EXHIBIT 10.1


                            ASSET PURCHASE AGREEMENT

                  THIS AGREEMENT made as of March 13, 2001 (this "Agreement") by
and among The National Medical Products Co. Ltd., a Saudi Arabian corporation
(the "Purchaser"), and LecTec Corporation, a Minnesota corporation (the
"Seller"). The Purchaser and Seller are referred to collectively herein as the
"Parties." Capitalized terms used in this Agreement shall have the meanings
given to them upon their first use or in Section 10 herein.

                               W I T N E S S E T H

                  WHEREAS, the Seller has been engaged in the business (the
"Business") of the research, development, design, manufacture, marketing,
distribution and sale of medical tape products of various types and
configurations for the world market, including the United States healthcare
market (hospitals and alternate care), the United States consumer market and the
international wound dressing healthcare market; and

                  WHEREAS, the Seller desires to sell and assign and the
Purchaser desires to buy, on the terms and conditions set forth in this
Agreement, the assets and properties of the Seller associated with the Business
as set forth herein;

                  NOW, THEREFORE, in consideration of the premises and of the
mutual promises herein made, and in consideration of representations,
warranties, and covenants herein contained, the Parties hereto agree as follows:

Section 1.  Purchase and Sale of Purchased Assets.

         (a)      Subject to and upon the terms and conditions of this
                  Agreement, the Seller agrees to sell, assign, transfer and
                  convey to the Purchaser and the Purchaser agrees to purchase
                  from the Seller, on the date hereof, all of the Seller's
                  right, title and interest, as of the date hereof, in and to
                  the following assets of the Seller (the "Purchased Assets") to
                  the extent employed solely in the Business:

                  (i)      The following machinery and equipment, documentation,
                           operation manuals and operator's records of the
                           Seller (collectively, "Equipment"):

                           A.       The tape coating equipment.

                           B.       Handling machinery related to the tape
                                    coating equipment.

                           C.       A tape converter manufactured by Deacro
                                    Industries Ltd. of Mississauga, Ontario,
                                    designated as a model DA 503, serial number
                                    1116.




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                           D.       The following equipment manufactured by
                                    Arsoma GmbH of Cleeburg, Germany and
                                    designated as follows:

                                    - Model EM 260 Slitter Assy, no serial
                                        number
                                    - Model CD 250 Core Dispenser, serial
                                        number CD250-31
                                    - Model RS 250 Rewind Station, serial
                                        number RS250-23
                                    - Model TR 250 Turret Rewinder, serial
                                        number TR250-29
                                    - Model EM 510 Slitter Assy, serial number
                                        EM510-20
                                    - Model CD 450 Core Dispenser, serial number
                                        CD450-20
                                    - Model RS 450 Roll  Stacker, serial number
                                        RS450-20
                                    - Model TR 450 Turret Rewinder, serial
                                        number TR450-20

                           E.       All documentation, operation manuals and
                                    operator's records relating to the
                                    foregoing.

                  (ii)     All of the following described intellectual property
                           (the "Intellectual Property"), including the goodwill
                           associated therewith, licenses and sublicenses
                           granted and obtained with respect thereto, and rights
                           thereunder, remedies against infringements thereof,
                           and rights to protection of interests therein under
                           the laws of all jurisdictions, owned or registered in
                           the name of the Seller, or its affiliates:

                           A.       Patent # US 4,696,854

                           B.       Patent # US 5,810,756

                           C.       The trademark "ISOCLEAR"

                           D.       The trademark "SUPERPORE"

                  (iii)    All former customer lists and customer contacts of
                           the Seller directly related to the Business.

                  (iv)     The Seller's claims and rights against third parties
                           relating to the Purchased Assets, including, without
                           limitation, rights under manufacturers' and vendors'
                           warranties.

         (b)      Notwithstanding anything in Section 1(a) to the contrary, the
                  assets and properties to be transferred by the Seller to the
                  Purchaser pursuant hereto (and the term "Purchased Assets" as
                  used herein) shall not include any assets and properties which
                  are not referred to in Sections 1(a)(i) through 1(a)(iv)
                  above.



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<PAGE>

         (c)      The parties acknowledge and agree that on the date hereof,
                  title to all of the Purchased Assets described in Section
                  1(a)(i) through 1(a)(iv) shall be conveyed to the Purchaser.

Section 2.  No Assumption of Seller Liabilities.

         Notwithstanding any implication to the contrary contained in this
Agreement, the Purchaser shall not assume, pay or in any way be liable or
responsible for any of the debts, liabilities or obligations of the Seller
arising in connection with the operation of the Business prior to the date
hereof.

Section 3.  Purchase Price.

         The Purchaser shall purchase and the Seller shall sell the Purchased
Assets for the sum of Seven Hundred Thousand Dollars (USD$700,000) (the
"Purchase Price"). The Purchase Price shall be delivered to Seller by wire
transfer or certified check simultaneously with the execution of this Agreement.

Section 4.  Closing, Closing Deliveries.

         (a)      The closing of the transactions contemplated herein (the
                  "Closing") shall take place simultaneously with the signing of
                  this Agreement (the "Closing Date").

         (b)      Simultaneously with the signing of this Agreement, Seller
                  shall deliver the following to Purchaser:

                  (i)      The Purchased Assets;

                  (ii)     A bill of sale and/or assignment relating to the
                           Purchased Assets in a form reasonably satisfactory to
                           the Purchaser; and

                  (iii)    Such other documents relating to the transactions
                           contemplated hereby which are reasonably requested by
                           the Purchaser.

         (c)      Simultaneously with the signing of this Agreement, Purchaser
                  shall deliver the following to Seller:

                  (i)      The Purchase Price;

                  (ii)     Such other documents relating to the transactions
                           contemplated hereby which are reasonably requested by
                           the Purchaser.

Section 5.  Representations and Warranties of the Seller.



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                  The Seller hereby represents and warrants to the Purchaser
that, except for those matters discussed in Section 8(e) of this Agreement, the
statements contained in this Section 5 are correct and complete as of the date
of this Agreement.

         (a)      Due Organization. The Seller is a corporation duly organized,
                  validly existing and in good standing under the laws of the
                  State of Minnesota. The Seller has all requisite corporate
                  power and authority to own, lease and operate its properties,
                  to carry on its business as presently conducted by it, to
                  enter into this Agreement and to consummate the transactions
                  contemplated hereby, except where the failure to have such
                  corporate power would not reasonably be likely to have a
                  Material Adverse Effect.

         (b)      Authorization. The execution and delivery by the Seller of
                  this Agreement and the performance of its obligations
                  hereunder, have been duly and validly authorized by all
                  necessary corporate action on its part, and this Agreement is
                  the legal, valid and binding obligation of the Seller,
                  enforceable against it in accordance with its terms.

         (c)      Non-Contravention. Except where the occurrence of any of the
                  events in (i) or (ii) below would not reasonably be likely to
                  have a Material Adverse Effect, neither the execution and
                  delivery by the Seller of this Agreement, nor the performance
                  by the Seller of its obligations hereunder will, or with the
                  giving of notice or the lapse of time, or both, would:

                  (i)      conflict with, result in a breach of, or constitute a
                           default under, any provision of the Articles of
                           Incorporation or By-laws of the Seller;

                  (ii)     conflict with, result in a breach of, or constitute a
                           default under, any provision of any contract,
                           indenture, lease, sublease, loan agreement,
                           restriction, Lien or other obligation or liability to
                           which the Seller is a party or by which it is bound,
                           or result in or create in any party the right to
                           accelerate, terminate, modify or cancel any contract,
                           license, indenture, lease, sublease or loan agreement
                           to which the Seller is a party or by which it, or any
                           of its properties or assets, is affected or bound;

                  (iii)    violate any order, writ, injunction, decree, law,
                           statute, rule or regulation applicable to the Seller;
                           or

                  (iv)     result in the creation or imposition of any Lien upon
                           any of the Purchased Assets.

         (d)      Title to Purchased Assets; Condition of Purchased Assets. The
                  Seller has good and marketable title to and possession of all
                  of the Purchased Assets, free and clear of all Liens and no
                  interest in or right to any of the Purchased Assets is held,
                  legally or beneficially by any Person other than the Seller.
                  The tangible Purchased Assets have been properly maintained
                  and are in good operating condition, reasonable wear and



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<PAGE>

                  tear excepted, and there exists no outstanding written notice
                  of any violation of any statute relating to them.

         (e)      Intellectual Property. The Seller exclusively owns the entire
                  right, title and interest in and to each item of Intellectual
                  Property. To the Seller's knowledge, the use of the
                  Intellectual Property in the conduct of the Business or the
                  use of the Seller's know-how in the conduct of the Business do
                  not infringe the rights of any third party.

         (f)      Consents of Third Parties. No consent, approval or agreement
                  of any Person, court, government or other entity is required
                  to be obtained by the Seller in connection with the execution
                  and delivery of this Agreement or the consummation of the
                  transactions contemplated hereby, except where the failure to
                  obtain such consent, approval or agreement would not be
                  reasonably likely to result in a Material Adverse Effect.

         (g)      Compliance with Law; Permits. The Seller has complied with
                  all, and has not committed any violation of any, federal,
                  state, local or foreign statutes, laws, rules and regulations
                  applicable to the Purchased Assets. Except where the absence
                  would not reasonably be likely to result in a Material Adverse
                  Effect, the Seller holds all permits, licenses (or permissions
                  in the nature thereof), registrations with, and consents of,
                  governmental authorities necessary to conduct the Business and
                  in the same manner as it has been conducted heretofore.

         (h)      No Broker. No agent, broker, person or firm acting on behalf
                  of the Seller or any of its Affiliates, or under its
                  authority, is or will be entitled to receive from Purchaser a
                  financial advisory fee, brokerage commission, finder's fee or
                  like payment in connection with this Agreement or any of the
                  transactions contemplated hereby.

         (i)      Environmental, Health and Safety Matters. Neither this
                  Agreement nor the consummation of the transaction that is the
                  subject of this Agreement will result in any obligations for
                  site investigation or cleanup, or notification to or consent
                  of government agencies or third parties, pursuant to any of
                  the so-called "transaction-triggered" or "responsible property
                  transfer" laws.

Section 6.  Representations and Warranties of the Purchaser.

                  The Purchaser hereby represents and warrants to the Seller
that the statements contained in this Section 6 are correct and complete as of
the date of this Agreement.

         (a)      Due Organization. Purchaser is a corporation duly organized,
                  validly existing and in good standing under the laws of Saudi
                  Arabia. The Purchaser has all requisite power and authority to
                  enter into this Agreement and to consummate the transactions
                  contemplated hereby and thereby.



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<PAGE>

         (b)      Authorization. The execution and delivery by the Purchaser of
                  this Agreement and the performance by it of its obligations
                  hereunder, have been duly and validly authorized by all
                  necessary action on its part, and this Agreement is the legal,
                  valid and binding obligation of the Purchaser, enforceable
                  against it in accordance with its terms.

         (c)      Non-Contravention. Neither the execution nor delivery of this
                  Agreement by the Purchaser nor the performance by the
                  Purchaser of its obligations hereunder will, or with the
                  giving of notice or the lapse of time, or both, would:

                  (i)      conflict with, result in a breach of, or constitute a
                           default under, any provision of the Purchaser's
                           articles of incorporation or by-laws, or of any
                           contract, indenture, lease, sublease, loan agreement,
                           Lien or other obligation or liability to which the
                           Purchaser is a party or by which it is bound; or

                  (ii)     violate any order, writ, injunction, decree, law,
                           statute, rule or regulation applicable to or by which
                           it or its properties are bound.

         (d)      Litigation. There is no litigation, arbitration, claim,
                  governmental or other investigation or proceeding (formal or
                  informal) involving the transactions contemplated hereby
                  pending or, to the best knowledge of the Purchaser,
                  threatened, against the Purchaser and to the best knowledge of
                  the Purchaser there exists no bases or grounds for any of the
                  foregoing.

         (e)      No Broker. No agent, broker, person or firm acting on behalf
                  of the Purchaser or under its authority, is or will be
                  entitled to a financial advisory fee, brokerage commission,
                  finder's fee or like payment in connection with this Agreement
                  or any of the transactions contemplated hereby.

         (f)      Consents of Third Parties. No consent, approval or agreement
                  of any Person, party, court, government or entity is required
                  to be obtained by the Purchaser in connection with the
                  execution and delivery of this Agreement or the consummation
                  of the transactions contemplated hereby.

Section 7.  Indemnification.

         (a)      The Parties shall be entitled to rely upon the representations
                  and warranties of the other party set forth in Section 5 and
                  Section 6 of this Agreement, and except as otherwise
                  specifically provided herein, such representations and
                  warranties shall survive the Closing and remain in full force
                  and effect for a period of eighteen (18) months after the
                  Closing (other than the representations and warranties set
                  forth in Sections 5(b) and 6(b) (Authorization), which shall
                  survive until sixty (60) days after the expiration of the
                  applicable statutes of limitations, and the representations
                  and warranties set forth in Section 5(e) (Title to Purchased
                  Assets), which shall survive indefinitely).



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<PAGE>

         (b)      The Seller, hereby agrees to indemnify and hold harmless the
                  Purchaser, the Purchaser's Affiliates and their respective
                  officers, directors, employees, stockholders, agents and
                  representatives (collectively, the "Purchaser Indemnified
                  Parties"), from and against any loss, liability, claim, damage
                  or expense (including costs of litigation and reasonable legal
                  fees and expenses) (a "Loss") suffered or incurred by the
                  Purchaser Indemnified Party based upon, arising out of or
                  resulting from any of the following:

                  (i)      The failure of the Seller to transfer to the
                           Purchaser good and sufficient title to the Purchased
                           Assets, free and clear of all Liens;

                  (ii)     Any breach of any representation or warranty of the
                           Seller contained in this Agreement; and

                  (iii)    Any breach of any covenant of the Seller contained in
                           this Agreement requiring performance after the
                           Closing Date.

         (c)      The Purchaser hereby agrees to indemnify and hold harmless the
                  Seller, the Seller's Affiliates and their respective officers,
                  directors, employees, stockholders, agents and representatives
                  (collectively, the "Seller Indemnified Parties"), from and
                  against any Loss suffered or incurred by any such Seller
                  Indemnified Party based upon, arising out of or resulting from
                  any of the following:

                  (i)      Any breach of any representation or warranty of the
                           Purchaser contained in this Agreement; and

                  (ii)     Any breach of any covenant of the Purchaser contained
                           in this Agreement requiring performance after the
                           Closing Date

         (d)      The Purchaser Indemnified Parties and the Seller Indemnified
                  Parties (the "Indemnified Parties") shall bring a claim for
                  indemnification hereunder in good faith and in a timely manner
                  consistent with good commercial practices.

         (e)      After the Closing Date, the rights set forth in this Section 7
                  shall be each party's sole and exclusive remedies against the
                  other parties hereto for misrepresentations or breaches of
                  covenants contained in this Agreement. Notwithstanding the
                  foregoing, nothing herein shall prevent any of the parties
                  hereto from bringing an action based upon allegations of fraud
                  or other intentional breach of an obligation of or with
                  respect to the other parties in connection with this
                  Agreement. In the event such action is brought, the Purchaser,
                  on the one hand, and the Seller and on the other hand, shall
                  bear their own fees and expenses in connection with such
                  action.

         (f)      Notwithstanding anything in this Agreement to the contrary,
                  the amount of any Losses for which indemnification is provided
                  under this Section 7 shall be reduced by (i) any related
                  recoveries actually received by an Indemnified Party under
                  insurance policies, (ii) any other related payments actually
                  received by an Indemnified Party from third parties and (iii)
                  any Tax benefits actually realized or received by an



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<PAGE>

                  Indemnified Party or any of their Affiliates, in each case, on
                  account of the matter resulting in such Losses or the payment
                  of such Losses.

         (g)      Anything to the contrary notwithstanding, neither the
                  Purchaser Indemnified Parties, on the one hand, nor the Seller
                  Indemnified Parties, on the other hand, shall be entitled to
                  recovery from the Indemnifying Party with respect to any
                  inaccuracy or breach of any representation or warranty in
                  Sections 5 or 6 hereof, as applicable, (i) unless and until
                  the aggregate amount of such Losses suffered, sustained or
                  incurred by the Purchaser Indemnified Parties or the Seller
                  Indemnified Parties, as the case may be, by reason of such
                  inaccuracy or breach, shall exceed USD$200,000 calculated on a
                  cumulative and not on a per item basis (the "Basket Amount"),
                  and then only with respect to the excess over the Basket
                  Amount, or (ii) in an aggregate amount in excess of
                  USD$700,000 (the "Cap").

Section 8.    Additional Covenants and Agreements.

         (a)      Tax Matters.

                  (i)      The Seller shall be solely responsible for and shall
                           indemnify and hold harmless the Purchaser for all
                           Taxes with respect to Purchased Assets which are due
                           and payable up to and including the Closing Date, and
                           the Purchaser shall be responsible for and indemnify
                           and hold harmless the Seller for all Taxes with
                           respect to the Purchased Assets which are due and
                           payable after the Closing Date, except that any Taxes
                           imposed upon the ownership of Purchased Assets which
                           relate to a period commencing prior to the Closing
                           Date and ending after the Closing Date, shall be
                           prorated such that Taxes for the period prior to the
                           Closing Date shall be the responsibility of the
                           Seller and Taxes for the period after the Closing
                           Date shall be the responsibility of the Purchaser.

                  (ii)     The Purchaser and the Seller recognize their mutual
                           obligations pursuant to Section 1060 of the Code to
                           timely file IRS Form 8594 with each of their
                           respective federal income tax returns. The Purchaser
                           and the Seller agree to allocate the Purchase Price
                           among the Purchased Assets in accordance with the
                           provisions of Section 1060 of the Code and the
                           Treasury Regulations thereunder.

                           Unless otherwise required by a determination within
                           the meaning of Section 1313 of the Code (or a
                           counterpart provision of foreign, state or local
                           law), all foreign, federal, state and local income
                           tax returns filed by the Purchasers and the Seller
                           shall be filed consistently with the allocations
                           reflected in this Section 8(a)(ii).

         (b)      Transfer of Purchased Assets. The Parties agree that
                  simultaneously with the execution of this Agreement title to
                  the Purchase Assets and Risk of Loss with



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                  respect to the Purchased Assets shall pass to Purchaser.
                  Purchaser shall physically remove the Purchased Assets from
                  Seller's premises within sixty days of the date hereof.
                  Purchaser acknowledges that any and all expenses associated
                  with the removal of the Purchased Assets from the Seller's
                  Premises shall be borne by Purchaser. Purchaser hereby (i)
                  indemnifies Seller for any Loss incurred by Seller in
                  connection with the Purchased Assets during the time that the
                  Purchased Assets remain on the premises of Seller (ii)
                  releases Seller from any Loss incurred by Seller with respect
                  to the Purchased Assets during the time that the Purchased
                  Assets remain on the premises of Seller.

         (c)      Transition Services. For a period of two weeks from the date
                  hereof, Seller shall provide training at Seller's facilities
                  with respect to the manufacturing processes of the Purchased
                  Assets, to the extent reasonably requested by Purchaser. After
                  two weeks from the date hereof and prior to the six month
                  anniversary hereof, Seller shall be available for up to ten
                  hours per month, by telephone or video conference, to answer
                  questions with respect to the manufacturing processes of the
                  Purchased Assets.

         (d)      Covenant Not to Compete. For a period of five years from and
                  after the Closing Date, the Seller will not engage directly or
                  indirectly in the Business that the Seller conducts or
                  conducted as of the Closing Date in any geographic area in
                  which the Seller conducts or conducted that Business as of the
                  Closing Date; provided, however, that no owner of less than 1%
                  of the outstanding stock of any publicly traded corporation
                  shall be deemed to engage solely by reason thereof in any of
                  its businesses. If the final judgment of a court of competent
                  jurisdiction declares that any term or provision of this
                  Section 8(d) is invalid or unenforceable, the Parties agree
                  that the court making the determination of invalidity or
                  unenforceability shall have the power to reduce the scope,
                  duration, or area of the term or provision, to delete specific
                  words or phrases, or to replace any invalid or unenforceable
                  term or provision with a term or provision that is valid and
                  enforceable and that comes closest to expressing the intention
                  of the invalid or unenforceable term or provision, and this
                  Agreement shall be enforceable as so modified after the
                  expiration of the time within which the judgment may be
                  appealed.

         (e)      Release of Liens. The Parties acknowledge that the Purchased
                  Assets are subject to Liens in favor of Wells Fargo Bank
                  Minnesota, N.A. and Wells Fargo Business Credit, Inc. The
                  Seller undertakes to obtain from each of the foregoing, as
                  soon as practicable after the Closing Date, a waiver letter
                  consenting to the transactions contemplated hereby. In the
                  event that the Seller is unable to obtain such consents, the
                  transactions contemplated hereby will deemed null and void,
                  and the Seller will take back the Purchased Assets and return
                  the Purchase Price to the Purchaser along with interest
                  calculated at a rate of 8% per annum.

Section 9.   Remedies; Specific Performance.




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         The Seller acknowledges and agrees that the Purchased Assets are unique
and that the Purchaser will be irreparably harmed in the event that this
Agreement, including the obligations of the Seller to sell and deliver the
Purchased Assets to the Purchaser are not specifically enforced. The parties
further agree it is impossible to measure in money the damage which will accrue
by reason of a refusal by the Seller to perform such obligations under this
Agreement. Therefore, in the event that the Purchaser shall institute any action
to enforce such obligations, the Seller hereby acknowledges that the Purchaser
does not have an adequate remedy at law and that injunctive or other equitable
relief (in addition to any other remedy to which it may be entitled, at law or
in equity) will not constitute any hardship upon the Seller.

Section 10.   Definitions.

         As used in this Agreement, the following terms shall have the meanings
ascribed to them below:

         (a)      "Affiliate" means, when used with reference to a specified
                  party, (i) any entity that, directly, or indirectly through
                  one or more intermediaries, controls, is controlled by, or is
                  under common control with, the specified party, and (ii) any
                  entity of which the specified party is, directly or
                  indirectly, the owner of an equity interest of ten (10)
                  percent or more.

         (b)      "Code" means the Internal Revenue Code of 1986, as amended,
                  including the rules and regulations thereunder, as well as any
                  successor or substitute provisions thereto.

         (c)      "knowledge" means, with respect to the Seller, the actual
                  knowledge after due inquiry (or what would reasonably be the
                  knowledge if due inquiry were made) of any executive officer
                  (determined in accordance with Rule 16a-1(f) under the
                  Exchange Act) of the Seller and with respect to the Purchaser,
                  the actual knowledge after due inquiry (or what would
                  reasonably be the knowledge if due inquiry were made) of any
                  executive officer (determined in accordance with Rule 16a-1(f)
                  under the Exchange Act) of the Purchaser, as the case may be.

         (d)      "Lien" means any mortgage, lien, pledge, restriction, charge,
                  security interest, claims, encumbrance, or rights, title and
                  interest of others.

         (e)      "Material Adverse Effect" means any circumstance, event,
                  occurrence, change or effect that, individually or in the
                  aggregate, materially and adversely affects the Purchased
                  Assets taken as a whole; provided, however, that none of the
                  following shall be deemed in themselves, either alone or in
                  combination, to constitute, and none of the following shall be
                  taken into account in determining whether there has been or
                  will be a Material Adverse Effect: (a) any adverse change,
                  effect, event, occurrence, state of facts or development
                  attributable to conditions affecting the industries in which
                  the Seller participates as a whole, the economy of the Unites
                  States as a whole or foreign economies in any locations where
                  the Seller has material operations or sales, (b) any adverse
                  change, effect, event, occurrence, state of facts or
                  development arising from or relating to any change in
                  accounting




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<PAGE>

                  requirements or principles or any change in applicable laws,
                  rules or regulations or the interpretation thereof, (c) any
                  adverse change, effect, event, occurrence, state of facts of
                  development arising from any action taken by the Purchaser or
                  any of its directors, officers, employees, agents or
                  Affiliates, other than the execution and delivery of this
                  Agreement and any permitted public announcement thereof.

         (f)      "Person" means any individual, general partnership, limited
                  partnership, corporation, limited liability company, joint
                  venture, trust, business trust, cooperative, association,
                  governmental entity (or any department, agency, or political
                  subdivision thereof), or other form of organization.

Section 11.  Expenses.

         Whether or not the transactions contemplated by this Agreement are
consummated, each party will pay its respective expenses, including all fees and
expenses of counsel, accountants and other advisors, incurred in connection with
the origination, negotiation, execution and performance of this Agreement.

Section 12.  Further Assurances.

         The parties agree that, on and after the Closing Date, each shall take
all reasonable action and execute any commercially reasonable documents,
instruments or conveyances which may be reasonably necessary or advisable to
carry out any of the provisions hereof. All such actions and assistance shall be
taken and rendered at the sole cost and expense of the requesting party.

Section 13.  No Public Announcement.

         The Purchaser and the Seller agree that the existence, nature and terms
and conditions of this Agreement and discussions between the parties regarding
the transactions contemplated hereby are, and shall be treated as, confidential
by the parties. Accordingly, each party agrees that it (a) will make no public
comment concerning or announcement of the transactions contemplated hereby; (b)
will respond to all inquiries concerning the transactions contemplated hereby by
stating that it is such company's policy not to comment on such inquiries; (c)
will take reasonable steps to restrict knowledge of the transactions
contemplated hereby to those who need to know; and (d) will notify the other
parties of any rumor external to the parties of the transactions contemplated
hereby. Notwithstanding the foregoing, the Purchaser acknowledge and agree that
the Seller, as a public company, is subject to certain disclosure requirements
under applicable securities laws. For this reason, the Seller reserves the right
to disclose the existence of and the status and terms of negotiations at any
time it is advised by its counsel that securities laws or the rules of any stock
market on which its shares are traded require such disclosure, and the Seller
shall have the right to issue a press release regarding the transactions
contemplated hereby upon the signing of this Agreement, provided that the text
of any such press release shall be reasonably acceptable to the Purchaser.

Section 14.  Entire Agreement.





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<PAGE>

         This Agreement contains the entire agreement among the Parties hereto
as to the subject matter hereof, and supersedes all prior agreements and
understandings between them relating thereto, written or oral, to the extent
they have related in any way to the subject matter hereof.


Section 15.  Amendments and Waivers.

         This Agreement may not be amended or modified, except by a writing
executed by the Party against which such amendment or waiver is sought to be
enforced. No extension of time for, or waiver of the performance of, any
obligation of any Party hereto shall be effective unless it is made in a writing
signed by the Party granting such extension or waiver. Unless it specifically
states otherwise, no waiver shall constitute or be construed as a waiver of any
default, misrepresentation, breach of warranty or covenant hereunder, or
subsequent breach or non-performance.

Section 16.  Notices.

         Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given pursuant to this
Agreement shall be in writing and shall be given in person or by facsimile or by
certified or registered first-class mail or internationally recognized express
courier delivery service addressed as follows:

         If to the Purchaser:     The National Medical Products Co., Ltd.
                                  2nd Industrial City
                                  P.O. Box 7681
                                  Riyadh 11472
                                  Saudi Arabia
                                  Fax:  00 966 1 498 5607
                                  Attn: Fahad Al Moammar, President

         with copies to:          Andre Granger, Vice President Operations
                                  The National Medical Products Co., Ltd.
                                  Fax:  00 966 1 498 5607

                                  Mark J. Vieno, Esq.
                                  2116 Second Avenue South
                                  Minneapolis, MN 55404

         If to the Seller:        LecTec Corporation
                                  10701 Red Circle Drive
                                  Minnetonka, MN 55343
                                  Attention: Rodney A. Young

         with a copy to:          Dorsey & Whitney, LLP
                                  220 South Sixth Street
                                  Minneapolis, MN 55402


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<PAGE>


                        Attention: Timothy S. Hearn, Esq.

Any such address may be changed by any party by written notice to the other
parties given in accordance herewith. Any notice shall be deemed to be given
three (3) days after being placed for delivery so addressed with postage or
other charges prepaid, provided, however, that any written notice actually
received by any party in less than three (3) days shall be deemed to be given,
for all purposes of this Agreement, at the time it is received. Notice given by
facsimile shall be deemed given upon electronic confirmation of delivery.

Section 17.  Governing Law; Consent to Jurisdiction.

         This Agreement is made and shall be governed and construed in
accordance with the laws of the State of Minnesota, without giving effect to any
choice or conflicts of laws principles thereof. This Agreement may be enforced
in any federal court or state court sitting in Minnesota; and the parties hereto
consent to the jurisdiction and venue of any such court and waive any argument
that venue in such forum is not convenient.

Section 18.  Successors and Assigns.

         This Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Party;
PROVIDED HOWEVER, that the Purchaser may (i) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (ii) designate one or
more of its Affiliates to perform its obligations hereunder (in any or all of
which cases the Purchaser nonetheless shall remain responsible for the
performance of all of its obligations hereunder).

Section 19.  Captions.

         Section headings and other captions are supplied herein for convenience
only and shall not be deemed a part of this Agreement for any purpose.

Section 20.  Counterparts.

         This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original for all purposes, and all of which together
shall constitute one agreement. A facsimile signature followed by an original
signature shall be sufficient to execute this Agreement.

Section 21.  Severability.

         If any term or provision of this Agreement, or the application thereof
to any Person or circumstance, shall to any extent be invalid or unenforceable
under applicable law, the remainder of this Agreement, or the application of
such term or provision to Persons or circumstances other than those as to which
it is invalid or unenforceable under applicable law, shall not be affected
thereby and each term and provision of this Agreement shall be valid and
enforced to the fullest extent permitted by applicable law.





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Section 22.  No Third Party Beneficiaries.

         Nothing in this Agreement shall confer any rights or remedies upon any
person or entity that is not a party or permitted assignee of a party to this
Agreement, except Indemnified Parties (as defined in Section 17).

Section 23.   Construction

         The Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.

Section 24.  Bulk Sales Laws.

         The parties hereby waive compliance with the provisions of all
applicable bulk sales laws (if any are applicable).



                                    * * * * *




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



                           THE NATIONAL MEDICAL PRODUCTS CO., LTD.


                           By /s/ Fahad Al Moammar
                           -----------------------
                               Its: President



                           LECTEC CORPORATION


                           By /s/ Rodney A. Young
                           ----------------------
                               Its: Chairman, Chief Executive Officer
                               and President










                  [Signature Page to Asset Purchase Agreement]


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