Document:

<PAGE>
                                                                   Exhibit 10.34

                              SETTLEMENT AGREEMENT

            THIS SETTLEMENT AGREEMENT, made and effective as of the 28th day of
May 2004, by and among:

            THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ALABAMA FOR ITSELF AND
FOR THE UNIVERSITY OF ALABAMA AT BIRMINGHAM ("UAB"), a body corporate organized
and existing under the laws of the State of Alabama with its principal place of
business at 1530 Third Avenue South, AB 1070, Birmingham, Alabama 35294-0110,

            THE UAB RESEARCH FOUNDATION ("UABRF"), a 501(c) not-for-profit
charitable foundation organized and existing under the laws of the State of
Alabama with its principal place of business at 1530 Third Avenue South, AB
1120G, Birmingham, Alabama 35294-0111,

            JEAN-PIERRE SOMMADOSSI, PH.D. ("Sommadossi"), an individual who
resides at 7 Lowell Street, Cambridge, MA 02138, and

            IDENIX PHARMACEUTICALS, INC., a for profit company organized and
existing under the laws of the State of Delaware with its principal place of
business at 60 Hampshire Street, Cambridge, Massachusetts 02139, for itself, its
subsidiaries, and all of its and their predecessors-in-interest and
successors-in-interest (collectively, "Idenix"):

                                   WITNESSETH:

            WHEREAS, Sommadossi was employed by UAB beginning March 1, 1985;

            WHEREAS, effective November 1, 1999, Sommadossi took a one-year
sabbatical leave from UAB;
<PAGE>
            WHEREAS, effective November 1, 2000, Sommadossi took an unpaid leave
from UAB prior to resigning from UAB effective November 1, 2002;

            WHEREAS, during both his sabbatical and his unpaid leave,
Sommadossi, individually and along with others, made Discoveries;

            WHEREAS, Sommadossi has assigned to Idenix his rights in the
Discoveries and the Patents;

            WHEREAS, UABRF has, claimed ownership of Sommadossi's rights in the
Discoveries and the Patents and has demanded that Sommadossi and/or Idenix
assign to UABRF any and all rights he and/or it has in the Discoveries and the
Patents;

            WHEREAS, Idenix and Sommadossi disagree with the claims that UABRF
has asserted with respect to ownership of the Discoveries and the Patents;

            WHEREAS, to protect their respective interests in the Discoveries
and the Patents, Idenix and Sommadossi have filed the Complaint against UABRF
seeking declaratory judgment in favor of Idenix with respect to the claims
asserted by UABRF and seeking certain other remedies for the benefit of Idenix
and Sommadossi; and

            WHEREAS, UAB and UABRF, on the one hand, and Sommadossi and Idenix,
on the other hand, have agreed to settle finally and irrevocably their disputes
and differences relating to the Discoveries and Patents.

            NOW, THEREFORE, for good and valuable consideration, including the
representations and promises made in this Settlement Agreement, the receipt and
sufficiency of which are hereby acknowledged by all of the parties, the parties
to this Settlement Agreement agree as follows:
<PAGE>
            1. UAB AND UABRF RELEASE OF CLAIMS: UAB and UABRF irrevocably
release, remise, acquit and forever discharge Sommadossi and Idenix, together
with each of their current and former employees, stockholders, officers,
directors, subsidiaries, Affiliates, licensees, sublicensees, representatives,
heirs, successors, assigns, agents and attorneys, of and from any and all manner
of actions, causes of action, claims, demands and liabilities, known or unknown,
relating to the ownership or other rights of possession and control of the
Discoveries and the Patents (except to enforce the contract rights of UAB and
UABRF contained herein) (hereinafter the "UAB/UABRF Released Claims"). Without
limiting the foregoing, the UAB/UABRF Released Claims include any claim that
Sommadossi was, or may have been, under a duty to assign to UAB or UABRF any
rights, or that UAB or UABRF has any ownership interest, in the Discoveries or
the Patents.

            2. IDENIX AND SOMMADOSSI RELEASE OF CLAIMS: Idenix (on behalf of
itself and its board of directors) and Sommadossi do hereby irrevocably release,
remise, acquit and forever discharge UAB and UABRF, together with each of their
current and former employees, officers, directors, trustees, subsidiaries,
Affiliates, representatives, heirs, successors, assigns, agents and attorneys,
of and from any and all manner of actions, causes of action, claims, demands and
liabilities, known or unknown, relating to ownership or other rights of
possession and control of the Discoveries and the Patents and all claims,
demands, liabilities, actions, causes of action which were related to or arising
from the matters which are the subject of the Complaint or this Settlement
Agreement (except to enforce the contract rights of Idenix and Sommadossi
contained herein) (hereinafter the "Idenix/Sommadossi Released Claims"). Idenix
further agrees to indemnify UAB and UABRF, together with each of their current
and former
<PAGE>
employees, officers, directors, trustees, subsidiaries, Affiliates,
representatives, heirs, successors, assigns, agents and attorneys, for losses,
including reasonable attorneys' fees and all other reasonable costs and expenses
incurred in connection with defending or litigating any Claim (as hereinafter
defined), it or any of them may suffer if any stockholder of Idenix, any
underwriter named in the Registration Statement or Novartis assert against such
persons any actions, causes of action, claims, demands and liabilities, known or
unknown (each a "Claim"), relating to or arising from the matters which are the
subject of the Complaint or this Settlement Agreement.

            3. UAB AND UABRF COVENANT NOT TO SUE. UAB and UABRF covenant not to
sue, directly or indirectly, Sommadossi or Idenix, or any of their current and
former employees, stockholders, officers, directors, subsidiaries, Affiliates,
licensees, sublicensees, representatives, heirs, successors, assigns, agents and
attorneys, on any claims or causes of action relating to the sale, offer for
sale, use, importation or making of any Product or the ownership of, or any
rights or obligations with respect to, any Discovery or Patent or related to or
arising from matters which are the subject of the Complaint or this Settlement
Agreement, except to enforce the contract rights of UAB and/or UABRF contained
herein. UAB and UABRF, covenant not, directly or indirectly, to file, commence,
support, undertake or maintain any action (including, but not limited to, any
court litigation, opposition, reexamination, revocation or invalidation
proceedings) challenging any Patent.

            4. SOMMADOSSI AND IDENIX COVENANT NOT TO SUE. Sommadossi and Idenix
(on behalf of itself and its board of directors) covenant not to sue UABRF, UAB
or any of their current and former employees, officers, directors, subsidiaries,
Affiliates, licensees, sublicensees, representatives, heirs, successors,
assigns, agents and attorneys, on any claims or causes of action
<PAGE>
relating to the ownership of any Patent or any claim, demand, liability, action,
or cause of action which was related to or arising from the matters which are
the subject of the Complaint or this Settlement Agreement except to enforce the
contract rights of Sommadossi and Idenix contained herein.

            5. PAYMENTS. Idenix agrees to: (i) pay to UABRF or its designees the
amount of $2 million within five (5) days of the signing of this Settlement
Agreement; and (ii) to remit the milestone payment and Sales Payments in the
manner and pursuant to the terms and conditions set forth on Exhibit A to this
Settlement Agreement.

            6. PAYMENT RIGHTS OF SOMMADOSSI. Idenix and Sommadossi agree and
acknowledge that Sommadossi has no rights to any consideration or payments
received by UABRF pursuant to this Settlement Agreement.

            7. ACKNOWLEDGEMENT OF OWNERSHIP OF DISCOVERIES AND PATENTS. UAB and
UABRF agree and acknowledge that neither UAB nor UABRF has any right, title or
ownership interest in the Discoveries or the Patents other than the payments to
which UABRF is entitled hereunder.

            8. DISMISSAL OF LITIGATION. In consideration of the promises made in
this Settlement Agreement, Sommadossi and Idenix have filed a stipulation of
dismissal with prejudice of the Complaint.

            9. WARRANTY OF CAPACITY: Each signatory to this Settlement Agreement
signing on behalf of a corporation or other person or entity warrants and
represents that he or she has the capacity and authority to enter into this
Settlement Agreement on behalf of the corporation or other person or entity for
which he or she is signing.
<PAGE>
            10. WARRANTY OF AUTHORITY TO BIND ALL INTERESTED PARTIES: Idenix,
Sommadossi, UAB and UABRF each represent and warrant to one and the other that
he or it has not assigned or in any way conveyed, transferred or encumbered all
or any portion of the UAB/UABRF Released Claims or the Idenix/Sommadossi
Released Claims.

            11. ADDITIONAL WARRANTIES OF SOMMADOSSI AND IDENIX: Sommadossi and
Idenix further represent and warrant as follows:

                  (a)   Discoveries. The list of patents and patent applications
                        attached hereto as Exhibit B is a complete list of all
                        patents and applications that name Sommadossi as an
                        inventor that were filed in the United States during the
                        Sabbatical Year and the Unpaid Leave Period; (ii) to the
                        knowledge of Sommadossi and Idenix, all patentable
                        inventions, discoveries, conceptions and reductions to
                        practice which were made during the Sabbatical Year and
                        the Unpaid Leave Period are claimed in the Patents; and
                        (iii) except to the extent that Idenix has assigned or
                        transferred to Novartis, or any of its Affiliates,
                        rights Idenix possesses or possessed to the Discoveries
                        or the Patents, no party other than Idenix has to date
                        received by assignment or otherwise any of the ownership
                        rights possessed by Sommadossi to the Discoveries or
                        Patents. To the best knowledge of Sommadossi and Idenix,
                        no invention or discovery claimed in a Patent filed
                        during the Sabbatical Period was conceived prior to the
                        commencement of the Sabbatical Period and no invention
                        or discovery claimed in a Patent filed during
<PAGE>
                        the Unpaid Leave Period was conceived prior to the
                        commencement of the Unpaid Leave Period.

                  (b)   Patent Prosecution. Idenix will use commercially
                        reasonable efforts, to prosecute, consistent with
                        applicable law in the relevant jurisdiction, and
                        consistent with Idenix' reasonable business discretion,
                        Patent claims covering drug candidates.

            12. NO ADMISSION OF FAULT OR LIABILITY: None of the parties to this
Settlement Agreement admits to any fault or liability. Instead, each party
expressly denies any liability or fault except with respect to his or its
respective obligations under this Settlement Agreement.

            13. NO STATEMENTS MADE INDUCING THIS AGREEMENT NOR RELIED UPON IN
ENTERING THIS AGREEMENT: None of the parties to this Settlement Agreement has
made any statements, representations, or warranties to the other parties other
than those made expressly herein to induce the other parties to execute this
Settlement Agreement.

            14. FREE, KNOWING, UNCONDITIONAL AND INTENDED RELEASE: The parties
hereto each have executed this Settlement Agreement as their own free act,
understanding its terms and effect, specifically intending that each of them
shall be unconditionally and irrevocably bound by its terms and in reliance upon
the advice and assistance of counsel of their respective choosing.

            15. INTEGRATION: This Settlement Agreement (which includes the
exhibits hereto) sets forth the entire agreement of the parties with respect to
the subject matters addressed herein. No provision of this Settlement Agreement
may be amended, nor any right hereunder
<PAGE>
waived, except by an instrument executed by all the parties. This Settlement
Agreement expressly supersedes all prior oral promises, statements, contracts
and representations relating to the subject matter of this Settlement Agreement.

            16. EXECUTION IN COUNTERPARTS: This Settlement Agreement may be
executed in counterparts, each of which shall be deemed an original. There may
be multiple originals of this Settlement Agreement.

            17. NEUTRAL INTERPRETATION: This Settlement Agreement is the product
of negotiations, and shall not be construed more strictly against one party than
any other.

            18. SEVERABILITY: If any provision of this Settlement Agreement is
found to be unlawful or unenforceable, such provision shall be deemed severable
from, and shall in no way affect the validity or enforceability of, the
remaining provisions of this Settlement Agreement.

            19. DISPUTE RESOLUTION: No party to this Settlement Agreement shall
commence litigation or any other form of adversarial proceeding against the
other party to this Settlement Agreement, with regard to obligations and/or
disputes arising hereunder, without first doing the following: (a) providing a
written notice of demand for mediation to the party with whom the dispute has
arisen, and (b) engaging in mediation in a good faith effort to resolve any
differences and disputes before commencing litigation or any other adversarial
proceeding. The prospective parties to the mediation shall make good faith
efforts to select a mediator who is mutually agreeable within ten days of
service of the notice. In the absence of agreement in that ten day period (or
such longer period as the parties may agree in writing), JAMS, or a comparable
alternative dispute resolution provider agreed upon by the relevant parties, in
the neutral locale of Washington, D.C., shall select the mediator. From the time
that the notice
<PAGE>
of demand for mediation is received by, or otherwise brought to the attention
of, an adverse party, until such time as any party declares that the mediation
is concluded, no party shall file litigation or any other adversarial proceeding
against the other party or parties relating to obligations and/or disputes
arising under this Settlement Agreement. All applicable statutes of limitations
shall be tolled during the standstill period. Each party to the mediation shall
bear his or its pro rata share of the mediation costs.

            20. DEFINITIONS: As used in this Settlement Agreement the following
terms shall have the following meanings:

            "Affiliate". Affiliate shall mean, with respect to any entity, any
            corporation, company, partnership, joint venture and/or firm that
            controls, is controlled by, or is under common control with such
            entity. For purposes of this definition of "Affiliate", "control"
            shall mean (a) in the case of corporate entities, direct or indirect
            ownership of at least fifty percent (50%) of the stock or shares
            having the right to vote for the election of directors, and (b) in
            the case of non-corporate entities, direct or indirect ownership of
            at least fifty percent (50%) of the equity interest with the power
            to direct the management and policies of such non-corporate
            entities. Without limiting the generality of the foregoing, for so
            long as Idenix and Novartis are parties to that Development, License
            and Commercialization Agreement, dated as of May 8, 2003, pursuant
            to which Novartis has exclusive rights to commercialize Products,
            Novartis will be considered an Affiliate of Idenix. The Parties
            acknowledge that in the case of certain entities organized under the
            laws of certain countries outside the United States, the maximum
            percentage ownership permitted by law for a foreign investor may be
<PAGE>
            less than fifty percent (50%), and that in such case such lower
            percentage shall be substituted in the preceding sentence; provided
            that such foreign investor has the power to direct the management
            and policies of such entity.

            "Complaint". Complaint shall mean the complaint Sommadossi and
            Idenix filed against UABRF in the United States District Court,
            District of Massachusetts on March 26, 2004.

            "Discoveries". Discoveries shall mean, collectively, those
            inventions, conceptions and reductions to practice made by
            Sommadossi, solely or jointly with others, during the Sabbatical
            Year and Unpaid Leave Period.

            "HCV Product". HCV Product shall mean a product embodying those
            inventions, conceptions and reductions to practice made by
            Sommadossi, solely or jointly with others, during the Sabbatical
            Year that has been approved for commercial sale and has within its
            approved product label a use for the treatment of human hepatitis C
            viral infection.

            "Major EU Countries". Major EU Countries shall mean the United
            Kingdom, France, Germany, Italy and Spain.

            "Minimum Return Amount". Minimum Return Amount shall mean a payment
            equal to the difference between $12 million and the aggregate amount
            of Sales Payments (inclusive of payments then due and actually paid
            relating to that calendar quarter) previously paid.
<PAGE>
            "Net Sales". Net Sales shall mean, with respect to any Product, the
            gross invoiced sales price of such Product by Idenix, its
            Affiliates, licensees and sublicensees and their respective
            affiliates to Third Parties, less the following deductions to the
            extent included in the gross invoiced sales price for such Product
            or otherwise directly paid or incurred by Idenix, its Affiliates,
            licensees and sublicensees with respect to the sale of such Product:

                  (a)   normal and customary trade and quantity discounts
                        actually allowed and properly taken directly with
                        respect to sales of such Product;

                  (b)   amounts repaid or credited by reason of rejections,
                        recalls, returns, rebates and allowances;

                  (c)   chargebacks and other amounts paid on sale or dispensing
                        of such Product;

                  (d)   retroactive price reductions that are actually allowed
                        or granted;

                  (e)   tariffs, duties, excise, sales, value-added or other
                        taxes (other than taxes based on income);

                  (f)   cash discounts for timely payment;

                  (g)   delayed ship order credits; and

                  (h) discounts pursuant to patient discount programs.

            In the case of sale of a Product for consideration other than cash,
            such as barter or countertrade, Net Sales shall be calculated on the
            fair market value of the consideration received.
<PAGE>
            In the event that the active pharmaceutical ingredient included in a
            Product and additional active pharmaceutical ingredient(s) are sold
            in a country as a fixed-dose combination therapy containing more
            than one (1) active pharmaceutical ingredient, and both the Product
            and a product containing such additional active pharmaceutical
            ingredient(s) as the sole active pharmaceutical ingredient(s) are
            sold separately in such country, the Net Sales for the Product in
            such country shall be calculated by multiplying Net Sales in such
            country (as would otherwise be determined in accordance with the
            paragraphs above based on the gross invoiced sales price of the
            combination therapy minus applicable deductions and taking into
            account the fair market value of any non-cash consideration) by the
            fraction A/(A+B), where A is the gross invoiced sales price in such
            country of the Product (when sold separately from the combination
            therapy), and B is the gross invoiced sales price in such country of
            the pharmaceutical product comprising the additional active
            pharmaceutical ingredient(s) as the sole active ingredient(s) (when
            sold separately from the combination therapy). Notwithstanding the
            foregoing, the fractional adjustment set forth in this paragraph
            shall not apply (and the fractional adjustment and procedures in the
            immediately following paragraph shall apply instead) in the event
            actual sales of such separate pharmaceutical product comprising the
            additional active pharmaceutical ingredient(s) as the sole active
            ingredient(s) are not more than incidental in such country.

            In the event that the active pharmaceutical ingredient included in a
            Product and additional active pharmaceutical ingredient(s) are sold
            in a country as a fixed-dose product combination therapy containing
            more than one (1) active pharmaceutical ingredient, and
<PAGE>
            either the Product or a product containing such additional active
            pharmaceutical ingredient(s) as the sole active pharmaceutical
            ingredient(s) is not sold separately in such country, the Net Sales
            for the Product in such country shall be calculated by multiplying
            Net Sales in such country (as would otherwise be determined in
            accordance with the first and second paragraphs above based on the
            gross invoiced sales price of the combination therapy minus
            applicable deductions and taking into account the fair market value
            of any non-cash consideration) by the fraction A/(A+B), where A is
            the fair market value in such country of the Product (when or if it
            were (as applicable) sold separately from the combination therapy),
            and B is the fair market value in such country of the pharmaceutical
            product comprising the additional active pharmaceutical
            ingredient(s) as the sole active ingredient(s) (when or if it were
            (as applicable) sold separately from the combination therapy).

            "NV-08B, NM-107, and NM-618" shall mean the same compound and
            compositions containing same referred to in the Registration
            Statement.

            "NM-283". NM-283 shall mean a 2'-C-Methyl-cytidine-3'-O-L-valine
            ester (dihydrochloride salt) or val-mCyd.

            "Novartis". Novartis shall mean Novartis Pharma AG and its
            Affiliates.

            "Patents". Patents shall mean those patents and patent applications
            listed on Exhibit B hereto which name Sommadossi, either as a sole
            or joint inventor, that have a priority date either in the
            Sabbatical Year or in the Unpaid Leave Period, and all
            continuations,
<PAGE>
            continuations-in-part (but only to the extent that such
            continuations or continuations-in-part contain subject matter first
            disclosed in a patent or patent application initially filed during
            the Sabbatical Year or the Unpaid Leave Period), substitutions,
            divisions, extensions, reissues, reexaminations and renewals of any
            such patents and patent applications, and any foreign counterparts
            and supplemental protection certificates and substantial equivalents
            of the foregoing in any country.

            "Product". Product shall mean any product, process,
            product-by-process, article of manufacture, or method including
            prodrugs, active metabolites, polymorphs, salts, hydrates, solvates,
            enantiomers and/or esters having the same active moiety (i) the
            manufacture, practice, use, offer for sale, sale or importation of
            which is covered by a Valid Claim and (ii) when the product is
            previously approved for use in treating Hepatitis B, such Valid
            Claim is a use, pharmaceutical composition or method of medical use
            claim, such use, pharmaceutical composition or method is included in
            the product label for a second indication approved by (A) the United
            States Food and Drug Administration (or a successor agency), if such
            product is sold in the United States, or (B) the appropriate
            regulatory authority in the country of sale, if such product is sold
            outside the United States. Product specifically includes, but is not
            limited to, making, using, selling and offering for sale of NM-283,
            NM-107, NM-618 and NV-08B including prodrugs, active metabolites,
            polymorphs, salts, hydrates, solvates, enantiomers and/or esters
            having the same active moieties.
<PAGE>
            "Registration Statement". Registration Statement shall mean
            Amendment No. 1 to the Registration Statement on Form S-1
            (Registration No. 333-111157) filed with the Securities and Exchange
            Commission on January 27, 2004.

            "Regulatory Approval". Regulatory Approval shall mean, with respect
            to a Product, the approval by the United States Food and Drug
            Administration (or a successor agency) necessary for the marketing
            and sale of the Product in the United States.

            "Sabbatical Year". Sabbatical Year shall mean the period from
            November 1, 1999 to October 31, 2000.

            "Sales Payment". Sales Payment shall mean an amount equal to
            one-half of one percent (0.5%) of Net Sales of a Product.

            "Third Party". Third Party shall mean any person or party other than
            a party to this Agreement and its Affiliates.

            "Unpaid Leave Period". Unpaid Leave Period shall mean the period
            from November 1, 2000 to November 1, 2002.

            "Valid Claims". Valid Claims shall mean a claim (a) of any issued,
            unexpired Patent that has not been revoked or held unenforceable or
            invalid by a decision of a court or governmental agency of competent
            jurisdiction from which no appeal can be taken, or with respect to
            which an appeal is not taken within the time allowed for appeal, and
            that has not been disclaimed or admitted to be invalid or
            unenforceable through reissue,
<PAGE>
            disclaimer or otherwise, (b) of any Patent application that has been
            pending, in the aggregate, for less than seven (7) years and that
            has not been cancelled, withdrawn or abandoned or (c) of a patent or
            patent application which covers an HCV Product which has not been
            held to be invalid, unpatentable or unenforceable by a decision of a
            court or governmental agency of competent jurisdiction from which no
            appeal can be taken, or with respect to which an appeal is not taken
            within the time allowed for appeal, or that has not been disclaimed
            or admitted to be invalid or unenforceable through reissue,
            disclaimer or otherwise.
<PAGE>
                 Signed under seal of this __ day of May, 2004.

                                   THE BOARD OF TRUSTEES OF THE
                                   UNIVERSITY OF ALABAMA
                                   FOR THE UNIVERSITY OF ALABAMA AT
                                   BIRMINGHAM

                                   By: /s/ illegible
                                      -----------------------------------------
                                   Its: Vice President for FIN Affairs and ADM

                                   THE UAB RESEARCH FOUNDATION

                                   By: /s/ illegible
                                      ------------------------------------------
                                   Its: Director

                                   /s/ Jean-Pierre Sommadossi
                                   --------------------------------------------
                                   Jean-Pierre Sommadossi
<PAGE>
                                   IDENIX PHARMACEUTICALS, INC.

                                   By: /s/ Andrea Corcoran
                                      -----------------------------------

                                   Its: Executive VP Legal
                                       ----------------------------------
<PAGE>
                                                 Idenix comments  - May 25, 2004

                                    EXHIBIT A

                                 Future Payments

Pursuant to the terms and conditions set forth herein and in the Settlement
Agreement to which this Exhibit A is attached, Idenix agrees to remit to UABRF
or its designees the payments set forth herein.

1. Milestone Payment. Within 30 days of the receipt of the Regulatory Approval
for the first Product to receive Regulatory Approval, Idenix shall remit to
UABRF a payment in the amount of $1 million.

2. Duration of Obligation to Make Sales Payments. After the first commercial
sale of any Product, for so long as there continues to be a Valid Claim that
covers the use, offer for sale, sale or importation of a Product in a country in
which Net Sales of such Product are generated, Idenix shall be obligated to
remit to UABRF the Sales Payments with respect to Net Sales generated by the
sale of such Product in such country except as otherwise provided in paragraph 4
below.

3. Financial Records and Reports; Remittance of Sales Payments. Within sixty
(60) days following the end of each calendar quarter, Idenix shall: (i) submit
to UABRF a written report setting forth in reasonable detail, on a
Product-by-Product and country-by-country basis, the following information with
respect to such calendar quarter: (a) Net Sales, and (b) the calculation of the
Sales Payment due to UABRF; and (ii) remit to UABRF or its designee, the
aggregate amount of Sales Payments identified in such quarterly report as being
due and owed to UABRF.

4. Minimum Payment. If, as of the 31st day of December of the seventh calendar
year after the commercial launch of an HCV Product in the later of the United
States or a Major EU Country, the aggregate Sales Payments made for all Products
do not equal or exceed $12 million, Idenix, shall, within 60 days thereafter,
remit to UABRF the Minimum Return Amount. If and to the extent, Idenix is
obligated to remit such Minimum Return Amount, such amount will then be credited
against Sales Payments which become due in each of the next succeeding quarterly
periods until such Minimum Return Amount has been fully applied. The obligation
of Idenix to make the payments contemplated in this paragraph 4 is conditioned
upon the commercial launch of an HCV Product in both the United States and a
Major EU Country.

5. Audits. Idenix shall keep, and shall use commerically reasonable efforts to
require its Affiliates, licensees and sublicensees to keep, complete and
accurate records of the gross invoiced sales price of the relevant Product and
applicable deductions relating to the reports and
<PAGE>
payments required pursuant hereto. UABRF will annually have the right at its own
expense to have an independent, certified public accountant, selected by UABRF
and reasonably acceptable to Idenix, review records pertaining to Net Sales and
the computation of the Sales Payments that are in the possession of Idenix,
including such records as it receives from its Affiliates and any licensee or
sublicensee, in the location(s) where such records are maintained by Idenix upon
reasonable notice and during regular business hours and under obligations of
confidence, for the sole purpose of verifying the basis and accuracy of such
payments made within the prior twelve (12) months. If the review of such records
reveals that Idenix failed to accurately report information relating to Net
Sales, Idenix shall promptly pay to UABRF any resulting amounts due, together
with interest calculated at the lesser of 1% per month, compounded monthly, or
the highest rate permitted by applicable law calculated on the number of days
such payments are paid after the date such payments are due. If any such under
payments are greater than five percent (5%) of the amounts actually due to
UABRF, then Idenix shall pay all of the costs of such review.

Any quarter with respect to which the Idenix payment (a) is less than eighty
(80%) of the amount actually due to UABRF or (b) is not timely paid to UABRF,
the Sales Payment for such quarter shall be increased to one percent (1%) for
such quarter.

5. Payment Currency. All amounts due hereunder shall be paid in United States
Dollars.

                                       xx
<PAGE>
                                    EXHIBIT B

                             Idenix Patent Portfolio

<TABLE>
<CAPTION>
TITLE
& DOCKET                            FILING           SERIAL
NAME                                DATE             NUMBER
---------------------------------------------------------------
<S>                                 <C>              <C>
IDX 1004 Methods for
Treating Hepatitis Delta
Virus Infection with (Beta)-L-2'
Deoxy-Nucleosides                   5/29/00          60/207,538
---------------------------------------------------------------
IDX 1004                            5/29/01          09/867,110
---------------------------------------------------------------
IDX1006 Methods and
Compositions for Treating           5/26/00          60/207,674
Flaviviruses and
Pestiviruses                        4/11/01          60/283,276
---------------------------------------------------------------
IDX1007 Methods and
Compositions for Treating           05/23/00         60/206,585
Hepatitis C Virus
---------------------------------------------------------------
IDX1007                             05/23/01         09/864,078
---------------------------------------------------------------
IDX1008
Phenylindoles For The               4/11/01          60/283,393
Treatment Of HIV
---------------------------------------------------------------
IDX1008                             4/11/02          10/122,252
---------------------------------------------------------------
IDX1009 Methods for
Inhibiting the Transmission
of HIV Using Topically              11/17/00         60/249,532
Applied Substituted
6-Benzyl-4-Oxopyrimidines
---------------------------------------------------------------
IDX1009                             11/19/01         10/001,868
---------------------------------------------------------------
IDX1013 Methods and
Compositions for Treating           9/28/01          60/326,184
Hepatitis C Virus
---------------------------------------------------------------
IDX1013 Methods and
Compositions for Treating
Hepatitis C Virus with              9/30/02          10/261,244
4'-Modified Nucleosides
---------------------------------------------------------------
</TABLE>

                                      xxi
<PAGE>
<TABLE>
<CAPTION>
TITLE
& DOCKET                            FILING           SERIAL
NAME                                DATE             NUMBER
---------------------------------------------------------------
<S>                                 <C>              <C>
IDX1014 Methods and
Compositions for Treating
Flaviviruses and                    9/28/01          60/326,192
Pestiviruses
---------------------------------------------------------------
IDX1014 Methods and
Compositions for Treating
Flviviruses and                     9/30/02          10/261,327
Pestiviruses with 4'
Branched Nucleosides
---------------------------------------------------------------
IDX1015 Methods and
Compositions for Treating           5/2/02           60/377,983
Hepatitis C Virus
---------------------------------------------------------------
IDX 1016 Methods and
Compositions for Treating
Flaviviruses and                    5/2/02           60/377,980
Pestiviruses
---------------------------------------------------------------
IDX 1017 2' and 3'-
Nucleoside Prodrugs for             6/28/02          60/392,351
Treating Hepatitis C Virus
---------------------------------------------------------------
IDX 1018  Modified 2' and
3'- Nucleoside Prodrugs for         6/28/02          60/392,350
Treating Hepatitis C Virus
---------------------------------------------------------------
IDX 1020 Substituted
Phenylindoles for the               08/07/02         60/401,915
Treatment of HIV
---------------------------------------------------------------
IDX 1021 PROV
(Beta)-L-2'-Deoxy-Nucleosides
for the Treatment of
Lamuvidine Resistant HBV            09/13/02         60/410,675
</TABLE>

                                      xxii<PAGE>

                                                                   EXHIBIT 10.55

                                 LEASE AGREEMENT

      THIS AGREEMENT made and entered into this 26 day of March 1992, between
REALTY FOUR, a Georgia General Partnership of Thomas County, Georgia,
hereinafter called Lessor, and SIMMONS OUTDOOR CORPORATION, a Delaware
Corporation, hereinafter called Lessee,

                                  WITNESSETH:

PREMISES LEASED: That Lessor has leased and by these presents does grant,
demise, and lease unto Lessee the following described premises:

      Located in the City of Thomasville, Thomas County, Georgia, in Plantation
      Oak Industrial Park, a 6 acre lot, more or less, bounded on the north by
      Plantation Oak Drive, on the west by a 40 foot utility easement deeded to
      the City of Thomasville paralleling the new west bypass, on the east by
      the yet-to-be named street between the Heilig-Meyers building and subject
      property and on the south by a line constructed by measuring 500 feet
      south along the easterly property line from the intersection of subject
      property lines at the new street and Plantation Oak Drive to a point,
      thence westerly at a right angle to the easterly property line to the
      intersection of the westerly boundary of subject property. Additionally,
      Lessor shall have an option to purchase an additional 400 feet of land to
      the south of subject property for a period of 8 years, the same being the
      original term of this lease, for the purpose of extending the building
      described by the attached specifications and to be built upon subject
      property.

TERM AND RENTAL: TO HAVE AND TO HOLD the same for a term of eight (8) years,
commencing on the fifteenth day of August, 1992 or upon completion sufficient
for occupancy. Construction work on the building is to begin by April 1, 1992,
with a completion date no later than September 15, 1992.

Lessee shall pay Lessor or its assigns a monthly rental of TEN THOUSAND ONE
HUNDRED DOLLARS ($10,100.00) to be paid on or before the first day of each month
by Lessee in advance to Lessor for the first four years of this lease. This base
rental shall be adjusted to increase or decrease by 60% of the change in the
consumer price index over the previous four year term of the lease to determine
the new monthly rental for the following four years. Lessee may renew this lease
for four additional four year terms at a new lease amount to be computed as
follows: the base rental at the end of the preceding period shall be adjusted to
increase or decrease by 60% of the change in the consumer price index over the
previous term of the lease to determine the new monthly rental for the following
four year term. Lessee shall give written notice to Lessor of the exercise of
this option not

<PAGE>

                        LEASE AGREEMENT continued, page 2

less than ninety days prior to the expiration of the term hereof and such option
shall be exercisable only in the absence of material default uncured after
notice.

It is further mutually agreed between the parties as follows:

1.    DESCRIPTION OF LESSOR'S WORK: Lessor, at its sole cost, agrees to purchase
and prepare land and construct the buildings through completion, certification
and occupancy, in complete accordance with plans and specifications approved by
Lessee and Lessor prior to commencement to construction. Said approved plans and
specifications are herewith specifically made a part of this lease and a copy
thereof is attached. Lessee shall be required to accept occupancy of leased
premises upon completion of all the improvements according to plans and
specifications by Lessee.

2.    TITLE AND ENJOYMENT: Lessor covenants that it will have a fee simple title
to the demised premises but it is understood, however, that Lessor will encumber
the land in borrowing money necessary to effect construction of the improvements
herein contemplated and the rights of Lessee shall be subordinate and subject to
the rights of the holder of such security instrument as shall be executed by
Lessor securing the loan, subject to lender's agreement not to disturb Lessee's
quiet enjoyment of the premises. In order for Lessor to obtain the requisite
financing for the contemplated construction, Lessee agrees to provide
satisfaction to Lessor's bank that lease payments will be made for the full term
of this lease, or any other form of guaranty sufficient for Lessor to obtain the
requisite financing.

Lessor agrees to protect the rights of Lessee to the free and unrestricted use
and occupancy of the demised premises and does hereby agree that it will notify
Lessee of the amount of the loan which may be secured in the manner aforesaid,
the terms of such loan and that Lessee may pay all rental payments directly to
the holder of such security instrument during such period of time as Lessor
shall default in the payment of any installment which shall become due under the
terms of such security instrument.

3.    TAXES AND INSURANCE: Lessor shall pay ad valorem taxes and take advantage
of all discounts offered for prompt payment of same, and upon presentation of
the paid tax bills, Lessee shall reimburse Lessor for said ad valorem taxes.
Lessee shall pay property insurance premiums during the term of this lease in
such amount that the property is insured for 10O% of its replacement value or
highest insurable value if less than 100%. During the term of this Lease, Lessee
shall procure and maintain in full force and effect public liability insurance,
naming Lessor and Lessee as co-insureds covering claims for personal injury or
property damage occurring on or about the Leased premises under a policy of
general liability insurance with limits of not less than $1,000,000.00 with
respect to all occurrences during each calendar year. Lessor and Lessee shall
provide each other with

<PAGE>

                        LEASE AGREEMENT continued, page 3

certificates of all insurance policies required to be procured and maintained by
them hereunder. All such policies shall provide that the insurers will not
cancel or change the insurance coverage afforded thereby without first giving
Lessor and Lessee ten (10) days prior written notice. Lessee shall be
responsible, at its expense, for insuring all its furniture, trade fixtures,
equipment, and other personal property of Lessee located on the Leased Premises.

4.    USE OF PREMISES: Premises shall be used by Lessee for the purpose of
warehousing and distribution of sports optical equipment and related activities,
but Lessee shall have the right to use the Leased Premises for any other lawful
purposes that do not create a nuisance, upon the written consent of the Lessor,
which consent shall not be unreasonably withheld. Lessee may use the Leased
Premises for outdoor storage, provided such storage area is adequately screened
from view and provided further that such storage is permitted by applicable
laws, codes and regulations and does not create a nuisance. Lessor represents to
Lessee that the Leased Premises is zoned to permit the use thereof as a sports
optical warehousing and distribution facility. Lessee covenants not to knowingly
use the premises for illegal purposes nor in such manner as to violate any
applicable and valid law, rule or regulation of any governmental body, and to
occupy and use said premises in a careful, safe and proper manner, and not
permit waste thereon.

5.    REPAIRS BY LESSOR: Lessor covenants and warrants leased premises will be
well built, properly constructed, structurally safe and sound, and suitable and
fit for Lessee's use. If the roof, exterior walls or other structural portions
of the building shall need or require repairs not caused by fire or other
casualty for which the Lessor is insured and not caused by the negligence or
fault of the Lessee, Lessor, after receiving notice from Lessee shall make such
repairs at the Lessor's expense.

6.    REPAIRS BY LESSEE: Lessee will, at its own expense, except for those items
covered under Lessor's insurance policy, maintain the building and equipment
including but not limited to the following: the heating and air conditioning
equipment, replacing all filters on a regular and timely basis, canopies,
exterior and interior doors, plate glass, electrical lighting and wiring, both
interior and exterior, drainage pipes for any utilities or fixtures, gutters and
downspouts, floor covering and redecorate the interior of the premises whenever
it deems same necessary. Lessor shall be responsible for the maintenance of the
roof, but shall not be held responsible for any loss or damage incurred as a
result of any defect or leakage in same.

At the expiration, or any prior termination, of the original or any renewal term
of this lease, Lessee will surrender the premises to Lessor in as good condition
as received, except for ordinary wear and tear, and damage by fire or other
casualty.

<PAGE>

                        LEASE AGREEMENT continued, page 4

7.    REMODELING: Lessee shall have the right and privilege to make from time to
time any alterations, changes and improvements, at its own expense, which Lessee
considers necessary to adapt the premises to the changing needs of Lessee's
business. However, Lessee shall obtain prior approval, which shall not be
unreasonably withheld, of Lessor to any such alterations, changes and
improvements which will affect the structural design of the premises.

8.    FIXTURES AND EQUIPMENT: Lessee nay install and operate in and upon the
premises such trade fixtures, equipment, machinery and appliances as it shall
consider necessary to the conduct of its business on the premises, provided all
laws, rules and regulations of governmental bodies with respect to installation
and operation thereof shall be fully and completely complied with by Lessee. On
the expiration of this lease, or on the expiration of any extension, renewal, or
sooner termination thereof, Lessee may remove all or any part of such fixtures,
equipment, machinery and appliances installed on the premises by Lessee,
provided, however that Lessee shall repair any damage to the premises which may
be caused by such installation, operation or removal. No electrical wiring or
fixtures shall be removed.

9.    ASSIGNMENT AND SUBLETTING: Lessee may transfer and assign this lease or
sublet the premises with the permission, which shall not be unreasonably
withheld, of Lessor, subject to any existing restrictions; but in such event,
Lessee shall remain liable for all rents and obligations of Lessee hereunder for
the remainder of the term of this lease.

10.   LESSOR'S LIABILITY FOR DAMAGE: Lessor shall not be liable for any damage
to Lessee's fixtures or merchandise caused by fire or other insurable hazards,
regardless of the cause thereof, and Lessee hereby releases Lessor of any and
all liabilities for such damage.

11.   DESTRUCTION OF OR DAMAGE TO PREMISES: If there occurs any fire, explosion
or other casualty to the leased premises or any portion thereof resulting in
damage or destruction to the leased premises, Lessee shall promptly notify
Lessor in writing of such damage and Lessor shall thereupon cause the damage to
be repaired forthwith unless the lease is terminated as hereinafter provided. If
the leased premises or any part thereof shall be rendered untenantable for
Lessee's intended use as a result of such damage, Lessee's obligation to pay
rent hereunder shall be reduced and abated in proportion to the amount of gross
rentable area of the premises rendered untenantable as the result of such
casualty. If premises are to be rebuilt or repaired Lessor agrees that such
rebuilding or repairs shall be complete within 150 days from date of said
destruction. Said rent reduction shall commence on the date such damage occurs
and end on the date the leased premises are restored and again ready for
occupancy. In the event the leased premises are damaged to the extent of more
than fifty percent (50%) of the replacement cost thereof, either Lessor or
Lessee may elect to terminate this lease with within thirty (30)

<PAGE>

                        LEASE AGREEMENT continued, page 5

days from the date of such damage by giving written notice thereof to the other
and thereupon this lease shall immediately terminate and Lessee shall have no
further obligation hereunder other than to pay the rent accrued to the date of
such damage.

12.   PERMITS, UTILITIES, ETC.: Lessee agrees to pay all license, permit fees
and occupational taxes, all expenses for gas, electricity, water, fuel and all
other utilities used on or furnished to Leased Premises during the term of this
Lease.

13.   DAMAGE TO PERSONS: Lessee shall be responsible for any and all causes of
action, claims or demands for damages for personal injuries, or for loss, damage
or injury to property, and any and all other causes of action, claims or demands
of every kind and character, caused by or arising from the use, occupancy or
operation of the leased premises by Lessee, or Lessee's agents, servants,
employees, invites or licensees, and Lessee agrees fully to indemnify and save
harmless Lessor against liability for any and all such causes of action, claims
and demands whatsoever, and will at its own expense, defend any and all actions
or proceedings brought against Lessor on account of any such causes of action,
claims or demands. Provided, however, that nothing contained in this paragraph
of this lease shall affect in any way or is intended to affect in any way
contract made by Lessor with any insurance carrier for the purpose of protecting
Lessor or insuring Lessor against any and all such causes of action, claims or
demands, damages or injuries.

14.   NO ESTATE IN LAND: This contract shall create the relationship of landlord
and tenant between Lessor and Lessee. Lessee has only a usufruct, not subject to
levy and sale and non-assignable except as herein provided.

15.   RIGHTS AND POWERS: All rights, powers and privileges conferred hereunder
upon parties hereto shall be cumulative but not restrictive to those given by
law.

16.   HOLDING OVER: If Lessee remains in possession after expiration of the
term hereof, with Lessor's acquiescence and without any distinct written
agreement of parties, Lessee shall be tenant at will; and there shall be no
renewal of this lease by operation of law.

17.   SURRENDER OF PREMISES: At termination of this lease from any cause, Lessee
shall surrender premises and keys thereof to Lessor in same condition as at
commencement of term, natural wear and tear only excepted.

18.   SERVICE OF NOTICE: Lessee hereby appoints as its agent to receive the
service of all dispossessory or distraint proceedings and notices thereunder,
and all notices required under this lease, the person in charge of said premises
at the time, or occupying premises; and if no person in charge or occupying the
same, then such service or notice may be made by attaching the

<PAGE>

                        LEASE AGREEMENT continued, page 6

same on the main entrance to premises, A copy of all notices under this lease
shall also be sent to Lessee's last known address, if different from premises,
which last known address shall be as follows:_____________________________, or
at such other address as Lessee may from time to time designate to Lessor in
writing. Any notice to Lessee shall also be with a copy to Law Offices of J.
James Donnellan, III. Notice to Lessor may be sent to Lessor at P. O. Box 828,
Thomasville, Georgia 31799, or at such other address as Lessor may from time to
time designate to Lessee in writing.

19.   REMEDIES OF LESSOR IN EVENT OF DEFAULT BY Lessee: In the event Lessee
shall default in the payment of any monthly rental herein provided for, and such
default shall continue to fifteen (15) days after Lessor shall have notified
Lessee in writing of the existence of such default, or if Lessee shall default
in the performance of any of the other covenants, promises, and agreements
herein set forth and contained for Lessee to keep and perform, and such default
shall continue for thirty (30) days after Lessor shall have notified Lessee in
writing of the existence of such default; or if Lessee is adjudicated a
bankrupt; or if a permanent receiver is appointed for Lessee's property,
including Lessee's interest in leased premises, and such receiver is not removed
within sixty (60) days after written notice from Lessor to Lessee to obtain such
removal; or if, whether voluntarily or involuntarily, Lessee takes advantage of
any debtor relief proceeding under any present or future law whereby the rent,
or any part thereof, is or is proposed to be reduced or payment thereof
deferred; or if Lessee makes an assignment for benefit of creditors; or if the
leased premises of Lessee's effects or interest therein should be levied upon or
attached under any process against Lessee not satisfied or dissolved within
thirty (30) days after written notice from Lessor to Lessee to obtain
satisfaction or dissolution thereof; then, and in any of the said events (said
events being hereinafter referred to as events of default) Lessee shall be
deemed to have breached this lease agreement and Lessor shall have the right at
its option either to:

(a)   Enter upon and take possession of said leased premises, as Lessee's agent
and without terminating this lease and re-rent the premises at the best price
obtainable by reasonable effort with or without advertisement for any term
Lessor deems proper. Lessor shall notify Lessee of the proposed terms of the
re-rental and unless within fourteen (14) days after the mailing of said notice
Lessee produces an acceptable tenant willing to rent immediately for the same
term at a better price than thus negotiated, Lessee shall be conclusively bound
by Lessor's terms and rent. Lessee shall thereupon become and thereafter be
liable and indebted to Lessor for, and upon demand, then or from time to time
thereafter made, shall pay to Lessor the difference between the amount of the
rent herein specified and the amount of rent which shall be collected and
received from the demised premises for each month during the remainder of the
term herein provided

<PAGE>

                        LEASE AGREEMENT continued, page 7

remaining after taking possession thereof by the Lessor, or

(b)   Forthwith cancel and terminate this lease by notice in writing to Lessee;
and if such notice shall be given all rights of Lessee to the use and occupancy
of said leased premises shall terminate as of the date set forth in such
notice, and Lessee will at once surrender possession of the premises to the
Lessor and remove all Lessee's effects therefrom, and Lessor may forthwith
re-enter the premises and repossess itself thereof. No termination of this lease
prior to the normal expiration thereof shall affect Lessor's right to collect
rent for the period prior to termination thereof.

20.   PLANS AND SPECIFICATIONS: Lessor agrees to construct the building
additions in accordance with the plans and specifications attached hereto.
Lessee hereby covenants that it has examined said plans and specifications,
approved the same and is aware of the contents thereof, the same being the plans
and specifications prepared by Lessor. Lessee agrees to accept the premises when
completed in accordance with said plans and specifications.

21.   PROVISION FOR ADDITIONAL SPACE: Lessor agrees to construct additional
warehouse space complete with 5" thick concrete floor, roof, walls, fire
sprinkler system, lighting, fire and security alarm, insulation, ridge vents and
liner panels all in accordance with the specifications which are a part of this
lease agreement in increments of 6,000 square feet with 12,000 square feet being
the minimum amount of additional space added at one time for a base cost
increase in the annual rental of $1.35 per square foot during the first four
year term of this lease. After the first four year term the base cost of
additional space shall be increased or decreased by 60% of the change in the
consumer price index the same as the rental for the original improvements. Each
time the size of the building is increased, the lease shall be renewed for a new
full four year term and the rent adjusted to increase or decrease by 60% of the
change in the consumer price index over the previous term of the lease.

22.   PROVISIONS FOR TEMPORARY SPACE: In the event that leased premises are not
ready for occupancy by Lessee by September 15, 1992, Lessor shall provide at its
expense suitable temporary warehouse space for use by Lessee until such time
building is ready for occupancy.

<PAGE>

                        LEASE AGREEMENT continued, page 8

23.   MISCELLANEOUS PROVISIONS: This Lease shall be construed and interpreted
under the laws of the State of Georgia. This Lease may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. The
headings in this Lease Agreement shall not in any way affect its meaning or
interpretation.

No change or modification of this lease shall be valid unless made in writing
between the parties.

This Lease Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that the provisions of this paragraph shall not be construed to allow any
assignment of this Lease by Lessee without the requisite written consent of
Lessor.

In witness whereof Lessor and Lessee have hereto set their hands and affixed
their seals the date first above written.

Signed, sealed and delivered by Lessor in the presence of us in Thomas County,
Georgia:

/s/ Gail C. Murphy                              /s/ Harry M. Tomlinson, Partner
------------------------                        --------------------------------
Notary public                                   Lessor

NOTARY PUBLIC, GEORGIA
RESIDING IN THOMAS COUNTY
MY COMMISSION EXPIRES APRIL 30, 1999

Signed, sealed and delivered
by Lessee in the presence of
us in________ County,________

/s/ Gail C. Murphy                              /s/ Frederick Cofe
------------------------                        --------------------------------
Notary Public                                   Lessee, President
                                                Attest:

NOTARY PUBLIC GEORGIA
RESIDING IN THOMAS COUNTY
MY COMMISSION EXPIRES APRIL 30, 1999
                                                /s/ Tim Robinson
                                                --------------------------------
                                                Secretary

                                                Corporate seal

<PAGE>

                           BUILDING SPECIFICATIONS for
                 60,000 square Foot Distribution Warehouse with
                           6000 Square Foot Office in
                              THOMASVILLE, GEORGIA
                                       for
                             SIMMONS OUTDOOR CORP.
                                   March, 1992

      DESCRIPTION OF WORK: Provide a six acre site with option to purchase an
additional four acres complete with 240 foot wide by 250 foot long by 20 foot
eaves height distribution warehouse complete with four 9' x 10' dock doors, one
14' x 14' grade level door, 80 foot x 75 foot office, restrooms and warehouse
manager's office in warehouse, complete with paving, walks, fencing, drives,
fire sprinkler system, electronic security system, fencing and landscaping as
more fully described herein and on the attached plans.

      BUILDING DESCRIPTION: The warehouse building shall be a pre-engineered
metal building with galvalume roof and painted wall panels. Interior frames
shall be spaced at 25 foot intervals with steel pipe columns spaced every 60
feet to provide support for the main frames. The office shall have wood framed
walls and metal framed roof with a metal roof the same as the main warehouse.
Exterior office walls shall be brick veneer with vertical facade above. All
office windows shall be double 3' x 4'-4" fixed glass insulated bronze aluminum
units.

      FLOOR AND FOUNDATION: Foundation design shall be based on a minimum soil
bearing capacity of 3000 pounds per square foot and shall be a monolithic
slab-on-grade type. The concrete for the floor shall have a minimum strength in
compression of 3000 pounds per square inch. The warehouse floor shall be five
inches thick and be reinforced with 6 x 6 x 6 gauge welded wire mesh. All floors
shall be troweled to a smooth, hard finish and a six mil polyethylene vapor
barrier shall be placed under the floor slab. The office floor shall be 4" thick
and reinforced with 6 x 6 x 10 gauge mesh. The soil under a five foot outer
perimeter of the warehouse shall be pre-treated for termites before the concrete
is placed and all the office and restroom areas shall be treated.

      ROOF: Roof panels shall be 26 gauge galvalume coated steel panels with a
20 year guarantee by the manufacturer. Eighty light transmitting panels 3' x 10'
and twenty 9" x 10" ridge vents shall be provided.

      EXTERIOR WALLS: Warehouse exterior walls shall be 26 gauge steel panels
with a factory applied siliconized polyester enamel coating in a color to be
selected by the owner. The interior perimeter of the warehouse walls shall be
covered with white 26 gauge steel liner panels extending from the floor to eight
feet above the floor to serve as protection for the wall insulation and the
outer wall panels. The office exterior walls shall be framed with SYP 2 x 6
lumber on 24" centers, sheathed and covered with brick veneer to approximately
ceiling height. The walls above shall have a vertical facade framed with steel
and wood and covered with metal facade panels in a color to be selected by the
owner.

<PAGE>

                         BUILDING SPECIFICATIONS, page 2

      FLASHING AND TRIM: All flashing and trim shall have a paint finish the
same as the wall panels in a color to be selected by the owner. Gutter and
downspouts are included.

      INSULATION: All roof areas and exterior walls of the warehouse shall be
insulated with 2 inches of fiberglass metal building insulation with a Lamtec
WMP-VR vapor barrier facing. The main office exterior walls shall have R-19
fiberglass insulation and the ceiling shall have R-19 fiberglass batts. The
offices and rest rooms in the warehouse shall have exterior walls framed with 2
x 4 lumber and shall receive R-12 wall insulation and R-19 ceiling insulation.

      INTERIOR WALLS: The main office interior partitions shall be framed from
2x4 wood studs and covered with 1/2 inch Sheetrock, taped and finished to 9 foot
ceiling height. Office, hall, lunch room, foyer and rest room walls shall be
primed with oil based paint and covered with a fabric backed vinyl wall covering
in a pattern to be selected by the owner. Equipment rooms shall be painted with
two coats of satin finish latex wall paint. The warehouse side of the main
office wall and the office and rest rooms in the warehouse shall be covered with
white 26 gauge steel panels.

      CEILING: The ceilings in the office and restrooms in the warehouse shall
be 1/2" Sheetrock. The main office ceiling shall be Class A 2' x 4' suspended
acoustical ceiling tile in a white steel grid. The area above the warehouse
restrooms and office shall be decked for light storage.

      INTERIOR DOORS: Office interior doors shall be flush solid core stained
birch 3' x 6'-8" x 1-3/8" units with stained jambs and colonial trim.

      EXTERIOR DOORS: Four 9' x 10' truck dock doors with mechanical
edge-of-dock dockboards and 50 inch dock height and one 14' x 14' grade level
door will be provided. Three 3' x 7' personnel doors as shown on the plan shall
be provided. The two primary office doors shall be a 3' x 7' aluminum and glass
doors recessed to provide weather protection. The five sectional overhead doors
shall be equipped with chain link gates to provide security for the warehouse
when the doors are open for ventilation.

      PLUMBING: The office shall have two rest rooms meeting the handicap code
with the balance of the restroom requirements being met by the facilities in the
warehouse. A water drinking fountain shall be provided in the hall near the
office restrooms as shown on the plan. All water and sewer service to be
provided by the City of Thomasville.

<PAGE>

                         BUILDING SPECIFICATIONS, page 3

      ELECTRICAL: The Lessor shall provide power and lighting for the offices,
rest rooms and lunch room and lighting for the warehouse. Warehouse lighting
shall be provided by 100 high intensity 400 watt metal halide fixtures. Office
lighting shall be provided by 2' x 4' four tube recessed ceiling fluorescent
fixtures. Adequate power shall be provided for office heating and cooling.

      HEATING, VENTILATION AND AIR CONDITIONING: The main office shall be heated
and cooled by three five ton electric heat pumps. The warehouse restrooms and
office shall be heated and cooled with one two ton electric heat pump. The
warehouse shall be heated with five natural gas fired 300,000 BtuH unit heaters
to provide about 50 degree F. warehouse temperature.

      FLOOR COVERING: All floors in the main office and warehouse office and
restrooms shall have a twelve dollar per square yard floor covering allowance
and may be either commercial grade vinyl tile or carpet. Warehouse floors shall
be natural concrete with sealer.

      FENCE: A 6 foot high 11 gauge chain link fence with three strands of
barbed wire shall be located as shown on the plan.

      PAVING: The area shown on the plot plan as paved shall be covered with a
minimum of 1-1/2" hot plant mix asphalt over prepared and compacted soil cement
base.

      FIRE SPRINKLER SYSTEM: A wet pipe automatic sprinkler system based on NFPA
#231-C for rack storage of Class IV materials stored in double row racks to a
maximum storage height of 16'-0" shall be provided in the building. This system
does not include sprinkler heads in racks. Sprinkler heads in the offices to be
chrome pendant type.

      ALARM SYSTEM: An electronic security system to monitor the fire sprinkler
system, doors, windows and gates shall be provided and connected to a central
computer by local telephone line for 24 hour per day supervision. This system to
be U. L. approved.

      LANDSCAPING AND STORM WATER RUNOFF CONTROL: Landscaping as required by the
City of Thomasville and the Restrictive Covenants of the Plantation Oak
Industrial Park shall be provided. Storm water retention is the responsibility
of the Owner of the Park.
<PAGE>

                            LEASE ADDENDUM AGREEMENT

      THIS ADDENDUM to the original lease dated March 26, 1992, made and entered
into this 1st day of April 1992, between REALTY FOUR, a Georgia General
Partnership of Thomas County, Georgia, hereinafter called Lessor, and SIMMONS
OUTDOOR CORPORATION, a Delaware Corporation, herainaftar called Lessee,

                                  WITNESSETH:

ITEM ONE: Lessee agrees to put on deposit at Commercial Bank in Thomasville,
Thomas County, Georgia, $30,000.00 upon signing this addendum and an additional
$30,000.00 upon occupancy of Leased Premises. Said deposit shall be subject to
this agreement and shall earn interest in Commercial Bank's prevailing Corporate
Money Market Account.

ITEM TWO: At any time prior to the beginning of the third year should Lessee
default in the payment of any monthly rental in accordance with paragraph 19 of
the Lease Agreement, the corpus of the deposit shall be used to make the
scheduled monthly rental payment. Lessee shall be in default until corpus is
fully replenished to its original beginning amount. Should Lessee remain in
default for two consecutive monthly rental periods, the entire remaining deposit
with accrued interest shall be paid to Lessor in addition to other remedies of
default as provided in the Lease Agreement. Should Lessee make all lease
payments on time for the first two years after occupancy, this deposit shall be
returned to Lessee. This additional payment does not relieve Lessee from its
obligations under the lease.

In witness whereof Lessor and Lessee have hereto set their hands and affixed
their seals the date first above written.

Signed, sealed and delivered
by Lessor in the presence of
us in Thomas County, Georgia:

/s/ Barbara C. Brinson                          /s/ Harry  M. Tomlinson
-------------------------                       --------------------------------
Notary Public                                   Lessor

[STAMP]

Signed, sealed and delivered
by Lessee in  the presence of
us in Dade County, FLORIDA

/s/ Deter J. Spadofern                          Frederick Cofe
-------------------------                       --------------------------------
Notary Public                                   Lessee, President

[STAMP]                                         Attest:

                                                /s/ Tim Robinson
                                                --------------------------------
                                                Secretary

                                                Corporate Seal

<PAGE>

                         SECOND LEASE ADDENDUM AGREEMENT

      THIS ADDENDUM to the original lease dated March 26, 1992 and the first
addendum agreement to said lease dated April 1, 1992, made and entered into this
6th day of June, 1995, between REALTY FOUR, a Georgia General Partnership of
Thomas County, Georgia, hereinafter called Lessor, and SIMMONS OUTDOOR
CORPORATION, a Delaware Corporation, hereinafter called Lessee,

                                   WITNESSETH

      WHEREAS, Paragraph 21 of the original lease agreement dated March 26,
1992, between the Lessor and Lessee made provisions for the Lessor to construct
for the Lessee additional warehouse space and set forth the method for computing
the cost and rent for the additional space and the method of extending the lease
agreement between the parties; and

      WHEREAS, the Lessee has requested the Lessor to construct additional space
pursuant to the provisions of Paragraph 21 of the original lease between the
parties dated March 26, 1992.

      NOW THEREFORE, in consideration of the sum of One ($1.00) Dollar in cash
this day paid by the Lessee to the Lessor, and of the mutual agreements
hereinafter set forth, Lessor and Lessee agree as follows:

      1.    The Lessor agrees to expand the warehouse which the Lessee is
currently leasing under the lease agreement between the parties dated March 26,
1992 by constructing an additional 30,000 square feet of warehouse space in
accordance with the plans and/or specifications attached hereto and marked as
Exhibit "A".

      2.    The parties agree that the terms of the lease and the rental payment
on the lease will be modified and the new term of the lease will be eight years
beginning from the date the warehouse expansion is completed by the Lessor
(which is estimated to be September 1, 1995) and the new rental to be paid by
the Lessee to the Lessor for the premises will be $14,840.00 per month beginning
upon the completion of the warehouse expansion by the Lessor (which is estimated
to be September 1, 1995). The Lessor and Lessee agree that the new monthly
rental of the premises after the completion of the warehouse expansion will
remain in effect for four years and thereafter the monthly rental will then be
adjusted to increase or decrease pursuant to the adjustment provisions contained
in the original lease agreement between the Lessor and Lessee dated March 26,
1992. The parties further agree that the Lessee shall now have the option of
renewing this lease for four additional four year terms beginning at the
expiration of the new eight year term set forth in this second lease addendum
agreement which is estimated to be September 1, 2003.

      3.    The parties agree that the expansion cost of $1.35 per square feet
set forth in paragraph 21 of the original lease agreement will apply only to
expansions completed prior

<PAGE>

to March 26, 1996 and thereafter the expansion cost will be increased or
decreased pursuant to the adjustment provision contained in the original lease
agreement between the Lessor and Lessee dated March 26, 1992.

      4.    Except as hereinabove modified all the terms and conditions of the
original lease between the parties dated March 26, 1992 and the first addendum
agreement to said lease dated April 1, 1992 shall remain the same.

      IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hand and
affixed their seals the date first above written.

                                                REALTY FOUR, a Georgia
                                                General Partnership

Signed, Sealed and Delivered
in the presence of us:                          By: /s/ Harry M. Tomlinson
                                                --------------------------------
                                                        General Partner

Beverly Reese
-----------------------
Unofficial Witness

Barbara C. Brinson
-----------------------
Notary Public

[STAMP]
                                                SIMMONS OUTDOOR CORPORATION,
                                                a Delaware Corporation

Signed, Sealed and Delivered
in the presence of us:                          By: /s/ Rolf P. Wilkerson
                                                --------------------------------
                                                        V.P. Operations

Jann Furmey                                     Attest: N. N. Swon
-----------------------                                -------------------------
Unofficial Witness                                      Secretary

/s/ Margaret James                                     LESSEE
-----------------------
Notary Public

[NOTARY STAMP]

<PAGE>

                                                                     EXHIBIT "A"

                       SPECIFICATIONS FOR ADDITIONAL WORK
                                       ON
                      SIMMONS OUTDOOR CORPORATION WAREHOUSE
                                       IN
                              THOMASVILLE, GEORGIA

                                  MAY 8, 1995

1. Expand the warehouse by 30,000 square feet. The warehouse addition will
include floor, skylights, lighting, electrical outlets, walls, liner panels,
insulation, alarm, unit heaters and sprinkler system just like the existing
building. The rear wall panels and framing will be relocated 125 feet further to
the rear of the building. There will not be a partition where the rear end wall
is now located.

2. Include a 12' x 15' receiving office in the corner by the present receiving
dock with one 3'x6'-8" personnel door and two 4' x 4' fixed glass windows, one
on each of the two inside walls. Behind the receiving office in the new
addition, provide a 12' x 24' quality assurance room with two double 3' x 4'-4"
single hung windows to the outside with undivided lights and one 3' x 6-8"
personnel door with half glass opening into the warehouse. Add two rest rooms
like those in the warehouse at the front of the building. Inside walls will be
5/8" painted firecode Sheetrock, ceilings to be suspended ceilings like in the
main office at the front of the building. The outside walls will be covered
with metal panels like the warehouse office at the front of the building. Remove
one toilet and install a urinal in the front men's rest room and install the
toilet and one urinal in the new men's rest room. Do not air condition the new
rest rooms. Offices are to be heated and air conditioned by through-the-wall
package units. Provide one wall mounted storage cabinet in each rest room.
Provide vinyl floor covering in the rest rooms, carpet in the offices and Q.A.
room.

3. Include a 12' x 18' x 8" returns department office in the present returns
department area of the main warehouse with suspended ceiling, painted Sheetrock
walls, through the wall heating and cooling system, three 4' x 4' fixed glass
windows, one 3' x 6'-8" door, carpeted floor, vinyl base.

4. Install two dock doors like the doors at the existing shipping area in the
center bay of the addition. Add paving for trucks to serve the two new dock
doors as shown on the revised site plan.

5. Add eleven new parking spaces at the end of the existing parking lot as shown
on the revised site plan.

6. Omit paving of the grassed area between the existing shipping and receiving
docks. This was discussed at one time but the decision was made to postpone this
work.

7. Do not provide the proposed 20' x 40' x 12' clear height pallet storage shed
with open sides near the existing shipping dock that was discussed at one time.

8. Relocate the fence to maintain the same clearance from the addition as from
the existing building.

9. Add personnel emergency egress (3' x 7' personnel doors) as required by the
Life Safety Code in the warehouse addition.

10. Change two fixed glass windows in the repair room to single hung, revise
alarm system to include new windows, doors and the new work in the warehouse
area.

<PAGE>
                     MEMORANDUM OF SECOND LEASE ADDENDUM AGREEMENT

GEORGIA, THOMAS COUNTY.

      THE INSTRUMENT has been executed by REALTY FOUR, a Georgia General
Partnership composed of C. W. McKinnon, Jr., Harry M. Tomlinson, Charles D.
Reichert and William M. Inman, hereinafter referred to an the "Lessor", and
SIMMONS OUTDOOR CORPORATION, a Delaware corporation, hereinafter referred to an
the "Lessee", for the purpose of evidencing that a Lease Agreement has been
entered into between Lessor and Lessee dated as of March 26,1992, amended April
1,1992, in connection with the following described property:

      ALL OF THAT TRACT OR PARCEL OF LAND lying, being and situate in the City
of Thomasville, Thomas County, Georgia, comprising 6.24 acres and being all of
Tract One as shown on a plat of survey prepared for Realty Four by Robert P.
Jolley, Jr., Georgia Registered Land Surveyor No. 1886, dated April 10,1992 and
recorded in Plat Cabinet 2, Page 9-B, of the Deed Records of Thomas County,
Georgia, and more particularly described by metes and bounds according to said
plat of survey as follows:

      TO REACH A POINT OF BEGINNING COMMENCE at the intersection of the eastern
margin of the 200 foot right-of-way of Thomasville West By-Pass with the
southern margin of the 80 foot right-of-way of Plantation Oak Drive and from
said point run south 89 degrees 58 minutes 56 seconds east a distance of 50.98
feet to an iron pin, which is the POINT AND PLACE OF BEGINNING; from said point
of beginning continue south 89 degrees 58 minutes 56 seconds east a distance of
569.4 feet to a point marked by an iron pin; thence run south 40 degrees 54
minutes 40 seconds east a distance of 26.2 feet to a point marked by an iron pin
located on the western margin of the 80 foot right-of-way of a proposed street;
thence run south 08 degrees 10 minutes 08 seconds west along said western margin
of the 80 foot right-of-way of said proposed street a distance of 480 feet to a
point marked by an iron pin; thence run north 81 degrees 49 minutes 32 seconds
west a distance of 606.19 feet to a point marked by an iron pin on the eastern
margin of a strip of land identified as "City of Thomasville W & L"; thence run
north 11 degrees 18 minutes 06 seconds east along the eastern margin of said
City of Thomasville W & L strip of land a distance of 416.99 feet to the point
and place of beginning,

which was amended on June 6, 1995, which amended lease includes the following
described additional real property:

      ALL OF THAT TRACT OR PARCEL OF LAND lying, being and situate in the City
of Thomasville, Thomas County, Georgia, comprising 5.66 acres and being all of
Tract II as shown on a plat of survey prepared for Realty Four by Robert P.
Jolley, Jr., Georgia Registered Surveyor No. 1886, dated April 10, 1992 and
recorded in Plat Cabinet 2, Page 9-B, of the Deed Records of Thomas County,
Georgia, and more particularly described by metes and bounds according to said
plat of survey as follows:

      TO REACH A POINT OF BEGINNING COMMENCE at the intersection of the eastern
margin of the 200 foot right-of-way of Thomasville West By-Pass with the
southern margin of the 80 foot right-of-way of Plantation Oak Drive and from
said point run south 89 degrees 58 minutes 56 seconds east a distance of 50.98
feet to an iron pin; thence run south 89 degrees 58 minutes 56 seconds east a
distance of 569.4 feet to a point marked by an iron pin; thence run south 40
degrees 54 minutes 40 seconds east a distance of 26.2 feet to a point marked by
an iron pin located on the western margin of the 80 foot right-of-way of a
proposed street; thence run south 08 degrees 10 minutes 08 seconds west along
said western margin of the 80- foot right-of-way of said proposed street a
distance of 480 feet to a point marked by an iron pin to the POINT AND PLACE OF
BEGINNING; from said point of beginning continue south 08 degrees 10 minutes 28
seconds west along the western margin of the 80 foot right-of-way of the
proposed street a distance of 400 feet to a point marked by an ion pin; thence
run north 81 degrees 49 minutes 32 seconds west a distance of 624.71 feet to a
point marked by an iron pin located on the eastern margin of a strip of land
identified as "City of Thomasville W & L"; thence run in a northerly direction
along a curve of the easterly margin of said City of Thomasville W & L strip of
land a distance of 134.25 feet to a point, which point is located a chord
distance of north 09 degrees 52 minutes 58 seconds east 134.24 feet from the
last mentioned point; thence continuing along the eastern margin of said City of
Thomasville W & L strip of land run north 11 degrees 18 minutes 06 seconds east
a distance of 266.22 feet to a point marked by an iron pin; thence run south 81
degrees 49 minutes 32 seconds east a distance of 606.19 feet to the point and
place of beginning.
<PAGE>
      The above described property is subject to the restrictive covenants dated
December 14, 1987 and recorded January 15, 1992, in Deed Book 332, Pages
293-301, of the Deed Records of Thomas County, Georgia.

      The term of the lease is for a period of eight (8) years commencing on
September 1, 1995. (estimated date of warehouse expansion)

      The second lease addendum agreement lease contains an option to renew the
same for four (4) additional periods of four (4) years following the initial
8-year term.

      IN WITNESS WHEREOF, Lessor and Lessee have executed this Memorandum of
Second Lease Addendum Agreement under seal, as of the 21st day of September,
1995, but effective June 6, 1995.

                 LESSOR:                        REALTY FOUR, a Georgia General
                                                Partnership

                                                 By: Harry M. Tomlinson
                                                    ----------------------------
                                                    Harry M. Tomlinson, Partner

Signed, Sealed and Delivered
in the presence of us:

/s/ [ILLEGIBLE]
-----------------------
Unofficial Witness

/s/ Paul J. McCollin
-----------------------
Notary Public

[NOTARY STAMP]
                LESSEE:                     SIMMONS OUTDOOR CORPORATION

                                            By: /s/ [ILLEGIBLE]
                                            ----------------------------------
                                                    President
                                                    Title

                                            Attest: /s/ Rolf P. Wilkerson (L.S.)
Signed, Sealed and Delivered,                       ----------------------------
in the presence of us:                              V.P. Operations
                                                    --------------------------
                                                    Title

Sandy J. Sandlin
-----------------------
Unofficial Witness

Kathleen A. Clark
-----------------------
Notary Public

[NOTARY STAMP]                                    (AFFIX CORPORATE SEAL)

<PAGE>

                         THIRD LEASE ADDENDUM AGREEMENT

      THIS ADDENDUM to the original lease dated March 26,1992 and the first
addendum agreement to said lease dated April 1,1993 and the second addendum
agreement to said lease dated June 6,1995 made and entered into this 2nd day of
November, 1999, between REALTY FOUR, a Georgia General Partnership of Thomas
County, Georgia, hereinafter called Lessor, and SIMMONS OUTDOOR CORPORATION, a
Delaware Corporation, hereinafter called Lessee.

                                   WITNESSETH:

      WHEREAS, Lessee has requested certain improvements to leased property at
201 Plantation Oak Drive in Thomasville, Georgia, said property being leased by
agreement between Lessor and Lessee as described above and

      WHEREAS, Lessee and Lessor have agreed to the scope of work and the cost
of same

      NOW THEREFORE, in consideration of One Dollar ($1,00) in cash this day
paid by the Lessee to the Lessor and the mutual agreements hereinafter set
forth, Lessee and Lessor agree as follows:

      1.    Lessor agrees to build new repair facilities in the warehouse,
modify the existing repair facilities in the office portion of the building,
expand the break room, add to the quality assurance offices, expand parking, and
add two 25 ton air conditioning units to the warehouse in accordance with the
plans and specifications attached hereto and marked as Exhibit "A".

      2.    The parties agree that the term of the lease and the rental payment
on the lease will be modified and the new term of the lease will be eight years
beginning January 1, 2000 and the new rental to be paid by the Lessee to the
Lessor for the premises will be $19,020.00 per month beginning January 1, 2000.
The Lessor and Lessee agree that the new monthly rental will remain in effect
for four years and thereafter the monthly rental will then be adjusted to
increase or decrease pursuant to the adjustment provisions contained in the
original lease agreement between the Lessor and Lessee dated March 26,1992. The
parties further agree that the Lessee shall now have the option of renewing this
lease for four additional four-year terms beginning at the expiration of the new
eight year term set forth in this third lease addendum agreement which is
December 31, 2007.

      3.    Except as hereinabove modified all the terms and conditions of the
original lease between the parties dated March 26,1992 and the first addendum
agreement to said lease dated April 1,1993 and the second addendum agreement to
said lease dated June 6,1995 shall remain the same.

<PAGE>

                     THIRD LEASE ADDENDUM AGREEMENT, page 2

      IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hand and
affixed their seals the day and year first written above.

For Lessor                          REALTY FOUR, A Georgia General Partnership,

                                                by  /s/ Harry M. Tomlinson
                                                  ------------------------------
                                                 General Partner

Signed, sealed and delivered
in the presence of us:

Elizabeth Garces
-----------------------
Unofficial Witness

STATE OF GEORGIA
COUNTY OF THOMAS

Before me, the undersigned authority, on this day personally appeared Harry M.
Tomlinson, in behalf of REALTY FOUR, Lessor, a person known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to
me that he is one of the four (4) general partners of REALTY FOUR and that he
executed the same for the purpose therein expressed as his act and deed in the
capacity therein stated.

Given under my hand and seal of office, this 3rd day of November, 1999.

NOTARY PUBLIC, THOMAS COUNTY,
GEORGIA MY COMMISSION EXPIRED DEC. 15, 2001

/s/ Lorianne M. Crosby
-----------------------
Notary Public
My Commission Expires:
(NOTARY SEAL AFFIXED)

<PAGE>

                     THIRD LEASE ADDENDUM AGREEMENT, page 3

For Lessee:                              SIMMONS OUTDOOR CORPORATION, a Delaware
                                         Corporation,

                                         By  /s/ Richard H. Irving,III(Seal)
                                             --------------------------------
                                                  Vice President

                                         Attest: /s/ L. Daniel Morris, JR.(Seal)
                                                --------------------------------
                                                      Asst Sec
                                                (CORPORATE SEAL AFFIXED)

                                   ATTESTATION

Signed, sealed and delivered in the presence of us in the County of Montgomery
and State of Alabama by Richard H. Irving, III and L. Daniel Morris, Jr., who
after being duly sworn, testify that they hold the offices of Vice President and
Asst. Secretary, respectively, and further provided proof that they were the
said officers of SIMMONS OUTDOOR CORPORATION, a Delaware corporation, and
testified and provided proof that they were duly empowered by the corporation to
execute the foregoing in its behalf for the purposes therein expressed and that
they each personally know the truth of the statements set forth herein.

/s/ Carole K. Putman
Unofficial Witness

Given under my hand and seal of office, this 2nd day of November, 1999.

/s/ Tracy O. Thompson
Notary Public
My Commission Expires: 11/21/99
(NOTARY SEAL AFFIXED)

<PAGE>

                                   EXHIBIT "A"
                      SPECIFICATIONS FOR ADDITIONAL WORK AT
                           SIMMONS OUTDOOR CORPORATION
                             IN THOMASVILLE, GEORGIA
                                       FOR
                         THIRD LEASE ADDENDUM AGREEMENT
                                 OCTOBER, 1999

DESCRIPTION OF WORK: Add new repair department facilities in the northeast
corner of the warehouse. Beginning at the northeast corner of the warehouse
these new facilities shall extend 48' along the north wall of the warehouse and
87'4" along the east wall of the warehouse. The width shall be 19'4" from the
outsides of the stud walls as shown on the plan labeled "New Repair Department".
Ceiling height shall be 9' as shown on the drawing labeled "Cross section at new
repair department offices". A 20' x 25' cage with white 26 gauge steel wall
panels 11' high will be built at the end of the new repair department with one
new 3' x 7' personnel door as shown on the plan. The existing exit from the
warehouse near the northeast corner will be relocated to the end of the new cage
as shown on the plan.

Rework the old repair department by adding two walls and two doors to divide the
space into two new offices and a new conference room. Relocate one door and
remove another door in the old repair office as shown on the plan labeled
"Rework old Repair Department".

Build a 15' x 39'4" addition to the quality assurance department as shown on the
floor plan drawing labeled "Addition to QC area". Ceiling height in the addition
to the QC area shall be 8' as shown on the cross section drawing labeled "Cross
section at quality assurance addition". Add two windows in the warehouse wall
located as shown on overall plan labeled "Simmons Outdoor Warehouse Floor Plan".

Build a 14'8" x 27' addition to the break room as shown on the plan labeled
"Break Room Addition".

Expand the parking lot by adding the paving shown on the overall plan labeled
"Simmons Outdoor Warehouse Floor Plan".

Add two 25 ton air conditioning units to the warehouse each with 60 feet of
horizontal duct for air distribution over the work areas. Locate these machines
as shown on the overall plan labeled "Simmons Outdoor Warehouse Floor Plan".

Add hoods over the six fresh air intake louvers located on the west wall of the
warehouse.

DEMOLITION: The existing office in the area where the new repair department is
to be located will be removed. The wall separating the break room from the
warehouse will be removed as shown on the plan labeled "Break Room Addition"
after the new walls are in place.

<PAGE>

                     SPECIFICATIONS FOR ADDITIONAL WORK AT
                 SIMMONS OUTDOOR CORPORATION IN THOMASVILLE, GA
                                     PAGE 2

EXTERIOR WALLS: New walls shall be framed from 2x4 studs on 16" centers and
covered on the office side with 1/2 inch drywall, taped and finished to the
ceiling height shown on the plans. Drywall shall receive two coats of satin
finish latex wall paint. The exterior of the new walls around the new repair
offices, quality assurance and break room shall be covered with white 26 gauge
steel "R" panels extending two feet above the ceiling height.

INTERIOR WALLS: New partition walls shall be framed from 2x4 studs on 16"
centers and covered on both sides with 1/2 inch drywall, taped and finished to
the ceiling height shown on the plans. Drywall shall receive two coats of satin
finish latex wall paint.

INSULATION: The perimeter walls of the new repair department, break room
addition and quality assurance addition shall have 3-1/2" fiberglass building
insulation and the suspended ceilings shall have R-19 fiberglass batts.

CEILING: Ceilings shall be Class A 2' x 4' suspended moisture resistant
acoustical ceiling tile in a white steel grid. The ceiling grid shall be
supported from 6" steel Zee purlins at 5' on centers, more or less, which shall
rest on top of the stud walls.

INTERIOR DOORS: New interior doors shall be flush solid core stained birch 3' x
6'-8" x 1-3/8" units with stained jambs and colonial trim. See the plans for the
location of doors with light kits.

SLATWALL: The entire west wall of the new conference room shall have Slatwall
with grooves on 3" centers installed from the corner by the air handling unit to
the corner by the new cabinet. The Slatwall shall receive two coats of satin
finish enamel after installation.

WINDOWS: The new exterior windows shown on the plan for the north and east
warehouse walls shall be double 3' x 4'4" insulated windows the same type as in
the existing office. The new exterior windows in the west wall of the warehouse
shall be the same type as the existing windows in the west wall of the
warehouse. The interior windows shown on the plans for the break room and
quality assurance rooms shall be 4' x 4' fixed 1/4" plate glass in a wood
frame, stained and varnished to match the other interior windows in the quality
assurance rooms. The doors marked GL on the plan shall have fixed tempered glass
panels to match the windows in the other wood doors in the office.

PLUMBING: No new plumbing is included in this work.

ELECTRICAL: A new 120/208 volt three phase 600 amp panel will be added next to
the existing service to the building to provide the required electrical capacity
for the two new 25 ton air conditioners. Four tube lay-in fluorescent fixtures,
duplex receptacles and switches for the lights shall be provided as shown on the
plans.

<PAGE>

                     SPECIFICATIONS FOR ADDITIONAL WORK AT
                 SIMMONS OUTDOOR CORPORATION IN THOMASVILLE, GA
                                     PAGE 3

HEATING, VENTILATION AND AIR CONDITIONING: The new repair department will be
heated and cooled by one 5 ton split heat pump. The existing ducts to the break
room will be capped off and a new 3-ton split air conditioning machine with 10
KW of electric heat will be installed for the combined break room area. A new
2-1/2 ton split system air conditioner with 10 KW of electric heat will provide
heating and cooling for the four rooms of the quality assurance department. Two
25 ton packaged air conditioning units shall be installed on the west wall of
the warehouse in the location shown on the plan labeled "Simmons Outdoor
Warehouse Floor Plan". These units will be supported at floor level on the
outside of the warehouse west wall by a welded steel frame. Return air will be
drawn into each machine at floor level from the warehouse and supplied through a
horizontal duct running from the machine approximately 14 feet above the floor
to the first row of building columns 60 feet to the east of the machines.

FIRE SPRINKLER SYSTEM ADDITIONS: The new repair department, the addition to the
break room and the addition to the quality assurance department will have
semi-recess chrome pendant sprinkler heads installed to provide fire sprinkler
protection. Sprinkler heads should work in their existing location in the new
conference room and two new offices where the old repair department was located
but will be relocated if necessary. No new sprinkler heads will be added to the
20' x 25' cage area. Walls are to remain low enough so as to cause no
interference with the existing fire sprinklers at the roof deck.

FLOOR COVERING: The floors in the new repair department shall have a thirteen
dollar per square yard floor covering allowance and may be either commercial
grade vinyl tile or carpet. The existing tile floor in the new conference room
and two new offices in the old repair department will be covered with commercial
grade carpet. The floor of the addition to the break room will have commercial
grade vinyl tile. New floor covering for the two original rooms of the quality
control department and the two new rooms shall have a thirteen dollar per square
yard floor covering allowance and may be either commercial grade vinyl tile or
carpet. The perimeter of all new rooms shall receive vinyl cove base.

CAGE: A 20' x 25' cage with white 26 gauge steel wall panels 11' high will be
built at the end of the new repair department with one new 3' x 7' personnel
door with cylinder lock as shown on the plan. Panels will be attached to
cold-formed steel framing. No additional lighting is provided for the cage.

HOODS: Provide and install six hoods over the automatic intake dampers in the
southwest wall of the warehouse. The hoods will be fabricated from 26 gauge
steel panels with a paint finish the same as the exterior walls of the
warehouse. Only the bottom of the hood will be open.

CABINETS: Provide a cabinet for the new conference room as shown on the drawing
labeled "Proposed Cabinet for Simmons Outdoor Conference room".

<PAGE>

                     SPECIFICATIONS FOR ADDITIONAL WORK AT
                 SIMMONS OUTDOOR CORPORATION IN THOMASVILLE, GA
                                     PAGE 4

PAVING: The new area shown on the plan labeled "Simmons Outdoor Warehouse Floor
Plan" as paved, approximately 187 feet long by 42' wide, shall be covered with
1-1/2" hot plant mix asphalt over prepared and compacted soil cement base. Two
concrete sidewalks shall connect the new paving with the existing paving. The
area between existing and new paving will be landscaped as required by the City
of Thomasville Building Department.

ALARM SYSTEM: The existing electronic fire and burglary security system in the
building will be modified as required to compensate for the changes made to the
building.

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