EXHIBIT 10.2










                   MERGER AGREEMENT AND PLAN OF REORGANIZATION

                                  BY AND AMONG

                              NATURE VISION, INC.,

                           PHOTO CONTROL CORPORATION,

                              PC ACQUISITION, INC.,

                  JEFF ZERNOV (AS STOCKHOLDERS' REPRESENTATIVE)

                                       AND

                          THE UNDERSIGNED STOCKHOLDERS


                                 April 15, 2004











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                                TABLE OF CONTENTS

                   MERGER AGREEMENT AND PLAN OF REORGANIZATION


ARTICLE 1  THE MERGER........................................................25
         1.1     The Merger..................................................25
         1.2     Closing; Effective Time.....................................25
         1.3     Effect of the Merger........................................25
         1.4     Certificate of Incorporation; Bylaws........................25
         1.5     Directors and Officers......................................26
         1.6     Effect on Capital Stock.....................................26
         1.7     Surrender of Certificates...................................30
         1.8     No Further Ownership Rights in Target Capital Stock.........32
         1.9     Lost, Stolen or Destroyed Certificates......................32
         1.10    Tax and Accounting Consequences.............................32
         1.11    Exemption from Registration.................................33
         1.12    Taking of Necessary Action; Further Action..................33

ARTICLE 2  REPRESENTATIONS AND WARRANTIES OF TARGET..........................33
         2.1     Organization, Standing and Power............................33
         2.2     Capital Structure...........................................33
         2.3     Authority; Noncontravention.................................34
         2.4     Financial Statements........................................34
         2.5     Absence of Certain Changes..................................35
         2.6     Absence of Undisclosed Liabilities..........................35
         2.7     Accounts Receivable.........................................35
         2.8     Litigation, Restrictions on Business Activities.............35
         2.9     Minute Books................................................36
         2.10    Governmental Authorization..................................36
         2.11    Title to Property...........................................36
         2.12    Intellectual Property.......................................36
         2.13    Environmental Matters.......................................37
         2.14    Taxes.......................................................37
         2.15    Employee Benefit Plans......................................38
         2.16    Employment Matters..........................................39
         2.17    Related Party Transactions..................................39
         2.18    Insurance...................................................40
         2.19    Compliance with Laws........................................40
         2.20    Real Property...............................................40
         2.21    Brokers' and Finders' Fees..................................40
         2.22    Vote Required...............................................40
         2.23    Inventory...................................................40
         2.24    Customers and Suppliers.....................................40
         2.25    Material Contracts..........................................41



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         2.26    Complete Copies of Materials................................41
         2.27    Representations Complete....................................41
         2.28    Projections.................................................41

ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB.........42
         3.1     Organization, Standing and Power............................42
         3.2     Capitalization and Voting Rights............................42
         3.3     Authority...................................................43
         3.4     SEC Documents; Financial Statements.........................44
         3.5     Financial Statements........................................44
         3.6     Absence of Certain Changes..................................45
         3.7     Absence of Undisclosed Liabilities..........................45
         3.8     Accounts Receivable.........................................45
         3.9     Litigation, Restrictions on Business Activities.............45
         3.10    Minute Books................................................45
         3.11    Governmental Authorization..................................45
         3.12    Title to Property...........................................46
         3.13    Intellectual Property.......................................46
         3.14    Environmental Matters.......................................46
         3.15    Taxes.......................................................46
         3.16    Employee Benefit Plans......................................47
         3.17    Employment Matters..........................................47
         3.18    Related Party Transactions..................................48
         3.19    Insurance...................................................49
         3.20    Compliance with Laws........................................49
         3.21    Real Property...............................................49
         3.22    Brokers' and Finders' Fees..................................49
         3.23    Inventory...................................................49
         3.24    Customers and Suppliers.....................................49
         3.25    Material Contracts..........................................49
         3.26    Complete Copies of Materials................................50
         3.27    Representations Complete....................................50
         3.28    Projections.................................................50

ARTICLE 4  CONDUCT PRIOR TO THE EFFECTIVE TIME...............................51
         4.1     Conduct of Business of Target...............................51
         4.2     Target Notices..............................................54
         4.3     Conduct of Business of Acquiror.............................54
         4.4     Acquiror Notices............................................58

ARTICLE 5  ADDITIONAL AGREEMENTS.............................................58
         5.1     No Solicitation.............................................58
         5.2     Shareholders Meeting or Consent Solicitation................59
         5.3     Access to Information.......................................60
         5.4     Confidentiality.............................................60

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         5.5     Public Disclosure...........................................60
         5.6     Consents; Cooperation.......................................61
         5.7     Update Disclosure; Breaches.................................61
         5.8     Irrevocable Proxies.........................................61
         5.9     Legal Requirements..........................................62
         5.10    Tax-Free Reorganization.....................................62
         5.11    Listing of Additional Shares................................62
         5.12    Additional Agreements; Best Efforts.........................62
         5.13    Employee Benefits...........................................62
         5.14    Preparation of Tax Return...................................63
         5.15    Sales, Transfer and Other Taxes.............................63
         5.16    Royalty Payments............................................63

ARTICLE 6  CONDITIONS TO THE MERGER..........................................63
         6.1     Conditions to Obligations of Each Party to Effect
                 the Merger..................................................63
         6.2     Additional Conditions to Obligations of Target..............64
         6.3     Additional Conditions to the Obligations of Acquiror........66

ARTICLE 7  TERMINATION, EXPENSES, AMENDMENT AND WAIVER.......................70
         7.1     Termination.................................................70
         7.2     Effect of Termination.......................................71
         7.3     Expenses and Termination Fees...............................71
         7.4     Amendment...................................................72
         7.5     Extension; Waiver...........................................72

ARTICLE 8  INDEMNIFICATION...................................................72
         8.1     Time Limitations............................................72
         8.2     Amount Limitations..........................................73
         8.3     Indemnification by Signing Stockholders.....................73
         8.4     Indemnification by Acquiror.................................74
         8.5     Matters Involving Third Parties.............................74
         8.6     Escrow Fund.................................................76
         8.7     Exclusive Remedy............................................76
         8.8     Stockholders' Representative................................77
         8.9     Actions of the Stockholders' Representative.................78

ARTICLE 9  GENERAL PROVISIONS................................................80
         9.1     Notices.....................................................80
         9.2     Interpretation..............................................81
         9.3     Counterparts................................................81
         9.4     Entire Agreement; No Third Party Beneficiaries..............81
         9.5     Severability................................................81
         9.6     Remedies Cumulative.........................................82
         9.7     Governing Law...............................................82
         9.8     Assignment..................................................82
         9.9     Rules of Construction.......................................83



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         9.10    Amendments and Waivers......................................83







































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                                    SCHEDULES
                                    ---------

Schedule 1.6(e) - Stock Options, Warrants, Convertible Debt
Schedule 6.3(o) - Release of Security Interests

Target Disclosure Schedule
Acquiror Disclosure Schedule


                                    EXHIBITS
                                    --------

Exhibit A - Articles of Merger
Exhibit B - Irrevocable Proxy
Exhibit C - Acquiror's Legal Opinion
Exhibit D - Target's Legal Opinion
Exhibit E - Target FIRPTA Notification Letter
Exhibit F - Escrow Agreement


























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                   MERGER AGREEMENT AND PLAN OF REORGANIZATION

This MERGER AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of April 15, 2004, by and among Photo Control Corporation, a
Minnesota corporation ("Acquiror"), PC Acquisition, Inc., a Minnesota
corporation ("Merger Sub"), Nature Vision, Inc., a Minnesota corporation
("Target"), the Stockholders' Representative ("Stockholders' Representative"),
and Dean Capra and Tony Capra (together with the Stockholders' Representative,
each a "Signing Stockholder" and, collectively, the "Signing Stockholders").
Target, Merger Sub, Acquiror, Stockholders' Representative and the Signing
Stockholders are referred to individually as a "Party" and collectively as the
"Parties."

                                    RECITALS

A.       The Boards of Directors of Target, Acquiror and Merger Sub believe it
         is in the best interests of their respective companies and the
         shareholders and stockholders of their respective companies that Target
         and Merger Sub combine into a single company through the statutory
         merger of Merger Sub with and into Target (the "Merger") and, in
         furtherance thereof, have approved the Merger.

B.       Pursuant to the Merger, among other things, each outstanding share of
         common stock of Target, $.01 par value ("Target Common Stock"), shall
         be converted into shares of common stock of Acquiror, $.08 par value
         ("Acquiror Common Stock"), at the rate set forth herein.

C.       Target, Acquiror and Merger Sub desire to make certain representations
         and warranties and other agreements in connection with the Merger.

D.       The parties intend, by executing this Agreement, to adopt a plan of
         reorganization within the meaning of Section 368 of the Internal
         Revenue Code of 1986, as amended (the "Code"), and to cause the Merger
         to qualify as a tax free reorganization under the provisions of
         Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.

E.       Concurrent with the execution of this Agreement and as an inducement to
         Acquiror to enter into this Agreement, all of the Signing Stockholders
         are delivering to Acquiror irrevocable proxies to vote the shares of
         Target's Common Stock owned by such persons to approve the Merger and
         against any competing proposals.


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                                    AGREEMENT

         NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the parties
agree as follows:

                                    ARTICLE 1

                                   THE MERGER
                                   ----------

1.1      The Merger. At the Effective Time (as defined in Section 1.2) and
         subject to and upon the terms and conditions of this Agreement, the
         Articles of Merger attached hereto as Exhibit A (the "Articles of
         Merger") and the applicable provisions of the Minnesota Business
         Corporation Act ("Minnesota Law"), Merger Sub shall be merged with and
         into Target, the separate corporate existence of Merger Sub shall cease
         and Target shall continue as the surviving corporation. Target as the
         surviving corporation after the Merger is hereinafter sometimes
         referred to as the "Surviving Corporation."

1.2      Closing; Effective Time. The closing of the transactions contemplated
         hereby (the "Closing") shall take place as soon as practicable after
         the satisfaction or waiver of each of the conditions set forth in
         Article 6 or at such other time as the parties hereto agree (the date
         on which the Closing shall occur, the "Closing Date"). The Closing
         shall take place at the offices of Gray, Plant, Mooty, Mooty & Bennett
         P.A., or at such other location as the parties hereto agree. On the
         Closing Date, the parties hereto shall cause the Merger to be
         consummated by filing the Articles of Merger, together with the
         required officers' certificates, with the Secretary of State of the
         State of Minnesota, in accordance with the relevant provisions of
         Minnesota Law (the time and date of such filing being the "Effective
         Time" and the "Effective Date," respectively).

1.3      Effect of the Merger. At the Effective Time, the effect of the Merger
         shall be as provided in this Agreement, the Articles of Merger and the
         applicable provisions of Minnesota Law. Without limiting the generality
         of the foregoing, and subject thereto, at the Effective Time, all the
         property, rights, privileges, powers and franchises of Target shall
         vest in the Surviving Corporation, and all debts, liabilities and
         duties of Target shall become the debts, liabilities and duties of the
         Surviving Corporation.

1.4      Certificate of Incorporation; Bylaws.

         (a)      Articles of Incorporation. At the Effective Time, the Articles
                  of Incorporation of Merger Sub, as in effect


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                  immediately prior to the Effective Time, shall be the Articles
                  of Incorporation of the Surviving Corporation until thereafter
                  amended as provided by Minnesota Law and such Certificate of
                  Incorporation.

         (b)      Bylaws. The Bylaws of Merger Sub, as in effect immediately
                  prior to the Effective Time, shall be the Bylaws of the
                  Surviving Corporation until thereafter amended.

1.5      Directors and Officers. The directors of the Surviving Corporation
         shall be the Stockholders' Representative and such other members as
         designated by the Stockholders' Representative, to hold office until
         such time as such directors resign, are removed or their respective
         successors are duly elected or appointed and qualified. The officers of
         the Surviving Corporation shall be as designated by the Stockholders'
         Representative, to hold office until such time as such officers resign,
         are removed or their respective successors are duly elected or
         appointed and qualified.

1.6      Effect on Capital Stock. By virtue of the Merger and without any action
         on the part of Acquiror, Merger Sub, Target or the holders of any of
         Target's securities:

         (a)      Conversion of Target Common Stock. The maximum number of
                  shares of Acquiror Common Stock to be issued or reserved for
                  issuance in exchange for the acquisition by Acquiror of all
                  outstanding Target Common Stock shall be 2,200,000 shares
                  subject to adjustment as set forth in Section 1.6(f) and
                  reduced as a result of (as adjusted and reduced, the "Total
                  Acquiror Shares"): (i) any Dissenting Shares (as defined
                  below) and (ii) any Stock Options (as defined in Section
                  1.6(e)). No adjustment shall be made in the number of shares
                  of Acquiror Common Stock issued in the Merger as a result of
                  (x) any increase or decrease in the market price of Acquiror
                  Common Stock prior to the Effective Time or (y) any cash
                  proceeds received by Target from the date hereof to the
                  Closing Date pursuant to the exercise of currently outstanding
                  options to purchase shares of Target Common Stock. Subject to
                  the terms and conditions of this Agreement and the Articles of
                  Merger as of the Effective Time, by virtue of the Merger and
                  without any action on the part of the holder of any shares of
                  Target Common Stock, at the Effective Time, each share of
                  Target Common Stock issued and outstanding immediately prior
                  to the Effective Time (other than shares to be cancelled
                  pursuant to Section 1.6(b) and shares, if any, held by persons
                  who have not voted such shares for approval of the Merger and
                  except respect to which such persons shall become entitled to
                  exercise dissenters' rights in

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                  accordance with the Minnesota Law, Sections 302A.471 and
                  302A.473 ("Dissenting Shares")) shall be cancelled and
                  extinguished and converted into and become the right to
                  receive .58137 shares of Acquiror Common Stock (the "Exchange
                  Ratio").

         (b)      Adjustments to Exchange Ratio. The Exchange Ratio shall be
                  adjusted to reflect fully the effect of any stock split,
                  reverse split, stock dividend (including any dividend or
                  distribution of securities convertible into Acquiror Common
                  Stock or Target Common Stock), reorganization,
                  recapitalization or other like change with respect to Acquiror
                  Common Stock or Target Common Stock occurring after the date
                  hereof and prior to the Effective Time. The Exchange Ratio
                  shall also be adjusted to reflect the issuance of any shares
                  of Target Common Stock occurring after the date hereof and
                  prior to the Effective Time, other than issued pursuant to the
                  exercise of Stock Options.

         (c)      Fractional Shares. No fraction of a share of Acquiror Common
                  Stock will be issued, but in lieu thereof each holder of
                  shares of Target Common Stock who would otherwise be entitled
                  to a fraction of a share of Acquiror Common Stock (after
                  aggregating all fractional shares of Acquiror Common Stock to
                  be received by such holder) shall receive from Acquiror an
                  amount of cash (rounded to the nearest whole cent) equal to
                  the product of (i) such fraction, multiplied by (ii) the
                  Closing Price. "Closing Price" means the average closing price
                  per share of Acquiror's Common Stock on the Nasdaq Small Cap
                  Market over the 30 day period preceding the Closing Date.

         (d)      Dissenters' Rights. Any Dissenting Shares shall not be
                  converted into Acquiror Common Stock but shall instead be
                  converted into the right to receive such consideration as may
                  be determined to be due with respect to such Dissenting Shares
                  pursuant to Minnesota Law. Target agrees that, except with the
                  prior written consent of Acquiror, or as required under
                  Minnesota Law, it will not voluntarily make any payment with
                  respect to, or settle or offer to settle, any such purchase
                  demand. Each holder of Dissenting Shares ("Dissenting
                  Shareholder") who, pursuant to the provisions of Minnesota
                  law, becomes entitled to payment of the fair value for shares
                  of Target Common Stock shall receive payment therefor (but
                  only after the value therefor shall have been agreed upon or
                  finally determined pursuant to such provisions). If, after the
                  Effective Time, any Dissenting Shares shall


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                  lose their status as Dissenting Shares, Acquiror shall issue
                  and deliver, upon surrender by such shareholder of certificate
                  or certificates representing shares of Target Common Stock,
                  the number of shares of Acquiror Common Stock to which such
                  shareholder would otherwise be entitled under this Section 1.6
                  and the Articles of Merger less the number of shares allocable
                  to such shareholder that have been or will be deposited in the
                  Escrow Fund (as defined below) in respect of such shares of
                  Acquiror Common Stock pursuant to Section 1.7 and Article 8.

         (e)      Stock Options, Warrants, Convertible Debt and Related Matters.
                  Schedule 1.6(e) sets forth each stock option, warrant and
                  convertible debt issued by Target and outstanding on the date
                  of this Agreement (collectively, the "Stock Options"),
                  including the number of shares of Target capital stock subject
                  to each such option, the exercise or vesting schedule, the
                  exercise price per share and the term of each such option,
                  whether or not fully exercisable. No additional Stock Options
                  will be granted by Target on or after the date hereof. On the
                  Closing Date, Target shall deliver to Acquiror an updated
                  Schedule 1.6(e) current as of such date to reflect the
                  exercise of any Stock Options. Prior to the Closing Date,
                  Target shall take all actions necessary so that effective as
                  of the Effective Time, Target shares shall no longer be
                  deliverable upon exercise thereof and in lieu of Target
                  shares, such Stock Options shall be exercisable for a number
                  of Acquiror shares equal to the number of Target shares
                  subject to such Stock Options multiplied by the Exchange
                  Ratio. The per share exercise price for each such Stock Option
                  shall be the current exercise price per Target share divided
                  by the Exchange Ratio. Effective as of the Effective Time,
                  Acquiror shall assume all obligations of Target with respect
                  to such Stock Options, as so modified. Promptly following the
                  Effective Time, Acquiror shall issue new option agreements,
                  warrants, or convertible debt instruments, as the case may be,
                  representing such Stock Options, as so modified.

         (f)      Total Acquirer Shares Adjustment.

                  (i)      Within 7 days after the Closing Date, the
                           Stockholders' Representative will prepare and deliver
                           to Acquiror a draft balance sheet prepared in
                           accordance with generally accepted accounting
                           principles ("GAAP") (the "Draft Balance Sheet") for
                           the Surviving Corporation as of the close of business
                           on the Closing Date


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                           (determined on a pro forma basis as though the
                           Parties had not consummated the transactions
                           contemplated by this Agreement). The Stockholders'
                           Representative will make available to Acquiror and
                           its accountants the work papers and back-up materials
                           used in preparing the Draft Balance Sheet.

                  (ii)     If Acquiror has any objections to the Draft Balance
                           Sheet, then it must deliver a detailed statement
                           describing its objections to Stockholders'
                           Representative within 2 days after receiving the
                           Draft Balance Sheet. Acquiror and the Stockholders'
                           Representative will use reasonable efforts to resolve
                           any such objections themselves through good faith
                           negotiation. If they do not obtain a final resolution
                           within 10 days after the Stockholders' Representative
                           has received the statement of objections, however,
                           Acquiror and the Stockholders' Representative will
                           select a mutually acceptable, nationally-recognized
                           accounting firm to resolve any remaining objections.
                           Acquiror will pay the costs and expenses of any
                           accounting firm so used. The determination made by
                           such accounting firm will be set forth in writing and
                           will be conclusive and binding upon the Parties. The
                           "Final Balance Sheet" means the Draft Balance Sheet
                           together with any revisions made pursuant to this
                           Section 1.6(f).

                  (iii)    The Total Acquiror Shares shall be reduced by 1 share
                           of stock for each $1 that the Target's Net Asset
                           Value (as defined below) as of June 30, 2004 and set
                           forth on the Final Balance Sheet is less than
                           $1,150,000 (not including adjustments relating to the
                           grant of stock options). Acquiror will recover such
                           shares from the Escrow Shares held in the Escrow
                           Fund, provided, however, that such reductions shall
                           not exceed the total amount of the Escrow Shares held
                           in the Escrow Fund. For the purposes of this Section
                           1.6 "Target's Net Asset Value" means Target's total
                           assets less Target's total liabilities, both
                           determined in accordance with GAAP consistently
                           applied.

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1.7      Surrender of Certificates.

         (a)      Exchange Agent. Signature Stock Transfer, Inc. shall act as
                  exchange agent (the "Exchange Agent") in the Merger.

         (b)      Acquiror to Provide Common Stock. Promptly after the Effective
                  Time, Acquiror shall make available to the Exchange Agent for
                  exchange in accordance with this Article 1, through such
                  reasonable procedures as Acquiror may adopt, the Total
                  Acquiror Shares less the number of shares of Acquiror Common
                  Stock to be deposited into the Escrow Fund (as defined in
                  Section 8.6) pursuant to the requirements of Article 8.

         (c)      Exchange Procedures. Promptly after the Effective Time,
                  Acquiror shall cause to be mailed to each holder of record of
                  a certificate or certificates (the "Certificates") which
                  immediately prior to the Effective Time represented
                  outstanding shares of Target Common Stock, whose shares were
                  converted into the right to receive shares of Acquiror Common
                  Stock (and cash in lieu of fractional shares) pursuant to
                  Section 1.6: (i) a letter of transmittal (which shall specify
                  that delivery shall be effected, and risk of loss and title to
                  the Certificates shall pass, only upon receipt of the
                  Certificates by the Exchange Agent, and shall be in such form
                  and have such other provisions as Acquiror may reasonably
                  specify) and (ii) instructions for use in effecting the
                  surrender of the Certificates in exchange for certificates
                  representing shares of Acquiror Common Stock (and cash in lieu
                  of fractional shares). Upon surrender of a Certificate for
                  cancellation to the Exchange Agent or to such other agent or
                  agents as may be appointed by Acquiror, together with such
                  letter of transmittal, duly completed and validly executed in
                  accordance with the instructions thereto, the holder of such
                  Certificate shall be entitled to receive in exchange therefor
                  a certificate representing the number of whole shares of
                  Acquiror Common Stock less the number of shares of Acquiror
                  Common Stock to be deposited in the Escrow Fund on such
                  holder's behalf pursuant to Article 8 and payment in lieu of
                  fractional shares which such holder has the right to receive
                  pursuant to Section 1.6, and the Certificate so surrendered
                  shall forthwith be canceled. Until so surrendered, each
                  outstanding Certificate will be deemed from and after the
                  Effective Time, for all corporate purposes, other than the
                  payment of dividends, to evidence the ownership of the number
                  of full shares of Acquiror

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                  Common Stock into which such shares of Target Common Stock
                  shall have been so converted and the right to receive an
                  amount in cash in lieu of the issuance of any fractional
                  shares in accordance with Section 1.6. As soon as practicable
                  after the Effective Time, and subject to and in accordance
                  with the provisions of Section 8.6, Acquiror shall cause to be
                  delivered to the Escrow Agent (as defined in Section 8.6) a
                  certificate or certificates representing 10% of the Total
                  Acquiror Shares (the "Escrow Shares") which shall be
                  registered in the name of the Escrow Agent as nominee for the
                  holders of Certificates cancelled pursuant to this Section
                  1.7. Subject to the provisions of Section 8.8, the Escrow
                  Shares shall be beneficially owned by such holders and shall
                  be held in escrow and shall be available to compensate
                  Acquiror for certain damages as provided in Article 8. To the
                  extent not used for such purposes, the Escrow Shares shall be
                  released, all as provided in Article 8.

         (d)      Distributions with Respect to Unexchanged Shares. No dividends
                  or other distributions with respect to Acquiror Common Stock
                  with a record date after the Effective Time shall be paid to
                  the holder of any unsurrendered Certificate with respect to
                  the shares of Acquiror Common Stock represented thereby until
                  the holder of record of such Certificate surrenders such
                  Certificate. Subject to applicable law, following surrender of
                  any such Certificate, there shall be paid to the record holder
                  of the certificates representing whole shares of Acquiror
                  Common Stock issued in exchange therefor, without interest, at
                  the time of such surrender, the amount of any such dividends
                  or other distributions with a record date after the Effective
                  Time which would have been previously payable (but for the
                  provisions of this Section 1.7(d)) with respect to such shares
                  of Acquiror Common Stock.

         (e)      Transfers of Ownership. If any certificate for shares of
                  Acquiror Common Stock is to be issued in a name other than
                  that in which the Certificate surrendered in exchange therefor
                  is registered, it shall be a condition of the issuance thereof
                  that the Certificate so surrendered is properly endorsed and
                  otherwise in proper form for transfer and that the person
                  requesting such exchange will have paid to Acquiror or any
                  agent designated by it any transfer or other taxes required by
                  reason of the issuance of a certificate for shares of Acquiror
                  Common Stock in any name other than that of the registered
                  holder of the Certificate surrendered,


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                  or established to the satisfaction of Acquiror or any agent
                  designated by it that such tax has been paid or is not
                  payable.

         (f)      No Liability. Notwithstanding anything to the contrary in this
                  Section 1.7, none of the Exchange Agent, Acquiror, the
                  Surviving Corporation or any party hereto shall be liable to
                  any person for any amount properly paid to a public official
                  pursuant to any applicable abandoned property, escheat or
                  similar law.

         (g)      Dissenting Shares. The provisions of this Section 1.7 shall
                  also apply to Dissenting Shares that lose their status as
                  such, except that the obligations of Acquiror under this
                  Section 1.7 shall commence on the date of loss of such status
                  and the holder of such shares shall be entitled to receive in
                  exchange for such shares the number of shares of Acquiror
                  Common Stock to which such holder is entitled pursuant to
                  Section 1.6.

1.8      No Further Ownership Rights in Target Capital Stock. All shares of
         Acquiror Common Stock issued upon the surrender for exchange of shares
         of Target Common Stock in accordance with the terms hereof (including
         any cash paid in lieu of fractional shares) shall be deemed to have
         been issued in full satisfaction of all rights pertaining to such
         shares of Target Common Stock, and there shall be no further
         registration of transfers on the records of the Surviving Corporation
         of shares of Target Common Stock which were outstanding immediately
         prior to the Effective Time. If, after the Effective Time, Certificates
         are presented to Acquiror for any reason, they shall be canceled and
         exchanged as provided in this Article 1.

1.9      Lost, Stolen or Destroyed Certificates. In the event any Certificates
         shall have been lost, stolen or destroyed, the Exchange Agent shall
         issue in exchange for such lost, stolen or destroyed Certificates, upon
         the making of an affidavit of that fact by the holder thereof, such
         shares of Acquiror Common Stock (and cash in lieu of fractional shares)
         as may be required pursuant to Section 1.6; provided, however, that
         Acquiror may, in its discretion and as a condition precedent to the
         issuance thereof, require the owner of such lost, stolen or destroyed
         Certificates to deliver a bond in such sum as it may reasonably direct
         as indemnity against any claim that may be made against Acquiror, the
         Surviving Corporation or the Exchange Agent with respect to the
         Certificates alleged to have been lost, stolen or destroyed.

1.10     Tax and Accounting Consequences. It is intended by the parties hereto
         that the Merger shall constitute a reorganization within the meaning of
         Section 368 of the


                                       32
<PAGE>

         Code. No Party shall take any action which would, to such Party's
         knowledge, cause the Merger to fail to qualify as a reorganization
         within the meaning of Section 368 of the Code.

1.11     Registration of Acquiror Common Stock. The shares of Acquiror Common
         Stock to be issued in connection with the Merger will be registered
         under the Securities Act of 1933, as amended (the "Securities Act").

1.12     Taking of Necessary Action; Further Action. If, at any time after the
         Effective Time, any further action is necessary or desirable to carry
         out the purposes of this Agreement and to vest the Surviving
         Corporation with full right, title and possession to all assets,
         property, rights, privileges, powers and franchises of Target, the
         officers and directors of Target and Merger Sub are fully authorized in
         the name of their respective corporations or otherwise to take, and
         shall take, all such lawful and necessary action, so long as such
         action is not inconsistent with this Agreement.

                                    ARTICLE 2

                    REPRESENTATIONS AND WARRANTIES OF TARGET
                    ----------------------------------------

         Target and the Signing Stockholders, jointly and severally, represent
and warrant to Acquiror that the statements contained in this Article 2 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, except as set forth in the attached disclosure
schedule accompanying this Agreement (the "Target Disclosure Schedule"). The
Target Disclosure Schedule will be arranged in paragraphs corresponding to the
sections contained in this Article 2.

2.1      Organization, Standing and Power. Target is a corporation, duly
         incorporated, validly existing and in good standing under the laws of
         the State of Minnesota. Target has full corporate power and authority
         and all permits and licenses necessary to carry on the businesses in
         which it is engaged and which it proposes to engage. There are no
         outstanding powers of attorney executed on behalf of Target and Target
         is not a guarantor of any other person or entity. Target has no
         subsidiaries and does not own, directly or indirectly, any equity
         interest in any entity.

2.2      Capital Structure. The authorized capital of Target consists of
         10,000,000 shares of Target Common Stock, of which 3,076,500 shares are
         issued and outstanding. All of the issued and outstanding shares have
         been duly authorized, are validly issued, fully paid and nonassessable,
         and are held of record as set forth in Schedule 2.2. There are no
         outstanding or authorized option, warrant, purchase right, phantom
         stock or other contracts or commitments that could

                                       33
<PAGE>

         require the Company to issue, sell or otherwise cause to become
         outstanding any of its capital stock other than pursuant to the
         exercise of an option outstanding as of the date of this Agreement
         under Target's Stock Option Plan ("Target Stock Option Plan").

2.3      Authority; Noncontravention.

         (a)      Each of Target and the Signing Stockholders has full power and
                  authority to enter into this Agreement and the ancillary
                  agreements hereto (collectively, the "Transaction Documents")
                  and to perform their obligations thereunder. The Transaction
                  Documents to which any of Target or the Signing Stockholders
                  is a party constitute valid and legally binding obligations of
                  each of Target and the Signing Stockholders, as applicable,
                  enforceable in accordance with their respective terms and
                  conditions.

         (b)      The execution and delivery of the Transaction Documents by
                  Target do not, and the consummation of the transactions
                  contemplated thereby will not, conflict with, or result in any
                  violation of, or default under (with or without notice or
                  lapse of time, or both), or give rise to a right of
                  termination, cancellation or acceleration of any obligation or
                  loss of any benefit under (i) any provision of the Articles of
                  Incorporation or Bylaws of Target, as amended, or (ii) any
                  Target Material Contract (as defined in Section 2.25), permit,
                  concession, franchise, license, judgment, order, decree,
                  statute, law, ordinance, rule or regulation applicable to
                  Target or any of its properties or assets.

         (c)      No consent, approval, order or authorization of, or
                  registration, declaration or filing with, any third person or
                  any court, administrative agency or commission or other
                  governmental authority or instrumentality ("Governmental
                  Entity") is required by or with respect to Target in
                  connection with the execution and delivery of any of the
                  Transaction Documents or the consummation of the transactions
                  contemplated thereby.

2.4      Financial Statements. Target has delivered to Acquiror its audited
         financial statements (balance sheet and statement of operations) for
         the fiscal years ended December 31, 2002 and December 31, 2003 ("Most
         Recent Target Fiscal Year End") and its unaudited financial statements
         (balance sheet and


                                       34
<PAGE>

         statement of operations) on a consolidated basis as at, and for the 2
         month period ended February 29, 2004 ("Most Recent Target Fiscal Month
         End") (collectively, the "Target Financial Statements"). The Target
         Financial Statements have been prepared in accordance with GAAP (except
         that the unaudited financial statements do not have notes thereto)
         applied on a consistent basis throughout the periods indicated and with
         each other. The Target Financial Statements fairly present the
         financial condition and operating results of Target as of the dates,
         and for the periods, indicated therein, subject, in the case of the
         unaudited financing statements, to normal year-end audit adjustments
         which are not material in the aggregate. Target maintains a standard
         system of accounting established and administered in accordance with
         GAAP. Target's Net Asset Value was greater than $1,400,000 as of
         December 31, 2003.

2.5      Absence of Certain Changes. Since the Most Recent Target Fiscal Year
         End, there have been no changes in the assets, business, financial
         condition, operations, results of operations or future prospects of
         Target that individually or in the aggregate would have a Material
         Adverse Effect (as defined in Section 9.2) on Target.

2.6      Absence of Undisclosed Liabilities. Target has no material obligations
         or liabilities of any nature (matured or unmatured, fixed or
         contingent) other than (a) those set forth or adequately provided for
         in the Target balance sheet for the period ended February 29, 2004
         ("Target Balance Sheet"), and (b) those incurred in the ordinary course
         of business prior to the Most Recent Target Fiscal Month End and not
         required to be set forth in the Financial Statements under GAAP. As of
         the Most Recent Target Fiscal Year End, Target has no debt other than
         trade payables and accruals arising in the ordinary course of business
         and the debt totaling approximately $527,000 secured by Target Real
         Property (as defined in Section 2.20) and 2 automobile loans.

2.7      Accounts Receivable. All material notes and accounts receivable of
         Target are reflected properly on Target's books and records, are valid
         receivables subject to no setoffs or counterclaims, are current and
         collectible, and will be collected in accordance with their terms at
         their recorded amounts, subject only to the reserve for bad debts set
         forth on the Target Financial Statement (rather than in any of its
         notes) for the fiscal year ended December 31, 2003, as adjusted for the
         passage of time through the Closing Date in accordance with the past
         custom and practice of Target.

2.8      Litigation, Restrictions on Business Activities. There is no action,
         suit, proceeding, hearing, investigation, charge, complaint, claim,
         demand or notice has been filed, commenced


                                       35
<PAGE>

         or, to the knowledge of Target, alleged against it. Target is not
         operating under or subject to, or in default with respect to, any
         order, writ, injunction or decree of any court or governmental agency.
         There is no agreement or law binding upon Target, as opposed to the
         application of such to those operating in the business industry
         generally, that has or could reasonably be expected to have the effect
         of prohibiting or impairing any current business practice of Target
         with respect to its business.

2.9      Minute Books. The minute books of Target made available to Acquiror
         contain a complete and accurate summary of all meetings of directors
         and shareholders or actions by written consent since the time of
         incorporation of Target through the date of this Agreement, and reflect
         all transactions referred to in such minutes accurately in all material
         respects.

2.10     Governmental Authorization. Target has obtained each federal, state,
         county, local or foreign governmental consent, license, permit, grant,
         or other authorization of a Governmental Entity (a) pursuant to which
         Target currently operates or holds any interest in any of its
         properties or (b) that is required for the operation of Target's
         business or the holding of any such interest (collectively called
         "Target Authorizations"), and all of such Target Authorizations are in
         full force and effect.

2.11     Title to Property. Target has good and marketable title to all of its
         properties, interests in properties and assets, real and personal,
         necessary for the conduct of its business as presently conducted or
         which are reflected in the Target Balance Sheet or acquired after the
         Target Balance Sheet Date (except properties, interests in properties
         and assets sold or otherwise disposed of in the ordinary course of
         business since the Target Balance Sheet Date), or with respect to
         leased properties and assets, valid leasehold interests therein, in
         each case free and clear of all mortgages, liens, pledges, charges or
         encumbrances of any kind or character ("Security Interests"), except
         (i) the for Security Interests for current taxes not yet due and
         payable, (ii) such imperfections of title, liens and easements as do
         not and will not materially detract from or interfere with the use of
         the properties subject thereto or affected thereby, or otherwise
         materially impair business operations involving such properties and
         (iii) Security Interests securing debt that are reflected on the Target
         Balance Sheet. The plants, property and equipment of Target that are
         used in the operations of its business are in good operating condition
         and repair.

2.12     Intellectual Property. Target owns or has the right to use pursuant to
         license, sublicense, agreement or permission all Intellectual Property
         necessary for the operation of the


                                       36
<PAGE>

         businesses of any of Target as presently conducted and as presently
         proposed to be conducted ("Target Intellectual Property"). Each item of
         Target Intellectual Property will be owned or available for use by
         Surviving Corporation on identical terms and conditions immediately
         after the Closing. Target has taken all necessary action to maintain
         and protect each item of Target Intellectual Property that it owns or
         uses. Target has not interfered with, infringed upon, misappropriated
         or otherwise come into conflict with any Intellectual Property rights
         of any third party.

         "Intellectual Property" means (A) inventions (whether or not
         patentable); trade names, trade marks, service marks, logos and other
         designations ("Marks"); works of authorship; mask works; data;
         technology, know-how, trade secrets, ideas and information; designs;
         formulas; algorithms; processes; schematics; computer software (in
         source code and/or object code form); and all other intellectual and
         industrial property of any sort and (B) patent rights; Mark rights;
         copyrights; mask work rights; SUI GENERIS database rights; trade secret
         rights; moral rights; and all other intellectual and industrial
         property rights of any sort throughout the world, and all applications,
         registrations, issuances and the like with respect thereto.

2.13     Environmental Matters. Target is and has at all times operated its
         business in material compliance with all Environmental Laws and to the
         best of Target's knowledge, no material expenditures are or will be
         required in order to comply with such Environmental Laws.

         "Environmental Laws" means all applicable statutes, rules, regulations,
         ordinances, orders, decrees, judgments, permits, licenses, consents,
         approvals, authorizations, and governmental requirements or directives
         or other obligations lawfully imposed by governmental authority under
         federal, state or local law pertaining to the protection of the
         environment, protection of public health, protection of worker health
         and safety, the treatment, emission and/or discharge of gaseous,
         particulate and/or effluent pollutants, and/or the handling of
         hazardous materials, including without limitation, the Clean Air Act,
         42 U.S.C.ss. 7401, et seq., the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, 42 U.S.C.ss. 9601, et seq., the
         Federal Water Pollution Control Act, 33 U.S.C.ss. 1321, et seq., the
         Hazardous Materials Transportation Act, 49 U.S.C.ss. 1801, et seq., the
         Resource Conservation and Recovery Act, 42 U.S.C.ss. 6901, et seq., and
         the Toxic Substances Control Act, 15 U.S.C.ss. 2601, et seq.

2.14     Taxes. Target has filed all Tax Returns that it was required to file.
         All such Tax Returns were correct and complete in


                                       37
<PAGE>

         all material respects. Target has paid all Taxes owed by Target,
         whether or not disputed. True, correct and complete copies of all
         federal and state Tax Returns filed by Target for the preceding 2
         fiscal years have been delivered or made available to Acquiror. None of
         Target's assets have a Security Interest that arose in connection with
         the failure to pay any tax. Target has withheld and paid all taxes
         required to have been withheld and paid in connection with amounts
         owing to any employee, independent contractor, creditor, stockholder or
         other third party. Target has not waived any statute of limitations or
         agreed to any extension of time with respect to a tax assessment or
         deficiency. No material Tax liability since December 31, 2003 has been
         incurred by Target other than in the ordinary course of business.

          "Tax" means any federal, state, local or foreign income, gross
         receipts, license, payroll, employment, excise, severance, stamp,
         occupation, premium, windfall profits, environmental (including taxes
         under Code ss. 59A), customs duties, capital stock, franchise, profits,
         withholding, social security (or similar), unemployment, disability,
         real property, personal property, sales, use, transfer, registration,
         value added, alternative or add-on minimum, estimated, or other tax of
         any kind whatsoever, including any interest, penalty or addition,
         whether disputed or not. "Tax Return" means any return, declaration,
         report, claim for refund, or information return or statement relating
         to Taxes, including any schedule, attachment or amendment.

2.15     Employee Benefit Plans. Schedule 2.15 list all of Target's pension or
         profit sharing plans, benefit plans including, without limitation, any
         disability, medical, dental, workers compensation, health insurance,
         life insurance, vacation, benefits plans, incentive plans, fringe
         benefit plans and any other material plans, programs, agreements or
         arrangements which provide benefits to any current or former employee
         of Target (collectively, "Target Plans"). With respect to each Target
         Plan that is an employee benefit plan (as defined in section 3(3) of
         Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
         the requirements of ERISA applicable to such Target Plan have been
         satisfied in all material respects. All the accrued obligations of
         Target, whether arising by operation of law, by contract or by past
         custom, for payments by Target to any 401k plan or other employee
         benefit plan, trust or other funds or any governmental agency with
         respect to unemployment compensation benefits, vacation and sick time
         pay, social security benefits or any other benefits for employees of
         Target shall have been paid prior to the Closing. All contributions,
         premiums or other payments due from the Target to (or under) any Target
         Plan have been fully paid or adequately provided for on the books and
         financial statements of Target. All accruals (including,


                                       38
<PAGE>

         where appropriate, proportional accruals for partial periods) have been
         made in accordance with prior practices.

2.16     Employment Matters.

         (a)      Schedule 2.16 contains a description of any written or oral
                  employment agreements, labor agreements, consulting agreements
                  or termination or severance agreements to which Target is a
                  party.

         (b)      Target has complied in all respects with all Laws relating to
                  employment, including without limitation all Laws concerning
                  equal employment opportunity, nondiscrimination, leaves and
                  absences, immigration, wages, hours, benefits, collective
                  bargaining, the payment of social security and similar Taxes,
                  occupational safety and health, and plant closing. To Target's
                  knowledge, no executive, key employee or group of employees
                  has any plans to terminate employment with Target. Target has
                  not experienced any strikes, grievances, claims of unfair
                  labor practices or other collective bargaining disputes.
                  Target has not committed any unfair labor practice. To
                  Target's knowledge, there are no organizational efforts
                  presently being made or threatened by or on behalf of any
                  labor union with respect to employees of Target.

         (c)      The consummation of the transactions contemplated herein will
                  not result in (i) the acceleration of payment or vesting of
                  any benefit, option or right to which any employee, director
                  or independent contractor of Target may be entitled, (ii) the
                  forgiveness of any indebtedness of any employee, director or
                  independent contractor of Target or (iii) any cost becoming
                  due or accruing to Target or the Acquiror with respect to any
                  employee, director or independent contractor of Target.

2.17     Related Party Transactions. Schedule 2.17 lists all contracts and
         agreements between Target, on one hand, and any of Target's
         shareholders employees, officers, or directors or member of his or her
         immediate family, on the other. All such contracts and agreements will,
         except as noted on Schedule 2.17, be terminated immediately prior to
         the Closing. None of Target's shareholders employees, officers, or
         directors or member of his or her immediate family owns any asset,
         tangible or intangible, that is used in the business of Target.

                                       39
<PAGE>

2.18     Insurance. Target's policies of fire, liability and other forms of
         insurance covering Target are of the type, coverage and in such amounts
         as are customary of Target's business, and are duly enforceable through
         the Closing Date.

2.19     Compliance with Laws. Target has complied with, are not in violation
         of, and have not received any notices of violation with respect to, any
         federal, state, local or foreign statute, law or regulation
         (collectively, "Laws") with respect to the conduct of its business, or
         the ownership or operation of its business, except for such violations
         or failures to comply as could not be reasonably expected to have a
         Material Adverse Effect on Target.

2.20     Real Property. Target does not lease any real property. Schedule 2.20
         lists and describes briefly all real property that Target owns ("Target
         Real Property"). With respect to the Target Real Property: (a) Target
         has good and marketable title to the parcel of real property, free and
         clear of any Security Interest, easement, covenant or other
         restrictions, and there are no parties (other than Target) in
         possession of or using the Target Real Property.

2.21     Brokers' and Finders' Fees. Neither Target nor any of the Signing
         Stockholders has any liability to pay any fees or commissions to any
         broker, finder or agent with respect to the transactions contemplated
         by this Agreement for which Acquiror could become liable or obligated.

2.22     Vote Required. The affirmative vote of a majority of the holders of the
         Target Common Stock outstanding on the record date set for the Target
         Shareholders Meeting is the only vote of the holders of any of Target's
         capital stock necessary to approve this Agreement and the transactions
         contemplated hereby.

2.23     Inventory. The material inventory of Target consists of raw materials
         and supplies, manufactured and purchased parts, goods in process, and
         finished goods, all of which is merchantable and fit for the purpose
         for which it was procured or manufactured, and none of which is
         slow-moving, obsolete, damaged or defective, subject only to the
         reserve for inventory writedown as adjusted for the passage of time
         through the Closing Date in accordance with the past custom and
         practice of Target.

2.24     Customers and Suppliers. Schedule 2.24 lists (a) the 5 largest
         customers and suppliers of Target for each of the two most recent
         fiscal years and sets forth opposite the name of each such customer the
         percentage of consolidated net sales and percentage of materials or
         services attributable to such customer or supplier, respectively and
         (b) any additional current customers and suppliers that Target
         anticipates will be among the 4 largest customers and


                                       40
<PAGE>

         suppliers for the current fiscal year. No customer or supplier listed
         on Schedule 2.24 has indicated that it will stop, or decrease the rate
         of, buying or supplying, as the case may be, materials, products or
         services from Target.

2.25     Material Contracts. Schedule 2.25 lists all material contracts and
         other agreements, whether written or oral, to which Target is a party
         or by which it is bound (collectively, the "Target Material
         Contracts"). Target has delivered to Acquiror a correct and complete
         copy of each written agreement listed in Schedule 2.25 and a written
         summary setting forth the terms and conditions of each oral agreement
         referred to in Schedule 2.25. With respect to each such agreement: (a)
         the agreement is legal, valid, binding, enforceable and in full force
         and effect; (b) the agreement will continue to be legal, valid,
         binding, enforceable and in full force and effect on identical terms
         following the consummation of the transactions contemplated hereby; (c)
         no party is in breach or default; (d) no event has occurred that, with
         notice or lapse of time, would constitute a breach or default, or
         permit termination, modification or acceleration, under the agreement;
         and (e) no party has repudiated any provision of the agreement.

2.26     Complete Copies of Materials. Target has delivered or made available
         true and complete copies of each document which has been requested by
         Acquiror or its counsel in connection with their legal and accounting
         review of Target.

2.27     Representations Complete. None of the representations or warranties
         made by Target or the Signing Stockholders herein or in any Schedule
         hereto, including the Target Disclosure Schedule, or certificate
         furnished by Target or the Signing Stockholders pursuant to this
         Agreement, when all such documents are read together in their entirety,
         contains or will contain at the Effective Time any untrue statement of
         a material fact, or omits or will omit at the Effective Time to state
         any material fact necessary in order to make the statements contained
         herein or therein, in the light of the circumstances under which made,
         not misleading.

2.28     Projections. Target and the Signing Stockholders each acknowledge and
         agree that neither Acquiror nor Merger Sub makes any representations or
         warranties (express, implied, at common law, statutory or otherwise)
         with respect to the accuracy or completeness of any projections,
         financial or otherwise, now, previously or hereafter made available to
         any of Target and the Signing Stockholders in connection with this
         Agreement. Target and the Signing Stockholders each acknowledge and
         agree that each has fully conducted and is relying exclusively upon (a)
         Acquiror's and Merger Sub's representations and warranties contained in
         Section 3 of


                                       41
<PAGE>

         this Agreement and (b) its own inspections and investigation as to the
         condition and suitability of the business, assets, real and personal
         properties, Liabilities, results of operations, condition (financial or
         otherwise) and prospects of Acquiror or Merger Sub.

                                    ARTICLE 3

            REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB
            ---------------------------------------------------------

         Acquiror and Merger Sub, jointly and severally, represent and warrant
to Target and Signing Stockholders that the statements contained in this Article
3 are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date, except as set forth in the attached
disclosure schedule accompanying this Agreement (the "Acquiror Disclosure
Schedule"). The Acquiror Disclosure Schedule will be arranged in paragraphs
corresponding to the sections contained in this Article 3.

3.1      Organization, Standing and Power. Each of Acquiror and Merger Sub is a
         corporation duly organized, validly existing and in good standing under
         the laws of its jurisdiction of organization. Each of Acquiror and
         Merger Sub has the corporate power to own its properties and to carry
         on its business as now being conducted and is duly qualified to do
         business and is in good standing in each jurisdiction in which the
         failure to be so qualified and in good standing would have a Material
         Adverse Effect on Acquiror and Merger Sub, respectively. Acquiror has
         delivered a true and correct copy of the Certificate of Incorporation
         and Bylaws or other charter documents, as applicable, of Acquiror and
         Merger Sub, each as amended to date, to Target.

3.2      Capitalization and Voting Rights.

         (a)      As of the Closing Date, except as set forth on the Acquiror
                  Disclosure Schedule, the authorized capital of Acquiror will
                  consist of 50,000,000 shares of Acquiror Common Stock, of
                  which 1,720,163 shares are issued and outstanding.

         (b)      The outstanding shares of Acquiror Common Stock are all duly
                  and validly authorized and issued, fully paid and
                  nonassessable, and were issued in accordance with the
                  registration or qualification provisions of the Securities Act
                  of 1933, as amended (the "Act") and any relevant state
                  securities laws, or pursuant to valid exemptions therefrom.

         (c)      As of the Closing Date, except as set forth on the Acquiror
                  Disclosure Schedule, Acquiror is not


                                       42
<PAGE>

                  required to issue more than 243,001 shares of Acquiror Common
                  Stock pursuant to: (i) any options outstanding as of the
                  Closing Date under Acquiror's stock option plan, (ii) warrants
                  for Acquiror Common Stock, and (iii) Acquiror's convertible
                  debt. Acquiror has reserved an additional 71,572 shares of
                  Acquiror Common Stock for purchase upon exercise of options to
                  be granted in the future under Acquiror's stock option plan.
                  Acquiror is not a party or subject to any agreement or
                  understanding, and, to the best of Acquiror's knowledge, there
                  is no agreement or understanding between any persons and/or
                  entities, which affects or relates to the voting or giving of
                  written consents with respect to any security or by a director
                  of Acquiror.

3.3      Authority.

         (a)      Each of Acquiror and Merger Sub has full power and authority
                  to enter into the Transaction Documents and to perform their
                  obligations thereunder. The Transaction Documents to which
                  either Acquiror or Merger Sub is a party constitute valid and
                  legally binding obligations of each of Acquiror and Merger
                  Sub, as applicable, enforceable in accordance with their
                  respective terms and conditions.

         (b)      The execution and delivery of the Transaction Documents do
                  not, and the consummation of the transactions contemplated
                  thereby will not, conflict with, or result in any violation
                  of, or default under (with or without notice or lapse of time,
                  or both), or give rise to a right of termination, cancellation
                  or acceleration of any obligation or loss of a benefit under
                  (i) any provision of the Certificate of Incorporation or
                  Bylaws of Acquiror or Merger Sub, as amended, or (ii) any
                  Acquiror Material Contract (as defined in Section 3.25)
                  permit, concession, franchise, license, judgment, order,
                  decree, statute, law, ordinance, rule or regulation applicable
                  to Acquiror or Merger Sub or their properties or assets.

         (c)      No consent, approval, order or authorization of, or
                  registration, declaration or filing with, any Governmental
                  Entity, is required by or with respect to Acquiror or Merger
                  Sub in connection with the execution and delivery of the
                  Transaction Documents by Acquiror or the consummation by
                  Acquiror of the transactions contemplated thereby.

                                       43
<PAGE>

3.4      SEC Documents; Financial Statements. Acquiror has furnished to Target a
         true and complete copy of each statement, report, registration
         statement (with the prospectus in the form filed pursuant to Rule
         424(b) of the Securities Act), definitive proxy statement, and other
         filing filed with the SEC by Acquiror since January 1, 2003, and, prior
         to the Effective Time, Acquiror will have furnished Target with true
         and complete copies of any additional documents filed with the SEC by
         Acquiror prior to the Effective Time (collectively, the "Acquiror SEC
         Documents"). In addition, Acquiror has made available to Target all
         exhibits to the Acquiror SEC Documents filed prior to the date hereof,
         and will promptly make available to Target all exhibits to any
         additional Acquiror SEC Documents filed prior to the Effective Time.
         All documents required to be filed as exhibits to the Target SEC
         Documents have been so filed, and all material contracts so filed as
         exhibits are in full force and effect, except those which have expired
         in accordance with their terms, and Acquiror is not in default
         thereunder. As of their respective filing dates, the Acquiror SEC
         Documents complied in all material respects with the requirements of
         the Securities Exchange Act of 1934, as amended (the "Exchange Act")
         and the Securities Act, and none of the Acquiror SEC Documents
         contained any untrue statement of a material fact or omitted to state a
         material fact required to be stated therein or necessary to make the
         statements made therein, in light of the circumstances in which they
         were made, not misleading, except to the extent corrected by a
         subsequently filed Acquiror SEC Document.

3.5      Financial Statements. Acquiror has delivered to Target its audited
         financial statements (balance sheet and statement of operations) for
         the fiscal years ended December 31, 2001, December 31, 2002 and
         December 31, 2003 ("Most Recent Acquiror Fiscal Year End") and its
         unaudited financial statements (balance sheet and statement of
         operations) on a consolidated basis as at, and for the 2 month period
         ended February 29, 2004 ("Most Recent Acquiror Fiscal Month End")
         (collectively, the "Acquiror Financial Statements"). The Acquiror
         Financial Statements have been prepared in accordance with GAAP (except
         that the unaudited financial statements do not have notes thereto)
         applied on a consistent basis throughout the periods indicated and with
         each other. The Acquiror Financial Statements fairly present the
         financial condition and operating results of Acquiror as of the dates,
         and for the periods, indicated therein, subject, in the case of the
         unaudited financing statements, to normal year-end audit adjustments
         which are not material in the aggregate. Acquiror maintains a standard
         system of accounting established and administered in accordance with
         GAAP.

                                       44
<PAGE>

3.6      Absence of Certain Changes. Since the Most Recent Acquiror Fiscal Year
         End, there have been no changes in the assets, business, financial
         condition, operations, results of operations or future prospects of
         Acquiror that individually or in the aggregate would have a Material
         Adverse Effect on Acquiror.

3.7      Absence of Undisclosed Liabilities. Acquiror has no material
         obligations or liabilities of any nature (matured or unmatured, fixed
         or contingent) other than (i) those set forth or adequately provided
         for in the Acquiror balance sheet for the period ended February 29,
         2004 ("Acquiror Balance Sheet"), and (ii) those incurred in the
         ordinary course of business prior to the Most Recent Fiscal Month End
         and not required to be set forth in the Acquiror Financial Statements
         under GAAP.

3.8      Accounts Receivable. All material notes and accounts receivable of
         Acquiror are reflected properly on Acquiror's books and records, are
         valid receivables subject to no setoffs or counterclaims, are current
         and collectible, and will be collected in accordance with their terms
         at their recorded amounts, subject only to the reserve for bad debts
         set forth on the Acquiror Financial Statement (rather than in any of
         its notes) for the fiscal year ended December 31, 2003, as adjusted for
         the passage of time through the Closing Date in accordance with the
         past custom and practice of Acquiror.

3.9      Litigation, Restrictions on Business Activities. There is no action,
         suit, proceeding, hearing, investigation, charge, complaint, claim,
         demand or notice has been filed, commenced or, to the knowledge of
         Target, alleged against it. Target is not operating under or subject
         to, or in default with respect to, any order, writ, injunction or
         decree of any court or governmental agency. There is no agreement or
         law binding upon Target, as opposed to the application of such to those
         operating in the business industry generally, that has or could
         reasonably be expected to have the effect of prohibiting or impairing
         any current business practice of Target with respect to its business.

3.10     Minute Books. The minute books of Acquiror made available to Target
         contain a complete and accurate summary of all meetings of directors
         and shareholders or actions by written consent since the time of
         incorporation of Acquiror through the date of this Agreement, and
         reflect all transactions referred to in such minutes accurately in all
         material respects.

3.11     Governmental Authorization. Acquiror has obtained each federal, state,
         county, local or foreign governmental consent, license, permit, grant,
         or other authorization of a Governmental Entity (a) pursuant to which
         Acquiror currently operates or holds any interest in any of its
         properties or


                                       45
<PAGE>

         (b) that is required for the operation of Acquiror's business or the
         holding of any such interest (collectively called "Acquiror
         Authorizations"), and all of such authorizations are in full force and
         effect.

3.12     Title to Property. Acquiror has good and marketable title to all of its
         properties, interests in properties and assets, real and personal,
         necessary for the conduct of its business as presently conducted or
         which are reflected in the Acquiror Balance Sheet or acquired after the
         date of the Acquiror Balance Sheet (except properties, interests in
         properties and assets sold or otherwise disposed of in the ordinary
         course of business since the Acquiror Balance Sheet Date), or with
         respect to leased properties and assets, valid leasehold interests
         therein, in each case free and clear of all Security Interests, except
         (i) the for Security Interests for current taxes not yet due and
         payable, (ii) such imperfections of title, liens and easements as do
         not and will not materially detract from or interfere with the use of
         the properties subject thereto or affected thereby, or otherwise
         materially impair business operations involving such properties and
         (iii) Security Interests securing debt that are reflected on the
         Acquiror Balance Sheet. The plants, property and equipment of Acquiror
         that are used in the operations of its business are in good operating
         condition and repair.

3.13     Intellectual Property. Acquiror owns or has the right to use pursuant
         to license, sublicense, agreement or permission all Intellectual
         Property necessary for the operation of the businesses of any of
         Acquiror as presently conducted and as presently proposed to be
         conducted ("Acquiror Intellectual Property"). Each item of Acquiror
         Intellectual Property will be owned or available for use by Acquiror on
         identical terms and conditions immediately after the Closing. Acquiror
         has taken all necessary action to maintain and protect each item of
         Acquiror Intellectual Property that it owns or uses. Acquiror has not
         interfered with, infringed upon, misappropriated or otherwise come into
         conflict with any Intellectual Property rights of any third party.

3.14     Environmental Matters. Acquiror is and has at all times operated its
         business in material compliance with all Environmental Laws and to the
         best of Acquiror's knowledge, no material expenditures are or will be
         required in order to comply with such Environmental Laws.

3.15     Taxes. Acquiror has filed all Tax Returns that it was required to file.
         All such Tax Returns were correct and complete in all material
         respects. Acquiror has paid all Taxes owed by Acquiror, whether or not
         disputed. True,


                                       46
<PAGE>

         correct and complete copies of all federal and state Tax Returns filed
         by Acquiror for the preceding 2 fiscal years have been delivered or
         made available to Target. None of Acquiror's assets have a Security
         Interest that arose in connection with the failure to pay any tax.
         Acquiror has withheld and paid all taxes required to have been withheld
         and paid in connection with amounts owing to any employee, independent
         contractor, creditor, stockholder or other third party. Acquiror has
         not waived any statute of limitations or agreed to any extension of
         time with respect to a tax assessment or deficiency. No material Tax
         liability since December 31, 2003 has been incurred by Acquiror other
         than in the ordinary course of business.

3.16     Employee Benefit Plans. Schedule 3.16 list all of Acquiror's pension or
         profit sharing plans, benefit plans including, without limitation, any
         disability, medical, dental, workers compensation, health insurance,
         life insurance, vacation, benefits plans, incentive plans, fringe
         benefit plans and any other material plans, programs, agreements or
         arrangements which provide benefits to any current or former employee
         of Acquiror (collectively, "Acquiror Plans"). With respect to each
         Acquiror Plan that is an employee benefit plan (as defined in section
         3(3) of ERISA), the requirements of ERISA applicable to such Acquiror
         Plan have been satisfied in all material respects. All the accrued
         obligations of Acquiror, whether arising by operation of law, by
         contract or by past custom, for payments by Acquiror to any 401k plan
         or other employee benefit plan, trust or other funds or any
         governmental agency with respect to unemployment compensation benefits,
         vacation and sick time pay, social security benefits or any other
         benefits for employees of Acquiror shall have been paid prior to the
         Closing. All contributions, premiums or other payments due from the
         Acquiror to (or under) any Acquiror Plan have been fully paid or
         adequately provided for on the books and financial statements of
         Acquiror. All accruals (including, where appropriate, proportional
         accruals for partial periods) have been made in accordance with prior
         practices.

3.17     Employment Matters.

         (a)      Schedule 3.17 contains a description of any written or oral
                  employment agreements, labor agreements, consulting agreements
                  or termination or severance agreements to which Acquiror is a
                  party.

         (b)      Acquiror has complied in all respects with all Laws relating
                  to employment, including without limitation


                                       47
<PAGE>

                  all Laws concerning equal employment opportunity,
                  nondiscrimination, leaves and absences, immigration, wages,
                  hours, benefits, collective bargaining, the payment of social
                  security and similar Taxes, occupational safety and health,
                  and plant closing. To Acquiror's knowledge, no executive, key
                  employee or group of employees has any plans to terminate
                  employment with Acquiror. Acquiror has not experienced any
                  strikes, grievances, claims of unfair labor practices or other
                  collective bargaining disputes. Acquiror has not committed any
                  unfair labor practice. To Acquiror's knowledge, there are no
                  organizational efforts presently being made or threatened by
                  or on behalf of any labor union with respect to employees of
                  Acquiror.

         (c)      The consummation of the transactions contemplated herein will
                  not result in (i) the acceleration of payment or vesting of
                  any benefit, option or right to which any employee, director
                  or independent contractor of Acquiror may be entitled, (ii)
                  the forgiveness of any indebtedness of any employee, director
                  or independent contractor of Acquiror or (iii) any cost
                  becoming due or accruing to Acquiror or Target with respect to
                  any employee, director or independent contractor of Acquiror.

3.18     Related Party Transactions. Schedule 3.18 lists all contracts and
         agreements between Acquiror, on one hand, and any of Acquiror's
         shareholders employees, officers, or directors of Acquiror or member of
         his or her immediate family, on the other. All such contracts and
         agreements will, except as noted on Schedule 3.18, be terminated
         immediately prior to the Closing. None of Acquiror's shareholders
         employees, officers, or directors of Acquiror or member of his or her
         immediate family owns any asset, tangible or intangible, that is used
         in the business of Acquiror.












                                       48
<PAGE>

3.19     Insurance. Acquiror's policies of fire, liability and other forms of
         insurance covering Acquiror are of the type, coverage and in such
         amounts as are customary of Acquiror's business, and are duly
         enforceable through the Closing Date.

3.20     Compliance with Laws. Acquiror has complied with, are not in violation
         of, and have not received any notices of violation with respect to, any
         Laws with respect to the conduct of its business, or the ownership or
         operation of its business, except for such violations or failures to
         comply as could not be reasonably expected to have a Material Adverse
         Effect on Acquiror.

3.21     Real Property. Acquiror does not lease any real property. Schedule 3.21
         lists and describes briefly all real property that Acquiror owns
         ("Acquiror Real Property"). With respect to the Acquiror Real Property:
         (a) Acquiror has good and marketable title to the parcel of real
         property, free and clear of any Security Interest, easement, covenant
         or other restrictions, and there are no parties (other than Acquiror)
         in possession of or using the Acquiror Real Property.

3.22     Brokers' and Finders' Fees. Acquiror has no liability to pay any fees
         or commissions to any broker, finder or agent with respect to the
         transactions contemplated by this Agreement for which Target or Signing
         Stockholders could become liable or obligated.

3.23     Inventory. The material inventory of Acquiror consists of raw materials
         and supplies, manufactured and purchased parts, goods in process, and
         finished goods, all of which is merchantable and fit for the purpose
         for which it was procured or manufactured, and none of which is
         slow-moving, obsolete, damaged or defective, subject only to the
         reserve for inventory writedown as adjusted for the passage of time
         through the Closing Date in accordance with the past custom and
         practice of Acquiror.

3.24     Customers and Suppliers. Schedule 3.24 lists (a) the 10 largest
         customers and suppliers of Acquiror for each of the two most recent
         fiscal years and sets forth opposite the name of each such customer the
         percentage of consolidated net sales and percentage of materials or
         services attributable to such customer or supplier, respectively and
         (b) any additional current customers and suppliers that Acquiror
         anticipates will be among the 10 largest customers and suppliers for
         the current fiscal year. No customer or supplier listed on Schedule
         3.24 has indicated that it will stop, or decrease the rate of, buying
         or supplying, as the case may be, materials, products or services from
         Acquiror.

3.25     Material Contracts. Schedule 3.25 lists all material contracts and
         other agreements, whether written or oral, to


                                       49
<PAGE>

         which Acquiror is a party or by which it is bound (collectively, the
         "Acquiror Material Contracts"). Acquiror has delivered to Target a
         correct and complete copy of each written agreement listed in Schedule
         3.25 and a written summary setting forth the terms and conditions of
         each oral agreement referred to in Schedule 3.25. With respect to each
         such agreement: (a) the agreement is legal, valid, binding, enforceable
         and in full force and effect; (b) the agreement will continue to be
         legal, valid, binding, enforceable and in full force and effect on
         identical terms following the consummation of the transactions
         contemplated hereby; (c) no party is in breach or default; (d) no event
         has occurred that, with notice or lapse of time, would constitute a
         breach or default, or permit termination, modification or acceleration,
         under the agreement; and (e) no party has repudiated any provision of
         the agreement.

3.26     Complete Copies of Materials. Acquiror has delivered or made available
         true and complete copies of each document which has been requested by
         Target or its counsel in connection with their legal and accounting
         review of Acquiror.

3.27     Representations Complete. None of the representations or warranties
         made by Acquiror herein or in any Schedule hereto, including the
         Acquiror Disclosure Schedule, or certificate furnished by Acquiror
         pursuant to this Agreement, when all such documents are read together
         in their entirety, contains or will contain at the Effective Time any
         untrue statement of a material fact, or omits or will omit at the
         Effective Time to state any material fact necessary in order to make
         the statements contained herein or therein, in the light of the
         circumstances under which made, not misleading.

3.28     Projections. Acquiror and Merger Sub each acknowledge and agree that
         neither Target nor the Signing Stockholders makes any representations
         or warranties (express, implied, at common law, statutory or otherwise)
         with respect to the accuracy or completeness of any projections,
         financial or otherwise, now, previously or hereafter made available to
         Acquiror and Merger Sub in connection with this Agreement. Acquiror and
         Merger Sub each acknowledge and agree that each has fully conducted and
         is relying exclusively upon (a) the Target's and Signing Stockholder's
         representations and warranties contained in Section 2 of this Agreement
         and (b) their own inspections and investigation as to the condition and
         suitability of the business, assets, real and personal properties,
         Liabilities, results of operations, condition (financial or otherwise)
         and prospects of Target.


                                       50
<PAGE>

                                    ARTICLE 4

                       CONDUCT PRIOR TO THE EFFECTIVE TIME
                       -----------------------------------

4.1      Conduct of Business of Target. During the period from the date of this
         Agreement and continuing until the earlier of the termination of this
         Agreement pursuant to Section 7.1 or the Effective Time, Target agrees
         (except to the extent expressly contemplated by this Agreement or as
         consented to in writing by the Acquiror), to carry on its business in
         the usual, regular and ordinary course in substantially the same manner
         as heretofore conducted. Target further agrees to (i) pay debts and
         Taxes when due subject to good faith disputes over such debts or Taxes,
         (ii) subject to Acquiror's consent to the filing of material Tax
         Returns if applicable, to pay or perform other obligations when due,
         and (iii) to use all reasonable efforts consistent with past practice
         and policies to preserve intact its present business organizations,
         keep available the services of its present officers and key employees
         and preserve its relationships with customers, suppliers, distributors,
         licensors, licensees, and others having business dealings with it, to
         the end that its goodwill and ongoing businesses shall be unimpaired at
         the Effective Time. Target agrees to promptly notify Acquiror of any
         event or occurrence not in the ordinary course of its or its
         subsidiaries' business, and of any event which could have a Material
         Adverse Effect on Target. Without limiting the foregoing, except as
         expressly contemplated by this Agreement, Target shall not, cause or
         permit any of the following without the prior written consent of
         Acquiror:

         (a)      Charter Documents. Cause or permit any amendments to its
                  Articles of Incorporation or Bylaws;

         (b)      Dividends; Changes in Capital Stock. Declare or pay any
                  dividends on or make any other distributions (whether in cash,
                  stock or property) in respect of any of its capital stock, or
                  split, combine or reclassify any of its capital stock or issue
                  or authorize the issuance of any other securities in respect
                  of, in lieu of or in substitution for shares of its capital
                  stock, or repurchase or otherwise acquire, directly or
                  indirectly, any shares of its capital stock except from former
                  employees, directors and consultants in accordance with
                  agreements providing for the repurchase of shares in
                  connection with any termination of service to it;

         (c)      Material Contracts. Enter into any material contract,
                  agreement, license or commitment, or violate, amend or
                  otherwise modify or waive any of


                                       51
<PAGE>

                  the terms of any of its material contracts, agreements or
                  licenses other than in the ordinary course of business
                  consistent with past practice;

         (d)      Stock Option Plans, etc. Accelerate, amend or change the
                  period of exercisability or vesting of options or other rights
                  granted under its stock plans or authorize cash payments in
                  exchange for any options or other rights granted under any of
                  such plans; or

         (e)      Issuance of Securities. Issue, deliver or sell or authorize or
                  propose the issuance, delivery or sale of, or purchase or
                  propose the purchase of, any shares of its capital stock or
                  securities convertible into, or subscriptions, rights,
                  warrants or options to acquire, or other agreements or
                  commitments of any character obligating it to issue any such
                  shares or other convertible securities, other than the
                  issuance of shares of Target Common Stock pursuant to the
                  exercise of stock options, warrants or other rights therefor
                  outstanding as of the date of this Agreement;

         (f)      Intellectual Property. Transfer to or license any person or
                  entity or otherwise extend, amend or modify any rights to its
                  Intellectual Property other than the grant of nonexclusive
                  licenses in the ordinary course of business consistent with
                  past practice;

         (g)      Exclusive Rights. Enter into or amend any agreements pursuant
                  to which any other party is granted exclusive marketing,
                  manufacturing or other exclusive rights of any type or scope
                  with respect to any of its products or technology;

         (h)      Dispositions. Sell, lease, license or otherwise dispose of or
                  encumber any of its properties or assets which are material,
                  individually or in the aggregate, to its business;

         (i)      Indebtedness. Incur or commit to incur any indebtedness for
                  borrowed money or guarantee any such indebtedness or issue or
                  sell any debt securities or guarantee any debt securities of
                  others;

         (j)      Leases. Enter into any operating lease requiring payments in
                  excess of $5,000 per year;


                                       52
<PAGE>

         (k)      Payment of Obligations. Pay, discharge or satisfy in an amount
                  in excess of $10,000 individually or $25,000 in the aggregate,
                  any claim, liability or obligation (absolute, accrued,
                  asserted or unasserted, contingent or otherwise) arising other
                  than in the ordinary course of business, other than the
                  payment, discharge or satisfaction of liabilities reflected or
                  reserved against in the Target Financial Statements;

         (l)      Capital Expenditures. Incur or commit to incur any capital
                  expenditures in excess of $10,000 in the aggregate;

         (m)      Insurance. Materially reduce the amount of any material
                  insurance coverage provided by existing insurance policies;

         (n)      Termination or Waiver. Terminate or waive any right of
                  substantial value, other than in the ordinary course of
                  business;

         (o)      Employee Benefits; Severance. Take any of the following
                  actions: (i) increase or agree to increase the compensation
                  payable or to become payable to its officers or employees,
                  except for increases in salary or wages of nonofficer
                  employees in the ordinary course of business and in accordance
                  with past practices, (ii) grant any additional severance or
                  termination pay to, or enter into any employment or severance
                  agreements with, any officer or employee, (iii) enter into any
                  collective bargaining agreement, or (iv) establish, adopt,
                  enter into or amend in any respect any bonus, profit sharing,
                  thrift, compensation, stock option, restricted stock, pension,
                  retirement, deferred compensation, employment, termination,
                  severance or other plan, trust, fund, policy or arrangement
                  for the benefit of any directors, officers or employees;
                  provided, however, that the foregoing provisions of this
                  subsection shall not apply to any amendments to employee
                  benefit plans described in ERISA Section 3(3) that may be
                  required by law;

         (p)      Lawsuits. Commence a lawsuit or arbitration proceeding other
                  than (i) for the routine collection of bills, or (ii) for a
                  breach of this Agreement;

                                       53
<PAGE>

         (q)      Acquisitions. Acquire or agree to acquire by merging or
                  consolidating with, or by purchasing a substantial portion of
                  the assets of, or by any other manner, any business or any
                  corporation, partnership, association or other business
                  organization or division thereof, or otherwise acquire or
                  agree to acquire any assets which are material, individually
                  or in the aggregate, to such entity's business;

         (r)      Taxes. Make any material tax election other than in the
                  ordinary course of business and consistent with past practice,
                  change any material tax election, adopt any tax accounting
                  method other than in the ordinary course of business and
                  consistent with past practice, change any tax accounting
                  method, file any tax return (other than any estimated tax
                  returns, immaterial information returns, payroll tax returns
                  or sales tax returns) or any amendment to a tax return, enter
                  into any closing agreement, settle any Tax claim or assessment
                  or consent to any Tax claim or assessment provided that
                  Acquiror shall not unreasonably withhold or delay approval of
                  any of the foregoing actions;

         (s)      Revaluation. Revalue any of its assets, including without
                  limitation writing down the value of inventory or writing off
                  notes or accounts receivable other than in the ordinary course
                  of business; or

         (t)      Other. Take or agree in writing or otherwise to take, any of
                  the actions described in Sections 4.1(a) through (s) above, or
                  any action which would make any of its representations or
                  warranties contained in this Agreement untrue or incorrect or
                  prevent it from performing or cause it not to perform its
                  covenants hereunder.

4.2      Target Notices. Target shall give all notices and other information
         required to be given to the employees of Target, any collective
         bargaining unit representing any group of employees of Target, and any
         applicable government authority under the National Labor Relations Act,
         the Code, the COBRA, and other applicable law in connection with the
         transactions provided for in this Agreement.

4.3      Conduct of Business of Acquiror. During the period from the date of
         this Agreement and continuing until the earlier of the termination of
         this Agreement pursuant to Section 7.1 or the Effective Time, Acquiror
         agrees (except to the extent expressly contemplated by this Agreement
         or as consented to in writing by the Target), to carry on its business
         in the


                                       54
<PAGE>

         usual, regular and ordinary course in substantially the same manner as
         heretofore conducted. Acquiror further agrees to (i) pay debts and
         Taxes when due subject to good faith disputes over such debts or Taxes,
         (ii) subject to Target's consent to the filing of material Tax Returns
         if applicable, to pay or perform other obligations when due, and (iii)
         to use all reasonable efforts consistent with past practice and
         policies to preserve intact its present business organizations, keep
         available the services of its present officers and key employees and
         preserve its relationships with customers, suppliers, distributors,
         licensors, licensees, and others having business dealings with it, to
         the end that its goodwill and ongoing businesses shall be unimpaired at
         the Effective Time. Acquiror agrees to promptly notify Target of any
         event or occurrence not in the ordinary course of its or its
         subsidiaries' business, and of any event which could have a Material
         Adverse Effect on Acquiror. Without limiting the foregoing, except as
         expressly contemplated by this Agreement, Acquiror shall not, cause or
         permit any of the following without the prior written consent of
         Target:

         (a)      Charter Documents. Cause or permit any amendments to its
                  Articles of Incorporation or Bylaws;

         (b)      Dividends; Changes in Capital Stock. Except as set forth on
                  Section 3.2 of the Acquiror Disclosure Schedule, declare or
                  pay any dividends on or make any other distributions (whether
                  in cash, stock or property) in respect of any of its capital
                  stock, or split, combine or reclassify any of its capital
                  stock or issue or authorize the issuance of any other
                  securities in respect of, in lieu of or in substitution for
                  shares of its capital stock, or repurchase or otherwise
                  acquire, directly or indirectly, any shares of its capital
                  stock except from former employees, directors and consultants
                  in accordance with agreements providing for the repurchase of
                  shares in connection with any termination of service to it;

         (c)      Material Contracts. Enter into any material contract,
                  agreement, license or commitment, or violate, amend or
                  otherwise modify or waive any of the terms of any of its
                  material contracts, agreements or licenses other than in the
                  ordinary course of business consistent with past practice;

         (d)      Stock Option Plans, etc. Accelerate, amend or change the
                  period of exercisability or vesting of options or other rights
                  granted under its stock plans or


                                       55
<PAGE>

                  authorize cash payments in exchange for any options or other
                  rights granted under any of such plans; or

         (e)      Issuance of Securities. Issue, deliver or sell or authorize or
                  propose the issuance, delivery or sale of, or purchase or
                  propose the purchase of, any shares of its capital stock or
                  securities convertible into, or subscriptions, rights,
                  warrants or options to acquire, or other agreements or
                  commitments of any character obligating it to issue any such
                  shares or other convertible securities, other than the
                  issuance of shares of Acquiror Common Stock pursuant to the
                  exercise of stock options, warrants or other rights therefor
                  outstanding as of the date of this Agreement;

         (f)      Intellectual Property. Transfer to or license any person or
                  entity or otherwise extend, amend or modify any rights to its
                  Intellectual Property other than the grant of nonexclusive
                  licenses in the ordinary course of business consistent with
                  past practice;

         (g)      Exclusive Rights. Enter into or amend any agreements pursuant
                  to which any other party is granted exclusive marketing,
                  manufacturing or other exclusive rights of any type or scope
                  with respect to any of its products or technology;

         (h)      Dispositions. Sell, lease, license or otherwise dispose of or
                  encumber any of its properties or assets which are material,
                  individually or in the aggregate, to its business;

         (i)      Indebtedness. Incur or commit to incur any indebtedness for
                  borrowed money or guarantee any such indebtedness or issue or
                  sell any debt securities or guarantee any debt securities of
                  others;

         (j)      Leases. Enter into any operating lease requiring payments in
                  excess of $5,000 per year;

         (k)      Payment of Obligations. Pay, discharge or satisfy in an amount
                  in excess of $10,000 individually or $25,000 in the aggregate,
                  any claim, liability or obligation (absolute, accrued,
                  asserted or unasserted, contingent or otherwise) arising other
                  than in the ordinary course of business, other than the
                  payment, discharge or satisfaction of liabilities


                                       56
<PAGE>

                  reflected or reserved against in the Acquiror Financial
                  Statements;

         (l)      Capital Expenditures. Incur or commit to incur any capital
                  expenditures in excess of $10,000 in the aggregate;

         (m)      Insurance. Materially reduce the amount of any material
                  insurance coverage provided by existing insurance policies;

         (n)      Termination or Waiver. Terminate or waive any right of
                  substantial value, other than in the ordinary course of
                  business;

         (o)      Employee Benefits; Severance. Take any of the following
                  actions: (i) increase or agree to increase the compensation
                  payable or to become payable to its officers or employees,
                  except for increases in salary or wages of nonofficer
                  employees in the ordinary course of business and in accordance
                  with past practices, (ii) grant any additional severance or
                  termination pay to, or enter into any employment or severance
                  agreements with, any officer or employee, (iii) enter into any
                  collective bargaining agreement, or (iv) establish, adopt,
                  enter into or amend in any respect any bonus, profit sharing,
                  thrift, compensation, stock option, restricted stock, pension,
                  retirement, deferred compensation, employment, termination,
                  severance or other plan, trust, fund, policy or arrangement
                  for the benefit of any directors, officers or employees;
                  provided, however, that the foregoing provisions of this
                  subsection shall not apply to any amendments to employee
                  benefit plans described in ERISA Section 3(3) that may be
                  required by law;

         (p)      Lawsuits. Commence a lawsuit or arbitration proceeding other
                  than (i) for the routine collection of bills, or (ii) for a
                  breach of this Agreement;

         (q)      Acquisitions. Acquire or agree to acquire by merging or
                  consolidating with, or by purchasing a substantial portion of
                  the assets of, or by any other manner, any business or any
                  corporation, partnership, association or other business
                  organization or division thereof, or otherwise acquire or
                  agree to acquire any assets which are material, individually
                  or in the aggregate, to such entity's business;

                                       57
<PAGE>

         (r)      Taxes. Make any material tax election other than in the
                  ordinary course of business and consistent with past practice,
                  change any material tax election, adopt any tax accounting
                  method other than in the ordinary course of business and
                  consistent with past practice, change any tax accounting
                  method, file any tax return (other than any estimated tax
                  returns, immaterial information returns, payroll tax returns
                  or sales tax returns) or any amendment to a tax return, enter
                  into any closing agreement, settle any Tax claim or assessment
                  or consent to any Tax claim or assessment provided that
                  Acquiror shall not unreasonably withhold or delay approval of
                  any of the foregoing actions;

         (s)      Revaluation. Revalue any of its assets, including without
                  limitation writing down the value of inventory or writing off
                  notes or accounts receivable other than in the ordinary course
                  of business; or

         (t)      Other. Take or agree in writing or otherwise to take, any of
                  the actions described in Sections 4.1(a) through (s) above, or
                  any action which would make any of its representations or
                  warranties contained in this Agreement untrue or incorrect or
                  prevent it from performing or cause it not to perform its
                  covenants hereunder.

4.4      Acquiror Notices. Acquiror shall give all notices and other information
         required to be given to the employees of Acquiror, any collective
         bargaining unit representing any group of employees of Acquiror, and
         any applicable government authority under the National Labor Relations
         Act, the Code, the COBRA, and other applicable law in connection with
         the transactions provided for in this Agreement.

                                    ARTICLE 5

                              ADDITIONAL AGREEMENTS
                              ---------------------

5.1      No Solicitation.

         (a)      Target will not: (i) solicit, initiate or encourage the
                  submission of any proposal or offer relating to the
                  acquisition of any capital stock or other voting securities,
                  or any substantial portion of the assets, of Target (including
                  any acquisition structured as a merger, consolidation or share
                  exchange), or (ii) participate in any discussions or
                  negotiations regarding, furnish any information, assist or

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<PAGE>

                  participate in, or facilitate in any other manner any effort
                  or attempt to do or seek any of the activities under Section
                  5.1(a)(i) of this Agreement. Target will notify Acquiror
                  immediately if any third-party makes any proposal, offer,
                  inquiry or contact in this regard.

         (b)      Acquiror will not: (i) solicit, initiate or encourage the
                  submission of any proposal or offer relating to the
                  acquisition of any capital stock or other voting securities,
                  or any substantial portion of the assets, of Acquiror
                  (including any acquisition structured as a merger,
                  consolidation or share exchange), or (ii) participate in any
                  discussions or negotiations regarding, furnish any
                  information, assist or participate in, or facilitate in any
                  other manner any effort or attempt to do or seek any of the
                  activities under Section 5.2(b)(i) of this Agreement. Provided
                  however, that prior to obtaining the approval of Acquiror's
                  shareholders with respect to merger, Acquiror may take any of
                  the actions described in Sections 5.2(b)(i) and (ii) above in
                  response to a bona fide written unsolicited acquisition
                  proposal if, but only if, such person has submitted an
                  unsolicited acquisition proposal which did not result from a
                  violation of Acquiror's obligations under Sections 5.2(b)(i)
                  and (ii). Acquiror will notify Target immediately if any
                  third-party makes any proposal, offer, inquiry or contact in
                  this regard. If Acquiror's board of directors determines that
                  such acquisition proposal constitutes a proposal superior to
                  the terms of the Merger, Target shall be immediately notified
                  of such determination. If such a determination is made,
                  Acquiror's board of directors may approve or recommend the
                  such acquisition proposal and may enter into an agreement
                  regarding such acquisition proposal provided that Acquiror's
                  board of directors has determined in good faith, that taking
                  such action is required in order for the members of Acquiror's
                  board of directors to comply with their fiduciary duties to
                  Acquiror's shareholders under applicable law and this
                  Agreement has been terminated in accordance with Section
                  7.1(g).

5.2      Shareholders Meeting or Consent Solicitation. Target shall promptly
         after the date hereof take all actions necessary to call a meeting of
         its shareholders to be held for the purpose of voting upon this
         Agreement and the Merger. Target will, through its Board of Directors,
         recommend to its shareholders approval of such matters as soon as

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<PAGE>

         practicable after the date hereof. Target shall use all reasonable
         efforts to solicit from its shareholders proxies or consents in favor
         of such matters. Neither Target nor any of the Signing Stockholders
         shall take any action, directly or indirectly, to cause or promote any
         Target shareholder to exercise dissenters' rights in accordance with
         the Minnesota Law, Sections 302A.471 and 302A.473.

5.3      Access to Information.

         (a)      Target will permit representatives of Acquiror to have full
                  access, at all reasonable times, and in a manner so as not to
                  interfere with the normal business operations of Target, to
                  all premises, properties, personnel, books, records (including
                  Tax records), contracts and documents of or pertaining to
                  Target. Acquiror will permit representatives of Target to have
                  full access, at all reasonable times, and in a manner so as
                  not to interfere with the normal business operations of
                  Acquiror, to all premises, properties, personnel, books,
                  records (including Tax records), contracts and documents of or
                  pertaining to Acquiror.

         (b)      No information or knowledge obtained in any investigation
                  pursuant to this Section 5.3 shall affect or be deemed to
                  modify any representation or warranty contained herein or the
                  conditions to the obligations of the parties to consummate the
                  Merger.

5.4      Confidentiality. Any information concerning the business and affairs of
         Target that is not already generally available to the public is
         considered to be confidential information (the "Target Confidential
         Information"). The Signing Stockholders will treat and hold as such all
         of the Target Confidential Information and refrain from using any of
         the Target Confidential Information except in connection with this
         Agreement and the transactions contemplated by this Agreement or with
         the written consent of Acquiror.

5.5      Public Disclosure. Unless otherwise permitted by this Agreement and
         except as may be required by Acquiror to comply with the rules and
         regulations of the SEC or any obligations pursuant to any listing
         agreement with any national securities exchange or with the NASD,
         Acquiror and Target shall consult with each other before issuing any
         press release or otherwise making any public statement or making any
         other public (or non-confidential) disclosure (whether or not in
         response to an inquiry) regarding the terms of this Agreement and the
         transactions contemplated hereby, and neither shall issue any such
         press release or make any such statement or disclosure without the
         prior


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<PAGE>

         approval of the other (which approval shall not be unreasonably
         withheld). All nonpublic information provided by Acquiror and Target
         will not be disclosed by either party or their representatives to any
         third party (other than accountants, counsel and authorized
         representatives of each party) without the prior written consent of the
         other, except as may be required by law.

5.6      Consents; Cooperation. Each of Acquiror and Target shall promptly apply
         for or otherwise seek, and use its best efforts to obtain, all consents
         and approvals required to be obtained by it for the consummation of the
         Merger and shall use its best efforts to obtain all necessary consents,
         waivers and approvals under any of its material contracts in connection
         with the Merger for the assignment thereof or otherwise. The parties
         hereto will consult and cooperate with one another, and consider in
         good faith the views of one another, in connection with any analyses,
         appearances, presentations, memoranda, briefs, arguments, opinions and
         proposals made or submitted by or on behalf of any party hereto in
         connection with proceedings under or relating to any federal or state
         antitrust or fair trade law.

5.7      Update Disclosure; Breaches. From and after the date of this Agreement
         until the Effective Time, Target shall promptly notify Acquiror, by
         written update to its Disclosure Schedule, of (i) the occurrence or
         nonoccurrence of any event which would be likely to cause any condition
         to the obligations of any party to effect the Merger and the other
         transactions contemplated by this Agreement not to be satisfied, or
         (ii) the failure of Target to comply with or satisfy any covenant,
         condition or agreement to be complied with or satisfied by it pursuant
         to this Agreement which would be likely to result in any condition to
         the obligations of any party to effect the Merger and the other
         transactions contemplated by this Agreement not to be satisfied. The
         delivery of any notice pursuant to this Section 5.7 shall not cure any
         breach of any representation or warranty requiring disclosure of such
         matter prior to the date of this Agreement or otherwise limit or affect
         the remedies available hereunder to the party receiving such notice,
         provided that such party, within 10 days after receipt of such notice,
         advises the other party of its objection to the matter disclosed in
         such notice and the nature of such objection.

5.8      Irrevocable Proxies. Each of the Signing Stockholders shall execute and
         deliver to Acquiror an Irrevocable Proxy substantially in the form of
         Exhibit B attached hereto concurrently with the execution of this
         Agreement with each such proxy, if not terminated sooner, terminating
         on December 31, 2004.

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<PAGE>

5.9      Legal Requirements. Each of Acquiror and Target will, and will cause
         their respective subsidiaries to, take all reasonable actions necessary
         to comply promptly with all legal requirements which may be imposed on
         them with respect to the consummation of the transactions contemplated
         by this Agreement and will promptly cooperate with and furnish
         information to any party hereto necessary in connection with any such
         requirements imposed upon such other party in connection with the
         consummation of the transactions contemplated by this Agreement and
         will take all reasonable actions necessary to obtain (and will
         cooperate with the other parties hereto in obtaining) any consent,
         approval, order or authorization of, or any registration, declaration
         or filing with, any Governmental Entity or other person, required to be
         obtained or made in connection with the taking of any action
         contemplated by this Agreement.

5.10     Tax-Free Reorganization. Neither Target, Acquiror nor Sub will, either
         before or after consummation of the Merger, take any action which, to
         the knowledge of such party, would cause the Merger to fail to
         constitute a "reorganization" within the meaning of Code Section 368.

5.11     Listing of Additional Shares. Prior to the Effective Time, Acquiror
         shall file with Nasdaq a Notification Form for Listing of Additional
         Shares with respect to the Total Acquiror Shares.

5.12     Additional Agreements; Best Efforts. Each of the parties agrees to use
         their best efforts to take, or cause to be taken, all action and to do,
         or cause to be done, all things necessary, proper or advisable under
         applicable laws and regulations to consummate and make effective the
         transactions contemplated by this Agreement, subject to the appropriate
         vote of shareholders of Target described in Section 5.2, including
         cooperating fully with the other party, including by provision of
         information. In case at any time after the Effective Time any further
         action is necessary or desirable to carry out the purposes of this
         Agreement or to vest the Surviving Corporation with full title to all
         properties, assets, rights, approvals, immunities and franchises of
         either of the constituent corporations, the proper officers and
         directors of each party to this Agreement shall take all such necessary
         action.

5.13     Employee Benefits. Acquiror shall take such reasonable actions, to the
         extent permitted by Acquiror's benefits program, as are necessary to
         allow eligible employees of Target to participate in the benefit
         programs of Acquiror, or alternative benefits programs in the aggregate
         substantially comparable to those applicable to employees of Acquiror
         on similar terms, as soon as practicable after the Effective Time of
         the Merger. For purposes of satisfying


                                       62
<PAGE>

         the terms and conditions of such programs, to the extent permitted by
         Acquiror's benefit programs, Acquiror shall use reasonable efforts to
         give full credit for eligibility or vesting for each participant's
         period of service with Target.

5.14     Preparation of Tax Return. Acquiror agrees to cause Surviving
         Corporation to timely prepare federal and state tax returns for the
         Target's tax year ending as a result of the Merger. Acquiror agrees to
         provide the Stockholders' Representative (as defined in Section 8.8) an
         opportunity to review and comment upon such returns prior to filing.
         Acquiror agrees not to cause Surviving Corporation to amend the federal
         and state tax returns of Target without the consent of Stockholders'
         Representative.

5.15     Sales, Transfer and Other Taxes. Any sales, transfer, purchase, use,
         real estate, excise or other Taxes (excluding income Taxes) that may be
         payable by reason of the sale, transfer or conveyance of the Total
         Acquiror Shares will be paid by the Signing Stockholders.

5.16     Royalty Payments. Prior to the Closing Date, all royalty payments
         payable to Jeff Zernov from Target shall have been terminated. Neither
         Acquiror nor the Surviving Corporation shall have any liability to Jeff
         Zernov for any such royalty payments.

                                    ARTICLE 6

                            CONDITIONS TO THE MERGER
                            ------------------------

6.1      Conditions to Obligations of Each Party to Effect the Merger. The
         respective obligations of each party to this Agreement to consummate
         and effect this Agreement and the transactions contemplated hereby
         shall be subject to the satisfaction at or prior to the Effective Time
         of each of the following conditions, any of which may be waived, in
         writing, by agreement of all the parties hereto:

         (a)      No Injunctions or Restraints; Illegality. No temporary
                  restraining order, preliminary or permanent injunction or
                  other order issued by any court of competent jurisdiction or
                  other legal or regulatory restraint or prohibition preventing
                  the consummation of the Merger shall be in effect, nor shall
                  any proceeding brought by an administrative agency or
                  commission or other governmental authority or instrumentality,
                  domestic or foreign, seeking any of the foregoing be pending;
                  nor shall there be any


                                       63
<PAGE>

                  action taken, or any statute, rule, regulation or order
                  enacted, entered, enforced or deemed applicable to the Merger,
                  which makes the consummation of the Merger illegal. In the
                  event an injunction or other order shall have been issued,
                  each party agrees to use its reasonable diligent efforts to
                  have such injunction or other order lifted.

         (b)      Governmental Approval. Acquiror and Target shall have timely
                  obtained from each Governmental Entity all approvals, waivers
                  and consents, if any, necessary for consummation of or in
                  connection with the Merger and the several transactions
                  contemplated hereby.

         (c)      Listing of Additional Shares. The filing with the Nasdaq
                  National Market of a Notification Form for Listing of
                  Additional Shares with respect to the shares of Acquiror
                  Common Stock issuable upon conversion of the Target Common
                  Stock in the Merger and upon exercise of the options under the
                  Target Stock Option Plan assumed by Acquiror shall have been
                  made.

         (d)      Approval of Acquiror's Shareholders. This Agreement and the
                  Merger shall have been approved and adopted by the holders of
                  at least a majority of the oustanding shares of Acquiror
                  Common Stock outstanding as of the record date set for the
                  Acquiror's shareholders meeting or solicitation of shareholder
                  consents.

6.2      Additional Conditions to Obligations of Target. The obligations of
         Target to consummate and effect this Agreement and the transactions
         contemplated hereby shall be subject to the satisfaction at or prior to
         the Effective Time of each of the following conditions, any of which
         may be waived, in writing, by Target:

         (a)      Representations, Warranties and Covenants. (i) The
                  representations and warranties of Acquiror and Merger Sub in
                  this Agreement shall be true and correct in all material
                  respects (except for such representations and warranties that
                  are qualified by their terms by a reference to materiality
                  which representations and warranties as so qualified shall be
                  true in all respects) on and as of the Effective Time as
                  though such representations and warranties were made on and as
                  of such time and (ii) Acquiror and Merger Sub shall have
                  performed and complied in all material respects with all
                  covenants, obligations


                                       64
<PAGE>

                  and conditions of this Agreement required to be performed and
                  complied with by them as of the Effective Time.

         (b)      Certificate of Acquiror. Target shall have been provided with
                  a certificate executed on behalf of Acquiror by a duly
                  authorized officer stating that the conditions set forth in
                  Section 6.2(a) have been fulfilled.

         (c)      Third Party Consents. Target shall have been furnished with
                  evidence satisfactory to it of the consent or approval of
                  those persons whose consent or approval shall be required in
                  connection with the Merger set forth on Schedule 2.3.

         (d)      Legal Opinion. Target shall have received a legal opinion from
                  Acquiror's legal counsel substantially in the form attached as
                  Exhibit C hereto.

         (e)      Resignation of Directors. Each of the directors of Acquiror
                  designated by Target shall resign their office effective
                  immediately following the Closing. The remaining directors of
                  Acquiror will elect replacements, effective immediately
                  following the Closing, for each of the resigning directors,
                  with such replacements, and the class in which each
                  replacement shall be placed, to be designated by Target. The
                  Stockholders' Representative shall name a replacement for any
                  such replacement directors designated by Target that for any
                  reason cannot serve on Acquiror's Board of Directors upon the
                  consummation of the Merger.

         (f)      Kiphart Investment. Effective as of the Closing, Richard P.
                  Kiphart shall purchase that number of whole shares of Acquiror
                  Common Stock for an aggregate purchase price of approximately
                  $1,000,000 at a price per share equal to the lower of the (a)
                  70% of the average closing price per share of Acquiror's
                  Common Stock on the Nasdaq Small Cap Market over the 30
                  calendar day period preceding the date hereof and (b) 70% of
                  the average closing price per share of Acquiror's Common Stock
                  on the Nasdaq Small Cap Market over the 30 calendar day period
                  preceding the day prior to the Closing Date; provided that the
                  price per share shall not be lower than $1.53. The
                  Stockholders' Representative shall have been delivered an
                  irrevocable proxy terminating after 2 years to vote such
                  shares of Acquiror Common Stock.

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<PAGE>

         (g)      Amendment to Articles of Incorporation. Acquiror shallhave
                  amended its Articles of Incorporation to authorize the
                  issuance of up to 50,000,000 shares of capital stock of
                  Acquiror.

         (h)      Escrow Agreement. Target shall have received an copy duly
                  executed by Escrow Agent and Acquiror of the Escrow Agrement
                  substantially in the form attached as Exhibit F hereto.

         (i)      Name Change. Acquiror shall have amended its Articles of
                  Incorporation to change its name to a name designated by
                  Target.

         (j)      Delivery of Certain Documents. At the Closing, Acquiror shall
                  have delivered to Target all of the following:

                  (i)      Copies of all third party and governmental consents
                           and approvals referenced in Sections 6.1(c) and
                           6.2(c) above;

                  (ii)     A copy of the Articles of Incorporation of Acquiror,
                           certified by the Secretary of State of the State of
                           Minnesota, and a Certificate of Good Standing from
                           the Secretary of State of the State of Minnesota
                           evidencing the good standing of Acquiror, each dated
                           as of a recent date; and

                  (iii)    Such other certificates, documents and instruments as
                           Acquiror reasonably requests relating to the
                           transactions contemplated hereby.

6.3      Additional Conditions to the Obligations of Acquiror. The obligations
         of Acquiror to consummate and effect this Agreement and the
         transactions contemplated hereby shall be subject to the satisfaction
         at or prior to the Effective Time of each of the following conditions,
         any of which may be waived, in writing, by Acquiror:

         (a)      Representations, Warranties and Covenants. (i) The
                  representations and warranties of Target in this Agreement
                  shall be true and correct in all material respects (except for
                  such representations and warranties that are qualified by
                  their terms by a reference to materiality which
                  representations and


                                       66
<PAGE>

                  warranties as so qualified shall be true in all respects) on
                  and as of the Effective Time as though such representations
                  and warranties were made on and as of such time and (ii)
                  Target shall have performed and complied in all material
                  respects with all covenants, obligations and conditions of
                  this Agreement required to be performed and complied with by
                  it as of the Effective Time.

         (b)      Certificate of Acquiror. Acquiror shall have been provided
                  with a certificate executed on behalf of Target by a duly
                  authorized officer stating that the conditions set forth in
                  Section 6.3(a) have been fulfilled.

         (c)      Third Party Consents. Acquiror shall have been furnished with
                  evidence satisfactory to it of the consent or approval of
                  those persons whose consent or approval shall be required in
                  connection with the Merger set forth on Schedule 2.3.

         (d)      Injunctions or Restraints on Merger and Conduct of Business.
                  No proceeding brought by any administrative agency or
                  commission or other governmental authority or instrumentality,
                  domestic or foreign, seeking to prevent the consummation of
                  the Merger shall be pending. In addition, no temporary
                  restraining order, preliminary or permanent injunction or
                  other order issued by any court of competent jurisdiction or
                  other legal or regulatory restraint provision limiting or
                  restricting Acquiror's conduct or operation of the business of
                  Target and its subsidiaries, following the Merger shall be in
                  effect, nor shall any proceeding brought by an administrative
                  agency or commission or other Governmental Entity, domestic or
                  foreign, seeking the foregoing be pending.

         (e)      Legal Opinion. Acquiror shall have received a legal opinion
                  from Target's legal counsel, in substantially the form
                  attached hereto as Exhibit D.

         (f)      No Material Adverse Changes. There shall not have occurred any
                  material adverse change in the condition (financial or
                  otherwise), properties, assets (including intangible assets),
                  liabilities, business, operations, results of operations or
                  prospects of Target.

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<PAGE>

         (g)      FIRPTA Certificate. Target shall, prior to the Closing Date,
                  provide Acquiror with a properly executed FIRPTA Notification
                  Letter, substantially in the form of Exhibit E.

         (h)      Resignation of Directors. The directors of Target in office
                  immediately prior to the Effective Time shall have resigned as
                  directors of Target effective as of the Effective Time.

         (i)      Proprietary Information and Inventions Agreements. All of the
                  employees of Target shall have entered into a Proprietary
                  Information and Inventions Agreements in a form reasonably
                  acceptable to Acquiror.

         (j)      Tax Free Transaction. The Merger shall qualify as a "tax free
                  transaction" in accordance with Section 368 of the Code, as
                  amended, and the Treasury Regulations thereunder.

         (k)      Employee Benefits Plans. Target shall terminate its Employee
                  Benefits Plans set forth on Schedule 2.15 effective as of a
                  date prior to the Closing and shall take all necessary steps
                  to effect such termination following the Closing, in
                  compliance with the requirements of ERISA.

         (l)      Zernov Employment Agreement. Jeff Zernov shall have entered
                  into an Employment Agreement in a form mutually acceptable to
                  Acquiror and Jeff Zernov.













                                       68
<PAGE>

         (m)      Technology Assignment Agreement. All current and former
                  employees and consultants of Target shall have assigned all
                  right, title and interest in and to any Target Intellectual
                  Property to Target.

         (n)      Delivery of Certain Documents. At the Closing, Target shall
                  have delivered to Acquiror all of the following:

                  (i)      Copies of all third party and governmental consents
                           and approvals referenced in Sections 6.1(c) and
                           6.3(c) above;

                  (ii)     Target's minute books, stock transfer records,
                           corporate seal and other materials relating to
                           Target's corporate administration;

                  (iii)    A copy of the Articles of Incorporation of Target,
                           certified by the Secretary of State of the State of
                           Minnesota, and a Certificate of Good Standing from
                           the Secretary of State of the State of Minnesota
                           evidencing the good standing of Target, each dated as
                           of a recent date; and

                  (iv)     Such other certificates, documents and instruments as
                           Acquiror reasonably requests relating to the
                           transactions contemplated hereby.

         (o)      Release of Security Interests. Target shall have obtained
                  UCC-3 Releases or similar termination statements with respect
                  to all security interests set forth on Schedule 6.3(o).

         (p)      Shareholder Approval. This Agreement and the Merger shall have
                  been approved and adopted by the holders of at least 98% of
                  the shares of Target Common Stock outstanding as of the record
                  date set for the Target Shareholders Meeting or solicitation
                  of shareholder consents.

         (q)      Escrow Agreement. Acquiror shall have received an copy duly
                  executed by Escrow Agent, Target and the Signing Stockholders
                  of the Escrow Agrement substantially in the form attached as
                  Exhibit F hereto.



                                       69
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                                    ARTICLE 7

                   TERMINATION, EXPENSES, AMENDMENT AND WAIVER
                   -------------------------------------------

7.1      Termination. At any time prior to the Effective Time, whether before or
         after approval of the matters presented in connection with the Merger
         by the shareholders of Target, this Agreement may be terminated:

         (a)      by mutual written consent duly authorized by the Board of
                  Directors of Acquiror and Target;

         (b)      By either Acquiror or Target, if the Closing shall not have
                  occurred on or before December 31, 2004 (provided, a later
                  date may be agreed upon in writing by the parties hereto, and
                  provided further that the right to terminate this Agreement
                  under this Section 7.1(b) shall not be available to any party
                  whose action or failure to act has been the cause or resulted
                  in the failure of the Merger to occur on or before such date
                  and such action or failure to act constitutes a breach of this
                  Agreement);

         (c)      by Acquiror, if (i) Target shall breach any representation,
                  warranty, obligation or agreement hereunder and such breach
                  shall not have been cured within five (5) days following
                  receipt by Target by written notice from Acquiror of such
                  breach, provided that the right to terminate this Agreement by
                  Acquiror under this Section 7.1(c) shall not be available to
                  Acquiror where Acquiror is at that time in material breach of
                  this Agreement, or (ii) the Board of Directors of Target shall
                  have withdrawn or modified its recommendation of this
                  Agreement or the Merger in a manner adverse to Acquiror or
                  shall have resolved to do any of the foregoing;

         (d)      by Target, if (i) Acquiror shall breach any representation,
                  warranty, obligation or agreement hereunder and such breach
                  shall not have been cured within five (5) days following
                  receipt by Acquiror of written notice from Target of such
                  breach, provided that the right to terminate this Agreement by
                  Target under this Section 7.1(d) shall not be available to
                  Target where Target is at that time in material breach of this
                  Agreement, or (ii) the Board of Directors of Acquiror shall
                  have withdrawn or modified its recommendation of this
                  Agreement or the Merger in a manner adverse to Target or shall
                  have resolved to do any of the foregoing;

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<PAGE>

         (e)      by Acquiror if any permanent injunction or other order of a
                  court or other competent authority preventing the consummation
                  of the Merger shall have become final and nonappealable;

         (f)      by Target if any permanent injunction or other order of a
                  court or other competent authority preventing the consummation
                  of the Merger shall have become final and nonappealable; or

         (g)      by Acquiror, if Acquiror enters into a definitive agreement
                  for a superior proposal as described in Section 5.1(b) and has
                  otherwise complied with all provisions of Section 5.1(b),
                  provided, however, that Acquiror shall pay to Target, within
                  30 days of such termination by Acquiror, a termination fee of
                  $125,000 and shall reimburse Target for reasonably incurred
                  expenses (including without limitation attorneys' fees and
                  accounting fees) up to a maximum of $100,000.

7.2      Effect of Termination. In the event of termination of this Agreement as
         provided in Section 7.1, this Agreement shall forthwith become null and
         void and there shall be no liability or obligation on the part of any
         of the Signing Stockholders, or Acquiror or Target or their respective
         officers, directors, shareholders or affiliates, except to the extent
         that such termination results from the breach by such party of any of
         its representations, warranties or covenants set forth in this
         Agreement; provided that, the provisions of Section 5.4
         (Confidentiality), Section 7.3 (Expenses and Termination Fees) and this
         Section 7.2 shall remain in full force and effect and survive any
         termination of this Agreement, and except that if either Party commits
         a breach of this Agreement prior to such termination, the other Party
         will be entitled to the remedy of specific performance in addition to
         any and all other available legal or equitable remedies (including,
         without limitation, damages).

7.3      Expenses and Termination Fees. Whether or not the Merger is
         consummated, all costs and expenses incurred in connection with this
         Agreement and the transactions contemplated hereby (including, without
         limitation, the fees and expenses of its advisers, accountants and
         legal counsel) shall be paid by the party incurring such expense. If
         Target has paid or pays any such fees and/or expenses incurred by the
         Signing Stockholders, then the Signing Stockholders shall reimburse
         Target or the Surviving Corporation for the amounts so paid; PROVIDED,
         HOWEVER, that such payment shall, if not promptly paid by the Signing
         Stockholders, be subject to recovery from the Escrow Shares in
         accordance with the provisions of


                                       71
<PAGE>

         Article 8 hereof. If the Surviving Corporation receives any invoices
         for amounts incurred by the Signing Stockholders and the Closing has
         occurred, the Surviving Corporation may pay such fees, and the Signing
         Stockholders shall reimburse the Surviving Corporation for the amounts
         so paid; PROVIDED, HOWEVER, that such payment shall, if not promptly
         reimbursed by the Signing Stockholders, be subject to recovery from the
         Escrow Shares in accordance with the provisions of Article 8 hereof.

7.4      Amendment. This Agreement may be amended at any time prior to the
         Effective Date upon the written consent of each of the parties hereto;
         provided that an amendment made subsequent to adoption of the Agreement
         by the shareholders of Target shall not (i) alter or change the amount
         or kind of consideration to be received on conversion of the Target
         Common Stock, (ii) alter or change any term of the Articles of
         Incorporation of the Surviving Corporation to be effected by the
         Merger, or (iii) alter or change any of the terms and conditions of the
         Agreement if such alteration or change would adversely affect the
         holders of Target Common Stock.

7.5      Extension; Waiver. At any time prior to the Effective Time any party
         hereto may, to the extent legally allowed, (i) extend the time for the
         performance of any of the obligations or other acts of the other
         parties hereto, (ii) waive any inaccuracies in the representations and
         warranties made to such party contained herein or in any document
         delivered pursuant hereto and (iii) waive compliance with any of the
         agreements or conditions for the benefit of such party contained
         herein. Any agreement on the part of a party hereto to any such
         extension or waiver shall be valid only if set forth in an instrument
         in writing signed on behalf of such party.

                                    ARTICLE 8

                                 INDEMNIFICATION
                                 ---------------

8.1      Time Limitations. A claim for indemnification pursuant to Section
         8.3(b) must be made in writing to the Stockholders' Representative on
         or before the third anniversary of the Closing Date, other than with
         respect to claims based on a breach of the representations and
         warranties set forth in Sections 2.13 and 2.14, which must be made in
         writing to the Stockholders' Representative within 30 days after the
         expiration of the applicable statute of limitations relating to the
         matters covered by such representations and warranties. A claim for
         indemnification pursuant to Section 8.4(b) must be made in writing to
         Acquiror on or before the on or before the third anniversary of the
         Closing Date, other than with respect to claims based on a breach of

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<PAGE>

         the representations and warranties set forth in Sections 3.14 and 3.15,
         which must be made in writing to the Acquiror within 30 days after the
         expiration of the applicable statute of limitations relating to the
         matters covered by such representations and warranties. Notwithstanding
         the foregoing or any other provision to the contrary contained herein,
         there will be no time limitation regarding claims (a) based on a breach
         of the representations and warranties set forth in Sections 2.3, 2.11,
         3.3 and 3.12 or (b) for indemnification brought pursuant to Sections
         8.3(a) or 8.4(a).

8.2      Amount Limitations. No indemnification claim may be asserted by either
         Party pursuant to Sections 8.3 or 8.4 until such Party has suffered
         Losses (as defined below) in excess of $75,000 (after which point such
         Party will only be entitled to indemnification from and against such
         further Losses). Each Party's obligation to indemnify the other
         pursuant to Sections 8.3 or 8.4 will be limited to, and capped at an
         amount equal to the Purchase Price (after which point such Party will
         have no obligation to indemnify from and against any further Losses).
         The Parties will make appropriate adjustments for actual Tax benefits
         and for proceeds actually received pursuant to insurance and
         third-party indemnification in determining Losses for purposes of this
         Article 8.

8.3      Indemnification by Signing Stockholders. Notwithstanding any
         investigation conducted before or after the Closing Date, and
         notwithstanding any actual or implied knowledge or notice of any facts
         or circumstances which Acquiror may have as a result of such
         investigation or otherwise, and subject to the limitations provided in
         Sections 8.1 and 8.2, the Signing Stockholders, jointly and severally,
         will indemnify, defend and hold harmless Acquiror and the Surviving
         Corporation (and each of their former, present and future officers,
         directors, employees, agents, shareholders, members, contractors,
         subcontractors, licensees, invitees, attorneys and all of their heirs
         and representatives), and each of their successors and assigns from and
         against all actions, suits, proceedings, hearings, investigations,
         charges, complaints, claims, demands, injunctions, judgments, orders,
         decrees, rulings, damages, dues, penalties, fines, costs, reasonable
         amounts paid in settlement, liabilities, Taxes, Security Interests,
         losses, expenses and fees, including all litigation costs and
         reasonable attorneys' fees and expenses ("Losses") (excluding
         incidental and consequential damages) caused by or arising out of:

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<PAGE>

         (a)      Any breach or default in the performance by any of Target or
                  Signing Stockholders of any covenant or agreement of any of
                  Target or Signing Stockholders contained in this Agreement; or

         (b)      Any breach of any warranty or representation made by any of
                  Target or Signing Stockholders herein or in any schedule or
                  exhibit hereto, or in any certificate or other instrument
                  delivered by or on behalf of any of Target or Signing
                  Stockholders pursuant hereto.

         Acquiror shall recoup all of its Losses first from the Escrow Fund and
         then directly from the Signing Stockholders.

8.4      Indemnification by Acquiror. Notwithstanding any investigation
         conducted before or after the Closing Date, and notwithstanding any
         actual or implied knowledge or notice of any facts or circumstances
         which Acquiror may have as a result of such investigation or otherwise,
         and subject to the limitations provided in Sections 8.1 and 8.2,
         Acquiror will indemnify and hold harmless all Target Shareholders
         immediately prior to Closing (and all of their heirs and
         representatives), but not including the Dissenting Shareholders, from
         and against any Losses (excluding incidental and consequential damages)
         caused by or arising out of:

         (a)      Any breach or default in the performance by Acquiror of any
                  covenant or agreement of Acquiror contained in this Agreement;
                  or

         (b)      Any breach of warranty or representation made by Acquiror
                  herein or in any schedule or exhibit hereto, or in any
                  certificate or other instrument delivered by or on behalf of
                  Acquiror pursuant hereto.

8.5      Matters Involving Third Parties.

         (a)      If any third party notifies any Party (the "Indemnified
                  Party") with respect to any matter (a "Third Party Claim")
                  that may give rise to a claim for indemnification against any
                  other Party (the "Indemnifying Party") under this Article 8,
                  then the Indemnified Party will promptly notify each
                  Indemnifying Party in writing. Delay on the part of the
                  Indemnified Party in notifying any Indemnifying Party will not
                  relieve the Indemnifying Party from their obligation unless
                  (and then solely to the extent) the Indemnifying Party is
                  prejudiced.

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<PAGE>

         (b)      Any Indemnifying Party will have the right to defend the
                  Indemnified Party against the Third Party Claim with counsel
                  of its choice reasonably satisfactory to the Indemnified Party
                  so long as (i) the Indemnifying Party notifies the Indemnified
                  Party in writing within 15 days after the Indemnified Party
                  has given notice of the Third Party Claim that the
                  Indemnifying Party will indemnify the Indemnified Party from
                  and against the entirety of any Losses the Indemnified Party
                  may suffer resulting from, arising out of, relating to, in the
                  nature of or caused by the Third Party Claim, (ii) the
                  Indemnifying Party provides the Indemnified Party with
                  evidence reasonably acceptable to the Indemnified Party that
                  the Indemnifying Party will have the financial resources to
                  defend against the Third Party Claim and fulfill its
                  indemnification obligations, (iii) the Third Party Claim
                  involves only money damages and does not seek an injunction or
                  other equitable relief, (iv) settlement of, or an adverse
                  judgment with respect to, the Third Party Claim is not, in the
                  good faith judgment of the Indemnified Party, likely to
                  establish a precedential custom or practice materially adverse
                  to the continuing business interests of the Indemnified Party,
                  and (v) the Indemnifying Party conducts the defense of the
                  Third Party Claim actively and diligently.

         (c)      So long as the Indemnifying Party is conducting the defense of
                  the Third Party Claim in accordance with Section 8.5(b), (i)
                  the Indemnified Party may retain separate co-counsel at its
                  sole cost and expense and participate in the defense of the
                  Third Party Claim, (ii) the Indemnified Party will not consent
                  to the entry of any judgment or enter into any settlement with
                  respect to the Third Party Claim without the prior written
                  consent of the Indemnifying Party (not to be withheld
                  unreasonably), and (iii) the Indemnifying Party will not
                  consent to the entry of any judgment or enter into any
                  settlement with respect to the Third Party Claim without the
                  prior written consent of the Indemnified Party (not to be
                  withheld unreasonably).

         (d)      If any of the conditions in Section 8.5(b) is not or is no
                  longer satisfied, (i) the Indemnified Party may defend
                  against, and consent to the entry of any judgment or enter
                  into any settlement with respect to, the Third Party Claim in
                  any manner it reasonably may deem appropriate (and the
                  Indemnified Party need


                                       75
<PAGE>

                  not consult with, or obtain any consent from, any Indemnifying
                  Party), (ii) the Indemnifying Parties will reimburse the
                  Indemnified Party promptly and periodically for the costs of
                  defending against the Third Party Claim (including reasonable
                  attorneys' fees and expenses), and (iii) the Indemnifying
                  Parties will remain responsible for any Adverse Consequences
                  the Indemnified Party may suffer resulting from, arising out
                  of, relating to, in the nature of, or caused by the Third
                  Party Claim to the fullest extent provided in this Article 8.

8.6      Escrow Fund. As security for the indemnity provided for in Section 8.3,
         10% of the Total Acquiror Shares issuable pursuant to Section 1.6(a)
         shall be deposited by Acquiror in an escrow account with a mutually
         acceptable person or institution as Escrow Agent (the "Escrow Agent"),
         as of the Closing Date, such deposit to constitute an escrow fund (the
         "Escrow Fund") to be governed by the terms set forth in this Agreement
         and the provisions of an Escrow Agreement to be entered into between
         the Escrow Agent and the Parties, provided, that the term of the Escrow
         Agreement shall be for a period of 24 months following the Closing
         Date. The Escrow Fund shall be allocated among the former Target
         Shareholders on a pro-rata basis in accordance with the number of
         shares of Target Common Stock held by the former Target Shareholders at
         the Effective Time (excluding for purposes of this calculation any
         Dissenting Shares). Upon compliance with the terms hereof and subject
         to the provisions of this Article 8, Acquiror and the Surviving
         Corporation shall be entitled to obtain indemnity from the Escrow Fund
         for Losses covered by the indemnity provided for in Section 8.3.

8.7      Exclusive Remedy. In the absence of fraud the right of the Parties to
         assert indemnification claims and receive indemnity payments under this
         Agreement is the sole and exclusive right and remedy exercisable by the
         Parties with respect to any Losses arising out of any breach by any
         Party of any representation, warranty, covenant or agreement of such
         Party set forth in this Agreement or otherwise relating to this
         Agreement and the contemplated transactions. No Party will have any
         other remedy (statutory, equitable, common law or otherwise) against
         any other Party with respect to such matters, and all such other
         remedies are hereby waived. Without limiting the foregoing, each of the
         Parties acknowledges and agrees that it will not have any remedy after
         the Closing for any breach of any representation, warranty, covenant or
         agreement set forth in


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<PAGE>

         this Agreement, except as expressly provided in this Article 8.

8.8      Stockholders' Representative.

         (a)      Jeff Zernov shall be constituted and appointed as agent
                  ("Stockholders' Representative") for and on behalf of the
                  Target shareholders to give and receive notices and
                  communications, to authorize delivery to Acquiror of the
                  Acquiror Common Stock or other property from the Escrow Fund
                  in satisfaction of claims by Acquiror, to object to such
                  deliveries, to agree to, negotiate, enter into settlements and
                  compromises of, and demand arbitration and comply with orders
                  of courts and awards of arbitrators with respect to such
                  claims, and to take all actions necessary or appropriate in
                  the judgment of the Stockholders' Representative for the
                  accomplishment of the foregoing. Such agency may be changed by
                  the holders of a majority in interest of the Escrow Fund from
                  time to time upon not less than 10 days' prior written notice
                  to Acquiror. The Stockholders' Representative may resign upon
                  30 days notice to the parties to this Agreement and the former
                  Target Shareholders. No bond shall be required of the
                  Stockholders' Representative, and the Stockholders'
                  Representative shall receive no compensation for his services.
                  Notices or communications to or from the Stockholders'
                  Representative shall constitute notice to or from each of the
                  Target shareholders. If Jeff Zernov is unable to serve as
                  Stockholders' Representative then, subject to the terms and
                  conditions of this Agreement, Tony Capra shall serve as
                  Stockholders' Representative. If Tony Capra is unable to serve
                  as Stockholders' Representative, then, subject to the terms
                  and conditions of this Agreement, Dean Capra shall serve as
                  Stockholders' Representative.

         (b)      The Stockholders' Representative shall not be liable for any
                  act done or omitted hereunder as Stockholders' Representative
                  while acting in good faith and in the exercise of reasonable
                  judgment, and any act done or omitted pursuant to the advice
                  of counsel shall be conclusive evidence of such good faith.
                  The Target shareholders shall severally indemnify the
                  Stockholders' Representative and hold him harmless against any
                  loss, liability or expense incurred without gross negligence
                  or bad faith on the part of the Stockholders' Representative
                  and arising


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<PAGE>

                  out of or in connection with the acceptance or administration
                  of his duties hereunder.

         (c)      The Stockholders' Representative shall have reasonable access
                  to information about Target and the reasonable assistance of
                  Target's officers and employees for purposes of performing its
                  duties and exercising its rights hereunder, provided that the
                  Stockholders' Representative shall treat confidentially and
                  not disclose any nonpublic information from or about Target to
                  anyone (except on a need to know basis to individuals who
                  agree to treat such information confidentially).

         (d)      Each of the Target shareholders hereby irrevocably appoints
                  the Stockholders' Representative as his, her or its true and
                  lawful attorney-in-fact and proxy, with full power of
                  substitution for and in his name, to vote and otherwise act
                  with respect to all of his, hers or its shares of capital
                  stock of the Acquiror held in the Escrow Fund, at any meetings
                  of stockholders of the Acquiror (or by written action in lieu
                  thereof) and at any other time such shares are required to or
                  may be voted or acted upon.

         (e)      It is understood and agreed that the appointment and proxy
                  granted by the each shareholder in Section 8.8(d) above is
                  irrevocable and is coupled with an interest within the meaning
                  of Minn. Stat. ss. 302A.449. The proxy granted in Section
                  8.8(d) above will not terminate by operation of law, or by
                  death, bankruptcy or adjudication of incompetence or insanity
                  of any Target shareholder or the occurrence of any other event
                  except upon the distribution of such shares to the Target
                  shareholders and then only with respect to such shares
                  distributed. All shares remaining in the Escrow Fund shall
                  remain subject to the proxy granted in Section 8.8(d) above.

8.9      Actions of the Stockholders' Representative. A decision, act, consent
         or instruction of the Stockholders' Representative shall constitute a
         decision of all Target shareholders for whom shares of Acquiror Common
         Stock otherwise issuable to them are deposited in the Escrow Fund and
         shall be final, binding and conclusive upon each such Target
         shareholder, and the Escrow Agent and Acquiror may rely upon any
         decision, act, consent or instruction of the Stockholders'
         Representative as being the decision, act, consent or instruction of
         each and every such Target


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<PAGE>

         shareholder. The Escrow Agent and Acquiror are hereby relieved from any
         liability to any person for any acts done by them in accordance with
         such decision, act, consent or instruction of the Stockholders'
         Representative.


















































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                                    ARTICLE 9

                               GENERAL PROVISIONS
                               ------------------

9.1      Notices. Any notice, offer, request, demand, claim or other
         communication provided for by this Agreement must be in writing and
         will be deemed given or delivered when delivered by hand, transmitted
         by facsimile or three days after the day when deposited in the United
         States mail, certified or registered, return receipt requested, postage
         prepaid and properly addressed to the intended recipient as set forth
         below:

         if to Acquiror or Merger Sub, to:

         Photo Control Corporation
         4800 Quebec Avenue North
         Minneapolis, MN 55428
         Attention:     President
         Facsimile No.: (650) 812-6246

         with a copy to:

         Gray Plant Mooty
         500 IDS Center
         80 South Eighth Street
         Minneapolis, MN 55402
         Attention:     J.C. Anderson
         Facsimile No.: (612) 632-4002

         if to Target or Stockholders' Representative, to:

         Nature Vision, Inc.
         213 4th Street NW
         Brainerd, MN 54601
         Attention:     Jeff Zernov
         Facsimile No.: (218) 825-0721

         with a copy to:

         Willeke & Daniels
         201 Ridgewood Avenue
         Minneapolis, MN 55403
         Attention:     Donald C. Willeke
         Facsimile No.: (612) 870-0689

         Any Party may send any notice, request, demand, claim or other
         communication to the intended recipient at the address set forth above
         using any other means, but no such notice, request, demand, claim or
         other communication will be deemed


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<PAGE>

         to have been duly given unless and until it actually is received by the
         intended recipient.

9.2      Interpretation. When a reference is made in this Agreement to Exhibits,
         such reference shall be to an Exhibit to this Agreement unless
         otherwise indicated. The words "include," "includes" and "including"
         when used herein shall be deemed in each case to be followed by the
         words "without limitation." In this Agreement, any reference to any
         event, change, condition or effect being "material" with respect to any
         entity or group of entities means any material event, change, condition
         or effect related to the condition (financial or otherwise),
         properties, assets (including intangible assets), liabilities,
         business, operations or results of operations of such entity or group
         of entities. In this Agreement, any reference to a "Material Adverse
         Effect" with respect to any entity or group of entities means any
         event, change or effect that is materially adverse to the condition
         (financial or otherwise), properties, assets (including intangible
         assets), liabilities, business, operations or results of operations of
         such entity and its subsidiaries, taken as a whole. In this Agreement,
         any reference to a party's "knowledge" means such party's actual
         knowledge after due and diligent inquiry of officers, directors and
         other employees of such party and its subsidiaries reasonably believed
         to have knowledge of such matters. The table of contents and headings
         contained in this Agreement are for reference purposes only and shall
         not affect in any way the meaning or interpretation of this Agreement.

9.3      Counterparts. This Agreement may be executed by facsimile and in one or
         more counterparts, each of which will be deemed an original but all of
         which together will constitute one and the same instrument.

9.4      Entire Agreement; No Third Party Beneficiaries. This Agreement, the
         other Transaction Documents and the documents and instruments and other
         agreements specifically referred to herein or delivered pursuant
         hereto, including the Exhibits, the Schedules, including the Target
         Disclosure Schedule and the Acquiror Disclosure Schedule (a) constitute
         the entire agreement among the parties with respect to the subject
         matter hereof and supersede all prior agreements and understandings,
         both written and oral, among the parties with respect to the subject
         matter hereof; (b) are not intended to confer upon any other person any
         rights or remedies hereunder, except for the rights of the Target
         Shareholders and optionholders to receive the consideration set forth
         in Article 1 of this Agreement.

9.5      Severability. In the event that any provision of this Agreement, or the
         application thereof, becomes or is declared by a court of competent
         jurisdiction to be illegal,


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<PAGE>

         void or unenforceable, the remainder of this Agreement will continue in
         full force and effect and the application of such provision to other
         persons or circumstances will be interpreted so as reasonably to effect
         the intent of the parties hereto. The parties further agree to replace
         such void or unenforceable provision of this Agreement with a valid and
         enforceable provision that will achieve, to the extent possible, the
         economic, business and other purposes of such void or unenforceable
         provision.

9.6      Remedies Cumulative. Except as otherwise provided herein, any and all
         remedies herein expressly conferred upon a party will be deemed
         cumulative with and not exclusive of any other remedy conferred hereby,
         or by law or equity upon such party, and the exercise by a party of any
         one remedy will not preclude the exercise of any other remedy.

9.7      Governing Law. This Agreement will be governed by and construed in
         accordance with the domestic laws of the State of Minnesota without
         giving effect to any choice or conflict of law provision or rule. Each
         of the Parties submits to the jurisdiction of any state or federal
         court sitting in Hennepin County, Minnesota, in any action or
         proceeding arising out of or relating to this Agreement and agrees that
         all claims in respect of the action or proceeding may be heard and
         determined there. Each Party also agrees not to bring any action or
         proceeding arising out of or relating to this Agreement in any other
         court. Each of the Parties waives any defense of inconvenient forum to
         the maintenance of any action or proceeding so brought and waives any
         bond, surety or other security that might be required of any other
         Party. Each Party agrees that a final judgment in any action or
         proceeding so brought will be conclusive and may be enforced by suit on
         the judgment or in any other manner provided by law or in equity.

9.8      Assignment. Neither this Agreement nor any of the rights, interests or
         obligations hereunder shall be assigned by any of the parties hereto
         (whether by operation of law or otherwise) without the prior written
         consent of the other parties. Subject to the preceding sentence, this
         Agreement will be binding upon, inure to the benefit of and be
         enforceable by the parties and their respective successors and
         permitted assigns.









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<PAGE>

9.9      Rules of Construction. The parties hereto agree that they have been
         represented by counsel during the negotiation, preparation and
         execution of this Agreement and, therefore, waive the application of
         any law, regulation, holding or rule of construction providing that
         ambiguities in an agreement or other document will be construed against
         the party drafting such agreement or document.
9.10     Amendments and Waivers. No amendment of any provision of this Agreement
         will be valid unless the same is in writing and signed by the Parties.
         No waiver by any Party of any default, misrepresentation or breach of
         warranty or covenant under this Agreement, whether intentional or not,
         will be deemed to extend to any prior or subsequent default,
         misrepresentation or breach of warranty or covenant under this
         Agreement.























                                       83
<PAGE>

         IN WITNESS WHEREOF, Target, Acquiror and Merger Sub have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized and the Stockholders' Representative and the Signing
Stockholders have executed this Agreement, all as of the date first written
above.

 "ACQUIROR":

PHOTO CONTROL CORPORATION                   "STOCKHOLDERS' REPRESENTATIVE"

s/s: Curtis Jackels                         s/s: Jeff Zernov
     -----------------------------               ------------------------------

By:                                         By:
     -----------------------------               ------------------------------
     Its: President
          ---------                         "SIGNING STOCKHOLDERS"

"MERGER SUB"                                s/s: Dean Capra
                                                 ------------------------------

PC ACQUISITION, INC.:                       By:
                                                 ------------------------------

s/s: Curtis Jackels                         s/s: Tony Capra
     -----------------------------               ------------------------------

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

"TARGET":

NATURE VISION, INC.

s/s: Jeff Zernov
     -----------------------------

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



















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