EXHIBIT 10.1



Proposal (Confidential)

PN 3222
(QTECH100296)

Quantech Ltd.
St. Paul, MN



SPR System Disposable Development




October 2, 1996


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Quantech Ltd.
SPR System Disposable Development

PN 3222/(QTECH100296)



Introduction/Assumptions

Quantech Ltd. (Quantech) is a development stage company seeking to commercialize
its SPR  technology.  The Company's  initial focus is the development of SPR for
the hospital  critical  care  diagnostic  market.  SPR, the core  technology  of
Quantech's proposed medical diagnostic system,  enables the Company to integrate
the existing diagnostic  methodologies of immunoassays,  DNA probes and chemical
binding  into a single,  simple,  economical  system in order to provide  rapid,
quantitative, diagnostic results. The Quantech system configuration will consist
of a small,  bench top instrument  and a series of  disposables  each offering a
particular  test or series of tests.  The  Quantech  system  has the  ability to
analyze body fluids (e.g., whole blood, urine,  saliva) without user preparation
or addition of reagents.

Quantech's  business  strategy  is to  capitalize  on the  flexibility,  extreme
sensitivity  and relatively  low cost of its diagnostic  system to penetrate and
expand the POC  market.  Quantech's  intended  entry into the POC market will be
Critical Care Units of hospitals,  the first unit being the Emergency Department
where the most pressing and unmet customer needs are found.

The Disposable
Quantech's disposable consists of an injection molded plastic carrier containing
up to four gold coated  grating  surfaces.  The gold  surface is  overlaid  with
reagents that react specifically with the analyte to be identified and measured.
A unique  aspect of the  Quantech  disposable  will be the  ability  to attach a
standard  vacutainer  tube,  complete  with  its  top  intact,  directly  to the
disposable  so that it is easy to use and  the  user  does  not  come in  direct
contact with the patient sample.  Future  disposables for certain tests may also
be configured to handle samples of urine, saliva, or other body fluids.

Unlike the majority of other disposables on the market,  Quantech's  disposables
do not require the addition of reagents by the user. This simplicity  translates
into lower production costs,  quicker development time, easier use, immediacy of
results and reduced costs to the user.  Individual  disposables will be packaged
in a  sterile  pouch  to  provide  extended  shelf  life.  Disposables  will  be
configured   to   provide    single   tests   or   panels   of   up   to   three
diagnostically-related  tests.  When  the test  disposable  is  inserted  in the
instrument, a bar-code reader will identify the type of test to be performed and
contain  certain  calibration  information  necessary  to  effectively  maintain
quality control.

The  development  team of Robert Case + Associates,  Inc. (RC+A) and the Product
Design Center (PDC) propose to assist Quantech in developing  and/or  specifying
the detailed,  commercial  part and assembly design and  specifications  for the
disposable sub-system, which consists of:

1.   Molded plastic disposable sample preparation/processing assembly, 
     including:
     a.  primary sample tube connection
     b.  red blood cell filtration chamber
     c.  sample temperature control chamber
     d.  sample introduction pressure/vacuum connection
     e.  assay reaction/read chamber
     f.  assay identification/QC bar code label target area


<PAGE>

Quantech Ltd.
SPR System Disposable Development

PN 3222/(QTECH100296)



2.   Mechanical articulation and disposable positioning components of the 
     instrument "drawer".
3.   Sample introduction pressure/vacuum components and fluid circuit.
4.   Sensor components for:
     a.  disposable positioning
     b.  reaction chamber sample volume fill
     c.  bar code reading target
Note:    It is assumed that the following specifications will be provided by 
Quantech:
         a.  red blood cell filtration material
         b.  sample temperature/tolerance
         c.  sample reaction volumes/tolerance
         d.  disposable positioning tolerances
         e.  bar code reading target area

ROBERT CASE + ASSOCIATES, INC./PRODUCT DESIGN CENTER

As specialists in health care product  development,  RC+A/PDC has  distinguished
itself through integrated  application of our core competencies of customer/user
research, industrial design and product engineering,  focused toward our clients
rapid product development needs.

The key results for our clients  are:  1) rapid  specification  of customer  and
technical  product  design  requirements   through  customer  and  user  product
evaluations;  2) integration of the customer/user requirements into the detailed
product  design,  engineering  and production  specifications;  3)  single-point
accountability  for delivery of product  engineering,  prototypes and production
specifications.

This fully integrated  product  development  process has repeatedly  enabled our
clients to develop Better Products, Faster.

Work Program

      Phase I    Sample Introduction and Preparation Feasibility Breadboard
                 Deliverables:  - Design specifications and documentation of the
                                  disposable fluid path, prep/processing 
                                  chambers and connectology.
                                - Design specifications and documentation of the
                                  sample introduction pressure/vacuum components
                                  and fluid circuit.
                                - Industrial design concepts (ergonomics & 
                                  aesthetics) for the disposable assembly.
                                - Fabrication of a functional disposable and 
                                  sample introduction/prep breadboard.
                                - Detailed plan for development of the 
                                  commercial sub-system.

      Phase II    Production Design Development
                  Deliverables:  -  Production Design Specifications and 
                                    Documentation


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Events and tasks for the  phases of  activity  are  detailed  below.  Subsequent
phases will be further detailed and quoted as the necessary  information becomes
available.  The Fees Outline defines the project budget and Appendix B - General
Provisions describes the contract terms.

Phase I - Sample Introduction and Preparation Feasibility Breadboard

Deliverables

-     Design  specifications  and  documentation  of the disposable  fluid path,
      prep/processing  chambers  and  connectology.
-     Design  specifications  and documentation of the sample  introduction
      pressure/vacuum  components and fluid circuit.
-     Industrial  design concepts  (ergonomics & aesthetics) for the disposable
      assembly.
-     Fabrication of a functional disposable and sample introduction/prep 
      breadboard.
-     Detailed Phase II plan for development of the commercial sub-system.


Activities

1.1      Product Requirements Review

         RC+A/PDC  will  review the  current  project/product  requirements  and
         specifications for the disposable  sub-system with Program  Management.
         The results of this review will  provide the basis on which the balance
         of this phase will proceed.

         Note:  The initial  review was  conducted on September  24, 1996 at the
         RC+A office in Chicago.  It is anticipated that a telephone review will
         be  scheduled  during the week of  October  7, 1996 to further  discuss
         design  concepts  and the recent  results  of  Quantech  research  with
         appropriate team members.

1.2      Disposable Sub-system Design Development

         RC+A/PDC will develop and/or  specify the functional  part and assembly
         design for the disposable sub-system, consisting of:

         1.  Plastic disposable sample preparation/processing assembly,
             including:
             a.   primary sample tube connection
             b.   red blood cell filtration chamber
             c.   sample temperature control chamber
             d.   sample introduction pressure/vacuum connection
             e.   assay reaction/read chamber
             f.   assay identification/QC bar code label target area
         2.  Disposable mechanical positioning components.
         3.  Sample introduction pressure/vacuum components and fluid circuit.

         A  Pro/Engineer  Rev. 16 CAD data base will be  developed  of all parts
         designed by RC+A/PDC as a part of this  project,  in  conjunction  with
         required FEA-based mechanical, thermal and flow analysis.

         Industrial design concept sketches of the proposed disposable ergonomic
         and  aesthetic  details  will  be  provided  in  conjunction  with  the
         engineering feasibility database/drawings.

<PAGE>

1.3      Program/Design Review

         RC+A/PDC  will  conduct  a review  of the  proposed  disposable  design
         documentation  with  Program  Management  and the impact on the program
         plan, if any.

Phase I - Sample Introduction and Preparation Feasibility Breadboard


1.4      Engineering Breadboard Fabrication and Testing

         RC+A/PDC will fabricate a functional  engineering breadboard which will
         demonstrate  feasibility for the proposed disposable sub-system design.
         The breadboard will include the following functional components:

         1.  Machined/purchased component disposable sample preparation/
             processing assembly, including:
             a.   primary sample tube connection
             b.   red blood cell filtration chamber/material
             c.   sample temperature control chamber
             d.   assay reaction/read chamber
             e.   sample introduction pressure/vacuum connection
         2.  Disposable mechanical positioning components.
         3.  Sample introduction pressure/vacuum components and fluid circuit.

         Tests  will be  conducted  and  documented  with  the  breadboard,  and
         necessary  revisions  made, to ensure  functionality  to  specification
         prior to delivery to Quantech R&D.

1.5      Program/Design Review

         RC+A/PDC will conduct a review of the breadboard, test data and revised
         engineering documentation with Project Management.  The results of this
         review will  determine  the  requirements  for the detailed  production
         design phase of the project.


<PAGE>


Phase II - Production Design Development



Deliverables

Detailed  production design  specifications and documentation for the Disposable
Sub-system.


Activities

2.1      Production Requirements Review

         RC+A/PDC will conduct a review session with Program  Management and the
         Program  Team  to  confirm  the   manufacturability   and   performance
         requirements and specifications for the disposable sub-system.

         The deliverables of this phase will provide detailed  production design
         specifications   and   documentation   for  the  commercial  parts  and
         assemblies of the following items:

         1.  Molded plastic disposable sample preparation/processing assembly,
             including:
             a.   primary sample tube connection
             b.   red blood cell filtration chamber
             c.   sample temperature control chamber
             d.   assay reaction/read chamber
             e.   sample introduction pressure/vacuum connection
             f.   assay identification/QC bar code label target area
         2.  Mechanical articulation and disposable positioning components of 
             the instrument "drawer".
         3.  Sample introduction pressure/vacuum components and fluid circuit.
         4.  Sensor components for:
             a.   disposable positioning
             b.   reaction chamber sample volume fill
             c.   bar code reading target
         Note:    It is assumed that the following specifications will be 
         provided by Quantech:
             a.   red blood cell filtration material
             b.   sample temperature/tolerance
             c.   sample reaction volumes/tolerance
             d.   disposable positioning tolerances
             e.   bar code reading target area

         Quantech  will supply  RC+A/PDC  with  specifications,  sources  and/or
         samples of all purchased parts and components which will interface with
         the disposable sub-system.

2.2      Detailed Component Design/Engineering

         2.2.1    Design Layout/Pro-E CAD Model

         RC+A/PDC  will develop a Pro-E model for the  commercial  design of the
         sub-system.  The CAD model will be reviewed with Program Management and
         Quantech  development  resources  for  confirmation  of  component  and
         subsystem functional and assembly requirements.


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         RC+A/PDC will  coordinate  with  Quantech  selected  vendors  regarding
         costing and timing for production implementation.


Phase II - Production Design Development



         2.2.2    Final Part Drawings & Database

         RC+A/PDC will produce detailed engineering  drawings,  material/process
         specifications and updated Pro-E database for the sub-system.

2.3      Program/Design Review

         A   detailed   design   review   of   the   production   documentation,
         specifications,  schedule  and costs  will be  conducted  with  Program
         Management and selected production  vendor(s).  Program Management will
         determine  the level of support  required  for  further  prototype  and
         production execution.





<PAGE>


Fees Outline
Robert Case + Associates, Inc./Product Design Center


Client:           Quantech Ltd. - Joe Shaw

Project:          SPR System Disposable Development

Project No:       3222/(QTECH100296)

Date:             October 2, 1996

Phase             Activity                                             Fees

    I             Sample Introduction and Preparation Feasibility Breadboard

                  A.  Disposable Sub-system Design Development         $47,600
                      (Activity 1.1-1.3)

                  B.  Engineering Breadboard Fabrication & Testing     $12,400*
                      (Activity 1.4-1.5)

                  Reimbursable Expenses                                $2500*

   II             Production Design Development                        $125,000*


(*) Budget Estimates

Notes:

1.       Estimates
         The  budget  estimated  fees will be quoted for  Client  approval  upon
         completion of each previous phase.
2.       Fees
         The fees quoted by RC+A/PDC in the proposal do not include reimbursable
         expenses  incurred by RC+A/PDC  which include but are not restricted to
         transportation,  lodging,  meals  and  long-distance  telephone  calls,
         delivery  services  and the  cost  of  documentation  and  reproduction
         excessive of the normal development process.  These fees will be billed
         on monthly progress  billings.  The quoted  out-of-pocket  expenses are
         estimates only.

         The fees and costs  quoted in the  proposal  will  remain in effect for
         sixty  (60)  days  from  the  date  of the  proposal  subject  only  to
         fluctuations in the cost of materials, outside services and time delays
         caused by factors beyond RC+A/PDC control. The fees and costs presented
         to  Client  have  been  estimated   according  to  Client's  goals  and
         objectives as originally stated and set forth in the proposal,  and are
         subject to revisions by RC+A/PDC as changes are made over the course of
         the project.  The fees and costs have been estimated according to using
         RC+A/PDC resources except where Client has indicated specific resources
         to be used prior to project quotation. Should Client require specifying
         resources to be used after RC+A/PDC has submitted a project  quotation,
         the fees and costs are subject to  revisions by RC+A/PDC as dictated by
         such Client specified resources. Status updates and projections will be
         made by RC+A/PDC at the intervals outlined in the proposal.

<PAGE>

Appendix A - Phase Approval
Robert Case + Associates, Inc./Product Design Center


Client:           Quantech Ltd. - Joe Shaw

Project:          SPR System Disposable Development

Project No:       3222/(QTECH100296)


Date:             October 2, 1996

Phase             Activity                                             Fees

    I             Sample Introduction and Preparation Feasibility Breadboard

                  A.  Disposable Sub-system Design Development         $47,600
                      (Activity 1.1-1.3)

                  B.  Engineering Breadboard Fabrication & Testing     $12,400*
                      (Activity 1.4-1.5)

                  Reimbursable Expenses                                $2500*


(*) Budget Estimate

The undersigned  hereby  authorizes  RC+A/PDC to proceed with the above Phase(s)
and  agrees to the  attached  Appendix  B  General  Provisions  of the  Proposal
(Revision Date 12-21-95).


Client Acceptance and Approval              RC+A/PDC Acceptance and Approval

By:                                         By:
         (Authorized Signature)                    (Department Manager)

Date:                                       Date: 10/4/96

Name:                                       Upon approval, please send signed
                                            copies of
Title:                                      Appendix A & B to:

Client Purchase Order No:2007               Robert Case + Associates, Inc.
                                            640 North LaSalle Street, Suite #282
                                            Chicago, Illinois  60610


<PAGE>


Appendix B - General Provisions of the Proposal
Robert Case + Associates, Inc.
----------------------------------------------------------------
This  Appendix is attached  to and made a part of the  proposal  given by Robert
Case + Associates, Inc. (hereinafter referred to as "RC+A").

1.   General Terms

     RC+A  is  a  professional  organization  providing  independent  consulting
     services to our  clients.  All Client  documents  and  information  will be
     considered  confidential.  All  Client  work in  progress  will be open for
     inspection  and  consultation  by authorized  employees  (as  designated by
     Client).  The rights to any  patentable  inventions  that may be  developed
     during the course of the project will be assigned to Client. All actions or
     costs  necessary  to obtain a patent or to reserve any other rights will be
     Client's sole  responsibility.  Client hereby  releases,  hold harmless and
     indemnifies  RC+A and its  agents  from  any and all  claims,  damages,  or
     attorneys' fees of any third parties  relating in any way to this proposal,
     including design, production, sale or use of items which are the subject of
     this  proposal.  Client  agrees  that  RC+A and its  Agents  shall  have no
     liability to Client for claims or damages of any kind which may result from
     RC+A services in relation to the subject matter of this proposal.

2.   Authorization to Proceed

     Upon receipt of Appendix A - Proposal  Approval signed by Client,  or other
     specific  approval,  RC+A will  commence the work set forth in the approved
     phase(s).  A written Purchase Order signed by an authorized agent of Client
     must follow within 15 days from RC+A's  commencement  of work. In the event
     such Purchase Order is not received on a timely basis, RC+A may in its sole
     discretion in addition to all other rights and remedies it may have,  elect
     to discontinue work on the phase.

     Should work on a phase be  discontinued  by Client or RC+A,  Client will be
     responsible for all fees and expenses  incurred by RC+A up to the time work
     on the phase is  discontinued,  including  a  start-up  and  shut-down  fee
     (estimated  to be 15% of the  total  proposed  phase  fees)  as well as all
     additional  fees  and  expenses  incurred  by  RC+A  as a  result  of  said
     discontinuance.

3.   Fees and Expenses

     All fees,  and costs  quoted in the  proposal  will remain in effect for 30
days from the date of the proposal.  Time  schedules  will be adjusted  based on
start  date.  Fees,  costs,  and  time  schedules  are  based on the use of RC+A
resources  except where Client has requested  the use of specific  resources and
these  resources  are  specified  in the project  proposal.  Fees are subject to
fluctuations in the cost of outside services and changes or additions  requested
by the client.  The time schedules set forth in this proposal are best estimates
of RC+A and subject o changes over the course of the project.

     The  fees  quoted  by RC+A in this  proposal  do not  include  reimbursable
expenses which include but are not limited to  transportation,  lodging,  meals,
travel incidentals and honoraria.  Expenses will be periodically invoiced during
the course of the project.  Because of delays in third party  billing,  expenses
may be invoiced as late as 90 days after the final project billing. Upon written
request,  documentation  of  expenses  will be  provided.  Quoted  out-of-pocket
expenses are estimates for budgeting purposes only.


<PAGE>

4.   Billing

     Upon  authorization,  Client will be invoiced for 100% of the approved fees
and/or  estimated  costs  for  proposals  of less  than  $5,000,  and 50% of the
approved fees and/or estimated costs for proposals in excess of $5,000.  Payment
will be due upon  receipt and shall be applied to the first fifty (50%)  percent
of the quoted fees and estimated  costs of each phase of the proposal.  Progress
billings  will be made  upon  commencement  of work for the  remaining  fees and
expenses  incurred by RC+A and will be due upon receipt.  Any balance  remaining
will be due upon  completion and delivery of the finished  project as defined in
the proposal.  RC+A shall retain title and rights to all work produced  until it
has received  Client's  final payment.  Client grants RC+A security  interest to
secure  payment to RC+A for all fees or other amounts due pursuant to all phases
of this proposal or any other proposals in Clients fixtures,  furniture,  office
equipment,  patents, accounts receivable, bank accounts, motor vehicles, and any
proceeds from their sale or deposition. Interest on unpaid invoices shall accrue
at 1 1/2% per each full or partial month after due date.

5.   Interpretation and Enforcement

     Parties hereby agree that  interpretation and enforcement of this agreement
     will be governed by Illinois law and venue of any claim or lawsuit shall be
     Chicago,  Illinois.  Any controversy or claim arising out of or relating to
     this  agreement or the breach  thereof shall be settled by  arbitration  in
     accordance  with the  rules of the  American  Arbitration  Association  and
     judgment  upon the award  rendered  shall be  entered  in any court  having
     jurisdiction  thereof. Any arbitrator's award or finding or any judgment or
     verdict thereon shall be final and u  unappealable.  All parties agree that
     venue  for said  arbitration  shall be in  Chicago,  Illinois  and that any
     litigation or arbitration commenced in any other venue shall be transferred
     instanter  to Chicago,  Illinois  upon the written  request of any party to
     this agreement. The prevailing party shall be entitled to reimbursement for
     attorneys' fees, costs or other expenses  pertaining to said arbitration or
     any litigation  and said  attorneys'  fees,  costs and other expenses shall
     become a part of any award,  judgment or verdict.  All arbitration's  shall
     have (3) three individuals  acting as arbitrators.  One arbitrator shall be
     selected  by RC+A . One  arbitrator  shall  be  selected  by  Client.  Both
     arbitrators shall select a third arbitrator.  Any arbitrator  selected by a
     party  shall  not be  affiliated,  associated  or  related  to the  parties
     selecting that arbitrator by blood,  marriage,  business or otherwise.  The
     decision  of the  majority  of the  arbitrators  shall be binding  upon all
     parties. Client grants RC+A security interest to secure payment to RC+A for
     all fees or other  amounts due  pursuant to all phases of this  proposal or
     any other  proposals  in Clients  fixtures,  furniture,  office  equipment,
     patents,  accounts  receivable,  bank  accounts,  motor  vehicles,  and any
     proceeds from their sale or  deposition.  This  Agreement  shall be binding
     upon  and  inure  to  the  benefit  of  the  parties  hereto,  their  legal
     representatives, heirs, administrators,  executors, successors and assigns.
     The waiver by either party of any breach of any provision of this Agreement
     shall not operate or be construed as a waiver of any  subsequent  breach by
     either party.  Each party agrees to perform any further acts and to execute
     and deliver any documents  which may be  reasonably  necessary to carry out
     the provisions of this Agreement.





Client Acceptance & Approval:                                   Date:10/4/96
(Rev. 12-21-95)