrower and its Subsidiaries (on a consolidated basis).

(b)  Audit  Reports.     Promptly   upon   receipt
thereof, a  copy  of each  report,  other than  the  reports
referred to in subsection (a) above, including any so-called
"Management Letter" or similar report, submitted to Borrower
by the Accountants in connection with any annual, interim or
special audit made by  the Accountants of  the books of  the
Company.

(c)  Notice of Defaults.  Immediate written notice
if:  (i) any Indebtedness of  Borrower or any Subsidiary  is
declared or  shall  become  due and  payable  prior  to  its
declared or stated  maturity, or  called and  not paid  when
due, (ii) the  holder  of any  note,  or other  evidence  of
Indebtedness, certificate  or security  evidencing any  such
Indebtedness of Borrower or any Subsidiary has the right  to
declare such  Indebtedness  due  and payable  prior  to  its
stated  maturity,  or   (iii) there  shall   occur  and   be
continuing  a  Potential  Default   or  Event  of   Default,
accompanied by a  statement of the  Chief Financial  Officer
setting forth  what  action  Borrower proposes  to  take  in
respect thereof.

(d)  Notice of  Suits,  Adverse  Events.    Prompt
written notice  of:   (i) any citation,  summons,  subpoena,
order to show cause  or other order  naming Borrower or  any
Subsidiary  as  a  party   to  any  proceeding  before   any
Governmental Body which may  have a material adverse  effect
on the business, operations, Property, assets,  liabilities,
condition (financial or otherwise) or prospects of  Borrower
or any Subsidiary, and  include with such  notice a copy  of
such citation,  summons, subpoena,  order to  show cause  or
other order,  (ii) any lapse  or  other termination  of  any
license, permit, franchise or other authorization issued  to
Borrower  or  any  Subsidiary  by  any  Governmental   Body,
(iii) any refusal  by  any  Governmental Body  to  renew  or
extend any license, permit, franchise or other authorization
of Borrower or any Subsidiary, and (iv) any dispute  between
Borrower or any Subsidiary and any Governmental Body,  which
lapse, termination,  refusal  or  dispute,  referred  to  in
clauses  (ii),  (iii) or  (iv)   above,  has  a   reasonable
likelihood of being adversely  determined and, if  adversely
determined, could  have a  material  adverse effect  on  the
business,   operations,   Property,   assets,   liabilities,
condition (financial or otherwise) or prospects of Borrower,
in each case  excluding matters (A)  relating solely to  the
Joint Ventures and  (B) with  respect to  which Borrower  is
made aware by Lender.

(e)  Other Information.    Promptly  upon  request
therefor by  Lender,  such  other  information  and  reports
relating to the past, present or future financial condition,
operations,  plans  and  projections  of  Borrower  and  the
Subsidiaries as  Lender from  time  to time  reasonably  may
request.

Section IX.4   Insurance.   Maintain  or  cause  to  be
maintained insurance against  such other risks  of the kinds  and
amounts  customarily  insured   against  by  similarly   situated
companies and such other insurance as is required to conform with
the requirements of this Agreement.  Such insurance shall,  where
applicable,  include  but  not   be  limited  to,  (a)   workers'
compensation  and   employer's   liability  insurance   and   (b)
comprehensive general  liability  insurance.    Lender  shall  be
provided a waiver  of subrogation with  respect to the  insurance
described in the foregoing clause (a).

Section IX.5   Maintenance of  Patents and  Licenses.  
Maintain in force  at all times,  all patents, trademarks,  trade
names, licenses, approvals, permits  and agreements necessary  or
desirable for the continuation the businesses of Borrower and the
Subsidiaries.

Section IX.6   Payment of Taxes.   Timely file all  tax
returns required to be filed by  or with respect to Borrower  and
the Subsidiaries; timely pay all taxes  that are due, or  claimed
or asserted  by any  taxing  authority to  be  due from  or  with
respect to Borrower and the Subsidiaries (other than taxes  which
are contested in  good faith and  as to  which adequate  reserves
have  been  established  in  Borrower's  and  the   Subsidiaries'
financial statements in accordance with GAAP); make all estimated
tax payments  sufficient  to avoid  underpayment  penalties;  and
withhold and timely  pay to the  applicable taxing authority  all
taxes required by all applicable laws  to be withheld or paid  in
connection with  any  amounts  paid or  owing  to  any  employee,
creditor, independent contractor or other third party.

Section IX.7   Advances.  Borrower and each  Subsidiary
shall use any and all amounts  received as an Advance solely  for
the purposes of investing in a Joint Venture, except as otherwise
expressly permitted in this Loan Agreement.

Article X
NEGATIVE COVENANTS

Until all of the Obligations are paid and performed  in
full Borrower will not:

Section X.1    Borrowing.  Following the Closing  Date,
create, incur  or  assume  any  liability  for  Indebtedness  for
Borrowed Money owed by Borrower or any Subsidiary, except (a) the
Note, (b) trade debt incurred in the ordinary course of business,
(c) any guarantee of Indebtedness for  Borrower Money of a  Joint
Venture (which Indebtedness for Borrowed  Money may be senior  to
the Loan), and (d)  any Indebtedness owed  by Borrower to  Parent
relating to  (i) advances  made by  Parent  to Borrower  for  the
payment by  Borrower of  taxes  or interest  on  the Loan  or  in
connection with the  making of a  contribution by  Borrower to  a
Joint Venture following the drawdown  by Borrower of all  amounts
permitted or  required  to  be drawn  under  the  Loan  and  (ii)
reimbursement  obligations  owed   by  Borrower   to  Parent   in
connection with letters of credit, surety bonds and other  credit
enhancements provided  by Parent  on behalf  of Borrower  or  any
Joint Venture; provided, that any such Indebtedness for  Borrower
Money owed by  Borrower to Parent  shall be  subordinated to  the
Loan in a manner reasonably acceptable to Lender.

Section X.2    Liens.  Create, incur, assume or  suffer
to exist any  Lien upon any  of the Property  of Borrower or  any
Subsidiary, whether  now  owned  or  hereafter  acquired,  except
Permitted Liens.

Section X.3    Merger  and  Acquisition.    Consolidate
with or merge into  any Person, or  acquire all or  substantially
all of the capital  stock or Property of  any Person, other  than
(a) any such activity relating to an acquisition of or investment
in a Joint  Venture, and  (b) the  creation or  acquisition of  a
Subsidiary to  the extent  that either  (i) the  Borrower is  not
liable  for  any   Indebtedness  for  Borrowed   Money  of   such
Subsidiary, except as permitted pursuant to Section 10.1   hereof,
or (ii) such  Subsidiary is or  is intended to  be involved as  a
partner, member  or  other  equity  interest  owner  in  a  Joint
Venture.

Section X.4    Contingent   Liabilities.        Assume,
guarantee, endorse, contingently agree to purchase, become liable
in respect of any  letter of credit,  or otherwise become  liable
upon the obligation of any Person, except (i) liabilities arising
from the  endorsement of  negotiable instruments  for deposit  or
collection or  similar transactions  in  the ordinary  course  of
business, (ii)  any liability  permitted under  Section 10.1  and
(iii) any such liabilities  in connection with  or in support  of
the activities of a Joint Venture, which such obligations may  be
senior to the Loan.

Section X.5    Dividends  and  Other  Distributions .   
Declare or pay any dividends or apply any of its Property to  the
purchase, redemption or other retirement of, or set apart any sum
for  the  payment  of  any  dividends  on,  or  make  any   other
distribution by reduction of capital or otherwise in respect  of,
any shares  of its  capital  stock, or  pay  or transfer  to  any
Affiliate any  money  or Property  of  Borrower, other  than  (a)
payments or  transfers of  money or  Property to  Joint  Ventures
and/or to Subsidiaries in connection with Joint Ventures, and (b)
any amounts paid to Parent as a  dividend or as a repayment on  a
loan from Parent to Borrower to the extent and only to the extent
permitted by Sections 2.3(d), (e), or (f).  Furthermore, Borrower
shall not declare, order, make, pay or set apart any sum for  any
Restricted Junior Payment,  except as permitted  by the  previous
sentence.

Section X.6    Scope of Borrower's Business.   Borrower
shall not, and shall cause its Subsidiaries not to, engage in any
business activities other than  the investment in Joint  Ventures
and activities reasonably related  to the Joint Ventures,  except
to the extent  that (i) Borrower  or its  Subsidiaries have  made
other investments that  are either funded  entirely with  capital
from Borrower,  any Subsidiary,  Parent or  another affiliate  of
Parent or (ii) Borrower and Parent have complied with the process
set forth in Article II of the Master Agreement.

Section X.7    Payments on Certain Indebtedness.   Make
any voluntary  or optional  prepayment  of any  Indebtedness  for
Borrowed Money permitted to  exist under the  terms of this  Loan
Agreement except the  Note and except  as otherwise permitted  by
Section 2.3(d), (e) or (f).

Section X.8    Amendment     of     Certificate      of   
Incorporation, etc.  Amend, modify or waive any term or provision
of its certificate of incorporation or bylaws, unless required by
law.

Section X.9    Issuance, Conversion and Sale of  Stock.
Issue or sell any shares of  its capital stock or securities  of
Borrower or any  Subsidiary convertible into  or exercisable  for
any shares of its capital stock, or permit the conversion of  any
shares of any class of its  capital stock to shares of any  other
class of its capital stock, except  to the extent that  following
any such  transaction  Parent  directly or  indirectly  owns  one
hundred percent (100%) of the outstanding shares or other  equity
interests in Borrower  and Borrower directly  or indirectly  owns
one hundred percent  (100%) of  the outstanding  shares or  other
equity interests in all Subsidiaries.

Section X.10   Transactions  with  Affiliates.    Sell,
lease, assign, transfer or otherwise  dispose of any Property  of
Borrower or any Subsidiary to any  Affiliate of Borrower or  such
Subsidiary, or lease such Property, render or receive services or
purchase assets  from any  Affiliate, except  for  administrative
services in  the ordinary  course of  business and  on terms  and
conditions  substantially  as  favorable  to  Borrower  or   such
Subsidiary as would  reasonably be obtained  by Borrower or  such
Subsidiary at that time in a comparable arm's-length  transaction
with a Person other than an Affiliate.

Article XI
DEFAULT AND REMEDIES

Section XI.1   Events of  Default.   The occurrence  of
any of the following shall constitute  an Event of Default  under
the Loan Documents:

(a)  Default in Payment.   If Borrower shall  fail
to pay all or  any portion of  the Obligations within  three
(3) Business  Days  after  receipt by  Borrower  of  written
notice from Lender that the same has become due and payable.

(b)  Pledge.  Borrower  shall default  in the  due
performance or observance of any term, covenant or agreement
on its  part to  be performed  or observed  pursuant to  the
Security Documents.

(c)  Breach of Covenants.

(i)   If Borrower  shall fail  to observe  or
perform any  covenant  or agreement  made  by  Borrower
contained in  Article  IX  or in  Article X,  and  such
failure shall continue for a period of twenty (20) days
after notice thereof is given by Lender; or

(ii)  If  Borrower shall fail  to observe  or
perform any covenant or  agreement made by Borrower  in
any of the Loan Documents to which Borrower is a party,
and such failure shall continue for a period of  thirty
(30) days after notice thereof is given by Lender.

(d)  Breach of Representation  and Warranty.   Any
representation or warranty made  by Borrower in or  pursuant
to any of the Loan Documents to which Borrower is a party or
in any instrument or  document furnished in compliance  with
the Loan Documents shall prove to be false or misleading  in
any material respect on the date as of which made, except to
the extent that  such breach of  representation or  warranty
could reasonably  be expected  to  have a  material  adverse
effect  on  the  business,  operations,  Property,   assets,
liabilities,  conditions   (financial   or   otherwise)   or
prospects of  Borrower  and  the Subsidiaries,  taken  as  a
whole.

(e)  Bankruptcy, Etc.

(i)  If following the Closing Date,  Borrower
shall (1) generally  not be  paying its  debts as  they
become due, (2) file, or consent by answer or otherwise
to the filing against it, of  a petition for relief  or
reorganization or arrangement or any other petition  in
bankruptcy  or  insolvency  under   the  laws  of   any
jurisdiction, (3) make an assignment for the benefit of
its creditors,  (4) consent  to the  appointment  of  a
custodian, receiver,  trustee  or  other  officer  with
similar powers for itself  or for any substantial  part
of  its  Property,  (5) be  adjudicated  insolvent   or
(6) take corporate action for the purpose of any of the
foregoing.

(ii)  If any  Governmental Body of  competent
jurisdiction shall enter  an order appointing,  without
consent of Borrower, a custodian, receiver, trustee  or
other officer  with  similar  powers  with  respect  to
Borrower or with respect to any substantial part of the
Property belonging  to Borrower,  or  if an  order  for
relief shall be entered in  any case or proceeding  for
liquidation or  reorganization  or  otherwise  to  take
advantage of any  bankruptcy or insolvency  law of  any
jurisdiction, or ordering  the dissolution,  winding-up
or liquidation of Borrower, or if any petition for  any
such relief shall be  filed against Borrower, and  such
petition shall  not  be dismissed  within  thirty  (30)
days.

(f)  Judgments.    If  there  shall  exist   final
judgments against Borrower which shall have been outstanding
for any period of thirty (30) days or more from the date  of
the entry thereof and shall not have been discharged in full
or stayed pending appeal.

(g)  Pledge  or  Encumbrance.    If  any  of   the
Property of Borrower shall be transferred, assigned,  pledge
or encumbered in any  respect except as expressly  permitted
by the Loan Documents.

Section XI.2   Acceleration of the  Obligations.   Upon
the occurrence  and  during  the  continuance  of  any  Event  of
Default, Lender, at any  time at its option,  may declare all  of
the Obligations  due  and  payable,  whereupon,  the  Obligations
immediately shall mature and become due and payable, all  without
presentment, demand,  protest, notice  of intent  to  accelerate,
notice of acceleration or any other  notice, all of which  hereby
are waived.

Section XI.3   Remedies on  Default.   If  any  of  the
Obligations have  been  accelerated  pursuant  to  Section  11.2,
Lender, at its option, may:

(a)  Enforcement of Security  Interests.   Enforce
the rights and  remedies under the  Security Instruments  in
accordance with their respective terms.

(b)  Other Remedies.  Enforce any of the rights or
remedies granted to Lender under any other Loan Document and
any other rights or remedies accorded to Lender at equity or
law, by virtue of statute or otherwise.

Section XI.4   Application  of   Funds.     Any   funds
received by  Lender  pursuant  to  the  exercise  of  any  rights
accorded to Lender pursuant to, or by the operation of any of the
terms of, any of,  the Loan Documents  after the acceleration  of
the Obligations, including, without limitation, proceeds from the
sale of Collateral, shall be applied by the Lender first, to  the
payment of the Obligations,  in such order  and manner as  Lender
shall elect, and  the balance, if  any, shall  be distributed  to
Borrower.

Section XI.5   Reinstatement   Following    Event    of   
Default.   To the  extent that,  following the  occurrence of  an
Event of  Default,  whether  or not  the  Obligations  have  been
accelerated by Lender,  Borrower cures and/or  Lender waives  all
Events of Default such that no  Event of Default is in effect  at
such time,  then the  acceleration of  the Obligations  shall  be
reversed and all  rights and obligations  of Lender and  Borrower
under this  Agreement and  all of  the  Loan Documents  shall  be
reinstated as of the time immediately preceding the occurrence of
the original Event of Default.

Section XI.6   Nonrecourse    as    to    Borrower .    
Notwithstanding anything to the contrary contained herein, Lender
agrees that the sole recourse of Lender against Borrower for  the
payment or  performance  of  the  Obligations  shall  be  to  the
Collateral, and no other property or assets of Borrower shall  be
subject to levy,  execution, or other  enforcement procedure  for
the payment or performance of the Obligations; provided, however,
that the foregoing provisions shall not (a) constitute a release,
reduction, discharge, or  waiver of any  of the Obligations,  (b)
limit the right of Lender to  name Borrower as a party  defendant
in any action  or suit for  judicial foreclosure  and sale  under
this Agreement,  so  long as  no  judgment  in the  nature  of  a
deficiency judgment shall be  enforced again Borrower, except  to
the extent of the Collateral, or  (c) in any way be construed  to
release, reduce, discharge, terminate, limit, or otherwise affect
or impair the Security Interests created under this Agreement  or
any of the other Loan Documents.  Notwithstanding the  foregoing,
Borrower shall be fully liable to Lender for damages suffered  by
Lender as a  result of (x)  the intentional or  willful fraud  or
misrepresentation by or on behalf of Borrower in connection  with
the performance of its obligations  under this Agreement and  (y)
the intentional misapplication of any proceeds of the Collateral,
including, without limitation,  the retention  or application  of
dividends, distributions,  or interest  in violation  of  Section
10.5 hereof.  Lennder covenants not  to sue Borrower with  respect
to this  Loan  Agreement  or  any  provisions  hereof  except  as
provided in this Section 11.6.

Section XI.7   Nonrecourse    as     to    Parent.     
Notwithstanding anything to the contrary contained herein, Lender
agrees that: (a) Parent has appeared as a party to this Agreement
solely for the purpose of acknowledging the provisions of Article
XIV of  this Agreement,  (b) Lender  shall  have no  recourse  to
Parent for the payment or performance  of any of the  Obligations
identified herein, excluding any of Parent's obligations pursuant
to Article XIV and (c) Lender  shall not sue Parent with  respect
to this Loan  Agreement or any  provisions hereof,  except for  a
breach of Parent's obligations pursuant to Article XIV.

Section XI.8   Subordination.  Lender acknowledges that
the  lenders  to  certain  of  the  Joint  Ventures  may  require
guarantees or  other  similar  commitments on  the  part  of  the
Borrower or the Subsidiaries and/or Liens upon certain assets  of
the Borrower or the Subsidiaries, including the Borrower's direct
or indirect interest in the  Joint Venture.  Lender  acknowledges
that such lenders may require that  such guarantees and Liens  be
senior to the Obligations and the Security Interests.

Section XI.9   Termination and  Release.   At any  time
after the aggregate of all Advances hereunder exceeds $7,500,000,
Borrower may notify Lender in writing of its desire to  terminate
Lender's commitment to make further Advances hereunder, at  which
time such  commitment will  automatically  terminate.   Upon  the
satisfaction of all Obligations hereunder and the termination  of
Lender's  commitment  to  make  Advances,  Lender,  upon  written
request for Borrower, shall release all Security Interests in the
Collateral.

Section XI.10  Restrictive Legends.   The Note and  the
certificates representing the Parent Common Stock into which  the
Note is convertible shall be stamped or otherwise imprinted  with
a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER  THE SECURITIES ACT  OF 1933,  AS
AMENDED, OR ANY STATE SECURITIES LAW, AND THUS MAY  NOT 
BE OFFERED  FOR SALE,  SOLD, TRANSFERRED  OR  OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES  ACT
OF 1933,  AS AMENDED,  AND QUALIFIED  FOR OFFERING  AND
SALE UNDER  APPROPRIATE STATE  BLUE SKY  OR  SECURITIES
LAWS, OR UNLESS THE HOLDER HAS DELIVERED TO THE COMPANY
AN OPINION  OF COUNSEL,  REASONABLY ACCEPTABLE  TO  THE
COMPANY THAT  SUCH REGISTRATION  AND QUALIFICATION  ARE
NOT REQUIRED.

Article XII
GENERAL PROVISIONS

Section XII.1  Role of Lender.   Any term or  condition
of any of  the Loan  Documents to  the contrary  notwithstanding,
Lender shall not have, and  by Lender's execution and  acceptance
of  this   Loan  Agreement   hereby  expressly   disclaims,   any
obligation,  liability  or  responsibility  for  the  management,
conduct or operation of the business  and affairs of Borrower  or
any of the  Collateral.  Furthermore,  Borrower acknowledges  and
agrees that in  no event shall  Lender be deemed  a mortgagee  in
possession with regard to any of the Collateral by virtue of  the
exercise  of  Lender's  rights  and  remedies  under  this   Loan
Agreement.   Lender  shall not  have,  has not  assumed  and,  by
Lender's execution and acceptance of this Loan Agreement,  hereby
expressly disclaims  any  liability  or  responsibility  for  the
payment or  performance of  any  indebtedness or  obligations  of
Borrower or any owner of the Collateral, and no term or condition
of any  of the  Loan Documents  shall  be construed  otherwise.  
Borrower hereby expressly acknowledges that no term or  condition
of any of the Loan Documents  shall be construed so as to  render
the relationship between Borrower and  Lender other than that  of
borrower, pledgor  and  lender.   Borrower  shall  at  all  times
represent that the  relationship between Borrower  and Lender  is
solely that of borrower and lender.  Borrower hereby  indemnifies
and agrees to  hold Lender harmless  from and  against any  cost,
expense or liability incurred or suffered  by Lender as a  result
of any assertion or claim of any obligation or responsibility  of
Lender for the management, operation  or conduct of the  business
and affairs of Borrower or as a result of any assertion or  claim
of any liability or responsibility of  Lender for the payment  or
performance of any indebtedness or obligation of Borrower.

Section XII.2  Defense of  Actions.   Lender  may  (but
shall not be  obligated to) commence,  appear in,  or defend  any
action  or  proceeding  purporting   to  affect  the  Loan,   the
Collateral, or the respective  rights and obligations of  Lender,
Borrower pursuant to the Loan Documents.   Lender may (but  shall
not be  obligated  to)  pay  all  necessary  expenses,  including
reasonable attorneys' fees and  expenses, incurred in  connection
with such proceedings  or actions,  for which  Borrower agree  to
reimburse Lender upon demand and which amount shall be a part  of
the Obligations.

Section XII.3  Indemnification; Subrogation.  If Lender
is made a party to any litigation concerning the Note, any of the
other Loan  Documents,  any of  the  Collateral or  any  interest
therein, or the  occupancy or  use of  any of  the Collateral  by
Borrower, then Borrower shall  indemnify, defend and hold  Lender
harmless  from  all  liability  by  reason  of  said   litigation
including reasonable  attorneys' fees  and expenses  incurred  by
Lender as a  result of any  such litigation, whether  or not  any
such litigation is prosecuted to judgment.  Lender may employ  an
attorney or attorneys to protect its rights hereunder, and in the
event  of  such  employment  following  any  breach  by  Borrower
hereunder, Borrower shall pay  Lender reasonable attorneys'  fees
and expenses  incurred by  Lender, whether  or not  an action  is
actually commenced against Borrower by reason of its breach.

Section XII.4  Waiver of  Offset.    All  sums  payable
pursuant to  the Loan  Documents shall  be paid  without  notice,
demand, counterclaim, setoff,  deduction or  defense and  without
abatement, suspension,  deferment, diminution  or reduction,  and
the obligations and liabilities under the Loan Documents shall in
no way be released, discharged  or otherwise affected (except  as
expressly provided therein) by reason of:   (i) any damage to  or
destruction of  or  any condemnation  or  similar taking  of  the
Collateral,  or  any  part   thereof;  (ii) any  restriction   or
prevention of or interference by any third party with any use  of
the Collateral or  any part  thereof; (iii) any  title defect  or
encumbrance or any eviction from the Collateral any part  thereof
by superior title or otherwise; (iv) any bankruptcy,  insolvency,
reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to Lender, or any action  taken
with respect to the Obligations or the liens, mortgages, security
interests or assignments securing the Obligations by any  trustee
or receiver of Lender, or by  any court, in any such  proceeding;
(v) any claim which Borrower has or might have against Lender; or
(vi) any default or failure on the  part of Lender to perform  or
comply with  any  of  the  terms hereof  or  of  any  other  Loan
Document.

Section XII.5  Sole Benefit.   This  Loan Agreement  is
intended solely for  the benefit of  the parties  hereto, and  no
tenants,  shareholders,   warrantholders,   employees,   vendors,
contractors, mechanic's lien claimants,  purchasers or any  other
third parties shall  have any rights  under this Loan  Agreement,
nor be entitled  to insist  upon performance  of the  obligations
arising hereunder.

Section XII.6  Conflicts and Construction.  The parties
acknowledge and agree  that (a) each party  and its counsel  have
reviewed and  revised  this Loan  Agreement  and the  other  Loan
Documents and negotiated  the terms and  provisions thereof,  and
this Loan  Agreement  and  the  other  Loan  Documents  shall  be
construed without the aid of any  canon or rule of law  requiring
interpretation against the party drafting or causing the drafting
of  an  agreement  or  portions  of  an  agreement  in  question,
(b) Borrower have not  received from Lender,  and Lender has  not
received from Borrower, any accounting, tax, legal, financial  or
other advice,  and  (c) each party  has  relied solely  upon  the
advice of its  own accounting,  tax, legal,  financial and  other
advisors.   The benefits, rights  and remedies of Lender and  the
security contained in or provided for  in the Loan Documents  are
cumulative;  provided,  however,  that  to  the  extent  of   any
conflict, inconsistency or ambiguity,  if any, between the  terms
and  provisions  of  this  Loan  Agreement  and  the  other  Loan
Documents, the terms and provisions of this Loan Agreement  shall
control unless  the  applicable  provisions  of  the  other  Loan
Documents increase the rights of Lender,  in which event, to  the
maximum  extent  permitted  by  applicable  law,  the  terms  and
provisions of the other Loan Documents shall control.

Article XIII
EXPENSES AND INDEMNITIES

Section XIII.1 Attorney's Fees  and  Other  Expenses.  
Borrower agrees to pay  to Lender on  demand all reasonable  fees
and expenses  or other  cost or  expenses incurred  by Lender  in
connection with the enforcement or collection against Borrower of
any provision of any of the  Loan Documents, whether or not  suit
is instituted,  including,  but not  limited  to, such  costs  or
expenses arising  from  the  enforcement  or  collection  against
Borrower of any  provision of any  of the Loan  Documents in  any
state or Federal bankruptcy or reorganization proceeding.

Section XIII.2 Indemnity.  Subject to the provisions of
Section 11.6 hereof, Borrower hereby agrees to indemnify and save
Lender harmless of and from the  following, except to the  extent
that any of the actions described  below are found by a court  of
competent jurisdiction in  a final  decision which  no longer  is
subject to appeal  to be the  result of the  gross negligence  or
willful or wanton misconduct of Lender:

(a)  Brokerage Fees.  The fees, if any, of brokers
and finders retained by Borrower or any Subsidiary.

(b)  Securities  Violations.    Any  loss,   cost,
liability, damage or expense (including attorneys' fees  and
expenses) incurred  by  Lender in  investigating,  preparing
for, defending  against,  or providing  evidence,  producing
documents or taking other action in respect of any commenced
or  threatened  litigation,  administrative  proceeding   or
investigation under any Federal securities law or any  other
securities law of any jurisdiction, or any regulation, or at
common  law  or  otherwise,  relating,  either  directly  or
indirectly, to  the transactions  contemplated by  the  Loan
Documents.

(c)  Operation of  Collateral; Joint  Venturers.  
Any loss,  cost,  liability, damage  or  expense  (including
attorneys' fees and  expenses) incurred  in connection  with
the ownership, operation or  maintenance of the  Collateral,
the construction  of  Lender  and  Borrower  as  having  the
relationship  of  joint  venturers,   or  partners  or   the
determination that any  of Lender or  Borrower has acted  as
agent for the others.

(d)  Representations.  Any loss, cost,  liability,
damage or expense (including  attorneys' fees and  expenses)
suffered and/or incurred at any time  by Lender as a  result
of or in connection with any failure of the  representations
and warranties made by Borrower in the Loan Documents to  be
true and correct.

Article XIV
CONVERSION RIGHTS; EXIT FEE

Section XIV.1  Conversion.

(a)  Obligation to Convert Debt.   Lender may,  in
its sole  and  absolute  discretion, elect  to  convert  all
outstanding Obligations, or any  portion thereof, from  debt
into Parent Common Stock.  Parent and Lender each agree,  in
the event Lender notifies Parent of its election to effect a
conversion in accordance with  Section 2.4 and this  Article
XIV  (a  "Conversion"),  to   take  all  corporate   actions
necessary  to  cause  such  a  Conversion  subject  to   the
Conversion Limitations set forth in Section 14.2.

(b)  Conversion Price.    In connection  with  any
Conversion, Lender  will receive  the  number of  shares  of
Parent Common Stock derived in accordance with the following
formula:

Shares of Parent Common Stock = Obligations  being
converted in accordance with Section 2.4,  divided
by the  Stock  Price, subject  to  the  Conversion
Limitations set forth in Section 14.2.

Any Obligations  of Borrower  that are  converted to  Parent
Common Stock  by Lender  pursuant to  Section 2.4  and  this
Article  XIV shall  immediately  be  deemed  to  have  been
satisfied and  extinguished and  shall thereafter  cease  to
accrue interest.

Section XIV.2  Conversion Limitations.  If at the  time
of any Conversion the number of shares of Parent Common Stock  to
be issued  upon such  Conversion, when  added  to the  number  of
shares of  Parent Common  Stock issued  in any  prior  Conversion
would exceed  Nineteen and  Nine-Tenths  Percent (19.9%)  of  the
aggregate number  of shares  of Parent  Common Stock  issued  and
outstanding as of the Effective Date (the "19.9% Threshold"), the
number of shares of  Parent Common Stock in  excess of the  19.9%
Threshold shall  not be  issued.   Instead, Parent  shall pay  to
Lender cash in an amount equal to the average of the Market Value
on the ten  (10) trading days  immediately prior to  the date  of
Conversion multiplied by 0.95 for  each share  of Parent  Common
Stock in excess of the 19.9% Threshold.

Section XIV.3  Guaranteed Yield.  No later than  thirty
(30) days after the Final Payment Date, Borrower shall  calculate
the Guaranteed Yield and the Payment Amount and pay to Lender the
amount by which the Guaranteed Yield exceeds the Payment  Amount,
if  any.     Borrower   shall   deliver  to   Lender   Borrower's
calculations, and Lender  shall have the  right to challenge  any
such calculations.

Section XIV.4  Subordination.  The obligation of Parent
to make any cash payment in  connection with a conversion of  the
Obligations pursuant to Section 2.4 and Article XIV (the "Payment
Obligations") shall be fully subordinated to Parent's Senior Debt
in accordance with the provisions of  this Section 14.4.   Parent
may not make any payments on  account of the Payment  Obligations
if there shall have occurred and  be continuing a default in  the
payment of principal of (or premium,  if any) or interest on  any
Specified Senior  Debt, the  payment  of commitment  or  facility
fees, letter of credit  fees or agency  fees under any  Specified
Senior Debt,  or  payments  with  respect  to  letter  of  credit
reimbursement arrangements  with one  or more  lenders under  the
credit or other  agreement evidencing any  Specified Senior  Debt
when due (a "Senior Payment Default").  Following the  occurrence
of an  event of  default (other  than a  Senior Payment  Default)
under any Specified  Senior Debt permitting  the holders of  such
Specified Senior Debt (or a trustee  or agent on behalf  thereof)
to accelerate the maturity thereof, or the occurrence of an event
which with the passage of time or the giving of notice, or  both,
could become  such an  event of  default (a  "Senior  Nonmonetary  
Default") and,  in  each case,  following  the giving  of  notice
thereof to  Parent in  accordance with  the terms  governing  the
relevant Specified Senior Debt (a "Blockage Notice"), Parent  may
not make any payments on account of the Payment Obligations for a
period (a  "Blockage  Period")  commencing  on  the  date  Parent
receives the Blockage Notice, and ending  on the earliest of  (i)
179 days after such  date, (ii) the date,  if any, on which  such
Senior Nonmonetary Default is waived or otherwise cured and (iii)
the date, if any, on which  such Blockage Period shall have  been
terminated by written notice  to Parent from  the holders of  the
relevant Specified Senior Debt (or a  trustee or agent on  behalf
thereof).

Upon any payment or distribution of assets of any  kind
or  character,  whether  in  cash,  property  or  securities,  to
creditors upon any dissolution or winding up or total or  partial
liquidation or  reorganization of  Parent, whether  voluntary  or
involuntary, or  upon  bankruptcy,  insolvency,  receivership  or
other proceedings, then and in such event, all principal, premium
(if any) and interest and all other amounts due or to become  due
upon all Parent's Senior Debt shall first be paid in full  before
the holders  of  the Payment  Obligations  shall be  entitled  to
receive or retain any assets so paid or distributed in respect of
the  Payment  Obligations  (for  principal,  premium  (if   any),
interest or otherwise); and, upon any such dissolution or winding
up or liquidation or reorganization, any payment or  distribution
of assets of any kind or character, whether in cash, property  or
securities, that the holders of the Payment Obligations would  be
entitled to, except as otherwise  provided herein, shall be  paid
by Parent or by any receiver, trustee in bankruptcy,  liquidating
trustee,  agent   or  other   person  making   such  payment   or
distributions, or by  the holders of  the Payment Obligations  if
received by them, directly and ratably to the holders of Parent's
Senior Debt, to the extent necessary to pay in full all  Parent's
Senior Debt, after  giving effect  to any  concurrent payment  or
distribution to  or  for the  holders  of Parent's  Senior  Debt,
before any payment or distribution is made to the holders of  the
Payment Obligations.

Each holder of  Payment Obligations hereby  irrevocably
authorizes and empowers (without imposing any obligation on)  the
holders of  Parent's Senior  Debt (or  any  trustee or  agent  on
behalf  thereof),  under  the  circumstances  set  forth  in  the
immediately preceding paragraph, to demand, sue for, collect  and
receive every such payment or distribution described therein  and
give acquittance therefor, to file claims and proofs of claims in
any statutory or nonstatutory  proceeding, to vote such  Parent's
Senior Debt  holder's ratable  share of  the full  amount of  the
Payment Obligations in its sole discretion in connection with any
resolution,  arrangement,  plan  of  reorganization,  compromise,
settlement or  extension  and  to  take  all  such  other  action
(including, without limitation, the  right to participate in  any
composition of  creditors and  the right  to vote  such  Parent's
Senior Debt holders' ratable share of the Payment Obligations  at
creditors' meetings for the election of trustees, acceptances  of
plans and otherwise), in  the name of the  holder of the  Payment
Obligations,  as  such  Parent's   Senior  Debt  holder  or   its
representative  may   deem  necessary   or  desirable   for   the
enforcement of these subordination provisions.

If any payment or distribution of assets of any kind or
character, whether  in cash,  property  or securities,  shall  be
collected or received  by any holder  of the Payment  Obligations
and such holder shall  not be permitted under  the terms of  this
instrument to  receive or  retain such  payment or  distribution,
such holder shall forthwith turn over the same to Parent's Senior
Debt holders  for  their ratable  benefit  in the  form  received
(except for the endorsement or the assignment of such holder when
necessary) and, until so turned over,  the same shall be held  in
trust by such holder as the property and for the ratable  benefit
of the Parent's Senior Debt holders.

Nothing contained in  this Section  14.4, shall  affect
any security interest which Lender may have in any subsidiary  of
Parent. 

Section XIV.5  Adjustment of  Parent Common  Stock  and    
Stock Price.

(a)  In case Parent  shall (i) pay  a dividend  or
make a distribution solely in shares of Parent Common Stock,
(ii) subdivide its outstanding shares of Parent Common Stock
into a greater number  of shares of  Parent Common Stock  or
(iii) combine its outstanding shares of Parent Common  Stock
into a smaller number of shares of Parent Common Stock, then
concurrently with the effectiveness of each such event,  the
Stock Price  in effect  immediately prior  thereto shall  be
adjusted  by   multiplying  the   Stock  Price   in   effect
immediately prior to such adjustment by a fraction of  which
the numerator shall be the number of shares of Parent Common
Stock outstanding immediately prior  to such adjustment  and
the denominator  shall be  the number  of shares  of  Parent
Common  Stock   outstanding   immediately   following   such
adjustment.  Such  adjustment to  the Stock  Price shall  be
made each time  any such  action described  in this  Section
14.5(a) shall occur.

(b)  In case Parent issues  rights or warrants  to
all  holders  of  Parent  Common  Stock  entitling  them  to
subscribe for or purchase shares of Parent Common Stock at a
price per  share less  than Market  Value the  Business  Day
immediately prior to  the record date  therefor, or in  case
Parent shall issue  to all  holders of  Parent Common  Stock
other securities convertible into or exchangeable for Parent
Common Stock for a consideration per share of Parent  Common
Stock deliverable upon conversion  or exchange thereof  less
than the Market Value on the Business Day immediately  prior
to the  record  date therefor,  the  Stock Price  in  effect
immediately prior  thereto  shall be  adjusted  as  provided
below so that the Stock Price therefor shall be equal to the
price determined  by  multiplying  (A) the  Stock  Price  in
effect immediately prior to such issuance by (B) a  fraction
of which the denominator shall be the sum of (1) the  number
of shares of Parent Common Stock outstanding on the date  of
issuance of  the  convertible  or  exchangeable  securities,
rights or warrants and (2)  the number of additional  shares
of Parent Common Stock offered for subscription or purchase,
or issuable upon such conversion  or exchange, and of  which
the numerator shall be the sum  of (1) the number of  shares
of Parent Common Stock outstanding  on the date of  issuance
of such convertible  or exchangeable  securities, rights  or
warrants and (2) the number  of additional shares of  Parent
Common Stock  which  the  aggregate offering  price  of  the
number of shares  of Parent  Common Stock  so offered  would
purchase at the Market Value on the Business Day immediately
prior to the record date therefor.  Such adjustment shall be
made whenever such  convertible or exchangeable  securities,
rights or warrants  are issued, and  shall become  effective
immediately after the record  date for the determination  of
stockholders entitled to receive such securities.   However,
upon the  expiration of  any right  or warrant  to  purchase
Parent Common Stock,  the issuance of  which resulted in  an
adjustment in  the  Stock  Price pursuant  to  this  Section
14.5(b), if any such right or  warrant shall expire and  not
have been  exercised, the  Stock Price  shall be  recomputed
immediately upon such  expiration and effective  immediately
upon such  expiration shall  be increased  to the  price  it
would have been (but reflecting any other adjustments to the
Stock Price made pursuant to the provisions of this  Section
14.5(b) after the issuance of  such rights or warrants)  had
the adjustment of the Stock Price made upon the issuance  of
such rights or warrants been made  on the basis of  offering
for subscription or purchase only  that number of shares  of
Parent Common Stock actually purchased upon the exercise  of
any rights or warrants.  No further adjustment to the  Stock
Price shall be  made upon  exercise of  any right,  warrant,
convertible  security  or   exchangeable  security  if   any
adjustment shall  have  been  made  upon  issuance  of  such
security.

Article XV
MISCELLANEOUS

Section XV.1   Notices.  All notices and communications
under  this  Agreement   shall  be  in   writing  and  shall   be
(i) delivered in person, (ii) sent  by telecopy or telegraph,  or
(iii) mailed, postage prepaid, either by registered or  certified
mail, return receipt requested,  or (iv) delivered by  nationally
recognized overnight express carrier,  addressed in each case  as
follows:

If to Borrower:          Stratus  Ventures  I Borrower L.L.C.
98 San Jacinto Blvd., Suite 2200
Austin, Texas 78701
Attn:  William H. Armstrong, III
Telecopy:  (512) 478-6340

with a copy to:          John G. Amato
Freeport-McMoRan Inc.
1615 Poydras
New Orleans, Louisiana 70112
Telecopy:  (504) 582-3513

If to Lender:            Oly Lender Stratus, L.P.
c/o Olympus Real Estate Corporation
200 Crescent Court, Suite 1650
Dallas, Texas 75201
Attn:  Hal R. Hall
Telecopy Number:  (214) 740-7340

with a copy to:          Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attn:  Robert C. Feldman
Telecopy Number:  (214) 746-7777

or to such  other address or  telecopy number, as  to any of  the
parties hereto, as such party shall designate in a written notice
to the other parties  hereto.  All notices  sent pursuant to  the
terms of this Section 15.1 shall  be deemed received (i) if  sent
by telecopy or telegraph, on the  day sent if a Business Day,  or
if such day is not a Business Day, then on the next Business Day,
(ii) if sent by overnight, express carrier, on the next  Business
Day immediately  following  the day  sent,  or (iii) if  sent  by
registered or certified mail, on the third Business Day following
the day sent.

Section XV.2   Survival of Indemnity.  The  obligations
of Borrower to  indemnify Lender  with respect  to the  expenses,
damages, losses, costs and liabilities described in Section  13.2 
shall survive the  repayment of all  amounts due  under the  Loan
Documents, the cancellation  of the Note  and the release  and/or
cancellation of  any  and  all of  the  Loan  Documents,  or  the
foreclosure of any Liens on the Collateral.

Section XV.3   Further Assurances.  From time to  time,
Borrower shall  execute and  deliver  to Lender  such  additional
documents as Lender may require to carry out the purposes of  the
Loan Documents and to protect Lender's rights thereunder.

Section XV.4   Severability.   In  the event  that  any
provision of  this Loan  Agreement is  deemed  to be  invalid  by
reason of the operation of any law, this Loan Agreement shall  be
construed as not containing such provision and the invalidity  of
such provision  shall  not  affect  the  validity  of  any  other
provisions hereof, and any and all other provisions hereof  which
otherwise are lawful  and valid shall  remain in  full force  and
effect.

Section XV.5   Waiver.  No delay on the part of  Lender
in exercising  any  right,  power or  privilege  hereunder  shall
operate as a waiver thereof, and no single or partial exercise of
any right, power or privilege  hereunder shall preclude other  or
further exercise thereof, or be deemed  to establish a custom  or
course of dealing  or performance  among the  parties hereto,  or
preclude the exercise of  any other right,  power or privilege.  
Any failure of Lender to insist  upon strict compliance with  any
of the terms or conditions of  this Loan Agreement or any of  the
other Loan Documents shall not be deemed a waiver of the same  or
any other term or condition of  this Loan Agreement or the  other
Loan Documents, and Lender may at any time thereafter insist upon
compliance with any and all such terms and conditions.  No  delay
or omission in the exercise of any right or remedy of Lender as a
result of a default by Borrower under this Loan Agreement or  any
of the other Loan Documents shall be deemed a waiver of any  such
right or remedy  as a result  of the same  default or  subsequent
defaults, nor  shall  any  single  or  partial  exercise  thereof
preclude any other  further exercise thereof  or the exercise  of
any other right or be deemed  to establish a custom or course  of
dealing or performance among the parties hereto, or preclude  the
exercise of any other right, power  or privilege.  Any waiver  of
rights and  remedies  of  Lender or  duties  and  obligations  of
Borrower under  this Loan  Agreement or  any  of the  other  Loan
Documents shall be  effective only if  made in  writing and  duly
executed and delivered by Lender.   No notice or demand given  in
any case shall  constitute a waiver  of the right  to take  other
action in  the  same, similar  or  other instances  without  such
notice or demand.

Section XV.6   Entire Agreement;  Modification.    This
Loan Agreement and the other Loan Documents constitute the entire
agreement of  the  parties with  respect  to the  subject  matter
hereof and supersedes all prior  agreements with respect to  such
subject matter, written or  oral.  No  modification or waiver  of
any provision of  any of the  Loan Documents, or  consent to  any
departure by Borrower  therefrom, shall be  effective unless  the
same shall be in writing, and  then such waiver or consent  shall
be effective only in  the specific instance  and for the  purpose
for which given.  No notice to or demand on Borrower in any  case
shall entitle Borrower to any other  or further notice or  demand
in the same, similar or other circumstances.

Section XV.7   Captions.   The  headings in  this  Loan
Agreement are for purposes of reference only and shall not  limit
or otherwise affect the meaning hereof.

Section XV.8   Counterparts.  This  Loan Agreement  may
be executed in any number of counterparts, each of which shall be
an original,  but  all of  which  together shall  constitute  one
instrument.

Section XV.9   Successors  and  Assigns.    This   Loan
Agreement shall be binding upon and  inure to the benefit of  and
be enforceable by  the respective successors  and assigns of  the
parties hereto.

Section XV.10  Remedies  Cumulative.   All  rights  and
remedies of Lender  pursuant to  this Loan  Agreement, any  other
Loan  Documents  or  otherwise,  shall  be  cumulative  and  non-
exclusive, and  may be  exercised  singularly or  concurrently.  
Lender shall not be required to prosecute collection, enforcement
or other  remedies  against Borrower  before  proceeding  against
Borrower, or  to  enforce  or  resort  to  any  security,  liens,
collateral or other rights of Borrower before proceeding  against
any security,  liens, collateral  or other  rights of  any  other
Obligor.  One or more successive  actions may be brought  against
Borrower, either in the  same action or  in separate actions,  as
often as Lender deems advisable, until all of the Obligations are
paid and performed in full.

Section XV.11 Time is of the  Essence.  Time is of  the
essence of this Loan Agreement and the other Loan Documents.

Section   XV.12   Survival   of   Representations   and    
Warranties.  The representations and warranties contained in this
Loan  Agreement  and  the  other  Loan  Documents  shall  survive
termination, cancellation, expiration and completion of this Loan
Agreement and shall survive any transfer or assignment hereof.

Section XV.13 Arbitration. 

(a)  Borrower and  Lender specifically  agree that  any
controversy, claim, or dispute arising  out of this Agreement  or
any of the other Loan Documents,  or any alleged breach  thereof,
shall be resolved  exclusively by arbitration.   Any  arbitration
shall take place  in Houston, Texas  and be  administered by  the
Houston, Texas  office of  the American  Arbitration  Association
(the "AAA") in accordance  with its Commercial Arbitration  Rules
in effect at the time the arbitration is initiated (collectively,
the "Rules").

(b)  As soon as a demand for arbitration shall be  made
by either  party, the  AAA shall  proceed to  provide a  list  of
arbitrators from  the Commercial  Panel  from which  the  parties
shall select a panel of  three neutral arbitrators in  accordance
with the Rules and normal procedures of the Houston, Texas office
of the AAA.  If  necessary, the AAA shall  select some or all  of
the arbitrators when it is authorized to do so under the Rules.

(c)  The  arbitration  panel   shall  render  a   full,
complete, conclusive, and binding resolution of the dispute.  The
arbitration award shall assess all reasonable attorneys' fees and
costs,  including   the  costs   of  the   arbitration  and   the
arbitrators' compensation, against the losing party.  Judgment on
the award  may  be  entered  in  any  court  having  jurisdiction
thereof.

Section XV.14 APPLICABLE LAW.  THE LOAN DOCUMENTS SHALL
BE CONSTRUED  IN ACCORDANCE  WITH AND  GOVERNED BY  THE LAWS  AND
DECISIONS OF THE STATE OF TEXAS. 

Section XV.15 VENUE.   BORROWER HEREBY AGREES THAT  ANY
STATE OR FEDERAL COURT LOCATED IN HARRIS COUNTY, TEXAS SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
LENDER AND BORROWER PERTAINING DIRECTLY  OR INDIRECTLY TO ANY  OF
THE LOAN DOCUMENTS OR TO ANY MATTER ARISING THEREFROM.   BORROWER
HEREBY  EXPRESSLY  SUBMITS  AND  CONSENTS  IN  ADVANCE  TO   SUCH
JURISDICTION IN ANY ACTION OR  PROCEEDING COMMENCED BY LENDER  IN
ANY OF SUCH  COURTS, AND HEREBY  WAIVES PERSONAL  SERVICE OF  THE
SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN,
AND AGREES THAT SERVICE  OF SUCH SUMMONS  AND COMPLAINT OR  OTHER
PROCESS OR PAPERS  MAY BE MADE  BY REGISTERED  OR CERTIFIED  MAIL
ADDRESSED TO BORROWER AT THE ADDRESS  TO WHICH NOTICES ARE TO  BE
SENT PURSUANT TO SECTION 15.1.  BORROWER WAIVES ANY CLAIM THAT  A
STATE OR  FEDERAL COURT  LOCATED IN  HARRIS COUNTY,  TEXAS IS  AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.  
SHOULD BORROWER, AFTER BEING SO SERVED, FAIL TO APPEAR OR  ANSWER
TO ANY SUMMONS, COMPLAINT, OR PROCESS OR PAPERS SO SERVED  WITHIN
THE TIME PRESCRIBED  BY LAW AFTER  THE MAILING THEREOF,  BORROWER
SHALL BE DEEMED IN  DEFAULT AND AN ORDER  AND/OR JUDGMENT MAY  BE
ENTERED BY LENDER AGAINST BORROWER AS  DEMANDED OR PRAYED FOR  IN
SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS.  THE EXCLUSIVE CHOICE
OF FORUM FOR BORROWER SET FORTH  IN THIS SECTION 15.15 SHALL  NOT
BE DEEMED TO PRECLUDE THE ENFORCEMENT  BY LENDER OF ANY  JUDGMENT
OBTAINED IN SUCH FORUM OR THE  TAKING BY LENDER OF ANY ACTION  TO
ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION.

Section XV.16 WAIVER  OF RIGHT TO  JURY TRIAL.   LENDER
AND BORROWER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER ANY  OF THE  LOAN DOCUMENTS  OR WITH  RESPECT TO  THE
TRANSACTIONS CONTEMPLATED THEREBY WOULD  BE BASED UPON  DIFFICULT
AND COMPLEX ISSUES,  AND THEREFORE,  THE PARTIES  AGREE THAT  ANY
LAWSUIT ARISING OUT OF  ANY SUCH CONTROVERSY WILL  BE TRIED IN  A
COURT OF  COMPETENT JURISDICTION  BY A  JUDGE SITTING  WITHOUT  A
JURY.

Section  XV.17  No  Obligation  to  Renew.     Borrower
acknowledges and agrees that the Loan is intended to be a six (6)
year loan  only and  that Lender  has no  obligation  whatsoever,
express or implied,  to extend the  term of the  Loan beyond  the
Maturity Date.  Borrower  further agrees that  in no event  shall
any such obligation ever arise except  in the event that  Lender,
in Lender's sole discretion, shall  elect to execute and  deliver
to Borrower a written extension  agreement (if any), which  shall
be on such terms and conditions as may be required by Lender,  in
Lender's sole discretion.

Section XV.18 STATUTE OF  FRAUDS.  THIS LOAN  AGREEMENT
AND THE  OTHER WRITTEN  LOAN DOCUMENTS  EXECUTED  BY ANY  OF  THE
PARTIES PRIOR  TO  OR  SUBSTANTIALLY  CONTEMPORANEOUSLY  HEREWITH
TOGETHER CONSTITUTE  A WRITTEN  LOAN AGREEMENT  WHICH  REPRESENTS
THAT  FINAL  AGREEMENT  BETWEEN  THE  PARTIES  AND  MAY  NOT   BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR  SUBSEQUENT
AGREEMENTS  OF  THE  PARTIES.    THERE  ARE  NO  UNWRITTEN   ORAL
AGREEMENTS BETWEEN THE PARTIES.

Section XV.19  Debt Incurrence Limitation  of Parent.  
Parent covenants and agrees that until all of the Obligations are
paid and performed in  full, Parent will not  incur any Debt  if,
immediately  following  the  incurrence  of  such  Debt  and  the
acquisition of any assets  in connection therewith, the  Coverage
Ratio would be less than 1.35 to 1.0.

This Loan Agreement has been executed and delivered by  each
of the parties hereto by a  duly authorized officer of each  such
party on the date first set forth above.

BORROWER:

STRATUS VENTURES I BORROWER L.L.C.,
a Delaware limited liability company

By:  Stratus Properties Inc.,
a Delaware corporation,
its sole member

By:/s/William H. Armstrong III                         
---------------------------
William H. Armstrong, III
President

PARENT:

STRATUS PROPERTIES INC.,
a Delaware corporation

By:  /s/ William H. Armstrong III                             
----------------------------
William H. Armstrong, III
President

LENDER:

OLY LENDER STRATUS, L.P.,
a Texas limited partnership

By:  Oly Fund II GP Investments, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Real Estate Partners II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly REP II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Fund II, LLC,
a Texas limited liability company,
its general partner

By:/s/ Hal R. Hall                          
---------------
Hal R. Hall
Vice President

EXHIBIT 1

Borrower Capital Stock

All stock  of Stratus  Ventures I  Borrower, L.L.C.  is
held   by   Stratus   Properties   Inc.,   a   Delaware
corporation, its sole member.

Table of Contents

page

Article I
DEFINITIONS AND DETERMINATIONS

1.1  Definitions.........................................  1

1.2  Lender's Discretion................................. 13

1.3  Approval in Writing................................. 13

Article II
LOAN AND TERMS OF PAYMENT

2.1  Loan................................................ 13

2.2  Interest............................................ 13

2.3  Prepayments; Payments............................... 14

2.4  Conversion into Parent Common Stock................. 15

2.5  Payments After Event of Default..................... 15

2.6  Method of Payment; Good Funds; Net Payments......... 15

2.7  Maximum Interest.................................... 15

Article III
CONDITIONS FOR CLOSING AND FUNDING OF LOAN
AND INITIAL ADVANCE

3.1  Representations and Warranties...................... 17

3.2  Delivery of Documents............................... 17

3.3  Security Interests.................................. 18

3.4  Performance; No Default............................. 18

3.5  Approval of Loan Documents and Security Interests... 18

3.6  Additional Items.................................... 18

Article IV
CONDITIONS FOR FUTURE FUNDING COMMITMENTS

4.1  Representations Bringdown........................... 20

4.2  No Default; Compliance With Terms................... 20

4.3  Delivery of Documents............................... 20

4.4  Additional Items.................................... 20

Article V
CONDITIONS FOR OTHER ADVANCES

5.1  Representations Bringdown........................... 21

5.2  No Default; Compliance With Terms................... 21

Article VI
REPRESENTATIONS AND WARRANTIES OF BORROWER

6.1  Organization and Good Standing...................... 21

6.2  Authorization of Agreement; Binding Obligation...... 21

6.3  Required Consents................................... 22

6.4  Financial Statements................................ 22

6.5  Absence of Undisclosed Liabilities.................. 22

6.6  Books of Account.................................... 22

6.7  Title to Property; Liens............................ 23

6.8  Condition of Assets................................. 23

6.9  Insurance........................................... 23

6.10 Conduct of the Business............................. 23

6.11 Litigation.......................................... 23

6.12 Compliance With Law; Permits........................ 24

6.13 Taxes............................................... 24

6.14 Conflicting Agreements.............................. 25

6.15 Patents, Trademarks, Franchises, Etc................ 25

6.16 Full Disclosure..................................... 25

6.17 Employee Matters.................................... 25

6.18 Other Indebtedness.................................. 26

6.19 Possession of Franchises, Licenses, Etc............. 26

6.20 Use of Proceeds..................................... 26

Article VII
REPRESENTATIONS AND WARRANTIES OF PARENT

7.1  Organization; Powers................................ 26

7.2  Authorization....................................... 26

7.3  Governmental Approvals.............................. 27

7.4  Enforceability...................................... 27

7.5  Financial Statements................................ 27

7.6  Litigation; Compliance with Laws; etc............... 27

7.7  Title, etc.......................................... 28

7.8  Federal Reserve Regulations; Use of Proceeds........ 28

7.9  Taxes............................................... 28

7.10 Employee Benefit Plans.............................. 29

7.11 Investment Company Act.............................. 29

7.12 Public Utility Holding Company Act.................. 29

7.13 Environmental Matters............................... 29

7.14 No Material Misstatements........................... 30

Article VIII
REPRESENTATIONS AND WARRANTIES OF LENDER

8.1  Investment Intent, etc.............................. 30

8.2  Sophistication; Financial Strength, etc............. 30

8.3  Restrictions on Transfer............................ 30

Article IX
AFFIRMATIVE COVENANTS

9.1  Legal Existence..................................... 31

9.2  Inspection; Audit................................... 31

9.3  Financial Statements and Other Information.......... 31

(a)  Financial Statements........................... 31

(b)  Audit Reports.................................. 32

(c)  Notice of Defaults............................. 32

(d)  Notice of Suits, Adverse Events................ 32

(e)  Other Information.............................. 33

9.4  Insurance........................................... 33

9.5  Maintenance of Patents and Licenses................. 33

9.6  Payment of Taxes.................................... 33

9.7  Advances............................................ 33

Article X
NEGATIVE COVENANTS

10.1 Borrowing........................................... 33

10.2 Liens............................................... 34

10.3 Merger and Acquisition.............................. 34

10.4 Contingent Liabilities.............................. 34

10.5 Dividends and Other Distributions................... 34

10.6 Scope of Borrower's Business........................ 34

10.7 Payments on Certain Indebtedness.................... 35

10.8 Amendment of Certificate of Incorporation, etc...... 35

10.9 Issuance, Conversion and Sale of Stock.............. 35

10.10 Transactions with Affiliates........................35

Article XI
DEFAULT AND REMEDIES

11.1 Events of Default................................... 35

(a)  Default in Payment............................. 35

(b)  Pledge......................................... 35

(c)  Breach of Covenants............................ 36

(d)  Breach of Representation and Warranty.......... 36

(e)  Bankruptcy, Etc................................ 36

(f)  Judgments...................................... 37

(g)  Pledge or Encumbrance.......................... 37

11.2 Acceleration of the Obligations..................... 37

11.3 Remedies on Default................................. 37

(a)  Enforcement of Security Interests.............. 37

(b)  Other Remedies................................. 37

11.4 Application of Funds................................ 37

11.5 Reinstatement Following Event of Default............ 37

11.6 Nonrecourse as to Borrower.......................... 37

11.7 Nonrecourse as to Parent............................ 38

11.8 Subordination....................................... 38

11.9 Termination and Release............................. 38

11.10 Restrictive Legends................................ 38

Article XII
GENERAL PROVISIONS

12.1 Role of Lender...................................... 39

12.2 Defense of Actions.................................. 39

12.3 Indemnification; Subrogation........................ 39

12.4 Waiver of Offset.................................... 40

12.5 Sole Benefit........................................ 40

12.6 Conflicts and Construction.......................... 40

Article XIII
EXPENSES AND INDEMNITIES

13.1 Attorney's Fees and Other Expenses.................. 41

13.2 Indemnity........................................... 41

(a)  Brokerage Fees................................. 41

(b)  Securities Violations.......................... 41

(c)  Operation of Collateral; Joint Venturers....... 41

(d)  Representations................................ 41

Article XIV
CONVERSION RIGHTS; EXIT FEE

14.1 Conversion.......................................... 42

(a)  Obligation to Convert Debt..................... 42

(b)  Conversion Price............................... 42

14.2 Conversion Limitations.............................. 42

14.3 Guaranteed Yield.................................... 42

14.4 Subordination....................................... 42

14.5 Adjustment of Parent Common Stock and Stock Price... 44

Article XV
MISCELLANEOUS

15.1 Notices............................................. 45

15.2 Survival of Indemnity............................... 46

15.3 Further Assurances.................................. 46

15.4 Severability........................................ 46

15.5 Waiver.............................................. 46

15.6 Entire Agreement; Modification...................... 47

15.7 Captions............................................ 47

15.8 Counterparts........................................ 47

15.9 Successors and Assigns.............................. 47

15.10 Remedies Cumulative................................ 47

15.11 Time is of the Essence............................. 47

15.12 Survival of Representations and Warranties......... 48

15.13 Arbitration........................................ 48

15.14 APPLICABLE LAW..................................... 48

15.15 VENUE.............................................. 48

15.16 WAIVER OF RIGHT TO JURY TRIAL...................... 49

15.17 No Obligation to Renew............................. 49

15.18 STATUTE OF FRAUDS.................................. 49

15.19 Debt Incurrence Limitation of Parent............... 49

LOAN AGREEMENT

by and among

STRATUS VENTURES I BORROWER L.L.C.
as borrower,

OLY LENDER STRATUS, L.P.
as lender,

and

STRATUS PROPERTIES INC.
as parent

Dated as of May 22, 1998

Exhibit 99.1

MASTER AGREEMENT

This MASTER AGREEMENT (this "Agreement") is made and entered
into this 22nd  day of May,  1998, by and  among OLY  FUND II  GP
INVESTMENTS, L.P., a Texas  limited partnership ("Olympus"),  OLY
LENDER STRATUS, L.P., a Texas limited partnership ("Oly Lender"),
OLY/STRATUS EQUITIES, L.P.,  a Texas  limited partnership,  ("Oly
Equities"),  STRATUS  PROPERTIES  INC.,  a  Delaware  corporation
("Stratus") and  STRATUS  VENTURES I  BORROWER  L.L.C.  ("Stratus
Ventures").

RECITALS

WHEREAS,  Stratus  is  in  the  business  of  land  and
commercial  real  estate  development   ancillary  to  its   land
development activities.

WHEREAS, Olympus desires to invest up to Fifty  Million
and No/100 Dollars  ($50,000,000.00) through the  formation of  a
series of  entities  with Stratus  or  affiliates of  Stratus  to
(i) develop  certain  properties   currently  owned  by   Stratus
(collectively,  "Existing  Properties")   and  individually,   an
"Existing  Property")   and   (ii) acquire  and   develop   other
properties  throughout  the  United  States  (collectively,  "New
Properties") and individually, a "New Property").

WHEREAS, Olympus  as general  partner of  Oly  Equities
desires to invest Ten Million and No/100 Dollars ($10,000,000.00)
in Stratus  in the  form of  a mandatorily  redeemable  preferred
stock pursuant to  a "Securities Purchase  Agreement" (herein  so
called) to  be  entered into  between  Oly Equities  and  Stratus
contemporaneously herewith, which amount  may be used by  Stratus
for any corporate purposes it deems appropriate.

WHEREAS, Olympus  as  general  partner  of  Oly  Lender
desires to provide up to Ten Million and No/100  ($10,000,000.00)
in convertible debt financing to  Stratus Ventures pursuant to  a
"Loan Agreement" (herein  so called) to  be entered into  between
Stratus Ventures and Oly Lender contemporaneously herewith, which
amount may be used by Stratus Ventures to invest with Olympus  in
one or more entities that will  be formed to acquire and  develop
New Properties.

WHEREAS, Stratus desires to grant Olympus a first right
of refusal to invest in certain development opportunities.

NOW THEREFORE, for and in consideration of the premises
and mutual covenants and agreements contained in this  Agreement,
the parties hereby agree as follows:

ARTICLE I
PROPERTY DEVELOPMENT

I.1  Equity Commitment.  Olympus  hereby agrees, for  a
period of three (3) years from the date hereof, to co-invest with
Stratus in ventures in an amount  up to Fifty Million and  No/100
Dollars ($50,000,000.00) of equity capital (in the form of equity
and mezzanine debt,  which shall  be subordinate  to third  party
secured financing) (the  "Equity Funds") for  the development  of
(i) certain Existing Properties  and (ii) certain New  Properties
on the basis described in this Agreement.

(a)  Existing Properties.  In accordance with  and
subject to the  Proposal Process set  forth in Section  2.1,
for the  development of  an Existing  Property, Olympus  and
Stratus agree that  the typical venture  will provide  (i) a
property contribution by Stratus at a contribution value  to
be designated by Stratus  and agreed to  by Olympus, (ii)  a
contribution  of   cash   Equity  Funds   by   Olympus   and
(iii) unless otherwise mutually agreed, Stratus and  Olympus
shall receive  identical instruments  in exchange  for  such
contributions, whether in  the form of  equity or  mezzanine
debt.   If  the  value  of  the  Existing  Property  exceeds
Stratus' equity  contribution amount  to the  venture,  then
Stratus shall receive cash from the venture in the amount by
which  the  Existing  Property  contribution  value  exceeds
Stratus' equity contribution.

(b)  New  Properties.    In  accordance  with  and
subject to the  Proposal Process set  forth in Section  2.1,
for the  acquisition  and  development of  a  New  Property,
Olympus and  Stratus agree  that  the typical  venture  will
provide (i) a  capital  contribution  by  Stratus  of  cash,
common  stock  or  other  securities,  like-kind  exchanges,
guarantees, or some combination thereof recorded at a  value
mutually agreed  by  Stratus  and  Olympus,  (ii) a  capital
contribution by Olympus in  cash and (iii) unless  otherwise
mutually agreed, Stratus and Olympus shall receive identical
instruments in exchange for  such contributions, whether  in
the form of equity or mezzanine debt.

I.2  Third Party  Investors/Developers.   In the  event
Olympus and  Stratus  agree to  include  a third  party  investor
and/or developer  in  any  venture,  Olympus  and  Stratus  shall
mutually agree upon a reduction in the participation interest  of
Olympus and Stratus  in order  to accommodate  such third  party;
provided, however, the participation interest offered to  Olympus
shall at all times be equal to or greater than the  participation
interest of each of the other parties.

ARTICLE II
FIRST RIGHT OF REFUSAL

II.1 Offer.  Stratus  shall provide  Olympus a  written
offer (an "Offer") to  invest in any  real estate acquisition  or
development  opportunity  (the  "Development  Opportunity")  that
becomes available  to  Stratus  and Stratus  desires  to  pursue;
provided, however,  Stratus  shall  not be  required  to  provide
Olympus with an  Offer of any  Development Opportunity for  which
Equity Funds will  be provided  entirely by  Stratus and  Olympus
shall not  have a  right to  participate therein.   The  economic
terms shall be  established by  the Proposal  Process (herein  so
called) of this Section 2.1 as follows: 

(a)  The  Initial  Proposal.    Each  Offer  shall
include a  proposal  (the "Initial  Proposal")  which  shall
contain  the  information   described  on  Schedule   2.1(a)
attached  hereto,  to  the  extent  reasonably  available.  
Subject to Section 1.2,  Stratus shall at  all times in  the
Proposal  Process   offer  to   Olympus  at   least  a   50%
equity/mezzanine participation.  Within fifteen (15) days of
receiving the Offer and the Initial Proposal, Olympus  shall
notify  Stratus  in  writing  whether  or  not  the  Initial
Proposal is  acceptable to  Olympus.   If Olympus  fails  to
notify Stratus in writing within  such fifteen (15) days  of
receipt of any Offer and Initial Proposal, Olympus shall  be
deemed to have declined such Offer and Initial Proposal  and
shall  have  no  further   right  to  participate  in   such
Development Opportunity.

(b)  The Alternative  Proposal.   If  the  Initial
Proposal is not  acceptable to Olympus,  Olympus may  reject
the Initial Proposal or,  alternatively, within such  15-day
period provided in Section 2.1(a), provide written notice to
Stratus  that  the  Initial  Proposal  is  not   acceptable,
together with a bona fide alternative written proposal  (the
"Alternative Proposal") which sets  forth economic terms  of
the Development  Opportunity  that would  be  acceptable  to
Olympus.   Within  fifteen  (15)  days  of  receipt  of  the
Alternative Proposal, Stratus shall provide Olympus  written
notice whether or not the Alternative Proposal is acceptable
to Stratus.    If  Stratus fails  to  provide  Olympus  such
written notice, Stratus shall be deemed to have declined the
Alternative Proposal.

(c)  The Second Alternative Proposal.  If  Stratus
does not accept the Alternative Proposal, Stratus shall have
the right to proceed with the Development Opportunity if and
only if (i) (A) the  Development Opportunity is  capitalized
by a  third party  on materially  more favorable  terms  and
conditions  to  Stratus  than  that  proposed  by   Olympus'
Alternative Proposal  and (B)  the transaction  (the  "Third
Party  Transaction")   contemplated   by   the   Development
Opportunity with the third party closes on or before six (6)
months after Olympus  receives written  notice from  Stratus
that Stratus  does not  accept the  Alternative Proposal  or
Stratus is deemed to have declined the Alternative Proposal,
or (ii) Stratus elects to provide the Equity Funds  required
for the Development Opportunity  without third party  equity
financing.  A Third  Party Transaction will be  conclusively
presumed to  be  on  materially  more  favorable  terms  and
conditions to Stratus than Olympus' Alternative Proposal  if
Stratus  elects  to  present   to  Olympus  the  terms   and
conditions of  the  proposed  Third  Party  Transaction  and
Olympus does not  within fifteen  (15) days  agree to  enter
into a  transaction  regarding the  Development  Opportunity
upon the  same  terms  and conditions  as  the  third  party
proposed; provided, however, Stratus  shall not be  required
to present any such  third party proposal  to Olympus.   If,
within such 6-month period, Stratus has not closed the Third
Party Transaction  and has  not  closed on  the  Development
Opportunity for its own  account, Stratus and Olympus  shall
reconsider  the   Initial  Proposal   and  the   Alternative
Proposal.  On or before twenty (20) days after such  6-month
period, Olympus may, but shall not be obligated to,  provide
Stratus with  a  second alternative  proposal  (the  "Second
Alternative Proposal"), which sets  forth economic terms  of
the Development  Opportunity  that would  be  acceptable  to
Olympus.  Within twenty (20) days  of receipt of the  Second
Alternative Proposal, Stratus shall provide Olympus  written
notice whether  or not  the Second  Alternative Proposal  is
acceptable to Stratus.  If Stratus fails to provide  Olympus
such  written  notice,  Stratus  shall  be  deemed  to  have
declined  the  Second  Alternative  Proposal.    If  Stratus
provides Olympus such written  notice that Stratus does  not
accept the Second Alternative Proposal or Stratus is  deemed
to have declined  the Second  Alternative Proposal,  Stratus
shall  have  the  right  to  proceed  with  the  Development
Opportunity if and only  if (y) the Development  Opportunity
is capitalized by  a third party  on at  least as  favorable
terms and conditions  to Stratus as  the Second  Alternative
Proposal or (z) Stratus elects  to provide the Equity  Funds
required for the Development Opportunity without third party
equity financing.

Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement, the  obligation of  each party  to proceed  under  the
terms of any  "Proposal" (herein so  defined to  mean either  the
Initial  Proposal,  the  Alternative   Proposal  or  the   Second
Alternative Proposal) shall be contingent upon the right of  such
party, for a  period of  thirty (30)  days after  receipt of  the
written acceptance by either Olympus or Stratus of any  Proposal,
to perform such due diligence and title and survey review as such
party deems necessary and which  is consistent with ordinary  and
customary real estate investment  and/or underwriting criteria.  
Each party shall use  its best efforts and  act in good faith  to
perform all such due diligence.

II.2 Termination of  First Right  of Refusal.   All  of
Stratus'  and   Olympus'   obiligations  under   this  Article  2
including, without  limitation,  the  obligation  of  Stratus  to
provide Olympus any  Offer shall terminate  upon the earliest  of
(i) the investment or commitment by Olympus of the full amount of
the Equity Funds  for Development Opportunities,  (ii) three  (3)
years  after  the   date  hereof,  (iii)   Olympus'  failure   to
participate in  or  agree to  participate  in at  least  one  (1)
Development Opportunity presented by Stratus to Olympus  pursuant
to the terms  of this Agreement  within any consecutive  12-month
period or (iv) the mutual agreement of the parties.

II.3 Olympus' Origination.   Olympus will endeavor  to,
but  shall  not   be  obligated  to,   source  and  present   new
opportunities  to   Stratus  for   acquisition  and   development
consistent with  Stratus'  existing  business  objectives.    The
parties acknowledge and  agree that each  of Olympus and  Stratus
and their respective  affiliates shall be  free to pursue  and/or
invest in and/or operate other business opportunities that may or
may not  compete  with  activities of  the  other  party  or  its
affiliates, subject to the terms and conditions set forth in this
Agreement, including, specifically, without limitation,  Stratus'
obligation to offer Olympus a first right of refusal as set forth
in this Article 2.

ARTICLE III
PARTNERSHIP STRUCTURE

III.1     Formation  of  Partnership.    On  or  before
twenty (20)  days  after  either Olympus  or  Stratus  agrees  in
writing to any Proposal  delivered to the  other pursuant to  the
terms of Section 2.1,  Olympus and Stratus  agree to cause  their
respective entities as contemplated by  Section 3.2 to execute  a
partnership (or,  if appropriate  to the  situation and  mutually
agreeable  to  the  parties,  other  limited  liability  vehicle)
agreement which  sets  forth  the terms  and  conditions  of  the
agreement between the Olympus and Stratus partners with regard to
the Development Opportunity described in such Proposal.

III.2     Entity Agreement.  Attached  as Exhibit A  is
the form  of the  partnership agreement  which shall  be used  by
Stratus  and  Olympus  to  negotiate  an  agreement  regarding  a
Proposal.  The economic  terms of equity participation,  promoted
interests, if  any,  and distributions  and  other terms  of  the
partnership agreement  and related  documents shall  reflect  the
terms agreed to by both parties pursuant to the Proposal Process.
At  the  closing  of  the  formation  of  any  partnership,  the
partnership shall reimburse each party's all expenses incurred in
connection with the  Development Opportunity; provided,  however,
that the legal expenses incurred in connection with each  party's
negotiation  of   the   partnership  agreement   shall   be   the
responsibility of  such  party  and  not  be  reimbursed  by  the
partnership.   In  addition,  Stratus shall  have  the  right  of
reimbursement of  Stratus' expenses  incurred in  pursuing  other
Development Opportunities for the purposes hereof and which  were
agreed  to  by  Olympus,  such  agreement  being  evidenced  upon
delivery by Olympus to  Stratus of an  executive summary of  such
Development Opportunity  prepared  and executed  by  Olympus,  as
provided in the Loan Agreement.   The Olympus partner shall be  a
special purpose  entity that  will be  formed by  Olympus or  its
affiliates.   The  Stratus partner  shall  be a  special  purpose
entity that will be formed by Stratus or its affiliates; provided
that with respect  to Development Opportunities  relating to  New
Properties in  which Olympus  provides  proceeds under  the  Loan
Agreement between Olympus and Stratus Ventures, then the  Stratus
partner shall be Stratus Ventures or a wholly-owned subsidiary of
Stratus Ventures.   Unless otherwise  agreed to  in the  Proposal
Process, each partner's interest (i.e., Olympus, Stratus and  any
third party)  shall be  based on  its respective  aggregate  cash
capital  contribution  or  deemed   capital  contribution  as   a
percentage of  the total  cash capital  contributions and  deemed
capital contributions made by all the partners.  Unless otherwise
agreed to  in the  Proposal Process,  after payment  of any  non-
partner obligations, all net  cash flow from  a project shall  be
distributed  pro-rata  to  each  partner  in  the  ratio  of  its
respective ownership percentages.

III.3     Management  Agreement.     Unless   otherwise
agreed, Stratus or its affiliate shall serve as property  manager
to the partnership  on market  terms and  conditions as  mutually
agreed by Olympus and Stratus.  Attached as Exhibit B is the form
of property  management  agreement  to be  used  by  Stratus  and
Olympus to negotiate an agreement in connection with a  Proposal.
The economic terms of the  compensation to the property  manager
shall be presented in the Proposal  and be mutually agreeable  to
the parties based upon  the circumstances of  the services to  be
rendered.

ARTICLE IV
MANDATORILY REDEEMABLE PREFERRED STOCK
AND CONVERTIBLE LOAN

IV.1 Mandatorily   Redeemable    Preferred   Stock .    
Simultaneously with the execution of this Agreement, Oly Equities
and Stratus  will execute  and  deliver the  Securities  Purchase
Agreement in the form of Exhibit C pursuant to which Oly Equities
will purchase  from Stratus  1,712,328  shares of  a  mandatorily
redeemable preferred  stock  for  the  aggregate  amount  of  Ten
Million and No/100 Dollars ($10,000,000.00).

IV.2 Loan Agreement.  Simultaneously with the execution
of this Agreement, Oly Lender  and Stratus Ventures will  execute
the Loan Agreement in the form of Exhibit D pursuant to which Oly
Lender agrees to lend to Stratus  Ventures up to Ten Million  and
No/100  Dollars  ($10,000,000.00)  to  be  used  in   Development
Opportunities relating to New Properties.  Stratus Ventures  must
draw at  least Seven  Million Five  Hundred Thousand  and  No/100
Dollars ($7,500,000.00) under the Loan Agreement prior to Stratus
contributing other  forms  of  equity  to  the  ventures,  unless
otherwise approved by  Oly Lender; provided  that nothing  herein
shall prohibit Stratus from funding any Development Opportunity.

IV.3 Investor Rights  Agreement.   Simultaneously  with
execution of  this  Agreement,  Oly  Equities  and  Stratus  will
execute and deliver the Investor Rights Agreement in the form  of
Exhibit E.

IV.4 Conversion of  Loan.   Subject to  the  conversion
limitations set  forth  in Article  XIV  of the  Loan  Agreement,
Stratus will deliver to Oly Lender  such number of shares of  its
common stock into  which the loan  is converted  pursuant to  the
Loan Agreement at such  time as Oly Lender  converts the loan  or
portion thereof as provided in the Loan Agreement.

ARTICLE V
MISCELLANEOUS

V.1  Entire Agreement.   This Agreement, including  all
exhibits  and  schedules  attached   hereto  and  all   documents
referenced herein or  therein, constitutes  the entire  agreement
among the parties with respect to  the subject matter hereof  and
supersedes any prior agreement  or understanding among them  with
respect to such subject matter.

V.2  Severability.  If any provision of this Agreement,
or  the  application   of  such  provision   to  any  person   or
circumstance, shall be held invalid  under the applicable law  of
any  jurisdiction,  the  remainder  of  this  Agreement  or   the
application of such provision  to other persons or  circumstances
or in other jurisdictions shall not  be affected thereby.   Also,
if any provision  of this Agreement  is invalid or  unenforceable
under any applicable  law, then  such provision  shall be  deemed
inoperative to  the extent  that it  may conflict  therewith  and
shall be deemed modified to conform with such law.  Any provision
hereof that  may prove  invalid or  unenforceable under  any  law
shall not  affect the  validity or  enforceability of  any  other
provision hereof.

V.3  Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be  deemed
to have  been  duly given  if  sent by  overnight  courier,  hand
delivered, mailed (first class registered mail or certified mail,
postage  prepaid)  or  sent  by  telecopy  at  the  addresses  or
facsimile numbers listed below  or to such  other address as  any
party shall have last designated by  notice to the other and  all
other parties  hereto  in  accordance with  this  Section  5.3 .  
Notices sent by hand delivery shall be deemed to have been  given
when received; notices  mailed in accordance  with the  foregoing
shall be deemed to have been given three days following the  date
so mailed; notices sent by telecopy shall be deemed to have  been
given  when  electronically  confirmed;   and  notices  sent   by
overnight courier shall be deemed to have been given on the  next
business day
following the date so sent.

If to Olympus:              Oly Fund II GP Investments, L.P.
200 Crescent Court, Suite 1650
Dallas, Texas 75201
Attention:  Hal R. Hall
Telecopy:  (214) 740-7355

with a required copy to:   Robert C. Feldman, Esq.
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Telecopy:  (214) 746-7777

If to Oly Lender:          Oly Lender Stratus, L.P.
200 Crescent Court, Suite 1650
Dallas, Texas 75201
Attention:  Hal R. Hall
Telecopy:  (214) 740-7355

with a required copy to:   Robert C. Feldman, Esq.
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Telecopy:  (214) 746-7777

If to Oly Equities:        Oly/Stratus Equities, L.P.
200 Crescent Court, Suite 1650
Dallas, Texas 75201
Attention:  Hal R. Hall
Telecopy:  (214) 740-7355

with a required copy to:   Robert C. Feldman, Esq.
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Telecopy:  (214) 746-7777

If to Stratus:             Stratus Properties Inc.
98 San Jacinto Blvd., Suite 2200
Austin, Texas 78701
Attention:  William H.  Armstrong, III
Telecopy:  (512) 478-6340

with a required copy to:   John G. Amato
1615 Poydras Street
New Orleans, Louisiana 70112
Telecopy:  (504) 585-3513

If to Stratus Ventures:    Stratus  Ventures  I  Borrower  L.L.C.
98 San Jacinto Blvd., Suite 2200
Austin, Texas 78701
Attention:   William H. Armstrong, III
Telecopy:  (512) 478-6340

with a required copy to:   John G. Amato
1615 Poydras Street
New Orleans, Louisiana 70112
Telecopy:  (504) 585-3513

V.4  Governing Laws.  This Agreement shall be  governed
by and construed and enforced in accordance with the laws of  the
State of  Texas (without  regard to  principles of  conflicts  of
laws).

V.5  Successors  and  Assigns.    Except  as  otherwise
specifically provided, this Agreement  shall be binding upon  and
inure to  the  benefit  of Olympus,  Oly  Lender,  Oly  Equities,
Stratus and Stratus Ventures and their respective successors  and
permitted assigns.  Each of Olympus, Oly Lender and Oly  Equities
shall have the right to assign  its rights and obligations to  an
affiliate controlled by or under common control with Olympus Real
Estate Fund II, L.P, which is at all times in a position to  fund
the financial obligations hereunder.

V.6  Counterparts.  This Agreement  may be executed  in
one or more counterparts, all of  which shall constitute one  and
the same instrument.

V.7  Headings.   The section  and article  headings  in
this Agreement are  for convenience of  reference only and  shall
not be deemed to alter or affect the meaning or interpretation of
any provision hereof.

V.8  Other Terms.   All  references to  "Articles"  and
"Sections" contained in this  Agreement are, unless  specifically
indicated   otherwise,   references   to   articles,    sections,
subsections and paragraphs of this  Agreement.  Whenever in  this
Agreement the singular number is used, the same shall include the
plural where  appropriate  (and vice  versa),  and words  of  any
gender shall include  each other  gender where  appropriate.   As
used in this Agreement, the following words or phrases shall have
the meanings indicated:  (i) "or" shall mean "and/or"; (ii) "day"
shall mean a calendar  day; (iii) "including" or "include"  shall
mean "including  without limitation";  and (iv) "law"  or  "laws"
shall mean  statutes,  regulations, rules,  judicial  orders  and
other legal pronouncements  having the effect  of law.   Whenever
any provision of this  Agreement requires or  permits a party  to
take or omit  to take any  action, or make  or omit  to make  any
decision, unless  the context  clearly requires  otherwise,  such
provision shall be  interpreted to authorize  an action taken  or
omitted, or a decision made or omitted, by the party acting alone
and in good faith.

V.9  No Recordation.   Neither this  Agreement nor  any
document referring to  this Agreement  shall be  recorded in  any
county, public  or official  records other  than as  exhibits  to
Stratus'  reports  filed   with  the   Securities  and   Exchange
Commission  or  otherwise  as  required  pursuant  to  any  legal
obligations of  any  of the  parties  or their  affiliates.    If
requested by any party, upon  expiration or other termination  of
this Agreement  or  any  obligations  or  rights  hereunder,  the
parties will promptly execute  any document reasonably  necessary
to evidence to third parties the termination of this Agreement or
any obligations or rights hereunder.

IN WITNESS WHEREOF, this Agreement  has been executed as  of
the day and year first above written.

OLYMPUS:

Oly Fund II GP Investments, L.P.,
a Texas limited partnership

By:  Oly Real Estate Partners II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly REP II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Fund II, LLC,
a Texas limited liability company,
its general partner

By:  /s/Hal R. Hall                               
--------------
Hal R. Hall
Vice President

OLY LENDER:

OLY LENDER STRATUS, L.P.,
a Texas limited partnership

By:  Oly Fund II GP Investments, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Real Estate Partners II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly REP II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Fund II, LLC,
a Texas limited liability company,
its general partner

By:  /s/ Hal R. Hall                         
---------------
Hal R. Hall
Vice President

OLY/STRATUS:

OLY/STRATUS EQUITIES, L.P.,
a Texas limited partnership

By:  Oly Fund II GP Investments, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Real Estate Partners II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly REP II, L.P.,
a Texas limited partnership,
its general partner

By:  Oly Fund II, LLC,
a Texas limited liability company,
its general partner

By:  /s/Hal R. Hall                         
--------------
Hal R. Hall
Vice President

STRATUS:

STRATUS PROPERTIES INC.,
a Delaware corporation

By:  /s/ William H. Armstrong III                                
----------------------------
William H. Armstrong, III
President

STRATUS VENTURES:

STRATUS VENTURES I BORROWER L.L.C.,
a Delaware limited liability company

By:  Stratus Properties Inc.,
a Delaware corporation,
its sole member

By:  /s/ William H. Armstrong III                          
----------------------------
William H. Armstrong, III
President

EXHIBIT A

FORM PARTNERSHIP AGREEMENT

[ATTACHED]

EXHIBIT B

FORM MANAGEMENT AGREEMENT

[ATTACHED]

EXHIBIT C

SECURITIES PURCHASE AGREEMENT

FILED AS SEPARATE EXHIBIT TO CURRENT REPORT ON 
FORM 8-K           

EXHIBIT D

LOAN AGREEMENT

FILED AS SEPARATE EXHIBIT TO CURRENT REPORT ON 
FORM 8-K

EXHIBIT E

INVESTORS RIGHTS AGREEMENT

FILED AS SEPARATE EXHIBIT TO CURRENT REPORT ON
FORM 8-K

SCHEDULE 2.1(a)

INITIAL PROPOSAL OUTLINE

The following outline shall be representative of the  information
that would normally be included in Initial Proposals that Stratus
presents to Olympus, to the extend reasonably available.  Content
and  format  may  vary  from  one  Initial  Proposal  to  another
depending on (i)  the type  of property  being considered  (i.e.,
office building vs. residential subdivision), (ii) the status  of
the  project  (i.e.,  existing   vs.  proposed)  and  (iii)   the
availability of information.

1.   Executive Summary
A  synopsis  of  the  project,  product,  pricing,  proposed
program,  timing,   capital   requirements   and   resulting
financial projections.

2.   Location Maps
Regional, area  and  local  maps sufficient  to  locate  the
project.

3.   Property Photographs
Aerial,  elevation,   interior  and   area  photographs   to
illustrate the project and surrounding area.

4.   Drawings
Site plans,  building elevations  and floor  plans shall  be
included when appropriate and/or available.

5.   Proposed Transaction Terms
Proposed  participants,   expected  capital   contributions,
relative ownership,  cash  distribution  priority,  if  any,
third party debt requirements, debt guarantees,  partnership
governance and project management oversight and compensation
shall be  outlined.   Changes/variances to  the  partnership
agreement  and  management  agreement  templates  shall   be
highlighted.

6.   Plan
A  bullet  point  synopsis  of  the  program  envisioned  to
develop,  sell  and/or  operate  the  project,  including  a
summary of  the  project  and its  pricing,  to  the  extent
practical and appropriate.

7.   Financial Projections
Annual financial  projections  using  discounted  cash  flow
analysis to  evaluate the  following three  (3) scenarios:  
best case, prudent case and pessimistic case.  The financial
projections shall also  include revenue, operating  expense,
capital  expenditures,  annual   debt  service,   cumulative
source/use statement and individual partner returns, to  the
extent practical and appropriate.

8.   Schedule
A high-level bar chart  (Gantt chart) summarizing the  tasks
to complete  prior  to  closing along  with  the  tasks  and
milestones for the project that occur subsequent to closing.

9.   Due Diligence Matters & Risk Assessment
A summary  of  completed  and ongoing  due  diligence  work,
including any material risks identified.

10.  Appendix
Proposals  may  also   include  appropriate  and   pertinent
supporting information  such  as the  following:    purchase
agreement,  market  research  product  inventory   listings,
entitlement information.

11.  Recovery by Stratus of "Pursuit Costs" of Prior  Development   
Opportunities
Proposals will identify reimbursable actual direct  expenses
incurred by Stratus in connection with its pursuit of  prior
Development Opportunities to be offered to Olympus.

12.  Revisions to the Representations  and Warranties of Stratus   
and Stratus Ventures Made in the Loan Agreement
Proposals may also include any revisions  to be made to  the
terms and conditions of  the representations and  warranties
made by Stratus and Stratus Ventures in Loan Agreement.

Exhibit A 

_______________________ LIMITED PARTNERSHIP
(A Texas Limited Partnership)

LIMITED PARTNERSHIP AGREEMENT

____________________

Dated as of __________, 1998

____________________

TABLE OF CONTENTS
Page

ARTICLE 1
Definitions

1.1    Definitions.......................................  1

ARTICLE 2
Organization

2.1    Formation of Limited Partnership..................  8

2.2    Name..............................................  8

2.3    Character of Business.............................  8

2.4    Registered Office and Agent.......................  8

2.5    Fiscal Year.......................................  8

ARTICLE 3
Capital Contributions

3.1    Capital Contributions to the Partnership..........  8

3.2    Additional Capital Contributions..................  9

3.3    No Return of Capital Contributions................ 11

3.4    Interest.......................................... 11

ARTICLE 4
Rights and Obligations of Partners

4.1    Management of Partnership......................... 11

4.2    Management Committee.............................. 12

4.3    Major Decisions................................... 14

4.4    Budgets and Reports............................... 15

4.5    Powers of the Operating Partner................... 15

4.6    Liability of Partners............................. 15

4.7    Other Activities of Partners...................... 16

ARTICLE 5
Exculpation and Indemnity

5.1    Exculpation....................................... 16

5.2    Indemnity......................................... 16

ARTICLE 6
Distributions and Allocations

6.1    Distributions..................................... 17

6.2    Tax Allocations................................... 17

ARTICLE 7
Admissions, Transfers and Withdrawals

7.1    Admission of New Partners......................... 17

7.2    Transfer of Partnership Interests................. 17

7.3    Buy/Sell.......................................... 18

7.4    No Substituted Partners........................... 21

7.5    Withdrawal of Partners............................ 21

ARTICLE 8
General Accounting Provisions and Books

8.1    Books of Account; Tax Returns..................... 21

8.2    Place Kept; Inspection............................ 22

8.3    Tax Matters Partner............................... 22

ARTICLE 9
Amendments and Waivers

9.1    Amendments and Waivers............................ 22

9.2    Certain Other Amendments.......................... 22

ARTICLE 10
Dissolution and Termination

10.1   Dissolution....................................... 23

10.2   Accounting on Dissolution......................... 24

10.3   Termination....................................... 24

10.4   No Negative Capital Account Obligation............ 24

10.5   No Other Cause of Dissolution..................... 24

10.6   Merger............................................ 25

ARTICLE 11
Miscellaneous

11.1   Waiver of Partition............................... 25

11.2   Entire Agreement.................................. 25

11.3   Severability...................................... 25

11.4   Notices........................................... 25

11.5   Governing Laws.................................... 25

11.6   Successors and Assigns............................ 26

11.7   Counterparts...................................... 26

11.8   Headings.......................................... 26

11.9   Other Terms....................................... 26

11.10  Power of Attorney................................. 26

11.11  Transfer and Other Restrictions................... 27

______________________ LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT

This Limited Partnership Agreement (this "Agreement") of    
_____________________,a__________________(the "Part Partner")         
and _____________________, as the financial partner (the "Financial
Partner") and __________________,a ______________________________
are  referred  to  herein  as  the  "Limited Partners").  The
General Partners and  the Limited Partners  are herein collectively
referred   to  as   the   "Partners" and individually referred to
as a  "Partner".  The Operating  Partner is additionally referred
to  as "FM."   The Financial Partner  is additionally referred to
as "Olympus."

RECITALS

A.  The parties hereto desire to form a limited  partnership
under the Act (as defined below).

B.  The Partnership  is  being  formed for  the  purpose  of
acquiring, owning, developing and reselling that certain property
located in __________________________________________and known as  
________________________ (the "Property").

C.  The initial Partners  hereto desire to  enter into  this
Agreement to establish  their respective  rights and  obligations
with respect to the  Partnership and to  provide for the  orderly
management of the affairs of the Partnership.

NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in  this Agreement, and  for other good  and
valuable consideration, the receipt  and sufficiency of which  is
hereby acknowledged, the Partners hereby agree as follows:

ARTICLE 1
Definitions

1.1     Definitions.   As used  in this  Agreement,  the
following terms shall have the following meanings:

"Act" shall have the meaning set forth in Section 2.1.

"Affiliate" shall mean,  when used with  reference to  a
specified  Person,  any  other   Person  that  directly   or
indirectly, through one or more intermediaries, controls, is
controlled  by,  or  is  under  common  control  with,   the
specified Person.  As used in this definition of  Affiliate,
the  term  "Control"  means  the  possession,  directly   or
indirectly, of the power to direct or cause the direction of
the management  and policies  of a  Person, whether  through
ownership of voting securities, by contract, or otherwise.

"Business"  shall  mean  all  tangible  and   intangible
property of the Partnership as of  the date of the  Buy/Sell
offer and any proceeds therefrom subject to all  obligations
or liabilities associated therewith.

"Business  Day"  shall  mean   any  day  other  than   a
Saturday, Sunday,  or  holiday  on  which  national  banking
associations  in  the  State  of  Texas  are  authorized  or
required to be closed.

"Business Plan" shall  mean the  business plan  attached
hereto as Exhibit A and incorporated  herein, and as may  be
amended from time to time in accordance with the  provisions
hereof or as may attached hereto  within sixty (60) days  of
the  execution  of  this  Agreement  upon  approval  of  the
Management Committee.

"Buy-Sell" shall have the  meaning set forth in  Section
7.3.

"Buy/Sell Closing  Date"  shall  have  the  meaning  set
forth in Section 7.3.

"Buy/Sell Election Period"  shall have  the meaning  set
forth in Section 7.3.

"Buy/Sell Offer"  shall have  the meaning  set forth  in
Section 7.3.

"Buy/Sell Purchaser" shall  have the  meaning set  forth
in Section 7.3.

"Buy/Sell Seller" shall  have the meaning  set forth  in
Section 7.3.

"Capital  Account"   shall  mean   a  separate   account
maintained  for  each   Partner  in   accordance  with   the
provisions of  Regulation section  1.704-1(b)(2)(iv).   Each
Partner shall have only  one Capital Account, regardless  of
the number of  classes of units  or other  interests in  the
Partnership owned by such  Partner.  Initially, the  Capital
Account of each Partner shall have a positive balance  equal
to its initial Capital  Contribution.  Such Capital  Account
shall  thereafter  be  adjusted   in  accordance  with   the
following provisions:

(a)  Additions.    The   Capital  Account  shall   be
increased  by  the  sum   of  (i) except  as   otherwise
provided in  paragraph  (f)  below  in  the  case  of  a
contribution of a  promissory note, the  amount of  cash
and the fair market value (determined as of the date  of
contribution, without regard to  section 7701(g) of  the
Code, including  a constructive  contribution  resulting
from   a   termination   and   reconstitution   of   the
Partnership under section 708(b)(1)(B)  of the Code)  of
property   contributed,   or   deemed   to   have   been
contributed, to the  capital of the  Partnership by  the
Partner,  net  of   any  liabilities   assumed  by   the
Partnership in connection with  such contribution or  to
which the contributed property is subject under  section
752 of the Code; plus (ii) the amount of any net  income
or other  item  of  income  or  gain  allocated  to  the
Partner pursuant to Article 6 hereof.

(b)  Subtractions.   The  Capital  Account  shall  be
reduced by the sum of (i) the amount of any net loss  or
other item of  expense, loss or  deduction allocated  to
the Partner pursuant to Article 6 hereof; plus (ii)  the
Distribution  Value   (determined  without   regard   to
section 7701(g)  of  the  Code) of  any  cash  or  other
property   distributed,   or   deemed   to   have   been
distributed, by the Partnership  to the Partner, net  of
any  liabilities   assumed   by   the   distributee   in
connection with the  distribution or to  which the  cash
or other distributed property  is subject under  section
752 of the Code.

(c)  Other Adjustments.   The  Capital Account  shall
otherwise  be  adjusted  by  the  Financial  Partner  in
accordance with  the other  capital account  maintenance
rules  of  Regulation  section  1.704-1(b)(2)(iv).    In
connection with the foregoing:

(d)  Determination  of   Fair  Market   Value.     In
determining  the  balance  of  each  Partner's   Capital
Account, and for all  other purposes of this  Agreement,
the fair  market value  of an  asset contributed  to  or
distributed by the  Partnership shall  be determined  in
good faith  by the  General  Partners (which  shall  use
their reasonable efforts not to overstate or  understate
the  fair   market   value   of  any   such   asset).   
Notwithstanding   the   preceding   sentence,   it    is
understood that no Partner shall have any obligation  to
contribute any real  property asset  to the  Partnership
unless all  General Partners  have  agreed to  the  fair
market value of  the asset.   [NOTE:   The valuation  of
significant property  assets will  be reflected  in  the
offer, as such term is  defined in the Master  Agreement
(the "Master Agreement"),  between [Oly/FM Funding]  and
FM Properties Inc., dated  May 22, 1998, and agreed  to
prior to the creation of the Partnership.]

(e)  Capital Account of Transferee.  A transferee  of
all or part of  an interest in  the capital and  profits
of the Partnership shall succeed to the Capital  Account
of the  transferor  to  the  extent  that  such  Capital
Account relates to the transferred interest.

(f)  Contribution of Note.  Notwithstanding any other
provision of this  definition of Capital  Account, if  a
Partner has  contributed  his  promissory  note  to  the
capital of the Partnership and such note is not  readily
traded on  an established  securities market,  then  the
principal of  such note  shall not  be credited  to  the
Partner's Capital Account until  and to the extent  that
either (i) the Partnership  makes a taxable  disposition
of the note or (ii) principal  payments are made on  the
note,  all   in  accordance   with  Regulation   section
1.704-1(b)(2)(iv)(d)(2).

"Capital Contribution" shall  mean the  gross amount  of
cash or the fair market value of other property  contributed
or  caused  to  be  contributed   to  the  capital  of   the
Partnership by  a Partner  with  respect to  such  Partner's
capital account.

"Cash Flow"  of the  Partnership  for any  period  shall
mean any and all cash revenues generated from the ownership,
sale of lots, sale of  undeveloped parcels, lease and  other
operation of the Partnership assets and any and all  capital
transaction proceeds minus the sum of (i) any operating  and
capital expenses incurred in  the operation of the  business
of  the  Partnership,   including  without  limitation   any
payments of interest and  principal (other than payments  of
principal  that  are  refinanced  by  the  Partnership)   on
Partnership indebtedness  required  by the  lender  of  such
indebtedness during the  quarterly period  in question,  and
(ii) a  reasonable  reserve   for  necessary  or   desirable
operating and capital expenses  of the Partnership that  are
anticipated to  be incurred  or to  become due  and  payable
within six (6)  months as the  Management Committee, in  the
exercise of its reasonable  discretion and as is  consistent
with the  Operating  Budget  and the  Business  Plan,  shall
determine.

"Code" shall mean the Internal Revenue Code of 1986  and
any successor statute, as amended from time to time.

"Contribution Percentage" of a General Partner shall  be
based on  the actual  equity capital  contributions of  such
Partner  in   relation   to   the   total   equity   capital
contributions of all General Partners.

"Deadlock"  shall  mean  the  failure  of  the   General
Partners to  agree with  respect to  any Major  Decision  or
other issue with respect to the Partnership which could have
a material adverse  effect or impact  to the Partnership  if
such issue remains unresolved between the Partners.

"Deemed Recipient" shall have  the meaning set forth  in
Section 3.2.

"Default Amount"  shall have  the meaning  set forth  in
Section 3.2.

"Default Date"  shall  have  the meaning  set  forth  in
Section 3.2.

"Defaulting Partner" shall  have the  meaning set  forth
in Section 3.2.

"Distribution  Period"  shall  mean   (i)  the   period
beginning on the Effective  Date and ending on  ___________,
____ and (ii) each calendar quarter thereafter.

"Distribution Value"  shall mean  the dollar  amount  of
any cash distribution and the fair market value, as  jointly
determined in  good faith  by the  Partners (each  of  which
shall  use  its  reasonable  efforts  not  to  overstate  or
understate fair  market  value), of  any  non-cash  property
distribution at the  time of  the distribution,  net of  the
distributee's  share  of  any   liabilities  to  which   the
distributed property is subject  and net of any  liabilities
assumed by the distributee.

"Effective Date"  shall have  the meaning  set forth  in
the preamble to this Agreement.

"Escrow Agent"  shall  have  the meaning  set  forth  in
Section 7.3.

"Financial Partner" shall mean [Olympus], together  with
its successors and assigns.

"FM" shall have  the meaning set  forth in the  preamble
of this Agreement.

"FM Representative" shall have the meaning set forth  in
Section 4.2.

"Indemnified Parties" shall have  the meaning set  forth
in Section 7.3.

"Loan" shall have the meaning set forth in Section 3.1.

"Lender" shall  have the  meaning set  forth in  Section
3.1.

"Major Decision" means any decision with respect to  (1)
approval of  the Business  Plan, including  the decision  to
make additional Capital Contributions except as provided  in
Section 3.2(a); (2) approval  of the  Operating Budget;  (3)
approval of the plans  and specifications for the  Property,
and the subsequent approval of all material change orders or
amendments given in substitution for such approved plans and
specifications;   (4)   approval   of   any   financing   or
refinancing, whether secured or unsecured, unless previously
approved in the  Business Plan or  annual Operating  Budget;
(5) approval of acquisition of any additional property,  (6)
approval of admission or withdrawal  of any Partners to  the
Partnership, (7)  approval of  any sale,  exchange or  other
disposition of the  Property unless  pursuant to  governance
deadlock provision in Section 7.3  below or in the  Business
Plan  or  annual  Operating  Budget;  (8)  approval  of  any
amendments to the Agreement; (9) approval of any termination
or dissolution of the Partnership; and (10) appointment of a
successor property manager pursuant to Section 4.1.

"Management Agreement" shall have the meaning set  forth
in Section 4.1.

"Management Committee" shall have the meaning set  forth
in Section 4.2.

"Mandatory  Additional  Contribution"  shall  have   the
meaning set forth in Section 3.2.

"Non-Defaulting Partners"  shall  have the  meaning  set
forth in Section 3.2.

"Offer Amount"  shall  have  the meaning  set  forth  in
Section 7.3.

"Offer Deposit"  shall  mean  the sum  of  Five  Hundred
Thousand and No/100 Dollars ($500,000.00) in cash.

"Offeree" shall have  the meaning set  forth in  Section
7.3.

"Offeror" shall have  the meaning set  forth in  Section
7.3.

"Olympus" shall  have  the  meaning  set  forth  in  the
preamble of this Agreement.

"Olympus Representative "  shall  have  the  meaning  set
forth in Section 4.2.

"Operating  Budget "  shall  mean  the  budget   attached
hereto as  Exhibit  B and  incorporated  herein, as  may  be
amended from time to time in accordance with the  provisions
hereof, or to be attached hereto  within sixty (60) days  of
the  execution  of  this  Agreement  upon  approval  by  the
Management Committee in accordance with this Agreement.

"Operating Partner" shall mean  [FM], together with  its
successors or assigns.

"Partner"  shall   mean   any  Person   executing   this
Agreement as of the Effective Date as a partner or hereafter
admitted to the Partnership as a partner as provided in this
Agreement, but does not include any Person who has ceased to
be a Partner of the Partnership.

"Partnership" shall have  the meaning set  forth in  the
preamble to this Agreement.

"Partnership Interest" shall have the meaning set  forth
in Section 7.3.

"Person" shall  mean an  individual, partnership,  joint
venture, limited  partnership,  limited  liability  company,
foreign limited  liability company,  trust, business  trust,
estate,   corporation,    custodian,   trustee,    executor,
administrator, nominee, association,  cooperative or  entity
in a representative capacity.

"Property" shall  have  the  meaning set  forth  in  the
preamble of this Agreement.

[To be used where applicable:  "Preferred Return"  shall
mean the following:

(a)  With respect to  the first Distribution  Period,
the Preferred Return of a  Partner shall be the  product
of (i) the Unreturned Capital of such Partner from  time
to time  during  such Distribution  Period,  times  (ii)
[_________ percent  (____%)],  times (iii)  a  fraction,
the numerator of  which is the  number of  days in  such
Distribution Period  and  the denominator  of  which  is
three hundred and sixty-five (365).

(b)  With  respect   to  each   Distribution   Period
following the first  Distribution Period, the  Preferred
Return of a Partner shall be  the sum of (i) the  excess
(if any) of such  Partner's Preferred Return  determined
as  of  the   last  day  of   the  Distribution   Period
immediately  preceding  the  Distribution  Period  under
consideration  over  any   distribution  made  to   such
Partner pursuant to Section  6.1 hereof with respect  to
such immediately  preceding  Distribution  Period,  plus
(ii) the product of  (A) the sum of  (1) the excess  (if
any) of such  Partner's Preferred  Return determined  as
of the last day  of the Distribution Period  immediately
preceding the  Distribution Period  under  consideration
over any distribution made  to such Partner pursuant  to
Section 6.1 hereof  with respect  to  such  immediately
preceding Distribution Period,  plus (2) the  Unreturned
Capital (if  any)  of such  Partner  from time  to  time
during  the  Distribution  Period  under  consideration,
times  (B) [_______  percent   (____%)],  times  (C)   a
fraction, the numerator of which  is the number of  days
in the Distribution Period  under consideration and  the
denominator of  which is  three hundred  and  sixty-five
(365).]

"Receipt Amount"  shall have  the meaning  set forth  in
Section 7.3.

"Regulation"    shall    mean    Treasury    Regulations
promulgated under Title 26 of the United States Code.

"Replacement Loan" shall have  the meaning set forth  in
Section 3.2.

"Representative" shall  have the  meaning set  forth  in
Section 4.2.

"Required Capital Contributions" shall have the  meaning
set forth in Section 3.1.

"Required Interest"  shall  mean  both  of  the  General
Partners.

"Sharing Ratio"  shall have  the  meaning set  forth  on
Schedule I attached hereto.

"Tax Matters Partner" shall  have the meaning set  forth
in Section 8.3.

"Unreturned  Capital"  as  of  a  date  shall  mean  the
following:

(a)  In  the  case  of  each  of  the  Partners,  its
Unreturned Capital shall be the excess, if any, of the total
Capital Contributions made  by such Partner  over the  total
distributions  received  by  such  Partner  under   [Section
6.1(ii)] hereof prior to the date as of which such Partner's

Unreturned Capital is determined.

(b)  In the case  of a transferee  of an interest  in
the Partnership, the  transferee's Unreturned Capital  shall
be the Unreturned Capital as of the date of the transfer  of
the transferor times a fraction,  the numerator of which  is
the Contribution Percentage attributable to the interest  in
Partnership  capital   and   profits  transferred   by   the
transferor to the transferee,  and the denominator of  which
is the sum of  the Contribution Percentages attributable  to
both  the  interest  in  Partnership  capital  and   profits
retained by  the transferor  (if any)  and the  interest  in
Partnership  capital   and   profits  transferred   by   the
transferor to  the  transferee.   Likewise,  the  Unreturned
Capital of the transferor shall be reduced by the Unreturned
Capital of  the  transferee  to whom  all  or  part  of  the
transferor's interest in Partnership capital and profits has
been transferred.

ARTICLE 2
Organization

2.1     Formation of Limited Partnership.  The  Partners
have formed a limited partnership  pursuant to and in  accordance
with the provisions of the Texas Revised Limited Partnership Act,
as from  time to  time amended  ("Act").   The Financial  Partner
shall file, on behalf of the Partnership a certificate of limited
partnership with the office of the Secretary of State of Texas.

2.2     Name.  The  name of  the Partnership  is Oly  FM
[Property Name] L.P.   The  Management Committee  may change  the
name of the Partnership from time  to time and shall give  prompt
written notice thereof to the Operating Partner and each  Limited
Partner; provided, however,  that such name  may not contain  any
portion of  the  name  or  mark  of  the  Partners  without  such
Partner's consent.   In such event,  the Financial Partner  shall
promptly file in the office of the Secretary of State of Texas an
amendment to the Partnership's certificate of limited partnership
reflecting such change of name.

2.3     Character of  Business.    The  purpose  of  the
Partnership  shall  be  (i)  to  acquire,  hold,  develop,  sell,
encumber, or otherwise act with respect to investments, direct or
indirect, in  the  Property, and  (ii) to  engage in  such  other
business as may be conducted  by a limited partnership  organized
under the laws of the State of Texas.

2.4     Registered Office  and  Agent.    The  name  and
address of the Partnership's initial registered agent are Olympus
Real Estate Corporation, 200 Crescent Court, Suite 1650,  Dallas,
Texas 75201.    The  Partnership's  initial  principal  place  of
business  shall  be  200  Crescent  Court,  Suite  1650,  Dallas,
Texas 75201.  The  Financial Partner may  change such  registered
agent, registered  office, or  principal place  of business  from
time to time.   The Financial Partner  shall give prompt  written
notice of  any such  change to  the  Operating Partner  and  each
Limited Partner.  The Partnership may from time to time have such
other place or places of business within or without the State  of
Texas as may be determined by the Financial Partner.

2.5     Fiscal Year.  The fiscal year of the Partnership
shall end on December 31 of each calendar year unless, for United
States federal  income  tax  purposes,  another  fiscal  year  is
required.  The Partnership  shall have the  same fiscal year  for
United States  federal income  tax  purposes and  for  accounting
purposes.

ARTICLE 3
Capital Contributions

3.1     Capital Contributions to  the Partnership.   The
Partners shall  contribute  or  be  deemed  to  have  contributed
capital to the Partnership in the amounts respectively set  forth
opposite their  names  on Schedule I  to  this Agreement  on  the
Effective   Date    (collectively,    the    "Required    Capital  
Contributions").   Also,  in  addition to  the  Required  Capital
Contributions, the Partners acknowledge that in order to purchase
and develop the  Property, the  Partnership will  need to  secure
from a third party lender (the "Lender") a term loan, which shall
be in the amount set forth in the Business Plan and on terms  and
conditions satisfactory to the Management Committee and  approved
in accordance with this Agreement (the "Loan").

3.2     Additional Capital Contributions.

(a)  After  the  funding  of  the  Required   Capital
Contribution set forth above  (including any amounts  deemed
to have been contributed), and  to the extent not  available
from proceeds of the Loan,  either (i) the General  Partners
may agree to  make additional Capital  Contributions to  the
Partnership as are deemed advisable by the General  Partners
(each  exercising  their  independent  discretion)  and   by
amendment to the Business Plan, or (ii) if either (A)  there
has been a default or an event of default under the Loan  or
(B) additional capital is necessary to complete any  capital
improvement  program  approved  in  the  Business  Plan,  or
(C) funds are  necessary  for  continued  operation  of  the
Property consistent with  the Business,  then the  Financial
Partner may elect to call or not call for additional Capital
Contributions  (in  each  case,  the  "Mandatory  Additional    
Contribution") to be  made to  the Partnership  to cure  any
default or event of  default under the  Loan or to  complete
such capital improvement  program or fund  operations.   The
Mandatory Additional Contribution in question shall be  made
by the General Partners pro rata, based on the  Contribution
Percentages of the  General Partners.   This Section 3.2  is
solely for the benefit of the  Partners, and shall not,  nor
shall it be deemed to, create any rights in, or provide  any
benefit to, any other person or entity, and the decision  to
make additional contributions  to the  Partnership shall  be
made in the  sole and absolute  discretion of the  Financial
Partner, except as my be provided in the Business Plan.

(b)  Each General Partner shall  be required to  make
its Mandatory Additional Contribution to the Partnership  on
or before twenty-one (21) days after written notice to  such
Partner ("Default Date").  In the event any General  Partner
fails  to  make  a  Mandatory  Additional  Contribution   as
required by  this Section  3.2 within  the time  period  set
forth herein (such Partner, being herein referred to as  the
"Defaulting Partner"), then,  the "Non-Defaulting  Partners"
(herein so  called) shall  be entitled,  as their  sole  and
exclusive remedy for such failure, by giving written  notice
to the Defaulting Partner to  make a loan (the  "Replacement
Loan") to  the  Defaulting Partner  in  the amount  of  such
Mandatory Additional  Contribution, which  Replacement  Loan
(i) shall be applied solely to fund the delinquent Mandatory
Additional Contribution,  (ii) shall  have  a  term  of  one
hundred twenty (120)  days from the  date of  such loan  and
(iii) shall bear  interest at  the  lesser of  (A)  eighteen
percent (18%) per annum and (B) the maximum rate of interest
which may  be charged,  collected  or contracted  for  under
applicable law, with accrued interest due at the maturity of
such loan  (each such  Replacement  Loan together  with  all
accrued interest  thereon from  time to  time, the  "Default
Amount").   Anything  contained  in this  Agreement  to  the
contrary  notwithstanding,   any  Partner   who  becomes   a
Defaulting Partner shall immediately and without any further
demand, notice or  cure period  (time being  of the  essence
herein) automatically cease to have a  right to vote on  all
Partnership decisions from  and after the  Default Date  for
any purposes hereunder for the remainder of the life of  the
Partnership  (unless   reinstated   as   described   below);
provided, however,  if a  Defaulting Partner  shall pay  the
Default Amount in  full to the  Non-Defaulting Partners  who
elected to make such  loan, on or  before the expiration  of
the 120-day term of the Replacement Loan to such  Defaulting
Partner, such Defaulting  Partner's voting rights  hereunder
shall be automatically re-instated (effective as of the date
such Default  Amount  is  paid in  full)  for  all  purposes
including voting rights.  If the Default Amount is not  paid
in full on or before the  expiration of the 120-day  period,
the  Defaulting  Partner's  voting   rights  shall  not   be
reinstated  upon  the  subsequent  payment  of  the  Default
Amount.

(c)  The Partners further agree  that if the  Default
Amount is not repaid  to the Non-Defaulting Partners  within
the 120-day  term,  then,  without demand,  notice  or  cure
period (time  being of  the  essence herein),  such  Default
Amount shall for all  purposes hereunder be  deemed to be  a
Capital Contribution by the  Non-Defaulting Partners to  the
Partnership effective as of  the expiration of such  120-day
term  of  such  Replacement   Loan,  which  deemed   Capital
Contribution shall be  credited as  an amount  equal to  the
product of 200%  times the Default  Amount, and the  Capital
Account of the Defaulting Partner shall for all purposes  be
appropriately reduced to  reflect such treatment;  provided,
however, with respect to any Default Amount attributable  to
a Replacement Loan made more  than one hundred twenty  (120)
days after the initial Replacement Loan (which is not repaid
during its  120-day  term)  is made  by  one  or  more  Non-
Defaulting Partner, the deemed Capital Contribution shall be
credited as an amount equal to the product of 300% times the
Default  Amount,   and  in   each  case   the   distribution
percentages of the  Defaulting Partner (i.e.,  the pro  rata
share of  the  particular distribution  which  such  Partner
would  otherwise  receive  under  such  sections)  shall  be
reduced by, and  the distribution percentages  of each  Non-
Defaulting Partner who makes its pro rata share of such loan
shall be increased by an amount equal to the quotient of (i)
200% (or 300%, as the case may be) times the Default Amount,
divided by (ii) the aggregate Capital Contributions made  by
the Partners  to  the  Partnership  prior  to  the  date  of
calculation    (including    the    Mandatory     Additional
Contributions of all  Non-Defaulting Partners but  excluding
the Default Amount then in question). 

(d)  The new  distribution  percentages  computed  in
accordance with  this Section   3.2 shall  remain in  effect
under this Agreement unless and until there is a  subsequent
adjustment to the distribution percentages.  Notwithstanding
the foregoing, no Partner's distribution percentage shall be
reduced under any circumstance to less than zero, nor  shall
any Partner's distribution percentage be increased under any
circumstance  to  more  than  100%.    Mandatory  Additional
Contributions shall be made pro rata, based on the  relative
Contribution Percentages of the General Partners.

(e)  Each Partner which becomes a Defaulting  Partner
hereby  irrevocably   grants  to   the  other   Partners   a
continuing, first priority,  perfected security interest  in
the Partnership  Interest  of  such  Defaulting  Partner  to
secure the prompt payment of  each Replacement Loan made  to
such Defaulting Partner  until such  time, if  ever, as  the
Default Amount with  respect to the  Replacement Loan  under
consideration  has  been  converted  to  a  deemed   Capital
Contribution pursuant  to  Section  3.2(c).   On  or  before
fifteen (15)  days after  any written  request of  any  Non-
Defaulting Partner, the Defaulting Partner shall execute and
deliver a UCC-1  financing statement in  form and  substance
acceptable to such Non-Defaulting  Partner to evidence  such
security interest, the failure  of which shall constitute  a
default under the Replacement Loan.   Prior to a default  or
maturity of  a Replacement  Loan, and  without limiting  the
remedies of the Non-Defaulting Partners, at the election  of
the Non-Defaulting  Partners, all  distributions payable  to
any Defaulting Partner under this Agreement shall be payable
directly to the Non-Defaulting  Partners (pro rata based  on
the relative amount  of the  Replacement Loan  made by  such
Non-Defaulting Partner)  until  the Replacement  Loan(s)  of
such Defaulting Partner are paid in full (or converted to  a
deemed Capital Contribution), shall be paid directly to  the
Non-Defaulting Partners  until  the  entire  amount  of  the
Replacement Loan is paid in full.  Any amounts paid directly
to a Non-Defaulting  Partner pursuant  to the  terms of  the
preceding sentence shall  be treated as  paid to the  person
(the "Deemed Recipient") entitled  to receive the amount  of
the distribution in the absence  of the requirements of  the
preceding sentence  (thereby discharging  the  Partnership's
obligation to make  the payment  in question  to the  Deemed
Recipient) and then  as applied by  the Deemed Recipient  on
behalf of the  Defaulting Partner  to the  repayment of  the
Defaulting Partner's loan.

(f)  EXCEPT AS  SET  FORTH  IN SECTION  3.1 OR  THIS
SECTION 3.2, NO  ADDITIONAL CAPITAL  CONTRIBUTIONS SHALL  BE
REQUIRED BY ANY PARTNER UNLESS AN EXPRESS WRITTEN CALL FOR A
CAPITAL CONTRIBUTION  IS MADE  BY THE  FINANCIAL PARTNER  TO
EACH OF THE GENERAL PARTNERS.

3.3     No Return of Capital Contributions.  No  Partner
is entitled to a  return of its  Capital Contribution, but  shall
look solely to distributions from the Partnership as provided for
in Article 6 of this Agreement.

3.4     Interest.   No  Partner  shall  be  entitled  to
interest on  its Capital  Contribution  or its  Capital  Account,
provided that each  Partner's Capital  Contribution shall  accrue
the Preferred Return (which shall not  be deemed to be  interest)
as set forth herein.  Any interest actually received by reason of
temporary investment of any part of the Partnership's funds shall
be included in the Partnership's funds.

ARTICLE 4
Rights and Obligations of Partners

4.1     Management  of  Partnership.    The  management,
control and  direction of  the  Partnership and  its  operations,
business  and  affairs  shall   be  vested  exclusively  in   the
Management Committee,  which  shall  have the  right,  power  and
authority, acting solely by itself  and without the necessity  of
approval by any Limited Partner or any other person, to carry out
any and all of the purposes of the Partnership and to perform  or
refrain from  performing any  and all  acts that  the  Management
Committee  may   deem   necessary,  desirable,   appropriate   or
incidental  thereto,  except  as   otherwise  provided  in   this
Agreement; provided, however,  that the  Operating Partner  shall
manage the Partnership and  its operations, business and  affairs
solely as described in Section 4.5.  The Management Committee may
assume  the  management  duties   and  responsibilities  of   the
Operating Partner as set forth in Section 4.5 at any time in  the
event the  Management  Committee  determines in  its  good  faith
discretion that  either  (i)  the  Operating  Partner  has  acted
negligently or with willful  misconduct in performing its  duties
or (ii) the monthly financial reports of the Partnership reveal a
material adverse deviation from the Business Plan more than three
(3) times within any  twelve (12) month  period.  The  Management
Committee agrees  that prior  to its  exercise  of its  right  to
assume  the  management  duties   and  responsibilities  of   the
Operating Partner as  result of either  default by the  Operating
Partner, the  Management Committee  shall first  deliver  written
notice of  said default  to the  Operating Partner  and give  the
Operating Partner ten (10) days thereafter in which to cure  said
default, the Operating  Partner so  elects.   No Limited  Partner
shall participate in the management, control or direction of  the
Partnership's  operations,  business  or  affairs,  transact  any
business for the Partnership, or have the power to act for or  on
behalf of or to bind  the Partnership.  Notwithstanding  anything
to the contrary provided herein, the Property shall be managed in
accordance  with  the  terms  and  conditions  of  that   certain
Management Agreement (the "Management  Agreement") dated of  even
date herewith by and between_____________ and___________________.    

4.2     Management Committee.

[The structure and duties of the Management Committee
are subject to the  proposal process of  Section 2.1 of  the
Master Agreement.   Two (2) alternatives,  depending on  the
Capital  Contributions  of  Olympus  and  FM,  are  provided
below.]

[Alternative 1

(a)  The "Management  Committee" (herein  so  called)
shall consist of three (3) representatives, one (1) of which
shall  be  designated  by  [Partner  1]  (the  "[Partner  1]   
Representative") and two (2) of which shall be designated by
[Partner 2]  (jointly,  the  "[Partner  2]  Representative")
(individually,  a  "Representative  and  collectively,   the
"Representatives").  The initial Representatives  designated
by [Partner 1] and [Partner 2]  are set forth opposite  such
Partner's name below:

Partner                  Initial Representative

[Partner 1]                                  

[Partner 2]                                  

[Partner 2]                                  

Olympus   and   FM   may   appoint   alternates   for    the
Representatives appointed by it, which alternates shall have
all the powers  of the Representatives  in their absence  or
inability  to  serve.    Olympus  and  FM  may  change   its
designated Representatives  effective  upon  written  notice
from Olympus or  FM designating such  Representative to  the
other Partners.   One  of  the [Partner  2]  Representatives
shall serve  as Chairman  of  the Management  Committee  and
shall set the agenda for such meetings.

(b)  The Representatives  shall  meet  quarterly  (or
more  often  as  the  Management  Committee  may  reasonably
determine) in the offices of the Partnership or by telephone
conference, unless  the Representatives  jointly agree  that
the meeting is unnecessary or  that a different schedule  or
location for the meeting is appropriate, to discuss  current
material management  issues (but  not day-to-day  operations
matters  which  are   in  accordance   with  the   operation
parameters set forth in the Business Plan, Operating  Budget
or otherwise set forth in writing)  or Major Decisions.   At
each meeting the Representatives shall each receive one  (1)
vote.  All  action taken by  the Management Committee  shall
require  the  approval  or  consent  of  at  least  two  (2)
Representatives  except   Major  Decisions   which   require
unanimous consent  as  described  in  Section  4.3    below.  
Representatives may  bring to  any meeting  such  employees,
agents, professionals and advisors as they deem necessary or
appropriate to assist them at such meeting.  A quorum  shall
consist of at least one  [Partner 1] Representative and  one
[Partner  2]   Representative   unless   the   [Partner   1]
Representative has declined  to attend  two (2)  consecutive
meetings, which are scheduled with at least seventy-two (72)
hours prior notice for  each meeting at  the offices of  the
Partnership, in  which  event  the quorum  may  be  two  (2)
[Partner 2] Representatives.

(c)  The  Financial   Partner,  on   behalf  of   the
Management Committee, shall be  authorized and empowered  to
(i) make all day-to-day management decisions (provided  that
such decisions are consistent with the operation  parameters
set  forth  in  the  Business  Plan,  Operating  Budget   or
otherwise in  writing)  except  for  Major  Decisions,  (ii)
direct the  Operating Partner,  (iii) perform  all acts  and
enter into and perform all contracts and other  undertakings
that the  Financial  Partner may,  in  the exercise  of  its
reasonable   discretion,    deem    necessary,    advisable,
appropriate  or  incidental  thereto  consistent  with   the
Business Plan and  Operating Budget and  (iv) terminate  the
property manager in the event of a default in the Management
Standard  (as  that  term  is  defined  in  the   Management
Agreement), provided, if the property manager is terminated,
then the Partnership (as a Major Decision) shall designate a
successor property manager.]

[Alternative 2

(a)  The "Management  Committee" (herein  so  called)
shall consist of four (4) representatives, two (2) of  which
shall be designated by  [Partner 1] (jointly, the  "[Partner
1] Representative") and two (2) of which shall be designated
by [Partner 2] (jointly,  the "[Partner 2]  Representative")
(individually,  a  "Representative  and  collectively,   the
"Representatives").  The initial Representatives  designated
by [Partner 1] and [Partner 2]  are set forth opposite  such
Partner's name below:

Partner                  Initial Representative

[Partner 1]                                  

[Partner 1]                                  

[Partner 2]                                  

[Partner 2]                                  

Olympus   and   FM   may   appoint   alternates   for    the
Representatives appointed by it, which alternates shall have
all the powers  of the Representatives  in their absence  or
inability  to  serve.    Olympus  and  FM  may  change   its
designated Representatives  effective  upon  written  notice
from Olympus or  FM designating such  Representative to  the
other Partners.   One  of  the [Partner  2]  Representatives
shall serve  as Chairman  of  the Management  Committee  and
shall set the agenda for such meetings. 

(b)  The Representatives  shall  meet  quarterly  (or
more  often  as  the  Management  Committee  may  reasonably
determine) in the offices of the Partnership or by telephone
conference, unless  the Representatives  jointly agree  that
the meeting is unnecessary or  that a different schedule  or
location for the meeting is appropriate, to discuss  current
material management  issues (but  not day-to-day  operations
matters  which  are   in  accordance   with  the   operation
parameters set forth in the Business Plan, Operating  Budget
or otherwise set forth in writing)  or Major Decisions.   At
each meeting the Representatives shall each receive one  (1)
vote.  All  action taken by  the Management Committee  shall
require the  approval  or  consent of  at  least  three  (3)
Representatives  except   Major  Decisions   which   require
unanimous consent  as  described  in  Section  4.3    below.  

Representatives may  bring to  any meeting  such  employees,
agents, professionals and advisors as they deem necessary or
appropriate to assist them at such meeting.  A quorum  shall
consist of at least one  [Partner 1] Representative and  one
[Partner  2]   Representative   unless  both   [Partner   2]
Representatives have declined to attend two (2)  consecutive
meetings, which are scheduled with at least seventy-two (72)
hours prior notice for  each meeting at  the offices of  the
Partnership, in  which  event  the quorum  may  be  two  (2)
[Partner 1] Representatives, and vice versa.

(c)  The  Financial   Partner,  on   behalf  of   the
Management Committee, shall be  authorized and empowered  to
(i) make all day-to-day management decisions (provided  that
such decisions are consistent with the operation  parameters
set  forth  in  the  Business  Plan,  Operating  Budget   or
otherwise in  writing)  except  for  Major  Decisions,  (ii)
direct the  Operating Partner,  (iii) perform  all acts  and
enter into and perform all contracts and other  undertakings
that the  Financial  Partner may,  in  the exercise  of  its
reasonable   discretion,    deem    necessary,    advisable,
appropriate or  incidental thereto  and (iv)  terminate  the
property manager in the event of a default in the Management
Standard  (as  that  term  is  defined  in  the   Management
Agreement), provided, if the property manager is terminated,
then the Partnership (as a Major Decision) shall designate a
successor property manager.]

4.3 Major Decisions.  All Major  Decisions shall be made  by
both  the  [Partner  1]   Representative  and  the  [Partner   2]
Representative.  Accordingly, neither  FM nor Olympus, on  behalf
of the Management Committee, shall have the right or the power to
make any  binding  commitment on  behalf  of the  Partnership  in
respect  of  a  Major  Decision  unless  and  until  all  of  the
Representatives have authorized the same in writing.

4.4 Budgets and Reports.

(a) By January 31st  of  each  calender  year  hereafter 
during the term hereof, the Operating Partner shall  prepare
a revised Operating  Budget and  the Business  Plan for  the
operation of  the  Partnership.   The  Management  Committee
shall have thirty (30) days after receipt thereof to  either
approve the submitted Business Plan and Operating Budget  or
respond with required changes to same.

(b)  The Operating  Partner agrees  to use  diligence
and to  employ all  reasonable efforts  to ensure  that  the
actual costs of operating  the Partnership shall not  exceed
the Operating  Budget,  either  in  total  or  for  any  one
accounting category.  The Operating Partner shall secure the
written  approval  of  the  Management  Committee  for   any
expenditure that (i) exceeds  fifteen percent  (15%) of  the
annual budgeted  amount  for  the  Partnership  in  any  one
accounting category on such Operating Budget or (ii) exceeds
ten percent  (10%) of  the annual  budgeted amount  for  the
Partnership in all  accounting categories  of the  Operating
Budget.  During each applicable calendar year, the Operating
Partner agrees to promptly  inform the Management  Committee
of any major increases  in costs and  expenses or any  major
decreases in  revenue  that  were not  foreseen  during  the
budget preparation period and thus were not reflected in the
Operating Budget.

(c)  The Operating  Partner  shall  also  submit  any
additional financial or operational reports as the Financial
Partner may from time to time reasonably request.

4.5     Powers of  the Operating  Partner.   Subject  to
Section 4.3, the Operating Partner shall have the duties, rights
and obligations to implement the operations of the Partnership as
described in the Business Plan,  Operating Budget or approved  in
writing by  the  Management  Committee.    Without  limiting  the
generality of  Section  4.1,  but  subject  to  Section 4.3,  the
Operating Partner,  acting on  behalf of  the Partnership,  shall
oversee the activities of property manager, or, if the Management
Agreement is terminated,  until a successor  property manager  is
appointed, perform  the duties,  rights  and obligations  of  the
property  manager;  provided,  however,  neither  the   Operating
Partner nor the property manager shall take any action that has a
material economic  affect on  the Partnership  without the  prior
approval  of   the  Management   Committee,  including,   without
limitation, approving the  form and substance  of all  contracts,
loan documents  or  other  documents  necessary  to  operate  the
business of the Partnership.

4.6     Liability of  Partners.   The  General  Partners
shall be personally liable for the  debts and obligations of  the
Partnership if (but solely to the extent) required by  applicable
law; provided, however, that all such debts and obligations shall
be paid or discharged first with the property of the  Partnership
(including insurance proceeds) before the General Partners  shall
be obligated to pay or discharge any such debt or obligation with
its personal assets.  Notwithstanding the preceding sentence, the
General Partners shall not be personally liable for any debts  or
obligations which  are  nonrecourse  or which,  under  the  terms
thereof, do  not create  or impose  such liability.   No  Limited
Partner shall  be  personally liable  for   any of  the  debts  or
obligations of the Partnership.

4.7     Other  Activities  of   Partners.    Except   as
otherwise agreed in writing, including,  but not limited to,  the
Commitment Agreement, each Partner (i)  may carry on and  conduct
in any way or in any capacity, including, but not limited to, for
such Partner's  own right  and for  such Partner's  own  personal
account, as a partner in any other partnership, as a venturer  in
any joint  venture,  as  a  member  or  manager  in  any  limited
liability  company,  as   an  employee,   officer,  director   or
stockbroker of  any  corporation,  or as  a  participant  in  any
syndicate,   pool,   trust,   association   or   other   business
organization, a business that  competes, directly or  indirectly,
with the business of  the Partnership, (ii) will  be free in  any
capacity to conduct  business activities the  same or similar  as
conducted by the  Partnership and (iii)  may make investments  in
any kind of property.   The Partnership  will have absolutely  no
claim or right to any such business or assets thereof.   Further,
the Partnership will have claim to and will own only those assets
contributed to the Partnership or acquired with Partnership funds
or credit.  Neither  this Agreement nor any  principle of law  or
equity shall preclude or limit, in any respect, the right of  any
Partner or any affiliate thereof to engage in or derive profit or
compensation from  any activities  or investments,  nor give  any
other  Partner  any  right  to  participate  or  share  in   such
activities or investments or  any profit or compensation  derived
therefrom.

ARTICLE 5
Exculpation and Indemnity

5.1     Exculpation.    Neither  the  General   Partners
nor any affiliate  of  the  General  Partners,  nor any  officer,
director,  manager,  member,  employee,  agent,  stockholder,  or
partner of the General Partners or  any of its affiliates,  shall
be liable, responsible, or accountable in damages or otherwise to
the Partnership or any Partner by  reason of, or arising from  or
relating to  the  operations, business,  or  affairs of,  or  any
action taken or  failure to act  on behalf  of, the  Partnership,
except to the extent that any of the foregoing is determined,  by
a  final,   nonappealable  order   of   a  court   of   competent
jurisdiction,  to  have  been  primarily  caused  by  the   gross
negligence, willful  misconduct,  or  bad  faith  of  the  person
claiming exculpation.

5.2     Indemnity.  The Partnership shall indemnify  the
General Partners,  each affiliate  of the  General Partners,  and
each officer, director, stockholder, manager, member, and partner
of the  General Partners  or any  of its  affiliates, and  if  so
determined by the General Partners, each employee or agent of the
General Partners or  any of  its affiliates,  against any  claim,
loss,  damage,  liability,   or  expense  (including   reasonable
attorneys' fees,  court costs,  and  costs of  investigation  and
appeal) suffered or incurred by any such indemnitee by reason of,
or arising  from  or relating  to  the operations,  business,  or
affairs of, or any action taken  or failure to act on behalf  of,
the Partnership, except to the extent any of the foregoing (i) is
determined by final, nonappealable order of a court of  competent
jurisdiction  to  have  been   primarily  caused  by  the   gross
negligence, willful  misconduct,  or  bad  faith  of  the  person
claiming indemnification or  (ii) is  suffered or  incurred as  a
result of any claim (other than a claim for indemnification under
this Agreement) asserted by  the indemnitee as plaintiff  against
the Partnership.  Unless a determination has been made (by final,
nonappealable order of  a court of  competent jurisdiction)  that
indemnification is not required, the Partnership shall, upon  the
request of  any indemnitee,  advance or  promptly reimburse  such
indemnitee's reasonable  costs of  investigation, litigation,  or
appeal, including reasonable attorneys' fees; provided,  however,
that the  affected  indemnitee  shall, as  a  condition  of  such
indemnitee's right to receive  such advances and  reimbursements,
undertake in writing  to repay promptly  the Partnership for  all
such advancements  or  reimbursements  if a  court  of  competent
jurisdiction determines that such indemnitee is not then entitled
to indemnification under this Section 5.2.   No Partner shall  be
required to contribute capital in respect of any  indemnification
claim under this  Section 5.2  unless otherwise  provided in  any
other written agreement to which such Partner is a party.

ARTICLE 6
Distributions and Allocations

6.1     Distributions.  No later  than thirty (30)  days
after the  end  of  each Distribution  Period  during  which  the
Partnership has Cash Flow, such Cash Flow shall be distributed as
set forth below and in the order of priority as set forth  below.
[Economic terms to be agreed per proposal process of Section 2.1
of the Commitment Agreement.]

6.2     Tax Allocations.    For  United  States  federal
income tax purposes, allocations of items of income, gain,  loss,
deduction, expense,  and  credit  for each  fiscal  year  of  the
Partnership shall be in  accordance with each Partner's  economic
interest in the respective item, as determined by the  Management
Committee pursuant  to  Section  704(b)  of  the  Code,  and  the
regulations   promulgated   thereunder   and   subject   to   the
requirements of Section  704(c) of the  Code and the  regulations
promulgated  thereunder.     Unless   the  Management   Committee
determines otherwise, allocations shall  be made to each  Partner
in the  same manner  as such  Partner (i)  would be  required  to
contribute  to  the   Partnership  or  (ii)   would  receive   as
distributions if the Partnership were to liquidate the assets  of
the Partnership at their book  value and distribute the  proceeds
in accordance with  Section 6. ; provided,  however, that if  any
such  allocation  is  not   permitted  by  applicable  law,   the
Partnership's subsequent income,  gain, loss, deduction,  expense
and credit shall be allocated among the Partners so as to reflect
as nearly as  possible the allocation  used in computing  capital
accounts.

ARTICLE 7
Admissions, Transfers and Withdrawals

7.1     Admission of New Partners.  After the  Effective
Date, new Partners may be admitted  to the Partnership only  with
the written consent of, and upon such terms and conditions as are
approved by the unanimous approval of the Management Committee.  
No admission of any new Partner shall cause the General Partner's
interest in Partnership allocations, distributions and capital to
be less than one percent (1%), and no Partner's Sharing Ratio  in
the Partnership shall  be reduced or  diluted unless approved  in
writing by such Partner or unless otherwise provided in any other
written agreement to which such Partner is a party.

7.2     Transfer of Partnership Interests.

(a)  No Transfers Without  Consent.   No Partner  may
transfer or encumber  all or any  portion of such  Partner's
interest  in  the  Partnership  without  the  prior  written
consent of the Management Committee; provided, however, that
Olympus may transfer all or any  portion of its interest  in
the Partnership  to  an  Affiliate of  Olympus  Real  Estate
Corporation without the  consent of FM.   Additionally,  any
interest  in  the  Partnership   held  by  Olympus  or   its
Affiliates may be transferred in  the exercise of rights  of
the limited partners  of Olympus Real  Estate Fund II,  L.P.
("Fund II") to remove the general partner under the  limited
partnership agreement of Fund II.

(b)  Death, Bankruptcy, etc. of Limited Partner.   In
the  event   of   the   death,   incompetence,   insolvency,
bankruptcy, termination, liquidation  or dissolution of  any
Limited Partner:

(i)     the Partnership shall not be  terminated
or dissolved, and the remaining Partners shall  continue
the  Partnership  and   its  operations,  business   and
affairs until  the dissolution  thereof as  provided  in
Section 10.1 of this Agreement;

(ii)    such  affected  Limited  Partner   shall
thereupon cease  to be  a Partner  for all  purposes  of
this Agreement  and  no officer,  partner,  beneficiary,
creditor, trustee,  receiver, fiduciary  or other  legal
representative and  no  estate  or  other  successor  in
interest of such Limited  Partner (whether by  operation
of law  of  otherwise)  shall become  or  be  deemed  to
become a  Limited Partner  for  any purpose  under  this
Agreement;

(iii)   the   Partnership   interest   of   such
affected  Limited  Partner  shall  not  be  subject   to
withdrawal or redemption  in whole or  in part prior  to
the dissolution,  liquidation  and  termination  of  the
Partnership;

(iv)    the  estate   or  other   successor   in
interest of  such  affected  Limited  Partner  shall  be
deemed a transferee of, and shall  be subject to all  of
the  obligations  with   respect  to,  the   Partnership
interest of  such affected  Limited  Partner as  of  the
date of  death,  incompetence,  insolvency,  bankruptcy,
termination, liquidation or  dissolution, except to  the
extent the Management Committee releases such estate  or
successor from such obligations; and

(v)     any legal representative or successor in
interest  having  lawful   ownership  of  the   assigned
Partnership interest  of such  affected Limited  Partner
shall have  the right  to receive  notices, reports  and
distributions, if any, to the same extent as would  have
been available to such affected Limited Partner.

7.3     Buy/Sell Option.

(a)  In the event  of a Deadlock  at any time  during
the term  of the  Partnership,  either General  Partner  may
exercise a "buy-sell"  right (the "Buy-Sell")  as follows:  
either General Partner (the "Offeror") exercising such  Buy-
Sell (A) shall  deliver to  the other  General Partner  (the
"Offeree") a written notice  (the "Buy/Sell Offer")  stating
the Offeror's exercise of such  right and setting forth  the
Buy/Sell Offer  and a  description  of any  negotiations  or
discussions with  third parties  that Offeror  may have  had
with respect to the sale of the Partnership Interest and the
Business, which Buy/Sell  Offer shall  represent the  dollar
amount (without reduction for any deemed or imputed expenses
of sale) that  the Offeror would  be willing to  pay to  the
Partnership in cash  for the Business  (the "Offer  Amount")
and (B) simultaneously  with the  delivery of  the  Buy/Sell
Offer, shall  deliver into  escrow  with a  title  insurance
company located  in Dallas,  Texas selected  by the  Offeror
(the "Escrow Agent"), a good faith deposit in the amount  of
the Offer Deposit.  The Offeror hereby instructs the  Escrow
Agent that the Escrow  Agent shall either  (i) in the  event
the Offeree elects to sell  its interest in the  Partnership
(the "Partnership Interest")  in accordance  with the  terms
hereof, apply such Offer Deposit to the purchase price as of
the Buy/Sell Closing Date (as hereinafter defined) or if the
Offeror fails to timely  purchase the Offeree's  Partnership
Interest in accordance with the terms hereof, disburse  such
Offer Deposit in accordance with Section 7.3(g), or (ii)  in
the event  the  Offeree  elects to  purchase  the  Offeror's
Partnership  Interest,  disburse   such  Offer  Deposit   in
accordance with Section 7.3(e).

(b)  The notice transmitting the Buy/Sell Offer shall
be deemed to constitute an offer by the Offeror to  purchase
the Offeree's Partnership Interest for a price equal to  the
Receipt Amount.  "Receipt  Amount" shall mean the  aggregate
amount which the Partner whose Partnership Interest is to be
transferred, whether Offeror or Offeree, would receive as  a
Partnership distribution if (i)  the Business were sold  for
cash for the Offer Amount, (ii) all debts and liabilities of
the Partnership but without  taking into account any  deemed
or imputed expenses which would occur for the sale to  third
parties (e.g.  imputed brokerage  fees, etc.)  were paid  in
full from such proceeds and (iii) prorations were made  with
respect to all current assets and current liabilities of the
Partnership.

(c)  The Offeree shall have forty-five (45) days from
the date of the Buy/Sell Offer  to elect, by written  notice
to the  Offeror  signed  by  the  Partner  constituting  the
Offeree, whether to sell such Offeree's Partnership Interest
to the Offeror or whether to purchase (or cause its designee
to purchase)  the  Offeror's  Partnership  Interest  in  the
Partnership (the "Buy/Sell Election Period").

(d)  If the Offeree fails to make an election  within
such forty-five (45)  day period,  or fails  to comply  with
subsection (e)  below, such  Offeree shall  be  conclusively
deemed to have elected to  sell its Partnership Interest  in
the Partnership to  the Offeror  according to  the terms  of
this Section 7.3.

(e)  If the  Offeree makes  an election  to  purchase
within such forty-five  (45) day period  by sending  written
notice to the Offeror as required by subsection (c), and  by
delivering into escrow  with the Escrow  Agent a good  faith
deposit in  the  amount  of the  Offer  Deposit,  then,  the
original  Offeror  shall  be  conclusively  deemed  to  have
elected to sell its Partnership Interest in the  Partnership
to the Offeree for a price  equal to the applicable  Receipt
Amount.  In the event the  Offeree timely makes an  election
to purchase, the Offeree  hereby instructs the Escrow  Agent
that the Escrow Agent  shall (i) return the Offeror's  Offer
Deposit to  the Offeror  and (ii) hold  the Offeree's  Offer
Deposit and shall either apply such Offeree's Offer  Deposit
to the  purchase  price  or disburse  such  Offeree's  Offer
Deposit in accordance with Section 7.3(g).

(f)  The General Partner  (the "Buy/Sell  Purchaser")
that is obligated  to purchase the  Partnership Interest  in
the Partnership of the other General Partner (the  "Buy/Sell
Seller") pursuant to  this Section 7.3  shall fix a  closing
date (the "Buy/Sell Closing Date") for such purchase that is
not a Business Day  that is not  later than forty-five  (45)
days after the expiration  of the Buy/Sell Election  Period,
by written notice  to the Buy/Sell  Seller at least  fifteen
(15) days in advance of Buy/Sell Closing Date.  The  closing
of such purchase  shall take place  on the Buy/Sell  Closing
Date at the address of the  Escrow Agent.  At such  closing,
the Partner constituting the  Buy/Sell Seller shall  execute
and deliver to the Buy/Sell Purchaser (or its designee) such
instruments of assignment, bills of sale, amendments to this
Agreement  and  other  instruments  and  documents  as   the
Buy/Sell  Purchaser  and  the   Buy/Sell  Seller  (or   such
designee) may reasonably require for the conveyance to  such
Buy/Sell Purchaser (or such designee) of all of the Buy/Sell
Seller's right, title  and interest in  and to the  Buy/Sell
Seller's Partnership  Interest  in the  Partnership  against
receipt by  the  Buy/Sell  Seller  of  a  wire  transfer  of
immediately available  funds  in  an  amount  equal  to  the
applicable Receipt Amount;  and the  Buy/Sell Seller  hereby
irrevocably constitutes and appoints the Buy/Sell  Purchaser
as its attorney-in-fact to execute, acknowledge and  deliver
any of such instruments or documents.  Each of the  Buy/Sell
Seller  and  Buy/Sell  Purchaser   shall  each  bear   their
respective closing costs  and expenses  (including, but  not
limited to, all attorney's fees and costs and all applicable
transfer and income taxes) incurred in the purchase or  sale
of  the  Buy/Sell  Seller's  Partnership  Interest  in   the
Partnership  hereunder.    Such  sale  of  such  Partnership
Interest shall be made  without representation, warranty  or
recourse, except for representations and warranties in  form
and  substance   reasonably  acceptable   to  the   Buy/Sell
Purchaser and the Buy/Sell Seller with respect to existence,
good   standing,   title,    no   encumbrance,    authority,
authorization,  no  conflicts,  and  such  other   customary
matters as  may  be  reasonably requested  by  the  Buy/Sell
Purchaser.   If the  Buy/Sell Offer  or the  closing of  the
purchase contemplated  thereby causes  the maturity  of  any
Partnership indebtedness  to  be accelerated,  the  Buy/Sell
Seller shall be released from liability resulting from  such
accelerated indebtedness  and the  Buy/Sell Purchaser  shall
pay such indebtedness in full (including without limitation,
any accrued but unpaid interest and any prepayment  premiums
or penalties) at Buy/Sell Purchaser's sole cost and  expense
and shall indemnify and  hold Buy/Sell Seller harmless  from
and  against  any   losses,  damages,   costs  or   expenses
(including attorneys' fees) incurred by Buy/Sell Seller,  or
the  Buy/Sell   Seller's  Affiliates,   employees,   agents,
representatives,   consultants,   attorneys,    fiduciaries,
servants,  officers,   directors,  partners,   predecessors,
successors and assigns and Affiliates of the foregoing  (the
"Indemnified Parties"),  as  a  direct  or  indirect  result
thereof, other than any  losses, damages, costs or  expenses
(including  attorneys'  fees)   incurred  by   any  of   the
Indemnified Parties as a  direct result of such  Indemnified
Party's bad conduct.   As a precondition  to the closing  of
the Buy/Sell  transaction,  the  Buy/Sell  Seller  shall  be
released  from  liability  from  any  indebtedness  of   the
Partnership, including, without  limitation, the release  of
any guaranty and collateral  pledged to secure any  guaranty
debt.  Anything contained in this Agreement to the  contrary
notwithstanding, in the  event the sale  of the  Partnership
Interest is not consummated because of a default on the part
of Buy/Sell Seller  or if  a condition  precedent cannot  be
fulfilled   because   Buy/Sell   Seller   frustrated    such
fulfillment, Buy/Sell Purchaser may, at its election, pursue
an  action  for  specific   performance  and/or  costs   and
expenses.

(g)  In  the  event   that  the  Buy/Sell   Purchaser
defaults in  its  obligation  to  purchase  the  Partnership
Interest of the  Buy/Sell Seller in  the Partnership on  the
Buy/Sell Closing Date,  the Buy/Sell Seller  shall have  the
right to (i)  solicit third party  offers on  behalf of  the
Partnership for the purchase of the Business, to accept  the
best such offer, as determined by the Buy/Sell Seller in its
sole and absolute discretion, and to consummate the sale  of
the Business to  such third  party pursuant  to such  offer,
(ii) purchase  the  Partnership  Interest  of  the  Buy/Sell
Purchaser for a purchase price equal to ninety percent (90%)
of the aggregate Partnership distributions that the Buy/Sell
Purchaser would be entitled to receive under this  Agreement
if the Business were sold for cash for the Offer Amount  and
all debts  and  liabilities of  the  Partnership  (excluding
imputed sale expenses) were paid in full from such  proceeds
and proration were made with  respect to all current  assets
and  current   liabilities   of   the   Partnership,   (iii)
specifically enforce the Buy/Sell Purchaser's obligation  to
purchase the Partnership  interest of  the Buy/Sell  Seller,
and (iv) notify the Escrow  Agent holding the Offer  Deposit
of the Buy/Sell Purchaser immediately to deliver such  Offer
Deposit to the Buy/Sell Seller as liquidated damages for the
breach  by  such  Buy/Sell   Purchaser  (and  the   Buy/Sell
Purchaser  covenants  and  agrees   to  cause,  and   hereby
instructs, the Escrow Agent to deliver such Offer Deposit to
the Buy/Sell Seller).  The delivery of the Offer Deposit  to
the  Buy/Sell  Seller  shall  not  constitute  a  return  of
capital.   The  Buy/Sell Purchaser  hereby  constitutes  and
appoints the  Buy/Sell  Seller as  its  attorney-in-fact  to
execute and deliver on behalf of the Buy/Sell Purchaser  all
documents as may be  reasonably required in connection  with
the delivery by the Escrow Agent of the Offer Deposit to the
Buy/Sell Seller.

7.4     No Substituted Partners.  Except as permitted by
Section 7.1, no transferee of any general or limited  partnership
interest in the Partnership may  become a substituted General  or
Limited Partner.    Rather,  any transferee  of  any  Partnership
interest of  a Partner  shall be  entitled  solely to  rights  as
assignee of the rights to receive all or part of the share of the
income,   gains,   losses,    deductions,   expenses,    credits,
distributions,  or  returns  of  capital  to  which  his  or  its
transferor would  otherwise  be  entitled  with  respect  to  the
Partnership interest so transferred.

7.5     Withdrawal of Partners.  Except as permitted  by
Section 7.2 hereof, no Partner shall  have any right to  withdraw
or resign from the Partnership  without the unanimous consent  of
the Management Committee.

ARTICLE 8
General Accounting Provisions and Books

8.1     Books of Account;  Tax Returns.   The  Financial
Partner shall prepare and file, or shall cause to be prepared and
filed, all United  States federal,  state, and  local income  and
other tax returns  required to be  filed by  the Partnership  and
shall keep or cause to be  kept complete and appropriate  records
and  books  of  account  in  which  shall  be  entered  all  such
transactions and  other  matters relative  to  the  Partnership's
operations, business  and affairs  as  are usually  entered  into
records and  books  of account  that  are maintained  by  persons
engaged in business of like character or are required by the Act.
Except as otherwise  expressly provided herein,  such books  and
records shall be maintained in accordance with the basis utilized
in preparing the Partnership's  United States federal income  tax
returns, which returns,  if allowed by  applicable law, may  upon
the approval  of  the  Management Committee  be  prepared  on  an
accrual basis.

8.2     Place Kept; Inspection.   The books and  records
shall be maintained  at the principal  place of  business of  the
Partnership, and all  such books and  records shall be  available
for inspection and copying at the reasonable request, and at  the
expense, of any Partner during the ordinary business hours of the
Partnership.

8.3     Tax Matters  Partner.    The  Financial  Partner
shall be the tax matters partner of the Partnership and, in  such
capacity, shall exercise  all rights conferred,  and perform  all
duties imposed, upon  a tax matters  partner under Sections  6221
through  6233  of  the  Code  and  the  regulations   promulgated
thereunder; provided, however, that  the Operating Partner  shall
have the right  to review and  approve any actions  taken by  the
Financial Partner in its  capacity as the  tax matters partner.  
Notwithstanding the foregoing, the  Financial Partner shall  have
the right  to  select the  methodology  to be  used  pursuant  to
Section 704(c) of  the Code  subject to  the Operating  Partner's
consent, which consent shall not be unreasonably withheld.

ARTICLE 9
Amendments and Waivers

9.1     Amendments and  Waivers.   Except  as  expressly
provided  in  Section  9.3  of  this  Agreement,  the  Management
Committee may, whether with or without the consent or vote of any
Limited Partner, amend or waive  any provision of this  Agreement
which merely (i) reflects the admission  or withdrawal of one  or
more  Limited  Partners  in   accordance  with  this   Agreement,
(ii) corrects  an  error  or  clarifies  an  ambiguity  in   this
Agreement, (ii) does not  adversely affect the Financial  Partner
or the Operating Partner in any material respect or (iii) changes
Schedule I to  this Agreement to  reflect the  Sharing Ratios  or
Partnership Interests  of  the  Partners as  from  time  to  time
amended in  accordance  with  this  Agreement.    The  Management
Committee shall amend Schedule I to this Agreement to reflect any
additional Capital Contributions.  The Partners agree to look  to
the books and records of the Partnership for determination of the
actual amount of Capital  Contributions made to the  Partnership,
as provided in Section 3.1 of this Agreement.

9.2     Certain Other Amendments.   Notwithstanding  any
provision to the  contrary contained herein,  no amendment to  or
waiver of  any provision  of this  Agreement shall  be  effective
against a  given Partner  without the  consent  or vote  of  such
Partner  if  such  amendment  or  waiver  would  (i)  cause   the
Partnership to fail to be treated as a limited partnership  under
the Act or cause a Limited Partner to become liable as a  general
partner of  the  Partnership,  (ii) change Section  3.1  of  this
Agreement to increase a Partner's obligation to contribute to the
capital of the Partnership,  (iii) change Section  5.1 or 5.2  of
this Agreement  to  affect  adversely  any  Partner's  rights  to
exculpation or indemnification, (iv) change Section 6.1 or 6.2 of
this Agreement  to affect  adversely  the participation  of  such
Partner in  the  income,  gains,  losses,  deductions,  expenses,
credits, capital or distributions  of the Partnership  (including
any amendments  to admit  one or  more  new Limited  Partners  or
General Partners), (v) change  Section 7.1 of  this Agreement  to
affect  adversely  the  anti-dilution  rights  of  such  Partner,
(vi) change the percentage of Partners necessary for any  consent
or vote required hereunder to the  taking of any action or  (vii)
amend Section 9.2 of this Agreement.

ARTICLE 10
Dissolution and Termination

10.1    Dissolution.  The Partnership shall be dissolved
upon the first to occur of the following events:

(i)  the  election   of  the   both   General
Partners to dissolve  the Partnership  with the  consent
of  the  Limited   Partners  then  representing   eighty
percent (80%)  in interest  of all  Limited Partners  at
any time;

(ii) the election of the Financial Partner to
dissolve the  Partnership if  all or  substantially  all
Partnership assets shall have  been sold or disposed  of
or shall consist of cash;

(iii)     both  the  General  Partners  shall
have withdrawn from the  Partnership within the  meaning
of the Act, or any other dissolution event specified  in
the Act shall have occurred;

(iv) the   Financial   Partner   shall   have
(A) made  a  general  assignment  for  the  benefit   of
creditors,   (B) filed   a    voluntary   petition    in
bankruptcy, (C) filed a petition  or answer seeking  for
itself  any  reorganization,  arrangement,  composition,
readjustment,  liquidation,   dissolution   or   similar
relief  under  any  bankruptcy  or  debtor  relief  law,
(D) filed an  answer  or  other  pleading  admitting  or
failing  to  contest  the  material  allegations  of   a
petition  filed  against   it  in   any  bankruptcy   or
insolvency proceeding brought against it or  (E) sought,
consented to,  or acquiesced  in  the appointment  of  a
trustee,  receiver  or   liquidator  of  the   Financial
Partner or  of  all  or  any  substantial  part  of  its
property;

(v)  if within  sixty  (60)  days  after  the
commencement of  any  proceeding against  the  Financial
Partner     seeking     reorganization,     arrangement,
composition, readjustment,  liquidation, dissolution  or
similar relief  under any  bankruptcy or  debtor  relief
law, the proceeding shall not have been dismissed; or

(vi) if within  sixty  (60)  days  after  the
appointment (without the Financial Partner's consent  or
acquiescence) of a  trustee, receiver  or liquidator  of
the Financial Partner or of all or any substantial  part
of its  property, the  appointment shall  not have  been
vacated or stayed  if within sixty  (60) days after  the
expiration of any such  stay, the appointment shall  not
have been vacated.

Notwithstanding the  foregoing,  the  Partnership  shall  not  be
dissolved upon  the occurrence  of an  event specified  in  (iii)
through (vi)  of this  Section 10.1 if within  ninety (90)  days
after such occurrence  a majority in  interest (under  applicable
federal income tax principles) of the remaining Partners agree in
writing to continue the  business of the  Partnership and to  the
appointment, effective  as  of  the  date  of  withdrawal,  of  a
successor Financial Partner.

10.2    Accounting  on  Dissolution.     Following   the
dissolution of the Partnership pursuant  to Section 10.1 of  this
Agreement, the books of  the Partnership shall  be closed, and  a
proper accounting of  the Partnership's  assets, liabilities  and
operations shall be made by the Financial Partner, all as of  the
most recent practicable date.  The Financial Partner shall  serve
as the liquidator of the Partnership  unless it has been  removed
or unless  it  otherwise fails  or  refuses  to serve.    If  the
Financial Partner does not serve as  the liquidator, one or  more
other persons  or  entities  may be  selected  to  serve  by  the
Operating Partner.   The expenses incurred  by the liquidator  in
connection with the dissolution,  liquidation and termination  of
the Partnership shall be borne by the Partnership.

10.3    Termination.  As  expeditiously as  practicable,
but in no event later than  one year (except as may be  necessary
to realize  upon any  material amount  of  property that  may  be
illiquid), after the dissolution  of the Partnership pursuant  to
Section 10.1 of  this Agreement, the  liquidator shall cause  the
Partnership to pay the current liabilities of the Partnership and
(i) establish a reserve fund (which may be in the form of cash or
other property, as  the liquidator shall  determine) for any  and
all other liabilities, including  contingent liabilities, of  the
Partnership in a reasonable  amount determined by the  liquidator
to be  appropriate  for  such purposes  or  (ii)  otherwise  make
adequate provision for  such other  liabilities.   To the  extent
that cash required  for the foregoing  purposes is not  otherwise
available, the  liquidator  may sell  property,  if any,  of  the
Partnership for cash.   Thereafter, all  remaining cash or  other
property, if any, of the Partnership shall be distributed to  the
Partners in accordance with the provisions of Section 6.1 of this
Agreement.  The Partners must agree on the value and  distributee
for all in-kind distributions or else  all property must be  sold
and the proceeds distributed in accordance herewith.  At the time
final distributions are  made in accordance  with Section 6.1  of
this Agreement, a certificate of  cancellation shall be filed  in
accordance  with  the  Act,  and  the  legal  existence  of   the
Partnership shall terminate,  but if at  any time thereafter  any
reserved cash or property is released because in the judgment  of
the liquidator the  need for such  reserve has  ended, then  such
cash or property shall be distributed in accordance with  Section
6.1 of this Agreement.

10.4    No  Negative   Capital  Account   Obligation.   
Notwithstanding any  other provision  of  this Agreement  to  the
contrary, in  no  event shall  any  Partner who  has  a  negative
capital account upon  final distribution  of all  cash and  other
property of the Partnership be required to restore such  negative
account to zero.

10.5    No Other Cause of Dissolution .  The  Partnership
shall not be  dissolved, or its  legal existence terminated,  for
any reason  whatsoever  except  as  expressly  provided  in  this
Article 10.

10.6    Merger.  Subject to  the rights of the  Partners
pursuant to Section  9.2, the Partnership  may, with the  written
consent of  the  Financial  Partner  acting  with  the  unanimous
approval of the Management Committee, adopt a plan of merger  and
engage in any merger permitted by applicable law.

ARTICLE 11
Miscellaneous

11.1    Waiver  of  Partition.    Each  Partner   hereby
irrevocably waives any and all rights  that he or it may have  to
maintain an  action for  partition of  any of  the  Partnership's
property.

11.2    Entire Agreement.   This  Agreement  constitutes
the entire  agreement  among the  Partners  with respect  to  the
subject matter  hereof  and  supersedes any  prior  agreement  or
understanding among them with respect to such subject matter.

11.3    Severability.     If  any   provision  of   this
Agreement, or the application of such provision to any person  or
circumstance, shall be held invalid  under the applicable law  of
any  jurisdiction,  the  remainder  of  this  Agreement  or   the
application of such provision  to other persons or  circumstances
or in other jurisdictions shall not  be affected thereby.   Also,
if any provision  of this Agreement  is invalid or  unenforceable
under any applicable  law, then  such provision  shall be  deemed
inoperative to  the extent  that it  may conflict  therewith  and
shall be deemed modified to conform with such law.  Any provision
hereof that  may prove  invalid or  unenforceable under  any  law
shall not  affect the  validity or  enforceability of  any  other
provision hereof.

11.4    Notices.   All notices,  requests, demands,  and
other communications hereunder shall be  in writing and shall  be
deemed to have been duly given if sent by overnight courier, hand
delivered, mailed (first class registered mail or certified mail,
postage prepaid),  or  sent  by  telex  or  telecopy  if  to  the
Partners, at  the addresses  or telex  or facsimile  numbers  set
forth on Schedule  I hereto, and  if to the  Partnership, at  the
address of its principal place of business at 200 Crescent Court,
Suite 1650, Dallas,  Texas 75201 (fax  214/740-7340), or to  such
other address as the Partnership or  any Partner shall have  last
designated by notice  to the  Partnership and  all other  parties
hereto in accordance  with this Section  11.4.   Notices sent  by
hand delivery shall be deemed to  have been given when  received;
notices mailed in accordance with  the foregoing shall be  deemed
to have  been given  three days  following  the date  so  mailed;
notices sent by telex  or telecopy shall be  deemed to have  been
given  when  electronically  confirmed;   and  notices  sent   by
overnight courier shall be deemed to have been given on the  next
business day following the date so sent.

11.5    Governing  Laws.     This  Agreement  shall   be
governed by and  construed and  enforced in  accordance with  the
laws of  the State  of Texas  (without  regard to  principles  of
conflicts of laws).

11.6    Successors and  Assigns.   Except  as  otherwise
specifically provided, this Agreement  shall be binding upon  and
inure to  the  benefit  of  the  Partners  and  their  respective
successors and permitted assigns.

11.7    Counterparts.  This Agreement may be executed in
one or more counterparts, all of  which shall constitute one  and
the same instrument.

11.8    Headings.  The section  and article headings  in
this Agreement are  for convenience of  reference only and  shall
not be deemed to alter or affect the meaning or interpretation of
any provision hereof.

11.9    Other Terms.  All  references to "Articles"  and
"Sections" contained in this  Agreement are, unless  specifically
indicated   otherwise,   references   to   articles,    sections,
subsections, and paragraphs of this Agreement.  Whenever in  this
Agreement the singular number is used, the same shall include the
plural where  appropriate  (and vice  versa),  and words  of  any
gender shall include  each other  gender where  appropriate.   As
used in this Agreement, the following words or phrases shall have
the meanings indicated:  (i) "or" shall mean "and/or"; (ii) "day"
shall mean a calendar  day; (iii) "including" or "include"  shall
mean "including  without limitation";  and (iv) "law"  or  "laws"
shall mean  statutes, regulations,  rules, judicial  orders,  and
other legal pronouncements  having the effect  of law.   Whenever
any provision of this Agreement requires or permits a Partner  to
take or omit  to take any  action, or make  or omit  to make  any
decision, unless  the context  clearly requires  otherwise,  such
provision shall be  interpreted to authorize  an action taken  or
omitted, or a  decision made or  omitted, by  the Partner  acting
alone and in good faith.

11.10   Power  of  Attorney.    By  execution  of   this
Agreement, the Operating Partner and each Limited Partner  hereby
makes, constitutes and appoints the Financial Partner, with  full
power  of  substitution  and  re-substitution  in  the  Financial
Partner (in its sole discretion), such Partner's true and  lawful
attorney-in-fact  (the  "Attorney")  for  and  in  the  Operating
Partner's or the Limited Partner's name, place and stead and  for
its use and benefit,  to prepare, execute, certify,  acknowledge,
swear to, file, deliver  or record any or  all of the  following,
authorized pursuant to the terms of this Agreement:

(i)  the Partnership's certificate of limited
partnership  or   any  other   agreement,   certificate,
report, consent, instrument, filing  or writing made  by
or relating to the  Partnership that the Attorney  deems
necessary, desirable,  or  appropriate  for  the  lawful
purpose of  (A)  organizing the  Partnership  under  the
Act,  (B)  admitting  Partners   with  respect  to   the
Partnership, (C)  pursuing or  effecting any  rights  or
remedies available  under  this Agreement  or  otherwise
with respect  to a  defaulting Partner,  (D)  qualifying
the Partnership to do  business in any jurisdiction  and
(E) complying  with  any law,  agreement  or  obligation
applicable to the Partnership;

(ii) any  agreement,   certificate,   report,
consent,  instrument,  filing  or  writing  made  by  or
relating to  the  Partnership  necessary,  desirable  or
appropriate to effectuate the  business purposes of,  or
the dissolution,  termination  or  liquidation  of,  the
Partnership  pursuant   to   applicable   law   or   the
respective terms of this Agreement; and

(iii)     any amendment to or modification or
restatement  of   this  Agreement,   the   Partnership's
certificate  of  limited   partnership,  or  any   other
agreement,  certificate,  report,  consent,  instrument,
filing or writing  of any type  described in  subsection
(i) or (ii)  of this  Section 11.10,  provided that  any
amendment of  or modification  to this  Agreement  shall
first have been adopted in accordance with Article 9  of
this Agreement.

11.11   Transfer and Other  Restrictions.  INTERESTS  IN
THE PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY  NOT BE OFFERED OR SOLD UNLESS  SUCH
INTERESTS HAVE  BEEN  REGISTERED  UNDER SUCH  ACT  OR  UNLESS  AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  INTERESTS IN  THE
PARTNERSHIP ARE  SUBJECT  TO CERTAIN  RESTRICTIONS  ON  TRANSFER,
VOTING AND OTHER TERMS AND CONDITIONS SET FORTH IN (1) ARTICLE  7   
AND (2) VARIOUS INVESTMENT  AGREEMENTS BETWEEN  OR AMONG  CERTAIN
PARTNERS.  COPIES  OF SUCH AGREEMENTS  MAY BE  OBTAINED FROM  THE
PARTNERSHIP OR THE FINANCIAL PARTNER AT THEIR PRINCIPAL EXECUTIVE
OFFICES.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS  WHEREOF,  the  undersigned  have  executed  this
instrument effective as of the Effective Date.

FINANCIAL PARTNER:

a___________________                                    

By:_______________                                               
Name:_____________                                                  
Title:____________                                                    

OPERATING PARTNER:

a__________________                                                  

By:________________                                                  
Name:______________                                                 
Title:_____________                                                 

LIMITED PARTNERS:

a__________________                                                 

By:________________                                                
Name:______________                                                 
Title:_____________                                           

a__________________                                                  

By:________________                                                 
Name:______________                                                 
Title:_____________                                                  

EXHIBIT A

Business Plan

EXHIBIT B

Operating Budget

SCHEDULE I

Partnership Capital Contributions and Sharing Ratios

[TO BE DETERMINED PER SECTION 2.1 OF COMMITMENT AGREEMENT]

Initial Capital     Sharing
Partner and Address           Contributions       Ratios

Financial Partner:

Operating partner:

Limited Partners:

Total All Partners

Exhibit B

MANAGEMENT AGREEMENT

THIS  MANAGEMENT   AGREEMENT  (this   "Agreement")   is
executed as  of the   day   of _______________  1998,  to   be
effective conditioned upon and as of the date of the  acquisition
of    the     Property    by     Owner,    by     and     between
______________________________ a ___________________ (hereinafter
called    "Owner"),    and    _____________________________     a
___________________ (hereinafter called "Property Manager").

W I T N E S S E T H:

WHEREAS, Owner  is  acquiring  that  certain  real  property
located in  _________ _______________________  more  particularly
described on Exhibit A attached hereto and made a part hereof for
all purposes,  together  with  all of  the  improvements  located
thereon (collectively, the "Property").

WHEREAS,  Owner  desires  to  engage  Property  Manager   to
develop, lease,  manage, maintain  and operate  the Property  and
Property Manager  desires to  accept  such engagement,  upon  the
terms and conditions hereinafter set forth.

WHEREAS, Owner  has provided  to Property  Manager,  Owner's
current Business Plan (hereinafter defined) and the operating and
capital budgets approved by Owner as of the date hereof.

NOW, THEREFORE, for and in consideration of the premises and
mutual covenants and agreements  contained in this Agreement  and
the compensation to be paid hereunder, Owner and Property Manager
hereby agree as follows:

ARTICLE I
ENGAGEMENT OF PROPERTY MANAGER

Owner hereby engages Property  Manager and Property  Manager
hereby accepts  such  engagement  on  the  terms  and  conditions
hereinafter provided  as  manager  for the  Property.    Property
Manager shall develop,  lease, manage, maintain  and operate  the
Property in an efficient and  first class manner consistent  with
the Business  Plan and  Budget  (hereinafter defined)  and  shall
exercise due diligence in all of its endeavors.  All of  Property
Manager's duties under this Agreement  shall be subject to  funds
being made  available  to  Property  Manager  by  Owner  for  the
Property Manager to perform its duties.

ARTICLE II
SERVICES TO BE PERFORMED BY PROPERTY MANAGER

II.1 Expenses.   All  reasonable obligations  or  reasonable
expenses approved by  Owner in writing  and incurred by  Property
Manager in the performance of its duties hereunder in  accordance
with the  provisions hereof  shall be  at  the expense  of  Owner
except as  otherwise specifically  provided in  this Agreement.  
Without Owner's prior  written consent  or as  authorized in  the
Business Plan or  Budget, Property  Manager shall  not incur  any
cost not specifically  set forth  in the  most recently  approved
Budget.

II.2 Contracts.   To the  extent  necessary to  fulfill  its
obligations under  this  Agreement, Property  Manager  shall  (i)
identify and, with the prior written approval of Owner or as  set
forth in  the Business  Plan or  Budget, enter  into, in  Owner's
name, contracts with engineers,  tradesmen and other  independent
contractors to perform  services necessary or  advisable for  the
development, operation, maintenance  or repair  of the  Property;
and (ii) with the prior written approval of Owner or as set forth
in the  Business  Plan  or  Budget,  place  orders,  in  Property
Manager's name on  behalf of  Owner, for  such equipment,  tools,
appliances,  materials  and  supplies   as  are  reasonable   and
necessary to  properly  develop,  maintain,  manage,  operate  or
repair the Property.   Except with the  prior written consent  of
Owner, every contract entered into by Property Manager for or  in
connection with the Property shall include as a condition thereof
the right by Owner to terminate, with or without cause, on thirty
(30)  days  prior  written  notice,  without  the  payment  of  a
cancellation fee.  Owner  shall be obligated to  pay the cost  of
any contract or agreement described in this section only if  such
cost is  provided  for in  the  Preliminary Budget  or  the  most
recently approved Budget  or is  otherwise approved  by Owner  in
writing.

II.3 Maintenance, Repair  and Sale  of Property.    Property
Manager shall supervise the development and sale of the  Property
and shall maintain the improvements, appurtenances and grounds of
the Property  in accordance  with the  "Management Standard"  (as
defined  in   Section   4.1 hereof),   including   within   such
maintenance, without limitation thereof, such normal  maintenance
and repair  work  as may  be  necessary or,  with  Owner's  prior
written consent, desirable.

II.4 Insurance.

(a)  Owner Obligations.  Owner shall cause to be placed
and kept  in force  all forms  of insurance  as Owner  deems
prudent and reasonable  given the nature  of the Property.  
All insurance coverage shall be placed with such  companies,
in  such  amounts,  and   with  such  beneficial   interests
appearing therein  as  Owner deems  prudent  and  reasonable
given the  nature  of the  Property.   Owner  shall  procure
appropriate clauses  in,  or  endorsements on,  all  of  the
policies whereby the  insurer names Property  Manager as  an
additional insured, and the  insurer waives subrogation  and
agrees to not terminate any  such policy or reduce  coverage
or amount without  giving Owner  at least  thirty (30)  days
prior written notice.

(b)  Property  Manager Obligations.   Property  Manager
shall promptly  investigate  and  make  a  full  and  timely
written report to Owner and,  if Owner requests, to  Owner's
insurance company as  to all accidents,  claims for  damages
relating to the ownership, operation and maintenance of  the
Property and any damage or  destruction to the Property  and
the estimated cost of repair  thereof and shall prepare  any
and all reports required by Owner and, if Owner requests, by
its insurance  company in  connection therewith.   All  such
reports shall be timely filed with the insurance company  as
required under the terms of the insurance policy involved.  
Without obtaining the prior written approval of Owner, which
may be  granted  or  withheld in  Owner's  sole  discretion,
Property  Manager  shall  not  settle  any  claims   against
insurance companies arising out of any policies or take  any
other action in connection with such settlements,  including
the execution of proofs of  loss, the adjustment of  losses,
signing of receipts and  collection of money.   The cost  of
the insurance and the payment of all premiums therefor shall
be the sole responsibility of, and  at the sole expense  of,
Owner.  Property  Manager shall assist  Owner in  completing
any insurance applications, questionnaires, etc.  reasonably
requested by Owner or  Owner's insurance agent or  insurance
company.

II.5 Operating Budgets; Business Plans.  Notwithstanding the
delivery of the approved Budget and Business Plan, unless some or
all of  the  obligations of  this  Section 2.5  are  specifically
waived in writing  by Owner, Property  Manager shall prepare  the
items described herein.

(a)  Preliminary Budgets.  Within  thirty (30) days  of
the date this Agreement is fully executed, Property  Manager
shall prepare and deliver to Owner, for Owner's approval,  a
proposed budget  and operating  plan  for the  upcoming  one
hundred twenty (120) days,  which budget and operating  plan
shall reflect thereon projections  of all receipts (if  any)
and operating costs and  expenses, capital expenditures  and
reserves that  Property Manager,  in  the exercise  of  good
business judgment, believes will be received or necessary to
be incurred, as the case may be, to develop and maintain the
Property during such one hundred twenty (120) days.   Within
ninety (90)  days  of  the  date  this  Agreement  is  fully
executed, Property Manager shall further prepare and deliver
to Owner an  additional proposed budget  and operating  plan
(such proposed budget and operating plan, together with  the
foregoing  budget  and  operating  plan,  the   "Preliminary
Budget" and the "Preliminary  Plan", respectively), for  the
upcoming calendar  year,  which budget  and  operating  plan
shall reflect thereon projections  of all receipts (if  any)
and operating costs and  expenses, capital expenditures  and
reserves that  Property Manager,  in  the exercise  of  good
business judgment, believes will be received or necessary to
be incurred, as the case may be, to develop and maintain the
Property during such calendar year.

(b)  Annual  Budgets.    Thereafter,  on  or  prior  to
October 31st  of  each calendar  year  during the  Term  (as
defined in  Section  4.4)  hereof, beginning  on  the  first
October 31st, after the date hereof, Property Manager  shall
submit to Owner, for Owner's approval, proposed budgets  and
operating plans for the Property on an annual basis for  the
upcoming calendar year, which proposed budgets and operating
plans shall reflect thereon projections of all receipts  (if
any) and operating costs and expenses, capital  expenditures
and reserves that Property Manager, in the exercise of  good
business judgment, believes will be received or necessary to
be incurred, as the case may be, to develop and maintain the
Property during such calendar  year.  Such proposed  budgets
and operating plans  (including the  Preliminary Budget  and
the Preliminary Plan) shall be submitted by Property Manager
solely as good  faith estimates, without  warranty of  their
accuracy or attainability;  provided, however, that,  except
as otherwise expressly provided in this Agreement,  Property
Manager shall not be reimbursed  by Owner for, and  Property
Manager hereby  expressly  indemnifies  Owner  against,  any
loss, expense or claim  in connection with any  unauthorized
expenditure or  liability incurred  by any  action taken  by
Property Manager.    Property  Manager shall  use  its  best
efforts to  manage  the development  of  the Property  in  a
manner consistent with, and subject to, both the total  cost
limitations and  categories in  the most  recently  approved
Budget.

(c)  Contents.   Without limiting  the foregoing,  each
Budget and Business Plan  (including the Preliminary  Budget
and the Preliminary Plan) shall include between them:  (i) a
projected  income   statement  for   the  Property,   (ii) a
projected balance sheet for  the Property, (iii) a  schedule
of projected  operations and  cash flow,  (iv) a  reasonable
estimate  and  projected  budget   of  gross  receipts   and
operating expenses,  itemized  in  a  manner  acceptable  to
Owner, (v) a projected budget  for capital expenditures  and
replacements, (vi)  an  identification  of  staffing  to  be
employed,  (vii) a   separate  estimate   of  the   Property
Management  Fee  (as  defined  in  Section  31.),   (viii) a
narrative description of the program for the development and
marketing of  the  Property,  and  (ix) any  and  all  other
matters reasonably requested by Owner.

(d)  Owner Approval.  Owner  shall, within thirty  (30)
days after receipt  of a proposed  Budget and Business  Plan
(including the Preliminary Budget and the Preliminary Plan),
approve or disapprove such Budget  and Business Plan in  its
sole discretion.  As used herein, the terms "Business  Plan"
and "Budget" shall  refer to the  currently approved  Budget
and Business  Plan  approved  by  Owner  as  amended  and/or
modified from time  to time.   Owner  shall provide  Manager
written notice  of its  approval or  disapproval;  provided,
that in  the event  Owner  fails to  do  so, the  Budget  or
Business Plan, as the  case may be,  from the previous  year
shall control  until  a  new  budget  or  business  plan  is
approved.  Within fifteen (15) days after Owner submits  any
objection to the proposed  budget or business plan,  Manager
will submit a revised budget or  business plan to Owner,  as
the case may  be.  If  Owner does not  approve such  revised
budget or  business plan  within fifteen  (15) days  of  its
submission to Owner, the budget or business plan as the case
may be, from  the previous year  shall control  until a  new
budget or business plan is approved.

II.6 Property Account and Owner Account.

(a)  Owner Account.   Property Manager shall  establish
and maintain  in a  banking or  other financial  institution
approved by Owner  or set forth  in the  Business Plan  from
time to  time  throughout  the term  of  this  Agreement,  a
separate bank or similar  account in the  name of Owner  for
the deposit  of  moneys  of Owner  received,  if  any,  with
respect to  the Property  (the "Owner  Account").   Property
Manager shall  also establish  such  other special  bank  or
similar accounts as may be approved  by Owner.  All  revenue
from the Property shall be  promptly deposited in the  Owner
Account.

(b)  Property  Account.    Operating  expenses  of  the
Property shall  be  paid by  the  Property Manager  from  an
account established in a  financial institution approved  by
Owner to  process funds  as described  in Section  2.7  (the
"Property Account")

II.7 Disbursements by Owner to Property Manager.

(a)   Monthly Payments.   On  or before  the  twentieth
(20th) day of  each calendar month,  Property Manager  shall
deliver to Owner a written request for disbursement, setting
forth,  in  reasonable  detail,   the  costs  and   expenses
reasonably estimated to be paid by Property Manager for  the
upcoming calendar  month, together  with any  other  working
capital needs  of the  Property  for the  upcoming  calendar
month, in  each case,  in accordance  with the  Budget  (the
"Required Monthly  Funds").   Property  Manager  shall  also
submit reasonable substantiation as  requested by Owner  for
all  requested  disbursements.    In  the  event  that   any
requested  disbursement  is  not  consistent  with,  or   in
compliance with,  the  Budget, Property  Manager  shall  set
forth such requested disbursements in a separate report  and
shall set forth a brief explanation for the reason for  such
discrepancy.  On or  before the first day  of the month  for
which the particular request for the Required Monthly  Funds
is made, Owner shall transfer,  via wire transfer, from  the
Owner Account to the Property Account designated by Property
Manager the Required Monthly Funds approved by Owner.

(b)  Emergency Withdrawals.    Property  Manager  shall
only be  entitled  to  make withdrawals  from  the  Property
Account in accordance with the  Budget or the Business  Plan
or in connection with a bona fide emergency due to  casualty
or act  of God  under circumstances  in  which it  would  be
unreasonable to seek  to obtain Owner's  approval, in  which
case Property  Manager shall  be entitled  to exceed,  by  a
reasonable amount, the  amounts set forth  in the Budget  in
order  to  address  such  bona  fide  emergency   situation;
provided that as soon  as practicable after such  emergency,
Property  Manager   shall   fully  inform   Owner   of   the
circumstances surrounding such  situation and  obtain, on  a
"going-forward" basis only, Owner's approval with respect to
Property Manager's handling of  similar emergency events  at
the Property  in the  future.   It  is understood  that  any
action taken by Property  Manager under this Section  2.7(b)   
in connection with any  particular emergency event shall  be
considered as  being  within  Property  Manager's  scope  of
authority under  this Agreement  but  shall not  create  any
precedent or duty on the part  of Property Manager or  Owner
to take any  action in connection  with any  future event.  
Nothing contained  in this  Section 2.7(b)  or elsewhere  in
this Agreement is  intended to  provide any  benefit to  any
third parties who  are not parties  hereto or successors  or
permitted assigns of parties hereto or impose upon  Property
Manager or Owner any duty or obligation to any third parties
who are  not  parties  hereto  or  successors  or  permitted
assigns of parties hereto, nor shall  it have the effect  of
giving, any enforceable rights to any third parties who  are
not parties  hereto or  successors or  permitted assigns  of
parties hereto, whether  such claims are  asserted as  third
party beneficiary  rights  or  otherwise.    The  Owner  and
Property Manager hereby acknowledge  and agree that, if  the
Owner fails to deposit funds in  the Property Account in  an
amount sufficient  to fund  the expenses  authorized in  the
Budget, Property Manager shall not be required to incur  any
out of pocket costs in  order to perform Property  Manager's
obligations under this Agreement.

II.8 Costs Not  Reimbursed  to  Property  Manager.    Unless
otherwise provided  herein,  Owner  shall  not  be  obligated  to
reimburse Property Manager for the payment by Property Manager of
(a) any expense  for  office  equipment  or  office  supplies  of
Property Manager  other  than  those used  on  the  Property  and
approved in  writing  by  Owner;  (b) any  overhead  expenses  of
Property Manager  incurred  in its  general  offices;  (c) unless
otherwise consented to by Owner  in writing, any salaries,  wages
and expenses for  any personnel,  including, without  limitation,
personnel spending all or a portion of their working hours at  or
providing  services  to  the  Property  specifically   performing
Property Manager's  duties hereunder;  (d) the cost  of  fidelity
insurance; (e) any accounting costs or overhead costs incurred in
connection with the  preparation and delivery  of the  statements
and reports required hereunder; or (f) any travel costs  incurred
by Property Manager not specifically provided for in the Budget.

II.9 Records; Reporting.

(a)  Records.    All  statements,  receipts,  invoices,
checks, leases, contracts, worksheets, financial statements,
books and records, and  all other instruments and  documents
relating to or  arising from the  development, operation  or
management of the Property shall  be the property of  Owner;
provided, that throughout the term of this Agreement, all of
such items  shall be  maintained by  Property Manager  in  a
manner consistent with the terms of this Agreement and  with
books and records customarily maintained by managing  agents
of properties similar in location,  size and revenue to  the
Property.  Owner and Property  Manager shall have the  right
to inspect  and to  copy all  such  items, at  such  party's
expense, at all  reasonable times,  and from  time to  time,
during the term of this Agreement.  Upon the termination  of
this Agreement, all  of such  books, records  and all  other
information relating  to  the  Property  promptly  shall  be
delivered to  Owner;  provided, however,  that  at  Property
Manager's   sole   expense,   Property   Manager   or    its
representatives shall  have  the  right,  for  a  reasonable
period of time not to exceed three (3) years following  such
termination,  to  inspect  such  books,  records  and  other
information for  data that  directly relates  to the  period
during which Property  Manager managed the  Property and  to
make copies thereof, at the offices of Owner upon reasonable
advance notice to Owner.

(b)  Statements.   Property Manager  shall prepare  and
deliver to Owner on  a monthly and  on a calendar  quarterly
basis, Property Manager's written estimates of the  amounts,
if any, by which any categories of the Preliminary Budget or
the  Budget  must  be   adjusted  to  adequately  fund   the
development, operation and maintenance  of the Property  for
the then  current  month or  quarter  as the  case  may  be,
although Owner shall  be under no  obligation to change  the
Preliminary Budget  or  the  Budget.    Such  reports  shall
include  the  following  information:  (i)  a  statement  of
operations on the Property during  such month or quarter  as
the case may be, and the  cost thereof, (ii) a statement  of
year-to-date  operations  on  the  Property,  and  the  cost
thereof, (iii) a statement of the actual cost of  operations
on the Property during such month or quarter as the case may
be compared to  the Preliminary Budget  or the Budget  which
identifies  any  variance   between  such   costs  and   the
Preliminary Budget or the Budget, and (iv) a description and
explanation of such variances.  Property Manager also  shall
furnish  Owner,  within  thirty  (30)  days  after   Owner's
request, such further information covering the operation and
maintenance of the Property as Owner may reasonably require,
including, but  not limited  to, the  following: (i)  income
statement (accrual basis for taxes and insurance), month and
year-to-date versus Budget; (ii) variance report  (narrative
form, month  and year-to-date),  (iii) balance  sheet,  (iv)
general ledger, (v)  rent roll  (including security  deposit
listing), (vi) accounts receivable aging report, (vii)  bank
reconciliation  for  each  account,  (viii)  calculation  of
Property Management Fee, (ix) schedule of reserve and escrow
accounts, (x) schedule of  capital expenditures, (xi) a  re-
forecast report, on a quarterly basis, of current full  year
operations compared to the Budget with explanations for  all
material variances, (xii) a marketing qualitative summary of
property  operations  for  the  preceding  month   including
comments   on   revenues,   expenses,   marketing,   leases,
competition, legal and other issues affecting the  Property,
and (xiii) any and all other reports reasonably requested by
Owner.

(c)  Annual Accounting Report.  Property Manager agrees
(i) to deliver to owner, within  twenty (20) days after  the
end  of  each  fiscal  year,  an  annual  accounting  report
(including  balance  sheet,   income  statement  and   other
financial  statements),   showing  the   results  of   gross
receipts, gross  operating expenses,  net operating  income,
net cash flow and the Property Management Fee which would be
payable if the Agreement  were terminated as  of the end  of
such fiscal year and any other information necessary to make
the computations required hereby  or which may be  requested
by Owner, all  for such fiscal  year and  (ii) to  cooperate
fully with  Owner,  at  no additional  expense  to  Property
Manager, but without limiting Property Manager's obligations
under Section 2.9(e),  in supplying all  of the  information
and documentation necessary for a nationally recognized firm
of certified  public  accountants  selected  by  Owner  (the
"Auditor") to prepare and deliver to  Owner an audit of  the
annual accounting  report provided  by Property  Manager  to
Owner pursuant to this Section 2.9(c) within forty-five (45)
days after the end of each fiscal year.

(d)  Additional  Fiscal  Reports.    Property   Manager
shall, upon  the  request of  Owner,  prepare for  Owner  or
assist Owner in the preparation of such additional financial
reports with respect to the Owner  or the Property as  Owner
may reasonably request or may be required in the preparation
of the audited annual accounting to be prepared pursuant  to
this Section 2.9.  Property Manager acknowledges and  agrees
that the  Property  Management Fee  to  be paid  under  this
Agreement includes compensation to Property Manager for  the
preparation of papers and schedules reasonably necessary for
the Auditor to  conduct its review  of the Property's  books
and records.  To  the extent such  papers and schedules  are
not properly prepared, Property Manager agrees to  reimburse
Owner  for  the  reasonable  additional  cost  and   expense
incurred by Owner for the Auditor to prepare such papers  or
schedules.

(e)  No  Liability  for  Returns  Required  by  Law.   
Property Manager  shall  be responsible  for  preparing  and
filing any  forms, reports  or returns  (except Owner's  tax
returns) that  may  be  required  by  law  relating  to  the
Property.  Property  Manager shall also  be responsible  for
any forms, reports or  returns that may  be required by  law
relating to any of Property Manager's employees.

II.10     Compliance  with  Legal  Requirements.    Property
Manager shall take such action as may be necessary to comply with
any and all orders or requirements affecting the Property by  any
federal, state, county or municipal authority having jurisdiction
thereover.  Property  Manager, however, shall  not take any  such
action as long as  Owner is contesting,  or has affirmed  Owner's
intention to contest and  institutes proceedings contesting,  any
such order  or  requirement, except  that  if failure  to  comply
promptly with any such order or requirement would or might expose
Property Manager to  criminal liability,  Property Manager  shall
comply with same.  Property  Manager shall promptly notify  Owner
in writing  of all  such orders  and  notices or  requirements.  
Nothing contained herein shall require Property Manager to employ
counsel to represent Owner in any such proceeding or suit.

II.11     Taxes.  Property Manager  shall timely render  the
Property for  taxation,  and obtain  and  verify bills  for  real
estate, personal property, and  all other taxes and  assessments,
if any, against the Property and promptly pay such tax bills  and
any  other  Impositions  (as  defined  below),  and  assist   and
cooperate with  Owner  in  connection with  all  such  taxes  and
assessments in all ways  reasonably requested by Owner  including
applications or  petitions of  Owner for  reduction of  taxes  or
assessments.  Owner shall have the  option but not obligation  to
employ a third party consultant  to accomplish the foregoing,  in
which event,  Property Manager  shall assist  and cooperate  with
such consultant.   As used herein,  "Impositions" shall mean  all
taxes, assessments, special  assessments, rents  and charges  for
any easement  or  agreement maintained  as  part of  or  for  the
benefit of the  Property, use  and occupancy  taxes and  charges,
water and  sewer  for  public  and  private  utilities,  excises,
levies, license and permit  fees and other governmental  charges,
general and special, ordinary  and extraordinary, unforeseen  and
foreseen, of any  kind and nature  whatsoever which  at any  time
prior to or during  the term of this  Agreement may be  assessed,
levied, confirmed, imposed upon or grow or become due and payable
out of or in respect of, or become a lien on (i) the Property  or
any part  thereof  or  any appurtenances  thereto,  or  upon  any
personal property  located,  or  used  in  connection  with,  the
Property, (ii)  the  rent,  income or  other  payments  (if  any)
received by or for  the account of Owner  or anyone claiming  by,
through or  under  Owner, (iii)  any  use or  occupation  of  the
Property, (iv) such  franchises, licenses and  permits as may  be
appurtenant to the use  of the Property and  (v) any document  to
which Owner is a party transferring an interest or estate in  the
Property.

ARTICLE III
FEES TO PROPERTY MANAGER

[The economic terms shall be agreed among the parties]

In consideration for the  performance of Property  Manager's
duties and responsibilities under this Agreement, in exchange for
its services provided to Owner and the Property, Owner shall  pay
to Property Manager a management fee to be computed as follows:  
Property Manager  shall receive  an annual  fee from  Owner  (the
"Management Fee") equal  to one percent  (1%) of the  Acquisition
and  Development  Costs  (as  defined  hereinbelow)  computed  as
follows:

(i)  the Management Fee shall commence on the first day
of the  month  following  the  initial  acquisition  of  the
Property;

(ii) the monthly balance subject to the Management  Fee
shall be  the  arithmetic  average of  the  Acquisition  and
Development Costs  of the  Property owned  by Owner  on  the
first day of the month and on the last day of the month; and

(iii)     the Management Fee  shall be payable  monthly
in arrears and shall be equal to 0.000833 multiplied by  the
balance computed in (ii) above.

As used herein, "Acquisition and Development Costs" means the sum
of (a) purchase price, whether cash or credit, paid, or for which
Owner is  obligated to  pay (if  on  credit), for  the  Property,
together with all  closing costs paid  by Owner, including  title
insurance, recordation charges, registration and transfer  taxes,
if any, and similar expenses, and to the extent reflected on  the
closing statement  executed  by  Owner  in  connection  with  the
acquisition of  the  Property,  all fees  and  expenses  paid  or
incurred by  or  on  behalf  of  Owner  in  connection  with  the
acquisition of  the Property,  including legal,  engineering  and
consulting fees, any  real estate commissions  or brokerage  fees
paid by Owner,  or on behalf  of Owner, to  anyone in  connection
with such acquisition (the "Acquisition Costs") and (b) all costs
and expenses incurred by Owner in connection with development and
marketing  of  the   Property,  including,  without   limitation,
engineering, legal,  land  planning  and  related  expenses  (the
"Development Costs").

ARTICLE IV
RELATIONSHIP OF PROPERTY MANAGER TO OWNER

IV.1 Use and  Maintenance  of Premises.    Property  Manager
shall employ its  best efforts to  develop, operate and  maintain
the Property in a manner (referred  to herein as the  "Management
Standard") consistent with (i) first class standards  (consistent
with the  Business Plan);  (ii) prudent  business and  management
practices applicable  to the  development, operation,  management
and maintenance of  the Property; and  (iii) the requirements  of
any deeds of trust, certificates of occupancy, permits, licenses,
consents or  other  recorded  or  unrecorded  agreements  now  or
hereafter affecting the  Property or as  required by the  limited
partnership agreement  (collectively referred  to herein  as  the
"Key Documents").    Property  Manager shall  use  all  contacts,
discount programs and  cost-savings measures at  its disposal  to
obtain services, products  and tax  and insurance  rates for  the
Property at the lowest cost,  without sacrificing the quality  of
such services or products.   Property Manager shall perform  such
other acts and deeds as are  reasonable, necessary and proper  in
the discharge  of  its duties  under  this Agreement.    Property
Manager may with prior written approval of Owner obtain goods  or
services for the Property from  direct or indirect affiliates  of
Property  Manager,  its  officers,  directors,  shareholders   or
employees, but only if  such goods and services  are of at  least
equal quality and of no higher  prices than comparable goods  and
services obtainable from unaffiliated parties and such goods  and
services are  otherwise  competitive with  comparable  goods  and
services.

IV.2 Sale or Refinancing of the Property.  Upon the  express
request of Owner but not otherwise, Property Manager shall assist
and cooperate  in any  attempt(s) by  Owner to  sell, finance  or
refinance all or any  portion of the  Property.  Such  assistance
and  cooperation  by  Property  Manager  and  Property  Manager's
personnel shall not  be deemed  to create  a broker-principal  or
similar relationship unless Owner and Property Manager enter into
a separate written agreement engaging Property Manager as  broker
with respect  to  all or  any  portion  of the  Property.    Such
assistance and  cooperation  shall include,  without  limitation,
answering prospective purchasers' or lenders' questions about the
Property or any portion thereof, preparing rent rolls,  notifying
tenants about the  sale of  the Property  and obtaining  estoppel
certificates and other documents from all tenants of the Property
in the form  required by the  prospective purchaser  or lender.  
Property Manager  shall also  provide, promptly  upon request  by
Owner, (a) an estoppel  certificate executed by Property  Manager
certifying that no uncured default by the Owner exists under this
Agreement or, if  such a  default(s) exists,  stating the  nature
thereof, (b)  a certificate  in favor  of  Owner and  any  lender
executed by Property Manager confirming, to the best of  Property
Manager's  actual   knowledge,  that   any  representations   and
warranties made (or  to be  made) by  Owner with  respect to  the
Property, or  the condition  or operation  thereof, in  any  loan
documents executed (or  to be  executed) by  Owner in  connection
with any  sale, financing  or refinancing  of the  Property,  are
substantially  true,   correct   and   complete,   or,   if   not
substantially   true,   correct   or   complete,   stating   with
particularity why  such representations  and warranties  are  not
substantially true, correct or complete, and (c) a  subordination
and  attornment  agreement  executed   by  Property  Manager   in
accordance with the provisions of Section 5.9 of this Agreement.

IV.3 Approvals and Consents to Property Manager.  Owner  and
Property Manager hereby acknowledge and agree that_______________   
is authorized by Owner to  grant approvals and consents  required
under this Agreement to Property Manager, and otherwise  instruct
Property Manager with respect  to Property Manager's  obligations
and performance under this Agreement.

IV.4 Term.  This Agreement shall commence on the date hereof
and continue  until such  time as  it is  terminated as  provided
herein (a) for Cause (as herein  defined) or (b) upon the  mutual
agreement of the parties.  The  entire term of this Agreement  is
sometimes herein referred to as the "Term".

IV.5 Termination by  Owner.    Owner,  at  its  option,  may
terminate this  Agreement for  "Cause" at  any time  upon  giving
written notice thereof.   The term  Cause shall  include (a)  the
failure of Property Manager to cure any fraud, misrepresentation,
misappropriation of  funds,  furnishing  any  statement,  report,
notice, writing or schedule to Owner that Property Manager knows,
or reasonably should have known, is  untrue or misleading in  any
material respect on  the date  as of  which the  facts set  forth
therein are  stated  or certified  or  the date  such  statement,
report, notice, writing  or schedule is  furnished to Owner,  and
such failure  continues  for a  period  of ten  (10)  days  after
written notice  thereof by  Owner to  Property Manager,  (b)  the
failure of Property Manager to comply with any term or  condition
of this Agreement (except for breach of the Management  Standard)
and such failure continues for a period of thirty (30) days after
written notice  thereof by  Owner to  Property Manager,  provided
that if such default is not reasonably susceptible of cure within
thirty (30) days, then such reasonable  time so long as  Property
Manager is diligently prosecuting the cure of the default, but in
no event  longer than  ninety (90)  days, (c)  the bankruptcy  or
insolvency of, the assignment for the benefit of creditors by, or
the appointment  of  a  receiver for  any  of  the  property  of,
Property Manager, (d) the  sale of all or  part of the  Property;
provided that in  the case of  a partial  sale, termination  will
only apply  to  those portions  of  the Property  sold,  (e)  the
failure of Property  Manager to  cure an  intentional or  grossly
negligent or illegal  act committed by  Property Manager  against
Owner and such failure  continues for a period  of ten (10)  days
after written notice  thereof by Owner  to Property Manager,  (f)
the failure  of  Property  Manager  to  cure  Property  Manager's
willful and/or reckless  misconduct that causes  damage to  Owner
and such failure continues  for a period of  ten (10) days  after
written notice thereof by Owner to Property Manager, or (g)  upon
thirty (30) days written notice from Owner to Property Manager in
the event Property Manager fails to perform its duties consistent
with the  Management Standard  as  determined by  the  management
committee of Owner.

IV.6 Termination by Property Manager.  Property Manager,  at
its option, may terminate this Agreement for the failure of Owner
to comply with any term or  condition of this Agreement and  such
failure continues for a period of thirty (30) days after  written
notice thereof by  Owner to  Property Manager,  provided that  if
such default is not reasonably susceptible of cure within  thirty
(30) days,  then  such  reasonable  time  so  long  as  Owner  is
diligently prosecuting the cure of the  default, but in no  event
longer than ninety (90) days.

IV.7 Obligations Upon Termination.

(a)   Upon termination  of this  Agreement, each  party
shall continue  to  be  fully liable  for  their  respective
obligations which  have  accrued  up to  and  including  the
termination date and  shall promptly  pay to  the other  all
amounts due  to the  other party  under  the terms  of  this
Agreement.  Such  payment shall be  made as  soon after  the
effective  date   of  termination   as  such   amounts   are
determinable.  Upon such  payment, neither party shall  have
any further  claim or  right against  the other,  except  as
expressly provided herein.

(b)  In  the event  of termination  of this  Agreement,
upon  the  effective  date  of  such  termination,  Property
Manager shall (i) surrender and deliver to Owner all  income
of the Property, if any, and other monies of Owner then held
by Property Manager and/or  in any bank account  (including,
without limitation,  the  Owner  Account  and  the  Property
Account) in excess of the reimbursements due and payable  to
Property Manager up to and  including the effective date  of
such termination,  (ii)  deliver  to Owner  as  received  by
Property Manager  any monies  or  other property  due  Owner
under this Agreement  but received  after such  termination,
and (iii) deliver to Owner everything then held by  Property
Manager  pertaining  to  the  Property,  including,  without
limitation copies of all books, records, keys and all  other
materials, property and supplies pertaining to the  Property
and/or this Agreement.

IV.8 Negation of  Partnership,  Joint  Venture  or  Lease.  
Nothing in this Agreement shall constitute, or be construed to be
or to create, a partnership, joint venture or lease between Owner
and Property  Manager  with respect  to  the Property.    In  the
performance of this Agreement, Property Manager shall act  solely
as an  independent contractor.  Neither  this Agreement  nor  any
agreements, instruments, documents  or transactions  contemplated
hereby shall in any respect  be interpreted, deemed or  construed
as making either  party a partner,  joint venturer, principal  or
agent with, or with  respect to, the other  party or as  creating
any similar relationship or entity, and each party hereto  agrees
that it will not make  any contrary assertion, contention,  claim
or counterclaim in  any action, suit  or other legal  proceedings
involving Property Manager and Owner.

IV.9 Indemnification.  Property Manager shall be liable  for
and shall indemnify  and hold harmless  Owner (and each  partner,
venturer, employee, agent, shareholder,  director and officer  of
Owner)  from  any  loss,  damage,  liability,  cost  or   expense
(including reasonable  attorneys' fees)  arising out  of (i)  any
actions of  Property Manager  not within  the scope  of  Property
Manager's duties hereunder, (ii)  any breach by Property  Manager
of Property Manager's  obligations hereunder or  (iii) the  gross
negligence or  willful misconduct  of  Property Manager.    Owner
shall indemnify  and hold  harmless  Property Manager  (and  each
employee, agent, director,  shareholder are  officer of  Property
Manager) from  any  loss,  damage,  liability,  cost  or  expense
(including reasonable  attorneys'  fees)  arising out  of  (x)  a
breach by  Owner of  Owner's obligations  hereunder, (y)  Owner's
gross negligence or  willful misconduct or  (z) actions taken  by
Property  Manager  within   the  scope   of  Property   Manager's
responsibilities under this Agreement.

IV.10     Owner's Limited Liability.  No general or  limited
partner in  or  of Owner,  whether  direct or  indirect,  or  any
disclosed  or  undisclosed  officers,  shareholders,  principals,
directors, employees, partners,  servants or agents  of Owner  or
any  of  the  foregoing  or  any  investment  advisor  of   Owner
(including any assignee or successor of Owner) or other holder of
any equity interest in Owner, shall be personally liable for  the
performance of  Owner's obligations  under this  Agreement.   The
liability of Owner (including any assignee or successor of Owner)
for Owner's obligations hereunder shall be limited to the  equity
interest of Owner in the Property.

IV.11     Property Manager's Limited Liability.  No  general
or limited partner in or of  Property Manager, whether direct  or
indirect, or any disclosed or undisclosed officers, shareholders,
principals, directors, employees, partners, servants or agents of
Property Manager  or  any  of the  foregoing  or  any  investment
advisor of Property Manager (including any assignee or  successor
of Property Manager) or  other holder of  any equity interest  in
Property Manager, shall be personally liable for the  performance
of Property Manager's obligations under this Agreement.

ARTICLE V
MISCELLANEOUS

V.1  No Assignment  by Property  Manager Etc.   Without  the
prior written consent of Owner, which  consent may be granted  or
withheld in Owner's sole  discretion, Property Manager shall  not
have the  right to  assign, transfer  or convey  any of  Property
Manager's right, title or interest hereunder, nor shall  Property
Manager have  the right  to delegate  any of  the obligations  or
duties required  to  be kept  or  performed by  Property  Manager
hereunder.

V.2  Notices.  All notices, demands, consents, approvals and
requests given by either party to the other hereunder shall be in
writing and sent  via the U.S.  Postal Service  by registered  or
certified mail, postage  prepaid or via  a nationally  recognized
overnight delivery service (e.g.  Federal Express) and  addressed
to the appropriate party at the respective addresses shown below.
All such notices shall be deemed  given on the earlier of  actual
receipt or refusal  of receipt by  the addressee. The  respective
addresses and additional notice parties are as follows:

If to Owner:        _______________________ Partnership
c/o Olympus Real Estate Corporation
200 Crescent Court, Suite 1650
Dallas, Texas 75201
Attention: Hal R. Hall

and to:             Robert C. Feldman
Weil, Gotshal & Manges, LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201

If to Property Manager:___________________________             
98 San Jacinto Blvd., Suite 220
Austin, Texas 78701
Attention:   Mr. William  H. Armstrong, III

With a copy to:     Kenneth N. Jones
Armburst, Brown & Davis, L.L.P.
100 Congress, Suite 1350
Austin, Texas 78701

Any party  may  at any  time  change its  respective  address  by
sending written notice to the other parties of the change in  the
manner hereinabove prescribed.

V.3  GOVERNING LAW.  THIS AGREEMENT  IS BEING  EXECUTED  AND
DELIVERED AND IS INTENDED TO BE PERFORMED IN THE STATE OF  TEXAS,
AND THE  TERMS AND  PROVISIONS HEREOF  SHALL BE  GOVERNED BY  AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THIS
AGREEMENT IS  PERFORMABLE IN,  AND THE  EXCLUSIVE VENUE  FOR  ANY
ACTION BROUGHT WITH RESPECT HERETO  SHALL LIE IN, DALLAS  COUNTY,
TEXAS.

V.4  Not a Third Party  Beneficiary Contract.  Neither  this
Agreement nor any  part hereof nor  any service, relationship  or
other matter alluded to herein shall inure to the benefit of  any
third  party  (specifically  including  any  lender,  tenants  or
contractors), to any trustee in  bankruptcy, to any assignee  for
the  benefit  of  creditors,  to   any  receiver  by  reason   of
insolvency, to  any other  fiduciary  or officer  representing  a
bankruptcy  or  insolvent  estate  of  either  party  or  to  the
creditors or  claimants of  such an  estate.   In addition,  this
Agreement shall terminate and  be of no  further force or  effect
upon the filing of any bankruptcy petition by or against Property
Manager.

V.5  Validity.  If any term  or provision of this  Agreement
or the application thereof to  any person or circumstance  shall,
to any extent, be invalid or unenforceable, the remainder of this
Agreement, 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 each
term and  provision  of this  Agreement  shall be  valid  and  be
enforced to the fullest extent permitted by law.

V.6  Entire Agreement.  This  Agreement contains the  entire
agreement between the parties hereto with respect to the  matters
herein contained  and  any  agreement  hereafter  made  shall  be
ineffective to effect any change or modification, in whole or  in
part, unless such agreement is in writing and signed by the party
against whom enforcement of the change or modification is sought.
This Agreement  shall bind,  and inure  to the  benefit of,  the
parties   hereto   and   their   respective   successors,   legal
representatives and assigns.

V.7  Attorneys' Fees.  If  either Owner or Property  Manager
employs an attorney  to enforce or  defend its rights  hereunder,
the prevailing party shall be entitled to recover its  reasonable
attorneys' fees, costs and  expenses incurred in connection  with
such enforcement or defense.

V.8  INDEMNIFICATION PROVISIONS.   THIS  AGREEMENT  CONTAINS
INDEMNIFICATION PROVISIONS SPECIFICALLY DESCRIBED IN SECTIONS 2.5
AND 4.7 HEREOF.

V.9  Subordination.  This Agreement and any extension hereof
shall  be  subordinate  to  any  mortgage  or  similar   security
instrument now  or  hereafter  affecting the  Property,  and  all
renewals,   modifications,   consolidations,   replacements   and
extensions thereof  (a  "Mortgage").   Property  Manager  further
agrees to  attorn  to  the holder  of  any  Mortgage  or  similar
security instrument affecting the Property, and any successor  or
assignee thereof, upon Owner's being dispossessed by such  holder
of Owner's interest in all or  any portion of the Property.   The
provisions of this  Section 5.9  shall be  self-operative and  no
further  instrument  of  subordination  or  attornment  shall  be
required.     Property  Manager   shall  execute   promptly   any
certificate or  other document  that Owner  or any  mortgagee  or
other security holder may request as to such subordination and/or
attornment,  which  certificate  or  document  may  include  such
customary and normal  provisions as  Owner may  determine in  its
sole discretion.   In the event  that Property  Manager fails  to
execute and deliver  such certificate  or document  on or  before
five (5) business days after  written notice to Property  Manager
by Owner,  then without  any further  notice and  opportunity  to
cure, such failure by Property Manager  shall be deemed to be  an
event for Cause hereunder.

V.10 Representations, Warranties and  Covenants of  Property
Manager.  In order to induce Owner to enter into this  Agreement,
Property Manager does hereby make the following  representations,
warranties and covenants:

(a)   Property Manager represents and warrants to Owner
that Property Manager is a              , is duly           
and legally existing  under the laws  of the state  of
its                        and  is  duly  qualified  to   do
business in the State of Texas.

(b)  Property Manager represents and warrants to  Owner
that Property Manager has full power and authority to  enter
into this Agreement and to carry out the transactions herein
contemplated, and that the undersigned officers of  Property
Manager have all necessary authority to execute and  deliver
this Agreement on behalf of Property Manager. 

(c)  Property Manager represents and warrants to  Owner
that this Agreement has been duly  execuded  and  delivered by
Property  Manager  and  constitutes  the  legal,  valid  and
binding  obligations  of  Property  Manager  enforceable  in
accordance with  their  terms, subject  to  laws  applicable
generally to creditor's rights.

(d)  Property Manager shall deliver to Owner, upon  the
effective date hereof (i)  a good standing certificate  from
the State of Texas, and (ii) an incumbency certificate and  
_________resolutions  of  Property  Manager  authorizing the
execution  and  delivery   by  Property   Manager  of   this
Agreement, certified by  an authorized  officer of  Property
Manager as being true, correct and complete.

(e)  There is  no  claim,  litigation,  proceedings  or
governmental investigation pending, or as far as is known to
Property Manager,  threatened, against  Property Manager  or
relating to the Property or the transactions contemplated by
this Agreement which does, or may reasonably be expected to,
affect the ability  of Property Manager  to enter into  this
Agreement or to carry out its obligations hereunder, and, to
Property Manager's actual knowledge,  there is no basis  for
any such  claim,  litigation,  proceedings  or  governmental
investigation.

(f)  Neither   the   consummation   of   the    actions
contemplated by  this  Agreement  on the  part  of  Property
Manager to be performed, nor  the fulfillment of the  terms,
conditions and provisions of this Agreement, conflicts  with
or will result in the breach of any of the terms, conditions
or  provisions  of,  or  constitute  a  default  under,  any
agreement, indenture,  instrument  or undertaking  to  which
Property Manager is a party or by which it is bound.

(g)  Property Manager  has and  will continue  to  have
during the  term of  this Agreement  qualified personnel  to
implement Property Manager's obligations hereunder.

V.11 Publicity and Public Relations.   Owner shall have  the
exclusive right to control, manage and monitor all publicity  and
public  relations  with  respect  to  the  Property  or   Owner's
ownership thereof.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

OWNER:

_____________________,
a____________________                        

By:____________________                      
Name:__________________                    
Title:_________________                        

PROPERTY MANAGER:

_______________________,
a______________________                        

By:_________        
Name:__________________                    
Title:_________________                        

EXHIBIT A

TO MANAGEMENT AGREEMENT

(ATTACH PROPERTY DESCRIPTION)

Exhibit 99.2

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of May 22, 1998, by and between
Oly/Stratus Equities, L.P., a Texas limited partnership (the
"Purchaser"), and Stratus Properties Inc. (formerly known as FM
Properties Inc.), a Delaware corporation (the "Company").

RECITALS:

A.   The Company presently conducts the business of
developing and marketing certain real property (the "Business");

B.   The Company requires additional capital in order to
expand the Business; and

C.   The Purchaser desires to provide additional capital to
the Company for such purpose in accordance with the terms and
subject to the conditions set forth in this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I.  ISSUANCE OF SECURITIES

I.1.  Authorization.  The Company has duly authorized the
issuance and sale of 1,712,328 shares of its Series B
Participating Preferred Stock, par value $0.01 per share (the
"Securities"), having an aggregate initial liquidation preference
of $9,999,995.52 plus accrued and unpaid dividends thereon, if
any, and other rights as specified in the Certificate of
Designations of the Powers, Preferences and Relative
Participating, Optional and Other Special Rights of Series B
Participating Preferred Stock and Qualifications, Limitations and
Restrictions Thereof, substantially in the form of Exhibit A
attached hereto (the "Certificate of Designations").

I.2.  Purchase and Sale of the Securities; the Closing.  
Subject to the terms and conditions hereof, the Company hereby
agrees to sell to the Purchaser, and the Purchaser hereby agrees
to purchase from the Company, the Securities for an aggregate
purchase price of $9,999,995.52.  The closing of such sale and
purchase shall be held at 10:00 A.M., Dallas, Texas time, on May
22, 1998, or on such other day and time as may be agreed by the
Company and the Purchaser (the "Closing Date"), at the offices of
Weil, Gotshal & Manges LLP, 100 Crescent Court, Suite 1300,
Dallas, Texas 75201.

On the Closing Date, the Company will deliver to the
Purchaser one or more certificates representing the Securities,
registered in the name of the Purchaser or in the names of one or
more nominees of the Purchaser and in any denomination as the
Purchaser may specify by timely notice to the Company (or, in the
absence of such notice, one certificate representing 1,712,328
shares registered in the name of the Purchaser), against delivery
to the Company of immediately available funds in the amount of
the purchase price of such Securities by wire transfer to an
account or accounts designated in writing by the Company prior to
the Closing Date.

ARTICLE II.  REPRESENTATIONS AND WARRANTIES

II.1.  Representations and Warranties of the Company.  The
Company makes the following representations and warranties to the
Purchaser, each of which is true and correct as of the date
hereof and shall be true and correct as of the Closing Date and
shall be unaffected by any investigation heretofore or hereafter
made by the Purchaser.

II.1.1.  Organization and Good Standing.  The Company
and each of the Subsidiaries (as hereinafter defined) is duly
organized, validly existing and in good standing under the laws
of the state of its organization.  The Company and each of the
Subsidiaries has the requisite power and authority to own, lease
or otherwise hold the assets owned, leased or otherwise held by
it and to carry on its business as presently conducted by it. 
The Company and each of the Subsidiaries is in good standing and
duly qualified to conduct business as a foreign corporation,
partnership or limited liability company, as applicable, in every
state of the United States in which its ownership or lease of
property or conduct of business makes such qualification
necessary.

II.1.2.  Authorization of Agreement; Binding
Obligation.  The Company has the requisite corporate power to
execute and to deliver this Agreement and the other Transaction
Documents and to perform the transactions contemplated hereby and
thereby to be performed by it.  The execution and delivery by the
Company of this Agreement and the other Transaction Documents and
the performance by it of the transactions contemplated hereby and
thereby to be performed by it have been duly authorized by all
necessary corporate action on the part of the Company.  This
Agreement and the other Transaction Documents have been duly
executed and delivered by duly authorized officers of the Company
and constitute valid and binding obligations of the Company
enforceable against it in accordance with terms hereof or
thereof, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).

II.1.3.  Subsidiaries and Equity Investments.  (a) 
Schedule 2.1.3 sets forth (i) the name of each entity of which
the Company directly or indirectly owns shares of capital stock
or other equity interests having in the aggregate 50% or more of
the total voting power of the issued and outstanding shares of
capital stock or other equity interests (individually, a
"Subsidiary" and collectively, the "Subsidiaries"); (ii) the name
of each corporation, partnership, limited liability company,
joint venture or other entity (other than the Subsidiaries) in
which the Company or any Subsidiary has, or pursuant to any
agreement has the right to acquire at any time by any means, an
equity interest or investment; (iii) in the case of each of the
Subsidiaries, (A) the jurisdiction of organization and (B) the
capitalization thereof and the percentage of each class of voting
stock or other equity interests owned by the Company or by any of
the Subsidiaries; and (iv) in the case of each of such entities
listed pursuant to clause (ii) hereof, the equivalent of the
information provided pursuant to the preceding clause (iii) with
regard to the Subsidiaries.

(b)  All of the outstanding shares of capital stock or
other equity interests of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable,
have not been issued in violation of any preemptive, maintenance
or similar rights.  The shares of capital stock or other equity
interests owned by the Company or any of the Subsidiaries as set
forth on Schedule 2.1.3 are owned of record and beneficially by
the Company or such Subsidiary, free and clear of any liens,
claims, charges, security interests or other legal or equitable
encumbrances, limitations or restrictions, except for security
interests granted to IMC Global Inc. ("IMC") pursuant to the Sale
and Guaranty Agreement among the Company, FM Properties Operating
Co., Circle C Land Corp., Freeport McMoRan Inc. and IMC.

(c)  There are no options, warrants, calls,
subscriptions, conversion or other rights, agreements or
commitments obligating any Subsidiary to issue any additional
shares of capital stock or other equity interests or any other
securities convertible into, exchangeable for or evidencing the
right to subscribe for any shares of such capital stock or other
equity interests.

II.1.4.  No Restrictions Against Issuance of
Securities; Required Consents.  The execution and delivery of
this Agreement and the other Transaction Documents by the Company
does not, and the performance by the Company of the transactions
contemplated hereby or thereby to be performed by it will not
(a) conflict with the certificate of incorporation or bylaws,
partnership agreement, operating agreement, or other
organizational documents, as applicable, of the Company or any
Subsidiary, (b) conflict with, or result in any violation of, or
constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation
or acceleration of any material obligation or to loss of a
benefit under, any material contract, permit, order, judgment or
decree to which the Company or any Subsidiary is a party or by
which any of their properties are bound, (c) constitute a
violation of any law or regulation applicable to the Company or
any Subsidiary, or (d) result in the creation of any lien, charge
or encumbrance upon any of the Company's or the Subsidiaries'
assets except, in the case of (a) through (d) hereof, for those
that, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect (i) on the business,
assets, financial condition, prospects, financial projections, or
results of operations of the Company and its Subsidiaries taken
as a whole or (ii) on the ability of the Company to perform on a
timely basis any material obligation under this Agreement or the
other Transaction Documents or to consummate the transactions
contemplated hereby or thereby (each, a "Material Adverse
Effect").  Except as set forth on Schedule 2.1.4, no consent,
approval, order or authorization of, or registration, declaration
or filing with, any nation or government, any state or other
political subdivision thereof or an entity exercising executive,
legislative, judicial, regulatory or administrative function of
or pertaining to government (each a "Governmental Entity") is
required to be obtained or made by or with respect to the Company
in connection with the execution and delivery of this Agreement
or any of the other Transaction Documents by the Company or the
performance by the Company of the transactions contemplated
hereby or thereby to be performed by it.  Assuming the accuracy
of the Purchaser's representations and warranties contained in
Section 2.2 hereof, the issuance and sale of the Securities are
exempt from the registration and prospectus delivery requirements
of the Securities Act of 1933, as amended (the "Securities Act").

II.1.5.  Capitalization.  The authorized capital stock
of the Company consists of 150,000,000 shares of common stock,
$0.01 par value ("Common Stock"), and 50,000,000 shares of
preferred stock, $0.01 par value ("Preferred Stock").  As of
March 31, 1998, the Company had, in the aggregate, 14,288,270
shares of Common Stock issued and outstanding.  As of the date of
this Agreement and as of the Closing Date, except for the
Securities, the Company had and will have no shares of Preferred
Stock issued and outstanding.  All of the outstanding shares of
Common Stock have been validly issued, are fully paid and
non-assessable and were not issued in violation of any
preemptive, maintenance or similar rights.  At the Closing, the
Securities shall be validly issued, fully paid and non-assessable
and shall have not been issued in violation of any preemptive,
maintenance or similar rights.  Except as disclosed in the SEC
Reports (as hereinafter defined), there are no options, warrants,
calls, subscriptions, conversion or other rights, agreements or
commitments obligating the Company to issue any capital stock of
the Company or any other securities convertible into, or
exchangeable, exercisable or evidencing the right to subscribe
for, capital stock of the Company.

II.1.6.  Financial Statements.  The Company has
delivered to the Purchaser true and complete copies of (a) the
audited consolidated balance sheets of the Company at December
31, 1996 and 1997 and the related statements of income, cash flow
and changes in shareholders' equity for the three years in the
period ended December 31, 1997, accompanied by certified opinions
of the Company's independent auditing firm as included in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; and (b) unaudited consolidated balance sheets
of the Company at March 31, 1997 and 1998 and related statements
of income, cash flow and changes in shareholders' equity for the
periods then ended as contained in the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 1998, all of
which have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") consistently
applied throughout the periods involved.  Such consolidated
balance sheets, including the related notes, fairly present the
consolidated financial position, assets and liabilities (whether
accrued, absolute, contingent or otherwise) of the Company and
the Subsidiaries at the dates indicated and such statements of
income, cash flow and changes in shareholders' equity fairly
present the consolidated results of operations, cash flow and
changes in shareholders' equity of the Company and the
Subsidiaries for the periods indicated.  The unaudited
consolidated financial statements as of and for the periods
ending March 31, 1997 and 1998 contain all adjustments, which are
solely of a normal recurring nature, necessary for a fair
statement of the consolidated financial position and results of
operations of the Company and the Subsidiaries for the periods
then ended.  References in this Agreement to the "Interim Balance
Sheet" shall mean the consolidated balance sheet of the Company
as of March 31, 1998 referred to above, and references in this
Agreement to the "Interim Balance Sheet Date" shall be deemed to
refer to March 31, 1998.

II.1.7.  Business, Properties and Other Information. 
The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and has delivered to the Purchaser true and complete copies of
the following reports and proxy statements filed with the
Securities and Exchange Commission (the "Commission"):

A.   its Annual Report on Form 10-K for its fiscal year
ended December 31, 1997;

B.   its Quarterly Report on Form 10-Q for its fiscal
quarter ended March 31, 1998;

C.   its Current Report on Form 8-K dated March 3,
1998; and

D.   the Proxy Statement for its 1998 Annual Meeting of
Stockholders, dated March 30, 1998.

Said reports and proxy statements comprise all materials required
to be filed by the Company with the Commission since December 31,
1997 and are collectively called the "SEC Reports," which term
shall also include on the Closing Date all further reports which
the Company may theretofore have filed with the Commission.

The SEC Reports do not contain any untrue statement of
a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading;
provided that to the extent any such information therein was
based upon or constitutes an estimate or projection, the Company
represents only that in preparing such estimate or projection it
acted in good faith and on a basis which the Company reasonably
believed to be reasonable and on a basis consistent with the
financial statements described in Section 2.1.6 hereof and
contained in the SEC Reports.  The Company knows of no facts not
disclosed in the SEC Reports listed above which facts
individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.

II.1.8.  Absence of Undisclosed Liabilities.  Neither
the Company nor any of the Subsidiaries has liabilities or
obligations, either direct or indirect, matured or unmatured or
absolute, contingent or otherwise, except:

(a)  those liabilities or obligations set forth on the
Interim Balance Sheet (including the notes thereto) and not
heretofore paid or discharged;

(b)  liabilities arising in the ordinary course of
business under any agreement, contract, commitment, lease or plan
specifically disclosed in the SEC Reports or not required to be
disclosed therein because of the term or amount involved;

(c)  those liabilities or obligations incurred,
consistently with past business practice, in or as a result of
the normal and ordinary course of business since the Interim
Balance Sheet Date;

(d)  the obligations set forth in the Transaction
Documents; and

(e)  those which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect.

II.1.9.  Books of Account.  The books, records and
accounts of the Company accurately and fairly reflect, in
reasonable detail, the transactions and the assets and
liabilities of the Company and the Subsidiaries and do not
contain any material inaccurate information or omit any material
information necessary in order to make such books, records and
accounts, in light of the circumstances under which they were
prepared, not misleading.  Neither the Company nor any of the
Subsidiaries has engaged in any transaction, maintained any bank
account or used any of the funds of the Company or the
Subsidiaries except for transactions, bank accounts and funds
which have been and are reflected in the normally maintained
books and records of the Company.

II.1.10.  Contracts and Commitments.  (a)  The SEC
Reports contain descriptions of and include as exhibits thereto
all agreements, contracts, commitments, leases, plans and other
instruments, documents and undertakings  required to be described
therein and filed as an exhibit thereto pursuant to the Exchange
Act and the rules and regulations of the Commission promulgated
thereunder.

(b)  Each of the agreements, contracts, commitments,
leases, plans and other instruments, documents and undertakings
described in and filed as an exhibit to (or required to be
described in and filed as an exhibit to) the SEC Reports is valid
and enforceable in accordance with its terms; the Company and the
Subsidiaries are (to the extent they are a party thereto), and to
the Company's knowledge all other parties thereto are, in
material compliance with the provisions thereof; the Company and
the Subsidiaries are not, and to the Company's knowledge no other
party thereto is, in default in the performance, observance or
fulfillment of any obligation, covenant or condition contained
therein; and no event has occurred which with or without the
giving of notice or lapse of time, or both, would constitute a
default thereunder.  Furthermore, no such agreement, contract,
commitment, lease, plan or other instrument, document or
undertaking, in the reasonable opinion of the Company, contains
any contractual requirement with which there is a reasonable
likelihood the Company, any Subsidiary or any other party thereto
will be unable to comply. 

II.1.11.  Liens and Encumbrances; Condition of Assets.
(a)  The Company and each of the Subsidiaries has good, valid
and indefeasible title to its material assets free and clear of
all title defects or objections, mortgages, liens, claims,
charges, pledges, or other encumbrances of any nature whatsoever,
including without limitation licenses, leases, chattel or other
mortgages, collateral security arrangements, pledges, title
imperfections, defect or objection liens, security interests,
conditional and installment sales agreements, charges, easements,
encroachments or restrictions, of any kind and other title or
interest retention arrangements, reservations or limitations of
any nature (collectively, "Liens"), other than (i) those
reflected or reserved against on the Interim Balance Sheet
(including the notes thereto), (ii) Liens for Taxes, assessments
and other governmental charges that are not due and payable or
that may thereafter be paid without penalty, (iii) those imposed
by municipal, county, state or federal land use or development
statutes, ordinances, rules, regulations or restrictions, and
(iv) those that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.  (The
items referred to in the exception to the immediately preceding
sentence are hereinafter referred to as "Permitted Liens".)

(b)  All of the assets of the Company and the
Subsidiaries are in good operating condition and repair, subject
to normal wear and maintenance, are usable in the regular and
ordinary course of business and materially conform to all
applicable laws, ordinances, codes, rules and regulations, and
Permits relating to their construction, use and operation. 

II.1.12.  Insurance.  The Company and each of the
Subsidiaries has insurance policies in full force and effect for
such amounts as are sufficient for material compliance with all
requirements of law and of all material agreements to which the
Company or any of the Subsidiaries is a party or by which any of
them is bound.  Except as set forth in Schedule 2.1.12, no event
relating to the Company or the Subsidiaries has occurred that can
reasonably be expected to result in a material retroactive upward
adjustment in premiums under any such insurance policies or that
is likely to result in a material prospective upward adjustment
in such premiums.  Excluding insurance policies that have expired
and been replaced in the ordinary course of business, no
insurance policy has been cancelled within the last two years
and, to the Company's knowledge, no threat has been made to
cancel any insurance policy of the Company or any Subsidiary
during such period.  No event has occurred, including, without
limitation, the failure by the Company or any Subsidiary to give
any notice or information or the Company or any Subsidiary giving
any inaccurate or erroneous notice or information, which limits
or impairs the rights of the Company or any Subsidiary under any
such insurance policies.  The Company has provided the Purchaser
with true and complete copies of all regularly prepared loss run
reports as of the date hereof.

II.1.13.  Conduct of the Business Since the Interim
Balance Sheet Date.  Except for the transactions contemplated by
the Transaction Documents, since the Interim Balance Sheet Date,
neither the Company nor any of the Subsidiaries has:

(a)  incurred any liabilities, other than liabilities
incurred in the ordinary course of business consistent with past
practice, or discharged or satisfied any lien or encumbrance, or
paid any liabilities, other than in the ordinary course of
business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or
discharge has caused or will cause any material damage or risk of
material loss to it or any of its material assets or properties;

(b)  sold, encumbered, assigned or transferred any
material assets or properties other than in the ordinary course
of business consistent with past practices;

(c)  created, incurred, assumed or guaranteed any
indebtedness for money borrowed, or mortgaged, pledged or
subjected any of its assets to any mortgage, lien, pledge,
security interest, conditional sales contract or other
encumbrance of any nature whatsoever, except for Permitted Liens,
in each case other than in the ordinary course consistent with
past practices;

(d)  made or suffered any amendment or termination of
any material agreement, contract, commitment, lease or plan to
which it is a party or by which it is bound, or cancelled,
modified or waived any substantial debts or claims held by it or
waived any rights of substantial value, in each case other than
in the ordinary course of business consistent with past
practices;

(e)  declared, set aside or paid any dividend or made
or agreed to make any other distribution or payment in respect of
its capital shares or redeemed, purchased or otherwise acquired
or agreed to redeem, purchase or acquire any of its capital
shares;

(f)  suffered any damage, destruction or loss that,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect;

(g)  made commitments or agreements for capital
expenditures or capital additions or betterments exceeding in the
aggregate $500,000 except in the ordinary course of business
consistent with past practices or such as may be involved in
ordinary repair, maintenance or replacement of its assets;

(h)  increased the salaries or other compensation of,
or made any advance (excluding advances for ordinary and
necessary business expenses) or loan to, any of its employees or
made any increase in, or any addition to, other benefits to which
any of its employees may be entitled, other than regularly
scheduled increases in the ordinary course of business consistent
with past practices;

(i)  except as required by law or GAAP, changed any of
the accounting principles followed by it or the methods of
applying such principles;

(j)  entered into any transaction other than in the
ordinary course of business consistent with past practice; or

(k)  suffered any material adverse change in its
business, operations, assets, properties, prospects or condition
(financial or otherwise).

II.1.14.  Employee Benefit Plans.  (a) All "employee
benefit plans," as defined by Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and
all other employee benefit arrangements or payroll practices,
including, without limitation, bonus plans, consulting or other
compensation agreements, incentive, equity or equity-based
compensation, deferred compensation arrangements, stock purchase,
severance pay, and change in control agreements, programs,
policies or arrangements maintained by the Company or any
Subsidiary or to which the Company or any Subsidiary contributes
or contributed on behalf of its respective employees or has any
liability, contingent or otherwise (the "Employee Plans"), are
listed on Schedule 2.1.14(a).  Any Employee Plans which
constitute "employee pension benefit plans" as defined in Section
3(2) of ERISA (the "Pension Plans") are so designated on
Schedule 2.1.14(a).  No Pension Plan is subject to Title IV of
ERISA or Section 412 of the Code.

(b)  Except as set forth on Schedule 2.1.14(b),
(i) each Pension Plan is qualified under Section 401 of the
Internal Revenue Code of 1986, as amended (the "Code"), and any
trust maintained pursuant thereto is exempt from federal income
taxation under Section 501 of the Code; and (ii) the Company and
each of the Subsidiaries has complied with respect to each
Employee Plan in all material respects with the reporting and
disclosure requirements of ERISA and no "party in interest" or
"disqualified person" has engaged in a "prohibited transaction"
within the meaning of Section 406 of ERISA or Section 4975 of the
Code.

(c)  The Employee Plans have been established,
maintained and operated in all material respects in accordance
with their terms and with all provisions of ERISA, the Code and
other applicable federal and state laws and regulations.

(d)  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment becoming due to any
employee or consultant (current, former or retired) of the
Company or any of the Subsidiaries, (ii) increase any benefits
otherwise payable under any Employee Plan or (iii) result in the
acceleration of the time of payment or vesting of any such
benefits.

II.1.15.  Litigation; Decrees.  There are no judicial
or administrative actions, proceedings or investigations pending
or, to the Company's knowledge, threatened that question the
validity of this Agreement or any action taken or to be taken by
the Company in connection with this Agreement.  Except as
described in the SEC Reports or on Schedule 2.1.15, there are no
(i) lawsuits, claims, administrative or other proceedings or
investigations relating to the conduct of the Business pending
or, to the Company's knowledge, threatened by, against or
affecting the Company or any affiliate thereof or (ii) judgments,
orders or decrees of any Governmental Entity binding on the
Company or any Subsidiary.

II.1.16.  Compliance With Law; Permits.  The Company
and each of the Subsidiaries has complied with each law,
judgment, order and decree of any Governmental Entity to which
the Company or the Subsidiaries or their business, operations,
assets or properties is subject and is not currently in violation
of any of the foregoing, except where the failure to so comply
with or violation of any of the foregoing could not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.  The Company and each of the Subsidiaries owns,
holds, possesses or lawfully uses in the operation of its
business all material licenses, permits, authorizations and
approvals (collectively, "Permits") which are necessary to
conduct the Business as now conducted or for the ownership and
use of its assets, free and clear of all Liens and in compliance
with all laws.  For purposes of this Agreement, the term "Permit"
excludes any development permit, approval or authorization issued
by any municipal, county, state or federal agency.  Neither the
Company nor any Subsidiary is in default, nor has the Company or
any Subsidiary received any notice of any claim of default, with
respect to any such Permits.  All such Permits are renewable by
their terms or in the ordinary course of business without the
need to comply with any special qualification procedures or to
pay any amounts other than routine filing fees.  None of such
Permits will be adversely affected by consummation of the
transactions contemplated hereby.  No shareholder, director,
officer, employee or former employee of the Company or any
affiliates of the Company, or any other person, firm or
corporation owns or has any proprietary, financial or other
interest (direct or indirect) in any Permits which the Company or
any Subsidiary owns, possesses or uses in the operation of the
Business as now conducted.

II.1.17.  Taxes.  (a) All Tax Returns (as defined in
paragraph (e) below) that are required to be filed on or before
the Closing Date by the Company or any of the Subsidiaries have
been duly filed on a timely basis under the statutes, rules or
regulations of each applicable jurisdiction.  To the best
knowledge of the Company, all such Tax Returns were complete and
accurate in all material respects.  All Taxes reflected on such
returns as owed by the Company or the Subsidiaries have been
paid, whether or not such Taxes are disputed.

(b)  No claim for assessment or collection of Taxes has
been asserted against the Company or any of the Subsidiaries. 
Except as disclosed on Schedule 2.1.17(b), neither the Company
nor any of the Subsidiaries is a party to any pending action,
proceeding or investigation by any Governmental Entity for the
assessment or collection of Taxes nor does the Company have
knowledge of any such threatened action, proceeding or
investigation.

(c)  Except as disclosed on Schedule 2.1.17(c), no
waivers of statutes of limitation in respect of any Tax Returns
have been given or requested by the Company or any of the
Subsidiaries nor has the Company or any Subsidiary agreed to any
extension of time with respect to a Tax assessment or deficiency.
No claim has ever been made by a Governmental Entity in a
jurisdiction where the Company or any Subsidiary does not
currently file Tax Returns that it is or may be subject to
taxation by that jurisdiction nor is the Company aware that any
such assertion of jurisdiction is threatened.  No security
interests have been imposed upon or asserted against any of the
assets of the Company or any of the Subsidiaries as a result of
or in connection with any failure, or alleged failure, to pay any
Tax.

(d)  To the best knowledge of the Company, the Company
and each of the Subsidiaries has withheld and paid all Taxes
required to be withheld in connection with any amounts paid or
owing to any employee, creditor, consultant, independent
contractor or other third party.

(e)  For purposes of this Agreement, the terms "Tax"
and "Taxes" shall mean all federal, state, local, or foreign
income, payroll, employee withholding, unemployment insurance,
social security, sales, use, service, service use, leasing,
leasing use, excise, franchise, gross receipts, value added,
alternative or add-on minimum, estimated, occupation, real and
personal property, stamp, transfer, workers' compensation,
severance, windfall profits, environmental (including taxes under
Section 59A of the Code), or other tax of the same or of a
similar nature, including any interest, penalty, or addition
thereto, whether disputed or not.  The term "Tax Return" means
any return, declaration, report, claim for refund, or information
return or statement relating to Taxes or any amendment thereto,
and including any schedule or attachment thereto.

II.1.18.  Real Property.  (a) The SEC Reports list all
material real property owned by the Company and each of its
Subsidiaries (collectively, the "Owned Real Property").  Except
as described in the SEC Reports or on Schedule 2.1.18(a), the
Company and each of its Subsidiaries has good and indefeasible
title in fee simple title to all Owned Real Property owned by it,
free and clear of all Liens (other than Permitted Liens).

(b)  The SEC Reports describe all material real property
leased by the Company and each of its Subsidiaries (collectively,
the "Leased Real Property").  Except as described in the SEC
Reports or on Schedule 2.1.18(b), the Company and each of the
Subsidiaries has good and valid leaseholds in all Leased Real
Property, in each case, under enforceable leases, free and clear
of all Liens (except Permitted Liens).

(c)  None of such Owned Real Property or Leased Real
Property is subject to any easements, rights of way, licenses,
grants, building or use restrictions, exceptions, reservations,
limitations or other impediments which, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.

II.1.19.  Commissions or Finders Fees.  Neither the
Company or any Subsidiary nor any person or entity acting on the
behalf of the Company or any Subsidiary has agreed to pay a
commission, finder's fee or similar payment in connection with
this Agreement or any matter related hereto to any other person
or entity.

II.1.20.  Certain Business Practices and Regulations;
Affiliate Transactions.  (a)  None of the Company, the
Subsidiaries or any directors, officers, agents or employees of
the Company or the Subsidiaries has (i) used any corporate funds
for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or (iii) made
any other unlawful payment.

(b)  Except as described in the SEC Reports or on
Schedule 2.1.20(b), none of (A) the officers or directors of the
Company or any of the Subsidiaries or any entity controlling or
controlled by any of the foregoing, or (B) any securityholder
known to the Company to own of record or beneficially more than
5% of the Common Stock, (i) owns, directly or indirectly, in
whole or in part, any Leased Real Property or other property the
use of which is necessary for the Business, (ii) has any cause of
action or other suit, action or claim whatsoever against, or owes
any amount to the Company or any of the Subsidiaries other than
claims in the ordinary course of business, (iii) has sold to, or
purchased from, the Company or any of the Subsidiaries any assets
or property for aggregate consideration in excess of $60,000
since January 1, 1998, or (iv) is a party to any contract or
participates in any arrangement, written or oral, pursuant to
which the Business provides services of any nature to any such
individual or entity, except to such individual in his capacity
as an employee of the Company or any of the Subsidiaries.

II.1.21.  Compliance with Nasdaq National Market Rules
and Regulations.   The Company has complied in all material
respects with all rules and regulations of the National
Associations of Securities Dealers, Inc. ("NASD") as they pertain
to the Nasdaq Stock Market's National Market interdealer
quotation system since the date the Common Stock was originally
approved for quotation thereon.  No event has occurred or, to the
knowledge of the Company, is reasonably likely to occur which
could result in the Common Stock being delisted from the Nasdaq
National Market or the Company being subject to any material fine
or sanction imposed by The Nasdaq Stock Market or the NASD.

II.2.  Representations and Warranties of the Purchaser. The
Purchaser makes the following representations and warranties to
the Company, each of which is true and correct as of the date
hereof and shall be true and correct as of the Closing Date and
shall be unaffected by any investigation heretofore or hereafter
made by the Company.

II.2.1.  Corporate Organization.  The Purchaser is a
limited partnership duly formed and validly existing under the
laws of the State of Texas and has the requisite partnership
power and authority to own, lease or otherwise hold its
properties and assets and to carry on its business as presently
conducted.

II.2.2.  Authorization and Effect of Agreement.  The
Purchaser has the requisite partnership power to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby to be consummated by it.  The execution and
delivery by the Purchaser of this Agreement and the consummation
by it of the transactions contemplated hereby to be consummated
by it have been duly authorized by all necessary partnership
action on the part of the Purchaser.  This Agreement has been
duly executed and delivered by the Purchaser and constitutes a
valid and binding obligation of the Purchaser, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).

II.2.3.  Investment Intent. The Purchaser is acquiring
the Securities for its own account for investment and not with a
view to, or for sale or other disposition in connection with, any
distribution thereof, nor with any present intention, agreement
or understanding to sell or otherwise dispose of all or any part
of the Securities.

II.2.4.  Sophistication and Financial Strength. The
Purchaser is an "accredited investor" (as that term is defined in
Rule 501 promulgated under the Securities Act) with such
knowledge and experience in business and financial matters that
the Purchaser is capable of evaluating, and has evaluated, the
merits and risks of an investment in the Company and of making an
informed investment decision.  The Purchaser has sufficient
financial strength to hold the Securities as an investment and to
bear the economic risks of such investment (including the
possible loss of such investment) for an indefinite period of
time.  The Purchaser has had the opportunity to ask questions of
representatives of the Company and receive answers concerning the
terms and conditions of the Securities and to obtain any
additional information that it deemed necessary to verify the
accuracy of information provided to Purchaser by the Company.

II.2.5.  Restrictions on Transfer. The Purchaser
understands that neither the Securities nor the Common Stock for
which the Securities may be redeemed has been registered under
the Securities Act or the securities laws of any state or other
jurisdiction and that neither the Securities nor the Common Stock
may be offered for sale, sold, transferred or otherwise disposed
of unless registered under the Securities Act and any applicable
state securities laws or sold, transferred or disposed of in a
transaction exempt for the registration requirements of the
Securities Act and any applicable state securities laws (and, if
requested by the Company, the Purchaser shall deliver an opinion
of counsel reasonably satisfactory to the Company that such
transaction is exempt from such registration requirements).

ARTICLE III.  CONDITIONS TO CLOSING

III.1.  Conditions Precedent to Obligations of the
Purchaser.  The obligations of the Purchaser under this Agreement
to consummate the transactions contemplated hereby will be
subject to the satisfaction, at or prior to Closing, of all of
the following conditions, any one or more of which may be waived
at the option of the Purchaser:

III.1.1.  Representations, Warranties and Covenants.

(a)  All representations and warranties of the Company
made in this Agreement or in any Exhibit, Schedule or
document delivered pursuant hereto that are qualified with
respect to materiality shall be true and complete in all
respects as of the date hereof and on and as of the Closing
Date and such representations and warranties that are not so
qualified shall be true and complete on the date hereof and,
in all material respects, on and as of the Closing Date,
without regard to any schedule updates furnished by the
Company after the date hereof.

(b)  All of the terms, covenants and conditions to be
complied with and performed by the Company on or prior to
the Closing Date shall have been complied with or performed.

(c)  The Purchaser shall have received a certificate,
dated as of the Closing Date, executed by an Executive
Officer of the Company, certifying in such detail as the
Purchaser may reasonably request that the conditions
specified in Sections 3.1.1(a) and (b) hereof have been
fulfilled.

III.1.2.  Closing Deliveries.  The Company shall have
delivered to the Purchaser the documents identified in Section
4.1.

III.1.3.  Governmental Consents or Approvals.  Each of
the governmental and other approvals, consents or waivers listed
or required to be listed on Schedule 2.1.4 shall have been
obtained.

III.1.4.  No Adverse Proceedings.  No suit, action,
claim or governmental proceeding shall be pending against, and no
order, decree or judgment of any court, agency or Governmental
Entity shall have been rendered against, any party hereto which
would render it unlawful, as of the Closing Date, to effect the
transactions contemplated by this Agreement in accordance with
its terms.

III.1.5.  Stock Certificates.  Stock certificates
representing the Securities shall have been duly executed and
delivered in accordance with Section 1.2.

III.1.6.  Certificate of Designations.  The Certificate
of Designations shall have been duly filed with, and accepted by,
the Secretary of State of the State of Delaware.

III.2.  Conditions Precedent to Obligations of the Company.
The obligations of the Company under this Agreement to
consummate the transactions contemplated hereby will be subject
to the satisfaction, at or prior to the Closing, of all of the
following conditions, any one or more of which may be waived at
the option of the Company:

III.2.1.  No Material Misrepresentation or Breach.
(a)  All representations and warranties of the
Purchaser made in this Agreement or in any Exhibit, Schedule
or document delivered pursuant hereto, shall be true and
complete in all material respects as of the date hereof and
on and as of the Closing Date.

(b)  All of the terms, covenants and conditions to be
complied with and performed by the Purchaser on or prior to
the Closing Date shall have been complied with or performed.

(c)  The Company shall have received a certificate,
dated as of the Closing Date, executed by an Executive
Officer of the Purchaser, certifying in such detail as the
Company may reasonably request that the conditions specified
in Sections 3.2.1(a) and (b) hereof have been fulfilled.

III.2.2.  Closing Deliveries.  The Purchaser shall have
delivered to the Company the purchase price and certificate as
set forth in Section 4.2.

III.2.3.  Governmental Consents or Approvals.  Each of
the governmental and other approvals, consents or waivers listed
on Schedule 2.1.4 shall have been obtained.

III.2.4.  No Adverse Proceedings.  No suit, action,
claim or governmental proceeding shall be pending against, and no
order, decree or judgment of any court, agency or other
Governmental Entity shall have been rendered against, any party
hereto which would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in
accordance with its terms.

III.3.  Conditions Precedent to Obligations of each of the
Company and the Purchaser.  The obligations of the Company and
the Purchaser under this Agreement to consummate the transactions
contemplated hereby will be subject to the satisfaction, at or
prior to the Closing, of all of the following conditions, any one
or more of which may be waived by mutual agreement of the Company
and the Purchaser:

III.3.1.  Investor Rights Agreement.  An Investor
Rights Agreement (the "Investor Rights Agreement"), in the form
attached as an exhibit to the Master Agreement (as defined),
shall have been duly executed and delivered, shall be in full
force and effect and no term or condition thereof shall have been
amended, modified or waived.

III.3.2.  Master Agreement.  A Master Agreement (the
"Master Agreement"), shall have been duly executed and delivered,
shall be in full force and effect and no term or condition
thereof shall have been amended, modified or waived.

III.3.3.  Loan Agreement.  A Loan Agreement (the "Loan
Agreement"), in the form attached as an exhibit to the Master
Agreement, shall have been duly executed and delivered, shall be
in full force and effect and no term or condition thereof shall
have been amended, modified or waived.

ARTICLE IV.  CLOSING DELIVERIES

IV.1.  Deliveries by the Company.  At the Closing, the
Company will deliver to the Purchaser the following:

IV.1.1.  Certified Resolutions.  Certified resolutions
of the Board of Directors of the Company approving the execution
and delivery of this Agreement, the Transaction Documents, and
each of the other documents delivered by the Company pursuant
hereto or thereto and authorizing the consummation of the
transactions contemplated hereby and thereby.

IV.1.2.  Officer's Certificate.  A certificate, dated
the Closing Date, executed on behalf of the Company in the form
described in Section 3.1.1.

IV.1.3.  Good Standing Certificates.  Governmental
certificates showing that the Company and the Subsidiaries are
duly incorporated and in good standing in the state of its
organization certified as of a date not more than five (5) days
before the Closing Date.

IV.2.  Deliveries by the Purchaser.  At the Closing, the
Purchaser will deliver to the Company:

IV.2.1.  Purchase Price.  Cash in immediately available
funds via wire transfer in the aggregate amount of $9,999,995.52
to the account or accounts designated by the Company pursuant to
Section 1.2.

IV.2.2.  Officer's Certificate.  A certificate, dated
the Closing Date, executed on behalf of the Purchaser in the form
described in Section 3.2.1.

ARTICLE V.  POST-CLOSING COVENANTS

V.1.  Post-Closing Notifications.  The Purchaser and the
Company will, and each will cause their respective affiliates to,
comply with any post-Closing notification or other requirements,
to the extent then applicable to such party, of any antitrust,
trade competition, investment or control, export or other law of
any Governmental Entity having jurisdiction over the Purchaser or
the Company.

V.2.  Certain Tax Matters.  All sales, use, transfer, stamp,
conveyance, value added or other similar taxes, duties, excises
or governmental charges imposed by any taxing jurisdiction,
domestic or foreign, and all recording or filing fees, notarial
fees and other similar costs of Closing with respect to the
issuance of the Securities or otherwise on account of this
Agreement or the transactions contemplated hereby will be borne
by the Company.  The Company will indemnify the Purchaser against
any liability, direct or indirect, for any Taxes imposed on the
Purchaser with respect to the issuance of the Securities.

ARTICLE VI.  SURVIVAL AND INDEMNIFICATION

VI.1.  Survival of Representations, Warranties and
Covenants.  (a)  The representations and warranties of the
Company and of the Purchaser contained in this Agreement shall
survive the Closing for a period of two years thereafter.  Any
claim for an Indemnifiable Loss (as hereafter defined) asserted
within such period of survival as herein provided will be timely
made for purposes hereof.

(b)  Unless a specified period is set forth in this
Agreement (in which event such specified period will control),
the covenants in this Agreement shall survive the Closing and
remain in effect for two years.

VI.2.  Certain Definitions.  For purposes of this Agreement,
(i) "Indemnity Payment" means any amount of Indemnifiable Losses
required to be paid pursuant to this Agreement, (ii) "Indemnitee"
means any person or entity entitled to indemnification under this
Agreement, (iii) "Indemnifying Party" means any person or entity
required to provide indemnification under this Agreement,
(iv) "Indemnifiable Losses" means any and all damages, losses,
liabilities, obligations, costs and expenses, and any and all
claims, demands or suits (by any person or entity, including
without limitation any Governmental Entity), including without
limitation the costs and expenses of any and all actions, suits,
proceedings, demands, assessments, judgments, settlements and
compromises relating thereto and including reasonable attorneys'
fees and expenses in connection therewith; provided, that
Indemnifiable Losses shall not include any loss of anticipated
profits, loss of use of revenues or capital, or any other
special, incidental or consequential losses or damages, and
(v) "Third Party Claim" means any claim, action or proceeding
made or brought by any person or entity who or which is not a
party to this Agreement or an affiliate of a party to this
Agreement.

VI.3.  Indemnification.  (a) The Company agrees to
indemnify, defend and hold harmless the Purchaser and its
affiliates and their respective directors, officers, partners,
employees, agents and representatives from and against any and
all Indemnifiable Losses, subject to the limitations and
equitable adjustments set forth Section 6.5 hereof, to the extent
relating to, resulting from or arising out of:

(i)       any breach of representation or warranty of
the Company under Article II of this Agreement; and

(ii)      any breach or nonfulfillment of any agreement
or covenant of the Company under the terms of this
Agreement.

(b)  The Purchaser agrees to indemnify, defend and hold
harmless the Company and its affiliates and their respective
directors, officers, partners, employees, agents, and
representatives from and against any and all Indemnifiable
Losses, subject to the limitations set forth Section 6.5 hereof,
to the extent relating to, resulting from and arising out of:

(i)       any breach of representation or warranty by
the Purchaser under Article II of this Agreement; and

(ii)      any breach or nonfulfillment of any agreement
or covenant of the Purchaser under the terms of this
Agreement.

(c)  (i)  The Company agrees to pay, in accordance with
Section 6.3(c)(ii) below, any costs and expenses of the
defense of any lawsuit (a "Transaction Suit"), including any
negotiations relating to the settlement or compromise
thereof, initiated by a third party against the Purchaser or
any of its affiliates or their respective officers,
directors, employees, partners, agents or representatives
(each, a "Purchaser Transaction Defense Party") that arises
out of or is based upon allegations relating to the
transactions contemplated by the Transaction Documents that
are consummated on the Closing Date in the event that any
such Transaction Suit is filed within two years of the date
of this Agreement.

(ii) If any Purchaser Transaction Defense Party is
named or becomes party to any Transaction Suit, the Company
agrees to assume and provide for the defense of such
Purchaser Transaction Defense Party, including providing a
joint defense in the event that the Company or any of its
affiliates or their officers, directors, employees,
partners, agents or representatives (each, a "Company
Transaction Defense Party") is named or becomes a party to
such Transaction Suit.  The Company shall provide legal
counsel to the Purchaser Transaction Defense Party (and pay
all related fees and expenses of such counsel), which
counsel shall be reasonably satisfactory to Purchaser and
may be counsel for the Company.  Notwithstanding the
foregoing, the Purchaser Transaction Defense Parties shall
have the right to employ their own counsel, and the Company
shall pay the reasonable fees and expenses of such counsel
in an amount up to $250,000, in the event that the
Purchaser, upon advice of counsel, reasonably concludes that
there is a conflict of interest between any Purchaser
Transaction Defense Party, on the one hand, and any Company
Transaction Defense Party, on the other hand, in any such
Transaction Suit.

VI.4.  Defense of Claims.  (a) If any Indemnitee receives
notice of assertion or commencement of any Third Party Claim
against such Indemnitee with respect to which an Indemnifying
Party is obligated to provide indemnification under this
Agreement, the Indemnitee will give such Indemnifying Party
reasonably prompt written notice thereof, but in any event not
later than 20 calendar days after receipt of such notice of such
Third Party Claim.  Such notice will describe the Third Party
Claim in reasonable detail, will include copies of all material
written evidence thereof and will indicate the estimated amount,
if reasonably practicable, of the Indemnifiable Loss that has
been or may be sustained by the Indemnitee.  The Indemnifying
Party will have the right to participate in, or, by giving
written notice to the Indemnitee, to assume, the defense of any
Third Party Claim at such Indemnifying Party's own expense and by
such Indemnifying Party's own counsel (reasonably satisfactory to
the Indemnitee), and the Indemnitee will cooperate in good faith
in such defense.

(b)  If, within ten calendar days after giving notice
of a Third Party Claim to an Indemnifying Party pursuant to
Section 6.4(a), an Indemnitee receives written notice from the
Indemnifying Party that the Indemnifying Party has elected to
assume the defense of such Third Party Claim as provided in the
last sentence of Section 6.4(a), the Indemnifying Party will not
be liable for any legal expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided,
however, that if the Indemnifying Party fails to take reasonable
steps necessary to defend diligently such Third Party Claim
within ten calendar days after receiving written notice from the
Indemnitee that the Indemnitee believes the Indemnifying Party
has failed to take such steps or if the Indemnifying Party has
not undertaken fully to indemnify the Indemnitee in respect of
all Indemnifiable Losses relating to the matter, the Indemnitee
may assume its own defense, and the Indemnifying Party will be
liable for all reasonable costs or expenses paid or incurred in
connection therewith.  Without the prior written consent of the
Indemnitee, the Indemnifying Party will not enter into any
settlement of any Third Party Claim which would lead to liability
or create any financial or other obligation on the part of the
Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder.  If a firm offer is made to settle a
Third Party Claim without leading to liability or the creation of
a financial or other obligation on the part of the Indemnitee for
which the Indemnitee is not entitled to indemnification hereunder
and the Indemnifying Party desires to accept and agree to such
offer, the Indemnifying Party will give written notice to the
Indemnitee to that effect.  If the Indemnitee fails to consent to
such firm offer within ten calendar days after its receipt of
such notice, the Indemnitee may continue to contest or defend
such Third Party Claim and, in such event, the maximum liability
of the Indemnifying Party as to such Third Party Claim will not
exceed the amount of such settlement offer, plus costs and
expenses paid or incurred by the Indemnitee through the end of
such ten calendar day period.

(c)  A failure to give timely notice or to include any
specified information in any notice as provided in Sections
6.4(a) or 6.4(b) will not affect the rights or obligations of any
party hereunder except and only to the extent that, as a result
of such failure, any party which was entitled to receive such
notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise damaged as a
result of such failure.

(d)  The Indemnifying Party will have a period of 30
calendar days within which to respond in writing to any claim by
an Indemnitee on account of an Indemnifiable Loss which does not
result from a Third Party Claim (a "Direct Claim").  If the
Indemnifying Party does not so respond within such 30 calendar
day period, the Indemnifying Party will be deemed to have
rejected such claim, in which event the Indemnitee will be free
to pursue such remedies as may be available to the Indemnitee on
the terms and subject to the provisions of this Article VI.

VI.5.  Limitation of Liability.  (a)    Notwithstanding any
other provision hereof, no Indemnitee will be entitled to make a
claim against an Indemnifying Party in respect of any breach of a
representation or warranty under Section 6.3(a)(i) or 6.3(b)(i)
unless and until the aggregate amount of claims in respect of
breaches of representations and warranties asserted for
Indemnifiable Losses under Section 6.3(a)(i) or 6.3(b)(i), as
applicable, exceeds $500,000, in which event the Indemnitee will
be entitled to make a claim against the Indemnifying Party to the
extent of the full amount of the Indemnifiable Losses.

(b)  Notwithstanding any other provision hereof, in no
event shall an Indemnifying Party be liable under this Article VI
for any Indemnifiable Losses in excess of $10,000,000.

(c)  In the event of a claim or right of action by
either party hereto against the other party arising out of this
Agreement and the transactions contemplated hereby (whether based
on contract, tort (including negligence), strict liability or
otherwise), each party's sole and exclusive remedy shall be its
rights under this Article VI and Section 8.1 of this Agreement.

ARTICLE VII.  TERMINATION

VII.1.  Termination.  Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated
at any time prior to the Closing, (a) by the mutual written
consent of the Purchaser and the Company, or (b) if the party
seeking to terminate is not then in material default or breach of
this Agreement:

(i)  by either the Purchaser or the Company if the
Closing shall not have occurred on or before June 30, 1998;

(ii) by either the Purchaser or the Company if there
shall have been entered a final, nonappealable order or
injunction of any Governmental Entity restraining or
prohibiting the consummation of the transactions
contemplated hereby or any material part thereof; or

(iii)     by either the Purchaser or the Company if the
other party is in material breach of any representation,
warranty, covenant or agreement herein contained and such
breach shall not be cured within twenty (20) days of the
date of notice of default served by the party claiming such
material default.

In no event shall termination of this Agreement relieve any party
of any liability for breaches of this Agreement prior to the date
of termination.

ARTICLE VIII.  MISCELLANEOUS PROVISIONS

VIII.1.  Specific Performance.  The parties recognize that
if the Company refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to
compensate the Purchaser for its injury.  The Purchaser shall
therefore be entitled, in addition to any other remedies that may
be available, to obtain specific performance of the terms of this
Agreement.  If any action is brought by the Purchaser to enforce
this Agreement, the Company shall waive the defense that there is
an adequate remedy at law.  In the event of a default by the
Company which results in the filing of a lawsuit for damages,
specific performances, or other remedies, the Purchaser shall be
entitled to reimbursement by the Company of reasonable legal fees
and expenses incurred by the Purchaser.

VIII.2.  Notices.  All notices and other communications
required or permitted hereunder will be in writing and (i)
delivered personally, (ii) sent by telefacsimile, (iii) delivered
by a nationally recognized overnight courier service, or (iv)
sent by registered or certified mail, postage prepaid, as
follows:

(a)  If to the Company, to:
Stratus Properties Inc.
98 San Jacinto Boulevard, Suite 2200
Austin, Texas 78701
Facsimile No.: (512) 478-5788
Attention:       William H. Armstrong, III

with a copy to:

Stratus Properties Inc.
1615 Poydras
New Orleans, LA 70112
Facsimile No.: (504) 585-3513
Attention:       John G. Amato

(b)  If to the Purchaser, to:

Oly/Stratus Equities, L.P.
200 Crescent Court, Suite 1650
Dallas, Texas 75201
Facsimile No.: (214) 740-7355
Attention: David D. Deniger

with a copy to:

Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Facsimile No.: (214) 746-7777
Attention:     Robert C. Feldman

All notices and other communications required or permitted under
this Agreement that are addressed as provided in this Section 8.2
will (x) if delivered personally or by overnight courier service,
be deemed given upon delivery; (y) if delivered by telefacsimile
or similar facsimile transmission, be deemed given when electron-
ically confirmed; and (z) if sent by registered or certified
mail, be deemed given three days following the date mailed.  Any
party from time to time may change its address for the purpose of
notices to that party by giving a similar notice specifying a new
address, but no such notice will be deemed to have been given
until it is actually received by the party sought to be charged
with the contents thereof.

VIII.3.  Expenses.  Except as otherwise expressly set forth
herein, each party hereto shall pay its own fees and expenses
incurred by it in connection with the transactions contemplated
by this Agreement.

VIII.4.  Successors and Assigns.  This Agreement will be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but will not
be assignable or delegable by the Company.  Nothing in this
Agreement is intended to limit the ability of the Purchaser to
sell or to transfer any or all of the Securities (and the rights
relating thereto) following the Closing Date.

VIII.5.  Waiver.  The Purchaser and the Company by written
notice to the other may (a) extend the time for performance of
any of the obligations of the other under this Agreement,
(b) waive any inaccuracies in the representations or warranties
of the other contained in this Agreement or in any document
delivered in connection herewith, (c) waive compliance with any
of the conditions or covenants of the other contained in this
Agreement, or (d) waive or modify performance of any of the
obligations of the other under this Agreement; provided, however,
that no such party may, without the prior written consent of the
other party, make or grant such extension of time, waiver of
inaccuracies or compliance or waiver or modification of
performance with respect to its (or any of its affiliates)
representations, warranties, conditions or covenants hereunder. 
Except as provided in the immediately preceding sentence, no
action taken pursuant to this Agreement will be deemed to
constitute a waiver of compliance with any representations,
warranties, conditions or covenants contained in this Agreement
and will not operate or be construed as a waiver of any
subsequent breach, whether of a similar or dissimilar nature.

VIII.6.  Entire Agreement.  The Transaction Documents
(including the Schedules and Exhibits hereto and thereto)
supersedes any other agreement, whether written or oral, that may
have been made or entered into by any party or any of their
respective affiliates (or by any director, officer or
representative thereof) relating to the matters contemplated
hereby or thereby.  The Transaction Documents (together with the
Exhibits and Schedules hereto and thereto) constitutes the entire
agreement by and among the parties hereto and there are no
agreements or commitments by or among such parties or their
affiliates except as expressly set forth herein.

VIII.7.  Amendments and Supplements.  This Agreement may be
amended or supplemented at any time by additional written
agreements signed by the parties hereto.

VIII.8.  Rights of the Parties.  Except as expressly
provided in Article VI or in Section 8.4, nothing expressed or
implied in this Agreement is intended or will be construed to
confer upon or give any person or entity other than the parties
hereto and their respective affiliates any rights or remedies
under or by reason of this Agreement or any transaction
contemplated hereby.

VIII.9.  Brokers.  The Purchaser hereby agrees to indemnify
and hold harmless the Company, and the Company hereby agrees to
indemnify and hold harmless the Purchaser, against any liability,
claim, loss, damage or expense incurred by the Purchaser or by
the Company, as the case may be, relating to any fees or
commissions owed to any broker, finder, or financial advisor as a
result of actions taken by the other in connection with this
Agreement or the transactions contemplated hereby.  Any
indemnification payment by the Company required by this Section
shall be equitably adjusted so that the payment of such amount
shall not adversely affect the Purchaser, through its ownership
of the Securities or the Common Stock issuable upon redemption
thereof, if any, or otherwise.

VIII.10.  Further Assurances.  From time to time, as and
when requested by any party, the other party will execute and
deliver, or cause to be executed and delivered, all such
documents and instruments as may be reasonably necessary to
consummate the transactions contemplated by this Agreement.

VIII.11.  Governing Law.  This Agreement, including without
limitation, the interpretation, construction and validity hereof,
shall be governed by the laws of the State of Delaware, without
regard to conflict of law principles thereof.

VIII.12.  Severability.  The parties agree that if one or
more provisions contained in this Agreement shall be deemed or
held to be invalid, illegal or unenforceable in any respect under
any applicable law, this Agreement shall be construed with the
invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions
contained herein shall not be affected or impaired thereby.

VIII.13.  Execution in Counterparts.  This Agreement may be
executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one
and the same agreement.

VIII.14.  Titles and Headings.  Titles and headings to
sections herein are inserted for convenience of reference only,
and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.

VIII.15.  Certain Interpretive Matters and Definitions. 
(a) Unless the context otherwise requires, (i) "Transaction
Documents" mean, collectively, this Agreement, the Certificate of
Designations, the Investor Rights Agreement, the Master
Agreement, and the Loan Agreement, including all exhibits and
schedules hereto or thereto, (ii) all references to Sections,
Articles or Schedules are to Sections, Articles or Schedules of
or to this Agreement, (iii) each term defined in this Agreement
has the meaning assigned to it, (iv) each accounting term not
otherwise defined in this Agreement has the meaning assigned to
it in accordance with GAAP, (v) "or" is disjunctive but not
necessarily exclusive, (vi) words in the singular include the
plural and vice versa, and (vii) the terms "affiliate" and
"subsidiary" have the meanings given to them in Rule 12b-2 of
Regulation 12B under the Exchange Act.  All references to "$" or
dollar amounts will be to lawful currency of the United States of
America.

(b)  No provision of this Agreement will be interpreted
in favor of, or against, either of the parties hereto by reason
of the extent to which either such party or its counsel
participated in the drafting thereof or by reason of the extent
to which any such provision is inconsistent with any prior draft
hereof or thereof.

[The remainder of this page is intentionally left blank.]

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

STRATUS PROPERTIES INC.
(formerly known as FM Properties Inc.)

By:                                     
Name:                                
Title:                               

OLY/STRATUS EQUITIES, L.P.

By:  Oly Fund II GP Investments, L.P.,
its General Partner

By:  Oly Real Estate Partners II,
L.P., its General Partner

By:  Oly REP II, L.P., its
General Partner

By:  Oly Fund II, LLC,
its General Partner

By:                      
Name:                 
Title:                

TABLE OF CONTENTS

Page

ARTICLE I.  ISSUANCE OF SECURITIES ............  1

1.1.  Authorization......................................  1

1.2.  Purchase and Sale of the Securities; the Closing...  1

ARTICLE II.  REPRESENTATIONS AND WARRANTIES........  2

2.1.  Representations and Warranties of the Company......  2

2.1.1.  Organization and Good Standing..............  2

2.1.2.  Authorization of Agreement; Binding

Obligation.....................................  2

2.1.3.  Subsidiaries and Equity Investments.........  3

2.1.4.  No Restrictions Against Issuance of

Securities; Required Consents..................  3

2.1.5.  Capitalization..............................  4

2.1.6.  Financial Statements........................  5

2.1.7.  Business, Properties and Other

Information....................................  5

2.1.8.  Absence of Undisclosed Liabilities..........  6

2.1.9.  Books of Account............................  7

2.1.10.  Contracts and Commitments..................  7

2.1.11.  Liens and Encumbrances; Condition of

Assets.........................................  7

2.1.12.  Insurance..................................  8

2.1.13.  Conduct of the Business Since the Interim

Balance Sheet Date.............................  8

2.1.14.  Employee Benefit Plans..................... 10

2.1.15.  Litigation; Decrees........................ 10

2.1.16.  Compliance With Law; Permits............... 11

2.1.17.  Taxes...................................... 11

2.1.18.  Real Property.............................. 12

2.1.19.  Commissions or Finders Fees................ 13

2.1.20.  Certain Business Practices and

Regulations; Affiliate Transactions............ 13

2.1.21.  Compliance with Nasdaq National Market

Rules and Regulations.......................... 13

2.2.  Representations and Warranties of the Purchaser.... 14

2.2.1.  Corporate Organization...................... 14

2.2.2.  Authorization and Effect of Agreement....... 14

2.2.3.  Investment Intent........................... 14

2.2.4.  Sophistication and Financial Strength....... 14

2.2.5.  Restrictions on Transfer.................... 15

ARTICLE III.  CONDITIONS TO CLOSING............ 15

3.1.  Conditions Precedent to Obligations of the

Purchaser........................................... 15

3.1.1.  Representations, Warranties and Covenants... 15

3.1.2.  Closing Deliveries.......................... 16

3.1.3.  Governmental Consents or Approvals.......... 16

3.1.4.  No Adverse Proceedings...................... 16

3.1.5.  Stock Certificates.......................... 16

3.1.6.  Certificate of Designations................. 16

3.2.  Conditions Precedent to Obligations of the

Company............................................. 16

3.2.1.  No Material Misrepresentation or Breach..... 16

3.2.2.  Closing Deliveries.......................... 17

3.2.3.  Governmental Consents or Approvals.......... 17

3.2.4.  No Adverse Proceedings...................... 17

3.3.  Conditions Precedent to Obligations of each of

the Company and the Purchaser....................... 17

3.3.1.  Investor Rights Agreement................... 17

3.3.3.  Loan Agreement.............................. 17

ARTICLE IV.  CLOSING DELIVERIES.............. 17

4.1.  Deliveries by the Company.......................... 17

4.1.1.  Certified Resolutions....................... 18

4.1.2.  Officer's Certificate....................... 18

4.1.3.  Good Standing Certificates.................. 18

4.2.  Deliveries by the Purchaser........................ 18

4.2.1.  Purchase Price.............................. 18

4.2.2.  Officer's Certificate....................... 18

ARTICLE V.  POST-CLOSING COVENANTS ............ 18

5.1.  Post-Closing Notifications......................... 18

5.2.  Certain Tax Matters................................ 18

ARTICLE VI.  SURVIVAL AND INDEMNIFICATION......... 19

6.1.  Survival of Representations, Warranties and

Covenants........................................... 19

6.2.  Certain Definitions................................ 19

6.3.  Indemnification.................................... 19

6.4.  Defense of Claims.................................. 20

6.5.  Limitation of Liability............................ 22

ARTICLE VII.  TERMINATION................. 22

7.1.  Termination........................................ 22

ARTICLE VIII.  MISCELLANEOUS PROVISIONS.......... 23

8.1.  Specific Performance............................... 23

8.2.  Notices............................................ 23

8.3.  Expenses........................................... 24

8.4.  Successors and Assigns............................. 24

8.5.  Waiver............................................. 25

8.6.  Entire Agreement................................... 25

8.7.  Amendments and Supplements......................... 25

8.8.  Rights of the Parties.............................. 25

8.9.  Brokers............................................ 25

8.10.  Further Assurances................................ 26

8.11.  Governing Law..................................... 26

8.12.  Severability...................................... 26

8.13.  Execution in Counterparts......................... 26

8.14.  Titles and Headings............................... 26

8.15.  Certain Interpretive Matters and Definitions...... 26

Defined Terms

Agreement..........................................  Introduction
Business...............................................  Recitals
Certificate of Designations.......................... Section 1.1
Closing Date......................................... Section 1.2
Code........................................... Section 2.1.14(b)
Commission......................................... Section 2.1.7
Common Stock....................................... Section 2.1.5
Company............................................. Introduction
Company Transaction Defense Party..............Section 6.3(c)(ii)
Direct Claim...................................... Section 6.4(d)
Employee Plans................................. Section 2.1.14(a)
ERISA.......................................... Section 2.1.14(a)
Exchange Act....................................... Section 2.1.7
GAAP............................................... Section 2.1.6
Governmental Entity...............................  Section 2.1.4
Indemnifiable Losses................................. Section 6.2
Indemnifying Party................................... Section 6.2
Indemnitee........................................... Section 6.2
Indemnity Payment.................................... Section 6.2
Interim Balance Sheet Date......................... Section 2.1.6
Interim Balance Sheet.............................. Section 2.1.6
Investor Rights Agreement.......................... Section 3.3.1
Leased Real Property........................... Section 2.1.18(b)
Liens.......................................... Section 2.1.11(a)
Master Agreement................................... Section 3.3.2
NASD.............................................. Section 2.1.21
Owned Real Property............................ Section 2.1.18(a)
Pension Plans.................................. Section 2.1.14(a)
Permits........................................... Section 2.1.16
Permitted Liens................................ Section 2.1.11(a)
Preferred Stock.................................... Section 2.1.5
Purchaser........................................... Introduction
Purchaser Transaction Defense Party.............Section 6.3(c)(i)
SEC Reports........................................ Section 2.1.7
Securities........................................... Section 1.1
Securities Act..................................... Section 2.1.4
Subsidiaries....................................... Section 2.1.3
Tax Return..................................... Section 2.1.17(e)
Tax............................................ Section 2.1.17(e)
Taxes.......................................... Section 2.1.17(e)
Third Party Claim.................................... Section 6.2
Transaction Documents............................ Section 8.15(a)
Transaction Suit................................Section 6.3(c)(i)

Exhibits

Exhibit A Form of Certificate of Designations

Schedules

Schedule 2.1.3 Subsidiaries and Equity Investments
Schedule 2.1.4 Governmental Entity Consents
Schedule 2.1.12     Insurance Matters
Schedule 2.1.14(a)  Employee Plans and Pension Plans
Schedule 2.1.14(b)  Pension Plans Qualification
Schedule 2.1.15     Litigation
Schedule 2.1.17(b)  Tax Proceedings
Schedule 2.1.17(c)  Tax Waivers
Schedule 2.1.18(a)  Owned Real Property
Schedule 2.1.18(b)  Leased Real Property
Schedule 2.1.20(b)  Affiliate Transactions

NOTICE OF INDEMNIFICATION:  THIS AGREEMENT CONTAINS
INDEMNIFICATION PROVISIONS IN ARTICLE VI, NOTICE OF WHICH IS
HEREBY GIVEN.

SECURITIES PURCHASE AGREEMENT

DATED AS OF MAY 22, 1998

BY AND BETWEEN

OLY/STRATUS EQUITIES, L.P.

AND

STRATUS PROPERTIES INC. 

Exhibit 99.3

STATUS PROPERTIES INC. AND OLYMPUS REAL ESTATE CORPORATION
COMPLETE FORMATION OF STRATEGIC ALLIANCE FOR
REAL ESTATE ACQUISITION AND DEVELOPMENT ACTIVITIES

AUSTIN and DALLAS, TEXAS, May 26, 1998 - Stratus
Properties Inc . (NASDAQ: STRS) and Olympus Real Estate
Corporation (Olympus), an affiliate of Hicks, Muse, Tate &
Furst Incorporated, announced today that they have completed
the formation of their previously announced strategic
alliance to develop certain of STRS' existing properties and
to pursue new real estate acquisition and development
opportunities.  Under the terms of the agreements, Olympus
has made a $10 million investment in STRS' mandatory
redeemable preferred stock, provided a $10 million
convertible debt financing facility to STRS and made
available up to $50 million of capital for direct investment
in joint STRS/Olympus projects.

Stratus Properties Inc., headquartered in Austin,
Texas, is engaged in the development and marketing of real
estate in the Austin, Dallas, Houston and San Antonio, Texas
areas.

Olympus Real Estate Corporation is a leading private
investment firm which invests in real estate equities,
mortgages, securities and operating businesses on a global
basis.  Olympus was formed in 1994 by David B. Deniger as
the real estate investment affiliate of Hicks, Muse, Tate &
Furst Incorporated.  Since the formation Olympus has
completed nearly $3 billion in real estate investments,
including numerous commercial, residential, hospitality and
golf-related projects throughout the world.