Document:

EXHIBIT 10.43

                                                     December 6, 2000

Robert Hoerr, M.D.
4374 Reinland Avenue
Shoreview, Minnesota 55126

Dear Dr. Hoerr:

         In order to induce you to continue in the employment of GalaGen Inc., a
Delaware corporation (the "Company"), and for other good and valid
consideration, each of us desires to enter into this employment agreement that
supercedes the terms of your existing employment with the Company, effective
upon execution and delivery by the parties of this agreement.

1.       EMPLOYMENT.

         The Company hereby agrees to employ you, and you agree to be employed
by the Company, on the terms and conditions hereinafter set forth. You will
continue to serve as Chief Technology Officer of the Company and, at no
additional compensation, shall serve in such directorships, Board committee
memberships and offices of the Company and its subsidiaries to which you may
from time to time be elected or appointed by the Board or the shareholders of
the Company. You agree to serve the Company faithfully and, to the best of your
ability, to promote the Company's interest, and to devote your full working
time, energy and skill to the Company's business. You may attend to personal
business and investment, engage in charitable activities and community affairs,
and serve on a reasonable number of corporate, educational and civic boards, so
long as those activities do not interfere with your duties under this Agreement

         You will have such authority, powers, functions, duties, and
responsibilities as are normally accorded chief technology officers. You will
discharge your duties at all times in accordance with any and all policies
established by the Board of Directors and will report to, and be subject to the
direction of, the chief executive officer.

2.       BASE SALARY.

         As partial compensation for all of your services (including services as
director, Board committee member or officer of the Company and its subsidiaries)
during your term of employment hereunder, you will receive a base salary at an
annual rate of Two Hundred Forty Thousand Dollars ($240,000.00), payable in
biweekly installments. Such base salary shall be reviewed annually at the
discretion of the Board.

3.       CASH BONUS; STOCK AWARDS AND OPTIONS.

         As additional compensation for your services, you shall be eligible (a)
to earn cash bonus compensation for each fiscal year in accordance with programs

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from time to time adopted by the Board of Directors and (b) for stock awards and
stock options of the Company as authorized from time to time by the Board of
Directors.

4.         FRINGE BENEFITS.

           (a)    You will be eligible to participate in any and all Company
sponsored insurance (including medical, dental, life and disability insurance),
retirement, and other fringe benefit programs that it maintains for its
executive officers, subject to and on a basis consistent with the terms of each
such plan or program. This will include the Company's annual payments for the
split dollar life insurance policy (Banker's Life Contract B124847).

           (b)   You will be entitled to four weeks of paid vacation annually.

5.        EXPENSES.

          During the term of your employment, the Company will reimburse you for
your reasonable travel and other expenses incident to your rendering of services
in conformity with its regular policies regarding reimbursement of expenses as
in effect from time to time. Payments to you under this paragraph will be made
upon presentation of expense vouchers in such detail as the Company may from
time to time reasonably require.

6.         TERM AND TERMINATION.

           (a)    TERM. Your employment with the Company will continue unless
and until terminated in accordance with the terms of this Agreement.

           (b)    TERMINATION. Your employment under this Agreement may be
terminated as follows:

                  (i)      By your resignation upon 30 days prior written notice
           to the Company.

                  (ii)     By the Company for Cause (as defined in this
          Agreement) immediately upon written notice to you.

                  (iii)   By the Company for any reason and at any time upon 30
          days prior written notice to you.

                  (iv)     By the Company at any time in the event of your
          Disability (as defined in this Agreement).

In the event of your termination of employment for any of the foregoing reasons,
you shall immediately resign as a director and/or officer of the Company and any
of its subsidiaries.

           (c)     DEATH. This Agreement will automatically terminate upon your
death.

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7.         CONSEQUENCES OF TERMINATION.

           (a)    TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION. If your
                  employment is terminated at any time by the Company for Cause
                  or if you resign other than by reason of a Constructive
                  Involuntary Termination, as herein defined, then you will be
                  paid your base salary to the date of termination and the
                  unpaid portion of any bonus or incentive amount earned by you
                  for the fiscal year ending prior to the termination of your
                  employment which you are entitled to receive under the terms
                  of any annual incentive plan maintained by the Company. You
                  will not be entitled to receive any base salary or fringe
                  benefits for any period after the date of termination, except
                  for the right to receive benefits which have become vested
                  under any benefit plan or to which you are entitled as a
                  matter of law.

           (b)    TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE INVOLUNTARY
                  TERMINATION. If the Company terminates your employment without
                  Cause or there is a Constructive Involuntary Termination of
                  your employment, then:

                  (i)    The Company will pay you a lump sum equal to eighteen
                         months of your current base salary, less applicable
                         tax withholdings; and

                  (ii)   The Company will pay you an amount equal to the
                         average of the bonus paid to you in each of the three
                         calendar years preceding termination (or average
                         annualized bonus if you have not been employed for
                         three full calendar years); and

                  (iii)  You will be entitled to continued participation in the
                         health care coverage and life insurance benefit plans
                         of the Company as in effect on the date of your
                         termination as permitted by law. The Company will
                         continue to pay its share of the health care and life
                         insurance premiums for this coverage, including the
                         Bankers Life split dollar policy referenced in 4(a)
                         (the Company will facilitate transfer of that policy to
                         the employee or a new employer upon termination for any
                         reason), for a period of up to eighteen months, and YOU
                         SHALL PAY YOUR SHARE OF THE COST ASSOCIATED WITH THAT
                         coverage as if you were still actively employed by the
                         Company. If you cannot be covered under any of the
                         Company's group plans or policies, the Company will
                         reimburse you for your full cost of obtaining
                         comparable alternative or individual coverage
                         elsewhere, less any contribution that you would have
                         been required to make under the Company's group plans
                         or policies. If, during the aforesaid eighteen-month
                         period, you are employed by a third party and become
                         eligible for any health care and/or life insurance
                         coverage provided by that third party, the Company will
                         not, thereafter, be obligated to provide you with the
                         insurance benefits described in this paragraph

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<PAGE>

                         (b)(iii). This eighteen-month coverage shall run
                         concurrently with COBRA and you shall be responsible
                         for the full cost of any coverage thereafter.

           (c)    TERMINATION IN THE EVENT OF DEATH OR DISABILITY. If your
                  employment terminates due to your death or if the Company
                  terminates your employment due to a Disability, then

                  (i)    The Company will continue to pay your base salary to
                         your estate or to you for the remainder of the month in
                         which your death occurs or in which your employment is
                         terminated due to Disability, together with the unpaid
                         portion of any bonus or incentive amount earned by you
                         for the fiscal year ending prior to the termination of
                         your employment which you are entitled to receive under
                         the terms of the applicable incentive plan; and in the
                         event of termination due to Disability, you will
                         continue to receive, during that month, all of the
                         fringe benefits then being paid or provided to you;

                  (ii)   You will be entitled to receive all Disability and
                         other benefits, such as continued health coverage or
                         life insurance proceeds, provided in accordance with
                         the terms and conditions of the health care coverage,
                         life insurance, disability, or other employee benefit
                         plans of the Company and applicable law.

           (d)    IN LIEU OF OTHER BENEFITS. The benefits provided you under
                  this Section 7 are in lieu of any benefits that would
                  otherwise be provided to you under any severance pay or other
                  policies of the Company.

           8.     NO MITIGATION. Following termination of your employment for
any reason you will be under no obligation to mitigate your damages by seeking
other employment, and there will be no offset against the amounts due you under
Section 7, except as specifically provided in Section 7(b)(iii) or for any
claims which the Company may have against you.

           9.     PROPERTY RIGHTS, CONFIDENTIALITY, NON-SOLICIT AND NON-COMPETE
PROVISIONS.

           (a)    COMPANY'S PROPERTY.

                  (i) You shall promptly disclose to the Company in writing all
         inventions, discoveries, and works of authorship, whether or not
         patentable or copyrightable, which are conceived, made, discovered,
         written, or created by you alone or jointly with another person, group,
         or entity, whether during the normal hours of employment at the Company
         or on your own time, during the term of this Agreement. You agree to
         assign all rights to all such inventions and works of authorship to the
         Company. You further agree to give the Company any of the assistance it
         reasonably requires in order for the Company to perfect, protect and
         use its rights to inventions and works of authorship.

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<PAGE>

                  This provision shall not apply to an invention, discovery, or
         work of authorship for which no equipment, supplies, facility, or trade
         secret information of the Company was used and which was developed
         entirely on your own time and which does not relate to the business of
         the Company, to the Company's anticipated research or developments, or
         does not result from any work performed by you for the Company.

                  (ii) You shall not remove any records, documents, or any other
         tangible items (excluding your personal property) from the premises of
         the Company in either original or duplicate form, except as is needed
         in the ordinary course of conducting business for the Company.

                  (iii) You shall immediately deliver to the Company, upon
         termination of employment with the Company, or at any other time upon
         the Company's request, any property, records, documents, and other
         tangible items (excluding your personal property) in your possession or
         control, including data incorporated in word processing, computer, and
         other data storage media, and all copies of such records, documents,
         and information, including all Confidential Information, as defined
         below.

         (b) CONFIDENTIAL INFORMATION. During the course of your employment you
will develop, become aware of, and accumulate expertise, knowledge, and
information regarding the Company's and its subsidiaries' organization
strategies, business, and operations and their past, current, or potential
customers and suppliers. The Company considers such expertise, knowledge, and
information to be valuable, confidential, and proprietary, and it shall be
considered Confidential Information for purposes of this Agreement. During this
Agreement and at all times thereafter you will agree not to use such
Confidential Information or disclose it to other persons or entities except as
is necessary for the performance of your duties for the Company or as has been
expressly permitted in writing by the Company. Provided, however, that the
foregoing covenant shall not apply to any information possessed by you prior to
your employment by the Company, or to any information which is in or has entered
the pubic domain or has been disclosed with any industry segment in which the
Company or any subsidiary or affiliated company of the Company operates by or
pursuant to the authority of the Company or any subsidiary or affiliated company
of the Company.

         (c) NON-SOLICITATION. During (i) the term of this Agreement, and (ii)
the greater of (A) any period for which you are receiving payments under Section
7 of this Agreement, or (B) one year after the termination of this Agreement or
the date on which you are no longer employed by the Company in any capacity,
whichever shall last occur, you shall not directly or indirectly attempt to hire
away any then-current employee of the Company or any subsidiary or to persuade
any such employee to leave employment with the Company or any subsidiary or
affiliated company.

         (d) NON-COMPETITION. During (i) the term of this Agreement and (ii) any
eighteen (18) month period for which you are receiving payments under Section 7
of this Agreement, you shall not engage or participate (either individually or

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as an employee, consultant, or principal, partner, agent, trustee, officer, or
director of a corporation, partnership or other business entity) in the business
activities that the Company or any subsidiary of the Company was engaged in at
the time of the termination of this Agreement. Provided, however, that mere
ownership of not more than 5% of the outstanding common stock of a company the
securities of which are publicly traded shall not constitute competition for
purposes of this Section 9(d).

             The provisions of this Section 9 shall survive the termination of
this Agreement.

           10.    ARBITRATION. Any disputes arising under or in connection with
this Agreement (including without limitation the making of this Agreement) shall
be resolved by final and binding arbitration to be held in Minneapolis,
Minnesota in accordance with the rules and procedures of the American
Arbitration Association. The parties shall select a mutually agreeable single
arbitrator to resolve the dispute or if they fail or are unable to do so, each
side shall within the following ten (10) business days select a single
arbitrator and the two so selected shall select a third arbitrator within the
following ten (10) business days. The arbitration award or other resolution may
be entered as a judgment at the request of the prevailing party by any court of
competent jurisdiction in Minnesota or elsewhere. The arbitrator shall have no
power to award any punitive or exemplary damages. The arbitrator may construe or
interpret, but shall not ignore or vary the terms of this Agreement, and shall
be bound by controlling law. You acknowledge that your failure to comply with
the terms of the Agreement regarding Confidential Information, Inventions, and
Non-Competition could cause immediate and irreparable injury to the Company and
that therefore, the arbitrators, or a court of competent jurisdiction, if an
arbitration panel cannot immediately be convened, will be empowered to provide
injunctive relief, including temporary or preliminary relief, to restrain any
such failure to comply. Each party shall bear its own costs and attorneys' fees
in connection with the arbitration.

           11.    DEFINITIONS. For purposes of this Agreement, the following
terms will have the meanings set forth below:

           (a)    CAUSE. "Cause" shall mean, and be limited to, (i) willful or
gross neglect of duties by you or (ii) an act or acts committed by you
constituting a felony and substantially detrimental to the Company or its
reputation.

           (b)    CONSTRUCTIVE INVOLUNTARY TERMINATION. "Constructive
Involuntary Termination" means a termination following:

                   (i) diminution in your title, duties, responsibilities and
           authority as an officer of the Company without your consent (provided
           that a change in a director position, chairman of the board or
           committee position shall not constitute Constructive Involuntary
           Termination);

                   (ii)    a reduction in your annual base salary without your
           consent;

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<PAGE>

                   (iii) the Company shall require you to relocate to any place
           other than a location within fifty miles of the location of the
           Company's principal executive offices immediately prior to such
           relocation; or

                   (iv) you are required for any continuing period of time to
           travel on Company business to a substantially greater extent than in
           the past.

           (c) DISABILITY. "Disability" means that you are deemed to be disabled
under the terms of the Company's long term disability plan and have satisfied
the qualifying period for entitlement to benefits under such plan.

           12.    GENERAL PROVISIONS.

           (a)    This Agreement may not be amended or modified except by a
                  written agreement signed by both of us.

           (b)    In the event that any provision or portion of this agreement
                  is determined to be invalid or unenforceable for any reason,
                  the remaining provisions of this Agreement will remain in
                  full force and effect to the fullest extent permitted by law.

           (c)    This Agreement shall bind and benefit the parties hereto and
                  their respective successors and assigns, but none of your
                  rights or obligations hereunder may be assigned by either
                  party hereto without the written consent of the other, except
                  by operation of law upon your death.

           (d)    This Agreement has been made in and shall be governed and
                  construed in accordance with the laws of the State of
                  Minnesota without giving effect to the principles of conflict
                  of laws of any jurisdiction.

           (e)    No failure on the part of either party to exercise, and no
                  delay in exercising, any right or remedy under this Agreement
                  will operate as a waiver; nor will any single or partial
                  exercise of any right or remedy preclude any other or further
                  exercise of any right or remedy.

           (f)    Any notice or other communication under this Agreement must
                  be in writing and will be deemed given when delivered in
                  person, by overnight courier (with receipt confirmed), by
                  facsimile transmission (with receipt confirmed by telephone
                  or by automatic transmission report), or upon receipt if sent
                  by certified mail, return receipt requested, as follows (or
                  to such other persons and/or addresses as may be specified by
                  written notice to the other party):

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                           If to GalaGen Inc.:

                           GalaGen Inc.
                           Attention: Chief Executive Officer
                           301 Carlson Parkway
                           Suite 301
                           Minnetonka, Minnesota 55305

                           If to Robert Hoerr, M.D.:

                           Robert Hoerr, M.D.
                           4374 Reinland Avenue
                           Shoreview, Minnesota 55126

           (g)    This Agreement, and any stock awards and stock option
                  agreements ancillary hereto, contain our entire understanding
                  and agreement with respect to these matters and supersede all
                  previous agreements, discussions, or understandings, whether
                  written or oral, between or on the same subjects.

           (h)    In the event any provision of this Agreement is held
                  unenforceable, that provision will be severed and shall not
                  affect the validity or enforceability of the remaining
                  provisions. In the event any provision is held to be
                  overbroad, that provision shall be deemed amended to narrow
                  its application to the extent necessary to render the
                  provision enforceable according to applicable law.

           (i)    All terms of this Agreement intended to be observed and
                  performed after the termination of this Agreement will
                  survive such termination and will continue in full force and
                  effect thereafter, including without limitation, Sections 7,
                  8, 9, 10, 11 and 12.

           (j)    The headings contained in this Agreement are for convenience
                  only and shall in no way restrict or otherwise affect the
                  construction of the provisions hereof. Unless otherwise
                  specified herein, references in this Agreement to Sections or
                  Exhibits are to the sections or exhibits to this Agreement.
                  This Agreement may be executed in multiple counterparts, each
                  of which shall be an original and all of which together shall
                  constitute one and the same instrument.

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<PAGE>

If the foregoing correctly sets forth your understanding of our agreement,
please indicate so by signing and returning to us a copy of this letter.

                                                Very truly yours,

                                                GALAGEN INC.

                                                /S/ HENRY J. CARDELLO
                                                --------------------------------
                                                Henry J. Cardello, President and
                                                Chief Executive Officer
Accepted and agreed to:

/S/ ROBERT HOERR, M.D.
------------------------
Robert Hoerr, M.D.EXHIBIT 10.44

                                                     December 6, 2000

Henry J. Cardello
2805 Boulder Bridge Drive
Shorewood, MN  55331

Dear Mr. Cardello:

         In order to induce you to continue in the employment of GalaGen Inc., a
Delaware corporation (the "Company"), and for other good and valid
consideration, each of us desires to enter into this employment agreement that
supercedes the terms of your existing employment with the Company, effective
upon execution and delivery by the parties of this agreement.

1.       EMPLOYMENT.

         The Company hereby agrees to employ you, and you agree to be employed
by the Company, on the terms and conditions hereinafter set forth. You will
continue to serve as President and Chief Executive Officer of the Company and,
at no additional compensation, shall serve in such directorships, Board
committee memberships and offices of the Company and its subsidiaries to which
you may from time to time be elected or appointed by the Board or the
shareholders of the Company. You agree to serve the Company faithfully and, to
the best of your ability, to promote the Company's interest, and to devote your
full working time, energy and skill to the Company's business. You may attend to
personal business and investment, engage in charitable activities and community
affairs, and serve on a reasonable number of corporate, educational and civic
boards, so long as those activities do not interfere with your duties under this
Agreement.

         You will have such authority, powers, functions, duties, and
responsibilities as are normally accorded presidents and chief executive
officers. You will discharge your duties at all times in accordance with any and
all policies established by the Board of Directors and will report to, and be
subject to the direction of, the Board of Directors.

2.       BASE SALARY.

         As partial compensation for all of your services (including services as
director, Board committee member or officer of the Company and its subsidiaries)
during your term of employment hereunder, you will receive a base salary at an
annual rate of Two Hundred Forty Thousand Dollars ($240,000.00), payable in
biweekly installments. Such base salary shall be reviewed annually at the
discretion of the Board.

<PAGE>

3.       CASH BONUS; STOCK AWARDS AND OPTIONS.

         As additional compensation for your services, you shall be eligible (a)
to earn cash bonus compensation for each fiscal year in accordance with programs
from time to time adopted by the Board of Directors and (b) for stock awards and
stock options of the Company as authorized from time to time by the Board of
Directors.

4.       FRINGE BENEFITS.

         (a)    You will be eligible to participate in any and all Company
sponsored insurance (including medical, dental, life and disability insurance),
retirement, and other fringe benefit programs that it maintains for its
executive officers, subject to and on a basis consistent with the terms of each
such plan or program.

         (b)    You will be entitled to four weeks of paid vacation annually.

5.       EXPENSES.

         During the term of your employment, the Company will reimburse you for
your reasonable travel and other expenses incident to your rendering of services
in conformity with its regular policies regarding reimbursement of expenses as
in effect from time to time. Payments to you under this paragraph will be made
upon presentation of expense vouchers in such detail as the Company may from
time to time reasonably require.

6.       TERM AND TERMINATION.

         (a)    TERM.  Your employment with the Company will continue unless
and until terminated in accordance with the terms of this Agreement.

         (b)    TERMINATION.  Your employment under this Agreement may be
terminated as follows:

                  (i)      By your resignation upon 30 days prior written notice
                           to the Company.

                  (ii)     By the Company for Cause (as defined in this
         Agreement) immediately upon written notice to you.

                  (iii)    By the Company for any reason and at any time upon 30
         days prior written notice to you.

                  (iv)     By the Company at any time in the event of your
         Disability (as defined in this Agreement).

In the event of your termination of employment for any of the foregoing reasons,
you shall immediately resign as a director and/or officer of the Company and any
of its subsidiaries.

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         (c)      DEATH.  This Agreement will automatically terminate upon your
                  death.

7.       CONSEQUENCES OF TERMINATION.

         (a)      TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION. If your
                  employment is terminated at any time by the Company for
                  Cause or if you resign other than by reason of a
                  Constructive Involuntary Termination, as herein defined,
                  then you will be paid your base salary to the date of
                  termination and the unpaid portion of any bonus or incentive
                  amount earned by you for the fiscal year ending prior to the
                  termination of your employment which you are entitled to
                  receive under the terms of any annual incentive plan
                  maintained by the Company. You will not be entitled to
                  receive any base salary or fringe benefits for any period
                  after the date of termination, except for the right to
                  receive benefits which have become vested under any benefit
                  plan or to which you are entitled as a matter of law.

         (b)      TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE INVOLUNTARY
                  TERMINATION. If the Company terminates your employment without
                  Cause or there is a Constructive Involuntary Termination of
                  your employment, then:

                       (i)    The Company will pay you a lump sum equal to
                              eighteen months of your current base salary, less
                              applicable tax withholdings; and

                      (ii)    The Company will pay you an amount equal to the
                              average of the bonus paid you in each of the three
                              calendar years preceding termination (or average
                              annualized bonus if you have not been employed for
                              three full calendar years); and

                     (iii)    You will be entitled to continued participation in
                              the health care coverage and life insurance
                              benefit plans of the Company as in effect on the
                              date of your termination as permitted by law. The
                              Company will continue to pay its share of the
                              health care and life insurance premiums for this
                              coverage for a period of up to eighteen months,
                              and YOU SHALL PAY YOUR SHARE OF THE COST
                              ASSOCIATED WITH THAT coverage as if you were still
                              actively employed by the Company. If you cannot be
                              covered under any of the Company's group plans or
                              policies, the Company will reimburse you for your
                              full cost of obtaining comparable alternative or
                              individual coverage elsewhere, less any
                              contribution that you would have been required to
                              make under the Company's group plans or policies.
                              If, during the aforesaid eighteen-month period,
                              you are employed by a third party and become

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                              eligible for any health care and/or life insurance
                              coverage provided by that third party, the Company
                              will not, thereafter, be obligated to provide you
                              with the insurance benefits described in this
                              paragraph (b)(iii). This eighteen-month coverage
                              shall run concurrently with COBRA and you shall be
                              responsible for the full cost of any coverage
                              thereafter.

         (c)      TERMINATION IN THE EVENT OF DEATH OR DISABILITY.  If your
                  employment terminates due to your death or if the Company
                  terminates your employment due to a Disability, then

                       (i)    The Company will continue to pay your base
                              salary to your estate or to you for the remainder
                              of the month in which your death occurs or in
                              which your employment is terminated due to
                              Disability, together with the unpaid portion of
                              any bonus or incentive amount earned by you for
                              the fiscal year ending prior to the termination of
                              your employment which you are entitled to receive
                              under the terms of the applicable incentive plan;
                              and in the event of termination due to Disability,
                              you will continue to receive, during that month,
                              all of the fringe benefits then being paid or
                              provided to you;

         (ii)     You will be entitled to receive all Disability and other
                  benefits, such as continued health coverage or life insurance
                  proceeds, provided in accordance with the terms and conditions
                  of the health care coverage, life insurance, disability, or
                  other employee benefit plans of the Company and applicable
                  law.

          (d)     IN LIEU OF OTHER BENEFITS. The benefits provided you under
                  this Section 7 are in lieu of any benefits that would
                  otherwise be provided to you under any severance pay or other
                  policies of the Company.

         8.       NO MITIGATION. Following termination of your employment for
any reason you will be under no obligation to mitigate your damages by seeking
other employment, and there will be no offset against the amounts due you under
Section 7, except as specifically provided in Section 7(b)(iii) or for any
claims which the Company may have against you.

         9.       PROPERTY RIGHTS, CONFIDENTIALITY, NON-SOLICIT AND NON-COMPETE
PROVISIONS.

         (a)      COMPANY'S PROPERTY.

                  (i) You shall promptly disclose to the Company in writing all
         inventions, discoveries, and works of authorship, whether or not
         patentable or copyrightable, which are conceived, made, discovered,
         written, or created by

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<PAGE>

         you alone or jointly with another person, group, or entity, whether
         during the normal hours of employment at the Company or on your own
         time, during the term of this Agreement. You agree to assign all
         rights to all such inventions and works of authorship to the Company.
         You further agree to give the Company any of the assistance it
         reasonably requires in order for the Company to perfect, protect and
         use its rights to inventions and works of authorship.

                  This provision shall not apply to an invention, discovery, or
         work of authorship for which no equipment, supplies, facility, or trade
         secret information of the Company was used and which was developed
         entirely on your own time and which does not relate to the business of
         the Company, to the Company's anticipated research or developments, or
         does not result from any work performed by you for the Company.

                  (ii) You shall not remove any records, documents, or any other
         tangible items (excluding your personal property) from the premises of
         the Company in either original or duplicate form, except as is needed
         in the ordinary course of conducting business for the Company.

                  (iii) You shall immediately deliver to the Company, upon
         termination of employment with the Company, or at any other time upon
         the Company's request, any property, records, documents, and other
         tangible items (excluding your personal property) in your possession or
         control, including data incorporated in word processing, computer, and
         other data storage media, and all copies of such records, documents,
         and information, including all Confidential Information, as defined
         below.

         (b)      CONFIDENTIAL INFORMATION. During the course of your employment
you will develop, become aware of, and accumulate expertise, knowledge, and
information regarding the Company's and its subsidiaries' organization
strategies, business, and operations and their past, current, or potential
customers and suppliers. The Company considers such expertise, knowledge, and
information to be valuable, confidential, and proprietary, and it shall be
considered Confidential Information for purposes of this Agreement. During this
Agreement and at all times thereafter you will agree not to use such
Confidential Information or disclose it to other persons or entities except as
is necessary for the performance of your duties for the Company or as has been
expressly permitted in writing by the Company. Provided, however, that the
foregoing covenant shall not apply to any information possessed by you prior to
your employment by the Company, or to any information which is in or has entered
the public domain or has been disclosed with any industry segment in which the
Company or any subsidiary or affiliated company of the Company operates by or
pursuant to the authority of the Company or any subsidiary or affiliated company
of the Company.

         (c)      NON-SOLICITATION. During (i) the term of this Agreement, and
(ii) the greater of (A) any period for which you are receiving payments under
Section 7 of this Agreement, or (B) one year after the termination of this
Agreement or the date on which you are no longer

                                       5
<PAGE>

employed by the Company in any capacity, whichever shall last occur, you shall
not directly or indirectly attempt to hire away any then-current employee of the
Company or any subsidiary or to persuade any such employee to leave employment
with the Company or any subsidiary or affiliated company.

         (d)      NON-COMPETITION. During (i) the term of this Agreement and
(ii) any eighteen (18) month period for which you are receiving payments under
Section 7 of this Agreement, you shall not engage or participate (either
individually or as an employee, consultant, or principal, partner, agent,
trustee, officer, or director of a corporation, partnership, or other business
entity) in the business activities that the Company or any subsidiary of the
Company was engaged in at the time of the termination of this Agreement.
Provided, however, that mere ownership of not more than 5% of the outstanding
common stock of a company the securities of which are publicly traded shall not
constitute competition for purposes of this Section 9(d).

         The provisions of this Section 9 shall survive the termination of this
Agreement.

        10.       ARBITRATION. Any disputes arising under or in connection with
this Agreement (including without limitation the making of this Agreement) shall
be resolved by final and binding arbitration to be held in Minneapolis,
Minnesota in accordance with the rules and procedures of the American
Arbitration Association. The parties shall select a mutually agreeable single
arbitrator to resolve the dispute or if they fail or are unable to do so, each
side shall within the following ten (10) business days select a single
arbitrator and the two so selected shall select a third arbitrator within the
following ten (10) business days. The arbitration award or other resolution may
be entered as a judgment at the request of the prevailing party by any court of
competent jurisdiction in Minnesota or elsewhere. The arbitrator shall have no
power to award any punitive or exemplary damages. The arbitrator may construe or
interpret, but shall not ignore or vary the terms of this Agreement, and shall
be bound by controlling law. You acknowledge that your failure to comply with
the terms of the Agreement regarding Confidential Information, Inventions, and
Non-Competition could cause immediate and irreparable injury to the Company and
that therefore, the arbitrators, or a court of competent jurisdiction, if an
arbitration panel cannot immediately be convened, will be empowered to provide
injunctive relief, including temporary or preliminary relief, to restrain any
such failure to comply. Each party shall bear its own costs and attorneys' fees
in connection with the arbitration.

         11.      DEFINITIONS.  For purposes of this Agreement, the following
terms will have the meanings set forth below:

         (a)      CAUSE. "Cause" shall mean, and be limited to, (i) willful or
gross neglect of duties by you or (ii) an act or acts committed by you
constituting a felony and substantially detrimental to the Company or its
reputation.

         (b)      CONSTRUCTIVE INVOLUNTARY TERMINATION.  "Constructive
Involuntary Termination" means a termination following:

                                       6
<PAGE>

                  (i)   diminution in your title, duties, responsibilities and
         authority as an officer of the Company without your consent (provided
         that a change in a director position, chairman of the board or
         committee position shall not constitute Constructive Involuntary
         Termination);

                  (ii)  a reduction in your annual base salary without your
         consent;

                  (iii) the Company shall require you to relocate to any place
         other than a location within fifty miles of the location of the
         Company's principal executive offices immediately prior to such
         relocation; or

                  (iv)  you are required for any continuing period of time to
         travel on Company business to a substantially greater extent than in
         the past.

         (c)      DISABILITY. "Disability" means that you are deemed to be
disabled under the terms of the Company's long term disability plan and have
satisfied the qualifying period for entitlement to benefits under such plan.

         12.      GENERAL PROVISIONS.

         (a)      This Agreement may not be amended or modified except by a
                  written agreement signed by both of us.

         (b)      In the event that any provision or portion of this agreement
                  is determined to be invalid or unenforceable for any reason,
                  the remaining provisions of this Agreement will remain in full
                  force and effect to the fullest extent permitted by law.

         (c)      This Agreement shall bind and benefit the parties hereto and
                  their respective successors and assigns, but none of your
                  rights or obligations hereunder may be assigned by either
                  party hereto without the written consent of the other, except
                  by operation of law upon your death.

         (d)      This Agreement has been made in and shall be governed and
                  construed in accordance with the laws of the State of
                  Minnesota without giving effect to the principles of conflict
                  of laws of any jurisdiction.

         (e)      No failure on the part of either party to exercise, and no
                  delay in exercising, any right or remedy under this Agreement
                  will operate as a waiver; nor will any single or partial
                  exercise of any right or remedy preclude any other or further
                  exercise of any right or remedy.

         (f)      Any notice or other communication under this Agreement must be
                  in writing and will be deemed given when delivered in person,
                  by overnight courier (with receipt confirmed), by facsimile
                  transmission (with receipt confirmed by telephone or by
                  automatic transmission report), or upon receipt if sent by

                                       7
<PAGE>

                  certified mail, return receipt requested, as follows (or to
                  such other persons and/or addresses as may be specified by
                  written notice to the other party):

                           If to GalaGen Inc.:

                           GalaGen Inc.
                           Attention:  Chairman of the Board
                           301 Carlson Parkway
                           Suite 301
                           Minnetonka, Minnesota 55305

                           If to Henry J. Cardello:

                           Henry J. Cardello
                           2805 Boulder Bridge Drive
                           Shorewood, MN  55331

         (g)      This Agreement and any stock awards and stock option
                  agreements ancillary hereto, contain our entire understanding
                  and agreement with respect to these matters and supersede all
                  previous agreements, discussions, or understandings, whether
                  written or oral, between or on the same subjects.

         (h)      In the event any provision of this Agreement is held
                  unenforceable, that provision will be severed and shall not
                  affect the validity or enforceability of the remaining
                  provisions. In the event any provision is held to be
                  overbroad, that provision shall be deemed amended to narrow
                  its application to the extent necessary to render the
                  provision enforceable according to applicable law.

         (i)      All terms of this Agreement intended to be observed and
                  performed after the termination of this Agreement will survive
                  such termination and will continue in full force and effect
                  thereafter, including without limitation, Sections 7, 8, 9,
                  10, 11 and 12.

         (j)      The headings contained in this Agreement are for convenience
                  only and shall in no way restrict or otherwise affect the
                  construction of the provisions hereof. Unless otherwise
                  specified herein, references in this Agreement to Sections or
                  Exhibits are to the sections or exhibits to this Agreement.
                  This Agreement may be executed in multiple counterparts, each
                  of which shall be an original and all of which together shall
                  constitute one and the same instrument.

                                       8
<PAGE>

If the foregoing correctly sets forth your understanding of our agreement,
please indicate so by signing and returning to us a copy of this letter.

                                                   Very truly yours,

                                                   GALAGEN INC.

                                                   /S/ ROBERT HOERR
                                                   -----------------------------
                                                   Robert Hoerr, M.D., Chairman

Accepted and agreed to:

/S/ HENRY J. CARDELLO
------------------------------------
Henry J. Cardello

                                       9

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