Document:

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                                                                   EXHIBIT 10.41

                               301 CARLSON PARKWAY

                                  OFFICE LEASE

                                     BETWEEN

                         CARLSON REAL ESTATE COMPANY, A
                          MINNESOTA LIMITED PARTNERSHIP

                                   AS LANDLORD

                                       AND

                                 GALAGEN, INC.,
                             A DELAWARE CORPORATION

                                    AS TENANT

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                             <C>
1.  BASIC LEASE PROVISIONS AND DEFINITIONS......................................  2
2.  PREMISES....................................................................  4
3.  RENT PAYMENT................................................................  4
4.  LANDLORD'S WORK; TENANT'S ACCEPTANCE OF PREMISES............................  5
5.  OPERATION AND USE OF PREMISES...............................................  6
6.  COMMON AREA.................................................................  7
7.  MAINTENANCE OBLIGATIONS.....................................................  7
8.  OPERATING EXPENSES AND REAL ESTATE TAXES....................................  8
9.  REPAIRS-ALTERATIONS......................................................... 10
10. UTILITIES AND OTHER SERVICES................................................ 10
11. LANDLORD'S ACCESS........................................................... 11
12. INDEMNITY AND NON-LIABILITY................................................. 11
13. INSURANCE................................................................... 12
14. ASSIGNMENT, SUBLETTING AND CORPORATE TRANSACTIONS........................... 14
15. DAMAGE OR DESTRUCTION....................................................... 16
16. EMINENT DOMAIN.............................................................. 18
17. MORTGAGEE PROTECTION........................................................ 19
18. RELOCATION OF PREMISES...................................................... 20
19. SIGNAGE..................................................................... 20
20. ENVIRONMENTAL COMPLIANCE.................................................... 20
21. DEFAULT..................................................................... 23
22. SURRENDER OF POSSESSION..................................................... 27
23. NOTICES..................................................................... 28
24. OCCUPANCY................................................................... 29
25. JOINT AND SEVERAL LIABILITY................................................. 29
26. QUIET ENJOYMENT............................................................. 29
27. BROKERAGE FEES.............................................................. 29
28. GENERAL..................................................................... 30

</TABLE>

<TABLE>
<CAPTION>
                        EXHIBIT                                  CITE
<S>                                                           <C>
     A - Additional Terms and Conditions                      Section 28.18
     B - Building Legal Description                           Section 1.4
     C - Premises and Building Site Plan                      Section 1.5
     D - Landlord's Work  Base Building                       Section 4
     E - Tenant Improvements                                  Section 4
     F - Rules and Regulations                                Section 5.4
     G - Operating Expense Exclusions                         Section 8
     H - Subordination, Non-Disturbance Agreement             Section 17
     I - Estoppel Certificate                                 Section 17

</TABLE>

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                                  OFFICE LEASE

DATE:    June ____, 2000

PARTIES: CARLSON REAL ESTATE COMPANY, A
         A MINNESOTA LIMITED PARTNERSHIP
         "Landlord"

         GALAGEN, INC.,
         A DELAWARE CORPORATION
         "Tenant"

AGREEMENT:

In consideration of the following terms and conditions, the parties agree as
follows:

      1.    BASIC LEASE PROVISIONS AND DEFINITIONS.

      1.1   STREET ADDRESS OF PREMISES: 301 Carlson Parkway, Suite 301,
Minnetonka, MN 55305.

      1.2   LANDLORD'S NOTICE ADDRESS: 301 Carlson Parkway, Suite 100,
Minnetonka, MN 55305.

      1.3   TENANT'S NOTICE ADDRESS: 301 Carlson Parkway, Suite 301, Minnetonka,
MN 55305.

      1.4   COMPLEX: The office project commonly known as 301 & 401 Carlson
Parkway, shown on Exhibit "C" and legally described on Exhibit "B", attached,
and shall include only buildings that are fully constructed and which have
received a certificate of occupancy.

      1.5   BUILDING: That part of the Complex commonly known as 301 Carlson
Parkway, shown on Exhibit "C-1" and legally described on Exhibit "B", attached.

      1.6   CONSERVATORY: That part of the Complex identified on Exhibit "C" as
the "Conservatory" containing approximately 5,000 square feet of space.

      1.7   PREMISES: The Premises shall be deemed to be approximately 6,814
rentable square feet of space, as depicted on Exhibit "C-2," attached, together
with all appurtenances thereto.

      1.8   TERM: Four (4) Lease Years.

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      1.9   PRO RATA SHARE: For the purposes of determining Tenant's share of
Real Estate Taxes and Operating Expenses related exclusively to the Building
(i.e. window washing, HVAC expense, janitorial services, etc.), a fraction, the
numerator of which is the number of rentable square feet in the Premises and the
denominator of which is the number of rentable square feet in the Building, in
each case as reasonably determined in the first instance by Landlord. For the
purposes of determining Tenant's share of Operating Expenses associated with the
Common Area, a fraction, the numerator of which is the number of rentable square
feet in the Premises and the denominator of which is the number of rentable
square feet in the Complex, in each case as reasonably determined in the first
instance by Landlord. For the purposes of calculating Pro Rata Share of
occupancy sensitive expenses such as cleaning and utilities, if the average
occupancy of the Building or Complex in any calendar year is less than ninety
(90%), then the Operating Expenses for such year shall be adjusted to reflect
what the Operating Expenses would have been at an average occupancy of
ninety-five (95%) percent.

      1.10  OPERATING EXPENSES: Defined in Section 8. Landlord estimates that
Operating Expenses for the first calendar year shall be Five and 84/100 Dollars
($5.84) per rentable square foot of the Premises.

      1.11  REAL ESTATE TAXES: Defined in Section 8. Landlord estimates that
Real Estate Taxes for the first calendar year shall be 55/100 Dollars ($0.55)
per rentable square foot of the Premises.

      1.12  LEASE YEAR: The twelve (12) full calendar month period commencing on
the Commencement Date and each anniversary thereof, unless the Commencement Date
does not fall on the first day of a month in which event the first Lease Year
shall commence on the first day of the month immediately following the month in
which the Commencement Date occurs. Each subsequent Lease Year shall commence on
the anniversary of the first Lease Year. The first Lease Year shall include any
initial partial calendar month.

      1.13  ANNUAL BASE RENT: Annual Base Rent shall be as follows:

<TABLE>
<CAPTION>
     Year          Per Square Foot          Annual Base Rent
     ----          ---------------          ----------------
<S>                <C>                      <C>
      1                 $16.50                 $112,431.00
      2                 $16.75                 $114,134.50
      3                 $17.00                 $115,838.00
      4                 $17.25                 $117,541.50
</TABLE>

      1.14  MONTHLY INSTALLMENT: Monthly Installments of Annual Base Rent shall
be as follows:

<TABLE>
<CAPTION>
           Year          Monthly Installment
           ----          -------------------
<S>                      <C>
            1                 $9,369.25
            2                 $9,511.21
            3                 $9,653.17
</TABLE>

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<TABLE>
<S>                      <C>

            4                 $9,795.12
</TABLE>

      1.15  ADDITIONAL RENT: All additional payment obligations of Tenant,
including but not limited to Operating Expenses, Real Estate Taxes and any other
charges or fees and any cost incurred by Landlord on behalf of Tenant.

      1.16  SECURITY DEPOSIT: No cash Security Deposit is required. (See Exhibit
"A", Paragraph 4, for additional terms regarding the Financial Security)

      1.17  COMMON AREA: Defined in Section 6.

      1.18  SCHEDULED DELIVERY DATE: On or about August 15, 2000.

      1.19  COMMENCEMENT DATE: On or about August 15, 2000, or any earlier date
upon which Tenant with Landlord's permission actually occupies and conducts
business in any portion of the Premises. Upon determination, Tenant shall, upon
Landlord's request, execute and deliver a written statement specifying the
Commencement Date, termination date and other pertinent dates of the Term.

      1.20  TERMINATION DATE: The last day of the Fourth (4th) Lease Year
following the Commencement Date.

      1.21  PERMITTED USE: General office use and other uses consistent with
Class A office buildings in the western Minneapolis suburban market, and for no
other use.

      2.    PREMISES.

Subject to the terms and conditions herein contained, Landlord hereby leases the
Premises to Tenant, and Tenant hereby accepts and leases the Premises from
Landlord for the Term, unless sooner terminated pursuant to any provision
hereinafter set forth together with the appurtenant right, in common with
others, to use the Common Areas as set forth in Section 6.

      3.    RENT PAYMENT.

      3.1   AMOUNT AND MANNER. Tenant shall pay to Landlord Annual Base Rent in
advance in equal Monthly Installments, without setoff or demand except as
expressly set forth herein, on the fifth (5th) day of each calendar month during
the Term of this Lease. Monthly Installments for any fractional month at the
commencement or expiration of the Term shall be prorated based upon a thirty
(30) day month. Monthly Installments of Annual Base Rent, Operating Expenses and
Real Estate Taxes shall be payable by Tenant to Landlord at the address set
forth in Section 1.2, above, or at such other place as Landlord shall
hereinafter designate in writing. Tenant agrees to take such action and execute
such documents as Landlord shall deem

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necessary or desirable to cause the timely automatic direct transfer from
Tenant's bank account of funds necessary to make all Monthly Installments and
regular monthly payments of Operating Expenses and Real Estate Taxes required
under the terms of this Lease, provided that annual adjusting payments and
non-regular payments will be invoiced and paid by Tenant as Additional Rent.
Tenant shall have the right to suspend the automatic direct transfer in the
event of a dispute with Landlord regarding Annual Base Rent or Additional Rent
due hereunder, or any other matter regarding the Lease, until the resolution of
such dispute. Landlord shall provide Tenant with sixty (60) days prior written
notice before implementing any change in the amount to be paid via the automatic
payment.

      3.2   LATE FEES. If any Monthly Installment is not received by Landlord on
or before the tenth (10th) day of the applicable calendar month, Tenant agrees
to pay Landlord an additional sum equal to five percent (5%) of the total amount
overdue, including Monthly Installments of Annual Base Rent, and Additional
Rent. Said charge is intended to defray Landlord's interest and administrative
expenses, and Tenant acknowledges that such charge represents a fair and
reasonable estimate of such expenses, and shall be due and payable for each full
or partial calendar month that any Monthly Installment and/or Additional Rent
remains unpaid. Further, Landlord shall be entitled to charge a fee of $25.00,
to cover its administrative expense, each time a check from Tenant is returned
by a bank for insufficient funds.

      3.3   JUDGEMENT INTEREST. In addition to the late charges referred to
above, which are intended to defray Landlord's costs resulting from late
payments, in the event Landlord obtains a judgement in any claim against Tenant
for the non- payment of a Monthly Installment or Additional Rent or any other
default hereunder, such judgement shall bear interest from the date of any such
judgement to the date same is paid at sixteen percent (16%) per annum or the
maximum lawful rate that Landlord may charge to Tenant under applicable laws,
whichever is less.

      3.4   REMEASURE. In the event it is determined that the Premises are
comprised of more or less than the rentable square footage stated in Section
1.6, as certified by a contractor or architect reasonably satisfactory to
Landlord, the parties agree to enter into a supplemental agreement setting forth
the actual rentable square footage of the Premises, as well as, any changes to
Tenant's Base Annual Rent and/or Additional Rent.

      4.    LANDLORD'S WORK; TENANT'S ACCEPTANCE OF PREMISES.

Landlord shall, at its sole cost and expense, complete the work described in the
attached Exhibit "D" ("Landlord's Work") and the tenant improvements, if any,
described on Exhibit "E" (the "Tenant Improvements"). With the exception of any
latent defects, Tenant's taking possession of the Premises shall be conclusive
evidence of Tenant's receipt of the Premises and of Landlord's Work in good and
satisfactory order, condition and repair. Latent defects shall be deemed to mean
an aspect of construction which is defective and which, as of the Delivery Date,
Tenant could not reasonably discover by reasonable and customary observation or
inspection. Tenant shall have thirty (30) days from the Delivery Date to submit
to Landlord, its punch list and one hundred eighty (180) days from the Delivery
Date to notify Landlord of any latent defects, and

                                       5
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Landlord shall, thereafter, use diligent efforts to perform such work as may be
necessary to complete or repair same in an expeditious manner. In the event
Landlord is unable to obtain a building permit for the Tenant Improvements due
to non-compliance with building code requirements, Tenant shall either revise
the plans for such improvements to comply with the building code or Landlord
shall have the right to terminate this Lease.

      5.    OPERATION AND USE OF PREMISES.

      5.1   USE. Tenant shall use the Premises for the Permitted Use set forth
in Section 1.20 and no other purpose.

      5.2   LEGAL COMPLIANCE. Tenant shall, at its expense, comply with all
laws, governmental orders, regulations, rules, local ordinances regarding (i)
any of the Permitted Uses described in Section 1.20, (ii) the condition of the
Premises to the extent Tenant is responsible therefor pursuant to this Lease,
(iii) improvements and equipment constructed in or installed upon the Premises
by Tenant. Upon receipt of any notice of noncompliance, Tenant shall promptly
notify Landlord in writing. Landlord shall comply with all laws, governmental
orders, regulations, rules and local ordinances relating to: (i) the Common
Areas, (ii) Landlord's Work, and (iii) the exterior surfaces, structural
elements, foundation and roof of the Building, and, unless specifically excluded
under the terms of this Lease, the costs and expenses associated with such
compliance by Landlord shall be included in Operating Expenses.

      Notwithstanding anything to the contrary contained in this Lease except as
set forth under the terms of Section 8 of this Lease, it shall be Landlord's
responsibility to comply with all laws, orders, regulations, rules, ordinances
and other governmental requirements which are generally applicable to the
Building or generally applicable to the Permitted Use. Landlord warrants and
represents that such use conforms to all such requirements currently in effect.

      5.3   OBJECTIONABLE MATERIAL. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, nor take any other action which would constitute a nuisance or would
disturb or endanger any other tenants of the Building or interfere with the use
of the respective premises. Without Landlord's prior written consent, Tenant
shall not receive, store, or otherwise handle any product, material or
merchandise which is hazardous, toxic, explosive or highly flammable other than
reasonable quantities thereof incidental to the conduct of Tenant's business
which are stored, used and disposed of in compliance with all applicable legal
requirements. Outside storage of any type of equipment, property or materials by
Tenant, its agents, employees, customers or suppliers shall be permitted only
with the prior written consent of Landlord. Tenant shall store all rubbish
within the Premises.

      5.4   RULES AND REGULATIONS. Landlord reserves the right from time to time
to adopt and amend rules and regulations concerning use of the Common Area and
Premises, with which Tenant agrees to comply ("Rules and Regulations"). A copy
of the current Rules and

                                       6
<PAGE>

Regulations is attached as Exhibit "F." Landlord agrees to uniformly enforce
such Rules and Regulations.

      5.5   INSURANCE RISK. Without Landlord's consent, Tenant shall not use the
Premises in any way which could increase insurance rates, or disallow any
sprinkler or other credits, or invalidate any standard form policy of insurance
with respect to the Premises, Building, Complex or Tenant's operations therein.

      6.    COMMON AREA.

The term "Common Area" means the entire area designed for common use or benefit
of occupants of the Building or Complex, including the parking lot, landscaped
and vacant areas, interior walkways connecting the Buildings within the Complex
and exterior sidewalks. The Common Area shall at all times be subject to the
exclusive control and management of Landlord and may be expanded, contracted,
improved or changed by Landlord from time to time as deemed desirable. Subject
to the Rules and Regulations, the Common Area is hereby made available to Tenant
and its employees, agents, customers, and invitees for their reasonable
nonexclusive use in common with other tenants of the Building and Complex, their
employees, agents, customers, invitees, and to Landlord for the purposes for
which constructed. Tenant shall not in any manner obstruct the Common Area.
Landlord shall have the right to change the area, location, and arrangement of
the Common Area; to enter into, modify, and terminate easements and other
agreements pertaining to the use and maintenance of the Common Area, to close
all or any portion of the Common Area to such extent as may be necessary; to add
or remove improvements; and to do and perform such other acts in and to these
areas and improvements as Landlord shall determine to be advisable with a view
to the improvement and convenient use thereof. No exhibit attached to this Lease
nor any other materials provided by Landlord shall constitute a warranty or
agreement as to the configuration of the Building or Complex or the occupants
thereof.

      7.    MAINTENANCE OBLIGATIONS.

      7.1   LANDLORD'S RESPONSIBILITIES. Landlord shall keep the Common Area,
exterior surfaces, structural elements, foundation, all heating and air
conditioning systems, and roof of the Building and Complex in good order and
repair and, subject to Section 8 and Exhibit "G" hereto, the expense of such
activities shall be an Operating Expense. Notwithstanding the foregoing,
Landlord shall not be required to make any repairs which become necessary as a
result of any act or omission of Tenant, its agents, representatives,
contractors, employees or customers.

      7.2   TENANT'S RESPONSIBILITIES. Throughout the Term of this Lease, Tenant
shall be obligated, at its sole cost and expense, to keep and maintain the
Premises plumbing, doors, windows, locks, electrical facilities and fixtures
therein in good, safe and working order, condition and repair. Tenant agrees to
replace and renew, with like kind and quality, any parts of the Premises that
may become too worn to be repaired, so that, at all times, the Premises shall be

                                       7
<PAGE>

in good, safe and working order, condition and repair. Tenant shall not permit
waste to the Premises. However, there shall be no obligation on the part of
Tenant to comply with any laws which may require structural alterations, or
additions, unless made necessary by any act, work, use or omission by Tenant.

      8.    OPERATING EXPENSES AND REAL ESTATE TAXES.

      Subject to the terms hereof and the exclusions set forth in Exhibit "G",
in addition to the Monthly Installments of Annual Base Rent, Tenant shall pay on
a monthly basis as Additional Rent during the term hereof, Tenant's Pro Rata
Share of "Operating Expenses," which shall mean the costs and expenses
reasonably incurred by Landlord in managing, cleaning, operating, maintaining,
repairing and insuring the Building and Complex and the real property described
on Exhibit "C" and the costs of any capital improvements to the Building (i)
required by any change in the laws, rules, regulations or orders of any
governmental authority first promulgated after the Commencement Date, or (ii)
capital improvements reasonably intended and expected to reduce total Operating
Expenses, (subsection (i) and (ii) being herein collectively referred to as the
"Qualified Capital Improvements"), which Qualified Capital Improvements shall be
amortized on a straight line basis at appropriate interest rates, not to exceed
two percent (2%) over prime rate, over the useful lives of such capital
improvements, with only the annual amortized amount, including interest,
includable in each year's Building Operating Costs (hereinafter referred to as
the "Qualified Capital Improvement Amortization"). Landlord shall compute
Operating Expenses in accordance with consistent generally accepted accounting
practices and shall apply all Operating Expenses in a non-discriminatory manner.
Any Operating Expense relating to the Complex shall be allocated between the
Buildings on an pro rata basis unless the nature of the expense does not lend
itself to a pro rata allocation. In that event, such expense(s) shall be
allocated on an equitable basis between the Buildings. Prior to the development
of 401 Carlson Parkway, Landlord shall only include costs relating to the 401
Site for water and parking lot maintenance (including snow plowing) in the
Building's Operating Expenses.

      Subject to the exclusions set forth on Exhibit "G", Operating Expenses
shall specifically include, but not be limited to, the total cost reasonably
incurred for fire and "all risk" coverage and liability insurance premiums due
and payable with respect to the entire Building and Complex which are required
to be carried by Landlord pursuant to the terms of this Lease; sewer; janitorial
services for the Building, Complex and Premises; costs associated with any
on-site engineer(s), including salaries and benefits, gardening, lawn and
landscape care; replacement of indoor plant materials for the Building;
maintenance, repair and replacement of the heating and air conditioning systems;
snow removal; parking lot line painting; sign maintenance; exterior maintenance
and repair, including roofs and building exteriors; security equipment and
services and the costs of personnel and contractors to implement said services;
any and all costs associated with the terms and conditions of the Declaration of
Covenants, Conditions, Easements and Restrictions for Carlson Center, dated
October 12, 1989, and Landlord's management fees and administrative costs
(Landlord's total management fee for the Building shall not exceed a maximum of
five percent (5%) of the gross receipts [hereinafter "gross receipts"] of the
Building, with gross receipts defined as the gross amount paid to Landlord as
rent, fees, charges or otherwise

                                       8
<PAGE>

for the use and/or occupancy of the Building or for any services, equipment, or
furnishings provided by Landlord in connection with such use and/or occupancy).

      All reasonable costs and expenses associated with the repair and
maintenance of the Conservatory, except those costs specifically related to the
purchase and/or maintenance of any food service equipment (i.e. ovens, soda
dispensing machines, etc.); the purchase of foodstuffs and softgoods, and; costs
related to foodservice employees, shall be considered an Operating Expense and
such costs shall be born equitably between the developed Buildings of the
Complex.

      In addition, and subject to the exclusions set forth on Exhibit "G",
Tenant shall pay on a monthly basis as additional rent during the term hereof
its Pro Rata Share of the real estate taxes and installments of special
assessments (amortized over the longest period of time permitted by the taxing
authority) levied or assessed with respect to the Building, and the real
property described on Exhibit "B" ("Real Estate Taxes") in the applicable year.
In the event of any refund of Real Estate Taxes with respect to a year for which
Tenant has paid its Pro Rata Share of Real Estate Taxes, Landlord shall, in
Landlord's discretion, either promptly pay to Tenant its Pro Rata Share of the
amount of the refund after deduction of Landlord's costs incurred in obtaining
such refund, or, unless the Term has expired or is otherwise terminated, apply
such amount as a credit against Tenant's future monthly installments of its Pro
Rata Share of Real Estate Taxes.

      Tenant's Pro Rata Share of Operating Expenses and Real Estate Taxes shall
be paid by Tenant in monthly installments in such amounts as are estimated and
billed by Landlord at the beginning of each twelve (12) month period commencing
and ending on dates designated by Landlord, each installment being due on the
first day of each calendar month. If at any time during such twelve (12) month
period, it shall appear that Landlord has materially underestimated or
overestimated Operating Expenses or Real Estate Taxes, Landlord may re-estimate
Tenant's Pro Rata Share of Operating Expenses and Real Estate Taxes and may bill
Tenant for any deficiency or credit Tenant for any surplus which may have
accrued during such twelve (12) month period and thereafter the monthly
installment payable by Tenant shall also be adjusted. Within one hundred (100)
days after the end of each such twelve (12) month period, Landlord shall deliver
to Tenant a statement of Operating Expenses and Real Estate Taxes for such
twelve (12) month period and the monthly installments paid or payable shall be
adjusted between Landlord and Tenant, and each party hereby agrees that Tenant
shall pay Landlord or Landlord shall credit Tenant' s account (or, if such
adjustment is at the end of the term, pay Tenant), within thirty (30) days of
receipt of such statement, the amount of any excess or deficiency in Tenant's
Pro Rata Share of Operating Expenses and Real Estate Taxes paid by Tenant to
Landlord during such twelve (12) month period. Failure of Landlord to provide
the statement called for hereunder within the time prescribed shall not relieve
Tenant from its obligations hereunder.

      Tenant shall have the right from time to time (but not exceeding once in
any 12 month period) to examine books and records relating to Operating
Expenses, including the right to conduct audits at Tenant's expense. Such
examinations and audits shall be performed by certified public accountants, at
Landlord's offices, during normal business hours, and on reasonable prior

                                       9
<PAGE>

written notice to Landlord. Tenant shall have the right from time to time (but
not exceeding once in any 12 month period) to examine books and records relating
to Operating Expenses, including the right to conduct audits at Tenant's
expense. In the event said audit discloses a total deviation in excess of four
(4%) percent, or more, of the actual Operating Expenses, Landlord shall credit
Tenant's account in the amount of any overpayment disclosed, plus interest at
the prime rate, and shall pay Tenant the cost of said audit. In no event shall
Tenant employ any person, firm or entity to perform the rights of Tenant
hereunder who is paid on a contingency fee basis.

      9.    REPAIRS-ALTERATIONS.

Tenant shall not damage the Premises and shall not permit waste to the Premises.
Tenant shall not make any improvements, additions or alterations to the
Premises, or install any equipment which defaces the Building or Complex
interior or exterior or negatively affects the structural or mechanical
components of the Building or Complex, without the prior written consent of
Landlord. No machinery or equipment shall be bolted or otherwise physically
attached to the floors or walls of the Premises without the prior written
consent of Landlord. Landlord may condition Landlord's approval upon the
condition that any such machinery, equipment, improvements, additions or
alterations be removed at Tenant's expense upon the termination of this Lease.
Tenant shall pay for any repairs necessary as a result of removal of any such
machinery, equipment, improvements, additions or alterations. Notwithstanding
the foregoing, Tenant, at its sole expense and without obtaining Landlord's
consent may make such interior and non-structural additions, deletions,
improvements and alterations not greater than $10,000 in value (collectively,
"Alterations") to the Premises as it may from time to time desire, provided that
such Alterations do not materially and adversely effect the utility or
mechanical systems of the Building or the value to Landlord of the Tenant
Improvements. All Alterations shall be made in a good and workmanlike manner.
All such Alterations and all equipment, machinery, trade fixtures, systems and
personal property at any time installed or located by Tenant on the Premises
shall remain Tenant's property and may be removed by Tenant at any time.

      10.   UTILITIES AND OTHER SERVICES.

Tenant shall pay its Pro Rata share of all utilities (including, without
limitation, gas and electricity) and janitorial services furnished to the
Building and Complex. In the event that Landlord determines, in Landlord's
reasonable discretion, that Tenant's water usage is disproportionally high
compared with other tenants in the Building, Landlord may charge Tenant directly
for such excess consumption. Notwithstanding the foregoing, if permitted by law,
Landlord shall have the right, at any time from time to time and upon written
notice to Tenant, to either contract for service from a different company or
companies providing electricity service to the Premises or Building or continue
to contract for service from the current electrical service provider. Landlord
shall not be liable for damages for failure of heat, hot or cold water, air
conditioning, sewer service, electric current, gas, or any other service by
reason of breakdown of plant, equipment, or apparatus, shut-down of any thereof
for necessary repairs or alterations or due to unavailability of fuel, water or
any other substance or utility, war, civil disturbance, strike,

                                       10
<PAGE>

lockout, fire, flood, casualty, governmental regulations, or other conditions
beyond Landlord's reasonable control other than due to unavailability of funds.

      Notwithstanding the foregoing, in the event Landlord fails to provide any
service (including without limitation repairs or maintenance) required hereunder
and as a result of such failure, Tenant is unable to operate its business from
the Premises as herein permitted for a period in excess of fifteen (15)
consecutive days or five (5) consecutive business days if such failure is due to
the negligence of Landlord, its agents, employees, or contractors, rent shall
equitably abate thereafter until such failure has been remedied.

      11.   LANDLORD'S ACCESS.

Upon one business day's prior notice, except in an emergency, Landlord may enter
the Premises during the Term hereof at all reasonable hours for the purpose of
inspection, verifying Tenant's compliance with this Lease or making repairs or
improvements to the Premises or any other portion of the Building, or for the
purpose of exhibiting the same to prospective purchasers, brokers, or lenders or
during the last six (6) months of the Term or any Renewal Term, prospective
tenants. In an emergency Landlord may enter the Premises at any time without
notice to take such action as Landlord deems to be prudent or necessary.

      12.   INDEMNITY AND NON-LIABILITY.

      12.1  INDEMNITY. Tenant shall defend, indemnify and hold harmless
Landlord, and Landlord's employees and agents, from and against any and all
claims arising from Tenant's use of the Premises or Building, or from the
conduct of Tenant's business or from any activity, work, or thing done,
permitted, or suffered by Tenant in or about the Premises or the Building and
shall further defend, indemnify and hold harmless, Landlord and Landlord's
employees and agents, from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease or arising from any negligence of
Tenant, or any of Tenant's agents, contractors, or employees, and from and
against all costs, attorneys' fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon. In the
event any action or proceeding is brought against Landlord by reason of any such
claim, Tenant upon notice from Landlord shall defend the same at Tenant's
expense by counsel satisfactory to Landlord. Notwithstanding any foregoing
provisions hereof to the contrary, Tenant shall have no obligation to indemnify
Landlord from and against any claims directly resulting from Landlord's
negligent actions or omissions or intentional misconduct.

      Landlord shall defend, indemnify and hold harmless Tenant, and Tenant's
employees and agents, from and against any and all claims arising from
Landlord's ownership of the Building or any activity, work, or thing done,
permitted or suffered by Landlord in or about that portion of the Building, and
shall further defend, indemnify and hold harmless Tenant and Tenant's

                                       11
<PAGE>

employees and agents from and against any and all claims arising from any breach
or default in the performance of any obligation on Landlord's part to be
performed under the terms of this Lease or arising from any negligence of
Landlord, or any of Landlord's agents, contractors, or employees, and from and
against all costs, attorneys' fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon. In the
event any action or proceeding is brought against Tenant by reason of any such
claim, Landlord upon notice from Tenant shall defend the same at Landlord's
expense by counsel satisfactory to Tenant. Notwithstanding any foregoing
provisions hereof to the contrary, Landlord shall have no obligation to
indemnify Tenant from and against any claims directly resulting from Tenant's
negligent actions or omissions.

      12.2  WAIVER. Tenant, as a material part of the consideration to Landlord
for this Lease, hereby assumes all risk of damage to property or injury to
persons in, upon or about the Premises arising from any cause except to the
extent caused by the negligence or willful misconduct of Landlord or its
employees, agents and contractors. Tenant hereby waives all claims in respect
thereof against Landlord.

      12.3  LIENS. Tenant shall not perform any act, or make any contract, that
may create, or be the foundation for, any lien against the Premises, the
Building, the Complex, or any portion thereof, and, should any such lien be
filed as a result of any act of Tenant, Tenant, at its own cost and expense,
shall bond for or discharge the same within ten (10) business days after the
filing thereof. Additionally, Tenant shall include the following language in all
contracts related to improvements or other work performed related to the
Premises:

      "PURSUANT TO MSA SECTION 514.06, NOTICE IS HEREBY GIVEN THAT IMPROVEMENTS
MADE BY ANY PARTY UPON THIS PREMISES ARE NOT AUTHORIZED, AS THAT TERM RELATES TO
INTERESTS IN LIENS UNDER SECTION 514.06, BY CARLSON REAL ESTATE COMPANY AND THAT
ALL IMPROVEMENTS ARE BEING MADE AT THE INSTANCE OF THE LESSEE OF THE PREMISES."

      12.4  NON-LIABILITY. Unless directly resulting from facilities controlled
by Landlord and from Landlord's negligent act or omission and Tenant has
notified Landlord, Landlord shall not be liable to Tenant for any damage
occasioned by: plumbing, electrical, gas, water, steam or other utility pipes,
systems, and facilities, or by the bursting, stopping, leaking or running of any
tank, washstand, closet or waste or other pipes in or about the Premises or
Building by water being upon or coming through the roof, or any skylight, vent,
trapdoor or otherwise or arising from any act or omission of any third party or
any tenant of the Building, its agents, contractors or employees.

      13.   INSURANCE.

      13.1  LIABILITY COVERAGE. Tenant shall, at its expense, obtain and keep in
force during the term of this Lease, including any renewal term, a commercial
general liability insurance policy with a combined single limit of not less than
$1,000,000 covering bodily injury to one or more persons and property damage
with deductibles in an amount reasonably satisfactory to

                                       12
<PAGE>

Landlord. All policies of insurance required to be provided hereunder by Tenant
or Landlord shall be issued by insurer(s) licensed and qualified to do business
in the State of Minnesota, with a current A.M. Best Company rating of at least
AVII. The policy shall name Landlord and any Mortgagee (as defined in Section
17) as an additional insured and shall cover losses in the Common Area caused by
Tenant.. Tenant shall increase its liability coverage as may be reasonably
requested by Landlord, if Landlord presents evidence that customary insurance
coverage limits for similar facilities in the Twin Cities market area have
increased. The establishment of insurance requirements shall not limit the
liability of Tenant under this Lease.

      Landlord shall obtain and keep in force with a financially responsible
insurance company, during the Term, including any renewal term, a commercial
general liability insurance policy with a combined single limit of not less than
$3,000,000 covering bodily injury to one or more persons and property damage.
The premium therefor shall be included in Operating Expenses.

      13.2  CERTIFICATES. Tenant shall deliver to Landlord certificates of
insurance, making specific reference to the Building, the Complex and the
Premises, evidencing the existence and amounts of the policy of insurance
required pursuant to this Section 13, as well as the deductible amounts. No such
policy shall be nonrenewable, cancelable or subject to material reduction of
coverage or other material modification except after thirty (30) days' prior
written notice to Landlord. Tenant shall, at least fifteen (15) days prior to
the expiration of such policy, furnish Landlord with renewals or "binders"
thereof. Any failure of Tenant to obtain, maintain, or provide copies or
certificates of any insurance required hereunder shall constitute a material and
continuing breach of this Lease.

      13.3  PROPERTY COVERAGE. Tenant shall maintain in effect, with a
financially responsible insurance company, policies of property insurance
covering for the full insurable value of all improvements (other than those
described in Exhibit "E"), additions or alterations to the Premises made without
Landlord's written consent, and all of Tenant's machinery, equipment, furniture,
fixtures and personal property. Such policies of insurance shall provide
protection for Tenant against all casualties included under standard insurance
industry practices within the classification of "Fire and Extended Coverage" and
shall contain a waiver of subrogation releasing Landlord from all claims and
liabilities arising from or caused by any hazard covered by Tenant's property
insurance. The proceeds from said insurance shall be used to repair or
reconstruct such insured property to the extent required under Section 15 of
this Lease.

      Additionally, Tenant shall maintain business interruption insurance in an
amount adequate to cover losses incurred by Tenant as a result of any damage or
destruction to the Building as described in Section 15 of this Lease.

      Landlord shall maintain in effect, with a financially responsible
insurance company, policies of property insurance covering the Building
including Landlord's Work as described in Exhibit "D" and Tenant's Improvements
as described in Exhibit "E," (other than the property required to be insured by
Tenant in the preceding paragraph, and other tenant improvements and

                                       13
<PAGE>

tenant property) on a replacement cost basis. The premium therefor shall be
included in Operating Expenses.

      13.4  RELEASE. Notwithstanding anything apparently to the contrary
elsewhere in this Lease, Landlord and Tenant each hereby mutually release and
relieve the other from all claims and liabilities arising from or caused by any
hazard covered by property insurance on the Premises or covered by property
insurance in connection with property on or activities conducted in or about the
Premises or Building or covered by the property insurance required hereunder,
regardless of the cause of the damage or loss, provided that this release shall
apply only to the extent that such loss is covered by such property insurance.
Tenant and Landlord shall, at the earlier of the date of obtaining insurance
coverages or the Commencement Date, give notice to the insurance carriers
involved that the foregoing mutual waiver of liability and subrogation is
contained in this Lease.

      14.   ASSIGNMENT, SUBLETTING AND CORPORATE TRANSACTIONS.

      14.1  LANDLORD CONSENT. Tenant shall not cause or permit any assignment,
sublease, encumbrance, or transfer (a "Transfer") of this Lease or any estate or
interest herein without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, conditioned, denied or delayed. It shall be
deemed reasonable for Landlord to withhold its consent to a Transfer if the
proposed Assignee refuses to provide the financial assurances reasonably
necessary in order to prove its ability to honor the obligations of Tenant under
the Lease. Landlord may also withhold consent in the event the use proposed by
the Assignee deviates from the Permitted Use hereunder or unreasonably burdens
the Complex parking area or other facilities.

      If Tenant wishes to transfer any of its rights except to a Permitted
Transferee (as defined below), Tenant shall submit in writing to Landlord (a)
the name and legal composition of the proposed assignee, subtenant or other
transferee (a "Transferee"); (b) the nature of the business proposed to be
carried on in the Premises; (c) the terms and provisions of the proposed
Transfer; (d) such financial and other information concerning the proposed
Transferee as Landlord may reasonably request; (e) the form of the proposed
assignment, sublease or other agreement governing the proposed Transfer, and (f)
a reminder that failure to respond within twenty (20) days is deemed an approval
of the request. Within twenty (20) days after Landlord receives all such
information it shall notify Tenant whether it approves such Transfer or if it
elects to proceed under Section 14.4 -Landlord's Right to Space. In no event may
Tenant publicly advertise or offer all or any portion of the Premises for
assignment or sublease without Landlord's prior written consent and in no event
at a rental less than that then sought by Landlord for a direct lease
(non-sublease) of comparable space in the Building. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with any proposed Transfer.
Attempted assignment or subletting without Landlord's prior written consent
shall constitute a material breach of this Lease. Failure of Landlord to respond
within twenty (20) days after receipt of all of the information listed above
shall be deemed approval by Landlord of the proposed Transfer.

                                       14
<PAGE>

      In the event that Landlord shall consent to a subletting of all or any
portion of the Premises under a sublease which obligates the subtenant to pay a
rental at a rate in excess of Tenant's Annual Base Rent as set forth in Section
1.12, above, then Tenant shall be entitled to receive the excess rental as paid
by the subtenant.

      Notwithstanding anything in this Lease to the contrary, and provided there
is no uncured default hereunder, Tenant may, without obtaining Landlord's
consent or giving prior notice to Landlord, transfer, sublet or assign all or a
portion of Tenant's interest in this Lease to a Permitted Transferee. In the
event of any transfer, sublease or assignment to a Permitted Transferee, Tenant
shall give Landlord written notice within thirty (30) days thereafter. A
"Permitted Transferee" shall mean (i) any affiliate, subsidiary, or parent of
Tenant, (ii) the surviving corporation or partnership in a statutory merger or
reorganization of Tenant, (iii) any corporation or partnership which purchases
substantially all of the stock or assets of Tenant, or (iv) any corporation or
partnership, the majority voting stock or interest of which shall be owned by
stockholders of Tenant holding a controlling percentage or more of the voting
stock of Tenant. No such transfer, sublease or assignment shall operate to
relieve Tenant of any liability hereunder and the Permitted Transferee shall
assume all obligations to be performed by Tenant under the terms of this Lease.

      14.2  CORPORATE TRANSACTIONS. Subject to Section 14.1 above, Tenant shall
not cause or permit, by operation of law or otherwise, any of the following
transactions which would have a material adverse affect on Tenant's
creditworthiness (collectively referred to as "Corporate Transactions") without
Landlord's consent, not unreasonably withheld, conditioned, denied or delayed
except as provided for herein: (a) a merger; (b) a sale of all or a portion of
Tenant's business; (c) change in the ownership or control of 50% or more of the
outstanding capital stock of Tenant if Tenant is a corporation; (d) if Tenant is
a partnership, any change in the identity of any general partner; or (e) any
conversion of a corporation or partnership to a limited liability corporation,
limited liability partnership or limited liability limited partnership. It shall
be deemed reasonable for Landlord to withhold its consent to a Corporate
Transaction if the proposed Purchaser or transferee refuses to provide the
financial assurances, including personal or corporate guarantees, reasonably
necessary in order to assure its ability to honor the obligations of Tenant
under the Lease.

      If Tenant wishes to consummate a Corporate Transaction that would have a
material adverse affect on Tenant's financial condition, Tenant shall submit in
writing to Landlord (a) the name and legal composition of the proposed purchaser
or other transferee (collectively, the "Purchaser"); (b) the nature of the
business proposed to be carried on in the Premises; (c) the terms and provisions
of the proposed Corporate Transaction; (d) such financial and other information
concerning the proposed Purchaser as Landlord may reasonably request; and (e)
the form of the proposed agreement governing the proposed Corporate Transaction.
Within thirty (30) days after Landlord receives all such information it shall
notify Tenant whether it approves such Corporate Transaction, or what financial
assurances would be acceptable to Landlord to effectuate Landlord's approval, or
if it elects to proceed under Section 14.4 - Landlord's Right to Space.

                                       15
<PAGE>

      14.3  NO RELEASE OF TENANT. Notwithstanding anything to the contrary
contained in this Section 14, no consent by Landlord to any Transfer or
Corporate Transaction shall relieve Tenant of any obligation to be performed by
Tenant under this Lease, whether occurring before or after such consent,
assignment, subletting or other Transfer or Corporate Transaction, and the
Transferee or assignee shall be jointly and severally liable with Tenant for the
payment of rent (or, in the case of sublease, rent in the amount set forth in
the sublease) and for the performance of all other terms and provisions of this
Lease. The consent by Landlord to any Transfer or Corporate Transaction shall
not relieve Tenant or any such Transferee or assignee from the obligation to
obtain Landlord's express prior written consent to any subsequent Transfer or
Corporate Transaction. The acceptance of rent by Landlord from any other person
shall not be deemed to be a waiver by Landlord of any provision of this Lease or
to be a consent to any Transfer or Corporate Transaction.

      14.4  LANDLORD'S RIGHT TO SPACE. Notwithstanding any of the above
provisions of this Section 14 to the contrary, if Tenant notifies Landlord that
it desires to enter into a Transfer and such Transfer requires Landlord's
consent, then Landlord, in lieu of consenting to such Transfer or withholding
its consent, may elect to terminate this Lease (in the case of an assignment or
a sublease of the entire Premises), or to terminate this Lease as it relates to
the space proposed to be subleased by Tenant (in the case of a sublease of less
than the entire Premises). In such event, this Lease (or portion thereof) will
terminate on the date the Transfer was proposed to be effective, and Landlord
may enter into a lease directly with the prospective Transferee identified by
Tenant.

      15.   DAMAGE OR DESTRUCTION.

      15.1  DAMAGE TO PREMISES COVERED BY INSURANCE. If the Premises are damaged
or destroyed by fire or other casualty insurable under standard fire and
extended coverage insurance (the "Event") so as to become partially or totally
untenantable, the Premises shall be repaired and restored by Landlord and Tenant
with due diligence. The repairs shall commence as soon as reasonably possible
following the Event. Landlord's obligation to repair and restore shall be
limited to the restoration of the work designated as Landlord's Work in Exhibits
"D" and Tenant Improvements in Exhibit "E" in each case including any changes to
plans and specifications agreed to by the parties during initial construction
(the "Agreed Change Orders") and Tenant shall be obligated to restore the
remainder of the Premises. If the Premises are damaged or destroyed to the
extent that the cost of the restoration would exceed 25% of the amount it would
have cost to replace the Premises in their entirety at the time such damage or
destruction occurred, and if the unexpired portion of the Term of this Lease
shall be one year or less on the date of the damage or destruction, then
Landlord may elect to terminate this Lease by giving notice to Tenant of its
election to do so within 60 days after such occurrence. If Landlord exercises
such right, then this Lease shall cease as of the date of such Event and all
rent and other charges payable by Tenant shall adjusted as of that date. In the
event Landlord does not elect to terminate the Lease, Landlord shall, within
forty-five (45) days following such fire or other

                                       16
<PAGE>

cause, reasonably estimate the amount of time that it will take Landlord to
repair and restore the Premises ("Landlord's Estimate"). If Landlord's Estimate
exceeds twelve (12) months, Tenant shall have the right to terminate this Lease
by delivering written notice thereof to Landlord within ten (10) business days
after receiving Landlord's Estimate. If Tenant does not elect to terminate this
Lease, Landlord shall promptly proceed with such repair and restoration and, if
such repair and restoration is not completed within thirty (30) days of
Landlord's Estimate, Tenant shall have the right to terminate the Lease by
delivering written notice thereof to Landlord within ten (10) business days
after such thirty (30) day delay period. Cost incurred by Landlord under this
Section 15 will not be included in Operating Expenses.

      15.2  DAMAGE TO PREMISES NOT COVERED BY INSURANCE. If the Premises shall
at any time be damaged or destroyed by a casualty not insurable under standard
fire or extended coverage insurance so as to become partially or totally
untenantable, then Landlord shall have the right to either repair and restore
the work designated as Landlord's Work in Exhibits "D" and "E" as it relates to
the Premises or to terminate this Lease. Such election shall be made by Landlord
upon notice to Tenant within 60 days after the occurrence of such casualty. If
Landlord elects to restore its work, such work shall not exceed what is required
to restore the Landlord's Work set forth on Exhibit "D" and the Tenant
Improvements set forth on Exhibit "E", in each case including any Agreed Change
Orders and Tenant shall be required to repair with diligence the remainder of
the Premises. If Landlord elects to terminate this Lease, this Lease shall
terminate as of the date of such Event and all rent shall be adjusted as of such
date of termination. In the event Landlord does not elect to terminate the
Lease, Landlord shall, within forty-five (45) days following such fire or other
cause, reasonably estimate the amount of time that it will take Landlord to
repair and restore the Premises ("Landlord's Estimate"). If Landlord's Estimate
exceeds twelve (12) months, Tenant shall have the right to terminate this Lease
by delivering written notice thereof to Landlord within ten (10) business days
after receiving Landlord's Estimate. If Tenant does not elect to terminate this
Lease, Landlord shall promptly proceed with such repair and restoration and, if
such repair and restoration is not completed within thirty (30) days of
Landlord's Estimate, Tenant shall have the right to terminate the Lease by
delivering written notice thereof to Landlord within ten (10) business days
after such thirty (30) day delay period. If Landlord elects to restore its work
and Tenant does not exercise it termination right as described in this Section
15.2, then Tenant shall be required to repair with diligence the remainder of
the Premises.

      15.3  DESTRUCTION OF THE COMPLEX. If all or any portion of the Complex
shall be damaged or destroyed by fire or other cause (regardless of whether the
Premises may be affected thereby) to the extent that the cost of restoration
thereof would exceed 25% of the amount it would have cost to replace the Complex
in its entirety at the time such damage or destruction occurred, then Landlord
may elect to repair that portion of the Complex owned by Landlord within a
reasonable time after such damage or destruction, or Landlord may elect to
terminate this Lease upon 30 days notice to Tenant, which notice shall be given,
if at all, within 60 days after the date of such occurrence. In the event of
such termination, this Lease shall cease 30 days after such notice is given and
all rent shall be adjusted as of that date. In the event Landlord does not elect
to terminate the Lease, Landlord shall, within forty-five (45) days following
such fire or other cause, reasonably estimate the amount of time that it will
take Landlord to repair and

                                       17
<PAGE>

restore the Building ("Landlord's Estimate"). If Landlord's Estimate exceeds
twelve (12) months, Tenant shall have the right to terminate this Lease by
delivering written notice thereof to Landlord within ten (10) business days
after receiving Landlord's Estimate. If Tenant does not elect to terminate this
Lease, Landlord shall promptly proceed with such repair and restoration and, if
such repair and restoration is not completed within thirty (30) days of
Landlord's Estimate, Tenant shall have the right to terminate the Lease by
delivering written notice thereof to Landlord within ten (10) business days
after such thirty (30) day delay period.

      15.4  RENT ABATEMENT. If the Premises are damaged or destroyed and Tenant
is prevented from occupying in part or in whole and does not occupy such portion
of the Premises or any part thereof for ten (10) consecutive business days,
Annual Base Rent and other charges hereunder related to that portion of the
Premises damaged or destroyed and not occupied by Tenant, shall be abated during
any period in which such damage or destruction continues to materially interfere
with the operation of Tenant's business in the Premises. Rent abatement shall be
Tenant's sole right against Landlord by reason of such damage or destruction and
such abatement shall apply only during the period commencing with such damage or
destruction and ending 30 days after Landlord substantially completes its
repairs or when Tenant reopens the Premises for business, whichever is earlier.

      15.5  DESTRUCTION CANCELLATION. In the event the Premises shall be damaged
or destroyed by fire or otherwise so as to become partially or totally
untenantable, during the last year of the Term or any extension term hereof,
either party shall have the option to terminate this Lease as of the date of
such damage or destruction by written notice to the other party given within
three (3) months following the date of such damage or destruction and this Lease
shall then be terminated and rent and all other charges shall cease as of the
date of the occurrence of such damage or destruction.

      16.   EMINENT DOMAIN.

      Except as may be otherwise agreed to by Landlord and Tenant as provided in
this Section, if all of the Premises, or such portion of the Premises as renders
the remainder impractical for Tenant's intended business use of the Premises,
are taken by any public authority under the power or threat of eminent domain or
by transfer in lieu thereof, then the term of this Lease shall cease as of the
date possession shall be taken by such public authority, and Landlord shall make
a pro rata refund of any Annual Base Rent that may have been paid in advance. In
the event that less than the entire Building is so taken and the Premises are
not in that portion of the Building so taken and provided the Premises are not
rendered untenantable thereby, then this Lease shall terminate only at the
option of Landlord. In the event that only a part of the Premises is so taken
and the parties agree that this Lease shall not so terminate, there shall be a
pro rata reduction in Annual Base Rent for the period following such taking, and
all other terms and provisions hereof shall remain in full effect. All damages
awarded for any such taking shall belong to and be the property of Landlord for
diminution in value to this leasehold or to the fee of the Premises; provided,
however, that Landlord shall not be entitled to any portion of the

                                       18
<PAGE>

award made to Tenant for loss of business, moving expenses, depreciation to and
cost of removal of stock and fixtures.

      17.   MORTGAGEE PROTECTION.

      17.1  SUBORDINATION OF LEASE. This Lease shall be subject and subordinate
at all times to the lien of any existing mortgage and other financing documents
and the lien of any mortgages and other financing documents that hereafter may
be made a lien upon the Building and Complex and the real property upon which it
is situated; provided, however, that the secured party named in each such
mortgage or other financing document (a "Mortgagee") shall agree to recognize
this Lease in the event of foreclosure if Tenant is not then in default and if
Tenant agrees to attorn to such Mortgagee as Landlord under this Lease. In the
event a Mortgagee elects to have this Lease a prior encumbrance, then and in
such event upon Mortgagee notifying Tenant to that effect, this Lease shall be
deemed a prior encumbrance whether this Lease is dated prior or subsequent to
the date of Mortgagee's encumbrance. Within twenty (20) business days following
Landlord's request, Tenant will execute and deliver any certificates of
subordination and other documents desirable to effect the purpose of this
Section 17.1, and in a form substantially similar to the attached Exhibit "H"
with such changes as Tenant may reasonably request; provided, however, that each
Mortgagee shall agree to recognize this Lease in the event of foreclosure if
Tenant is not then in default and shall agree not to join Tenant as a party
defendant in any action to foreclose the mortgage unless such joinder is
required under applicable law. Failure of Tenant to comply with the foregoing
requirements within twenty (20) business days following Landlord's request shall
be deemed an Event of Default.

      17.2  INSURANCE. Whenever under this Lease policies of insurance or bonds
are to be provided for the benefit of Landlord, the same shall, at the option of
Landlord, be made payable to and shall secure Landlord and/or any Mortgagee.

      17.3  ESTOPPEL CERTIFICATE. Tenant shall, within twenty (20) business days
following a request from Landlord, execute and deliver to Landlord an Estoppel
Certificate substantially in the form attached as Exhibit "I" with such changes
as tenant may reasonably request, attesting to the terms and condition of this
Lease and the compliance to date of Landlord with the terms and conditions of
this Lease and such other matters as requested by Landlord concerning the
tenancy of Tenant under this Lease. In the event that Tenant asserts any known
default by Landlord, Tenant shall set forth such alleged default or defaults
upon the said certificate in detail and attest to the fact that those listed
defaults are, to the knowledge of Tenant, the only defaults by Landlord
hereunder.

      17.4  MORTGAGEE'S PERFORMANCE. Tenant agrees to give to any Mortgagee(s),
by registered mail, a copy of any notice of default served upon Landlord,
provided that prior to such notice Tenant has been notified in writing of the
address of such Mortgagee, which notice shall state that it is given pursuant to
this Section of the Lease and that copies of notices shall be sent to such
Mortgagee. Mortgagee shall have the right (but shall not be obligated) to
perform the obligations of Landlord hereunder, in the same manner and time as
Landlord.

                                       19
<PAGE>

      18.   RELOCATION OF PREMISES.

      Landlord reserves the right to relocate Tenant in substitute premises of
similar square footage and configuration within the Building or Complex upon
ninety (90) days written notice to Tenant. If this right is exercised, Landlord
shall, at its own expense, provide Tenant with improvements at the new location,
comparable to those in the original location (including, without limitation,
quality and level of finish), and shall, at Landlord's own expense, move
Tenant's personal property to the new location. Landlord shall reimburse Tenant
for expenses incurred by Tenant in relocating its telephone service and computer
system. If the current rental rate at the new location is greater than at the
original location, Tenant's Annual Base Rent shall not be increased for the
remainder of the Term hereof. For a period of thirty (30) days following receipt
of the notice of relocation, Tenant has the option of canceling this Lease,
effective at any time prior to the relocation date, by sending written notice to
Landlord.

      19.   SIGNAGE.

      Tenant, at Landlord's sole cost and expense, shall have the right to
building standard internal directory and suite signage. No other signage shall
be displayed by Tenant without the prior written consent of Landlord.

      20.   ENVIRONMENTAL COMPLIANCE

      I.    (a)   Landlord represents, to the best of its knowledge, that on the
      Commencement Date, there is no Hazardous Material in the Building, the
      Complex or on the Premises in violation of any Environmental Law. Landlord
      hereby agrees that if at anytime during the term of this Lease it should
      be determined that the Building, Complex or Premises were contaminated
      with Hazardous Material on the Commencement Date of this Lease or
      thereafter because of any acts or omissions of Landlord, Landlord agrees
      to indemnify and hold Tenant harmless from any and all claims,
      liabilities, damages and obligations of any nature arising from or as a
      result of such contamination.

      II.   Tenant represents, warrants, and covenants to Landlord that:

      (a)   Tenant will cause the Premises at all times to be and remain in
      compliance with all applicable laws, ordinances, and regulations
      (including consent decrees and administrative orders) relating to public
      health and safety and protection of the environment, including those
      statutes, laws, regulations, and ordinances identified in subparagraph
      (f), all as amended and modified from time to time (collectively,
      "Environmental Laws"). Tenant agrees to obtain and keep in effect all
      governmental permits and approvals relating to the use or operations of
      the Premises required by applicable Environmental Laws, and Tenant agrees
      to comply with the terms of the same.

                                       20
<PAGE>

      (b)   Tenant will not generate, manufacture, store, treat, transport,
      release, or dispose of "Hazardous Material," as that term is defined in
      subparagraph (f), on, in, under, about or from the Premises, Complex or
      Building, other than in such quantities as are required for the conduct of
      Tenant's permitted business, and other than those lawfully incorporated
      into the Premises, in keeping with good construction practices, as
      appropriate building materials, and then only in compliance with all
      Environmental Laws, health, safety, handling, reporting and disclosure
      laws, regulations and rules. Tenant shall promptly provide to Landlord
      upon written request, but not more often than once in any twelve month
      period unless Landlord has reasonable cause to believe that Tenant is not
      in compliance with this Section 20, a detailed list of such materials used
      in the conduct of Tenant's business or incorporated in the Premises,
      together with copies of all applicable permits related to such materials,
      if any. If any Hazardous Material (other than as permitted in the
      foregoing sentence) is found on the Premises, or if Tenant or any one of
      its employees, agents, contractors, suppliers or invitees causes,
      contributes to or aggravates any release or disposal of any Hazardous
      Material on, in, under or about the Premises, or Building, Tenant, at its
      own cost and expense will immediately take such action as is necessary to
      detain the spread of and remove the Hazardous Material to the complete
      satisfaction of Landlord and the appropriate governmental authorities.

      (c)   Tenant will immediately notify Landlord and provide copies upon
      receipt of all written complaints, claims, citations, demands, inquiries,
      reports, or notices relating to Tenant's compliance with Environmental
      Laws. Tenant will, at its sole cost if any such violation is due to the
      act or omission of Tenant, promptly cure any such action. Tenant will keep
      the Premises, Complex and Building free of any lien imposed pursuant to
      any Environmental Laws on account of Tenant's generation, manufacture,
      storage, treatment, transportation, release, or disposal of Hazardous
      Material.

      (d)   If Tenant breaches or fails to comply with any of the foregoing
      warranties, representations, and covenants, Landlord may cause the removal
      (or other cleanup acceptable to Landlord) of any Hazardous Material (other
      than those expressly authorized herein) from the Premises, Building or
      Complex. The costs of such Hazardous Material removal and any other
      cleanup (including transportation and storage costs) will be additional
      rent under this Lease, whether or not a court or administrative agency has
      ordered the cleanup, due and payable on Landlord's demand. Tenant hereby
      grants Landlord, its employees, agents and contractors, access to the
      Premises to remove or otherwise clean up any Hazardous Material. Landlord,
      however, except as specifically set forth herein, has no affirmative
      obligation under this Lease to remove or otherwise clean up any Hazardous
      Material, from the Premises, Building or Complex and nothing in this Lease
      will be construed as creating any such obligations.

      (e)   Tenant agrees to indemnify, defend, and hold Landlord and Landlord's
      affiliates, shareholders, partners, directors, officers, employees and
      agents free and harmless from and against all losses, liabilities,
      obligations, penalties, claims, litigation, demands, defenses, costs,
      judgments, suits, proceedings, damages (including consequential

                                       21
<PAGE>

      damages), disbursements, or expenses of any kind (including attorneys' and
      experts' fees and expenses and fees and expenses incurred in
      investigating, defending, or prosecuting any litigation, claim, or
      proceeding) that may at any time be imposed upon, incurred by, asserted,
      or awarded against Landlord or any of them in connection with or arising
      from or out of Tenant's obligations hereunder.

            This indemnification is the personal obligation of Tenant and shall
      survive termination of this Lease. Tenant, its successors, and assigns
      waive, release, and agree not to make any claim or bring any cost recover
      action against Landlord under CERCLA, as that term is defined in
      subparagraph (f), or any state equivalent or any similar law now existing
      or enacted after this date.

      (f)   For purposes of this Lease "Hazardous Material" means:

            i.    "Hazardous substances" or "toxic substances" as those terms
            are defined by the Comprehensive Environmental Response,
            Compensation, and Liability Act (CERCLA), 42 U.S.C. #9601, et seq.,
            or the Hazardous Materials Transportation Act, 49 U.S.C. # 1 80 1,
            et seq., both as amended to and after this date.

            ii.   "Hazardous wastes," as that term is defined by the Resource
            Conservation and Recovery Act ("RCRA"), 42 U.S.C. #6901, et seq., as
            amended to and after this date.

            iii.  Any pollutant or contaminant or hazardous, dangerous, or toxic
            chemicals, materials, or substances within the meaning of any other
            applicable federal, state, or local law, regulation, ordinance, or
            requirement (including consent decrees and administrative orders)
            relating to or imposing liability or standards of conduct concerning
            any hazardous, toxic, or dangerous waste substance or material, all
            as amended to and after this date.

            iv.   Crude oil or any fraction of it that is liquid at standard
            conditions of temperature and pressure (60 degrees Fahrenheit and
            14.7 pounds per square inch absolute).

            v.    Any radioactive material, including any source, special
            nuclear, or by product material as defined at 42 U.S.C. #201 1, et
            seq., as amended to and after this date.

            vi.   Asbestos in any form or condition.

            vii.  Polychlorinated biphenyl's (PCB's) or substances or compounds
            containing PCB's.

                                       22
<PAGE>

      21.   DEFAULT.

      21.1  EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" by Tenant:

      (a)   Tenant fails to make any Monthly Installment or Additional Rent
      payment when due. Landlord agrees not to exercise its remedies until ten
      (10) days following written notice of Landlord to Tenant that the payment
      is past due.

      (b)   Tenant fails to make any Monthly Installment or Additional Rent
      payments when due under this Lease two (2) or more times during any twelve
      (12) month period during the Term.

      (c)   Tenant abandons the Premises; provided, however, that vacation of
      the Premises by Tenant, by itself, shall not constitute an Event of
      Default hereunder.

      (d)   Tenant fails to comply with any of the provisions of Section 20 -
      Environmental Compliance.

      (e)   Any guarantor of this Lease is in default under any guaranty of this
      Lease.

      (f)   Tenant fails, within ninety (90) days after the commencement of any
      proceedings against Tenant seeking relief under any reorganization,
      arrangement, consolidation, readjustment, liquidation, dissolution or
      similar arrangement or proceeding under any state or federal bankruptcy or
      other statute, law or regulation, to have such proceedings dismissed, or
      Tenant fails, within ninety (90) days after any appointment pursuant to
      any state or federal bankruptcy or other statute, law or regulation,
      without Tenant's consent or acquiescence, of any trustee, receiver or
      liquidator for the Premises, for Tenant or for all or any substantial part
      of Tenant' s assets, to have such appointment vacated.

      (g)   Tenant fails to perform or comply with any provision of this Lease
      other than those described in (a) through (f) above, and such failure is
      not cured within thirty (30) days after written notice to Tenant or, if
      such failure cannot be cured within such thirty (30) day period, Tenant
      fails within such thirty (30) day period to commence, and thereafter
      diligently proceed with, all actions necessary to cure such failure as
      soon as reasonably possible but in all events within ninety (90) days of
      such notice; provided, however, that if Landlord in its reasonable
      judgment determines that such failure cannot or will not be cured by
      Tenant within such ninety (90) days, then such failure shall constitute an
      Event of Default immediately upon such notice to Tenant.

      21.2  REMEDIES. Upon the occurrence of an Event of Default, Landlord shall
have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:

                                       23
<PAGE>

      (a)   Landlord may, upon notice to Tenant and in accordance with Minnesota
      law, terminate this Lease, or without notice to Tenant re-enter the
      Premises without terminating this Lease. No re-entry or taking possession
      of the Premises by Landlord shall be construed as an election on its part
      to terminate this Lease unless a notice of such intention is given to
      Tenant (all other demands and notices of forfeiture or other similar
      notices being hereby expressly waived by Tenant). Upon the service of any
      such notice of termination, the Term of this Lease shall automatically
      terminate. Should Landlord at any time 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 Premises, reasonable attorneys' fees, and the value
      at the time of such termination of any rent reserved in this Lease for the
      remainder of the term over the then reasonable rental value of the
      Premises for the remainder of such term, all of which amount shall be
      immediately due and payable from Tenant to Landlord.

      (b)   Landlord may require that, upon any termination of the Lease or
      Tenant's right to possession without termination of this Lease, Tenant
      shall immediately surrender possession of the Premises to Landlord, vacate
      the same and remove all effects therefrom except those that may not be
      removed under other provisions of this Lease. If Tenant fails to surrender
      possession and vacate as aforesaid, Landlord may forthwith re-enter the
      Premises in accordance with Minnesota and expel and remove Tenant and any
      other persons and property therefrom, without being deemed guilty of
      trespass, eviction, conversion or forcible entry and without thereby
      waiving Landlord's rights to rent or any other rights given Landlord under
      this Lease or at law or in equity. If Tenant does not remove all effects
      from the Premises, Landlord may, in accordance with Minnesota, either
      declare such effects abandoned and dispose of the same in any reasonable
      manner without liability to Tenant or any other party, or remove any or
      all of such effects in any manner it shall choose and store the same
      without liability to Tenant. Tenant shall pay Landlord on demand any
      expenses incurred in such removal and storage for any length of time
      during which the same shall be in Landlord's possession or in storage.

      (c)   Landlord can continue this Lease in full force and effect, and the
      Lease will continue in effect as long as Landlord does not terminate
      Tenant's right to possession, and Landlord shall have the right to collect
      Annual Base Rent and Additional Rent when due. After Tenant's right to
      possession is terminated Landlord may enter the Premises and may make such
      alterations and repairs as it shall determine may be reasonably necessary
      to relet the Premises and Landlord may (but shall not be required to)
      relet the same or any part thereof upon such terms and conditions as
      Landlord in its sole discretion may deem advisable. Upon any reletting,
      all rentals received by Landlord from such reletting shall be applied as
      follows: first, to the payment of any indebtedness other than rent or
      other charges due under this Lease from Tenant to Landlord; second, to the
      payment of any costs and expenses of such reletting, including brokerage
      fees and costs of such alterations and repairs; and third, to the payment
      of Annual Base Rent and Additional Rent and other charges due and unpaid
      hereunder. In no event shall Tenant be entitled to receive any surplus of
      any sums received by Owner on a reletting in excess of the rental and
      other charges payable hereunder. If such rentals and other charges
      received

                                       24
<PAGE>

      from such reletting during any month are less than those to be paid during
      that month by Tenant, Tenant shall pay any such deficiency to Landlord
      upon demand. No act by Landlord allowed by this Section shall terminate
      this Lease unless Landlord notified Tenant that Landlord elects to
      terminate this Lease. Landlord can terminate Tenant's right to possession
      of the Premises at any time. Notwithstanding the foregoing, in the event
      that Landlord elects to terminate Tenant's right to possession only,
      without terminating this Lease, Landlord shall use commercially reasonable
      efforts to mitigate its damages; provided that Landlord shall not be
      required to relet the Premises in preference to other available space in
      the Complex.

      21.3  RECEIPT OF MONIES. To the extent permitted under applicable law, no
receipt of monies by Landlord from or for the account of Tenant or from anyone
in possession or occupancy of the Premises after the giving of any notice under
this Lease, including, without limitation, a notice of termination of this
Lease, shall reinstate, continue or extend the Term of this Lease or affect any
notice given to Tenant prior to the receipt of such money. No payment by Tenant
or receipt by Landlord of a lesser amount than the charges herein reserved shall
be deemed to be other than on account of the earliest stipulated rent or other
charges, nor shall any endorsement or statement on any check or on any letter
accompanying any check be deemed to be an accord and satisfaction. Landlord
shall not be deemed to have accepted payment made to a "lockbox" or other
depository until five (5) days after Landlord's actual receipt of the payment
if, and only if, during said period Landlord did not refund or attempt to refund
such payment. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.

      21.4  BANKRUPTCY. If at any time there exists an act of bankruptcy, which
shall include the filing by Tenant, or any guarantor of a petition in bankruptcy
(including, without limitation, a petition for liquidation, reorganization or
for adjustment of debts of an individual with regular income), the filing of any
such petition against Tenant or any guarantor with such party failing to secure
a discharge thereof within 90 days after the filing thereof, or Tenant or any
guarantor becoming insolvent or admitting in writing an inability to pay its
debts as they mature, or making an assignment for the benefit of creditors or
petitioning for or entering into an arrangement with creditors or a custodian
being appointed or taking possession of Tenant's or any guarantor's property
whether or not a judicial proceeding is instituted, then this Lease at
Landlord's option shall (if permitted by law) be terminated, in which event
neither Tenant, any guarantor, nor any person claiming through or under Tenant
or any guarantor or by virtue of any statute or court order shall be entitled to
possession of the Premises. Landlord, in addition to the other rights and
remedies given by this Lease or by virtue of any statute or rule of law, may
retain as liquidated damages any rent or any monies received by Landlord from
Tenant or others on behalf of Tenant.

      21.5  LEGAL EXPENSES. In case suit shall be brought because of the breach
of any agreement or obligation contained in this Lease on the part of Tenant or
Landlord to be kept or performed, and a breach shall be established, the
prevailing party shall be entitled to recover all expenses incurred therefor,
including reasonable attorneys' fees and legal expenses.

                                       25
<PAGE>

      21.6  LANDLORD'S RIGHT TO CURE DEFAULT. If Tenant fails to perform any
agreement or obligation on its part to be performed under this Lease, Landlord
shall have the right (but shall be under no obligation), if no emergency exists,
to perform the same upon ten (10) days notice to Tenant, and, in any emergency,
to perform the same immediately without notice or delay. For the purpose of
curing Tenant's defaults as aforesaid, Landlord shall have the right to enter
the Premises and Tenant shall within ten (10) days after demand reimburse
Landlord for any costs incurred by Landlord to cure any of Tenant's defaults,
including reasonable attorneys' fees. Except for gross negligence or willful
misconduct by Landlord, Landlord shall not be liable for any loss,
inconvenience, annoyance or damage resulting to Tenant or anyone holding under
Tenant for any action taken by Landlord pursuant to this Section. Any act done
by Landlord pursuant to this Section shall not constitute a waiver of any such
default by Tenant or a waiver of any covenant, term or condition herein
contained or the performance thereof.

      21.7  RIGHTS AND REMEDIES. The rights and remedies given to Landlord in
this Lease are distinct, separate, non-exclusive and cumulative rights and
remedies, in addition to every other remedy at law or in equity, and may be
exercised concurrently. No delay or failure by Landlord to insist upon the
strict performance of any agreement, term, covenant or condition hereof, or to
exercise any right or remedy consequent upon a breach thereof, and no acceptance
of full or partial rent during the continuance of any such breach, shall
constitute a waiver of any such breach, agreement, term, covenant or condition.
No waiver by Landlord of any breach (including recurrent failure to timely pay
rent) by Tenant under this Lease or of any breach by any other tenant under any
other lease of any portion of the Building shall affect or alter this Lease in
any way whatsoever or be construed as a waiver of any subsequent breach.

      21.8  SECURITY DEPOSIT. Tenant shall provide Landlord the letter of credit
described in Paragraph 4 of Exhibit "A" of this Lease, concurrently with the
execution of this Lease, which shall be retained by Landlord as security for
Tenant's full, timely and faithful performance of all of Tenant's obligations
hereunder, including but not limited to the payment of Annual Base Rent,
Operating Expenses and Real Estate Taxes. If Tenant fails to pay such amount or
any other charges hereunder or otherwise defaults with respect to any provisions
of this Lease, Landlord may, at its option, apply all or any portion of the
Letter of Credit (, the "Financial Security"), to the payment thereof or for
payment of any other sums for which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage that Landlord
may suffer thereby. If Landlord so uses or applies all or any portion of the
Financial Security, Tenant shall, within ten (10) days after written demand
therefor, deposit with Landlord an amount sufficient to restore the Financial
Security to the full amount stated in Section 1.15 and Paragraph 4 of Exhibit
"A", and Tenant's failure to do so shall be a material breach of this Lease.
Tenant shall not be entitled to any interest upon the Financial Security, nor
shall Landlord be required to segregate or hold the Financial Security separate
from Landlord's other funds, but shall carry such sum as a bookkeeping entry
only. In the event that Tenant shall fully perform the covenants and provisions
of this Lease, Landlord shall refund the Financial Security, or the unused
balance thereof, if any, to Tenant within thirty (30) days after the expiration
or sooner termination of the term of this Lease.

                                       26
<PAGE>

      21.9  DEFAULT BY LANDLORD. A. If Landlord shall fail or neglect to perform
or observe any of the terms, covenants or conditions of this Lease on its part
to be performed or observed within thirty (30) days after receipt of written
notice of default or, when more than thirty (30) days are reasonably required
because of the nature of the default, if Landlord shall fail to commence and
proceed diligently to cure such default within thirty (30) days after receipt of
written notice from Tenant but in all events within ninety (90) days of such
notice, then Landlord shall be liable for any and all damages sustained by
Tenant as a result of Landlord's breach.

            B.    Provided that Tenant has been notified in writing of the most
current mailing address of Landlord's mortgagee, Tenant shall notify said
mortgagee of Landlord's default and shall afford said mortgagee the opportunity
to cure Tenant's default for a period of thirty (30) days following mortgagee's
receipt of such notice.

            C.    Landlord shall reimburse Tenant for its out-of-pocket costs
directly incurred by Tenant as a result of curing Landlord's breach, within
thirty (30) days of receipt of an itemized bill therefore, provided Tenant fully
complies with each of the following:

                  (i)   Landlord receives thirty (30) days (the "Notice Period")
prior written notice from Tenant of its intent to commence repairs or otherwise
cure Landlord's breach, including a detailed description of the work to be
performed.

                  (ii)  Tenant submits copies of all paid invoices together with
lien waivers signed by each vendor/contractor indicating that they have been
paid in full for all services rendered and materials supplied.

                  (iii) Tenant secures all necessary governmental approvals
prior to commencement of any work.

      22.   SURRENDER OF POSSESSION.

      22.1  CONDITION. At the expiration of the term hereof, Tenant shall
surrender the Premises broom-clean in good condition and repair, ordinary wear
and tear, condemnation and damage caused by casualty excepted. For the purposes
of this Section 22.1, the term "reasonable wear and tear" shall mean that level
of wear and tear which would be allowed by a prudent owner maintaining those
items described in Section 7.2 herein, in the manner required of Tenant under
this Lease.

      22.2  HOLDING OVER. In the event Tenant remains in possession of any part
of the Premises after the expiration of the tenancy created hereunder, without
Landlord's written consent, Tenant shall be considered a hold-over tenant
subject to all of the conditions of this Lease insofar as the same are
applicable to a hold-over tenant, except that the monthly rent payable by Tenant
shall be an amount equal to 150% of the rate paid by Tenant during the last
month of the Term or any Extended Term allowed hereunder. Notwithstanding
anything to the

                                       27
<PAGE>

contrary contained herein, during any hold-over tenancy, Tenant shall vacate the
Premises within ten (10) days of receipt of Landlord's written notice ("Holdover
Notice To Vacate"). If Tenant remains in possession of the Premises after the
Holdover Notice To Vacate without the execution of a new lease, it shall be
occupying the Premises as a tenant at sufferance, subject to all of the
conditions of this Lease insofar as the same are applicable to tenant at
sufferance, except that the monthly rent payable by Tenant shall be an amount
equal to 300% of the rate paid by Tenant during the last month of the Term or
any Extended Term allowed hereunder. Tenant shall indemnify and hold Landlord
harmless from and against all claims, liabilities, damages, costs or expenses,
including reasonable attorneys' fees and costs of defending the same, incurred
by Landlord and arising from Tenant's failure to timely surrender the Premises,
including (i) any rent payable by or any loss, cost, or damages, including lost
profits, proven by any prospective tenant of the Premises, and (ii) Landlord's
damages as a result of such prospective tenant rescinding or refusing to enter
into the prospective lease of the Premises by reason of such failure to timely
surrender the Premises. Nothing contained herein shall limit Landlord's right to
evict Tenant as allowed under Minnesota law.

      22.3  FIXTURES. All partitions, wallcovering, ceilings, sinks, plumbing,
floor covering, and other improvements within the Premises shall become the
property of Landlord at the moment of completion of installation; provided,
however, Landlord may direct Tenant to remove, at Tenant's sole cost and
expense, any such improvements, including without limitations, plenum wiring,
upon the termination of this Lease not previously approved by Landlord and any
such other improvements required to be removed as indicated by Landlord at the
time of Landlord's consent to same. Tenant shall retain ownership of all
removable trade fixtures and machinery ("Tenant's Property") placed in the
Premises by Tenant. Prior to the expiration of the Term, Tenant shall remove all
Tenant's Property and repair any damages occasioned by such removal at Tenant's
expense. Upon the failure of Tenant to remove Tenant's Property prior to
expiration of the Term, all remaining Tenant's Property shall, at Landlord's
election, be deemed abandoned by Tenant. Notwithstanding the foregoing, Tenant
shall have no obligation to remove or restore wallcoverings, paint, and floor
coverings.

      23.   NOTICES.

      Whenever under this Lease provision is made for notice, such notice shall
be in writing, and it shall be deemed sufficient notice and service if such
notice is delivered personally or by a nationally-recognized overnight courier
service providing proof of delivery or by U.S. registered mail or certified
mail, postage prepaid, return receipt requested, to Tenant at the address set
forth in Section 1.3 or the Landlord at its then current address for the payment
of rent under this Lease. Any notice so sent shall be effective for all purposes
at the time of personal delivery or deposit thereof in the U.S. mail. Either
party may hereafter change the address for notice stated in Section 1, above, by
notifying the other party in writing of the new address.

                                       28
<PAGE>

      24.   OCCUPANCY.

      If Landlord permits Tenant to occupy the Premises prior to the
Commencement Date, such occupancy shall be governed by all of the terms and
conditions of this Lease, including the requirement under Section 13 of this
Lease to maintain insurance. However, Tenant shall not owe Landlord any sums for
Annual Base Rent, Real Estate Taxes or Operating Expenses associated with the
Premises during said early occupancy period. In the event Tenant is unable to
enter into and occupy the Premises on the Commencement Date specified in Section
1.18, because the Premises are not ready for occupancy with Landlord's Work
(including without limitation, completion of all Common Areas and parking areas
associated with the Building, and issuance of a certificate of occupancy by
applicable governmental authorities or other comparable approval) and Tenant
Improvements completed, Landlord shall not be liable for damages to Tenant,
Annual Base Rent shall abate during the period Tenant is unable to occupy the
Premises; and the Commencement Date shall automatically be redefined to mean the
date Landlord delivers possession with Landlord's Work and Tenant Improvements
substantially completed.

      25.   JOINT AND SEVERAL LIABILITY.

      In the event that two or more individuals, corporations, partnerships or
other entities (or any combination of two or more thereof) shall sign this Lease
as Tenant, the liability of each individual, corporation, partnership or other
entity to perform all obligations hereunder shall be deemed to be joint and
several. In like manner, in the event that Tenant shall be a partnership or
other business association, the members of which are, by virtue of statute, or
general law, subject to personal liability, then and in that event, the
liability of each such member shall be deemed to be joint and several.

      26.   QUIET ENJOYMENT.

      So long as Tenant is not in default under any of the covenants and
agreements of this Lease, Tenant's quiet and peaceable enjoyment of the Premises
shall not be disturbed by Landlord or by any person claiming by, through, or
under Landlord.

      27.   BROKERAGE FEES.

      Other than the broker fees paid by Landlord to Grubb & Ellis and CB
Richard Ellis, Tenant warrants that it has not incurred liability for any real
estate brokerage fees or any other fees to any third party in connection with
this Lease and in the event that any third party institutes legal action in an
effort to recover brokerage fees as a broker for Tenant, Tenant shall defend
such action and indemnifies and hold Landlord harmless from any related damages,
liability or costs.

                                       29
<PAGE>

      28.   GENERAL.

      28.1  CONSENT. Whenever under this Lease provision is made for Tenant to
secure the consent of Landlord, such consent shall be in writing. The consent by
either party to any act by the other party of a nature requiring consent shall
not be deemed to constitute consent to any similar act.

      28.2  LEASE NEGOTIATION. The submission of this Lease for examination does
not constitute an offer, a reservation of or option for the Premises, and this
Lease shall become effective only upon execution and delivery thereof by both
parties.

      28.3  NO MODIFICATION. This writing is intended by the parties as a final
expression of their agreement and as a complete and exclusive statement of the
terms thereof. No course of prior dealings between the parties or their
officers, employees, agents or affiliates shall be relevant or admissible to
supplement, explain or vary any of the terms of this Lease. No representations,
understandings or agreements have been made or relied upon in the making of this
Lease other than those specifically set forth herein. This Lease can be modified
only by a writing signed by the party against whom the modification is
enforceable.

      28.4  SEVERABILITY. If any term or provision of this Lease, or any portion
thereof, or the application thereof to any person or circumstances shall, to any
extent, be invalid or unenforceable, then the remainder of this Lease and the
application of such term or provision to persons or circumstances, other than
those as to which it is held invalid or unenforceable, shall not be affected and
shall be valid and be enforced to the fullest extent permitted by law.

      28.5  THIRD PARTY BENEFICIARY. Nothing contained in this Lease shall be
construed so as to confer upon any other party the rights of a third party
beneficiary except rights contained herein for the benefit of Landlord's
Mortgagee.

      28.6  HEADINGS. The headings of the Sections and Subsections herein are
for convenience only, and do not limit or construe the contents of such Sections
and Subsections.

      28.7  FORCE MAJEURE. Whenever a period of time is herein provided for
either party to perform, said party shall not be responsible for, and there
shall be excluded from the computation of such period of time, any delays due to
strikes, riots, acts of God, unforeseeable impossibility of or delay in
obtaining materials for which there is no reasonable substitute for reasons
other than unavailability of funds; contractor defaults (except in the case of
Landlord's Work) national emergency, acts of a public enemy, governmental
restrictions, laws or regulations, or any other cause or causes, whether similar
or dissimilar to those enumerated, beyond its reasonable control other than
delay caused by lack of funds. This Section shall not

                                       30
<PAGE>

excuse Tenant from the prompt payment of rent, additional rent, or any other
payments required by the terms of this Lease.

      28.8  PARTIES IN INTEREST. The terms, conditions, covenants and agreements
herein contained shall inure to the benefit of and shall bind the parties hereto
and their respective successors and permitted assigns.

      28.9  WAIVER. No provisions of this Lease shall be deemed waived unless
such waiver is in writing and signed. The waiver of any breach of any provision
of this Lease shall not be deemed a waiver of such provision or of any
subsequent breach of the same or any other provision of this Lease. No delay or
omission in the exercise of any right or remedy shall impair such right or
remedy or be construed as a waiver. Landlord's acceptance of any payment of rent
due under this Lease shall not be deemed a waiver of any default by Tenant under
this Lease, including Tenant's recurrent failure to timely make Monthly
Installment or Additional Rent payments, and no endorsement or statement on any
check or accompanying any check or payment shall be deemed an accord and
satisfaction. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.

      28.10 JURY TRIAL. Landlord and Tenant hereby mutually waive any and all
rights which either may have to request a jury trial in any proceeding at law or
in equity in any court of competent jurisdiction.

      28.11 LIMITATION OF LIABILITY. Tenant acknowledges and agrees that the
liability of Landlord under this Lease shall be limited to its interest in the
Complex and any judgments rendered against Landlord shall be satisfied solely
out of the proceeds of sale or transfer of its interest in the Building or the
rents collected therefrom. No personal judgment shall lie against Landlord upon
extinguishment of its rights in the Building and any judgment so rendered shall
not give rise to any right of execution or levy against Landlord's assets. The
provisions hereof shall inure to Landlord's successors and assigns including any
Mortgagee. The foregoing provisions are not intended to relieve Landlord from
the performance of any of Landlord's obligations under this Lease, but only to
limit the personal liability of Landlord in case of recovery of a judgment
against Landlord.

      28.12 AUTHORITY. If Tenant is a corporation, partnership or other form of
business entity, each of the persons executing this Lease on behalf of Tenant
warrants and represents that Tenant is a duly organized and validly existing
entity, that Tenant has full right and authority to enter into this Lease and
the persons signing on behalf of Tenant are authorized to do so and have the
power to bind Tenant to this Lease. Tenant shall provide Landlord upon request
with evidence reasonably satisfactory to Landlord confirming the foregoing
representations.

      28.13 ATTORNEYS' FEES. In the event suit is brought by either party for
the recovery of the Premises, or any sum due hereunder, or to enforce such
party's rights under this Lease, the prevailing party shall be entitled to
recovery of all costs incurred therein, including reasonable attorneys' fees.

                                       31
<PAGE>

      28.14 NO PARTNERSHIP. Nothing contained in this Lease shall be interpreted
as creating a partnership, joint venture, or relationship of principal and agent
between Landlord and Tenant, it being understood that the sole relationship
created hereby is one of landlord and tenant.

      28.15 APPLICABLE LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Minnesota.

      28.16 ENTIRE AGREEMENT.

      (a)   This Lease contains the entire understanding and agreement of the
parties hereto. All prior negotiations, understandings and agreements between
the parties have been incorporated herein and are superseded hereby.

      (b)   Tenant acknowledges and agrees that no prior information provided or
statements made by Landlord or its agent(s) ("Prior Information"), including
without limitation, estimated Operating Expenses and Real Estate Taxes, any
other financial matters, and any matters related to:

            (i)   Any of the premises in the Building or Complex;

            (ii)  The Building itself or the Complex itself; or

            (iii) The number or kind of tenants in the Building or Complex,

have in any way induced Tenant to enter into this Lease.

      (c)   Tenant acknowledges that prior to entering into this Lease, the
Tenant has satisfied itself of all its concerns by conducting an independent
investigation of the validity of such Prior Information.

      28.17 RESTRICTIVE COVENANTS AT CARLSON CENTER. Tenant's use of the
Premises shall comply with the restrictive covenants now in force or later
imposed on the Premises, a copy of which has been provided to Tenant.

      28.18 ADDITIONAL TERMS. Additional terms to this Lease, if any, are
attached as Exhibit "A."

      28.19 CONTRACTOR APPROVAL. Landlord shall approve all contractors hired by
the Tenant to perform work in the Building, including, without limitation,
contractors performing Tenant Improvements, furniture moving, and installation
of data cabling. It shall be reasonable for Landlord to disapprove any
contractor, installer, or worker performing any work on or in the Premises,
Building, or Complex for, without limitation, the following reasons, (a) the
Contractor is non-union, (b) the Contractor cannot provide financial assurances
reasonably necessary in order to prove its ability to honor its contractual
obligations, or (c) the contractor has not demonstrated the required skill
necessary to perform the work set forth in its contract with Tenant.

                                       32
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.

                                       LANDLORD:

                                       CARLSON REAL ESTATE COMPANY, A
                                       MINNESOTA LIMITED PARTNERSHIP

                                       By /s/ Dean A. Riesen
                                          ----------------------------
                                          Dean A. Riesen
                                          Its General Partner

                                       TENANT:

                                       GALAGEN, INC.,
                                       A DELAWARE CORPORATION

                                       By /s/Franklin L. Kuhar
                                          ----------------------------
                                          Franklin L. Kuhar
                                          Its Chief Financial Officer

                                       33
<PAGE>

                                   EXHIBIT "A"

                         ADDITIONAL TERMS AND CONDITIONS

This Exhibit forms a part of the Lease dated June ____, 2000, by and between
Carlson Real Estate Company, A Minnesota Limited Partnership, Landlord, and
GalaGen, Inc., a Delaware corporation, Tenant. The parties further agree as
follows:

1.    PARKING. As of the Commencement Date, Landlord hereby leases to Tenant
five (5) parking stalls contained in the lower level parking garage within the
Building as depicted on Exhibit "C-3" to this Lease (the "Parking Spaces") and
Tenant hereby accepts and leases the Parking Spaces, "as is", from Landlord for
the Term and extended term (if any), unless sooner terminated pursuant to any
provision set forth in this Lease. From the Commencement Date, Tenant shall pay
Landlord, as Additional Rent, for such Parking Spaces an annual rate commencing
at One Hundred Twenty-five and 00/100 Dollars ($125.00) per month, plus any and
all taxes, for the first Lease Year for each Parking Space ($125.00 X 5 spaces =
$625.00/month) and increasing 2% each successive Lease Year ("Parking Rent").
Parking Rent shall be paid in equal monthly installments, as Additional Rent.
The Parking Spaces and the Premises may be treated separately by Landlord under
the terms of this Lease and Landlord shall not be required to provide any
improvements in the event of a relocation of the Parking Spaces. Tenant shall
use the Parking Spaces for parking passenger vehicles and for no other purpose.
Parking shall be at the sole risk of Tenant and Tenant assumes all risk for
damage which may occur to any vehicle. The Parking Spaces shall only be
furnished such heat as is necessary for its use and shall not be furnished with
air conditioning. Landlord shall maintain the parking garage. The Parking Spaces
will not affect the determination of Tenant's Pro Rata Share. Except as provided
in this Paragraph 1, Tenant's occupancy of the Parking Spaces shall be subject
to all of the terms and conditions of this Lease as if the Parking Spaces were
included in the definition of "Premises". Failure to pay the monthly parking fee
shall be an Event of Default.

2.    LANDLORD ASSIGNMENT OF LEASE. Tenant hereby specifically consents to any
future assignment of this Lease by Landlord of its right, title and interest in
and to this Lease to Carlson Real Estate Company, A Minnesota Limited
Partnership, ("Carlson") or any affiliate, subsidiary, or parent of Carlson.
Landlord agrees to provide Tenant with written notice of any such assignment.
Upon assignment of this Lease to Carlson, Landlord shall be released from any
and all liabilities, rights and obligations due under the terms of the Lease.

3.    OPTION TO EXTEND. Subject to the superior rights and needs of Born
Information Services, Inc. ("Born"), at the expiration of the initial term of
this Lease, if this Lease shall then be in full force and effect and provided
Tenant is not then in default beyond any applicable cure period, then Tenant
shall have the option to extend this Lease for an extended term of four (4)
years (the "First Extended Term"), upon the same terms and conditions stated in
this Lease, except that the Annual Base Rent shall be at the Market Rental Rate
as determined in accordance with the terms set forth below. In order to exercise
the said option to extend, Tenant shall give Landlord written notice

                                       34
<PAGE>

thereof not less than nine (9) months prior to the expiration of the initial
term (the "Option Notice").

      As used in this Lease, the term "MARKET RENTAL RATE" shall mean the net
rental rate per rentable square foot per year, exclusive of operating costs and
expenses, for space as to which the Market Rental Rate is being determined (the
"Space"), and for the time period as to which such rate is being determined,
that a willing tenant would pay, and a willing Landlord would accept, in arm's
length bona fide negotiations for comparable office space in the Complex, if all
of such space were leased to a single tenant possessing creditworthiness
comparable to Tenant. In determining the Market Rental Rate, the following
factors (and any other factors then known to be pertinent) shall be considered:
the size of the location and floor level; definition of rentable area; the
quality, age, location of the building; tenant clientele of the building; all
economic concessions (such as rental abatements); the manner in which rents are
then subject to escalation; existing leasehold improvements (including, but not
limited to the finish, quality and condition of the space); any leasehold
improvements to be provided by the Landlord, whether directly or by allowance;
whether or not Tenant has engaged a tenant representative broker who is to be
compensated by Landlord.

      Following the receipt of Tenant's written notice of its desire to exercise
this renewal option, Landlord shall provide Tenant with written notice of the
Market Rental Rate (the "Market Rental Rate Notice"). The Market Rental Rate
Notice shall be provided to Tenant at least eight (8) months and fifteen (15)
days prior to the expiration of the Term of this Lease. If Tenant disagrees with
the Market Rental Rate, Tenant's only option shall be to rescind its exercise of
this Option to Extend upon five (5) business days prior written notice to
Landlord and the Lease shall then terminate on the Termination Date. If Tenant
agrees with the Market Rental Rate, Landlord shall then offer the Premises to
Born. Within forty-five days of the date Tenant notifies Landlord of its
acceptance of the Market Rental Rate, Landlord shall notify Tenant whether Born
requires the Premises. In the event Born does not require that Premises, then
Tenant's Option to Extend shall be valid and binding. In the event Born requires
the Premises, thereby precluding the extension of the Term of this Lease for the
Premises, Landlord shall use its best efforts to provide suitable replacement
space within the Carlson Center. If Landlord is unable to provide comparable
space in Carlson Center, reasonably acceptable to Tenant, within ninety (90)
days of receipt of Tenant's Option Notice, then this Lease shall terminate on
the Termination Date and Landlord agrees that Annual Base Rent and Tenant's Pro
Rata Share of Operating Expenses and Real Estate Taxes shall abate for final two
(2) months of the Term of this Lease.

4.    ADDITIONAL FINANCIAL SECURITY. In addition to the Security Deposit
required under Section 1.16 of this Lease, Tenant has deposited with Landlord as
additional financial security, an irrevocable, standby letter of credit from an
accredited financial institution, in the amount of Seventy-five Thousand and
00/100 ($75,000.00) dollars (the "Letter of Credit"). Following the end of the
seventh (7th) month of the term of this Lease and provided Tenant is not then in
default under the terms hereunder, then commencing on the eighth (8th month),
the Letter of Credit shall be reduced by $15,000.00 per month, for every month
Tenant is not in default under the terms of this Lease, until the balance has
been reduced to zero. The proceeds of the Letter of Credit shall be applied in
accordance with the terms of Section 21.8 of this Lease and shall be assignable
to

                                       35
<PAGE>

Carlson Real Estate Company, A Minnesota Limited Partnership and/or Carlson Real
Estate Company, Inc., without the consent of Tenant.

      Additionally, in partial consideration for Landlord agreeing to the terms
of this Lease, Carlson Real Estate Company, Inc. or Carlson Real Estate Company,
A Minnesota Limited Partnership (collectively, "Carlson Real Estate Company")
shall be entitled to subscribe for and purchase from Tenant, in its sole
discretion and at the price of $5.00 per share, up to a maximum of 10,000 fully
paid and non-assessable shares of Tenant's stock. Carlson Real Estate Company
may exercise this warrant at any time during the ten (10) year period commencing
on the date hereof. The terms of this stock subscription warrant shall be set
forth in a separate document executed by Tenant.

                                       36
<PAGE>

                                   EXHIBIT "B"

                           BUILDING LEGAL DESCRIPTION

      As of the execution date of the Lease, the Legal Description of the
Complex is:

OUTLOT H, CARLSON CENTER 9TH ADDITION ACCORDING TO THE RECORDED PLAT THEREOF,
AND SITUATE IN HENNEPIN COUNTY, MINNESOTA.

On or before July 30, 2000, Landlord shall re-plat the Complex and Landlord
intends that the new Complex Legal Description will be :

                      301 CARLSON PARKWAY (THE "BUILDING")

LOT 1, BLOCK 1, CARLSON CENTER 16TH ADDITION ACCORDING TO THE RECORDED PLAT
THEREOF, AND SITUATE IN HENNEPIN COUNTY, MINNESOTA.

                               401 CARLSON PARKWAY

LOT 2, BLOCK 1, CARLSON CENTER 16TH ADDITION ACCORDING TO THE RECORDED PLAT
THEREOF, AND SITUATE IN HENNEPIN COUNTY, MINNESOTA.

                                       37
<PAGE>

                                   EXHIBIT "C"

                         PREMISES AND BUILDING SITE PLAN

                                       38
<PAGE>

                                   EXHIBIT "D"

                                 LANDLORD'S WORK
                                 "BASE BUILDING"

The following work is to be done by Landlord or its agent(s) at Landlord's sole
expense.

1.    PARKING AREA. Landlord shall provide asphalt parking areas described in
      Exhibit "B."

2.    BUILDING SHELL. Landlord shall provide the building shell in accordance
      with the following specifications:

      (a)   FRAME. Structural steel, pre-cast concrete and masonry.

      (b)   WALL. Exterior walls to be unpainted exposed masonry and the
      interior of the exterior walls to be glass, metal studs, insulation and
      5/8" drywall above the glass area only.

      (c)   ROOF.

      (d)   EXTERIOR DOOR(S) AND WINDOWS. Per architectural plan. Window blinds
      shall be included on all windows.

      (e)   UTILITIES. Water service lines to each floor, electric service lines
      to each floor, sanitary sewer line extension to floor.

      (f)   SLAB FLOOR. (No finishes) Machine trowelled.

      (g)   SPRINKLER SYSTEM. Landlord shall install a fire sprinkler system in
      accordance with the requirements of the applicable bureau. The number of
      heads and spacing shall be designed as if the Building were completely
      open and undivided. Any revisions, additions, or relocations which the
      Tenant may desire to have done must be done in accordance with the
      requirements of the applicable rating bureau. All resulting revision work
      to be done on the sprinkler system must be performed as a Tenant
      Improvement.

      (h)   COMMON AREA. Fixtures and finishes installed.

      (i)   CEILING GRID. Installed.

      (j)   CEILING TILE AND LIGHT FIXTURES. Provided, but not installed.

      (k)   VARIABLE AIR VOLUME BOXES. One per every 1,500 rentable square feet.
      Provided, but not installed.

                                       39
<PAGE>

      (l)   HVAC. Roof Top equipment and main distribution lines installed. Base
      energy management system is included.

      (m)   CARD ACCESS. Landlord shall provide an exterior, common area and
      elevator door card access system. Such system shall have the capability to
      allow Tenant access for a Premises card entry system.

                                       40
<PAGE>

                                   EXHIBIT "E"

                              "TENANT IMPROVEMENTS"

1.    Landlord shall complete the installation of Tenant's Improvements
substantially as described in the set of preliminary plans as prepared by
BDH&Young and dated May 22, 2000 (the "Preliminary Plans). Landlord shall pay
the reasonable costs associated with the preparation of the Preliminary Plans.
For the initial Premises of approximately 6,814 rentable square feet of space,
Landlord agrees to contribute up to $22.00 per rentable square foot towards the
Tenant Improvements (the "Improvement Allowance"). The reasonable costs of
preparing construction drawings shall be considered a Tenant Improvement expense
and shall be paid from the Improvement Allowance.

2.    Landlord shall request at least three (3) competent bidders to act as
general contractor (the "General Contractor") for the Tenant Improvements. Upon
receipt of the bid(s), Landlord and Tenant shall review all bids received from
the bidders and shall jointly select the General Contractor based upon such
bids.

3.    Landlord shall be responsible for completion of the Tenant Improvements,
including without limitation (a) filing and obtaining approvals from all
governmental and quasi-governmental authorities having jurisdiction over the
Premises, Building or the Tenant Improvements; (b) causing the General
Contractor to perform its duties as construction manager; and (c) reviewing
architectural, engineering, electrical and other plans and facilitating the bid
process. Landlord shall cause the contractors to perform the work and
installation contemplated by the Preliminary Plans, including any work and
installation reasonably inferable therefrom (such work and installation shall
collectively be referred to as the "Work"), expeditiously and with due diligence
through completion. Except for items otherwise specified by Tenant in the
Preliminary Plans, all Work shall be completed with new materials and in a
first-class and workmanlike manner.

4.    Landlord shall have the right to require that Tenant approve, in advance,
any amount in excess of the Improvement Allowance and shall reserve the right to
require that Tenant pre-approve any excess caused by change orders subsequent to
the commencement of Tenant Improvements. All Tenant Improvements shall be
consistent with other Tenant Improvements in the Building and Landlord shall
have the right to reasonably reject any plans which contain improvements of a
special use or nature with little or no residual value.

                                       41
<PAGE>

                                   EXHIBIT "F"

                          OFFICE RULES AND REGULATIONS

      The following Rules and Regulations for tenants of 301 Carlson Parkway are
additional provisions of the Lease to which they are attached. The capitalized
terms used herein have the same meanings as the terms are given in said Lease.

      1.    USE OF COMMON AREAS. Tenant shall not obstruct the Common Areas, and
Tenant shall not use the Common Areas for any purpose other than ingress and
egress to and from the Premises. The Common Areas, except for the sidewalks, are
not open to the general public and Landlord reserves the right to control and
prevent access to the Common Areas of any person whose presence, in Landlord's
opinion, would be prejudicial to the safety, reputation or interests of the
Building and its tenants.

      2.    NO ACCESS TO ROOF. Tenant has no right of access to the roof of the
Building and shall not install, repair or replace any antenna, aerial, aerial
wires, air-conditioner or other device on the roof of the Building, without the
prior written consent of Landlord. Any such device installed without such
written consent is subject to removal at Tenant's expense without notice at any
time. In any event Tenant shall be liable for any damages or repairs incurred or
required as a result of its installation, use, repair, maintenance or removal of
such devices on the roof and agrees to indemnify and hold harmless Landlord from
any liability, loss, damage, cost or expense, including reasonable attorney's
fees, arising from any activities of Tenant's agents or employees on the roof of
the Building.

      3.    SIGNAGE. No sign, placard, picture, name, advertisement or notice
visible from the exterior of the Premises will be inscribed, painted, affixed or
otherwise displayed by Tenant on or in any part of the Building without the
prior written consent of Landlord. Landlord reserves the right to adopt and
furnish Tenant with general guidelines relating to signs in or on the Building.
All approved signage will be inscribed, painted or affixed at Tenant's expense
by a person approved by Landlord, which approval will not be unreasonably
withheld.

      4.    PROHIBITED USES. The Premises will not be used for manufacturing,
for the storage of merchandise held for sale to the general public, for lodging
or sleeping or for the sale of goods to the general public. Tenant will not
permit any food preparation on the Premises except that Tenant may use
Underwriters' Laboratory approved equipment for microwaving, brewing coffee,
tea, hot chocolate and similar beverages so long as such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.

      5.    JANITORIAL SERVICES. Tenant will not employ any person for the
purpose of cleaning the Premises or permit any person to enter the Building for
such purpose other than Landlord's janitorial service, except with Landlord's
prior written consent. Tenant will not necessitate, and will be liable for the
cost of, any undue amount of janitorial labor by reason of Tenant's carelessness
in or indifference to the preservation of good order and cleanliness in the
Premises or Common Area. Janitorial service will not be furnished to areas in
the Premises on nights

                                       42
<PAGE>

when such areas are occupied after 9:30 p.m., unless such service is extended by
written agreement to a later hour in specifically designated areas of the
Premises.

      6.    KEYS AND LOCKS. Landlord will furnish the Building with a card
access system and Landlord shall provide Tenant with access cards. Landlord may
make a reasonable charge for any additional or replacement cards. Tenant will
not duplicate any cards, alter any locks or install any new or additional lock
or bolt on any door of the Building. On the termination of the Lease, Tenant
will deliver to Landlord all cards to any locks or doors in the Building which
have been obtained by Tenant and if such keys are unavailable, shall pay
Landlord the cost for fabricating such cards.

      7.    NUISANCES AND DANGEROUS SUBSTANCES. Tenant will not conduct itself
or permit its agents, employees, contractors or invitees to conduct themselves,
in the Premises or anywhere on or in the Property in a manner which is offensive
or unduly annoying to any other tenant or Landlord's property managers. Tenant
will not install or operate any phonograph, radio receiver, musical instrument,
or television or other similar device which emits sound into the Common Area or
the premises of any other tenant. Tenant will not use or keep in the Premises or
the Building any kerosene, gasoline, naphtha, benzene or other combustible fluid
or material other than appropriately stored limited quantities thereof
reasonably necessary for the maintenance of office equipment. Without Landlord's
prior written approval, Tenant will not use any method of heating or air
conditioning other than that supplied by Landlord. Tenant will not use or keep
any foul or noxious gas or substance in the Premises or permit or suffer the
Premises to by occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors or
vibrations. Tenant will not interfere in any way with other tenants or those
having business in the Building. Tenant will not bring or keep any animals
(except assistance dogs) in or about the Premises or the Building.

      8.    BUILDING NAME AND ADDRESS. Without Landlord's prior written consent,
Tenant will not use the name of the Building in connection with or in promoting
or advertising Tenant's business except as Tenant's address.

      9.    BUILDING DIRECTORY. A directory for the Building will be provided
for the display of the name and location of tenants. Landlord reserves the right
to approve any additional names Tenant desires to place in the directory and, if
so approved, Landlord may assess a reasonable charge for adding such additional
names.

      10.   WINDOW COVERINGS. No curtains, draperies, blinds, shutters, shades,
screens or other coverings, window ventilators, hangings, decorations or similar
equipment shall be attached to, hung or placed in, or used in or with any
windows of the Building without the prior written consent of Landlord, and
Landlord shall have the right to control all lighting within the Premises that
may be visible from the exterior of the Building.

      11.   WALL COVERINGS. Any wallpaper or vinyl fabric materials which Tenant
may install on painted walls shall be applied with a strippable adhesive. The
use of nonstrippable adhesives

                                       43
<PAGE>

will cause damage to the walls when materials are removed, and repairs made
necessary thereby shall be made by Landlord at Tenant's expense.

      12.   FLOOR COVERINGS. Tenant will not lay or otherwise affix linoleum,
tile, carpet or any other floor covering to the floor of the Premises in any
manner except as approved in writing by Landlord. Tenant will be liable for the
cost of repair of any damage resulting from the violation of this rule or the
removal of any floor covering by Tenant or its contractors, employees or
invitees. Tenant shall provide and maintain hard surface protective mats under
all desk chairs which are equipped with casters to avoid excessive wear and tear
to carpeting. If Tenant fails to provide such mats, the cost of carpet repair or
replacement made necessary by such excessive wear and tear shall be charged to
and paid for by Tenant.

      13.   ELECTRICAL AND TELEPHONE INSTALLATIONS. Landlord will direct
Tenant's electricians as to where and how telephone, telegraph and electrical
wires are to be installed. No boring or cutting for wires will be allowed
without the prior written consent of Landlord. The location of burglar alarms,
smoke detectors, telephones, call boxes and other office equipment affixed to
the Premises shall be subject to the written approval of Landlord.

      14.   OFFICE CLOSING PROCEDURES. Tenant will see that the doors of the
Premises are closed and locked and that all water faucets, water apparatus and
utilities are shut off before Tenant or its employees leave the Premises, so as
to prevent waste or damage. Tenant will be liable for all damage or injuries
sustained by other tenants or occupants of the Building or Landlord resulting
from Tenant's carelessness in this regard or violation of this rule. Tenant will
keep the doors to the Building corridors closed at all times except for ingress
and egress.

      15.   PLUMBING FACILITIES. The toilet rooms, toilets, urinals, wash bowls
and other apparatus shall not be used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
disposed of therein. Tenant will be liable for any breakage, stoppage or damage
resulting from the violation of this rule by Tenant, its employees, agents or
invitees.

      16.   USE OF HAND TRUCKS. Tenant will not use or permit to be used in the
Premises or in the Common Areas any hand trucks, carts or dollies except those
equipped with rubber tires and side guards or such other equipment as Landlord
may approve.

      17.   REFUSE. Tenant will store all its trash and garbage within the
Premises. No material will be placed in the trash boxes or receptacles if such
material may not be disposed of in the ordinary and customary manner of removing
and disposing of trash and garbage in the city in which the Building is located
without being in violation of any law or ordinance governing such disposal. All
trash and garbage removal will be only through such Common Areas provided for
such purposes and at such times as Landlord may designate.

      18.   SOLICITING. Canvassing, peddling, soliciting and distribution of
handbills or any other written materials in the Building are prohibited, and
Tenant will not participate in and will cooperate to prevent such activities.

                                       44
<PAGE>

      19.   PARKING. Tenant will use, and will cause its agents, employees,
contractors and invitees to use, the parking spaces to which it is entitled
under the Lease in a manner consistent with Landlord's directional signs and
markings in the parking area. Specifically, but without limitation, Tenant will
not park, or permit its agents, employees, contractors or invitees to park, in a
manner that impedes access to and from the Building or the parking area or that
violates space reservations for handicapped drivers registered as such with the
Minnesota Department of Motor Vehicles or other designated parkers and Tenant
shall not park any vehicle(s) overnight. Landlord may use such reasonable means
as may be necessary to enforce the directional signs and markings in the parking
area, including but not limited to towing services, and Landlord will not be
liable for any damage to vehicles towed as a result of non-compliance with such
parking regulations.

      20.   FIRE, SECURITY AND SAFETY REGULATIONS. Tenant will comply with all
safety, security, fire protection and evacuation measures and procedures
established by Landlord or any governmental agency.

      21.   RESPONSIBILITY FOR THEFT. Tenant assumes any and all responsibility
for protecting the Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed. Landlord
shall not be responsible for lost or stolen property from Tenant's Premises or
the Common Area regardless of whether or not such loss occurs when such area is
locked against entry.

      22.   SALES AND AUCTIONS. Tenant will not display or sell merchandise
outside the exterior walls and doorways of the Premises nor use such areas for
storage. Tenant will not install any exterior lighting, amplifiers or similar
devices or use in or about the Premises and advertising medium which may be
heard or seen outside the Premises, including flashing lights, searchlights,
loudspeakers, phonographs or radio broadcasts. Tenant will not conduct or permit
to be conducted any sale by auction in, upon or from the Premises or elsewhere
in the Property, whether said auction be voluntary, involuntary, pursuant to any
assignment for the payment of creditors or pursuant to any bankruptcy or other
insolvency proceeding.

      23.   LANDLORD NOTICE. Tenant shall give prompt notice to Landlord of any
accidents or defects in plumbing, electrical fixtures or heating apparatus so
that such accidents or defects may be attended to promptly.

      24.   CONTRACTORS. Tenant will refer all contractors, contractor's
representatives and installation technicians, rendering any service to Tenant,
to Landlord for Landlord's supervision, approval, and control before performance
of any contractual service. This provision shall apply to all work performed in
the Building including installations of telephones, telegraph equipment,
electrical devices and attachments and installations of any nature affecting
floors, walls, woodwork, trim, windows, ceilings, equipment or any other
physical portion of the Building.

      25.   MOVING. Movement in or out of the Building of furniture, office
equipment, or other bulky materials, or movement through the Building entrances
or lobby shall be restricted to hours

                                       45
<PAGE>

designated by Landlord. Landlord reserves the right to prescribe the weight,
size and position of all equipment, materials, furniture or other property
brought into the Building, and no property will be received in the Building or
carried up or down the freight elevator or stairs except during such hours,
along such routes, in such manner and by such persons as may be designated by
Landlord. Tenant is to assume all risk as to damage to articles moved and injury
to persons or public engaged or not engaged in such movement, including
equipment, property, and personnel of Landlord if damaged or injured as a result
of acts in connection with such service performed for Tenant and Tenant hereby
agrees to indemnify and hold harmless Landlord from and against any such damage,
injury, or loss, including attorneys' fees.

      26.   WEIGHT LOADS. No safe or other object heavier than the lift capacity
of the freight elevators of the Building shall be brought into or installed on
the Premises. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designated to carry and
which is allowed by law. The moving of safes shall occur only between such hours
as may be designated by, and only upon previous notice to, the manager of the
Building, and the persons employed to move safes in or out of the Building must
be acceptable to Landlord.

      27.   OFF-HOUR ACCESS. On Sundays and legal holidays, and on other days
between the hours of 6 p.m. and 6 a.m. access to the Building, or to the halls,
corridors, elevators or stairways in the Building, or to the Premises may be
refused unless the person seeking access is known to the watchman of the
Building and has a pass or is properly identified. Landlord shall in no case be
liable for damages for the admission to or exclusion from the Building of any
person who the Landlord had the right to exclude under Rule 1 above. In case of
invasion, mob, riot, public excitement, or other commotion, Landlord reserves
the right to prevent access to the Building during the continuance of the same
by closing the doors or otherwise, for the safety of the tenants or Landlord and
protection of property in the Building.

      28.   UTILITY CONSERVATION. Tenant shall not waste electricity, water or
air conditioning and agrees to cooperate fully with Landlord to assure the most
effective operating of the Building's heating and air conditioning, and shall
not allow the adjustment (except by Landlord's authorized building personnel) of
any controls other than room thermostats installed for Tenant's use. Tenant
shall keep corridor doors closed.

      29.   ENFORCEMENT. Landlord may waive any one or more of these Rules and
Regulations for the benefit of any particular tenant or tenants, but no such
waiver by Landlord will be construed as a waiver of such Rule in favor of any
other tenant or tenants or prevent Landlord from thereafter fully enforcing
these Rules and Regulations against any or all of the tenants of the Building.

      30.   EFFECT ON LEASE. These Rules and Regulations are in addition to, and
shall not be construed to in any way modify or amend, in whole or in part, the
terms, covenants, agreements and conditions of the Lease. Violation of these
Rules and Regulations constitutes a failure to fully perform the provisions of
the Lease.

                                       46
<PAGE>

      31.   ADDITIONAL AND AMENDED RULES. Landlord reserves the right to rescind
or amend these Rules and Regulations and/or adopt any other reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Building and for the preservation of good order
therein, with which Tenant shall be required to comply.

                                       47
<PAGE>

                                   EXHIBIT "G"

                          OPERATING EXPENSE EXCLUSIONS

a.    the cost of decorating, redecorating, special cleaning, or other services
not provided on a regular basis to all tenants of the Building (costs of
decorating the Common Areas for holidays and the like shall be considered an
Operating Expense);

b.    any costs associated with the initial non-recurring interior or initial
non-recurring exterior landscaping associated with the original construction of
the Building or Complex;

c.    Landlord's general overhead (including salaries and cost of benefits for
building personnel above the grade level of general manager) except for the
management fee specifically set forth in Section 8;

d.    wages, salaries, fees, and fringe benefits paid to executive personnel or
officers or partners of Landlord and compensation or benefits provided to
clerks, attendants, or other persons in commercial concessions operated by
Landlord or others;

e.    all costs relating to activities for the solicitation and execution of
leases for space in the Building including without limitation commissions,
promotional and advertising expense;

f.    costs of correcting items which are the result of defects in the design or
construction of the Building or the materials used in the construction of the
Building (including but not limited to latent defects in the Building) or in the
Building equipment or appurtenances thereto, except that, for the purposes of
this subsection, conditions resulting from ordinary wear and tear and use shall
not be deemed defects;

g.    costs of initial cleaning of, and rubbish removal from, the Building to be
performed prior to final completion of construction of the Building or Common
Areas;

h.    any increase in the cost of Landlord's insurance caused by the specific
uses of another tenant.

i.    the cost of any items for which Landlord is reimbursed by insurance, or
otherwise compensated by a tenant, or another party other than by tenants of the
Building, pursuant to clauses similar to Section 8 of the Lease;

j.    any operating cost representing an amount paid to a related corporation,
entity or person which is in excess of the fair market value of similar services
in the western Minneapolis suburban office market;

k.    the cost of any work or services performed for or facilities furnished to
any tenant of the Building to a greater extent or in a manner more favorable to
such tenant than is available to Tenant:

                                       48
<PAGE>

l.    costs, including costs of plans, construction, permit, license and
inspection costs, incurred with respect to the installation of tenant
improvements made for tenants in the Building or incurred in renovating or
otherwise improving, decorating, painting or redecorating vacant space for
tenants or other occupants of the Building;

m.    except as otherwise specifically included in Operating Expenses as set
forth in the Lease, the cost of regular and overtime wages and salaries or any
other expenses to Landlord in curing its defaults or performing work expressly
provided in this Lease to be borne at Landlord's expense;

n.    any costs, fines, or penalties incurred due to violation by Landlord of
any law or other governmental rule or authority, provided such costs, fines or
penalties were not caused by Tenant.

o.    damage and repairs necessitated by the negligence or willful misconduct of
Landlord or Landlord's employees, contractors or agents;

p.    attorney's, accountants and other professionals fees and expenses incurred
in connection with: negotiations or disputes with tenants, other occupants, or
prospective tenants or other occupants; accounting, legal or other professional
fees relating to the ownership, leasing, construction, or sale of the Building
or the Office Complex except as specifically provided in this Lease.

q.    finance charges, interest and other payments including without limitation
payments of principal and interest on any mortgages and/or other debt
encumbering the Building or Common Areas, or obligation in the nature of a
mortgage or other project financing and rental payments on any ground lease or
other underlying lease;

r.    except for costs associated with the rental of equipment in an emergency
situation, rental payments incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a capital nature,
except operating/maintenance equipment not affixed to the Building or Common
Areas which is used in providing janitorial or similar services;

s.    any charge for Landlord's income tax, excess profit tax, franchise tax,
gross receipts, or like tax on Landlord's business or resulting from Tenant's
lease with Landlord, except that in the event a "rental tax" is ever applied to
the rent paid, that tax will be the responsibility of each tenant.

t.    The cost of subscriptions, political donations, professional fees (except
as specifically provided in the Lease), travel costs, entertainment and all
other dues and donations;

u.    Except for Landlord's management fee, any charges that would result in
Landlord collecting in excess of one hundred percent (100%) of all Operating
Expenses;

                                       49
<PAGE>

v.    capital costs for sculpture, paintings or other art objects; and

w.    costs associated with the collection and write-off of bad debts

                                       50
<PAGE>

                                   EXHIBIT "H"

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

      THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"AGREEMENT") is made by and between TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA, a New York corporation with offices at 730 Third Avenue, New York,
New York 10017 ("LENDER") and Galagen, Inc., a Delaware corporation with its
principal place of business at _________________________ ("TENANT").

                                    RECITALS:

      A.    Lender has made or is about to make a loan (together with all
advances and increases, the "Loan") to Jesmar II, Inc., a Minnesota corporation
("BORROWER").

      B.    Borrower, as landlord, and Tenant have entered into a Lease dated
______ as amended by amendments dated ____________________ (the "LEASE") which
leased to Tenant Suite 301 (the "LEASED SPACE") located in the Property (defined
below).

      C.    The Loan is or will be secured by the Mortgage, Assignment of Leases
and Rents, Fixture Filing Statement and Security Agreement recorded or to be
recorded in the official records of the County of Hennepin, State of Minnesota
(together with all advances, increases, amendments or consolidations, the
"MORTGAGE") and the Assignment of Leases and Rents recorded or to be recorded in
such official records (together with all amendments or consolidations, the
"ASSIGNMENT"), assigning to Lender the Lease and all rent, additional rent and
other sums payable by Tenant under the Lease (the "RENT").

      D.    The Mortgage encumbers the real property, improvements and fixtures
located at 301 Carlson Parkway in the City of Minnetonka, County of Hennepin,
State of Minnesota, commonly known as 301 Carlson Parkway, and described on
EXHIBIT "A" (the "Property").

      IN CONSIDERATION of the mutual agreements contained in this Agreement,
Lender and Tenant agree as follows:

      1.    The Lease and all of Tenant's rights under the Lease are and will
remain subject and subordinate to the lien of the Mortgage and all of Lender's
rights under the Mortgage and Tenant will not subordinate the Lease to any other
lien against the Property without Lender's prior consent.

      2.    This Agreement constitutes notice to Tenant of the Mortgage and the
Assignment and, upon receipt of notice from Lender, Tenant will pay the Rent as
and when due under the Lease to Lender and the payments will be credited against
the Rent due under the Lease.

                                       51
<PAGE>

      3.    Tenant does not have and will not acquire any right or option to
purchase any portion of or interest in the Property.

      4.    Tenant and Lender agree that if Lender exercises its remedies under
the Mortgage or the Assignment and if Tenant is not then in default under this
Agreement and if Tenant is not then in default beyond any applicable grace and
cure periods under the Lease:

      (a)   Lender will not name Tenant as a party to any judicial or
non-judicial foreclosure or other proceeding to enforce the Mortgage unless
joinder is required under applicable law but in such case Lender will not seek
affirmative relief against Tenant, the Lease will not be terminated and Tenant's
possession of the Leased Space will not be disturbed;

      (b)   If Lender or any other entity (a "SUCCESSOR LANDLORD") acquires the
Property through foreclosure, by other proceeding to enforce the Mortgage or by
deed-in-lieu of foreclosure (a "FORECLOSURE"), Tenant's possession of the Leased
Space will not be disturbed and the Lease will continue in full force and effect
between Successor Landlord and Tenant; and

      (c)   If; notwithstanding the foregoing, the Lease is terminated as a
result of a Foreclosure, a Lease between Successor Landlord and Tenant will be
deemed created, with no further instrument required, on the same terms as the
Lease except that the term of the replacement Lease will be the then unexpired
term of the Lease. Successor Landlord and Tenant will execute a replacement
Lease at the request of either.

      5.    Upon Foreclosure, Tenant will recognize and attorn to Successor
Landlord as the landlord under the Lease for the balance of the term. Tenant's
attornment will be self-operative with no further instrument required to
effectuate the attornment except that at Successor Landlord's request, Tenant
will execute instruments reasonably satisfactory to Successor Landlord
confirming the attornment.

      6.    Successor Landlord will not be:

      (a)   liable for any act or omission of any prior landlord under the Lease
occurring before the date of the Foreclosure except for repair and maintenance
obligations of a continuing nature imposed on the landlord under the Lease;

      (b)   required to credit Tenant with any Rent paid more than one month in
advance or for any security deposit unless such Rent or security deposit has
been received by Successor Landlord;

      (c)   bound by any amendment, renewal or extension of the Lease that is
inconsistent with the terms of this Agreement or is not in writing and signed
both by Tenant and landlord;

      (d)   bound by any reduction of the Rent unless the reduction is in
connection with an extension or renewal of the Lease at prevailing market terms
or was made with Lender's prior consent;

                                       52
<PAGE>

      (e)   bound by any reduction of the term(1) of the Lease or any
termination, cancellation or surrender of the Lease unless the reduction,
termination, cancellation or surrender occurred during the last 6 months of the
term or was made with Lender's prior consent;

      (f)   bound by any amendment, renewal or extension of the Lease entered
into without Lender's prior consent if the Leased Space represents 50% or more
of the net rentable area of the building in which the Leased Space is located;

      (g)   subject to any credits, offsets, claims, counterclaims or defenses
that Tenant may have that arose prior to the date of the Foreclosure or liable
for any damages Tenant may suffer as a result of any misrepresentation, breach
of warranty or any act of or failure to act by any party other than Successor
Landlord;

      (h)   bound by any obligation to make improvements to the Property,
including the Leased Space, to make any payment or give any credit or allowance
to Tenant provided for in the Lease or to pay any leasing commissions arising
out of the Lease, except that Successor Landlord will be;

            (i)   bound by any such obligations provided for in the
            Lender-approved form Lease;

            (ii)  bound by any such obligations if the overall economic terms of
            the Lease (including the economic terms of any renewal options)
            represented market terms for similar space in properties comparable
            to the Property when the Lease was executed; and

            (iii) bound to comply with the casualty and condemnation restoration
            provisions included in the Lease provided that Successor Landlord
            receives the insurance or condemnation proceeds;

or

      (i)   liable for obligations under the Lease with respect to any off-site
property or facilities for the use of Tenant (such as off-site leased space or
parking) unless Successor Landlord acquires in the Foreclosure the right, title
or interest to the off-site property.

      7.    Lender will have the right, but not the obligation, to cure any
default by Borrower, as landlord, under the Lease. Tenant will notify Lender of
any default that would entitle Tenant to terminate the Lease or abate the Rent
and any notice of termination or abatement will not be effective unless Tenant
has so notified Lender of the default and Lender has had a 30-day cure period
(or such longer period as may be necessary if the default is not susceptible to
cure within 30 days) commencing on the latest to occur of the date on which (i)
the cure period under the Lease expires; (ii) Lender receives the notice
required by this paragraph; and (iii) Successor Landlord obtains possession of
the Property if the default is not susceptible to cure without possession.

-------------------

(1)   For purposes of this subparagraph "the term of the Lease" includes any
renewal term after the right to renew has been exercised.

                                       53
<PAGE>

      8.    All notices, requests or consents required or permitted to be given
under this Agreement must be in writing and sent by certified mail, return
receipt requested or by nationally recognized overnight delivery service
providing evidence of the date of delivery, with all charges prepaid, addressed
to the appropriate party at the address set forth above.

      9.    Any claim by Tenant against Successor Landlord under the Lease or
this Agreement will be satisfied solely out of Successor Landlord's interest in
the Property and Tenant will not seek recovery against or out of any other
assets of Successor Landlord. Successor Landlord will have no liability or
responsibility for any obligations under the Lease that arise subsequent to any
transfer of the Property by Successor Landlord.

      10.   This Agreement is governed by and will be construed in accordance
with the laws of the state or commonwealth in which the Property is located.

      11.   Lender and Tenant waive trial by jury in any proceeding brought by,
or counterclaim asserted by, Lender or Tenant relating to this Agreement.

      12.   If there is a conflict between the terms of the Lease and this
Agreement, the terms of this Agreement will prevail as between Successor
Landlord and Tenant.

      13.   This Agreement binds and inures to the benefit of Lender and Tenant
and their respective successors, assigns, heirs, administrators, executors,
agents and representatives.

      14.   This Agreement contains the entire agreement between Lender and
Tenant with respect to the subject matter of this Agreement, may be executed in
counterparts that together constitute a single document and may be amended only
by a writing signed by Lender and Tenant.

                                       54
<PAGE>

      IN WITNESS WHEREOF, Lender and Tenant have executed and delivered this
Agreement as of _____________, 2000.

                                       TEACHERS INSURANCE AND ANNUITY
                                       ASSOCIATION OF AMERICA, a New
                                       York corporation

                                       By:
                                          --------------------------------
                                          Name:
                                               ---------------------------
                                          Title:
                                                --------------------------

                                       GALAGEN, INC.,
                                       A DELAWARE CORPORATION

                                       By:
                                          --------------------------------
                                          Name:
                                               ---------------------------
                                          Title:
                                                --------------------------

                                       55
<PAGE>

                                 ACKNOWLEDGMENT

State of ________________

County of_______________

      On this the _______ day of ______________, 2000 before me, the undersigned
officer, personally appeared ________________________ who acknowledged
himself/herself to be the _________________________of Teachers Insurance and
Annuity Association of America, a corporation, and that he/she, as such
________________________ being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself/herself as ___________________________.

      In witness whereof I hereunto set my hand and official seal.

                                       ----------------------
                                       Notary Public

                                 ACKNOWLEDGMENT

State of ________________

County of_______________

      On this the _______ day of ______________, 2000 before me, the undersigned
officer, personally appeared ________________________ who acknowledged
himself/herself to be the _________________________of
_____________________________________, and that he/she, as such
________________________ being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself/herself as ___________________________.

      In witness whereof I hereunto set my hand and official seal.

                                       ----------------------
                                       Notary Public

                                       56
<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

 Outlot H, Carlson Center 9th Addition according to the recorded plat thereof,
                   and situate in Hennepin County, Minnesota.

                                       57
<PAGE>

                                   EXHIBIT "I"

                              ESTOPPEL CERTIFICATE

                        STATEMENT OF TENANT IN RE: LEASE
                              [Tenant's Letterhead]

                                                                   Date: _______

Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017
Attn: _______________________

                                                 RE: TIAA Appl. #
                                                     TIAA Mtge. #
                                                     301 Carlson Parkway
                                                     Minnetonka, MN  55305

Ladies and Gentlemen:

      It is our understanding that you have committed to place a mortgage upon
the subject premises and as a condition precedent thereof have required this
certification of the undersigned.

      The undersigned, as lessee, under that certain Lease dated ________, made
with Jesmar II, Inc., as lessor, hereby ratifies said Lease and certifies that:

      1.    the "Commencement Date" of said Lease is ____________________; and

      2.    the undersigned is presently solvent and free from reorganization
            and/or bankruptcy and is in occupancy, open, and conducting business
            with the public in the premises; and

      3.    the operation and use of the premises do not involve the generation,
            treatment, storage, disposal or release of a hazardous substance or
            a solid waste into the environment other than to the extent
            necessary to conduct its ordinary course of business in the premises
            and in accordance with all applicable environmental laws, and that
            the premises are being operated in accordance with ail applicable
            environmental laws, zoning ordinances and building codes; and

      4.    the current base rental payable pursuant to the terms of said Lease
            is $____________ per annum; and further, additional rental pursuant
            to said Lease is payable as follows: _________________________; and

                                       58
<PAGE>

      5.    said Lease is in full force and effect and has not been assigned,
            modified, supplemented or amended in any way (except by agreement(s)
            dated _____), and neither party thereto is in default thereunder;
            and

      6.    the Lease described above represents the entire agreement between
            the parties as to the leasing of the premises; and

      7.    the term of said Lease expires on __________________; and

      8.    all conditions under said Lease to be performed by the lessor have
            been satisfied, including, without limitation, all co-tenancy
            requirements thereunder, if any; and

      9.    all required contributions by lessor to lessee on account of
            lessee's improvements have been received; and

      10.   on this date there are no existing defenses or offsets, claims or
            counterclaims which the undersigned has against the enforcement of
            said Lease by the lessor; and

      11.   no rental has been paid in advance and no security (except the
            security deposit in the amount of $______ ) has been deposited with
            lessor; and

      12.   lessee's floor area is ____________square feet; and

      13.   the most recent payment of current basic rental was for the payment
            due on ______________________, 2000, and all basic rental and
            additional rental payable pursuant to the terms of the Lease have
            been paid up to said date; and

      14.   the undersigned acknowledges notice that lessor's interest under the
            Lease and the rent and all other sums due thereunder will be
            assigned to you as part of the security for a mortgage loan by you
            to lessor. In the event that Teachers Insurance and Annuity
            Association of America, as lender, notifies the undersigned of a
            default under the mortgage and demands that the undersigned pay its
            rent and all other sums due under the Lease to lender, lessee agrees
            that it shall pay its rent and all such other sums to lender.

                                       Very truly yours,

                                       ----------------------------
                                       Galagen, Inc. (Lessee)

                                       By:
                                          -------------------------
                                       Its:
                                           ------------------------

                                       59
<PAGE>

                 AUTHORIZATION FOR AUTOMATIC WITHDRAWAL OF RENT

RE:   Leased Premises at: 301 Carlson Parkway, Suite 301, Minnetonka, Minnesota

Commencing on ______________, 2000, the undersigned authorizes Carlson Real
Estate Company to withdraw funds from the account identified below for the
Monthly Installment of Annual Base Rent and Additional Rents as defined in the
lease, relating to the above premises on the FIFTH business day of each month
during the lease term. Carlson Real Estate Company will notify payor of the then
current amount due prior to the day of funds transfer. This authorization shall
remain effective until such time as the undersigned delivers written notice to
Carlson Real Estate Company of the withdrawal of said authorization.

Please attach a voided check OR fill in the banking information for the account.

BANK:
          ------------------------------

ADDRESS:
          ------------------------------

          ------------------------------

ACCOUNT #:
          ------------------------------

ABA #:
         ------------------------------

------------------------------
TENANT

------------------------------
SIGNATURE

------------------------------
TITLE

------------------------------
DATE

                                       60<PAGE>

                                                                   Exhibit 10.42

                                                            Exhibit 10.42

                                SUPPLY AGREEMENT

                                     BETWEEN

                               ESTEE LAUDER, INC.

                                       AND

                                  GALAGEN INC.

                                                            DATED: JULY 11, 2000

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                                                                   PAGE

<S>    <C>                                                                 <C>
1.     Definitions..........................................................1
2.     Purchase and Sale; Ingredient Specifications.........................2
3.     Price; Payment; Miscellaneous Terms and Conditions of Sale...........3
4.     Trademarks...........................................................3
5.     Forecasts; Shipments; Orders.........................................3
6.     Inspection of Shipments..............................................5
7.     Trade Secrets and Confidentiality....................................5
8.     Safety and Health-Responsible Care...................................7
9.     Quality of the Ingredient; Certain Regulatory Matters................7
10.    Indemnification......................................................9
11.    Term and Termination................................................10
12.    Dispute Resolution..................................................11
13.    Publicity...........................................................12
14.    Force Majeure.......................................................12
15.    Assignability.......................................................12
16.    Waiver; Severability................................................13
17.    Governing Law.......................................................13
18.    Notices.............................................................13
19.    Headings............................................................14
20.    Entire Agreement....................................................14
21.    Parties' Relationship...............................................14
22.    Counterparts........................................................14

</TABLE>

<PAGE>

                                SUPPLY AGREEMENT

         This Supply Agreement, including all attached Annexes which are
incorporated and made a part hereof, dated this 11th day of July, 2000 (the
"EFFECTIVE DATE"), by and between ESTEE LAUDER, INC., a Delaware corporation
(together with its Affiliates "EL"), and galagen Inc., a Delaware corporation
("GALAGEN"), sets forth the terms and conditions for the commercial supply of
the Ingredient (as defined herein);

         WHEREAS, GalaGen owns or has rights to certain patents and know-how
applicable to the Ingredient;

         WHEREAS, GalaGen has the requisite experience and facilities to
manufacture and package the Ingredient; and

         WHEREAS, EL and its Affiliates wish to purchase commercial quantities
of the Ingredient from GalaGen, and GalaGen is willing to supply the Ingredient
to EL and its Affiliates for use in the Field of Use (as defined herein) upon
the terms and conditions set forth herein;

         NOW, THEREFORE, the parties hereto agree as follows:

         1.       DEFINITIONS

         The following terms shall have the meanings set forth below, or where
indicated, for purposes of this Agreement.

         "ACT" means the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, as amended from time to time and all other applicable
laws and regulations in any other jurisdiction.

         "AFFILIATE(S)" means, in the case of either party, any corporation,
joint venture, or other business entity which directly or indirectly controls,
is controlled by, or is under common control with that Party. "Control," as used
in this definition, means having the power to direct, or cause the direction of,
the management and policies of an entity, whether through ownership of voting
securities, by contract or otherwise.

         "COMMERCIAL QUANTITIES" means quantities of the Ingredient sufficient
for launch of products containing the Ingredient and on-going market supply
consistent with the forecasting mechanism set forth in Section 4 of this
Agreement.

         "EL MANUFACTURING FACILITY" shall mean a manufacturing and/or packaging
facility of EL or an EL Affiliate.

                                       1

<PAGE>

         "FIELD OF USE" means cosmetic and skin care products.

         "INGREDIENT" means the spray dried colostrum ingredient specified in
ANNEX A to this Agreement.

         "MANUFACTURING PROCESS" means the processes, means and procedures used
by GalaGen in the manufacture and production of the Ingredient.

         "TECHNICAL INFORMATION" means all know how, trade secrets, inventions,
data, technology and other information now owned or licensed by GalaGen or
hereafter acquired or licensed by GalaGen during the term of this Agreement that
are necessary or useful to the manufacture, packaging, use or sale of Ingredient
including, but not limited to, (i) medical, chemical and other scientific data,
(ii) processes and analytic methodology used in the validation, stability
testing and other testing or analysis of such Ingredient and (iii) packaging and
manufacturing data and processes.

         2.       PURCHASE AND SALE; INGREDIENT SPECIFICATIONS

         2.1      (a) During the term of this Agreement, and subject to the
provisions hereof, GalaGen agrees to manufacture, package, and supply the
Ingredient for use in the Field of Use to EL and its Affiliates in sufficient
quantities to meet the total requirements, consistent with the forecasting and
ordering provisions set forth in Section 5 of this Agreement, of EL and its
Affiliates, and EL agrees to purchase from GalaGen all of its requirements for
the Ingredient for the term of this Agreement so long as GalaGen is able to
supply quantities of the Ingredient ordered by EL in accordance with the
forecasting and ordering provisions set forth in Section 5 of this Agreement.

                  (b) GalaGen retains the right to manufacture, package and
supply to additional parties Ingredient and products for use in the Field of
Use, and EL retains the right to purchase colostrum from third-party sources if
GalaGen is unable to supply quantities of the Ingredient ordered by EL in
accordance with the forecasting and ordering provisions set forth in Section 5
of this Agreement.

         2.2      (a) GalaGen shall manufacture and package the Ingredient
supplied to EL in accordance with mutually agreed upon specifications to be
attached as ANNEX A to this Agreement (the "SPECIFICATIONS"), as ANNEX A is
updated from time to time. Once established, no change in the specifications,
methods, processes and/or procedures set forth in ANNEX A may be made unless (i)
EL agrees in writing thereto or (ii) such change is required by any regulatory
agency that has jurisdiction over EL, GalaGen or the Ingredient; PROVIDED THAT,
GalaGen shall notify EL in writing prior to making any such required change.
Ingredient provided in accordance with such Specifications shall be
substantially identical, in all relevant aspects, to the samples of Ingredient
with which GalaGen has previously supplied EL.

                                       2

<PAGE>

         3.       PRICE; PAYMENT; MISCELLANEOUS TERMS AND CONDITIONS OF SALE

         3.1      Pricing for Commercial Quantities of the Ingredient shall be
$[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]/kg.

         3.2      GalaGen will invoice EL for each shipment of the Ingredient
delivered to EL. Payment for all such invoices shall be made by check or bank
transfer within thirty (30) days of the date of the invoice.

         3.3      GalaGen shall deliver all orders on a business day to EL
F.O.B. GalaGen. Title and risk of loss to all shipments of the Ingredient shall
pass to EL upon delivery of the Ingredient by GalaGen to the carrier, but
passage of title shall not constitute acceptance of the Ingredient.

         4.       TRADEMARKS

         4.1      The parties agree to work together to develop a mutually
acceptable trademark ("Trademark") to be used in association with the
Ingredient. The trademark shall be displayed prominently on the packaging of EL
products containing the Ingredient. The Trademark shall be jointly owned by
GalaGen and EL. During the term of this Agreement and any renewals, EL shall
have the right to use the Trademark on its products containing the Ingredient.
During the term of this Agreement and any renewals, GalaGen shall be permitted
to use the Trademark in its own advertising, promotions and press releases
relating to the Ingredient, subject to prior approval by EL of the content of
such advertising, promotions and press releases. Upon termination of this
Agreement and any renewals, neither EL nor GalaGen will make any further use of
the Trademark.

         4.2      GalaGen acknowledges that it is not permitted to use any EL
Trademark except for the Trademark, and further agrees not to use, or permit to
be used, the Trademark in connection with any third party.

         4.3      EL agrees not to use the Trademark in connection with any EL
product that does not contain the Ingredient, or in any product containing
colostrum not purchased from GalaGen.

         5.       FORECASTS; SHIPMENTS; ORDERS

         5.1      (a) In order to assist GalaGen in planning its production, EL
will provide GalaGen with a six month rolling forecast of the quantities of
Ingredient required by EL, by month, for the following six months. The forecast
shall be made in good faith and shall constitute EL's best estimates of future
orders, but shall not be binding on EL; PROVIDED THAT, the aggregate amount of
Ingredient to be shipped under firm purchase orders provided by EL in accordance
with Section 5.1(b) hereof shall, for any given month, be no more than 110%, and
no less than 90%, of the forecasted shipments for such month as indicated in the
forecast provided by EL in the month

                                       3

<PAGE>

         immediately preceding the month in which the purchase order is issued.
         EL shall provide its first six month forecast within 90 days after the
         Effective Date and each subsequent update will be provided no later
         than five (5) business days prior to the beginning of the next monthly
         period. GalaGen shall, no later than ten (10) business days after
         receipt of each such forecast, notify EL in writing of any prospective
         problems of which GalaGen is aware that might prevent GalaGen from
         meeting EL's forecasted order quantities or estimated delivery dates.
         Except as provided elsewhere in this Agreement and unless GalaGen has
         previously identified to EL potential problems in meeting EL's
         forecasted requirements, GalaGen shall use its best efforts to deliver
         all of the Ingredient ordered during any month, pursuant to purchase
         orders provided under Section 5.1(b).

                  (b) EL will provide GalaGen with its firm purchase orders at
least one month prior to the anticipated delivery date for the Ingredient and in
accordance with the batch size increments specified in ANNEX B. To facilitate
GalaGen's responsiveness to changes in EL's requirements, while minimizing
exposure to obsolescence, GalaGen is authorized to procure necessary materials
based upon forecast by mutual agreement. Manufacturing and procurement lead
times, and the authorized procurement horizon are delineated in ANNEX B,
attached hereto and made part hereof, as may be amended from time to time by
mutual agreement of both parties. EL agrees to accept partial shipments of
Ingredient should, for any reason, it become necessary to ship in advance of
order completion.

                  (c) EL agrees to be held liable for all obsolescence of
materials resulting from changes in Ingredient or purchase order requirements,
provided GalaGen has ordered in accordance with the authorized procurement
horizons specified in Section 5.1(a) and/or standard container sizes and/or
minimum order quantities. GalaGen will use all reasonable commercial efforts to
mitigate obsolescence potential. GalaGen will submit supporting documentation on
all claims of obsolescence and requests for reimbursement thereof.

         5.2      Each purchase order will specify the quantity of the
Ingredient ordered and the required delivery date; PROVIDED THAT, such purchase
order shall not specify a delivery date sooner than one month from the date the
telecopied purchase order is sent by EL; PROVIDED, FURTHER, THAT, the aggregate
amount of Ingredient to be shipped under firm purchase orders provided by EL in
accordance with Section 5.1(b) hereof shall, for any given month, be no more
than 110%, and no less than 90%, of the forecasted shipments for such month as
indicated in the forecast provided by EL in the month immediately preceding the
month in which the purchase order is issued; PROVIDED, FURTHER, THAT, GalaGen
shall use commercially reasonable efforts to accommodate "Rush" orders from EL.
EL shall bear the reasonable incremental costs of "Rush" orders. Transportation
details will be coordinated between EL and GalaGen.

         5.3      If for any reason GalaGen experiences a shortage of materials
required to manufacture products and GalaGen is therefore unable to supply EL
with the full quantity of the Ingredient ordered by it and accepted by GalaGen,
EL shall be entitled to the same proportionate quantity of available GalaGen
product as the quantity of the Ingredient purchased by EL from

                                       4

<PAGE>

GalaGen in the twelve (12) months preceding the supply shortage bears to all
orders for applicable products received by GalaGen from other customers.

         5.4      If GalaGen fails to deliver the Ingredient in the quantities
requested by EL within twenty (20) business days of the date of delivery as
specified in a purchase order issued in accordance with Section 5.1(a), then EL
shall have the right to cancel the amount of the purchase order that is
unfulfilled. Said right shall apply only to the extent that such purchase order
is unfulfilled.

         6.       INSPECTION OF SHIPMENTS

         GalaGen shall provide EL with a certificate of analysis of the
Ingredient with each shipment, with which such shipment is presumed to conform.
EL will have the right to inspect shipments of the Ingredient and verify their
conformity to the order. If EL determines that the Ingredient does not conform
to the applicable specifications and agreements or there are other delivery
errors, EL will notify GalaGen in writing of all nonconformities that existed at
the time of delivery of the Ingredient. Such notification shall be made as soon
as reasonably possible after discovery of the nonconformity, but not later than
thirty (30) days after delivery of the lot. Such notice shall specify the
reasons for rejection. If EL does not reject a shipment of the Ingredient within
thirty (30) days after delivery, EL will be deemed to have accepted the
shipment. After notice of rejection is received by GalaGen, EL shall cooperate
in good faith with GalaGen in determining whether rejection is necessary or
justified. If GalaGen accepts EL's determination that the shipment of Ingredient
is nonconforming, EL's remedy shall be as set forth in Section 9.2. If GalaGen
does not accept EL's determination that the Ingredient are nonconforming, EL or
GalaGen may seek resolution of the dispute in accordance with Section 12.

         7.       TRADE SECRETS AND CONFIDENTIALITY

         7.1      Both GalaGen and EL agree that, subject to the limitations set
forth in Section 7.3, all information disclosed to the other party, whether in
oral, written or graphic form, and identified in writing by the disclosing party
as confidential shall be deemed "CONFIDENTIAL INFORMATION" of the disclosing
party. In particular, Confidential Information shall be deemed to include, but
not be limited to any patent application or drawing or potential patent claim,
trade secrets, information, ideas, inventions, samples, processes, procedures,
methods, formulations, packaging designs and materials, test data, future
development plans, launch dates for products including the Ingredient,
technological know-how and engineering, manufacturing, regulatory, marketing,
servicing, sales, financing or human resources matters relating to the
disclosing party and its business.

         7.2      Both parties will take the precautions it normally takes with
its own confidential and proprietary information to prevent disclosure of
Confidential Information to third parties.

         7.3      Both GalaGen and EL agree that, notwithstanding the above, the
obligations of confidentiality shall not be deemed to apply to:

                                       5

<PAGE>

                  7.3.1 Information that at the time of disclosure is or
thereafter becomes generally known or available to the public, through no
wrongful act or failure to act on the part of the receiving party.

                  7.3.2 Information that was known by or in the possession of
the receiving party at the time of receiving such information from the
disclosing party as evidenced by written records.

                  7.3.3 Information obtained by the receiving party from a
third-party source who is not breaching a commitment of confidentiality to the
disclosing party by revealing such information to the receiving party.

                  7.3.4 Information that is independently developed by the
receiving party without use of Confidential Information of the other party as
evidenced by written records.

                  7.3.5 Information that is the subject of a granted written
permission to disclose that is issued by the disclosing party to the other
party.

                  7.3.6 Information that is required to be disclosed pursuant to
the law (including SEC regulations), but only to the extent required to be
disclosed; PROVIDED THAT, the disclosing party notifies the other party in
writing and gives the other party reasonable time to comment on the same prior
to disclosure.

         7.4      During the term of this Agreement and for a period of five (5)
years after the expiration or termination of this Agreement each party shall
maintain all Confidential Information in trust and confidence and shall not
disclose any Confidential Information to any third party or use any such
information for any unauthorized purpose, other than as authorized in Section
7.3 or as necessary to accomplish the purpose of this Agreement subject to an
appropriate binder of confidentiality as set forth in Section 7.5. Each party
may use such Confidential Information only to the extent required to accomplish
the purposes of this Agreement. Confidential Information shall not be used for
any purpose or in any manner that is not consistent with this Agreement or that
would constitute a violation of any laws or regulations including, without
limitation, the export control laws of the United States. Each party hereby
agrees that it will not in any way attempt to obtain, either directly or
indirectly, any information regarding any Confidential Information from any
third party who has been employed by, provided consulting services to, or
received in confidence information from, the other party.

         7.5      Both parties will make diligent efforts to ensure that all
employees, consultants, agents, subcontractors and manufacturing contractors who
may have access to Confidential Information of the other party, and any other
third parties who might have access to Confidential Information, will use such
information in a manner consistent with the terms of this Agreement and will be
bound by the terms set forth in this Section 7. No Confidential Information
shall be

                                       6

<PAGE>

disclosed to any employees, subcontractors, agents or consultants who do not
have a need to receive such information.

         7.6      Except as required by law or as provided by Section 4.2, each
party to this Agreement agrees not to disclose to any third party the terms of
this or any other agreement, business relationship or negotiations with the
other party to this Agreement except in press releases approved in writing by
both parties prior to their release. This shall not preclude either party from
communicating with its directors, officers or other representatives who, in the
course of their responsibilities for that party, need to know the information
referred to in this Section 7.6 and who are advised of, and agree to, the
provisions of this Section 7.6.

         7.7      To the extent either party discloses confidential information
of the other party to an employee, consultant, subcontractor or manufacturing
contractor (an "AGENT") or permits an Agent to have access to such confidential
information, such party shall indemnify the other party for any claims, damages,
losses, liabilities, costs or expenses, including reasonable attorneys' fees,
incurred by the other party as a result of the indemnifying party's Agent
further disclosing or misusing such confidential information.

         8.       SAFETY AND HEALTH-RESPONSIBLE CARE

         8.1      From time to time GalaGen may provide EL with safety and
health information, including, without limitation, warnings, material safety
data sheets, precautionary safety measures, and instructions on proper care, use
and handling, storage, and disposal of the Ingredient. EL agrees to observe all
precautions and instructions provided by GalaGen and to communicate all such
environmental, safety and health information to its employees.

         8.2      Both parties shall follow safe handling, storage,
transportation, use, and disposal practices with respect to the Ingredient,
including, but not limited to, those required by U.S. federal, state, and local
laws, regulations, and ordinances.

         9.       QUALITY OF THE INGREDIENT; CERTAIN REGULATORY MATTERS

         9.1      GalaGen hereby represents and warrants that:

                  (a) no Ingredient constituting any shipment to EL shall be at
the time of shipment (i) adulterated or misbranded within the meaning of the
Act, or the rules and regulations promulgated thereunder, as such law, rule or
regulation is constituted and in effect at the time of any such shipment or (ii)
an article which may not, under the provisions of Sections 404, 505 or 512 of
the Act, be introduced into interstate commerce;

                  (b) it has complied with, and during the term of this
Agreement will continue to comply with, the laws, rules and regulations which
affect the ability of GalaGen to manufacture and

                                       7

<PAGE>

package the Ingredient in Commercial Quantities for use and sale in the Field of
Use in the United States of America;

                  (c) it shall obtain and maintain all necessary permits,
registrations and licenses required to manufacture, package and supply the
Ingredient and it shall produce the Ingredient and dispose of all waste in
compliance with all applicable environmental laws, regulations, and standards.
GalaGen makes no representations with respect to the waste disposal practices of
its suppliers.

                  (d) all Ingredient delivered hereunder will comply with the
specifications set forth in ANNEX A, as it may be amended from time to time by
mutual agreement of the parties;

                  (e) its production and sale of Ingredient to EL, and EL's
purchase and distribution of products containing Ingredient, does not, to the
best of GalaGen's knowledge, as of the date of this Agreement, infringe upon any
US patent or violate any valid rights of any person or applicable law, rule, or
regulation;

                  (f) there is no investigation by any governmental body of
which it is aware, or any action, suit, proceeding or claim pending against it,
or, to its knowledge, threatened against it with respect to the transactions
contemplated by this Agreement or the Ingredient; and

                  (g) it shall not provide any bovine-derived materials derived
from the maximum Bovine Spongiform Encephalopathy ("BSE") risk group (e.g.,
brain, eye, spinal cord) and that any such bovine-derived materials shall be
sourced from non-BSE countries following World Health Organization guidelines.

         The foregoing warranties are the only warranties made by GalaGen with
respect to the Ingredient delivered hereunder, and may only be modified or
amended by a written instrument signed by a duly authorized officer of GalaGen
and a duly authorized officer/employee of EL. EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, EACH PARTY MAKES NO WARRANTY, EXPRESS OR IMPLIED,
CONCERNING THE INGREDIENT, OR THE MERCHANTABILITY OR FITNESS THEREOF FOR ANY
PURPOSE. The preceding sentence shall not be construed to limit any
representation or warranty of GalaGen with respect to the quality or compliance
with the specification of any Ingredient.

         9.2      Any Ingredient delivered to EL by GalaGen that do not conform
to the specifications and are rejected after delivery as set forth in Section 6,
or that are otherwise not in compliance with the warranty made in Section 9.1,
will be replaced, or EL's account may be credited, at EL's election. The remedy
of replacement or credit is available only if such nonconformance was not caused
by EL's misuse, unauthorized modifications, neglect, improper testing or
improper storage, including without limitation storage at inappropriate
temperatures, transportation, use beyond any dating provided, by accident, fire
or other hazard. THE EXPRESS OBLIGATIONS STATED IN THIS SECTION 9.2 AND IN
SECTIONS 6 AND 10 ARE IN LIEU OF ALL OTHER

                                       8

<PAGE>

LIABILITIES OR OBLIGATIONS OF GalaGen FOR DAMAGES, INCLUDING BUT NOT LIMITED TO
DIRECT OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE
DELIVERY, USE OR PERFORMANCE OF THE INGREDIENT.

         9.3      If requested in writing by EL, GalaGen shall supply at EL's
reasonable expense Technical Information and methods of manufacture and
packaging to EL to enable EL to fulfill its obligations under this Agreement or
to the extent that such information, in EL's judgment, is necessary to enable it
to comply with any statutory or regulatory requirements, or with a request by
any governmental or regulatory authority.

         9.4      (a) If requested in writing by EL, GalaGen will permit EL to
inspect, twice per year, during normal business hours and hours during which
GalaGen is manufacturing Ingredient, GalaGen's facilities and records to the
extent EL deems reasonably necessary to enable EL to verify compliance by
GalaGen with its obligations under this Agreement in relation to the Ingredient
and to verify compliance with any statutory or regulatory requirements to which
EL is subject and that are applicable to the manufacture and/or packaging of the
Ingredient. Notwithstanding the foregoing, EL shall have the right to inspect
GalaGen's facilities and records at any time without prior written notice, in
the event that there is a quality or regulatory problem or other manufacturing
problem with the Ingredient.

                  (b) If, as a result of any such inspection, EL concludes that
GalaGen is not in compliance with any of the foregoing obligations or
requirements, it shall so notify GalaGen in writing, specifying such areas of
noncompliance in reasonable detail and GalaGen shall provide a problem
resolution plan within thirty (30) days of EL's request. GalaGen shall use its
best efforts to remedy and/or provide an action plan with an actual time line
for the problems identified within a reasonably mutually agreed upon time frame.

         10.      INDEMNIFICATION

         10.1     GalaGen agrees to and hereby does indemnify, defend and hold
EL, EL's Affiliates, its officers, directors and shareholders, and its
successors and assigns (collectively the "EL INDEMNIFIED PARTIES") harmless from
and against all claims, liabilities, suits and proceedings, and all damages
(other than consequential, incidental, special or indirect damages), losses,
costs, recoveries and expenses, including reasonable legal expenses and costs
(including attorney's fees) that the EL Indemnified Parties may incur, arising
out of any third party claim of property damage or personal injury or death
arising from (i) GalaGen's negligent or willful misconduct in its performance
under this Agreement or (ii) GalaGen's breach of any obligation, representation
or warranty hereunder.

         10.2     EL agrees to and hereby does indemnify, defend and hold
GalaGen, GalaGen's Affiliates, its officers, directors and shareholders, and its
successors and assigns (collectively the "GALAGEN INDEMNIFIED PARTIES") harmless
from and against all claims, liabilities, suits and proceedings, and all damages
(other than consequential, incidental, special or indirect damages), losses,
costs, recoveries and expenses, including reasonable legal expenses and costs
(including

                                       9

<PAGE>

attorneys' fees) that the GalaGen Indemnified Party may incur, arising out of
any third party claim of property damage or personal injury or death arising
from (i) EL's negligent or willful misconduct in its performance under this
Agreement or in the marketing and/or sale of the products containing the
Ingredient or (ii) EL's breach of any obligation, representation or warranty
hereunder.

         10.3     The foregoing indemnification obligations of EL and GalaGen
are subject to the following: (a) the indemnifying party must be notified by or
on behalf of the indemnified party in writing promptly after a claim is made, a
suit is filed or an action or investigation is initiated (each, a "PROCEEDING")
against the indemnified party; (b) the indemnifying party shall be permitted, at
its own cost, to defend, control, conduct and prosecute, in the indemnifying
party's sole discretion and by counsel of the indemnifying party's choosing, the
defense of such Proceeding brought against the indemnified party; (c) except as
may otherwise be required by law, the indemnified party shall not compromise the
position of the indemnifying party by admission, statements, disclosure or
conduct (collectively, "DISCLOSURE") in a way that could prejudice the defense,
control, conduct or prosecution of said cause of action (it being understood
that no indemnified party shall be deemed to have violated this provision so
long as such party has acted in good faith to fulfill its obligations under this
provision); and (d) the indemnified party shall cooperate with the indemnifying
party in the defense, conduct, prosecution or termination of the Proceeding,
including the furnishing of information and the assistance from employees of the
indemnified party at the indemnifying party's reasonable request and at no
charge to the indemnifying party. With respect to clause (c) above, the
indemnified party will provide the indemnifying party with prompt written notice
in advance of any such Disclosure being made to permit the indemnifying party to
seek an appropriate protective order, restriction on response or withdrawal of
the request for Disclosure. If, however, any such request for relief by the
indemnifying party is denied or is otherwise unavailable, the relevant
indemnified party may make the disclosure without any liability to the
indemnifying party.

         11.      TERM AND TERMINATION

         11.1     The initial term of this Agreement shall begin as of the
Effective Date and shall remain in effect for three years, unless earlier
terminated as provided herein. Thereafter, this Agreement shall renew
automatically for consecutive one year renewal periods, unless EL provides
GalaGen with six (6) months prior written notice of its intention not to renew
upon the expiration of the initial term or relevant renewal period.

         11.2     In the event that GalaGen fails to supply conforming
Ingredient for three (3) consecutive months, for reasons other than force
majeure, on more than one (1) occasion, EL shall have the right to terminate
this Agreement immediately at no cost, the second time GalaGen fails to supply
conforming Ingredient for three (3) consecutive months, for reasons other than
force majeure.

         11.3     In the event either party commits a material breach or
defaults in the performance or observance of any of the material provisions of
this Agreement, and such breach is not cured within ninety (90) days after the
receipt of written notice thereof from the other party specifying such

                                       10

<PAGE>

breach or default, the party not in breach or default shall be entitled (without
prejudice to its other rights) to terminate this Agreement without additional
penalty, termination fee or cost by giving notice to take effect immediately.

         11.4     Either party may terminate this Agreement with written notice
to the other party, effective the date of such notice, in the event of
insolvency, assignment for the benefit of creditors, failure to pay in the
ordinary course of business debts as they come due, or bankruptcy proceedings by
or against the other party.

         11.5     The termination of this Agreement shall not release EL from
the obligation to pay any sum that may be owed to GalaGen or operate to
discharge any liability that had been incurred by any party prior to any such
termination, including sums incurred in connection with the manufacture of
Ingredient in process at the time of the termination. The termination of this
Agreement shall be without prejudice to and shall not affect the right of either
party to recover any and all damages to which it may be entitled, or to exercise
any other remedies which it might otherwise have under this Agreement.

         11.6     Notwithstanding any termination of this Agreement, the
provisions of Sections 4, 7, 9, 10 and 12 shall remain in effect.

         12.      DISPUTE RESOLUTION

         If a claim of breach, nonperformance, nonpayment or repudiation should
arise related to or in connection with this Agreement (a "DISPUTE"), the parties
shall attempt to resolve the matter (a) within sixty (60) days from the date
that the party raising the Dispute notifies the other party in writing of the
Dispute, or (b) if this Agreement specifies a cure period for the subject of the
Dispute, (b) within such cure period. If the parties do not resolve the Dispute
within the sixty (60) day period or relevant cure period, as appropriate, then
the parties agree to submit the Dispute to mediation before a mediator mutually
acceptable to both parties. GalaGen and EL agree to make available to the
mediator on a confidential basis any information, test results, or research in
either party's possession related to the subject of the Dispute in addition to
supplying any other information requested or necessary to allow the mediator to
facilitate the mediation. If the parties do not resolve the Dispute through
mediation within forty five (45) days after the Dispute is submitted to
mediation, the parties agree to submit the Dispute to binding arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules by a panel of three qualified arbitrators. GalaGen and EL
agree to make available to the arbitrators on a confidential basis any
information, test results, or research in either party's possession related to
the subject of the Dispute in addition to supplying any other information
requested or necessary to allow the arbitrators to deliver an opinion, which
shall be rendered within forty-five (45) days of selection of the full panel or
such additional time as the arbitrators reasonably need. The arbitrators shall
base their decision on governing law in accordance with Section 17 and shall be
required to provide to the parties a written summary of their findings and the
facts and law on which their decision is based.

                                       11

<PAGE>

         13.      PUBLICITY

         Except as provided by Section 4.1, GalaGen and EL agree not to issue
any press release or other public statement disclosing the existence of or
relating to this Agreement without prior written consent of the other party;
PROVIDED, HOWEVER, THAT, neither GalaGen nor EL shall be prevented from
complying with any duty of disclosure it may have pursuant to law (including SEC
regulations) subject to notifying the other party in writing and giving such
other party reasonable time to comment on proposed disclosure prior to its
issuance.

         14.      FORCE MAJEURE

         14.1     No party shall be responsible or liable to the other hereunder
for failure or delay in the performance of this Agreement due to factors beyond
its reasonable control, including without limitation, any war, fire, accident,
earthquake or other casualty, or any act of God or the public enemy. Upon the
occurrence of an event of force majeure, the party failing or delaying
performance, shall promptly notify the other party, in writing, setting forth
the nature to the occurrence, its expected duration and how such party's
performance is affected. In the event of the applicability of this Section 14,
the party failing or delaying performance shall use its best efforts to
eliminate, cure and overcome any such causes and resume the performance of its
obligations as soon as practicable under the circumstances.

         14.2     Neither party hereto shall be liable for damages for failure
in the performance of its obligations hereunder in the event such performance is
prevented by a cause beyond its reasonable control, including, without
limitation, acts of God, act, regulation, or law of any government, war, civil
commotion, destruction of production facilities or material by fire, earthquake
or storm, labor disturbances, and failure of public utilities or common
carriers; PROVIDED, HOWEVER, THAT, such failure on the part of either party
shall not prevent the other party from exercising its right to terminate this
Agreement in accordance with the provisions of this Agreement.

         15.      ASSIGNABILITY

         Neither party hereto shall assign or otherwise transfer any of its
rights or obligations under this Agreement, in whole or in part, without the
prior written consent of the other party, except that either party may, without
the necessity for such consent, assign this Agreement or any interest herein or
any right hereunder, to any of its Affiliates or successors by merger or sale of
all or substantially all of its business unit to which this Agreement relates;
PROVIDED, HOWEVER, THAT, GalaGen may not, without EL's prior written consent,
assign this Agreement, or its rights and obligations hereunder, to any entity
listed on ANNEX C hereto, or to any Affiliate of any such entity. This Agreement
shall be binding upon any permitted assignee or successor of either party. Any
assignment that is not in accordance with this Section 15 will be void.

                                       12

<PAGE>

         16.      WAIVER; SEVERABILITY

         16.1     Each party acknowledges and agrees that any party's failure to
enforce at any time any of the provisions of this Agreement shall not be deemed
to be a waiver of such provisions or of the right of such other party or parties
thereafter to enforce each and every such provision.

         16.2     The rights and remedies set forth herein shall be the
exclusive rights and remedies of the parties, except that nothing herein shall
limit the right of GalaGen to be paid for shipments of the Ingredient delivered
to, and deemed accepted by, EL.

         16.3     If and to the extent that any provision of this Agreement is
determined by any legislature, court or administrative agency to be in whole or
in part invalid or unenforceable, such provision or part thereof shall be deemed
to be surplusage and, to the extent not so determined to be invalid or
unenforceable, each provision hereof shall remain in full force and effect
unless the purposes of this Agreement cannot be achieved. In the event any
provisions shall be held invalid, illegal or unenforceable the parties shall use
commercially reasonable efforts to substitute a valid, legal and enforceable
provision which insofar as practical implements the purposes hereof.

         17.      GOVERNING LAW

         This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Delaware as though made and to be fully
performed in said State.

         18.      NOTICES

         All notices required or permitted hereunder shall be given in writing
and sent by facsimile transmission, or mailed postage prepaid by first class
certified or registered mail, or hand delivered to the following addresses:

EL:                        Estee Lauder, Inc.
                           125 Pinelawn Road
                           Melville, New York  11747
                           Attention:  Senior Vice President Research &
                                       Development

GalaGen:                   GalaGen Inc.
                           1275 Red Fox Road, MS 7420
                           Arden Hills, Minnesota 55112
                           Attention:  President

or to such other addresses as the parties may hereafter advise each other in
writing. Any notice, if sent properly addressed, postage prepaid, shall be
deemed made seven (7) days after the date of mailing as indicated on the
certified or registered mail receipt, or on the next business day if sent by
express courier service or if hand delivered or sent by facsimile transmission.

                                       13

<PAGE>

         19.      HEADINGS

         The headings of each section in this Agreement are intended for
guidance only and shall not be considered part of this written understanding
between the parties hereto.

         20.      ENTIRE AGREEMENT

         20.1     This Agreement, represents and incorporates the entire
understanding among the parties hereto with respect to the subject matter of
this Agreement, and each party acknowledges that there are no warranties,
representations, covenants or understandings of any kind, nature or description
whatsoever made by any party to the other or others, except such as are
expressly herein above set forth.

         20.2     This Agreement shall not be subject to change or modification
unless specifically agreed to in writing by both parties.

         20.3     The parties recognize that, during the term of this Agreement,
a purchase order, acknowledgment form or similar routine document (collectively
"FORMS") may be used to implement or administer provisions of this Agreement.
Therefore, the parties agree that the terms of this Agreement prevail in the
event of any conflict between this Agreement and the printed provisions of such
Forms, or typed provisions of Forms that add to, vary, modify or are at conflict
with the provisions of this Agreement.

         21.      PARTIES' RELATIONSHIP

         Nothing in this Agreement shall create among the parties a partnership,
joint venture or principal-agent relationship and, for the avoidance of doubt,
both parties now confirm they are independent contractors trading for and on
their own behalf.

         22       COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and the
same instrument.

                                       14

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

ESTEE LAUDER, INC.                                   GALAGEN INC.

By  /s/Harvey Gedson                                 By  /s/ Henry J. Cardello
    -------------------------------                      -----------------------
Name  Harvey Gedson                                  Name  Henry J. Cardello
      -----------------------------                        ---------------------
Its  Sr.VP R&D                                       Its President & CEO
     ------------------------------                      -----------------------

                                       15

<PAGE>

                                     ANNEX A

                                 Specifications

PHYSICAL

Spray Dried Bovine Colostrum Fraction

Identity (Total Bovine IgG)                           ### % minimum

Moisture                                              ### % to ### %

MICROBIOLOGY

Total Aerobic Plate Count                            ### maximum cfu/gram

Yeast/Mold                                           ### maximum cfu/gram

S. AUREUS                                            < ### MPN1/gram

###- [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].

                                       1

<PAGE>

                                                                   Exhibit 10.42

                                     ANNEX B

EL will issue Purchase Orders for the Ingredient produced by GalaGen Purchase
Orders will be issued at least one month before the desired delivery date. The
minimum order quantity is 20 kgs and quantities shall be ordered in multiples of
20 kgs.

EL assumes full financial responsibility for obsolete raw materials purchased
and received in support of EL Purchase Orders, down payments, if required, to
reserve contracted manufacturing services in support of EL Purchase Orders, and
cancellation fees, if any for contracted manufacturing services scheduled to
support EL Purchase Orders. Limitations are as follows:

         Raw Materials - Liability is limited to those raw materials purchased
         specifically to manufacture Licensed Ingredients for EL. Raw Materials
         in excess of this amount are the responsibility of GalaGen.

         Safety Stock - Inventories as mutually agreed to by both parties are
         the liability of EL. Safety stocks maintained by GalaGen, but not
         agreed to by EL, are the liability of GalaGen.

EL recognizes the necessity for GalaGen to commit to selected raw materials
based upon forecasts, as provided by EL, beyond the lead-times covered by the
formal Purchase Order process. Maximum forward coverage is 6 months for
colostrum raw material. Any changes to the agreed upon coverage shall be
communicated to EL and require prior written approval by EL. Limitations are as
follows:

         EL accepts liability for quantities of materials GalaGen committed to
         in accordance with mutually agreed upon purchase polices in support of
         forecasted requirements. Liability is limited to actual costs incurred
         as of the date that a change in requirements or specifications is
         officially communicated in writing to GalaGen. GalaGen agrees to use
         all viable means of mitigating the obsolescence, including use of the
         materials for other GalaGen products.

Liability for raw materials not covered by the lead-time for issuance of EL
Purchase Orders, mutually agreed purchase policies, or the previously stated
exceptions are the responsibility of GalaGen.

<PAGE>

                                     ANNEX C

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***].

                                       2

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