Document:

Exhibit 10.47
                               SEVERANCE AGREEMENT

         THIS  SEVERANCE  AGREEMENT   ("Agreement")  is  made  effective  as  of
_________,  2000 between MEDTOX  Scientific,  Inc., a Delaware  corporation (the
"Company") and ______________ (the "Employee").

                                    RECITALS

         WHEREAS,  the Company  desires to foster the  continuous  employment of
certain key management  personnel and to induce Employee to remain in the employ
of the Company,  and in  consideration of the agreement of Employee in Section 3
below, the Company and Employee agree as follows:

         1.       Definitions.  The following defined terms have the respective
                  meanings described below:

                  1.1      Cause.  Termination by the Company of the Employee's
                           employment for "Cause" shall mean termination upon:

                           (a)      the  willful  and  continued  failure by the
                                    Employee to substantially perform Employee's
                                    duties with the Company (other than any such
                                    failure resulting from Employee's incapacity
                                    due to physical or mental  illness)  after a
                                    written demand for  substantial  performance
                                    is   delivered   to  the   Employee  by  the
                                    Company's  Chief  Executive  Officer,  which
                                    demand specifically identifies the manner in
                                    which the Company believes that Employee has
                                    not   substantially   performed   Employee's
                                    duties; or

                           (b)      the willful engaging by the Employee in
                                    conduct which is demonstrably and
                                    materially injurious to the Company,
                                    monetarily or otherwise.

         For  purposes  of this  Section  1.1 no act,  or failure to act, on the
         Employee's part shall be deemed "willful" unless done, or omitted to be
         done, by the Employee not in good faith and without  reasonable  belief
         that the Employee's  action or omission was in the best interest of the
         Company.

                  1.2      Company.  The term "Company" means MEDTOX Scientific,
                           Inc. and any successors and assigns of the Company.

         2.  Term of  Agreement.  This  Agreement  shall  commence  on the above
effective  date and  continue in effect  through  January 2, 2001 (the  "Term").
Commencing  on January 3, 2000 and each January 3  thereafter,  the Term of this
Agreement shall  automatically  be extended for one additional year unless,  not
later than July 1 of the  preceding  year,  the Company gives  Employee  written
notice  that it does not  desire  to  extend  this  Agreement.  The Term of this

<PAGE>

Agreement  shall be subject to earlier  termination  as  described  in Section 4
below.

         3. Notice and Date of  Termination.  If the Company elects to terminate
the  employment  of Employee,  the Company  will  provide  Employee a "Notice of
Termination"  which shall state Employee's final day of employment (the "Date of
Termination") and whether or not such termination is for Cause.

         4. Severance  Payment for  Termination by Company Other Than For Cause.
If during the Term of this  Agreement the Company  terminates  the employment of
Employee  other than for Cause,  Employee  shall be  entitled  to the  following
benefits subject to the provisions of Section 6 of this Agreement:

                  (a)      the Company will pay to Employee the Employee's  then
                           current  base  salary  during the  twelve  (12) month
                           period  following the Date of Termination  subject to
                           applicable  withholdings  and in accordance  with the
                           regular payroll practices of the Company.

                  (b)      continuous coverage, at the Company's expense,  under
                           any group health plan  maintained  by or on behalf of
                           the Company, in which Employee participated as of the
                           Date of  Termination,  during the  twelve  (12) month
                           period following the Date of Termination.

         Employee's  right to continued  coverage under this section shall in no
way reduce or limit any  continuation  coverage  under such group health plan to
which Employee or any of Employee's  qualified  beneficiaries are entitled under
the provisions of the  Consolidated  Omnibus Budget  Reconciliation  Act of 1985
("COBRA") or Minnesota Statutes ss.ss. 61A.092 and 62A.17 et seq. This extension
of  coverage,  however,  shall  be  coordinated  with,  and  shall  be  provided
concurrently  with, any benefits or continuation  rights otherwise  available to
Employee and Employee's eligible dependents under state or federal  continuation
of coverage  statutes,  including but not limited to, Minnesota  Statutes ss.ss.
61A.092  and  62A.17  et  seq.  and  the  federal  Consolidated  Omnibus  Budget
Reconciliation Act ("COBRA").  Accordingly,  within ten (10) days after the Date
of  Termination,  Employee and  Employee's  dependents who are eligible for such
statutory  continuation rights shall complete all forms and papers necessary and
customary to elect such continuation  coverage. The Parties expressly agree that
the  extension  of benefits  provided  for by this  Agreement is not intended to
create a  retiree  health  plan  covering  any  other  employees.  In all  other
respects, the payment of benefits,  including the amounts and timing thereof, to
Employee and  Employee's  eligible  dependents  will be governed by the terms of
applicable  employee benefit plans for which Employee and Employee's  dependents
are eligible.  Employer will answer any  reasonable  questions that Employee may
have  from  time to time and will  offer  him the same  assistance  given  other
participants  in  employee  benefit  plans so long as  Employee  is  entitled to
benefits as provided herein or under the terms of those plans.

         Nothing in this Agreement,  including the Severance  Payments described
in this  Section  4,  shall in any way be  construed  to  extend  the  period of

<PAGE>

Employee's employment with the Company, and the Date of Termination shall not be
extended  beyond the date as specified  by the Company  pursuant to Section 4 of
this Agreement.

     5. Sole Remedy.  The payments  under  Section 4 shall be the sole remedy of
Employee in connection  with the  termination  of  Employee's  employment by the
Company under the circumstances described in Section 4 of this Agreement.

     6. Conditions of Receiving Severance Payments.  As a condition of receiving
the benefits  described in Section of this Agreement,  and in  consideration  of
receiving the Severance Payment described therein, Employee agrees as follows:

                  6.1  Release of Claims.  Employee  agrees to execute a general
         release in favor of the Company in the form attached  hereto as Exhibit
         A within ten (10) days of the Date of Termination.  Severance  benefits
         as  described  in  Section 4 shall be  provisionally  made to  Employee
         during this ten (10) day period, and during the  "Consideration  Period
         and  Rescission of Release"  period  described in Exhibit A, Section 3,
         provided that Employee shall immediately  reimburse the Company for any
         such payments upon Employee's  failure to sign Exhibit A within the ten
         (10) day period,  or upon Employee's  rescission of the general release
         contained in Exhibit A as provided  therein.  If Employee fails to sign
         the general release  contained in Exhibit A within ten (10) days of the
         Date of Termination,  or subsequently  rescinds the release as provided
         in  Exhibit A,  Section 3, the  Company  shall  have no  obligation  to
         provide  benefits  to  Employee  as  provided  in  Section  4  of  this
         Agreement.

                  6.2 Covenant Not to Compete.  Employee  agrees that during the
         twelve (12) month period following the Date of Termination during which
         Employee  receives  Severance  Payments  as  described  in  Section  4,
         Employee will not directly or indirectly own, manage, operate, control,
         be employed by,  participate  in or be connected in any manner with the
         ownership,  management,  operation or control of any business providing
         or  delivering  products or services  which  compete with the business,
         products  or  services  of  the  Company  or  its  affiliates,  in  the
         geographic markets in which the Company operates.

                  The  parties  believe  that this  Covenant  Not to  Compete is
         reasonable and fully enforceable. Nevertheless, if a court of competent
         jurisdiction or arbitrator with authority to interpret and enforce this
         Agreement   finds  any  portion  of  this   Covenant   Not  to  Compete
         unreasonable in geographic scope or duration,  such court or arbitrator
         shall have the power to modify  this  Covenant  Not to Compete so as to
         render it  reasonable  and  enforceable,  while  still  protecting  the
         Company's legitimate employer interests.

                  6.3 Covenant Not to Solicit.  Employee  agrees that during the
         twelve (12) month period following the Date of Termination during which
         Employee  receives  Severance  Payments  as  described  in  Section  4,

<PAGE>

         Employee will not,  either  personally,  or through an employer,  firm,
         agent,  servant,  employee,   partner,   shareholder,   representative,
         affiliate, or any other entity:

                           (a)      Solicit  any  customer  which  is  or  was a
                                    customer of the Company or its affiliates as
                                    of the  date of the Date of  Termination  or
                                    the  twelve  (12) month  period  immediately
                                    preceding the Date of  Termination,  for the
                                    purposes of providing or delivering products
                                    or services which compete with the business,
                                    products  or  services of the Company or its
                                    affiliates,   without   the  prior   written
                                    consent  of the  Company's  Chief  Executive
                                    Officer.

                           (b)      Employ  or offer to  employ  any  individual
                                    employed  by the  Company  within the twelve
                                    (12) month period immediately  preceding the
                                    Date of Termination,  or request,  advise or
                                    entice  any such  individual  to  leave  the
                                    employment of the Company, without the prior
                                    written consent of the Company.

                  6.4 Assignment of  Intellectual  Property.  Employee agrees to
         acknowledge that all documents and other tangible  property relating in
         any  way to the  business  of  the  Company  which  were  conceived  or
         generated  by Employee or came into  Employee's  possession  during the
         period  of  Employee's  employment  by the  Company  are the  exclusive
         property of the Company. By accepting payments pursuant to Section 4 of
         this Agreement,  Employee thereby assigns,  transfers, and sells to the
         Company any rights Employee may have in all  improvements,  inventions,
         designs, ideas, works of authorship,  copyrightable works, discoveries,
         trademarks, copyrights, trade secrets, formulae, processes, techniques,
         know-how,  and data,  whether or not  patentable,  made or conceived or
         reduced to practice  or learned by  Employee,  either  alone or jointly
         with others,  during the period of Employee's employment by the Company
         (whether or not during  normal  working  hours),  or that resulted from
         tasks  assigned to  Employee  by the  Company or  resulted  from use of
         premises,  equipment,  or resources owned, leased, or contracted for by
         the Company (collectively referred to as "Inventions"). Employee agrees
         to provide all  reasonable  assistance to the Company in perfecting and
         maintaining  its rights to the  Inventions,  including the execution of
         documents and things  memorializing the assignment of ownership of such
         Inventions to the Company as provided herein.

                  6.5 Nondisclosure.  Employee agrees not to use or disclose any
         information  owned by,  developed by, for, or about the Company,  or in
         any respect  concerning or relating to the Company's  business,  or the
         business of any of its clients or customers, that Employee has acquired
         during   Employee's   employment   by   the   Company    ("Confidential
         Information").  Such Confidential Information shall include, but not be
         limited  to,  all   computer   programs,   product   designs,   product
         specifications, pricing, discounting, marketing, research, development,
         business  affairs,   future  plans,  technical  data,  customer  lists,
         Inventions  (as defined in  Paragraph  6.4 of this  Agreement),  or any
         other information which Employee has received as a result of Employee's

<PAGE>

         employment by the Company,  whether or not acquired or developed by the
         Company.   Employee   acknowledges  the  Company's  right  to  prohibit
         Employee's  disclosure of Confidential  Information and that the rights
         created by this Agreement are in addition to all other rights which the
         Company  has to prevent the  disclosure  of trade  secret  information.
         Employee  agrees not to use such  Confidential  Information  himself or
         disclose such  information  to any other party,  directly or indirectly
         without the prior  written  consent of the  Company.  To the extent not
         inconsistent  with this  Section 6.5,  nothing  herein shall in any way
         prevent   Employee  from   utilizing   Employee's   general   business,
         management,   and  financial  skills,  techniques,  and  abilities.  By
         accepting  payments  pursuant to Section 4 of this Agreement,  Employee
         thereby agrees to the terms provided in this Section 6.5.

                  6.6 Return of Records,  Documents and Property.  Employee will
         return to the  Company all its  records,  equipment,  machinery,  keys,
         correspondence,  documents,  Inventions (as defined in Paragraph 6.4 of
         this Agreement),  and Confidential Information (as defined in Paragraph
         6.5 of this Agreement) in Employee's  possession  within three (3) days
         of the Date of Termination. By accepting payments pursuant to Section 4
         of this  Agreement,  Employee  thereby  agrees to the terms provided in
         this Section 6.6.

                  6.7  Remedy  for  Breach.  Employee  agrees  that in the event
         Employee breaches any of the covenants  contained in Sections 6.1, 6.2,
         6.3, 6.4, 6.5,  and/or 6.6 of this Agreement,  irreparable  injury will
         result to the Company,  the Company's remedy at law will be inadequate,
         and the  Company  will be  entitled to an  injunction  to restrain  the
         continuing  breach  of  this  Agreement  by  Employee,   or  Employee's
         partners, agents, servants, employees, or representatives, or any other
         persons or  entities  acting for or with  Employee,  in addition to any
         other  rights  or  remedies  which  the  Company  may have at law or in
         equity.  In the event of any  violation  by Employee of this Section 6,
         Employee  agrees to pay the reasonable  costs and attorneys' fees which
         the Company  incurs in pursuing  any of its rights with respect to this
         Section 6, in addition to the damages sustained by the Company.

         7.  Termination  of  Agreement.  If  (a)  the  Company  terminates  the
employment  of Employee for Cause,  (b) Employee  voluntarily  resigns from full
time employment with the Company, (c) Employee retires from full time employment
with the  Company,  (d)  Employee  dies or (e)  Employee  is no longer  actively
employed  by the Company due to  disability  (as such term is defined  under the
Company's employee benefit programs);  then (1) the Term of this Agreement shall
automatically  terminate  and (2) Employee  shall have no right to any severance
payments  or other  benefits  from the  Company  (except  for  applicable  COBRA
requirements  or applicable  benefits under the Company's stock option plans) or
any other right or remedy under this Agreement.

         8.  Confidentiality.  The existence of this Agreement,  and each of the
terms  and  provisions  of this  Agreement,  are  confidential  and shall not be
disclosed by Employee in any manner (other than to Employee's counsel who agrees
to comply with this  provision  of  confidentiality)  without the prior  written
consent of the Company's Chief Executive Officer.
<PAGE>

         9.  Arbitration.  Except as provided in Section 6.7 of this  Agreement,
any dispute or claim under this Agreement, not resolved by the parties, shall be
resolved by final and binding  arbitration.  Unless the parties agree otherwise,
the arbitration  shall be conducted in accordance with the rules of the American
Arbitration Association.  There shall be a single arbitrator,  whose award shall
become  final ten (10) days after it is  delivered in writing to the parties for
their final  comment.  The  arbitration  shall be governed by the United  States
Arbitration Act, 9 U.S.C. ss. 1 et seq. Judgment upon the arbitrator's award may
be entered by any court having jurisdiction  thereof. The prevailing party shall
also be entitled to recovery of  reasonable  attorneys'  fees.  The  arbitration
shall be conducted in Minneapolis,  Minnesota and any awards shall be subject to
the limitations of liability expressed in this Agreement.

     10. No Employment Contract. Nothing in this Agreement shall be construed to
require the Company to continue the employment of Employee.

     11.  Assignment.  This  Agreement  shall be  binding  upon and inure to the
benefit  of  the   parties   hereto  and  their   respective   heirs,   personal
representatives,  successors  and assigns.  Employee  may not assign  Employee's
rights under this Agreement.

     12.  Notice.  Any notice given under this  Agreement must be in writing and
delivered to the last known address of the party receiving said notice.

     13.  Governing  Law. This  Agreement  and any disputes  arising under or in
connection with it, shall be governed by the laws of the State of Minnesota.

     14. Entire  Agreement and  Amendment.  This  Agreement  contains the entire
agreement  between the parties  pertaining to the subject  matter  hereof.  This
Agreement  may only be amended in writing  signed by  Employee  and by the Chief
Executive  Officer  acting on behalf of the  Company.  IN WITNESS  WHEREOF,  the
Company and Employee have executed  this  Agreement  effective as of the day and
year first above written.

MEDTOX SCIENTIFIC, INC.                     Employee Name

By   ------------------------------         -----------------------------------
Its: ------------------------------         (Employee's signature)

Date                                        Date
     -------------------------------        ------------------------------

<PAGE>
                                    EXHIBIT A
                                 GENERAL RELEASE

1.  Definitions.  I intend  all words used in this  Release to have their  plain
meanings in ordinary  English.  Technical legal words are not needed to describe
what I mean. Specific terms I use in this Release have the following meanings:

     a. "I" "me" and "my", as used herein,  shall at all times mean Employee and
anyone who has or obtains any legal rights or claims through said named person.

     b.  "the  Company",  as  used  herein,  shall  at  all  times  mean  MEDTOX
Scientific, Inc., its parent corporations, subsidiaries, successors and assigns,
partners,  any  affiliated  and  predecessor  companies,  their  affiliated  and
predecessor  or management  companies,  their  successors  and assigns,  and the
present  and former  officers,  directors,  shareholders,  partners,  employees,
attorneys,  and agents of any of them,  whether in their  individual or official
capacities,  and the  current  and  former  trustees  or  administrators  of any
pension,  welfare,  or other  employee  benefit  plan of the  Company,  in their
official and individual capacities.

     c. "My  Claims"  mean all of the  claims I have now  against  the  Company,
whether or not I know about those  claims,  including but not limited to, claims
for any action or inaction,  loss,  expense,  or any damages of whatever  nature
arising from any occurrence or occurrences  from the beginning of time until the
date of this  Release,  including  claims for:  breach of  contract;  payment of
wages, commissions,  reimbursements,  sick pay, vacation pay, employee benefits,
insurance, pension, or other compensation; fraud or misrepresentation; violation
of any federal,  state, and/or local law, regulation or rule,  including but not
limited to, the Minnesota Human Rights Act, Title VII of the Civil Rights Act of
1964,  the Americans  with  Disabilities  Act, the  Rehabilitation  Act, the Age
Discrimination  in Employment Act, the Employee  Retirement Income Security Act,
the Consolidated Omnibus Budget Reconciliation Act, the Family and Medical Leave
Act,  the Fair  Labor  Standards  Act,  the  Worker  Adjustment  and  Retraining
Notification Act, and all other federal,  state,  and/or local civil rights laws
prohibiting  discrimination  or other  unlawful  activity  on the basis of race,
color, creed, marital status, sex, age, religion,  national origin,  disability,
pregnancy,  sexual orientation,  political  affiliation,  status with respect to
public assistance,  membership in local commission, or any other protected class
status;  sexual harassment;  retaliation;  defamation;  intentional or negligent
infliction of emotional distress;  breach of the covenant of good faith and fair
dealing;   promissory   estoppel;   unjust  enrichment;   negligence;   wrongful
termination  of  employment;   constructive  discharge;   invasion  of  privacy;

<PAGE>

fraudulent   inducement;   negligent   hiring,   retention,   training,   and/or
supervision;  all other claims for unlawful employment practices; all claims for
attorney's fees, costs,  disbursements,  fees, or other payments;  and all other
common law, legal,  equitable or statutory claims (whether on a contract,  tort,
or other theory),  whether they could be brought directly by me on my own behalf
or by any other person, agency, or organization on my behalf.

2.  Agreement to Release My Claims.  On behalf of myself,  my attorneys,  heirs,
executors,   administrators,   successors  and  assigns,  I  agree  to  release,
discharge,  and give up all My Claims  against the  Company in exchange  for the
compensation,  promises and undertakings as described in the Severance Agreement
between me and the  Company.  I agree to release and  discharge  the Company not
only from any and all of My Claims that I could make on my own behalf,  but also
from  those  claims  that  may or  could  be  brought  by any  other  person  or
organization on my behalf.  I have not caused or permitted to be served,  filed,
or commenced,  and I will not cause or permit to be served, filed, or commenced,
any lawsuits,  charges,  complaints,  actions, notices, or other demands against
the Company with any federal,  state, or local judicial or administrative agency
or body based on My Claims. In the event any such claim has been or is asserted,
I  agree  that  this  Release  shall  act  as a  total  and  complete  bar to my
re-employment or to recovery of any relief or sum or amount  whatsoever from the
Company, whether labeled award, liability,  damages,  judgment,  backpay, wages,
fine,  or  penalty,  or  otherwise  resulting  directly or  indirectly  from any
lawsuit,  remedy,  charge,  or complaint,  whether brought privately by me or by
anyone else,  including any federal,  state, or local judicial or administrative
agency or body, whether or not on my behalf or at my request.  The payments I am
receiving represent full and fair compensation for the release of all My Claims.
The Company  shall not be obligated  and does not owe me anything in addition to
that  described  above.  This release shall not affect any claims which could be
made under any employee  welfare  benefit plan or any pension or retirement plan
through the Company.

3. Non-Admission. Even though the Company is paying me to release My Claims, the
Company  does not admit that it is  responsible  or legally  obligated to me. In
fact, the Company  denies that it is  responsible or legally  obligated to me or
that it has engaged in any wrongdoing.

4. Consideration  Period and Rescission of Release. I understand that I may take
up to  twenty-one  (21) calendar days after  receiving  this General  Release to
consider whether I wish to sign this General Release. In addition,  I understand
that I may rescind (i.e.,  revoke and cancel) my release of claims arising under
the federal Age  Discrimination  in  Employment  Act, 29 U.S.C.ss.  621 et seq.,
within seven (7) calendar  days of signing  this General  Release.  I understand
that I also may rescind  (i.e.,  revoke and cancel) my release of claims arising

<PAGE>

under the  Minnesota  Human  Rights Act within  fifteen  (15)  calendar  days of
signing  this  General  Release.   I  understand  that  to  be  effective,   the
rescission/revocation  must be in writing and delivered to the Company,  in care
of Richard Braun, Chief Executive Officer,  either by hand or by mail within the
respective  rescission/revocation  periods. If sent by mail, the rescission must
be:

         1.       Postmarked within the respective rescission/revocation
                  periods as stated above;

         2.       Properly addressed, as stated above; and

         3.       Sent by certified mail, return receipt requested.

5.  Knowing  and  Voluntary.  I have read this  General  Release  carefully  and
understand  and agree to all of its terms.  I have been  advised to discuss this
Release with my own attorney.  In agreeing to sign this and Release,  I have not
relied on any statements or explanations made by the Company or its attorneys.

                                       -----------------------------------
                                       Employee

SUBSCRIBED AND SWORN to before me
this ____ day of ________________, 2000

------------------------------------
Notary PublicExhibit 10.48

                            PURCHASE & SALE AGREEMENT

          THIS  AGREEMENT is entered into effective the 27th day of July 2000 by
  and between Medtox Scientific,  Inc., a Delaware  corporation  ("Buyer");  and
  NMRO,  Inc., a Michigan  corporation  ("Seller")and  ESP Employment  Screening
  Partners,  Inc.,  a Delaware  corporation  ("Selling  Shareholder")  sometimes
  hereinafter collectively referred to as ("Sellers"),  and solely as to Section
  2 hereof, by Dr Murray Lappe, a California resident ("Lappe").

                                                        RECITALS:

         1.  Selling  Shareholder  is the  owner of 100% of all the  issued  and
outstanding stock and equity of Seller and Lappe is the controlling  shareholder
of Selling Shareholder.

2. Seller and Selling  Shareholder  are the owners and  operators  of a specimen
collection business ("Business")  operating out of the Sellers business location
at 8100, 26th Avenue South, Bloomington MN. 55425 ("Premises").

         3.  Seller  and  Selling  Shareholder  now  wish to  close  down  their
operations  at the  Premises  and sell the Business to Buyer in exchange for the
consideration as hereinafter provided.

          NOW, THEREFORE,  in consideration of the representations,  warranties,
  covenants and agreements of the parties herein contained,  and intending to be
  legally bound thereby, the parties mutually agree as follows:

         Section 1.  Purchase  and Sale of  Business.  Subject to and in express
reliance of the  warranties,  representations  and  covenants  contained in this
Agreement,  and subject to the terms and conditions  hereof,  Seller and Selling
Shareholder  hereby agree to sell,  assign,  convey and transfer to Buyer all of
their right, title and interest,  in and to the specific assets of the Business,
as described  in detail on Exhibit "A"  attached  hereto and made a part hereof,
for the consideration set forth herein (the "Assets").

         Simultaneous with the Closing,  Seller and Selling Shareholder shall do
all  things as may be  reasonably  required  to put Buyer  into  possession  and
effective  control over the conduct of the Business with the specific  customers
identified in the list attached as Exhibit "B" (the "Customer List").
<PAGE>

         Section 2.  Confidentiality and Non-Competition Agreements.

     A. Seller and Selling Shareholder acknowledge that their services and their
knowledge  of the Business  are of unique  value;  and the entrance of Seller or
Selling  Shareholders into  competition,  with Buyer, or any of its wholly owned
subsidiaries,  directly or indirectly,  by use of name, reference, or otherwise,
in the operation of the Business  within the  Restricted  Territory,  as defined
below,  cannot adequately be compensated by damages in an action at law. In view
of the necessity of Seller and Selling Shareholder not entering into competition
with Buyer or any of its wholly  owned  subsidiaries,  in the  operation  of the
Business within the Restricted  Territory and as a material  inducement to Buyer
to enter into this  Agreement  and to pay for the  Business,  Seller and Selling
Shareholder hereby covenant and agree that they will not directly or indirectly,
either as principal,  agent, manager,  employee,  owner,  partner,  shareholder,
officer or director of a proprietorship,  partnership,  corporation or otherwise
engage in any activity  competitive with the Business for the specific customers
identified  in the Customer List within a fifty (50) mile radius of the Premises
(the "Restricted  Territory");  or disparage or otherwise criticize the products
or  services  being  provided  by, or sold by Buyer or any of its  wholly  owned
subsidiaries  within the  Restricted  Territory  for a period of three (3) years
from the Closing Date;  provided  however,  that the  foregoing  non-competition
covenant and the other provisions of this Section,  shall not apply to either of
the  following:  (1) the  solicitation  for sale or the sale of on-site  testing
services  offered  by  eScreen,   Inc,  a  subsidiary  of  Selling   Shareholder
("eScreen"),  within  the  Restricted  Territory,  to the  following  persons or
entities:  Wal Mart,  Target,  Best Buy,  Galyan's,  ChoicePoint,  UPS, Aerotek,
Hyatt, Yellow Freight, or Host Marriott; or (2) the solicitation for sale or the
sale of eScreen on-site testing services within the Restricted Territory, by any
eScreen-contracting  physician,  physician group, medical group, medical clinic,
occupational clinic or rehabilitation clinic (each, an "eScreen Contractor"), to
any  persons  or  entities,  regardless  of  whether  they are  included  on the
Customers  List,  provided  only that Sellers do not provide to any such eScreen
Contractor  a copy of the  Customer  List or any  names  therefrom  that are not
excluded under the immediately  preceding  clause (1) of this  paragraph.  Buyer
shall  have  the  right  to  enforce  the  provisions  of this  Section  and the
Confidentiality and Non-competition Agreement by specific remedies including but
not  limited to  temporary  restraining  orders,  and  temporary  and  permanent
injunctions,  but such remedies  shall be cumulative and shall not preclude said
parties from seeking damages  resulting from a breach of this provision.  Seller
and Selling  Shareholder  have  carefully  read and considered the provisions of
this Section and, having done so, agree that the  restrictions set forth herein,
including  but  not  limited  to  the  time  period  of  the  restrictions,  the
geographical limitation to the Restricted Territory, and the application of such
restrictions to particular  customers are fair and reasonable and are reasonably
required for the  protection of the  interests of Buyer in the Business.  In the
event that, notwithstanding the foregoing, any of the provisions of this section

<PAGE>

shall be held to be invalid or  unenforceable,  the remaining  provisions hereof
shall nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included herein.

         B.  Seller  and  Selling  Shareholder  shall  keep  in  confidence  all
confidential  and  proprietary  information  about the Business and the Business
operations of Seller being acquired by Buyer.  All information  relating to such
Business  operations shall be presumed to be Confidential  Information except to
the extent that such Confidential Information is otherwise publicly available or
is  received  from a third party not  affiliated  with Seller or Buyer after the
Closing Date.  Seller and Selling  Shareholder shall keep in confidence all such
Confidential Information and other financial information relating to Seller, the
Assets and Business  operations and will not,  without the prior written consent
of  Buyer,  except  to the  extent  required  by law or to the  extent  any such
information is otherwise  publicly  available or received from a third party not
affiliated with Buyer or Seller, reveal any such Confidential Information to any
third party. All documents  relating to the Assets being acquired by Buyer shall
be  delivered  to Buyer at the Closing Date or  thereafter  if not  available or
found as of the Closing Date.  No such  documents  shall be  reproduced  without
Buyer's prior written approval.

         C. Lappe represents and warrants that as the controlling shareholder of
the  Selling  Shareholder,   Lappe  will  derive  an  indirect  but  nonetheless
recognizable   economic   benefit  from  the  completion  of  the   transactions
contemplated hereby, and therefor as an inducement to Buyer and in consideration
of Buyer's  entering  into this  agreement,  Lappe  agrees  that in  addition to
Sellers,  he too shall be personally bound by and shall  personally  comply with
each of the covenants  contained within the  Confidentiality and Non-Competition
Agreements set forth in this Section 2. Lappe represents and warrants that Lappe
has carefully read and  considered  the  provisions of this Section and,  having
done so,  agrees  that the  restrictions  set forth  herein,  including  but not
limited to the time period of the restrictions,  the geographical  limitation to
the Restricted Territory, and the application of such restrictions to particular
customers are fair and reasonable and are reasonably required for the protection
of the interests of Buyer in the Business.

         Section 3. Purchase  Price and  Allocation.  The purchase price for the
Business,  and the Sellers covenants contained in Section 2 hereof and all other
assets being acquired  hereunder  shall be Two Hundred and Ten Thousand  Dollars
($210,000) ("Purchase Price"). It is agreed that the Purchase Price reflects the
fair market value of the Business and agreements  contained herein.  The parties
agree to allocate ten percent (10%) of the Purchase Price as  consideration  for
the Confidentiality and Non-Competition Agreements of Sellers and Lappe.

         Section 4. Payment of Purchase  Price.  The Purchase  Price set forth
in Section 3, shall be payable as follows:
<PAGE>

         A. Seventy-Five Thousand Dollars ($75,000) shall be paid in three equal
installments of $25,000 each. The first  installment shall be due at the time of
Closing and the remaining two $25.000  installments payable on the 30th and 60th
day, respectively, following the Closing.

     B.  One  Hundred  Thirty-Five   Thousand  Dollars  ($135,000)  in  non-cash
consideration  shall be paid by Buyer by the  deliver  to Seller at  Closing  of
15,152 shares of the common stock of Medtox  Scientific,  Inc.  ("Medtox  Common
Stock").

         C.  During  the  period  subsequent  to the  Closing  Date and prior to
October 1, 2000,  or such later date as the  parties  mutually  agree in writing
that Buyer may file the  Registration  Statement  as required by  paragraph D of
Section  7 of  this  Agreement,  Buyer  shall  have  the  right  and  option  to
re-purchase from Seller the Medtox Common Stock in consideration for the payment
by Buyer to Seller of nine dollars per share (for an aggregate re-purchase price
of One Hundred Thirty-Six Thousand Three Hundred Sixty-Eight Dollars ($136,368).

         Section 5.  Assumption of  Liabilities.  The parties  hereto agree that
Buyer is assuming  absolutely no  liabilities  of Seller or Selling  Shareholder
related in any way to the Business or the Business assets or operations.

         Section 6.  Representations,  Warranties  and  Covenants  of Seller and
Selling  Shareholder.  Seller and  Selling  Shareholder  jointly  and  severally
represent,  warrant  and  covenant  to  Buyer  that as of the date  hereof,  the
Effective Time and Date of Closing:

         A. Authorization and Authority. The execution, delivery and performance
by Seller of this Agreement and all other agreements  contemplated  hereby shall
have been duly and validly  authorized  and approved by all  necessary  actions.
Seller  has the  legal  power  and  authority  to enter  into and  perform  this
Agreement and all other agreements  contemplated  hereby.  Neither the execution
and  delivery  of this  Agreement,  nor  the  consummation  of any  transactions
contemplated  hereby  or  thereby,  has  constituted  or  resulted  in  or  will
constitute  or result in a material  default or violation by Sellers of any term
or  provision  in  the  Certificate  of  Incorporation,  Bylaws,  or  organizing
instruments  of Sellers,  or any agreement to which Sellers are a party,  or any
judgment, decree,  governmental order, statute, rule or regulation by which they
are bound or to which their properties or assets,  including the Assets referred
to herein, are subject.

     B.  Organization  and  Standing  of Seller.  Seller is a  corporation  duly
organized,  validly existing and in good standing under the laws of the state of
Michigan,  and has all necessary corporation powers to own its properties and to
carry on its  business as now owned and operated by it. All shares of Seller are
owned by the Selling Shareholder.
<PAGE>

         C.  Laws  and  Governmental   Orders.  This  Agreement  and  all  other
agreements  contemplated  hereby are and will be valid and binding agreements of
Seller and Selling Shareholder,  enforceable in accordance with their respective
terms.  Neither the execution nor delivery by Seller or Selling  Shareholder  of
this  Agreement  or any other  agreements  contemplated  hereby will violate any
applicable state or federal law or regulation.

          D.  Business  of  Seller.  The  Customer  List  attached  as Exhibit B
contains a complete and accurate  listing as maintained by Sellers of all of the
customers  of the Business as of June 30, 2000,  without any  representation  or
warranty as to the current status or activity level of any such customers of the
Business.

         E.  Agreements  and  Commitments.  Seller has no  material  commitments
and/or  agreements  which have not been  disclosed to and approved by Buyer with
any of the  customers of the Business  included on Exhibit "B" or which  include
any special  pricing,  volume  discounts,  or similar terms that are not already
reflected in the gross sales revenue of the Business as of June 30, 2000.

     F. Financial Information.  Seller's financial information provided to Buyer
with respect to the customers  identified on Exhibit "B" are true,  accurate and
complete.

     G.  Commissions.  Sellers have not incurred any  obligation  or  liability,
contingent  or otherwise,  for broker's or finder's fees in connection  with the
transactions contemplated by this Agreement.

         H.  Orderly  Transition.  Seller and Selling  Shareholder  shall assist
Buyer  in every  reasonable  manner  to  insure  an  orderly  transition  of the
operation of the Business. As of the Closing Date, the Sellers shall discontinue
all specimen collection operations at the Premises and make arrangements for all
incoming  telephone  calls to the  Premises  to roll over  directly  to  Buyer's
location at 8072,  26th Avenue South,  Bloomington  MN 55425  ("Buyer's  Site").
Sellers  shall  also   prominently  post  on  the  Premises  that  Sellers  have
discontinued  all specimen  collection  business and refer all such  business to
Buyer's  Site. As of the Closing Date Sellers  shall  authorize  Buyer to mail a
notice (in a form  reasonably  satisfactory  to Sellers) to all customers of the
Business  identified  on the Customer  List that Sellers  have  transferred  the
Business to Buyer.

         I. Investment  Intent.  The Sellers  acknowledge that the Medtox Common
Stock has not been registered  under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws, and is being offered and sold in
reliance upon federal and state exemptions from such  registration.  The Sellers
have such  knowledge and  experience in financial and business  matters that the
Sellers  are  capable of  evaluating  the merits and risks of the Medtox  Common
Stock in  connection  with this  Agreement.  The Sellers have  received  certain

<PAGE>

information  concerning  the  Buyer  and  have  had the  opportunity  to  obtain
additional information as desired by Sellers in order to evaluate the merits and
the risks  inherent in holding the Medtox Common Stock.  The Sellers are able to
bear the  economic  risk and lack of  liquidity  inherent  in holding the Medtox
Common Stock for an  indefinite  period.  The Sellers are  acquiring  the Medtox
Common  Stock  for  investment  and  not  with a view  toward  or  for  sale  or
distribution  thereof  within the  meaning of the  Securities  Act,  or with any
present  intention of distributing or selling the Medtox Common Stock within the
meaning of the Securities Act. The Selling  Shareholder  acknowledges and agrees
that after the Closing  the Medtox  Common  Stock may not be sold,  transferred,
offered  for sale,  pledged,  hypothecated  or  otherwise  disposed  of  without
registration  under the Securities Act and any applicable state securities laws,
except  pursuant to an  exemption  from such  registration  available  under the
Securities Act or such state securities laws.

         J.  Survival of  Warranties.  All  representations  and  warranties  of
Sellers  regarding the subject  matter  hereof,  are expressly set forth in this
Section 6, and Sellers make no other  warranties  either express or implied with
regard to the Business or the Assets, including, but not limited to, the implied
warranties  of  merchantability  or  fitness  for  a  particular   purpose.   No
representation,  covenant or warranty made by Seller or Selling  Shareholder  in
this  Agreement  or in any  exhibit  hereto  or  agreement  contemplated  hereby
contains or will contain on the Closing Date any untrue  statement of a material
fact or omit  or  will  fail to  state  material  facts  necessary  to make  any
statement made not misleading. All representations and warranties made herein by
Seller or Selling Shareholder shall be deemed remade on the Closing Date and the
obligation of the Sellers with respect to the  completeness and accuracy of such
representations and warranties shall survive the Closing and continue thereafter
as provided in Section 14 hereof.

     Section  7.  Representations,  Warranties  and  Covenants  of Buyer.  Buyer
represents,  warrants and covenants to Seller and Selling Shareholder that as of
the Effective Time and the Date of Closing:

         A. Authorization and Authority. The execution, delivery and performance
by Buyer of this Agreement and all other  agreements  contemplated  hereby shall
have been duly and validly  authorized  and approved by all  necessary  actions.
Buyer has the legal power and authority to enter into and perform this Agreement
and all other agreements contemplated hereby. Neither the execution and delivery
of this Agreement, nor the consummation of any transactions  contemplated hereby
or thereby,  has  constituted  or resulted in or will  constitute or result in a
material  default  or  violation  by  Buyer  of any  term  or  provision  in the
Certificate of Incorporation, Bylaws, or organizing instruments of Buyer, or any
agreement  to which  Buyer is a party,  or any  judgment,  decree,  governmental
order,  statute,  rule or  regulation  by which  it is  bound  or to  which  its
properties or assets are subject.

         B.  Laws  and  Governmental   Orders.  This  Agreement  and  all  other
agreements  contemplated  hereby are and will be valid and binding agreements of
Buyer  enforceable  in  accordance  with their  respective  terms.  Neither  the
execution  nor  delivery  by Buyer of this  Agreement  or any  other  agreements

<PAGE>

contemplated  hereby  will  violate  any  applicable  state  or  federal  law or
regulation.

     C.  Commissions.  Buyer  has not  incurred  any  obligation  or  liability,
contingent  or otherwise,  for broker's or finder's fees in connection  with the
transactions contemplated by this Agreement.

         D. Issuance of Medtox  Common Stock.  With respect to the Medtox Common
Stock; (1) such shares are issuable upon and in payment of the Purchase Price as
set forth in this Agreement,  when so issued,  will be duly authorized,  validly
issued  and  fully  paid and  nonassessable;  (2)  except  as set  forth in this
Agreement,  there are no  restrictions on the transfer of such shares other than
those  imposed  by  state  and  federal   securities   laws  applicable  to  the
transactions  contemplated  by  this  Agreement;  and (3) the  offer,  sale  and
issuance by the Buyer of all such  shares to be issued on the Closing  hereunder
will comply with or  otherwise  be exempt from all federal and state  securities
laws.

         E.  Registration of Common Stock.  Buyer agrees to use its best efforts
to file with the  Securities  and Exchange  Commission  on or before  October 1,
2000, a registration  statement for the purpose of registering the Medtox Common
Stock  constituting  the  non-cash  portion  of the  Purchase  Price  under  the
Securities Act of 1933, as amended,  and listing the Selling  Shareholder as the
selling  shareholder  for  purposes  of  such  registration  (the  "Registration
Statement").   Selling  Shareholder  shall  provide  to  Buyer  all  information
pertaining to the Selling Shareholder,  as selling  shareholders,  necessary for
inclusion  in  such  registration  statement.  Buyer  shall  bear  the  cost  of
preparation and filing such Registration Statement,  provided that Sellers shall
each  bear the costs of their  respective  legal  counsel,  if any,  engaged  to
represent them in connection with such Registration Statement.  The Buyer's last
10-K, 10-Q and proxy statement filed with the Securities Exchange Commission are
each  attached  hereto as Exhibit "C".  Buyer is a reporting  company  under the
Securities Act of 1933 and is current in all of its reporting requirements.

         F. Financial Statements. The profit and loss statements and the balance
sheets of Buyer for the fiscal year ended  December  31,  1999,  and the quarter
ended March 31, 2000 are attached hereto as Exhibit "C" and incorporated  herein
by  reference.  Said  financial  statements  fairly and  accurately  present the
operations of Buyer for the periods covered and the financial  position of Buyer
without material errors as of the date thereof.

         G. Survival of Warranties.  All representations and warranties of Buyer
regarding the subject matter hereof,  are expressly set forth in this Section 7,
and Buyers make no other warranties either express or implied, including but not
limited to, any warranty  with regard to the financial  condition of Buyer,  the
Medtox  Common  Stock or the  value  thereof.  No  representation,  covenant  or
warranty made by Buyer in this  Agreement or in any exhibit  hereto or agreement
contemplated  hereby  contains or will  contain on the  Closing  Date any untrue
statement  of a  material  fact or omit or will  fail to  state  material  facts
necessary to make any statement made not  misleading.  All  representations  and

<PAGE>

warranties  made herein by Buyer shall be deemed remade on the Closing Date, and
the obligations of Buyer with respect to the  completeness  and accuracy of such
representations  and warranties shall survive Closing and continue thereafter as
provided in Section 14 hereof.

         Section 8. Seller's  Obligations Before Closing.  Seller covenants that
from  the  date  of  this  Agreement   until  Closing  Buyer  and  its  counsel,
accountants,  and other  representatives  shall have full access  during  normal
business  hours to all  properties',  books,  accounts,  records,  contracts and
documents  that relate to both the  Business and the  customers  included on the
Customer List of the Business  (i.e.,  Seller is not obligated to provide access
to its books and records that do not relate to the  Business,  or that relate to
products or services  of Seller that are not part of the  Business  and that are
provided by Seller to customers that are included on the Customer  List.  Seller
shall  furnish or cause to be furnished to Buyer and their  representatives  all
data and information concerning the customers of the Business serviced on or off
the Premises as may be  requested.  Seller and Selling  Shareholder  will assist
Buyer in every reasonable manner between the date hereof and the Date of Closing
for an orderly transition of the operations of the Business.

         Section 9. Buyer's  Obligations  Before  Closing.  Buyer covenants that
from  the  date of this  Agreement  until  the  Date of  Closing  Buyer  and its
representatives  will  hold  in  strict  confidence,  and  will  not  use to the
detriment of Seller or Selling  Shareholder any  confidential  customer data and
information  obtained in connection  with this  transaction  or agreement,  with
respect to the Business of Sellers; and if the transactions contemplated by this
Agreement  are not  consummated.  Buyer  will  return  to  Seller  all  data and
information  that Seller may  reasonably  request,  including  all  extracts and
summaries,  prepared  by or made  available  to Buyer in  connection  with  this
transaction. All such information disclosed shall be kept confidential by Buyer.

         Section 10. Conditions Precedent to Buyer's Closing. The obligations of
Buyer  under this  Agreement  to be  performed  at the Date of Closing  shall be
subject to Seller  meeting the  following  conditions at or prior to the Date of
Closing,  any of which may be waived by Buyer at its option  provided,  however,
that no such waiver of a condition shall  constitute a waiver by Buyer of any of
its other rights or remedies, at law or in equity, if Seller shall be in default
of any of its representations, warranties, or covenants under this Agreement not
specifically so waived:

     A. Representations,  Warranties and Covenants. Each of the representations,
warranties  and  covenants  made  by  Seller  and  Selling  Shareholder  in this
Agreement shall be true in all material respects.

         B. Compliance with Agreement. Seller and Selling Shareholder shall have
materially  performed  and  complied  with all of their  obligations  under this
Agreement and all other agreements contemplated hereby which are to be performed
or  complied  with by Seller or Selling  Shareholder  prior to or at the Date of
Closing.
<PAGE>

     C. Closing Documents.  The form and substance of all documents delivered to
Buyer on or before the Date of Closing  pursuant to this  Agreement  shall be in
form reasonably satisfactory to Buyer and Buyer's counsel.

     D. Absence of Litigation.  No action,  suit, or proceeding before any court
or any government body or authority not previously  disclosed  pertaining to the
transaction contemplated by this Agreement or its consummation,  shall have been
instituted on or threatened on or before the Date of Closing.

         E. Buyer's Inspection  Contingency.  Buyer's  performance  hereunder is
contingent upon Buyer's inspection and approval of the Customer List and related
financial records of Seller. Such documents shall be true, accurate and complete
in all material respects and reflect a level of gross sales revenues of at least
$30,000 per month, in the aggregate,  for the six (6) months up to and including
June 30,  2000  (except to the  extent  that such gross  sales  revenue  will be
reduced for periods subsequent to June 30, 2000 as a result of the loss of gross
sales revenue from the Multi-Care  entities,  which reduction Buyer acknowledges
and accepts),  with revenues from specimen  collection provided to the customers
identified on the Customer List constituting at least ninety-five  percent (95%)
of total  revenue,  and the  balance of total  revenue  derived  primarily  from
breath-alcohol testing services. In the event Buyer, in Buyer's sole discretion,
is not completely satisfied with the Customer List and related financial records
of Seller,  Seller  hereby  agrees that Buyer shall have the right to  terminate
this Agreement by serving  written notice thereof on Seller or Seller's agent in
person or by registered or certified mail on or before the Closing date.

         F. Failure to Meet Conditions  Precedent.  In the event that any of the
aforementioned  conditions are not met prior to or as of the Closing Date, Buyer
may, at its sole option, terminate this Agreement, in which case it shall become
null, void and of no effect after Buyer provides  written notice of such failure
to Seller on the Closing Date and  Seller's  failure to cure the same within ten
(10) days following receipt of such written notice from Buyer.

         Section 11. Conditions  Precedent to Seller's Closing.  The obligations
of Seller and Selling  Shareholder  under this  Agreement to be performed at the
Date of Closing shall be subject to the reasonable satisfaction,  at the Date of
Closing,  of the following  conditions,  any of which-may be waived by Seller at
its option:

     A. Representations,  Warranties and Covenants. Each of the representations,
warranties and covenants  made by Buyer in this  Agreement  shall be true in all
material respects on the Date of Closing.

     B.  Compliance with  Agreement.  Buyer shall have materially  performed and
complied  with  all of its  obligations  under  this  Agreement  and  all  other
agreements contemplated hereby which are to be performed or

<PAGE>

complied with prior to or at the Date of Closing.

     C. Closing Documents.  The form and substance of all documents delivered to
Seller pursuant to this Agreement  shall be in form  reasonably  satisfactory to
Seller and Seller's counsel.

     D. No Material Changes.  During the period from the date hereof to the Date
of  Closing,  there  shall  not have  been any  material  adverse  change in the
financial condition or the operations of Buyer.

         E. Failure to Meet Conditions  Precedent.  In the event that any of the
aforementioned conditions are not met prior to or as of the Closing Date, Seller
may, at its sole option, terminate this Agreement, in which case it shall become
null, void and of no effect after Seller provides written notice of such failure
to Buyer on the  Closing  Date and  Buyer's  failure to cure the same within ten
(10) days following receipt of such written notice from Seller.

         Section  12. Date of Closing and  Effective  Time.  The Date of Closing
shall be on or before  August 3, 2000,  or such later  date as the  parties  may
agree  ("Closing  Date").  The Closing shall take place at Buyer's Site, or such
other  location as the parties may agree.  The effective  time of the Closing of
this  Agreement  shall be as of  midnight on the  Closing  Date (the  "Effective
Time").

         Section 13.  Delivery of Documents at Closing.

     A. On the Date of Closing,  Seller and Selling Shareholder shall deliver or
cause to be delivered to Buyer, the following:

     (1) A copy of any necessary resolutions authorizing the execution, delivery
and/or  performance  of this  Agreement  and all other  agreements  contemplated
hereby.

     (2) The Customer List in substantially the form of Exhibit "B".

     (3) Final approval of the exact form and substance of the letter to be sent
out to all customers on the Customer List following the Closing.

     (4) Simultaneous  with such delivery,  Seller shall do all things as may be
reasonably  required to put Buyer into  effective  possession and control of the
conduct of the Business  with the  customers  identified on the Customer List of
the Business.

Such other instruments and documents as may be required by any provision of this
Agreement or reasonably  necessary,  in the opinion of Buyer or Buyer's counsel,
to  reflect  the  performance  of  this  Agreement  and  all  other   agreements
contemplated hereunder.
<PAGE>

     B. On the Date of Closing,  Buyer shall deliver or cause to be delivered to
Seller, the following:

     (1) A copy of any necessary resolutions authorizing the execution, delivery
and performance of this Agreement and all other agreements contemplated

     (2) Such other  instruments  and  documents as may be required by any other
provision of this Agreement or reasonably necessary, in the opinion of Seller or
Seller's  counsel,  to reflect the  performance  of this Agreement and all other
agreements contemplated hereby.

     (3) A  certificate  or  certificates  representing  15,152 shares of Medtox
Common Stock registered in the name of the Seller.

         C. All documents and instruments to be delivered on the Date of Closing
shall be regarded as having been  delivered  simultaneously,  and no document or
instrument  shall be  regarded  as  having  been  delivered  until all have been
delivered.

          Section 14.  Obligations After Closing.

         A.  Seller's  Indemnification.  Seller and Selling  Shareholder  hereby
agree to  indemnify  Buyer and hold it  harmless  from and  against  any and all
losses,  costs,  damages,  assessments,  fines  and  other  expenses,  including
reasonable  attorney's  fees  and  court  costs  ("Damages")  arising  out of or
resulting  from;  (1) any  liabilities  or  obligations  of  Seller  or  Selling
Shareholder not expressly assumed by Buyer; (2) any material breach by Seller or
Selling  Shareholder of any covenant,  warranty or  representation  contained in
this Agreement, the exhibits hereto or any agreement contemplated hereunder; (3)
or any  material  inaccuracy  in any  document  delivered  by Seller or  Selling
Shareholder to Buyer pursuant to the terms of this Agreement; and (4) any or all
liabilities  of every kind and nature and  howsoever  originating  and  existing
arising  out of any  and  all  of  Seller's  or  Selling  Shareholder'  business
operations  prior to or  subsequent  to the Date of  Closing  hereunder  and not
payable by Buyer in  accordance  with this  Agreement,  provided  however,  that
Sellers'  obligations  under  this  Section  14(A)  clauses  (2) and  (3)  shall
terminate and have no further  effect at any time after the  expiration of three
(3)  years  from  the  Closing  Date,  provided,  however,  that  the  foregoing
limitation shall not apply to the Confidentiality and Non-Competition Agreements
of Sellers and Dr. Lappe set forth in Section 2 of this  Agreement,  which shall
expire  separately  four (4) years from the Closing  Date.  Buyer shall have the
right to set off any  amounts  due  hereunder  against  any amount due Seller or
Selling Shareholder as the same may become due.
<PAGE>

         B. Buyer's  Indemnification of Seller. Buyer hereby agrees to indemnify
Seller and Selling  Shareholder  and hold them harmless from and against any and
all losses,  damages costs,  assessments,  fines and other  expenses,  including
reasonable  attorney's  fees and  court  costs  ("Damages"),  arising  out of or
resulting  from; (1) any material  breach by Buyer of any covenant,  warranty or
representation contained in this Agreement, the exhibits hereto or any agreement
contemplated hereunder; (2) any material inaccuracy in any document delivered by
Buyer to Seller  pursuant to the terms of this  Agreement;  and (3) from any and
all liabilities of every kind and nature and howsoever  originating and existing
arising out of any and all of Buyer's business operations subsequent to the Date
of Closing, provided, however that Buyer's obligations under this Section 14 (B)
clauses (2) and (3) shall  terminate  and have no further force or effect at any
time after the expiration of three (3) years from the Closing Date.

         C.  Defense  of  Indemnification  Claims.  If  any  party  shall  claim
indemnification  pursuant to the  provisions of this Section,  the party seeking
indemnification  shall promptly  notify the party from whom  indemnification  is
sought in  writing  of the basis for such  claim or  demand,  setting  forth the
nature of the claim or demand in detail. The party against whom  indemnification
is sought shall have the right to compromise or, if  appropriate,  defend at its
own cost and  through  counsel of its own  choosing,  any claim or demand of any
third  party  giving  rise to such claim for  indemnification.  Such  notice and
opportunity  to  compromise  or, if  applicable,  to defend shall be  conditions
precedent  to any  payment  by  way of  indemnification  to the  party  claiming
indemnification  pursuant to this  Section.  In the event the party against whom
indemnification  is sought  undertakes to compromise or defend any such claim or
demand,  it shall promptly notify the other party in writing of its intention to
do so and shall  give the  other  party  such  security  as the  party  claiming
indemnification reasonably may request. The party claiming indemnification shall
fully  cooperate  with  the  other  party  and its  counsel  in the  defense  or
compromise of such claim or demand. The party seeking  indemnification  shall at
all times  also have the right to fully  participate  in the  defense at its own
expense.  If the indemnifying  party shall,  within a reasonable time after this
notice, fail to defend, the party seeking  indemnification shall have the right,
but not the obligation, to undertake the defense of, and to compromise or settle
(exercising  reasonable  business judgment) the claim or other matter on behalf,
for the account, and at the risk, of the indemnifying party.

         D.  Limitations  on  Indemnification.  No party shall be liable for any
Damages to a person  claiming  indemnification  under this  Section 14 until the
amount  of  such  Damages,  in the  aggregate,  exceeds  Five  Thousand  Dollars
($5,000.00).  After the foregoing threshold is met, the indemnifying party shall
be liable for all Damages,  including the threshold  amount,  provided  however,
that each party's total indemnification obligation hereunder shall be limited to
the amount of the Purchase Price.
<PAGE>

     Section 15. Expenses.  Each of the parties shall pay all costs and expenses
incurred by it in  negotiation  and preparing  this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.

         Section 16.  Miscellaneous

         A. Further Assurances. The parties agree that after the Date of Closing
they will from time to time, upon the reasonable request of the other,  execute,
acknowledge  and deliver in proper form any instruments of conveyance or further
assurance necessary or reasonably desirable to meet its obligations, liabilities
and agreements contemplated hereunder.

         B. Entire Agreement.  Except as supplemented in a writing signed by the
party against whom  enforcement  is sought,  this Agreement and the exhibits and
documents referred to herein contain all of the terms and conditions agreed upon
by the parties  with  respect to the subject  matter of this  Agreement,  and no
other promises,  agreements or  understandings,  written or oral,  regarding the
subject matter of this Agreement, shall be of any force or effect.

         C. Modifications. No change, modification or waiver of any provision of
this  Agreement  shall  be valid  or  binding  unless  it is in  writing,  dated
subsequent to the date hereof and signed by the parties intended to be bound. No
waiver of any breach,  term or  condition  of this  Agreement by any party shall
constitute  a  subsequent  waiver  of the  same  or any  other  breach,  term or
condition.

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

     E. Notices. All notices, requests, demands or other communications required
or  permitted  by  this  Agreement  shall  be in  writing,  and  delivery  shall
b(degree)deemed  to be  sufficient  if delivered  personally or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

         If to Buyer:    Medtox Scientific, Inc.

                         402 West County Road D

                         St. Paul, MN  55112

                         Attention:   James Lockhart, CFO
<PAGE>

         If to Sellers:  National Medical Review Offices, Inc.

                         5900 Wilshire Blvd. 22nd Floor

                         Los Angeles, CA  90036

                         Attention:   President

           or to such other  addresses  as may be  specified  pursuant to notice
           given by  either  party in  accordance  with the  provisions  of this
           Subsection.

     F. Headings.  The headings used in this Agreement are for convenience  only
and shall not be deemed to constitute a part hereof,  and shall not be deemed to
limit, characterize or in any way affect the provisions of this Agreement.

     G. Recitals  Incorporated.  The recitals to this Agreement are incorporated
into and constitute an integral part of this Agreement.

         H. Cross-References.  References in this Agreement,  or in any document
executed  pursuant hereto to any Section  or-Subsection  are,  unless  otherwise
specified,  to such Section or Subsection of this Agreement or such document, as
the case may be.

     I.  Possession.  Ownership and  possession of the Business  Assets shall be
deemed  effective on the Effective  Time and shall actually be transferred as of
the Date of Closing.

         J.  Relationship  Between Buyer and Seller.  Nothing in this  Agreement
shall be construed as creating a joint  venture  between Buyer and Seller or any
relationship  other than that of buyer and seller, and neither party hereto, nor
anyone else,  shall have the  authority or power by virtue of the  provisions of
this Agreement to incur any liability or  obligation,  other than as provided by
the specific  provisions of this Agreement which would be binding upon the other
party hereto.

     K.  Severability.  If any term,  covenant or  condition  in this  Agreement
shall,  to any  extent,  be  invalid or  unenforceable,  the  remainder  of this
Agreement and the covenants  contained  herein shall not be affected thereby and
the residue shall be valid and  enforceable to the fullest  extent  permitted by
law.

         L. Survival of Terms.  The agreements,  representations  and warranties
contained in this  Agreement  shall be deemed to be remade at and the respective
obligations  of the parties for the  completeness  and  accuracy  thereof  shall
survive the closing.  Each party  agrees to indemnify  the other for and save it
harmless  against  any  breach of any  warranty  or  representation  made by the
indemnifying party under this Agreement in accordance with Section 14 hereof.
<PAGE>

         M.  Access to Files.  Seller  agrees  that all  files  relating  to the
Business  Assets shall become the  property of the Buyer;  provided  that Seller
shall have reasonable  access to said files at ail reasonable  times,  including
the ability to copy said files for its own use.

     N. Governing Law. This  Agreement  shall be governed by and  interpreted in
accordance with the laws of the State of Minnesota.

     O. Nondisclosure. If this Agreement is terminated for failure of either the
Buyer or Seller  to meet any  their  respective  obligations,  Buyer and  Seller
hereby  covenant  that they will not disclose to any person other than the Buyer
or Seller any proprietary  information  about the other party or any information
about the transaction contemplated herein, except as may be necessary to enforce
that party's rights under this Agreement.

     P. Binding Agreement.  Except as otherwise provided herein,  this Agreement
and the terms,  conditions  and  covenants  contained  herein  and  transactions
contemplated  hereunder  shall be binding  upon and inure to the  benefit of the
parties  hereto  and  their  representative   successors,   representatives  and
permitted assigns.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective the date and year first above written.

          SELLER:                                  BUYER:

          BY:_________________________             BY:_________________________

          Its:________________________             Its:________________________

          SELLING SHAREHOLDER:

          -------------------------

          MURRAY I. LAPPE, SOLELY AS TO SECTION 2

          -------------------------
<PAGE>

                                   Exhibit "A"

                      Assets of Business Purchased by Buyer

         Sellers  agrees  that on the Date of  Closing,  they  shall  deliver to
Buyer:

     A. All of Seller's customer lists, customer records and other data relating
to the customers of the Business; and

     B. All of  Sellers  inventory  of forms and kits used to  perform  specimen
collections services for the customers of the Business's; and

     C. The breath-alcohol equipment (5 units) used by Sellers in the Business.

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