<PAGE>   1
                                                                EXHIBIT 10(v)(i)








                                 LEASE AGREEMENT



      LANDLORD:     UNIVERSITY SCIENCE CENTER PARTNERSHIP


      TENANT:       NOVAGEN, INC.


      PROPERTY:     601 SCIENCE DRIVE AND, SUITE D, 597 SCIENCE DRIVE
                    MADISON, WISCONSIN


      DATE:         DECEMBER 5, 1996





<PAGE>   2

                                 LEASE AGREEMENT

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                  <C>                                                     <C>
                                    ARTICLE 1
                                PREMISES AND TERM

Section 1.1.         Leased Premises.  .....................................  1
Section 1.2.         Term of Lease.  .......................................  2
Section 1.3.         Option to Extend Term..................................  2
Section 1.4.         Security Deposit.  ....................................  2
Section 1.5.         Condition of Improvements..............................  2
Section 1.6.         Right of First Refusal.................................  3
Section 1.7.         Prior Leases...........................................  3

                                    ARTICLE 2
                                      RENT

Section 2.1.         Base Rent.  ...........................................  4
Section 2.2.         Additional Rent.  .....................................  5
Section 2.3.         Past Due Rent.  .......................................  5
Section 2.4.         Real Estate Taxes.  ...................................  5

                                    ARTICLE 3
            INSTALLATIONS, REPAIRS AND MAINTENANCE OF LEASED PREMISES

Section 3.1.         Maintenance by Tenant.  ...............................  7
Section 3.2.         Maintenance by Landlord.  .............................  8
Section 3.3.         Exterior Signs.  ......................................  9
Section 3.4.         Alterations, Changes and Installations by Tenant.  ....  9
Section 3.5.         Fixtures and Equipment.  ..............................  9
Section 3.6.         Liens and Obligations.  ............................... 10

                                    ARTICLE 4
                               CONDUCT OF BUSINESS

Section 4.1.         Business Use.  ........................................ 10
Section 4.2.         Utility Charges.  ..................................... 11
Section 4.3.         Taxes on Leasehold.  .................................. 11
Section 4.4.         Assignment or Subletting.  ............................ 11
Section 4.5.         Rules and Regulations.  ............................... 12
Section 4.6.         Surrender.  ........................................... 12
</TABLE>




                                        i



<PAGE>   3

<TABLE>
<CAPTION>
<S>                  <C>                                                     <C>

                                    ARTICLE 5
                         COMMON USE AREAS AND FACILITIES

Section 5.1.         Common Area.  ......................................... 14
Section 5.2.         Use of Common Area.  .................................. 14
Section 5.3.         Operation and Maintenance.  ........................... 14
Section 5.4.         Preventing Public Rights.  ............................ 15
Section 5.5.         Charge for Common Area and Facilities.  ............... 15
Section 5.6.         Formula For Pro Rata Share.  .......................... 15
Section 5.7.         Basis For Changes.  ................................... 16

                                    ARTICLE 6
                                    INSURANCE

Section 6.1.         Casualty Insurance.  .................................. 16
Section 6.2.         Public Liability Insurance.  .......................... 17
Section 6.3.         Tenant's Contents.  ................................... 18
Section 6.4.         Increase in Fire Insurance.  .......................... 18
Section 6.5.         Hold Harmless.  ....................................... 18
Section 6.6.         Waiver of Subrogation.  ............................... 19

                                    ARTICLE 7
                         DESTRUCTION OF LEASED PREMISES

Section 7.1.         Destruction of Leased Premises.  ...................... 20
Section 7.2.         Rebuilding by Landlord.  .............................. 20
Section 7.3.         Abatement of Rent Upon Destruction of Premises.  ...... 20

                                    ARTICLE 8
                             EFFECT OF CONDEMNATION

Section 8.1.         Total Condemnation.  .................................. 21
Section 8.2.         Partial Condemnation.  ................................ 21
Section 8.3.         Landlord's Damages.  .................................. 21
Section 8.4.         Tenant's Damages.  .................................... 21

                                    ARTICLE 9
                                    REMEDIES

Section 9.1.         Events of Default by Tenant.  ......................... 22
Section 9.2.         Re-Entry by Landlord.  ................................ 22
Section 9.3.         Right to Relet.  ...................................... 23
Section 9.4.         Parties May Remedy Defaults.  ......................... 24
Section 9.5.         Landlord's Remedies: Liquidated Damages.  ............. 24
Section 9.6.         Expenses of Landlord.  ................................ 26
Section 9.7.         Waiver of Redemption.  ................................ 26
Section 9.8.         Defaults of Landlord.  ................................ 26
</TABLE>





                                       ii

<PAGE>   4


<TABLE>
<CAPTION>
<S>                  <C>                                                     <C>

Section 9.9.         Rights Cumulative.  ................................... 26

                                   ARTICLE 10
                                  MISCELLANEOUS

Section 10.1.          Subordination.  ..................................... 27
Section 10.2.          Sale of Property.  .................................. 27
Section 10.3.          Offset Statement.  .................................. 27
Section 10.4.          Attornment.  ........................................ 28
Section 10.5.          Recording.  ......................................... 28
Section 10.6.          Excavations.  ....................................... 28
Section 10.7.          Access to Premises.  ................................ 29
Section 10.8.          Quiet Enjoyment.  ................................... 29
Section 10.9.          Notices.  ........................................... 29
Section 10.10.         Holding Over.  ...................................... 29
Section 10.11.         Consents by Landlord. ............................... 30
Section 10.12.         Successors and Assigns. ............................. 30
Section 10.13.         Governmental Regulations. ........................... 30
Section 10.14.         Certain Expenses of Landlord. ....................... 30
Section 10.15.         Force Majeure. ...................................... 30
Section 10.16.         General. ............................................ 31
Section 10.17.         Effect of Ground Lease .............................. 32

                                   ARTICLE 11
                                   ATTACHMENTS

Section 11.1.          Attachments.  ....................................... 32
</TABLE>





                                       iii

<PAGE>   5

                            UNIVERSITY SCIENCE CENTER

                                 LEASE AGREEMENT


        This Lease is made this 5th day of December, 1996, by and between
University Science Center Partnership, a Wisconsin general partnership
(hereinafter referred to as "Landlord") and Novagen, Inc., an Arkansas
corporation (hereinafter referred to as "Tenant").

                              W I T N E S S E T H :

        IT IS HEREBY AGREED, by and between the parties hereto, in consideration
of the covenants and agreements set forth in this Lease, as follows:

                                    ARTICLE 1
                                PREMISES AND TERM

        SECTION 1.1. LEASED PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord on the terms and provisions and subject to
the conditions hereinafter set forth in this Lease, the following described
premises:

        601 Science Drive and Suite D, 597 Science Drive, Madison, Dane County,
        Wisconsin, (herein referred to as the "Leased Premises") consisting of
        approximately 17,750 square feet of space at 601 Science Drive and 282
        square feet of space at Suite D, 597 Science Drive and all necessary
        common areas situated upon the property described in Exhibit A attached
        hereto. (The Property described in Exhibit A is referred to herein as
        the "Landlord's Property"). The location of the Leased Premises on the
        Landlord's Property is indicated on the map attached hereto as Exhibit
        B-1, and the floor plan attached hereto as Exhibit B-2.

        It is understood and acknowledged by both parties that Landlord, at the
time of execution of this Lease, holds all or a portion of the Leased Premises
as a tenant under a ground lease




                                       iv


<PAGE>   6

described in Section 0. Landlord may increase the amount of property located
within the Landlord's Property which it owns or leases.

        SECTION 1.2. TERM OF LEASE. The term of this Lease ("the term") shall
begin on December 5, 1996, ("the commencement date"). The term shall end at
midnight on November 30, 2001.

        SECTION 1.3. OPTION TO EXTEND TERM. Provided Tenant is not then in
default and has not previously sublet or assigned this Lease, Tenant is hereby
granted one (1) option to extend the term of this Lease for five (5) years, such
extended term to begin upon the expiration of the original term of this Lease;
and all terms, covenants and provisions of this Lease shall apply to the
extended term, including the rent increase provision of Section 0, except that
Tenant shall not have any further option to extend following the exercise of
such option to extend. If Tenant elects to exercise its option to extend, Tenant
shall do so only by giving Landlord notice in writing of its intention to do so
not later than six (6) months prior to the expiration of the original term.

        SECTION 1.4. SECURITY DEPOSIT. Tenant shall pay to Landlord upon
execution of this Lease the sum of Eight Thousand Six Hundred and no/100 Dollars
($8,600.00) as security for the performance of the obligations hereof by Tenant.
This sum shall be returned to Tenant within ten (10) days following the
termination of this Lease, provided Tenant has fulfilled all of its obligations
herein.

        SECTION 1.5. CONDITION OF IMPROVEMENTS. On the commencement date,
Landlord shall deliver the Leased Premises in "as is" condition.

        SECTION 1.6. RIGHT OF FIRST REFUSAL. If, during the term of this Lease,
any of the other




                                       2
<PAGE>   7


leasable space located in the building which includes the Leased Premises (i.e.
597-605 Science Drive) becomes available for rental, Tenant, provided it is not
in default with respect to the performance of any of its obligations under the
terms and provisions of this Lease, shall have a right of first refusal for the
leasing of such space. This right of first refusal shall be exercised as
follows:

        Landlord, upon determining that such other leasable space has or will
        become available for rental during the term of this Lease, shall provide
        to Tenant written notice specifying the date on which such space will be
        available, the number of square feet of floor space comprising such
        space, and Landlord's rental rate therefor. Tenant may elect to rent
        such space by written notice delivered to Landlord within fourteen (14)
        days following the date of Landlord's notice. Tenant's written notice
        shall obligate Tenant to lease such space on the terms proposed in
        Landlord's notice. Except as otherwise specifically provided in
        Landlord's notice, all terms of such lease shall be identical to those
        then in effect under this Lease, including the term and options to
        extend the term of this Lease. If Landlord has not received Tenant's
        notice within such fourteen (14) day period, Tenant's right to lease
        such additional space under this Lease shall end unless such space shall
        again become available for lease, in which case such space shall again
        be subject to Tenant's right of first refusal as described herein.

        SECTION 1.7. PRIOR LEASES. As of the commencement date, this Lease shall
supersede, terminate and replace any prior leases between Landlord and Tenant.
The foregoing notwithstanding, Tenant shall pay to Landlord the sum of Two
Thousand Nine Hundred Fifty-




                                       3
<PAGE>   8


three and 13/100 Dollars ($2,953.13) on the commencement date. This amount
relates to deferred rent under a prior lease between Tenant and Landlord.
Landlord also hereby acknowledges Tenant's right to remove a 5-ton HVAC unit
from the building known as 595 Science Drive which unit was paid for and
installed by Tenant.

                                    ARTICLE 2
                                      RENT

        SECTION 2.1. BASE RENT. Tenant shall pay to Landlord at its office in
Madison, Wisconsin, or such other place as Landlord may designate in writing,
and without any deduction or offset whatsoever, as base rent the following
amounts on or before the first day of each calendar month.

        (a)    For 601 Science Drive, the sum of Eleven Dollars and 50/100
               ($11.50) per square foot per year (i.e. the sum of Two Hundred
               Four Thousand One Hundred Twenty-five and 00/100 Dollars
               ($204,125.00)) in 12 equal monthly installments of Seventeen
               Thousand Ten and 42/100 Dollars ($17,010.42) in advance on or
               before the first day of each calendar month during the first year
               of this Lease.

        (b)    For 597 Science Drive, the sum of Six Dollars and 00/100 ($6.00)
               per square foot per year (i.e. the sum of One Thousand One Six
               Hundred Ninety-two and 00/100 Dollars ($1,692.00)) in 12 equal
               monthly installments of One Hundred Forty-one and 00/100 Dollars
               ($141.00) in advance on or before the first day of each calendar
               month during the first year of this Lease.

        (c)    The base rent for each subsequent lease year shall be the base
               rent for the prior year increased by four percent (4%). The first
               such increase or decrease shall





                                       4

<PAGE>   9

               take place on January 1, 1998.

        If the term of this Lease does not commence on the first day of a
calendar month, the base rent for such fractional month shall be computed pro
rata on the basis of thirty (30) days per month and paid to Landlord on the
first day of the next succeeding calendar month along with the rent for such
succeeding month.

        SECTION 2.2. ADDITIONAL RENT. In addition to base rent, Tenant shall pay
as part of the consideration for this Lease and as additional rent, hereinafter
designated "additional rent," all additional amounts hereinafter provided for
and the same shall be payable upon Landlord's demand except as otherwise
expressly provided.

        SECTION 2.3. PAST DUE RENT. If Tenant shall fail to pay when due any
base rent or additional rent, and such amount shall not be paid within ten (10)
days after the date when due, such unpaid amounts shall bear interest from the
due date thereof to the date of payment at the rate of percent per annum or the
prime interest rate then charged by the Firstar Bank Wisconsin or its successors
or assigns, whichever is greater.

        SECTION 2.4. REAL ESTATE TAXES. Landlord shall pay all real estate taxes
on Landlord's Property, including all general real estate taxes, personal
property taxes on Landlord's property and installments for special assessments
arising during the term of the Lease. Tenant agrees to reimburse Landlord for
Tenant's pro rata share of such taxes. Tenant's pro rata share of such taxes
shall be calculated as follows:

        (a)    General Real Estate Taxes. For purposes of calculating Tenant's
               pro rata share of general real estate taxes, such taxes shall be
               divided into two separate categories. The first category shall be
               real estate taxes allocable to land values. The second





                                       5

<PAGE>   10


               category shall be real estate taxes attributable to improvements.


               (1)    Taxes Attributable to Land Value. Landlord shall determine
                      by inspection of tax records the total real estate taxes
                      attributable to land value assessed against the Landlord's
                      Property. Tenant's pro rata share of such tax shall be
                      based upon its portion of the net leasable area within all
                      buildings located on Landlord's Property.

               (2)    Taxes Attributable to Improvements. Landlord shall
                      determine by inspection of tax records the total real
                      estate taxes attributable to improvements on Landlord's
                      Property. Landlord shall also determine in its reasonable
                      discretion the cost of the Leased Premises, and the cost
                      of all improvements situated on the Landlord's Property
                      which are available for leasing to and occupancy by
                      tenants. Tenant's pro rata share of the taxes described in
                      this subparagraph shall be determined, as a percentage, by
                      dividing the cost of the Leased Premises by the cost of
                      all improvements situated on the Landlord's Property which
                      are available for leasing to and occupancy by tenants.

        (b)    Installments for Special Assessments. Tenant's pro rata share of
               installments for special assessments levied on Landlord's
               Property shall be based upon its portion of the net leasable area
               within all buildings located on Landlord's Property.

        (c)    Personal Property Taxes on Landlord's Property. Tenant's pro rata
               share of personal property taxes on Landlord's property shall be
               based upon its portion of the net leasable area within all
               buildings located on Landlord's Property.





                                       6

<PAGE>   11

        Tenant's obligation for each tax described in this section shall be
further prorated for the first year of this Lease between Landlord and Tenant as
of the commencement date of this Lease.

        Tenant shall pay to Landlord along with Tenant's monthly base rent, an
amount equal to one-twelfth (1/12) of its pro rata share of the estimated annual
real estate taxes, personal property taxes and installments for special
assessments for Landlord's Property. Such payment shall be applied by Landlord
to the payment of the taxes on the Landlord's Property. Tenant shall be
responsible for the prompt payment of its pro rata share of any deficiency so
that all such taxes shall be paid before the same become delinquent. At the
termination of this Lease, Tenant shall promptly pay Landlord for Tenant's pro
rata share of the estimated taxes for that portion of the termination year
during which the Lease is in effect. Such estimate shall be based upon the taxes
for the preceding year.

        Tenant's pro rata share of taxes shall be adjusted from time to time as
Tenant leases additional space in the building either by exercise of any option,
right of first refusal, or otherwise or as additional rental space is added to
Landlord's Property.





                                       7
<PAGE>   12

                                    ARTICLE 3
            INSTALLATIONS, REPAIRS AND MAINTENANCE OF LEASED PREMISES

        SECTION 3.1. MAINTENANCE BY TENANT. Tenant shall at all times keep the
Leased Premises and all partitions, doors, fixtures, electrical and lighting
fixtures, plumbing and electrical lines and equipment located within the Leased
Premises and including heating, ventilating and air conditioning lines and
equipment located outside the Leased Premises but servicing only the Leased
Premises in good order, condition and repair, including periodic painting as
determined by Landlord, reasonable wear and tear excepted. If Tenant refuses or
neglects to repair property as required hereunder and to the reasonable
satisfaction of Landlord as soon as reasonably possible after written demand,
Landlord may make such repairs without liability to Tenant for any loss or
damage that may accrue to Tenant's property or to Tenant's business by reason
thereof, and upon completion thereof, Tenant shall pay Landlord's costs for
making such repairs plus twenty (20%) percent for overhead, upon presentation of
bill therefor, as additional rent. When used in this paragraph, the term
"repairs" shall include replacements and renewals when necessary and all such
repairs shall be equal in quality and class of original work.

        Service contracts by the Tenant are required on all heating and air
conditioning units, including but not limited to changing filters, checking
belts and oiling of units. The Tenant shall provide the Landlord with evidence
of a service contract. If Tenant refuses or neglects to maintain a service
contract, Landlord may contract for the maintenance and Tenant shall pay
Landlord the costs plus twenty (20%) percent for overhead as additional rent.
Tenant shall cause the service contractor to provide Landlord with a statement
of HVAC condition prior to





                                       8
<PAGE>   13

surrender of the premises.

        SECTION 3.2. MAINTENANCE BY LANDLORD. Landlord shall keep foundations,
exterior walls, roof and all other structural members, both interior and
exterior, of the Leased Premises and all common areas in good repair and shall
have access to the Leased Premises for such purpose, but Landlord shall not be
required to make any such repairs which become necessary or desirable by reason
of the negligence of Tenant, its agents, servants, employees or customers.

        SECTION 3.3. EXTERIOR SIGNS. All signs to be installed by Tenant shall
be approved in advance in writing by the Design Review Board appointed by the
Board of Regents of the University of Wisconsin System. All signs to be
installed by Landlord shall be approved in advance in writing by the Design
Review Board.

        Tenant shall remove all signs installed by Tenant at the termination of
this Lease. Such installations and removals shall be made in such a manner as to
avoid injury, defacement or any other damages to the buildings and improvements.
The cost of repairing any damage to the building caused by the installation,
removal, or maintenance of the sign shall be borne by the Tenant.

        The cost of all signs, other than those furnished by Landlord, including
the installation, maintenance, and removal thereof, shall be the responsibility
of the Tenant.

        SECTION 3.4. ALTERATIONS, CHANGES AND INSTALLATIONS BY TENANT. Tenant
shall not make or cause to be made any alterations, additions or improvements to
the Leased Premises, or cause to be installed any fixtures, interior or exterior
lighting, plumbing equipment or mechanical equipment, without the prior written
consent of Landlord.

        SECTION 3.5. FIXTURES AND EQUIPMENT. Subject to Section 3.4,





                                       9
<PAGE>   14

Tenant may, at its own expense, furnish and install such equipment in and on the
Premises as may be necessary or desirable for Tenant's business. All such
equipment shall remain the property of Tenant. Tenant may also, at its own
expense, furnish and install such business and trade fixtures in and on the
Premises as may be necessary or desirable for Tenant's business. Any such
fixtures shall immediately become and remain the personal property of Landlord
and shall not be removed by Tenant during or at the expiration of the term of
this Lease.

        SECTION 3.6. LIENS AND OBLIGATIONS. Tenant agrees not to create or to
permit others to create any lien or obligations against Landlord or the Leased
Premises in making alterations, repairs or in installing materials, fixtures or
equipment, agrees to cause any claim for such lien to be released, and further
agrees to hold Landlord harmless from all claims and demands by any third party
in any manner connected with such alterations, repairs or installations or with
Tenant's occupancy for such purpose. Tenant shall comply with all laws and all
directions, rules and regulations of all governmental regulatory bodies or
officials having jurisdiction over such alterations, repairs or installations,
except that Tenant shall not be required to comply with any laws, regulations or
orders by governmental authority necessitating structural alterations, changes,
repairs or additions, unless made necessary by the act or work performed by
Tenant, in which case Tenant shall so comply, at its own expense, after first
procuring the written consent of Landlord.





                                       10
<PAGE>   15

                                    ARTICLE 4
                               CONDUCT OF BUSINESS

        SECTION 4.1. BUSINESS USE. It is understood and agreed that the Leased
Premises shall be used and occupied by Tenant as an office and laboratory.
Tenant shall not use the Leased Premises for any use not identified as a
permitted use by any zoning ordinance or other governmental regulation relating
to the Leased Premises or approved as a conditional use by the governmental
bodies having zoning authority. No use shall be permitted, or acts done, which
will cause a cancellation of any insurance policy covering the Leased Premises.
Tenant shall not sell, permit to be kept, used or sold in or about the Leased
Premises any article which may be prohibited by the standard form of fire
insurance policy. In the event Tenant's use of the Leased Premises results in an
increase in the cost of any insurance relating to the Landlord's Property,
Tenant shall pay such additional cost to Landlord upon demand. Tenant shall
comply with all applicable laws, ordinances, regulations and/or deed and plat
restrictions affecting the use and occupancy of the Leased Premises. Tenant
shall not commit, or permit to be committed, any waste or nuisance on the Leased
Premises.

        SECTION 4.2. UTILITY CHARGES. Tenant shall be solely responsible for and
promptly pay all charges for heat, water, gas, sewer, electricity or any other
utility used or consumed in the Leased Premises including supplemental heating.
In no event shall Landlord be liable for an interruption or failure in the
supply of any such utilities to the Leased Premises.

        SECTION 4.3. TAXES ON LEASEHOLD. Tenant shall be responsible for and
shall pay before delinquency all municipal, county, state, or other taxes
assessed during the term of this Lease against any leasehold interest or
personal property of any kind, owned by or placed in, upon or





                                       11
<PAGE>   16

about Leased Premises by Tenant.

        SECTION 4.4. ASSIGNMENT OR SUBLETTING. Tenant agrees not to sell,
assign, mortgage, pledge or in any manner transfer this Lease or any estate or
interest thereunder and not to sublet the Leased Premises or any part or parts
thereof without the prior written consent of Landlord in each instance which
consent shall not be unreasonably withheld. Consent by Landlord to one
assignment of this Lease or to one licensing or subletting of the Leased
Premises shall not be a waiver of Landlord's rights hereunder as to subsequent
assignment or subletting. Landlord's rights to assign this Lease are and shall
remain unqualified.

        SECTION 4.5. RULES AND REGULATIONS. The rules and regulations appended
to this Lease as Exhibit C are hereby made a part of this Lease, and Tenant
agrees to comply with and observe the same. Tenant's failure to keep and observe
said rules and regulations shall constitute a breach of the terms of this Lease
in the manner as if the same were contained herein as covenants. Landlord
reserves the right from time to time to amend or supplement said rules and
regulations and to adopt and promulgate additional rules and regulations
applicable to Leased Premises, and the property described in Exhibit A, provided
that such additional rules and regulations do not unreasonably interfere with
Tenant's use and enjoyment of the Leased Premises. Notice of such additional
rules and regulations, and amendments and supplements, if any, shall be given to
Tenant, and Tenant agrees thereupon to comply with and observe all such rules
and regulations and amendments thereto and supplements thereof.

        SECTION 4.6. SURRENDER. On the last day of the term of this Lease,
including any option term, or upon the sooner termination thereof, Tenant shall
peaceably and quietly





                                       12
<PAGE>   17

surrender the Leased Premises and all improvements thereon in the same condition
as at the commencement of this Lease, in good order, condition and repair, fire
and other unavoidable casualty, and reasonable wear and tear excepted. All
alterations, additions, improvements and fixtures which may be made or installed
by either Landlord or Tenant upon the Leased Premises pursuant to Section 3.5,
shall, except as provided in Section 3.5, remain the property of Landlord and
shall remain upon and be surrendered with the Leased Premises as a part thereof,
without disturbance, molestation or injury at the termination of the term of
this Lease, whether by the elapse of time or otherwise, all without compensation
or credit to Tenant. Any personal property and equipment not removed shall be
deemed abandoned and shall become the property of Landlord; provided, that the
Landlord shall have the option to effect said removals and Tenant shall pay
Landlord, on demand, the cost of removal thereof, with interest at the rate of
ten (10%) percent per annum from the date of such removal by Landlord, or the
prime interest rate established by the Firstar Bank Wisconsin or its successors
or assigns, whichever is higher.

        If, prior to surrender of the premises or within twenty (20) days
thereafter, Landlord so directs by written notice to Tenant, Tenant shall repair
any damage occasioned by such removals and Tenant will pay to Landlord, on
demand, the cost thereof with interest from the date of completion of such
repairs by Landlord, at the rate specified in the immediately preceding
paragraph of this Lease.

        The delivery to Landlord at the place then fixed for the payment of rent
of the keys to the Leased Premises shall constitute surrender of the premises by
Tenant and acceptance of the keys by Landlord shall constitute acceptance by
Landlord of such surrender. Such acceptance by





                                       13
<PAGE>   18

Landlord shall not constitute a waiver of any rights to recover damages under
terms of this Lease. This method of surrender shall not be exclusive and shall
be in addition to all other methods of surrender.

        Anything in this section to the contrary notwithstanding, at any
termination of this Lease, Landlord shall have a lien upon all of the property
of Tenant then located in or upon the Leased Premises to secure the payment of
any amounts due from Tenant to Landlord by reason of this Lease or to secure the
payment of damages, and Landlord may retain possession of such property until
payment in full of said amounts. Said lien shall not be defeated by placing such
property in storage. If Tenant has not redeemed said property within ninety (90)
days after the termination of said Lease, Landlord may sell such property at
public or private sale without further notice to Tenant, and shall apply in a
reasonable manner determined by Landlord the proceeds of sale to reduce the
amounts then owed from Tenant to Landlord.

                                    ARTICLE 5
                         COMMON USE AREAS AND FACILITIES

        SECTION 5.1. COMMON AREA. As used herein, "common area" shall include
all of that portion of the improvements on and all areas within the Landlord's
Property which are designed for common use and benefit, exclusive of space in
buildings (or any further buildings) designed for rental to Tenants for
commercial purposes as the same may exist from time to time. Landlord reserves
the right to change building perimeters, add additional buildings, drives, or
other structures and to make other changes desired, provided only that
reasonable access to the Leased Premises is provided.

        SECTION 5.2. USE OF COMMON AREA. Landlord hereby grants to Tenant, its
employees,





                                       14
<PAGE>   19

agents, customers and invitees, the nonexclusive right during the term of this
Lease to use the common areas from time to time constituted, such use to be in
common with Landlord and all tenants of Landlord from time to time, its and
their employees, agents, customers and invitees, except when the same are being
repaired.

        SECTION 5.3. OPERATION AND MAINTENANCE. The common area shall at all
times be subject to the exclusive control and management of Landlord and
Landlord shall manage, operate, repair and maintain the common area and its
facilities in a clean and sightly condition. The manner in which such area and
facilities shall be maintained and the expenditures therefor shall be at the
Landlord's sole discretion.

        SECTION 5.4. PREVENTING PUBLIC RIGHTS. If Landlord deems it necessary in
order to prevent the acquisition of special rights, Landlord may from time to
time close all or any portion of the common area or take such action as shall be
reasonably appropriate for that purpose.

        SECTION 5.5. CHARGE FOR COMMON AREA AND FACILITIES. During the term of
this Lease Tenant shall pay to Landlord an annual charge which shall be Tenant's
pro rata share of the Landlord's actual cost of operating, repairing, and
maintaining the common area and other facilities which shall include, but shall
not be limited to driveway, parking areas, landscaped and vacant areas,
area-ways, walks, curbs, corridors, gardens, sanitary and storm sewers, signs,
public facilities such as washrooms, drinking fountains, toilets, the cost of
operating, repairing, lighting, heating, air conditioning, cleaning, painting,
removing of snow, ice and debris, policing and inspecting, insurance for hazards
and other risks, maintenance including but not limited to such repair of paving,
curbs, walkways, driveways, landscaping and drainage and lighting facilities as
may be necessary from time to time to keep the same in good condition and
repair, a





                                       15
<PAGE>   20

reasonable allowance for the depreciation of maintenance equipment, a reasonable
allowance for Landlord's overhead costs in conjunction with the foregoing, and
all costs and expenses other than those of a capital nature, but excluding legal
fees recovered by Tenant from Landlord in any litigation relating to this Lease.
Landlord shall provide Tenant with an itemized statement of such costs.

        SECTION 5.6. FORMULA FOR PRO RATA SHARE. The annual charge for common
area maintenance and facilities shall be computed on the basis of twelve (12)
consecutive calendar months commencing and ending on dates designated by the
Landlord and shall be paid in advance in monthly installments on the first day
of each calendar month in an amount estimated by Landlord. Within sixty (60)
days after the end of each such twelve (12) month period, Landlord shall
determine and furnish to Tenant a computation of the actual amount charged for
such period; and the amounts so estimated and paid during such period shall be
adjusted promptly (including adjustments on a pro rata basis for any partial
such period at either end of the Lease term) by one party's paying to the other
whatever amount is necessary to effectuate such adjustment.

        The Tenant's pro rata share of the Landlord's actual costs defined in
this Article shall be that portion which the net leasable area in the Leased
Premises bears to the total net leasable area in the buildings located from time
to time on the Landlord's Property.

        SECTION 5.7. BASIS FOR CHANGES. Changes in any particular floor area
occurring during any calendar month shall be effective on the first day of the
next succeeding calendar month and the amounts of any floor area in effect for
the whole of any year shall be the average of the total amounts in effect on the
first day of each calendar month in such year.





                                       16
<PAGE>   21

                                    ARTICLE 6
                                    INSURANCE

        SECTION 6.1. CASUALTY INSURANCE. Landlord shall at all times during the
term of this Lease keep all improvements which are now or hereafter located on
the Landlord's Property insured against loss or damage by fire and the extended
coverage hazards at full insurance value with loss payable to Landlord,
Landlord's mortgagee and such other parties as Landlord may designate, as their
interests may appear.

        Tenant agrees to reimburse Landlord for its pro rata share of the cost
of such insurance. Tenant's pro rata share shall be based upon its portion of
the cost of improvements on the Landlord's Property, as determined under Section
0, and upon that portion of the policy year during which this Lease is in
effect. Tenant's portion of the cost of the improvements on the Landlord's
Property shall be determined, as a percentage, by dividing the cost of the
Leased Premises, including all equipment, and business and trade fixtures which
are or become the property of Landlord under other provisions of this Lease, by
the cost of all improvements on the Landlord's Property. Each month Tenant shall
pay to Landlord an amount equal to one-twelfth (1/12) of its pro rata share of
the estimated annual casualty insurance premium. Upon Landlord's receipt of any
premium notice, Tenant shall upon demand make up any deficiency to the extent of
its pro rata share.

        SECTION 6.2. PUBLIC LIABILITY INSURANCE. Landlord shall at all times
during the term of this Lease keep in full force and effect a policy of public
liability and property damage insurance with respect to the Landlord's Property
and all business operated thereon, with limits of public liability not less than
One Million and No/100 ($1,000,000.00) Dollars for injury or death in any





                                       17
<PAGE>   22

one occurrence, and property damage liability insurance in the amount of One
Hundred Thousand and No/100 ($100,000.00) Dollars. The policies shall name
Landlord, Tenant and Landlord's mortgagees and the lessor on the underlying
ground lease as co-insureds as their interests may appear. Upon written request
by Tenant, Landlord shall provide the Tenant with evidence of such insurance,
including identification of the Tenant as a co-insured. Landlord may from time
to time during the term of this Lease increase the above stated coverage in its
discretion. Tenant shall reimburse Landlord for its pro rata share of the cost
of such insurance in the same manner as provided in Section 6.1 regarding
casualty insurance.

        SECTION 6.3. TENANT'S CONTENTS. Tenant shall be responsible for
obtaining such insurance as it may deem advisable for all property located in
the Leased Premises. It is understood that the insurance carried by Landlord
does not cover the risk of loss or damage to Tenant's property. Tenant waives
any claim against Landlord and shall save Landlord harmless from any claim for
loss or damage to contents, merchandise, fixtures, equipment or work done by
Tenant regardless of the cause of any such damage or loss.

        SECTION 6.4. INCREASE IN FIRE INSURANCE. Tenant agrees that it will not
keep or use, in or upon the Leased Premises any article which may be prohibited
by the standard form fire insurance policy. If Tenant's use or occupancy causes
any increase in premiums for fire or casualty insurance on the Landlord's
Property, or the Leased Premises, or any part thereof, above the rate of the
least hazardous type of occupancy legally permitted in the Leased Premises,
Tenant shall pay the additional premium on such insurance. No part of such
additional premium resulting from the use or occupancy of another tenant shall
be charged to Tenant under Sections





                                       18
<PAGE>   23

6.1 and/or 6.2 of this Lease. The Tenant shall also pay in such event any
additional premium on any rent insurance policy that may be carried by the
Landlord for its protection against rent loss through fire or other casualty.
Bills for such additional premiums shall be rendered by Landlord to Tenant at
such times as Landlord may elect, and shall be due and payable by Tenant when
rendered, and the amount thereof shall be deemed to be, and be paid as,
additional rent.

        SECTION 6.5. HOLD HARMLESS. Landlord shall not be liable for any loss,
injury, death, or damage to persons or property which at any time may be
suffered or sustained by Tenant or by any person whosoever may at any time be
using or occupying or visiting the Landlord's Property or be in, on, or about
the same, whether such loss, injury, death, or damage shall be caused by or in
any way result from or arise out of any act, omission, or negligence of Tenant
or of any occupant, subtenant, visitor, or user of any portion of the Landlord's
Property, or shall result from or be caused by any other matter or thing whether
of the same kind as or of a different kind than the matters or things above set
forth, and Tenant shall indemnify Landlord against all claims, liability, loss
or damage whatsoever on account of any such loss, injury, death, or damage.
Tenant shall indemnify Landlord against all claims, liability, loss or damage
arising by reason of the negligence or misconduct of Tenant, its agents or
employees. Tenant hereby waives all claims against Landlord for damages to the
building and improvements that are now on or hereafter placed or built on the
Landlord's Property and to the property of Tenant in, on, or about the
Landlord's Property, and for injuries to persons or property in or about the
Landlord's Property, from any cause arising at any time. The preceding sentences
shall not apply to loss, injury, death, or damage arising by reason of the
negligence or misconduct of





                                       19
<PAGE>   24

Landlord, its agents, or employees.

        SECTION 6.6. WAIVER OF SUBROGATION. Landlord and Tenant hereby release
each other from any and all liability or responsibility to the other (or to
anyone claiming through or under them by way of subrogation or otherwise) for
any loss or damage to property caused by fire or any of the extended coverage or
supplementary insurance contract casualties, even if such fire or other casualty
shall have been caused by the fault or negligence of the party or anyone for
whom such party may be responsible, provided, however, that this release shall
be applicable and in force and effect only in respect to loss or damage
occurring during such time as the releaser's policies shall contain a clause or
endorsement to the effect that any such release shall not adversely effect or
impair or prejudice the right of the releaser to recover thereunder. Landlord
and Tenant each agree that their policies will include such a clause or
endorsement so long as the same is obtainable and if not obtainable, shall so
advise the other in writing and such notice shall release both parties from the
obligation to obtain such a clause or endorsement.










                                       20
<PAGE>   25

                                    ARTICLE 7
                         DESTRUCTION OF LEASED PREMISES

        SECTION 7.1. DESTRUCTION OF LEASED PREMISES. If the building which
includes the Leased Premises is damaged or partially destroyed by fire or other
casualty to the extent of less than one-quarter (1/4) of the then cost of
replacement thereof above foundation, the same shall be repaired as quickly as
is practicable, by Landlord, except that the obligation of Landlord to rebuild
shall be limited to repairing or rebuilding of Landlord's improvements. If the
building which includes the Leased Premises is so destroyed or damaged to the
extent of one-quarter (1/4) or more of the then replacement cost thereof, then
Landlord may elect not to repair or rebuild by giving notice in writing
terminating this Lease, in which event this Lease shall be terminated as of the
date of such notice.

        SECTION 7.2. REBUILDING BY LANDLORD. If Landlord shall undertake to
restore or repair the building which includes the Leased Premises, it shall
initiate and pursue the necessary work with all reasonable dispatch, in a manner
consistent with sound construction methods.

        SECTION 7.3. ABATEMENT OF RENT UPON DESTRUCTION OF PREMISES. If such
damage or partial destruction renders the Leased Premises wholly untenantable,
the base rent shall abate until the Leased Premises have been restored and
rendered tenantable. If such damage or partial destruction renders the premises
untenantable only in part, the base rent shall abate proportionately as to the
portion of the Leased Premises rendered untenantable. Rent shall not abate under
this section if the damage or destruction is caused by the negligence or
misconduct of Tenant, its agents, employees, customers or invitees.





                                       21
<PAGE>   26

                                    ARTICLE 8
                             EFFECT OF CONDEMNATION

        SECTION 8.1. TOTAL CONDEMNATION. In the event that the Leased Premises
or such part of the Leased Premises as will render the remainder untenantable,
shall be appropriated or taken under the power of eminent domain by any public
or quasi-public authority, this Lease shall terminate and expire as of the date
of taking.

        SECTION 8.2. PARTIAL CONDEMNATION. In the event of any other partial
condemnation, Tenant shall have the option of terminating this Lease on the
effective date of such condemnation by written notice to Landlord prior to such
effective date, unless Landlord shall provide to Tenant within a reasonable time
after such effective date reasonably comparable space to that taken.

        SECTION 8.3. LANDLORD'S DAMAGES. In the event of any condemnation or
taking, whether whole or partial, the Tenant shall not be entitled to any part
of the award paid for such condemnation and Landlord is to receive the full
amount of such award. The Tenant hereby expressly waives any rights or claim to
any part thereof.

        SECTION 8.4. TENANT'S DAMAGES. Although all damages in the event of any
condemnation are to belong to the Landlord whether such damages are awarded as
compensation for diminution in value of the leasehold or to the fee of the
Leased Premises, Tenant shall have the right to claim and recover from the
condemning authority, but not from Landlord, such compensation as may be
separately awarded or recoverable by Tenant in Tenant's own right on account of
any and all damage to Tenant's business by reason of the condemnation, and for
or on account of any cost or loss to which Tenant might be put in removing
Tenant's property.





                                       22
<PAGE>   27

                                    ARTICLE 9
                                    REMEDIES

        SECTION 9.1. EVENTS OF DEFAULT BY TENANT. Upon the failure by Tenant to
pay rent when due, Landlord may terminate this Lease or Tenant's right to use
and occupy the Leased Premises by ten (10) days' written notice to Tenant unless
Tenant within such ten (10) days pays all rent due. Upon the happening of any
one or more of the following events: (a) the levying of a writ of execution or
attachment on or against the property of Tenant; (b) the taking of any action
for the voluntary dissolution of Tenant; (c) the commencement of a mechanic's
lien foreclosure action against Tenant as a result of a mechanic's lien or claim
therefor against the land or Building of which the Leased Premises are a part;
(d) the failure of Tenant to perform any other of the terms, provisions, and
covenants of this Lease, Landlord may terminate this Lease or Tenant's right to
use and occupy the Leased Premises by thirty (30) days' written notice to Tenant
unless Tenant, within such thirty (30) day period, cures the specified default
or, if the default is of a character which cannot be cured within thirty (30)
days, the Tenant commences and diligently pursues the cure of such default
within thirty (30) days.

        SECTION 9.2. RE-ENTRY BY LANDLORD. Upon such termination of the Lease or
termination of Tenant's right to use and occupy the Leased Premises as
aforesaid, or if Tenant at any time during the term of this Lease vacates the
premises or ceases operating said business in the entire or any appreciable part
of the Leased Premises, except for causes beyond its control, Landlord may
reenter the Leased Premises.

        SECTION 9.3. RIGHT TO RELET. Should Landlord elect to reenter, as herein
provided, or should it take possession pursuant to legal proceedings or pursuant
to any notice provided for by





                                       23
<PAGE>   28

law, it may either terminate this Lease or it may from time to time without
terminating this Lease, make such alterations and repairs as may be necessary in
order to relet the Leased Premises, and relet the Leased Premises or any part
thereof for such term or terms (which may be for a term extending beyond the
term of this Lease) and at such rental or rentals upon such other terms and
conditions as Landlord in its sole discretion may deem advisable upon each such
reletting. All rentals received by the Landlord from such reletting shall be
applied, first, to the payment of any indebtedness other than rent due hereunder
from Tenant to Landlord; second, to the payment of any costs of such alterations
and repairs; third, to the payment of rent due and unpaid future rent as the
same may become due and payable hereunder. If such rentals received from such
reletting during the month be less than that to be paid during that month by
Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of said premises by Landlord shall be construed as an election in its
part to terminate this Lease unless a written notice of such intention be given
to Tenant or unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect to terminate this Lease for such previous
breach. Should Landlord at any time reenter or terminate this Lease for any
breach, in addition to any other remedies it may have, it may recover from
Tenant all damages it may incur by reason of such breach, including the cost of
recovering the Leased Premises and reasonable attorney's fees. All which amounts
shall be immediately due and payable from Tenant to Landlord.

        SECTION 9.4. PARTIES MAY REMEDY DEFAULTS. In the event of any breach
hereunder by either party, and in lieu of Landlord's terminating this Lease as
herein provided, Landlord or





                                       24
<PAGE>   29

Tenant respectively may immediately or at any time thereafter, after having
given the other party the requisite notice to correct the same and that time for
such correction having elapsed, cure such breach for the account and at the
expense of the other party. If Landlord or Tenant at any time, by reason of such
breach, is compelled to pay, or elects to pay, any sum of money or do any act
which will require the payment of any sum of money, or incurs any expense,
including reasonable attorney's fees, in instituting or prosecuting any action
or proceeding to enforce such party's rights hereunder, the sum or sums so paid
or incurred by such party, if paid or incurred by Landlord, shall be deemed to
be additional rent hereunder and shall be due from Tenant to Landlord on the
first day of the month following the payment of such respective sums, and if
paid or incurred by Tenant, shall be due and payable by Landlord on demand with
interest at the rate provided in Section 4.6 hereof. This option is given to the
parties is intended for their protection and its existence shall not release the
parties from the obligation to perform the terms and covenants herein provided
to be performed by the respective parties or deprive Landlord of any legal
rights which it may have by reason of any default of Tenant.

        SECTION 9.5. LANDLORD'S REMEDIES: LIQUIDATED DAMAGES. In the event that
at any time, whether before or after the commencement of the term hereof, a
bankruptcy petition shall be filed by Tenant or against Tenant and Tenant shall
thereafter be adjudicated a bankrupt, or such petition shall be approved by the
court, in any court or pursuant to any statute either of the United States or of
any State, whether in bankruptcy, insolvency, for reorganization under Chapter
XI or XIII of the Bankruptcy Act or under any other provisions of the Bankruptcy
Act, or under the provisions of any law of like impact, for the appointment of a
receiver or trustee of 





                                       25
<PAGE>   30

Tenant or for the property of Tenant, or if Tenant shall make an assignment of
Tenant's property for the benefit of its creditors, or if proceedings are
instituted in a court of competent jurisdiction for the reorganization,
liquidation or involuntary dissolution of Tenant, then immediately upon the
happening of any such event, and without any entry or other act by Landlord,
this Lease and the term and estate hereby granted (whether or not the term shall
therefore have commenced) shall expire, terminate and come to an end in the same
manner and with the same force and effect as if the date of such occurrence were
the date hereinbefore fixed for the expiration of the term hereof. In the event
of the termination of the term hereof by the happening of any such event,
Landlord shall forthwith upon such termination, and any other provisions of this
Lease to the contrary notwithstanding, become entitled to recover as and for
liquidated damages caused by such breach of the provisions of this Lease an
amount equal to the difference between the then cash value of the rent reserved
hereunder for the unexpired portion of the demised term and the then cash rental
value of the Leased Premises for such unexpired portion of the term hereby
demised unless the statute which governs or shall govern the proceeding in which
such damages are to be provided limits or shall be entitled to prove as and for
liquidated damages an amount equal to that allowed by or under such statute. The
provision of this paragraph shall be without prejudice to Landlord's right to
prove in full damages for rent accrued prior to the termination of this Lease
but not paid. This provision of this Lease shall be without prejudice of any
rights given Landlord by any pertinent statute to prove any amounts allowed
thereby. In making such computation, the then cash rental value of the Leased
Premises shall be deemed prima facie to be the rent realized upon any reletting,
if such reletting can be accomplished by Landlord within a reasonable time after
such a termination of this Lease.





                                       26
<PAGE>   31

        SECTION 9.6. EXPENSES OF LANDLORD. Upon the occurrence of an event of
default, notwithstanding anything herein to the contrary and whether or not
Landlord terminates this Lease, Tenant shall promptly, upon request, reimburse
Landlord for all costs and expenses reasonably incurred in enforcing this Lease,
including reasonable attorneys' fees.

        SECTION 9.7. WAIVER OF REDEMPTION. Tenant hereby expressly waives any
and all rights of redemption granted by or under any present or future laws in
the event of Tenant's being evicted or dispossessed for any cause, or in the
event of Landlord's obtaining possession of the Leased Premises, by reason for
the violation by Tenant of any of the covenants or conditions of this Lease, or
otherwise.

        SECTION 9.8. DEFAULTS OF LANDLORD. Should Landlord be in default under
the terms of this Lease, Landlord shall cure such default within thirty (30)
days after written notice of such default from Tenant, or in the event such
default is of such a character as to require more than thirty (30) days to cure,
Landlord shall use due diligence to cure such default.

        SECTION 9.9. RIGHTS CUMULATIVE. All rights and remedies of Landlord and
Tenant herein enumerated shall be cumulative and none shall exclude any other
right or remedy allowed by Law, and said rights and remedies may be exercised
and enforced concurrently and whenever and as often as occasion therefor arises.





                                       27
<PAGE>   32


                                   ARTICLE 10
                                  MISCELLANEOUS

        SECTION 10.1. SUBORDINATION. At Landlord's option, this Lease shall be
subordinated to any existing mortgages covering the Leased Premises, any
extension or renewal thereof, or to any new mortgages which may be placed
thereon from time to time, provided, however, anything to the contrary contained
herein notwithstanding, every such mortgage shall contain a provision that the
mortgagee shall recognize the validity of this Lease in the event of foreclosure
of the Landlord's interest so long as Tenant shall not be in default under the
terms of this Lease. Tenant shall execute whatever instruments may be required
to effect such subordination.

        SECTION 10.2. SALE OF PROPERTY. Landlord shall have the right at any
time to sell, transfer or convey its interest in all or any portion(s) of
Landlord's Property, improvements and buildings of which the Leased Premises are
a part to any person, firm or corporation whatsoever, and upon any such sale,
transfer or conveyances, Landlord shall cease to be liable under any covenant,
condition or obligation imposed upon it by this Lease, or any of the terms and
provisions thereof; provided, however, that any such sale, transfer or
conveyance shall be subject to this Lease and that all of the Landlord's
covenants and obligations contained herein shall be binding upon the subsequent
owner or owners thereof; and provided further that such transferee from Landlord
shall in writing assume the obligations of Landlord hereunder.

        SECTION 10.3. OFFSET STATEMENT. Within ten (10) days after request
therefor by Landlord, or in the event that upon any sale, assignment or
hypothecation of the Leased Premises and/or all or any portion(s) of the
Landlord's Property by Landlord an offset statement shall be required by Tenant;
Tenant agrees to deliver in recordable form a certificate to any proposed





                                       28
<PAGE>   33

mortgagee or purchaser, or to Landlord, certifying (if such be the case) that
this Lease is in full force and effect and that there are no defenses or offsets
thereto, or stating those claimed by Tenant.

        SECTION 10.4. ATTORNMENT. Tenant shall, in the event any proceedings are
brought for the foreclosure of, or in the event of exercise of the power or sale
under any mortgage made by the Landlord covering the Leased Premises, attorn to
the purchaser upon any such foreclosure or sale and recognize such purchaser as
the Landlord under this Lease.

        SECTION 10.5. RECORDING. Tenant shall not record this Lease without the
written consent of Landlord; however, upon the request of either party hereto
the other party shall join in the execution of memorandum or so called "short
form" of this Lease for the purpose of recordation. Said memorandum or short
form of this Lease shall describe the parties, the Leased Premises and the term
of this Lease and shall incorporate this Lease by reference.

        SECTION 10.6. EXCAVATIONS. In case any excavation shall be made for
buildings or improvements or for any other purpose upon the land adjacent to or
near the Leased Premises, Tenant will afford to Landlord, or the person or
persons, firms or corporations causing or making such excavation, license to
enter upon the Leased Premises for the purpose of doing such work as Landlord or
such person or persons, firms or corporations shall deem to be necessary to
preserve the walls or structures of the building from injury, and to protect the
building by proper securing of foundations. Insofar as Landlord may have control
over the same, all such work shall be done in a manner as will not materially
interfere with the operation of Tenant's business in the Leased Premises.

        SECTION 10.7. ACCESS TO PREMISES. Landlord reserves for itself and the
landlord under





                                       29
<PAGE>   34

the underlying ground lease, the right to enter upon the Leased Premises at all
reasonable hours, upon reasonable advance notice, for the purpose of inspecting
the same, or of making repairs, additions or alterations to the building in
which the Leased Premises are located, to exhibit the Leased Premises to
prospective tenants, purchasers or others, to display during the last ninety
(90) days of the term, without hindrance or molestation by Tenant, "For Rent" or
similar signs on the exterior of the Leased Premises. The exercise by Landlord
of any of its rights under this provision shall not be deemed an eviction or
disturbance of Tenant's use and possession of the Leased Premises.

        SECTION 10.8. QUIET ENJOYMENT. If and so long as Tenant pays the rent
reserved by this Lease and performs and observes all of the covenants and
provisions hereof, Tenant shall quietly enjoy the Leased Premises, subject,
however, to the terms of this Lease.

        SECTION 10.9. NOTICES. Any notice required or permitted under this Lease
shall be deemed sufficiently given or served if sent by certified mail to Tenant
at the address of the Leased Premises, and to Landlord at its office or such
other place as it may designate in writing, and either party may by like written
notice at any time and from time to time designate a different address to which
notices shall subsequently be sent. Notices given in accordance with these
provisions shall be deemed received when mailed.

        SECTION 10.10. HOLDING OVER. In the event Tenant remains in possession
of the Leased Premises after the expiration of this Lease and without the
execution of a new Lease, it shall be deemed to be occupying said premises as a
Tenant from month-to-month, subject to all conditions, provisions and
obligations of this Lease insofar as the same are applicable to a month-to-month
tenancy. Nothing in this section shall operate to preclude Landlord from





                                       30
<PAGE>   35

removing Tenant from the Leased Premises upon the expiration of this Lease.

        SECTION 10.11. CONSENTS BY LANDLORD. Whenever under this Lease provision
is made for Tenant securing the written consent or approval of Landlord, such
consent or approval will not be unreasonably withheld.

        SECTION 10.12. SUCCESSORS AND ASSIGNS. The terms, covenants and
conditions hereof shall be binding upon and inure to the successors in interest
and assigns of the parties hereto.

        SECTION 10.13. GOVERNMENTAL REGULATIONS. Tenant shall, at Tenant's sole
cost and expense, comply with all of the requirements of all city, county,
municipal, state, federal and other applicable governmental authorities, now in
force, or which may hereafter be in force, pertaining to signs, installations,
repairs and business operations in the Leased Premises and shall faithfully
observe all statutes now in force or which may hereafter be in force.

        SECTION 10.14. CERTAIN EXPENSES OF LANDLORD. Any out-of-pocket expenses
reasonably incurred by Landlord for purposes of considering or acting upon any
request for consent or waiver under, or modification of, any of the provisions
of this Lease, including reasonable attorney's fees, shall be promptly
reimbursed by Tenant upon Landlord's request.

        SECTION 10.15. FORCE MAJEURE. In the event that either Landlord or
Tenant shall be delayed or hindered in or prevented from the performance of any
act required hereunder by reason of strikes, lock outs, labor disputes,
inability to procure materials, failure of power, restrictive governmental laws
or regulations, riots, insurrection, war or other reason of a like nature not
attributable to the negligence or fault of the party delayed in performing work
or doing acts required under the terms of this Lease, then performance of such
act shall be excused for the period of the unavoidable delay and the period for
the performance of any such act shall





                                       31
<PAGE>   36

be extended for an equivalent period. Provided, however, that this provision
shall not operate to excuse Tenant from the timely payment of rent and other
payments required by the terms of this Lease.

        SECTION 10.16. GENERAL. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent or of partnership or of joint venture or of
any association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of rent nor any other provisions
contained in this Lease nor any acts of the parties hereto shall be deemed to
create any relationship between Landlord and Tenant other than the relationship
of landlord and tenant. No waiver of any default of Tenant or Landlord hereunder
shall be implied from any omission by Landlord or Tenant any action on account
of such default if such default persists or is repeated, and no express waiver
shall affect any default other than the default specified in the express waiver
and that only for the time and to the extent therein stated. One or more waivers
of any covenant, term or condition of this Lease by Landlord or Tenant shall not
be construed as a waiver of a subsequent breach of the same covenant, term or
conditions. The consent or approval by Landlord to or of any act by Tenant
requiring the Landlord's consent or approval shall not be deemed to waive or
render unnecessary Landlord's consent or approval to or of any subsequent
similar act by Tenant. The invalidity or unenforceability of any provision
hereof shall not affect or impair any provision. The plural sense where there is
more than one tenant and to either corporations, associations, partnership or
individuals, male or females, shall in all instances be assumed as though in
each case fully expressed. The laws of the State of Wisconsin shall govern the
validity, performance and enforcement of this Lease. The submission of this





                                       32
<PAGE>   37

Lease for examination does not constitute a reservation of or option for the
Leased Premises and this Lease becomes effective as a Lease only upon execution
and delivery thereof by Landlord and by Tenant. The headings contained herein
are for convenience only and do not define, limit or construe the contents of
the provisions hereof. All negotiations, representations and understandings
between the parties are incorporated herein and may be modified or altered only
by agreement in writing between the parties.

        SECTION 10.17. EFFECT OF GROUND LEASE. Tenant acknowledges that Landlord
is presently leasing Landlord's Property under a ground lease having a term
equal to or greater than the term of this Lease. Tenant further acknowledges
that all of its rights under this Lease are specifically subordinate to the
rights of the landlord named in said ground lease and its successors and
assigns.

                                   ARTICLE 11
                                   ATTACHMENTS

        SECTION 11.1. ATTACHMENTS. The following are attached hereto and made a
part hereof with the same force and effect as if set forth in full herein:

        Exhibit A:           Legal Description of Landlord's Property.
        Exhibit B-1:         Location of Leased Premises.
        Exhibit B-2:         Floor Plan.
        Exhibit C:           Rules and Regulations.





                                       33
<PAGE>   38


        IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease and
affixed their respective seals as of the day, month and year first above
written.



LANDLORD:                                   TENANT:
UNIVERSITY SCIENCE CENTER                   NOVAGEN, INC.
PARTNERSHIP


By:  University Research Park Facilities
     Corp., Managing Partner



     BY:   /s/ WAYNE F. MCGOWN              BY:   /s/ DAVID DUBBELL
         -----------------------------          --------------------------------
           Wayne F. McGown, Assistant             David Dubbell
           Secretary/Treasurer                    Title:  President
                                                         -----------------------













                                       34
<PAGE>   39


                                    EXHIBIT A

                    LEGAL DESCRIPTION OF LANDLORD'S PROPERTY

PARCEL A: Lot One (1) of Certified Survey Map No. 5417 recorded in the Dane
County Register of Deeds office in Volume 24 of Certified Survey Maps, pages
348 through 350, as Document No. 2057120, in the City of Madison, Dane County,
Wisconsin.

PARCEL B: A parcel of land located in the Southeast 1/4 of the Northeast 1/4 of
Section 30, Township 7 North, Range 9 East, in the City of Madison, Dane
County, Wisconsin, to-wit: Commencing at the Northeast corner of said Section
30; thence South 89 degrees 14'52" West, 661.98 feet; thence South 00 degrees
23'00" East, 1,814.00 feet to the Southeast corner of Lot 1 of Certified Survey
Map No. 5417, recorded in the Dane County Register of Deeds office in Volume 24
of Certified Survey Maps, pages 348 through 350, as Document No. 2057120;
thence South 89 degrees 14'52" West, along the Southerly edge of said Lot 1,
313.50 feet to the point of beginning; thence South 44 degrees 16'04" West,
46.66 feet; thence North 45 degrees 43'56" West, 46.63 feet; thence North 89
degrees 14'52" East, 65.97 feet to the point of beginning.

PARCEL C: Lot 30, University Research Park University of Wisconsin-Madison
First Addition, in the City of Madison, Dane County, Wisconsin

PARCEL D: (Lot 1 of) Certified Survey Map No. 6569 recorded in the Dane County
Register of Deeds office in Volume 32 of Certified Survey Maps, pages 147, 148,
and 149, as Document No. 2207630, in the City of Madison, Dane County, Wisconsin












<PAGE>   40


                                   EXHIBIT B-1

                           LOCATION OF LEASED PREMISES





                               [Site map omitted]


<PAGE>   41


                                   EXHIBIT B-2

                                   FLOOR PLAN




                              [Floor plan omitted]





<PAGE>   42


                                    EXHIBIT C

                              RULES AND REGULATIONS


None Adopted