SECOND AMENDMENT TO PHASE I OPTION AGREEMENT
                         (2101 Kennedy Option)


     THIS SECOND AMENDMENT TO PHASE I OPTION AGREEMENT is dated this 9th day of
June, 1999, by and between Hillcrest Development ("Owner") and R & D Systems,
Inc. ("Buyer").

RECITALS:

     1.  Owner and Buyer entered into a Phase I Option Agreement dated February
10, 1999 and a First Amendment to Phase I Option Agreement dated April 10, 1999
with respect to property commonly known as 2101 Kennedy and 659 Cleveland
together with surface parking parcels (collectively the "Option Agreement").

     2.  The parties wish to amend the Option Agreement on the terms and
conditions hereafter set forth.

     NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:

     1.  The word "Property" as used in the Option Agreement and in the
Purchase Agreement attached as Exhibit B to the Option Agreement is hereby
amended to exclude that part of the Property taken by, or to be taken, and/or
deeded, or to be deeded, to the City of Minneapolis for additional right-of-way
for Kennedy Street as a result of the contemplated realignment of the Kennedy
Street and Arthur Street intersection.

     2.  Except as provided for above, all the terms and conditions of the
Option Agreement and the Purchase Agreement attached as Exhibit B to the Option
Agreement shall remain in full force and effect.


OWNER:                                BUYER:

Hillcrest Development                 R & D Systems, Inc.


By: /s/ Scott M. Tankenoff            By:/s/ Thomas E. Oland
    ------------------------             ----------------------
    Its:  General Partner                Its:  President