UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

FORM 10-K

[ X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 [Fee Required] 

For the fiscal year ended            December 31, 1997                        
                          -------------------------------------
                                          or
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934 [No Fee Required] 
For the transition period from              to                                
                            --------------  -----------------

Commission file number              0-25246 
                      -----------------------------------------               
                          
                      

             
                           WINSLOEW FURNITURE, INC.
            (Exact name of registrant as specified in its charter)

        Florida                                       63-1127982
----------------------------------                --------------------
(State or other jurisdiction                       (I.R.S. Employer
of incorporation or organization)                  Identification No.)

201 Cahaba Valley Parkway, Pelham, Alabama               35124           
------------------------------------------          ------------------  
(Address of principal executive offices)               (Zip Code)

	(Registrant's telephone number, including area code) (205) 403-0206

	Securities registered pursuant to Section 12 (b) of the Act:

                                      NONE

	Securities registered pursuant to Section 12(g) of the Act:

                                        Name of each exchange
	Title of each class	   	on which registered
        ------------------------        ----------------------
	Common Stock,
        $.01 par value per share        Nasdaq National Market   


Indicate by check mark whether the registrant: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such 
filing requirements for the past 90 days.  Yes   X      No
                                              -------     -------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K. [    ]

The aggregate market value of shares of Common Stock held by non-affiliates of 
the registrant as of February 27, 1998, was approximately $98,959,828 based on 
a $19.00 closing sale price for the Common Stock quoted on the Nasdaq National 
Market System on such date.  For purposes of this computation, all executive 
officers, directors, and 5% beneficial owners are, in fact, affiliates of the 
registrant.

The number of shares of Common Stock, $.01 par value per share, of the 
registrant outstanding as of  February 27, 1998, was 7,542,258.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant's definitive Proxy Statement for the registrant's 
1998 Annual Meeting of Shareholders, to be filed with the Securities and 
Exchange Commission not later than 120 days after the end of the fiscal year 
covered by this report, are incorporated into Part III hereof.









INDEX TO ITEMS

Part I  	                                                         Page

Item 1.  Business.........................................................  3

Item 2.  Properties....................................................... 14

Item 3.  Legal Proceedings................................................ 15

Item 4.  Submission of Matters to a Vote of Security Holders.............. 15


Part II	

Item 5.  Market for Registrant's Common Equity and Related        
         Stockholder Matters ............................................. 16

Item 6.  Selected Financial Data.......................................... 17

Item 7.  Management's Discussion and Analysis of Financial        
         Condition and Results of Operations.............................. 19

Item 8.  Financial Statements and Supplementary Data...................... 26

Item 9.  Changes in and Disagreements with Accountants on         
         Accounting and Financial Disclosure.............................. 42


Part III

Item 10. Directors and Executive Officers of the Registrant............... 42

Item 11. Executive Compensation........................................... 42

Item 12. Security Ownership of Certain Beneficial Owners and      
         Management........................................................42

Item 13. Certain Relationships and Related Transactions................... 42


Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on  
         Form 8-K......................................................... 43

Signatures................................................................ 46

                                       2

PART I

ITEM 1. Business


GENERAL

     WinsLoew Furniture, Inc. (the "Company" or "WinsLoew") designs, 
manufactures and distributes casual furniture, contract seating and ready-to-
assemble ("RTA") furniture.

Casual Furniture.  WinsLoew produces and distributes casual furniture for both 
the residential and contract markets.  WinsLoew's residential products are 
constructed of extruded and tubular aluminum, wrought iron and cast aluminum. 
WinsLoew markets its residential products through independent sales 
representatives primarily to specialty patio stores, department stores and 
furniture stores.  WinsLoew's contract products are constructed of extruded, 
tubular and cast aluminum, steel, wrought iron, wood and fiberglass.  Contract 
products are marketed primarily through an in-house sales force, primarily to 
apartment developers and management companies, hospitality providers (hotel, 
motel, restaurants, country clubs and resorts), and city and state 
municipalities.  During the third quarter of 1997, the Company disposed of 
certain assets of its Lyon Shaw wrought iron furniture manufacturing business 
in the casual furniture product line (See Note 3 of Notes to the Financial 
Statements).

Contract Seating.  WinsLoew  assembles and distributes contract seating 
products constructed of  contemporary, traditional and transitional styles of 
wood and metal.  Products include upholstered chairs, sofas and love seats 
offered in a variety of finish and fabric options.  Products are designed for 
use in the restaurant, lodging, office, healthcare facilities and retail 
stores.  These products are assembled pursuant to specific orders and are 
distributed to a broad customer base which includes architectural design firms, 
office furniture dealers, and restaurant and lodging chains through independent 
sales organizations.

RTA Furniture. WinsLoew's RTA products consist of a promotionally priced 
product line, upper priced ergonomically designed products and extensive line 
of futons and related accessories.  Futons (as used herein) consists of a 
frame, mattress and cover which easily converts from a comfortable sofa to a 
bed.  WinsLoew designs, manufactures, and distributes RTA promotionally priced 
"spindle" and "flatline" furniture designed for household use.  Products 
include coffee tables, end tables, wall units, desks, children's furniture and 
rolling carts.  Distribution is primarily through mass merchants and catalog 
wholesalers.  WinsLoew's upper priced ergonomically designed "space savers" 
include computer desks, work stations and modular units.  Marketing of these 
products is through in-house and independent sales representatives to office 
furniture wholesalers and catalog firms.  Futons are manufactured in a variety 
of styles and finishes, and are constructed of selected hardwood and pine. The 
Company manufactures the futons and accessories, including coffee tables and 
end tables.  In addition, the Company imports a line of frames from Indonesia. 
 Futon products are distributed through specialty retailers,  selected mass 
merchants, and national accounts.

During 1997, the Company adopted a plan to dispose of its "RTA" operations and 
recorded a pretax non-cash charge totaling $12.4 million in the fourth quarter 
of 1997 relating to the disposal of the "RTA"  operations (See Note 2 of Notes 
to the Financial Statements for a summary of the charges).  The Company plans 
to sell two of the businesses and is in the process of liquidating the assets 
related to the futon business.

                                       3


PRODUCT LINES

WinsLoew has two principal product lines (Casual Furniture and Contract 
Seating) that are produced or distributed in 4 manufacturing locations as 
follows:



DIVISION AND LOCATION     PRINCIPAL PRODUCTS            PRINCIPAL CUSTOMERS

CASUAL FURNITURE:

Winston                  Residential casual           Specialty patio stores,
Haleyville, Alabama      furniture constructed        department stores and 
                         of aluminum                  furniture stores


Texacraft                Contract casual              Apartment developers 
Houston, Texas           furniture constructed        and management 
                         of aluminum, wrought         companies, hospitality
                         iron, wood and fiberglass    providers and manufactures


Winston International    Imported residential         Specialty patio stores,
Haleyville, Alabama      casual furniture             department stores and
                         constructed of cast          furniture stores
                         aluminum and wrought iron


CONTRACT SEATING:

Loewenstein              Contemporary, transitional   Architectural design
Pompano Beach, Florida   and traditional seating for  firms, restaurant and
                         hospitality, office and      lodging chains, office
                         other institutional uses     furniture dealers and 
                                                      retail store planners

Gregson                  Traditional office and       Office furniture dealers
Liberty, North Carolina  other institutional seating  and lodging chains


     The Company's third product line,  RTA, was produced and distributed out 
of three manufacturing facilities during 1997 as follows:
       

Southern Wood            Promotional RTA furniture    Mass merchandisers and
Sparta, Tennessee                                     catalog wholesalers


Continental              Ergonomically designed       Catalog firms and office
Irwindale, California    space savers for home and    furniture wholesalers
                         office use


New West                 Futons, frames, covers, and  Specialty retailers and
Cookeville, Tennessee    related accessories          selected mass
                                                      merchandisers

               


COMPETITIVE STRENGTHS

WinsLoew believes that it has the following competitive strengths.

Casual Furniture.  Management attributes casual furniture's historical success 
to its: (i) commitment to producing a quality product delivered "in time and on 
time", (ii) emphasis on providing extensive customer service, (iii) cost-
efficient manufacturing operations, (iv) innovatively styled products and 
merchandising programs, and (v) results-oriented management, team philosophy 
and culture.  Management believes that WinsLoew can continue the growth it has 
experienced in the casual furniture line by capitalizing on its existing 
distribution channels, manufacturing capabilities and reputation for quality 
and customer service.  Specifically, WinsLoew intends to grow in its existing 
market through: (i) continued leadership in new products and merchandising 
programs, (ii) expanding existing market penetration, (iii) broadening 
distribution channels, (iv) developing off season products for its distribution 
channel and other channels, (v) expanding the Winston International division's 
product line.

                                       4

Contract Seating.  WinsLoew is committed to providing value to its contract 
seating customers by offering innovative designs, a broad range of high quality 
products at competitive prices and responsive customer service with quick and 
timely delivery.  WinsLoew ensures that its products provide both superior 
structural integrity and aesthetic styling through its adherence to strict 
manufacturing and quality control standards and through its long-standing and 
frequently exclusive relationships with a number of leading Italian designers 
and manufacturers.  These suppliers have extensive experience in the design, 
engineering and production of contemporary and transitional-styled chairs.  The 
suppliers use steam-bending of solid wood components, intricate joinery and 
other sophisticated manufacturing techniques generally unavailable in the 
United States.  In addition, WinsLoew's electrostatically applied, ultraviolet 
cured wood finishing system produces one of the most consistent, durable and 
vibrant finishes in the industry.  The system also increases manufacturing 
efficiency and reduces waste and air emissions.  WinsLoew's commitment to 
providing high levels of customer service is also typified by its policies of 
paying freight charges if a guaranteed shipping date is missed and, under its 
"Quick Ship" program, guaranteeing shipment of a significant portion of its 
product line within 10 working days from receipt of a customer's order.

WinsLoew offers a broad selection of wood, metal and upholstered chairs, sofas 
and love seats designed for restaurant, lodging, office and other institutional 
uses, with prices generally ranging from $150 to $550.  WinsLoew's custom 
design capabilities also allow it to modify styles, materials and production in 
order to provide customers with products that meet particular specifications.  
WinsLoew's strategy of offering a broad selection of product styles and price 
ranges provides it with access to distribution channels serving a variety of 
end users, including restaurants, hotels, healthcare facilities, retail store 
planners, corporate offices, schools, sports facilities, airport lounges and 
cruise lines.

RTA Furniture.  WinsLoew's RTA furniture product line consists of three 
products: (i) promotionally priced RTA products sold directly to mass 
merchandisers and catalog wholesalers under the Southern Wood name, (ii) upper 
priced ergonomically designed "space savers", consisting of modular computer 
workstations, sold to catalog firms and office furniture wholesalers under the 
MicroCentre name, and (iii) futons, frames, covers and accessories under the 
New West name.  Southern Wood's low cost structure is based on its use of 
inexpensive raw materials, its relatively low labor rates and its use of 
equipment to achieve cost savings.  WinsLoew believes that its focused price 
strategy will allow the Company to maintain or increase market share and 
provide opportunities for product line extensions.  WinsLoew believes 
Continental increases its opportunities for growing furniture distribution 
channels without incurring significant marketing and selling expenses.  During 
1997,  the Company decided to discontinue the operation of its RTA product line 
and currently has the Continental and Southern Wood businesses for sale.   

Also during 1997, the Company discontinued the manufacturing and distribution 
of futons and accessories and started the process of liquidating the assets of 
this operation.


BUSINESS STRATEGY

Casual Furniture  

The business strategy of the Casual Division emphasizes the following elements:

Expansion of Sales and Market Share.  WinsLoew's growth objectives for the 
casual furniture line are primarily focused on areas where WinsLoew can 
capitalize on its existing distribution channels, manufacturing capabilities 
and reputation for quality and customer service, including: (i) new product 
introductions in WinsLoew's extruded and tubular aluminum and International 
divisions, (ii) expansion into new geographic areas, particularly west of the 
Rocky Mountains, and (iii) increased sales to commercial customers such as 
hotels, restaurants, country clubs, interior designers and apartment and hotel 
developers.

Provide Value to Customers.  WinsLoew is committed to providing value to its 
retailing customers by designing and manufacturing high quality, competitively 
priced products and responding to its customers' needs for "in time and on 
time" delivery.  WinsLoew maintains a strong customer service orientation that 
is typified by its PDQ shipping program, where WinsLoew either ships within 15 
business days after credit approval or pays for the freight costs.  Quick 
delivery is particularly important to casual furniture retailers because of the 
short selling season and the retailer's general desire to minimize inventory 
levels.  Another principal component of WinsLoew's marketing strategy is its 
focus on special sales programs for customers.  These programs also reduce the 
effects of seasonality on WinsLoew's operations and minimize WinsLoew's 
finished good inventory.

                                       5

Commitment to Product and Industry Leadership.  Management believes that the 
high fashion style and variety of WinsLoew's casual furniture designs provide a 
strong competitive advantage and WinsLoew therefore devotes significant 
resources to new product development and introductions.  

Enhanced Use of Manufacturing Capabilities.  WinsLoew operates approximately 
295,000 square feet of manufacturing space for casual furniture products and 
produces most of such products from basic raw materials using strict quality 
control measures.  WinsLoew's vertical integration permits WinsLoew to: (i) 
produce a variety of chairs, tables and other furniture products, (ii) 
manufacture cushions and (iii) cut and assemble the fabric covers that are 
combined with preassembled poles to produce outdoor umbrellas.  WinsLoew also 
maintains strict cost containment measures in order to ensure that its products 
are manufactured in a cost-efficient manner.

Develop or Acquire Complementary Product Lines.  WinsLoew continues to seek 
opportunities to develop or acquire complementary product lines in order to 
capitalize on its existing distribution channels, manufacturing capabilities 
and reputation for quality and customer service.

Contract Seating

The business strategy of the contract seating divisions emphasizes the 
following elements:

Historical Base Business.  WinsLoew's base contract seating business has 
historically been concentrated within the hospitality market.  This market has 
fluctuated with general economic cycles because many end users defer 
expenditures for building new or refurbishing existing restaurant and lodging 
facilities during economic downturns.  Based upon its past experience, the 
management believes that WinsLoew's core hospitality business will grow as 
expenditures by the hospitality industry increase for new construction and 
refurbishment of restaurants and lodging facilities.

Private Label Program.  WinsLoew offers a "private label" program through which 
contract seating products are marketed to nationally recognized designers and 
manufacturers of office furniture systems.  WinsLoew believes that its success 
in generating private label business is primarily attributable to its proven 
ability to produce a quality product on short lead time, its state-of-the-art 
finishing capabilities, its competitive prices and the direct involvement of 
its senior executives in private label marketing.

Develop or Acquire Complementary Product Lines.  WinsLoew continues to seek 
opportunities to develop or acquire complementary product lines in order to 
capitalize on its existing distribution channels, manufacturing capabilities 
and reputation for quality and customer service.

RTA Furniture

The business strategy of the RTA division emphasizes the following elements:

WinsLoew seeks to increase its promotional RTA product sales by marketing its 
products to its core customer base and to broader channels of distribution 
within the furniture industry, including national accounts and selected mass 
merchants.  The Company has increased its independent sales representative 
force and prepared new sales literature.  Continental Engineering is in the 
process of increasing its product offering of ergonomically designed furniture, 
strengthening its in-house sales force and making its products available 
through broader channels of distribution.  In each of these operations, 
WinsLoew seeks to take advantage of its position as a low cost producer.

During 1997, the Company adopted a plan to dispose of its "RTA" operations and 
recorded a pretax non-cash charge totaling $12.4 million in the fourth quarter 
of 1997 relating to the disposal of the "RTA"  operations (See Note 2 of Notes 
to the Financial Statements for a summary of the charges).  The Company plans 
to sell two of the businesses and is in the process of liquidating the assets 
related to the futon business.

                                       6

PRODUCTS

WinsLoew designs, manufactures and distributes two principal product lines: (i) 
casual furniture for both the residential and contract markets and (ii) 
contract seating designed for restaurant, lodging, office or other general 
institutional use.  During 1997, the Company decided to discontinue its RTA 
product line.

Casual Furniture

WinsLoew's casual furniture products for residential use consist principally of 
medium to upper-medium priced indoor and outdoor furniture sold under three 
brand names: "Winston" residential extruded and tubular aluminum furniture, 
"Texacraft" contract casual furniture, and "Winston International" imports 
casual furniture.  WinsLoew currently manufactures and sells numerous style 
collections that include traditional, European, and contemporary design 
patterns.  Within each style collection there are multiple products including 
chairs, tables, chaise lounges and accessory pieces such as ottomans, cocktail 
tables, end tables, tea carts and umbrellas.  WinsLoew offers extruded and 
tubular aluminum with glider action, adjustable positions and rocking and 
swivel motions.  WinsLoew's casual seating products feature cushions and vinyl 
strapping in a variety of colors and patterns.  All of WinsLoew's casual 
furniture products feature a durable painted finish which is also offered in a 
wide selection of colors.  The suggested retail prices for a table and four 
chairs currently range from approximately $600 to $1,400.

WinsLoew's casual contract products include chairs, chaise lounges, tables and 
umbrellas constructed of extruded, tubular and cast aluminum, steel, wrought 
iron, wood and fiberglass.  WinsLoew's casual contract products include a 
selection of restaurant and outdoor seating and site furnishings.  Casual 
contract products are marketed through Company and independent sales 
representatives, primarily to apartment developers and management companies, 
hospitality providers (hotel, motel, restaurants, country clubs, and resorts) 
and city and state municipalities.

WinsLoew continually reviews and evaluates its casual furniture designs, and 
annually adds and discontinues designs it deems appropriate.  WinsLoew 
identifies trends in shapes, colors and patterns through independent research, 
contacts with WinsLoew's dealers and the occasional use of independent 
designers.  Management also solicits opinions from its manufacturer's 
representatives, dealers and employees prior to final design selection.  
WinsLoew has generally replaced or modified approximately one-third to one-half 
of its casual furniture product lines annually.  The costs of implementing 
these annual changes have historically included certain: (i) research and 
development costs; (ii) capital expenditures for tooling; and (iii) advertising 
and catalog expenses. Shipments of WinsLoew's new designs generally begin in 
September of each year.

Contract Seating

WinsLoew's contract seating products (other than the casual contract products 
described above) include wood, metal and upholstered chairs, as well as 
reception area love seats and sofas.  WinsLoew's broad product line consists of 
numerous distinct models of chairs in contemporary, traditional and 
transitional styles.  WinsLoew's general merchandising strategy for contract 
seating is to provide innovative seating products that are practical, 
comfortable, sturdy and moderately priced.

Wood frames are produced from a variety of wood species and are finished with 
one of WinsLoew's numerous standard colors or can be finished to customer's 
specification.  WinsLoew's metal chairs are available in chrome or in a 
selection of standard powder coat finishes.  For upholstered products, the 
customer may select from a number of catalog fabrics, vinyls and leathers or 
may specify or supply its choice of materials.  WinsLoew maintains an inventory 
of unassembled chair components that enables it to respond quickly to large 
quantity orders in a variety of finish and fabric combinations.  See " ---
Manufacturing."  

WinsLoew believes that an important element of its success in the contract 
seating business is its long-standing and frequently exclusive relationships 
with leading Italian design firms, as well as its proven ability to offer 
innovative products that are sturdy, aesthetically appealing and scaled for the 
United States market.  This belief is based upon WinsLoew's extensive industry 
experience and discussions with key customers, sales representatives and 
competitors.  WinsLoew continually reviews and reconsiders its contract 
furniture designs, and annually adds and deletes designs as it deems 
appropriate to address perceived marketing opportunities.  WinsLoew generally 
begins the design process by identifying marketing needs and conceptualizing 
product ideas through regular meetings of its senior management team.  
Reflecting its focus on both sales and manufacturing, WinsLoew also solicits 
opinions with respect to trends in styles, colors and other design elements 
from its sales representatives, customers, and employees prior to final design 
selection.  Preliminary sketches are provided to either WinsLoew's 
manufacturing personnel or WinsLoew's European suppliers, who in turn engineer 
the product's construction and produce one or more prototypes in preparation 
for actual full-scale production.  New products are generally introduced at 
national or regional furniture markets.  WinsLoew's custom design capabilities 
also allow it to modify styles, materials and production in order to provide 
customers with products that meet their particular needs.

                                       7

RTA Furniture

WinsLoew's promotionally priced RTA furniture "spindle"  products include 
coffee tables, end tables, wall units, desks, chairs, children's furniture and 
rolling carts.  Promotionally priced furniture products also include "flatline" 
products such as bookcases and wall units.  RTA products also include 
ergonomically designed "space savers", including modular desk and computer 
workstations.  WinsLoew's futon products consisted of futons (mattresses), 
frames, covers and related accessories.  Frames were constructed of hardwood 
and pine, and came in a variety of sizes.  Hardwood frames were finished in a 
variety of stains, while pine frames were unfinished.  Futons were constructed 
of fabric shells stuffed with foam and cotton.  Covers for futons were 
available in a variety of fabrics.  Accessories included ottomans, end tables 
and cocktail tables.  Frames were sold unassembled in a box containing all 
components, hardware, and instructions necessary for assembly.  In addition to 
manufactured frames, the Company imported and distributed frames that accounted 
for approximately one half of the frames sold.   

RTA furniture products are sold unassembled in a box that contains all 
components and hardware necessary for home-assembly.  WinsLoew's merchandising 
approach for RTA furniture products emphasizes products with a stable, 
predictable demand, as well as self-service convenience.  For example, the 
lithographed product boxes include color pictures, a listing of product 
features and assembly instructions that allow retailers to utilize available 
floor space and shelf space efficiently. 

MANUFACTURING

Casual Furniture

WinsLoew has manufacturing facilities for casual furniture products in 
Haleyville, Alabama, and Houston, Texas.  The facilities in Haleyville 
manufacture extruded and tubular aluminum casual furniture and most related 
accessories, including cushions and umbrellas. In the Houston facility, the 
Company manufactures extruded and tubular aluminum, steel and wood furniture.  
WinsLoew's goal at its facilities is to produce a high quality product at the 
lowest possible manufacturing cost and deliver it in a timely manner to 
dealers.  WinsLoew's international products are manufactured in Mexico. See "--
-Marketing and Sales."

Winston Division - Haleyville, Alabama.  WinsLoew's aluminum furniture 
manufacturing facility in Haleyville manufactures goods exclusively to order.  
Products are normally shipped on the day completed, eliminating the need to 
maintain finished goods inventory.  WinsLoew provides timely delivery service 
by typically shipping goods within three weeks after credit approval.

In the manufacturing process, extruded aluminum tubes are cut to size and 
shaped or bent in specially designed machinery.  The aluminum is then welded to 
form a solid frame, and the frame is subjected to a grinding and buffing 
process to eliminate any rough spots that may have been caused during welding. 
 After this process is completed, the frame is cleaned, painted in a state-of-
the-art powder coating system and heat cured.  WinsLoew then adds vinyl 
strapping, cushions, fabric slings, or other accessories to the finished frame, 
as appropriate.  The product is then packaged with umbrellas, tempered glass 
and other accessories, as applicable, and shipped to the customer.

WinsLoew's Haleyville facilities were extensively refurbished and modernized in 
late 1984 and significantly expanded in 1990 and 1993.  WinsLoew believes that 
its Haleyville facilities are some of the most modern in the casual aluminum 
furniture industry, and that the efficiencies attributable to these plants are 
a significant factor in WinsLoew's relatively low manufacturing costs. 

                                       8

WinsLoew's vertical integration provides additional manufacturing efficiencies. 
WinsLoew manufactures cushions for its aluminum furniture in Haleyville, and, 
in addition, cuts, sews and assembles the fabric covers that are combined with 
pre-assembled poles to produce outdoor umbrellas.

WinsLoew believes that it manufactures the highest quality aluminum casual 
furniture in its price range.  The major frame components of the aluminum 
furniture are welded, and not riveted or bolted, thereby increasing the 
durability and enhancing the appearance of the aluminum product line.  The 
powder coated painting process results in an attractive and durable finish.  To 
ensure that only the highest quality products are shipped to customers, 
WinsLoew's quality control department has established control check points 
where the quality of 100% of its aluminum products is examined during the 
manufacturing process.  These processes allow WinsLoew to offer a two-year 
frame and finish guarantee on all of its aluminum products for residential use. 
 Warranty expense to date has been negligible.

Texacraft Division - Houston, Texas.  WinsLoew's Houston facility includes an 
aluminum furniture manufacturing facility with processes essentially the same 
as WinsLoew's aluminum line in Haleyville.  Additionally, the Houston facility 
manufactures steel and wood furniture and includes a fiberglass manufacturing 
facility for tables, umbrellas, and accessories.

Contract Seating

WinsLoew currently utilizes approximately 226,000 square feet of manufacturing 
space for contract seating production in facilities located in Florida and 
North Carolina.  

Loewenstein Division - Pompano Beach, Florida.  This facility assembles and 
finishes to customer order most of WinsLoew's contract seating products (other 
than the casual contract products described above).  Component parts are either 
purchased from a variety of suppliers, including a number of European 
manufacturers, or manufactured by WinsLoew's Gregson division.  The principal 
elements of wood chair assembly include: (i) frame glue-up, (ii) sanding, (iii) 
seat assembly (in which upholstered seats are constructed from component 
bottoms, foam padding and cloth coverings) and (iv) painting/lacquering.  To 
provide consistency and speed in this finishing process, WinsLoew utilizes a 
state-of-the-art conveyorized paint line with electrostatic spray guns and a 
three-dimensional ultraviolet drying system.  For upholstered products, the 
specified fabric cloth is stretched to the chair frame over foam padding.  
Metal chairs are generally assembled from imported components.  After rework 
and leveling, chairs are cartoned to prevent damage in transportation.  The 
manufacturing process also includes a number of product inspections and other 
quality control procedures.

Gregson Division - Liberty, North Carolina.  This manufacturing facility is 
vertically integrated and includes such operations as kiln-drying, cutting, 
planing, gluing, veneering, sanding, routing, carving, shaping, assembling, 
upholstering, and finishing.  Based on WinsLoew's experience during the past 
several years, WinsLoew believes that this manufacturing flexibility minimizes 
the risks of relying on third-party suppliers for component parts and 
frequently permits a faster response to customer needs.  While styling is 
continuously updated, the basic construction process does not change 
significantly from year to year, which reduces the need for substantial 
modifications to the production process.



RTA Furniture

Southern Wood Division - Sparta, Tennessee.  This facility constructs RTA 
furniture from high density particle board, dowels and wood scrap materials.  
The particle board is available from various manufacturers.  For "spindle" 
furniture, the dowels and wood scrap materials are available from various 
sources and are generally the by-product of other processes such as the 
production of wooden tool handles and dimension stock.  WinsLoew is generally 
able to purchase these scrap materials at an attractive cost because the 
primary alternative use for such materials is as a waste fuel source.  A wood 
grain pattern is imprinted on the particle board using a laminating process, 
and these boards are then cut to the proper length and width, shaped and 
completed with plastic molding.  Spindles are produced by automated lathes, 
sanded, stained and lacquered.  Each piece of furniture is individually boxed 
and includes board, spindles, bolts and assembly instructions.  This business 
is currently being held for sale.

                                       9

Continental - Irwindale, California.  This facility designs and manufactures
ergonomically designed "space savers", modular computer desks and workstations. 
The particle board is laminated and then cut and drilled, if necessary, on 
automated machinery.  The board moves from station to station on a conveyor 
system, which moves material through the facility.  The individual pieces then 
have the appropriate hardware attached, and then are boxed along with assembly 
instructions.  This business is currently being held for sale.

New West Futon Division - Sparta, Tennessee.  During 1997, this facility 
manufactured futons, chairs, tables and related accessories marketed under the 
New West  trademark.  The futon unit consisted of three distinct components:  
frame, mattress and cover.  Each of these components were manufactured, 
although WinsLoew purchased some items both domestically and overseas. 
Dimension stock was then assembled as a frame and one of a variety of finishes 
was applied to the frame.  The mattress was produced with specialized equipment 
and was usually filled with cotton.  however, upgrades included polyurethane 
foam and pocketed coil springs.  Finally, covers, in a wide variety of fabric 
options (including the customer's own materials), were cut and sewn to fit the 
mattress.  Each of these components were then boxed and sold separately or in 
combination.  As of November 21, 1997, this operation was closed down and its 
assets are in the process of being liquidated.

Manufacturing Capacity

Management believes that the Company's manufacturing facilities in the casual 
and contract seating product lines are currently operating, in the aggregate, 
at approximately 75% of capacity, assuming a one-shift basis.  Management 
considers the Company's present manufacturing capacity to be sufficient for the 
foreseeable future and believes that, by adding multiple shift operations, the 
Company can significantly increase the total capacity of its facilities to meet 
growing product demand with minimal additional capital expenditures.  In 
addition, the Company engages in an ongoing maintenance and upgrading program, 
and considers its machinery and equipment to be in good condition and adequate 
for the purposes for which they are currently used.

The Company plans to dispose of its futon division facilities in Tennessee.


MARKETING AND SALES

Casual Furniture

WinsLoew markets its residential casual furniture products throughout the 
United States, Canada  and the Caribbean.  Substantially all of WinsLoew's 
residential sales are currently made to customers located east of the Rocky 
Mountains.  WinsLoew's residential products are marketed to approximately 800 
active customers, including specialty patio stores, full-line furniture 
retailers, and department stores. WinsLoew also sells its contract casual 
products to certain commercial end-users such as hotels, restaurants, country 
clubs, exporters, interior designers and developers of apartments and motels.

Substantially all of WinsLoew's residential products are sold through 
approximately 30 independent manufacturer's representatives.  Each 
representative: (i) is assigned a territory in which to promote, solicit and 
sell WinsLoew's products, (ii) agrees to assist in the collection of 
receivables and adjustment of any complaints with regard to his or her sales 
and (iii) receives commissions based on the net sales made in his or her 
territory.  WinsLoew determines the prices at which its products will be sold 
and may refuse to accept any orders submitted by a sales representative for 
credit-worthiness or other reasons.  WinsLoew's representatives may carry other 
products which do not directly compete with WinsLoew's product lines.  WinsLoew 
has long-standing relationships with most of its representatives.  

WinsLoew's marketing program assists its representatives in various ways, 
including:  (i) holds exhibitions at national and regional furniture shows and 
leases a year-round showroom at the Merchandise Mart in Chicago, Illinois, (ii) 
provides retailers with annual four-color catalogs of its products, sample 
materials illustrating available colors and fabrics, point of sale materials 
and special sales brochures, (iii) provides information directly to 
representatives at annual sales meetings attended by senior management and 
manufacturing personnel, (iv) maintains a customer service department which 
ensures that WinsLoew promptly responds to the needs and orders of WinsLoew's 
customers, (v) maintains regular contact with key retailers and (vi) conducts 
ongoing surveys to determine dealer satisfaction.  WinsLoew's casual contract 
products are marketed nationally through a team of company and independent 
sales representatives.

                                       10

The Winston International division of WinsLoew was organized primarily  for the 
purpose of  distributing casual furniture products that are not manufactured by 
WinsLoew.  Winston International's current product offerings include a line of 
cast aluminum products.  This product line is inventoried, distributed and 
administered in Haleyville, Alabama.  

Contract Seating

WinsLoew's hospitality and other institutional contract seating products are 
sold primarily to architectural design firms, restaurant, lodging chains, 
office furniture dealers and retail store planners.  WinsLoew's office and 
other institutional seating products are sold primarily to office furniture 
dealers and lodging chains.  Substantially all of WinsLoew's contract seating 
products are sold through approximately 40 independent sales representative 
organizations that employ approximately 100 sales associates.  Each sales 
representative: (i) promotes and sells WinsLoew's products in an assigned 
territory, (ii) assists WinsLoew in responding to customer service request and 
(iii) receives commissions based on the net sales made in his or her territory. 
 WinsLoew determines the prices at which its products will be sold, and may 
refuse to accept any orders submitted by a sales representative for 
creditworthiness or other reasons.

WinsLoew's marketing program assists its representatives in various ways, 
including:  (i) holds exhibitions at national shows, (ii) provides its 
representatives and customers with four color catalogs of its products, (iii) 
provides information to representatives at sales meetings and (iv) maintains a 
customer service department that ensures WinsLoew promptly responds to the 
needs and orders of customers.

RTA Furniture

WinsLoew's promotional RTA furniture products are sold primarily by outside 
sales representatives.  The Company distributes price lists and catalogs of its 
products.  Promotionally priced RTA products are sold primarily to mass 
merchandisers, discounters and warehouse clubs.  

Upper priced "space savers" are sold by a team of in-house and independent 
representatives primarily to catalog and office furniture wholesalers.  Product 
catalogs, brochures and price lists are prepared by the Company as sales 
material for its salespersons.  Additionally the Company purchases "pages" in 
catalogs issued by the wholesalers as a means of marketing its products to 
retailers.  The Company holds exhibitions at national shows and maintains a 
customer service department to ensure WinsLoew promptly responds to the needs 
and orders of customers.

BACKLOG

As of December 31, 1997, WinsLoew's backlog of orders was approximately $17.6 
million, compared to $13.1 million at December 31, 1996.  WinsLoew, in 
accordance with industry practice, generally permits orders to be canceled 
prior to shipment without penalty.  Management does not consider backlog to be 
predictive of future sales activity because of WinsLoew's short manufacturing 
cycle and delivery time, and, especially in the case of casual furniture, the 
seasonality of sales.

RAW MATERIALS AND FOREIGN SOURCING

WinsLoew manufactures most of its products to order from basic raw materials, 
and, consequently, is able to avoid carrying large amounts of finished goods 
inventory particularly in its casual and contract seating product lines.  
WinsLoew also attempts to maintain minimum levels of raw material inventory.  
WinsLoew's principal raw materials consist of extruded aluminum tubes, steel 
rods, woven vinyl fabrics, paint/finishing materials, vinyl strapping, cushion 
filler materials, cartons,  glass table tops, component parts for contract 
seating, particle board and other lumber products and hardware.  Although 
WinsLoew has no long-term supply contracts, it generally has a number of 
sources for its raw materials and has not experienced any significant problems 
in obtaining adequate supplies for its operations.  Nevertheless, the purchase 
of aluminum is, from time to time, highly competitive, and its price, as a 
commodity, is subject to market conditions beyond WinsLoew's control.  In 
addition, fluctuations in lumber prices and the costs of other raw materials 
have not historically had a material adverse effect on WinsLoew's results of 
operations.

                                       11

However, there can be no assurance that future price increases will not have a 
material adverse effect on WinsLoew's financial condition and results of 
operations.  Management believes that WinsLoew's policy of maintaining several 
sources for most supplies contributes to its ability to obtain competitive 
pricing.  

A significant portion of the Loewenstein raw materials consist of component 
chair parts purchased from several Italian manufacturers.  WinsLoew views its 
suppliers as "partners" and works with such suppliers on an ongoing basis to 
design and develop new products.  WinsLoew believes that these cooperative 
efforts, its long-standing relationships with these suppliers and its 
experience in conducting on-site, quality  control inspections provide it with 
a competitive advantage over many other furniture manufacturers, including a 
competitive purchasing advantage in times of product shortages.  In addition, 
in the case of Italian and European suppliers, WinsLoew generally contracts for 
its purchases of such component parts in such manner as to minimize its 
exposure to foreign currency fluctuations.  Although WinsLoew has close working 
relationships with its foreign suppliers, WinsLoew's future success may depend, 
in part, on maintaining such or similar relationships.  Given the special 
nature of the manufacturing capabilities of these suppliers, in particular 
certain wood-bending capabilities, and sources of specialized wood types, the 
Loewenstein division  could experience a disruption in their operations in the 
event of any required replacement of such suppliers.  There can also be no 
assurance that situations beyond WinsLoew's control, including political 
instability, significant and prolonged foreign currency fluctuations, economic 
disruptions, the imposition of tariffs and import and export controls, changes 
in government policies and other factors will not have a material adverse 
effect on WinsLoew.

FURNITURE INDUSTRY AND COMPETITION

The furniture industry is cyclical and affected by changes in general economic 
conditions, consumer confidence and discretionary income, interest rate levels, 
and credit availability.  Sales of casual furniture products are also affected 
by weather conditions during the peak retail selling season and the resulting 
impact on consumer purchases of outdoor furniture products.

The furniture industry is highly  competitive and includes a large number of 
manufacturers, none of which dominate the market.  Certain of the companies 
which compete directly with WinsLoew may have greater financial and other 
resources than WinsLoew.  Based on its extensive industry experience, 
management believes that competition in casual furniture and contract seating 
is generally a function of product design, construction quality, prompt 
delivery, product availability, customer service and price.  Management 
similarly believes that competition in WinsLoew's promotional price niche of 
the RTA furniture industry is limited, and is based primarily on prompt 
delivery, product availability, customer service and price.


WinsLoew believes that it successfully competes in the furniture industry 
primarily on the basis of its innovatively styled product offerings and 
merchandising programs, the quality of its products, and WinsLoew's emphasis on 
providing high levels of customer service.  While sales of imported, foreign-
produced casual furniture have increased significantly in recent years, 
WinsLoew's sales have not been adversely affected because such foreign products 
are generally:  (i) limited in design, styles and colors, (ii) of lesser 
quality than WinsLoew's products, (iii) marketed in the lower-end price range 
and (iv) not supported with competitive customer service and responsiveness to 
customers' needs for quick delivery. 

TRADEMARKS AND PATENTS

WinsLoew has registered the following trademarks with the United States Patent 
and Trademark Office:  Winston, Lyon-Shaw, Loewenstein/Oggo, From the Source, 
Gregson, Southern Wood Products, and LeCasso. Management believes that 
WinsLoew's trademark position is adequately protected in all markets in which 
WinsLoew does business.  WinsLoew also believes that its various trade names 
are generally well recognized by dealers and distributors, and are associated 
with a high level of quality and value.

WinsLoew holds several design and utility patents, and has applications pending 
for issuance of other design and utility patents.  Since WinsLoew believes that 
it is an innovator of styles and designs, it is the Company's policy to apply 
for design and utility patents for those designs which it believes may be of 
significance to WinsLoew.  

                                       12

EMPLOYEES

At December 31, 1997, WinsLoew had approximately 797 full-time employees, of 
whom 25 were employed in management, 125 in sales, general, and administrative 
positions, and 647 in manufacturing, shipping, and warehouse positions.

The only employees subject to collective bargaining agreements are 
approximately 144 of WinsLoew's hourly employees in Haleyville, Alabama, who 
are represented by the Retail, Wholesale, and Department Store Union.  The 
labor agreement between WinsLoew and such union, which expires on July 31, 
2001, provides that there shall be no strikes, slowdowns or lockouts.  WinsLoew 
considers its employee relations to be good.

ENVIRONMENTAL MATTERS

WinsLoew's management believes that WinsLoew complies in all material respects 
with all applicable federal, state and local provisions relating to the 
protection of the environment.  The principal environmental regulations that 
apply to WinsLoew govern air emissions, water quality and the storage and 
disposition of solvents.  Compliance with environmental protection laws and 
regulations has not had a material adverse impact on WinsLoew's financial 
condition or results of operations in the past and is not expected to have a 
material adverse impact in the future.

On November 23, 1993, WinsLoew was named as a potentially responsible party by 
the United States Environmental Protection Agency ("EPA") for cleanup at the 
Carolawn Superfund Site in Ft. Lawn, Chester County, South Carolina.  WinsLoew 
denied it sent any waste to the site, nor is responsible in any way for its 
cleanup.  The EPA has produced documents showing that in 1972 (prior to the 
acquisition of WinsLoew's former Lyon-Shaw division), Lyon-Shaw may have had 
Southeastern Pollution Control, Inc. ("SEPCO") pick up waste for disposal at 
another site, and suspects that SEPCO may have moved some waste from that site 
to the Carolawn site, which it also operated.  In 1987, WinsLoew purchased 
certain assets of Lyon-Shaw from a seller which is still in existence.  The 
agreement did not provide for an assumption of this type of liability.  Based 
on the percentage of the Lyon-Shaw waste to the total waste, it would appear 
that if WinsLoew did have any liability at the Carolawn Superfund Site, it 
would not exceed $4,000.  In January 1998, the EPA proposed complete and final 
settlement at it relates to PRP where the PRP's responsibility is de mininis, 
and Lyon Shaw fell into this group.  The Company intends to accept this 
settlement.

                                       13

ITEM 2.  Properties

The following table provides information with respect to each of the Company's 
facilities:

________________________________________________________________________________
|           |          |             |Approximate|           |      |          |
|           |          |             |Building   |Approximate|      |          |
|           |          |             |Area       | Land Area | Owned|  Lease   |
|           |          |             |(square)   |  Owned    |  or  |Expiration|
| Location  | Division | Primary Use | feet)     | (acres)   |Leased|   Date   |
|-----------|----------|-------------|-----------|-----------|------|----------|
|Pelham,    |          |             |           |           |      |          |
|  AL       |   All    |Headquarters |   11,500  |     1.8   | Owned|   N/A    |
|-----------|----------|-------------|-----------|-----------|------|----------|
|Haleyville,|          |Manufacturing|           |           |      |          |
|  AL       | Winston  | and Offices |  155,000  |    17     | Owned|   N/A    |
|-----------|----------|-------------|-----------|-----------|------|----------|
|Haleyville,|          |             |           |           |      |          |
|  AL       | Winston  |  Warehouse  |   20,000  |     1     | Owned|   N/A    |
|-----------|----------|-------------|-----------|-----------|------|----------|
|Haleyville,|          |             |           |           |      |          |
|  AL       | Winston  |Sewing Plant |   30,000  |     1     | Owned|   N/A    |
|-----------|----------|-------------|-----------|-----------|------|----------|
|Chicago,   | Casual   |Merchandise  |           |           |      |          |
|  IL       | Division |Mart Showroom|   12,000  |    N/A    |Leased|  8/31/02 |
|-----------|----------|-------------|-----------|-----------|------|----------|
|Houston,   |          |Manufacturing|           |           |      |          |
|  TX       |Texacraft | and Offices |   89,500  |    N/A    |Leased|  4/15/05 |
|----------------------|-------------|-----------|-----------|------|----------|
|Pompano   |           |Manufacturing|           |           |      |          |
|Beach, FL |Loewenstein| and Offices |  100,000  |    13.8   | Owned|   N/A    |
|----------|-----------|-------------|-----------|-----------|------|----------|
|Pompano   |           |             |           |           |      |          |
|Beach, FL |Loewenstein|  Warehouse  |    6,500  |    N/A    |Leased| 12/2/95  |
|----------|-----------|-------------|-----------|-----------|------|----------|
|Liberty,  |           |Manufacturing|           |           |      |          |
|  NC      |Gregson    | and Offices |  126,000  |     9.5   | Owned|   N/A    |
|----------|-----------|-------------|-----------|-----------|------|----------|
|Sparta,   |Southern   |             |           |           |      |          |
|  TN      | Wood      |Manufacturing|   94,300  |    10.0   | Owned|   N/A    |
|----------|-----------|-------------|-----------|-----------|------|----------|
|Sparta/   |           |             |(three     |           |      |          |
|Cookeville|           |             |facilities)|           |      |          |
|  TN      |New West   |Manufacturing|  190,400  |    43.5   | Owned|   N/A    |
|----------------------|-------------|-----------|-----------|------|----------|
|Irwindale,|           |Manufacturing|           |           |      |          |
|  CA      |Continental| and Offices |   91,655  |     N/A   |Leased| 6/30/02  |
|__________|___________|_____________|___________|___________|______|__________|

__________________________

	For additional information with respect to the Company's lease 
obligations, see Note 9 of Notes to the Company's Consolidated Financial 
Statements included in this Annual Report on Form 10-K.

Substantially all of the company's assets are currently pledged as collateral 
for a credit facility.  See Note 4 of Notes to the Company's Consolidated 
Financial Statements included in this Annual Report on Form 10-K.

                                       14
                                       
ITEM 3.  Legal Proceedings

	From time to time, the Company is subject to legal proceedings and 
other claims arising in the ordinary course of its business.  The Company 
maintains insurance coverage against potential claims in an amount which it 
believes to be adequate.  Based primarily on discussions with counsel and 
management familiar with the underlying disputes, the Company believes that it 
is not presently a party to any litigation, the outcome of which would have a 
material adverse effect on its business or operations.


ITEM 4.  Submission of Matters to a Vote of Security Holders

None

                                       15

PART II


ITEM 5.  Market for the Registrant's Common Equity and Related Stockholder 
         Matters

The Company's Common Stock has been listed for quotation on the Nasdaq National 
Market System under the symbol "WLFI" since January 1, 1995.  The following 
table sets forth, for the period indicated, the high and low sales prices per 
share of Common Stock as reported by the Nasdaq National Market System:

                         High        Low
1996

First Quarter..........  $6          $4 7/8 

Second Quarter.........  $6          $5  

Third Quarter..........  $8          $5

Fourth Quarter.........  $10 1/8     $6 7/8


1997

First Quarter..........  $11 7/8     $8 1/8 

Second Quarter.........  $11         $8 3/8

Third Quarter..........  $15         $10 15/16

Fourth Quarter.........  $16 13/16   $13 5/16


As of February 27, 1998, there were approximately 117 holders of record of 
Common Stock.  The closing sale price for the Common Stock on February 27, 
1998, was $19.

The Company has not declared nor paid any cash dividends on its Common Stock, 
does not anticipate that any dividends will be declared nor paid in the 
foreseeable future, and intends to retain earnings to finance the development 
and expansion of the Company's operations.  In addition, the Company's payment 
of dividends is also restricted under the terms of its credit facilities (see 
Note 4 of Notes to the Company's Consolidated Financial Statements).

                                       16
                                         
Item 6.  Selected Financial Data

The following selected financial data are derived from the Consolidated 
Financial Statements of Winsloew included elsewhere herein.  The following 
data should be read in conjunction with WinsLoew's Consolidated Financial 
Statements and related notes, "Management's Discussion and Analysis of 
Financial Condition and Results of Operations" and the other financial 
information included herein.


                                           Years Ended December 31,
                            ---------------------------------------------------
                              1997      1996       1995      1994       1993 (1)
                            ---------------------------------------------------
                                  (In thousands, except per share amounts)

Income Statement Data:
Net sales                   $114,749   $106,695   $ 95,443   $ 83,284   $77,789
Cost of sales                 73,329     68,757     64,999     55,878    51,265
                            --------   --------   --------   --------   ------- 
Gross profit                  41,420     37,938     30,444     27,406    26,524
Selling, general and
  administrative expenses     20,548     20,082     17,719     14,731    14,263
Amortization                     976      1,426      2,077      2,000     1,922
Non-recurring charges             --         --                   917     1,814
                            --------   --------   --------   --------   ------- 
Operating income              19,896     16,430     10,648      9,758     8,525
Interest expense               2,296      3,083      3,841      2,795     3,136
                            --------   --------   --------   --------   ------- 
Income from continuing
  operations before
  income taxes and
  extraordinary items         17,600     13,347      6,807      6,963    5,389
Provision for income taxes     6,686      4,822      2,739      3,068    2,172
                            --------   --------   --------   --------   ------- 
Income from continuing
  operations before
  extraordinary items         10,914      8,525      4,068      3,895    3,217
Income (loss) from
  discontinued operations
  net of taxes                  (471)      (241)    (7,519)     2,457    2,001
(Loss) from sale of
  discontinued operations,    (8,200)        --         --         --       --
  net of taxes
Extraordinary items               --         --       (593)        --   (1,223)
                            --------   --------   --------   --------   ------- 
Net income (loss)             $2,243     $8,284    ($4,044)    $6,352   $3,995  
                            ========   ========   ========   ========   =======



Basic earnings (loss) per share:
Income (loss) from continuing
 operations before
 extraordinary items            $1.46      $0.98      $0.45      $0.40   $0.40
Income (loss) from
  discontinued operations,      (0.06)     (0.03)     (0.83)      0.26    0.25
  net of taxes
(Loss) from sale of
  discontinued operations,      (1.10)        --         --         --      --
  net of taxes
Extraordinary items                --         --      (0.07)        --   (0.15)
                             --------   --------   --------   --------   ------
Net income (loss) per share     $0.30      $0.95     ($0.45)     $0.66   $0.50  
                             ========   ========   ========   ========   =====

Weighted average shares         7,484      8,724      9,029      9,655    8,075 
                             ========   ========   ========   ========   =======

                                       17


                                           Years Ended December 31,
                            ---------------------------------------------------
                              1997      1996       1995      1994       1993(1)
                            ---------------------------------------------------
                                  (In thousands, except per share amounts)

Dilutive earnings (loss)
per share:

Income (loss) from
  continuing operations
  before extraordinary items    $1.44      $0.98      $0.45      $0.40    $0.40
Income (loss) from
  discontinued operations,
  net of taxes                  (0.06)     (0.03)     (0.83)      0.26     0.25
Gain (loss) from sale of
  discontinued operations,
  net of taxes                  (1.08)        --         --         --       --
                             --------   --------   --------   --------   -------

Net income (loss) per share     $0.30      $0.95     ($0.45)     $0.66    $0.50
                             ========   ========   ========   ========   =======

Weighted average shares and
common share equivalents
outstanding                     7,563      8,730      9,029      9,655     8,075
                             ========   ========   ========   ========   =======

                                                                                

                                                     December 31,
                            ---------------------------------------------------
                              1997       1996       1995        1994    1993(1)
                            ---------------------------------------------------
                                                    (In thousands)
Balance Sheet Data:

Working capital              $29,337    $40,102    $43,677    $51,957  $33,984
Total Assets                  79,339     99,624    104,608    110,261   89,457
Long-term debt
(less current portion)        15,908     38,726     40,130     39,094   21,221
Total debt                    16,423     40,681     41,941     40,893   24,160
Stockholders' equity          51,026     48,400     53,228     60,680   56,536


(1)	Represents the combined results of Winston and Loewenstein, which are
        the predecessor companies to WinsLoew.

                                       18

Item 7.  Management's Discussion and Analysis of Financial 
Condition and Results of Operations


General

WinsLoew is comprised of companies engaged in the design, 
manufacture and distribution of casual furniture and contract 
seating furniture.  WinsLoew's casual furniture products are 
distributed through independent manufacturer's representatives and 
are constructed of extruded and tubular aluminum and cast aluminum.  
These products are distributed through fine patio stores, 
department stores and full line furniture stores nationwide.  
WinsLoew's contract seating products are distributed to a broad 
customer base which includes architectural design firms and 
restaurant and lodging chains.  

During 1997 the Company adopted a plan to dispose of its RTA 
operations.  WinsLoew's RTA products include ergonomically-designed 
computer workstations, which the Company denotes as "space savers", 
promotionally-priced coffee and end tables, wall units and rolling 
carts and an extensive line of futons, futon frames and related 
accessories.  Distribution of RTA furniture products is primarily 
through mass merchandisers, catalogue wholesalers and specialty 
retailers.  As a result of this decision, the Company recorded a 
pre-tax non-cash charge totaling $12.4 million in the fourth 
quarter of 1997 relating to the disposal of the RTA operations.  
The charge can be summarized as follows:

Write-off of goodwill in connection with         
sale of assets                                  $ 3,902,000
Reduction of inventory value                      2,791,000
Reduction of property to net realizable
value                                             2,067,000
Reduction of accounts receivable value            1,390,000
Other liabilities / reserves                      1,050,000
Accrual for losses through disposition            1,200,000
                                                -----------
Total                                           $12,400,000
                                                ===========

The Company plans to sell two of the businesses and is in the 
process of liquidating the assets related to the futon business.  

During 1995 the Company's Board of Director's adopted a plan to 
redirect the marketing and operations of certain of the Company's 
businesses. As a result of the changes to be implemented, the 
Company recorded a charge of $7.1 million for restructuring.  This 
charge was the result of management's plan to make changes in the 
product lines, management, marketing focus and operational strategy 
in the Company's RTA product line.  The plan included exiting 
certain markets and products.

The table below summarizes the charges for restructuring recorded 
in 1995:

Reduction in carrying value of 
promotionally-priced seating subsidiary 
held for sale                                   $2,526,000

Reduction in carrying values of 
manufacturing facilities held for sale 
and other asset write-downs                        848,000

Reduction in inventory values from
exiting certain futon products                   3,372,000

Severance costs for certain former
management                                         390,000
                                               -----------
Total                                           $7,136,000
                                               ===========

                                       19


Management's 1995 review also identified other operating and 
financial issues related to ongoing operations of the Company, 
which were not recorded as part of the charges for restructuring.  
The review resulted in additional operating charges totaling $2.1 
million (6.2% of net sales).  These additional charges include $1.4 
million for inventory which was considered excess, unusable or 
obsolete and $650,000 for accounts receivable which were considered 
uncollectable.  These charges have been included in the net loss 
from discontinued operations in 1995.  The balance of the following 
discussion focuses on the Company's continuing operations.

Results of Operations

The following table sets forth net sales, gross profit and gross 
margin as a percent of net sales for the years ended December 31, 
1997, 1996 and 1995 for each of the Company's product lines (in 
thousands, except for percentages):



                  1997                    1996                    1995
          ----------------------  ----------------------  ----------------------
            Net   Gross   Gross     Net   Gross   Gross     Net   Gross   Gross
            Sales Profit  Margin   Sales  Profit  Margin   Sales  Profit  Margin
          ------- ------- ------  ------- ------- ------  ------- ------- ------
Casual
furniture $56,363 $24,164  42.9%  $58,066 $23,812  41.0%  $55,758 $19,681  35.3%

Contract
seating    58,386  17,256  29.6%   48,629  14,126  29.0%   39,685  10,763  27.1%
         --------- -------       --------- -------        -------- -------     
Total    $114,749  $41,420 36.1% $106,695  37,938  35.6%  $95.443 $30,444  31.9%
         ========= =======       ========= =======        ======== =======      

The following table sets forth certain information relating to the 
Company's operations expressed as a percentage of the Company's net 
sales:



                        For the Years Ended December 31,

                                1997      1996      1995
Gross profit                    36.1%     35.6%     31.9%
Selling, general and
   administrative expense       17.9%     18.8%     18.6%
Amortization                     0.9%      1.3%      2.2%
Operating income                17.3%     15.4%     11.2%
Interest expense                 2.0%      2.9%      4.0%
Provision for income taxes       5.8%      4.5%      2.9%
Income from continuing 
operations before 
    extraordinary item           9.5%      8.0%      4.3%
(Loss) from discontinued 
operations, 
    net of taxes                (0.4%)    (0.2%)    (7.9%)
(Loss) from sale of 
discontinued 
   operations, net of taxes     (7.1%)     ---       ---          
Extraordinary item               ---       ---      (0.6%)
Net income (loss)                2.0%      7.8%     (4.2%)


                                                    
Comparison of Years Ended December 31, 1997 and 1996

Net Sales:  WinsLoew's consolidated net sales for 1997 increased 
$8.0 million or 7.5% to $114.7 million, compared to $106.7 million 
in 1996.  The casual product line sales increased by 7.6%, after 
excluding sales for the Company's wrought iron business sold during 
1997.  The Company believes that due to its high quality and 
innovative designs, existing retail customers have allocated more 
floor space, requiring larger inventories of the Company's casual 
aluminum furniture.  The contract seating product line experienced 
a sales increase of 20.1% due to growth in the core business and 
increased demand from the lodging industry.

                                       20

Gross Margin:  Consolidated gross margin increased $3.5 million in 
1997 to $41.4 million compared to $37.9 million in 1996. The casual 
and contract seating product lines improved gross margins in 1997 
due to greater operating efficiencies, increased sales volumes and 
improved raw material costs. 

Selling, General and Administrative Expenses:  Selling, general and 
administrative expenses increased $466,000 in 1997, compared to 
1996, due to commissions expense and other variable costs related 
to the increased sales volume in 1997.

Amortization:  Amortization expense decreased due to the intangible 
assets that became fully amortized in 1996.

Operating Income:  As a result of the above, WinsLoew recorded 
operating income of $19.9 million (17.3% of net sales) in 1997, 
compared to operating income of $16.4 million (15.4% of net sales) 
in 1996.

Interest Expense:  WinsLoew's interest expense decreased $787,000 
in 1997, compared to 1996.  The Company has reduced its debt by 
$24.3 million from December 31, 1996. 

Provision for Income Taxes:  WinsLoew's effective tax rate from 
continuing operations of 38.0% in 1997 and 36.1% in 1996 is greater 
than the federal statutory rate due to the effect of state income 
taxes and non-deductible goodwill amortization.  

Comparison of Years Ended December 31, 1996 and 1995

Net Sales:  The Company's consolidated net sales increased $11.3 
million, or 11.8% to $106.7 million in 1996 from $95.4 million in 
1995.  Net sales increased in both product lines.  Net sales 
increased in the casual furniture product line 4.1%.  The Company 
believes that due to its high quality and innovative designs, 
existing retail customers have allocated more floor space, 
requiring larger inventories of the Company's casual aluminum 
furniture. The contract seating product line experienced a sales 
increase of 22.5% due to increased demand resulting from 
construction in the lodging industry.

Gross Profit:  The consolidated gross margin increased to 35.6% in 
1996, compared to 31.9% in 1995. The casual and contract seating 
product lines improved gross margins in 1996, due to greater 
operating efficiencies and increased sales volumes.  The casual 
product line also experienced favorable raw material costs in 1996.

Selling, General and Administrative Expenses:  Selling, general and 
administrative expenses increased by $2.4 million in 1996, compared 
to 1995, due to increased commissions and other variable selling 
costs related to the higher volume in 1996 and an increased 
provision for doubtful accounts.

Amortization:  Amortization expense decreased due to the intangible 
assets that became fully amortized in 1996

Operating Income:  As a result of the above, the Company's 
operating income was $16.4 million (15.4% of net sales) in 1996, 
compared to $10.6 million (11.2% of net sales) in 1995.

Interest Expense:  The Company's net interest expense decreased by 
$758,000 in 1996, compared to 1995.  The Company had reduced its 
debt by $10.7 million until December 31, 1996, when it purchased 
$9.3 million of its common stock.  This stock purchase resulted in 
a net debt reduction in 1996 of $1.4 million.  These reductions in 
debt levels and the Company's increased profitability have led to 
improved financial ratios and, in turn, allowed the Company to pay 
lower spreads between the base rate and LIBOR and the rates which 
the Company is obligated to pay its lenders.  These lower spreads 
decreased the Company's effective interest rate below those 
incurred in 1995.

                                       21

Income Tax Expense: WinsLoew's 1996 effective tax rate from 
continuing operations of 36.1% and 40.2% in 1995 is greater than 
the federal statutory rate due to the effect of state income taxes 
and non-deductible goodwill amortization.  

Extraordinary item:  The Company incurred an extraordinary charge 
of $593,000 (net of an income tax benefit of $360,000) related to 
prepayment penalties and the write-off of unamortized deferred loan 
costs associated with the retirement of the separate credit 
facilities in the first quarter of 1995.

Seasonality and Quarterly Information

The furniture industry is cyclical and sensitive to changes in 
general economic conditions, consumer confidence, and discretionary 
income, interest rate levels and credit availability.

Sales of casual products are typically higher in the second quarter 
and fourth quarters of each year, primarily as a result of the 
following: (i) high retail demand for casual furniture in the 
second quarter, preceding the summer months and (ii) the impact of 
special sales programs on fourth quarter sales.  The Company's 
casual product sales can also be affected by weather conditions 
during the peak retail selling season and the resulting impact on 
consumer purchases of outdoor furniture products.  During the third 
quarter of 1997,  the Company sold its Lyon Shaw wrought iron 
division (See Note 3 of the Notes to the Financial Statements).

The following table presents the Company's unaudited quarterly data 
for 1997 and 1996.  Such operating results are not necessarily 
indicative of results for future periods.  WinsLoew believes that 
all necessary and normal recurring adjustments have been included 
in the amounts in order to present fairly and in accordance with 
generally accepted accounting principles the selected quarterly 
information when read in conjunction with WinsLoew's Consolidated 
Financial Statements included elsewhere herein.

                                       22
                                         
(In thousands, except per share amounts)

1997 Quarters                    First     Second      Third    Fourth
                               --------    --------   --------  --------
Net sales                      $23,136     $37,524    $27,985   $26,104
Gross profit                     7,353      14,511      9,864     9,692
Operating Income                 2,667       8,047      4,432     4,750
Interest expense                   857         645        590       204
Income from continuing 
  operations                     1,093       4,565      2,350     2,906
(Loss) from discontinued 
  operations                      (275)        (61)       (68)      (67)     
(Loss) on sale of discontinued 
  operations                        --          --         --    (8,200)
                               --------    --------   --------  --------
Net income (loss)               $  818      $4,504     $2,282   ($5,361) 
                               ========    ========   ========  ========
Basic earnings per share:
  Income from continuing 
  operations                     $0.15       $0.61      $0.31     $0.39
  (Loss) from discontinued 
  operations (1)                 (0.04)      (0.01)     (0.01)    (0.01)
  (Loss) on sale of 
  discontinued 
  operations (1)                    --          --         --     (1.09)
                               --------    --------   --------  --------
  Net income (loss)              $0.11       $0.60      $0.30    ($0.71)
                               ========    ========   ========  ========
Weighted average shares          7,443       7,456      7,508     7,524
                               ========    ========   ========  ========
Diluted earnings per share:
  Income from continuing 
  operations (1)                 $0.15       $0.61      $0.31     $0.38 
  (Loss) from discontinued 
  operations (1)                 (0.04)      (0.01)     (0.01)    (0.01)
  (Loss) on sale of 
  discontinued 
  operations (1)                    --          --         --     (1.07)
  Net income (loss)  (1)         $0.11       $0.60      $0.30    ($0.70)
                               ========    ========   ========  ========
Weighted average shares and
common share equivalents 
outstanding                      7,495       7,502      7,602     7,630  
                               ========    ========   ========  ========

1996 Quarters                    First     Second       Third    Fourth
                               --------    --------   --------  --------
Net sales                      $21,021     $34,539    $25,110   $26,025
Gross profit                     6,256      13,594      8,384     9,704
Operating Income                 1,186       6,856      3,301     5,087
Interest expense                 1,187         647        682       567
Income from continuing 
operations                           4       3,846      1,757     2,918
Income (loss) from 
discontinued operations             86        (228)       363      (462)
                               --------    --------   --------  --------
Net income                      $   90     $ 3,618    $ 2,120   $ 2,456
                               ========    ========   ========  ========
Basic earnings per share:
   Income from continuing 
   operations (1)                $0.00       $0.43      $0.21     $0.35
   Income (loss) from 
   discontinued 
   operations (1)                 0.01       (0.03)      0.04     (0.06)
                               --------    --------   --------  --------
   Net income                    $0.01       $0.40      $0.25     $0.29
                               ========    ========   ========  ========
Weighted average shares          8,967       8,967      8,589     8,383
                               ========    ========   ========  ========
Diluted earnings per share:
   Income from continuing 
   operations (1)                $0.00       $0.43      $0.21     $0.35
   Income (loss) from 
   discontinued 
   operations (1)                 0.01       (0.03)      0.04     (0.06)
                               --------    --------   --------  --------
   Net income                    $0.01       $0.40      $0.25     $0.29
                               ========    ========   ========  ========
Weighted average shares and
common share equivalents 
outstanding                      8,967       8,967      8,595     8,413
                               ========    ========   ========  ========
(1)  Quarter amounts do not add to annual figures due to rounding.

                                       23

Liquidity and Capital Resources

The Company's short-term cash needs are primarily for working 
capital to support its debt service, accounts receivable and 
inventory requirements.  The Company has historically financed its 
short-term liquidity needs with internally generated funds and 
revolving line of credit borrowings.  At December 31, 1997 the 
Company had $29.3 million of working capital and $18 million of 
unused and available funds under its credit facilities.

The Company has a senior credit facility with a consortium of banks 
and other institutional lenders.  The facility, which matures in 
February 2001 and is collateralized by substantially all of the 
assets of the Company, consists of a revolving line of credit, term 
loan and an acquisition line of credit.  The working capital 
revolving line of credit allows the Company to borrow funds up to a 
certain percentage of eligible inventory and accounts receivable.  
The $12.5 million acquisition line of credit can be used for 
capital expenditures and purchases of the Company's common stock.

In June 1996, WinsLoew amended its senior credit facility to 
provide the Company with a variable amount available under the 
revolving line of credit (see Note 4 to the Consolidated Financial 
Statements).  Due to the seasonal nature of the casual furniture 
product line, WinsLoew's cash requirements are usually greater in 
the first quarter of each year.  The June 1996 amendment allows the 
amount available to fluctuate with the seasonal nature of the 
Company's business.  After the first quarter of each year, the 
Company's cash requirements from its credit line decline.  By use 
of a variable amount of credit availability, the Company can avoid 
the cost of an available but unused line of credit.  At December 
31, 1997, from an available maximum line of credit of $40 million, 
WinsLoew has elected to set the amount available at $25 million.

In July 1996, WinsLoew amended its senior credit facility to allow 
the Company to borrow under its line of credit to purchase shares 
of the Company's common stock (see Note 5 to the Consolidated 
Financial Statements).  As of December 31, 1997, there was $2.1 
million available for such repurchases.

Cash Flows From Operating Activities:   Net cash provided by 
operations increased to $22.6 million in 1997 primarily due to 
improved profitability from continuing operations.

Cash Flows From Investing Activities:   During 1997, the Company 
spent $1.0 million on capital expenditures and received $2.1 
million in proceeds related to the disposition of certain assets of 
its wrought iron business.

At December 31, 1997, the Company had no material commitments for
capital expenditures.

Cash Flows From Financing Activities:   The Company used the cash 
generated by operations and from investing activities to repay 
$24.3 million of debt during 1997.

Foreign Exchange Fluctuations and Effects of Inflation  

WinsLoew purchases some raw materials from several Italian 
suppliers.  These purchases expose the Company to the effects of 
fluctuations in the value of the U.S. dollar versus the Italian 
lira.  If the U.S. dollar declines in value versus the Italian 
lira, the Company will pay more in U.S. dollars for these 
purchases.  To reduce its exposure to loss from such potential 
foreign exchange fluctuations, the Company will occasionally enter 
into foreign exchange forward contracts.  These contracts allow the 
Company to buy Italian lira at a predetermined exchange rate, 
thereby transferring the risk of subsequent exchange rate 
fluctuations to a third party.  However, if the Company is unable 
to continue such forward contract activities, and the Company's 
inventories increase in connection with expanding sales activities, 
a weakening of the U.S. dollar against the Italian lira could 
result in reduced gross margins. The Company elected to hedge a 
portion of its exposure to purchases made in 1997 by entering into 
foreign currency forward contracts with a value of $2.2 million at 
December 31, 1997.  The Company did not incur significant gains or 
losses from these foreign currency transactions.

                                       24

Inflation has not had a significant impact on the Company in the 
past three years, nor is it expected to have a significant impact 
in the foreseeable future.

Year 2000

The Company began an assessment of Year 2000 issues on its computer 
system in mid-1995 and began the process of updating hardware and 
software at each of its facilities.  The Company is completing the 
software and hardware installation at the last facility which is 
expected to be completed during the first half of 1998.  

The Company has no plans to address these issues with its 
discontinued operations as the expected date of disposition is  
mid-1998.

The Company estimates the cost to complete the project for the 1995 
to 1998 period at approximately  $550,000 of which approximately 
$310,000 was capitalized and approximately $150,000 was expensed 
through December 1997.  From an ongoing cost standpoint,  the Year 
2000 issues are not expected to have a significant impact on the 
Company's financial position, results of operations or liquidity.
                                       
                                       25

ITEM 8.   Financial Statements and Supplementary Data

	INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                      Page

Report of Ernst & Young LLP, Independent Auditors....................  27

Consolidated Balance Sheets as of 
        December 31, 1997 and 1996...................................  28

Consolidated Statements of Income
        For the Years Ended December 31, 1997, 1996, and 1995........  29

Consolidated Statements of Stockholders' Equity 
        For the Years Ended December 31, 1997, 1996 and 1995.........  30

Consolidated Statements of Cash Flows
        For the Years Ended December 31, 1997, 1996, and 1995........  31

Notes to Consolidated Financial Statements...........................  32

                                       26


REPORT OF INDEPENDENT AUDITORS


Stockholders of WinsLoew Furniture, Inc.

We have audited the accompanying consolidated balance sheets of WinsLoew 
Furniture, Inc. and Subsidiaries as of December 31, 1997 and 1996, and the 
related consolidated statements of income, stockholders' equity and cash flows 
for each of the three years in the period ended December 31, 1997.  These 
financial statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based on 
our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of WinsLoew 
Furniture, Inc. and Subsidiaries at December 31, 1997 and 1996, and the 
consolidated results of their operations and their cash flows for each of the 
three years in the period ended December 31, 1997, in conformity with generally 
accepted accounting principles.




Birmingham, Alabama
February 6, 1998

                                       27   


                   WinsLoew Furniture, Inc. and Subsidiaries
                          Consolidated Balance Sheets

(In thousands except per share amounts)

                                             December 31,
                                      -------------------------- 
                                        1997             1996
                                      ----------      ----------
                                    
Assets
Cash and cash equivalents              $    707       $    897 
Accounts receivable, less allowances 
   for doubtful accounts of $2,702
   and $1,531 at December 31, 1997 
   and 1996, respectively                21,124         22,851 
Inventories                               9,096         10,716  
Prepaid expenses and deferred
   income taxes                           7,391          3,748
Net assets of discontinued 
   operations                             2,057         12,711  
                                       --------       --------
          Total current assets           40,375         50,923 

Net assets of discontinued
   operations                             6,860         13,937 
Property, plant and equipment, net       10,320         11,954 
Goodwill, net                            21,021         21,699 
Other assets                                763          1,111
                                       --------       --------
                                       $ 79,339       $ 99,624
                                       ========       ========

Liabilities and Stockholders' Equity
Current portion of long-term debt      $    515       $  1,955 
Accounts payable                          3,187          3,926 
Other accrued liabilities                 7,336          4,940
                                       --------       --------
          Total current liabilities      11,038         10,821 

Long-term debt, net of current portion   15,908         38,726 
Deferred income taxes                     1,367          1,677
                                       --------       --------
          Total liabilities              28,313         51,224
                                       --------       --------
Commitments and contingencies (note 9)

Stockholders' equity:
 Preferred stock, par value
    $.01 per share, 5,000,000 shares
    authorized, none issued                  --             --  
 Common stock; par value $.01 per
    share, 20,000,000 shares
    authorized, 7,481,783 and
    8,967,112 shares issued and
    outstanding at December 31, 1997
    and 1996, respectively                   75             75
 Additional paid-in capital              24,926         24,543 
 Retained earnings                       26,025         23,782
                                       --------       --------
          Total stockholders' equity     51,026         48,400 
                                       --------       --------
                                       $ 79,339       $ 99,624
                                       ========       ========

                             See accompanying notes.

                                       28


                   WinsLoew Furniture, Inc. and Subsidiaries
                       Consolidated Statements of Income
                              

(In thousands, except per share amounts)

                                   Year Ended December 31
                          -----------------------------------------
                                1997        1996         1995
                          ------------   ----------   -------------
Net sales                     $114,749    $106,695     $ 95,443   
Cost of sales                   73,329      68,757       64,999
                              --------    --------     --------
   Gross profit                 41,420      37,938       30,444   

Selling, general and
  administrative expenses       20,548      20,082       17,719 
Amortization                       976       1,426        2,077     
                              --------    --------     --------    
   Operating income             19,896      16,430       10,648    

Interest expense                 2,296       3,083        3,841
                              --------    --------     --------   
  Income (loss) before                                 
  income taxes and
  extraordinary item            17,600      13,347        6,807    
Provision for income taxes       6,686       4,822        2,739  
                              --------    --------     --------      
    Income (loss) before
    extraordinary item          10,914       8,525        4,068
(Loss)from discontinued
    operations, net of taxes      (471)       (241)      (7,519)
(Loss)from sale of discontinued
    operations, net of taxes    (8,200)         --           --
Extraordinary item                  --          --         (593)   
                              --------    --------     --------    

   Net income (loss)            $2,243      $8,284      $(4,044)   
                              ========    ========     ========    
Basic Earnings (loss) per share:
  Income from continuing 
    operations before 
    extraordinary item           $1.46       $0.98        $0.45    
  (Loss) from discontinued
    operations, net of taxes     (0.06)      (0.03)       (0.83)
  (Loss) from sale of 
    discontinued operations,     (1.10)         --           --
    net of taxes
Extraordinary item                  --          --        (0.07)        
                               -------     -------     --------    
   Net income (loss)             $0.30       $0.95       ($0.45)    
                              ========    ========     ========    

Weighted average number                                   
  of shares                      7,484       8,724        9,029           
                              ========    ========     ========    
                                 
Diluted earnings (loss) per share:
  Income from continuing 
    operations before 
    extraordinary item           $1.44       $0.98        $0.45    
  (Loss) from discontinued
    operations, net of taxes     (0.06)      (0.03)       (0.83)
  (Loss) from sale of 
    discontinued operations,     (1.08)         --           --
    net of taxes
Extraordinary item                  --          --        (0.07)        
                               -------     -------     --------    
   Net income (loss)             $0.30       $0.95       ($0.45)    
                              ========    ========     ========    

Weighted average number                                   
  of shares                      7,563       8,730        9,029           
                              ========    ========     ========    
                             See accompanying notes.

                                       29

                   WinsLoew Furniture, Inc. and Subsidiaries
                Consolidated Statements of Stockholders' Equity

(In thousands, except share amounts)

                             Common Stock      Additional
                          ------------------     Paid-in    Retained
                           Shares     Amount     Capital    Earnings    Total
                          ---------   ------   ----------   --------   -------
Balance,               
December 31, 1994         9,541,135     $95      $41,043    $19,542    $60,680
Repurchase and
   cancellation         
   of stock                (574,023)     (5)      (3,403)        --     (3,408)
Net income                       --      --           --     (4,044)    (4,044)
                          ---------   ------   ----------   --------   -------
Balance,                
December 31, 1995         8,967,112      90       37,640     15,498     53,228

Exercise of stock
   options                   25,100      --          187         --        187
Repurchase and
   cancellation
   of stock                (576,925)     (6)      (3,958)        --     (3,964)
Repurchase and
   cancellation
   stock from
   affiliated company      (933,504)     (9)      (9,326)        --     (9,335)
Net Income                       --      --           --      8,284      8,284
                          ---------   ------   ----------   --------   -------
Balance,
December 31, 1996         7,481,783     $75      $24,543    $23,782    $48,400

Exercise of stock
   options                   94,725       1          872         --        873
Repurchase and 
   cancellation
   of stock                 (50,000)     (1)        (489)        --       (490)
Net loss                         --      --           --       2,243     2,243
                          ---------   ------   ----------   --------   -------
Balance,
December 31, 1997         7,526,508     $75      $24,926     $26,025   $51,026

                          =========   ======   ==========   ========   =======

                             See accompanying notes.

                                       30

                                         
                   WinsLoew Furniture, Inc. and Subsidiaries
                    Consolidated Statements of Cash Flows 
                                
(In thousands)
                                             Year ended December 31,
                                        ---------------------------------
                                          1997         1996         1995
                                        -------      --------     -------

Cash flows from operating activities:
Net income (loss)                        $2,243       $8,284      ($4,044)      
Adjustments to reconcile net
   income to net cash provided
   (used in) operating activities:
Depreciation and amortization             2,293        2,630        3,258
Provision for losses on accounts
   receivable                                11        1,699          240
Change in net assets held for sale       17,731        4,249        4,894
Write-off of loan costs related
   to early retirement of debt               --           --          953
Changes in operating assets and
   liabilities, net of effects
   from acquisitions:
        Accounts receivable               1,716       (1,731)      (2,340)
        Inventories                         657            8        1,826       
        Prepaid expenses and
          deferred income taxes          (3,870)          64         (781)
        Other assets                         50         (144)         (21)
        Accounts payable                   (654)       2,022       (1,390)
        Other accrued liabilities         2,700       (1,608)       2,501 
        Deferred income taxes              (310)         690         (360)
                                        --------     --------     --------
          Total adjustments              20,324        7,879        8,780
                                        --------     --------     --------
          Net cash provided by 
          (used in) operating 
          activities                     22,567       16,163        4,736 
                                        -------      --------     --------

Cash flows from investing activities:
Capital expenditures, net of
  disposals                              (1,001)      (1,290)      (1,649)
Proceeds from disposition of business     2,119           --           --
                                        --------     --------     --------
          Net cash provided by
          (used in) investing 
          activities                      1,118       (1,290)      (1,649)
                                        --------     --------     --------
Cash Flows from financing activities:
Net borrowings under revolving
  credit agreements                     (19,872)         (65)         329
Payments on long-term debt               (4,386)      (4,225)      (1,861)
Proceeds from issuance of 
  common stock, net                         873          187           --

Repurchase and cancellation of stock       (490)      (3,964)      (3,408)
Repurchase and cancellation of stock
  from affiliated company                    --       (9,335)          --
Proceeds from issuance of long-term
  debt                                       --        3,030        1,020     
Increase in term loan upon refinancing       --           --        1,560
Loan costs                                   --           --       (1,385)
                                        --------     --------     --------
          Net cash provided by 
          (used in) financing
          activities                    (23,875)     (14,372)      (3,745)
                                        --------     --------     --------
          Net increase (decrease) in
          cash and cash equivalents        (190)         501         (658)     

Cash and cash equivalents at
  beginning of year                         897          396        1,054
                                        --------     --------     --------
Cash and cash equivalents at
  end of period                            $707         $897       $1,054
                                        ========     ========     ========
Supplemental disclosures:
     Interest paid                       $2,318       $3,296       $4,010
     Income taxes paid                   $6,048       $3,937       $1,347


                              See accompanying notes.

                                       31

WinsLoew Furniture, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1997


1.  Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of WinsLoew
Furniture, Inc. and its subsidiaries.  All material intercompany
balances and transactions have been eliminated.


Business

WinsLoew is comprised of companies engaged in the design, 
manufacture and distribution of casual furniture and contract 
seating furniture.  WinsLoew's casual furniture products are 
distributed through independent manufacturer's representatives, 
and are constructed of extruded and tubular aluminum, wrought 
iron and cast aluminum.  These products are distributed through 
fine patio stores, department stores and full line furniture 
stores nationwide.  WinsLoew's contract seating products are 
distributed to a customer base which includes architectural 
design firms, and restaurant and lodging chains.  The Company 
performs periodic credit evaluations of its customers' financial 
condition and determines if collateral is needed on a customer by 
customer basis.  The Company has one lodging customer that 
accounted for 17%, 11% and 6% of revenues in the years ended 
December 31, 1997, 1996 and 1995.


Cash and Cash Equivalents

The Company classifies as cash and cash equivalents all highly 
liquid investments which have maturities at the date of purchase 
of three months or less.  The Company maintains its cash in bank 
deposit accounts which, at times, may exceed the federally 
insured limits.  The Company has not experienced any losses in 
such accounts.

Inventories

Inventories are stated at the lower of cost or market.  Cost is 
determined utilizing the first-in, first-out ("FIFO") and 
weighted average methods.


Property, Plant and Equipment

Property, plant and equipment are stated at cost.  The Company 
provides for depreciation on a straight-line basis over the 
following estimated useful lives:  building and improvements, 8 
to 40 years; manufacturing equipment, 2 to 10 years; office 
furniture and equipment, 3 to 7 years; and vehicles, 3 to 5 
years.


Goodwill 

Goodwill is amortized on a straight-line basis over forty years 
from the date of the respective acquisition.  The carrying value 
of goodwill is reviewed if the facts and circumstances suggest it 
may be impaired.  If the review, using undiscounted cash flows 
over the remaining amortization period, indicates that the cost 
of goodwill will not be recoverable, the Company's carrying value 
will be reduced.

                                       32

Deferred Costs (Other Assets)

Loan acquisition costs and related legal fees, included in other 
assets, are deferred and amortized over the respective terms of 
the related debt.

Income Taxes

Deferred income taxes are provided for temporary differences 
between the basis of assets and liabilities for financial 
reporting purposes and the related basis for income tax purposes 
in accordance with the provisions of Statement of Financial 
Accounting Standards ("SFAS") No. 109, Accounting for Income 
Taxes.

Earnings Per Share   

In 1997, the Financial Accounting Standards Board issued 
Statement No. 128, Earnings per Share.  Statement 128 replaced 
the calculation of primary and fully diluted earnings per share 
with basic and diluted earnings per share.  Unlike primary 
earnings per share, basic earnings per share excludes any 
dilutive effects of options, warrants and convertible securities.  
Diluted earnings per share is very similar to the previously 
reported fully diluted earnings per share.  All earnings per 
share amounts for all periods have been presented, and where 
appropriate, restated to conform to the Statement 128 
requirements.

The numerators for the earnings per share calculation are set 
forth on the face of the accompanying income statement.  The only 
difference between the denominator for the basic and dilutive 
calculations are the number of shares added to basic for the 
dilutive effect of employee stock options.

Revenue Recognition

Sales are recorded at time of shipment from the Company's 
facilities to customers.

Use of Estimates

The preparation of the consolidated financial statements requires 
the use of estimates in the amounts reported.  Actual results 
could differ from those estimates.

Accounting for Stock-Based Compensation Plans

The Company follows the provisions of Accounting Principles Board 
Opinion No. 25, Accounting for Stock Issued to Employees and 
related Interpretations to account for its stock option plan.  
Under provisions of APB No. 25, no compensation expense has been 
recognized for stock option grants.

Foreign Currency Forward Contracts

The Company has exposure to losses which may result from 
settlement of certain raw materials purchases denominated in a 
foreign currency.  To reduce this exposure, the Company enters 
into forward contracts to buy foreign currency.  These forward 
contracts are accounted for as hedges, therefore, gains and 
losses from settlement of the forward contracts are used to 
offset gains and losses from settlement of the liability for the 
purchased raw materials.  Gains and losses are recognized in the 
same period in which gains or losses from the raw material 
purchases are recognized.  The Company is exposed to losses on 
the forward contracts in the event it does not purchase the raw 
materials, however, the Company does not anticipate this event.   

At December 31, 1997 the Company had forward contracts to 
purchase 3.8 billion lira for $2.2 million.  There were no 
significant deferred gains or losses and actual gains included in 
cost of sales were $30,000, $15,000 and $178,000 for the years 
ended December 31, 1997, 1996 and 1995.
Impact of Recently Issued Accounting Standard   

                                       33

Statement of Financial Accounting Standard No. 131, Disclosures 
about Segment of an Enterprise and Related Information 
establishes standards for the disclosure of information about 
operating segments in financial statements.  The standard will be 
applicable to the Company's December 31, 1998 financial 
statements.  The Company has not yet determined whether the 
Statement will result in any change in financial statement 
disclosure, however, the Statement will have no effect on the 
Company's consolidated financial position, results of operations 
or liquidity.

2.  Discontinued Operations

As of November 21, 1997, the Company's Board of Directors adopted 
a plan to discontinue the Company's ready to assemble ("RTA") 
operations.  Of the three businesses comprising these operations, 
two are being held for sale and one is in the process of being 
liquidated.  It is expected the plan will be completed by July 
1998.  As a result during the fourth quarter the Company recorded 
a loss on the disposition of its RTA operations of $12,400,000, 
or $8,200,000 after taxes, including a provision for estimated 
losses prior to disposal, which is summarized below:

Write-off of goodwill in connection with sale of assets  $ 3,902,000
Reduction of inventory value                               2,791,000
Reduction of property to net realizable value              2,067,000
Reduction of accounts receivable value                     1,390,000
Other liabilities / reserves                               1,050,000
Accrual for losses through disposition                     1,200,000
                                                         -----------
Total                                                    $12,400,000
                                                         ===========

The operating results of the discontinued operations are 
summarized as follows (dollars in thousands, except for per share 
amounts):


                                 For the year ended December 31,
                                 -------------------------------
                                 1997          1996           1995

Net sales                      $23,317       $37,284        $51,759
Income before taxes               (779)         (355)        (9,973)
Net (loss)                        (471)         (241)        (7,519)
Net (loss) per share            ($0.06)       ($0.03)        ($0.83)

During 1995, management reviewed the products, markets and 
strategy of the combined operations of the Company.  The review 
culminated with decisions to redirect the marketing and 
operations of certain of the Company's businesses. As a result of 
the changes to be implemented, the Company recorded a charge of 
$7.1 million for restructuring.  This charge was the result of 
management's plan to make changes in the product lines, 
management, marketing focus and operational strategy in the 
Company's RTA product line.  The plan included exiting certain 
markets and products.

In connection with the restructuring charge, the Company recorded 
other adjustments in 1995, primarily to increase inventory 
reserves and allowances for uncollectable accounts receivable.  
These adjustments resulted in charges of $1.4 million to cost of 
sales and $650,000 to selling, general and administrative 
expenses.  These have also been included above.

                                       34

The net assets of the discontinued operations at December 31,
1997 and 1996 are as follows:

(In thousands)                               1997        1996
                                           -------     --------
Current assets                             $5,711      $14,495
Current liabilities, including reserve 
   for estimated losses through 
   disposal date                           (3,654)      (1,784)
                                           -------     --------
Net assets of discontinued 
   operations, current                     $2,057      $12,711
                                           =======     ========

Property, net                               2,781        5,771
Goodwill, net                               4,018        8,127
Other assets                                   61           39
                                           -------     --------
Net assets of discontinued 
   operations, non-current                 $6,860      $13,937
                                           =======     ========

As a result of the Board approval of the plan, the consolidated 
financial statements of the Company have been restated to reflect 
the results of operations and net assets of the RTA operations as 
a discontinued operation in accordance with generally accepted 
accounting principles.


3.  Acquisition and Disposition

During the third quarter of 1997 the Company disposed of certain 
assets of its wrought iron business in the casual furniture 
product line.  The sale generated proceeds of $2.1 million.  This 
business accounted for net sales of $5.7 million, $11.0 million 
and $11.6 million in the years ended December 31, 1997, 1996, and 
1995 respectively.  The operating income of this business was not 
material to consolidated operating income.  During the third 
quarter of 1997, the Company recorded approximately $230,000 of 
costs associated with the sale in selling, general and 
administrative expenses.

In March 1995, the Company purchased all of the stock of 
Continental Engineering Group, Inc. for $7,345,000.  Continental 
is a manufacturer of ergonomically designed "space-savers" 
(computer workstations, desks, chairs, modular systems and 
accessories).  The acquisition resulted in goodwill of 
$4,248,000.  Funds for the acquisition were provided under 
WinsLoew's credit facility.  The acquisition was accounted for 
under the purchase method and, accordingly, the operating results 
of Continental have been included in discontinued operations 
since the date of acquisition.

4.  Long-Term Debt

Long-term debt consisted of the following at December 31, 1997 
and 1996:

(In thousands)                      1997        1996
                                  -------     -------
Revolving line of credit          $ 1,546     $21,418
Term loan                           2,287       5,471
Acquisition line of credit         12,500      12,500
Other                                  90       1,292
                                  -------     -------
                                   16,423      40,681
Less: current portion                 515       1,955
                                  -------     -------
                                  $15,908     $38,726
                                  =======     =======

                                       35

Senior Credit Facilities

The Company's senior credit facility, as amended, provides for 
$62.5 million which matures in February 2001, and is 
collateralized by substantially all of the assets of the Company.  
The facility consists of a working capital revolving line of 
credit (maximum of $40 million), a term loan (originally $10 
million) and an acquisition line of credit (maximum of $12.5 
million).  The working capital revolving line of credit allows 
the Company to borrow funds up to a certain percentage of 
eligible inventory and accounts receivable.  The term loan 
currently requires quarterly repayments of $190,000. The 
acquisition line of credit converts to a term loan with principal 
payments due in quarterly installments totaling 15% in 1998, 35% 
 in 1999 and 50% in 2000.  Additionally, a payment equal to 50% of 
cash flow, as defined, is required for each year within 90 days 
of year-end.  This is estimated to be $11.7 million for 1997 and 
will be financed on the revolver.  In June 1996, WinsLoew amended 
its senior credit facility to provide the Company with a variable 
amount available under the revolving line of credit.  The 
amendment reduced the amount available under its revolving line 
of credit to $20 million effective each June 30.  The Company 
may, at its option, elect to increase the revolving line of 
credit at each December 31 through the following June 30 to a 
maximum of $40 million. As of December 31, 1997, WinsLoew elected 
to increase the revolving line of credit to $25 million.

In July 1996, the Company amended its senior credit facility to 
allow the Company to borrow up to $6.6 million under its line of 
credit to purchase shares of the Company's common stock (see Note 
5 below).  Currently there is $2.1 million available for this 
purpose.

The interest rates on the components of the senior credit 
facility are either the base rate plus a spread, or the LIBOR 
rate plus a spread, as elected by the Company.  The spread is 
determined by the leverage ratio, as defined, for the twelve 
month period ending each quarter.  At December 31, 1997, the 
loans are priced at the base rate plus .25% (8.75% at December 
31, 1997) and the LIBOR rate plus 1.25% (7.14% at December 31, 
1997).  In addition, WinsLoew pays an unused facility fee of 
 .375% per annum on a quarterly basis in arrears.

The agreement requires the Company to meet certain financial 
ratios for leverage, interest coverage, tangible net worth and 
includes other provisions generally common in such agreements 
including restrictions on dividends, additional indebtedness and 
capital expenditures.  At December 31, 1997, the Company was in 
compliance with its debt covenants.  The carrying values of the 
revolving line of credit, term loan and acquisition loan 
approximate their fair value at December 31, 1997.

The Company incurred an extraordinary charge of $593,000 (net of 
an income tax benefit of $360,000) related to prepayment 
penalties and the write-off of unamortized deferred loan costs 
associated with the retirement of the separate credit facilities 
in 1995.  In connection with the new senior credit facility, the 
Company incurred loan costs and related fees of $1,385,000.

5.  Capital Stock

During 1997, the Company retired 50,000 shares of common stock 
purchased for $490,000.  On January 23, 1998, the Board approved 
a plan authorizing the repurchase of  1,000,000 shares of the 
Company's stock in the open market at times and prices deemed 
advantageous.

During 1996 and 1995, the Company's Board of Directors approved 
plans to repurchase the Company's stock.  During 1996, the 
Company repurchased 576,925 shares of stock at a cost of 
$3,964,000.  Also during 1996, the Company retired 933,504 shares 
of its common stock purchased from an affiliated company at $10 
per share.  During 1995, the Company retired 574,023 shares of 
common stock for $3,408,000.

                                       36


7.  Income Taxes

The provision (benefit) for income taxes consisted of the 
following:

(In thousands)                         1997      1996     1995
                                     -------   -------   -------
Provision for taxes related to 
   continuing operations             $6,686    $4,822    $2,739
(Benefit) for taxes related to 
   discontinued operations             (223)     (114)   (2,454)
(Benefit) for taxes related to
   loss on sale of discontinued 
   operations                        (4,200)       --        --
(Benefit) related to
   extraordinary item                    --        --      (360)
                                     -------   -------   -------
Total provision (benefit)
   for taxes                         $2,263    $4,708      ($75)
                                     =======   =======   =======


                               For the Years Ended December 31,
                               --------------------------------
(In thousands)                  1997        1996         1995
                               ------      ------      -------
Federal:                                                        
Current                        $3,985      $4,478        $821
Deferred                       (1,936)       (251)       (945)
State:
Current                           496         542         389
Deferred                         (282)        (61)       (340)
                               -------     --------   --------
                               $2,263      $4,708        ($75)

At December 31, 1997 and 1996, deferred tax assets and 
liabilities consisted of the following:

(In thousands)                           1997               1996
Deferred tax assets:
Capitalized inventory costs             $  415            $  461
Reserves and accruals                    3,660             1,842
State net operating loss 
carryforwards                              344               301
                                        ------            ------
                                         4,419             2,604
Less:  valuation reserve                    --               (80)
                                        ------            -------
Deferred tax assets                      4,419             2,524

Deferred tax liabilities:
Intangible asset basis difference          (98)             (247)
Excess of tax over book depreciation    (1,194)           (1,283)
Prepaid expenses                           (93)             (135)
Other                                      (75)              (20)
                                        -------           -------
Deferred tax liabilities                (1,460)           (1,685)
                                        -------           -------            
Deferred income taxes, net              $2,959            $  839
                                        =======           =======

Included in:
Other current assets                    $4,326             $2,516
Deferred income taxes                   (1,367)            (1,677)
                                        -------            -------
                                        $2,959             $  839
                                        =======            =======

                                       37



The following table summarizes the differences between the 
federal income tax rate and the Company's effective income tax 
rate for financial statement purposes:



                               For the Years Ended December 31,

                                1997       1996      1995
                                -----     ------    -------
Federal income tax rate         34.0%     34.0%     (34.0%)
State income taxes               4.7%      2.2%       3.5%
Goodwill amortization            9.3%      2.0%      35.4%
Other                            2.2%     (2.0%)      4.1%
                                -----     ------    ------- 
Effective tax rate              50.2%     36.2%       9.0%
                                =====     ======    =======


8.  Related Party Transactions

In October 1994, WinsLoew entered into a ten-year agreement (the 
"Investment Services Agreement") with Trivest, Inc. ("Trivest").  
Trivest and the Company have certain common shareholders, 
officers and directors.  Pursuant to the Investment Services 
Agreement, Trivest provides corporate finance, financial 
relations, strategic and capital planning and other management 
advice to the Company.  The base compensation is $500,000, 
subject to cost of living increases and increases for additional 
businesses acquired.  For 1997, 1996 and 1995, the amount 
expensed was $628,000, $604,000 and $564,000, respectively.  
Included in loan acquisition costs is $375,000 paid to Trivest in 
1995 for negotiations on the Company's behalf for the senior 
credit facility.  In 1996, the Company retired 933,504 shares of 
its common stock purchased from an affiliated company at $10 per 
share (see Note 5 above).

9.  Commitments and Contingencies

Leases

The Company leases certain office space, manufacturing facilities 
and various items of equipment under operating leases.  Some 
leases for office and manufacturing space contain renewal options 
and provisions for increases in minimum payments based on various 
measures of inflation.  Rental expense amounted to approximately 
$763,000, $728,000, and $733,000 for the years ended December 31, 
1997, 1996 and 1995, respectively.  Operating lease agreements in 
effect at December 31, 1997, have the following remaining minimum 
payment obligations:

(In thousands)
1998                          $  744
1999                             714
2000                             718
2001                             722
2002                             466
2003 - 2006                    1,069

                                 
Employment Agreements

The Company has employment agreements with certain employees.  
The agreements provide for minimum salary levels and bonuses 
based on a percentage of pre-tax operating income, as defined in 
the agreements.

                                       38

Employee Benefit Plans

The Company has an employee benefit plan established under the 
provisions of Section 401(k) of the Internal Revenue Code.  Full-
time employees who meet various eligibility requirements may 
voluntarily participate in the plan.  The plan provides for 
voluntary employee contributions through salary reduction, as 
well as discretionary employer contributions.  No significant 
Company contributions were made in the years 1997, 1996 and 1995.

Stock Option Plan

In 1994, the Company established a Stock Option Plan (the "Plan") 
as a means to retain and motivate key employees and directors.  
The Compensation Committee of the Board of Directors administers 
and interprets the Plan and is authorized to grant options to all 
eligible employees of the Company and non-employee directors.  
The Plan provides for both incentive stock options and non-
qualified stock options.  Options are granted under the Plan on 
such terms and at such prices as determined by the Compensation 
Committee, except that the per share exercise price of incentive 
stock options cannot be less than the fair market value of the 
Company's common stock on the date of grant.  The Company has 
reserved 1,500,000 shares of common stock for issuance upon 
exercise of stock options.  All options which have been granted 
have a term of ten years and vest ratably over five years.

Pro forma net income and earnings per share have been determined 
as if the Company had accounted for its employee stock options as 
compensation expense based on their fair value.  Fair value was 
estimated at the date of grant using a Black-Scholes option 
pricing model for 1997 and 1996 assuming a risk-free interest 
rate of 6.45% for 1997 and 6.2% for 1996, a volatility factor for 
the Company's common stock of .411 in 1997 and .532 in 1996 and a 
weighted-average expected life of the options of six years.  The 
pro forma information is not likely to be representative of the 
effects of options on pro forma net income in future years 
because the Company is required to include only options granted 
since 1994 in the pro forma information.



                               For the Years Ended December 31,
                               --------------------------------
                                1997        1996          1995
(In thousands)                 ------      ------       -------
Pro forma net income (loss)    $2,068      $8,198       ($4,127)
                               ======      ======       ========

Pro forma income (loss)
   per share, diluted:

Income from continuing
   operations                   $1.41       $0.97         $0.44
(Loss) from discontinued 
   operations, net of taxes     (0.06)      (0.03)        (0.83)
(Loss) from sale of 
   discontinued operations,
   net of taxes                 (1.08)         --            --
Extraordinary item                 --          --         (0.07)
                                ------      ------       -------
Net income (loss)               $0.27       $0.94        ($0.46)
                                ======      ======       =======

                                       39
                                         

Information with respect to WinsLoew's Plan is as follows:



                              1997
                    ----------------------------
                                    Weighted 
                                Average Exercise 
                     Options          Price           1996           1995
                     -------    ----------------    --------       -------- 
Options 
outstanding 
at January 1         671,550         $ 8.34          738,450        525,575
Granted              250,000         $11.14           25,000        305,250
Exercised            (94,725)        $ 7.97          (25,100)            --
Canceled             (41,975)        $ 9.99          (66,800)       (92,375)
                     --------                       ---------       --------
Options
outstanding 
at December 31       784,850         $ 9.19          671,550        738,450
                     =======                        ========       ========
Exercise prices
per share          $5.88-$16.06                   $5.88-$11.63    $5.88-$11.63

Options
exercisable 
at December 31       407,100         $ 9.12          480,400        488,450
                     =======                        ========       ========

Options
available 
for grant at 
December 31          595,325                         803,350        761,550
                     =======                        ========       ========


Information with regard to options outstanding and exercise price 
at December 31 is as follows:

								                        
                                                           Options Exercisable
                                                          at December 31, 1997 
                                                          --------------------
                                               Weighted
            Weighted                           Average            
            Average   Options Outstanding      Remaining                Weighted
Exercise   Exercise ------------------------     Life                   Average
Price        Price    1997    1996    1995    at 12/31/97   Shares      Price
-----------  -----  -------  -------  ------- -----------   -------     --------
$5.88-$6.67  $6.19  291,850  356,250  411,150     7.0       160,250     $6.34
   8.66       8.66   10,250   10,250   10,250     7.2         4,100      8.66
10.00-10.50  10.32  284,750  158,550  158,550     8.0        99,750     10.00
11.13-11.63  11.56  163,000  146,500  158,500     6.4       143,000     11.63
  12.63      12.63   20,000       --       --     9.6            --        --
  16.06      16.06   15,000       --       --     9.8            --        --
                    -------  -------  -------               -------   
Total         9.19  784,850  671,550  738,450     7.4       407,100      9.12
             =====  =======  =======  =======     ===       =======      ====

The estimated weighted average fair value of options granted in 
1997 is $5.56 per option.  The weighted average remaining 
contractual life for options granted in 1997 is 9.4 years.


Litigation and Liability Claims

The Company is, from time to time, involved in routine litigation 
including general liability and worker's compensation claims.  It 
is the opinion of management that sufficient insurance has been 
purchased to cover current and potential general liability and 
worker's compensation claims.  None of such litigation in which 
the Company is presently involved is believed to be material to 
its liquidity, financial position or results of operations.

                                       40

                                         
10.  Supplemental Information

The following balance sheet captions are comprised of the items 
specified below :


                                           December 31,
                                         -----------------
                                           1997      1996
(In thousands)                          -------    -------
Inventories:                             
Raw materials                           $ 7,597    $ 7,569
Work in process                           1,038      2,657
Finished goods                              461        490
                                        -------    -------
                                        $ 9,096    $10,716
                                        =======    =======
Property, plant and equipment:
Land                                    $ 1,751    $ 1,751
Building and improvements                 8,745      8,745
Manufacturing equipment                   6,682      9,693
Office equipment                          1,731      1,529
Construction in progress                     67         19
Vehicles                                    107        128
                                        -------    -------
                                         19,083     21,865
Accumulated depreciation                 (8,763)    (9,911)
                                        --------   --------
                                        $10,320    $11,954
                                        ========   ========
Other accrued liabilities:
Compensation, commissions and 
  employee benefits                     $ 2,254    $ 2,397
Customer deposits                         1,559        882
Income taxes                                971      1,031
Interest                                     88        110
Other                                     2,464        520
                                        --------   --------
                                        $ 7,336    $ 4,940
                                        =======    ========

Depreciation expense for continuing operations was $1,317,000, 
$1,204,000, and $1,181,000 for the years ended December 31, 1997, 
1996 and 1995, respectively.

Accumulated amortization at December 31, 1997 and 1996 related to 
goodwill was $5,564,000 and $4,886,000, respectively.  
Accumulated amortization at December 31, 1997 and 1996 related to 
other intangible assets was $773,000 and $475,000, respectively.

                                       41

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

No events nor occurrences required to be disclosed in this Item 9 have 
occurred.



PART III

ITEM 10.  Directors and Executive Officers of the Registrant

The information required in this Item 10 is incorporated by reference to the 
registrant's definitive Proxy Statement to be filed with the Securities and 
Exchange Commission not later than 120 days after the end of the fiscal year 
covered by this report.


ITEM 11.  Executive Compensation

The information required in this Item 11 is incorporated by reference to the 
registrant's definitive Proxy Statement to be filed with the Securities and 
Exchange Commission not later than 120 days after the end of the fiscal year 
covered by this report.


ITEM 12.  Security Ownership of Certain Beneficial Owners and Management

The information required in this Item 11 is incorporated by reference to the 
registrant's definitive Proxy Statement to be filed with the Securities and 
Exchange Commission not later than 120 days after the end of the fiscal year 
covered by this report.


ITEM 13.  Certain Relationships and Related Transactions

The information required in this Item 11 is incorporated by reference to the 
registrant's definitive Proxy Statement to be filed with the Securities and 
Exchange Commission not later than 120 days after the end of the fiscal year 
covered by this report.

                                      42 

PART IV

ITEM 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)	Documents filed as part of this report:

(1)	Financial Statements:

Reference is made to the index set forth on page 26 of this Annual Report on 
Form 10-K

(2)	Financial Statements Schedules:

The following consolidated financial statement schedule is filed herewith:

                                                   Sequential
                                                   Page Number
                                                   -----------
Schedule II -- Valuation and Qualifying Accounts        48              


Any required information not included in the above-described schedule is 
included in the consolidated financial statements and notes thereto contained 
herein.  All other schedules for which provision is made in the applicable 
accounting regulations of the Securities and Exchange Commission are not 
required under the related instructions or are otherwise not applicable and 
therefore have been omitted.

       (3)   Exhibits:  (An asterisk to the left of an exhibit number denotes
             a management contract or compensatory plan or arrangement required
             to be filed as an exhibit to the Annual Report on Form 10-K)

     Exhibit Description

        2.1  Agreement and Plan of Merger, dated as of September 30, 1994,
             by and among Registrant, Old Winston and Old Loewenstein (1)

        3.1  Registrant's Articles of Incorporation (1)

        3.2  Registrant's Bylaws (1)

      *10.1  Registrant's 1994 Stock Option Plan, As  Amended and Restated
             Effective January 23, 1997(6)

       10.2  Form of Indemnification agreement between the Registrant
             and certain of its directors and executive officers, and
             schedule of parties thereto (10.2) (2)

      *10.3  Employment Agreements between the Registrant and each of Bobby
             Tesney, R. Craig Watts,   Stephen C. Hess, and Vincent A.
             Tortorici, Jr.(10.3) (2)

      *10.4  Investment Services Agreement, dated December 16, 1994, between
             the Registrant and Trivest, Inc. (10.6) (2)

       10.5  Agreement, dated August 1, 1996, between Winston and the Retail,
             Wholesale, and Department Store Union, AFL-CIO (10.8) (1)

	
       10.6  Lease, dated May 24, 1996, between LaSalle National Bank
             and Winston (10.7)  (6)

                                       43


       10.7  Business Lease, dated November 18, 1993, between Loewenstein
             and Emanuel Vanzo (10.21) (2)

       10.8  Lease Agreement by and between Teacher Insurance and Annuity
             Association and Winston Furniture Company of Alabama, Inc.,
             commencing December 15, 1995 (10.23) (4)

       10.9  Lease Agreement, dated as of January 11, 1989, between W. Leslie
             Pelio and Michael Haworth d/b/a Simworth, as amended (10.29) (2)

      10.10  Standard Industrial Lease Milti-tenant, dated as of June 1997,
             between The Mutual Life Insurance Company of New York and
             Continental Engineering Group, Inc., d/b/a Microcenter (7)

      10.11  Stock Purchase Agreement among WinsLoew Furniture, Inc.,
             Continental Engineering Group, Inc., and  certain
             Shareholders, dated February 15, 1995 (10.31) (3)

      10.12  Credit Agreement, dated February 2, 1995, among the Registrant,
             its subsidiaries, and Heller Financial, Inc. (10.32) (3)

      10.13  First Amendment to Credit Agreement, dated February 22, 1995,
             among the Registrant, its subsidiaries, and Heller Financial,
             Inc. (10.17) (4)

      10.14  Second Amendment to Credit Agreement, dated May 8, 1995, among
             the Registrant, its subsidiaries, and Heller Financial, Inc.
             (10.18) (4)

      10.15  Third Amendment to Credit Agreement, dated November 15, 1995,
             among the Registrant, its subsidiaries, and Heller Financial,
             Inc. (10.19) (4)

      10.16  Fourth Amendment to Credit Agreement, dated November 20, 1995,
             among the Registrant, its subsidiaries, and Heller Financial, Inc.
             (10.20) (4)

      10.17  Fifth Amendment to Credit Agreement, dated June 30, 1996 among the
             registrants, its subsidiaries, and Heller Financial, Inc.
             (10.21) (5)

      10.18  Sixth Amendment to Credit Agreement, dated July 1, 1996, among the
             registrants, its subsidiaries, and Heller Financial, Inc.
             (10.22) (5)

      10.19  Seventh Amendment to Credit Agreement, dated January 27, 1997,
             among the registrants, its subsidiaries, and Heller Financial, Inc.
             (10.20) (6)
	 
     *10.20  Registrant's Non-Qualified Supplemental Retirement Plan for Key
             Employees (10.22) (6)

       21.1  Registrant's Subsidiaries (7)

       23.1 Consent of Ernst & Young LLP, Independent Auditors (7)

__________________________

        (1)  Incorporated by reference to the exhibits, shown in parentheses
             and filed with the Registrant's Registration Statement on Form S-4
             (No. 33-85476).

        (2)  Incorporated by reference to the exhibits, shown in parentheses
             and filed with the Registrant's Annual Report on Form 10-K for
             the year ended December 31, 1994

        (3)  Incorporated by reference to the exhibits, shown in parentheses
             and filed with the Registrant's Report on Form 8-K filed
             April 7, 1995.

                                       44
	
        (4)  Incorporated by reference to the exhibits, shown in parentheses
             and filed with the Registrant's Annual Report on Form 10-K for
             the year ended December 31, 1995.

        (5)  Incorporated by reference to the exhibits, shown in parentheses
             and filed with the Registrant's Report on Form 10-Q for the
             quarter ended June 28, 1996.
	
        (6)  Incorporated by reference to the exhibits, shown in parentheses
             and filed with the Registrant's Annual Report on Form 10-K for
             the year ended December 31, 1996.


        (7)  Filed herewith.

        (b)  Reports on Form 8-K

             No reports on Form 8-K were filed by the Registrant during the
             last quarter of the period covered by this report.

        (c)  Exhibits required by Item 601 of Regulation S-K

             The index to exhibits that are listed in Item 14 (a) (3) of this
             report and not incorporated by reference follows the "Signatures"
             section hereof and is incorporated herein by reference.

        (d)  Financial Statements Schedules required by Regulation S-X

             The financial statement schedules required by Regulation S-X which
             are excluded from the Registrant's Annual Report to Shareholders
             for the year ended December 31, 1997, by Rule 14a-3 (b)(1) are
             included above.  See Item 14(a)2 for index.

                                       45

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                WINSLOEW FURNITURE, INC.


							
Date: March 27, 1998            By: /s/ Bobby Tesney
                                   ---------------------
                                        Bobby Tesney
                                        President and Chief Executive Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
registrant in the capacities, and on the dates indicated.


Signature                         Title                             Date

/s/ Bobby Tesney                President, Chief Executive           
-----------------               Officer and Director             March 27, 1998
    Bobby Tesney                (Principal Executive Officer)



/s/ Vincent A. Tortorici, Jr.   Vice President and Chief            
-----------------------------   Financial Officer (Principal     March 27, 1998
    Vincent A. Tortorici, Jr.   Financial and Accounting Officer)



/s/ Earl W. Powell              Chairman of the Board            March 27, 1998
------------------
    Earl W. Powell



/s/ Phillip T. George, M.D.     Director                         March 27, 1998
---------------------------
    Phillip T. George, M.D.



/s/ William F. Kaczynski, Jr.   Director                         March 27, 1998
----------------------------
    William F. Kaczynski, Jr.


 
/s/ Peter W. Klein              Director                         March 27, 1998
------------------                    
    Peter W. Klein



/s/ M. Miller Gorrie            Director                         March 27, 1998
---------------------
    M. Miller Gorrie



/s/ James S. Smith              Director                         March 27, 1998
------------------
    James S. Smith



/s/ Henry C. Cheek              Director                         March 27, 1998
------------------                    
    Henry C. Cheek

                                       46

 
/s/ William H. Allen, Jr.       Director                         March 27, 1998
-------------------------
    William H. Allen, Jr.



/s/ Sherwood M. Weiser          Director                         March 27, 1998
----------------------               
    Sherwood M. Weiser

                                       47

<TABLE>
<CAPTION>
SCHEDULE II - VALUATION OF QUALIFYING ACCOUNTS
WINSLOEW FURNITURE, INC.
DECEMBER 31, 1997



------------------------------------------------------------------------------------------------------------------------
| COL. A                             COL. B    |       COL. C       |       COL. D      |    COL. E   |     COL. F     |
------------------------------------------------------------------------------------------------------------------------
|                                   Balance at |                 Additions              |             |                |
|                                   Beginning  |     Charged to     |      Charged to   |             |   Balance at   |
|     Description                   of Period  |  Costs and Expense |   Other Accounts  |  Deductions |  End of Period |
------------------------------------------------------------------------------------------------------------------------

<S>                                   <C>             <C>                    <C>        <C>                <C>
 Year ended December 31, 1995
 Allowance for doubtful accounts       $  430,000      $  240,000               --       ($  212,000)(1)    $  458,000
                                       ==========      ==========            =======     ===============    ==========


 Year ended December 31, 1996
 Allowance for doubtful accounts       $  458,000      $1,699,000               --       ($  125,000)(1)    $2,032,000
                                       ==========      ==========            =======     ===============    ==========


 Year ended December 31, 1997
 Allowance for doubtful accounts       $2,032,000      $   11,000               --       ($1,255,000)(1)    $  788,000
                                       ==========      ==========            =======     ===============    ==========



 Year ended December 31, 1996
 Allowance for excess and
 obsolete inventory                    $  142,000      $  438,000               --       ($  131,000)(2)    $  449,000
                                       ==========      ==========            =======     ===============    ==========

 Year ended December 31, 1997
 Allowance for excess and
 obsolete inventory                    $  449,000      $1,075,000               --       ($1,189,000)(2)    $  335,000
                                        ==========      ==========            =======     ===============    ==========



 (1)  Uncollectible accounts receivable written-off.
 (2)  Excess and obsolete inventory written-off.


</TABLE>

                                      48


                             EXHIBIT 10.10

STANDARD INDUSTRIAL LEASE-MULTI-TENANT

1. 	Basic Provisions (the "Basic Provisions").

	I .1 Parties: This Lease (the "Lease"), dated for 
reference purposes only June _, 1997, is made by and between 
THE MUTUAL LIPE INSURANCE COMPANY OP NEW YORK, a New York 
corporation ("Landlord), and CONTINENTAL ENGINEERING GROUP, 
INC., California corporation, dba "MicroCentre" ("Tenant).

	1.2 Premises: That certain real property, including all 
improvements therein or to be provided by Landlord under the 
terms of this Lease, commonly known as 530J N. Irwindale 
Avenue, and consisting of approximately 91,655 square feet 
of rentable area located in Irwindale, California, as 
depicted on Exhibit A hereto (the "Premises"). (See 
Paragraph 2 for further provisions.) The Premises are a 
portion of a building consisting of approximately 148,953 
square feet of rental area, herein referred to as the 
"Building." The Premises, the Building, the Common Areas (as 
defined in Paragraph 2.3 below), and the land upon which the 
same are located, along with all other buildings and 
improvements thereon, are herein collectively referred to as 
the "Industrial Center," as more particularly depicted on 
the site plan attached hereto as Exhibit B.

	1.3	Term: five (5) years and two (2) months (the 
Original Terms) commencing on May 1, 1997 ("Commencement 
Date"), and ending June 30, 2002 (the Expiration Date), as 
the same may be adjusted pursuant to Paragraph 3 below.

	1.4	Base Rent: $29,329.60 per month (the "Base Rent") 
($0.32 per rental square foot per month), payable on the 1st 
day of each month commencing on the Commencement Date. (See 
Paragraph 4 for further provisions.) 	See Addendum 
Paragraph C.

1.5	Base Rent Paid Upon Execution: None.

1.6	Deposits: $21,857.00 (the "Security Deposit"), and 
$0.00 (the "Cleaning Deposits). (See Paragraph 5 for further 
provisions.)	See Addendum Paragraph D.

	1.7	Permitted Use: Manufacturing and distribution of 
computer workstations, furniture and related items, and for 
sales and general office administration in connection 
therewith. (See Paragraph 6 for further provisions.)

1.8	-Real Estate Brokers: The following real estate brokers 
(collectively, the "Broker") and brokerage relationships 
exist in this transaction and are consented to by the 
parties (check applicable boxes): N/A

	
__Landlord exclusively ("Landlord's Broker"); _ both 
Landlord and Tenant, and __ Tenant exclusively (tenants 
Broker). (See Paragraph 15 for further provisions.)

	1.9	Guarantor. The obligations of the Tenant under 
this Lease are to be guaranteed by	N/A

	(Guarantor") pursuant to a Guaranty of Obligations of 
Tenant pursuant to Lease in the form attached hereto as 
Exhibit E. (See paragraph 37 for funkier provisions.)

	1.10	Addenda. Attached hereto is an Addendum, 
consisting of Paragraphs A. through E., and Exhibits A 
through E, all of which constitute a part of this Lease.

2.	Premises, Parking and Common Areas.	See 
Addendum Paragraph A.
2.1  Premises. Landlord hereby leases to Tenant and 
Tenant leases from Landlord the Premises for the 
term, at the rental, and upon all of the conditions 
set forth herein. Unless otherwise provided herein, 
any statement of square footage set forth in this 
Lease, or that may have been used in calculating 
rental, is an approximation which Landlord may 
adjust from time to time in accordance with the 
standard method for measuring floor area in 
comparable premises established by the Building 
Owners and Managers Association International 
("BOMA"). Upon any such remeasurement, Landlord 
shall notify Tenant of the new square footage of the 
Premises and the Base Rent, which change in Base 
Rent shall be effective as of the date of Landlord's 
notice.

	2.2 Vehicle Parking. Tenant shall be entitled to 
Tenant's prorate share of vehicle parking spaces for the 
Building, unreserved and unassigned, on those portions of 
the Common Areas designated by Landlord for parking. Tenant 
shall not use more parking spaces than said number. Said 
parking spaces shall be used only for parking by vehicles no 
larger than full size passenger automobiles or pick-up 
trucks, herein called "Permitted Size Vehicles." Vehicles 
other than Permitted Size Vehicles are herein referred to as 
"Oversized Vehicles."

	2.2.1 Tenant shall not permit or allow any vehicles 
that belong to or are controlled by Tenant or Tenant's 
employees, suppliers, shippers, customers, or invitees to be 
loaded, unloaded, or parked in areas other than those 
designated by Landlord for such activities.

	2.2.2 If Tenant permits or allows any of the prohibited 
activities described in Paragraph 2.2 of this Lease, then 
Landlord shall have the right, without notice, in addition 
to such other rights and remedies that it may have, to 
remove or tow away the vehicle involved and charge the cost 
to Tenant, which cost shall be immediately payable upon 
demand by Landlord.

	2.3 Common Areas-Definition. The term "Common Areas" is 
defined as all areas and facilities outside the Premises and 
within the exterior boundary line of the Industrial Center 
that are provided and designated by the Landlord from time 
to time for the general non-exclusive use of Landlord, 
Tenant and of other tenants of the Industrial Center and 
their respective employees, suppliers, shippers, customers 
and invitees, including parking areas, loading and unloading 
areas, trash areas, roadways, sidewalks, walkways, parkways, 
driveways and landscaped areas.

	2.4 Common Areas - Tenant's Rights. Landlord hereby 
grants to Tenant, for the benefit of Tenant and its 
employees, suppliers, shippers, customers and invitees, 
during the term of this Lease, the non-exclusive right to 
use, in common with others entitled to such use, the Common 
Areas as they exist from time to time, subject to any 
rights, powers, and privileges reserved by Landlord under 
the terms hereof or under the terms of any rules and 
regulations or restrictions governing the use of the 
Industrial Center. Under no circumstances shall the right 
herein granted to use the Common Areas be deemed to include 
the right to store any property, temporarily or permanently, 
in the Common Areas. Any such storage shall be permitted 
only by the prior written consent of Landlord or Landlord's 
designated agent, which consent may be revoked at any time. 
In the event that any unauthorized storage shall occur then 
Landlord shall have the right, without notice, in addition 
to such other rights and remedies that it may have, to 
remove the property and charge the cost to Tenant, which 
cost shall be immediately payable upon demand by Landlord.

2.5	Common Areas-Rules and Regulations. Landlord or such 
other person(s) as Landlord may appoint shall have 
the exclusive
	I

control and management of the Common Areas and shall have 
the right, from time to time, to establish, modify, amend 
and enforce reasonable rules and regulations with respect 
thereto. Tenant agrees to abide by and conform to all such 
rules and regulations, and to cause its employees, 
suppliers, shippers, customers, and invitees to so abide and 
conform. Landlord shall not be responsible to Tenant for the 
non-compliance with said rules and regulations by other 
tenants of the Industrial Center.

2.6	Common Areas-Changes. Landlord shall have the right, in 
Landlord's sole discretion, from time to time:

	(a) To make changes to the Common Areas, including, 
without limitation, changes in the location, size, shape and 
number of driveways, entrances, parking spaces, parking 
areas, loading and unloading areas, ingress, egress, 
direction of traffic, landscaped areas and walkways; 
provided, however, that permanent: changes made by Landlord 
(other than as n may be required by law) shall not 
materially interfere with Tenant's use of the Premises for 
the permitted Use;

(b)	To close temporarily any of the Common Areas for 
maintenance purposes, so long as reasonable access to the 
Premises

remains available;

(c)	To designate other land outside the boundaries of the 
Industrial Center to be a part of the Common Areas;
(d)	To add additional buildings and improvements to the 
Common Areas;

	(e)	To use the common areas while engaged in making 
additional improvements, repairs or alterations to the 
industrial Center, or any portion thereof;

	(f)	To do and perform such other acts and make such 
other changes in, to or with respect to the Common Areas and 
Industrial Center as Landlord may, in the exercise of sound 
business judgment, deem to be appropriate.

3.	Term. 1'	See 
Addendum Paragraph B.
	3.1 	Term. The Commencement Date, the Expiration Date 
and the Original Term of this Lease are as 
specified in Paragraph 1.3.

	3.2 Delay in Possession. Notwithstanding said 
Commencement Date, if for any reason Landlord cannot deliver 
possession of the Premises to Tenant on said date, Landlord 
shall not be subject to any liability therefor, nor shall 
such failure affect the validity of this Lease or the 
obligations of Tenant hereunder or extend the term hereof, 
but in such case, Tenant shall not be obligated to pay rent 
or perform any other obligation of Tenant under the terms of 
this Lease, except as may be otherwise provided in this 
Lease, until possession of the Premises is tendered to 
Tenant.

	3.3 Early Possession. If Tenant occupies the Premises 
prior to said Commencement Date, such occupancy shall be 
subject to all provisions of this Lease, such occupancy 
shall not advance the Expiration Date, and Tenant shall pay 
rent for such period at the initial monthly rates set forth 
below.

4.	Rent.		See 
Addendum Paragraph C.
	4.1	Base Rent. Commencing on the Commencement Date, 
Tenant shall pay to Landlord Base Rent for the Premises, in 
advance on the first day of each month during the Term, 
without any offset or deduction. Rent for any period during 
the term hereof which is for less than one month shall be a 
pro rata portion of the Base Rent. Rent shall be payable in 
lawful money of the United States to Landlord at the address 
stated herein or to such other persons or at such other 
places as Landlord may designate in writing.

	4.2 Additional Rent; Rent. As used in this Lease, the 
term "rent" shall mean Base Rent and additional rent, and 
the term additional rent" shall mean personal property taxes 
and all other amounts payable by Tenant to Landlord pursuant 
to this Lease other than Base Rent. Where no other time is 
stated herein for payment, payment of any amount due from 
Tenant to Landlord hereunder shall be made within ten (10) 
days after Tenant's receipt of Landlord's invoice or 
statement therefor.

5.	Deposits.	See 
Addendum Paragraph D.
	Tenant shall deposit with Landlord upon execution 
hereof the Deposits set forth in Paragraph 1.6. The Security 
Deposit shall be held as security for Tenant's faithful 
performance of Tenant's obligations hereunder. If Tenant 
fails to pay rent or other charges due hereunder, or 
otherwise defaults with respect to any provision of this 
Lease, Landlord may use, apply or retain all or any portion 
of the Security Deposit for the payment of any rent or other 
charge in default or for the payment of any other sum to 
which Landlord may become obligated by reason of Tenant's 
default, or to compensate Landlord for any loss or damage 
which Landlord may suffer thereby. If Landlord so uses or 
applies all or any portion of the Security Deposit, Tenant 
shall within ten (10) days are written demand therefor 
deposit cash with Landlord in an amount sufficient to 
restore said deposit to the full amount then required of 
Tenant. If the monthly rent shall, from time to time, 
increase during the term of this Lease, Tenant shall, at the 
time of such increase, deposit with Landlord additional 
money as an additional security deposit so that the total 
amount of the Security Deposit held by Landlord shall at all 
times bear the same proportion to the then current Base Rent 
as the initial Security Deposit bears to the initial Base 
Rent set forth in Paragraph 1.4. Landlord shall not be 
required to keep any Deposit separate from its general 
accounts. If Tenant performs all of Tenant's obligations 
hereunder, the Security Deposit (only), or so much thereof 
as has not therefore been applied by Landlord, shall be 
returned, without payment of interest or other increment for 
its use, to Tenant (or, at Landlord's option, to the last 
assignee, if any, of Tenant's interest hereunder) at the 
expiration of the term hereof, and after Tenant has vacated 
the Premises. If Tenant fails to surrender the Premises to 
Landlord in the condition required hereunder, including 
without limitation the provisions of Paragraph 7.2(c) below, 
Landlord shall be entitled to have the Premises cleaned and 
repaired to restore them to the condition so required, and 
may retain the cost of such cleaning and repairing from the 
Cleaning Deposit. No trust relationship is created herein 
between Landlord and Tenant with respect to any Deposit.

6.	Use.		See 
Addendum Paragraph E.
	6.1	Use. The Premises shal1 be used and occupied only 
for the purpose set forth in Paragraph 1.7 and for no other 
purpose. Tenant shall not use or permit the use of the 
Premises in a manner that creates waste or a nuisance, or 
that disturbs owners and/or occupants of, or causes damage 
to, neighboring premises or properties.

6.2 	Compliance with Covenants, Conditions and Building 
Restrictions.

	(a) If and to the extent that the improvements on the 
Premises do not comply with any applicable covenant or 
restriction of record or applicable building code, 
regulation or ordinance in effect on the Commencement Date 
(other than those which apply because of the nature of 
Tenant or its business or the use to which Tenant will put 
the Premises or to any alterations or Utility installations 
(as defined in Paragraph 7.3(a)) made or to be made by 
Tenant) then Landlord shall, except as otherwise provided in 
this Lease, promptly after receipt of written notice from 
Tenant setting forth with specificity the nature and extent 
of such non-compliance given within thirty (30) days after 
the Commencement Date, rectify the same at Landlord's 
expense. If Tenant does not give Landlord written notice of 
a non-compliance within thirty (30) days following the 
Commencement Date, correction of that non-compliance shall 
be the obligation of Tenant at Tenant's sole cost and 
expense.

	(b) Except as provided in Paragraph 6.2(a) Tenant 
shall, at Tenant's expense, promptly comply with all 
applicable statutes, ordinances, rules, regulations, orders, 
covenants and restrictions of record, and requirements of 
any fire insurance underwriters or rating bureaus, now in 
effect or which may thereafter come into effect, whether or 
not they reflect a change in policy from that now existing, 
during the term or any part of the term hereof, relating in 
any manner to the Premises and the occupation and use by 
Tenant of the Premises and of the Common Areas. Tenant shall 
not use or permit the use of the Premises or the Common 
Areas in any manner that will tend to create waste or a 
nuisance or shall tend to disturb other occupants of the 
Industrial Center.

6.3	Condition of Premises. 	See Addendum 
Paragraph B.

	(a) Landlord shall deliver the Premises to Tenant clean 
and free of debris on the Commencement Date (unless Tenant 
is already in possession thereof). If the plumbing, fire 
sprinkler system, lighting, air conditioning, heating, or 
loading doors, of any, in the Premises as of the 
Commencement Date, other than those constructed by Tenant, 
shall not be in good operating condition on the Commencement 
Date, Landlord shall, except as otherwise provided in this 
Lease, promptly after receipt of written notice from Tenant 
setting forth with specificity the nature and extent of such 
noncompliance and given within fifteen (1S) days after the 
Commencement Date, rectify same at Landlord's expense. If 
Tenant does not give Landlord written notice of a non-
compliance within fifteen (1 S) days after the Commencement 
Date, correction of that noncompliance shall be the 
obligation of Tenant at Tenant's sole cost and expense.

	(b) except as otherwise provided in subparagraph (a) 
above or exhibit C to this Lease, Tenant hereby accepts the 
Premises in their condition existing as of the Lease 
Commencement Date or the date that Tenant takes possession 
of the Premises, whichever is earlier, subject to all 
applicable zoning, municipal, county and state laws, 
ordinances and regulations governing and regulating the use 
of the Premises, and any covenants or restrictions of record 
and accepts this Lease subject thereto and to al1 matters 
disclosed thereby and by any exhibits attached hereto. 
Tenant acknowledges that neither Landlord nor Landlord's 
agent has made any representation or warranty as to the 
condition of the Premises, or the present or future 
suitability of the Premises, the Building or the Industrial 
Center for the conduct of Tenant's business.

6.4 	Hazardous Materials.

	(a) Tenant covenants and agrees that it shall not cause 
or permit any Hazardous Material (as defined below) to be 
brought upon, kept, or used in or about the Premises by 
Tenant or Tenant's agents, employees, contractors, invitees 
or any other party for whom Tenant is responsible (tenant's 
Agents). The foregoing covenant shall not extend to 
materials typically found or used in general office 
applications so long as (I) such materials and any equipment 
which generates such materials are maintained only in such 
quantities as are reasonably necessary for Tenant's 
operations in the Premises, (ii) such materials are used 
strictly in accordance with the manufacturers' instructions 
therefor, (iii) such materials are not disposed of in or 
about the Premises in a manner which would constitute a 
release or discharge thereof, and (iv) all such materials 
and any equipment which generates such materials are removed 
from the Premises by Tenant upon the expiration or earlier 
termination of this Lease. Any use, storage, generation, 
disposal, release or discharge by Tenant of Hazardous 
Materials in or about the Premises as is permitted hereunder 
shall be carried out in compliance with all applicable 
federal, state and local laws, ordinances, rules and 
regulations. Moreover, no hazardous waste resulting from any 
operations by Tenant shall be stored or maintained by Tenant 
in or about the Premises for more than ninety (90) days 
prior to removal by Tenant. Tenant shall, annually within 
thirty (30) days after Tenant's receipt of Landlord's 
written request therefor, provide to Landlord a written list 
identifying any Hazardous Materials then maintained by 
Tenant in the Premises, the use of each such Hazardous 
Material and the approximate quantity of each such Hazardous 
Material so maintained by tenant, together with written 
certification by Tenant stating, in material, that neither 
Tenant nor any person for whom tenant is responsible has 
released or discharged any Hazardous Materials in or about 
the Premises.

	(b) In the event that Tenant proposes to conduct any 
use or to operate any equipment which will or may utilize or 
generate a Hazardous Material other than as specified in 
subparagraph (a) above, tenant shall first in writing submit 
such use or equipment to Landlord for approval. No approval 
by Landlord shall relieve tenant of any obligation of Tenant 
pursuant to this Paragraph 6.4, including the removal and 
cleanup and indemnification obligations imposed upon tenant 
by this Paragraph 6.4. Tenant shall, within five (5) days 
after receipt thereof, furnish to Landlord copies of all 
notices or other communications received by tenant with 
respect to any actual or agreed release or discharge of any 
Hazardous Material in or about the Premises and shall, 
whether or not Tenant receives any such notice or 
communication, notify Landlord in writing of any discharge 
or release of Hazardous Material by Tenant or anyone for 
whom Tenant is responsible in or about the Premises. In the 
event that Tenant is required to maintain any Hazardous 
Materials license or permit in connection with any use 
conducted by Tenant or any equipment operated by Tenant in 
the Premises, copies of each such license or permit, each 
renewal or revocation thereof and any communication relating 
to suspension, renewal or revocation thereof Shall be 
furnished to Landlord within five (5) days after receipt 
thereof by Tenant. Compliance by tenant with the two 
immediately preceding sentences shall not relieve Tenant of 
any other obligation of tenant pursuant to this Paragraph 
6.4.

(c)  Upon any violation of the foregoing covenants, Tenant 
shall be obligated, at Tenant's sole cost, to clean-up and 
remove from the Premises all Hazardous Materials introduced 
into the Premises by Tenant or any person or entity for whom 
tenant is responsible. Such clean-up and removal shall 
include all testing and investigation required by any 
governmental authorities having jurisdiction and preparation 
and implementation of any remedial action plan required by 
any governmental authorities having jurisdiction. AH such 
clean-up and removal activities of Tenant shall, in each 
instance, be conducted to the satisfaction of Landlord and 
all governmental authorities having jurisdiction. Landlord's 
right of entry pursuant to Paragraph 32 shall include the 
right to enter and inspect the Premises for violations of 
tenant's covenants herein.

	(d) Tenant shall indemnify, defend and hold harmless 
Landlord, its partners, and its and their successors, 
assigns, partners, officers, employees, agents, lenders and 
attorneys from and against any and all claims, liabilities, 
losses, actions, costs and expenses (including attorneys' 
fees and costs of defense) incurred by such indemnified 
persons, or any of them, as the result of (i) the 
introduction into or about the Premises by Tenant or anyone 
for whom tenant is responsible of any Hazardous Materials, 
(ii) the usage, storage, maintenance, generation, 
disposition or disposal by Tenant or anyone for whom Tenant 
is responsible of Hazardous Materials in or about the 
Premises, (iii)) the discharge or release in or about the 
Premises by Tenant or anyone for whom Tenant is responsible 
of any Hazardous Materials, (iv) any injury to or death of 
persons or damage to or destruction of property resulting 
from the use, introduction, maintenance, storage, 
generation, disposal, disposition, release or discharge by 
Tenant or anyone for whom Tenant is responsible of Hazardous 
Materials in or about the Premises, and (v) any failure of 
tenant or anyone for whom Tenant is responsible to observe 
the foregoing covenants of this Paragraph 6.4.

	(e) Upon any violation of the foregoing covenants, 
Landlord shall be entitled to exercise all remedies 
available to a landlord against a defaulting tenant, 
including, but not limited to, those set forth in Paragraph 
13.2. Without limiting the generality of the foregoing, 
tenant expressly agrees that upon any such violation 
Landlord may, at its option, (i) immediately terminate this 
Lease or (iii) continue this Lease in effect until 
compliance by Tenant with its clean-up and removal covenant 
notwithstanding any earlier expiration date of the term of 
this Lease. No action by Landlord hereunder shall impair the 
obligations of tenant pursuant to this Paragraph 6.4.

	(f) As used in this Paragraph 6.4, "Hazardous 
Materials" is used in its broadest sense and shall include 
any petroleum based products, pesticides, paints and 
solvents, polychlorinated biphenyl, lead, cyanide, DDT, 
acids, ammonium compounds and other chemical products and 
any material or material defined or designated as hazardous 
or toxic, or other similar term, by any federal, state or 
local environmental statute, regulation, or ordinance 
affecting the Premises presently in effect or that may be 
promulgated in the future, as such statutes, regulations and 
ordinances may be amended from time to time, including, but 
not limited to, the following statutes: (i) Resource 
Conservation and Recovery AS of 1976, 42 U.S.C. * 6901 et 
seq., (iii) Comprehensive Environmental Response, 
Compensation, and Liability AS of 1980, 42 U.S.C. * 9601 CT 
seq., (iii) Clean Air Act, 42 U.S.C. * 7401-7626, (iv) 
Water pollution Control Act (Clean Water Act of 1977), 33 
U.S.C. * 1251 CT seq., (v) Insecticide, Fungicide, and 
Rodenticide Act (Pesticide Act of 1987), 7 U.S.C. * 135 et 
seq., (vi) Toxic Materials Control Act, 15 U.S.C. * 2601 ct 
seq., (vii) Safe Drinking Water Act, 42 U.S.C. * 300(f) ct 
seq., (viii) National Environmental Policy Act (NEPA) 42 
U.S.C. * 4321 et seq., (ix) Refuse Act of lA99, 33 U.S.C. * 
407 et seq., and (x) California Health and Safety Code * 
25316 ct seq.

	(g) By its signature to this Lease, tenant confirms 
that it has conducted its own examination of the Premises 
and the Industrial Center with respect to Hazardous 
Materials and accepts the same "AS IS" and with no Hazardous 
Materials present thereon. Tenant acknowledges that 
incorporation of any material containing asbestos into the 
Premises is absolutely prohibited. Tenant agrees, represents 
and warrants that it Shall not incorporate or permit or 
suffer to be incorporated, knowingly or unknowingly, any 
material containing asbestos into the Premises.

	6.5 Tenant's Compliance with Law. Tenant Shall not use 
the Premises in any way (or permit or suffer anything to be 
done in or about the same) which Will conflict with any law, 
statute, ordinance or governmental rule or regulation or any 
covenant, condition or restriction (whether or not of public 
record) affecting the Premises, now in force or which may 
hereafter be enacted or promulgated, including, the 
provisions of any city or county zoning codes regulating the 
use thereof. Tenant shall, at its sole cost and expense, 
promptly comply with (i) all laws, statutes, ordinances and 
governmental rules and regulations, now in force or which 
may hereafter be in force, applicable to Tenant or its use 
of or business or operations in the Premises, including 
without limitation Prop. 65, if applicable, (ii) all 
requirements, and other covenants, conditions and 
restrictions, now in force or which may hereafter be in 
force, which affect the Premises, and (iii) all 
requirements, now in force or which may hereafter be in 
force, of any board of free underwriters or other similar 
body now or hereafter constituted relating to or affecting 
the condition, use or occupancy of the Premises 
(collectively, "Applicable Laws "). The judgment of any 
court of competent jurisdiction or the admission by tenant 
in any action against tenant, whether Landlord be a party 
thereto or not, that Tenant has violated any law, statute, 
ordinance, governmental rule or regulation or any 
requirement, covenant, condition or restriction shall be 
conclusive of the fact as between Landlord and Tenant. It is 
expressly understood and agreed that, subject to performance 
by Landlord of the work described in the Work Letter, if 
any, attached as an exhibit hereto, Tenant is accepting the 
Premises "AS Is, in its present state and condition, without 
any representations or warranties from Landlord of any kind 
whatsoever, either express or implied, with respect to the 
Premises, including compliance of the Premises with The 
Americans With Disabilities Act, Title 24 and the rules and 
regulations promulgated thereunder, as amended from time to 
time (Collectively, the "Agent). Except as otherwise 
provided for in the Work Lenore, ff. Tenant's use of the 
Premises or operations therein cause Landlord to incur any 
obligation under the ADA, as reassemble determined by 
Landlord, then Tenant Shall reimburse Landlord for 
Landlord's costs and expenses in connection therewith. If 
Tenant's initial use of the Premises is nor a place of 
public accommodation" within the meaning of the ADA, then 
Tenant may not thereafter change the use of the Premises to 
cause the Premises to become a "place of public 
accommodation." In the event that tenant desires or is 
required hereby to make alteration, improvements, additions 
or Utility installations (as defined in Paragraph 7.3(a) 
below) to the Premises in order to satisfy its obligation 
under the ADA, then all such alteration, improvements, 
additions or Utility Installations shall be subject to 
Paragraph 7.3 below, and shall be performed at Tenant's sole 
cost and expense. Tenant shall be responsible for insuring 
that the Premises and Tenant's use thereof and operation 
therein fully and completely comply with the ADA.

	6.6 Inspection; Compliance. Landlord and Landlord's 
lender(s) Shall have the right to enter the Premises at any 
time, in the case of an emergency, and otherwise at 
reasonable times, for the purpose of inspecting the 
condition of the Premises and for verifying compliance by 
tenant with this Lease and all Applicable Laws (as defined 
in Paragraph 6.5), and to employ experts and/or consultants 
in connection therewith and/or to advise Landlord with 
respect to Tenant's activities, including, but not limited 
to, the installation, operation, use, monitoring, 
maintenance or removal of any Hazardous Material or storage 
tank on or from the Premises. The costs and expenses of any 
such inspections shall be paid by the party requesting same, 
unless a default or breach of this Lease, violation of 
Applicable Law or a contamination, caused or materially 
contributed to by tenant, is found to exist or be imminent, 
or unless the inspection is requested or ordered by a 
governmental authority as the result of any such existing or 
imminent violation or contamination, in which case Tenant 
shall upon request reimburse Landlord's lender, as the case 
may be, for the costs and expense of such inspections with 
interest at the rate set forth in Paragraph 13.5(a) below 
accruing from and after such cost or expire was incurred by 
Landlord or Landlord's lender through the date of payment in 
full thereof.

	 7. 	Maintenance, Repairs, Alterations and Common Area 
Services.

	7.1 Landlord's Obligations. Subject to the provision of 
Paragraphs 6 (Use), 7.2 (Tenant's Obligations) and 9 (Damage 
or Destruction) and except for damage caused by any 
negligent or intentional act or omission of Tenant, Tenant's 
employees, suppliers, shippers, customers, or invitees, in 
which event Tenant shall repair the damage, Landlord, at 
Landlord's expense, shall keep in good condition and repair 
the foundation, exterior walls, structural condition of 
interior bearing walls, the heating, ventilating and air 
conditioning system outside the Premises but serving the 
Premises, and roof of the Premises, as well as the parking 
lots, walkways, driveways, landscaping, fences, signs and 
utility installation of the Common Areas and all parts 
thereof. Landlord shall not, however, be obligated to paint 
the exterior or interior surface of exterior walls, nor 
shall landlord be required to maintain, repair or replace 
windows, doors or plate glass of the Premises. Landlord 
shall have no obligation to make repairs under this 
Paragraph 7.1 until a reasonable time after receipt of 
written notice from Tenant of the need for such repairs. 
tenant expressly waives the benefits of any statute now or 
hereafter in effect which would otherwise afford Tenant the 
right to make repairs at Landlord's expire or to terminate 
this Lease because of Landlord's failure to keep the 
Premises in good order, condition and repair. Landlord shall 
not be liable for damages or loss of any kind or mature by 
reason of Landlord's failure to furnish any Common Area 
services when such failure is caused by accident, breakage, 
repairs, strikes, lockout, or other labor disturbances or 
disputes of any character, or by any other cause beyond the 
reasonable control of Landlord.

7.2 	Tenant's Obligations.

	(a) Subject to the provisions of Paragraphs 6 (Use), 
7.1 (Landlord's Obligations), and 9 (Damage or Destruction), 
Tenant, at Tenant's expense, shall keep in good order, 
condition and repair the Premises and every part thereof 
(whether or not the damaged portion of the Premises or the 
means of repairing the same are reasonably or readily 
accessible to tenant) including, without limiting the 
generality of the foregoing, all plumbing, electrical and 
lighting facilities and equipment within the Premises, 
fixtures, interior walls and interior surfaces of exterior 
walls, ceilings, windows, doors, plate glass and skylights 
located within the Premises.

	(b) If Tenant fails to perform Tenant's obligations 
under this Paragraph 7.2 or under any other paragraph of 
this Lease, Landlord may enter upon the Premises after prior 
written notice to Tenant (except in the case of emergency 
dept., a situation involving a threat of property damage or 
personal injury), in which case no notice shall be 
required)), perform such obligations on Tenant's behalf and 
put the Premises in good order, condition and repair, and 
the cost thereof together with interest thereon from and 
after Landlord incurs the same at the maximum rate then 
allowable by law shall be due and payable as additional rent 
to Landlord together with Tenant's next Base Rent 
installment.

	(c) On the last day of the term hereof, or on any 
sooner termination, tenant shall surrender the Premises to 
Landlord in the same condition as received, ordinary wear 
and tear excepted, clean and free of debris. Any damage or 
deterioration of the Premises shall not be deemed ordinary 
wear and tear if the same could have been prevented by good 
maintenance practices. Tenant shall repair any damage to the 
Premises occasioned by the installation or removal of 
tenant's trade fixtures, alterations, furnishings and 
equipment. Notwithstanding anything to the contrary 
otherwise stated in this Lease, subject to Landlord's right 
to require Tenant to remove the same pursuant to Paragraph 
7.3(a) below, Tenant shall leave all Utility Installations" 
(as defined in such Paragraph 7.3(a)) on the Premises in 
good operating condition.

7.3 	Alterations and Additions.

	(a) Tenant Shall not, without Landlord's prior written 
consent, make any alteration, improvements, additions, or 
Utility Installation in, on or about the Premises, or the 
Industrial Center. except for interior, nonstructural 
alterations to the Premises, consistent in All respects with 
the initial tenant improvements made in the Premises, not 
exceeding S2,500 in cumulative costs during the term of the 
Lease. In any event, whether or not in excess of $2,500 in 
cumulative cost, Tenant shall make no change or alteration 
to the exterior (or visible from the exterior) of the 
Premises, the Building or the Industrial Center without 
Landlord's prior written consent. As used in this Paragraph 
7.3, the term "Utility installation" shall mean carpeting, 
window coverings, air lines, telephone, data and other 
cabling, power panels, electrical distribution systems, 
lighting fixtures, space heaters, air condition, plumbing 
and fencing. Landlord may require that tenant remove any or 
all of said alterations, improvements, additions or Utility 
installations, regardless of when installed and whether at 
Tenant's or Landlord's expense, at the expiration of the 
term, and restore the Premises and the Industrial Center to 
their prior condition. Landlord may require Tenant to 
provide Landlord, at Tenant's sole cost and expose, a lien 
and completion bond in an amount equal to one and one-half 
times the estimated cost of such improvements, to insure 
Landlord against any liability for mechanic's and 
materialmen's liens and to insure completion of the work. 
Should Tenant make any alterations, improvements, addition 
or Utility installations without the prior approval of 
Landlord, Landlord may, at any time during the term of this 
Lease, require that Tenant remove any or all of the same.

	(b) Any alteration, improvement, addition or Utility 
installations in or about the Premises or the Industrial 
Center that tenant shall desire to make and which requires 
the comment of the Landlord shall be presented to Landlord 
in written form, with proposed detailed plan and the name of 
the contractor Tenant proposes to perform the same. If 
Landlord shall give its consent, the consent shall be deemed 
conditioned upon Tenant acquiring a permit to do so from 
appropriate governmental agencies, the furnishing of a copy 
thereof to Landlord prior to the commencement of the work 
and the compliance by tenant of all conditions of said 
permit in a prompt and expeditious manner.

	(c) Tenant shall pay, when due, all claims for labor or 
materials furnished or agreed to have been furnished to or 
for Tenant at or for use in the Premises, which claims are 
or may be secured by any mechanics' or materialmen's lien 
against the Premises, or the Industrial Center, or any 
interest therein. Tenant shall give Landlord not less than 
twenty (20) days' notice prior to the commencement of any 
work in the Premises, and Land lord shall have the right to 
post notices of non-responsibility in or on the Premises or 
the Building as provided by law. If Tenant Shall, in good 
faith, contest the validity of any such lien, claim or 
demand, then Tenant shall, at its sole expense defend itself 
and Landlord against the same and Shall pay and satisfy any 
such adverse judgment that may be rendered thereon before 
the enforcement thereof against the Landlord or the Premises 
or the Industrial Center, upon the condition that Tenant 
Shall furnish to Landlord a surety bond satisfactory to 
Landlord in an amount equal to such contested lien claim or 
demand indemnifying Landlord against liability for the same 
and holding the Premises and the Industrial Center free from 
the effect of such lien or claim. In addition, Landlord may 
require Tenant to pay Landlord's attorneys' fees and costs 
in participating in such action if Land lord shall decide it 
is to Landlord's best interest to do so.

	(d) All alterations, improvements, additions and 
Utility installations (whether or not such Utility 
installations constitute trade fixtures of Tenant), which 
may be made on the Premises shall be the property of 
Landlord and shall remain upon and be surrendered with the 
Premises at the expiration of the Lease term, unless 
Landlord requires their removal pursuant to Paragraph 
7.3(a). Notwithstanding the provision of this Paragraph 
7.3(d), Tenant's machinery and equipment, other than Utility 
Installations and other than that which is affixed to the 
Premises so that it cannot be removed without damage to the 
Premises, shall remain the property of Tenant and may be 
removed by Tenant subject to the provisions of Paragraph 
7.2.

	(e) Tenant Shall surrender the Premises by the end of 
the last day of the Term or any earlier termination date, 
with All of the improvements, parts and surfaces thereof 
clean and free of debris and in good operating order, 
condition and state of repair, ordinary wear and tear 
excepted. "Ordinary wear and tear" Shall not include any 
damage or deterioration that would have been prevented by 
good maintenance practice or by Tenant performing All of its 
obligations under this Lease. Except as otherwise agreed or 
specified in writing by Landlord, the Premises, as 
surrendered, Shall include the Utility Installations. The 
obligation of Tenant Shall include the repair of any damage 
occasioned by the Installation, maintenance or removal of 
Tenant's trade fixtures, furnishings, equipment, and 
alterations and/or Utility Installation, as Well as the 
removal of any storage tank Installed by or for Tenant, and 
the removal, replacement, or redemption of any soil, 
material or groundwater contaminated by Tenant, all as may 
then be required by Applicable Law and/or good practice. 
Tenant's trade fixtures shall remain the property of tenant 
and shall be removed by Tenant subject to its obligation to 
repair and restore the Premises per this Lease.

	7.4 Utility Additions. Landlord reserves the right to 
install new or additional utility facilities throughout the 
Building and the Common Areas for the benefit of Landlord or 
Tenant, or any other tenant of the Industrial Center, 
including, but not by way of limitation, such utilities as 
plumbing, electrical systems, security systems, 
communication systems, and fire protection and detection 
systems, so long as such installation do not unreasonably 
interfere with Tenant's use of the Premises.

8. 	Insurance; Indemnity.

	8.1	Liability Insurance-Tenant. Tenant Shall, at 
Tenant's expense, obtain and keep in force during the term 
of this Lease a policy of combined single limit bodily 
injury and property damage insurance insuring Tenant and 
Landlord against any liability arising out of the use, 
occupancy or maintenance of the Premises and the Industrial 
Center. Such insurance Shall be on an occurrence basis with 
single limit coverage in an amount not less than 
S1,000,000.00 per occurrence. The policy Shall insure 
performance by Tenant of the indemnity Provision of this 
Paragraph 8. The limits of said insurance shall not, 
however, limit the liability of Tenant hereunder nor relieve 
Tenant of any obligation hereunder. Any insurance to be 
carried by Tenant Shall be primary to and not contributory 
with any similar insurance carried by Landlord, whose 
insurance Shall be excess insurance only. Tenant Shall carry 
workers' compensation insurance in the amount required by 
law, and such other coverage (whether property, liability or 
other) as Landlord Shall deem necessary or desirable from 
time to time.

	8.2 Property Insurance - Tenant. Subject to the 
requirements of Paragraph 8.5, Tenant at its cost Shall 
either by separate policy or, with comment of Landlord, by 
endorsement to a policy already carried, maintain insurance 
coverage on all of Tenant's personal property, tenant owned 
alteration and Utility installations in, on, or about the 
Premises with full replacement cost coverage with a 
deductible of not to exceed S5,000 per occurrence. The 
proceeds from any such insurance shall be used by Tenant for 
the replacement of personal property or the restoration of 
tenant owned alterations and Utility installations. tenant 
shall, from time to time upon Landlord's request, provide 
Landlord with written evidence that such insurance is in 
force.

	8.3 Property Insurance. Landlord shall obtain and keep 
in force during the term of this Lease a policy or policies 
of insurance covering loss or damage to the Industrial 
Center improvements, but not Tenant's personal property, 
fixtures, equipment or tenant improvements, in an amount not 
less than eighty percent (80 %) of the full replacement 
value thereof, as the same may exist from time to time, 
providing protection against all perils included within the 
classification of fire, extended coverage, vandalism, 
malicious mischief, nood (in the event same is required by a 
lender having a lien on the Premises), special extended 
perils (at risk", as such term is used in the insurance 
industry), plate glass insurance and such other insurance as 
Land lord deems advisable.

8.4 	Payment of Premium Increase.

	(a) tenant shall pay the entirety of any increase in 
the property insurance premium for the Industrial Center 
over what it was immediately prior to the commencement of 
the Term of this Lease ff. the increase is specified by 
Landlord's insurance carrier as being caused by the nature 
of Tenant's occupancy or any act or omission of Tenant.

	(b) If the Premises are part of a larger building, or 
ff. the Premises are part of a group of buildings owned by 
Landlord which are adjacent to the Premises, then Tenant 
shall pay for any increase in the premiums for the property 
insurance of such building or buildings ff. said increase is 
caused by Tenant's acts, omissions, use or occupancy of the 
Premises.

	8.5 Insurance Policies. Insurance required hereunder 
Shall be in companies holding a General Policyholders 
Rating" of at least A or such other rating as may be 
required by a lender having a lien on the Premises, as set 
forth in the most current issue of Best's Insurance Guide.. 
Tenant Shall not do or permit to be done anything which 
Shall invalidate the insurance policies carried by Land 
lord. Tenant Shall deliver to Landlord copies of liability 
and property insurance policies required under Paragraphs 
8.1 and 8.2 or certificates evidencing the existence and 
amounts of such insurance within seven (7) days after the 
Commencement Date. No such policy shall be cancelable or 
subject to reduction of coverage or other modification 
except after thirty (30) days' prior written notice to 
Landlord. tenant shall, at least thirty (30) days prior to 
the expiration of such policies, and without the requirement 
of further notice, furnish Landlord with renewals or 
"binders" thereof.

	8.6 Waiver of Subrogation. tenant and Landlord each 
hereby release and relieve the other, and waive their entire 
right of recovery against the other, for loss or damage 
arising out of or incident to the perils insured against 
under policies of property insurance carried hereunder (or 
required to be insured against under property insurance 
hereunder, whether or not such insurance required hereunder 
is actually obtained and/or maintained) which perils occur 
in, on or about the Premises, whether due to the negligence 
of Land lord or Tenant or their agents, employees, 
contractors and/or invitees. Tenant and Land lord shall, 
upon obtaining the policies of insurance required hereunder, 
give notice to the insurance carrier or carriers that the 
foregoing mutual waiver of subrogation is contained in this 
Lease.

	8.7 Indemnity. tenant shall indemnify and hold harmless 
Landlord and its agents, Landlord's master or ground lessor, 
partners and lenders from and against any and all claims, 
loss of rents and/or damages, losses, costs, liens, 
judgments, penalties, permits, causes of action, attorneys' 
and consultant's fees, expenses and/or liabilities arising 
out of, involving, or dealing with tenant's use of the 
Premises or the Industrial Center, or from the conduct of 
tenant's business or from any activity, work or things done, 
permitted or suffered by tenant in or about the Premises or 
elsewhere and shall further indemnify and hold harmless such 
indemnified parties from and against any and all claims 
arising from any breach or default in the performance of any 
obligation on tenant's part to be performed under the terms 
of this Lease, or arising from any act or omission of 
Tenant, or any of Tenant's agents, contractors, employees or 
invitees, and from and against All costs, attorneys' fees, 
expenses and liabilities incurred in the defense of any such 
claim or any action or proceeding brought thereon, and in 
case any action or proceedings be brought against any such 
indemnified any by reason of any such claim, Tenant upon 
notice from Land lord shall defend the same at tenant's 
expense by counsel reasonably satisfactory to Land lord and 
Landlord shall cooperate with Tenant in such defense. The 
foregoing shall include, but not be limited to, the defense 
or pursuit of any claim or any action or proceeding involved 
therein, and whether or not (in the case of claims made 
against Land lord) litigated and/or reduced to judgment, and 
whether well founded or not. In case any action or 
proceeding be brought against Landlord by reason of any of 
the foregoing matters, Tenant upon notice from Landlord 
shall defend the same at Tenant's expense by counsel 
reasonably satisfactory to Land lord and Landlord shall 
cooperate with Tenant in such defense. Landlord need not 
have first paid any such claim in order to be so 
indemnified. Tenant, as a material pan of the consideration 
to Landlord, hereby assumes all risk of damage to property 
of tenant or injury to persons, in, upon or about the 
Industrial Center arising from any cause and Tenant hereby 
waives all claims in respect thereof against Landlord.

	8.8 Exemption of Landlord from Liabilities. Tenant 
hereby agrees that Landlord shall not be liable for injury 
to Tenant's business or any loss of income therefrom or for 
damage to the goods, wares, merchandise or other property of 
Tenant, Tenant's employees, invitees, customers, or any 
other person in or about the Premises or the Industrial 
Center, nor Shall Landlord be liable for injury to the 
person of Tenant, Tenant's employees, agents or contractors, 
whether such damage or injury is caused by or results from 
fire, steam, electricity, gas, water or rain, or from the 
breakage, leakage, obstruction or other defects of pipes, 
sprinklers, wires, appliances, plumbing, air conditioning or 
lighting fixtures, or from any other cause, whether said 
damage or injury results from conditions arising upon the 
Premises or upon other portions of the Industrial Center, or 
from other sources or places and regardless of whether the 
cause of such damage or injury or the means of repairing the 
same is inaccessible to Tenant. Landlord shall not be liable 
for any damages arising from any act or neglect of any other 
tenant, occupant or user of the Industrial Center, nor from 
the failure of Land lord to enforce the provisions of any 
other lease of the Industrial Center. Notwithstanding 
Landlord's negligence, willful misconduct or breach of this 
Lease, Landlord shall under no circumstances be liable for 
consequential damages, or for injury to Tenant's business or 
for any loss of income or profit therefrom.

	8.9 Limitation of Liability. Tenant agrees that. in the 
event Tenant shall! have any claim against landlord under 
this T ease 2~.S'-g out of the subject manner of this Lease, 
Tenant's sole recourse shall be against the Landlord's 
interest in the Industrial Center for the satisfaction of 
any claim, judgment or decree requiring the payment of money 
by Landlord as a result of a breach hereof or otherwise in 
connection with this Lease, and no other property or assets 
of Land lord, its successors or assigns, shall be subject to 
the levy, execution or other enforcement procedure for the 
satisfaction of any such claim, judgment, injunction or 
decree. In addition, in no event shall Landlord be liable 
for any consequential damages. Tenant funkier hereby waives 
any and all right to assess any claim against or obtain any 
damages from, for any reason whatsoever, the directors, 
officers and partners of Landlord, including all injuries, 
damages or losses to tenant's property, real and personal, 
whether known, unknown, foreseen, unforeseen, patent or 
latent, which tenant may have against Landlord or its 
directors, officers or partners. Tenant understands and 
acknowledges the significance and consequence of such 
specific waiver.

9. 	Damage or Destruction.

9.1 	Definitions.

	(a)	Premises Partial Damage Shall mean if the Premises 
are damaged or destroyed to the extent that the cost of 
repair is less than fifty percent (50%) of the then 
replacement cost of the Premises.

	(b)	"Premises Total Destruction" shall mean if the 
Premises are damaged or destroyed to the extent that the 
cost of repair is fifty percent (SO 9G) or more of the then 
replacement cost of the Premises.

	(c)	"Premises Building Partial Damage" Shall mean if 
the Building of which the Premises are a pan is damaged or 
destroyed to the tenant that the cost to repair is less than 
fifty percent (50%) of the then replacement cost of the 
Building.
	(d)	"Premises Building Total Destruction" shall mean 
if the Building of which the Premises are a pan is damaged 
or destroyed to the extent that the cost to repair is 
twenty-five percent (25 %) or more of the then replacement 
cost of the Building.

(e) 	"Industrial Center Buildings " shall mean all of the 
buildings on the Industrial Center site depicted on Exhibit 
B hereto.

	(f)	"Industrial Center Buildings Total Destruction" 
shall mean if the Industrial Center Buildings are damaged or 
destroyed to the extent that the cost of repair is twenty-
five percent (25%) or more of the then replacement cost of 
the Industrial Center Buildings.

	(g) "Insured Loss ~ Shall mean damage or destruction 
which was caused by an event required to be covered by the 
insurance described in Paragraph 8, or for which insurance 
coverage is otherwise available. The fact that an Insured 
Loss has a deductible amount Shall not make the loss an 
uninsured loss.

	(h)	"Replacement Cost" Shall mean the amount of money 
necessary to be spent in order to repair or rebuild the 
damaged area to the condition that existed immediately prior 
to the damage occurring excluding All improvements made by 
tenants.

9.2 	Premises Partial Damage; Premises Building Partial 
Damage.

	(a) Insured Loss: Subject to the provisions of 
Paragraphs 9.4 and 9.5, if at any time during the term of 
this Lease there is damage which is an Insured Loss and 
which falls into the classification of either Premises 
Partial Damage or Premises Building Partial Damage, then 
Land lord shall, at Landlord's expense, repair such damage 
to the Premises, but not Tenant's fixtures, equipment or 
tenant improvements, as soon as reasonably possible and this 
Lease shall continue in full force and effect.

	(b) Uninsured Loss: Subject to the provisions of 
Paragraphs 9.4 and 9.5, ff. at any time during the term of 
this Lease there is damage which is not an Insured Loss and 
which falls within the classification of Premises Partial 
Damage or Premises Building Partial Damage, unless caused by 
a negligent or willful act of Tenant (in which event tenant 
shall make the repairs at tenant's expense), which damage 
prevents Tenant from using the Premises, Land lord may at 
Landlord's option either (i) repair such damage as soon as 
reasonably possible at Landlord's expense, in which event 
this Lease shall continue in full force and effect, or (iii) 
give written notice to Tenant within sixty (60) days after 
the date of the occurrence of such damage of Landlord's 
intention to cancel and terminate this Lease as of the date 
of the occurrence of such damage. In the event Landlord 
elects to give such notice of Landlord's intention to cancel 
and terminate this Lease, Tenant shall have the right within 
ten (10) days after the receipt of such notice to give 
written notice to Landlord of Tenant's intention to repair 
such damage at Tenant's expense, without reimbursement from 
Land lord, in which event this Lease Shall continue in Full 
force and effect, and Tenant Shall proceed to make such 
repairs as soon as reasonably possible. If Tenant does not 
give such notice within such ten (10) day period this Lease 
Shall be canceled and terminated as of the date of the 
occurrence of such damage.

9.3 	Premises Total Destruction; Premises Building Total 
Destruction; Industrial Center Buildings Total Destruction.

	(a) Subject to the provisions of Paragraphs 9.4 and 
9.5, if at any time during the term of this Lease there is 
damage, whether or not it is an Insured Loss, and which 
falls into the classifications of either (i) Premises Total 
Destructio4 or (u) Premises Building Total Destructio4 or 
(iii) Industrial Center Buildings Total Destruction, then 
Landlord may at Landlord's option either (i) repair such 
damage or destructio4 but not Tenant's fixtures, equipment 
or tenant improvements, as soon as reasonably possible at 
Landlord's expense, and this Lease shall continue in full 
force and effect, or (u) give written notice to Tenant 
within sixty (60) days after the date of occurrence of such 
damage of Landlord's intention to cancel and terminate this 
Lease, in which case this Lease shall be canceled and 
terminated as of the date of the occurrence of such damage.

9.4 	Damage Near End of Term.

	(a) Subject to Paragraph 9.4(b), if at any time during 
the last twelve (12) months of the term of this Lease there 
is substantial damage, whether or not an Insured Loss, which 
falls within the classification of Premises Partial Damage 
or Premises Building Panial Damage, Landlord may at 
Landlord's option cancel and terminate this Lease as of the 
date of occurrence of such damage by giving written notice 
to Tenant of Landlord's election to do so within sixty (60) 
days after the date of occurrence of such damage.

	(b) Notwithstanding Paragraph 9.4(a), in the event that 
tenant has an option to extend or renew this Lease, and as 
of the occurrence of the damage the time within which said 
option may be exercised has not yet expired, Tenant shall 
exercise such option, if it is to be exercised at all, no 
later than twenty (20) days after the occurrence of an 
Insured Loss falling within the classification of Premises 
Panial Damage, during the last twelve (12) months of the 
term of this Lease. If Tenant duly exercises such option 
during said twenty (20) day period, Landlord shall, at 
Landlord's expense, repair such damage, but not Tenant's 
fixtures, equipment or tenant improvements, as soon as 
reasonably possible and this Lease shall' continue in Full 
force and effect. If tenant fails to exercise such option 
during said twenty (20) day period, then Landlord may at 
Landlord's option terminate and cancel this Lease as of the 
expiration of said twenty (20) day period by giving written 
notice to tenant of Landlord's election to do so within 
thirty (30) days after the expiration of said twenty (20) 
day period, notwithstanding any term or provision in the 
grant of option to the contrary.

	9.5 Abatement of Rent; Tenant's Remedies. In the event 
Landlord repairs or restores the Premises pursuant to the 
provisions of this Paragraph 9, the Base Rent payable 
hereunder for the period during which such damage, repair or 
restoration continues shall be abated in proportion to the 
degree to which tenant's use of the Premises is impaired to 
the extent that Landlord is reimbursed therefor by proceeds 
of rental interruption insurance, if any, carried by 
Landlord or Tenant. Except for abatement of Base Rent, if 
any, Tenant shall have no claim against Landlord for any 
damage suffered by reason of any such damage, destruction, 
repair or restoration.

	9.6 Termination-Advance Payments. Upon termination of 
this Lease pursuant to this Paragraph 9, an equitable 
adjustment shall be made concerning advance rent and any 
advance payments made by Tenant to Landlord. Landlord shall, 
in addition, so long as tenant is not in default hereunder, 
return to Tenant so much of Tenant's security deposit as has 
not therefore been applied by Landlord.

	9.7	Waiver. Landlord and Tenant waive the provisions 
of any statute which relate to termination of leases when 
leased property is destroyed and agree that such event shall 
be governed by the terms of this Lease.

10.	Real Property Taxes.

	10.1 (a) Landlord shall pay the Real Property Taxes, as 
defined in Paragraph 10.2, applicable to the Premises. 
Notwithstanding the foregoing, Tenant shall pay to Landlord 
upon demand therefor the entirety of any increase in Real 
Property Taxes assessed by reason of Alterations or Utility 
Installations placed upon the Premises by Tenant or at 
Tenant's request.

	10.2 Definition of "Real Property Taxes". As used 
herein, the term "Real Property Taxes" shall include any 
form of real estate tax or assessment, general, special, 
ordinary or extraordinary, and any license fee, commercial 
rental tax, improvement bond or bonds, levy or tax (other 
than inheritance, persoM1 income or estate taxes) imposed 
upon the Industrial Center by any authority having the 
direct or indirect power to tax, including any city, state 
or federal government, or any school, agricultural, 
sanitary, fire, street, drainage or other Improvement 
district thereof, levied against any legal or equitable 
interest of Landlord in the Premises or in the real property 
of which the Premises are a part, Landlord's right of rent 
or other income therefrom, and/or Landlord's business of 
leasing the Premises, or otherwise imposed on Landlord as an 
owner of real property in lieu of or in addition to real 
property taxes. The term "Real Property Taxes " shall also 
include any tax, fee, levy, assessment or charge, or any 
increase therein, imposed by reason of events occurring, or 
changes in applicable law taking effect, during the term of 
this Lease, including but not limited to a change in the 
ownership of the Premises or in the improvements thereon, 
the execution of this Lease, or any modification, amendment 
or transfer thereof, and whether or not contemplated by the 
Parties.

10.3 	Personal Property Taxes.

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

	(b)	If any of Tenant's said personal property shall be 
assessed with Landlord's real property, Tenant shall pay to 
Landlord the taxes attributable to Tenant within ten (10) 
days after receipt of a written statement setting forth the 
taxes applicable to Tenant's property.

11. Utilities. Tenant shall pay for all water, gas, heat, 
light, power, telephone and other utilities and services 
supplied to the Premises, together with any Taxes thereon, 
including hook-up charges and/or penalties. If any such 
services are not separately metered to the Premises, Tenant 
shall pay a reasonable proportion to be determined by 
Landlord of all charges jointly metered with other premises 
in the Building.

12.1 	Landlord's Consent Required.

	(a) Tenant shall not, directly or indirectly, 
voluntarily or by operation of law, sell, assign, encumber, 
pledge or otherwise transfer or hypothecate all or any part 
of the Premises or Tenant's leasehold estate hereunder 
(collectively "Assignment.), or permit the Premises to be 
occupied by anyone other than Tenant or sublet the Premises 
(Sublease") or any opinion thereof without Landlord's prior 
written consent being had and obtained in each instance, 
subject to the terms and conditions contained in this 
Paragraph.

	(b) If Tenant desires at any time to enter into an 
Assignment of this Lease or a Sublease of the Premises or 
any opinion thereof, Tenant shall request, in writing, at 
least sixty (60) days prior to the effective date of the 
Assignment or Sublease, Landlord<Hord's consent to the 
Assignment or Sublease, and shall provide Landlord with the 
following information:

(i) The name of the proposed assignee, subtenant or 
occupant;

(ii) The nature of the proposed assignee's, subtenant's or 
occupant's business to be carried on in the Premises;

(iii) The terms and provisions of the proposed Assignment or 
Sublease and a copy of such documents; and

(iv)Such financial information concerning the proposed 
assignee, subtenant or occupant which Landlord shall have 
requested following its receipt of Tenant's request for 
consent.

(c) At any time within thirty (30) days after Landlord's 
receipt of the notice specified above, Landlord may by 
written notice to Tenant elect either to (I) consent to the 
proposed Assignment or Sublease, (ii) refuse to consent to 
the proposed Assignment or Sublease, or (iii) terminate this 
Lease in full with respect to an Assignment or terminate in 
pan with respect to a Sublease and enter into a lease 
directly with the proposed assignee or subtenant. Landlord 
and Tenant agree (by way of example and without limitation) 
that Landlord shall be entitled to take into account any 
fact or factor which Landlord reasonably deems relevant to 
such decision, including, but not necessarily limited to, 
the following, all of which are agreed to be reasonable 
factors for Landlord's consideration

01) The financial strength of the proposed assignee or 
subtenant (which shall be at least equal to that of Tenant 
as of the date of execution of this Lease), including the 
adequacy of its working capital to pay all expenses 
anticipated in connection with any remodeling of the 
Premises.

(ii) The experience of the proposed assignee or subtenant 
with respect to businesses of the type and size which such 
assignee or subtenant proposes to conduct in the Premises.

(iii) The quality and nature of the business and/or services 
to be conducted in or from the Premises by the proposed 
assignee or subtenant and in any other locations which it 
has.

(iv) Violation of exclusive use rights previously granted by 
Landlord to other tenants of the Building or Industrial 
Center.

(v) The effect of the type of services and business which 
the proposed assignee or subtenant proposes to conduct in 
the Premises upon the tenant mix in the Building or in the 
opinion of the Industrial Center which contains the 
Premises, including duplication of services offered by 
surrounding tenants and compatibility of the services and 
business which such assignee or subtenant proposes to 
conduct in or offer from the Premises with business and 
services conducted by surrounding tenants in the Industrial 
Center.

(vi) The quality of the appearance of the Premises resulting 
from any remodeling or renovation to be conducted by the 
proposed assignee or subtenant, and the compatibility of 
such quality with that of other premises in the Building.

(vii) Whether there then exists any default by Tenant 
pursuant to this Lease or any nonpayment or nonperformance 
by Tenant under this Lease which, with the passage of time 
and/or the giving of notice, would constitute a default 
under this Lease.

(viii) Any fact or factor upon which Landlord reasonably 
concludes that the business to be conducted by such assignee 
or subtenant will not be a financial success in the 
Premises.

Moreover, Landlord shall be entitled to be reasonably 
satisfied that each and every covenant, condition or 
obligation imposed upon Tenant by this Lease and each and 
every right, remedy or benefit afforded Landlord by this 
Lease is not impaired or diminished by such Assignment or 
Sublease. In no event shall there be any substantial change 
in the use of the Premises in connection with any Assignment 
or Sublease except as expressly approved in writing by 
Landlord in advance. Landlord and Tenant acknowledge that 
the express standards and provisions set forth in this Lease 
dealing with Assignment and Sublease have been freely 
negotiated and are reasonable at the date hereof taking into 
account Tenant's proposed use of the Premises and the nature 
and quality of the Premises. No withholding of consent by 
Landlord in accordance with the foregoing shall give rise to 
any claim by Tenant or any proposed assignee or subtenant or 
entitle Tenant to terminate this Lease or to any abatement 
of rent. Approval of any Assignment of Tenant's interest 
shall, whether or not expressly so stated, be conditioned 
upon such assignee assuming in writing all obligations of 
Tenant hereunder by a written instrument satisfactory to 
Landlord.

(d) If Landlord consents to the Sublease or Assignment 
within said shiny (30) day period, Tenant may enter into 
such Assignment or Sublease of the Premises or opinion 
thereof, but only upon the terms and conditions set  in the 
notice furnished by Tenant to Landlord pursuant to Paragraph 
(b) above; provided, however, that in connection with such 
Assignment or Sublease, as a condition to Landlord's 
consent, Tenant shall pay to Landlord one hundred percent 
(100%) of the excess, if any, of (i) in the case of an 
Assignment, the rental and other payment obligations of the 
proposed assignee under the terms of the proposed Assignment 
over the rental and other payment obligations of Tenant 
under the terms of this Lease, or (ii) in the case of a 
Sublease, the amount proposed to be paid by the subtenant 
over the proportionate amount of rental and other payment 
obligations required to be paid by Tenant to Landlord under 
the terms of this as applicable to the opinion of the 
Premises so subleased.

(e) No consent by Landlord to any Assignment or Sublease by 
Tenant shall relieve Tenant of any obligation to be 
performed by Tenant under this Lease, whether arising before 
or after the Assignment or Sublease. The consent by Landlord 
to any Assignment or Sublease shall not relieve Tenant of 
the obligation to obtain Landlord's express written consent 
to any other Assignment or Sublease. Any Assignment or 
Sublease that is not in compliance with this paragraph shall 
be void and, at the option of Landlord, shall constitute a 
material default by Tenant under this Lease. The acceptance 
of rent by Landlord or payment to Landlord of any other 
monetary obligation by a proposed assignee or sublessee 
shall not constitute the consent by Landlord to such 
Assignment or Sublease. Tenant shall promptly provide to 
Landlord a copy of the fully executed Sublease or 
Assignment.

(f) Any sale or other transfer, including transfer by 
consolidation, merger or reorganization, of twenty-five 
percent (25 %) or more of the voting stock of Tenant, if 
Tenant is a corporation, or any sale or other transfer of 
twenty0lve percent (25%) or more of the partnership interest 
in Tenant if Tenant is a partnership, shall be an Assignment 
for purposes of this paragraph. As used m this paragraph 
three term "Tenant" shall also mean any entity that has 
guaranteed Tenant's obligation under this Lease, and the 
prohibition hereof shall be applicable to any sales or 
transfers of stock or partnership interests of said 
guarantor.

(g) Each assignee, subtenant or other transferee, other than 
Landlord, shall assume, as provided in this paragraph all 
obligations of Tenant under this Lease and shall be and 
remain liable jointly and severally with Tenant for the 
payment of rent and all other monetary obligations 
hereunder, and for the performance of all the terms, 
covenants, conditions and agreements herein contained on 
Tenant's part to be performed for the term of the Lease; 
provided, however, that the assignee, subtenant, or other 
transferee shall be liable to landlord for rent only in the 
amount set forth in the Assignment or Sublease. No 
Assignment shall be binding on Landlord unless the assignee 
or Tenant shall deliver to Landlord a counterpart of the 
Assignment and an instrument in recordable form that 
contains a covenant of assumption by the assignee 
satisfactory in material and form to Landlord, consistent 
with the requirements of this paragraph but the failure or 
refusal of the assignee to execute such instrument of 
assumption shall not release or discharge the assignee from 
its liability as set forth above.

(h) If this Lease is assigned to any person or entity 
pursuant to the provisions of the Bankruptcy Code, 11 U.S.C. 
Section 101 ct seq., (the Bankruptcy Code"), any and all 
monies or other consideration payable or otherwise to be 
delivered in connection with such Assignment shall be paid 
or delivered to Landlord, shall be and remain the exclusive 
property of Landlord and shall not constitute property of 
Tenant or of the estate of Tenant within the meaning of the 
Bankruptcy Code. Any and all monies or other considerations 
constituting Landlord's property under the preceding 
sentence not paid or delivered to Landlord shall be held in 
trust for the benefit of Landlord and be promptly paid or 
delivered to Landlord.

(i) Any person or entity to which this Lease is assigned 
pursuant to the provisions of the Bankruptcy Code, shall be 
deemed, without further act or deed, to have assumed all of 
the obligations arising under this Lease on and after the 
date of such Assignment. Any such assignee shall upon demand 
execute and deliver to Landlord an instrument confirming 
such assumption.

(j) Tenant shall pay Landlord's expenses and attorneys' fees 
incurred in processing an Assignment or Sublease, but in no 
event less than Five Hundred Dollars (S500.00) for each such 
proposed transfer to cover the legal review and processing 
expenses of Landlord, whether or not Landlord shall grant 
its consent to such proposed transfers.

(k) All options to extend, renew or expand, if any, 
contained in this Lease are personal to Tenant. Consent by 
Landlord to any Assignment or subletting shall not include 
consent to the Assignment or transfer of any such rights 
with respect to the Premises or any special privileges or 
extra services granted to Tenant by this Lease, or any 
addendum or amendment hereto or letter of agreement. AH such 
options, rights, privileges and extra services shall 
terminate upon such Assignment or subletting unless Landlord 
specifically grants in writing such options, rights, 
privileges and extra services to such assignee or subtenant. 
Similarly, any allowance, abatement or monetary concession 
provided to Tenant as an inducement to execute this Lease is 
personal to Tenant and shall be amortized (on a straight 
line basis) over the term of this Lease. Upon any Assignment 
or subletting, the then unamortized portion thereof shall be 
paid by Tenant to Landlord in cash on or before the 
effective date of such Assignment or subletting.

12.2	Additional Terms and Conditions Applicable to 
Subletting. Regardless of Landlord's consent, the following 
terms and conditions shall apply to any subletting by Tenant 
of all or any part of the Premises and shall be included in 
subleases:

(a) Tenant hereby assigns and transfers to Landlord all of 
Tenant's interest in all rentals and income arising from any 
Sublease heretofore or hereafter made by Tenant, and 
Landlord may correct such rent and income and apply same 
toward Tenant's obligations under this Lease; provided, 
however, that until a default shall occur in the performance 
of Tenant's obligations under this Lease, Tenant may 
receive, correct and enjoy the rents accruing under such 
Sublease. Landlord shall not, by reason of this or any other 
Assignment of such Sublease to Landlord nor by reason of the 
correction of the rents from a subtenant, be deemed liable 
to the subtenant for any failure of Tenant to perform and 
comply with any of Tenant's obligations to such subtenant 
under such Sublease. Tenant hereby irrevocably authorizes 
and directs any such subtenant, upon receipt of a written 
notice from Landlord stating that a default exists in the 
performance of Tenant's obligations under this Lease, to pay 
to Landlord the rents due and to become due under the 
Sublease. Tenant agrees that such subtenant shall have the 
right to rely upon any such statement and request from 
Landlord, and that such subtenant shall pay such rents to 
Landlord without any obligation or right to inquire as to 
whether such default exists and notwithstanding any notice 
from or claim from Tenant to the contrary. Tenant shall have 
no right or claim against such subtenant or landlord for any 
such rents so paid by said subtenant to Landlord.

(b) Any subtenant shall, by reason of entering into a 
Sublease under this Lease, be deemed, for the benefit of 
Landlord, to have assumed and agreed to conform and comply 
with each and every obligation herein to be performed by 
tenant other than such obligations as are contrary to or 
inconsistent with provisions contained in a Sublease to 
which Landlord has expressly consented in writing.

(c) If Tenant's obligations under this Lease have been 
guaranteed by third parties, then a Sublease, and Landlord's 
consent thereto, Shall not be effective unless said 
guarantors give their written consent to such Sublease and 
the terms thereof.

(d) Landlord may consent to subsequent subletting and 
Assignments of the Sublease or any amendments or 
modifications thereto without notifying Tenant or anyone 
else liable on the Lease or Sublease and without obtaining 
their consent and such action shall not relieve such persons 
from liability.

(e) In the event of any default under this Lease, Landlord 
may proceed directly against tenant, any guarantors or any 
one else responsible for the performance of this Lease, 
including the subtenant, without first exhausting Landlord's 
remedies against any other person or entity responsible 
therefor to Landlord, or any security held by Landlord or 
tenant.

(f) In the event tenant shall default in the performance of 
its obligations under this Lease, Landlord, at its option 
and without any obligation to do so, may require any 
subtenant to attorn to Landlord, in which event Landlord 
shall undertake the obligations of Tenant under such 
Sublease from the time of the exercise of said option to the 
termination of such Sublease; provided, however, Landlord 
shall not be liable for any prepaid rents or security 
deposit paid by such subtenant to Tenant or for any other 
prior defaults of Tenant under such Sublease.

(g) Each and every consent required of Tenant under a 
Sublease Shall also require the consent of Landlord.

(h) Landlord's written consent to any subletting of the 
Premises by tenant shall not constitute an acknowledgment 
that no default then exists under this Lease of the 
obligations to be performed by tenant nor shall such consent 
be deemed a waiver of any then existing default, except as 
may be otherwise stated by Landlord at the time.

13.	Default; Remedies.

13.1	Default. The occurrence of any one or more of the 
following events shall constitute a material default of this 
Lease by Tenant:

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

(b) The failure by Tenant to make any payment of rent or any 
other payment required to be made by Tenant hereunder, as 
and when due, where such failure Shall continue for a period 
of three (3) days after the same is due and payable.

(c) Except as otherwise provided in this Lease, the failure 
by Tenant to observe or perform any of the covenants, 
conditions or provisions of this Lease to be observed or 
performed by Tenant, other than described in Paragraph (b) 
above, where such failure shall continue for a period of ten 
(10) days after written notice thereof from Landlord to 
tenant; provided, however, that if the nature of Tenant's 
noncompliance is such that more than ten (10) days are 
reasonably required for its cure, then tenant shall not be 
deemed to be in default if tenant commenced such cure within 
said ten (10) day period and thereafter diligently 
prosecutes such cure to completion within thirty (30) days. 
To the extent permitted by law, such ten (10) day notice 
shall constitute the sole and exclusive notice required to 
be given to Tenant under applicable unlawful detained 
statutes.

(d) (i) The making by Tenant of any general arrangement or 
general assignment for the benefit of creditors; (ie) tenant 
becomes a "debtor" as defined in I 1 U.S.C. *101 or any 
successor statute thereto (unless, in the case of a petition 
filed against Tenant, the same is dismissed within sixty 
(60) days); (ie) the appointment of a trustee or receiver to 
take possession of substantially all of Tenant's assets 
located at the Premises or of Tenant's interest in this 
Lease, where possession is not restored to Tenant within 
thirty (30) days; or (iv) the enactment, execution or other 
judicial seizure of substantially all of Tenant's assets 
located at the Premises or of Tenant's interest in this 
Lease, where such seizure is not discharged within thirty 
(30) days. In the event that any provision of this Paragraph 
13.1 (d) is contrary to any Applicable Law, such provision 
shall be of no force or effect.

(e) The discovery by Landlord that any financial statement 
given to Landlord by Tenant, any assignee of tenant, any 
subtenant of Tenant, an successor in interest of tenant or 
any guarantor of Tenant's obligation hereunder, was 
materially false.

(f) If the performance of Tenant's obligations under this 
Lease is guaranteed: (i) the death of a guarantor, (ie) the 
termination of a guarantor's liability with respect to this 
Lease other than in accordance with the terms of such 
guaranty, (ie) a guarantor's becoming insolvent or the 
subject of a bankruptcy filing, (iv) a guarantor's refusal 
to honor the guaranty, or (v) a guarantor's breach of its 
guaranty obligation on anticipatory breach basis, and 
tenant's failure, within sixty (60) days following written 
notice by or on behalf of Landlord to tenant of any such 
event, to provide Landlord with written alternative 
assurance or security, which, when coupled with the then 
existing resources of Tenant, equals or exceeds the combined 
financial resources of tenant and the guarantors that 
existed at the time of execution of this Lease.

13.2 Remedies. In the event of any such material default by 
Tenant, Landlord may at any time there after, with or 
without notice or demand and without limiting Landlord in 
the exercise of any right or remedy which Landlord may have 
by reason of such default:

(a) Terminate Tenant's right to possession of the Premises 
by any lawful means, in which case this Lease and the term 
hereof Shall terminate and Tenant Shall immediately 
surrender possession of the Premises to Landlord. In such 
event Landlord Shall be entitled to recover from Tenant: (i) 
the worth at the time of the award of the unpaid rent which 
had been earned at the time of termination; (ii) the worth 
at the time of award of the amount by which the unpaid rent 
which would have been earned after termination until the 
time of award exceeds the amount of such rental loss that 
the tenant proves could have been reasonably avoided; (ie) 
the worth at the time of award of the amount by which the 
unpaid rent for tile balance of the term after the time of 
award exceeds the amount of such rental loss that the tenant 
proves could be reasonably avoided; and (IV) any other 
amount necessary to compensate Landlord for all the 
detriment proximately caused by the Tenant's failure to 
perform its obligations under. this Lease or which in the 
ordinary course of things would be likely to result 
therefrom, which amount the parties hereby agree shall 
include, without limitation, unamortized tenant improvements 
constructed or paid for by Landlord, unamortized broker's 
commissions paid by Landlord to any Broker, Inducement 
Provision (as defend in Paragraph 13.3 below), the cost of 
recovering possession of the Premises, expenses of 
reletting, including necessary renovation and alteration of 
the Premises and reasonable attorneys' fees. The worth at 
the time of award of the amount referred to in provision 
(iii) of the prior sentence shall be computed by discounting 
such amount at the discount rate of the Federal Reserve Bank 
of San Francisco at the time of award plus one percent (1%). 
Efforts by Landlord to mitigate damages caused by Tenant's 
default or breach of this Lease shall not waive Landlord's 
right to recover damages under this paragraph. If 
termination of this Lease caused by Tenant's default or 
breach of this Lease shall not waive Landlord's right to 
recover damages under this paragraph. If Termination of this 
Lease is obtained through the provisional remedy of unlawful 
detained, Landlord shall have the right to recover in such 
proceeding the unpaid rent and damages as are recoverable 
therein, or Landlord may reserve therein the right to 
recover all or any part thereof in a separate suit for such 
rent and/or damages. If a notice and grace period required 
under subparagraphs 13.1 (b), (c) or (d) was not previously 
given, a notice to pay rent or quit, or to perform or quit, 
as the case may be, given to Tenant under any statute 
authorizing the forfeiture of leases for unlawful detainer 
shall also constitute the applicable notice for grace period 
purposes required by subparagraphs 13.1(b), (c) or (d). In 
such case, the applicable grace period under subparagraphs 
13.1(b), (c) or (d) and under the unlawful detained statute 
shall run concurrently after the one such statutory notice, 
and the failure of Tenant to cure the default within the 
greater of the two such grace periods shall constitute both 
an unlawful detained and a breach of this Lease entitling 
Landlord to the remedies provided for in this Lease and/or 
by said statute.

(b) Maintain Tenant's right to possession in which case this 
Lease Shall continue in effect whether or not Tenant Shall 
have vacated or abandoned the Premises. In such event 
Landlord Shall be entitled to enforce All of Landlord's 
rights and remedies under this Lease, including the right to 
recover the rent as it becomes due hereunder. Acts of 
maintenance or preservation, efforts to relet the Premises, 
or the appointment of a receiver to protect the Landlord's 
interest under the Lease or Landlord's withholding of 
consent to an Assignment or Subletting pursuant to the terms 
and conditions of Paragraph 12 above, shall not constitute a 
termination of the tenant's right to possession.

(c) The foregoing provisions of clause (2) shall apply even 
though Tenant has breached the Lease and abandoned the 
Premises, in which case Landlord shall have the right to re-
enter the Premises with or without process of law, to eject 
therefrom all parties in possession thereof, and, without 
terminating this Lease, at any time and from time to time, 
but without obligation to do so, to relet the Premises and 
the improvements located therein or any part or parts of any 
thereof for the account of Tenant, or otherwise, on such 
conditions as Landlord in its discretion may deem proper, 
with the right to make alterations and repairs to the 
Premises in connection therewith, and to receive and chock 
the rents therefor, and apply the same (i) first to the 
payment of such costs and expenses as Landlord may have 
paid, assumed or incurred: (A) in recovering possession of 
the Premises and said improvements, including attorneys' 
fees, and costs; (B) expenses for placing the Premises and 
said improvements in good order and condition, for 
decorating and preparing the Premises for reletting; (C) for 
making any alterations, repairs, changes or additions to the 
Premises that may be necessary or convenient; and (D) all 
other costs and expenses, including leasing and subleasing 
commissions, and charges paid, assumed or incurred by 
Landlord in or upon reletting the Premises and said 
improvements, or in fulfillment of the covenants of Tenant 
under this Lease; (iii) then to the payment of Monthly 
Rental, tenant's Proportionate Share of Common Operating 
Costs, and other monetary obligations due and unpaid 
hereunder; and (iii) any balance shall be held by Landlord 
and applied in payment of future amounts as the same may 
become due and payable hereunder. Any such reletting may be 
for the remainder of the term of this Lease or for a longer 
or shorter period. Landlord may execute any lease or 
sublease made pursuant to the terms of this subparagraph 
either in its own name or in the name of Tenant as its 
agent, as Landlord may see fit. The tenant(s) or 
subtenant(s) thereunder shall be under no obligation 
whatsoever with regard to the application by Landlord of any 
rent collected by Landlord from such tenant or subtenant to 
any and all sums due and owing or which may become due and 
owing under the provisions of this Lease, nor shall Tenant 
have any right or authority whatever to collect any rent 
whatever from such tenant(s) or subtenant(s). If tenant has 
been credited with any rent received by such reletting and 
such rent shall not be promptly paid to Landlord by the 
tenant(s) or subtenant(s), or if such rentals received from 
reletting during any month are less than those to be paid 
during that month by Tenant hereunder, Tenant shall pay any 
such deficiency to Landlord. Such deficiency shall be 
calculated and paid monthly. tenant shall also pay to 
Landlord as soon as ascertained, any costs and expenses 
incurred by Landlord in such reletting or in making such 
alterations and repairs not covered by the rentals received 
from such reletting. For all purposes set forth in this 
subsection, Landlord is hereby irrevocably appointed as 
agent for Tenant. No taking of possession of the Premises by 
Landlord shall be construed as Landlord's acceptance of a 
surrender of the Premises by Tenant or an election of 
Landlord's pan to terminate this Lease unless written notice 
of such intention is given to Tenant. Notwithstanding any 
such subletting without termination, Landlord may at any 
time thereafter elect to terminate this Lease for such 
previous breach. Election by Landlord to proceed pursuant to 
this clause (3) shall be made upon written notice to tenant 
and shall be deemed an election of the remedy described in 
California Civil Code Section 1951 .4(providing that a 
lessor of real property may continue a lease in effect after 
a lessee's breach or abandonment and recover rent as it 
becomes due, if the lessee has the right to sublet or 
assign, subject only to reasonable limitations). If Landlord 
elects to pursue such remedy, unless Landlord relets the 
Premises, Tenant shall have the right to sublet the Premises 
and to assign its interest in this Lease, subject to all of 
the standards and conditions set forth in Paragraph 12. 
Landlord may elect to terminate the prosecution of such 
remedy at any time by written notice to Tenant, and the 
right of tenant to sublet or assign shall terminate upon 
receipt by tenant of such notice.

(d) Pursue any other remedy now or hereafter available to 
Landlord under the laws or judicial decisions of the state 
wherein the Premises are located. Unpaid installments of 
rent and other unpaid monetary obligations of tenant under 
the terms of this Lease shall bear interest from the date 
due at the maximum rate then allowable by law.

(e) The expiration or termination of this Lease and/or the 
termination of Tenant's right to possession shall not 
relieve Tenant from liability under any indemnity provisions 
of this Lease as to manners occurring or accruing during the 
term hereof or by reason of Tenant's occupancy of the 
Premises.

13.3 Default by Landlord. Landlord shall not be in default 
unless Landlord fails to perform obligations required of 
Landlord within a reasonable time after written notice by 
Tenant to Landlord and to the holder of any first mortgage 
or deed of trust covering the Premises whose Name and 
address shall have therefore been furnished to Tenant in 
writing, specifying wherein Landlord has failed to perform 
such obligation.

13.4 Inducement Recapture In Event of Breach. Any agreement 
by Landlord for free or abated rent or other charges 
applicable to the Premises, or for the giving or paying by 
Landlord to or for Tenant of any cash or other bonus, 
inducement or consideration for Tenant's entering into this 
Lease, all of which concessions are hereinafter referred to 
as "Inducement Provisions ", shall be deemed conditioned 
upon tenant's full and faithful performance of all of the 
terms, covenants, and conditions of this Lease to be 
performed or observed by tenant during the term hereof as 
the same may be extended. Upon the occurrence of a breach of 
this Lease by tenant, any such Inducement Provision shall 
automatically be deemed deleted from this Lease and of no 
funkier force or effect, and any rent, other charge, bonus, 
inducement or consideration therefore abated, given or paid 
by Landlord under such an Inducement Provision shall be 
immediately due and payable by Tenant to Landlord, and 
recoverable by Landlord as additional rent due under this 
Lease, notwithstanding any subsequent cure of said breach by 
Tenant. The acceptance by Landlord of rent or the ere of the 
breach which initiated the operation of this paragraph shall 
not be deemed a wavier by Landlord of the provisions of this 
paragraph unless specifically so stated in writing by 
Landlord at the time of such acceptance.

13.5 Late Payments and Deliveries.

(a) Any amount due from Tenant to Landlord hereunder which 
is not paid to Landlord when due shall bear interest at the 
maximum rate of interest which Landlord is then permitted to 
charge by the applicable usury law, accruing from the date 
due until the same is fully paid. Payment of such interest 
shall not excuse or cure any default by Tenant pursuant to 
this Lease. Such rate shall remain in effect after the 
occurrence of any breach or default hereunder by Tenant to 
and until payment of the entire amount due.

(b) TENANT ACKNOWLEDGES THAT THE LATE PAYMENT BYTENANTTO 
LANDLORD OP RENT, TENANT'S SHARE OP OPERATING EXPENSES AND 
OTHER SUMS DUE HEREUNDER AND THE FAILURE TO DELIVER ON TIME 
REPORTS AND OTHER ITEMS REQUIRED TO BE DELIVERED WILL CAUSE 
LANDLORD TO INCUR COSTS NOT CONTEMPLATED BY THIS LEASE, THE 
EXACT AMOUNT OF WHICH WILL BE EXTREMELYDIPPICULT TO 
ASCBRTAIN. SUCH COSTS MAY INCLUDE, BUT ARE NOT LIMITED TO, 
ADMINISTRATIVE, PROCESSING AND ACCOUNTING CHARGES, AND LATE 
CHARGES WHICH MAY BB IMPOSED ON LANDLORD BY THE TERMS OF ANY 
ENCUMBRANCE COVERING THE PRBMISES. ACCORDINGLY, IF ANY SUM 
DUE FROM TENANT, ANY REPORT OR OTHER ITEM FROM TENANT 
HEREUNDER SHALL NOT BE RECEIVED BY LANDLORD OR LANDLORD'S 
DESIGNEE WITHIN PIVE (5) DAYS APTER THB DATE DUE, TENANT 
SHALL PAY TO LANDLORD, IN ADDITION TO ANY INTEREST ON 
DELINQUENT AMOUNTS PROVIDED ABOVE, A LATE CHARGE EQUAL TO 
THE GREATER OP TEN PERCENT (10%) OP THE DELINQUENT AMOUNT 
(IP APPLICABLE) OR $200.00, AS LIQUIDATED DAMAGES PER 
OCCURRENCE. THE PARTIES AGREE THAT SUCH LATE CHARGE 
REPRESBNTS A PAIR AND REASONABLE ESTIMATE OP THE COST 
LANDLORD WILL INCUR BY REASON OP LATE PAYMENT OR LATE 
DELIVERY BY TENANT. ACCEPTANCE OP SUCH LATE CHARGE SHALL NOT 
CONSTITUTE A WAIVER OP TENANT'S DEPAULT WITH RESPECT TO SUCH 
OVERDUE AMOUNT OR OTHER ITEM, NOR PREVENT LANDLORD PROM 
EXERCISING ANY OTHER RIGHTS AND REMEDIES GRANTED HEREUNDER 
OR BY LAW TO LANDLORD.	


Landlord's Initials           Tenant's Initials

13.5.1 If Tenant shall, during any six (6) month period, be 
more than ten (10) days delinquent in the payment of any 
rent or other amount payable by Tenant hereunder on three 
(3) or more then, notwithstanding anything herein to the 
contrary, Landlord may, by written notice to Tenant, elect 
to require Tenant to pay all Base Rent, Tenant's Share of 
Operating Expenses and additional rent payable hereunder 
quarterly in advance. Such right of Landlord shall be in 
addition to and not in lieu of any other right or remedy 
available to Landlord hereunder or at law on account of 
Tenant's default hereunder.

14. Condemnation. If the Premises or any portion thereof or 
the Industrial Center are taken under the power of eminent 
domain, or sold under the threat of the exercise of said 
power (all of which are herein called "condemnation", this 
Lease shall terminate as to the part so taken as of the date 
the condemning authority takes title or possession, 
whichever first occurs. It more than twenty percent (20%) of 
the floor area of the Premises is taken by condemnation and 
such taking materially and adversely affects Tenant's 
ability to conduct business in the Premises, Tenant may, at 
Tenant's option, to be exercised in writing only within ten 
(10) days after Landlord shall have given Tenant written 
notice of such taking (or in the absence of such notice, 
within ten (10) days after the condemning authority shall 
have taken possession) terminate this Lease as of the date 
the condemning authority takes such possession. If Tenant 
does not terminate this Lease in accordance with the 
foregoing, this Lease shall remain in full force and effect 
as to the portion of the Premises remaining, except that the 
rent shall be reduced in the proportion that the floor area 
of the Premises taken bears to the total floor area of the 
Premises. No reduction of rent shall occur if the only area 
taken is that which does not have the Premises located 
thereon. Any award for the taking of all or any pan of the 
Premises under the power of eminent domain or any payment 
made under threat of the exercise of such power shall be the 
property of Landlord, whether such award shall be made as 
compensation for diminution in value of the leasehold or for 
the taking of the fee, or as severance damages; provided, 
however, that Tenant shall be entitled to any award it may 
obtain in separate proceedings with the condemned for loss 
of or damage to Tenant's trade flusters and removable 
personal property. In the event that this Lease is not 
terminated by reason of such condemnation, Landlord shall to 
the extent of severance damages received by Landlord in 
connection with such condemnation repair any damage to the 
Premises caused by such condemnation except to the extent 
that Tenant has been reimbursed therefor by the condemning 
authority. Tenant shall pay any amount in excess of such 
severance damages required to complete such repair.

15. Broker's Fee. Upon execution of this Lease by both 
parties, Landlord shall pay to the Broker a fee as set forth 
in a separate agreement between Landlord and said Broker. 
Tenant represents and warrants to Landlord that it has had 
no dealings with any person, firm, broker or finder (other 
than the Broker, if any, named in Paragraph 1.8) in 
connection with the negotiation of this Lease and/or the 
consummation of the transaction contemplated hereby, and 
that no broker or other person, firm or entity other than 
said named Brokers is entitled to any commission or finder's 
fee in connection with said transaction. Tenant hereby 
agrees to indemnify, protect, defend and hold Landlord 
harmless from and against liability for compensation or 
charges which may be claimed by any such unnamed broker, 
finder or other similar party by reason of any dealings or 
actions of Tenant, including any costs, expenses, attorneys' 
fees reasonably incurred with respect thereto.

16. Estoppel Certificate. Tenant shall within ten (10) days 
after written notice from Landlord execute, acknowledge and 
deliver to Landlord a statement in writing in form similar 
to the then most current "Tenancy Statement" form published 
by the American Industrial Real Estate Association, pies 
such additional information, confirmation and/or statements 
as may be reasonably requested by Landlord. Tenant's failure 
to deliver such statement within such time shall be 
conclusive upon Tenant (a) that this Lease is in full force 
and effect, without modification except as may be 
represented by Landlord, (b) that there are no uncured 
defaults in Landlord's performance, (c) that not more than 
one month's Base Rent has been paid in advance, and (d) that 
any other statements of fact regarding Tenant or this Lease 
included by Landlord in the statement are correct. Tenant 
shall be liable for all loss, cost or expense resulting from 
the failure of any sale or funding of any loan caused by any 
material misstatement contained in any Tenancy Statement 
supplied by Tenant. Tenant irrevocably appoints Landlord as 
attorney-in-fact for Tenant with full power and authority to 
execute and deliver in the name of Tenant any Tenancy 
Statement if Tenant fails to deliver the same within such 
ten (10) day period, and such statement, as signed by 
Landlord, shall be binding on Tenant.

17. Landlord's Liability. The term "Landlord" as used herein 
shall mean only the owner or owners, at the time in 
question, of the fee title or a tenant's interest in a 
ground lease of the Industrial Center, and except as 
expressly provided in Paragraph 15, in the event of any 
transfer of such title or interest, Landlord herein named 
(and in case of any subsequent transfers then the grantor) 
shall be relieved from and after the date of such transfer 
of all liability as respects Landlord's obligations 
thereafter to be performed, provided that any funds in the 
hands of Landlord or the then grantor at the time of such 
transfer, in which Tenant has an interest, shall be 
delivered to the grantee. The obligations contained in this 
Lease to be performed by Landlord shall, subject as 
aforesaid, be binding on Landlord's successors and assigns, 
only during their respective periods of ownership.

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

19.	Headings. The paragraph captions contained in This 
Lease are for convenience only and shall not be considered 
in the construction or interpretation of any provision 
hereof.

20. Time of Essence; Force Majeure. Time is of the essence 
with respect to the performance of all obligations to be 
performed or observed by the parties under this Lease. 
Notwithstanding the foregoing, in the event that a part-y is 
delayed in performing any obligation of such party pursuant 
to This Lease by any cause beyond the reasonable control of 
such party, the time period for performing such obligation 
shall be extended by a period of .time equal! to the period 
~ of the delay. for the ,purpose of this paragraph, a cause 
shall be beyond the reasonable control of a party when such 
cause would affect any person similarly situated (such as a 
power outage, labor strike, governmental or other third 
party delay or truckers' strike) but shall not be beyond the 
reasonable control of a party when peculiar to such party 
(such as financial inability). This paragraph shall not 
apply to any obligation to pay money, but shall operate to 
delay the Commenced (but not the Expiration) Date in the 
event (only) of a delay affecting Landlord.

21.	Counterparts. This Lease may be executed in several 
counterparts, each of which shall be deemed an original, but 
all of which shall constitute one and the same instrument.

22. Incorporation of Prior Agreements; Amendments. This 
Lease contains all agreements of the parties with respect to 
any manner mentioned herein. No prior or contemporaneous 
agreement or understanding pertaining to any such manner 
shall be effective. This Lease may be modified in writing 
only, signed by the parties in interest at the time of the 
modification. Except as otherwise stated in this Lease, 
Tenant hereby acknowledges that neither the real estate 
Broker listed in Paragraph 15 hereof nor any cooperating 
broker on this transaction nor the Landlord or any employee 
or agents of any of said persons has made any oral or 
written warranties or representations to Tenant relative to 
the condition or use by Tenant of the Premises or the 
Industrial Center and Tenant acknowledges that Tenant 
assumes all responsibility regarding the Occupational Safety 
Health Act, the legal use and adaptability of the Premises 
and the compliance thereof with all Applicable Laws and 
regulations in effect during the term of this Lease except 
as otherwise specifically stated in this Lease.

23.	Notices. 

23.1 Any notice required or permitted to be given hereunder 
shall be in writing and may be given by personal delivery or 
by certified mail, and if given personally or by mail, shall 
be deemed sufficiently given if addressed to Tenant or to 
Landlord at the address noted below the signature of the 
respective parties, as the case may be. Either party may by 
notice to the other specify a different address for notice 
purposes except that upon Tenant's taking possession of the 
Premises, the Premises shall constitute Tenant's address for 
notice purposes. A copy of all notices required or permitted 
to be given to Landlord hereunder shall be concurrently 
transmitted to such party or parties at such addresses as 
Landlord may from time to time hereafter designate by notice 
to Tenant.

23.2 Any notice sent by registered or certified mail, return 
receipt requested, shall be deemed given on the date of 
delivery shown on the receipt card, or if no delivery date 
is shown, the postmark thereon. If sent by regular mail the 
notice shall be deemed given forty-eight (48) hours after 
the same is addressed as required herein and mailed with 
postage prepaid. Notices delivered by United States Express 
Mail or overnight courier that guarantees next day delivery 
shall be deemed given twenty-four (24) hours after delivery 
of the same to the United States Postal Service or courier. 
If any notice is transmitted by facsimile transmission or 
similar means, the same shall be deemed served or delivered 
upon telephone confirmation of receipt of the transmission 
thereof, provided a copy is also delivered via delivery 
service or mail.

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

25.	Recording. Either Landlord or Tenant shall, upon 
request of the other, execute, acknowledge and deliver to 
the other a form memorandum of this Lease for recording 
purposes.

26. Holding Over. If Tenant or anyone claiming under Tenant 
shall remain in possession of the Premises or any pan 
thereof after expiration of the Lease term or earlier 
termination thereof without any agreement in writing between 
Landlord and Tenant with respect thereto, Tenant shall (a) 
occupy upon all of the terms and conditions of this Lease 
except that the monthly Base Rent due from Tenant shall be 
equal to the greater of two hundred percent (200%) of the 
monthly Base Rent in effect at the end of the term or the 
then fair market rental value of the Premises, (b) pay all 
damages sustained by Landlord by reason of such retention, 
and (c) indemnify, defend, and hold Landlord harmless from 
and against any loss or liability resulting from such 
holding over. If Landlord so notifies Tenant in writing, 
such holding over shall constitute a renewal of this Lease 
for a one year term; otherwise Landlord's acceptance of rent 
shall create only a month-to-month tenancy, in either case 
upon the terms set forth in this paragraph. Any such month-
to-month tenancy shall be terminable at the end of any 
calendar month by either party by written notice to the 
other party given not less than ten (10) days prior to the 
end of such month. Nothing contained in this paragraph shall 
be deemed or construed to waive Landlord's right of reentry 
or any other right of Landlord hereunder or at law.

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

28. Covenants and Conditions. Each provision of this Lease 
performable by Tenant shall be deemed both a covenant and a 
condition.

29. Binding Effect; Choice of Law. Subject to any provisions 
hereof restricting Assignment or subletting by Tenant and 
subject to the provisions of Paragraph 17, this Lease shall 
bind the parties, their personal representatives, successors 
and assigns. This Lease shall be governed by the laws of the 
state where the Industrial Center is located and any 
litigation concerning this Lease between the parties hereto 
shall be initiated in the county in which the Industrial 
Center is located.

30. Subordination; Attornment; Non-Disturbance.

(a) This Lease, and any Option granted hereby, at Landlord's 
opinion, shall be subordinate to any ground lease, mortgage, 
deed of trust, or any other hypothecation or security now or 
hereafter placed upon the Industrial Center and to any and 
all advances made on the security thereof and to all 
renewals, modifications, consolidations, replacements and 
extensions thereof. Notwithstanding such subordination, 
Tenant's right to quiet possession of the Premises shall not 
be disturbed it Tenant is not in default and so long as 
Tenant shall pay the rent and observe and perform all of the 
provisions of this Lease, unless this Lease is otherwise 
terminated pursuant to its terms. Tenant agrees that the 
lenders holding any such security device shall have no duty, 
liability or obligation to perform any of the obligations of 
Landlord under this Lease, but that in the event of 
Landlord's default with respect to any such obligation, 
Tenant will give any lender whose name and address have been 
furnished Tenant in writing for such purpose notice of 
Landlord's default and allow such lender thirty (30) days 
following receipt of such notice for the cure of said 
default before invoking any remedies Tenant may have by 
reason thereof. If any mortgagee, trustee or ground lessor 
shall elect to have this Lease and any Options granted 
hereby prior to the lien of its mortgage, deed of trust or 
ground lease, and shall give written notice thereof to 
Tenant, this Lease and such Options shall be deemed prior to 
such mortgage, deed of trust or ground lease, whether this 
Lease or such Options are dated prior or subsequent to the 
date of said mortgage, deed of trust or ground lease or the 
date of recording thereof.

(b) Tenant agrees to attorn to a lender or any other party 
who acquires ownership of the Premises by reason of a 
foreclosure of a security device, and that in the event of 
such foreclosure, such new owner shall not: (i) be liable 
for any act or omission of any prior landlord or with 
respect to events occurring prior to acquisition of 
ownership, (ii) be subject to any offsets or defenses which 
Tenant might have against any prior landlord, or (iii) be 
bound by prepayment of more than one month's rent. Tenant 
agrees to execute any documents required to effectuate an 
attornrnent, a subordination or to make this Lease or any 
Option granted herein prior to the lien of any mortgage, 
deed of trust or ground lease, as the case may be. Tenant's 
failure to execute such documents within ten (10) days after 
written demand shall constitute a material default by Tenant 
hereunder without further notice to Tenant or, at Landlord's 
option, Landlord shall execute such documents on behalf of 
Tenant as Tenant's attorney-in-fact. Tenant does hereby 
make, constitute and irrevocably appoint Landlord as 
Tenant's attorney-in-fact and in Tenant's name, place and 
stead, to execute such documents in accordance with this 
Paragraph 30(b).

31. Attorneys' Fees. If any party brings an action or 
proceeding to enforce the terms hereof or declare rights 
hereunder, the Prevailing Party (as hereafter deemed) in any 
such proceeding, action, or appeal thereon, shall be 
entitled to reasonable attorneys' fees. Such fees may be 
awarded in the same suit or recovered in a separate suit, 
whether or not such action or proceeding is pursued to 
decision or judgment. The term, Prevailing Party shall 
include, without limitation, a party who substantially 
obtains or defeats the relief sought, as the case may be, 
whether by compromise, settlement, judgment, or the 
abandonment by the other party of its claim or defense. The 
attorneys' fee award shall not be computed in accordance 
with any court fee schedule, but shall be such as to fully 
reimburse all attorneys' fees reasonably incurred. Landlord 
shall be entitled to attorneys' fees, costs and expenses 
incurred in the preparation and service of notices of 
default and consultations in connection therewith, whether 
or not a legal action is subsequently commenced in 
connection with ..such default or resulting breach.

32. Landlord's Access. Landlord and Landlord's agents shall 
have the right to enter the Premises at reasonable times for 
the purpose of inspecting the same, showing the same to 
prospective purchasers, lenders, or tenants, and making such 
alterations, repairs, improvements or additions to the 
Premises or to the Industrial Center as Landlord may deem 
necessary or desirable. Landlord may at any time place on or 
about the Premises or the Building any ordinary for Sale" 
signs and Landlord may at any time during the last one 
hundred twenty (120) days of the term hereof place on or 
about the Premises any ordinary "for Lease" signs. All 
activities of Landlord pursuant to this paragraph shall be 
without abatement of rent, nor shall Landlord have any 
liability to Tenant for the same.

33. Auctions. Tenant shall not conduct, nor permit to be 
conducted, either voluntarily or involuntarily, any auction 
upon the Premises or the Common Areas without first having 
obtained Landlord's prior written consent. Notwithstanding 
anything to the contrary in this Lease, Landlord shall not 
be obligated to exercise any standard of reasonableness in 
determining whether to grant such consent.

34. Signs. Tenant shall not place any sign upon the Premises 
or the Industrial Center without Landlord's prior written 
consent. Under no circumstances shall Tenant place a sign on 
any roof of the Industrial Center. The installation of any 
sign on the Premises by or for tenant shall be subject to 
the provisions of Paragraph 7 (Maintenance, Repairs, Utility 
Installations, Trade Fixtures and Alterations). Unless 
otherwise expressly agreed herein, Landlord reserves all 
rights to the use of the roof and the right to install, and 
all revenues from the installation of, such advertising 
signs on the Premises, including the roof, as do not 
unreasonably interfere with the conduct of Tenant's 
business.

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

36. Consents. Landlord's actual reasonable costs and expense 
(including, but not limited to, architects', attorneys', 
engineers' or other consultants' fees) incurred in the 
consideration of, or response to, a request by Tenant for 
any Landlord comment pertaining to this Lease or the 
Premises, including, but not limited to, consents to an 
Assignment, a subletting or the presence or use of Hazardous 
Material, practice or storage tank, shall be paid by Tenant 
to Landlord upon receipt of an invoice and supporting 
documentation therefor. Subject to Paragraph 12.2(e) 
(applicable to Assignment or subletting), Landlord may, as a 
condition to considering any such request by Tenant, require 
that Tenant deposit with Landlord an amount of money (in 
addition to the Security Deposit held under Paragraph 5) 
reasonably calculated by Landlord to represent the cost 
Landlord will incur in considering and responding to 
Tenant's request. Except as otherwise provided, any unused 
portion of said deposit shall be refunded to Tenant without 
interest. Landlord's consent to any act, Assignment of this 
Lease or subletting of the Premises by Tenant shall not 
constitute an acknowledgment that no default or breach by 
Tenant of this Lease exists, nor shall such consent be 
deemed a waiver of any then existing default or breach, 
except as may be otherwise specifically stated in writing by 
Landlord at the time of such consent.

37. Guarantor. In the event that there is a Guarantor of 
this Lease, said Guarantor shall have the same obligations 
as Tenant under this Lease. Without limiting the generality 
of the foregoing, it shall constitute a default of the 
Tenant under this Lease if any Guarantor fails or refuses, 
upon reasonable request by Landlord to give (a) evidence of 
the due execution of the guaranty called for by this Lease, 
including the authority of the Guarantor (and of the party 
signing on Guarantor's behalf) to obligate such Guarantor on 
said guaranty, and including in the case of a corporate 
Guarantor, a certified copy of a resolution of its board of 
directors authorizing the mailing of such guaranty, together 
with a certificate of incumbency showing the signatures of 
the persons authorized to sign on its behalf, (b) current 
financial statements of Guarantor as may from time to time 
be requested by Landlord, (c) a Tenancy Statement, or (d) 
written confirmation that the guaranty is still in effect.

38. Quiet Possession. Upon Tenant paying the rent for the 
Premises and observing and performing all of the covenants, 
conditions and provisions on Tenant's part to be observed 
and performed hereunder, Tenant shall have quiet possession 
of the Premises for the entire term hereof subject to all of 
the provisions of this Lease.

39.	Options.

39.1 Definition. As used in this paragraph the word "Option" 
has the following meaning: (1) the right or option to extend 
the term of this Lease or to renew this Lease or to extend 
or renew any lease that Tenant has on other property of 
Landlord; (2) the option or right of first refusal to lease 
the Premises or the right of first offer to lease the 
Premises or the right of first refusal to lease other space 
within the Industrial Center or other property of Landlord 
or the right of first offer to lease other space within the 
Industrial Center or other property of Landlord; (3) the 
right or option to purchase the Premises or the Industrial 
Center, or the right of first refusal to purchase the 
Premises or the Industrial Center, or the right of first 
offer to purchase the Premises or the Industrial Center, or 
the right or option to purchase other property of Landlord, 
or the right of first refusal to purchase other property of 
Landlord or the right of first offer to purchase other 
property of Landlord.

39.2 Options Personal. Each Option granted to Tenant in this 
Lease is personal to the original Tenant and may be 
exercised only by the original Tenant while occupying the 
Premises who does so without the intent of thereafter 
assigning this Lease or subletting the Premises or any 
portion thereof, and may not be exercised or be assigned, 
voluntarily or involuntarily, by or to any person or entity 
other than Tenant. The Options, if any, herein granted to 
Tenant are not assignable separate and apart from this 
Lease, nor may any Option be separated from this Lease in 
any manner, either by reservation or otherwise.

39.3 Multiple Options. In the event that Tenant has any 
multiple options to extend or renew this Lease a later 
option cannot be exercised unless the prior option to extend 
or renew this Lease has been so exercised.

39.4 Effect of Default on Options.

(a) Tenant shall have no right to exercise an Option, 
notwithstanding any provision in the grant of Option to the 
contrary, (i) during the time commencing from the date 
Landlord gives to Tenant a notice of default pursuant to 
Paragraph 13. l(b) or 13. l(c) and continuing until the 
noncompliance alleged in said notice of default is cured, or 
(ii) during the period of time commencing on the date after 
a monetary obligation to Landlord is due from Tenant and 
unpaid (without any necessity for notice thereof to Tenant) 
and continuing until the obligation is paid, or (iii) at 
anytime after an event of default described in Paragraphs 
13.1(a). 13.1(d), or 13.1(e) (without any necessity of 
Landlord to give notice of such defualt to Tenant), or (iv) 
in the event that Landlord has given to Tenant three or more 
notices of default under Paragraph 13.1(b) or Paragraph 
13.1(c), whether or not the defaults are cured, during the 
twelve (12) month period of time immediately prior to the 
time that Tenant attempts to exercise the subject Option.

(b) The period of time within which an Option may be 
exercised shall not be extended or enlarged by reason of 
Tenant's inability to exercise an Option because of the 
provisions of Paragraph 39.4(a).

(c) All rights of Tenant under the provisions of an Option 
shall terminate and be of no further force or effect, 
notwithstanding Tenant's due and timely exercise of the 
Option, if after such exercise and during the term of this 
Lease, ~I) Tenant fails to pay to Landlord a monetary 
obligation of Tenant for a period of thirty (30) days after 
such obligation becomes due (without any necessity of 
Landlord to give notice thereof to Tenant), or (ii)) Tenant 
fails to commence to cure a default specified in Paragraph 
13.1(c) within thirty (30) days after the date that T 
Landlord gives notice to Tenant of such default and/or 
Tenant fails thereafter to diligently prosecute said cure to 
completion, or (iii) Tenant commits a default described in 
Paragraphs 13.1 (a), 13.1 (d) or 13. l(e) (without any 
necessity of Landlord to give notice of such default to 
Tenant), or (iv) Landlord gives to Tenant three or more 
notices of default under Paragraph 13.1(b), or Paragraph 
13.1(c), whether or not the defaults are cured.

40. Multiple Buildings. If the Premises are part of a group 
of buildings controlled by Landlord, Tenant agrees that it 
will abide by, keep and observe all reasonable rules and 
regulations which Landlord may make from time to time for 
the management, safety, care, and cleanliness of the 
grounds, the parking and unloading of vehicles and the 
preservation of good order, as well as for the convenience 
of other occupants or tenants of such other buildings and 
their invitees, and that Tenant will pay its fair share of 
common expenses incurred in connection therewith. The 
initial rules and regulations are as set forth in Exhibit D 
hereto.

41. Security Measures. Tenant hereby acknowledges that 
Landlord shall have no obligation whatsoever to provide 
guard service or other security measures for the benefit of 
the Premises or the Industrial Center, Tenant assumes all 
responsibility for the protection of Tenant, its agents, and 
invitees and the property of Tenant and of Tenant's agents 
and invitees from acts of third parties. Nothing herein 
contained shall prevent Landlord, at Landlord's sole option, 
from providing security protection for the Industrial Center 
or any part thereof.

42. Easements. Landlord reserves to itself the right, from 
time to time, to grant such easements, rights and 
dedications that Landlord deems necessary or desirable, and 
to cause the recordation of parcel maps and restrictions, so 
long as such easements, rights, dedications, maps and 
restrictions do not unreasonably interfere with the use of 
the Premises by Tenant. Tenant shall sign any of the 
aforementioned documents upon request of Landlord and 
failure to do so shall constitute a material default of this 
Lease by Tenant without the need for further notice to 
Tenant. 43. Performance Under Protest. If at any time a 
dispute shall arise as to any amount or sum of money to be 
paid by one party to the other under the provisions hereof, 
the party against whom the obligation to pay the money is 
asserted shall have the right to make payment, under 
protest, and such payment shall not be regarded as a 
voluntary payment, and there shall survive the right on the 
part of said party to institute suit for recovery of such 
sum. If it shall be adjudged that there was no legal 
obligation on the part of said party to pay such sum or any 
part thereof, said party shall be entitled to recover such 
sum or so much thereof as it was not legally required to pay 
under the provisions of this Lease.

44. Authority. It Tenant is a corporation, trust, or general 
or limited partnership, each individual executing this Lease 
on behalf of such entity represents and warrants that he or 
she is duly authorized to execute and deliver this Lease on 
behalf of said entity. If Tenant is a corporation, trust or 
partnership, Tenant shall, concurrently with the execution 
of this Lease, deliver to Landlord evidence of such 
authority satisfactory to Landlord. 45. Conflict. Any 
conflict between the printed provisions of this Lease and 
the typewritten or handwritten provisions, if any, shall be 
controlled by the typewritten or handwritten provisions.

46.	Offer. Preparation of this Lease by Landlord or 
Landlord's agent and submission of same to Tenant shall not 
be deemed an of(offer to lease.  This Lease shall become 
binding upon Landlord and Tenant only when fully executed by 
Landlord and Tenant.
	
47. Amendments. This Lease may be modified only in writing, 
signed by the panics in interest at the time of the 
modification. The parties shall amend this Lease from time 
to time to reflect any adjustments that arc made to the Base 
Rent or other rent payable under this Lease. As long as they 
do not materially increase Tenant's obligations hereunder, 
Tenant agrees to make such reasonable non-monetary 
modifications to this Lease as may be reasonably required by 
an institutional, insurance company or pension plan lender 
in connection with the obtaining of normal financing or 
refinancing of the property of which the Premises arc a pan.

48. Nondisclosure of Lease Terms. Landlord and Tenant agree 
that the terms of this Lease are confidential and constitute 
proprietary information of the panics hereto. Disclosure of 
the terms hereof could adversely affect the ability of 
Landlord to negotiate with other tenants of the Industrial 
Center. Each of the panics hereto agrees that such party, 
and its respective partners, officers, directors, employees, 
agents and attorneys, shall not disclose the terms and 
conditions of this Lease to any other person without the 
prior written consent of the other party hereto except 
pursuant to an order of a court of competent jurisdiction. 
Provided, however, that Landlord may disclose the terms 
hereof to any lender now or hereafter having a lien on 
Landlord's interest in the Industrial Center, or any portion 
thereof, and either party may disclose the terms hereof to 
its respective independent accountants who review its 
respective financial statements or prepare its respective 
tax returns, to any prospective transferee of all or any 
portions of their respective interests hereunder (including 
a prospective sublessee or assignee of Tenant), to any 
lender or prospective lender to such party, to any 
governmental entity, agency or person to whom disclosure is 
required by applicable law, regulation or duty of diligent 
inquiry and in connection with any action brought to enforce 
the terms of this Lease, on account of the breach or alleged 
breach hereof or to seek a judicial determination of the 
rights and obligations of the panics hereunder.

49.	Addendum. Attached hereto is an addendum or addenda 
containing paragraphs A through E which constitute a 
pan of this Lease.

LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS 
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY 
EXECUTION OP THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY 
CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME 
THIS LEASE IS EXECUTED, THE TERMS OP THIS LEASE ARE 
COMMERCIALLY REASONABLE AND EPFECTUATE THE INTENT AND 
PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.  
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY 
FOR APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY 
LANDLORD OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL 
SUFFICIENCY, LEGAL EPPECT, OR TAX CONSEQUENCES OP THIS LEASE 
OR THE TRANSACTION RELATING THERETO. THE PARTIES SHALL RELY 
SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE 
LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

The parties hereto have executed this Lease as of the date 
last set forth below.

Landlord

THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a New York 
corporation .

By /s/ William J. Swackhamer
       William J. Swackhamer
   Real Estate/Vice President/

Executed on 8/15/97

ADDRESS FOR NOTICES AND RENT

19712 MacArthur Boulevard, Suite 200
Irvine, California 92612
Attention Vice President Real Estate Investment

Tenant

CONTINENTAL ENGINEERING GROUP, INC., a CALIFORNIA 
corporation  dba MicroCentre

By /s/ Frederick W. Lee III
   Executed on 8/12/97

ADDRESS FOR NOTICES AND RENT
5300 N. Irwindale Avenue
Irwindale, California 91706


ADDENDUM TO LEASE BETWEENTHE  MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK, AS LANDLORD, AND CONTINENTAL ENGINEERING GROUP, 
INC.,AS TENANT, DATED JUNE_, 1997

	This Addendum is attached to and forms a part of that 
certain Standard Industrial Lease Mutual-Tenant of even date 
herewith by and between THE MUTUAL LIFE INSURANCE COMPANY OF 
NEW YORK as landlord and CONTINENTAL ENGINEERING GROUP, 
INC., as Tenant. In the event of any conflict between the 
provisions of the Lease and the Provisions of the Addendum, 
this Addendum shall control.

A.	Right of First Offer

Tenant shall have a one-time right of first offer to lease 
5304 N. Irwindale Ave., which is in the Building and 
consists of approximately 37,436 square feet of rentable 
area (collectively, the Expansion Space") from Landlord if, 
after the Commencement Date and during the Original Term of 
this Lease, such space becomes available and Landlord is 
interested in marketing all or a portion of such space. 
Tenant acknowledges that the Expansion Space is currently 
occupied by another tenant. At such time as the Expansion 
Space becomes available and Landlord becomes interested in 
leasing any portion of the Expansion Space (including all), 
Landlord shall notify Tenant in writing of the Base Rent 
(which shall be 100% of fair market value rental) and on the 
other terms and conditions on which Landlord would be 
willing to lease such portion of the Expansion Space 
(including all). Tenant shall, within three (3) days 
following its receipt of Landlord's notice, indicate in 
writing its intention to add to the Premises the entire 
portion of the Expansion Space (including all) so offered by 
Landlord on the terms specified in Landlord's notice. Any 
failure by Tenant to respond to Landlord's notice within 
such three (3) day period, or any notice by Tenant 
specifying Tenant's acceptance of the Expansion Space on 
terms other than those set forth in Landlord's notice or of 
only a portion of the Expansion Space so offered by 
Landlord, shall cause Tenant's rights under this paragraph 
A. to terminate with respect to the Expansion Space so 
offered, and Landlord shall thereafter be free to lease the 
Expansion Space so offered to another party at any rate and 
on any terms Landlord chooses.

If Tenant is entitled to and gives notice to Landlord within 
such three (3) days of its desire to add the offered 
Expansion Space to the Premises, the Expansion Space so 
offered shall be delivered by Landlord to Tenant on the 
terms set forth in Landlord's notice, and shall otherwise be 
added to the Premises on the same terms and conditions set 
forth in this Lease with respect to the Premises to the 
extent not inconsistent with the terms and conditions 
specified in Landlord's notice (except that the provisions 
of Exhibit C of the Lease shall not apply unless clearly 
specified to the contrary in Landlord's notice).

Notwithstanding anything to the contrary contained in this 
paragraph A., Landlord shall be required to offer any 
portion of the Expansion Space (including all) to Tenant, 
and Tenant shall be entitled to exercise its rights 
hereunder with respect thereto, only if, at the time of such 
offer and exercise, respectively, Tenant is not in default 
under any of the terms, conditions, provisions or covenants 
of this Lease, and there has not then occurred an event 
which, with notice and/or lapse of time, would constitute 
such a default. Moreover, in no event shall Tenant have the 
right of first opportunity with respect to any Expansion 
Space (1) which is, as of the date of this Lease, subject to 
another tenant's rights, including without limitation rights 
of renewal, first opportunity, offer or refusal, which prior 
right is exercised by such other tenant, (2) which becomes 
available during the last three (3) years of the Original 
Term or (3) with respect to any Expansion Space which is or 
becomes the subject of a renewal lease with the existing 
tenant or occupant as of the date of expiration of the 
existing lease therefor.

B.	Old Lease and Possession of Premises

The Lease to which this Addendum is attached and of which it 
forms a part is a replacement for that certain lease dated 
December 13, 1991 by and between Birtcher Campbell Reliance-
MIP Ltd., a California Limited Partnership ("former 
Landlord"), Landlord's predecessor in interest, and Tenant 
(the "Old Lease"). It is agreed and acknowledged that (i) 
Tenant is currently in possession of the Premises, (ii) 
Tenant will remain in possession of the Premises pursuant to 
this Lease, ((iii)) the Old Lease expires, by its terms, 
January 31, 1998, 0lv) there is nothing required of Landlord 
to put Tenant in possession of the Premises or any portion 
thereof, and Landlord shall have no responsibility, as to 
either performance of payment of costs, for any work 
necessary or desired by Tenant to be performed in the 
Premises, except as set forth in Exhibit C hereto, (v) 
Tenant wil1 remain in possession of the Premises pursuant to 
the Old Lease until 11:59 p.m. on the day before the 
Commencement Date (the "Termination Date"), (vi) the Old 
Lease will terminate with respect to the Premises on the 
Termination Date and (vii) from and after the Commencement 
Date, Tenant shall occupy the Premises pursuant to this 
Lease.

Notwithstanding the termination of the Old Lease, the 
following obligations of the parties thereunder shall be 
preserved:

(1)	Landlord shall remain responsible for and shall hold 
harmless Tenant from and against any and all claims, costs, 
expenses, losses, damages, actions and causes of action for 
which Landlord is responsible under the Old Lease and which 
accrue on or before the Termination Date.

(2)	Tenant shall remain responsible for and shall defend, 
indemnify and hold harmless Landlord from and against any 
and all claims, costs, losses, expenses, damages, actions 
and causes of action arising from, pertaining to or 
connected with the Premises and/or Tenant's occupancy 
thereof, for which the Tenant is responsible under the Old 
Lease and which accrue on or before the Termination Date.

(3)	Tenant shall remain liable for the costs of all 
utilities used on or at the Premises through the Termination 
Date accrued and unpaid, whether or not then billed, as of 
the Termination Date until full payment thereof by Tenant.

(4)	Tenant shall remain responsible for any taxes of the 
type required to be paid by Tenant under the Old Lease and 
assessed against the Premises and the personal property 
located therein or thereon with a lien date prior to the 
Commencement Date, irrespective of the date of the billing 
therefor.

(5)	Tenant shall remain obligated to Landlord for all 
"Monthly Rental" and other rent payable to Landlord by 
Tenant pursuant to the Old Lease with respect to the 
Premises and accrued and unpaid (whether or not invoiced) 
through the Termination Date until complete payment of the 
same; provided, however, that the foregoing shall not apply 
to and Landlord and Tenant hereby agree that there shall be 
no adjustment of Common Operating Costs for the 1996 and 
1997 calendar years, regardless of whether any such 
adjustment would result in an amount due from Landlord to 
Tenant or from Tenant to Landlord. In the event that any 
additional rent item with respect to the Premises is payable 
under the Old Lease on a basis different than under this 
Lease, Landlord's adjustment shall reflect the basis used 
under the Old Lease through the Termination Date and the 
basis used under this Lease for the period subsequent to the 
Termination Date.

 (6) Failure of Tenant to perform its obligations under this 
Addendum section A. shall be deemed a default by Tenant 
pursuant to this Lease (after any applicable grace period as 
set forth in Paragraph 13.1), entitling Landlord to exercise 
all remedies available to a landlord against a defaulting 
tenant, including, but not limited to, those provided in 
Paragraph 13.2 of the Lease.

C.	Base Rent

Notwithstanding anything to the contrary in the Lease, 
monthly Base Rent shall be as set forth in Exhibit E to this 
Lease.

D.	Security Deposit

Landlord and Tenant acknowledge and agree that the Security 
Deposit described in Paragraph 1.6 above is currently on 
deposit with Landlord pursuant to the Old Lease, and shall 
remain on deposit with Landlord pursuant to this Lease to 
secure the full and faithful performance by Tenant of its 
obligations pursuant to this Lease in accordance with 
Paragraph 5 of the Lease.

E.	Irwindale Redevelopment Plan

(1)	Tenant acknowledges that the Industrial Center is 
subject to: (a) that certain Disposition and Development 
Agreement dated June 28, 1985 (the "DDA"), between the 
Irwindale Community Redevelopment Agency and Birtcher 
Campbell Properties, recorded on March 13, 1986, as 
Instrument No. 86-320883 in the Official Records (the 
"Official Records) of Los Angeles County, California; and 
(b) the Redevelopment Plan adopted by the Irwindale 
Community Redevelopment Agency (the "Redevelopment
Plan). Tenant has had an opportunity to review a copy of the 
DDA and the Redevelopment Plan.

(2)	With respect to the DDA and this Redevelopment Plan, 
Tenant agrees to the following:

(a)	Tenant acknowledges that pursuant to the Redevelopment 
Plan, the Industrial Center's designated zoning is "M-2.

(Heavy Manufacturing). Tenant represents that Tenant shall 
only use the Premises consistent with the foregoing zoning
and the terms and conditions of the Redevelopment Plan; 
provided, however, the foregoing shall not be interpreted
to permit any use other than as expressly provided by 
paragraph 6 of the Lease.

(b)	Tenant shall not discriminate upon the basis of race, 
sex, color, creed, marital status, religion, national origin 
or ancestry in the sublease, rental or transfer, or in the 
use, occupancy, tenure, or enjoyment of the Premises, or any 
pan thereof, nor shall Tenant or any person claiming under 
or through Tenant establish or permit any such practice or
practices of discrimination or segregation with reference to 
the selection, location, number, use or occupancy of
tenants, lessees, subtenants, sublessees, or vendees of the 
Premises, or any part thereof.

(c)  Tenant shall comply with Health and Safety Code Section 
33436.


 EXHIBIT C

WORK LETTER

Tenant acknowledges and agrees that only minor (in terms of 
time and amount) modifications to the Premises are required 
for tenant's occupancy thereof. Accordingly, promptly upon 
execution hereof, Landlord shall make available to Tenant, 
to enable tenant to repaint, recarpet or refloor, and 
remodel offices in, the Premises with Building standard 
materials selected by tenant, up to the sum of Twelve 
Thousand Five Hundred No/lOOths Dollars (S12,500.00) (the 
"Allowance); provided, however, that improvements and 
alterations made by tenant pursuant to the foregoing shall 
be subject to Section 7.3 of the Lease and provided further 
that the Allowance shall be available to Tenant for such 
work only if and to the extent that tenant submits to 
Landlord, on or before December 31, 1997, documentary 
evidence satisfactory to Landlord as to the amount and scope 
of such work and evidencing that such work is completed. 
Moreover, in the event Tenant utilizes the services of its 
employees in connection with such work, tenant will provide 
to Landlord evidence of insurance covering such activities 
in the Premises by tenant and its employees in form and 
substance satisfactory to Landlord, and Landlord shall make 
available from the Allowance no more than Five Thousand 
Dollars (55,000.00) to reimburse tenant for reasonable labor 
charges paid to such employees in connection with such work. 
In no event shall Landlord be required to pay the Allowance 
or any portion thereof to Tenant at any time when Tenant is 
in breach or default under the Lease. Subject to the 
foregoing, tenant accepts the Premises "AS IS. n Any other 
work necessary or desirable for Tenant's use of the Premises 
shall be Tenant's sole responsibility, both as to 
performance and payment of costs.

EXHIBIT D
RULES AND REGULATIONS

	The following Rules and Regulations shall be in effect 
for the Premises. Landlord reserves the right to adopt 
reasonable modifications and additions hereto. In the case 
of any conflict between those regulations and the Lease, the 
Lease shall be controlling. Landlord shall have the right to 
waive one or more rules for the benefit of a particular 
tenant in Landlord's reasonable discretion.

1.	Except with the prior written consent of Landlord, 
tenant shall not conduct any retail sales in or from the 
Premises, or any business other than that specifically 
provided for in the Lease.

2.	Landlord reserves the right to prohibit personal goods 
and services vendors from access to the Premises except 
upon such reasonable terms and conditions, including, but 
not limited to, the payment of a reasonable fee and 
provision for insurance coverage, as are related to the 
safety, care and cleanliness of the Premises, the 
preservation of good order thereon, and the relief of any 
financial or other burden on Landlord occasioned by the 
presence of such vendors or the sale by them of personal 
goods or services to Tenant or its employees. If reasonably 
necessary for the accomplishment of these purposes, Landlord 
may exclude a particular vendor entirely or limit the number
of vendors who may be present at any one time in the 
Premises. The term "personal goods or services vendors' 
means persons who periodically enter the Premises for the 
purpose of selling goods or services to Tenant other than 
goods or services which are used by Tenant only for the 
purpose of conducting its business on the Premises. 
"Personal goods or services" include, but are not 
limited to, drinking water and other beverages, food, 
barbering services and shoe shining services.

3.	The sidewalks, driveways and other areas of common 
access within the Premises shall not be obstructed by 
Tenant or used by it for any purpose other than for ingress 
to and egress from the Premises. Neither tenant nor its 
employees or contractors Shall go upon the roof of the 
Premises without the prior written consent of Landlord.

4.	The toilet rooms, water and wash closets and other 
water apparatus Shall not be used for any purpose other than 
that for which they were constructed, and no foreign 
substance of any kind whatsoever Shall be thrown therein, 
and the expense of any breakage, stoppage or damage 
resulting from the violation of these rules shall be borne 
by Tenant.

5.	No sign, advertisement or notice visible from the 
exterior of the Premises shall be inscribed, painted or 
affixed by tenant on any part of the Premises without the 
prior written consent of Landlord. If Landlord shall have 
given such consent at any time, whether before or after the 
execution of this Lease, such consent shall in no way 
operate as a waiver or release of any of the provision 
hereof or of this Lease, and shall be deemed to relate only 
to the particular sign, advertisement or notice so consented 
to by Landlord and shall not be construed as dispensing with 
the necessity of obtaining the specific written consent of 
Landlord with respect to each and every such sign, 
advertisement or notice other than the particular sign, 
advertisement or notice, as the case may be, so consented to 
by Landlord.

6.	In order to maintain the outward professional 
appearance of the Premises, all window coverings to be 
installed at the Premises shall be subject to Landlord's 
prior approval. If Landlord by a notice in writing to 
tenant, shall object to any curtain, blind, shade or screen 
attached to, or hung in, or used in connection with, any 
window or door of the Premises, such use of such curtain, 
blind, shade or screen shall be forthwith discontinued by 
tenant. No awnings shall be permitted on any part of the 
Premises; provided, however, that the foregoing shall not 
apply to the existing awning located outside the Premises.

7.	Tenant shall not do or permit anything to be done in 
the Premises, or bring or keep anything therein, which shall 
in any way increase the rate of fire insurance on the 
Premises, or on the property kept therein, or conflict with 
the regulations of the Fire Department or the fire laws, or 
with any insurance policy upon the Premises, or any part 
thereof, or with any rules and ordinances established by the 
Board of Health or other governmental authority.

8.	Tenant shall not sweep or throw or permit to be swept 
or thrown from the Premises any dirt or other substance into 
any common areas, and Tenant shall not use, keep or permit 
to be used or kept any foul or noxious gas or substance in 
the Premises, or permit or suffer the Premises to be 
occupied or used in a manner offensive or objectionable to 
Landlord by reason of noise, odors and/or vibrations, nor 
shall any animals, birds or firearms be kept in or about the 
Premises.

9.	No cooking shall be done or permitted by Tenant on the 
Premises, nor shall the Premises be used for lodging.

10.	Tenant shall not use or keep in the Premises any 
kerosene, gasoline, or inflammable fluid or any other 
illumminating material, or use any method of heating other 
than that supplied by Landlord.

11.	Tenant, upon the termination of its tenancy, shall 
deliver to Landlord all keys of offices, rooms and toilet 
rooms which shall have been furnished tenant or which Tenant 
shall have had made and, in the event of loss of any of the 
keys so furnished, shall pay Landlord therefor.

12.	Tenant shall see that the windows and doors of the 
Premises are closed and securely locked before leaving the 
Premises and shall exercise care and caution that all water 
faucets or water apparatus are entirely shut off before 
Tenant or Tenant's employees leave the Premises, and that 
all electricity, gas or air shall likewise be carefully shut 
off, so as to prevent waste or damage, and for any default 
or carelessness Tenant shall make good all injuries 
sustained by Landlord.

13.	Tenant shall not erect any aerial or antenna on the 
roof or exterior walls of the Premises without Landlord's 
prior written consent.

	Exhibit E
RENT Schedule

           Monthly
           Base Rent 
           Rate (per
           sq ft of        Monthly
           rentable        Base rent        Monthly Base
Months     space)          Waiver           Rent Payable
------     -----------    ----------        ------------ 
1-2        $0.32          $29,329.60        $     0.00
3-8        $0.32          $     0.00        $29,329.60 
9-20       $0.34          $     0.00        $31,162.70
21-32      $0.35          $     0.00        $32,079.25
33-44      $0.365         $     0.00        $33,454.08
45-56      $0.38          $     0.00        $34,828.90
57-62      $0.395         $     0.00        $36,203.73


Landlord hereby conditionally excuses tenant from the 
payment of Base Rent during the months and in the amounts 
designated as "Monthly Base Rent Waiver as specified above, 
provided that tenant shall pay all other charges under this 
Lease from and after the Commencement Date and provided 
further that Tenant shall not be in default in its 
obligations under this Lease. Should Tenant at any time 
during the Original Term be in default under the Lease and 
not cure such default within the cure periods provided in 
the Lease, then the total sum of such Base Rent so 
conditionally excused shall become immediately due and 
payable by tenant to Landlord. If at the date of expiration 
of the Original Term, Tenant has not so defaulted, Landlord 
shall waive any payment of all such Base Rent so 
conditionally excused.


FIRST AMENDMENT TO LEASE

(THIS FIRST ADMENTMENT TO LEASE ( the Amendment) is made as 
of the _ day of August, 1997, by and between The MUI UAL UFE 
INSURANCE COMPANY OF NEW YORK, a NEW York corporation 
(LANDLORD.). and CONTINENTAL ENGINEERD4G GROUP. INC.,

California corporation (tenant.), with respect to the 
following:

RECITALS

	A.	Landlord is the Landlord and Tenant pursuant to 
that certain written Standard Industrial Lease  Multi-Tenant 
dated as of June  _, 1997 (the 'Lease'). The Lease covers 
certain premises commonly known as 5300 N. Irwindale Avenue 
(the Premises ) which are a portion of building' located in 
Irwindale, California (the Building), which Building is part 
of a project commonly known as Civic Commerce Center (the 
Industrial Center) located at 16021-16031 E. Arrow Highway, 
Irwindale, California.

	n.	Tenant and Landlord desire to amend certain 
provisions of the Lease on the terms and conditions set 
forth in this Amendment.

AGREEMENT

	NOW, THEREFORE, IN CONSIDERATION OF the foregoing 
Recitals and for other good and valuable consideration, the 
receipt and adequacy of which are hereby acknowledged, 
Landlord and Tenant hereby agree as follows:

1.	Capitalized Terms Capitalized terms used herein and not 
otherwise defined shall have the meanings given to such 
terms in the Lease.

2. Premises and/or Premises Building Partial Damage: 
Uninsured Loss:  In the event of an Uninsured Loss giving 
rise to an option in favor of Landlord pursuant to Paragraph 
9.2(b) of the Lease, as a result of which landlord estimates 
that the damage would take more than one hundred eighty 
(180) days to repair, which estimate, if in excess of one 
hundred eighty (180) days, shall be delivered to tenant as 
soon as practicable, and in any event within sixty (60) 
days, after the occurrence of the damage Tenant shall have 
the right. so long as Tenant is not in default and Tenant's 
negligent or  willful act did not cause the damage, to 
terminate the Lease by written notice to Landlord given, if 
at all, within ten (10) days after the occurrence of the 
damage  In the event Tenant fails or is not entitled to give 
such notice or if Landlord's estimate is one hundred eighty 
(180) days or less, then Tenant's option shall lapse and 
have no further force or effect.

3.  Late Payments and Deliveries: The amount "TEN PERCENT 
(10%) appearing in Paragraph 13.5 (b) is hereby amended to 
be "SIX PERCENT (6%)

4.	Holding Over.  The phrase "two hundred percent (200%) " 
appearing in Paragraph 26 of the Lease is hereby amended to 
be "one hundred fifty percent (150%).

5.	Lease in Effect.  Landlord and Tenant acknowledge and 
agree that the Lease, except as amended by this Amendment, 
remains unmodified and in full force and effect in 
accordance with its terms.

6. 	Entire Agreement  This Amendment embodies the entire 
understanding between Landlord and Tenant with respect to 
the subject matter hereof and can be changed only by an 
instrument in writing executed by both Landlord and Tenant..

7.	Conflict of Terms. 	In the event that there is any 
conflict or inconsistency between the terms and conditions 
of the Lease and those of this Amendment, the terms and 
conditions of this Amendment shall control and govern the 
rights and obligations of the parties.


	IN WITNESS WHEREOF, the undersigned have entered into 
this Amendment to be effective as of the date above written.

LANDLORD:								TENANT:

THE  MUTUAL LIFE INSURANCE				CONTINENTAL
COMPANY OF NEW YORK, a New York
Corporation.

By:___________________________


Title:___________________________


                                    EXHIBIT 21.1


List of Registrant's Subsidiaries


        Name of Subsidiary                           State of Incorporation
---------------------------------------------       -----------------------
Winston Furniture Company of Alabama, Inc.               Alabama

Loewenstein, Inc.                                        Florida

Continential Engineering Group, Inc.                     California




                                       EXHIBIT 23.1


CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-87352) pertaining to the WinsLoew Furniture, Inc. 1994 Stock
Option Plan of WinsLoew Furniture, Inc. of our report dated February 6, 1998,
with respect to the consolidated financial statements of WinsLoew Furniture,
Inc. and Subsidiaries included in the Annual Report (Form 10-K) for the year
ended December 31, 1997.

Our audits also included the financial statement schedule of WinsLoew
Furniture, Inc. listed in Item 14(a).  This schedule is the responsibility
of the Company's management.  Our responsibility is to express an opinion based
on our audits.   In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

                                                   /s/ Ernst & Young, LLP


Birmingham, Alabama
March 25, 1998