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                             PURCHASE AND SALE AGREEMENT
                                 (Improved Property)



                                       between



                                    STAODYN, INC.

                   (A Wholly-Owned Subsidiary of Rehabilicare Inc.)

                                         and



                               ETKIN-JOHNSON GROUP LLC




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                             PURCHASE AND SALE AGREEMENT
                                 (IMPROVED PROPERTY)

     THIS AGREEMENT dated August ____, 1998, is between STAODYN, INC., a
Delaware corporation, a wholly-owned subsidiary of Rehabilicare Inc., a
Minnesota corporation, ("Seller"), and ETKIN-JOHNSON GROUP LLC, a Colorado
limited liability company ("Buyer").

                                       RECITALS

     A.   Seller owns the options ("Options") to acquire certain land,
improvements and tangible personal property located at 1225 Ken Pratt Boulevard
(formerly known as 1225 Florida Avenue), Longmont, Colorado which is further
described and defined as the "Property" in Section 1 of this Agreement pursuant
to the terms of the Leases (each of which is referred to as a "Lease" and
collectively "Leases") between Staodyn, Inc. as Lessee and 1225 Building LLC as
Lessor dated July 16, 1993 and Staodyn as Lessee and Pendleton Construction Co.,
Inc. as Lessor dated July 16, 1993 (1225 Building LLC and Pendleton Construction
Co., Inc. are each individually referred to as a "Ground Owner" and collectively
"Ground Owners").

     B.   Seller desires to exercise the Options and acquire the Property and to
immediately thereafter sell the Property to Buyer and Buyer desires to purchase
the Property, upon the terms and provisions of this Agreement.

                                      COVENANTS

     IN CONSIDERATION of the foregoing and the mutual agreements herein, the
parties hereto agree as follows:

                        SECTION 1. PROPERTY AND PURCHASE PRICE

     1.1  PROPERTY.  Subject to the terms and conditions of this Agreement,
Seller agrees to sell and convey and Buyer agrees to purchase and pay for the
following described property (all of which is hereinafter collectively referred
to as the "Property"):

          (a)  The land described in EXHIBIT 1.1 (a) hereto together with all 
rights and all appurtenances to or used in connection therewith that are 
transferred by Ground Owners to Sellers pursuant to the options (the "Land"), 
including without limitation, any of the following that are actually 
transferred by the Ground Owners to the Seller:  all minerals, oil, 

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gas and other hydrocarbon substances on and under the Land, as well as all 
development rights, air rights, water, water rights and water stock relating 
to the Land, any rights to any land lying in the bed of any existing 
dedicated street, road or alley adjoining the Land and to all strips and 
gores adjoining the Land, and any other easements, rights-of-way or 
appurtenances used in connection with the beneficial use and enjoyment of the 
Land;

          (b)  All improvements located on, appurtenant to or used in connection
with the Land (the "Improvements");

          (c)  The fixtures and tangible personal property identified in Exhibit
1.1 (c) hereto (the "Personal Property");

          (d)  Copies of all non-proprietary books, records, files, reports,
plans and specifications and soil tests relating to the Land or Improvements, in
the possession or under the control of the Seller that are specifically
requested by Buyer (the "Reports");

          (e)  Seller's rights as Landlord under any subleases of the Property
which have been approved by Buyer and which extend beyond the Closing.

     1.2  PURCHASE PRICE.  The purchase price for the Property is Three Million
Five Hundred Fifty Thousand Dollars ($3,550,000.00) and shall be payable as
follows:

          (a)  One Hundred Thousand Dollars ($100,000.00) (the "Deposit") paid
to Seller by Buyer within five (5) business days following execution of this
Agreement, which amount shall be held by Land Title Guarantee Company with an
address of Commercial Department (Attn: Ellie Matthew), 3033 East First Avenue,
Suite 600, Denver, CO 80206 (the "Title Company") in an interest-bearing account
of a type agreed upon by Buyer and Seller, as an earnest money deposit and part
payment of the purchase price.  This Deposit becomes non-refundable upon the
expiration of the Examination Period unless Buyer has exercised its rights to
terminate this Agreement pursuant to Section 5.  By delivery of a fully executed
copy of this Agreement to the Title Company, the parties direct the Title
Company to hold and disburse the deposit in accordance with the terms of this
Agreement.  Except as provided in Section 8.2, interest on the Deposit shall be
the property of Buyer;

          (b)  The balance of the purchase price of Three Million Four Hundred
Fifty Thousand Dollars ($3,450,000.00), subject to closing adjustments, shall be
paid by Buyer at the closing of the purchase and sale provided for in Section
6.1 (the "Closing") by wire transfer to an account designated by Seller.

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                SECTION 2. DOCUMENTS TO BE DELIVERED TO BUYER

     2.1  DOCUMENTS TO BE DELIVERED TO BUYER.  Within ten (10) days after the
date of Seller's execution of this Agreement or such other time as may be
specified below, Seller shall deliver to Buyer at Seller's expense the following
items relating to the Property:

          (a)  A title insurance commitment ("Commitment") issued by the 
Title Company showing the status of record title to the Land and 
Improvements, along with legible copies of all recorded documents referred to 
in the Commitment, which Commitment commits to insure title to the Property 
in the Buyer in the amount of the purchase price under an Owner's Policy, 
ALTA 1992 with the standard printed exceptions contained in such form deleted 
and the exception for taxes limited to current year taxes not due or payable. 
 Buyer acknowledges receipt of the Commitment and copies of such documents 
prior to the date hereof. Exceptions (other than preprinted exceptions) shown 
on Schedule B-2 of the title insurance commitment are referred to below as 
the "Permitted Exceptions."

          (b)  A certificate of taxes due covering the Land and the
Improvements, prepared by the Treasurer of the County in which the Property is
located, which Buyer acknowledges it has received prior to the date hereof.

          (c)  Within thirty (30) days following the date of Seller's execution
of this Agreement, two (2) copies of a survey of the Property prepared by a
surveyor registered in the State of Colorado which shall meet the minimum
standard detail requirements for ALTA/ACSM Land Title Surveys, for an Urban
Survey, jointly established and adopted by ALTA and ACSM in 1992, to be dated
not more than thirty (30) days prior to the date of this Agreement, certified to
Buyer, Buyer's lender and the Title Company as of a recent date.

          (d)  Within ten (10) days of Buyer's request therefor, copies of such
Reports as Buyer may specifically request shall be furnished to Buyer pursuant
to Section 5.1(a) hereof.

          (e)  A copy of any environmental report concerning the Property in the
possession of Seller.

          (f)  A copy of the Leases and all amendments and modifications
thereto, if any.

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        SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND BUYER

     3.1  SELLER'S REPRESENTATIONS.  All representations and warranties are made
according to Seller's actual knowledge.  Seller's actual knowledge shall mean
and refer only to the actual knowledge of Mr. David Kaysen, CEO of Staodyn, Inc.
Seller represents and warrants to Buyer as of the date of this Agreement and as
of the date of the Closing as follows:

          (a)  STATUS AND AUTHORITY.  It is duly organized, validly existing 
and in good standing.  It has full power to own its property and to carry on 
its business as now being conducted.  It has the right, power, legal capacity 
and authority to enter into and perform its obligations under this Agreement 
and the documents to be executed and delivered pursuant hereto.  The 
execution and delivery of this Agreement and such documents have been duly 
and validly authorized by all necessary corporate action on its part to make 
this Agreement and such documents valid and binding upon it.  Upon execution 
and delivery, this Agreement and such documents will constitute Seller's 
valid and binding obligations enforceable in accordance with their terms, 
except to the extent limited by bankruptcy or insolvency laws, or laws 
affecting creditors' rights generally.

          (b)  TITLE TO THE OPTIONS.  Seller is the current lessee under the
Leases and has full right to exercise the Options.

          (c)  LIABILITIES.  Seller has incurred no obligation or liability
which is, or could become, a lien or other encumbrance on the Property of any
nature whatsoever.

          (d)  TANGIBLE PERSONAL PROPERTY. At Closing, Seller shall convey by 
quitclaim deed the Personal Property.  Seller has good and marketable title 
to the Personal Property  free of all liens and encumbrances.  Buyer shall 
have the right to inspect all the Personal Property prior to the Closing.

          (e)  LEASES.  On the date of the Closing, the Leases will be
terminated and there will be no leases affecting the Property except subleases,
if any, approved by Buyer, or in the event of an Accelerated Closing, pursuant
to Section 6.1 hereof, all subleases not previously approved by Buyer shall be
terminable on thirty (30) days' advance written notice.

          (f)  LITIGATION.  There is no action, suit or proceeding pending or to
the actual knowledge of Seller, threatened against the Property or Seller with
respect to its interests in, management and rental of, or other activities with
respect to, the Property.

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          (g)  ZONING AND COMPLIANCE WITH LAW.  Seller has no actual knowledge
of, nor has it received notice of, any violation of any applicable federal,
state or local law or regulation, including without limitation, any applicable
building, zoning, environmental or other law, ordinance or regulation, affecting
the Property or its operations.

          (h)  NO DEFAULTS.  The consummation of the transactions contemplated
by this Agreement will not result in the breach of any of the terms or
provisions of, or constitute a default under any material agreement or other
instrument to which Seller is a party or by which it or any portion of the
Property may be bound.

          (i)  LIENS.  All sums due for work that has been or will be performed
in or on the Property by Seller and materials furnished in connection therewith
which might in any circumstance give rise to a mechanic's or materialman's lien
either have been paid or, as to work presently in progress or to be performed,
Seller will promptly make payment as payment becomes due, and all necessary
waivers of rights to a mechanic's or materialmen's lien either have been
obtained or Seller will promptly obtain such waivers as such work is completed.

          (j)  LEASE.  The Leases and documents referred to therein delivered by
Seller to Buyer constitutes the entire agreement between Seller and Ground
Owners and there has been no default by Seller thereunder and Ground Owners have
made no claims that Seller is in default thereunder.

     3.2  BUYER'S REPRESENTATIONS.  Buyer represents and warrants to Seller that
all limited liability company action necessary to authorize the Buyer to proceed
with the transaction contemplated by this Agreement has been taken and that the
persons entering into this Agreement on behalf of the Buyer have been duly
authorized to execute and deliver this Agreement and all other documents
required to be executed by Buyer hereunder.

                SECTION 4. SELLER'S OBLIGATIONS BEFORE CLOSING

     4.1  THE LEASE AND OPTION.  Seller will not modify, alter or amend the
Options and will not default in its obligation under the Leases or take any
action or fail to take any action which would result in the termination or lapse
of the Options; and will take all actions required to exercise its rights under
the Options and to consummate the acquisition of the Property thereunder on or
before the Closing Date (described below).

     4.2  SUBLEASES.  Seller will not enter into any subleases of the Property
that are not terminable on thirty (30) days advance notice without the prior
written approval of such sublease by Buyer.

                                      5

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            SECTION 5. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE

     The obligation of Buyer to purchase the Property is subject to the
satisfaction of the following conditions precedent on or before the time set
forth below.  If any condition is not so satisfied, the condition may be waived
by Buyer in writing designated as a waiver or amendment to this Agreement, or
Buyer may terminate this Agreement in which event Buyer shall be returned the
Deposit and the parties will be released from all obligations hereunder.

     5.1  DETERMINATION BY BUYER. 

          (a)  CONDITIONS PRECEDENT.  On or before expiration of the
"Examination Period" (as defined  below), Buyer shall determine that the
following are acceptable to Buyer in its sole and absolute discretion:

               (i)   the exceptions to the marketability of the title to the
          Property as shown by the Commitment and other title evidence delivered
          pursuant to Section 2.1;

               (ii)  the financial condition of the Property; 

               (iii) the Improvements and the Personal Property are in
          working condition and that any machinery included therein also is in
          operating condition; and

               (iv)  the results of Buyer's inspections made pursuant to Section
          5.1 (b) hereof.

As used herein, the term "Examination Period" shall mean the period of time
commencing on the date of execution of this Agreement by Seller and ending on
the same day of the second month following such day unless such day is a
Saturday, Sunday or legal holiday in which event the Examination Period shall be
extended to the next day which is not a Saturday, Sunday or legal holiday;
provided however the expiration of the Examination Period will be extended for a
period of time equal to any delay in Seller providing the documents required
under Section 2.1 beyond the date on which delivery is required under Section
2.1.

          (b)  RIGHT OF ENTRY; INSPECTIONS; REPORTS.  Buyer and Buyer's
representatives, agents, consultants and designees shall have the right, at
reasonable times and upon reasonable notice to Seller, to enter upon the
Property, at Buyer's own cost, for any purpose in connection with its proposed
purchase, development or operation of the Property, 

                                      6

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including, without limitation, the right to examine all Reports relating to 
the Property which are in the possession or control of Seller and the right 
to make such inspections, investigations and tests as Buyer may elect to make 
or obtain; provided, however, any entry of Buyer hereunder shall be conducted 
in such a manner as to minimize the inconvenience caused to any tenants or 
Seller.  To the extent that any Reports pertaining to the Property are 
located in Seller's New Brighton, Minnesota office, the same shall be made 
available to Buyer for inspection at such office, or at Seller's election,  
may be copied and delivered to Buyer within ten (10) days following Buyer's 
specific written request therefor.  Buyer acknowledges and agrees that any 
Reports or other information furnished by Seller in regard to the Property 
are made without warranty or representation. In addition, Buyer may make such 
inquiries as Buyer deems appropriate of Seller's consultants or contractors 
who have performed work with respect to the Property.  Seller agrees to make 
all such books, records and files available to Buyer and Buyer's attorneys, 
accountants and other representatives at any time during business hours upon 
reasonable notice from Buyer and to cause its consultants and contractors to 
furnish Buyer with any information and copies of documents reasonably 
requested by Buyer.  From and after the execution of this Agreement, Buyer 
and Buyer's representatives, agents, consultants and designees shall be 
entitled to communicate directly with all governmental authorities in 
connection with Buyer's proposed purchase of the Property.  Buyer shall 
indemnify, defend, protect and hold Seller harmless from any claims, 
liabilities, damages or expenses (including attorneys' fees and costs) 
arising out of or incurred in connection with the entry by Buyer or its 
agents, designees, or representatives hereunder or arising from or in 
connection with any and all mechanic's liens and physical damage to property 
or persons arising out of any such entry by Buyer or its agents, designees or 
representatives, which obligations of Buyer shall survive the termination of 
this Agreement.

          (c)  BUYER'S RIGHT TO TERMINATE. If on or before the expiration of 
the Examination Period, Buyer delivers to Seller written notice that any of 
the conditions precedent set forth in Section 5.1 (a), have not been 
satisfied, it shall be conclusively presumed that Buyer has elected to 
terminate this Agreement and Buyer will instruct the Title Company to refund 
the Deposit in which event the Deposit will be returned to Buyer and this 
Agreement shall be of no further force or effect.  If no such written notice 
is given by Buyer to Seller on or prior to expiration of the Examination 
Period, the conditions precedent set forth in Section 5.1 (a) shall be deemed 
to be satisfied. 

     5.2  ACCURACY OF REPRESENTATIONS AND WARRANTIES OF SELLER.  On the date of
this Agreement and as of the Closing Date, all representations and warranties in
this Agreement by Seller shall be true in all material respects as though made
at that time.  Buyer shall give written notice of any inaccuracies it discovers
to Seller and Seller thereafter shall have the opportunity to object and/or
proceed to cure or to terminate this Agreement.  If the Seller's 

                                      7

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decision is to proceed to cure, then the inaccuracy will be considered by 
Buyer to be resolved.

     5.3  NO MATERIAL ADVERSE CHANGE.  Subject to the provision in Section 9,
during the period from the date of this Agreement to the Closing Date, the
Property shall not have sustained any loss or damage which materially adversely
affects its use.  Condemnation is addressed in Section 9.

     5.4  COMPLIANCE WITH COVENANTS.  Seller shall have complied with all the
agreements and covenants set forth in this Agreement.

     5.5  DOCUMENT APPROVAL.  On the Closing Date, all certificates, opinions
and other documents required to be delivered under this Agreement by Seller at
Closing shall have been delivered to Buyer in form and substance required by
this Agreement.

     5.6  SUBSEQUENTLY DISCOVERED DEFECTS.  If any matter affecting title to 
the Property ("Title Defect") shall arise or be discovered by Buyer which is 
not set out in the Commitment or the Survey, Buyer shall have the right to 
object to such Title Defect by the delivery to Seller of notice of such Title 
Defect within five (5) days after Buyer discovers such Title Defect provided 
that, if such Title Defect is discovered within five (5) days prior to the 
Closing Date, the Closing shall be extended for such period as may be 
necessary to give effect to the provisions of this Section 5.6 If Buyer does 
not so object within such period, such Title Defect shall become a Permitted 
Exception.  Upon receipt of notice of Buyer's objection to any such Title 
Defect, Seller shall have the right, but not the obligation, to cure such 
Title Defect to the satisfaction of Buyer and the Title Company for a period 
of five (5) days from the date of such notice except for such items that are 
typically cured at Closing such as satisfactions of deeds of trust and other 
liens satisfied by the payment of money.  If the aforesaid cure period 
extends beyond the Closing, the date of the Closing shall be extended to a 
date that is three (3) days after the expiration date of such five-day 
period.  If Seller cures Buyer's objection to the satisfaction of Buyer 
within the cure period, then the Closing shall occur on the original or 
postponed date of the Closing but otherwise upon the terms and provisions 
contained herein.  If Seller has not cured such Title Defect to the 
satisfaction of the Title Company such that the Title Company will delete the 
Title Defect from the final policy to be issued, Buyer shall either (a) close 
on such original or postponed date (and Buyer shall thereby be deemed to have 
waived such objection) or (b) terminate this Agreement by giving notice to 
Seller and the Title Company before such original or postponed date, in which 
case the Deposit shall be delivered to Buyer and each party shall thereupon 
be released from all further obligations under this Agreement.  If, in 
Seller's attempt to cure a Title Defect, Buyer discovers other Title Defects 
not set out in the 

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Commitment or Survey, such additional Title Defects shall be subject to the 
procedure set forth above.

                          SECTION 6. THE CLOSING

     6.1  THE CLOSING.  The Closing shall take place at 10:00 a.m. local time 
at the offices of LeBoeuf, Lamb, Greene & MacRae, in Denver, Colorado on the 
date Seller acquires title to the Property but not earlier than January 10, 
1999 and not later than July 10, 1999 (the "Closing Date"), or such later 
date as may be established pursuant to the terms hereof.  Seller represents 
it has exercised the Options. Within thirty (30) days of the date hereof, 
Seller shall give Buyer written notice of the specific Closing Date, which 
shall be no earlier than January 10, 1999 and no later than July 10, 1999.  
Notwithstanding anything herein to the contrary, Buyer may request Seller to 
close on a date earlier than January 10, 1999, and provided the Ground Owners 
consent to such earlier Closing Date, the parties shall cooperate with each 
other to close on an earlier date mutually acceptable to the parties and the 
Ground Owners (an "ACCELERATED CLOSING"), and on such Accelerated Closing 
Date, Buyer, in addition to the Purchase Price, shall pay to Seller, all rent 
and other expenses and charges owed by Seller to Ground Owners pursuant to 
the Leases attributable to the period between such actual earlier Closing 
Date and January 10, 1999.

     6.2  OBLIGATIONS OF SELLER AND BUYER AT CLOSING.  The following events
shall occur at the Closing:

          (a)  Seller shall execute (or cause Ground Owners to execute), have
acknowledged and deliver to Buyer a special warranty deed conveying title to
Buyer to the Land and the Improvements, subject only to the Permitted
Exceptions.

          (b)  Buyer shall be delivered either (i) a current ALTA Extended
Owner's Policy of title insurance on the Property to be issued pursuant to the
Commitment showing no lien, encumbrance or other restriction other than the
Permitted Exceptions or (ii) an unqualified written commitment from the Title
Company to deliver such policy of title insurance.

          (c)  Seller shall execute, have acknowledged and deliver to Buyer an
instrument whereby Seller as lessee terminates the Leases.

          (d)  Seller shall execute, have acknowledged and deliver to Buyer a
bill of sale conveying to Buyer all of Seller's right, title and interest in and
to the Personal Property with general warranties of title, subject only to those
matters approved or waived by Buyer pursuant to Section 5 that relate to the
Personal Property.

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          (e)  Seller shall deliver to Buyer an affidavit that all
representations and warranties contained in Sections 3.1 and 12.7.

          (f)  Seller shall deliver to Buyer a certification executed by Seller
under penalty of perjury in the form of, and upon the terms set forth in EXHIBIT
6.2(f) attached hereto, setting forth Seller's address and federal tax
identification number and certifying that Seller is not a "foreign person" in
accordance with and/or for the purpose of the provisions of Sections 7701 and
1445 (as may be amended) of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.

          (g)  Seller and Buyer shall deliver, or cause to be delivered, such
other instruments and documents as may be reasonably required to transfer title
to the Property to Buyer in the condition herein contemplated.

          (h)  At the Closing, Buyer shall deliver a wire transfer of funds
against delivery of the items specified in Section 6.2 payable to the order of
Seller in the amount set forth in Section 1.2(b).

     6.3  CLOSING COSTS.  Closing costs and adjustments shall be allocated as
follows:

          (a)  Buyer shall pay all recording and documentary fees due in
connection with the acquisition of the Property from Seller.  Seller will pay
the cost of the owner's policy of title insurance to be provided pursuant to the
terms of this Agreement, up to but not in excess of $3,110 and all sales, use or
excise taxes, if any, due upon the transfer of the Personal Property.

          (b)  All real property taxes levied against the Land and Improvements,
all personal property taxes levied against the Personal Property, and other
regular expenses, if any, affecting the Property shall be paid or shall be
prorated as of 11.59 p.m. on the day preceding the Closing in accordance with
the provisions set forth below.  For purposes of calculating prorations, Buyer
shall be deemed to be in title to the Property and therefore entitled to the
income and responsible for the expenses, for the entire day upon which the
Closing occurs.  Any apportionments which are not expressly provided for below
shall be made in accordance with customary practice in Denver, Colorado and all
apportionments are final.  To the extent any revenues or costs are reasonably
ascertainable, such adjustments, if and to the extent known and agreed upon as
of the Closing, shall be paid by Buyer to Seller (if the prorations result in a
net credit to the Seller) or by Seller to Buyer (if the prorations result in a
net credit to the Buyer), by increasing or reducing the cash portion of the
purchase price to be paid by Buyer at the Closing.  Any such adjustments not
determined or not agreed upon as of the Closing, and identified as such in
writing by the parties, shall be paid by Buyer 

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to Seller, or by Seller to Buyer, as the case may be, in cash as soon as 
practicable following the Closing.

          (c)  All non-delinquent real estate taxes and assessments on the 
Land and Improvements and all non-delinquent taxes on the Personal Property 
shall be prorated based on the actual current tax bill or the most recent 
levy and assessment information, if available, but if such tax bill or levy 
and assessment information has not been received by Seller or ascertained by 
Buyer and Seller, as the case may be, by the Closing the then current year's 
taxes shall be deemed to be one hundred two percent (102%) of the amount of 
the previous year's tax bill and such adjustment shall be final;

          (d)  All utility service charges for electricity, heat and air
conditioning service, other utilities, elevator maintenance, common area
maintenance, taxes (other than real estate taxes and personal property taxes),
other expenses incurred in operating the Property that Seller customarily pays,
and any other costs incurred in the ordinary course of business or the
management and operation of the Property shall be prorated on an accrual basis. 
Seller shall pay all such expenses that accrue prior to the Closing and Buyer
shall pay all such expenses accruing on the Closing and thereafter.  Seller and
Buyer shall obtain billings and meter readings as of the Closing to aid in such
prorations; and

          (e)  All capital and other improvements (including labor and
materials) which are performed or contracted for by Seller prior to the Closing
Date will be paid by the Seller, without contribution or proration from Buyer,
and Seller hereby indemnifies and holds Buyer and the Property harmless from any
materialmen or mechanic liens arising from the same, however, Buyer acknowledges
that Seller has no obligations to make such improvements prior to the Closing
Date.

            SECTION 7. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE

     The obligations of Seller to convey the Property to Buyer, and Buyer's 
right to purchase the Property, are subject to the satisfaction of the 
following conditions precedent on or before the time set forth below.  If any 
condition is not so satisfied, the condition may be waived by Seller in 
writing designated as a waiver or amendment to this Agreement, or Seller may 
terminate this Agreement by written notice to Buyer given within ten (10) 
business days of the applicable satisfaction date set forth below in which 
event the Deposit shall be returned to Buyer and the parties shall be 
released from all obligations hereunder.

     7.1  PERFORMANCE BY GROUND OWNER.  On or before the Closing Date, the
Ground Owners shall have performed their obligations under the Options
including, without limitation, Ground Owners' obligation to convey title to the
Property to Seller or Buyer (as 

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Seller may direct).  If Seller gives Buyer notice of termination due to 
Ground Owners' default in their obligation to sell the Property to Seller, 
then at Buyer's election made in writing to Seller within ten business days 
following receipt of such notice of Seller's termination ("BUYER'S ELECTION 
NOTICE"), either (a) Seller will assign to Buyer all claims it may have 
against Ground Owners or either of them upon Buyer's payment of the Purchase 
Price, adjusted pursuant to the terms hereof, to Seller, which payment shall 
be made within ten days of Buyer's Election Notice, or (b) this Agreement 
shall be terminated, in which event the Deposit shall be returned to Buyer 
and thereafter Seller shall reimburse Buyer for "Buyer's Costs", as defined 
in and in accordance with SECTION 8.3 hereof.  

          If Seller does not terminate this Agreement after a Ground Owner
default, and if within sixty (60) days following such default Seller has been
unable to cause the Ground Owners to convey title to Buyer, then Buyer may
terminate this Agreement upon written notice to Seller given within fifteen (15)
days of the expiration of said sixty (60) day period and the Deposit shall be
returned to Buyer and Seller shall reimburse Buyer for "Buyer's Costs", as
defined in and in accordance with SECTION 8.3 hereof.

     7.2  ACCURACY OF REPRESENTATIONS AND WARRANTIES OF BUYER.  On the date of
this Agreement and as of the Closing Date, all representations and warranties in
this Agreement by Buyer shall be true in all material respects as though made at
that time.

     7.3  COMPLIANCE WITH COVENANTS.  On the Closing Date, Buyer shall have
complied with all of its monetary covenants set forth in this Agreement.

                        SECTION 8. DEFAULT AND TERMINATION

     8.1  TIME OF ESSENCE.  Time is of the essence of the obligations of the
parties.

     8.2  BUYER DEFAULT.  If Buyer defaults in performing its obligations
hereunder and any such default is not cured within ten (10) days of Buyer's
receipt of Seller's written notice of any such default, Seller shall be entitled
to (i) terminate this Agreement and have the Deposit and all interest thereon
paid to Seller as liquidated damages, or (ii) bring an action against Buyer for
specific performance.

     8.3  SELLER DEFAULT.  If Seller shall default in performing its 
obligations hereunder, (i) Buyer may elect to terminate this Agreement, have 
the Deposit returned to Buyer and thereafter, Seller shall reimburse Buyer 
for its non-refundable, out-of-pocket expenses incurred with respect to its 
satisfaction of the conditions precedent set forth in SECTION 5.1 hereof and 
its costs to secure financing for the transaction contemplated herein, which 
costs shall in no event exceed $100,000 within thirty (30) days of Seller's 
receipt of invoices for 

                                      12

<PAGE>

such costs (collectively "BUYER COSTS") or (ii) Buyer may elect to seek 
specific performance of this Agreement from Seller because of such default.  
Seller shall have no liability hereunder arising out of the default of the 
Ground Owner, other than as set forth in Section 7.1(b) hereof.

                 SECTION 9. CASUALTY AND CONDEMNATION

     It is the intention of the parties that Seller shall transfer the 
Property at the Closing in its present state and condition, subject only to 
reasonable wear and tear.  Therefore, risk of loss to the Property from fire 
or other casualty shall be borne by Seller until the Closing is completed.  
In the event that any damage occurs to the Property prior to the Closing Date 
and the reasonable cost of repair is $50,000.00 or less, Seller shall cause 
such repairs to be made as soon as reasonably practical and the Closing Date 
shall be reasonably extended to accommodate such restoration by Seller.  If 
the Property is damaged by fire or other casualty prior to Closing and the 
reasonable cost of repair and restoration of such damage with materials of 
like kind and quality is greater than $50,000.00, Buyer may elect either to 
(a) have Seller assign to Buyer all of its right, title and interest in and 
to the proceeds of any and all fire or other casualty insurance relating to 
such damage (and deductible related to such insurance proceeds), and the 
Buyer shall be entitled to a credit against the purchase price in an amount 
equal to the deductible portion of the insurance policy covering the 
Property, or (b) terminate this Agreement, in which event the Deposit shall 
be returned to Buyer and Seller shall, within thirty (30) days of receipt of 
invoices therefor, pay Buyer's Costs.  

     In the event that all or a portion of the Property is taken or 
threatened to be taken by eminent domain prior to the Closing Date (a 
"TAKING"), Buyer and Seller shall each have the option of terminating this 
Agreement within twenty (20) days following the date that Seller provides 
notice to Buyer of the Taking, in which case Buyer shall receive back the 
entire Deposit and both Buyer and Seller shall be released from all 
obligations hereunder.  In the event that neither party exercises such option 
to terminate this Agreement, then the parties shall proceed to close this 
transaction as contemplated hereby and Seller shall assign to Buyer all of 
Seller's interests in all proceeds payable to Seller in connection with the 
Taking.  Notwithstanding anything herein to the contrary, if any such Taking 
does not involve condemnation of Seller's leasehold interest under the Leases 
or the Options, then Seller shall have no option of terminating this 
Agreement.

                        SECTION 10. INDEMNIFICATION

     This Section Intentionally Deleted.

           SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES

                                      13

<PAGE>

     No representations or warranties whatever are made by any party to this
Agreement except as specifically set forth in this Agreement or in an instrument
delivered pursuant to this Agreement.  The representations, warranties and
indemnities made by the parties to this Agreement and the covenants and
agreements to be performed or complied with by the respective parties under this
Agreement before the Closing Date shall be deemed to be continuing and shall
survive the Closing; provided, however, the representations and warranties of
Seller shall terminate on the date which is one year after the Closing Date.  

                       SECTION 12. MISCELLANEOUS

     12.1 EFFECT OF HEADINGS.  The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.

     12.2 ENTIRE AGREEMENT/SURVIVAL OF AGREEMENT.  This Agreement constitutes
the entire agreement between the parties hereto and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties
regarding the subject matter of this Agreement.  No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties hereto.  This Agreement and all provisions hereof shall survive the
Closing contemplated hereunder except as expressly set forth herein to the
contrary.

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

     12.4 BINDING EFFECT.  This Agreement shall be binding on and shall inure to
the benefit of the parties to it and their respective successors and assigns.

     12.5 NOTICES.  All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
service, if served personally on the party to whom notice is given, if sent by
facsimile with electronic confirmation of delivery, or on the third day after
mailing, if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid and properly addressed as
follows:

     To Buyer at:

     Etkin-Johnson Group LLC

                                      14

<PAGE>

     1512 Larimer St., Suite 325
     Denver, CO 80202
     Attention:  David L. Johnson
     Phone: 303-629-5354
     Fax: 303-629-5451

     with a copy to:

     LeBoeuf, Lamb, Greene & MacRae
     370 17 Street, Suite 2600
     Denver, Colorado 80202-5626
     Attention:  Barry Permut, Esq.
     Phone: 303-291-2720
     Fax: 303-297-0422

     To Seller at:

     Rehabilicare
     1811 Old Highway 8
     New Brighton, Minnesota  55112
     Attention:  David Kaysen, CEO
     Phone: 612-638-0419
     Fax: 612-638-0477
     
     with a copy to:

     Malkerson Gilliland Martin LLP
     1500 AT&T Tower
     901 Marquette Avenue
     Minneapolis, Minnesota  55402
     Attention:  Kathleen Martin
     Phone: 612-344-1702
     Fax: 612-344-1414

     12.6 GOVERNING LAW.  This Agreement shall be construed in accordance with
the laws of the State of Colorado.

     12.7 BROKER'S FEES.  Each of the parties represents and warrants that
except for Seller's engagement of CB Commercial whose commission will be paid by
Seller, it has not employed, retained or otherwise utilized any broker or finder
in connection with any of the 

                                      15

<PAGE>

transactions contemplated by this Agreement and no other broker or person is 
entitled to any commission or finder's fees in connection with any of these 
transactions.  The parties each agree to indemnify and hold harmless one 
another against any loss, liability, damage, cost, claim or expense incurred 
by reason of any brokerage commission or finder's fee alleged to be payable 
because of any act, omission or statement of the indemnifying party.

     12.8 RECOVERY OF LITIGATION COSTS.  If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default, or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.

     12.10     SELLER'S EXECUTION OF AGREEMENT.  Provided Seller executes and
returns to Buyer a counterpart of this Agreement within five (5) business days
of the day first above set forth, this Agreement shall thereupon become a
binding and enforceable contract between Seller and Buyer.

                         STAODYN, INC.,
                         a Delaware corporation

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

                         Date of Execution by Seller: August ___, 1998


                         ETKIN-JOHNSON GROUP LLC, 
                         a Colorado limited liability company


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

                         Date of Execution by Buyer: August ___, 1998




                                      16

<PAGE>

                                    EXHIBIT 1.1(a)

                              Legal Description of Land

PARCEL A:

Lots 1 and 3, Block 1, Longmont Industrial Park, Unit No. 2, Replat C, County of
Boulder, Colorado


PARCEL B:

Lot 2, Longmont Industrial Park Replat of Lot 4, Unit No. 2, Replat D, County of
Boulder, Colorado


PARCEL C:

Lot 2, Block 1, Longmont Industrial Park Unit No. 2, Replat C, County of
Boulder, State of Colorado

                                      17

<PAGE>

                                    EXHIBIT 1.1(c)

                              Tangible Personal Property

1.   The air compressors located in the Building.

2.   The phone system currently installed in the Building.


                                      18

<PAGE>

                                    EXHIBIT 6.2(f)

                    Transferor Certification of Non-Foreign Status

     To inform ______________________, a ______________________corporation 
("Transferee") that withholding of tax under Section 1445 of the Internal 
Revenue Code of 1986, as amended ("Code") will not be required upon the 
transfer of certain real property to the Transferee by 
________________________ ("Transferor"), the undersigned hereby certifies the
following on behalf of the Transferor:

     1.   The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Code and the
Income Tax Regulations promulgated thereunder);

     2.   The Transferor's U. S. employer identification/social security number
is ________________________; and

     3.   The Transferor's office/personal residence address is

          ____________________________________
          ____________________________________
          ____________________________________

     The Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.

     The Transferor understands that the Transferee is relying on this 
Certification in determining whether withholding is required upon said 
transfer.

     Under penalty of perjury I declare that I have examined this Certification
and to the best of my knowledge and belief it is true, correct and complete, and
I further declare that I have authority to sign this document on behalf of the
Transferor.


DATE:  _____________, 1998.

                                   By:
                                        ---------------------------------------

                                   Its:
                                        ---------------------------------------

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